AMD 2012 Annual Report Download - page 18

Internet browsing. VISION A6, A8 and A10 based desktops and notebooks are designed to allow a greater
computing performance for digital consumption and creation. These activities include watching HD movies,
photo editing, DirectX 11 gaming, multi-tasking, and video editing. VISION FX desktops are based on the AMD
FX processor and an AMD Radeon HD 6000, HD 7000 or HD 8000 series graphics card. We designed these
VISION FX systems to enable the highest capabilities sought by enthusiasts and are only available on desktop
PCs. There is also VISION Pro Technology, which is designed for business users and extends the approach of
VISION Technology to commercial PC platforms.
We market our products through our direct marketing and co-marketing programs. In addition, we have
cooperative advertising and marketing programs with customers and third parties, including market development
programs, pursuant to which we may provide product information, training, marketing materials and funds.
Under our co-marketing development programs, eligible customers can use market development funds as partial
reimbursement for advertisements and marketing programs related to our products and third party systems
integrating our products, subject to meeting defined criteria. Original Equipment Manufacturers, or OEMs, may
qualify for market development funds based on purchases of eligible products.
Customers
Our microprocessor customers consist primarily of OEMs, original design manufacturers, or ODMs, system
builders and independent distributors in both domestic and international markets. ODMs provide design and/or
manufacturing services to branded and unbranded private label resellers, OEMs and system builders. Our
graphics products customers include the foregoing as well as AIBs, or add-in-board manufacturers.
Customers of our chipset products consist primarily of PC and server OEMs, often through ODMs or other
contract manufacturers, who build the OEM motherboards, as well as desktop and server motherboard
manufacturers who incorporate chipsets into their channel motherboards.
Our sales and marketing teams work closely with our customers to define product features, performance and
timing of new products so that the products we are developing meet our customers’ needs. We also employ
application engineers to assist our customers in designing, testing and qualifying system designs that incorporate
our products in order to assist in optimizing product compatibility. We believe that our commitment to customer
service and design support improves our customers’ time-to-market and fosters relationships that encourage
customers to use the next generation of our products.
Original Equipment Manufacturers
We focus on three types of OEMs: multi-nationals, selected regional accounts and target market customers.
Large multi-nationals and regional accounts are our core OEM customers. Our OEM customers include
numerous foreign and domestic manufacturers of servers and workstations, desktop and mobile PCs, and PC
motherboards.
In 2012, Hewlett-Packard Company accounted for more than 10% of our consolidated net revenues. Sales to
Hewlett-Packard consisted primarily of products from our Computing Solutions segment. Five customers,
including Hewlett-Packard, accounted for approximately 59% of the net revenue attributable to our Computing
Solutions segment. In addition, five customers accounted for approximately 48% of the net revenue attributable
to our Graphics segment. A loss of any of these customers could have a material adverse effect on our business.
Third-Party Distributors
Our authorized distributors resell to sub-distributors and mid-sized and smaller OEMs and ODMs.
Typically, distributors handle a wide variety of products, including those that compete with our products.
Distributors typically maintain an inventory of our products. In most instances, our agreements with distributors
10