New York/Sunnyvale - After a focussed cost-saving programme, US chip maker AMD was advancing toward the profit zone after reducing its losses in the third quarter to a surprising 69 million dollars, the company said after markets closed Thursday.

AMD had 396 million dollars in losses in the same period last year.

Revenues climbed by 14 per cent to 1.78 billion dollars, giving it another leg up against its much larger rival, industry leader Intel.

AMD has spun off its chip production into a separate operation and brought the Abu Dhabi government into a majority ownership of the new operation with 700 million dollars earlier this month.

The infusion of new capital will help expand operations in Dresden, Germany. Through the spin off, AMD plans to spare costs and become more flexible.

AMD's third quarter results exceeded expectations of analysts.