Advanced Micro Devices Inc said third-quarter sales fell a more-than-expected 22 percent from the second quarter, as it cut computer-chip prices in response to increased competition from industry leader Intel Corp.
Sales totaled about US$766 million, the company said in a statement. Advanced Micro in August forecast a 15 percent third-quarter drop. The company today said it expects to post a loss before charges in the period of US$90 million to US$110 million, or US$0.26 to US$0.3 a share.
Advanced Micro, Intel's main rival in computer processors, last month said it planned to fire 15 percent of its workers to curb costs to cope with what analysts say will be the industry's worst year on record. Some personal computer makers and resellers this week said the attacks on the US hastened declining demand.
"The chip cycle is bottoming out, but is still going down at the moment," said Cristian Stoian, an analyst at Daiwa SBCM in London. "In the PC market, demand is poor and the market is weak." The shares of Sunnyvale, California-based Advanced Micro traded in Germany fell as much as 7.1 percent to 9.10 euros.
In recent months, Intel has slashed the price of its Pentium chips to regain market share lost to Advanced Micro, analysts said. It cut the price of the Pentium 4 PC processor by as much as 84 percent since the chip's November debut to attract customers.
Concerns about sluggish economies have led consumers worldwide to curb spending on computers, televisions and other electronics. Worldwide chip sales fell 42 percent in August, the Semiconductor Industry Association said Monday.
Advanced Micro is firing 2,300 workers and closing two older plants..
Advanced Micro shares rose US$0.54, or 6.4 percent, to US$9.00 on Thursday. They've dropped 62 percent in the past year, compared with a 52 percent drop for the Philadelphia Semiconductor Index. Intel has fallen 47 percent in the past year.
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