AMD warns of falling short in Q4

SAN FRANCISCO: AMD Inc. said that tough competition in the memory-chip market would push its fourth-quarter revenue below Wall Street's expectations.

Sunnyvale, California-based AMD said it now expects that revenue will be "up slightly" from the $1.24 billion in the third quarter, and that operating income will be "down significantly" from third-quarter operating income of $68.4 million.

"In a competitive and challenging NOR flash memory market, the Memory Group is anticipated to have lower fourth-quarter sales and an operating loss," the company said in a statement.

NOR is a type of flash memory that retains data when electrical current is shut off and is widely used in cell phones and other devices.

AMD, which competes with far larger Intel Corp. in the market for microprocessors and flash memory chips, said that its Computation Products Group, which includes its popular Opteron chip, "continued its upward trajectory" during the fourth quarter, and it forecast that sales there would rise from the third quarter.

AMD's warning comes one day before Intel, the world's largest chipmaker, is slated to report its fourth-quarter results. AMD is scheduled to report its fourth-quarter results on Jan. 18. AMD did not provide a forecast for per-share profits.

The company's previous forecast for the fourth quarter called for "overall sales to increase, driven by processor sales that exceeded seasonal trends, and flash memory sales that were flat to up."

AMD may have suffered market-share losses to Intel in the fourth quarter, which itself lost share to AMD early last year after an ill-timed price increase to its customers for flash memory chips.