AMD Suffers 'Major Setback,' Losses of Another Half-Billion Dollars

In what AMD President and COO Dirk Meyer called a "major setback in the strategic transformation of our company," AMD posted an historic loss for a microprocessor company, admitting an "unacceptable" hemorrhage of $504 million for the first quarter of this year, on revenue of $1.23 billion - a 7% drop annually, and a 30% drop over the previous quarter.

CPU shipments were down in all segments for the quarter, very sharply, with gross margin plunging to an abysmal 31%. AMD had already reported a $529 million loss in the fourth quarter of 2006.

At the start of its quarterly earnings report to analysts, Meyer stated the key to healing his company will be to accelerate its shift to the 65 nm lithography process, while at the same time slowing the transition of one of its fabrication facilities to 200 mm - one of its lower priority production form factors. The company will also accelerate its efforts to produce its new ATI 600 graphics card series next month. "Our customers want us to win," Meyer said.

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