AMD sees slowing profits, vows deeper AI involvement

By Al Mayadeen English
Source: Agencies
2 Aug 2023 15:52

The company's CEO says AMD is increasing its R&D spending in AI and has developed a strategy to advance its chips in the sector.

AMD Chair and CEO Lisa Su speaks at the AMD Keynote address during the Consumer Electronics Show (CES) on January 4, 2023, in Las Vegas, Nevada, United States (AFP)

AMD eyes $5.7 billion in sales during the third quarter, as the tech giant places bets on its data center and embedded divisions projects to grow on a fiscal year basis.

“We are expecting a large ramp in the second half for our Data Center business, weighted towards the fourth quarter and we are still looking at a ZIP code — let’s call it 50%, plus or minus, second half to first half,” AMD CEO Lisa Su told analysts, who forecasted that the company will make $5.81 billion in revenue during Q3.

Earlier this week, the chipmaker reported a $27 million net income, down from $447 million during the same period last year. Its shares net value also dropped from 27 to 2 cents.

Despite the tech market boom hyped by artificial intelligence AI, AMD sales suffered from declining PC sales, leading its total revenue to drop from $6.55 billion a year ago.

But ranking as one of the world's top producers of high-end graphics processing units (GPUs) and CPUs - a key component for AI applications - the company still holds good potential to thrive again in the market, and narrow down the gap with its rivals Intel and Nvidia.

While Intel reported surprisingly high profits, it was Nvidia that brought the market shock. In just less than one month, the tech firm's market value skyrocketed last May from almost $300 billion to over $1 trillion after it announced breakthroughs in its chips technology in the AI field (that can support emerging high-demanding applications such as ChatGPT.)

Su said that the company is increasing its R&D spending in AI, and has developed a strategy that includes AI-specific chips and software development.

“Our goal is to make this a significant growth driver for AMD,” Su said, adding that these advancements could also help PC chip sales.

“Going forward, we see AI as a significant PC demand driver as Microsoft and other large software providers incorporate generative AI into their offerings," Su continued.

“We expect our client segment will grow in the seasonally stronger second half of the year based on the strength of our product portfolio."