AMD 2000 Annual Report Download - page 9

PC Processors
In 2000, our most significant microprocessor product sales were from the
AMD Athlon(TM) and AMD Duron(TM) processors, our seventh-generation
microprocessor products. The AMD Athlon and AMD Duron microprocessors are based
on superscalar RISC architecture and are designed to be compatible with
operating system software such as Windows 2000, Windows NT(R), Windows 98 (and
their predecessor operating systems), Linux, Netware and UNIX.
We began volume shipments of AMD Athlon microprocessors in the second half
of 1999. The AMD Athlon processor is an x86-compatible, seventh-generation
design featuring:
. a superpipelined, nine-issue superscalar microarchitecture optimized for
high clock frequency;
. a fully pipelined, superscalar floating point unit;
. high-performance backside L2 cache interface;
. enhanced 3DNow!(TM) technology with 24 additional instructions designed
to improve integer math calculations, data movements for Internet
streaming, and digital signal processor (DSP) communications; and
. a system bus which is a 200 MHz system interface based on the Alpha(TM)
EV6 bus protocol with support for scalable multiprocessing.
We began shipments of AMD Duron processors in the second half of 2000. The
AMD Duron processor, a derivative of the AMD Athlon processor core, is designed
to provide an optimized solution for value-conscious business and home users,
and features:
. full-speed, on-chip L2 cache memory;
. a 200 MHz front side system bus; and
. a superscalar floating point unit with enhanced 3DNow! technology.
Our overall PC processor sales growth in 2001 depends upon a continuing
successful production ramp in Dresden Fab 30, timely volume availability of
chipsets and motherboards from third party suppliers and increasing commercial
and consumer market acceptance of AMD Athlon and AMD Duron microprocessors.
Our microprocessor products have and will continue in 2001 and 2002 to
make significant contributions to our overall revenues, profit margins and
operating results. We plan to continue to make significant capital expenditures
to support our microprocessor products both in the near and long term. Our
ability to increase microprocessor product revenues, and benefit fully from the
substantial financial investments and commitments we have made and continue to
make related to microprocessors, depends upon the success of our seventh-
generation and future generations of microprocessors beginning with the "Hammer"
family of microprocessors that we plan to introduce in 2002. The Hammer
processors will be our first processors capable of 64-bit operation, and are
being designed to deliver leading-edge performance on both the 64-bit software
used by high-end workstations and servers and the 32-bit software used by the
majority of desktop users.
The microprocessor market is characterized by short product life cycles and
migration to ever higher performance microprocessors. To compete successfully
against Intel in this market, we must transition to new process technologies at
a fast pace and offer higher performance microprocessors in significantly
greater volumes. We must achieve acceptable yields while producing
microprocessors at higher speeds.
Intel has dominated the market for microprocessors used in PCs for many
years. Because of its dominant market position, Intel has historically set and
controlled x86 microprocessor and PC system standards and, thus, dictated the
type of product the market requires of Intel's competitors. In addition, Intel
may and does vary prices on its microprocessors and other products at will and
thereby affects the margins and profitability of its competitors due to its
financial strength and dominant position. Intel also exerts substantial
influence over PC manufacturers and their channels of distribution through the
"Intel Inside" brand and other marketing programs. Intel invests billions of
dollars in, and as a result exerts influence over, many other technology
companies. We expect Intel to continue to invest heavily in research and
development, new manufacturing facilities and other technology companies, and to
remain dominant:
. through the Intel Inside and other marketing programs;
. through other contractual constraints on customers, retailers, industry
suppliers and other third parties;
. by controlling industry standards; and
. by controlling supply and demand of motherboards, chipsets and other
system components.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001