AMD reduces third-quarter revenue projection

Manufacturing issues hurt Fusion and Opteron chip shipments, AMD said

Advanced Micro Devices on Wednesday reduced its revenue projection for its third fiscal quarter ending Oct. 1, citing manufacturing yield problems.

AMD now expects third-quarter revenue to increase by 4 percent to 6 percent compared to the second quarter, down from its earlier projection of a 10 percent increase, plus or minus 2 percent.

A chip fab in Dresden, Germany, owned by AMD partner Globalfoundries has had problems with chips manufactured using a 32-nanometer process, AMD said. That led to a limited supply of AMD's "Llano" Fusion chips for mainstream PCs.

AMD's 16-core Opteron server processors code-named "Interlagos," also made with the 32-nm process, shipped later than originally planned, AMD said. Servers based on Interlagos are now expected in the fourth quarter.

AMD spun off its manufacturing assets to Globalfoundries in 2009, but the companies work closely together on chip manufacturing. AMD holds roughly an 11 percent stake in the company.

AMD is using Taiwan Semiconductor Manufacturing Co. (TSMC) to make the first Fusion processors, the E and C series, for netbooks using the 40-nanometer process. TSMC is also making graphics processors for AMD.

AMD's share of the microprocessor market grew to 19.4 percent in the second calendar quarter, up from 17.8 percent in the same quarter last year, according to Mercury Research. Intel's share was 79.9 percent.

AMD is due to report its fiscal third-quarter results after Oct. 27.

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