AMD: Processor prices dropped more than expected

Declining microprocessor prices have hit Advanced Micro Devices Inc. (AMD) even harder than it expected. Revenue for the third quarter, ending Sept. 30, came in at some US$766 million, down 22 percent from the second-quarter figure of $985.3 million, the chip maker said in a statement Friday. The company had previously predicted a quarter-to-quarter drop of about 15 percent.

On a yearly basis, revenue was down some 37 percent over the record $1.2 billion the company posted in the third quarter of 2000. Sales of flash memory products dropped about $100 million from the second to the third quarter of this year, in line with expectations, which AMD chalked up to weakness in the communication sector and major customers' excess inventories.

Sales of PC processors remained on a par with the previous quarter, when AMD sold a record 7.7 million units, but aggressive competition drove prices down sharply.

AMD expects to report a pro-forma net loss of between $90 million and $110 million for the quarter, which corresponds to a loss of between $0.26 and $0.31 per share, not including one-time special charges of between $80 million and $110 million.

Full results for the third quarter are due to be announced Oct. 17.

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Rick Perera

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