What Display Daily thinks: You can either look at the PC market as stagnating, in decline, or facing the post-pandemic blues, but no matter how you look at it, it is unlikely to shake off whatever ails it any time soon. That’s going to put a damper on IT displays, and if you factor in that the gaming market is also showing signs of continued weakness, it may create other issues as companies like AMD, and Nvidia, push into the high-performance computing (HPC) category and ride the AI wave.
The upside to AI may not hurt innovation or development in PC gaming quite yet, but there is a threat that it will suck up all the oxygen in the management chambers of companies like AMD. The question is, will that create new opportunities or reduce opportunities in IT product sales, and maybe freeze gamer upgrade cycles? It may also mean that in the absence of graphics cards and new whiz bang GPUs, gamers will have money left over to buy that bigger, brighter display. It’s worth considering the strategic track to take here because there may be an opportunity for displays to fill the vacuum left in the market while the graphics guys chase bright shiny new objects.
AMD Revenues Impacted by Weak PC and Gaming Sales
AMD announced revenue of $5.4 billion for the second quarter of 2023, gross margin of 46%, operating loss of $20 million, net income of $27 million, and diluted earnings per share of $0.02. On a YoY basis, revenue was down 18.2%, while net income plunged by 93.9%. On a sequential basis, revenue rose 0.2%, while net income turned positive over the previous quarter’s loss. Gross margin was 46% (up from 4.5% in the previous quarter), operating income was $1.1 billion, and net income was $948 million.
Revenue of $5.4 billion declined 18% year over year as strength in the embedded segment was more than offset primarily by lower client segment revenue. Client revenue was impacted by a weaker PC market and a significant inventory correction across the PC supply chain, two problems that date back to the previous quarter. The company reported an operating loss of $20 million, as compared to a profit of $526 million in the same quarter last year, primarily due to the client segment underperforming and amortization of acquisition-related intangible assets. Gaming segment revenue was $1.6 billion, down 4% year over year and 10% sequentially. This was primarily due to lower gaming graphics sales.
