Here’s How AMD is Hanging On

With the semiconductor market dominated by Intel (NASDAQ:INTC) and the demand for personal computers decreasing, Advanced Micro Devices (NYSE:AMD) is finding it difficult to stay competitive.

The company has already fallen behind its rivals in the Windows 8 tablet market, and competition is increasing from new entrants to the market, Qualcomm (NASDAQ:QCOM) and Nvidia (NASDAQ:NVDA).

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However, the company has decided to make the tablet market one of its top priorities. To further that end, AMD announced a plan Thursday to collaborate with Microsoft (NASDAQ:MSFT) on more than 125 Windows 8 tablets for several original equipment manufacturers, including Hewlett-Packard (NYSE:HPQ), Dell (NASDAQ:DELL), and Sony (NYSE:SNE). The new tablets will be announced before the Consumer Electronics show in January, according to Computerworld.

Since former Lenovo (LNVGY.PK) executive Rory Read because AMD’s chief executive officer in August of last year, the company has developed a new chip roadmap in an effort to lessen the its reliance on the declining PC business. The company has plans to use two new tablet chips, called Kabini and Tamesh, to join the competition. These chips, the company has said, will bring better performance and battery life to tablets.

So far, the company’s old chip roadmap has not proven too successful. AMD’s most recently developed chip, the Z-60, has only been used in a single tablet, Fujitsu’s (FJTSY.PK) Stylistic Q572, which is slated be released in November.

AMD is struggling. On October 12, it cut its third-quarter forecasts, citing weak demand across all product lines, and last week the company announced that it would cut 1,800 jobs as part of its restructuring efforts.

According to MKM analysts Daniel Berenbaum the company’s problem is its inability to provide a viable product. Computer makers are “less concerned about keeping AMD alive and more concerned with keeping themselves alive” he told Bloomberg.

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