AMD Cuts Revenue Forecast Even As Leaked Roadmaps Predict Early Trinity

This week has been a good news / bad news for Sunnyvale--but the bad, at least, was somewhat expected. The company gave notice today that its third quarter revenue would be lower than expected, with estimated quarterly income up 4-6 percent from Q2 levels. That's significantly less than AMD's original projection of ~10 percent, plus or minus two percentage points.

The company's notice comes a month after rumors began that Bulldozer shipments might be delayed due to manufacturing problems. AMD announced it was shipping its server CPU, Interlagos, for revenue several weeks ago, but that announcement was originally expected in August. The company's news release states:
The less-than-forecasted preliminary third quarter 2011 revenue results are primarily due to 32 nanometer (nm) yield, ramp and manufacturing issues at GLOBALFOUNDRIES in its Dresden, Germany factory that limited supply of "Llano". Additionally, 45nm supply was less than expected due to complexities related to the use of common tools across both technology nodes. AMD continues to work closely with its key partner GLOBALFOUNDRIES to improve 32nm yield performance in order to satisfy strong demand for AMD products.

The less-than-forecasted preliminary third quarter 2011 gross margin results are primarily due to less-than-expected supply of "Llano" and associated products with higher average selling price (ASP). Additionally, shipments of AMD's next-generation server processor, codenamed "Interlagos", occurred later in the third quarter than originally anticipated.
There are two ways to read the announcement. On the one hand, it suggests that GlobalFoundries had more trouble than anticipated with 32nm yields (as opposed to a Llano-specific problem) and that the issues stretched across both production lines. The issues, however, have apparently been worked out or aren't serious enough to curtail production altogether. While AMD shipped Interlagos later than expected, the difference worked out to a matter of weeks--not months.

This news comes on the heels of a leaked roadmap slide that implies AMD could ship Trinity for revenue as early as Q1. A launch in this time frame would be earlier than expected, but would put Trinity into systems in time to face off against Ivy Bridge.

AMD's next-generation mobile part will combine a Cayman-derived GPU using VLIW4 instead of Llano's Cypress-derived part with 2-4 Bulldozer-class CPU cores.

Details on the CPU's enhancements over Zambezi (desktop Bulldozer) are few and far between. It's possible that AMD's 'Trinity' codename was chosen to reflect improvements to the CPU, GPU, and the interconnect system that links them. This last is easily the weakest link in Llano—Intel's Sandy Bridge has a much weaker GPU, but a vastly superior shared L3 cache interconnect. If Trinity delivers on all three fronts it should significantly close the gap between itself and SB, though Intel is likely to retain the overall performance crown.

More details should be available next month, when AMD gives its third quarter figures. The company is announcing a bit later than usual, its conference call is scheduled for October 27.