K6-2 problems hit revenues at AMD

K6-2 problems hit revenues at AMD
Richard Ball AMD has announced a ‘substantial decline’ in first quarter revenues due to manufacturing problems with its K6-2 processor family. For the quarter to March, the company expects revenues of $630m, down from $789m in the last quarter of 1998. AMD blamed the decline on manufacturing problems and competition, especially in the sub-400MHz processor category, which has reduced the K6 average selling price to $78. Yield problems ‘continued to take a heavy toll on production volume’, the company admitted. ‘We tried to raise the speed grades. These changes can sometimes affect total yields,’ said Robert Stead, European marketing manager. However, design changes started in the fab in March may have cured the major problems. ‘The issues we faced in the first two months of 1999 are largely fixed,’ said Stead. Production doubled in March compared with January or February. Monthly production of over two million units is now expected to continue for the rest of the year. Revenues will be further boosted once more K6-3 and K7 devices are produced throughout the year. The problems that affected K6 and K6-2 should not reappear, claimed Stead. ‘With regard to K6-3 and K7, these are being made in the same process and the same fab,’ he added.


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