Even as AMD tries to put a bright face on the rest of its business, the news was bad for the rest of the semiconductor sector.
The end of the pandemic boom in personal-computer sales looks like it is going to hurt chip makers more than investors — and the companies themselves — may have expected.
Advanced Micro Devices Inc. AMD stunned Wall Street on Thursday with news that its third-quarter revenue would come in a whopping $1 billion less than forecast, with the industry swimming in inventory, especially in the PC market. AMD’s unexpected comments echoed similar warnings from Micron Technology Inc. MU executives last week, signaling that the semiconductor downturn may be worse than some have forecast, thanks in large part to the PC industry.
While there was not much more information in AMD’s press release, Micron executives — who forecast that revenue in the fiscal first quarter would come in $1 billion below estimates last week — said that the PC market was down more than previously estimated. Micron was also more cautious about the data-center business. Micron said it was now looking for PC sales to fall around 15% on a year-over-year basis, as opposed to the almost 10% drop the company forecast in June.
Still, even as AMD tries to put a bright face on the rest of its business, the news was bad for the rest of the semiconductor sector, and especially its biggest rival in the PC business, Intel Corp. INTC . Intel investors have to be wondering now if the disappointing comments and forecasts from that company’s last earnings report were downcast enough.“This preannouncement may imply something a bit worse,” said Chris Rolland, a Susquehanna Financial analyst, in a note to clients.
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