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AMD narrows Q3 loss on Athlon, flash memory strength

AMD narrows Q3 loss on Athlon, flash memory strength

Advanced Micro Devices (AMD) is moving in the right direction, narrowing its third-quarter loss on strong increases in revenue from its processors and flash memory business, the company has announced.

Third-quarter revenue came in at $US954 million, up 88 per cent from the third quarter of 2002. Analysts polled by Thomson First Call had expected the company to post revenue of $US858 million.

Net loss was $US31 million for the quarter, an improvement over the $US254 million AMD lost in the third quarter of last year.

"Our progress this past quarter was an excellent example of what I hope you will soon recognise as the new AMD," president and CEO, Hector Ruiz, said.

Sales from microprocessors and chipsets increased 91 per cent from the third quarter of 2002 to $US503 million in the quarter, and the division posted an operating profit of $US19 million, AMD's chief financial officer, Robert Rivet, said.

Last year AMD was forced to cut third-quarter production after over-estimating demand for its processors, which accounted for weaker-than-expected revenue and losses.

AMD introduced the Athlon 64 processor at the end of last month, too late for it to have any real impact on the company's finances. But shipments of Opteron, the server version of AMD's 64-bit technology, were strong in the past quarter, Ruiz said. Chipset and motherboard manufacturers expressed concerns about a lack of Athlon 64 chips in the market after the launch.

"We underanticipated demand, and we're ramping as fast as we can to try and improve on that," Ruiz said.

The company shipped "tens of thousands" of Athlon 64 processors in the third quarter, and expected to ship "hundreds of thousands" by the end of the year, Ruiz said.

During the third quarter, AMD's flash memory joint venture with Fujitsu began operations as a combined company. FASL LLC combines the production and distribution of both company's flash memory products, and AMD owns 60 per cent of the joint venture.

FASL's revenues and costs were included in AMD's financial results for the first time this quarter, helping to boost revenues, Rivet said. AMD's Spansion flash memory brand was now the world's number one NOR flash brand, and the average selling prices of Spansion products grew in the third quarter, Rivet said.

The flash memory business contributed $US424 million to AMD's revenues, but lost money.

The company expects fourth-quarter 2003 revenue to improve based on seasonal trends and the increased number of Athlon 64 processors available to customers, Rivet said.

Several PC manufacturers, including HP and Fujitsu Siemens would ship Athlon 64 systems in the fourth quarter, Ruiz said.

By the end of the first half of next year, half of the processors AMD manufactured would be Athlon 64 chips, he said.

The company's 90-nanometer process technology rollout was also scheduled for the first half of 2004, but AMD didn't expect to start making chips from 300mm wafers until it moves to a 65-nanometer process in 2005 or 2006.


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