AMD shrugs off COVID chip shortage fears by focusing on premium PCs

AMD is concentrating on the high-end PC market, Su said, and has worked hard to manage its supply chain.

AMD shrugged off the concerns about supply-chain issues and COVID-related Chinese manufacturing shutdowns, reporting record revenue of US$5.887 billion (up 71 percent) for the first quarter of 2022. And while AMD's rivals expressed uncertainty regarding ongoing chip shortages as a result of COVID-related manufacturing shutdowns in China, AMD appears less worried. The topic wasn't even mentioned in the company's press release.

Intel warned that COVID shutdowns in China could negatively affect the company's revenue for the rest of the year. Microsoft, too, also said it was taking a conservative approach to the threat of COVID as well. But AMD chief executive Dr. Lisa Su said that the company had worked hard to mitigate supply-chain concerns. Attacking the premium segments of gaming PCs also insulated the company, she said. AMD reported record revenue in its Computing and Graphics segment, with Radeon GPUs and Ryzen CPUs selling for higher average prices than before, and Su said that the company continues to gain a greater chunk of the total client processor market in terms of revenue, as it has for the last two years.

Although the PC market is experiencing some softness coming off multiple quarters of near record unit shipments, our focus remains on the premium gaming and commercial portions of the market where we see strong growth opportunities, and we expect to continue gaining overall client revenue share, Su said.

By emphasizing the premium segments of the market, AMD can ship fewer processors, with potentially fewer disruptions. Su didn't rule out being affected by chip shortages, though she did minimize them: AMD expects the PC market during the second half of the year to grow seasonally, as it usually does. However, Su said that she expects sub-seasonal growth for the PC market, and that AMD has taken a bit more of a conservative perspective on the PC.

That being the case I think we've managed through the supply situations very well, Su added.