AMD 2001 Annual Report Download - page 199

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
--------------------------------------------------------------------------------
RESULTS OF OPERATIONS
In 2001, we participated in all three technology areas within the digital
integrated circuit (IC) market--microprocessors, memory circuits and logic
circuits--through our Core Products and Foundry Services segments. In 2000 and
1999, in addition to our Core Products and Foundry Services segments, we also
participated in the digital IC market through our Voice Communications and
Vantis segments. Our Core Products segment includes our PC processor products,
Memory products and Other IC products. PC processor products include our
seventh-generation microprocessors, the AMD Athlon and AMD Duron
microprocessors, and our sixth-generation microprocessors. Memory products
include Flash memory devices and Erasable Programmable Read-Only Memory
(EPROM) devices. Other IC products include embedded processors, networking
products and platform products, which primarily consist of chipsets. Our Foundry
Services segment consists of service fees from Legerity, Inc. and Vantis
Corporation. Our Voice Communications segment consisted of our voice
communications products subsidiary, Legerity, Inc. (Legerity), until July 31,
2000, the effective date of its sale. Our Vantis segment consisted of our
programmable logic devices subsidiary, Vantis Corporation (Vantis), until June
15, 1999, the date of its sale.
We sold 90 percent of Legerity for approximately $375 million in cash, effective
July 31, 2000. We sold Vantis to Lattice Semiconductor Corporation (Lattice) for
approximately $500 million in cash, effective June 15, 1999.
The following is a summary of net sales by segment for 2001, 2000 and 1999:
(Millions) 2001 2000 1999
-------------------------------------------
Core Products segment:
PC Processors $ 2,419 $ 2,337 $ 1,387
Memory Products 1,133 1,567 773
Other IC Products 242 457 400
-------------------------------------------
3,794 4,361 2,560
Foundry Services segment 98 143 43
Voice Communications segment - 140 168
Vantis segment - - 87
-------------------------------------------
Total $ 3,892 $ 4,644 $ 2,858
-------------------------------------------
Net Sales Comparison for Years Ended December 30, 2001 and December 31, 2000
Total net sales of $3,892 million decreased by 16 percent in 2001 compared to
2000.
PC processors net sales of $2,419 million increased by four percent in 2001
compared to 2000. This increase was primarily due to an increase in unit sales
of our seventh-generation microprocessors, the AMD Athlon and AMD Duron
microprocessors, partially offset by a decline in average selling prices. We
expect PC processor unit shipments and average selling prices in the first
quarter of 2002 to remain relatively flat as compared to the fourth quarter of
2001. Maintaining PC processor sales levels in 2002 depends on a continuing
successful technology transition in Dresden Fab 30, our ability to maintain
average selling prices for our seventh-generation microprocessors, continuing
growth in
11
Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002