AMD 2006 Annual Report Download - page 12

Table of Contents
telecommunications servers; digital imaging; and military and industrial controls systems. Such markets have lengthy design and qualification cycles and longer
life spans in the marketplace than typical mainstream computing products.
Prior to July 2006, we also provided MIPS® architecture-based Alchemy embedded processors. In July 2006 we sold the Alchemy family of products to
Raza Microelectronics, Inc.
Our embedded processor products, from AMD Opteron to AMD Geode, exemplify our “x86 Everywhere” microprocessor strategy, which is our goal for
utilizing the x86 instruction set architecture to power a wide variety of devices in diverse places such as the home, office or car, in the supply chain, in storage
networks, in the data center, and/or in global communications networks. We believe that when a greater number of devices are standardized with an x86-based
platform, end-users can benefit from the ability to run their existing x86-based software on devices that interoperate with each other. This can accelerate and
simplify the process of enabling faster, easier connectivity and data sharing between a wide range of products, from portable consumer electronics to PCs and
servers. With our full range of embedded microprocessors, we are able to extend our x86-based product offerings to serve markets from embedded appliances to
embedded server-class products.
Graphics and Chipset Products
Graphics and Chipset Market
The semiconductor graphics market addresses the need for visual processing in various computing and entertainment platforms such as desktop and
notebook PCs, workstations and game consoles. The strength of the semiconductor graphics market is heavily dependent upon the market for PCs. Visual realism
and graphical display capabilities are key elements of product differentiation among various product platforms. PC users value a rich visual experience,
particularly in the high-end enthusiast market where consumers seek out the fastest and highest performing visual processing products to deliver the most
compelling and immersive gaming experiences. Moreover, for some consumers, the PC market is evolving from a traditional data and communications
processing machine to an entertainment platform. This has led to the increasing creation and use of processing intensive multimedia content for PCs and PC
manufacturers creating more PCs designed for playing games, displaying photos and capturing TV and other multimedia content. In turn, the trend has
contributed to the development of higher performance graphics solutions. For example, we believe that the enhanced 3D graphics capabilities enabled by
Microsoft® Windows Vista ™ and the increasing availability of “media center” PCs will spur development of advanced graphics applications intended for
mainstream users, which will contribute to increased demand for graphics and chipset products.
The primary product of a semiconductor graphics supplier is the graphics processing unit, or GPU, a semiconductor chip that increases the speed and
complexity of images that can be displayed on a graphical interface and improves image resolution and color definition. The GPU off-loads the burden of
graphics processing from the CPU. In this way, a dedicated graphics processor and CPU work in tandem to increase overall speed and performance of the
system. A graphics solution can be in the form of either a stand-alone graphics chip or an integrated chipset solution. Recently, to further improve graphics
processing performance, semiconductor graphics suppliers have introduced multi-GPU technologies which increase graphics processing speed by dividing
graphics rendering and display among two or more graphics processors.
Graphics and Chipset Products
We provide our graphics solution for both desktop and notebook PCs by adding either one or more discrete graphics processors, which are stand-alone
graphics chips, or by integrating the graphics hardware into the motherboard chipset. Discrete graphics chips tend to provide higher levels of performance and
speed, while integrated chipsets generally offer a lower cost solution, improved power consumption and smaller form factors. The demand for integrated graphics
solutions has grown in recent years as the performance of integrated chipsets has advanced. Also, customers of graphics products such as original equipment
manufacturers, or OEMs, and PC system integrators, or SIs, who are continually pressured to meet lower price and power consumption targets
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007