AMD expects to return to profit in 2nd half

(Adds details, executive comments)

SAO PAULO, May 19 (Reuters) - Advanced Micro Devices Inc (AMD.N), the world's second-largest computer chip maker, expects to return to profitability in the second half of the year, Chief Executive Hector Ruiz said on Monday.

"We think we're through the hardest part of the transition. We believe we'll be profitable in the second half of this year", Ruiz told journalists in Sao Paulo, Brazil.

"I think people will begin to see a very strong recovery for AMD," he said. The company is in the final stages of integrating graphic chips producer ATI and is cutting costs, he added.

Ruiz is in Brazil for a computer chip industry summit organized by the Brazilian government. Other companies attending include AMD's larger rival, Intel Corp (INTC.O), Texas Instruments (TXN.N) and International Business Machines (IBM.N).

AMD, based in Sunnyvale, California, posted a net loss of $358 million in the first quarter. It was the company's sixth straight quarterly loss and compared with a year-earlier loss of $611 million.

Ruiz said AMD will start a campaign in the second half of the year highlighting the graphics processing capabilities of its products. In addition, it is studying potential partnerships in the event it decides to build a new chip factory.

"We want to use capital in a more efficient way instead of building a factory by ourselves," said Ruiz.