AMD Returns to Profit Ready for Big K6 Push

Chip maker ends run of losses by turning in first quarter profit and says further growth is to come

AMD has bounced back into the black as it attempts to ramp up sales of its next generation chip, the K6, in order to break Intel?s stranglehold.

The chip maker announced a profit of $12.9 million for the first quarter, ended 30 March, overturning a $21.2 million loss in the previous quarter. Sales for the period were also up 11 per cent, to $552 million from $497 million in the last quarter of 1996.

The last time that AMD made a profit was in Q1 1996. Losses in 1996 totalled $94 million.

Dataquest analyst Joe D?Elia said AMD?s results were in line with what had been expected. He said AMD?s sales would rise dramatically this year as more K6 chips became available.

AMD?s return to profit was announced one week after the launch of its high-speed K6 MMX processors, which are priced at least 25 per cent less than Intel?s Pentium MMX chips. AMD shipped just 10,000 K6 chips last quarter, but said it was increasing volumes later this year.

AMD chairman WJ Sanders said the improved results for the first quarter of 1997 were a result of ?recovering strength in all sectors of our business even before volume shipments of AMD-K6 MMX processors?.

Sanders said AMD would ship ?hundreds of thousands? of the high-end K6 processors during the second quarter of 1997, and millions of units during the second half of the year.