Item 1. Business
ITEM 1. BUSINESS
Cautionary Statement Regarding Forward-Looking Statements
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; international sales will continue to be a significant portion of total sales in the foreseeable future; that AMD’s cash, cash equivalents, and short-term investment balances together with the availability under that certain revolving credit facility (the Revolving Credit Agreement) made available to AMD and certain of its subsidiaries, our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures and purchase commitments , and acquisitions over the next 12 months and beyond; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that actions associated with the 2024 Restructuring Plan will be substantially completed by the end of the first quarter of fiscal year 2025; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial position, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; revenue allocated to remaining performance obligations that are unsatisfied which will be recognized in the next 12 months; a small number of customers will continue to account for a substantial part of AMD’s revenue and receivables in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies such as AI; AMD’s expectation that it will not pay dividends in the near future; AMD’s ability to achieve its corporate responsibility initiatives; expected future AI technology trends and developments; the expected benefits of AMD’s acquisition of Silo AI Oy (Silo AI); AMD’s anticipated acquisition of ZT Group Int’l, Inc. (ZT Systems) and the anticipated timing of the transaction; AMD’s intention to seek a strategic partner to acquire ZT Systems' manufacturing business; and AMD’s expectation to fund stock repurchases through cash generated from operations. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part I, Item 1A-Risk Factors” and the “Financial Condition” section set forth in “Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements.
Additionally, we make certain voluntary disclosures in this report and on our website, which are informed by various standards and frameworks (including standards for the measurement of underlying data), and the interests of various stakeholders. As such, these voluntary disclosures may not necessarily be “material” under the federal securities laws for SEC reporting purposes. Furthermore, much of this information is subject to methodological considerations or information, including from third-parties, that is still evolving and subject to change, and which AMD does not independently verify. For example, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control.
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References in this Annual Report on Form 10-K to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc. and our consolidated subsidiaries.
Overview
AMD is the high performance and adaptive computing leader, powering the products and services that help solve the world’s most important challenges. Our technologies advance the future of data centers, powering the cloud services that have become an essential part of how we work, game, and connect to network, PCs, edge computing, and artificial intelligence (AI). We drive innovation through high-performance and adaptive computing technology, software and product leadership.
With our high-performance product portfolios, we deliver differentiated solutions, such as our semi-custom System-on-Chip (SoCs), Adaptive SoCs, and accelerated processing units (APUs), and platform level client computing devices, embedded platforms and servers for our customers. We offer a deep portfolio of data center computing solutions including AI accelerators, microprocessors (CPUs), graphic processing units (GPUs), data processing units (DPUs), Smart Network Interface Cards (SmartNICs), and field programmable gate arrays (FPGAs), to meet the vast computing performance requirements of today’s data centers, supercomputers, AI and Machine Learning (ML) data center environments and cloud environments. We drive innovation with our line-up of CPUs, APUs and chipsets for desktops and notebooks, to bring performance, efficiency, AI capabilities and modern security features to gamers, creators, consumers and enterprises. AMD was the first company to integrate a dedicated neural processing unit (NPU) on the same SoC as an x86 CPU for AI PCs. Our GPUs, including discrete GPUs, semi-custom SoC products and development services, work together with software to power immersive gaming experiences for PCs, game consoles and cloud gaming services. We are a leader in embedded computing, where we deliver high-performance and scalability across a full portfolio of CPUs, APUs, FPGAs, system on modules (SOMs) and Adaptive SoCs that are used in a variety of markets, including automotive, industrial, healthcare, storage and networking. We also incorporate dedicated AI processing capabilities into our embedded portfolio.
We develop world-class software stacks that are used to enable our high-performance products. Our software stacks include development tools, compilers, and drivers for our CPUs, APUs, GPUs and FPGAs. We work closely with our customers to define and develop customized solutions to precisely match their requirements. We enable this by combining our broad portfolio of high-performance IP with our leadership design and packaging to deliver world-class customized solutions to our customers. We invest in innovative technology and solutions such as our custom-ready chiplet platform and AMD Infinity Architecture to maintain our leadership position as a custom-design silicon provider of choice.
Our Strategy
We believe that AI is defining the next era of computing and that the full potential of AI will be realized when the technology is pervasive across cloud, edge and end devices. We believe AMD has the compute engines, intellectual property, software capabilities and expertise to be a leader in this next computing era with a broad, portfolio of high-performance compute engines spanning across supercomputing, cloud, edge, embedded and end devices. We believe we have a unique opportunity to make AMD the end-to-end AI leader based on the breadth of our technology and product portfolios.
Our AI strategy is focused on three priorities. The first is delivering a broad portfolio of high-performance adaptive hardware and software solutions. The second is expanding the deep and collaborative partnerships we have established across the ecosystem to accelerate deployments of AMD based AI solutions at scale. And the third is providing compelling user experiences to extend the open and proven software platform we have established that enables our AI hardware to be deployed more broadly and easily.
One of our priorities in 2024 was to accelerate growth in our Data Center segment. The demand for our data center AI accelerator products was very strong as large hyperscaler customers, OEMs and ODMs deployed our AMD Instinct™ MI300X GPUs. During the year, we announced that we have accelerated our AMD AI accelerator roadmap to deliver an annual cadence of leadership AMD Instinct solutions. We announced our 5th Gen AMD EPYC™ family of server processors, providing leadership performance and capabilities for a wide range of data center workloads.
During the year, we completed the acquisition of Silo AI Oy (Silo AI), an AI lab based in Finland. The acquisition of Silo AI expanded our capability to accelerate development and deployment of AI models on AMD hardware. Silo AI has also developed a software stack used to train multiple state-of-the-art large language models (LLMs) on AMD Instinct accelerators that can accelerate the development of highly-performant AMD training solutions.
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We also focused on building our data center AI rack and data center-scale solutions capabilities by entering into an agreement to acquire ZT Group Int’l, Inc. (ZT Systems), a provider of AI and general purpose compute infrastructure for hyperscale computing companies in August 2024. We believe that with the acquisition of ZT Systems, we can deliver leadership training and inferencing solutions that can accelerate time to deployment for our AMD Instinct platforms. The acquisition is expected to close in the first half of fiscal year 2025, subject to certain regulatory approvals and other customary closing conditions. We intend to seek a strategic partner to acquire ZT Systems' manufacturing business.
We continued to invest in driving software capabilities and the open ecosystem to deliver powerful new features and capabilities in the AMD ROCm™ open software stack, bringing the latest features to highly-performant AI training and inference on AMD platforms. During the year, we made several key optimizations and additional features in the latest AMD ROCm software that increases performance in key generative AI workloads, adds expanded support and optimization for additional frameworks and libraries, and simplifies the overall developer experience.
Our Business
Our four reportable segments are:
• the Data Center segment, which primarily includes AI accelerators, server CPUs, GPUs, APUs, DPUs, FPGAs, SmartNICs, and Adaptive SoC products for data centers;
• the Client segment, which primarily includes CPUs, APUs, and chipsets for desktops and notebooks;
• the Gaming segment, which primarily includes discrete GPUs, semi-custom SoC products and development services; and
• the Embedded segment, which primarily includes embedded CPUs, GPUs, APUs, FPGAs, SOMs, and Adaptive SoC products.
In addition to these reportable segments, we have an All Other category, which is not a reportable segment.
Beginning with our fiscal year ending December 27, 2025, we plan to combine the Client and Gaming segments into one reportable segment to align with how we manage our business. As a result, we will have three reportable segments: Data Center, Client and Gaming, and Embedded.
Data Center Segment
Data Center Market
The Data Center segment primarily includes server-class CPUs, GPUs, AI accelerators, DPUs, FPGAs, SmartNICs, and Adaptive SoC products. We leverage our technology to address the computational, visual data processing and AI workload acceleration needs in the data center market. Modern data centers require high performance, energy efficient, scalable and adaptable compute engines to meet the demand driven by the growing amount of data that needs to be stored, accessed, analyzed and managed. Different combinations of CPUs, GPUs, DPUs, FPGAs, SmartNICs, and Adaptive SoCs enable the optimization of performance and power for a diverse set of workloads.
Data Center Products
Server CPUs. Our CPUs for server platforms currently include the AMD EPYC Series processors. EPYC CPUs, which are based on the x86 architecture, are server-specific processors designed for high-performance computing, enterprise IT, supercomputing, and large data centers. We recently announced our 5th generation AMD EPYC family of server processors, further expanding our high-performance server CPU portfolio.
Data Center GPUs. Our AMD Instinct family of GPU accelerator products, including AMD Instinct MI200, MI300 and MI325 series, are based on AMD CDNA™ architecture. AMD Instinct accelerators are designed to address the growing demand for AI training and inferencing and exascale-class scientific computing. Our visual cloud GPU offerings include products in the Radeon™ PRO V families. Our visual cloud data center GPUs include a range of solutions tailored towards workloads requiring remote visualization, such as Desktop-as-a-Service, Workstation-as-a-Service and Cloud Gaming.
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FPGAs and Adaptive SoCs. We offer a wide range of FPGAs, Adaptive SoCs and acceleration cards for the data center. Devices include the Virtex™ and Kintex™, Artix™, and Spartan™ FPGA products, as well as Zynq™, Zynq MPSoC, and Versal™ Adaptive SoC products. Our Alveo™ accelerator cards provide a platform for accelerating multiple data center workloads at the edge or the cloud.
Networking Products. Our Pensando™ DPUs and comprehensive networking software stack offload data center infrastructure services from the host CPU, are used by large Infrastructure as a Service (IaaS) cloud providers to accelerate workload performance for hosted virtualized and bare-metal offerings.
The AMD Solarflare™ portfolio offers a comprehensive low latency networking solution that combines hardware adapters with the Onload™ family of user space networking libraries. AMD Solarflare products are the preferred networking solution for capital markets, enabling customers to develop a wide range of high-performance applications across the entire trading ecosystem.
Client Segment
Client Market
Our CPUs and APUs power PCs that have become an integral part of how customers work, learn and play.
Client Products
Desktop CPUs. Our CPUs and APUs for desktop platforms currently include the AMD Ryzen and AMD Ryzen Threadripper™ processors. We launched the Ryzen 9000 series processors featuring “Zen 5” cores, along with X3D models featuring 2nd generation AMD 3D V-Cache™ technology for leadership gaming performance. Our 7000-series Ryzen desktop processors also feature models which include our 1 st generation AMD 3D V-Cache technology. Our latest AMD Ryzen G-Series processors integrate advanced graphics.
Notebook CPUs. Our AMD Ryzen mobile processors offer a leadership combination of performance, battery life, and immersive visual experiences for PCs. We released AMD Ryzen AI 300 Series processors featuring a NPU for next-generation AI PCs featuring our latest “Zen 5” architecture in 2024. Our AMD Ryzen 8000 Series mobile processors, built on the “Zen 4” feature our first generation NPU, and AMD Ryzen 6000 and 5000 Series mobile processors, which are powered by both our “Zen 2” and “Zen 3+” core architectures, address mainstream consumer and commercial markets. Our AMD Ryzen Z1 Series deliver immersive experiences for handheld gaming systems.
Commercial CPUs. The AMD PRO solutions include mobile laptops, desktops and workstations for large enterprise, mid-market and the small and medium business (SMB) customers. Our AMD PRO technology solution offers enterprise-class security features manageability, reliability and extended image stability, for commercial client PCs. We launched our AMD Ryzen AI PRO 300 series, bringing world-class security and manageability and leadership productivity, battery life, and AI capabilities to business notebooks and mobile workstations. Our commitment to high performance leadership continued with the launch of AMD Ryzen PRO 200 Series mobile processors that expand our commercial CPU portfolio to enable PCs spanning a range of price points. The AMD Ryzen PRO 8000G series desktops offer an integrated AI desktop solution for enterprises, and our AMD Ryzen Threadripper PRO CPU enables leadership performance for premium workstations.
Chipsets. We offer a full suite of chipset products to support our AMD Ryzen and AMD Threadripper platforms, for entry level through professional workstation desktop systems.
Gaming Segment
Graphics Market
Graphics processing is a fundamental component across many of our products. Our customers generally use our graphics solutions to enable immersive visualization and to process AI/ML based workloads. We develop our graphics products for use in various computing devices and entertainment platforms, including data centers, desktop PCs, notebook PCs, handheld devices, All-in-Ones, and professional workstations. In addition, we leverage our core IP, including graphics and processing technologies, to develop semi-custom solutions deeply co-engineered with our customers which has enabled many of today’s leading gaming consoles and handheld gaming products.
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Semi-Custom Products. Our semi-custom products are tailored, high-performance, customer-specific solutions based on CPU, GPU and multi-media technologies. We work closely with our customers to define solutions to precisely match the requirements of the device or application. AMD semi-custom SoC products power the Sony PlayStation ® 5, the Microsoft ® Xbox Series S™ and X™ game consoles, as well as the Valve Steam Deck PC. In 2024, Sony launched the PlayStation 5 Pro with additional graphics performance and AI capabilities compared to the original PlayStation 5.
Discrete Desktop and Notebook GPUs . Our AMD Radeon discrete GPU processors for desktop and notebook PCs support current generation application programming interfaces (APIs) like DirectX® 12 Ultimate and Vulkan ® , support high-refresh rate displays and include the latest technologies for immersive gaming experiences and high-performance AI/ML computing. Our current Radeon RX 7000 Series graphics, based on the AMD RDNA™ 3 architecture, deliver high performance for the latest gaming and creation workloads. All of our graphics products are supported by the AMD Software: Adrenalin Edition™ application that is regularly enhanced to provide the latest in performance, features, and stability.
Professional GPUs. Our AMD Radeon PRO family of professional graphics products are designed for integration in desktop workstations, optimized through hardware and software for demanding use cases such as 3D rendering, design and manufacturing for Computer-Aided Design (CAD), and media and entertainment for broadcast and animation pipelines on high resolution displays.
Embedded Segment
The Embedded Market
The Embedded segment primarily includes embedded CPUs, GPUs, APUs, FPGAs, and Adaptive SoC products. Embedded products address computing needs in aerospace and defense, automotive, industrial, vision and healthcare, communications infrastructure, test measurement, emulation and prototyping, audio, video and broadcasting, and data center. Typically, our embedded products are used in applications that require varying levels of performance, where key features may include relatively low power, small form factors, and 24x7 operations. High-performance graphics are important in some embedded systems. Support for Linux ® , Windows ® and other operating systems as well as for increasingly sophisticated applications are also critical for some customers. Other requirements may include meeting rigid specifications for industrial temperatures, shock, vibration and reliability. The embedded market has moved from developing proprietary, custom designs to leveraging industry-standard instruction set architectures and processors as a way to help reduce costs and speed time to market.
Embedded Products
Embedded CPUs, APUs and GPUs . Our products for embedded platforms include AMD EPYC Embedded CPUs, AMD Ryzen Embedded series processors including V-Series APUs and CPUs and R-Series APUs and CPUs, and Radeon Embedded GPUs. Our embedded processors and GPUs are designed to support high performance compute, high-bandwidth network connectivity and security, high-performance storage requirements for enterprise and cloud infrastructure, 3D graphics performance and 4K multimedia requirements of automotive infotainment systems.
FPGAs and Adaptive SoCs. O ur FPGA products are hardware-customizable devices that can be tailored to meet the specific needs of each customer, enabling them to differentiate their products and accelerate time to market. Our FPGA families include AMD UltraScale+™, UltraScale™ 7 Series, and other older series. Adaptive SoC products include the AMD Zynq™ SoC and Zynq UltraScale+ Multi-Processing System-on-a-Chip (MPSoC), which combine FPGA technology with a heterogeneous processing system, as well as the industry’s first RFSoC architecture with integrated radio frequency (RF) data converters (Zynq UltraScale+ RFSoC). The AMD Versal™ portfolio, composed of software-programmable Adaptive SoCs, is a heterogeneous compute platform that combines a processing system, programmable logic, AI Engines, and digital signal processing (DSP) Engines to achieve dramatic system-level performance improvements over today's fastest FPGA competitors’ solutions and accelerates applications in a wide variety of markets, including aerospace and defense, automotive, industrial, vision and healthcare, communications infrastructure, test measurement, emulation and prototyping, audio, video and broadcasting, and data center.
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Development Boards, Kits and Configuration Products. We offer development kits for all our FPGA and Adaptive SoCs. These kits include hardware, development tools, IP, and reference designs that streamline and accelerate the development of domain-specific and market-specific applications. Our AMD Kria™ K24 SOM provides high determinism and low latency for powering electric drives and motor controllers used in compute-intensive DSP applications at the edge. Coupled with our Kria KD240 Drives Starter Kit, an out-of-the-box-ready motor control-based development platform, the products offer a seamless path to production deployment.
Legacy Product Families. We offer prior generation high-end Virtex™ and low-end Spartan™ FPGA families as well as the original Virtex and Spartan families. Our prior generations of Complex Programmable Logic Devices (CPLD) include the CoolRunner™ and XC9500 product families. CPLDs are single-chip, nonvolatile solutions characterized by instant-on and universal interconnect and operate on the lowest end of the programmable logic density spectrum.
Design Platforms and Services
Adaptable Platforms. We offer two types of platforms that support our customers' designs and reduce their development efforts: FPGAs and Adaptive SoCs. FPGAs feature reconfigurable hardware as well as integrated memory, DSP, analog mixed signal, high-speed serial transceivers, and networking cores coupled with advanced software for a broad range of applications in all of our end markets. Our Adaptive SoCs feature a heterogeneous processing system with integrated programmable hardware fabric targeting embedded systems that need real-time control, analytics, sensor fusion, and adaptable hardware for differentiation and acceleration. Our Zynq UltraScale+ RFSoCs feature integrated high-performance RF data converters targeting wireless, radar, and cable access applications. Enabled by both hardware and software design tools and an extensive operating system, middleware, software stack, and IP ecosystem, Adaptive SoCs target software developers as well as traditional hardware designers. Our Versal portfolio combines a processing system, programmable logic, AI Engines, and DSP Engines with leading-edge memory and interfacing technologies to deliver powerful heterogeneous acceleration for any application. This product portfolio is ideally suited to accelerate a broad set of applications in the emerging era of big data and AI.
Software Development Platform. Our AMD Vivado™ Design Suite provides hardware design teams with the tools and methodology needed to program FPGAs and Adaptive SoCs. Our Vitis™ unified software platform enables the development and deployment of embedded software and accelerated applications, on our FPGAs and Adaptive SoCs. Our Vitis AI unified software platform enables the development and deployment of AI software on our FPGAs and Adaptive SoCs.
Sales and Marketing
We sell our products through our direct sales force and through independent distributors and sales representatives in both domestic and international markets. Our sales arrangements generally operate on the basis of product forecasts provided by the particular customer, but do not typically include any commitment or requirement for minimum product purchases. We primarily use product quotes, purchase orders, sales order acknowledgments and contractual agreements as evidence of our sales arrangements. Our agreements typically contain standard terms and conditions covering matters such as payment terms, warranties and indemnities for issues specific to our products.
We generally warrant that our products sold to our customers will conform to our approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. We offer up to three-year limited warranties for certain product types, and sometimes provide other warranty periods based on negotiated terms with certain customers.
We market and sell our latest products under the AMD trademark.
Our product brand for server microprocessors is AMD EPYC™ processors.
Our product brands for data center graphics are AMD Instinct™ accelerators, and Radeon PRO V-series.
Our client product brands for desktop and notebook PCs include: AMD Ryzen™, AMD Ryzen AI™, AMD Ryzen PRO, AMD Ryzen™ Threadripper™, AMD Ryzen Threadripper PRO, AMD Athlon™, and AMD PRO A-Series processors.
Our product brand for the consumer graphics market is AMD Radeon™ graphics, and AMD Embedded Radeon graphics is our product brand for the embedded graphics market.
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Our product brand for professional graphics products is AMD Radeon PRO graphics.
We also market and sell our chipsets under AMD trademarks.
Our FPGA products are Virtex™-6, Virtex-7, Virtex UltraScale+, Kintex™-7, Kintex UltraScale™, Kintex UltraScale+, Artix™-7, Artix UltraScale+, Spartan™-6, and Spartan-7 brands.
Our product brands for Adaptive SoCs are Zynq-7000, Zynq UltraScale+ MPSoC, Zynq UltraScale+ RFSoCs, Versal HBM, Versal Premium, Versal Prime, Versal AI Core, Versal AI Edge, Vitis, and Vivado.
Our product for System-on-Module (SOM) is Kria™ brand.
We also sell low-power versions of our AMD Athlon, as well as AMD Geode™, AMD Ryzen, AMD EPYC,
AMD R-Series and G-Series processors as embedded processor solutions.
Our compute and network acceleration board products are sold under the Alveo™ and Pensando™ brands.
We market our products through direct marketing and co-marketing programs. In addition, we have cooperative advertising and marketing programs with customers and third parties, including market development programs, pursuant to which we may provide product information, training, marketing materials and funds. Under our co-marketing development programs, eligible customers can use market development funds as reimbursement for advertisements and marketing programs related to our products and third-party systems integrating our products, subject to meeting defined criteria.
Customers
Our Data Center Segment customers consist primarily of hyperscale data centers, original equipment manufacturers (OEMs), original design manufacturers (ODMs), system integrators and independent distributors in both domestic and international markets. ODMs provide design and/or manufacturing services to branded and unbranded private label resellers, OEMs and system builders.
Our Client Segment customers consist primarily of PC OEMs, a network of independent distributors and, for chipset products, ODMs that manufacture motherboards.
Our Gaming Segment customers include PC OEMs and independent distributors as well as add-in-board manufacturers (AIBs), independent game console and portable gaming devices manufacturers and contract manufacturers for AMD branded graphics cards.
Our Embedded Segment products are sold to customers in a very wide range of markets such as aerospace and defense, automotive, industrial, vision and healthcare, communications infrastructure, test measurement, emulation and prototyping, audio, video and broadcasting, and data center. For these products, we either sell directly to our customers or through a network of distributors and OEM partners. We are also developing a network of Value Added Resellers (VARs) and Integrated Solution Vendors (ISVs) for our Alveo products.
We work closely with our customers to define product features, performance and timing of new products so that the products we are developing meet our customers’ needs. We also employ application engineers to assist our customers in designing, testing and qualifying system designs that incorporate our products. We believe that our commitment to customer service and design support improves our customers’ time-to-market and fosters relationships that encourage customers to use the next generation of our products.
We also work with our customers to create differentiated products that leverage our CPU, GPU, APU, DPU and FPGA technology. Certain customers pay us non-recurring engineering fees for design and development services and a purchase price for the resulting products.
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Original Equipment Manufacturers
We focus on three types of OEM partners: multi-nationals, selected regional accounts and selected global and local system integrators, who target commercial and consumer end customers of all sizes. Large multi-nationals and regional accounts are the core of our OEM partners’ business; however, we are increasingly focused on the VAR channel which resells OEM systems to the mid-market and the small and medium business (SMB) segments. Additionally, we have increased our focus on global system integrators, which resell OEM systems, coupled with their software and services solutions into Enterprise, high performance computing (HPC) and Cloud Service Provider customers. Our OEM customers include numerous foreign and domestic manufacturers of servers and workstations, desktops, notebooks, PC motherboards and game consoles.
Hyperscale Data Centers
Large multi-national public cloud service providers and hyperscale private data centers directly and indirectly purchase a substantial portion of our data center-focused products, including server CPUs, GPU accelerators, DPUs, FPGAs and Adaptive SOCs. These products are incorporated into servers and other data center appliances sold by OEMs to the hyperscale customers or into custom servers or hardware designed by or for these customers and manufactured by ODMs or contract manufacturers. Hyperscale data centers use these products to operate web-based applications or to support public cloud computing and storage service offerings, including but not limited to AI workloads such as generative AI models.
Third-Party Distributors
Our authorized channel distributors resell to sub-distributors, OEMs, ODMs, and other customers. Typically, distributors handle a wide variety of products, and may include products from other manufacturers that compete with our products. Distributors typically maintain an inventory of our products. In most instances, our agreements with distributors protect their inventory of our products against price reductions and provide certain return rights with respect to any product that we have removed from our price book or otherwise subject to discontinuation. In addition, some agreements with our distributors may contain standard stock rotation provisions permitting limited product returns.
Add-in-Board (AIB) Manufacturers and System Integrators
We offer component-level graphics and chipset products to AIB manufacturers who in turn build and sell board-level products using our technology to system integrators (SIs), retailers and sub distributors. In most instances, our agreements with AIBs protect their inventory of our products against price reductions. We also sell directly to some SI customers. SIs typically sell from positions of regional or product-based strength in the market. They usually operate on short design cycles and can respond quickly with new technologies. SIs often use discrete graphics solutions as a means to differentiate their products and add value to their customers.
Competition
The markets in which our products are sold are highly competitive and delivering the latest and best products to market on a timely basis is critical to achieving revenue growth. We believe that the main factors that determine our product competitiveness are total cost of ownership, timely product introductions, product quality, product features and capabilities (including accelerations for key workloads such as AI), energy efficiency (including power consumption and battery life, given their impact on total cost of ownership), reliability, performance, size (or form factor), selling price, cost, adherence to industry standards (and the creation of open industry standards), level of integration, software and hardware compatibility, ease of use and functionality of software design tools, completeness of applicable software solutions, security and stability, brand recognition and availability. We expect that competition will continue to be intense due to rapid technological changes, frequent product introductions by our competitors or new competitors of products that may provide better performance or experiences or that may include additional features that render our products comparatively less competitive.
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Competition in Data Center Segment
In the Data Center segment, we compete primarily against Intel Corporation (Intel) and NVIDIA Corporation (NVIDIA) with our CPU, GPU and DPU server products. In addition, we compete against Intel with our FPGA and Adaptive SoC server products. A variety of smaller fabless silicon companies offer proprietary accelerator solutions and Arm based CPUs targeting data center use-cases. In addition, some of our customers are internally developing their own data center microprocessor products and accelerator products which could impact the available market for our products.
Competition in Client Segment
Our primary competitor in the supply of CPUs and APUs is Intel. A variety of companies provide or have developed Arm-based microprocessors and platforms which could lead to further adoption of Arm-based PC solutions.
Competition in Gaming Segment
In the graphics market, our principal competitor in the supply of discrete graphics is NVIDIA, who is the discrete GPU market share leader, and Intel, who manufactures and sells integrated graphics processors and gaming-focused discrete GPUs. With respect to integrated graphics, higher unit shipments of our APUs and Intel’s integrated graphics may drive computer manufacturers to reduce the number of systems they build paired with discrete graphics components, particularly for notebooks, because they may offer satisfactory graphics performance for most mainstream PC users at a lower cost. We are the market share leader in semi-custom game console products, where graphics performance is critical.
Competition in Embedded Segment
We expect continued competition from our primary FPGA competitors such as Intel, Lattice Semiconductor Corporation and Microsemi Corporation, and from ASSP vendors such as Broadcom Corporation, Marvell Technology Group, Ltd., Analog Devices, Texas Instruments Incorporated and NXP Semiconductors N.V., and from Qualcomm Incorporated and NVIDIA. In addition, we expect continued competition from the ASIC market, which has been ongoing since the inception of FPGAs. Intel is our main competitor for embedded CPUs. Other competitors include manufacturers of high-density programmable logic products characterized by FPGA-type architectures; high-volume and low-cost FPGAs as programmable replacements for ASICs and ASSPs; ASICs and ASSPs with incremental amounts of embedded programmable logic; high-speed, low-density CPLDs; high-performance DSP devices; products with embedded processors; products with embedded multi-gigabit transceivers; discrete general-purpose GPUs targeting data center and automotive applications; and other new or emerging programmable logic products .
Research and Development
We focus our research and development (R&D) activities on designing and developing products. Our main area of focus is on delivering the next generation of processors (CPU and GPU), FPGAs and Adaptive SoCs, accelerators (adaptive, graphics and DPU), SOMs and SmartNICs and associated software. We focus on designing, with security in mind, new integrated circuits (ICs) with improved performance and performance-per-watt in advanced semiconductor manufacturing processes, the design of logic and interface IP, advanced packaging technologies, and heterogeneous integration technologies. We also focus on software as part of the development of our products, including design automation tools for hardware, embedded software, optimized software tools and libraries that extend the reach of our platforms to software and AI developers. Through our R&D efforts, we were able to introduce a number of new products and enhance our IP core offerings and software.
We also work with industry leaders on process technology, design tools, intellectual property, software and other industry consortia to conduct early-stage R&D. We are also actively contributing to numerous industry open-source software initiatives across a broad range of technologies. We conduct product and system R&D activities for our products in the United States with additional design and development engineering teams located in various countries who undertake specific activities at the direction of our U.S. headquarters.
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Manufacturing Arrangements and Assembly and Test Facilities
Third-Party Wafer Foundry Facilities
We utilize Taiwan Semiconductor Manufacturing Company Limited (TSMC) for the production of wafers for our HPC, FPGA and Adaptive SoC products and GLOBALFOUNDRIES Inc. (GF), with respect to wafer purchases for our HPC products at the 12 nm and 14 nm technology nodes. Additionally, we utilize TSMC, United Microelectronics Corporation (UMC) and Samsung Electronics Co., Ltd. for the production of our ICs in the form of programmable logic devices.
Other Third-Party Manufacturers
We outsource board-level graphics product manufacturing to third-party manufacturers.
Assembly, Test, Mark and Packaging Facilities
Wafers for our products are either sorted by the foundry or delivered by the foundry to our assembly, test, mark and packaging (ATMP) partners or subcontractors located in the Asia-Pacific region who package and test our final semiconductor products. We are party to two ATMP joint ventures (collectively, the ATMP JVs) with Tongfu Microelectronics Co., Ltd. The ATMP JVs, Siliconware Precision Industries Ltd. (SPIL) and King Yuan Electronics Company (KYEC) provide ATMP services for our products.
Intellectual Property and Licensing
We rely on contracts and intellectual property rights to protect our products and technologies from unauthorized third-party copying and use. Intellectual property rights include copyrights, patents, patent applications, trademarks, trade secrets and mask work rights. As of December 28, 2024, we had approximately 7,500 patents in the United States and approximately 1,900 patent applications pending in the United States. In certain cases, we have filed corresponding applications in foreign jurisdictions. Including United States and foreign matters, we have approximately 18,800 patent matters worldwide consisting of approximately 13,200 issued patents and 5,600 patent applications pending. We expect to file future patent applications in both the United States and abroad on significant inventions, as we deem appropriate. We do not believe that any individual patent, or the expiration of any patent, is or would be material to our business. As is typical in the semiconductor industry, we have numerous cross-licensing and technology exchange agreements with other companies under which we both transfer and receive technology and intellectual property rights. We have acquired various licenses from external parties to certain technologies that are implemented in our products, including our IP cores and devices. These licenses support our continuing ability to make and sell our products. We have also acquired licenses to certain proprietary software, open-source software, and related technologies, such as compilers, for our design tools. Continued use of such software and technology is important to the operation of the design tools upon which our customers depend .
Backlog
Sales are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time. Although such orders or agreements may provide visibility into future quarters, they may not necessarily be indicative of actual sales for any succeeding period as some of these orders or agreements may be revised or canceled without penalty.
Seasonality
Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact these trends.
Human Capital
As of December 28, 2024, we had approximately 28,000 employees in our global workforce. We believe we are at our best when our culture of innovation, creative minds and people from all kinds of backgrounds work together in an engaging and open environment. Areas of focus for us include the following:
Mission, Culture, and Engagement
Our History - Founded in 1969 as a Silicon Valley start-up, the AMD journey began with dozens of employees focused on leading-edge semiconductor products. From those modest beginnings, we have grown into a global
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company achieving many important industry firsts along the way. Today, we develop high-performance and adaptive computing to solve some of the world’s toughest and most interesting challenges.
Our Vision - High performance and adaptive computing is transforming our lives.
Our Mission - Build great products that accelerate next-generation computing experiences.
Our employees are driven by this vision and mission. Innovation occurs when creative minds and diverse perspectives from all over the world work together. This is the foundation of our unique culture and the reason we believe our employees are among the most engaged in our industry.
We conduct an annual survey of our global workforce to measure our culture, engagement, and workplace experience. The results are reviewed by our Board of Directors and acted upon by our senior leadership team. Results from our 2024 survey reported scores that continued to be among the very best for global companies in the technology industry. Our employees described our culture as inclusive, innovative, open, and respectful, and rated the quality of our managers high, and employment engagement is among the top 10% of our high-performing technology industry peers.
Diversity, Belonging and Inclusion (DB&I)
Our diverse and inclusive workforce encourages employees to share their opinions and different perspectives. We believe that building a diverse talent pipeline, encouraging a culture of respect and belonging, and increasing inclusion of unique and underrepresented voices makes our company stronger. Our Employee Resource Groups (ERGs), which are open to all our employees, encourage employee engagement and play an important role in our culture. More than 85% of all new hires join at least one of AMD’s ERGs when starting employment. In 2024, we continued to focus on developing our female engineering community through mentoring opportunities and expanding the program, “Advancing Women in Technology,” that aims to support the career development of women in technical careers at AMD.
Total Rewards
We invest in our workforce by offering competitive salaries, incentives, and benefits to ensure that we continue to attract and retain the industry’s best and brightest in an equitable manner. We regularly review our compensation practices, considering factors relevant to ensuring equitable pay such as an employee’s role, experience, skills, and performance. We also benchmark set pay ranges based on relevant market data and our overall workforce. We focus on flexibility and choice in our benefits that resonate with a multi-generational workforce as well as offering inclusive benefits that support our DB&I objectives, such as global parental and bereavement leave, and financial assistance to build a family through adoption or surrogacy. While we believe that there is unique collaboration that can occur when employees meet in person, we embrace flexibility with hybrid and remote work as options for our employees.
We have a strong pay for performance culture that we believe drives superior results. Our employees have benefited from our robust financial results through our strong short-term and long-term incentive programs. Our rewards programs enable us to attract, retain and motivate our workforce.
Development
We offer our employees opportunities to advance their careers at the Company and the majority of our new leaders are promoted from within. We are focused on leadership progression and encourage our employees to take advantage of new opportunities. Our manager and leadership development programs are highly rated, and we provide specialized development programs for our employees as well as educational assistance in the form of tuition reimbursement for eligible employees to continue their university education or achieve advanced certifications.
We have an enterprise-wide mentoring program where employees have the opportunity to learn from experienced colleagues, develop new skills, and build their professional networks. The program also supports effective onboarding, helping new hires more quickly acclimate to our company culture and work processes. We believe that our mentoring program is a valuable investment in our workforce, and we are committed to its ongoing success.
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Employee Voice
At AMD, we value the importance of employee voice and actively engage in efforts to ensure that our employees' opinions and perspectives are heard and considered. Our employee voice strategy includes an annual AMDer Survey (engagement survey). Our scores rank AMD in the top 10% of high-tech firms on similar questions, categories and overall score. Additionally, we measure effectiveness across all elements of the employee lifecycle, including onboarding, exit, and regularly seek out employee feedback on areas including benefits and total rewards satisfaction. Further, our executive team holds frequent employee roundtables, town halls and global team meetings with question-and-answer segments which facilitate open communication and feedback from our workforce.
Government Regulations
Our global operations are subject to various United States and foreign laws and regulations, including, but not limited to, those relating to export control, customs, intellectual property, data privacy and security, climate, environmental, health and safety requirements, cybersecurity, tax, employment, competition and anti-trust, anti-corruption, anti-bribery, conflict minerals, corporate governance, financial and other disclosures, and AI. Compliance with these governmental laws and regulations do not presently have a material adverse impact on our capital expenditures, results of operations or competitive position. However, compliance with changes to existing or new regulations may have a material adverse impact on our future capital expenditures, results of operations or competitive position. In addition, the failure to comply with government laws and regulations may subject us to consequences including fines, limits on our ability to sell our products, suspension of certain of our business activities, reputational damage, criminal and civil liabilities, and sanctions, which may have a material adverse effect on our capital expenditures, results of operations or competitive position. For additional information about government regulations applicable to our business, and their potential impacts see Risk Factors in Item 1A.
Environmental Regulations
Our operations and properties are subject to various United States and foreign laws and regulations, including those relating to materials used in our products and the manufacturing processes of our products, discharge of pollutants into the environment, the treatment, transport, storage and disposal of solid and hazardous wastes and remediation of contamination. These laws and regulations require our suppliers to obtain permits for operations in making our products, including the discharge of air pollutants and wastewater. Environmental laws are complex, change frequently and tend to become more stringent over time. For example, the European Union (EU) and China are among a growing number of jurisdictions that have enacted restrictions on the use of lead and other materials in electronic products. These regulations affect semiconductor devices and packaging. Jurisdictions including the EU, Australia, California and China are developing or have finalized market entry or public procurement regulations for computers and servers based on ENERGY STAR specifications as well as additional energy consumption limits.
Certain environmental laws, including the United States Comprehensive, Environmental Response, Compensation and Liability Act of 1980, or the Superfund Act, impose strict or, under certain circumstances, joint and several liability on current and previous owners or operators of real property for the cost of removal or remediation of hazardous substances and impose liability for damages to natural resources. These laws often impose liability even if the owner or operator did not know of, or was not responsible for, the release of such hazardous substances. These environmental laws also assess liability on persons who arrange for hazardous substances to be sent to disposal or treatment facilities when such facilities are found to be contaminated. Such persons can be responsible for cleanup costs even if they never owned or operated the contaminated facility. We have been named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale, California that are on the National Priorities List. Since 1981, we have discovered hazardous material releases to the groundwater from former underground tanks and proceeded to investigate and conduct remediation at these three sites. The chemicals released into the groundwater were commonly used in the semiconductor industry in the United States in the wafer fabrication process prior to 1979.
In 1991, we received Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board relating to the three sites. We have entered into settlement agreements with other responsible parties on two of the orders. During the term of such agreements, other parties have agreed to assume most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders. We remain responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations under the settlement agreements.
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To address anticipated future remediation costs under the orders, we have computed and recorded an estimated environmental liability of approximately $5.5 million and have not recorded any potential insurance recoveries in determining the estimated costs of the cleanup. The progress of future remediation efforts cannot be predicted with certainty and these costs may change. We believe that any amount in addition to what has already been accrued would not be material.
Additional Information
AMD was incorporated under the laws of Delaware on May 1, 1969 and became a publicly held company in 1972. Our common stock is currently listed on The NASDAQ Global Select Market (NASDAQ) under the symbol “AMD”. Our mailing address and executive offices are located at 2485 Augustine Drive, Santa Clara, California 95054, and our telephone number is (408) 749-4000. For financial information about geographic areas and for segment information with respect to revenues and operating results, refer to the information set forth in Note 4 of our consolidated financial statements. We use a 52- or 53-week fiscal year ending on the last Saturday in December. References in this report to 2024, 2023 and 2022 refer to the fiscal year unless explicitly stated otherwise.
AMD, the AMD Arrow logo, 3D V-Cache, AMD Athlon, AMD CDNA, AMD FidelityFX, AMD FirePro, AMD FreeSync, AMD Instinct, AMD RDNA, Alveo, Artix, CoolRunner, EPYC, Geode, Infinity Fabric, Kinex, Kria, Opteron, Pensando, Radeon, ROCm, Ryzen, Spartan, Threadripper, UltraScale, UltraScale+, Versal, Virtex, Vitis, Vivado, XDNA, Xilinx, Zynq and combinations thereof are trademarks of Advanced Micro Devices, Inc.
Microsoft, Windows, DirectX and Xbox One are registered trademarks of Microsoft Corporation in the United States and/or other countries. Linux is the registered trademark of Linus Torvalds in the United States and/or other countries. PlayStation is a registered trademark of Sony Interactive Entertainment, Inc. Arm is a registered trademark of Arm Limited (or its subsidiaries) in the United States and/or other countries. Vulkan and the Vulkan logo are registered trademarks of Khronos Group Inc. Steam Deck and the Steam Deck logo are trademarks and/or registered trademarks of Valve Corporation in the United States and/or other countries.
Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners.
Website Access to Our SEC Filings and Corporate Governance Documents
On the Investor Relations pages of our website, http://ir.amd.com, we post links to our filings with the SEC, our Principles of Corporate Governance, our Code of Ethics for our executive officers, all other senior finance executives and certain representatives from legal and internal audit, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and persons performing similar functions, our Worldwide Standards of Business Conduct, which applies to our Board of Directors and all of our employees, and the charters of the committees of our Board of Directors.
Our filings with the SEC are posted on our website as soon as reasonably practical after they are electronically filed with, or furnished to, the SEC. The SEC website, www.sec.gov, contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. You can also obtain copies of these documents by writing to us at: Corporate Secretary, AMD, 2485 Augustine Drive, Santa Clara, California 95054, or emailing us at: Corporate.Secretary@amd.com. All of these documents and filings are available free of charge.
If we make substantive amendments to our Code of Ethics or grant any waiver, including any implicit waiver, to our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, we intend to disclose the nature of such amendment or waiver on our website.
The information contained on our website is not incorporated by reference in, or considered to be a part of, this report.
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