AMD Finds Big Time Tough

AMD has been engaged in a fierce price war with rival Intel during the past several months, denting profit margins at both companies. In the fourth quarter, AMD reported a net loss of $574 million, due to charges related to its acquisition of graphics-chip maker ATI as well as declining prices for AMD's server processors.

Speaking at the conference Monday, Ruiz said that pricing remained "very competitive," but he declined to provide details or to comment on profitability expectations.

Ruiz said that in order to sustain the company's long-term target of 50% gross margins, AMD must achieve at least 30% market share. In the fourth quarter, market research firm Mercury Research reported that AMD had achieved total market share of 25%, its highest level ever.

But Ruiz noted that AMD has lost market share in the channel recently, as it reserved much of its chip production for original equipment manufacturers such as H-P and Dell.

Todd Swank, the director of marketing at Nor-Tech, which sells branded and white-box PCs to resellers, said that there had been some shortages of AMD chips in the channel in the fourth quarter, but that things appeared to have improved recently.

AMD is "making a lot of effort to make up with channel right now," says Swank.

Historically, AMD relied on channel customers to get its chips into the market, as the top-tier PC makers generally offered only machines with Intel chips.

< Previous

1 2 3 4

Next >