AMD’s CPU business took a slap in the fourth quarter as chip selling prices came in lower than expected, it revealed yesterday.

The chip vendor said its Q4 revenue, excluding its recently acquired ATI business, would be up just 3 per cent on the previous quarter’s $1.33bn. Analysts had been primed for a numbers neared $1.44bn.

Income, excluding ATI and acquistion related charges, will be “positive, but substantially lower than in the third quarter” when it made $0.27 per share.

AMD said saw a “significant increase in unit sales” in the quarter, but its gross margin and operating income in the quarter took a hit from “significantly lower” microprocessor average selling prices.

Observers put the slump in ASP down to aggressive action by Intel as it cleared its shelves ahead of new product launches. AMD is lining up a slew of launches itself of course. However, duelling product launches are unlikely to mean an easing of the pressure for either company.®