AMD Beats Own Revenue Forecast Despite of 32nm Chip Shortages

AMD's Revenue Exceeds Forecasts, Company Posts Profits

by Anton Shilov
10/28/2011 | 10:14 AM

Despite of the fact that Globalfoundries could not ship enough new-generation microprocessors made using 32nm SOI process technology to Advanced Micro Devices, the latter managed to beat its own revenue forecasts. Thanks to high demand towards its multi-core server chips based on Bulldozer micro-architecture and the popularity of Fusion A-series accelerated processing units (APUs), the company even posted $97 million income.

 

AMD said late on Thursday that revenue for the third quarter of 2011 was $1.69 billion, net income was $97 million (or $0.13 per share) and operating income of $138 million. $1.69 billion is higher than AMD anticipated in its mid-quarter update (up to $1.66 billion), but is still lower than the company predicted originally ($1.749 billion and upwards). AMD's gross margin was 45%, lower than the company forecasted due to lower-than-expected amount of new chips in the product mix.

Revenue in the third quarter of 2011 was adversely impacted by 32nm yield, ramp and manufacturing issues experienced by one of our foundry partners, that limited supply of Fusion "Llano" A-series APUs. Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes, AMD said.

“Strong adoption of AMD APUs drove a 35% sequential revenue increase in our mobile business. Despite supply constraints, we saw double digit revenue and unit shipment growth in emerging markets like China and India as well as overall notebook share gains in retail at mainstream price points. Through disciplined execution and continued innovation we will look to accelerate our growth and refine our focus on lower power, emerging markets, and the cloud,” said Rory Read, the president and chief exec of AMD.

Computing Solutions segment revenue was $1.3 billion, 6% increase sequentially and 5% year-over-year. Sequentially, higher mobile and server microprocessor revenues were partially offset by lower desktop revenue. About 90% of mobile processors shipped and about 60% of all client microprocessors were accelerated processing units. Besides, double digit growth in server processor revenue driven by significantly higher ASP.

Graphics segment revenue was $403 million, up 10% compared to the prior quarter mainly due to seasonal strength in the add-in board (AIB) market, strong demand for mobile discrete graphics at OEMs and improved product mix.

AMD expects revenue to increase 3%, plus or minus 2%, sequentially for the fourth quarter of 2011.