AMD still smarting from ATI buy

Chipmaker AMD plans to receive an US$880 million hit this quarter as the aftermath of its purchase of ATI still lingers.

AMD purchased ATI in 2006 for some US$5.4bn. The deal proved costly for AMD in the following year as costs from the acquisition combined with delayed processor shipments set the company back in its battle with rival chipmaker Intel.

The company said that the new units which came from buying the graphics firm have not been meeting expectations and, as a result, AMD plans to receive some $880 million in impairment charges related to the "intangible and goodwill" assets within the company.

For the fiscal quarter ending June 28th, AMD also plans to report a $32 million hit related to employee severance pay and US$36 million from investments in Spansion Inc. and Auction Rate Securities.

However, the company also said that it expects a windfall of roughly $190 million from the sale of its 200mm wafer fabrication tools.

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