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The newly-revamped chip maker now expects revenue for the quarter ending 27 December to decline around 25% from Q3 to roughly $1.19 billion.

As recently as November the company said it expected revenue to remain roughly the same as Q3, indicating the severity of the decline in the PC market and the wider economy.

Analysts believe the announcement could have knock-on effects for other technology companies, not least Intel. "The magnitude of AMD's miss obviously raises the risk that Intel will also pre-announce revenue worse than its already revised range," claims Craig Berger of FBR Capital Markets.

AMD split into two companies earlier this autumn, with processor manufacturing spun-off into a separate entity called The Foundry Company, leaving AMD concentrating on chip design.

The company is expected to announce the launch of its new Phenom II processors early next year, as it attempts to claw back ground on Intel's Core i7.