AMD still smarting from ATI buy

Company expecting $880m hit this quarter

AMD is still feeling the effects of its acquisition of ATI

AMD is expecting an $880m hit this quarter as the aftermath of its purchase of ATI lingers on.

The chip firm purchased ATI in 2006 for some $5.4bn, but the deal proved costly in the following year as expenses from the acquisition, combined with delayed processor shipments, set AMD back in its battle with Intel.

AMD claimed that the new units which came from buying the graphics firm have not been meeting expectations.

As a result, AMD plans to receive some $880m in impairment charges related to the "intangible and goodwill" assets within the company.

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

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