Despite the loss, AMD executives say the company saw record shipments of APUs in 2011, and tout the upcoming "Trinity" chips for ultrathin notebooks.
Micro Devices generated solid revenue out of it PC chip business and saw
encouraging numbers from its server processors, but falling sales of its
graphics products and charges the company paid related to its relationship with
Globalfoundries and its restructuring plan resulted in a $177 million loss in
the fourth quarter of 2011.
announced Jan. 24, comes after a third quarter in which AMD, the world's
second-largest chip maker, earned $97 million, and $375 million in the fourth
quarter of 2010. Revenue for the quarter was $1.69 billion, about the same as
the previous quarter and a little better than the $1.65 billion in the same
period in 2010.
projection of an 8 percent decrease in revenue for the current quarter also
missed analyst expectations.
and CEO Rory Read set a positive tone during a conference call with journalists
and analysts, saying the company has made significant improvements in
execution, and that demand for both its PC and server chips are growing, but
admitted that the graphics business was hurt in part by the flooding late last
year in Thailand that significantly impacted the worldwide production of
hard-disk drives (HDDs), which in turn reduced demand for graphics boards.
Thailand produces more than 40 percent of the world's HDDs.
Read said, he expects the industry to bounce back in the coming quarters as the
HDD market returns to normal. AMD executives also are hoping for a bounce from
the company's Radeon
HD 7970 GPUs
, which were released late last year. However, AMD and other
graphics chip makers, like Nvidia, are facing a world where demand is
increasing for chips that offer integrated graphics capabilities.
was dogged by its relationship with manufacturing partner Globalfoundries,
which was created two years ago when AMD spun off its manufacturing business.
AMD took a $209 million charge during the quarter in connection with the
Globalfoundries investment, and took another $98 million charge related to its
restructuring plan, which includes laying
off 10 percent of the workforce
the call, CFO Thomas Seifert said AMD expects to save about $200 million from
the layoffs, money it plans to reinvest in the company's product development.
Read and other executives said they were pleased with the performance of AMD's
accelerated processing units (APUs), which were first introduced in January
2011. The APUs, first offered in notebook and desktop chips, offer graphics and
CPUs integrated onto the same chip. Read said the company's "Brazos"
APUs, for lightweight notebooks and netbooks, have been the most successful
product in AMD history, and the company saw a 25 percent increase in shipments
of mobile chips throughout 2011.
maker is recovering from the stumble it took in the third quarter, when issues
at a Globalfoundries' manufacturing plant
limited the number of
32-nanometer "Llano" chips hitting the market. Read has been vocal
since about the need to improve AMD's execution, and said that Llano processors
for mainstream notebooks and desktops accounted for 80 percent of the company's
shipments in the fourth quarter.
hoping to see that trend later in the first half of 2012 when it launches
"Trinity," which it said will enable OEM partners to build very thin
and light notebooks to meet a rapidly growing demand for such devices. The
chips will offer double the performance-per-watt capability of current APUs and
will fuel a new line of what AMD executives are calling "ultrathin"
notebooks, which Read said will be as thin as 17mm.
devices will compete with Intel's ultrabook push, which the larger chip maker
kicked off in May 2011. OEMs such as Lenovo, Acer, Asus and Hewlett-Packard
have introduced first-generation ultrabooks, and Intel officials have said they
expect as many as 70 ultrabook designs based on their upcoming "Ivy
Bridge" chip when it's released later this year.
cost has been an issue with ultrabooks, with prices ranging from $900 to about
$1,400. AMD officials believe that with Trinity, manufacturers will be able to
make ultrathins that are almost as thin and light as ultrabooks, but at prices
in the $500 range. Read said he expects consumers to embrace ultrathins, which
will give them the mobility they want at an affordable price.
want to develop that kind of ultrathin experience that reaches the masses,"
Read said. "Everyone."
said the company is seeing strong interest in its 16-core Opteron 6200 and
eight-core Opteron 4200 server chips, based on the new
. Read expects that interest to grow now that HP
has announced five ProLiant servers based on the chip, and Dell is offering
four PowerEdge blades powered by the new Opterons.