Advanced Micro Devices caught up with Intel today, announcing that it is slashing its fourth-quarter revenue forecast because of a sharp drop in demand.

The company said it expects revenue from continuing operations for the fourth quarter ending Dec. 27 to be 25 percent lower than its third-quarter revenue of $1.58 billion. That doesn’t include technology license revenue. The shortfall is due to weaker than expected demand across all geographies and businesses, particularly in the consumer market.

Curiously, AMD did not change its guidance at its annual analyst meeting on Nov. 13, a day after Intel slashed its fourth-quarter revenue forecast by a billion dollars. At that time, AMD expected a flat quarter, but it said back then it would offer new guidance today. AMD’s executives said they wanted to wait until they had more visibility into the quarter.

AMD will report final results on Jan. 22. The outlook matches the gloomy forecast from Intel, which foresaw a bad quarter much earlier. However, Hewlett-Packard, a major customer of both companies, surprisingly has not changed its forecast. HP doesn’t have the same fiscal quarter dates — its fourth will close at the end of January. But other tech giants like Cisco have joined in the steady drumbeat of forecast slashing.

The recession is hitting all chip makers. The Semiconductor Industry Association’s annual forecast predicted the first decline in annual sales for 2009 since the crash in 2001. AMD is in the process of cutting costs by dividing itself into two companies, one that makes chips and another that designs them.

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