AMD 2014 Annual Report Download - page 19

Research and Development
We focus our research and development activities on improving and enhancing product design. One main
area of focus is on delivering the next generation of products with greater system level integration of the CPU
and GPU and transforming our products into SoCs, with, in each case, improved system performance and
performance-per-watt characteristics. For example, we are focusing on improving the battery life of our
microprocessors and APU products for notebooks 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, as well as developing an HSA, which
is designed for software developers to easily program APUs by combining scalar processing on the CPU with
parallel processing on the GPU, all while providing high bandwidth access to memory at low power. We believe
that these integrated platforms will bring customers better time-to-market and increased performance and energy
efficiency. We also work with industry leaders on process technology, software and other functional intellectual
property and we work with others in the industry, public foundations, universities and industry consortia to
conduct early stage research and development.
Our research and development expenses for 2014, 2013 and 2012 were approximately $1.1 billion,
$1.2 billion and $1.4 billion, respectively. For more information, see “Part II, Item 7—Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” below.
We conduct product and system research and development activities for our products in the United States
with additional design and development engineering teams located in China, Canada, India, Singapore, Taiwan
and Israel.
Manufacturing Arrangements and Assembly and Test Facilities
Third-Party Wafer Foundry Facilities
GLOBALFOUNDRIES Inc. On March 2, 2009, we entered into a Wafer Supply Agreement (the WSA)
with GLOBALFOUNDRIES Inc. (GF). The WSA governs the terms by which we purchase products
manufactured by GF, a related party to us. Pursuant to the WSA, we are required to purchase all of our
microprocessor and APU product requirements from GF with limited exceptions. For more information about the
WSA, see “Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of
Operations-GLOBALFOUNDRIES,” below. GF currently manufactures wafers for our products on 300
millimeter wafers primarily in technologies ranging from 32nm to 28nm.
Taiwan Semiconductor Manufacturing Company. We also have foundry arrangements with Taiwan
Semiconductor Manufacturing Company (TSMC) for the production of wafers for certain products. We are in
production in TSMC’s 300 millimeter fabrication facilities in technologies ranging from 65nm to 28nm.
Other Third-Party Manufacturers. We outsource board-level graphics product manufacturing to third-
party manufacturers. We also outsource board-level and system-level product manufacturing to third-party
manufacturers for our SeaMicro dense server and storage products.
Assembly, Test, Mark and Packaging Facilities
We own and operate two assembly, test, mark and packaging facilities. Some wafers for our products are
delivered from third-party foundries to our assembly, test, mark and packaging facilities. Our assembly, test,
mark and packaging facilities are described in the chart set forth below:
Facility Location
Approximate
Manufacturing
Area Square
Footage Activity
Penang, Malaysia ................................. 150,000 Assembly, Test, Mark & Packaging
Suzhou, China .................................... 100,000 Assembly, Test, Mark & Packaging
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