AMD 2010 Annual Report Download - page 3

To Our Stockholders:
2010 was a year of significant accomplishments for AMD. We delivered differentiated products
and platforms that expanded customer relationships and drove solid financial results. Our 2010 results
demonstrate the benefits of our new business model as a fabless design company. The year also
marked the start of the AMD Fusion Era of Computing as we shipped the first Accelerated Processing
Units (APUs) to customers worldwide. APUs combine an unprecedented level of processing
performance with low power consumption, enabling incredibly vivid and lifelike computing experiences.
We believe that as we enter 2011, we are well positioned to drive profitable growth. We plan to
capitalize on our position in the industry as the only company with both leading-edge graphics and x86
microprocessors. We plan to seize the opportunity ahead and lead this next era of the industry based
on our AMD Fusion family of processors.
Consistent financial results with a new fabless business model
We achieved many financial milestones in 2010, increasing revenue 20 percent year-over-year,
restructuring our balance sheet, reducing our overall debt, improving our gross margin and delivering
positive adjusted non-GAAP free cash flow. Most importantly, we demonstrated that our fabless
business model works, generating profitability at the operating income level every quarter in 2010. We
improved our balance sheet by reducing our overall debt. Without taking into account
GLOBALFOUNDRIES’ indebtedness, we reduced our debt by approximately $357 million during 2010.
We remain focused on adhering to strong financial discipline and believe that we are positioned for
continued profitable growth in 2011.
Delivering on a compelling roadmap with record achievements
Throughout 2010, we showed a consistent focus on execution and a commitment to delivering
innovative and compelling products. AMD remains an industry leader in graphics technology at a time
when visual computing has become a critical part of the PC experience. We shipped more than
35 million DirectX®11-capable graphics processor units (GPUs) in 2010, and are currently shipping a
second generation of cutting-edge products based on this important technology. Our DirectX®11
leadership helped generate record annual GPU shipments and revenue. We also posted an all-time
company high for annual GPU unit shipments, setting company records for both mobile discrete
graphics and professional graphics products. In addition, our award-winning AMD Eyefinity multi-
display technology continued to win the hearts and minds of gamers as it redefined the visual
computing experience.
We also achieved record client annual revenue for 2010. The launch of the “Danube” platform was
among the most successful client platform introductions in our history, contributing to record notebook
CPU unit shipments for the year. We expanded our business with Lenovo to notebook platforms when
Lenovo selected VISION PRO technology as the platform for their AMD-based ThinkPad laptops for the
commercial market. We also were pleased to gain Sony back as a customer with the introduction of new
AMD-based Sony Vaio notebooks. In total, we secured more than 130 design wins as part of our VISION
2010 launch, spanning multiple price points across both the consumer and commercial markets.
In servers, we implemented a strategy to focus on the most important workloads where we have a
compelling competitive advantage. For cloud datacenters and value-conscious markets, we have the
AMD Opteron™ 4000 series. For performance-driven applications and large enterprises, the AMD
Opteron™ 6000 series delivers exceptional compute capability. In November 2010, the Top 500
supercomputer list compiled by Top500.org showed that AMD powers more of the top 50
supercomputers in the world than any other processor vendor. Our goal for 2011 is to improve our
traction in the server market. We exited 2010 with more than 70 server designs shipping from our
major global customers and we are now focusing our marketing and sales resources to translate these
design wins into sales growth for 2011.
Leading the AMD Fusion Era of Computing
We kicked off 2011 with the launch of the world’s first APU, changing the trajectory of processor
design and development. The AMD Fusion Family of APUs signifies an innovation landmark,
combining our leadership and expertise in x86 computing and graphics into a single new architecture
that we believe is the most significant advancement in processor architecture in decades. APUs are
specifically designed to provide better experiences on the types of visual and data-intensive
applications that are becoming increasingly popular. We shipped more than one million APUs in the