AMD's CEO Hector Ruiz has admitted that the chip maker's lack of focus on its channel partners is one of the main reasons that its Q1 revenue will fall well below a previous forecast of between $1.6-billion and $1.7-billion.

Almost since the successful launch of the Opteron, AMD has gone out of its way to madly court OEMs like Dell and HP which pre-Opteron showed little interest in AMD. This strategy, and AMD's subsequent lack of focus on its traditional partners, it seems, has returned to haunt it.
At a Morgan Stanley conference in San Francisco, Ruiz was forthright.
"We let down our channel partners," he told the audience. "We went from being a player whose majority of sales were in the distribution channel as opposed to OEMs, to one that has changed in a very short time to having a majority of sales going to OEM buyers.
"That transition happened probably faster than we had planned. A larger number of OEMs wanted our products faster than we were prepared to meet, so we were not able to feed the channel."
AMD has recorded market share gains against its biggest rival, Intel, for 10 consecutive quarters. But despite this success, Ruiz admits that it may be too late to retain some disgruntled customers.
"A channel partner needs a commitment for a 30- to 60-day supply of products," Ruiz says. "I couldn't give it to them, so they decided to get it somewhere else. We let down our channel partners by not being able to support them as much as they needed us. We need to get our distribution business back on track."
The Register reports that Ruiz's excuse for what appears to be a poor upcoming first quarter didn't go over that well with Wall Street analysts.
They questioned why, if all available chips are being sold – even if it is only via OEMS – revenue was being adversely affected.
Ruiz never answered this question directly, but did point out that the "pricing environment is very competitive."
He promised that the company would quickly spring back by increasing production, particularly of its Barcelona quad-core Opteron chip due out in the second half of 2007 which will compete against Intel's Clovertown quad-core Xeon chip, launched at the end of last year.