AMD's profits grow in Q1 on Opteron, flash memory

Advanced Micro Devices (AMD) has posted its second straight profitable quarter, as higher flash memory and Opteron sales led the way in the first quarter of 2004.

Revenue was $US1.2 billion, up 73 per cent from the $US715 million AMD recorded in the first quarter of 2003. Net income was $US45 million, compared to a loss of $US146 million in the first quarter of last year.

"The first quarter of 2004 was a high-water mark for AMD," chairman, president, and chief executive officer of AMD, Hector Ruiz, said. "It was a quarter in which we delivered on a very important promise to ourselves - to make money."

The company set a record for quarterly revenue in the first quarter, he said.

Flash memory revenue was up 188 per cent from last year's first quarter to $US628 million, and the group posted a profit of $US14 million.

AMD's flash memory business is known as Fasl LLC, and is operated through a joint venture with Fujitsu in which AMD is the majority partner. Average selling prices for AMD's flash memory products rose along with unit shipments, especially in Asia-Pacific and the Americas, chief financial officer, Robert Rivet, said.

Shipments of its latest flash memory technology, known as Mirrorbit, also rose, he said.

AMD's new chips led the way in a solid quarter for the company's microprocessor business.

While Opteron represented a relatively small portion of AMD's overall processor shipments, unit shipments doubled in the quarter as partners such as Sun Microsystems introduced their new servers based on the chip, Ruiz said.

AMD's presence in the server market was virtually non-existent prior to Opteron, leaving a great deal of room for the company to grow, Ruiz said.

Shipments and average selling prices of the rest of AMD's product portfolio, including the Athlon XP desktop processors, also increased compared to the first quarter of last year, Rivet said.

The first quarter is historically a weak quarter compared to the fourth quarter, but AMD's revenue decreased only 2 per cent.

By the end of 2004, AMD would be earning more revenue from its eighth-generation Opteron and Athlon 64 processors than its seventh-generation Athlon XP processors, Ruiz said.

The chips would continue to grow as more software partners develop 64-bit versions of their products, and Microsoft released the 64-bit version of Windows XP, he said.

AMD was on track to start volume production of its chips on its 90-nanometre process technology during the second quarter, Ruiz said. The company would ship products for revenue in the third quarter, he said.

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