AMD 1993 Annual Report Download - page 12

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been produced using 0.8-micron CMOS technology, and the vast majority of AMD's
manufacturing capacity is now sub-micron CMOS. In 1993, the Corporation began to
prepare the SDC for the anticipated demand for its Am486 microprocessor family
and its 5-volt Flash Memory through the investment of additional funds in 1993,
bringing the total investment in the SDC to more than $360 million in 1993, and
it is estimated to reach approximately $460 million in 1994.
AMD has developed different base processes that are optimized for logic,
memory and programmable logic designs. Having process expertise which is
reproducible across different product designs allows AMD to bring new and
improved designs quickly into production. The Corporation's capital commitment
to improvements in process technology has led to reductions in feature size and
defect densities, which in turn result in the higher transistor count, speed,
functionality and power efficiency of AMD's integrated circuits. In 1993, the
Corporation continued building development versions of 0.7-micron triple-layer
metal logic products and memory devices with 0.5-micron feature sizes, and
researched patterning methods that will eventually produce 0.25-micron feature
sizes. In 1993, the Corporation also began shipment of 0.7-micron triple-layer
metal logic products (Am486). In addition, 0.5 micron feature size logic and
memory devices are in the final stages of development. Research is also being
carried out on process and patterning methods to produce 0.35-micron and
0.25-micron feature size devices.
Product design and development and wafer fabrication activities are
currently conducted at Advanced Micro Devices' facilities in California and in
Texas. A subsidiary of Sony Corporation manufactures bipolar products for the
Corporation in San Antonio, Texas, using equipment owned by the Corporation.
Nearly all product assembly and final testing is performed at the Corporation's
manufacturing facilities in Penang, Malaysia; Singapore; and Bangkok, Thailand,
or by subcontractors in Asia. A limited amount of testing of products destined
for delivery in Europe and Asia is performed at the Corporation's facilities in
Basingstoke, England.
Foreign manufacture entails political and economic risks, including
political instability, expropriation, currency controls and fluctuations,
changes in freight rates and in interest rates, and exemptions for taxes and
tariffs. For example, if the Corporation were not able to assemble and test its
products abroad, or if air transportation between the United States and these
facilities were disrupted, there could be a material adverse effect on the
Corporation's operations. The Corporation has not experienced any material
adverse effects associated with such risks.
In July 1993, the Corporation commenced construction of its 700,000
square foot submicron semiconductor manufacturing facility in Austin, Texas
(FAB 25). The Corporation estimates that the cost of this facility will be
approximately $1 billion when fully equipped. The Corporation anticipates the
facility will commence volume production in 1995. The Corporation has also
recently entered in to an agreement with Digital Equipment Corporation
(DEC(Registered Trademark)) under which DEC will provide a foundry in
Queensferry, Scotland, for production of the Corporation's Am486 products;
however, under the terms of such arrangement both parties have certain rights
to terminate this relationship earlier, in the event of adverse developments in
the Corporation's litigations with Intel. DEC will produce wafers for the
Corporation in the Queensferry foundry utilizing an adaptation of DEC's
0.68-micron process technology.
A major portion of the Corporation's current effort in both process
technology and circuit design is directed toward the development of large scale
integration products for microprocessor, programmable logic and memory
applications. The Corporation has entered into a strategic alliance with
Hewlett-Packard Corporation to collaborate on the development of advanced
process technology that will enable the Corporation to produce microprocessors
and logic devices with 0.35 micron CMOS logic technology. The Corporation
anticipates the technology will be developed by the end of 1995 and that the
production of such products will commence sometime in 1996. The Corporation is
also placing emphasis on the development of CMOS non-volatile memories,
programmable logic and VLSI (Very Large Scale Integration) logic products and
specialized circuits for the telecommunications market. (For information
concerning product development refer to the section entitled Products above.)
Quality Assurance. The Corporation's long-established quality program has
allowed it to achieve one of the highest quality and reliability levels in the
industry. This program is led by top management through an
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994