AMD upbeat about PC, chip markets

Advanced Micro Devices CEO Jerry Sanders said the PC market is "definitely in a recovery" and that sales will improve after the second quarter.

Speaking at a Merrill Lynch technology conference on Wednesday, Sanders said he doesn't expect a price war with Intel and noted the second quarter will be the "trough quarter" for the chip industry.

"For the PC industry, the second quarter is always the weakest quarter, and we don't see any difference in that pattern," Sanders said. "The communications business is not recovering yet, but the PC and computers business is now beginning a slow recovery. This means to me that the second quarter is the trough for entire chip industry."

In April, the chipmaker topped estimates in its first quarter, with earnings of 37 cents a share on revenue of $1.19 billion. AMD said at the time that second-quarter sales would be down as much as 10 percent from the first quarter.

First Call expects AMD to report a profit of 28 cents a share on sales of $1.09 billion in the second quarter.

"I feel better about the quarter than I did two weeks ago," Sanders said.

This comment from Sanders came after a period of weak chip sales for the industry. The Semiconductor Industry Association reported that March's semiconductor industry revenue was down 4.7 percent from a year ago. It was the third consecutive month with year-over-year declines.

Sanders was upbeat about AMD's market share gains. He said the company is aiming to grab 30 percent of the PC processor market, up from the current 21 percent.

On other topics, he said he expects AMD's flash memory sales to grow for the year even though most experts predict double-digit declines. Flash memory is used primarily in wireless and handheld devices.

In addition, he said Dell Computer (Nasdaq: DELL) isn't likely to become an AMD customer any time soon. AMD has agreements with most PC makers with the exception of Dell, which is staunchly loyal to Intel.>