AMD posts third quarter profit warning

AMD’s third quarter revenue will be lower than expected, the chip giant and Spintel rival has warned.

Demand for notebooks in North America and Europe hasn’t been as high as it hoped. It thought that third quarter revenue would enjoy seasonal growth but has piped up to say that a decline, rather than growth, is expected – of between one and four percent. 

iPad friendly and News International owned Wall Street Journal reports that the trouble could be down to AMD’s dismissal of slate and tablet computing. Earlier this month, VP at AMD Leslie Sobon said that there are no immediate plans to target the growing tablet market, though she did say that with its Ontario chip on the cards it will be in a good position to capitalise on it  if it needs to.

Sobon was quoted as saying: “We will move to tablets when they are proven successful.” The general feeling is that British ARM currently has the stranglehold on the mobile and tablet chip segment.

As usual, the gospel being preached is that it’s consumer buying habits rather than its own shortfalls that are behind the profit warning. Economic uncertainty means people are still shaky about buying new technology.

While the quarter may have investors and stock holders feeling apprehensive we’ll reserve judgement until the battle between the next-gen AMD chips and Intel’s Sandy Bridge kicks off. We’ve heard from industry sources close to AMD that it is “in the crapper” with a wide range of its products, though the core CPU side of things is looking promising for 2011. 

As far as notebook demand goes – we’ve heard that demand will be high for its latest and greatest at the start of next year. But capacity problems mean that while geeks will want to get their hands on the latest AMD kit, shortages at TSMC and Global Foundries mean that there may not be enough to go around.

Following AMD’s announcement it saw after-hours stocks at the NYSE rising from $6.40 to $6.45. 

Intel adjusted its profits earlier this year though it still expects growth.