AMD 2000 Annual Report Download - page 371

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Voice Communications products net sales of $140 million decreased by 17 percent
in 2000 compared to 1999 as a result of the sale of our Legerity subsidiary,
effective July 31, 2000.
There were no sales from Vantis products in our 2000 net sales. Vantis products
contributed $87 million to our 1999 net sales prior to Vantis' sale.
The Foundry Services segment included service fees of $143 million from Lattice
and Legerity in 2000 compared to $43 million from Lattice in 1999. The increase
was primarily due to the addition of service fees from Legerity and secondarily
to an increase in service fees from Lattice.
Net Sales Comparison of Years Ended December 26, 1999 and December 27, 1998
Total net sales increased by $316 million, or 12 percent, to $2,858 million in
1999 from $2,542 million in 1998.
PC processors net sales of $1,387 million increased by ten percent in 1999
compared to 1998. This increase was primarily due to the introduction of AMD
Athlon microprocessors, which were our first seventh-generation Microsoft
Windows compatible microprocessors, at the end of the second quarter of 1999,
and was partially offset by a decrease in net sales of AMD-K6 microprocessors.
Although unit sales volumes of AMD-K6 microprocessors increased, net sales
decreased due to declines in average selling prices which were caused by
aggressive Intel pricing, including marketing programs and product bundling of
microprocessors, motherboards, chipsets and combinations thereof.
Memory products net sales of $773 million increased by 38 percent in 1999
compared to 1998 primarily as a result of strong growth in demand for Flash
memory devices, which was slightly offset by a decline in net sales of EPROMs.
Other IC products net sales of $400 million increased by ten percent in 1999
compared to 1998 primarily due to an increase in net sales from chipset products
and home networking products.
Voice Communications net sales of $168 million were relatively flat between 1999
and 1998. Increases in net sales from our Ethernet controllers and physical
layer circuits, as well as increases in net sales of linecard circuits, were
offset by a weakness in the sales of mature network products.
Vantis products net sales of $87 million decreased by 58 percent in 1999
compared to 1998 primarily because there were two quarters of sales in 1999
prior to Vantis' sale, as compared to a full year of sales in the prior year.
The Foundry Services segment consisted of service fees of $43 million from
Lattice in 1999.
Comparison of Expenses, Gross Margin Percentage and Interest Income and Other,
Net
The following is a summary of expenses, gross margin percentage and interest
income and other, net for 2000, 1999 and 1998:
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001