AMD Q1 sales and profits rise, warns of GPU constraint ahead

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AMD Q1 sales and profits rise, warns of GPU constraint ahead

Microscope contributor

Supply constraints on AMD's 40nm graphics processors will continue this year, the firm has confirmed, though availability will ease.

Aside from this shortfall, the chip giant last night took another step on the road to recovery by posting profits of $257m (£166m) in the first quarter compared to a loss of $414m a year ago, while sales grew 33% to $1.57bn.

The firm made a profit in the fourth quarter buoyed by Intel's $1.25bn payment for anti-competitive behaviour, ending 12 consecutive quarters of losses.

"Our operating performance is improving, the cash generation of the business is beginning to be realised and we are improving our balance sheet," said Dirk Meyer, CEO at AMD.

Sales at the Computing Solutions segment grew 23% year-on-year to $1.16bn but fell 5% sequentially, driven by decreases in microprocessor shipments that were in part offset by rising average sales prices.

The Graphics segment saw revenues climb 88% on the same period in 2009 to $409m. Record mobile GPU shipments were counter balanced by lower game console royalties and declining discrete GPU sales.

Meyer said there were shortages of its 40nm GPU products in Q1 and though it saw some improvements in supply it was also experiencing increasing demand and forecasted demand.

"The result being that we still see a gap between demand and supply, as per our internal plans and thinking that gap is going to narrow over the next months and quarters but we still think we are going to be hand to mouth throughout much of this year," he said.

AMD also deconsolidated Global Foundries and realised a non-cash, one time gain of $325m.

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