AMD predicts losses, introduces K7

AMD predicts losses, introduces K7

Advanced Micro Devices (AMD) has warned that it expects to record a second-quarter operating loss of about $US200 million, but tried to sweeten the news by releasing its Athlon, formerly called K7, processor, which it hopes will make up ground on arch-rival Intel.

The preliminary results for the quarter ending June 27 also showed revenue for the period will be less than $US600 million. For the second quarter last year, AMD posted an operating loss of $US64.56 million on revenue of $526.53 million. Last quarter, AMD posted a net loss of $128.4 million on revenue of $631.6 million.

The continued losses stem directly from a price-cutting war with Intel that WJ Sanders III, AMD chairman and chief executive officer, described as a "blood bath".

However, AMD is betting that the high-end, Athlon processor will turn its fortunes around. The company will ship thousands of the processors this quarter and expects to ship hundreds of thousands more in the next quarter, Sanders said.


The Athlon is AMD's seventh-generation microprocessor. The 600MHz version is priced at $US699, the 550MHz Athlon is priced at $US479 and the 500MHz version is priced at $US324, each in 1000-unit quantities, the company said in a statement. End-user systems based on the processor are planned for the third quarter.

The Athlon represents AMD's entrance into the market of high-end processors. "I wouldn't expect to see the K7 in sub-$US1000 computers," he said. "We are trying to hit high-end price points of about $US1200 per machine and above." AMD will not cut prices for the K7, he added.

Until now, Intel controlled the high-priced processor market, which allowed it to cut prices of other, cheaper processors, industry analysts said.

As far as local availability of Athlon is concerned, Steven Fraser, AMD business development manager Australia/ New Zealand, said he expects to have product here this quarter.

"Whatever Jerry [WJ Sanders III] said applies here as well," Fraser explained.

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