Intel 'death blow' hits at AMD

Shares in chip maker Advanced Micro Devices (AMD) fell by 27 per cent on Friday after the firm warned that its sales for the quarter to 1 July would be below analysts' expectations.

Analysts said AMD was "really not ready" for fierce competition from Intel.

"You wonder whether Intel is basically trying to deal AMD a death blow or just showing that it can fight back," said Pat Dorsey, director at analyst morningstar.com.

"The big surprise here is that Intel is waging an all-out price war, firing back at AMD to acquire market share a little more aggressively than people thought."

AMD said sales for the period would be £701m ($985m), 17 per cent lower than the £847m ($1.19bn) for the previous three months and considerably less than the £768m ($1.08bn) AMD had estimated for the three months to 1 July.

This is despite record unit sales for its Athlon and Duron processors and record total PC processor unit sales.

The firm said its second-quarter earnings would range from 3 to 5 cents a share when it reports on 12 July. Analysts had predicted 27 cents a share.

AMD blamed weak demand for flash-memory devices and a price war with Intel that depressed the firm's average selling prices.

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