On August 2, Advanced Micro Devices (AMD) released strong financial results for the second quarter of 2022. However, its prediction for the third quarter was slightly below Wall Street’s estimate, showing caution in the face of a lack of certainty as OEMs continue to shift inventories.
For AMD, the second quarter was filled with reason for celebration as its sales increased by 70% to US$6.55 billion, beating analysts’ expectations of US$6.53 billion. Datacenter segment revenue increased 83 percent YoY to US$1.5 billion, indicating exceptional performance.
Even while AMD has officially outperformed Intel in terms of market capitalization and has continued to win substantial market share over Intel, the drop in PC demand is still viewed as a serious worry.
In contrast to earlier predictions of a high single digit percent decline, AMD CEO Lisa Su told analysts that the business altered its view on the PC market for this year to decline by the mid-teens percent. Consequently, AMD is more pessimistic than Intel, which predicted a 10% fall in PC demand for the entire year of 2022.
According to AMD, revenue for the third quarter would be at US$6.7 billion, less than the US$6.81 billion average analyst estimate.
Global shipments of laptops are expected to decline 17.2 percent from the same period last year in the third quarter, according to research from DIGITIMES, following a 23.6 percent decline in the second quarter. According to Jim Hsiao, a senior analyst at DIGITIMES Research, the correction will cause fourth-quarter shipment to experience a 21.9 percent year-over-year fall.
The results of Vanguard International Semiconductor Corp (SMIC), a Taiwanese legacy node foundry service provider, for the second quarter likewise show the weak market for electronic goods. On the same day, Vanguard issued a warning stating that this wave of semiconductor inventory adjustment phase could run up to four seasons. This quarter, it will be under pressure to lower costs as capacity utilization will fall from full capacity to 81–83 percent.
More than 70% of Vanguard International’s sales in the second quarter of 2022 comes from power management ICs and small and medium-sized flat panel driver ICs.
Failure to receive orders in the third quarter will not be good for the fourth-quarter Christmas shopping season because the third quarter is a crucial season for the consumer electronics industry.
Consumer sentiment may be impacted by global inflation and economic uncertainty in China, a significant market for personal computers and consumer electronics.
Since customers have been making significant purchases over the past two years and the average inventory level in most countries is already at 6 to 8 weeks, the consumer Windows notebooks are predicted to have a lower peak season influence than in the past, according to DIGITIMES Research.
Lisa Su emphasized that AMD continues to experience robust demand in the datacenter, embedded, and gaming console industries despite providing conservative PC guidance.