AMD shedding red ink in processor price war

A bloody price war with Intel is costing Advanced Micro Devices dearly. Despite continued strong volume shipments of its Athlon and Duron processors, the company said its overall sales will be down and a substantial loss will result from the combination of slow PC demand and aggressive pricing by Intel of its latest processors.

Rob Herb, AMD executive vice president and chief sales and marketing officer said sales will fall about 15 percent in the current third quarter from the second quarter. Sales of flash memory products would fall about 30 percent, or $100 million. "A revenue decline in this range would result in an operating loss for the third quarter." Herb said PC processor unit sales in the current quarter will remain at or near the record level of 7.8 million units achieved in the second quarter.

In a bit of good news for AMD, the top Linux software distribution companies, Caldera, MandrakeSoft, Red Hat, SuSE, and Turbolinux announced they have certified the AMD Athlon MP processor and the AMD-760 MP chipset, for one-way and two-way Linux workstations and servers. "Certification of the AMD Athlon MP (multiprocessing) processor and AMD-760 MP chipset by the leading Linux distributions is a key element to help AMD expand its presence in the Linux workstation and server markets," said Richard Heye, Vice President, Platform Engineering and Infrastructure for AMD's Computation Products Group. "These certifications demonstrate that business customers can take advantage of robust and reliable AMD Athlon MP processor-based workstation and server solutions running on the Linux operating system."

AMD made a strong showing at the LinuxWorld show in San Francisco this week with a dozen software and server companies showing products build around or running on AMD Linux machines The AMD Athlon MP processor is an x86 processor designed for high-performance multiprocessing servers and workstations.