AMD brings in record rev­enue, but chip spinoff drags on profit

De­mand from note­book firms fu­eled growth, chief exec says

Austin American-Statesman - - BUSINESS - By Kirk Laden­dorf

Ad­vanced Mi­cro De­vices Inc. re­ported record sec­ond-quar­ter rev­enue Thurs­day and said it was al­ter­ing its plans for in­tro­duc­ing its first Fu­sion chips, which com­bine a graph­ics pro­ces­sor and com­puter pro­ces­sor on the same piece of sil­i­con.

Sun­ny­vale, Calif.-based AMD, which has about 2,300 em­ploy­ees and sub­stan­tial op­er­a­tions in Austin, took in $1.7 bil­lion in rev­enue, up 40 per­cent from the same pe­riod last year. The com­pany recorded a net loss of $43 mil­lion, or 6 cents a share, that was tied to its stake in Glob­al­Foundries, the man­u­fac­tur­ing spinoff that it jointly owns with an in­vest­ment com­pany backed by the govern­ment of Abu Dhabi. The spinoff al­lowed AMD to fo­cus on de­sign­ing chips.

With­out the Global-Foundries ad­just­ment, AMD said it would have made a profit of $83 mil­lion for the quar­ter. The re­sults com­pared with a loss of $330 mil­lion, or 49 cents a share, on rev­enue of $1.2 bil­lion a year ago.

Con­tin­ued from B

“We are pleased with our over­all per­for­mance, and we see strong op­por­tu­ni­ties for con­tin­ued growth,” said CEO Dirk Meyer.

The com­pany ex­pects rev­enue will be sea­son­ally up in the cur­rent quar­ter. He noted that much of the growth is fu­eled by more sales to mak­ers of note­book com­put­ers, where AMD sup­plies both pro­ces­sors and graph­ics chips.

An­a­lysts, who don’t in­clude Glob­al­Foundries in their fore­casts for AMD, con­grat­u­lated Meyer on a strong quar­ter.

Sales of com­puter pro­ces­sor chips to­taled $1.2 bil­lion in the quar­ter, up 31 per­cent from a year ago. Sales of graph­ics chips to­taled $440 mil­lion, up 87 per­cent.

Meyer gave a more de­tailed out­look for AMD’s Fu­sion plans. The com­pany has moved up pro­duc­tion of its low-power Fu­sion chip, code-named On­tario, which is aimed at net­book com­put­ers and low-cost desk­tops. On­tario will ship to com­puter mak­ers in the fourth quar­ter with prod­ucts be­com­ing avail­able to com­puter buy­ers early next year. On­tario will be man­u­fac­tured by Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co.

“On­tario will open up seg­ments for us that we haven’t been able to com­pete in be­fore,” he said.

But Meyer added that a sec­ond Fu­sion project, co­de­named Llano, will be de­layed by per­haps two months be­cause of slower than ex­pected progress at Glob­al­Foundries with its next-gen­er­a­tion man­u­fac­tur­ing process. Llano, which in­volves chips for main­stream desk­tops and note­books, will still ship in the first half of next year.

Dirk Meyer

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