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AMD: PC CPU sales possibly reduced to single digits

Posted: 23 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:CPU Sales? PC processor sales? 32nm Llano processors?

Advanced Micro Devices have stated that PC processor sales may slow to a "new baseline" of low second-digit growth long term. This prediction came as AMD reported an 11 percent decline in quarterly sales and expectations of a clip of about one percent for the coming three months.

Rory Read, AMD's chief executive, noted that the slowdown of global economic activity is causing the PC baseline to reset to a new level.

Client PC sales have declined for the last three quarters and have been below historical averages for the last seven quarters, Read said. AMD also noted a slowdown in consumer notebook sales generally, as well as weak sales for its own resellers in China and Europe.

Read also predicted that the PC ecosystem will continue to experience pressure moving forward. With the increasing pressure, Read believes that the right course of action is maintaining discipline in their execution.

In the short term, "macro headwinds will continue next quarter." he said. "We expect notebook softness will continue in the second half with growth but at lower rate as buyers anticipate the rollout of Windows 8 and [OEMs] build inventory," he added.

A year ago, International Data Corp. (IDC) trimmed its forecast for PC processor sales to 9.3 percent from just over ten percent. Today, IDC cut its overall semiconductor growth forecast for 2012 to 4.3 percent from 6-7 percent previously.

Read said ARM's progress in client PCs "will be muted for some time" but ARM-based systems could make "significant progress in the 3+ year time frame," he said. Windows-based tablets generally "could enjoy 20 percent market share" within three years, he added.

Advanced Micro Devices reported revenues of $1.41 billion, 11 percent down from the prior quarter and 10 percent down from the same period in 2011. The company reported net profit of $37 million, up from a loss of $590 million in the prior quarter but down from a profit of $61 million in the same period last year.

AMD's channel partners were not able to get the company's 32nm Llano processors until late last year. Resellers build up their inventory of motherboards waiting for those chips, an issue that slowed AMD's growth in the quarter.

The company no longer has any constraints on access to foundry process technology. It expects a new batch of ultrathin notebooks using its processors will ship with Windows 8 in October.

AMD also felt weaker than anticipated sales for server chips, especially for business end users. "We believe Bulldozer [AMD's new x86 core] will drive modest share growth [in servers in the] near term," Read said.

Overall, AMD saw processor selling prices decrease sequentially and year-over-year. The company is shipping its first 28nm graphics processors this year and will ship 28nm PC processors in 2013.

- Rick Merritt
E.E. Times US

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