TSMC feels no downturn in the market - November revenue soared 50.2 percent

TSMC management was optimistic this week about its prospects for contract manufacturing of semiconductor components for US customers, as its budget for building two facilities in Arizona reached $40 billion and its design capacity was tripled.
On a global scale the company also feels good because its November revenue grew by 50.2% compared to the previous year.Image source: TSMCIn accordance with the statistics published by TSMC in November the company made about $7.3 billion in current exchange rates, and this corresponds to the sequential growth of 5.9%, and in annual terms the revenue jumped by 50.2%.
We can not hesitate to call this year a period of significant growth for TSMC, because from January to November the company's revenue grew by 44.6% to $67.6 billion.
For not the easiest year in terms of geopolitics the dynamics is very decent.Let us not forget, however, that not everything is cloudy in TSMC activities.
The amount of capital spending for the current year, it still had to reduce from $40 to $36 billion.
At the last quarterly event the company representatives also complained about the decline in demand for products used in the PC and smartphone segments, some of which are produced on an advanced 7-nm process.
By the middle of next year, the company expects to regain the utilization rate of the respective production lines.
The company also has to postpone the modernization of its facilities due to delays in the supply of lithographic equipment.

NVIDIA gaming revenue collapsed by more than half, but server revenue grew by 31%--the company's net income fell by 72%

NVIDIA's long-awaited quarterly report was not a complete disappointment for analysts, as revenue of $5.93 billion slightly exceeded their expectations, and only earnings per share of $0.27 missed forecasts.
On the other hand, NVIDIA expects revenue in the fourth quarter not to exceed $6 billion, while investors were expecting a little more at $6.09 billion.
Only the server and automotive segments maintained positive year-over-year revenue dynamics.Source image: NVIDIAIn this area NVIDIA's revenue in the third quarter rose by 31% compared to the same period last year to $3.833 billion.
In fact, about 65% of all revenue in the last quarter the company received exactly from sales of components for data centers, and the presence of positive Consistent growth was hampered by weak demand in China, but even so, revenue increased by 1%.
As for the impact of U.S.
sanctions on the supply of calculator gas pedals in China, NVIDIA managed to largely offset it by the supply of alternative solutions to the PRC market - we are talking about recently introduced A800.The total revenue of the company at the same time decreased by 17% year-on-year, to $5.931 billion.
Consistent decline reached 12 %.
In the gaming segment, the company generated only $1.574 billion in revenue, down 51% from the same quarter last year, and down 23% from the second fiscal quarter.
By the way, the fourth quarter of fiscal 2023 is already on the NVIDIA calendar, so the captions in the table may be confusing to the uninformed reader.Image source: NVIDIAAccording to NVIDIA representatives, the dynamics of gaming revenue in the third quarter reflected the decline in supply of GPUs to its partners, who had to find ways to reduce accumulated inventory as quickly as possible.
Demand for graphics cards was undermined by both macroeconomic problems and the impact of lockdowns in China.
While a 51 percent year-over-year decline in gaming revenue was blamed on declines in both desktop and mobile graphics chip sales, the 23 percent sequential decline was primarily driven by mobile graphics solutions.There were few comments from the CFO about the impact of the cryptocurrency sector on NVIDIA's business.
According to Colette Kress, the transition of Ethereum to a new mathematical model reduced the degree of suitability of video cards for cryptocurrency mining.
In turn, this contributed to the influx of used graphics cards in the secondary market and reduced the demand for new graphics cards in some regions of the world, especially in its budget part, according to NVIDIA.In the direction of professional visualization NVIDIA's revenue decreased by 60% to $ 200 million, in annual comparison, the decline reached 65%.
In contrast, the automotive segment increased 86 percent to $251 million in year-over-year revenue and 14 percent in sequential revenue - primarily due to demand for autopilot systems.
For OEM and other, NVIDIA revenue decreased 69% year-over-year to $73 million and sequential revenue decreased 48%.
Sequential decrease in NVIDIA explain the decline in demand for Jetson platforms and components for notebooks, and revenue from sales of CMP gas pedals for cryptocurrency mining in the past quarter was negligible, although a year ago, reached $ 105 million.
Operating expenses of NVIDIA in the third quarter rose by 7% sequentially to $ 2.576 billion and by 31% year on year.
Operating income increased 20% sequentially to $601 million, but was down 77% year over year.
Net income rose 4 percent sequentially to $680 million, but was down 72 percent year over year.
NVIDIA's revenue per share also fell proportionally, from $0.97 last year to $0.27 this year.
It is noteworthy that NVIDIA's overall revenue in the segment of computing and network solutions grew by 27% year over year to $3.816 billion, although as you can guess in this case, the company helped the server segment.
Graphics sales alone were 24 percent less than the previous quarter, and 48 percent less than the year before - only $2.115 billion.
As a side note, NVIDIA was forced to write off $702 million in the third quarter due to a backlog in its inventory, but it was mainly due to problems with its server component A100 sales in China.
The breakdown was as follows: $354 million was for products that were already in stock, while $34 million was for products that were out of stock.

AMD's number of customer processors shipped in the third quarter fell 43%

At the quarterly reporting event, company executives talked about changes in the processor supply mix only in relative terms, but the 10-Q reporting form released later allowed for specific numerical figures.
AMD said the number of CPUs shipped in the quarter was down 43 percent, though the year-over-year average selling price was up 5 percent.Source image: AMDRemind that AMD's third-quarter revenue in the customer segment fell 40 percent from $1.7 billion to $1.0 billion, due to significant inventory build-up in customers' warehouses while demand decreased.
While AMD has seen a 43 percent year on year decline in volume terms for the segment, the average selling price has even increased 5 percent although yesterday AMD officials said the number was down in sequential terms.AMD attributes the decline in processor shipments in volume terms to an accumulation of substantial inventory in the customer warehouse and a decline in demand for the product, but the year on year increase in average selling price is due to an increase in the share of more than 10 percent of the total sales volume.
In this comparison, the number of CPUs sold to customers has decreased by 18%, and their average price has increased by 28%, but in this case due to the shift in demand towards more expensive mobile Ryzen models.
Apparently, by the third quarter, the moment of inertia in sales of mobile processors AMD exhausted itself, and only desktop versions of Ryzen among the more expensive ones were in sane demand.
By the way, AMD explained how its revenue changed in the gaming segment, which includes not only discrete graphics cards, but also components of game consoles.
On an annualized basis in the third quarter, it grew 14% from $1.4 billion to $1.6 billion, but since the beginning of the year growth reached 34% and corresponded to the level of revenue of $5.2 billion.
The engine of growth were gaming consoles, as noted yesterday, but gaming graphics cards have not only declined in revenue, but also reduced the number of shipped units.
The weakness in video card demand is attributed to worsening macroeconomic conditions.

AMD prepares for further revenue decline - PC market situation will improve only in 2023

AMD quarterly conference revealed that the company's revenue in the consumer segment on the background of declining demand for new PCs decreased by 40% compared to the same period last year.
At the same time, the trends in which the market is developing at the moment are not so unambiguous as to characterize them by any single definition.
It is only clear that now the market is falling, but recovery is not far off, believe AMD.Source image: AMDFirst, AMD CEO Lisa Su (Lisa Su) explained that revenue in the client area in the third quarter decreased, among other reasons, due to lower number of processors sold.
Their average selling price also declined in a sequential comparison, as more expensive processors were depleted faster in terms of inventory.
In year-on-year comparisons, the average selling price went up, and this can be explained by the continuing tendency to shift the focus towards more expensive models.
The head of AMD even added that the company's position is strong in the premium, gaming and corporate customer market segments, and it expects to strengthen its position in these areas going forward.
In the long term, the price structure of AMD products supply in the client segment should not change, as the head of the company is convinced.As noted earlier today, AMD management expects to reduce the number of computers sold in the whole market by 20% this year, and next year's decline will be limited to 10%.
The company will continue to actively get rid of inventory in the fourth quarter, and this process is somewhat accelerated in a sequential comparison, and in general by the end of the year AMD will be in better shape, but it should be understood that the revenue in the current quarter slightly reduced in the client segment, as well as in the gaming.
In the latter case, such dynamics can be explained by the fact that the peak demand for components for gaming consoles occurred in the third quarter, and in the fourth quarter it traditionally declines.
New gaming video cards with RDNA 3 architecture, which will be presented this week, though will be able to revive the market in the fourth quarter, losses from the decline in demand for game consoles components will not be able to cover.
But next year AMD expects to maintain revenue in the gaming segment at the level of the current year, which, given the high base effect formed by the last stages of the cryptocurrency boom is quite optimistic.In general, speaking of the PC market, AMD management expects to overcome major problems in the current quarter and early next year, and the rest of 2023 should already contribute to the PC market recovery, according to Lisa Su.
In the customer segment, she promises to introduce some new products (most likely the new Ryzen 7000), which, combined with the recently announced Ryzen 7000 processors, will help revive interest in the brand's products.Moreover, at retail, even in the third quarter, sales volumes of Ryzen 5000 processors grew, according to Lisa Su, but only when it comes to desktop models.
With the expansion of the range of motherboards with socket AM5 more affordable models in the current quarter will increase the popularity of the new family of Ryzen 7000 processors, as the company's management expects.
AMD is not ready for the aggressive pricing policy for the sake of reducing the inventory, because it is important for it to maintain the profitability indicators.
Last year, for example, the company did not fight for the segment of Chromebooks, because it was based on too cheap processors, the release of which was unprofitable for the company.

Ryzen processor sales collapsed by 40% - AMD has negative profits in the customer segment

AMD quarterly report was released a few hours ago, and in terms of revenue dynamics only slightly disappointed analysts, who were ready for the loss of the former momentum of the PC market.
The company's total revenue was up 29% year-over-year, but in the consumer segment it collapsed by 40% due to Ryzen processors, and had to end the quarter with operating losses in this area.Image source: AMDNet revenue for AMD fell 93% to $66 million, but the company attributes this to the costs associated with the Xilinx takeover deal.
At the end of the quarter AMD's revenue was $5.6 billion, and while a 29% increase in annualized terms cannot be characteristic of previous quarters, it still looks decent against the backdrop of competitors.
Profit margin decreased during the year from 48% to 42%, operating expenses increased by 113% to $2.43 billion, and the quarter ended with an operating loss of $64 million.
The company explains this by the growth of expenses on research and development, as well as by the consequences of the Xilinx takeover deal.
Due to the need to reduce inventories and review product prices in the past quarter AMD lost at least $ 160 million.Image source: AMDAs the head of the company Lisa Su (Lisa Su) said at the conference call, \"the third quarter was worse than we expected because of the deteriorating PC market and a significant correction of inventories in the supply chain in this segment.
In fact, the value of inventory at the end of the quarter increased 77% to $3.37 billion.
Even in such a difficult environment, the CEO added, the company managed to increase revenue in the data center, embedded and gaming solutions segments.
At least in the area of game consoles there was a positive trend.Image source: AMDIn the segment of data centers revenue grew by 45% year on year to $1.6 billion due to the popularity of central processors EPYC family.
Operating profit rose from $308 million to $505 million, and the operating margin rose from 28% to 31%.
The past quarter was AMD's tenth consecutive quarter in which its server processor sales volumes in cash terms broke a record.
EPYC processors of new Genoa generation are in high demand, as pointed out by AMD, although their formal announcement is only scheduled for November 10.
Shipments of Xilinx Programmable Matrixes and Pensando Computing Accelerators are up noticeably.
Lisa Su said she expects revenue growth in the server segment next year, especially cloud solutions in the U.S., but the Chinese market will be weak.Image source: AMDIn the client segment, AMD saw a 40% drop in revenue to $1 billion compared to the same quarter last year.
Processor shipments declined due to inventory surpluses while demand in the PC market declined, all of which resulted in an operating loss of $26 million in the segment.
Nevertheless, the shift in the supply mix in favor of the more expensive Ryzen desktop models allowed the average selling price to increase year-over-year.
The company only needs to add that the Ryzen 7000 processors with Zen 4 architecture introduced in the last quarter received praise in published reviews.
By the end of 2023, according to Lisa Suh, the capacity of the PC market should shrink by 10%.
This year, the market will shrink by the full 20%.Image source: AMDIn the gaming segment, which recently includes both graphics cards and components for gaming consoles, AMD managed to increase revenues by 14% year-on-year to $1.6 billion.While revenues in the direction of graphics cards declined, gaming consoles provided a positive trend, partially compensating for this.
In fact, gaming console components have been breaking revenue records for six consecutive quarters.
Operating profit in this segment fell from $231 million to $142 million.
The company had to generate less revenue from graphics solutions and faced increased inventory, as well as downward price adjustments.
The operating profit margin dropped from 16% to 9%.
Gaming consoles were in high demand because of Microsoft and Sony's preparations for the new season.
On the profile slide of the presentation AMD also did not forget to mention the preparation for the announcement of graphics solutions generation RDNA 3 with chips produced by 5nm technology.
Novelties are to significantly increase performance compared to current generation products.
As expected, they will be presented this week.AMD's revenue in the segment of embedded solutions grew by an impressive 1549% to $ 1.3 billion as a result of changes in the accounting structure and the acquisition of Xilinx at the beginning of the current

Intel has returned to profitability despite falling revenue

Intel Corp.'s third-quarter revenue fell 15% to $15.3 billion, in full compliance with its management's projections.
By the middle of the decade, Intel hopes to cut annual expenses by $8-10 billion, with savings reaching $3 billion as early as next year.According to the head of the company, staff cuts will not be a significant factor in savings, although they will start already in the current quarter.Image source: Intel Net income at Intel in the past quarter fell by 59% from $5.9 to $2.4 billion using Non-GAAP method and operating profit margin fell from 31.8 to 10.8 %.
Profit margin fell from 58.3% to 45.9% year over year.
At the same time, the company managed to increase spending on research and development by 12% to $5.4 billion.
Intel was forced to end the quarter with operating losses, but due to the tax refunds it showed a net profit.
The period ended with an operating loss of $175 million, but a net profit of $1.02 billion.In the client computing area, which is most dependent on PC market conditions, Intel's revenues fell 17% year over year to $8.1 billion, but grew sequentially by 6% due to an increase in average selling price.
Intel expects PC sales to dip 15 to 19 percent this year, primarily in the consumer and education sectors, as well as inventory adjustments in the OEM segment, but year-over-year sales should remain above pre-pandemic levels for the foreseeable future.
At the end of next year, PC sales should either remain at current levels or decline slightly.
According to the Intel representatives, from 270 to 295 million computers will be sold next year.
The head of the corporation even said that Intel was able to significantly strengthen its position in the PC segment in the third quarter.Image source: IntelIn the server segment last quarter, revenue at Intel dropped by an impressive 27% to $4.2 billion, but in the reporting documents the company proudly announced that it had started production of those models of processors Sapphire Rapids family, which were aimed at mass consumption, and also expects to slightly increase its market share in this segment by the end of the year.
In the past quarter, Intel's server revenue was undermined by weak demand in the Chinese corporate sector.Image source: IntelThe immediate issue of the upcoming staff reductions at the quarterly event Intel management spoke reluctantly, only noting its inevitability.
Intel's freelancers and contractors will be the first to suffer, they will feel Intel's desire to save money as early as this quarter.
Marketing and advertising costs will be cut.
Quantitative figures for staff reductions are not specified, but CFO Davis Zinsner let it slip that they will be significant.
CEO Patrick Gelsinger added that production costs would be prioritized over payroll in the search for cost savings.
By early October, the company had 131,500 employees.According to Intel's management, the company is on track to implement a plan to master five new process technologies in four years.
There were no delays in learning Intel 4 and Intel 3 technologies, the first prototypes of chips made with the Intel 20A and Intel 18A technologies were already running in the company's labs, and this also applies to products for a large third-party customer - at least the digital design of the respective product is ready and the first working samples exist.
In the customer segment, the company is going to introduce Meteor Lake processors (Intel 4) next year, at the same time Emerald Rapids servers will appear.
On schedule, the company is preparing to launch server processors in 2024.
The Meteor Lake series stepping design should be completed this quarter, and Intel's server segment managed to get the first Intel 3 Granite Rapids processor components last quarter, systems based on their samples are already working in Intel labs.
For the first time, the company will use ultra-hard ultraviolet (EUV) lithography as part of its Intel 4 and Intel 3 processors.
This will endow the respective products with breakthrough performance in terms of performance per watt of power consumption and density, according to Intel.Image source: IntelSome of Intel's business areas showed positive revenue growth in the third quarter.
Among them were networking and edge computing solutions, which grew revenue 14% to $2.3 billion and kept operating income at $75 million, despite an 85% decline from the same period last year.

Intel will lay off thousands of employees because of the downturn in the PC market

Intel is due to report its third-quarter financial results later this month, and the event will be preceded by a painful decision for the company to cut staff, according to knowledgeable sources.
The number could run into thousands of layoffs, with some divisions losing up to 20 percent of their jobs.Source image: IntelInformation about the impending downsizing at Intel was released this week by Bloomberg, but concerns about its inevitability have previously been expressed by anonymous company employees on social media pages.
As of the end of July, Intel had 113,700 employees, as many semiconductor companies had stopped hiring this summer, and at the previous quarterly conference, the CFO said Intel would be forced to cut costs in the third quarter of this year.By some estimates, Intel units will lose one in five employees in some cases, but that is more true for professionals in sales and marketing.
Analysts at Gartner and IDC reported this week that PC and laptop sales were down 15% or 20% in the third quarter compared to the same period last year.
Intel still depends about half of its revenue on the PC segment, so current market trends are undermining the company's financial performance.
According to Intel's own forecasts, its year-end revenue could decline by $11 billion from expectations.
Third-party analysts believe Intel's third-quarter revenue will fall about 15%.
Intel's profit margin is also approaching 45% versus its historical 60%.
In such circumstances, it is necessary to take measures to reduce costs, and laying off some staff is the traditional way to achieve it.Intel's fixed costs could reach $25 or $30 billion, according to some experts, and staff cuts would reduce that amount by an amount of 10 to 15%.
Intel's previous major downsizing took place in 2016, when about 11 percent or 12,000 employees lost their jobs.
Intel's stock price has fallen more than 50 percent this year, and it lost 20 percent in the last month alone.
Management needs to show resolve in the fight to cut costs in order to gain investor confidence.
Dividend payments are also in question, but the public offering of its Mobileye subsidiary should provide Intel with an influx of capital, which is good news amid such a gloomy trend.

AMD Ryzen sales plummeted by 40% last quarter - company underperformed by $1 billion, shares fell

The third fiscal quarter is barely over on the calendar of many companies, but that doesn't stop them from summing up the preliminary results of this reporting period.
AMD did not wait for full statistics to be published, and this week was forced to admit that revenue fell short of its own expectations by an average of $1 billion, and in the client area, mainly represented by Ryzen processors, and even fell by 40% year on year.Image source: AMD Management said that in the third quarter the company generated no more than $5.6 billion, while its own forecast earlier mentioned a range of $6.5 to $6.9 billion.
Profit margin instead of the expected 54% was barely close to 50%.
Such statements caused the decline in the company's share price after the end of the trading session by 4.5%.Speaking about the results of the quarter in more detail, CEO Lisa Su (Lisa Su) said that \"the PC market in the past quarter significantly sagged.
Even AMD's competitive range of desktop and mobile processors could not overcome the negative macroeconomic trend and customers maintaining substantial inventory of products yet to be sold.Specifically on the customer side, AMD reduced revenue by 53% sequentially and 40% year over year, to $1 billion.In the data center segment (server processors and gas pedals) revenue increased by 8% sequentially and 45% year over year, to $1.8 billion.
The Gaming segment (graphics and console chips) was another \"ray of light in a dark realm,\" with core revenues flat quarter over quarter, up 14 percent year over year to $1.6 billion.
Finally, the Embedded Solutions business increased revenues by 4 percent sequentially to $1.3 billion, primarily as a result of the Xilinx acquisition completed this year.
AMD incidentally had to write down $160 million due to product price adjustments and unrealized product inventory.
It is noteworthy that operating expenses in the third quarter even decreased from $1.6 to $1.5 billion against expectations.By the way, overall AMD revenue decreased by 15% only in sequential comparison, in annual terms it increased by a solid 29%, although against the background of the achievements of previous quarters such dynamics and does not seem expressive.