Chip maker Advanced Micro Devices, Inc.(NYSE:AMD), which is due to report its quarterly results on Oct. 18, fell nearly 8 percent on Thursday after the company warned of a 10 percent fall in its third quarter revenues.
The company said that its revenues for the third quarter would be lower by 10 percent from its second quarter as demand for chips had weakened.
Personal computers are seeing a decline in sales as more customers are moving to smartphones and mobile devices such as tablets for their daily computing needs.
Research firms Gartner and IDC both released figures on Thursday which showed that PC shipments in the third quarter had fallen to their lowest since 2001, with a decline of 8 percent on year.
The forecast for this year is also a 1.2 percent decline in shipments, the first in more than a decade.
Sales of PCs impact chipmakers such as Intel and AMD, s they provide the microprocessors which run the computers.
The current forecast by AMD warns of a steeper decline than the company’s previous forecast when it had said that revenues would fall by 1 percent.
The world's second largest chip maker also wrote down its inventory by $100 million following a drop in demand for its products. It also had to reduce the prices of its products on account of weak demand.
Shares of the company slumped 14.38% to $2.74 in Friday’s session.