Coronavirus: Layoffs Unlikely At AMD And Intel

TECH NEWS – An analyst believes that it’d cost them too much money to get the old-new workforce hired for the two companies, so they instead wait.

Business Insider reports about Timothy Arcuri’s thoughts – he is an analyst at UBS Securities. He thinks the two companies’ bad situation could turn around quickly, as after the pandemic ends or slows down, there could be a significant demand for AMD‘s and Intel products. Nvidia also sees that – in China at least – the demand for laptops and notebooks for homework has significantly increased. The supply chain is trying to catch up to the demand. Quoting Business Insider, „Demand-side visibility is very limited but supply-side constraints are clear,” he said. That’s why “companies are not doing anything to slow down and rather are more likely pulling more aggressively to provide comfort that near-term demand can be satisfied.”

The semiconductor-manufacturing companies, such as AMD and Intel, try to avoid layoffs because it’d be costly for them to rehire people, so they rather go with higher operating costs so the demand wouldn’t be higher for just a couple of weeks. So they take a hit now to have more profit later – console manufacturers spend a lot of money to create and promote their new console, so at first, they are sold at a loss until their costs are recuperated. The same went for the PlayStation 4, which quickly turned a profit, and now, only its granddad PS2 stands in front of it as the best-selling console of all time. Arcuri bases his claims on what he heard from Ernie Maddock, an industry veteran. The datacentre developments somewhat insulated the companies from the coronavirus’ impact until a bit later this year.

For Intel, UBS predicts a 10% hit in the client computing group, a 3% hit to the data centre, and a 10% hit to memory net sales for this quarter that started today. After this quarter that ends in late June, UBS doesn’t think COVID-19 will significantly affect Intel – in the worst scenario, their share value might drop to 46 dollars. (Currently, it is 54, after a 3% drop.)

For AMD, UBS doesn’t predict an impact on the revenue beyond the first quarter of the fiscal year. Their decrease would mirror Intel’s losses (a 3% revenue hit). In the worst scenario, the coronavirus might impact the third quarter. That’s October-December. How would the impact be possible? Well… guess what the PlayStation 5 and the Xbox Series X use – AMD hardware. Both are planned to launch this Holiday season, the same time frame. So… the consoles might be delayed in the worst scenario.

Arcuri’s report comes at a time when the American semiconductor industry is asking the US government to make its operations essential to the economy. The chips are essential for water, telecommunications, and energy systems’ infrastructure, plus digital workplaces and financial networks also require them, John Neuffer, the chief of Semiconductor Industry Association, claims. The SIA also argues that the fabrication of the semiconductors is done in cleanrooms, minimalising the possibility of the spread of the coronavirus this way.

So the semiconductor companies are also not that affected in the downfall of the economy throughout the world. The gaming industry is also seeing a windfall, but we’ll discuss this separately later today.

Source: WCCFTech

Please support our page on Patreon, so we can continue to write you the latest gaming, movie and tech news and reviews as an independent magazine.
Become a Patron!

Spread the love
Avatar photo
Anikó, our news editor and communication manager, is more interested in the business side of the gaming industry. She worked at banks, and she has a vast knowledge of business life. Still, she likes puzzle and story-oriented games, like Sherlock Holmes: Crimes & Punishments, which is her favourite title. She also played The Sims 3, but after accidentally killing a whole sim family, swore not to play it again. (For our office address, email and phone number check out our IMPRESSUM)

No comments

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

theGeek TV