AMD Starts Joint Venture with Nantong Fujitsu After Third Quarter Losses
AMD missed this year’s earning targets and experienced a $197 million loss in the third quarter of 2015. However, the company did manage to increase its revenue to $1.06 billion, up from $942 million from its previous quarter.
Now, the firm has decided to sell majority of its back-end packaging and assembly facilities in Asia as a part of a joint venture with China’s Nantong Fujitsu Microeletronics providing factories in Penang, Malaysia, and Suzhou, China, in exchange for $371 million in cash and a 15 percent stake in the new entity.
Nantong Fujitsu will get 85 percent of ownership in this new venture, which is expected to drop the expenditures for AMD. Around 1,700 workers at the factories of AMD will become employees of the joint venture.
Earlier this month, AMD had also announced to cut 5% of its global workforce, as it attempted to adjust to the fourth consecutive quarterly loss.
AMD has generally struggled in recent years in the PC market as the trend of mobile and tablet usage grows. As a result, the demand for x86 based processors by Intel and AMD has significantly reduced, opening door for other types of processors, such as ARM architecture and others.
Going forward, AMD further expects a further 10 percent decline in the fourth quarter, plus or minus 3 percent.