With AMD reporting huge losses for the fourth quarter of 2006, motherboard makers in Taiwan say the US chipmaker has plunged to its lowest point, and may not regain its competitive edge until the launch of the Socket AM2+ platform and K8L architecture based CPUs in the third quarter 2007. AMD reported net losses of US$574 million for the fourth quarter of 2006 on revenues US$1.77 billion. Fourth-quarter gross margins dropped to 40% from 52% in the previous quarter, and fell on year from 57% which the company recorded for the fourth quarter of 2005.
The company attributed the decrease in gross margins chiefly to significantly lower average selling prices (ASPs) for server processors, and the inclusion of operations from the former ATI. Motherboard makers in Taiwan pointed out that AMD used to be highly competitive in the markets for clone systems, servers and high-end gaming. But in 2006, AMD met with a strong challenge from Intel's Core 2 Duo on the desktop. Intel's dual-core Xeon 5100 was a strong competitor for AMD's Opteron, while Intel's quad-core Xeon 5300 also grabbed much of the server market, the motherboard makers said.
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News source: DigiTimes
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