"Third quarter sales increased nine percent from the prior quarter, and 32 percent year-over-year, due to strong demand for all AMD processor brands," said Robert J. Rivet, AMD's chief financial officer. "Microprocessor unit shipments grew 18 percent sequentially as customers continued leveraging AMD's open platform approach. Demand for AMD Turion 64 mobile processors was especially strong, resulting in record mobile processor sales and unit shipments coupled with increased average selling prices (ASPs). Record AMD Opteron processor sales resulted from continued adoption of dual core processors, record unit shipments and improved ASPs." Desktop processor sales were flat sequentially with increased unit shipments offset by decreased ASPs. AMD continued to successfully ramp production in both Fab 36 and Chartered Semiconductor. The conversion to 65 nanometer production in Fab 36 is on track, with revenue shipments planned for the fourth quarter. Third quarter gross margin was 51.4 percent, compared to 56.8 percent in the second quarter of 2006 and 55.4 percent in the third quarter of 2005. The gross margin decrease was largely due to lower desktop processor ASPs which caused a decline in overall processor ASPs.
