ADVANCED MICRO DEVICES, INC
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According to Hoover's Handbook of American Business 1993, Advanced Micro Devices has become one of the leading producers of computer microprocessors. Jerry Sanders was working at Fairchild Camera in Silicon Valley when he was fired, reportedly for wearing a pink shirt while making a sales call at IBM. In 1969, Sanders decided to start up his own semi-conductor company. Sanders had no general management experience and was unable to raise the large amounts of capital required to engage in semiconductor research and development. He therefore built the company by acquiring second-source agreements, or licenses to manufacture products designed by other chip makers. He also employed his flair for marketing to make these agreements pay, and he was successful enough so that Advanced Micro Devices went public in 1972, also receiving a cash infusion of $30 million in 1977 when Seimens, interested in gaining a foothold in the U.S. market for semiconductors, bought nearly 20 percent of Sanders' company. The company signed a second-source deal with Intel in 1982, which enabled the company to manufacture exact copies of Intel's iAPX86 line of microprocessors which are used to operate IBM-compatible personal computers (p. 93).According to the Porter Model, Advanced Micro Devices is a company that has opted for a followership position in terms of technological strategies. The company was founded on this basis specifically because the founder could n
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p. The engineers managed to imitate the Intel chip, a process that took two years. The product was expected to make $100 million in its first full year. The reason AMD went into R&D to this extent was because Intel decided in 1987 not to license the 386 or any subsequent design. AMD then sued to get Intel to change this stance and to live up to a 1982 agreement giving AMD the right to be a second source for Intel microprocessors. AMD could not wait for the legal case to finish, so the company set out to imitate the 386 on its own. One man was put in charge of the project, and he enlisted the aid of a number of engineers. They studied the Intel chip and fathomed its technology over a long period of time, using a "reverse-engineering" approach by taking the Intel design apart bit by bit. This approach involved a danger of infringing on patents, though as things have worked out, the decision in the court case has made that a moot point.
The problem faced by AMD at the time can be seen in the following chart:
Class of Chip Peak Sales AMD Share
286
$150 million
1990
52 percent
386
$1.1 billion
1991
5 percent to 7 percent
(386 clone)
. . .
Some common words found in the essay are:
Asia Europe, Micro Devices, AMD Share, AMD R&D, Intel AMD, Texas Instruments, Silicon Valley, Port Mitchell, Operating Income, Cypress Semiconductor, micro devices, advanced micro, advanced micro devices, 486 chip, 386 chip, research development, intel chip, port mitchell 1992, market increasing, source agreement, increasing competition, week pp, powell schwartz 1992, intel 386 chip, mitchell rebello 1991,
Approximate Word count = 1987
Approximate Pages = 8 (250 words per page)
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