More firms are backing AMD processors as sales soar

AMD’s impressive progress in closing the gap on much larger rival Intel is starting to have a positive effect on its revenue and profitability.

The chipmaker reported sales of $1.3bn and a net profit of $185m for its first financial quarter of 2006. Sales rocketed over 70 percent compared to the year-ago period. AMD chief financial officer Robert J Rivet hailed the results as “another great quarter”.

The company’s flagship Opteron processor achieved record sales and AMD said it expects its state-of-the-art 65nm manufacturing process to begin in the second half of 2006. Profit margins are also improving.

The numbers are significant because even though AMD has had a competitive processor business for several years now, market share gains have not always been felt in financial performance thanks to manufacturing issues and margin pressures.

The improving financial performance of the firm, together with impressive stock gains over the last 12 months, could make yet more firms willing to partner with it, and further weaken Intel’s grip on the sector.