Advanced Micro Devices Inc.

The U.S. semiconductor industry, notoriously volatile even without the shock of a global economic downturn, was badly hurt in 2008 as prices for memory chips continued their dizzyingly rapid fall and demand for PC microprocessors dropped off amid weaker demand.

Many of the problems facing Advanced Micro Devices Inc. are of its own making. But the limited choices the chip maker has for solving its troubles are symptoms of an affliction sweeping through Silicon Valley.

Slumping sales, big layoffs and devastated stock prices are becoming the norm, resurrecting memories of the malaise that gripped the Valley for years after the dot-com meltdown in 2000.

With Advanced Micro Devices Inc.'s cash reserves dwindling and the chip maker's overall financial health deteriorating to dangerous levels last year, the company was thrown a lifeline by Lehman Brothers, the investment bank now in bankruptcy.

The $1.5 billion in AMD debt that Lehman scooped up in August 2007 demonstrates the important role that banks like Lehman and other investment firms play in helping prop up wobbly companies by pouring money into them when they're down.

European Union regulators have expanded their antitrust case against Intel Corp., claiming that the world's largest semiconductor maker has deliberately squeezed rival AMD out of the chip market.

The European Commission said Thursday that it has added three new charges against Intel, warning that it may order Intel to change its behavior under threat of large fines that can total 10 percent of its global revenue. Intel's 2007 sales were $38 billion.

Intel said the new charges did not reflect any major change to the first group sent in July 2007.

Intel Corp.'s second-quarter profit jumped 25 percent as blossoming sales of laptop chips helped the company cruise past Wall Street's estimates Tuesday.

Investors viewed the chipmaker's favorable results as a sign that global PC demand is healthy despite a sputtering U.S. economy that has depressed some domestic spending. Intel CEO Paul Otellini said demand for Intel's chips remains strong "in all segments and all parts of the globe." Three-quarters of Intel's business is outside the U.S.

Grappling with major layoffs and a stock price that's been chopped nearly in half since last year, Advanced Micro Devices Inc. kept new details about its turnaround plans close to the vest Thursday in a very brief annual meeting with shareholders.

The Sunnyvale-based company's chief executive, Hector Ruiz, notably did not discuss AMD's long-awaited plans to cut its heavy manufacturing costs. His 20-minute speech was punctuated with just one question from a shareholder -- about why AMD doesn't sponsor professional golf tournaments to increase its visibility.

Grappling with major layoffs and a stock price that's been chopped nearly in half since last year, Advanced Micro Devices Inc. kept new details about its turnaround plans close to the vest Thursday in a very brief annual meeting with shareholders.

The Sunnyvale-based company's chief executive, Hector Ruiz, notably did not discuss AMD's long-awaited plans to cut its heavy manufacturing costs. His 20-minute speech was punctuated with just one question from a shareholder -- about why AMD doesn't sponsor professional golf tournaments to increase its visibility.