A negative financial update from Advanced Micro Devices (AMD) last night raised a potentially ominous sign for semiconductor stocks ahead of tomorrow's bellwether earnings report from Intel.
Analysts expect Intel, the world's largest chip maker, to report an 11 per cent increase in sales from the third quarter to the fourth, driven by strong demand for microprocessors used in notebook and server computers.
The update will be the first quarterly report this year from a major US technology company.
In an unscheduled financial update after the market close, AMD pointed to a "competitive and challenging" environment for flash memory, a business that has AMD and Intel jockeying for leadership. AMD said sales in that business would fall, reversing an earlier forecast for flat-to-higher sales.
Flash remains a relatively small business for Intel, accounting for an estimated 7 per cent of its more than $8 billion in sales last quarter, but it has been a thorn in the side of the company.