AMD’s GPU sales have halved, but processors and AI accelerators are growing

AMD it is mainly known for its processors and graphics chips. Now the company has published its financial results, where it indicated the direction of the company and how the individual divisions are doing. The company as such is doing slightly better than last year. Compared to Q1/23, its revenues rose slightly from USD 5.35 billion to USD 5.47 billion, from a loss of USD 139 million to a net profit of USD 123 million according to GAAP. But the Non-GAAP metric shows an increase in net profit from USD 0.97 billion to USD 1.01 billion. Considering these numbers, the company is doing quite well.

As with Nvidia, AMD’s growth was mainly driven by the division Data Center, i.e. accelerators for artificial intelligence and others. In the case of AMD, these are, for example, the Instinct MI300X models. The division’s revenue thus grew from 1.3 billion to 2.34 billion USD, which is an 80% increase. The operating profit also went up, very significantly from 148 to 541 million USD. AI is simply pulling more than one company up. At the same time, this division also includes EPYC server processors, which are used in almost 900 cloud instances from AWS, Google, Oracle Cloud, Microsoft Azure and others. At the same time, the company announced that EPYC Turin processors on the Zen 5 architecture are still planned for this year, and test samples are already being sent out.

Segment Client including common processors has also significantly improved, which was also supported by the new Ryzen 8040 mobile processors with Ryzen AI, but AMD also mentions the first Ryzen Pro desktop processors with NPU. Here it grew from USD 739 million to USD 1.37 billion (+85%), an operating loss of USD 172 million turned into an operating profit of USD 86 million. The Strix Point processors should then arrive before the end of this year.

It’s very bad for the division Gaming, i.e. gaming GPUs. From revenues of USD 1.76 billion, the division fell by 48% to only USD 929 million. Fortunately, it remains profitable, although there was a significant drop here too, from 314 to 151 million USD. The launch of the Radeon 7900 GRE did not help the company either. Sales of Radeons as well as various custom-made solutions (probably meaning console variants here) have been falling.

Like Gaming, the division also fell Embedded. It was a 46% drop from $1.56 billion to $846 million in revenue and from $798 to $342 million in operating profit. However, AMD mentions that it recently introduced a new generation of ARM Versal AI Edge Gen 2 processors (but they will not be available until the end of next year) and that Sony has chosen Artix-7 and Zynq UltraScale chips for its automotive lidar solutions.

The company’s shares fell 9% to $144 yesterday.