AMD To Take Nearly $1B Hit For Q2

Advanced Micro Devices announced Friday it will take an $880 million impairment charge for the second quarter related to the Handheld and DTV units of its Consumer Electronics Group (CEG). Several more charges were included in a Friday 8-K filing by Sunnyvale, Calif.-based AMD with the Securities & Exchange Commission that bring the total of additional charges the chip maker will take for Q2 to just under $1 billion.

In addition to the $880 million in goodwill and intangible asset impairment charges related to formerly ATI-held portions of AMD's CEG, the company will also take a restructuring charge of $32 million related primarily to employee severance payments from downsizing which began in the second quarter, $24 million in investment impairment charges related to AMD's ownership of Spansion stock and $12 million to do with the chip maker's Auction Rate Securities holdings.

AMD acquired graphics chip maker ATI in 2006 for $5.4 billion.

AMD also offered a more positive preview of its second-quarter earnings call, scheduled for July 17 at market close. The company said it "expects to recognize a gain in connection with sales of certain 200mm wafer fabrication tools" which AMD predicted would have a favorable impact on Q2 gross margin to the tune of $190 million.