AMD Restrained CPU and GPU Sales in 2H-2022 to Avoid Unsold Inventory


AMD in its Q4-2022 earnings release call disclosed to investors that it “undershipped” chips in the second half of 2022 to keep prices (margins) high and save itself from unsold inventory, in the wake of a steep slump in the PC market. “We undershipped in Q3, we undershipped in Q4,” AMD CEO Dr Lisa Su told investors. “We will undership, to a lesser extent, in Q1 [sic],” she added.

Major chipmakers are experiencing an unprecedented slump in demand compared to the spike in demand during the COVID 19 pandemic lockdowns. With high energy prices and the ebb in the pandemic causing much of the white-collar workforce to return to office, there’s no longer the kind of demand the PC industry saw in 2021. On the other hand, undersupplies artificially hold prices high, with graphics cards and desktop processors still being unreasonably pricey compared to previous generations. AMD calculated that it would rather make less revenues on fewer chips shipped, than end up with a bloated unsold inventory that it would have to sell at a thin margins, or even at a loss. The company on Tuesday beat expectations to report good Q4-2022 results, which received a thumbs-up from investors.