AMD cuts sales forecast, blames weak economy

AMD said the weak economy hurt demand for its microprocessors

Advanced Micro Devices on Thursday cut its revenue forecast for the third quarter, saying a challenging economy hit demand for all its products.

The chip maker now expects revenue for the quarter ending Sept. 29 to be down about 10 percent from the second quarter. In a previous forecast, AMD said revenue would decline by no more than 4 percent, and might even increase slightly.

AMD said it was also affected by lower selling prices for its chips and poor utilization of its manufacturing facilities. It will take a US$100 million inventory charge for unsold products.

The write-off could be tied to its "Llano" Fusion chips, which started appearing in PCs in the middle of last year, said Nathan Brookwood, principal analyst at Insight 64.

AMD had supply and manufacturing issues with Llano and demand for the chip was poor. The company is doing better with a successor to Llano code-named Trinity, which became available in laptops and PCs in May.

AMD designs PC, server and graphics processors that are then manufactured by contract firms such as GlobalFoundries. Demand for PCs has been slumping, with IDC and Gartner reporting PC shipments in the third quarter dropping by 8.5 percent from a year earlier.

"The whole PC sector is under pressure. AMD is closely tied to PCs," Brookwood said.

AMD could benefit from Microsoft's launch of Windows 8, which will ship in PCs starting the end of this month, Brookwood said. Analysts think buyers have been holding off on PC purchases until the new OS arrives.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Brand Post

Bitdefender 2019

Taking cybersecurity to the highest level and order now for a special discount on the world’s most awarded and trusted cybersecurity. Be aware without a care!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?