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AMD cites $70 Million in fourth-quarter costs
By siliconindia
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Wednesday, 31 December 2008, 15:56 IST
Bangalore: AMD, one of the major chip manufacturers sets $70 million in restructuring costs during the fourth quarter. In a filing with the Securities and Exchange Commission, AMD also cited fourth quarter layoffs of 600 employees.
About $34 million of the total $70 million is accounted for severance and employee benefits, while $13 million is accounted for contract or program termination costs. Asset impairments will costs $17 million and another $6 million is for exist costs at facilities.
In a Form 10-Q filing, the company had earlier specified that it expected to cut approximately 500 employees and take a charge to operations in the fourth quarter of fiscal 2008 of $50 million. A new Forum 8K filing says that further cost reduction actions will result in additional charges in the first half of fiscal 2009.
The company has also determined that it would incur a material charge for impairment of assets during the fiscal quarter ended December 27 related to the 2006 acquisition of ATI Technologies. The Company concluded that the current carrying value of its goodwill was impaired. "This conclusion was reached based on the results of an updated long-term financial outlook for the businesses of the former ATI Technologies in light of the current market conditions and economic outlook," AMD stated.
According to the Form 8K, the company expects that the impairment charge will be material, but it is unable to estimate the amount of the impairment charge. The Company will disclose such an estimate or range of estimates in a filing with the SEC promptly and in any event within four business days of determining such an estimate or range of estimates.
AMD had been split in to two earlier this year in order to defray the burdensome costs of its manufacturing operations. After receiving a big investment from Mubadala Development, the manufacturing operation runs as a separate concern called The Foundry Company.