AMD 2002 Annual Report Download - page 40

Table of Contents
other components. In recent years, many of these third-party designers and manufacturers have lost significant market share to Intel or exited the business. In
addition, these companies produce chipsets, motherboards, BIOS software and other components to support each new generation of Intel’s microprocessors, and
Intel has significant leverage over their business opportunities.
Our microprocessors are not designed to function with motherboards and chipsets designed to work with Intel microprocessors. Our ability to compete
with Intel in the market for AMD Athlon 64 and AMD Opteron microprocessors will depend on our ability to ensure that PC platforms are designed to support
our microprocessors. A failure of the designers and producers of motherboards, chipsets and other system components to support our microprocessor offerings
would have a material adverse effect on us.
If we are unable to develop, produce and successfully market higher-performing microprocessor products, we may be materially adversely affected. The
microprocessor market is characterized by short product life cycles and migration to ever-higher performance microprocessors. To compete successfully, we
must transition to new process technologies at a fast pace and offer higher-performance microprocessors in significantly greater volumes. If we fail to achieve
yield and volume goals or to offer higher-performance microprocessors in significant volume on a timely basis and at competitive prices, we could be materially
adversely affected.
To be successful, we must increase sales of our microprocessor products to existing customers and develop new customers in both consumer and
commercial markets, particularly the latter. Our production and sales plans for microprocessors are subject to other risks and uncertainties, including:
• our ability to continue offering new higher performance microprocessors competitive with Intel’s product offerings;
• our ability to introduce and create successful marketing positions for the upcoming AMD Opteron and AMD Athlon 64 microprocessors, which rely in
part on market acceptance and demand for 64-bit microprocessors based on x86 technology.
• our ability to maintain and improve the successful marketing position of the AMD Athlon XP microprocessor, which relies in part on market
acceptance of a metric based on overall processor performance versus processor clock speed (measured in megahertz frequency);
• our ability to maintain adequate selling prices of microprocessors despite increasingly aggressive Intel pricing strategies, marketing programs, new
product introductions and product bundlings of microprocessors, motherboards and chipsets;
• our ability, on a timely basis, to produce microprocessors in the volume and with the performance and feature set required by customers;
• the pace at which we expect to be able to convert production in Fab 30 to 90 nanometer copper interconnect process;
• our ability to attract and retain engineering and design talent;
• our ability to expand system design capabilities; and
• the availability and acceptance of motherboards and chipsets designed for our microprocessors.
Our ability to increase microprocessor product revenues and benefit fully from the substantial investments we have made and continue to make related to
microprocessors depends on the continuing success of our AMD Athlon microprocessors and the success of future generations of microprocessors, most
immediately the AMD Opteron processor, and later this year the AMD Athlon 64 processor. If we fail to achieve continued and expanded market acceptance of
our microprocessors, we may be materially adversely affected.
We must introduce in a timely manner, and achieve market acceptance for, our AMD Opteron and AMD Athlon 64 microprocessors, or we will be
materially adversely affected. We plan to ship our AMD Opteron
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003