Advanced Micro Devices

American company that develops computer processors and technologies for business and consumer markets.

Advanced Micro Devices is an American company that develops computer processors. AMD's main products are microprocessors, motherboard chipsets, and graphics processors for servers, workstations, personal computers, and embedded systems. While initially, it manufactured its own processors, the company later outsourced its manufacturing, a practice known as going fabless, after GlobalFoundries was spun off in 2009.

First twelve years

Advanced Micro Devices was formally incorporated by Jerry Sanders, along with seven of his colleagues from Fairchild Semiconductor, on May 1, 1969. Sanders, an electrical engineer who was the director of marketing at Fairchild, had, like many Fairchild executives, grown frustrated with the increasing lack of support, opportunity, and flexibility within the company. He later decided to leave to start his own semiconductor company. Robert Noyce, who had developed the first silicon integrated circuit at Fairchild in 1959, had left Fairchild together with Gordon Moore and founded the semiconductor company Intel in July 1968.

In September 1969, AMD moved from its temporary location in Santa Clara to Sunnyvale, California. To immediately secure a customer base, AMD initially became a second source supplier of microchips designed by Fairchild and National Semiconductor. AMD first focused on producing logic chips. The company guaranteed quality control to United States Military Standard, an advantage in the early computer industry since unreliability in microchips was a distinct problem that customers – including computer manufacturers, the telecommunications industry, and instrument manufacturers – wanted to avoid.

In November 1969, the company manufactured its first product: the Am9300, a 4-bit MSI shift register, which began selling in 1970. Also in 1970, AMD produced its first proprietary product, the Am2501 logic counter, which was highly successful. Its best-selling product in 1971 was the Am2505, the fastest multiplier available.

In 1971, AMD entered the RAM chip market, beginning with the Am3101, a 64-bit bipolar RAM. That year AMD also greatly increased the sales volume of its linear integrated circuits, and by year-end, the company's total annual sales reached US$4.6 million.

AMD went public in September 1972. The company was a second source for Intel MOS/LSI circuits by 1973, with products such as Am14/1506 and Am14/1507, dual 100-bit dynamic shift registers. By 1975, AMD was producing 212 products – of which 49 were proprietary, including the Am9102 (a static N-channel 1024-bit RAM) and three low-power Schottky MSI circuits: Am25LS07, Am25LS08, and Am25LS09.

Intel had created the first microprocessor, its 4-bit 4004, in 1971. By 1975, AMD entered the microprocessor market with the Am9080, a reverse-engineered clone of the Intel 8080, and the Am2900 bit-slice microprocessor family. When Intel began installing microcode in its microprocessors in 1976, it entered into a cross-licensing agreement with AMD, which was granted a copyright license to the microcode in its microprocessors and peripherals, effective October 1976.

In 1977, AMD entered into a joint venture with Siemens, a German engineering conglomerate wishing to enhance its technology expertise and enter the American market. Siemens purchased 20% of AMD's stock, giving the company an infusion of cash to increase its product lines. The two companies also jointly established Advanced Micro Computers (AMC), located in Silicon Valley and in Germany, allowing AMD to enter the microcomputer development and manufacturing field, in particular, based on AMD's second-source Zilog Z8000 microprocessors. When the two companies vision for Advanced Micro Computers diverged, AMD bought out Siemens' stake in the American division in 1979. AMD closed Advanced Micro Computers in late 1981 after switching focus to manufacturing second-source Intel x86 microprocessors.

Total sales in the fiscal year 1978 topped $100 million, and in 1979, AMD debuted on the New York Stock Exchange. In 1979, the production also began on AMD's new semiconductor fabrication plant in Austin, Texas; the company already had overseas assembly facilities in Penang and Manila and began construction on a fabrication plant in San Antonio in 1981. In 1980, AMD began supplying semiconductor products for telecommunications, an industry undergoing rapid expansion and innovation.

Technology exchange agreement with Intel

Intel had introduced the first x86 microprocessors in 1978. In 1981, IBM created its PC, and wanted Intel's x86 processors, but only under the condition that Intel also provides a second-source manufacturer for its patented x86 microprocessors. Intel and AMD entered into a 10-year technology exchange agreement, first signed in October 1981 and formally executed in February 1982. The terms of the agreement were that each company could acquire the right to become a second-source manufacturer of semiconductor products developed by the other; that is, each party could "earn" the right to manufacture and sell a product developed by the other, if agreed to, by exchanging the manufacturing rights to a product of equivalent technical complexity. The technical information and licenses needed to make and sell a part would be exchanged for royalty to the developing company. The 1982 agreement also extended the 1976 AMD–Intel cross-licensing agreement through 1995. The agreement included the right to invoke arbitration of disagreements and after five years the right of either party to end the agreement with one year's notice. The main result of the 1982 agreement was that AMD became a second-source manufacturer of Intel's x86 microprocessors and related chips, and Intel provided AMD with database tapes for its 8086, 80186, and 80286 chips. However, in the event of a bankruptcy or takeover of AMD, the cross-licensing agreement would be effectively canceled.

Beginning in 1982, AMD began volume-producing second-source Intel-licensed 8086, 8088, 80186, and 80188 processors, and by 1984, its own Am286 clone of Intel's 80286 processor, for the rapidly growing market of IBM PCs and IBM clones. It also continued its successful concentration on proprietary bipolar chips. In 1983, it introduced INT.STD.1000, the highest manufacturing quality standard in the industry.

The company continued to spend greatly on research and development, and in addition to other breakthrough products, created the world's first 512K EPROM in 1984. That year, AMD was listed in the book The 100 Best Companies to Work for in America, and later made the Fortune 500 list for the first time in 1985.

By mid-1985, the microchip market experienced a severe downturn, mainly due to long-term aggressive trade practices (dumping) from Japan, but also due to a crowded and non-innovative chip market in the United States. AMD rode out the mid-1980s crisis by aggressively innovating and modernizing, devising the Liberty Chip program of designing and manufacturing one new chip or chipset per week for 52 weeks in the fiscal year 1986, and by heavily lobbying the U.S. government until sanctions and restrictions were put in place to prevent predatory Japanese pricing. During this time, AMD withdrew from the DRAM market and made some headway into the CMOS market, which it had lagged in entering, having focused instead on bipolar chips.

AMD had some success in the mid-1980s with the AMD7910 and AMD7911 "World Chip" FSK modem, one of the first multi-standard devices that covered both Bell and CCITT tones at up to 1200 baud half-duplex or 300/300 full-duplex. Beginning in 1986, AMD embraced the perceived shift toward RISC with their own AMD Am29000 (29k) processor; the 29k survived as an embedded processor. The company also increased its EPROM memory market share in the late 1980s. Throughout the 1980s, AMD was a second-source supplier of Intel x86 processors. In 1991, it introduced its own 386-compatible Am386, an AMD-designed chip. Creating its own chips, AMD began to compete directly with Intel.

AMD had a large, successful flash memory business, even during the dot-com bust. In 2003, to divest some manufacturing and aid its overall cash flow, which was under duress from aggressive microprocessor competition from Intel, AMD spun off its flash memory business and manufacturing into Spansion, a joint venture with Fujitsu, which had been co-manufacturing flash memory with AMD since 1993. In December 2005, AMD divested itself of Spansion in order to focus on the microprocessor market, and Spansion went public in an IPO.

Acquisition of ATI, a spin-off of GlobalFoundries, and acquisition of Xilinx

On July 24, 2006, AMD announced its acquisition of the graphics processor company ATI Technologies. AMD paid $4.3 billion and 58 million shares of its stock, for a total of approximately $5.4 billion. The transaction was completed on October 25, 2006. On August 30, 2010, AMD announced that it would retire the ATI brand name for its graphics chipsets in favor of the AMD brand name.

In October 2008, AMD announced plans to spin off manufacturing operations in the form of GlobalFoundries Inc., a multibillion-dollar joint venture with Advanced Technology Investment Co., an investment company formed by the government of Abu Dhabi. The partnership and spin-off gave AMD an infusion of cash and allowed it to focus solely on chip design. To assure the Abu Dhabi investors of the new venture's success, AMD's CEO Hector Ruiz stepped down in July 2008, while remaining executive chairman, in preparation for becoming chairman of GlobalFoundries in March 2009. President and COO Dirk Meyer became AMD's CEO. Recessionary losses necessitated AMD cutting 1,100 jobs in 2009.

In August 2011, AMD announced that former Lenovo executive Rory Read would be joining the company as CEO, replacing Meyer. In November 2011, AMD announced plans to lay off more than 10% (1,400) of its employees from across all divisions worldwide. In October 2012, it announced plans to lay off an additional 15% of its workforce to reduce costs in the face of declining sales revenue.

AMD acquired the low-power server manufacturer SeaMicro in early 2012, with an eye to bringing out an ARM architecture server chip.

On October 8, 2014, AMD announced that Rory Read had stepped down after three years as president and chief executive officer. He was succeeded by Lisa Su, a key lieutenant who had been serving as a chief operating officer since June.

On October 16, 2014, AMD announced a new restructuring plan along with its Q3 results. Effective July 1, 2014, AMD reorganized into two business groups: Computing and Graphics, which primarily includes desktop and notebook processors and chipsets, discrete GPUs, and professional graphics; and Enterprise, Embedded, and Semi-Custom, which primarily includes server and embedded processors, dense servers, semi-custom SoC products (including solutions for gaming consoles), engineering services, and royalties. As part of this restructuring, AMD announced that 7% of its global workforce would be laid off by the end of 2014.

After the GlobalFoundries spin-off and subsequent layoffs, AMD was left with significant vacant space at 1 AMD Place, its aging Sunnyvale headquarters office complex. In August 2016, AMD's 47 years in Sunnyvale came to a close when it signed a lease with the Irvine Company for a new 220,000 sq. ft. headquarters building in Santa Clara. AMD's new location at Santa Clara Square faces the headquarters of archrival Intel across the Bayshore Freeway and San Tomas Aquino Creek. Around the same time, AMD also agreed to sell 1 AMD Place to the Irvine Company. In April 2019, the Irvine Company secured approval from the Sunnyvale City Council of its plans to demolish 1 AMD Place and redevelop the entire 32-acre site into townhomes and apartments.

In October 2020, AMD announced that it was acquiring Xilinx in an all-stock transaction valued at $35 billion. The deal is expected to be completed by the end of 2021.

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Advanced Micro Devices
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Last modified on April 21, 2021, 12:35 pm
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