AMD CFO Thomas Seifert revealed at a Barclays investor conference that the company expects gross margins to climb above 45 percent in 2011 due to the new agreement with Intel and the launch of new products.
Speaking at a Barclays investor conference on Wednesday, Chief Financial Officer Thomas Seifert said a recent agreement with Intel Corp (INTC.O) would help save money. The cross-licensing deal effectively lets the loss-making chip maker outsource more manufacturing. [ID:nN12421488]
Analysts, on average, expect AMD to post 43.1 percent gross margins in 2011, according to Thomson Reuters I/B/E/S.
"The take or pay option that we have today for certain idle capacity will be gone," Seifert said, referring to an agreement with its contract manufacturing affiliate, Globalfoundries, set to expire in the first quarter of 2011. "This will allow us to get the gross margin above 45 percent."