AMD Reports Strong Q3 Sales

"AMD's 64-[bit] processors now represent over one-third of our processor revenues, on track to becoming 50 percent of our processor revenues by the end of the year," Ruiz told industry analysts.

Ruiz also said there has been good customer response to the company's recently introduced low-end Sempron CPU, which is aimed at the value segment of the PC market where machines sell for $500 or less. Sempron is effectively replacing both AMD's old-line Duron CPU and its Athlon XP processor. The latter chip, which will largely be phased out after the first quarter of next year, is a 32-bit CPU.

Its successor, the Athlon 64, is Opteron's desktop cousin. While 64-bit processors are already hot in the server space, they won't be a big factor on the desktop until Microsoft's 64-bit version of Windows XP becomes available next year. Once that happens, AMD expects Athlon 64 to take off in a big way.

Yesterday, Ruiz reported that AMD's processor business overall jumped 21 percent from the second quarter to the third quarter. Sales are expected to rise further moving forward.

"We think we can gain [processor market] share in the fourth quarter of this year," says Henri Richard, AMD's executive vice president of worldwide sales and marketing, referring to the company's battle with market-leader Intel.

There was one soft spot amid AMD's mostly bright picture, as flash memory sales were buffeted by declining demand in the cell phone market. However, AMD's flash memory sales overall remained profitable.

Deconstructing AMD's numbers, the $1.24 billion the company reported in third-quarter sales marked a 30 percent rise compared with the same period in 2003. In the third quarter of 2003, AMD reported sales of $954 million and a net loss of $31 million.

Third-quarter operating income of $68 million improved from an operating loss of $30 million in the third quarter of 2003.

Moving forward, AMD is on track to release multicore versions of its 64-bit processors in 2005. Such chips place two CPUs on a single semiconductor die. AMD is also in the midst of transitioning its processors to an advanced 90-nm semiconductor fabrication technology.