AMD Reports $590 Million Loss Due to Breakup with GF

AMD has taken an expected hit on its Q1 quarter earnings as a result of the decision to buy itself out of a manufacturing agreement with Globalfoundries. The agreement would have given Globalfoundries exclusive manufacturing rights of AMD 28 nm APUs.

The $703 million payment drove AMD to a $590 million loss for the second quarter 2012. Revenue was down 2 percent year over year to $1.59 billion. Non-GAAP net income was $92 million, up from $56 million in Q1 2011. AMD also noted that its cash reserves declined by $201 million to $1.71 billion, which was due to a $281 million cash payment in the SeaMicro acquisition and a $150 million expense due to wafer supply in 2012. AMD previously said that the total cost of SeaMicro will be $336 million.

CEO Rory Read said that AMD was able to meet customer demand for 32 nm products in the first quarter as 32 nm processor supply improved. AMD was able to ramp its APU share in mobile processors to "nearly 100 percent" and achieve 30 percent unit growth year over year. While not explicitly stating that AMD is focusing on the very low end of the notebook market, Read said that "APUs continue to increase as a percentage of […] top-selling notebook SKUs in North America, priced at about $400." Bulldozer cores accounted for the first time for more than 50 percent of AMD server CPU revenue and unit shipments in the quarter. Read noted that demand for AMD GPU is "strong" and that he was "happy" with 28 nm chip supply.

For the second quarter, AMD expects revenue to increase about 3 percent sequentially as Trinity and Brazos 2.0 will launch "later this quarter".

  • Jargon
  • jdamon113
    here comes the take over.
  • Devoteicon
    It's okay AMD...there are plenty of fish in the sea.
  • I don't see a very bright future for AMD

  • santiagoanders
    AMD breakup with GF? I see what you did there. It's like AMD has a girl friend.
  • maxinexus
    I still don't get why AMD had to pay GF. For break up of an agreement? They basically own a big share of the company and sold the shares...
  • killerclick
    $10M because of the breakup with GF, and $580M because their CPUs suck.
  • ang1dust
    This is not bad. Its a negative perspective. Its like moving from one apt to the next but having to break the lease in the process. "Owner breaks lease and has a 800 dollar loss for the month" little do they know they are now paying 300/m less in rent and will make it up in a month or 2. AMD will make that up in a quarter or 2. Its already been talked about when they broked it off with GF....OLD NEWS
  • wiyosaya
    Sometimes, hits like this are planned and have to be taken. I hope AMD knows what it is doing on this front.
  • tmk221
    frozonici see amd is having a bad time, they suck at making decent CPU´s and their GPU´s will get outperformed by nvidia´s gtx 6xx series.... they either go loud or go home.
    I don't agree with the gpu part.

    Come on nVidia released their new GPU 3 moths later than AMD. So I guess it's nothing special that 680 is 10-15% faster that 7970. AMD is almost done with 7xxx series while nVidia is at the very begining of introduction of 6xx series. I think nothing changed in AMD-nVidia race. It's constantly amd taking over performance crown, then nVidia follows up 2-3 moths later and takes over. And the cycle repeat.

    That's my opinion. Maybe something gonna change if nVidia has gk110 ready to go. But that is rumor so far. And even if it's true, AMD will be ready with 8xxx series by the end of the year.