Personal Tech
Commercial PC demand expected to cushion broader slowdown
AMD expects its PC CPU shipments to decline in the second half of the year because
of the memory supply crisis, but hopes that expanding corporate sales will pick
up the slack.
During a conference call for the chip firm’s Q1 2026
financial results, chair and CEO Lisa Su outlined the effects the memory
shortage is having, even on some of the biggest firms in the industry.
“We are planning for second half PC shipments to be lower
due to higher memory and component costs,” Su told analysts on the call. “Against this backdrop, we still expect our Client revenue to grow
year-over-year and outperform the market, driven by the strength of our Ryzen
portfolio and expanding commercial adoption.”
As Reg readers will be aware, some types of memory
have more
than quadrupled in price since last year, due to the makers switching their
factory capacity to favor HBM and other AI server memory types, rather than the
DRAM and NAND flash used in desktops and laptops.
AMD has so far been doing well here, with revenue from its Client
and Gaming segment up by 23 percent compared with the same period last year, to
$3.6 billion. But this is set to change.
“We expect second half demand in gaming to be impacted by
higher memory and component costs. We now expect second half gaming revenue to
decline more than 20 percent compared to the first half,” commented CFO Jean
Hu.
As previously reported by The Register, the huge hike
in memory costs is having
an impact on PC sales, with analyst Gartner estimating that we will see a drop
in shipments of more than 10 percent during 2026.
Worst affected will be budget models, because vendors won’t
be able to build them at a price that will satisfy cost-conscious buyers – those
looking for systems below about the $500 mark.
Conversely, the forecast price rises triggered a buying
spree among corporate customers, as organizations bring forward any planned
hardware refresh cycles in an effort to purchase before the cost gets too high.
This, and increasing adoption of AMD’s Ryzen chips inside corporate
PC boxes could explain the firm’s expectation of higher client revenue.
Su indicated that AMD was happy with the deal it was getting
from its memory vendor partners, and said the company has secured enough supply
to meet and exceed its targets.
“We are expecting that there could be some demand impact as
a result of the memory price increases on things like the PC business in the
second half of the year as well as the Gaming business. So we’re taking that
into account in our overall model,” she said.
“And we continue to work closely with the memory providers
as well as our customers to ensure that every time we ship a CPU or GPU, then
it’s paired with the memory on the other side so that we don’t have compute
that is not being deployed.”
“What we’re focused on is ensuring that we continue to make
good progress on the Commercial business and the premium segments of the
market. So we believe that we will continue to grow on a year-over-year basis
for the Client business compared to last year,” she said.
AMD’s overall revenue for Q1 was $10.25 billion, up roughly
38 percent on the same period last year, which the firm attributed to strong
demand for AI infrastructure.
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