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Just when you think that things cannot get any worse at Advanced Micro Devices Inc. (NYSE: AMD), they get worse. Fitch ratings has now downgraded AMD’s corporate credit rating today. This is not normal downgrade is the rating was a drop of three notches and this sends the credit rating that much further into junk-bond territory. To make matters worse Fitch believes that AMD’s cash levels will continue to decline. Fitch expects revenue to decline in the double-digits in 2013.

The company’s long-term issuer default rating was cut down to triple C rating. This reflects Fitch’s expectations that negative free cash flow will drive below AMD’s target level in 2013. Fitch also worries that its negative cash flow will approach the minimum operating level for AMD. The risk is that after AMD’s wider than expected loss the company will need a strong recovery in the end-market as well as an adoption of new products just preserve cash during its turnaround.

We would go on further, but this is AMD we are talking about. The risks here are not just to the downside. AMD is looking more and more each day as though it has relevance issues longer term. When was the last great thing anyone heard about AMD? The smartphone and the moves to the mobile web are not helping trends come back toward AMD. By our take, AMD doesn’t even have Intel Corporation (NASDAQ: INTC) to attack for its shortcomings this time around.

AMD shares are down 2.5% at $2.67 and the 52-week trading range is $1.81 to $8.35. As of today, AMD is now only worth about $2 billion in market cap.