AMD lowers third quarter forecast amid weakening demand

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Stagnating notebook sales have taken a toll on AMD, as the chipmaker has adjusted its revenue forecast to account for lower-than-expected sales. At the end of the second quarter, the company predicted that revenue in the following period would be "up," but that has changed. It now expects revenue for the third quarter (ending Saturday, September 25) to be between 1% and 4% lower than the $1.65 billion it reported in the second quarter.

AMD blames its dampened outlook on "weaker than expected demand, particularly in the consumer notebook market in Western Europe and North America," but declined to comment further. Earlier this week, Intel reportedly lowered processor prices by as much as 50% to fuel short-term demand. Interestingly, neither chip firm expected the slowdown -- or as Intel CEO Paul Otellini put it in July, his company wasn't "planning for any seasonal softness."

Summer revenue is traditionally strong for component manufacturers and system builders, thanks in part to back-to-school sales. AMD's typical seasonal growth for the period ranges from 5% to 10%. While consumer demand has slowed, business purchases have remained stable according to Otellini and others. Outside of economic factors, many wonder whether tablets such as the iPad have affected notebook sales, but little hard evidence has surfaced.

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