AMD reduced its expected sales from $6.7 billion to $5.6 billion, a $1.1 billion decrease, for the quarter. It also informed investors that its non-GAAP gross margin would be 50% rather than the anticipated 54%. On November 1, 2022, AMD will hold a conference call to discuss their downgrading and future plans in more detail.
Consumer PC sales were down from last year, but the company also highlighted significant inventory changes in the PC supply chain. However, it did point out that its embedded, gaming, and data center segments are still operating as expected.
AMD's revenue shortfall was directly linked to decreased shipments and lower average selling prices (ASPs) among other semiconductor companies, which have also struggled with oversupply.
AMD's flaw relates to an amazing Q2 performance in which revenues increased by 70% year on year as it continued to eat into Intel's market share despite desktop CPU sales falling to their lowest level in 30 years. However, the company's Q2 disclosures indicated that there may be some challenges on the way.
AMD's CPU and GPU competitors have recently suffered similar revenue shortfalls as a result of the declining PC market and subsequent inventory adjustments. In August, NVIDIA announced a $1.4 billion shortfall as a result of declining GPU sales as a result of the crypto mining sector's collapse, which resulted in disappointing quarterly results and significant losses for the company's shares. Intel, the industry leader in CPUs, also suffered a $17 million loss in quarterly earnings.
A number of economic difficulties have shook global markets, including supply chain interruptions and inflation, which have stoked the slow decline of the PC market. However, with the expected release of next-gen GPUs, the future looks bright.