Bad For Intel, Catastrophic for AMD

Intel Corp. said late Wednesday that it expects financial results for its current, fourth fiscal quarter to be "below expectations," as the technology bellwether grapples with a flagging economy.
The chip maker said it now expects fourth-quarter revenue to be $9 billion, "plus or minus $300 million," which is lower than the company's previous expectation of between $10.1 billion and $10.9 billion.

Never mind Intel, at targeted gross margins of 55%, it will do just fine. The recuperating AMD will be the worst hit. Yet again, we can expect AMD to break it's promise of returning to profitability in the second half of 2008. We all saw what happened to AMD when Intel's gross margins drops close to 50% and needs to clear inventory. It's safe to assume things won't be different.

For now you can expect AMD to make noise and show its impoverished investors (AMD @ $2.57/share) that it is taking the necessary steps. It already announced laying off 500 employees. Soon they'll be talking about 32nm and reviving Bobcat. It's about being too little too late for AMD these days.