SAN JOSE – Annual PC processor sales may slow to “a new baseline” of low single-digit growth long term, said Advanced Micro Devices. The prediction came as AMD reported an 11 percent decline in quarterly sales and expectations of a dip of about one percent for the coming three months.
“We believe the PC baseline may be resetting to a new level,” said Rory Read, AMD’s chief executive, speaking on a conference call with financial analysts. “It’s clear global economic activity is slowing,” he said.
Client PC sales have declined for the last three quarters and have been below historical averages for the last seven quarters, Read said. AMD also noted a slowdown in consumer notebook sales generally, as well as weak sales for its own resellers in China and Europe.
“We think there’s pressure in the entire PC ecosystem going forward, and the right focus is to be very disciplined in our execution,” said Read.
In the short term, “macro headwinds will continue next quarter.” he said. “We expect notebook softness will continue in the second half with growth but at lower rate as buyers anticipate the rollout [in October] of Windows 8 and [OEMs] build inventory,” he added.A year ago
, International Data Corp. trimmed its forecast for PC processor sales to 9.3 percent from just over ten percent. Today
, IDC cut its overall semiconductor growth forecast for 2012 to 4.3 percent from 6-7 percent previously.
Read said ARM's progress in client PCs "will be muted for some time" but ARM-based systems could make "significant progress in the 3+ year time frame," he said. Windows-based tablets generally "could enjoy 20 percent market share" within three years, he added.
Advanced Micro Devices reported revenues of $1.41 billion, 11 percent down from the prior quarter and 10 percent down from the same period in 2011. The company reported net profit of $37 million, up from a loss of $590 million in the prior quarter but down from a profit of $61 million in the same period last year.
AMD’s channel partners were not able to get the company’s 32nm Llano processors until late last year. Resellers build up their inventory of motherboards waiting for those chips, an issue that slowed AMD’s growth in the quarter.
The company no longer has any constraints on access to foundry process technology. It expects a new batch of ultrathin notebooks using its processors will ship with Windows 8 in October.
AMD also felt weaker than anticipated sales for server chips, especially for business end users. “We believe Bulldozer [AMD’s new x86 core] will drive modest share growth [in servers in the] near term,” Read said.
Overall, AMD saw processor selling prices decrease sequentially and year-over-year. The company is shipping its first 28nm graphics processors this year and will ship 28nm PC processors in 2013.