Results form AMD and Taiwan Semiconductor suggest AI demand can survive an economic slowdown—and geopolitical worries.
There’s a lot of hand-wringing in chip land lately. While the beaten down PC and smartphone markets seem to have stabilized, several leading chip makers that serve the auto and industrial markets—sectors that analysts thought were robust—stumbled this past week.
ON and Lattice said the economic weakness would likely last for several quarters. On Wednesday, Silicon Labs capped it off with one of the most disappointing forecasts in recent memory. The chip maker said it projected sales to be less than half the consensus this quarter because of similar economic difficulties. The stock was down as much 18% on the news.
The Wall Street Journal reported this week that $5 billion of Nvidia orders from China next year may be at risk because of the recent export controls. Shares of Nvidia are down 3.5% over the last month, though they’re still up 197% in 2023. But during the earnings call, CEO Lisa Su gave guidance for AMD’s data center AI chips for the first time, saying the products are expected to generate about $400 million in revenue for the fourth quarter and surpass $2 billion in 2024. The growth would make its MI300, AMD’s upcoming AI accelerator, the fastest product to hit $1 billion in sales in company history, Su added.
In a statement to Barron’s on Tuesday, Nvidia said there is “high demand” for its advanced AI systems, which take significant lead time to build.
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