The previous financial estimations for Advanced Micro Devices and Intel Corp. have been reduced by many industry analysts. According to them, the demand of personal computers is expected to lower during the fourth quarter of the year, while also continuing on a down road during 2009, which means that the financial performance of the two central processing unit makers will be affected.

During the next year, the total available microprocessor market will see only a 2 percent growth, says analyst Tim Luke from Barclays Capital. The analyst has made a previous estimation of 5 percent growth for the market, also adding that the Atom processor designed for the ultra low-cost personal computers would raise the estimation to a 6 percent growth. According to Tim Luke, the industry revenue is expected to drop 2 percent next year amid unit sales growth.

"The supply chain is telling us that there is strong concern for demand decline, probably into the low- to mid-single digits on a unit basis for total PC processor growth in the year 2009," Shane Rau, an analyst at IDC, is reported to have said in an interview.

Tim Luke and Shane Rau are among those analysts that believe the two suppliers of x86 central processing units will face hard times next year. Given this, the estimates for earnings and profitability of AMD and Intel were reduced, although the ratings are said to remain the same. According to other voices, the stocks of the two will downgrade as well.

Krisha Shanker, analyst at JMP, is cautious on server and PC demand from notebook and motherboard companies, saying that AMD and Intel will be affected. Another analyst to make a weaker estimation for the two companies is Craig Berger from Friedman Billings Ramsey, who said that Taiwanese notebook and motherboard manufacturers would show low demand.

“Significant weakening in November of corporate notebook demand” has been registered, says Vijay Rakesh, ThinkEquity analyst, who determined Acer and Dell to already reduce their orders for new laptops. Moreover, Asustek Computer and Apple also cut their notebook outsourcing orders a few days ago. Intel will be primarily affected, but AMD will feel the effects as well.

Auguste Richard from Piper Jaffray believes that Intel will enter a dark cloud, as there will be “weakness in the company’s channel business due to the strong dollar and the tight credit environment”. AMD will also be affected, as the company sells central processing units and chipsets, as well as graphics processing units, most of them in the channel.

“PC OEMs are being very conservative with their build plans for Q4. [Because they] are worried about having too much inventories if end-market demand comes in materially weaker than expectations this holiday season,” said an analyst with Avian Security.