AMD’s Llano APU Disaster Could End With $30 Million Class Action Settlement

Llano has once again surfaced from the murky deaths to make headlines in the tech world. The last time we talked about AMD’s Llano Accelerated Processing Unit (APU), AMD investors filed a lawsuit against the company regarding its hyping up the product’s 2011 launch.

“[AMD] repeatedly highlighted the strong and significant interest in, demand for, and unit shipments of its Llano APUs,” said the plaintiffs in the 2014 filing. “Defendants falsely and misleadingly represented that AMD's desktop business was in a 'strong position' and that it would continue to rebound in 2012,” which was allegedly a violation of federal securities laws.

llano die
AMD Llano Die Shot

Well, here we are over three years later, and AMD is finally willing to settle the lawsuit, which reached class action status. AMD would pay out $29.5 million to settle with shareholders. Those who wish to claim a portion of the settlement must have been an AMD shareholder between April 4, 2011 and October 18, 2012. The company decided to cut its losses and settle instead of going forward with a trial (which could have resulted in the company paying out even more money).

At the center of the case were statements that AMD made with regards to the viability of Llano’s performance in the marketplace, and how its success would add to the company’s bottom line. According to the lawsuit, AMD claimed that it would have “ample product available” at launch and that it was “well positioned” to leverage the back-to-school season for maximum sales. AMD also stated that high margins on the chip would leave to higher 2H gross margins.

“Defendants’ statements about Llano were false and misleading,” the lawsuit alleges. “The yield problems that plagued the Company in 2010 had not been resolved, and by the time of the Llano launch in June 2011, AMD was significantly supply-constrained such that AMD was only able to ship whatever meager supply of Llano it was able to generate to its top-tier OEM customers, leaving AMD’s important channel customers without any supply of Llano at all.”

The lawsuit backs up its above assertions by the fact that AMD admitted that it had supply issues with Llano when it issued Q3 revenue guidance, which resulted in a 14 percent decline in the company’s share price after the announcement. AMD’s troubles with Llano continued into 2012, after this most OEM’s were already own to the next big thing — AMD’s Trinity APU. AMD eventually took a $100 million write down on unsold Llano inventory.

Judge Yvonne Gonzalez Rogers has yet to approve the settlement, but more details will be revealed October 9th. As stipulated by the nearly $30 million settlement, AMD would continue to deny wrongdoing in the case.