AMD Sued for Overestimating Demand for “Llano” APUs

Class-Action Filed Against AMD for Overestimated Adoption of Llano

by Anton Shilov
01/16/2014 | 11:53 PM

The first high-performance accelerated processing unit (APU) from Advanced Micro Devices code-named “Llano” was not particularly successful product for the company: it launched late, its yields were lower-than-expected and its performance was not high. But Llano is yet to deliver its final blow to AMD: the company was sued this week for overestimating demand for the chip.


Robbins Geller Rudman & Dowd LLP this week said that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of AMD common stock during the period between October 27, 2011 and October 18, 2012. The complaint charges AMD and certain of its officers and directors with violations of the Securities Exchange Act of 1934.  AMD is a multinational semiconductor company that develops computer processors and related technologies for commercial and consumer markets.

The complaint alleges that during the class period, defendants made false and misleading statements about the AMD’s business and prospects. Specifically, the complaint alleges defendants made false statements and/or concealed adverse facts regarding AMD Llano APU, including repeatedly highlighting the “strong” and “significant” interest in, demand for, and unit shipments of, the Llano APUs, and falsely and misleadingly representing that AMD’s desktop business was in a “strong position” and that it would “continue to rebound” in 2012.  As a result of defendants’ false statements, AMD stock traded at artificially inflated prices throughout the from October, 2011, to October 18, 2012.

In July 2012, AMD announced that weak demand for Llano APUs in desktop devices, particularly in its Chinese and European markets, had resulted in AMD’s reporting of lower than expected revenue for the June 30, 2012 quarter. Low demand for Llano was conditioned by absense of FM1 mainboards in the channel (since due to low yields AMD initially shipped Llano chips to OEMs only). The revelation of this information caused the price of AMD stock to decline by nearly 25% on extremely heavy trading volume.  Then on October 18, 2012, the company announced that its gross margins for the fiscal 2012 third quarter had declined more than 31% from its previous quarter, in large part due to AMD’s recording of an approximate $100 million inventory write-down, mainly attributable to the overstated value of the Llano. On this news, the price of AMD stock declined nearly another 17% on extremely heavy trading volume.

Plaintiff seeks to recover damages on behalf of all purchasers of AMD common stock during the class period. The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.