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AMD to focus efforts beyond PC market

Posted: 25 Jan 2013 ?? ?Print Version ?Bookmark and Share

Keywords:restructuring? processors? graphics chips?

AMD President and CEO Rory Read remained optimistic Tuesday saying that his company continues to make progress on its strategy for returning to profitability despite disappointing fourth quarter sales.

Read acknowledged that AMD's full-year results fell short of expectations as a tough economy hurt PC sales. AMD plans to complete the majority of a significant restructuring announced last year during the first quarter, Read said. The company's goal is to reduce its operating expenses by 25 per cent from early 2012 levels by the third quarter, and to return to profitability and positive cash flow by the second half of this year, he said.

AMD is charting a new course to focus more heavily on non-PC markets, including embedded markets, heterogeneous computing and dense servers. (See AMD to churn out quad-x86 chips for tablet-notebooks.)

Since Read took over as AMD's CEO in 2011 the company has been looking to shed its longtime image as a distant No. 2 player in the PC processor space to Intel and re-make itself as a system-on-chip provider.

AMD plans to introduce several new graphics chips and processors in the first half of 2013, Read said. "We have the right strategy and a new set of products coming to market in 2013," Read said.

Last October, AMD announced it would lay off 15 per cent of its employees to cut costs while undertaking an aggressive push into embedded markets to counter declining PC sales. The company also cut 10 per cent of its workforce 2011. (See AMD deals with PC slump via job cuts, restructuring.)

By the numbers

AMD reported fourth quarter sales of $1.16 billion, down 9 per cent from the previous quarter and down 32 per cent from the fourth quarter of 2011. AMD reported a net loss of $473 million, or 63 cents per share, wider than net losses of $157 million and $177 million in the previous and year-ago quarters, respectively.

On a pro forma basis, excluding charges associated with the termination of AMD's wafer supply agreement with Globalfoundries and restructuring charges, AMD reported a net loss of $102 million, or 14 cents per share. (See AMD signs fixed-price wafer deal with Globalfoundries.)

AMD's fourth quarter sales were in line with consensus analysts' expectations, according to Yahoo Finance. The company's pro forma net loss was smaller than analysts expected.

Read said AMD enjoyed significant growth in sales of SeaMicro dense servers in the fourth quarter, driven by large-scale cloud data centre wins. SeaMicro solutions are being deployed and evaluated by a broad variety of marquee customers, he said. AMD bought SeaMicro last year for $334 million.

Read also highlighted AMD's recent design wins at a new customer, Vizio, which he said were based on the graphics performance and long battery life of AMD's accelerated processing units (APUs), which combine graphics and microprocessing capability. The first Vizio products featuring AMD APUs will be two touch-based ultrathin notebook PCs and one tablet, he said.

- Dylan McGrath
??EE Times

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