AMD issues severe losses warning….

Chip maker AMD said late yesterday its Q2 results will be worse than it expected. The company warned it will lose $200 million in Q2. That follows a loss last Q of $128 million, which CEO Jerry Sanders described at the time as a very bad result. The company is now predicting it will only sell over three and a half million chips in Q2. It managed to sell five million in Q1. The news sent its share price tumbling to just over $18 on Wall Street. Yesterday, Sanders blames severe market conditions for the decline, but suggested that the Athlon-K7 could be AMD's salvation. But AMD has the problem that it needs to churn out enough Athlons to satisfy anticipated demand and at a price that will turn its fortunes round. We will examine the realities of this later today. And we now have an idea how the different flavours of Athlon will be priced. The 600MHz part will cost $699, the 550MHz part $479, the 500MHz part will cost $324. (1000 units). AMD has now posted information on the Athlon on its Web site. The profit warning will cast a heavy cloud over the introduction of AMD's new processor. It now appears to make more sense than ever for some white knight to ride in and asset strip AMD.®