Analyst Richard Whittington said in a research note that the "tables have turned" between AMD and Intel with regard to manufacturing execution.
"In spite of forecasts to sharply increase supply of microprocessors in the second half, reports continue that Intel is falling short of the mark not just for Q3 but for soon-arriving Q4 as well," Whittington wrote.
Whittington lowered Intel from "strong buy" to "market perform." Intel shares were down 3.19 to 61.75, while AMD slipped 1.69 to 28.81.
Whittington said that he had reports that top tier PC makers were having problems getting sufficient x86 processors from Intel, and that second tier and white box makers "are clearly not seeing the allocations they'd anticipated."
He speculated that Intel was slowing down production on PIIIs to avoid problems like the ones that arose with the 1.13Ghz chips, which had to be recalled.
Revenue estimates for the third quarter were dropped from $9.4bn (£6.7bn) to $9.1bn, and earnings from 39 cents per share to 38 cents per share. Fourth quarter figures were dropped to $10.1bn in revenue, down from $10.6bn, and 44 cents per share earnings , down from 45 cents per share.
For fiscal 2000, Whittington expects to see revenues at $35.52bn, and earnings of $1.66 cents per share, down from revenues of $36.62bn and earnings of $1.68 per share.
He also downgraded AMD to "market perform" from "strong buy." Whittington cited the warning from SCI, saying that company's demand issue could be based on low-end PCs.
He reduced third quarter revenue earnings from 65 cents per share to 63 cents, and fourth quarter earnings from 86 cents per share to 78 cents. For the year, he dropped his estimates of earnings of $2.69 per share on revenues of $5.04bn to earnings of $2.59 per share on revenues of $5bn.
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