The list of difficulties for Advanced Micro Devices (AMD) (AMD) – Get Advanced Micro Devices Inc. Report goes on.
And it must be said that the semiconductor manufacturer did not need that.
Indeed, AMD has been grappling with questions about consumer demand for its products for several months now as recession fears intensify. Indeed if AMD recorded a 22% increase in its revenues to $5.9 billion in the first-quarter compared to the fourth quarter of 2021, the firm’s net profit fell by 19% from one quarter to another to $786 million.
In addition, first-quarter revenues included partial quarter financial results from the recently completed acquisition of Xilinx which closed February 14, 2022. Excluding Xilinx, AMD had record quarterly revenue of $5.3 billion.
A Shortfall Linked to Crypto
For investors, these results suggest that demand for consumer products is slowing. Attention is particularly focused on graphics processing units (GPUs) –chips used for video games –. Investors and analysts are specifically monitoring GPU prices.
AMD shares are down 20.7% since June 1.
Investors are wondering if the fear of recession and inflation will not force consumers to drastically reduce their spending. In such a scenario, their bet is that it is expenses deemed non-essential such as video games that risk paying a high price.
In addition, the demand for GPUs, which had been very supported by the crypto industry, should suffer from the difficulties currently facing this still young sector. Cryptocurrency miners use GPUs but faced with falling prices of digital currencies they are forced to reduce their costs and therefore turn to the secondary market of GPUs.
The soon transition of the Ethereum crypto platform from a transaction validation process requiring intensive use of computers, or proof-of-work, to a process requiring fewer computers, or proof-of-state, goes without no doubt affect AMD’s revenue.
Scroll to Continue
The company, aware of all these challenges, tries to find solutions. One of the avenues is external growth. AMD therefore acquired Xilinx, an industrial and enterprise chip designer. This will create new end-markets for AMD to sell hardware to.
AMD Hacked?
However, the chip maker will now turn to another equally urgent problem: RansomHouse, a group of hackers, has just announced that it has hacked AMD and stolen important data.
RansomHouse claims to be in possession of 450 GB of data from AMD stolen on January 5.
“An era of high-end technology, progress and top security… there’s so much in these words for the crowds. But it seems those are still just beautiful words when even technology giants like AMD use simple passwords to protect their networks from intrusion,” RansomHouse wrote on its data leak site. “It is a shame those are real passwords used by AMD employees, but a bigger shame to AMD Security Department which gets significant financing according to the documents we got our hands on — all thanks to these passwords.”
The group of hackers explains that it managed to illegally enter AMD’s system because of the company’s use of weak passwords.
AMD told the media that an investigation was underway into a data breach but did not confirm RansomHouse’s announcements. The company did not immediately respond to a request for comment.
RansomHouse burst onto the cybercriminal scene in December 2021 and has the same goal as other cybercrime groups although they deny it: to extort companies. They say that they do not encrypt data.
“Our primary goal is to minimize the damage that might be sustained by related parties. RansomHouse members prefer common sense, good conflict management and intelligent negotiations in an effort to achieve fulfillment [sic] of each party’s obligations instead of having non-constructive arguments,” the organization says on its dark website.
Earlier this month, RansomHouse claimed to be the author of a cyberattack against Shoprite (SRHGF) , the first African retail group with 2,943 stores in South Africa, Nigeria, Ghana, Madagascar, Mozambique, Namibia, DRC, Angola.
Source: https://www.thestreet.com/technology/amd-victim-of-a-bad-blow-at-a-very-bad-time?puc=yahoo&cm_ven=YAHOO&yptr=yahoo