Feeds

AMD misses Q3 revenue targets

Lays the blame on GlobalFoundries wafer baker

Top three mobile application threats

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. ®

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.