Chipmaker AMD to form joint venture with China’s NFME

AMD’s joint venture will be with Nantong Fujitsu Microelectronics Co., Ltd. It is said to be a $436 million agreement which combines AMD’s high-volume ATMP facilities with Nantong Fujitsu Microelectronics’ OSAT expertise, and is said to be the latest step in AMD’s strategic transformation. The midpoint of the range translates to about $955 million, well short of analysts’ estimate of $996.3 million.

AMD’s formal headquarters are in Sunnyvale, Calif., but Austin is where most of its senior executives live and much of its engineering is done.

AMD earlier this month said it would cut 5 percent of its global workforce. The deal will close in the first half of 2016.

AMD will contribute its Penang and Suzhou assembly and test manufacturing facilities, and will include roughly 1,700 employees and its local management team.

“Zen remains on track for availability in 2016”, Su said Wednesday during a webcast for investors, “and we believe it will return AMD to the mainstream server and high-end client market in a significant way in 2017 and beyond”.

However, the company saw an increment on its sales of semi-custom chips for consoles, as per Venture Beat. Sales in the unit that includes those chips decreased 2% from the year-earlier period but increased 13% from its second quarter. Net loss was $136 million, or 17 cents a share, compared with a profit of $41 million, or 5 cents a share a year ago.

For the fourth quarter, AMD expects revenues to fall 10 percent sequentially from the third quarter, due to a seasonal decline in semi-custom chip sales. A year ago, AMD reported a profit of $17 million on revenue of $1.43 billion, a drop of 26 percent in revenue.

Analysts on average had expected a loss of 12 cents per share and revenue of $995.9 million, according to Thomson Reuters. Faced with sharp declines in personal computing sales and the ever-present specter of its much larger rival Intel Corp., AMD has reported losses in four consecutive quarters. The stock further gained $0.02 or 1.02% in the after-hours trade.