In an order on Tuesday, US District Judge Yvonne Gonzales Rogers said plaintiffs have supported their claims that AMD officials misled them by stating in the spring of 2011 that problems with the new processor were in the past.
Plaintiffs’ lawyer Jonathan Gardner said he was pleased with the decision. Lawyers for AMD could not immediately be reached for comment.
The lawsuit was over the Llano chip, which it had touted as “the most impressive processor in history.”
Originally set for product launch in the fourth quarter of 2010, sales of the Llano were delayed because of problems at the company’s chip manufacturing plant, the lawsuit said.
The then Chief Financial Officer Thomas Seifert told analysts on an April 2011 conference call that problems with chip production for the Llano were in the past, and that the company would have ample product for a launch in the second quarter.
AMD continued to insist that there were no problems with supply, concealing the fact that it was only shipping Llanos to top-tier computer manufacturers because of supply constraints.
By the time AMD ramped up shipments in late 2011, demand had dwindled, leading to an inventory glut, the lawsuit said. AMD disclosed in October 2012 that it was writing down $100 million of Llano inventory as not shiftable.
Shares fell nearly 74 percent from a peak of $8.35 in March 2012 to a low of $2.18 in October 2012 when the market learned the extent of the problems with the Llano launch.
The lawsuit seeks damages on behalf of the Arkansas Teacher Retirement System, Belgium-based KBC Group’s KBC Asset Management and other investors who bought the company’s shares between April 2011 and October 2012.