AMD Suffers £120 Million Loss, Dumps SeaMicro Server Business

Chipmaker Advanced Micro Devices (AMD) has fallen short of revenue targets for the first quarter of 2015, hauling in $1.03 billion (£670m) – 17 percent down the previous quarter’s earnings and 26 percent down from the first quarter in 2014.

The company also suffered an operating loss of $137 million (£90m) and net loss of $180 million (£120m), with its computing and graphics segment revenue decreasing 20 percent sequentially and 38 percent from Q1 2014.

High-density servers

AMD has also withdrawn from the high-density server market, reversing the strategy initiated three years ago with the SeaMicro acquisition. The SeaMicro exit is effective immediately, and AMD said the move will “simplify and sharpen” the company’s economic future.

However, this restructuring played a necessary evil on the Q1 figures, as the SeaMicro cut has cost AMD $75 million (£50m) this quarter.

“Building great products, driving deeper customer relationships and simplifying our business remain the right long-term steps to strengthen AMD and improve our financial performance,” said Lisa Su, AMD CEO.

“Under the backdrop of a challenging PC environment, we are focused on improving our near-term financial results and delivering a stronger second half of the year based on completing our work to rebalance channel inventories and shipping strong new products.”

The company is not alone in blaming a ‘challenging PC environment’ for a reversal in fortunes. Intel attributed flat year-on-year revenues on an “uninterested” PC market.

AMD has also entered into a fifth amendment of their agreement with GlobalFoundries, and expects to purchase approximately $1 billion in wafers in 2015, in line with the company’s current market expectations.

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Ben Sullivan

Ben covers web and technology giants such as Google, Amazon, and Microsoft and their impact on the cloud computing industry, whilst also writing about data centre players and their increasing importance in Europe. He also covers future technologies such as drones, aerospace, science, and the effect of technology on the environment.

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