Advanced Micro Devices on Thursday slashed expected level of revenues for the fourth quarter due to global economic slump. According to the company, the demand towards all of its chips has so far been lower than expected.

AMD said it expected revenue from continuing operations for the fourth quarter ending on December 27, 2008 to be approximately 25% lower than third quarter 2008 revenue of $1.585 billion, not including process technology license revenue, or about $1.1887 billion. The decrease is due to weaker than expected demand across all geographies and businesses, particularly in the consumer market, the company said in a statement. Originally, AMD expected its Q4 FY2008 revenue to be flat compare to the Q3.

The warning from the world’s second largest supplier of x86 central processing units as well as high-performance graphics processing units seems rather alarming. AMD has started shipping 45nm server quad-core AMD Opteron processors for revenue and is about to start shipping desktop-oriented AMD Phenom II microprocessors. The lower-than-expected demand towards new desktop chips may mean that consumers are indeed planning to considerably slash spending in Q1 2009. Moreover, the warning also claims that the demand towards ATI Radeon graphics chips is also lowering, despite of the fact the ATI lineup is stronger than back in 2006 and 2007.

Back in November AMD’s arch-rival Intel Corp. said its fourth quarter revenue would be 10% lower than initially expected.

AMD will report fourth quarter 2008 results after market close on January 22, 2009.

Tags: AMD, ATI