Lisa Su, Advanced Micro Devices Inc. (AMD) President and Chief Executive Officer.
Bridget Bennett | Bloomberg | Getty Images
amd And intel There are fierce competitors in a tough market for chips, but one has a much brighter short-term outlook than the other. While Intel is expecting declines across the board, AMD’s data center business is on the rise with the introduction of a new chip, and the pandemic-era acquisition of specialty chip maker Xilinx is also contributing to growth.
on Tuesday, AMD said It expected sales of $5.3 billion in the March quarter, which would be a 10% year-over-year decline in sales.
It’s not a great outlook, but it looks a lot stronger than Intel’s guide for the March quarter. Last week, Intel said it expected $11 billion In sales, that would be a 40% decline year-on-year.
Neither chipmaker gave full-year guidance, citing economic uncertainty. “We obviously want to be careful given just the macro environment going into the year,” AMD CEO Lisa Su told analysts on the company’s earnings call.
But the stock market is showing how the two companies are drifting apart.
after intel report last weekIt fell over 7% in extended trade. AMD declined less than 2% on Tuesday following its earnings report.
After two years of high sales during the Covid pandemic, both companies are facing a slump in the PC market as people bought new computers to work from home or go to school.
AMD’s PC chip group revenue declined 51% on a year-over-year basis in the fourth quarter. Intel declined 36%, but by a sizable base. Overall, AMD CEO Lisa Su said Tuesday that she expects the total PC market to decline by 10% in 2023, but said AMD actually gained market share in the fourth quarter.
Su said, “It’s fair to say that we believe the first half will certainly be lower than where we are with client inventory levels. We expect some improvement in the second half.”
The companies diverge more dramatically when it comes to data center chips.
Intel’s datacenter group sales fell 33% from the previous year to $4.3 billion, partly due to the late release of its latest server chip family, Sapphire Rapids.
AMD’s data center business is growing strongly, however, up 42% year-over-year to $1.7 billion. AMD released its latest data center chips, the fourth-generation Epic processors, in November. AMD expects its data center business to grow this year, while PC chips for gaming and graphics processors will decline.
AMD’s data center business also faces tough macroeconomic conditions, but on Tuesday Su signaled to investors that its gains would come at Intel’s expense.
“In our Embedded and Data Center segments, we believe we are well-positioned to drive revenue growth and gain share in 2023 based on our competitive position and leadership strength.”
AMD also found success with its 2020 acquisition of Xilinx, which it Bought for $35 billion. Xilinx, which makes processors that perform specialized tasks such as encryption or video compression, was the main contributor of $1.4 billion in sales for AMD’s embedded division, an annual increase of 1,868%, according to the company.