Advanced Micro Devices on Thursday reported a heavy loss for its fourth quarter, due mostly to charges connected to its acquisition of graphics chip maker, ATI.

AMD reported a net loss of $US1.772 billion -- greater than its revenue for the quarter, which was $1.770 billion. The figures compare to a loss in the fourth quarter last year of $576 million on revenue of $1.773 million.

The net loss included charges of $1.675 billion, mostly related to AMD's acquisition of ATI in 2006. Excluding the charges, AMD said its loss would have been $97 million, greater than the $25 million it lost in the fourth quarter a year earlier.

This is the fifth-straight quarterly loss for AMD, which has been struggling to get its newest processors to market on time.

AMD delayed volume shipments of its quad-core Opteron processors, code-named Barcelona, in early December when it said it found a bug in the chip's Level 3 cache memory. Earlier this month, AMD said it was pushing back the release of its quad-core Phenom 9700 and 9900 processors.

The company has replaced some Opteron chips that it sold, although it was under no obligation to do so, said Dirk Meyer, AMD's president and chief operating officer, on a conference call to discuss the results. AMD has patched the bug in its quad-core chips and fixed the problem in updated processors, Meyer said. AMD issued a BIOS fix for the bug in December and offered users a workaround.

The company still managed to ship a record number of microprocessors in the quarter, it said Thursday, including nearly 400,000 of its quad-core chips.

AMD hopes to double its Opteron shipments in the first quarter of 2008 compared to the fourth quarter, said Bob Rivet, executive vice president and chief financial officer at AMD.

It will ship sample Barcelona processors in larger volume to OEMs (original equipment manufacturers) in the next month to put in systems, said Hector Ruiz, AMD's chairman and CEO.

Intel reported lower-than-expected earnings this week, in part because of weak prices for memory chips, but it has been selling more quad-core chips than AMD. It is also ahead of AMD in chip production, rolling out more than 30 Penryn-based chips based on the 45-nanometer process, with AMD still producing chips using the older 65-nm process.

AMD is putting samples of 45-nm processors through the paces and hopes to ship the chips later this year, Meyer said.

Brushing off a question about price pressure from Intel, Ruiz said AMD's first priority was to return to profitability. AMD executives speculated that it had gained processor market share, but said the company wasn't going after market share in unit shipments, instead focusing on meeting customer needs.

AMD hopes to return to profitability by the second quarter of 2008, Rivet said.

The ongoing chip demand will be a growth driver, Ruiz said. Though there is trepidation in the global economy, microprocessors will remain under demand. Emerging markets such as India, China and Brazil need chips to establish an infrastructure even if the economies slows down, Ruiz said.