Motley Rice LLC announced a $29.5 million preliminary settlement agreement with semiconductor company Advanced Micro Devices, Inc. (NASDAQ: AMD). The settlement seeks to recover losses for shareholders in a case alleging that AMD made false and misleading statements and concealed material facts regarding the commercial success of its Llano APU computer processor chip. Motley Rice and Labaton Sucharow LLP are co-lead counsel for the class.
The litigation alleges that at the start of the class period in April 2011, Defendants made statements that previous yield issues that had impacted the Llano chip in 2010 were no longer an issue for the company. These statements allegedly reassured the market and shareholders. Plaintiffs contend AMD additionally claimed that the Llano computer chips were being shipped to customers in sufficient volume for a successful June 2011 launch. However, starting in early 2011, AMD allegedly was having substantial yield issues with Llano and could not provide Llano a significant part of its customer base – the distribution channel.
At the end of September 2011, AMD stated it was having yield issues with Llano. However, Plaintiffs allege that the problems with the yield in 2011 caused weakened demand for the chip in 2012. Yet, throughout 2012, Plaintiffs allege that AMD continued to tout the supposedly strong demand for Llano, particularly in its channel. Plaintiffs allege that the truth about the channel sales began to come to light in July 2012, and in October 2012, AMD took a write down of $100 million in Llano inventory. AMD's stock price dropped from a class period high of $9.10 to $2.62 at the end of the class period. AMD denies all allegations.
The case is Hatamian v. Advanced Micro Devices, Inc., No. 14-cv-00226 (N.D. Cal.).