Last year, AMD felt confident in its profits, as consumers bought computers en masse and cryptocurrency miners snapped up almost every video card that was available. But this year the situation has radically changed. And while AMD is making more money than before, thanks in part to better sales of data center hardware and gaming systems, the company’s third-quarter profits fell 93% from a year ago.
According to the earnings report, AMD made $66 million in profit in the third quarter on revenue of about $5.6 billion, reports The Verge. That’s not a particularly exceptional number on its own, but it gets even worse when you compare it to last year’s third quarter, when revenue was $923 million on $4.3 billion in revenue.
AMD says it missed its targets for the quarter due to “the softening PC market and substantial inventory reduction actions across the PC supply chain,” and that a big factor in the profit decline is its roughly $50 billion acquisition of chip maker Xilinx in February.
Despite the significant decline in profits and the fact that the market is not so heated due to demand from miners, AMD notes that they managed to increase sales in the gaming segment by 14% to $1.6 billion thanks to “higher sales of semi-custom products.” By this, most likely, the company means chips for the PlayStation 5, Xbox Series S and X, and Steam Deck game consoles.
AMD isn’t the only chip company suffering right now. Intel’s third-quarter profit also fell 85% year-over-year, and the company plans to make massive cost cuts that will include layoffs. It is not yet known how NVIDIA, AMD’s competitor in the field of graphics processors, is doing, the company will announce its quarterly earnings on November 16.