Feeds

AMD misses Q3 revenue targets

Lays the blame on GlobalFoundries wafer baker

Next gen security for virtualised datacentres

Struggling x86 and graphics chip maker Advanced Micro Devices put out its preliminary financial results for the third quarter of fiscal 2011 after Wall Street closed today, and the numbers were not good.

AMD ends its third quarter on October 1, which for all intents and purposes is nearly done, and rather than surprise investors on October 27 when it reports its numbers, the company decided to surprise them today. (We now have a better idea of why Rick Bergman, who was formerly general manager of AMD's Products Group, left the company for "a new opportunity" late last week.)

In a statement released after the market closed, AMD expected for sequential revenue growth of between 4 and 6 per cent in the third quarter. The company had previously forecast revenue growth of double this. In the second fiscal quarter ended on July 2, AMD reported $1.57bn in sales, so the current quarter will come in at between $1.63bn and $1.66bn. If you do the math, AMD is short somewhere between $63m and $94m for the quarter.

To make matters worse, AMD said that gross margins for the quarter would be in the range of 44 to 45 per cent, down from the 47 per cent it was predicting three months ago.

"The less-than-forecasted preliminary third quarter 2011 revenue results are primarily due to 32 nanometer yield, ramp, and manufacturing issues at GlobalFoundries in its Dresden, Germany factory that limited supply of 'Llano'," AMD said in a statement. "Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes. AMD continues to work closely with its key partner GlobalFoundries to improve 32nm yield performance in order to satisfy strong demand for AMD products."

Things started going wrong late last year, apparently. In January, AMD dismissed Dirk Meyer as CEO, tapping Thomas Seifert, AMD's CFO, to be the interim CEO. By April, AMD announced that it has rejigged its fab pact with GlobalFoundries to motivate its spun-out wafer baking operations to do a better job on the 32 nanometer ramp, which is critical for AMD's Opteron server and Fusion PC processors.

"The less-than-forecasted preliminary third quarter 2011 gross margin results are primarily due to less-than-expected supply of 'Llano' and associated products with higher average selling price (ASP)," AMD continued in its statement. "Additionally, shipments of AMD's next-generation server processor, code-named 'Interlagos', occurred later in the third quarter than originally anticipated."

You can see now why Intel is not in any great hurry to get its Xeon E5 server processors out the door. Intel was bragging at its Developer Forum two weeks ago that it was selling the Xeon E5s under non-disclosure to hyperscale cloud and HPC customers and would launch the chips formally in early 2012. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.