ATI Technologies Inc. will not hit its fiscal Q4 revenue targets, thanks to pullback from Intel, the company said Wednesday after the bell.

The GPU maker now expects consolidated revenue to be approximately $520 million for the quarter, far below its previous expectation of at least $620 million.  That estimate was made on June 29, before the company announced merger plans with Advanced Micro Devices on July 24.

The revenue shortfall, ATI said, was a likely one after the announced agreement, as Intel, AMD’s chief rival and a major ATI integrated chipset customer to that point, was expected to pull back its orders.

"While we anticipated a decline in future Intel-based chipset business following the announcement of the acquisition agreement with AMD, the decrease occurred much sooner than we expected," said Dave Orton, CEO of ATI, in a statement. "Our other product lines are quite healthy and the response to our recent handheld, digital TV and GPU product announcements has been extremely positive from both customers and from the overall market."

ATI believes the sales adjustment is temporary in nature and should not have a long-term impact on revenue.

According to Wall Street firm Lehman Brothers, Intel’s related ATI chipset business was worth $80 million to $100 million per quarter. However, Lehman’s managing director and global sector head of technology equity research, Tim Luke, sees a bright side to ATI’s downward revenues.

“While this could be seen as a negative catalyst for AMD’s stock in today’s trading, we believe AMD’s core business remains on track and we are encouraged by the company’s recent traction in the OEM channel,” Luke said in a research note before the opening of trading today.

“We believe potential upside exists to the extent that AMD can further penetrate Dell beyond the previously announced consumer desktop and 2-way/4-way server business. In addition, as we have previewed, we believe AMD is in discussions with Toshiba regarding incremental notebook business, which could potentially impact our AMD unit share assumptions should a deal close before year-end.

“We view weakness in the stock today, resulting from ATI’s negative pre-announcement, as possible opportunity given AMD’s recent share gains and potential for incremental contract wins beyond what has previously been disclosed,” he concluded.