AMD: Q3 financial results. The release of Athlon Hammer and other plans. Comments from AMD

The most unpleasant was the officially announced delay of desktop Hammers. Last time the release date was moved from Q4 2002 to Q1 2003. Now, according to EE Times, AMD plans to release the desktop Hammer family after the server Opteron, expected about mid-2003: "the Opteron server version of Hammer to be introduced in mid-2003 will precede the Athlon desktop Hammer chip". So, the release of desktop Athlon Hammer chips seems to be delayed for another quarter.

Similar "server" trends touched Barton-based K7 Athlon to be released. Now, according to AMD, early in 2003 we´ll see Barton chips for high-end workstations and servers. The mainstream Bartons will be released later [I wonder what´s the diffrerence between server and desktop Bartons except for the price. Such information hasn´t been disclosed yet. By thw way, the company website still has the September 12 roadmap, scheduling Barton to Q4 2002. I guess this is to be updated soon].

Answering to criticism about the absence of volume sales of Athlon 2400+ and higher, AMD representatives said that about 2 million of such chips will be released this quarter.

Now, about AMD Q3 financial results. With $508 million turnover, higher than planned $500 million, the company reported the dead loss of $254.2 million or $0.74 per stock. Similar Q2 results of $600 million and $185 million were less painful.

AMD Q3 processor sales made just $262 million, 31% less than $380 million of the previous quarter. At that both revenues and sold chip quantities were reduced. At the same time, flash memory sales increased from $175 million of Q2 to $189 million due to the increased demand for high-end mobiles.

In Q4 the company counts on 20% (comparing to Q3 results) sales increase due to operating loss reduction and flash memory demand and processor sales volumes growth.

These months the company is to seriously revise expenses and cut operating losses in 2003 by $350 million to gain profitability already in Q2 2003. The breakeven quarter balance means $875 million sales volumes at the expense of next year capital development investments.

Pity, but capital development investments cut also touched 2002 plans. This value is expected to reach $750 million instead of planned $850 million this year. As Q3 R&D expenses grew by 24% up to $221 million, Q4 2002 expenses will be reduced.

We applied to the AMD office for additional comments from the press conference and received the following answer:

• Our guidance regarding the roadmap introduction schedule for the Hammer family of processors has not changed. We expect system availability for the desktop AMD Athlon processor based on Hammer technology to be in late Q103 or early Q203.
• The upcoming AMD OpteronT processor is on track to be available in the 1H03 for the server and workstation markets.
• Regarding our strategy for the Hammer family of processors, AMD is focused right now on the server space. AMD will have a clear performance advantage vs. the competition with the AMD Opteron processor. This represents AMD´s best opportunity to penetrate the enterprise server market.

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