AMD warned that its quarterly revenue will be lower than forecast, citing
softness in sales of its memory chips used in cell phones and other devices. Net
income for the third quarter is anticipated to increase from the $ 32 million
reported in the second quarter despite slightly lower sales.

"Our gross margin and net income are expected to improve sequentially from
the second quarter of 2004, largely due to significantly higher sales and
stronger ASPs in our processor business," said Robert J. Rivet, AMD’s chief
financial officer, in a statement. "Although third quarter sales are anticipated
to be lower than projected due to softness in our profitable Flash memory
business, sales in our microprocessor business remained strong driven by
increased demand for AMD64 processors."

AMD warned that its quarterly revenue will be lower than forecast, citing
softness in sales of its memory chips used in cell phones and other devices. Net
income for the third quarter is anticipated to increase from the $ 32 million
reported in the second quarter despite slightly lower sales.

AMD follows its larger rival, Intel in saying that sales of flash memory
chips had been less than forecast in the quarter. Earlier this month, Intel
lowered its forecast, blaming lower-than-expected demand for its
microprocessors, flash memory and communications chips. But AMD did not name
weak microprocessor sales as an issue.

"Our gross margin and net income are expected to improve sequentially from the
second quarter of 2004, largely due to significantly higher sales and stronger
ASPs in our processor business," said Robert J. Rivet, AMD’s chief financial
officer, in a statement. "Although third quarter sales are anticipated to be
lower than projected due to softness in our profitable Flash memory business,
sales in our microprocessor business remained strong driven by increased demand
for AMD64 processors."

"Our recent checks have indicated strong K8 momentum in North America and
Europe in Q3," said Michael McConnell, an analyst with investment banking firm
Pacific Crest Securities Inc. (Portland, Ore.) "AMD forecasts indicate 1.1
million K8 unit shipments in Q3, up from an estimated 400,000 in Q2."