AMD Lowers Revenue Forecast Due to Poor Yields of A-Series "Llano" APUs, Shipments Delays of Bulldozer CPUs

Poor Yields and Later-than-Expected Product Shipments Lower AMD's Revenue Expectations

by Anton Shilov
09/28/2011 | 05:01 PM

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.