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AMD takes an additional $70 million in restructuring charges

AMD and ATI have not enjoyed the success the two firms envisioned when AMD bought the graphics firm in 2006. AMD is hurting due to the global economy and announced this week that it will take an additional restructuring charge related to the $5.4 billion is spent to purchase ATI.

AMD says that it also laid off 100 more employees than it had originally announced bringing the total laid off over the quarter to 600.

As a result of the additional layoffs, AMD is recording $70 million in restructuring charges rather than the $50 million in charges it has expected. The chipmaker also says that the new cost reduction would result in additional charges though the first half of 2009, though the firm did not specify what the additional charges would be.

EWeek reports that AMD will take an additional goodwill impairment charge related to the ATI purchase from 2006. AMD says that the charge is based on an updated, long-term financial outlook. This isn’t the first impairment charge AMD has taken in relation to the ATI purchase, in June of 2006 AMD took a charge totaling $800 million. AMD will also take a $20 million impairment charge on an investment in flash maker Spansion.

AMD announced in early December that it was cutting revenue forecasts by 25%.

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RE: This isnt good news...
By masher2 on 12/30/2008 3:23:30 PM , Rating: 1
> "Maybe things will turn around when AMD gets their 45nm chips out. "

I love to see competition against Intel as much as anyone, but its going to take more than a die shrink to put AMD CPUs operations back in the game. K10 wasn't nearly the boost it should have been, and its already getting a little long in the tooth.

RE: This isnt good news...
By FITCamaro on 12/30/2008 4:12:05 PM , Rating: 3
Some are saying the new 45nm chips offer the same overclockability as C2D. Given that Phenom isn't THAT much slower than C2D and Phenom's lower prices, this could help AMD. Put them back at the top, no. But definitely won't hurt.

RE: This isnt good news...
By theapparition on 12/31/2008 12:00:16 PM , Rating: 2
Problem is, even if you are right (which I don't agree with), Intel already has a new generation out.

AMD has NOTHING to compete with i7.

RE: This isnt good news...
By Amiga500 on 12/30/2008 4:18:08 PM , Rating: 3
K10.5 really does seem to be much better from all the preliminary stuff floating around the net. AMD have really improve the L3 latency which is making a BIG difference in many benches.

Sure, it can't go toe-to-toe with i7 at the high end, but it can give it a bloody nose at the low to mid range.

Especially considering platform costs.

RE: This isnt good news...
By FITCamaro on 12/30/2008 5:09:11 PM , Rating: 2
Yeah i7 looks really sweet but I'm just not going to spend that much for a motherboard and RAM. DDR3 is still expensive. I got 4GB of OCZ SLI DDR2-800 memory for $10 over the holidays. Same memory I've already got 4GB of.

RE: This isnt good news...
By 16nm on 12/30/2008 7:43:53 PM , Rating: 1
K10 wasn't nearly the boost it should have been...
What boost? If anything, I'd say K10 slowed rather than boosted. It certainly hurt earnings. As much as AMD didn't want a dog of a chip, K10 was a K9.

RE: This isnt good news...
By Operandi on 12/31/2008 12:09:10 AM , Rating: 2
K10 had the following problems.

1. It was too late.

2. It was built on too big of a process.

3. It couldn't scale fast enough to compete with C2D.

4. The initial revision suffered from design bugs.

Thats a lot to overcome but if half of those issues could have been avoided things would have been a bit different for the Phen. Some of it perhaps was to be expected such as the inferior manufacturing process and consequently the clock speed disadvantage, but the late introduction and the design bug really hurt AMD and should not have happened.

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner
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