AMD 2000 Annual Report Download - page 11

switching equipment, automotive applications, PC hard disk drives, printer
controllers, industrial machine controls and numerous other types of electronic
equipment to store firmware which controls the equipment's operation. EPROMs are
generally preferred over more expensive Flash memory devices in applications
where end users do not need to reprogram the information stored on the IC. We
believe the market for EPROMs, which is significantly smaller than the market
for Flash memory devices, will continue to decline as EPROMs are replaced in
various applications by Flash memory devices.
Other ICs
Embedded Processors. Our embedded processors are x86 software compatible
general purpose processors designed specifically for embedded applications. Our
16-bit family of E86 embedded processors are built around the C186/C188
processor with additional integrated features such as additional memory, serial
ports, high-level data link control channels, or universal serial bus ports. Our
32-bit E86 family of embedded processors includes the AMD-K6-2E+, AMD-K6-IIIE+
and Am(R)486 discrete processors as well as the Elan(TM)SC400 and ElanSC520
fully integrated processors. Our Elan processors integrate the PC AT peripheral
set on chip to serve small form factor applications.
Platform Products. Our platform products include chipsets and motherboard
reference design kits designed to support AMD seventh-generation
microprocessors for use in PCs. As the AMD Athlon and AMD Duron
microprocessors do not function with chipsets and motherboards designed to
work with Intel microprocessors, we must develop compatible platform products.
We license the design interface specifications for these products to third-
party manufacturers to facilitate the sale of our microprocessors. It is
possible that from time to time a third-party manufacturer will be unable to
make chipset products available to the market in a timely manner corresponding
with the introduction of our microprocessor products. As the lack of
availability of these third-party chipsets could impact our ability to sell
our microprocessors, we manufacture a quantity of chipsets within our own
fabrication facilities or our authorized foundries on a limited basis. We are
then able to have a supply of products available for sale, should the need
exist, until they are available from the third-party manufacturers.
Networking Products. Our networking products include logic devices that are
used in the data communication and networking industry to establish and manage
connectivity.
Our product portfolio encompasses the following local area network (LAN)
products:
. home networking controllers and physical layer products;
. Ethernet controllers supporting the enterprise and small business
networking areas;
. Ethernet physical layer and repeater products which are used in
enterprise and small business systems solutions; and
. Ethernet physical layer and switch products which are used in
enterprise, small business and telecommunication systems.
Voice Communications
Voice Communications Products ($140 million, or 3 percent, of our 2000
net sales) included the voice telecommunications products of our former
subsidiary, Legerity. These products are used in infrastructure equipment such
as central office switches, digital loop carriers and digital subscriber loop
access multiplexers (DSLAMS), and in customer premise equipment such as
wireless local loop systems, cable telephony systems, private branch exchange
equipment and voice over digital subscriber line (DSL) systems. In modern
telephone communications systems, voice communications are generally transmitted
between the speaker and the central office switch in analog format, but are
switched and transmitted over longer distances in digital format. Legerity's
subscriber line interface circuits (SLIC) for line cards connect the user's
telephone wire to the telephone company's digital switching equipment.
Legerity's SLAC(TM) line cards are coder/decoders which convert analog voice
signals to a digital format and back. Legerity's DSL products include a
coder/decoder device and a modem device for use in DSLAM applications.
Legerity's cordless telephony products include a baseband controller for the 900
MHz narrow band digital cordless market. On August 4, 2000, we completed the
sale of 90 percent of Legerity for approximately $375 million in cash to
Francisco Partners, L.P., effective July 31, 2000. We retained a ten percent
ownership interest in Legerity and a warrant to acquire approximately an
additional ten percent. As part of the transaction, we entered into various
service contracts with Legerity to continue to provide, among other things,
wafer fabrication and assembly, test, mark and pack services to Legerity.
Foundry Services
Foundry Services ($142 million, or 3 percent of our 2000 net sales) include
fees for services provided to Lattice and Legerity.
Research and Development; Manufacturing Technology
Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001