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Consumer Electronics

AMD (AMD): No PC Bottom In Sight

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By Douglas A. McIntyre Updated Published
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winter14Intel (INTC) sees a bottom to the falling demand for PCs. Smaller competitor AMD (AMD) does not. During the Intel earnings conference call, the company’s CEO said that PC sales had leveled off. Contrasting that the CEO of AMD who said, “I don’t know how anybody can say that we hit bottom given the continued uncertainty that we have in the macroeconomic climate,” according to Reuters.

If AMD is right, it may be penning it own obituary. The company lost $416 million on $1.18 billion in revenue in the latest reported quarter. AMD says it needs $1.3 billion in sales to break even and it is forecasting that Q2 sales will be worse than Q1. That means the firm continues to burn cash and may continue that for the rest of the year and into 2010 depending on how long it takes tech spending to rebound.

AMD has filed antitrust suits against Intel and the EU is pursuing the charges aggressively. But, unless AMD can get substantial damages from any legal action, its balance sheet will get worse by the month.

AMD’s core business will not go away. It has about 20% of the PC and server chip markets. That is a valuable franchise. Another company will buy that business and leave behind AMD’s awful balance sheet. AMD does not have long to live as an independent company.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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