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AMD lowers revenue expectations because of poor APU sales

Advanced Micro Devices on Monday lowered its revenue guidance for the quarter citing slow demand for its accelerated processing units by end-users and PC makers. The company expects its revenue and profitability to be lower than originally anticipated.

AMD claims that its sales in Q2 will be approximately 8 percent lower than revenue for the first quarter, or about $950 million, which will be AMD’s lowest revenue in more than a decade. The sequential decrease is primarily due to lower than expected consumer PC demand impacting the company’s original equipment manufacturer (OEM) APU sales. AMD believes that its second quarter channel sales and channel inventory reduction efforts will be in-line with its plans.

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AMD also said that its non-GAAP gross margin will drop to 28 per cent because of higher mix of semi-custom products in its mix.

AMD did not reveal whether demand for its “Carrizo” accelerated processing units for notebooks was lower than expected, or demand for its “Kaveri” product dropped because of competing offerings from Intel.

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KitGuru Says: Since AMD is stretching lifecycles of its APUs to over two years, it is not really surprising that demand for its chips is getting lower, especially keeping in mind that sales of PCs are weak in general these days.

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