International Production Facilities 6 Problematic Issues & Their Solutions 9 Appendix C ? Foreign Subsidiaries 13 Advanced Micro Devices (AMD), founded May 1st, 1969 and headquartered in Sunnyvale, California, is one of the largest manufacturers of integrated circuits in the world. Founded originally by Jerry Sanders and seven others in a single room in 1969 with only $100,000, AMD now employs approximately 13,000 people worldwide and has annual revenues in excess of $2.4 billion.
In 1978, AMD opened up international assembly facilities in Manila, Philippines, and expanded the Penang, Malaysia factory that they originally opened in 1973 as their first overseas manufacturing base. By the end of 1981, the company had more than doubled its sales over 1979. Plants and facilities expanded with an emphasis on building in Texas. New production facilities were built in San Antonio, and more fabrication space was added to their Austin, Texas facilities as well. In the years following 1981, AMD expanded its global operations tremendously with the incorporation of AMD Singapore in 1983; as well as by building a facility in Bangkok, Thailand. By 1994, AMD had become a supplier of flash memory, networking, EPROM, telecommunications and programmable logic chips. In more recent years, AMD?s sixth and seventh generation chips, including the new Athlon processor have been, and will continue to be one of the leading chipsets available worldwide. Their international sales operations entail exchange rate fluctuations, political and economic risks, including expropriation, currency controls, changes in freight rates and changes in rates and exemptions for taxes and tariffs. The company?s first products were products that they redesigned from other companies for greater speed and efficiency. Now AMD produces processors, flash memories, programmable logic devices, and products for communications and networking applications. Their processors, the K6 and Athlon, are being used by IBM, Compaq and other computer manufacturers around the world. On November 29, 1999, a 750MHz Athlon (see front cover for photograph) processor was brought to market, making it the fastest processor available in home computers. The 750MHz Athlon processor is priced at $799 in 1,000 unit quantities.
The Essay on Computer Processors Athlon Processor
Matthew Thwaites Mrs. Meehan DIC 2 A 1 Processors: Which is the best? A processor is the chip inside a computer which carries out of the functions of the computer at various speeds. There are many processors on the market today. The two most well known companies that make processors are Intel and AMD. Intel produces the Pentium chip, with the most recent version of the Pentium chip being the ...
The 750MHz AMD Athlon processor is the first processor that is built using AMD’s aluminum 0.18-micron manufacturing process, and new AMD Athlon processors are now being built using that advanced technology. The 0.18-micron manufacturing process shrinks the size of the AMD Athlon processor die, enabling faster processor speeds and lowering power consumption.
AMD is moving away from only supplying low-end chips, to supplying high-end high performance chips using their 0.18-micron manufacturing process. The Athlon is currently being manufactured in the Austin, Texas facility, and is expected to begin featuring copper interconnect technology later this year in its newest facility, Fab 30 in Dresden, Germany.
Aside from the numerous processors that AMD produces, they also produce flash memory. It does simultaneous read/write and is the first hardware capable of reading data during programming or erasing operations. Programmable logic devices, communications and networking applications are also among the products made by AMD. The company has sales offices worldwide and has manufacturing facilities in Sunnyvale, California; Austin, Texas; Bangkok, Thailand; Penang, Malaysia; Singapore; Suzhou, China and Aizu-Wakamatsu, Japan. A wafer fabrication facility in Dresden, Germany is scheduled to begin commercial production in 2000. The balance sheets and income statements for AMD are provided in Appendices A & B. Total net sales increased by $186 million, or 8 percent, to $2.542 billion in 1998 from $2.356 billion in 1997. Although sales grew, net loss also grew by $83 million dollars to $103 million in 1998. AMD blames the net loss due to the general downturn in the worldwide semiconductor market and the current economic conditions in Asia, which negatively impacted their results of operations. Closing share price for AMD on the NYSE as of Wednesday, December 1, 1999 was $27.50 US, which gave it a market capitalization of $4.064 billion.
The Business plan on Market Segmentation, and Product Positioning
For the purpose of this assignment, I am assuming myself as the owner of a plastic molded toy company in United States that manufacturers, and distributes plastic molded toys through retailers across the country and around the world. The company is capitalizing on the strong growth in the children’s toys segment and planning to expand in an aggressive manner throughout the nation. The company ...
The processor market is characterized by short product life cycles and rapid change. To compete successfully against Intel, AMD?s largest competitor, in this market, AMD must be able to develop and bring new products to market quickly and in high volume. Intel has dominated the market for microprocessors used in personal computers for a long time. Intel can set and control processor standards due to this market dominance and dictate the type of product the market requires of Intel’s competitors. In addition, Intel may vary prices on its processors and other products at will and thereby affect the margins and profitability of its competitors due to its financial strength and dominant position. Given Intel’s industry dominance and brand strength, Intel’s decisions on processor prices can impact and have impacted the average selling prices of the AMD-K6 processors, and consequently can impact and has impacted AMD?s margins. AMD does not have the financial resources to compete with Intel on such a large scale. In a processor market predominantly run by Intel, AMD has had its work cut out for it to stake its own claim in that arena. The company ranks second in the microprocessor market (after Intel) with about 10% of sales. However, it has grabbed about 60% of the market for sub-$1,000 PCs.
AMD?s major goals are to gain market share and have profitable growth. However, consistent long-term growth is very difficult for AMD to achieve because they must continuously invest in research and development in order to stay competitive in the rapidly changing processor market. Originally AMD had concentrated on low-end chips, but with Intel?s market dominance, they were being threatened of pushed out of the market. Now, with the introduction of the high-end Athlon chip, AMD is trying to diversify their processor line. In an interview with Jerry Sanders November 29, 1999 on CNBC, he stated that: ?Turns out that when we only offered low-end chips, we got over 50% of the retail market, but then Intel collapsed the prices. Intel subsidized the prices of their low-end chips with the higher margins they were making on their high-end chips. Now we have both and feel it will help defend against future strategies Intel may try to employ against us.? This strategy will help AMD diversify and protect against these types of strategies that Intel may try to employ in the future. Nearly all product assembly and final testing of AMD products occurs at their manufacturing facilities in Penang, Malaysia; Bangkok, Thailand; and Singapore; or by subcontractors in Asia.
The Essay on Describe how marketing techniques are used to market products in two organisations
Describe how marketing techniques are used to market products in two organisations In this task I will describe how marketing techniques are used to market products in two different organisations in this case NHS and Nike. NHS The NHS was found by Aneurin Bevan on the 5th of July 1948 when he opened the Park hospital in Manchester; his ambition was to break a high standard of healthcare to ...
AMD also recently entered into one of the most potentially explosive markets in terms of growth. They constructed an assembly and test facility in Suzhou, China and production began in the first quarter of 1999. For a complete list of AMD?s foreign subsidiaries refer to Appendix C. AMD also depends on foreign foundry suppliers and joint ventures for the manufacture of a portion of their finished silicon wafers. Foreign manufacturing and construction of foreign facilities entail political and economic risks, including political instability, currency controls and fluctuations, changes in freight and interest rates, and loss or modification of exemptions for taxes and tariffs. Any disruptions or changes in international politics, or shipping could potentially have an adverse effect on sales. In 1993, AMD and Fujitsu Limited (Fujitsu) formed a joint venture, Fujitsu AMD Semiconductor Limited (FASL), for the development and manufacture of non-volatile memory devices. AMD controls 49.992% of the company and Fujitsu controls the remaining stake. In connection with FASL, AMD and Fujitsu have entered into various joint development, cross-license and investment arrangements. Accordingly, the companies are providing their product designs and process and manufacturing technologies to FASL. In addition, both companies are collaborating in developing manufacturing processes and designing flash memory devices for FASL. Interestingly, the right of each company to use the licensed intellectual property of the other with respect to certain products is limited both in scope and geographic areas. For instance, AMD and Fujitsu have cross-licensed their respective intellectual property to produce stand-alone flash memory devices within the joint venture. Furthermore, AMD?s ability to sell flash memory products incorporating Fujitsu intellectual property, whether or not produced by FASL, is also limited in certain territories, including Japan and Asia (excluding Taiwan).
The Essay on Intel Vs. Amd The True Story (Intel Bias)
The processor world used to be only Intel, now there is another contender, AMD (Advanced Micro Devices). A couple years ago when AMD first made its way into the scene there were many incompatibility problems with AMD processors and programs. However due to changes in the design these incompatibility problems no longer plague the AMD line of processors. But it is a known fact that an AMD equivalent ...
Fujitsu is likewise limited in its ability to sell flash memory devices incorporating AMD intellectual property, whether or not produced by FASL, in certain territories including the United States and Taiwan. The functional currency of FASL is the Japanese yen. They translate these financial statements in the U.S. dollar using the exchange rate at each balance sheet date for assets and liabilities and a weighted-average exchange rate for each period for income statement items. Translation adjustments are recorded as a separate component of stockholders’ equity in the U.S. dollar financial statements.
AMD uses foreign exchange forward and option contracts to reduce their exposure to currency fluctuations on net monetary assets position in their foreign subsidiaries, liabilities for products purchased from FASL, fixed asset purchase commitments and obligations for future investments in AMD Saxony. They had $13 million (notional amount) of short-term foreign currency forward contracts denominated in the Japanese yen, German mark and British pound outstanding as of December 27, 1998. They also had entered into various foreign currency option arrangements. In 1997, AMD purchased $150 million of call option contracts to hedge their obligations to provide loans to, or invest equity in, AMD Saxony, of which $75 million were outstanding as of December 27, 1998. In 1998, AMD entered into a no-cost collar arrangement to hedge Dresden Fab 30 project costs through which they purchased $300 million of put option contracts and sold $300 million of call option contracts. AMD had $220 million of no-cost collar option contracts outstanding as of December 27, 1998. The reason that AMD uses these contracts is to minimize the impact of foreign currency exchange rate movements on their operating results and on the cost of capital asset acquisition.
The Term Paper on Harley Davidson Sales Market Share Along With Financial Ratios
Harley Davidson incorporated celebrated their one-hundredth year in 2003 and continues to grow. From the brink of bankruptcy, to the current industry, and looking into the future, Harley Davidson has had an interesting past, present, and future. In July 8, 1986 if you had invested $100 in Harley-Davidson common stock and reinvested all dividends, the value of your investment on December 31, 2001 ...
Problematic Issues & Their Solutions AMD is up against a tough competitor in Intel as described earlier in the Market Conditions & Competition section, however, they have taken measures to try to gain market share. AMD must try to gain market share and at the same time strive to reach and sustain profitability. With the introduction of the Athlon, AMD has broadened their product line in the microprocessor arena. This will help them make gains in market share and brand recognition. By introducing the fastest chip available in a personal computer, AMD has turned more then a few heads in the industry, garnering more respect and recognition. These Athlon chips, being high-end, will have a higher profit margin and, if widely accepted, should lead AMD closer to profitability. For quite some time AMD had been plagued by lawsuits filed against them by numerous companies claiming patent and copyright infringement. The largest of these claims could have put AMD right out of business had the plaintiff, Intel, won. Intel and AMD were locked in a tough five-year arbitration battle, over the rights to make and sell the Am386 family of microprocessors. The judgment on this case came in February 1992, with AMD awarded full rights to make and sell the Am386.
Three years later, in 1995, AMD reached an agreement with Intel to settle all previously outstanding legal disputes between the two companies and not in court. In December 1995, AMD signed a cross-licensing agreement with Intel that will expire on New Years Eve 2000. The agreement gives AMD and Intel the right to use each other?s patents and some specific copyrights. If AMD uses Intel technologies in their products, through the cross licensing agreement, they are required to pay royalties. Taiwan is currently recovering from a major earthquake that occurred on September 21, 1999. The earthquake resulted in an interruption of power to their suppliers’ manufacturing facilities that contributed to a severe shortage of motherboards in the last week of the third quarter of 1999 which adversely affected their sales of AMD Athlon microprocessors. Overall sales growth in the fourth quarter of 1999 and in the first quarter of 2000 is dependent upon a successful production ramp on 0.25-micron and 0.18-micron technology, market acceptance of their AMD Athlon microprocessor and availability of chipsets and motherboards from Taiwanese and other suppliers, as to which they cannot give any assurance.
The Research paper on Case Study: Intel Corporation 1968-2003
Intel has made numerous strategic changes to its business model over the last 30 years to address changing market conditions and therefore maintain its ability to add value, buttressing the organizations effectiveness at capturing profits. The technology landscape has been extremely dynamic over this period and companies that have not adapted rapidly have faced extinction. Intel is amongst the ...
The effects of the earthquake in Taiwan may continue to have an adverse impact on their business. AMD is currently trying to make up for lost production time and hence sales due to this earthquake. AMD is currently devoting their attention to producing a wider array of processors to help defend against possible strategies that Intel might wish to pursue to try and hurt AMD. Not only are they defending against these strategies, they are also gaining respect, recognition and building towards profitability. The earthquake in Taiwan may have disrupted their Athlon production somewhat, however, this is a one in a million event that is not foreseeable and not likely to occur often. AMD is doing the right thing by broadening their product lines through investing heavily in research and development. Having a first mover advantage in the processor market may mean hundreds of millions of dollars to the company?s bottom line if they are able to continue the trend they have started with the 750MHz Athlon chip.
AMD should try their best to maintain this first mover advantage as the personal computing and hence processor market, in accordance with Moore?s Law, is a rapidly changing market and the benefits of being the first to offer the newest, fastest chips available are extremely great as the margins on high-end chips are immense.
——————————————————————————– (Thousands except share and per share amounts) 1999 1998
—– —-
ASSETS
Current assets:
Cash and cash equivalents $ 8 $ 11,453
Accounts receivable from affiliates 64,007 74,837
Inventories:
Raw materials and supplies 4,471 4,921
Work-in-process 57,760 35,693
Finished goods 2,339 8,471
———- ———
Total inventories 64,570 49,085
Other current assets 299 1,960
———- ———
Total current assets 128,884 137,335
Property, plant and equipment:
Equipment 944,936 764,921
Buildings 131,016 117,449
Construction in progress 3,866 5,708
———- ———
Total property, plant and equipment 1,079,818 888,078
Accumulated depreciation (507,449) (288,342)
———- ———
Property, plant and equipment, net 572,369 599,736
Other assets 11,895 9,955
———- ———
TOTAL $ 713,148 $ 747,026
========== =========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Loan payable to affiliates $ 114,036 $ 93,868
Accounts payable 34,998 105,473
Payables to affiliates 29,200 33,331
Accrued liabilities 11,307 8,047
Income taxes payable 17 31,908
———- ———
Total current liabilities 189,558 272,627
Deferred income taxes 59,610 62,097
Other accrued liabilities 1,269 772
Commitments – –
Stockholders’ equity:
Common stock, par value $500; 800,000 shares authorized;
636,000 shares issued and outstanding in 1999 and 1998 318,790 318,790
Retained earnings 214,978 203,931
Accumulated other comprehensive loss (71,057) (111,191)
———- ———
Total stockholders’ equity 462,711 411,530
———- ———
TOTAL $ 713,148 $ 747,026
========== =========
(Thousands except per share amounts) 1998 1997 1996 —————————————————————————————–
Net sales $2,542,141 $ 2,356,375 $ 1,953,019 Cost of sales 1,718,703 1,578,438 1,440,828 Research and development 567,402 467,877 400,703 Marketing, general and administrative 419,678 400,713 364,798 2,705,783 2,447,028 2,206,329 Operating loss (163,642) (90,653) (253,310) Litigation settlement (11,500) – – net 34,207 35,097 59,391 Interest expense (66,494) (45,276) (14,837) ———- ———– ———– in joint venture (207,429) (100,832) (208,756) Benefit for income taxes (91,878) (55,155) (85,008) ———- ———– ———– Loss before equity in joint venture (115,551) (45,677) (123,748) Equity in net income of joint venture 11,591 24,587 54,798 ———- ———– ———– Net loss $ (103,960) $ (21,090) $ (68,950) ========== =========== =========== Basic $(0.72) $(0.15) $(0.51) ========== =========== =========== Diluted $(0.72) $(0.15) $(0.51) ========== =========== =========== Basic 143,668 140,453 135,126 Diluted 143,668 140,453 135,126 Advanced Micro Devices S.A.N.V. Belgium AMD Trading Company Limited Bermuda AMD South America Limitada (2) Brazil Advanced Micro Devices (Canada) Limited Canada Advanced Micro Devices (Suzhou) Limited (3) China Advanced Micro Devices S.A. France Vantis SAS (1) France Advanced Micro Devices GmbH Germany AMD Saxony Holding GmbH Germany AMD Saxony Manufacturing GmbH (4) Germany Vantis GmbH Germany AMD Foreign Sales Corporation Guam Advanced Micro Devices S.p.A. Italy Vantis Japan K.K. (1) Japan Advanced Micro Devices Sdn. Bhd. Malaysia Advanced Micro Devices Export Sdn. Bhd. (5) Malaysia Advanced Micro Devices Services Sdn. Bhd. (6) Malaysia AMD (Netherlands) B.V. (7) Netherlands Advanced Micro Devices (Singapore) Pte. Ltd. Singapore AMD Holdings (Singapore) Pte. Ltd. (8) Singapore Advanced Micro Devices AB Sweden Advanced Micro Devices S.A. (9) Switzerland AMD (Thailand) Limited (7) Thailand Advanced Micro Devices (U.K.) Limited United Kingdom Vantis (UK) Limited (1) United Kingdom Vantis II (UK) Limited (1) United Kingdom
