Problems at Globalfoundries facilities have limited the supplies of 32nm "Llano" Fusion chips, forcing AMD to reduce financial forecasts for the third quarter.
Executives with Advanced Micro Devices
are pointing to manufacturing problems with partner Globalfoundries as the key
reason for lowering their third-quarter financial forecasts.
AMD on Sept. 28 announced that revenue
for the quarter will come in 4 to 6 percent higher than the second quarter, a
drop from the initially projected 10 percent increase. In addition,
third-quarter gross margins will come in at 44 to 45 percent, down from the
previous estimate of about 47 percent.
The problem is centered around issues
with Globalfoundries' Dresden manufacturing plant in Germany that are limiting
the supplies of 32-nanometer "Llano" chips, according to AMD. At the same time,
complexities in the 45nm process also are limiting supplies of those chips. The
complexities surround the use of tools that are used in both the 32nm and 45nm
The lack of 32nm Llano Fusion
accelerated processing units (APUs) means fewer products with higher average
selling prices powered by the chip.
The problems are not limited to the
Llano APUs, AMD said-shipments of the company's next-generation Opteron
6200 Series "Interlagos"
occurred later in the third quarter than officials
had expected. Interlagos, which offer up to 16 cores and also are made by the
32nm process, are built on the new "Bulldozer" architecture. AMD announced
Sept. 7 the Interlagos chips were shipping.
Systems powered by Interlagos chips are
due out later in the fourth quarter.
For AMD, the manufacturing problems are
in stark contrast to what Intel is doing, according to Ross Seymore, managing
director of U.S. semiconductor research for Deutsche Bank Securities.
"Even as AMD faces challenges at 32nm,
its primary competitor is poised to start shipping 22nm-based MPUs, which will
further pressure AMD's costs and product competitiveness," Seymore said in a
research note Sept. 28.
AMD spun off its manufacturing business
in 2009 to create-in conjunction with Advanced Technology Investment Co. of Abu
Dhabi-Globalfoundries. AMD works with both Globalfoundries and Taiwan
Semiconductor Manufacturing Co. to build AMD's processors. TSMC makes several
Fusion APUs as well as graphics chips for AMD.
AMD is scheduled to announce
third-quarter financial numbers Oct. 27.
The chip maker's Fusion
processors-which feature high-level graphics integrated on the same piece of
silicon as the CPU-have helped AMD bolster its standing in the worldwide
processor market. Analysts
at Mercury Research
in July said the Fusion chips helped AMD grow its share
of the chip market to 19.4 percent in the second quarter, up from 17.8 percent
during the same period in 2010.
However, IHS iSuppli said Sept. 28 that
in the second quarter grew its market share
to 81.8 percent, thanks to high
corporate demand for PCs and strong sales of its "Sandy Bridge" chips, which
like the Fusion APUs integrate the graphics technology with the CPU.