Company reviewed – Advanced Micro Devices, Inc. (AMD)

Introduction

• AMD was founded in 1969 as a logic chip producing company.

Since that day, they have developed into a large multi-national company that produces micro-processors (CPUs), mainly for computers.

Currently in the market, there are only two major competitors, that is Intel and AMD.

1. Cheaper and more competitive products

2. Acquisition of ATI

• Shared knowledge and technology base.• Able to simultaneously release Graphic cards and

CPUs

3. Innovative ideas

• The AMD Phenom™ Quad Core Processor technology, scheduled for release in 2008-2009

4. Popular among enthusiasts

• Dunno leh

5. Growing market share

Market share in

CPUs

1. Weaker brand name

• Most people associate PCs with Intel

2. Less popular in mainstream market

• also dunno leh

3. Stiff competition

• Since there are only two competitors in the industry, Intel and AMD, competition is heavy between the two.

vs

4. Lesser market share

Intel still dominates most of the market

5. Smaller production capabilities

• AMD produces their own processors in Fabrication Plants, called "FABs".

• To date, Intel owns many more FABs than AMD.

• AMD has even considered giving up being in the fabrication business, due to losses.

Only real men have fabs.

—Former AMD CEO, Jerry Sanders

Image of AMD's future 300mm fab in Dresden

6. Slower product availability

• AMD products are generally released later than Intel’s• Resulting in lower sale figures, although lately AMD has been

gaining higher sale records

7. Smaller profit margin• To remain competitive, AMD is forced to slash prices on it’s

best selling models, like the Athlon 64 FX Series.• Thus reducing the profit margin.

1. Huge market demand for more efficient processor

2. Lower prices give better opportunities to penetrate into less

developed markets

3. Contracts with Original Equipment Manufacturer (OEM) and reseller

companies

1. Market dominance by IntelNeed to respond accordingly to Intel’s action e.g. introduction of new processor or new technology – could lead to loss or pressureto release new products (could lead to prematurely developed product)

2. Rival Intel further price cutsForces AMD to cut price as well, to stay competitive

3. Lawsuits

-From competitor (Intel may sue the company for certain matters)

-From government (Antitrust agency)