AMD struggles to halt decline

By Alun Williams

Posted on 17 Oct 2002 at 11:42

AMD blames weak PC market demand for poor financial figures.

Once again AMD has seen mobile phone-driven success for Flash memory products, but once again this is not enough to offset the harsh conditions for the PC microprocessor market.

Recording a net loss of $254.2m, AMD reported total sales of $508.2m for the three months ending 29 September. Sales fell by 15 per cent from the last quarter and fell by 34 per cent compared to the third quarter of 2001.

The company is, however, expecting a seasonal improvement in demand for the fourth quarter.

Robert J. Rivet, AMD's chief financial officer, asserted that the company had made aggressive moves to 'align our product mix with current customer and end-user demand'. And he promised: 'We are accelerating our strategy to reset our business model and lower our corporate breakeven point.' This strongly suggests another round of cutbacks.

'We took more aggressive action in the third quarter than in the second quarter, which masked the progress that AMD is achieving in the marketplace,' said Rivet in an official AMD company statement. 'The actual consumption of AMD microprocessors, was higher in the third quarter than in the second quarter. While AMD's unit sales for desktop were hard hit by our actions, we believe we held market share in mobile unit sales and made substantial progress in server unit sales, increasing unit shipments by 17 per cent.'

These latest results can be compared to the $184m loss reported back in July for AMD's second quarter figures. While the company had seen success for Flash memory products, it performed badly on microprocessors for PCs. Sales generally fell 33 per cent in that quarter from the previous three months.