AMD 1993 Annual Report Download - page 11

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According to Dataquest, an industry research firm, during 1993, the
Corporation was the fifth-largest independent U.S. manufacturer of integrated
circuits, and the thirteenth largest worldwide (excluding IBM), ranked according
to sales to unaffiliated customers. Advanced Micro Devices competes for
integrated circuit market share with Texas Instruments, Motorola, National
Semiconductor, Intel, North American Philips, and with several prominent
Japanese firms. These firms include Nippon Electric Co., Hitachi, Toshiba,
Fujitsu, Matsushita and Mitsubishi, who are making active efforts to increase
their respective and collective worldwide market shares. (For more information
concerning Fujitsu, see section Joint Venture with Fujitsu Limited above.)
All of the above-mentioned competitors are either substantially larger in
both gross sales and in total assets than Advanced Micro Devices or are part of
larger corporate enterprises to whose resources, financial and other, the
competitors have access. In addition to the above, many other companies
dedicated to only one or two process technologies and product types compete with
the Corporation in those technologies and product types.
RESEARCH AND DEVELOPMENT
In keeping with its objective of increasing emphasis on the development of
proprietary products while maintaining its role as a high-volume producer of
popular designs, Advanced Micro Devices endeavors to manufacture products
utilizing advanced technology which is consistently reproducible in an industry
where the technology is complex and subject to rapid change. The Corporation
directs its research and development efforts towards the advancement of wafer
processing technology and the design of new circuits utilizing consistently
reproducible advanced technologies. (For information concerning these advances
see section Process Technology and Manufacturing below.) The Corporation
emphasizes research and development efficiency improvements through the use of
computer-aided design workstations and complementary circuit design software.
The semiconductor industry is subject to rapid changes in technology and
requires a high level of capital spending and extensive research and development
programs to maintain the state of the art. The Corporation's expenses for
research and development in 1991, 1992 and 1993, were $213,765,000,
$227,860,000, and $262,802,000, respectively. Such expenses were 17.4%, 15.0%
and 16.0% of sales in 1991, 1992 and 1993, respectively. Advanced Micro Devices'
research and development expenses are charged to operations as incurred. Most of
the research and development personnel are integrated into the engineering
staff.
PROCESS TECHNOLOGY AND MANUFACTURING
Monolithic integrated circuits are manufactured from a circuit layout
separated into layers that are produced on photomasks (working plates). The
actual production of the integrated circuit includes wafer fabrication, wafer
sort, assembly and final test.
The semiconductor industry is increasingly process-based, meaning that the
advance of semiconductor technology requires the ability to develop new design
and manufacturing processes. The process technologies generally utilized in the
manufacture of integrated circuits are bipolar and metal-oxide semiconductor
(MOS). CMOS products require less power than circuits built with other
processes, such as bipolar or N-MOS (N-channel MOS). In addition, CMOS
technology allows for a much broader circuit design capability than NMOS or
bipolar and thus CMOS designs are displacing both NMOS and bipolar product
designs. The advances and advantages of CMOS technology have created an
increased demand for products manufactured with CMOS processes. During 1993,
over two-thirds of the Corporation's total sales were derived from CMOS
products.
With advances in CMOS processing technology and the continued erosion of
demand for products manufactured with bipolar technology, the Corporation has
significantly streamlined its wafer fabrication capacity by restructuring its
manufacturing capabilities from an emphasis on bipolar process technology to an
emphasis on CMOS process technology. The Corporation is primarily a CMOS
manufacturer and has achieved cost-effective production in its Submicron
Development Center (SDC) which was completed in 1991 and continues to be
improved to incorporate more advanced technology. Am386 microprocessors have
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994