Chipwar forces AMD into the red

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Chipwar forces AMD into the red

Chipmaker AMD has posted a US$611m net loss over the first quarter of 2007 as the company is struggling to compete against Intel.

AMD has warned earlier this month that its revenues would fall short of the company's forecasts by about US$400m. The chipmaker reported first quarter revenue of US$1.23bn, down 30 percent since the previous quarter.

"After more than three years of successfully executing our customer expansion strategy and significantly growing our unit and revenue base, our first quarter performance is disappointing and unacceptable," said Robert Rivet, AMD’s chief financial officer.

AMD earlier this month announced a corporate restructuring that will cut costs by US$500m a year. But Rivet stressed that customers remain confident about the company's strategic direction and products.

At the time it blamed its revenue drop on increased competition from rival chipmaker Intel and at the same time slashed its prices by up to 40 percent in an attempt to grow its market share.

The chipmaker in the previous quarter lost nearly US$574m, but US$551m of that was related to the acquisition of ATI. The take-over and integration of the graphics chip maker accounted for US$113m in costs in the first quarter.
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