PC Demand ‘Decidedly Weaker’ in Advance of Windows 10 Launch, AMD CEO Says

A day after Intel CEO Brian Krzanich disclosed his company had downgraded its PC sales expectations for the year despite any anticipated sales bump from the impending Windows 10 launch (see 1507160038), Advanced Micro Devices CEO Lisa Su similarly disclosed that her company’s Q2 revenue and gross margin decreased “more than we initially guided" at AMD's May 6 Analyst Day event "as the consumer PC market became decidedly weaker” thereafter. The “softer than expected” consumer PC demand in advance of the Windows 10 launch “caused our OEM notebook sales to slow late in the quarter, as our OEM customers and retailers actively work through their inventory of Windows 8-based systems,” Su said on a Thursday earnings call. That slowdown also hurt orders for AMD’s sixth-generation Carrizo processor, “as some OEMs chose to align Carrizo launches with the Windows 10 launch,” Su said. “We expect our mobile unit shipments will rebound and ramp in the second half of the year as more than 35 Carrizo platforms come to market globally.” With the passing of Q2, AMD is optimistic that the worst of the company’s problems are done for 2015, Su said. “Looking forward, we believe the second quarter will be our revenue trough for the year,” she said, citing as one reason the improving second-half OEM demand she expects as the market “transitions” to Windows 10. “That said, the PC market remains volatile,” she said. Chief Financial Officer Devinder Kumar seemed to contradict Su on the outlook for second-half PC demand from AMD’s OEM customers when he said: “Due to the shift in the PC market, we are now seeing a more challenging environment than we did in May with OEMs remaining very cautious about the second half, particularly the back-to-school cycle.” AMD representatives didn't comment.