AMD Says 1st-Qtr. Shipments, Sales Are Below Forecasts

Advanced Micro Devices Inc., Intel Corp.’s biggest rival in the computer chip market, said Wednesday that it shipped fewer-than-expected microprocessors in the first quarter and that sales were below expectations.

A production glitch that began in the fourth quarter of 1998 continued to hurt production of some of its highest-powered chips in January and February.

Moreover, deep price cuts by Intel have pushed AMD’s average microprocessor price lower.

AMD is struggling with manufacturing problems and a fierce fight with Intel. The industry leader has been cutting prices aggressively to win back sales that AMD took with its popular K6 chip, which sells at a discount to Intel’s Pentium.

AMD said it expects first-quarter revenue to be $630 million, down from a record $789 million in the fourth quarter and up from $541 million in the year-ago period.

Last month, AMD said it would cut 300 jobs, or 2.2% of its workers, and warned that production glitches would result in a “significant” first-quarter loss.

AMD shares rose 44 cents to close at $16.19 on the New York Stock Exchange before its warning. The company is scheduled to report first-quarter earnings next week.