AMD posts large second-quarter loss

- Advanced Micro Devices (AMD) this week reported a much worse than expected second-quarter net loss of $US64.56 million on sales of $US526.53 million.

The chip-maker blamed the results on weakening demand in the worldwide semiconductor industry, coupled with continued price pressures on flash memory products. Those factors produced a substantial decline in revenues from AMD's non-microprocessor business units, the company said.

The poor results came despite a 35 per cent sequential increase in sales of AMD's flagship K6 microprocessors, said Jerry Sanders, AMD's president and chief executive officer. That increase was insufficient to offset a decline in sales from virtually all other units, he said.

"It's pretty lacklustre except for our processor business," Sanders said.

AMD's K6 processors compete with Pentium processors from Intel, and are used to power PCs.

Overall unit sales declined three per cent over the prior quarter, and by 11 per cent from the same quarter a year ago -- the first time AMD has seen unit shipments decline year over year since the first quarter of 1996, Sanders said. Sales of memory chips declined 21 per cent year over year, while flash memory sales fell 25 per cent, he said.

The company was also affected by financial turmoil in Asia, which depressed sales in that region, Sanders said. The company expects an upturn in sales in Europe, "but I don't think Asia holds any good news for us", he added.

Sanders offered no guarantee that the company can return to profit by the end of the fiscal year.

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