AMD REPORTS SECOND QUARTER RESULTS
-Cites Weak PC Market Demand; Improving Flash Outlook-
SUNNYVALE, CA - July 17, 2002 - AMD (NYSE:AMD) today
reported sales of $600,299,000 and a net loss of $184,938,000, for the quarter
ended June 30, 2002. The net loss amounted to $0.54 per share.
Second quarter sales declined by 39 percent from the
second quarter of 2001 and by 33 percent from the first quarter of 2002. In the
second quarter of 2001, AMD reported total sales of $985,264,000 and net income
of $17,352,000, or $0.05 per diluted share. In the first quarter of 2002, AMD
reported sales of $902,073,000 and a net loss of $9,163,000, or $0.03 per share.
For the first six months of 2002, sales declined by 31
percent from the first six months of 2001. AMD reported sales of $1,502,372,000
and a net loss of $194,101,000, or $0.57 per share. For the first six months of
2001, AMD reported sales of $2,174,011,000 and net income of $142,189,000, or
$0.43 per diluted share.
"A weaker than expected PC market, particularly in North
America and Europe, resulted in soft microprocessor demand in a highly
competitive market," said Robert J. Rivet, AMD's chief financial officer. "Flash
memory product sales improved in the second quarter based on the strength of the
high-end mobile phone market, as consumers are buying feature-rich phones built
with high-density, high performance flash memory. The successful introduction of
AMD MirrorBit(tm) technology has given us competitive momentum."
BUSINESS OVERVIEW
PC processor sales of $380 million for the quarter fell
by 35 percent compared to $588 million in the second quarter of 2001. Processor
sales declined by 44 percent from the $684 million reported in the first quarter
of 2002. Desktop unit sales were down while mobile processor unit sales were
flat.
AMD lowered processor inventories in the PC supply chain
in the second quarter to help better position its customers in the current
market environment.
AMD has completed its conversion from 180-nanometer to
130-nanometer technology. The Company's Fab 30 plant in Dresden, Germany is now
producing 100 percent of its wafer starts in 130-nanometer technology, and will
have all wafer outs in 130-nanometer technology in the fourth quarter. AMD is
the only microprocessor company with all of its microprocessor production in
130-nanometer technology.
Development roadmaps for AMD Athlon(tm) and AMD
Opteron(tm) PC processors based on Hammer technology continue on schedule. AMD
plans to begin production shipments of AMD Athlon PC processors based on Hammer
technology in the fourth quarter.
Second quarter sales of AMD memory products were down 45
percent compared to the second quarter of 2001, and were up nine percent from
the first quarter of 2002. Memory sales were $175 million in the second quarter
compared with $316 million in second quarter of 2001 and $160 million in the
first quarter of 2002. AMD flash memory unit shipments increased in the second
quarter of 2002 and bit shipments were a record.
ADDITIONAL HIGHLIGHTS OF THE QUARTER
* In April, AMD announced that it is collaborating with
Microsoft to incorporate 64-bit support for AMD Athlon and AMD Opteron
processors based on Hammer technology into the Windows® operating system. AMD
demonstrated at its annual shareholders meeting an AMD Opteron dual
processor-based server running a developmental 64-bit version of Windows.
* In April, AMD announced the AMD Athlon XP mobile
processor, manufactured on state-of-the-art 130-nanometer technology.
* In April, AMD announced the introduction of the
Alchemy(tm) Au1100(tm) processor, targeting the non-PC mobile Internet appliance
market, such as web pads, telematics, and PDAs, offering an industry-leading
combination of high performance, low power and high integration.
* In May, AMD announced the Fab 25 manufacturing
facility in Austin, Texas is in volume production of Flash memory devices
utilizing 170-nanometer technology.
* In May, AMD, Infineon Technologies AG and DuPont
Photomasks, Inc. announced plans to establish and operate a new advanced
photomask facility in Dresden, Germany.
* Also in May, AMD announced that it will be providing
assistance to UNETE (Union de Empresarios para la Tecnologia en la Educacion,
A.C.), a private organization in Mexico dedicated to building computer labs in
Mexican schools. Hector Ruiz, president and CEO of AMD, met with President
Vicente Fox of Mexico where the two discussed AMD's desire to help bring
computer technology to the classrooms of Mexico and AMD's increasing commitment
to the IT industry in Mexico.
* In June at Computex Taipei 2002, AMD demonstrated a
four-way multiprocessor server, based on the AMD Opteron processor. The
demonstration marked the first-ever public showing of a four-way multiprocessor
platform by AMD, and illustrated AMD's growing performance and competitiveness
in addressing the server market. Also at Computex Taipei, more than 35 leading
hardware infrastructure vendors announced plans to support AMD Opteron and AMD
Athlon processors based on Hammer technology.
* In June, the AMD Athlon XP processor won the 2002 PC
World World Class Award for Computer Product of the Year. In all, the AMD Athlon
processor family and systems based on such processors have won more than 100
awards worldwide.
CURRENT OUTLOOK
AMD's outlook statements are based on current
expectations. The following statements are forward-looking, and actual results
could differ materially. Economic and industry conditions remain uncertain, and
continue to make it particularly difficult to forecast product demand. The
company's current outlook for the third quarter is based on the following
projections:
* The company expects sequential sales growth of flash
memory devices.
* The company expects unit sales of PC processors will
follow seasonal patterns, which generally show sequential increases from second
quarter levels.
AMD aggregate sales are currently expected to improve
modestly in the third quarter compared to the second quarter. This forecast is
dependent upon demand and PC processor pricing patterns in a weak PC market and
the rate of growth in an improving flash memory market. At these sales levels,
AMD expects to report a loss in the third quarter.
