AMD loses money, Intel makes a profit

Battered by its ongoing price war with Intel, chip maker Advanced Micro Devices (AMD) has reported a second-quarter loss before adjustments of $US162 million on sales of $US595.1 million.

AMD also revealed that Atiq Raza, its president, chief technical officer and chief operating officer, will leave the company at the end of this week. Raza had been viewed as a potential heir to chairman and CEO Jerry Sanders.

The net loss of $US162 million for the quarter, which ended June 27, compares to a deficit of $US64.6 million, in the same quarter last year. The revenue figure is 13 per cent higher than sales in the same quarter last year, but down 6 per cent from the first quarter of 1999.

AMD has been waging a fierce price war with Intel and the results are largely a reflection of that battle. Average selling prices for AMD's K6 processors dropped from $US78 in the first quarter to $US67 in the current quarter, Sanders said in a teleconference.

"In the face of Intel's intensifying aggression in the consumer sector of the PC market ... further gains in unit market share or revenue growth are unlikely," Sanders said in a statement.

Intel has reported a second-quarter profit of $US1.7 billion on revenues of $US6.7 billion. Intel said increased sales of its lower-cost Celeron processors were responsible for dragging average selling prices below historic levels.

AMD will now look to its forthcoming Athlon processor for growth, Sanders said. Athlon, formerly known as the K7, is the follow-on to AMD's K6 and will be available in 500MHz, 550MHz and 600MHz versions. The first Athlon-based systems are due to go on sale in August from top-tier PC manufacturers, Sanders said.

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James Niccolai

PC World
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