AMD 1993 Annual Report Download - page 7

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embedded microprocessors contained in peripherals or other coprocessors
which perform certain functions such as arithmetic calculations. The iAPX
architecture, originally developed by Intel Corporation, has been the leading
architecture for personal computer microprocessors. AMD's strategy has been to
serve as an alternative source for iAPX microprocessors, introducing products
at comparable prices to competitive products, but with additional
customer-driven features. The Corporation in 1993 entered into a license
agreement with Microsoft(Registered Trademark), the personal computer
industry's leading supplier of operation systems software, pursuant to which
the Microsoft(Registered Trademark) Windows(Trademark) compatible logo now
appears on AMD's microprocessor packaging and advertising indicating that the
Corporation's product is compatible with such software. This approach is also
representative of the computer industry's shift from an emphasis on hardware
compatibility to software compatibility.
The PC market is currently divided into laptop, personal information
devices, desktop and portable varieties, and AMD plays a significant role in
such arenas. The Corporation has developed the Am386(Registered Trademark)
microprocessor, which is designed to meet the specifications of the Intel 80386
microprocessor. The Am386 family of microprocessors accounted for approximately
seventeen percent (17%) of the Corporation's 1993 revenues. The Corporation
believes that its success with the Am386 family has been largely due to its
competitive features and pricing coupled with customers' demand for a
reasonably priced second source. As is often the case in the semiconductor
industry, the average selling price of the Am386 has experienced significant
downward pressure as it approaches the end of its product life cycle. Most
computer manufacturers have made a transition from the 386 to the 486 family of
microprocessors.
The Corporation now offers a Am486(Trademark) family of products. The
Corporation began shipping Am486DX products in the second quarter of 1993, and
began volume shipment of its Am486SX products in 1994. The Corporation's 486DX
and 486SX products are the subject of microcode litigations with Intel
Corporation. (For more information see Item 3, Legal Proceedings, Numbers 2-8).
The Corporation is currently in the process of developing additional Am486
products. It is anticipated that development of such 486 products will be
completed by the end of 1994.
The Corporation is currently developing its next generation of CPU
microprocessor products known as the K series, based on superscalar RISC type
architecture. The K series products will be compatible with software such as
Microsoft(Registered Trademark) Windows(Trademark) currently compatible with
the X86 CPU microprocessors. The Corporation anticipates that the development
of the first K series products will be completed sometime in late 1994. The
Corporation currently offers a family of RISC microprocessors for embedded
control applications discussed below.
The future outlook for the Corporation's microprocessor products is highly
dependent on the timing of new product introductions, the outcome of its various
litigation matters with Intel, and other microprocessor market conditions.
Applications Solutions Products
Computer Systems, Interfaces and Mass Storage. The Corporation offers a
range of products which are utilized in a variety of computer systems. Computer
systems include a peripheral chip which is a special-purpose component that
works with central processing units, managing selected input/output or other
system functions. Other systems components control disk drives, keyboards and
printers. Through the use of communication peripherals, computers can operate in
networks and communicate locally and over long distances.
Many of these systems require a high-performance microprocessor for
embedded control. The Corporation's proprietary Am29000(Trademark) family of
RISC microprocessors is used extensively by a wide range of customers for
embedded control applications. Examples of these applications include
high-performance laser printer controllers, high-resolution graphics
controllers, communications controllers, and accelerator cards. Many
manufacturers, such as Motorola, Intel, IDT, National Semiconductor and Texas
Instruments offer RISC-based microprocessors which compete with the Am29000
family in certain applications. The Corporation expects that the RISC
microprocessor market will continue to grow.
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994