California-based Advanced Micro Devices Inc., the no. 2 maker of personal-computer processors after Intel, has posted $330 million loss for the second quarter, making shares to dip more than 12%.

AMD's gross margins for the second quarter plunged to 37%, down from 43% in the first quarter.

The gross margins are very much critical for the chip-makers as they reflect how well companies are controlling costs. AMD's gross profit margin is shrinking, while Intel's is improving.

AMD, which has been struggling for the last two years to return to profitability, has lost 49 cents a share as compared with $1.97 a share last year.

The company also warned that its chip proceeds would rise only slightly in the third quarter.

AMD said it lost 62 cents a share, when certain items are stripped out.

Dirk Meyer, CEO of AMD said even after improving cash and lowering costs, company's "Gross margin was disappointing".

AMD is in the process of major transformation. It recently spun off its plants with the help of Abu Dhabi govt., structuring a new company known as Global foundries.

In the after hour trading, AMD closed at $4.08, down 2.16% on the New York Stock Exchange.