Print

Mail

wiki links

AMD foresees no change for 4Q

Advanced Micro Devices Inc, Intel Corp's biggest rival in personal-computer processors, repeated its forecast that fourth-quarter sales will be unchanged or rise at a percentage in the high single digits.

"Demand for flash memory continues to be weak as we expected, but our opportunities for increased PC processor revenues are somewhat better than we previously expected," so the company can meet targets, Chairman Jerry Sanders said.

Price competition in the market for flash-memory chips and a seasonal drop in PC processor sales in the first quarter will delay the company's return to profitability until the second quarter. Analysts surveyed by Thomson Financial/First Call don't expect the company to have a profit until the fourth quarter of next year.

Semiconductor sales slid this year, as demand plunged for the PCs, cellphones and electronic products that run on chips.

Advanced Micro and others are closing older plants, cutting jobs and trimming costs to cope with the slowdown. Analysts predict an industry wide revenue drop of 31 percent this year, the worst decline in history.

The decline may be abating now, Sander said.

"Semiconductor revenues overall are currently troughing," he said at an analyst meeting at Advanced Micro's headquarters in Sunnyvale, California.

The company will spend US$650 million on research and development and US$800 million more on new manufacturing equipment next year, both about the same as this year, Sanders said.

Advanced Micro is reducing manufacturing costs and widening its product line, trying to boost sales during the slump. Faster versions of its Athlon XP are due out this quarter.

Still, the environment is tough. Intel has chopped the cost of its Pentium 4 chip this year, trying to win back sales.

Advanced Micro is shrinking its circuits to 130 nanometers from 180 nanometers now, and it plans to switch to 90 nanometers in 2003 and then 65 nanometers when it opens a new plant in 2005.

The chipmaker is looking for a partner for that plant and wouldn't comment on which company it might be.

The company is also working with an Asian made-to-order chip company for the first time.

Taiwan Semiconductor Man-ufacturing Co (台積電) is the largest contract foundry in the world, followed by United Microelectronics Corp (聯電).

Advanced Micro, the second-biggest maker of flash memory behind Intel, expects worldwide flash sales to drop 29 percent this year, with Advanced Micro faring "a little" better.

"The sudden collapse of the communications market coupled with the slowdown in the world economy made a fool of all our previous forecasts," said Walid Maghribi, who runs the company's flash unit.

Flash sales will be little changed next year, he said.
This story has been viewed 1845 times.