AMD 1997 Annual Report Download - page 9

brand recognition and distribution capabilities. Almost all of these suppliers
now rely either on Intel or on third-party manufacturers for the major
subsystems of their PCs, such as the motherboard, and are increasingly
outsourcing the design and manufacture of complete systems. The third-party
suppliers of these subsystems, based primarily in Asia, are focused on
providing PCs and motherboards that incorporate the latest trends in features
and performance at low prices. Increasingly, these third-party suppliers are
also supplying fully configured PC systems through alternative distribution
channels.
BUSINESS GROUPS; PRODUCTS
AMD participates in all three segments of the digital IC market--memory
circuits, logic circuits and microprocessors--through, collectively, its
Communications Group, its Memory Group, its Computation Products Group (CPG)
and its programmable logic subsidiary, Vantis Corporation.
COMMUNICATIONS GROUP
Communications Group products ($707 million, or 30 percent, of the Company's
1997 net sales) include telecommunication products, networking and
input/output (I/O) products and embedded processors.
Telecommunication Products. The Company's telecommunication products are
used primarily in public communications infrastructure systems and cordless
telephony applications. Specifically, the products are used in such equipment
as central office switches, digital loop carriers, wireless local loop
systems, private branch exchange (PBX) equipment and voice/data terminals.
Among the Company's more significant products for the communications market
are its line card products. In modern telephone communications systems, voice
communications are generally transmitted between the speaker and the central
office switch in analog format, but are switched and transmitted over longer
distances in digital format. The AMD subscriber line interface circuits (SLIC)
for line cards connect the user's telephone wire to the telephone company's
digital switching equipment. The AMD subscriber line audio processing circuits
(SLAC(TM)) line cards are coder/decoders which convert analog voice signals to
a digital format and back. The Company's non-cellular telephony products are
used in digital cordless phone solutions.
Networking and I/0 Products. The Company's networking and I/O products are
used within personal computers to manage the connection of the personal
computer to local area networks and to manage selected input/output functions.
The Company's networking products primarily support data communications and
internetworking and are used in hubs, switches, routers and network interface
cards used to connect workstations and personal computers to local area
networks.
The Company supplies integrated circuits for business applications utilizing
the 10-megabit-per-second, the 100-megabit-per-second and the gigabit-per-
second Ethernet local area network standards. The Company offers a range of
integrated circuits that work with central processing units to manage selected
input/output functions such as small computer system interface disk drive
controllers and communications and networking devices. The Company also
supplies a range of products specially designed to add additional functions,
improve performance and reduce costs in computer peripheral, interface or mass
storage applications. These are generally special-purpose products which are
designed for a specific application. In the case of some large customers,
these products are tailored for specific customers' needs.
Embedded Processors. Embedded processors are general purpose devices,
consisting of an instruction control unit and an arithmetic and logic unit,
used to carry out a single application with limited user interface and
programmability. The Company's current product focus for embedded processors
utilizes existing x86 cores increasingly targeted at communications
applications. The Company offers a line of C186 and C188 processors for use as
embedded processors in hard disk drives. The Company offers an expanding range
of embedded processors based upon third- and fourth-generation x86
microprocessor technology, for both communications as well as handheld
computing applications.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998