Advanced Micro Devices (better known to computer gamers as AMD, a U.S.-baed producer of semiconductors, computer processors and the like), is having a rough year, reporting nearly $200 million in losses during Q3 2015 alone.
While the computer gaming industry seems to be doing just fine thanks to services like Steam, GOG, Origin and a constant stream of Humble Bundles, the industry that builds those rigs said games are actually played on is in a bit of a slump.
This is perhaps no better evident than in the case of AMD, who recently announced quarterly results including a loss of a whopping $197 million, according to a report from Bit-Tech. As the original report points out, AMD has been losing ground to competitors like Nvidia and Intel for some time now, but not on a level of this magnitude.
According to AMD president Dr. Lisa Su, however, the company is trying to make up the difference by initiating some new tactics.
AMD delivered double-digit percentage sequential revenue growth in both of our segments in the third quarter. We continue to take targeted actions to improve long-term financial performance, build great products and simplify our business model. The formation of a joint venture of our back-end manufacturing assets is a significant step towards achieving these goals and strengthening our balance sheet.
That all sounds pretty optimistic considering the size of AMD’s most recent losses, especially when projections for the next quarter forecast further losses. To counteract this, AMD is partnering up with Nantong Fujitsu Microelectronics to handle assembly and testing of various products. That will mean a smaller cut of the profits for AMD, but it also means a smaller cost to their own pocketbook before shipping product to consumers.
According to the original report, a big portion of these most recent losses is due to poor sales of older model units.
So all of that begs the question: Is this an issue that’s affecting all of PC manufacturing or just an example of one of the bigger competitors finally being muscled out by the competition. With losses like these, it seems like AMD will have to have a few additional tricks up its sleeve to recover.
If you’re not running anything with AMD under the hood right now, it’s likely this news isn’t making you worry too much. But a big company like Advanced Micro Devices winding up in this position could be an early warning for bigger underlying issues. Be sure to let us know your thoughts on the matter in the comments section below.