ATI Technologies, a leading developer of graphics technologies and core-logic solutions that is to be acquired by Advanced Micro Devices, said it would miss its revenue estimates by up to $140 million as a result of lower than expected sales of chipsets for processors by Intel Corp., the world's largest chipmaker.
ATI Technologies expected revenues for the fourth quarter of fiscal 2006 to be between $620 million and $660 million. However, the company on Wednesday announced that consolidated revenue for the fourth quarter of fiscal 2006 is currently expected to be approximately $520 million.
The anticipated revenue shortfall is due primarily to lower sales volumes of integrated chipsets for Intel-based platforms, the company explained. In addition, handheld revenue was lower than expected, reflecting a supply chain adjustment by one of ATI's major customers. "We believe this adjustment is temporary in nature and should not have a long-term impact on revenue," the company said in a statement. Handheld and DTV businesses account for about 20% of ATI's revenue, which chipsets bring ATI roughly 26% of revenue, according to the compay's Q3 FY2006 results.