The two chip makers' first-quarter numbers could
give insight into the U.S. economy.
When Intel and Advanced Micro Devices detail their first-quarter 2008
financial numbers later this week, industry watchers will be looking for more
than just sales figures and updates to their chip road maps.
The two companies are the largest producers of x86 processors for servers,
desktops and laptops, and both are seen as bellwethers of the technology
industry. Intel will report its numbers first on April 15 and AMD
will follow on April 17. Click Here to Watch the
Latest eWEEK Newsbreak Video.
While the first quarter of the financial year is usually slower than the
fourth quarter of the previous year, the industry will be looking
closely at the numbers from AMD
and Intel to determine if the current state of the U.S.
has slowed IT spending.
has already signaled that its revenue
for the first quarter of 2008 will be
down 15 percent compared with the fourth quarter. Typically, revenue usually
decreases about 7 percent.
On the other hand, shipments of microprocessors are usually down about 6
percent in the first quarter, said Dean McCarron, principal analyst of Mercury
Research. McCarron said, "If the first-quarter numbers are below what is
usually the average from this time of year, it could mean that the markets are
contracting a little bit more and that could be related to the overall
Of the two companies, AMD finds itself in
a much trickier financial situation. In addition to its sales being down 15
percent this quarter, the company announced that it is preparing to lay off 10
percent of its 16,000-person work force. The company's financial situation has
been complicated by its acquisition
of graphics tech company ATI in 2006
and delays with its quad-core processors.
When it discloses its numbers on April 17, McCarron said he thinks that AMD
might also detail some of its restructuring plans, including its much discussed
"asset-smart" strategy, although it will probably offer more
information closer to the third quarter.
Hector Ruiz has said he expects the company to return to profitability by the
second half of 2008.
On the technology side, AMD is also
likely to detail how its quad-core
Opteron chip, "Barcelona,"
is doing since the company fixed its design flaw
and how AMD plans to ramp up its manufacturing
from 65 nanometers to the new 45-nanometer process later in 2008.