Shares of chipmaker AMD slipped 7 percent after the company announced its Q3 revenue will be 10 percent lower than Q2 revenue.

Analysts were expecting AMD’s revenue to hit $1.38 billion, but according to AMD’s latest announcement it could come in at less than $1.3 billion. Gross margin will also be lower than expected 31 percent versus 44 percent.

AMD is blaming the downturn on weak demand, but analysts see a wider problem, for AMD and the industry as a whole.

PC demand is expected to remain weak, despite the Windows 8 launch and Intel’s efforts to promote ultrabooks. Strong demand for tablets is also having an impact on the market, which is bad news for AMD and Intel.

More here.