The Chips Are Down For AMD as PC Sales Plummet.

The personal computer industry is in a free-fall at the moment, and the recent reports from industry analysts confirm the gravity of the situation, down by as much as 21%.

The Post-PC era is a market trend involving a decline in the sales of personal computers in favor of post-PC devices; which include mobile devices such as smartphones and tablet computers. On post-PC devices, the use of traditional applications are de-emphasized in favor of mobile apps and cross-platform web applications as an alternative to application software that can only be used on a PC, along with an emphasis on portability and connectivity. As tablets and smartphones become more powerful, they are steadily eroding away at the PC. Additional factors for the decline include economic malaise, and markets in emerging countries are sluggish as well.

Industry insiders have been expecting some PC Buyers to postpone purchases of new systems until the launch of Microsoft’s new operating system, however the magnitude of the slowdown in the third quarter came as a surprise.

Even more surprising, is the impact this is having on chip maker AMD, the main competitor to Intel. AMD has scaled back its chip manufacturing for the last three months of the company’s 2012 fiscal year by more than 75 percent. You see, to make chips, AMD needs to buy silicon wafers, which it has planned on spending approx $500 Million. Well due to the declining market, they have reduced their promised silicon wafer purchase to only $115 Million.

The clouds on the horizon are darkening even more for AMD, as they are getting destroyed by an already poor market position. Their success in penetrating the tablet market has been dismal, and AMD continues to lose market share to Intel, all the while the PC market place continues to decline rapidly.

What does all this mean to you? Competition keeps prices low, and fuels innovation. Whenever a major competitor is in danger of losing market share, or worse, going under, it is never good for the consumer.

To survive, not only does AMD have to make drastic emergency measures, but it also needs the PC industry to revive. It’s bad enough when a company needs to correct the course of their own ship, it’s even more treacherous when they have to rely on the marketplace for survival as well.

What do you think?

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J. D. Redmond  ~ “Dr. Tech” ~ http://www.DrTech.co

 

Jacques Redmond

About Jacques Redmond

I'm an I.T. Security Professional, Technology Analyst, Consultant, & Tech Writer Protecting You From Viruses, Malware, Trojans, Hackers, and other Cyber Threats. I enjoy taking complicated subjects, and putting them in a way that's easy for everyone to understand. My site INFORMATIONWARFARE.US gives free advice to combat threats to your system.