Furious price cuts and competition from Intel are the obvious culprits for the slip. "Revenues declined sharply quarter-over-quarter for the Computing Solutions segment, primarily due to lower overall average selling prices and significantly lower unit sales, especially in the resale channel," AMD explains.
To counteract the drop, the chip maker says it plans to "restructure its business model to increase operational efficiencies and lower its operating cost structure." Capital expenditures for 2007 should drop by $500 million, AMD notes, although that decrease shouldn't materially hurt its capacity plans. AMD also intends to reduce discretionary expenses and hire new staff only for critical positions. More details will be revealed during AMD's first-quarter financial results announcement conference call on April 19, the firm says.