AMD to sell some testing operations, gives weak revenue forecast

Scaling down operations: AMD will sell 85% of its ATMP (assembly, test, mark and pack) operations in Suzhou, China and Penang, Malaysia.

Advanced Micro Devices Inc said it would sell most of its assembly and testing operations in two Asian cities, as the struggling chipmaker looks to cut spending amid weak demand for its processors for personal computer.

AMD said it will sell 85% of its ATMP (assembly, test, mark and pack) operations in Suzhou, China and Penang, Malaysia to China's Nantong Fujitsu Microelectronics Co Ltd for a net proceeds of US$320mil (RM1.3bil).

The company also said it would create a joint venture with NFME as part of the deal, to which it will contribute 1,700 employees. It said it did not plan to cut any jobs.

AMD earlier this month said it would cut 5% of its global workforce. It had 9,700 employees globally, according to its annual report in February.

AMD, which makes central processing units and graphics chips, said it expects the transaction to be "cost neutral" and significantly reduce its capital expenditures.

The company also reported its fifth straight fall in quarterly revenue and forecast current-quarter revenue that fell short of analysts' average expectations.

"Overall, PC demand, particularly in the consumer market, continues to be somewhat muted," chief executive Lisa Su said on a call with analysts.

PC shipments fell 7.7% worldwide in the third quarter as the rising dollar made them costlier, research firm Gartner said last week.

AMD posted a net loss of US$197mil (RM817.5mil) in the third quarter ended Sept 26 compared with net income of US$17mil (RM70.5mil) a year earlier.

Sunnyvale, California-based AMD's revenue fell 25.8% to US$1.06bil (RM4.4bil). — Reuters