bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Advanced Micro Devices (AMD), the second-largest maker of computer processors after Intel, has announced plans to cut about 2,000 jobs - or 15 per cent of its work force - from its operations in the United States, Europe and Asia by the middle of next year.

Carol Mui, AMD spokeswoman for Greater China, said 300 jobs in Singapore, Taiwan and Hong Kong would be affected, with most of the cuts taking place in Singapore.

The jobs affected include marketing, business development and manufacturing functions. But Ms Mui said its manufacturing and outsourcing partnership with Taiwan's United Microelectronics Corp (UMC) announced in January would remain unaffected.

Under the deal, the two companies plan to build a US$4 billion joint foundry in Singapore.

Ms Mui said the cost cuts would not include its China operations, where the company will be stepping up investments. The company moved its south Asian headquarters from Hong Kong to Shanghai on October 1.

This is the chip-maker's second round of cuts in a single year. In June, AMD closed two older factories and cut 2,300 jobs, or 15 per cent of its work force.

Ms Mui said half of the affected employees were notified on Thursday. The company had 13,187 employees as of the end of September.

The cuts came as no surprise. AMD said at an earnings conference in October that it would be laying off more staff as part of a broader plan to reduce expenses by US$350 million next year, news that was received positively by analysts and shareholders. The plan was aimed at cutting items such as administrative costs -  not engineering efforts.

The plan also included reducing the inventory of AMD processors on the market and an effort to increase cash flow by securing asset-based loans. Semiconductor analysts from Gartner Dataquest expect AMD to accelerate its outsourcing plans with UMC and farm out a significant portion of its manufacturing to the Taiwanese company to reduce capital costs.

The result of the measures, AMD said, would help put an end to three consecutive quarters of losses, reaching the break-even point by the second quarter.

'While painful and unfortunate, [Thursday's] action will help to position AMD so that we can take full advantage of the eventual market recovery,' AMD chief executive Hector Ruiz said.

Mr Ruiz said in a statement that the company would continue to broaden its offerings and release new products to compete in new markets.

'Over the next 180 days, we are unleashing a number of intensely competitive products and solutions to the marketplace that will enable us to compete in segments of the market where we have not yet been before. In essence, we are confident that we are taking the steps needed to solidify our financial position while extending our competitive reach across broad segments of the market.'

This year, AMD moved into new markets and Asian ventures. The company acquired maker of low-power chips Alchemy to better compete with Transmeta's Crusoe chips and Intel's Xscale line for market share in the personal digital assistant (PDA) and mobile-devices sector.

Earlier this year AMD migrated to a 0.13-micron manufacturing process that allows it to etch more circuits on smaller dies and produce tinier chip packages for small and thin laptops coming out from Asian makers. The thin and light notebook market makes up just 15 per cent of US and European sales, but accounts for up to 50 per cent in Asian markets such as Japan and Hong Kong. Last month, the company set up a research and development joint venture with China Basic Education Software to work on three reference designs for computers for use by students and teachers in the mainland.

International Research Corp analyst Kitty Fok said there had been some encouraging signs for AMD's business in China. The mainland's PC market is 48 per cent dominated by local players such as Legend, with white boxes accounting for 32 per cent and multinational PC brands taking just a 20 per cent share.

'AMD has over 45 per cent market share in China's white-box business, much higher than other Asian countries,' she said.

But Legend, the country's biggest supplier of PCs, mostly uses Intel chips, as do Dell Computer, Hewlett-Packard and IBM.



AMD job cuts to hit Singapore hard