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As a result of strategic changes on the market of personal computers as well as due to extremely competitive products available from the arch-rival Intel Corp., sales of Advanced Micro Devices dropped by 17% in 2012 compared to the previous year. The company lost $1.18 billion in 2012 as well as $473 million in the last quarter of the year, which clearly signals that AMD needs changes and competitive products.

AMD on Tuesday announced revenue for the fourth quarter of 2012 of $1.16 billion, an operating loss of $422 million, and a net loss of $473 million, or $0.63 per share. Fourth quarter gross margin was positively impacted by the sales of higher priced desktop microprocessors and reached 15%. For the year ended December 29, 2012, AMD reported revenue of $5.42 billion, an operating loss of $1.06 billion and a net loss of $1.18 billion, or $1.60 per share. The whole year gross margin was 23%.

Microprocessor Sales Down

Computing solutions segment (microprocessors, chipsets, etc.) revenue in Q4 2012 was $829 million, down 11% sequentially and 37% year-over-year. The sequential and year-over-year decreases were primarily driven by lower microprocessor unit volume shipments. Operating loss was $323 million, compared with an operating loss of $114 million in Q3 2012 and operating income of $165 million in Q4 2011 primarily because AMD was charged for change of the supply agreement with GlobalFoundries.

Client computing revenue declined 13% sequentially, primarily driven by lower microprocessor unit volume shipments. Desktop APU shipments increased as a percentage of desktop microprocessor shipments as sales of AMD’s second-generation A-series APU, code-named “Trinity” more than doubled in the quarter, compared to Q3 2012. Client microprocessor ASP was flat as richer desktop microprocessor offerings offset lower mobile microprocessor ASP.

Server revenue increased sequentially, driven by a higher mix of fabric AMD SeaMicro compute systems (which are primarily based on Intel Corp.’s Atom and Xeon microprocessors) focused on dense servers.

Chipset revenue declined in line with the client microprocessor business.

Graphics Cards Sales Down

AMD’s graphics solutions business showed mixed results in Q4 2012. Graphics segment revenue was $326 million, down 5% sequentially and 15% year-over-year, mainly due to a decline in GPU unit volume shipments, partially offset by a seasonal increase in game console revenue and record revenue in workstation graphics. Graphics segment operating income was $22 million, up $4 million from the prior quarter primarily due to higher game console revenue.

At the same time, the company managed to increase unit shipments and revenue for its high-end AMD Radeon HD graphics cards in the channel, primarily due to the “Never Settle” promotion, which included free video games bundled with graphics cards in addition to a new driver that enabled higher performance of AMD’s graphics solutions.

“AMD continues to evolve our operating model and diversify our product portfolio with the changing PC environment. Innovation is the core of our long-term growth.  The investments we are making in technology today are focused on leveraging our distinctive IP to drive growth in ultra low power client devices, semi-custom SoCs and dense servers.  We expect to deliver differentiated and groundbreaking APUs to our customers in 2013 and remain focused on transforming our operating model to the business realities of today,” said Rory Read, AMD president and CEO.

Tags: AMD, ATI, Radeon, Fusion, FX, Opteron, Trinity, Piledriver, Vishera, Business


Comments currently: 10
Discussion started: 01/23/13 10:08:09 AM
Latest comment: 09/22/13 01:41:19 PM
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Judging from the report, it seems that AMD is in a shift at the moment.
They do fine in some sectors and sucks in others, I hope they will stand on their feet and don't let intel dominate the CPU market.

Trinity APU may save the day for 2013, they perform pretty nice and the integrated GPU is good enough for most mainstream users, unlike the intel GPU offerings that are good only at higher CPUs, and seriously, if you got an i7 you will stay with integrated GPU?
This balance can make the difference in the entry level area.

We all lose if there is a monopoly.
Let's hope they will come up with something good and make intel to drop prices.
7 2 [Posted by: nitro912gr  | Date: 01/23/13 10:08:09 AM]

Skipping over the fact that they came in above estimates for Q4. We all knew AMD would be down again, but they weren't as down as analysts expected.
3 0 [Posted by: KeyBoardG  | Date: 01/23/13 12:57:54 PM]

AMD beat the market hence the 11.5% bounce in share price.
3 2 [Posted by: linuxlowdown  | Date: 01/23/13 08:26:12 PM]

Comsidering the worldwide economic meltdown, AMDs total reorganization, their buy-out of wafers in Q4 from GloFo, their purchase of Seamicro and the buy-out of exclusive CPU production at GloFo earlier this year, AMD did pretty good for the year.

Trinity laptop/desktop and FX are all a sales success and AMD's low voltage, low powered APUs are also selling extremely well. AMD will be in the new X-Box and Play Station in addition to tablets and other portables.

All in all AMD's future looks bright even though they will have a lot of work to do for several years to really start benefitting from the reorganization.
4 2 [Posted by: beenthere  | Date: 01/23/13 08:29:12 PM]
- collapse thread

Rory Read states it will be a 3 point plan to turn around the company in a several quarter time span. I think the benefit from the reorganisation will be seen in just 2-3 years time - with lower operating costs, a new SoC direction and fruits from the new labor hires of the high profile chip experts such as Jim Keller and those from Qualcomm and Apple more recently.
1 2 [Posted by: linuxlowdown  | Date: 01/24/13 05:59:31 AM]
Oh no no they cant wait for that long. Their initial and still current plan is to break even by the 3rd quarter of this year 2013.

They need money to protect and develop their main strengths, that is IPs. Without those mere lay offs and cost cutting wont do any good in a few quarters time. For this very reason they are doing away with low volume and/or low margin businesses.
0 0 [Posted by: vanakkuty  | Date: 01/24/13 06:21:31 AM]


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