The company highlighted lower-than-expected sales of consumer PCs and major inventory adjustments in the PC supply chain. It did point out that its embedded, gaming, and data center segments continue to operate as expected. Despite the challenges, AMD will continue to grow even though its sales expectations have been cut from a year-over-year growth rate of 55% to 29% as a result of its warning. The revenue shortfall was explicitly attributed to AMD’s client processors’ decreased shipments and lower average selling prices (ASPs). Other semiconductor producers like Intel and Nvidia have also been troubled by this issue because of bloated stockpiles as demand declines. AMD’s shortcoming follows an amazing Q2 performance in which its revenue increased 70% year over year as it continued to eat into Intel’s market share despite desktop CPU sales being at their lowest level in 30 years. However, the company’s Q2 disclosures hinted at possible problems that might be on the horizon; most analysts believed that the Q3 guidance was already below average. Similar revenue deficits have lately been experienced by AMD’s rivals in the CPU and GPU markets as a result of the waning PC market and ensuing inventory adjustments. NVIDIA pre-announced a $1.4 billion shortfall in August as a result of falling GPU sales following the collapse of the crypto mining industry, which ultimately led to subpar quarterly results and severe losses for the company’s shares. The industry leader in CPUs, Intel, also reported its first quarterly loss in decades, losing $500 million despite a 17% decline in sales. Worldwide markets have been shaken by a number of economic issues, such as supply chain interruptions and inflation, which have prepared the ground for the PC market’s quick decline. However, with the expected release of next-gen GPUs, the future does look promising.
