Advanced Micro Devices Inc.’s third quarter results suffered from weak sales of chips for personal computers, but it disclosed a deal with a Chinese company that will provide a $371 million cash infusion and reduce future costs.

The chip maker on Thursday reported a $197 million loss in its third quarter on revenue that fell 26% from the year-earlier period. AMD recorded a $65 million write-down of some older chips in addition to a previously announced restructuring charge.

AMD,...