AMD 22Q2: PC 23Q1 bottoms out, with a fundamental reversal looming
AMD 2022 Q4 results: GAAP, revenue of $5.6 billion slightly supermarket expectations, up 16% year-on-year, 0.6% month-on-month, gross margin of 43% , down 7 percentage points year-on-year; For 2022, revenue was $23.6 billion, up 44% year-on-year, gross margin was 45% , down 3 percentage points year-on-year, and net profit was $1.32 billion, down 58% year-on-year.
1.Data centers grow strongly to the first business, smoothing PC business cycle impact
22Q4, AMD expects revenue of $5.6 billion, up 16% year-on-year. PC revenue fell 51% year-on-year to $90.3 billion, becoming the biggest drag on the company's revenue, accounting for 48% of the company's revenue from 21Q1, 1 to fall to 16% of 22Q4.
revenue trend
Data centers, on the other hand, grew 42% year-over-year, from 18% in 21Q1 to 30% in 22Q4. In the short term, the inventory cycle is more sensitive to the impact of consumer electronics such as PC and mobile phones. In the long term, it is a fundamental shift in semiconductor growth.
22Q4, AMD introduced the latest fourth-generation server chip, AMD benefits from better performance, continue to occupy a high share.
revenue breakdown
2.Expect PC business to bottom out at 23Q1
In 2022, there were 290 million pcs shipped, according to IDC, and AMD expects the overall PC market to 2023 another 10 percent to 260 million units. This is in line with Intel's previous forecasts, which 2023 between 270 million and 295 million pcs in the 22Q3 earnings season. In the 22Q4 earnings season, Intel expects the market to be close to the lower end of expectations, 270 million units.
But with accelerated inventory destocking and the release of the latest Ryzen 7000, AMD says PC KARMA will bottom out at 23Q1 and 23Q2 is expected to return to growth.
TSMC 22Q4 results are expected, this round of semiconductor inventory cycle is expected to bottom 23H1,23H2 could reverse.
Looking ahead to 2023Q1, AMD expects continued solid growth in data center, embedded business, and a rebound in stacked PC business that will drive the company's gross margin back to 50% , with AMD's 22Q4 gross margin at 43% .
3. The penetration of AI applications is an important driver of long-term growth in the future
Recently, CHATGPT has become so popular that the general public has a more direct perception of AI. The penetration of AI technology will drive the continuous demand for computing power.
4.Takeaway
This round of semiconductor cycle, it is hoped that 23H2 ushered in a reversal, the industry's leading companies ushered in the cycle inflection point time is expected to be more front-line.
We believe AMD is basically bottoming out on expectations that data center, embedded business continues to grow robustly and consumer electronics destocking is coming to an end. We Expect 2023-2025 AMD to have revenues of $24.1, $27.3, and $30.8 billion, corresponding to net income of $4.8, $6.3, and $7.7 billion.
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