AMD's new artificial intelligence (AI) chip will generate more revenue than expected this year, although revenue in the first quarter of 2024 will be lower than expected.
AMD said revenue for the first quarter of 2024 is expected to be $5.4 billion, which is well below analysts' estimate of $57$700 million, and echoes rival Intel's pessimistic approach to the personal computer (PC) and data center chip markets.
AMD said gross margin (the percentage of sales remaining after deducting production costs) for the first quarter of 2024 was approximately 52%, in line with **.
Excluding certain items, AMD reported fourth-quarter 2023 earnings of 77 cents per share, in line with expectations. Operating income was 61$700 million, compared to an average** of 61$300 million.
investing.Jesse Cohn, an analyst at Com, said: "AMD's quarterly results were flat, with significant declines in operating income and operating margins being the most prominent. ”
This prospect has once again raised concerns that customers are delaying purchases in AMD's core markets (PCs, servers, consoles, and programmable processors). Although the company is making inroads into AI accelerators, it is still in the early stages of expansion, and this lucrative segment is currently dominated by Nvidia.
AMD launched the MI300 series of AI accelerators in December last year. Such chips can help companies develop AI models through data training, and they are in high demand. AMD expects sales of the MI300 series chips to exceed $3.5 billion in 2024, up from $2 billion previously. But Chris Caso, an analyst at Wolfe Research, said Wall Street has been a figure of up to $8 billion.
AMD CEO Lisa Su said that once more capacity is put into production in the second half of the year, the company's AI chip sales will exceed the current ** $3.5 billion.
The big question is whether AMD's Mi300 series chips can challenge the dominance of Nvidia and its H100. Numerous companies are looking for alternatives to Nvidia's advanced AI chips, which account for about 80% of the market. AMD has one of the few viable alternatives on the market.
In the fourth quarter of 2023, AMD's PC chip segment revenue increased by 62% to 14$600 million versus an expectation of $15$100 million; Data center sales were 22$800 million, just under $2.3 billion**; Gaming PC-related revenue decreased 17% to 13$700 million, analysts expect sales of $12$500 million.
AMD is Intel's biggest competitor in the field of computer processors, which are the main components of laptops, desktops, and servers.
Su Lifeng said that with the increase of AI PCs, the market is expected to grow "moderately" in the second half of 2024 and have more room for **. According to research firm Canalys, global PC shipments are expected to grow by around 5% by 2024.
Intel said in its quarterly report that the lucrative data center processor market is also weakening. Three months ago, AMD warned investors that demand for gaming consoles and embedded processors was slowing. The company has now reiterated that idea, saying demand in these markets will remain subdued this year.
AMD's data center business, which includes traditional server chips and AI processors, grew 38% year-on-year, but demand from cloud computing companies remains "weak," Su said. As companies seek to develop and operate their own generative AI applications, corporate budgets are being focused on the chips used in AI servers.
AMD is the second-largest manufacturer of discrete graphics chips that turn PCs into gaming consoles. It also supplies chips for Sony and Microsoft's gaming consoles. Nvidia is leading the market for PC discrete graphics chips.
Industries such as automotive and industrial, which have been hit by a chip glut** due to weak end-market demand, the market for programmable chips that can be customized to perform various functions has been faltering over the past few quarters. AMD's embedded business revenue fell 24% to $1.1 billion in the fourth quarter of 2023.
Proofreading by Zhang Jie).