AMD 90 nano shipments 50% by year end

FINANCIAL ANALYSTS queued up to listen to Robert Rivet and Hector Ruiz, beancounter and boss respectively, chat about their Q3 earnings the firm reported last night.

Ruiz said that AMD improved gross margin and grew its top line 30% over the same period a year ago. He said Credit Suisse, Merrill Launch, Microsoft, Qualcomm and many others have now dabbled their toes in the AMD64 business.

He calls AMD the "new AMD" repeatedly, which while it may be "customer centric" appears to have as the major element of its newness an ability to make money.

He said that the firm's processor business grew by 21% over the second quarter, and he said, he believed the firm grew share in that period.

AMD had started shipping 90 nanometre processors during the period and said 50% of wafer starts will use that process technology by the end of 2004.

He also said that the firm has started sampling customers with 90 nano dual core processors, which AMD will ship next year.

Rivet said that processor sales were down two per cent sequentially, but gross margin improved to 40.5% in the quarter, which he said represented a a six per cent improvement from the third quarter last year.

The CPU group sold $673 million worth of processors, a 34% increase on quarter last year. Unit sales of AMD64 grew by more than 50% sequentially and represented one third of processor sales, said Rivet. The Sempron was particularly successful in China.

Flash memory sales declined because of softness in wireless handset sales he said.

Ruiz said AMD won't have any significant shipments of Athlon XPs beyond the first calendar quarter of 2005. Nor, he said, was AMD plagued by overstock of CPUs. He said: "We're not at all concerned about inventory on the CPU side. We're solidly positioned to gain share". AMD is positioning itself as an enterprise player, which suggests to us that it's still taking something of a back seat on the notebook front. As for flash memory, Rivet said that the market was competitive in the quarter. "We had a slight decline in ASPs (average selling prices) but overall it wasn't a disaster. As the supply chain clears out, we'll continue to see a competitive environment but no particular effect on ASPs."

Ruiz claimed that even though Intel remained an 800 pound gorilla, AMD "worry a hell of lot more" about what its customers want. "If we do that well there's less of a risk of a competitor doing anything." µ