AMD brings in record revenue, but chip spinoff drags on profit
Demand from notebook firms fueled growth, chief exec says
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.
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“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.