“We achieved a significant milestone with the recent announcement of our Asset Smart strategy, which will transform both AMD and the industry through the creation of ‘The Foundry Company’,” said Dirk Meyer, AMD’s president and CEO. “AMD will be assured access to leading-edge manufacturing processes without the obligation to make the capital investment required to maintain a world-class manufacturing operation. We look forward to the successful closing of this joint venture early in 2009.”
“We are pleased to have reached our goal of operational profitability this quarter while increasing gross margin to 51 percent,” said Robert J. Rivet, AMD’s chief financial officer. “Improved execution across all of our businesses was punctuated by a refresh of our graphics product line-up, driving 55 percent sequential revenue growth and market share gains. In addition, customer adoption of our quad-core microprocessors was strong, with unit shipments increasing 46 percent sequentially.”
Third quarter 2008 gross margin was 51 percent, and 45 percent excluding process technology license revenue. This compares favorably to both the second quarter 2008 non-GAAP gross margin of 37 percent, and third quarter of 2007 gross margin of 41 percent.
| Reconciliation of GAAP to Non-GAAP Gross Margin1 | ||||||||||||
| (Millions, except percentages) | Q3-08 | Q2-08 | Q3-07 | |||||||||
| GAAP Gross Margin | $ | 905 | $ | 696 | $ | 635 | ||||||
| GAAP Gross Margin % | 51 | % | 52 | % | 41 | % | ||||||
| Process technology license revenue | 191 | - | - | |||||||||
| Gain on sale of 200mm equipment | - | 193 | - | |||||||||
| Non-GAAP Gross Margin | $ | 714 | $ | 503 | $ | 635 | ||||||
| Non-GAAP Gross Margin % | 45 | % | 37 | % | 41 | % | ||||||
| Segment Information | |||||||||
| (Millions) | Q3-08 | vs Q2-08 | vs Q3-07 | ||||||
| Computing Solutions (including process technology license revenue in Q3-08) | |||||||||
| Revenue | $ | 1,391 | 26 | % | 8 | % | |||
| Microprocessor Units | up | down | |||||||
| Microprocessor Average Selling Prices (ASP) | flat | flat | |||||||
| Graphics (including game console royalties) | |||||||||
| Revenue | $ | 385 | 55 | % | 40 | % | |||
| Graphic Processor Units | up | up | |||||||
| Graphic Processor Average Selling Prices (ASP) | up | up | |||||||
