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AMD Athlons to sell out in Q4

No flash in the pan

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AMD expect to sell out its production of Athlons during the fourth quarter and forecasts that sales of "AMD Athlon processors, AMD Duron processors, and PC processors in the aggregate will set new records, individually and collectively, in both units and dollars".

But sales of the Duron, Athlon's cheaper brother, will be slow in the fourth quarter because of a lack of cheap "integrated" chipsets, according to CEO Jerry Sanders.

And slow corporate demand may stall AMD's plans to get IBM, HP and Compaq to use the Athlon - in corporate lines - until the second half of next year.

On top of this, Mustang, Palomino and Morgan, server and notebook versions of Athlon, are being held back from the fourth quarter to the first part of next year.

AMD now forecasts that its processor sales for the year will tally at 28 million units, compared with earlier projections of 25 million units and 1999's total of 18.8 million units.

The company announced the new figures in a statement accompanying its Q3, 2000 results. This was a strong performance with CPU sales - up 50 per cent on Q3, 1999 and 10 per cent sequentially. AMD said it met its goal of sequentially doubling Athlon and Duron processor sales to more than 3.6 million units. This was the "steepest ramp of unit shipments of any processor in AMD's history".

And let's not forget AMD's flash memory business. This may not make the heart sing, but it sure pulls in the profits for AMD. Soaring sales - more than double that of Q3 1999 proved to be the bedrock for a quarter which saw AMD break a bagful of records - record sales, record operating income and record net income.

AMD net income in Q3 was $409 million - helped enormously by the sale during the quarter of the voice communications business Legerity for $336.9 million. Excluding one-offs (there was also $22 million worth of charges incurred through the retirerment of some AMD loan paper), net income was still a healthy $219.3 million. Revenues for the quarter came in just over $1.2 billion.

Aggregate sales of CPUs and flash were up more than 80 per cent on the same period and 10 per cent up on Q2. Total revenues were up three per cent on Q2, as AMD waved goodbye to its voice communications business.

For the year AMD forecasts annual sales of $4.8 billion, compared to $2.9 billion in 1999. All in all, a fine set of results, but there is no disguising that so far as size is concerned, the company remains a chimp, compared with Intel's 800lb gorilla. ®

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