AMD sounds alarm for lower 2Q chip sales

July 7, 2006 – AMD said that sales for its fiscal 2Q06 ended July 2 are expected to be approximately $1.215 billion, a 52% increase from a year ago, but down 9% from the prior quarter, instead of flat to slightly down. The company blamed slow sales of entry-level systems as well as mainstream mobile and desktop processors, although it touted strong demand for servers and workstations resulting in record sales of its Opteron line of server processors. Final results will be released July 20.

AMD’s decline seems to be at the hands of rival Intel, which has been fighting to stem losses in marketshare by reducing prices across several chip lines. “Data points suggesting Intel has been aggressively pricing in the low-end desktop space have been plentiful this quarter, leading to the desktop shortfall by AMD,” according to Citigroup analyst Glen Yeung, quoted by MarketWatch.

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