AMD’s woes deepen

frog-mouth-crocodile-blair_42596_990x742Fabless chipmaker AMD lowered its revenue estimate for its second second quarter saying the demand for personal computers was weaker than expected.

The company also cut its adjusted gross margin forecast for the quarter ended June 27.

The company has been shifting focus to gaming consoles and low-power servers but progress has been slower than anyone expected. This is partly because Intel has upped its game and new competitors are designing low-cost and power-efficient chips.

AMD was at the initial stage of reviewing whether to split itself in two or spin off a business, in a move to reverse its fortunes and take on Intel. Other rumours have suggested that it was going to sell itself off.

The company said that it expects revenue to have decreased about eight percent from the first quarter, compared with its previous forecast of down three percent, plus or minus three percent.

This implies revenue of about $948 million. Analysts were expecting $999.6 million.

AMD also cut its forecast for second-quarter adjusted gross margin to about 28 percent, as weak demand from PC makers also hurt demand of its APUs which combine both computing and graphic processing capability.

AMD had forecast margins of about 32 percent.

The company warned in April that it expected weak demand for personal computers to continue for some time as original equipment manufacturers focus on lean inventories.