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Unexpectedly poor Zen 4 sales could hit AMD hard as the company is expected to lose millions in the fourth quarter of 2022

AMD launched the Ryzen 7000 series CPUs on August 30. (Source: AMD-edited)
AMD launched the Ryzen 7000 series CPUs on August 30th. (Source: AMD Editing)

According to AMD’s Q3 2022 financials, the company’s data center, gaming and embedded systems segments performed well. But the client segment, including consumer CPUs such as the Ryzen 6000 series, took a major hit due to a softening PC market. Additionally, the company also expects a less-than-ideal fourth quarter of 2022, likely due to poor Zen 4 sales.

AMD released financial results for the third quarter of 2022 While overall, the company performed well, with revenue up 29% year over year, currently at $5.6 billion , but this figure was much lower than previously expected. AMD CEO Dr. Lisa Su said, “Q3 results were lower than our expectations due to a softening PC market and substantial inventory reduction actions across the PC supply chain.”

The company noted that the increase in revenue was mainly due to the significant increase in data center Growth, Gaming and Embedded Systems sections. For example, Team Red’s EPYC series of server processors continued to sell well, driving a 45% year-over-year increase in data center revenue. AMD says this is the company’s “10th

time a quarter of record server processor sales in Q3’22”. Similarly, the game revenue of the red team also increased year-on-year 14% to $1.6 billion. The main contributor to gaming revenue was strong sales of the PS5 and Xbox Series S/X consoles, both of which use AMD-developed SoCs. However, AMD’s gaming segment actually recorded a drop in operating income from $231 million to $142 million due to weakness in “graphics card revenue and inventory, pricing and related expenses.” From this, we can reasonably infer that the GPU flooding caused by the crypto mining crash may still hit the company hard due to excess RX 6000 inventory and falling prices. Moving on, AMD explained that customer segment revenue A sharp drop of 40% year over year to $1.022 billion was due to a sharp decrease in CPU sales. AMD blamed the weaker processor shipments on “a weak PC market and a significant inventory adjustment across the PC supply chain.”



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