And citing sluggish demand for PCs and a slowdown in the flash memory market, AMD projected that its sales for the first quarter of 2001 will be sequentially flat, as compared to the fourth quarter of 2000.

This follows a similar announcement from Intel, which on Tuesday also said it expected lackluster demand in the first quarter of 2001 (see Jan. 16 story ).

AMD, meanwhile, reported record sales of $1.18 billion for the fourth quarter of 2001, ended Dec. 31, up 33% from the $968.7 million figure posted in the like period a year ago. The company also reported a net of $177.9 million, or $0.53 per share, compared to $65 million, or $0.21 a share, a year ago.

Despite the growth in the quarter, AMD missed Wall Street's projections. The company was supposed to earn $0.55 a share in the quarter, according to First Call/Thomson Financial.

For the year, AMD also reported record sales of $4.6 billion, a 63% jump over 1999. Net income was $983 million, or $2.89 per diluted share, compared to a loss of $88.9 million, or $0.30 a share. The 2000 results included a one-time net gain of $189.2 million from the sale of the company's voice communications business.

"AMD had the best year in its history," declared W.J. Sanders III, chairman and chief executive officer. "While the deterioration of the PC market late in the year impacted sales of PC processors in the fourth quarter, AMD substantially outperformed the semiconductor industry in a year of extraordinary growth."

Despite the slowdown in the PC business, AMD gained market share--at the expense of its main rival: Intel Corp., Sanders claimed. "AMD gained market share in the PC processor arena, with more than 26.5 million total units sold in 2000," Sanders said. "We believe we gained three points of market share in units during the year, to approximately 17% of the worldwide market for PC processors," he said.

"We continue to be the volume provider for PCs featuring speeds of 1-GHz and greater," he added. "Indeed, by the end of the current quarter, all AMD Athlon processors will be manufactured with clock speeds of 1-GHz or higher."

On the negative side, sales of AMD's Duron processors impacted by the unavailability of certain chipsets. Total PC processor average selling prices were negatively affected by end-of-life pricing of AMD-K6-2 family of processors.

AMD also expects that normal seasonal weakness in first-quarter demand for PC processors, coupled with the effects of excess inventories in the distribution channels, will impact the sales of these chips in the first quarter of 2001.

The company currently expects to sell between 6 and 6.5 million processors in the first quarter. Accordingly, PC processor revenues are expected to be modestly lower.

It currently projects that sales of its flash memory products will grow modestly in the first quarter from the levels of the fourth quarter of 2000, but it projects substantial growth for the year as a whole.

Accordingly, the company expects that total first-quarter sales for AMD will be up year-on-year, but no better than flat sequentially from the fourth quarter of 2000.