AMD

11 Pages 2764 Words

ets. In fact, six out of AMD’s nine facilities are located in East Asia and employ approximately 5,600 people.
The company’s consolidated global position produces a very interesting case. This paper will analyze AMD’s international operations, competitors, alliances, legal problems, and its relationship with stakeholders. In addition, the recent meltdown in high-tech stocks and the reduction of PC sales are provoking the semiconductor industry to diversify its business. This analysis will consider the consequences of this problem and the resulting changes in AMD’s corporate business strategies.

THE COMPETITIVE PC CHIP MARKET
The personal computer microprocessor market is considered a quasi-monopolistic market in which the largest corporate buyers such as Dell Computer Corp., Compaq Computer Corp., Hewlett Packard Co. and IBM Corp buy almost solely from Intel Corp. (Mathew 2001, 1). For this reason, AMD has had difficulty introducing its microprocessors into the market. For example, in January 1994, AMD and Compaq Computers Corp. formed an alliance in which AMD Am486 microprocessors would power Compaq computers (AMD 2001, 2). Between 1994 and 2001 AMD was not able to convince another large PC vendor to buy its microprocessors. However, in January 2001 AMD got its first contract with a major PC vendor, Micron Electronics Inc., to supply the Athlon microprocessor for the Micro Electronics’ ClientPro product line (Konicki 2001, 2). In the same month, AMD also contracted to supply and introduce its first version of the Duron microprocessor for laptops to NEC Corp., Japan (Duron chips for lap!
tops… 2001, 1)
In addition, while Intel launched the Pentium IV at the end of 2000, AMD took advantage of the transition from Pentium III to IV to try to convince several of the largest corporate buyers, which were comparing the new Intel’s Pentium IV and AMD’s Athlon, to switch to AMD’s Athlon microprocessors. Altho...