In AMD’s first quarter 2026 financial report conference call, AMD CEO Su Zifeng warned that global memory supply will be further tight in the second half of 2026, and the pressure to increase the cost of consumer products will increase. Su Zifeng said that client and game business demand will decline in the second half of the year, and AMD is adjusting its business planning accordingly.
AMD Executive Vice President and Chief Financial Officer Jean Hu further pointed out that due to rising memory and component costs, gaming business revenue (including GPU and console) in the second half of the year is expected to drop by more than 20% compared to the first half of the year.
This is consistent with the judgment of executives such as Micron and SK Hynix. The entire industry is coping with component price fluctuations.
Why is the memory tight? AI eats up production capacity. The demand for HBM in data centers continues to rise. Samsung, SK Hynix, and Micron have all shifted their production capacity to HBM. The supply of consumer-grade DDR5 and GDDR6 has tightened, prices have increased, and the cost of graphics cards and host BOMs has increased.
The price of consoles has increased across the board, a double squeeze. Microsoft raised the price of its Xbox Series in two rounds; Sony raised prices across the board for new PS5 models in March, and recently even raised the price of the refurbished PS5 Slim by US$100 (approximately 682 yuan). Console prices increase → sales decline → orders for semi-custom chips decrease, and AMD’s gaming business suffers from both sides.
In contrast to the cold winter on the consumer side, AMD expects Q2 data center CPU revenue to increase by 70% year-on-year, and AI computing power demand remains the core driving force.
