AMD Reports Strong Q3 Despite 32-nm Manufacturing 'Issues'

reported strong third-quarter earnings

The quarterly growth was attributed primarily to the company’s record AMD processor shipments and revenue in the mobile space.

In total, mobile AMD processor unit sales have grown over 50 percent in the last two quarters alone. "We clearly outgrew the market in the mobile segment and we believe we took share in the quarter," said AMD president and CEO, Rory Read, during the earnings call.

AMD posted earnings of $97 million, compared to a loss of $118 in the same period last year.

The company reported a total third-quarter revenue of $1.69 billion, a 7 percent sequential increase and 4 percent year-over-year increase compared to the $1.62 billion it reported in the third quarter of last year.

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AMD’s Computing Solutions segment revenue increased 6 percent sequentially and 5 percent year-over-year.

Server segment revenue was up 27 percent sequentially in Q3 which, according to Read, is just "the beginning of a move in the right direction."

Its Graphics segment revenue increased 10 percent sequentially and 4 percent year-over-year, driven primarily by increased discrete mobile graphics revenue.

Despite overall growth, Read emphasized that there is still "more to do." He stressed the importance of boosting AMD’s execution efforts over the coming months, after facing significant manufacturing challenges this quarter.

According to a preliminary third-quarter statement AMD made last month, its foundry business, Globalfoundries, was the key culprit behind these sluggish manufacturing rates.

"The less-than-forecasted preliminary third quarter 2011 revenue results are primarily due to 32 nanometer (nm) yield, ramp and manufacturing issues at GLOBALFOUNDRIES in its Dresden, Germany factory that limited supply of 'Llano'. Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes,” the firm said in last month’s statement.

Read confirmed, however, that despite these "issues," AMD will continue its relationship with Globalfoundries.

"From an execution standpoint, you know and we know, we faced significant manufacturing challenges in the quarter,” Read said during the call. "Having said that, demand was strong and interest in our product is significant. We will continue an aggressive effort with our foundry partner to improve manufacturing performance of this important 32-nm technology. And we are already seeing steady improvements, day after day, week after week. But we are not out of the woods yet."

AMD anticipates revenue to increase 3 percent, plus or minus 2 percent, sequentially, in Q4, and intends to refine its focus on low power, emerging markets and the cloud.