Microprocessor maker Advanced Micro Devices (AMD) this afternoon cut its outlook for revenue for the fiscal Q3 ending on October 1st, blaming manufacturing issues with its foundry partner, GlobalFoundries.
AMD shares are down 49 cents, or 8%, at $5.66 58 cents, or almost 10%, at $5.57 in late trading, after the stock fell 34 cents, or 5%, to $6.15 during the regular session.
The company now sees revenue rising 4% to 6% from Q2′s level, versus a prior estimate for an increase of 8% to 12%.
Analysts on average have been expecting a 9% increase, to $1.72 billion in revenue.
AMD also cut its gross profit margin outlook, projecting 44% to 45% margins, versus an earlier expectation for 47% margin.
The shortfall is “primarily due to 32 nanometer (nm) yield, ramp and manufacturing issues at GLOBALFOUNDRIES in its Dresden, Germany factory that limited supply of ‘Llano‘.”
“Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes. AMD continues to work closely with its key partner GLOBALFOUNDRIES to improve 32nm yield performance in order to satisfy strong demand for AMD products. ”
The slip-up with Llano meant fewer high-margin parts as a percentage of the overall mix of products, which hurt gross margin, said AMD. Also, the company shipped its “next-generation server processor,” called “Interlagos,” later than expected.
AMD will report full Q3 results on October 27th, after market close, it said.
Shares of competitor Intel (INTC) are down 18 cents, or 0.8%, at $22.14.
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