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PC gloom claims latest casualty

AMD joins profit warning fray

AMD and Intel are already bitter rivals in the processor market, often competing for the same customers.

So, not surprisingly, AMD yesterday issued its own fourth-quarter profit warning only days after Intel made waves with its gloomy forecast for the quarter ahead.

AMD joined a long list of PC-related vendors suffering from weak demand. The chip maker is looking at fourth-quarter net income to stand at around 50 to 60 cents per share, AMD announced in a statement.

These numbers fall well below the predictions of analysts who forecast earnings per share of 68 cents for the period.

Like Gateway, Apple and Intel, AMD pointed to slow sales of PCs in retail markets and slow processor sales as indicators that the coming quarter will not finish as hoped.

Consequently, AMD expects fourth-quarter unit shipments of its PC processors will be only very slightly higher than the 6.8 million shipped in the third quarter. The chip vendor had been expecting to ship between 8 million and 9 million units of its PC processors in the fourth quarter.

While the wireless world seems to threaten the PC's dominance, chip makers AMD and Intel are looking for the PC to act as the central machine connecting various wireless devices together.

The two companies also claim their respective flash memory products still show strong growth and could be a bright spot in the coming quarters.

Additionally, despite the slowdown in PC sales, demand for chips to run in high-end computers also remains high, according to both AMD and Intel.


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