AMD’s fiscal results show GPU sales are tanking, and AI PCs are hugely important – here’s what that means for the future of computers

AMD has just revealed its Q1 2024 earnings with some turbulent news on the GPU front – as well as an apparent focus on AI PCs when it comes to the Ryzen CPU side of the equation.

The Q1 results for the gaming division saw revenue fall precipitously to $922 million, which is 48% less than it was in the same quarter last year – and 33% down compared to the previous quarter, thanks to a “decrease in semi-custom revenue and lower AMD Radeon GPU sales.”

Semi-custom refers to revenue taken from consoles, but clearly Radeon graphics cards for PCs are struggling, as mentioned. Worse still, things won’t be getting any better by all accounts.

Wccftech reports that Jean Hu, Executive VP and CFO at AMD, commented: “We actually think the second-half will be lower than first-half that’s basically how we’re looking at this year for the gaming business. And at the same time, Gaming’s gross margin is lower than our company average. So overall, will help the mix on the gross margin side, that’s just some color on the gaming side. But you’re right, Q2 game is down a lot.”

Interestingly, AMD’s big talking points on the CPU side were Epyc processors (for servers) and Ryzen Strix Point, next-gen laptop chips which promise to seriously up the ante for AI (with a very powerful NPU). Team Red’s CEO, Lisa Su, announced that both of these Zen 5-based processor ranges were now sampling, and so are on track for a launch in the second half of 2024.

However, as per the Wccftech report, there was no mention made of ‘Granite Ridge’ CPUs which are also Zen 5 based, and will be the chips that go in desktop PCs.

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Analysis: Should we be worried about the future here?

The lack of mention of Zen 5 desktop (Ryzen 9000) could be read as a little worrying. It’s possible these chips were mentioned, and Wccftech didn’t pick up on it, but there’s certainly no talk of next-gen Ryzen for desktop in any of the materials we’ve seen related to AMD’s Q1 fiscal revelations.

Could this even mean that while Ryzen Strix Point APUs are on track, that maybe Ryzen 9000 might not be? We doubt it, and that’s reading too much into this. Indeed, all the rumors coming through about Ryzen 9000 – including the fact that this family name has now actually been used by two motherboard makers in BIOS updates preparing the ground for the next-gen CPUs – seem to point to the processors remaining on track. A Q3 launch seems the most likely bet, and there’s surely no way AMD has let Ryzen 9000 slip to next year.

So, don’t worry about that notion, but it is telling that AMD chose to focus on Strix Point, and more broadly, AI PCs – meaning laptops with beefy NPUs to accelerate AI workloads (these next-gen NPUs will be triple the speed, or more, compared to current efforts).

This is yet more food for thought regarding the push that’s being given to AI PCs, combined with recent revelations that pretty much every laptop maker is getting behind these devices, and will be producing notebooks with Snapdragon X Elite (ARM) chips. Those will be followed by Strix Point, and also Lunar Lake CPUs from Intel in the same AI-boosting vein, later in 2024. (All the NPUs from these CPU ranges will be in the same kind of 45-50 TOPS – trillions of operations per second – territory).

What about that big fall in gaming GPU revenue? That’s a clear concern for AMD, even though it’s downplayed by the execs, which is naturally par for the course when it comes to a financial announcement.

It’s perhaps not too much of a surprise, though, as AMD hasn’t pushed out any big launches this year, with just a pair of new RDNA 3 offerings. Of those, the RX 7600 XT has received a lukewarm reception. However, there’s also the RX 7900 GRE launching outside of Asia – and it’s a surprisingly strong mid-range offering, in truth (after some initial wobbles were dealt with). Indeed, the GRE is actually top of our ranking of the best graphics cards right now, even though it has still flown somewhat under the radar for some gamers.

We don’t expect much else from AMD until the launch of next-gen RDNA 4 graphics cards, and again, much as with Ryzen 9000, we’re hopeful of a Q3 launch. Especially if RX 7000 sales aren’t as strong as the rumor mill would have us believe, which seems to be the case going by the current state of Team Red’s coffers.

RDNA 4 could well turn things around, mind, with some seriously powerful mid-range offerings if the rumor mill is right.

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