AMD Warns of Loss in 1st Quarter

Advanced Micro Devices Inc., Intel Corp.’s main rival in the increasingly competitive microprocessor market, said Monday that it now expects to post a “significant loss” in its first quarter because of manufacturing problems with its core K6 family of chips.

The Sunnyvale, Calif.-based company also said it will cut 300 jobs over the next two quarters, which will result in a charge against earnings in the quarter ending March 28 and in the next quarter.

The job cuts, which represent about 2.2% of AMD’s total work force of 13,800, are the first at AMD in about three years, a spokesman said.

More details on the charges will be given when AMD reports first-quarter earnings after the market’s close on April 6, AMD said.

Monday’s announcement was made after the markets closed; AMD shares rose 50 cents to close at $18.94 on the New York Stock Exchange.

The news was the latest in a series of manufacturing problems that have hurt AMD, which has competed with Intel for years. Recently AMD began to gain market share in the retail-consumer sector, where its low-cost processors are used in sub-$1,000 PCs.

The job cuts are part of a restructuring to focus on areas where AMD can lead and grow profitably, a spokesman said.