Published in PC Hardware

AMD issues Q2 sales warning

by on07 July 2015

Stock dips 13.8 percent

AMD has revised its second quarter sales outlook, warning its investors that sales might not be in line with company guidance. 

The new outlook warns that sales will be down eight percent quarter-to-quarter, significantly more than previous guidance of around three percent. Weaker than expected PC demand is to blame, claims AMD.

Accelerated Processing Units, or APU's were not selling as well as the company expected. The new outlook predicts that AMD will reach $1.0bn in sales.

Gross margin (non-GAAP) is expected to be at 28%, significantly below prior guidance of 32%. GAAP is four percent down from Q1 2015 32%. Lower APU PC volumes are to blame for that and a mix shift towards enterprise, embedded, and semi-custom chip sales.

AMD list a $33 Million GAAP change related to migrating previous 20nm designs to new 14nm / 16nm designs. Despite the fact that AMD COO at that time, Lisa Su, promised 20nm products in 2015, these projects have been canceled or readjusted. 

Back in November 2014 our industry sources were certain that there won't be 20nm GPUs coming in 2015. The same issue plagued some already announced SoC's, including highly anticipated Project Skybridge and the defunct Nolan APU. Both AMD and Nvidia had to stay away for 20nm manufacturing due to low yeields and high leakage, and AMD was affected on both the GPU and the APU side. As a result, AMD Carrizo is a 28nm design that has to fight with Broadwell notebooks, based on 14nm designs. 

We expect to see 14 / 16nm products from AMD in 2016, but it still not clear at what point, most likely in the later part of the year.

This revenue warning adjustment caused AMD stock to go all the way down to $2.13, which is a new 52-week low. This is 16 percent down year to date, and 13.8 percent from the $2.46 per stock when market closed last night.

At least on the GPU side AMD remains competitive, but 28nm APUs are a hard sell, especially with Intel's new 14nm designs in the fray. 

Last modified on 07 July 2015
Rate this item
(9 votes)

Read more about: