PC market weakness hits AMD core business

The ongoing decline in the PC market can be seen in Q3 numbers from chip maker AMD

Signs of the impact of the decline in the PC industry can be seen across the industry with Intel's recent results showing the damage from its involvement in that market and the latest numbers from its rival AMD also showing a shrinking return from its once core business.

AMD posted a 6% drop in PC chip sales to $790m in its third quarter results but is in a prime position to finish the year with a flourish thanks to its position as the processor supplier to the Xbox One and PlayStation 4, which helped the revenue from the graphics and visual solutions division jump by 110% to $79m.

Overall revenues beat expectations rising 15% year-on-year to $1.46bn and it forecast a 5% increase in the fourth quarter and its net income for Q3 was also solid with $48m a vast improvement on the $157m net loss a year ago.

Recognising the ongoing trends in the market the chip maker is doing its best to move away from its once core market and enter into other areas to reduce its reliance on the PC space.

"Over the next two years we will continue to transform AMD to expand beyond a slowing, transitioning PC industry, as we create a more diverse company and look to generate approximately 50% of our revenue from these new high growth markets," said Rory Read, AMD president and CEO

"We have strategically targeted that semi-custom, ultra-low power client, embedded, dense server and the professional graphics market where we can offer differentiated products that leverage our APU and graphics IP. Our strategy allows us to continue to invest in the product that will drive growth, while effectively managing operating expenses," he added.

Read said that it expected the PC market would decline by 10% this year and by the same amount in 2014 but it still "remains an important part of our business but the market is clearly in transition".

He added that it had the right channel and OEM relationships to be able to push into  commercial and consumer notebook markets.

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