Looks like AMD shipped 40% more processors this quarter than last and they project and additional sequential growth 18.5% for next quarter. That's 2.7 to 3.8 going to 4.5 million. They say they are getting 54% of the sub 1000 PC.
This unit growth is very impressive. Where is it coming from? Is it Intel's loss or other second tier players or is unit growth just very good over all?
Regards
AMD Achieves Record Sales and Bookings as it Returns to Profitability
BusinessWire, Tuesday, October 06, 1998 at 17:15
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 6, 1998--Led by
substantial growth in sales of AMD-K6(R)-2 processors with 3DNow!(tm)
technology, AMD today reported record sales of $685,927,000 during its
third quarter, ended September 27, 1998, which resulted in net income
of $1,006,000, or $0.01 per share.
Sales increased by 30 percent from the immediate-prior quarter,
and by 15 percent from the like period of 1997.
In the immediate-prior quarter, AMD reported a net loss of
$64,560,000 on sales of $526,538,000, which resulted in a net loss of
$0.45 per share. In the like period of 1997, AMD reported a net loss
of $31,675,000 on sales of $596,644,000. The net loss amounted to
$0.22 per share.
For the first nine months of 1998, the company reported total
sales of $1,753,321,000, which resulted in a net loss of $126,281,000,
or $0.88 per share. For the first nine months of 1997, AMD reported
total sales of $1,743,204,000, which resulted in a net loss of
$8,756,000, or $0.06 per share.
"AMD achieved record sales and returned to nominal profitability
on rapid market acceptance of our AMD-K6-2 processor with 3DNow!
technology," said W.J. Sanders III, chairman and chief executive
officer. "This product, introduced on May 28, 1998, was the largest
contributor to the substantial increase in sales of our Microsoft(R)
Windows(R) compatible AMD-K6 processor family.
"Shipments of AMD-K6 family processors increased by more than one
million units to 3.8 million units, and AMD-K6 family processor sales
increased by 70 percent over the immediate-prior quarter. Excellent
manufacturing and sales execution enabled AMD to return to
profitability one quarter ahead of expectations.
"We are extremely pleased by the strong demand in the retail
channel for personal computers powered by AMD-K6-2 processors,"
Sanders continued. "According to PC Data, systems powered by AMD-K6
family processors captured 31 percent of the total U.S. retail market
for desktop systems in August, the latest period for which data are
available. In the rapidly growing market for sub-$1,000 systems, PCs
powered by AMD-K6 family processors captured a 54 percent market share
-- the highest penetration we have achieved to date. The
highest-volume desktop system sold in the United States retail channel
in August was a system powered by an AMD-K6-2 processor with 3DNow!
technology, even surpassing sales of Apple Computer's successful iMac
system.
"During the quarter, we introduced and shipped hundreds of
thousands of our 350MHz AMD-K6-2 processors," Sanders continued. "With
the availability of these higher-performance devices, AMD now has very
attractive products for the mainstream desktop market: systems priced
at $1,500 and below, which comprise 80 percent of the U.S. retail
desktop personal computer market.
"During the quarter we also introduced a 300MHz AMD-K6 processor
for mobile applications. The AMD-K6/300 has a clock speed matching the
highest-speed mobile processor on the market.
"In the face of continuing intense price pressures and weak
overall industry demand, we were able to maintain flat sales compared
to the immediate-prior quarter in the aggregate for our Communications
Group, our Memory Group, and Vantis, our programmable logic
subsidiary," said Sanders.
"On the strength of demand for AMD-K6 family processors, total
third-quarter company bookings achieved a record level," Sanders
concluded.
(UPDATE) Chip Maker Advanced Micro Posts Surprise Profit, Cites K6 Sales
Dow Jones Online News, Tuesday, October 06, 1998 at 23:32
By Dean Takahashi, Staff Reporter of The Wall Street Journal
Advanced Micro Devices Inc. posted a surprise profit for its third
quarter, as its K6 family of microprocessors began grabbing more market
share from Intel Corp.
AMD, a Sunnyvale, Calif., semiconductor maker, reported a profit for
its quarter ended Sept. 27 of $1 million, or one cent a diluted share,
compared with a loss of $31.7 million, or 22 cents a share, a year
earlier. Revenue for the quarter was $685.9 million, up 15% from $596.6
million a year earlier.
AMD's profit was well above analysts' estimate of an 11-cent-a-share
loss, as tallied by First Call Corp. AMD's turnaround was particularly
sharp compared with its second quarter, when it posted a loss of $64.6
million, or 45 cents a share.
"A few more quarters of this and people will start to become
believers," said Nathan Brookwood, an analyst at market researcher
Insight 64 in Saratoga, Calif. AMD announced the results after markets
closed Tuesday. Earlier, AMD shares rose 8.2%, or $1.50, to $19.875 in
New York Stock Exchange composite trading. The stock rose to $20.50 in
after-hours trading, according to Instinet.
"Anecdotal evidence suggests the worst is behind us," said W.J.
"Jerry" Sanders III, chief executive officer of AMD. "We're establishing
credibility by making what we said we were going to make."
The upside surprise illustrates the profit-generating power of some
attractive chip products. AMD said sales of its K6 and K6-2
microprocessors topped 3.8 million units in the quarter, compared with
2.7 million in the second quarter. Mr. Sanders said he was confident
that AMD can ship 4.5 million microprocessors in the fourth quarter, and
he predicts AMD will sell 20 million to 25 million microprocessors, or
at least 19% of the total market, in 1999.
Market researcher PC Data said AMD had grabbed 54% of the U.S. market
for chips used in sub-$1,000 computers in August, the most recent period
available. Those gains in the low end market caused its microprocessor
revenue to more than double, to $381 million from $178 million in the
third quarter a year earlier, the company said.
But AMD's other businesses were hamstrung by the yearlong
semiconductor recession. AMD's programmable logic chips were down 19%
from a year ago, communications chips were down 30% and flash-memory
chips were down 28%. Mr. Sanders said that bookings indicate flat
revenue going forward in those businesses.
Last month, AMD launched a K6-2 microprocessor that operates at a
speed of 350 megahertz, close to Intel's mainstay 400-megahertz
microprocessor. That helped AMD command higher prices. Its average
selling price in the third quarter was $100, compared with an estimated
$81 in the second quarter, according to Mr. Brookwood.
But in the coming quarters, analysts believe that AMD's problem could
shift from a concern about making enough chips to worries about
oversupply, especially as Intel launches more chips targeted at the low
end of the market.
To date, AMD's success has been with retail consumers. But its
factory capacity has grown so much that it will have to break into other
Intel strongholds as well. The company is focusing on increasing sales
to makers of portable computers. It may have a harder time with makers
of business-desktop computers, a sector in which Intel's brand name
attracts strong customer loyalty, said Ashok Kumar, an analyst at Piper
Jaffray Inc. in Minneapolis. Meanwhile, Intel is shifting its focus to
higher-value server-workstation chips, which AMD cannot match.
Mr. Sanders said AMD can parry expected accross-the-board price cuts
from Intel with new products, including 400-megahertz and 450-megahertz
K6-2 microprocessors, as well as a microprocessor with integrated
cache-memory, code-named Sharktooth.
Next week, AMD will unveil details of its most important gamble to
date: a new microprocessor, code-named K7. The chip is a major attempt
to design an Intel-compatible microprocessor that doesn't plug into
Intel's existing circuitry on a motherboard, the main system board in a
computer. As a result, AMD must help its partners engineer additional
components beyond the microprocessor, such as motherboards themselves,
as well as data highways and chip sets.
AMD plans to demonstrate a working unit at the Comdex computer show
in November and to launch the K7 in the first half of next year, about
the same time that Intel plans to release microprocessors with its
second-generation multimedia processing technology, called Katmai New
Instructions, which Intel will describe in greater detail next week at
the annual Microprocessor Forum in San Jose, Calif.
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