Chip sales give AMD muscle to take on Intel

By Alun Williams

Posted on 21 Jan 2004 at 16:23

It's been a long road back to profitability for AMD, the long standing chip rival to Intel. Its latest financial results, however, show the Athlon XP processor driving the company back into the black.

Strong demand for the AMD Athlon XP desktop processor line saw sales increase 38 per cent (year-on-year) to $581mn for the Computation Products Group (CPG) . Mention was also made of strong sales for the Athlon 64 FX, which - the company said - was becoming the platform of choice for
enthusiasts.

Flash memory sales of $566mn represented a large 161 per cent jump from the same period a year ago. Its Flash memory business as a whole, however, still operated at a loss of $3mn for the company's fourth quarter.

'Fourth quarter profitability was driven by solid sales growth across all business lines,' said Robert J. Rivet, AMD's chief financial officer. 'We saw positive growth across all microprocessor brands, including strong AMD Athlon XP processor sales in the fourth quarter. Furthermore, we continue to
lead the industry to pervasive 64-bit computing based on increasing adoption of AMD Athlon 64 and AMD Opteron processors.'

While AMD makes bullish noises about 64-bit computing, as you would expect, the real impact of the new Athlon64 will still be seen in succeeding quarters.

As for the latest figures themselves - covering the three months ending 28 December, 2003 - AMD reports a net income of $43mn based on sales of $1.2bn (a 76 per cent increase on the same period a year ago).

In terms of outlook for the coming three months, AMD is not getting carries away. It says it expects sales to fall slightly, as seasonal patterns hold sway, i.e. a post-Christmas lull.