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AMD's CPU division posts profits but GPU arm suffers

Unable to take advantage of what it has
Mon Jul 25 2011, 13:16

CHIP DESIGNER AMD has posted a small profit for its second quarter, while its graphics division showed a loss.

AMD, which recently launched its Fusion A series of chips, revealed that for the three months ending 2 July the firm took in $1.57bn resulting in a profit of $61m. Compared to the second quarter last year when the company posted a $43m loss the figures look good, and there's hope that the next few quarters will start to see its Fusion A series chips help the firm's bottom line.

Dissecting AMD's results, perhaps the most worrying aspect is the downturn in the firm's graphics division. AMD's graphics division, which for all intents and purposes is the former ATI, posted an operating loss of $7m for the second quarter. Compared to profits of $19m and $33m for the previous quarter and the second quarter of 2010, respectively, it is a disappointing showing.

AMD reported that GPU sales were "flat sequentially and year-over-year", meaning demand is not picking up regardless of what quarter it is. Although the size of the loss isn't large, the fact is that AMD has an excellent line-up of graphics cards at the moment. That the firm was unable to take that advantage and translate it into revenue means the firm has to take a look at its marketing and channel activities.

Currently AMD is still on the hunt for a CEO and last week the Wall Street Journal reported that it is in no rush to replace current interim CEO Thomas Seifert, who is also the firm's CFO. Talking about the results, Seifert said, "In the first half of 2011, AMD brought to market the most competitive client offerings in our history, reinforcing our position as a design and innovation powerhouse [...] today's computing experience is increasingly being defined by the ability to deliver brilliant multimedia and video content with all day battery life. Fusion APUs [accelerated processing units] are ideal to meet this need, positioning AMD to gain unit market share in the mobile computing space."

AMD has bet the company on the success of its APUs. Most benchmarks show AMD's Fusion A series chips as average performers, with their above average GPUs being their advantage. For the market that AMD is pitching the Fusion A series chips at, that might be enough, but AMD needs some of those 150 laptop partners that have signed up to ship Llano chips to bring out models and fast.

As for the future, AMD said it expects revenue to increase 10 per cent in the third quarter. µ


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