Chip clone manufacturer Advanced Micro Devices (AMD) has reportedconductor market. worse than expected second-quarter losses, signalling the continuing crisis in the global semi-conductor market.
The California-based vendor posted a net loss of more than $64.5 million and sales of $526.5 million for the quarter ending 28 June.
Sales were down 11 per cent on the same period last year and losses per share amounted to 45 cents, more than double estimates analysts had predicted.
The losses occurred despite strong sales of AMD's updated K6 chip. Sales of the chip, which goes head-to-head with Intel's range of processors, were up one million over the previous quarter.
But weakness in AMD's memory chip and communications units offset strength in the K6 business.
IDC senior analyst Kelly Henry said: 'The sector is slowing down and there are a lot of processors out there. It's hurting everyone, but it's even tougher for the smaller guys when they have a competitor that has 90 per cent of the market.'
AMD chairman Jerry Sanders argued: 'Weakening demand in the semi-conductor industry, coupled with price pressures on flash memory products, produced a decline in sales from our non-microprocessor business units.'
With the exception of its K6 operation, 'demand is as weak as I've ever seen', he admitted.
The price pressure has had severe consequences for AMD given that it pledges to undercut Intel's equivalent chips by 25 per cent.
As to whether AMD can continue to offer such discounts, Henry added: 'It's a matter of what Intel is going to do - it depends whether it wants market share or margin.'
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