AMD Delays move to Southwest Austin till 2008
By Kirk Ladendorf
AMERICAN-STATESMAN STAFF
Thursday, March 08, 2007
Advanced Micro Devices Inc. is delaying the move to its new Oak Hill campus by five months to defer some expenses related to the project. The decision comes at a time when AMD is under financial pressure because of tough product and price competition with its longtime rival, Intel Corp.
Construction is on schedule for the $270 million project, which will allow AMD to consolidate its Austin work force into a single location.
But the company has postponed the beginning of the move from August until January. That will enable AMD to defer buying new equipment and furnishings, and push accounting for the depreciation until 2008.
A second reason for the delay, said spokesman Travis Bullard, is to avoid any disruption to the midyear launch of AMD's Barcelona processor chip family.
The new chip is expected to be a crucial factor in AMD's efforts to return to profitability later this year. Executives don't want anything to upset the engineering and marketing work related to the new chip.
The first half of 2007 already looks rocky. AMD warned Monday that its first-quarter chip revenue is expected to fall below its previous guidance of $1.6 billion to $1.7 billion because of intense price competition with Intel.
Analyst Cody Acree with Stifel, Nicolaus & Co. in Dallas lowered his 2007 revenue forecast for the company to $6.6 billion, down $400 million, in light of that intensified competition. He also is forecasting a loss for the year of 55 cents a share, or $171 million.
Holding off on the move to the new campus "sounds like the prudent thing to delay any unnecessary distractions and delay any unnecessary expenses this year," Acree said.
When the move starts in January, AMD will have a single campus to house employees who now work at its Southeast Austin offices or several sites across the city. By the time the move is complete in April, the 860,000-square-foot campus will house about 2,500 workers, with room for another 450.
Austin is one of AMD's main engineering, marketing and administrative centers. Although its official headquarters is in Sunnyvale, Calif., most of AMD's senior executive team lives and works in Austin. CEO Hector Ruiz lives in Austin but splits work time between Central Texas and California.
The chip maker, which has been criticized by environment- al groups for choosing the new site in a sensitive watershed area, has taken steps to reduce the environmental impact of its project.
AMD recruited environmental experts to help design the new campus, which is on a hilltop above Southwest Parkway near West William Cannon Drive. The buildings are concentrated on 33 of the 58 acres, leaving the rest of the land undeveloped. Advanced green building features will include a rainwater harvesting system that will feed water into a million-gallon tank to reduce runoff and water consumption.
The company also is preserving hundreds of native plants removed from the site at the Lady Bird Johnson Wildflower Center. Those plants will be replanted later this year after construction is completed.
The company says 95 percent of the site excavation work for the new campus is complete and more than 25 percent of the construction is done. About 450 construction workers will be involved in the project.
kladendorf@statesman.com; 445-3622
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