Chip-maker AMD has boosted its bid to snatch ?sixth generation? market-share from Intel, by announcing profits of $12.9 million for the first quarter of 1997, overturning a $21.2 million loss in the previous quarter. Sales for the period were also up 11 per cent, to $552 million from $497 million in the last quarter of 1996.
The results, and earnings of 9 cents a share, were in line with what analysts had been expecting according to Joe D?Elia at Dataquest. The last time that AMD made a profit was in the first quarter of 1996, with losses in 1996 totaling $94 million. D?Elia said that AMD sales would increase dramatically this year as more K6 chips became available.
AMD?s return to profit was announced a week after the launch of its high-speed K6 MMX processors, which are priced at least 25 per cent under Intel?s. AMD shipped just 10,000 K6 chips last quarter, but says that it is ramping up volumes this year. AMD chairman W.J. Sanders said that the improved results for the first quarter of 1997 were due to ?recovering strength in all sectors of our business even before volume shipments of AMD-K6 MMX processors.?
Sanders said that AMD would ship ?hundreds of thousands? the high-end K6 processors during the second quarter of 1997, and millions of units during the second half of the year. AMD has said that it wants to grab 30 per cent of the K6 market, currently dominated by Intel, but has yet to announce any major supply deals with the largest PC manufacturers, although Compaq is using AMD chips in some models. Dataquest analysts in the US estimate that AMD can grab around 25 per cent of the processor market over the next three years.
AMD is kicking off its bid to topple Intel?s? Pentium market share with the launch next week of a television advertising campaign for its K6 range of processor. The US advertising campaign features an 18-wheeler tanker truck rampaging through a street, ramming parked cars and setting off explosions. John Lister , chief executive of US brand-name research firm Lister Butler, commented that AMD would need to spend a lot of money and energy if it wanted to build its brand name.
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