A Califronia Judge ruled that AMD will now face claims of securities fraud from company shareholders over the troublesome Launch of Llano APUs four years ago, Reuters reports.
The ruling will permit the suit to go forward, it doesn’t however lay any judgement on the case at hand.
The lawsuit claims that AMD had committed securities fraud by concealing production issues from investors, which they allege was to artificially inflate prices of AMD shares. The allegation is that production issues with Llano APUs were downplayed by AMD’s ex-CFO Thomas Seifert in early 2011. As well as that the slow ramp of Llano APUs led to a $100 million inventory surplus later in the year which AMD had to write down when the demand dropped off. Damages are being sought for the decline in AMD’s share price on behalf of a group of investors who bought AMD stocks between April 2011 and October 2012.
Judge OK’s Class Action Against AMD Over Unsold Llano APUs
Llano was AMD’s first ever mainstream high performance APU ( Accelerated Processing Unit ), the other being the low power Brazos APU. APUs were a line of products born out of AMD’s long-term “The Future is Fusion” roadmap. The fusion initiative was about “fusing” CPU and graphics cores into a single processor. Llano bought this initiative to life as it featured integrated x86 processor cores along with graphics processing units on the same piece of silicon die.
Llano was also AMD’s first ever product to be manufactured on the 32nm SOI process of its ex-manufacturing arm Globalfoundries, which was sold off just a couple of years prior. So it was the first processor that AMD had manufactured through a third party pure play foundry. The transition from AMD’s 45nm to Globalfoundries’ 32nm wasn’t as smooth as planned. Llano APUs were supposed to launch and begin selling in Q4 of 2010 but due to Globalfoundries’ problematic 32nm process; yields were poor, costs were high and volume was low. As a result Llano started to ramp very slowly. In early 2011 AMD began to sell Llano to major OEMs and later in the year the APU began to sell in the channel.
