AMD reports second quarter results

Second quarter 2009 revenue was flat compared to the first quarter of 2009 and decreased 13% compared to the second quarter of 2008.

"The AMD Product Company successfully executed its product and technology roadmaps in the first half of the year, including introducing the Six-Core AMD Opteron processor months ahead of schedule. While we increased cash, exceeded our revenue plan and reduced operating expenses in the second quarter, gross margin was disappointing,"

said Dirk Meyer, AMD president and CEO.

"New platform, microprocessor and graphics introductions planned for the second half of 2009 position us well to improve margins and meet our financial goals for the year," Meyer added.

In the second quarter of 2009, AMD reported a net loss attributable to AMD common stockholders of $330m or $0.49 per share, which includes the net favorable impact of $86m, or $0.13 per share, primarily from the sale of inventory written-down in the fourth fiscal quarter of 2008 as described in the table below. AMD's operating loss was $249m.

In the first quarter of 2009, AMD had revenue of $1.177bn, a net loss attributable to AMD common stockholders of $416m and an operating loss of $298m.

In the second quarter of 2008, AMD had revenue from continuing operations of $1.362bn, a net loss attributable to AMD common stockholders of $1.195bn and an operating loss of $569m.

In the second quarter of 2009, AMD Product Company reported a non-GAAP net loss of $244m and a non-GAAP operating loss of $205m.

In the first quarter of 2009, AMD Product Company reported a non-GAAP net loss of $189m and a non-GAAP operating loss of $123m.

Second quarter 2009 AMD gross margin was 37%, including a positive impact of 8% points due to a $98m benefit from the sale of inventory written down in the fourth quarter of 2008. First quarter 2009 AMD gross margin was 43%, including a positive impact of 5% points due to a $64m benefit from the sale of inventory written down in the fourth quarter of 2008. Second quarter 2009 AMD Product Company non-GAAP gross margin was 27% compared to 35% in the prior quarter.

Current Outlook

AMD's outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under 'Cautionary Statement' below.

Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be up slightly for the third quarter of 2009.

Additional Highlights

· Leading enterprise computing providers, including Dell, HP, IBM and Sun Microsystems announced new servers based on the Six-Core AMD Opteron processor, which is a drop-in replacement for the Quad-Core AMD Opteron processor and delivers up to 34% more performance-per-watt in the exact same platform.

· AMD introduced the first 40nm desktop graphics processor, the first 1 GHz graphics processor and held the first public preview of working silicon and drivers supporting Microsoft's upcoming DirectX 11 technology featured in Windows 7.

· Customer adoption of AMD's graphics products for the professional market continued, with Dell, HP and Lenovo offering workstations featuring ATI FirePro professional graphics accelerators.

· HP, Acer, BenQ, and Medion announced solutions powered by the AMD Neo and ATI Radeon family of low-power technologies, including delivering the industry's first affordable, full-featured HD computing experiences to the increasingly popular ultrathin notebook and all-in-one desktop markets.

· AMD refreshed its Dragon platform technology for desktop PCs, including the introduction of the AMD Phenom II X4 955 Black Edition processor, the company's fastest quad-core processor.

The stability of AMD Phenom II processors on Dragon technology provides an ideal platform for overclocking, resulting in the industry's first known CPU to break the 7GHz barrier.

· Adobe, ArcSoft and Cyberlink began offering optimized versions of their video editing and processing applications that use ATI Stream technology to intelligently combine the computing power of AMD's CPUs and GPUs to greatly accelerate the time-intensive activity of video encoding.

· AMD's vision to bring a leading-edge semiconductor manufacturing facility and thousands of jobs to upstate New York is being fulfilled as Globalfoundries prepares to break ground on the construction of the Fab 2 project in New York. Fab 2 is expected to be the world's most technologically-advanced semiconductor manufacturing facility, expanding AMD's access to world-class manufacturing expertise.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its second quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site. The webcast will be available for 10 days after the conference call.