AMD forecasts Q4 revenue below estimates as supply chain constraints weigh

(Reuters) – Advanced Micro Devices on Tuesday forecast fourth-quarter revenue that fell just short of estimates as supply chain constraints hampered its ability to meet strong demand for AI chips while the PC market grew more slowly than some investors expected.

Shares of the Santa Clara, Calif.-based company fell 5% in extended trading. The stock is up about 10% so far this year.

Demand for AI chips from big tech companies including Microsoft and Meta has grown much faster than their supply from AMD and bigger rival Nvidia, limiting chip companies’ ability to take advantage of the order surge.

Capacity to produce AI chips will be very tight by 2025, the world’s largest contract chipmaker TSMC said in July, marking a significant obstacle to the supply of these advanced semiconductors.

The company expects revenue of $7.5 billion, plus or minus $300 million, for the fourth quarter, compared with analysts’ average estimate of $7.54 billion, according to data compiled by LSEG.

The company reported revenue of $6.82 billion for the third quarter, compared to estimates of $6.71 billion.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D’Silva)