2023-11-01 00:25:44
U.S. semiconductor manufacturer Advanced Micro Devices (AMD) announced on October 31 that sales of new chips for artificial intelligence (AI) are expected to reach $2 billion (approximately 300 billion yen) next year. There was widespread optimism that demand for AI chips would offset the impact of weak orders for video game consoles.
In a conference call following announcing its financial results, AMD announced that its new chip MI300, which will compete with NVIDIA products in the AI accelerator market, will begin shipping in the next few weeks. Due to strong orders from large customers in the cloud computing industry, the company expects sales to reach $400 million this quarter and $2 billion for the full year 2024. It is expected to become the fastest AMD product in history to reach the $1 billion mark in sales.
This helped shift focus from the sales outlook, which fell short of most market expectations. According to the company, sales for the October-December (fourth quarter) are expected to be between $5.8 billion and $6.4 billion. The average analyst estimate was $6.4 billion.
Chief Financial Officer Gene Hu said in a statement that “reduced gaming sales” offset strong demand elsewhere. Sales of industrial, automotive, and network system chips are also expected to remain weak.
AMD stock initially fell 5.1% in following-hours trading, but most of the losses were offset by the company’s AI-related comments on the conference call.
In the July-September (3rd quarter) financial results, earnings per share excluding some items was 70 cents (market estimate 68 cents). Sales were $5.8 billion ($5.7 billion).
Sales by division were 1.45 billion dollars (1.23 billion dollars) for the personal computer (PC) chip division, 1.6 billion dollars (1.62 billion dollars) for the data center division, and 1.5 billion dollars for the gaming computer-related division. 10 million dollars (1.53 billion dollars).
Original title:AMD’s AI Optimism Helps Investors Look Past Tepid Forecast (1)(excerpt)
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