NEW YORK (Dow Jones)Shares of chip maker Advanced Micro Devices Inc. (AMD) fell as much as 5% Thursday after JP Morgan H&Q analyst Eric Chen issued a cautious research report on the company.
According to Chen, AMD, of Sunnyvale, Calif.,may be experiencing difficulty in stabilizing its 0.13 micron processor technology, which could delay the production of its Athlon processors using the technology. This, in turn, could hurt gross margins and market share as well as weaken AMD's competitive position with regard to both costs and performance, the analyst said.
While Chen doesn't expect a pushout of its volume ramping up using .13 micron to affect the current quarter, he did note it "brings some risk to the company's financial performance in the first quarter of 2002, or even longer depending on how quickly the company can resolve the process issue."
Chen maintained his longterm buy rating on shares of AMD, but recommended investors trim their positions.
Shares of AMD were recently trading down 2.7%, or 36 cents, at $12.85 on volume of 3.3 million. Average daily volume is 6.3 million.
Officials at AMD weren't immediately available for comment.
By Donna Fuscaldo, Dow Jones Newswires; 2019385253; donna.fuscaldo@dowjones.com
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