Chip maker Advanced Micro Devices Inc is predicting a improved sales in the near future as it continues to compete effectively with formidable rival Intel Corp. At a meeting with analysts last week, AMD predicted that revenue for fiscal 1999 could reach $3.7bn, with sales of $4.4bn and $5.8bn for the following two years, respectively. The Sunnyvale, California-based company is confident about the prospects for its CPU business in the fourth quarter and says it is on track to ship 4.7 million K6 processors in the period – up from an initial estimate of 4.5 million – and estimate that its goal of $100 for an average selling price. Analysts at Credit Suisse First Boston reckon the company could actually ship more than 5 million units in the quarter and see ASPs slightly above $101. Thus, the bank is convinced that its estimate of $784.5m in revenue for the CPU business in the fourth quarter is a solid one. Non-CPU business is expected to see sales that are flat with third-quarter levels at $300m. The first half of 1999 is slightly questionable, according to CSFB, as seasonal slowdowns and difficulty in ramping faster CPUs could impact sales. Pricing could be a problem, as the company is having difficulty in scaling K6 to 400MHz and beyond and the company’s highly-anticipated Sharptooth, or K6-3, processor won’t be made available until later in the first quarter than originally anticipated. All that, when added to stiffer competition from Intel’s Celeron, could see ASPs below $100. AMD also told analysts that by the second quarter of 1999 it expects to have 14 million PCs out there using K6 chips with 3DNow technology, AMD’s counterpart to Intel’s MMX technology. The company aims to have 30 million PCs using its multimedia technology in the market by the end of next year.
