AMD 2004 Annual Report Download - page 16

Table of Contents
NROM technology allows memory devices to store two bits of data in a memory cell using a nitride-based non-conducting storage medium. NROM technology
has similar characteristics to our MirrorBit technology and may allow these competitors to develop Flash memory technology that is competitive with MirrorBit
technology. Furthermore, NAND Flash memory vendors gained an increasing share of the overall Flash memory market in 2003 and 2004. If further significant
improvements in NAND Flash memory technology occur in the future, applications currently using NOR Flash memory may transition to NAND Flash memory.
As a result, NAND Flash memory vendors may gain a substantial share of the overall Flash memory market.
Competition With Respect to Our Personal Connectivity Solutions
With respect to our embedded processors for personal connectivity devices, our principal competitors are Freescale (formerly Motorola Semiconductor),
Hitachi, Intel, NEC Corporation, Toshiba, and Via Technologies. We expect competition in the market for these devices to increase as our principal competitors
focus more resources on developing low-power embedded processor solutions.
Research and Development
Our research and development is focused on product design and system and process development. We have devoted significant resources to product design
and to developing and improving manufacturing process technologies. In order to remain competitive, we must continue to maintain our technology leadership.
In particular, we have made and continue to make significant investments in manufacturing process technologies and in strategic relationships with
industry-leading companies relating to manufacturing process technology development.
Our research and development expenses for fiscal 2004, 2003, and 2002 were $935 million, $852 million and $816 million.
Microprocessors
We conduct product and system research and development activities for our microprocessor products in the United States with additional design and
development engineering teams located in Germany, China, Japan and India. With respect to process development, some research and development takes place at
Fab 30. We also have a joint development agreement with IBM pursuant to which we work together to develop new microprocessor process technologies to be
implemented on silicon wafers. On September 15, 2004, we amended our joint development agreement and extended the relationship for an additional three
years, from December 31, 2005 to December 31, 2008. Under the amended development agreement, we agreed to continue to develop jointly new
microprocessor process technologies. In addition, we received a license from IBM to have our products made in 90-nanometer and 65-nanometer at a third-party
foundry or a joint manufacturing facility owned by us and a third-party foundry. The development agreement may be extended further by the mutual agreement
of the parties, and can also be terminated immediately by either party if the other party permanently ceases doing business, becomes bankrupt or insolvent,
liquidates or undergoes a change of control, or can be terminated by either party upon 30 days written notice upon a failure of the other party to perform a
material obligation thereunder.
Flash Memory
We conduct product and system research and development activities for our Flash memory products primarily in Sunnyvale, California and in Japan, with
additional design and development engineering teams located in the United States, Europe and Asia. Currently, our primary development focus with respect to
Flash memory is on products based on MirrorBit technology for the wireless and embedded business markets. In addition, we are developing new non-volatile
memory process technology, including 90-nanometer floating gate technology and 90-nanometer MirrorBit technology utilizing three-layer copper interconnect.
Our SDC facility is developing processes on 200-millimeter and 300-millimeter wafer technology.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005