AMD Projects 20% Gaming Revenue Drop in H2 Citing Rising Memory & Component Costs

It’s not hidden anymore that the gaming industry is under tremendous pressure given the situation around memory and internal component costs. In the recent past, we have come across reports about a whopping jump in the price of gaming handhelds as well as the prices of mainstream laptops, including Microsoft Surface lineup. Now, AMD is warning that the memory crunch is likely to extend pressure across the gaming segment. This comes during the earnings call for the first quarter of 2026, which the company shared yesterday.

AMD warns of dip in the gaming segment in the second half of the year

During the earnings call, CEO Lisa Su noted that AMD expects gaming revenue to decline by around 20% in the second half of the year. The primary reason appears to be higher memory and component costs, which are making it more expensive to develop gaming hardware.

At a time when demand for GPUs and gaming chips remains relatively stable, it is the supply side that is causing issues. Memory pricing has been trending upward, and that is starting to impact margins across the board.

That being said, AMD’s overall business is not slowing down at the same pace as it reported $10.1 billion in Q1 revenue. The company is doing fairly well when it comes to segments like data center, as it continues to show strength, helping it balances the expected dip in gaming.

Memory crunch to extend further

Speaking of what lies ahead, Lisa Su also pointed towards memory crunch continuing into the coming quarters. This could affect supply further and keep costs elevated, not just for AMD but for all the players across the chip industry.

Back in earlier cycles, similar conditions have led to price hikes and limited availability of gaming hardware. It is still unclear if things will escalate to that level again. There is also the possibility that AMD may shift more focus toward higher-margin segments if the gaming slowdown deepens. That could reshape priorities, at least in the near term.