AMD’s profitability has collapsed as the PC and cryptocurrency mining industries decline

AMD was riding high last year as customers purchased computers in droves and cryptocurrency miners scooped up every GPU they could get their hands on, but the business has crashed and burned this year. While it is making more money than before, due in part to increased sales in the data center and gaming sectors, its third-quarter earnings fell by 93 percent from the previous year.

AMD made $66 million in profits in the third quarter on around $5.6 billion in sales, according to its financial release. That’s not a very great statistic on its own, but it becomes worse when compared to its Q3 performance last year when earnings were $923 million on sales of $4.3 billion.

AMD claims it missed its quarterly expectations due to “the declining PC market and significant inventory reduction activities throughout the PC supply chain,” and that the accounting it’s undertaking after purchasing chip firm Xilinx in February for an estimated $50 billion is a large role in its lower profitability.

The corporation did see some expansion in a few regions. While the market for gaming GPUs isn’t as hot as it was when they could be used to mine Ethereum, AMD says its gaming segment increased by 14 percent, or $1.6 billion, due to “higher semi-custom product sales,” which are most likely the chips powering consoles like the PlayStation 5, Xbox Series S and X, and Steam Deck. The firm also witnessed a 45 percent year-over-year increase in its data center segment, where it claims its Epyc chips are doing well, and its embedded business benefited greatly from the Xilinx purchase.

AMD plans to reveal a new generation of those CPUs on November 10th, as well as a new architecture for its GPUs on November 3rd. According to AMD CEO Lisa Su, who spoke on the firm’s earnings call, the business is also relying on a large number of customers purchasing consoles as the Christmas season approaches.

AMD isn’t the only chipmaker in trouble right now. Intel’s third-quarter earnings were also down by 85 percent year on year, and the corporation plans to make significant expenditure cutbacks, including layoffs. We won’t know how AMD’s competition in the GPU area, Nvidia, has fared until it reports profits on November 16th.