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
• AMD saw its share of the x86 server processor
market grow 51% in the quarter, from 7.4% to
11.2%, according to analyst firm Mercury Research.
• July 2005, Information Week
• Although Intel remains dominate in the market with
88.8% share, "you have to keep in mind that five
years ago Intel's number was 100%," McCarron
says. "I'm sure that AMD's success is not lost on
Intel."
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.
Image of AMD's future 300mm fab in
Dresden
Only real men have fabs.
—Former AMD CEO, Jerry Sanders
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 Intel
Need to respond accordingly to Intel’s action e.g. introduction
of new processor or new technology – could lead to loss or pressure
to release new products (could lead to prematurely developed product)
2. Rival Intel further price cuts
Forces 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)