AMD CPU Shipments were Down by up to 40% in Q3; Higher ASP as Desktop Ryzen Chips Got Pricier

Like its rivals, AMD had a bittersweet third quarter, falling short of estimates but still recording year-on-year growth of 29%. Team Red’s report card was notably better than Team Blue’s. While the latter’s data center business had a disastrous Q3, AMD’s revenue gain was mainly the result of a robust server/enterprise division. For the first time since the launch of the Ryzen chips, the client segment suffered from a humiliating operating margin or loss of -3%.

The client revenue was down from $1.7 billion in Q3 2021 to $1 billion this year. Similarly, the operating margin fell from 29% to -3%, or a loss of $26 million, vs. a profit of $490 the previous year. The decrease was primarily due to lower revenue. On the bright side, client processor ASP increased year-over-year, primarily due to a richer mix of Ryzen desktop processor sales. Essentially, the average price of the desktop Ryzen CPU saw a hike.

The graphics division has a similar story. Although the operating margin roughly halved from 16% to 9% YoY, the revenue was up 14%, thanks to strong sales of gaming consoles. As a result, operating income was $142 million, or 9% of revenue, compared to $231 million, or 16% a year ago. This can be primarily attributed to reduced GPU sales due to the crypto-fallout. The subsequent flooding of the channel inventory and retailers’ attempts to empty stocks further aggravated the situation.

Unlike Intel, the data center segment was AMD’s savior. The Epyc lead division had a strong quarter, courtesy of a 45% lift in revenue and a 31% increase in operating margin. The former grew from $1.1 billion last year to $1.6 billion this time around. Meanwhile, the operating income went from just $308 million to half a million in just a year.

Going by official estimates, the fourth quarter will be similar. Slim margins and small gains in quarterly revenue will likely be the themes again, as the client segment is unlikely to recover by New Year’s.

Areej Syed

Processors, PC gaming, and the past. I have written about computer hardware for over seven years with over 5000 published articles. I started during engineering college and haven't stopped since. On the side, I play RPGs like Baldur's Gate, Dragon Age, Mass Effect, Divinity, and Fallout. Contact: areejs12@hardwaretimes.com.
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