Replies to post #66838 on Advanced Micro Devices Inc (AMD)

[avatar]

...Spansion loss reaction stupidity is receding

The "mounting losses" news reports were based on the form 8-K/A filed by AMD. I don't think the form paints as dire a picture of Spansion as the news stories have reported.

---------------------------------------

From MarketWatch:

SAN FRANCISCO (MarketWatch) - The losses are mounting for the flash memory-chip unit of Advanced Micro Devices Inc. ahead of its planned initial public offering.

In a filing Monday with the Securities and Exchange Commission, AMD said its Spansion memory-chip unit will post a fourth-quarter operating loss. AMD , the world's second largest maker of computer chips, did not estimate the amount of the loss. ...


-------------------------

The form 8-K/A:

28-Nov-2005

Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure
On November 28, 2005, Spansion, a majority-owned subsidiary of Advanced Micro Devices, Inc. (the "Company"), filed Amendment No. 7 to its Registration Statement on Form S-1, which included an update to Spansion's outlook for the fourth quarter of fiscal 2005. Accordingly, the Company is filing this amendment to its Current Report on Form 8-K originally filed on October 21, 2005, to provide the following information in connection with its Memory Products Group.

For the Memory Products Group, gross margin increased in the third quarter of fiscal 2005 by seven percent as compared to the second quarter of fiscal 2005 due to a 15 percent increase in unit shipments, partially offset by a three percent decrease in average selling prices. Gross margin also was favorably impacted by three factors: a greater percentage of MirrorBit products shipped; a greater percentage of higher density products shipped; and increased utilization of Spansion's manufacturing facilities. The Company expects these trends to continue in the fourth quarter of fiscal 2005 resulting in continued improvement in gross margins for the Memory Products Group. However, the Company expects the Memory Products Group to incur an operating loss in the fourth quarter of fiscal 2005, primarily because Spansion's fabrication facilities are not operating at full capacity due in part to constraints in Spansion's testing capacity for some of the Flash memory products ordered by customers during the quarter. Spansion is in the process of addressing its need for additional testing capacity.