AMD 2009 Annual Report Download - page 3

To Our Stockholders:
2009 marked AMD’s 40th anniversary as a semiconductor innovator. It was a year in which we
celebrated our rich history while taking great strides toward an even brighter future.
We reshaped our company, while achieving every major new product milestone in the year—from
industry-leading graphics products, to visually-richer client platforms, to higher-performance six-core
server processors. With the formation of GLOBALFOUNDRIES, we made a game-changing move
helping to unlock AMD from the capital-intensive burden of funding the leading-edge manufacturing
capacity we require. Finally, we reached a historic settlement with Intel, resulting in unprecedented
ground-rules for fair competition in the x86-microprocessor industry. We hope the settlement will mark
a new era where our customers will realize the benefits of fair and open competition and a renewed
focus on customer-centric innovation.
We exited 2009 with strong momentum and enter 2010 with a new business model, compelling
products and strong customer demand.
2009: Strengthening in a down year
Despite a challenging global economic environment and downturn in worldwide PC demand, we
made solid progress to strengthen the company financially.
First, we resized the company in an effort to achieve consistent profitability. In so doing, we were
able to align under a more streamlined organization, with a more focused strategy, poised to deliver
our new AMD Fusion™ processor technology.
Second, we closed a transaction with the Advanced Technology Investment Corporation (ATIC)
and the Mubadala Development Company of Abu Dhabi. This fulfilled a multi-year vision to create two
companies capable of delivering innovation and impact to the global technology industry: a leading
design innovator in AMD and a leading-edge manufacturing company in GLOBALFOUNDRIES. As a
result, AMD retains access to leading-edge manufacturing capacity while mitigating the capital-
intensive burden of building and maintaining manufacturing facilities and operations.
Third, with improved operating performance, the formation of GLOBALFOUNDRIES and the
proceeds of the Intel litigation settlement, we were able to dramatically strengthen our balance sheet.
Growing product and platform momentum
2009 was also a year in which we showcased our unique opportunity as the only company in the
world that designs and delivers both high-performance x86-microprocessors and leading-edge
graphics. We delivered platforms in desktop and notebook markets focused on enabling a better PC
experience and solutions to the server market optimized for key applications like cloud computing and
virtualization.
AMD’s resurgence as a graphics leader comes at a time in the industry when graphics technology
is becoming an increasingly important part of computing and the computing experience. In the second
half of the year, we launched the ATI Radeon™ HD 5000 Series of discrete graphics that delivered
leading-edge performance and enabled our partners to deliver new visual experiences through our ATI
Eyefinity technology. Timed with the launch of the new Microsoft®Windows®7 operating system, we
were the only company with DirectX®11 capable graphics processors shipping that take full advantage
of all of the capabilities enabled by this new graphics programming standard. We quickly expanded the
ATI Radeon HD 5000 Series product offerings to span the entire graphics price-point stack, delivering
advanced performance and features at every price point.
Helping consumers “See the Difference”
In 2009, we launched an innovative and unprecedented marketing effort called VISION
Technology from AMD, a program designed to improve how PC benefits are communicated at the
point of sale. In contrast to the traditional marketing emphasis on the technical specifications of
individual hardware components, the VISION campaign communicates the value of the whole system,
and how the combined capabilities of the CPU and GPU can deliver a superior experience for
mainstream PC users. It emphasizes how AMD technology-based PCs can be optimized for video,
digital media and content creation activities, among other applications. In short, we believe VISION
Technology helps consumers make better informed buying decisions. In response to strong market
adoption, we recently expanded VISION Pro Technology to commercial and small business channels.