AMD Starting to Fill Orders for Clone of Intel’s 386 Chip

Advanced Micro Devices said Tuesday that it had taken orders for its clone of Intel’s widely used 386 microprocessor and would begin shipping the long-awaited part this quarter.

The Sunnyvale-based semiconductor company’s efforts to make and market a 386, the brain inside the most popular International Business Machines-compatible personal computers, has resulted in a protracted legal battle with Intel. The legal issues remain unresolved, but AMD indicated late last year that it would nonetheless move ahead with its plans.

The chip is considered a crucial product for AMD, which is suffering from an aging product line and intense competition from Japanese chip companies in its core markets. AMD Chairman W. J. (Jerry) Sanders III said the 386 would account for “millions” of dollars in revenue in the current quarter and “tens of millions” in the second quarter. He said the company hopes to have 10% of the $1-billion 386 market by year-end.

The company also said it lost $43 million in the fourth quarter, including a $27.7-million charge to cover an adverse judgment in a patent infringement lawsuit with Brooktree Corp. of San Diego, as well as a $6-million restructuring charge to pay for a series of layoffs. Sales declined 7% to $265.9 million from $285.3 million in the year-ago period.

For the year, AMD lost $53.6 million on sales of $1.059 billion, contrasted with a profit of $46.1 million on sales of $1.104 billion in 1989.

The company said it expected to return to profitability in the second quarter.