AMD hurt by poor K6 yields

AMD may be living down to its reputation for poor execution in its battle to wrestle Intel to the ground in microprocessors.

The Californian chip maker was up a healthy 30 per cent in year-on-year revenues to $596.6 million but lost $31.7 million despite high demand for its K6 processors.

CEO Jerry Sanders blamed the fact that the company had only managed to make one million of the parts in the July-September quarter - 500,000 less than it had anticipated. In particular, there were problems making the fastest 233MHz devices. Also, aggressive pricing by Intel forced AMD to cut margins lower than expected.

"Revenues from K6 processors increased by 50 per cent to more than $150 million. The loss in the third quarter was due to disappointing yields in the production of K6 processors," Sanders said.

"While to date we have executed the steepest microprocessor unit production ramp in AMD history, yield and speed-grade improvements have lagged our expectations," he added.

"Achieving our planned production goal of approximately two million units in the current quarter will require progress in improving yields. No activity within the company has higher priority or more focus than increasing production of K6 processors through higher yields and migration to the next-generation 0.25-micron process."

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