AMD Reported Loss, Hurt By ATi Charges & Price War

AMD swung to a fourth-quarter loss, hurt by charges related to its acquisition of ATI and a price war with Intel that crimped AMD’s profit margins. AMD also offered a weak sales forecast for the current quarter and warned of a tough price environment. In Q4, microprocessor shipments rose 26% from a year ago, driven by laptop chip shipments. Excluding the ATI deal that closed Oct. 24, operating income tumbled 77% to $ 63 million, hurt by much lower average selling prices for its chips used in corporate servers. AMD is trying to sustain its momentum by rolling out new chips and integrating ATI. AMD is also upgrading its chip-manufacturing plants to help fill orders from new customers such as Dell. CEO Hector Ruiz said the company faces a tough computer chip price environment. “Pricing is incredibly challenging. We expect it to be for at least all of the year, but in particular for the first half of the year,” he said.


AMD swung to a fourth-quarter loss, hurt by charges related to its acquisition of ATI and a price war with Intel that crimped AMD’s profit margins. AMD also offered a weak sales forecast for the current quarter and warned of a tough price environment. In Q4, microprocessor shipments rose 26% from a year ago, driven by laptop chip shipments. Excluding the ATI deal that closed Oct. 24, operating income tumbled 77% to $ 63 million, hurt by much lower average selling prices for its chips used in corporate servers. AMD is trying to sustain its momentum by rolling out new chips and integrating ATI. AMD is also upgrading its chip-manufacturing plants to help fill orders from new customers such as Dell. CEO Hector Ruiz said the company faces a tough computer chip price environment. “Pricing is incredibly challenging. We expect it to be for at least all of the year, but in particular for the first half of the year,” he said.

VR-Zone is a leading online technology news publication reporting on bleeding edge trends in PC and mobile gadgets, with in-depth reviews and commentaries.