Stefan Mileschin

AMD has warned that its second quarter revenues will be down about 11 percent from the prior quarter.

It is blaming poor sales in China and Europe as consumers dine from rubbish bins rather than buying new chips.

Such optimism from AMD was clearly infectious and shares have fallen six percent.

AMD had expected that second-quarter revenue would increase three percent from the first quarter.

Alex Gauna of JMP Securities told Reuters sales in China reflect stronger chip updates by rivals Nvidia and Intel. Basically the pair of them had better technology, he claimed.

AMD had been hit by the European economic situation because it had always played in the lower end of the computer market. It is this market where people are not buying.

AMD posted a first-quarter loss of $590 million and is concerned that things could get worse. It is squaring off against Intel's Ivy Bridge and Chipzilla is getting sales for its recently launched Romley server chip.

Operating expenses for the second quarter will be about eight percent less than prior guidance of $605 million, the company warned.

AMD is due to fess up the full details when it announces its financial results next Thursday.

http://news.techeye.net/chips/amd-warns-on-revenue