Advanced Micro Devices, Inc. (NASDAQ:AMD) announced that it will sell majority of its assembly and testing businesses in two Asian cities, in an effort to trim spending due to weak demand for its chips for PCs.
The chipmaker reported that it will sell 85 percent of its assembly, test, mark and pack (ATMP) operations in Penang, Malaysia and Suzhou, China in a deal valued at $320 million to China-based Nantong Fujitsu Microelectronics Co.
AMD also stated it would form a mutual venture with Nantong Fujitsu as part of the deal, and will contribute 1,700 staff. The company said it has no plans to trim jobs.
Earlier this month, the company reported it would trim 5 percent of its overall workforce. According to its annual report in Feb., the company had 9,700 workers worldwide.
AMD anticipates the deal to be cost neutral and considerably lower its capital expenses.
The chipmaker also posted fifth consecutive drop in quarterly sales and projected fourth quarter revenue that missed consensus average forecast.
PC shipments plummeted 7.7 percent globally in the latest quarter as strong dollar made them expensive, according to research firm Gartner.
The Sunnyvale, California-based company posted a loss of $197 million in the latest quarter, versus a net profit of $17 million one year ago. On adjusted basis, loss was 17 cents per share. Revenue came in at $1.06 billion, down 25.8 percent from the same period last year. Analysts surveyed by Thomson Reuters I/B/E/S were looking for 12 cents per share on $995.9 million in revenue.
Looking forward, AMD anticipates revenue to drop roughly 10 percent, plus or minus 3 percent, in the fourth quarter. The average of which translates to roughly $955 million, below consensus forecast of $996.3 million.
