AMD 2002 Annual Report Download - page 12

Table of Contents
generation x86 microprocessors that have been modified to target embedded networking, telecom, PC peripheral and consumer electronics applications.
Wireless LAN Products. In November 2002, we announced our first product for the wireless local area network (WLAN) market, the Alchemy Solutions
Wireless LAN Am1772™ chipset. These chipsets are designed for low power consumption, reduced additional components, compact design and increased battery
life.
Platform Products. Our platform products include chipsets and motherboard reference design kits designed to support our microprocessors for use in
PCs. The primary purpose of these products is to ensure that there is continued availability of chipset products to support AMD processors in the event of a
supply gap from third-party providers. Such supply gaps can occur from time to time when a third-party manufacturer is unable to make chipset products
available to the market at the same time that our microprocessor products are introduced.
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.
We do not intend to develop new networking products or to enhance our existing networking products.
Foundry Services
Our Foundry Services segment ($34 million in sales, or one percent of our 2002 net sales) consists of fees for products sold to Vantis and Legerity. As
described above, we no longer manufacture products for Legerity or Vantis, although we may continue to sell products previously manufactured to Vantis
through the third quarter of 2003.
Research and Development; Manufacturing Technology
Manufacturing technology is a key determinant in the improvement of most semiconductor products. Each new generation of manufacturing process
technology has resulted in products with greater performance. We have devoted significant resources in developing manufacturing process technologies used in
the production of ICs. In order to remain competitive, we must continue to maintain our process technology leadership. In particular, we have made and continue
to make significant investments in process technologies and in strategic relationships with industry leading companies relating to manufacturing process
technology development. We may not realize our expected return on these investments if we fail to continue to gain market acceptance for our products, if the
market for our microprocessor or Flash memory products should significantly deteriorate or if we are unable to realize the full benefits of our strategic
relationships. In addition, if we are unable to remain competitive with respect to process technology, we will be materially and adversely affected.
Our efforts concerning process technologies are focused in two major areas: logic technology used for manufacturing our microprocessors and non-volatile
memory technology used for manufacturing our Flash memory products. During 2002, we converted our microprocessor manufacturing from 180 nanometer
process technology to 130 nanometer process technology. As of year-end 2002, all of our microprocessors were
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003