WORLDTECHAMD Shifts to Data Center First as Gaming Revenue Falls Sharply
AMD chief executive Lisa Su now describes the Sunnyvale chipmaker as a data-center-first company, two days after the company reported a steep fall in gaming revenue. The shift comes as the data center business has become the clear centre of AMD's revenue, according to TechPowerUp.
Data center business dominates quarterly results
AMD reported a record $8.5 billion from its data center unit in the third quarter, up 97 percent. That segment now accounts for 64 percent of the company's $13.4 billion total revenue, up from 47 percent a year earlier.
The gaming segment, by contrast, fell to $773 million, or under 6 percent of revenue. AMD attributes the decline mainly to lower semi-custom sales, the custom chips it builds for Sony and Microsoft consoles, together with weaker demand for graphics products.
Gaming comparison and recent history
Compared with the previous quarter, gaming revenue was flat. The year-earlier third quarter, however, had been lifted by a 181 percent jump in console-driven sales to $1.3 billion, which makes the year-on-year drop look steeper.
Su's remarks to Yahoo Finance's Brian Sozzi on November 5 framed the company's priorities going forward.
Outlook for the data center division
Speaking to Yahoo Finance, Su said AMD's data center business should grow 50 percent sequentially from the third quarter to the fourth, and suggested it could more than double next year.
Open questions
- How much of the data center growth will come from AI accelerators rather than general server processors?
- Will gaming revenue recover once console demand changes?