Advanced Micro Devices’ plans to build a $4.5 billion chip manufacturing plant in Malta are on track, despite a huge decline in revenue, a company spokesman said.
AMD released its 2008 year-end report last week, revealing a 35 percent decrease in revenue of compared to the third quarter.
“The global economic conditions have led to a real softening of the demand,” said Travis Bullard, the corporate public relations manager for the company.
Bullard and other company officials emphasized the new direction of the company.
“Although industry visibility is poor, our priorities remain clear and achievable,” said Dirk Meyer, AMD’s president and CEO, in a statement to the press. “We remain focused on further reducing our break even point through targeted restructuring actions while ensuring we execute our highly-competitive product and technology roadmaps. We made significant progress toward the creation of ‘The Foundry Company’ in the quarter, and anticipate closing the transaction in February. We expect our ongoing restructuring actions and asset smart strategy, combined with the strength of our innovative product offerings, will leave us well positioned for a global market recovery.”
The restructuring of AMD has been centered on returning the company to its core business and divesting itself of some of its other businesses, Bullard said. In an agreement reached earlier this week, the company sold the basis of its handheld business including certain graphics and multimedia technology assets, intellectual property and resources to Qualcomm Incorporated.
In addition to the restructuring, AMD has instituted cost-cutting measures such as temporary pay cuts for executives and employees, as well as reducing its staff.
On Jan. 16, AMD announced plans to cut 1,100 jobs, 9 percent of its global staff.
Bullard said the last condition to be met before closing the deal to build the Malta facility is shareholders’ approval of the plan, which is expected in February. Shareholders will cast votes in person at a Feb. 10 meeting in Austin, Texas, or by proxy.
Fourth quarter 2008 gross margin was 23 percent, including a negative impact of 20 percentage points due to a $227 million incremental write down of inventory, which was attributed to weak market conditions.
For the year ending Dec. 27, 2008, AMD achieved revenue of $5.808 billion compared to a reported revenue of $5.858 billion for fiscal year 2007. In the fourth quarter of 2008, AMD reported a net loss of $1.4 billion or $2.34 per share. The fourth quarter loss for continuing operations was $1.414 billion with the operating loss reported as $1.274 billion. The loss from discontinued operations was $10 million.
Source : http://www.troyrecord.com/
