Advanced Micro Devices Inc. (AMD) said in documents filed Tuesday with the U.S. Securities and Exchange Commission that it expects to report lower revenues and higher losses for the first quarter of 1998 compared with the previous quarter.
Last quarter the Sunnyvale, California-based chip maker reported a net loss of $12.3 million on sales of about US$613 million. If the predictions for this quarter prove accurate, AMD will have lost money in three out of the past four quarters.
AMD's flagship K6 processor competes with Intel Corp.'s Pentium II processor, and AMD has pledged to keep its product priced 25 percent lower than Intel's in the hope of stealing market share.
But according to Michael Slater, founder and editorial director of the Microprocessor Report, who spoke last week in Austin, Texas, at a seminar held by his company, sources close to AMD say production difficulties have forced the company to sell its chips at a loss in order to underprice Intel.
AMD officials just a week ago acknowledged that ongoing production difficulties have forced it to lower by some 20 percent its forecast for 1998 shipments of K6s.
"[AMD] expects revenues in the first quarter of 1998 to decline significantly, and the net loss to increase significantly as compared to the fourth quarter of 1997," AMD said in a 10-K report filed Tuesday with the U.S. Securities and Exchange Commission.
In the third quarter of 1997 AMD reported a loss of $31.7 million on sales of $597 billion. In the quarter prior to that the company earned $10 million on sales of $597 billion.
The company did not return calls seeking comment today.
Advanced Micro Devices can be reached at +1-408-732-2400 or at http://www.amd.com/.