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Advanced Micro Devices said Wednesday that revenue for the third quarter ending October 1, 2011, would be lower than originally expected. The company blamed poor yields of its A-series "Llano" accelerated processing units (APUs) as well as delayed product shipments of its highly-anticipated chips based on Bulldozer micro-architecture.

AMD expects it revenue to increase 4% to 6% as compared to the second quarter of 2011, or to the range between $1.6328 billion and 1.6642 billion, which will be a slight increase from $1.62 billion the company earned in Q3 FY2010. The company previously forecasted third quarter 2011 revenue to increase 10% ±2% from the second quarter of 2011. In addition, AMD expects third quarter gross margin to be approximately 44% to 45%, down from previously forecasted 47% and lower than 46% in the same period last year.

The less-than-forecasted preliminary third quarter 2011 revenue results are primarily due to 32nm yield, ramp and manufacturing issues at Globalfoundries in its Dresden, Germany factory that limited supply of A-series "Llano" accelerated processing units. 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 to improve 32nm yield performance in order to satisfy strong demand for AMD products.

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). Additionally, shipments of AMD's next-generation Opteron server processor, code-named "Interlagos", occurred later in the third quarter than originally anticipated. Finally, the company had to delay the launch of its highly-anticipated FX-series microprocessors code-named "Zambezi".

AMD will report third quarter 2011 results after market close on Thursday, October 27, 2011.

Tags: AMD, 32nm, Fusion, Bulldozer, Llano, Globalfoundries, Zambezi, Opteron, Interlagos

Discussion

Comments currently: 11
Discussion started: 09/29/11 12:05:19 PM
Latest comment: 10/02/11 07:32:22 AM
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1. 
what does "ramp issues" and "manufacturing issues" mean? I know what "yield issues" are but not the other two.
0 0 [Posted by: taltamir  | Date: 09/29/11 12:05:19 PM]
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ramping usually means upping the number of chips of a certain type produced (so that if you put the numbers in a graph you see a ramp).
1 1 [Posted by: Countess  | Date: 09/30/11 04:28:26 AM]
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2. 
Ramp issues, means moving from one product to another and speeding up the process of a new product.

Manufacturing issues is a bit more nebulous. It can be almost anything from learning to use a new process to poor communication's between various groups involved in production.

AMD is moving from one process to some very new ones in a lot of new chips, its not surprising to see them stutter step a bit but their new products are very impressive.
0 0 [Posted by: DEADTIME  | Date: 09/29/11 05:29:31 PM]
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3. 
Well, it looks like AMD has dug themselves into a truely deep hole. I was completely unaware of their poor yields and was expecting their platform setup and marketing to help them become competetive with Intel again. Llano is a just a stopgap product that is close to an APU capable of playing modern games at high resolutions with high textures. All AMD did was tapewrap an Athlon II with a Redwood GPU. I hope Bulldozer is as revolutionary as the documents claim it to be. Otherwise, AMD is screwed, especially in the high-end market segment.
0 0 [Posted by: DirectXtreme  | Date: 09/29/11 06:41:26 PM]
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"All AMD did was tapewrap an Athlon II with a Redwood GPU."
they did a bit more then that, otherwise it wouldn't be performing like a mid range GPU while having only half the bandwidth that it needs to share with the CPU.

and the high-end market segments are only a tiny potion of the market. socket 1366 and 2011 are not going to be high volume sellers.
its the 2500 and 2600 that hey need to start competing with.

and how have they dug themselves in a hole? their revenue is still growing, just not as fast. and they are turning a (modest) profit.
that last one in particular is unheard of with AMD in the middle of either a product change or a process change... and AMD has both going on at the moment.
2 1 [Posted by: Countess  | Date: 09/30/11 04:36:30 AM]
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4. 
Last year the SOI tooling utilization in GloFo was no more than 75% or even lower. From that POV GloFo has plenty free resources to burn 32nm SOI. Why does not she want doing that? Maybe GloFo isn't interested fundamentally to move to 32nm because in this case the SOI utilization, taking into accounting AMD share and future products competitive position, will drop well below 50%. "The sheepskin isn't too good for manufacturing".
0 1 [Posted by: Azazel  | Date: 09/29/11 08:13:48 PM]
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last year AMD didn't have llano. its proven to be a highly sought after product, particularly among OEM's.

and AMD's future competitive position hasn't looked so goo in 5 years. if llano is popular now with its relatively weak CPU, then trinity will surely be a smash hit. and bulldozer is set to close the gab substantialy between AMD's current products and intel's in terms of performance.
1 1 [Posted by: Countess  | Date: 09/30/11 04:31:43 AM]
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You read to much about Llano's popularity.
Llano's popularity is firstly the A. and P. replacement , and secondly very low shipments, and thirdly the marketing trick because Llano took some interest in very few market only, like HTPC, for instance.
0 1 [Posted by: Azazel  | Date: 09/30/11 06:14:08 AM]
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You can say it whatever way you want. The fact still remains that Llano is wiping the floor in the low power and new thin book market segments. You would take a new atom over a e-350?
2 1 [Posted by: veli05  | Date: 09/30/11 01:03:30 PM]
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Considering that the e-350 has absolutely nothing to do with Llano at all, I wouldn't say that the e-350 proves Llano's superiority. Intel never wanted the netbook to exist at all. Instead, Atom was supposed to go into tablets and cellphones. It took a lot longer than Intel would have liked to get there, so netbooks turned into a temporary niche for the chips.
0 0 [Posted by: chuckula  | Date: 10/02/11 07:32:22 AM]
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5. 
Ramp issues means going from being able to make a few prototypes to have full scale mass production. Ramping up is the process that is done in order to scale up. If the ramp up is hindered, than scaling up can't take place. Ramping up is getting the manufacturing process to work on a production line, scaling up is getting that production line up to speed and muliplied on simultanious lines.

The manufacturing issues seem to be to me is getting enough usable chips on each silicon platter. If you look at the picture, that disk is made with potentially many chips to be cut apart on it. Each chip is tested to determine possible defects, how many usable cores, and speed clockability. They are then sorted, mounted and sold as different speeds and number of CPU cores. If too many are not usable at all, production can be drastically slowed. As they work on getting the APU's "ramped up" in to full scale production, the tooling and testing facilities utilied to striaghten out the problem, so "Bulldozer" is delayed waiting for it's turn to start production. Since, those facilities are needed to verify "Bulldozer's" integrity, they can't commence their full production run either. I just saw my value drop 20%. I really hope that the problem is only in the APU chip, not actually in the design of the Bulldozer chips themselves.

Jeff Dranetz
0 0 [Posted by: jdranetz  | Date: 09/30/11 06:22:24 AM]
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