AMD 1995 Annual Report Download - page 18

address new industry standards and technological changes, or to respond to new
product announcements by others, or that any such new products will achieve
market acceptance.
Historically, the semiconductor industry has experienced rapid
technological advances together with substantial price reductions in maturing
products. After a product is introduced, prices normally decrease over time as
production efficiency and competition increase, and a successive generation of
products is developed and introduced for sale. AMD's future revenues and
profits may continue to be adversely affected by price reductions by Intel and
other competitors.
Numerous firms compete with AMD in the manufacture and sale of integrated
circuits. Some of these firms have resources greater than those of AMD and do
not depend upon integrated circuits as their principal source of revenue. There
is also significant captive production by certain large users of integrated
circuits, such as manufacturers of computers, telecommunications equipment and
consumer electronics products.
AMD competes for integrated circuit market share with, among others, Intel,
Texas Instruments, Motorola, National Semiconductor, IBM, Philips, Nippon
Electric Co., SGS-Thomson, Hitachi, Toshiba, Fujitsu Limited (Fujitsu),
Matsushita, Mitsubishi, Samsung, Hyundai and Siemens, all of whom are making
active efforts to increase their respective and collective worldwide market
shares. (For more information concerning Fujitsu, see the discussion on the
joint venture with Fujitsu below.) Intel, in particular, has long held a
dominant position in the market for microprocessors used in PCs. Intel's
dominant market position has to date allowed it to set x86 microprocessor
standards and thus dictate the type of product the market requires of Intel's
competitors. In addition, Intel's financial strength has enabled it to reduce
prices on its microprocessor products within a short period of time following
their introduction, which reduces the margins and profitability of its
competitors who are forced to reduce prices to maintain competitiveness. AMD
expects Intel to continue to spend substantial
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Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 1996