AMD 2009 Annual Report Download - page 22

gave up any claims of breach from the previous license agreement, and Intel paid us $1.25 billion. Intel has also
agreed to abide by a set of business practice provisions. As a result, we dropped all pending litigation including
the case in U.S. District Court in Delaware and two cases pending in Japan. We also withdrew all of our
regulatory complaints worldwide. See “Item 3—Legal Proceedings” for more information.
Other potential competitors include ARM Ltd., whose product offerings are used in the mobile and
embedded electronics market as relatively low cost and small microprocessors, and also in form factors that offer
an alternative to mainstream PCs such as netbooks and tablets.
Competition in the Chipset Market
In the chipset market, our competitors include suppliers of integrated graphics chipsets. PC manufacturers
are increasingly choosing to use integrated chipsets, particularly for notebook computers, over discrete GPUs
because integrated chipsets can cost significantly less than discrete GPUs while offering acceptable graphics
performance for most mainstream PC users. Intel Corporation manufactures and sells integrated graphics chipsets
bundled with their microprocessors and is a dominant competitor in this market.
Competition in the Graphics Market
In the graphics market, our competitors include integrated graphics and discrete graphics suppliers. Intel
manufactures and sells integrated graphics chipsets bundled with their microprocessors and is a dominant
competitor with respect to this portion of our business. Intel could leverage its dominance in the microprocessor
market to sell its integrated chipsets. Moreover, computer manufacturers are increasingly using integrated
graphics chipsets, particularly for notebooks, because they cost less than traditional discrete graphics components
while offering reasonably good graphics performance for most mainstream PCs.
Intel could take actions that place our discrete GPUs and integrated chipsets at a competitive disadvantage
such as giving one or more of our competitors in the graphics market, such as Nvidia Corporation, preferential
access to its proprietary graphics interface or other useful information.
Other than Intel, our principal competitor is Nvidia Corporation and to a lesser extent, Matrox Electronic
Systems Ltd., Silicon Integrated Systems Corp. and Via Technologies, Inc. Along with AMD, Nvidia
Corporation is the dominant player in discrete graphics solutions. Other competitors include a number of smaller
companies, which may have greater flexibility to address specific market needs, but lesser financial resources to
do so, especially as we believe that the growing complexity of visual processors and the associated research and
development costs represent an increasingly high barrier to entry in this market.
In the game console category, we compete primarily against Nvidia Corporation. Other competitors include
Intel Corporation and IBM.
Research and Development
We focus our research and development activities on improving and enhancing both product design and
process technology. One main area of focus is on delivering the next generation of microprocessors with
improved system performance and performance-per-watt characteristics. For example, we are focusing on
improving the battery life of our microprocessors for notebook PCs and the power efficiency of our
microprocessors for servers. We are also focusing on delivering a range of low power integrated platforms to
serve key markets, including commercial clients, mobile computing, and gaming and media computing. We
believe that these integrated platforms will bring customers better time-to-market and increased performance and
energy efficiency. Longer-term, our research and development efforts are focused on implementing our vision of
heterogeneous computing and the accelerated computing architecture in support of AMD Fusion. This includes
greater system level integration of the CPU and GPU. We also work with other industry leaders on process
14