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Intel's manufacturing problems continue and could help rival AMD



Intel Corp. Apology on Wednesday, customers were not surprised about its ongoing supply constraints to investors, but the report could prove to be a potential advantage for competing company Advanced Micro Devices Inc.

Earlier on Wednesday, the giant chip gave customers an update in the regulatory files on its current manufacturing challenges.

"I also want to inform you about our stock and investment efforts to improve the balance between supply and demand and support you with Intel's leading products," wrote Michelle Johnston Holthaus, Intel

INTC, -0.77%

Executive Vice President and General Manager, Sales & Marketing. "Despite our best efforts, we have not yet resolved this challenge."

Investors were not bugged by news because Intel reaffirmed its previous fourth-quarter guidance, which included a $ 1

.2 billion revenue growth forecast for the full year.

"I am confident Intel will meet its financial obligations if otherwise there is no need to provide discounts on prices that are not yet contractually bound," said Pat Moorhead, senior analyst at Moor Insights & Strategy, by e-mail.

It was unclear whether Intel was faced with other manufacturing problems or whether the letter reiterated the ongoing problems spoken last month by CEO Bob Swan in a conference call on company earnings.

"We're mitigating our customers and expecting more from us," Swan said last month in a call. “PC demand exceeded our expectations and exceeded third-party forecasts. Now we think the market is stronger than we expected in the second quarter, which made building buffers more difficult. We are working hard to regain balance between supply and demand, but we expect it to be a challenge in the fourth quarter. "

Although it is necessary for computer manufacturers to change their production to suit another microprocessor brand, it is possible that AMD

AMD, -0.75%

could ultimately benefit from Intel's supply problems. "This is an opportunity for AMD to acquire a stake, but OEMs [original equipment manufacturers] will take some time to switch volumes to AMD," said Kevin Krewell, senior analyst at Tirias Research. He added that it is not clear which Intel products were most affected by the problems.

If AMD shares burst this month, investors can see Intel news as another reason to jump aboard.


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