Feeds

AMD bleeds red in Q1 after GlobalFoundries deal rejig

But sales not as bad as expected

Eight steps to building an HP BladeSystem

PC and server chip maker Advanced Micro Devices didn't do as badly as expected in the first quarter, with revenues only down 1.7 per cent to $1.59bn.

But the red ink was deeper than usual in the wake of its restructuring of its relationship with fab partner GlobalFoundries, which cost AMD a $703m writeoff in the quarter. And thus, instead of posting a $92m profit, AMD posted a $590m loss.

The first quarter normally has a sequential decline for both AMD and archrival Intel, so a dip was not unexpected.

The Computing Solutions segment at AMD posted just a tad bit over $1.2bn in revenues in the first quarter ended in March, flat from the year-ago period. Operating income from this segment, which makes processors and chipsets for servers and PCs, actually rose by 24 per cent to $124m.

On the server front, Rory Read, AMD's CEO, said the Opterons "continue to make progress," and that this was the third consecutive quarter of growth for the server business at AMD. "We are fully committed building our server business, step by step, over the long haul," Read said several times in the call with Wall Street analysts. AMD gained a little market share against rival Intel in the server racket in the fourth quarter of 2011, and Read said that he believed AMD gained some share again in the first quarter, too.

Server processor shipments were up compared to the year ago period, but because AMD has slashed prices and is shipping a different mix of "Bulldozer" Opteron 4200s and 6200s, server chip and chipset revenues were down in Q1. The Bulldozer chips above now account for more than half of Opteron shipments and revenues, said Read.

AMD closed its acquisition of microserver and server interconnect upstart SeaMicro in the quarter, and will no doubt put its Opteron 3200 processors into the machines as quickly as it can. And perhaps others. After burning $293m in cash for SeaMicro (plus assuming another $43m in costs), AMD was sitting on a pile of cash that was $1.71bn deep.

Client chip shipments were down in the quarter, as were revenues and ASPs, as 45 nanometer products were being gradually replaced by hybrid CPU-GPU designs, which AMD calls Accelerated Processing Units, or APUs. AMD has shipped over 30 million of its "Brazos" APUs to date, and is getting ready to ramp-up its next generation "Brazos 2.0" and "Trinity" APUs this quarter with volume shipments by the back to school season.

Read said that a "steady supply of 32 nanometer parts" allowed AMD to meet its commitments to PC and server customers in the quarter.

AMD's Graphics division posted revenues of $382m in the first quarter, flat sequentially but down 7.5 per cent year-on-year. Operating income in graphics was up 78.9 per cent to $34m in the quarter. That middle line was 26 per cent higher than in Q4 2011, which had the same revenues for discrete graphics. Read said that the 28 nanometer ramp for discrete graphics cards for PCs was going well and "demand was strong."

GPU average selling prices were actually up in the quarter overall, thanks to improved sales of desktop GPUs through channel partners, which offset lower GPU sales to game console makers.

As is the case with rival Nvidia, AMD wishes it could get more 28 nanometer GPU parts from fab partner Taiwan Semiconductor Manufacturing Corp. Read said that AMD was "monitoring this closely" and was "going to track it week in and week out." ®

Mobile application security vulnerability report

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
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
Bose says today IS F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.