14 DAY TRIAL // On Thursday, Advanced Micro Devices backed up its previous financial forecast, saying it was confident that the financial turmoil would not affect it as much as it would affect other PC industry players. The world’s largest chip maker, Intel, announced a day before that it had cut its initial fourth-quarter revenue forecast by 14 percent, also expressing its concerns regarding the IT industry.
The IT market broadened lately, and both computer chip makers have seen market share growth. According to AMD's chief financial officer, Robert Rivet, the economic downturn is nothing but "a storm that will pass." "We will come out of it in a better economic position," he said, adding that "We're not going to change our guidance," while also saying that AMD would update progress in December.
About a month ago, AMD announced better-than-expected third quarter results and stated that the fourth-quarter revenue was expected to be flat. According to Rivet, AMD should be able cut its capital expenditures to $300 million from $800 million as soon as it managed to transfer its manufacturing facilities next year. Moreover, the company expects a 2009 gross revenue of 45 percent.
Rivet stated that the Sunnyvale chip maker expected a sales growth of 4 percent to 5 percent in units during next year, while the global Gross Domestic Product should be 1.8 percent. The forecast seems optimistic to some analysts, who would rather say the PC growth will range from one to two percent. Moreover, Intel already said that demand was lowering throughout all market segments.
AMD is struggling to gain market share in most market segments besides netbooks. A processor for this category of low-powered machines will be released, yet not in the near future, as the company's roadmap shows. Intel launched the Atom processor for this area, and it has been declared a real success. "We're ignoring it," said AMD chief executive, Dirk Meyer. According to them, Atom would rather steal from higher-end markets than create new markets.