AMD Records Highest Yearly Profitability Despite Declining GPU Demand

The firm is predicting a significant decline in its GPU sales in next quarter due to the dip in crypto

American semiconductor chip maker Advanced Micro Devices, better known as AMD, on Tuesday published its quarterly earnings report, which shows the company had “highest profitability in [seven] years.”

Despite the excellent results, the firm is expecting a revenue drop in the next quarter due to the plunge in cryptocurrency mining, a major market for the company’s graphics cards.

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According to the earnings report, AMD touched $1.42 billion in revenue in the last quarter of 2018, and for the whole year, the figure totaled at $6.48 billion, a significant rise compared to the previous year’s total revenue of $5.25 billion.

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Despite the impressive numbers, the company missed its revenue target by $20 million. “For the first quarter of 2019, AMD expects revenue to be approximately $1.25 billion, plus or minus $50 million, a decrease of approximately 12 percent sequentially and 24 percent year-over-year,” AMD noted in the report.

Lack of Crypto Mining Demand is Taking Down the GPU Industry

The chip maker is also concerned about the decreasing demand for the graphics card as it explained: “The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales.”

Moreover, AMD’s CEO Lisa Su predicted a fall in the GPU market as early as October 2017 when the cryptocurrency market was showing tremendous growth projection.

Yesterday, GPU making giant Nvidia’s share price plummeted 13 percent following a warning from its CEO about the company’s performance in the last quarter and the lowering of its revenue guidance for the fourth quarter of the 2019 fiscal year down to $2.2 billion, plus or minus two percent.

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