Advanced Micro Devices Inc (AMD)

[mas]

from CC

Hector Ruiz

I think maybe one way to look at it, perhaps, would be as Dirk mentioned in his remarks, is we have some, we would call it, some transitionary hurdles to overcome in the third quarter. We had a transition to a new memory technology, we had transition to a new product, Rev F. All of that places a phenomenal burden on our organization.

Also, frankly, the demand for mobile product was a lot stronger than we had anticipated, and in shifting a rather complicated system of supply chain logistics while doing all this product transitions to go toward more mobile and less desktop, we lost some efficiencies. We believe that somewhere on the order of 2 of the 5 percentage points that we lost in margin were lost due to us not being able to execute as well as we would have liked, as Dirk mentioned. But the other 3 points, the 60% or so of the margin, is really to a rather precipitous decline in desktop ASPs.