“Although industry visibility is poor, our priorities remain clear and achievable,” said Dirk Meyer, AMD’s president and CEO. “We remain focused on further reducing our breakeven 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.”
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 due to weak market conditions. Third quarter 2008 gross margin was 51 percent, 45 percent excluding process technology license revenue.
| Reconciliation of GAAP to Non-GAAP Gross Margin 2, 3 | ||||||||||||
| (Millions, except percentages) | Q4-08 | Q3-08 | Q4-07 | |||||||||
| GAAP Gross Margin | $ | 272 | $ | 916 | $ | 769 | ||||||
| GAAP Gross Margin % | 23 | % | 51 | % | 44 | % | ||||||
| Incremental write-down of inventory | (227 | ) | - | - | ||||||||
| Process technology license revenue | - | 191 | - | |||||||||
| Non-GAAP Gross Margin | $ | 499 | $ | 725 | $ | 769 | ||||||
| Non-GAAP Gross Margin %* | 43 | % | 45 | % | 44 | % | ||||||
| *For Q3-08 the revenue number used in the gross margin percent calculation excludes $191 million of process technology license revenue | ||||||||||||
|
Segment Information 3 |
||||||||||||
| (Millions) | Q4-08 | vs Q3-08 | vs Q4-07 | |||||||||
| Computing Solutions (including process technology license revenue in Q3-08) | ||||||||||||
| Revenue | $ | 873 | -37 | % | -38 | % | ||||||
| Microprocessor Units | down | down | ||||||||||
| Microprocessor Average Selling Prices (ASP) | down | down | ||||||||||
| Graphics (including game console royalties) | ||||||||||||
| Revenue | $ | 270 | -30 | % | -8 | % | ||||||
| Graphic Processor Units | down | down | ||||||||||
| Graphic Processor Average Selling Prices (ASP) | up | up | ||||||||||
