AMD’s quarterly results show a sharp loss in overall operating income, but the company’s data center and embedded businesses look strong enough to help the company weather difficult economic conditions. Credit: Gordon Mah Ung AMD announced third quarter results this week, and while it posted a $64 million loss in terms of overall operating income—mainly due to its acquisition of Xilinx—but large gains in the company’s data center, embedded and gaming segments provided an encouraging note. Total revenue rose by 29% for the third quarter of 2022, to $5.56 billion from $4.31 billion one year ago. Gross profit also rose in year on year terms, from $2.08 billion in last year’s third quarter to $2.35 billion for the past three months. The decline in operating income was caused by much higher operating expenses, which more than doubled in the third quarter, rising from $1.14 billion a year ago to $2.42 billion in the most recent figures. AMD chalked the higher expenses up to its acquisition, in February 2022, of semiconductor company Xilinx, which cost the company roughly $50 billion. Additionally, higher spending on R&D also cut into AMD’s margins. Investors appeared to focus on the good data center and embedded segment news, as AMD shares rose 3.7% to $61.83 in Thursday afternoon trading. Data center uptake helps compensate for PC market decline Like the rest of the semiconductor industry, AMD’s growth was slowed somewhat by the decline in PC sales. That part of the company’s business declined from $1.69 billion in the third quarter of 2021 to $1.02 billion this year. However, other parts of AMD grew significantly to compensate for that decline, with the company’s data center net revenue rising from $1.1 billion last third quarter to $1.6 billion in the latest numbers, which represents a 45% increase. The Xilinx acquisition also helped bolster AMD’s numbers in the embedded sector – which is unsurprising given Xilinx’s focus on that area. The third quarter of 2021 saw AMD make just $79 million in net revenue from embedded products, while the latest quarter showed $1.3 billion in the same segment. The company said that it credits growth in the data center market to positive sales numbers for its EPYC processors, which have helped it take substantial market share away from Intel. While the server processor market has largely belonged to Intel over the past decades, that company’s market share has fallen from 98% five years ago to 88%, as of May of this year. AMD’s estimates for future revenue are bullish, with the company predicting a roughly 14% year-on-year rise for its fourth quarter, to a total of approximately $5.5 billion. AMD also stated that it expects growth both in year-over-year and sequential terms for its embedded and data center businesses. Related content news analysis Western Digital keeps HDDs relevant with major capacity boost Western Digital and rival Seagate are finding new ways to pack data onto disk platters, keeping them relevant in the age of solid-state drives (SSD). By Andy Patrizio Dec 06, 2023 4 mins Enterprise Storage Data Center news analysis Global network outage report and internet health check Cisco subsidiary ThousandEyes, which tracks internet and cloud traffic, provides Network World with weekly updates on the performance of ISPs, cloud service providers, and UCaaS providers. By Ann Bednarz and Tim Greene Dec 06, 2023 286 mins Networking news analysis Cisco uncorks AI-based security assistant to streamline enterprise protection With Cisco AI Assistant for Security, enterprises can use natural language to discover policies and get rule recommendations, identify misconfigured policies, and simplify complex workflows. By Michael Cooney Dec 06, 2023 3 mins Firewalls Generative AI Network Security news Nvidia’s new chips for China to be compliant with US curbs: Jensen Huang Nvidia’s AI-focused H20 GPUs bypass US restrictions on China’s silicon access, including limits on-chip performance and density. By Anirban Ghoshal Dec 06, 2023 3 mins CPUs and Processors Technology Industry Podcasts Videos Resources Events NEWSLETTERS Newsletter Promo Module Test Description for newsletter promo module. Please enter a valid email address Subscribe