Advanced Micro Devices Inc, which warned last month that is was likely to post an operating loss in the current quarter due to pricing pressure from Intel Corp, now says it expects a significant loss in the first quarter, due to continuing manufacturing problems with its K6 family of chips. The company also said it would cut around 300 jobs, or just over 2% of its workforce.
The company will ship only around 5 million K6 parts during the quarter, rather than the 5.5 million units originally forecast. It had difficulties in the first eight weeks shipping 350-MHz parts, although both 300- and 400-MHz chip yields were apparently unaffected. The problems had now been solved, AMD said.
AMD said it expects some projects and products to be cut. Vandis Corp, the programmable logic division, has been cited as a potential casualty, along with embedded processors and flash memory. AMD will detail the charges when it reports its first quarter earnings on April 6th, after the market closes.
The company is not expected to begin shipments of its next generation K7 chip until the third quarter of the year. But the part is expected to be demonstrated at the Cebit trade show in Germany later this month, at speeds of up to 600MHz, according to some reports.
