AMD held their Q3 2011 conference call this afternoon to announce their financial results for the quarter. Previously, AMD had issued a warning for this quarter based on production problems over at fab partner Global Foundries, so there has been a cloud lingering over AMD's Q3 for most of the last month.

As it turns out, even with problems at Global Foundries it has been a good quarter for AMD. AMD booked $1.69B in revenue for the quarter, keeping $97M of that as profit. AMD has been turning small profits for some time now since they spun off Global Foundries, but this is the first time they’ve turned a profit in Q3. Meanwhile the all-important gross margin was 45%, where AMD has for better or worse held steady for the last year. AMD’s gross margin is the key to their profitability, and while a 45% margin is normally enough for a small profit AMD has long been trying to improve it to be on better footing against Intel’s 60%+ margins.

Unsurprisingly the breadwinner for the quarter was Llano, which launched just before the start of the quarter. Overall AMD’s mobile business revenue increased 35% over Q2, and at this point AMD is selling Llano as fast as they can produce it. This is why the continuing status of GloFo’s 32nm process is so important to AMD, as at this point AMD’s mobile growth is limited only by supply constraints. And where are all of those Llanos going? While AMD doesn’t break down shipments of individual CPU families by region, AMD has cited China and India as major growth markets for the quarter, where they saw double digit growth in both markets.

Meanwhile in terms of market segments AMD saw growth in both mobile and server sales while desktop sales have continued to shrink, reflecting the wider market trend. Some of this can also be explained by Bulldozer, which launched not even 2 weeks after the end of Q3. Whereas Llano had already launched and landed a number of notebook design wins to give AMD a strong quarter in the mobile market, Bulldozer’s slipping to Q4 would further exacerbate slipping desktop sales as customers waited for Bulldozer’s launch before making a purchase. Unfortunately alongside Bulldozer's late launch, AMD’s Average Selling Price (ASP) has once again slipped on a year-to-year basis, which reflects the company’s difficulty in raising their gross margin.

Finally, the graphics division of AMD once again turned a operating income of $12M on revenue of $403M. As APU revenue is booked separately from GPU revenue, the graphics division often teeters between a profit and loss, so its fate is tied to AMD’s discrete (non-iGPU/APU) GPU sales. Overall discrete GPU sales were up both sequentially and year-to-year, as was the ASP. AMD cited add-in (desktop) GPU sales as the primary driver for the sequential growth, while mobile GPU sales were the primary driver for the year-to-year growth.

Wrapping things up, for Q4 is expecting 3% sequential revenue growth. Q4 will be the first quarter the Bulldozer has shipped through most-to-all of the quarter, and while it hasn’t been an impressive desktop product we’ve yet to see server performance. A strong showing in the server space will be important for AMD as server CPUs command a higher price. Meanwhile AMD is still expecting to ship their next generation of GPUs in Q4, however they will be “shipping for revenue”, which is not necessarily the same as being available for sale at retail. So we may not see the Radeon 7000 series until 2012, even if AMD technically ships them in 2011.

Source: AMD Investor Relations



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  • marc1000 - Friday, October 28, 2011 - link

    i also believe that this is due to Brazos, and not Llano.... Reply
  • jabber - Friday, October 28, 2011 - link

    Well I guess you could put a Llano in a laptop. I used to have a Athlon64 4000 desktop CPU in a Compaq laptop I bought in 2005. Very capable machine for the time. Used it everyday till I replaced it in 2009.

    Needed some dual core goodness by then.
  • Taft12 - Monday, October 31, 2011 - link

    Uhhh, you sound unaware that Llano laptop chips exist which I can assure you, they do. Not only that, they're awesome! Especially the A8's
  • Beenthere - Friday, October 28, 2011 - link

    Opterons are designed for heavy workloads and thats where the BD architecture currently shines. Single threading is Bulldozers weak point. That may improve with Piledriver. Win 8 already shows ~5 improvement with the FX CPus over Win 7. All of the major laptop makers are selling Llano APU based laptops as they meet the needs of mainstream consumers. Reply
  • bakonator - Saturday, October 29, 2011 - link

    I feel like bulldozer is only a prequel, or maybe i am still just overly optimistic. I am by no means a computer scientist, but it seems to me that the architecture is aimed at a different goal, and missing a significant part...the integrated GPU. Imagine a top of the line bulldozer with a 6990 on chip... Reply
  • silverblue - Saturday, October 29, 2011 - link

    It'd be like having a Ferrari with its handbrake on. The bandwidth just isn't there, and the die would be horribly large. Mid-range at best is more sensible - why spend on transistors you simply cannot use?

    If they threw stacked memory on die, it'd solve the bandwidth issue... just not the heat or power.
  • tipoo - Sunday, October 30, 2011 - link

    That would be a monster to cool, and would also be hard to feed it with adequate bandwidth. Reply
  • freezervv - Friday, October 28, 2011 - link

    "the continuing status of GloFlo’s 32nm process"

    Why G-L-O-F-*L*-O?

    Wouldn't that suggest their name was GlobalFloundries?
  • marc1000 - Friday, October 28, 2011 - link

    Global Floss??? Reply
  • silverblue - Saturday, October 29, 2011 - link

    Correct. In an industry with short names for everything, it only makes sense to abbreviate or shorten it somewhat. :P Reply

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