AMD plans non-cash $880 million ATI-related charge

NEW YORK, July 13 (Reuters) - Advanced Micro Devices (AMD.N) plans to take a second-quarter non-cash charge of $880 million for writing-off some of the value of its 2006 purchase of graphics chip maker ATI Technologies.

Chip maker AMD said in filing with the U.S. Securities and Exchange Commission on Friday that the charge follows an impairment analysis of its goodwill and intangible assets associated with parts of ATI, which it said had performed below expectations. It announced plans in July 2006 to buy ATI for $5.4 billion.

AMD also said it would record a charge of about $32 million in the quarter ended June 28 for a restructuring it began in that period aimed at reducing its break-even point and involving severance charges.

It said it expects the restructuring, from which it does not expect subsequent material charges, to be completed by the end of fiscal 2008.

It also warned that it would record investment impairment charges of about $36 million related to short-term investments including a $24 million charge for its investment in Spansion Inc SPSN.O and a $12 million charge for its holdings in Auction Rate Securities.

The company also expects to recognize a second-quarter gain for the sale of certain wafer fabrication tools, boosting its gross margin for the quarter by about $190 million. (Reporting by Sinead Carew; Editing by Toni Reinhold)