TECH NEWS – AMD is planning for weaker demand in the PC and gaming segments, so the RAMpocalypse continues to hit us.
AMD expects rising memory and component prices to cause demand for PCs and gaming products to decline in the second half of this year. In its Q1 2026 earnings report, AMD’s Client and Gaming segment posted a 23% year-over-year revenue increase, reaching $3.94 billion, while showing a 9% decline compared to the previous quarter. According to AMD, the client segment, which includes desktop and laptop categories, enjoyed strong popularity thanks to a strong product portfolio. This includes the latest Ryzen 9000X3D CPUs for desktops and the Ryzen AI portfolio for laptops, resulting in impressive sales growth of more than 50% compared to the previous year. OEMs such as Dell, HP, and Lenovo expanded their offerings with the Ryzen AI 300/400 series for the mainstream segment, as well as Ryzen AI Max for the high-end AI/Workstation segment.
While AMD expects demand for Ryzen CPUs to remain stable in the second quarter of 2026, total shipments are expected to decline in the second half of the year. This is mainly due to the RAMpocalypse, which has caused memory prices to rise sharply because of growing demand from the AI industry. Industry sources have already warned of an additional imminent price increase on top of the 10% hike already imposed on consumer chips. These prices are expected to affect both Ryzen desktop and Ryzen laptop CPUs.
The gaming area, which includes both the Radeon and console segments, is being more heavily affected by rising memory and component costs. According to AMD, gaming revenue declined by 15%, and the company expects a further decline of 20% or more compared to the first half of 2026. Both Microsoft and Sony have announced price increases for PlayStation 5 and Xbox Series consoles. Since further price increases are expected in the second half of the year for components, including memory, another price hike for these consoles may follow.
Jean Hu, AMD’s chief financial officer, said that the 15% decline in gaming revenue was in line with the company’s expectations. AMD expects gaming demand in the second half of the year to be negatively affected by higher memory and component costs, and currently expects gaming revenue to decline by more than 20% in the second half compared to the first. Speaking about memory supply constraints, AMD’s CEO said that although memory supply remains tight for everyone, the company has secured the supply needed to meet and exceed its targets by working with partners. Higher demand is being seen in the data center segment, which is not surprising, since the data center ecosystem includes memory consumed by AI. Despite strong year-over-year growth and momentum for Ryzen AI and gaming products, AMD expects overall PC and gaming demand to weaken in the second half of 2026. The primary reason is the sharp rise in memory and component prices caused by the explosive growth in AI demand.
“In the desktop category, we expanded our Ryzen lineup to include our latest X3D processors, which deliver top-tier performance for gaming, content creation, and professional workloads. We also introduced the Ryzen AI 400 and Ryzen AI Pro 400 series desktop CPUs to extend our AI PC offerings to consumer and commercial systems. In the mobile sector, we achieved robust growth fueled by a richer product mix, with Ryzen 400 mobile PC shipments surging and commercial adoption increasing. The commercial sector was a key highlight of the quarter, with Ryzen Pro PC sell-through increasing by over 50% year-over-year, as Dell, HP, and Lenovo expanded their AMD product offerings. Looking ahead, we expect demand for our Ryzen CPUs to remain solid in the second quarter. However, we are planning for PC shipments in the second half of the year to be lower due to higher memory and component costs. Despite this, 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.”
“Similar to the PC market, we believe that demand for gaming in the second half of the year will be impacted by higher memory and component costs, and we are planning the business accordingly. From a supply standpoint, we are very happy with our partnership with memory vendors, and we have secured enough supply to meet and exceed our targets. So let me be clear: it is a tight memory environment, but I think we have a very strong partnership with our memory providers. Now, regarding your comments on inflationary pressures, this is something everyone in the industry is dealing with. During this time of tight supply, we are seeing cost increases on the memory side. I think we are all working through that. We are actually seeing it unfold in the data center market because of the demand for AI computing. People are largely focused on ensuring supply assurance. The larger impact we are watching is the effect on consumer markets. And as we mentioned in our prepared remarks, we expect memory price increases to have some impact on demand for products like PCs in the second half of the year, as well as gaming”, Lisa Su said.
Although the company expects client revenue to continue growing and outperforming the broader market, higher costs will likely have a negative impact on shipments and gaming revenue.
Source: WCCFTech
