AMD scales back on chip orders

Posted by Trent Nouveau

Advanced Micro Device (AMD) has confirmed that it will be scaling back on chip orders from GlobalFoundries in 2013 to conserve cash as the company struggles to deal with a contracting personal computer market.

According to AMD, the move will allow it to "better align with today's PC market dynamics."

As such, AMD is lowering wafer purchase commitments for the fourth quarter of 2012 to approximately $115 million and a total of $1.15 billion in fiscal 2013.

In other chip news, AMD has reiterated its commitment to socketed processors, which will undoubtedly please the PC enthusiast community after a slew of reports suggested Intel will be ending production of user-upgradeable CPUs.

"AMD [has] a long history of supporting the do-it-yourself and enthusiast desktop market with socketed CPUs and APUs that are compatible with a wide range of motherboard products from our partners," a spokesperson told ZDnet.

"We have no plans at this time to move to BGA [ball-grid array] only packaging and look forward to continuing to support this critical segment of the market."

For its part, Santa Clara told Maximum PC  "[Intel] remains committed to the growing desktop enthusiast and channel markets, and will continue to offer socketed parts in the LGA package for the forseeable future..."

As TG Daily previously reported, the traditional PC market is stagnating because people are increasingly relying on mobile device to access the Internet.

"People just don’t need PCs the way they used to,” Rick Sherlund, an analyst at Nomura Holdings Inc told Bloomberg

"They’ve got alternatives now for accessing the Internet. They’ve got smartphones and tablets, so there’s really no growth left in the traditional PC market."

Indeed, according to IHS iSuppli, the PC market is set to contract by 1.2 percent to 348.7 million units this year.

Meanwhile, ABI Research is reporting that low ultrabook sales during the first half of 2012 effectively undermined Intel’s rather bullish "40% of notebook" claims made previously this year in an apparent fit of optimism.

"Higher than expected device prices, the wait for Windows 8, and a sluggish global economy have hindered sales for the new thin and light portable computers," confirmed senior analyst Josh Flood.

"Nevertheless, after the launch of Windows 8 and the release of a host of new ultrabook models we will see shipments rise to twenty-one million by the end of 2012."