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  1. Technology
April 9, 1987


By CBR Staff Writer

Chairman and co-founder of Advanced Micro Devices Jerry Sanders III is one of the most colourful and outspoken characters in the semiconductor industry: couple that with the fact that his company has just announced perhaps the hottest product in its history, and Amiel Kornel couldn’t pass up the opportunity of an interview with the man when he passed through Paris the other day.

When Advanced Micro Devices Inc announced in March its new 32-bit Am29000 microprocessor (CI No 644), chairman Jerry Sanders left little doubt about his goal: The 29000 is AMD’s shot at greatness, he said. For a man whose company was battling recently for survival, the boast might seem excessive. But Sanders does not shy away from bravado. And he has good reason for optimism. The company he helped found is looking forward to its first profitable quarter in two years and, with the Am29000, he has leapfrogged competition in the race to develop the next generation of 32-bit CMOS microprocessors.Sanders expects AMD to post a $100m to $110m loss on sales of $625m for fiscal 1987, which ended last week. But he added that the last quarter was profitable, the firm’s first in two years. AMD registered a net income loss of $36.6m in fiscal 1986 on sales of $576m. It was the 18-year-old company’s worst year ever.

Critical juncture

In a lengthy exclusive interview in Paris recently, Sanders discussed the road he and AMD have travelled to arrive at this critical juncture in AMD’s history.In common with other US chip suppliers, AMD over the past few years has sought to shift its product emphasis from low-cost commodity semiconductors, mostly EPROMS (erasable programmable read-only memory), to proprietary bipolar chips. Sanders said that the firm’s EPROM business has accounted for about 60% of losses and he blames Japanese price-cutting. AMD joined other US manufacturers in the anti-dumping complaint against Japanese rivals last year. The result was the US-Japan semiconductor trade agreement. Alleged breaches of that accord motivated President Reagan to announce plans to levy up to $300m in punitive import duties on Japanese electronics goods: those duties are scheduled to be imposed from about the middle of this month.Sanders doesn’t see a swift solution to the trade dispute in sight and has been steering his company towards less dependence on memory products. Proprietary logic chips now account for 45% of AMD revenues, he said, and should rise to two-thirds of the company’s business in coming years. The new 32-bit Am29000 microprocessor is to be the standard-bearer for the firm’s new course. Sanders looks for the new chip and associated products to generate $100m annually for the firm by 1990. I’m excited about having something to stake my reputation on, he enthused.Currently, 32-bit microprocessors account for only about a half of one per cent of the $29,000m worldwide semiconductor market, according to the London office of Dataquest Inc. But the high-tech market research outfit estimates that the 32-bit marketplace will grow more than 12-fold in terms of units shipped by 1991. Worldwide, sales should reach almost $400m. The Am29000, scheduled for volume production by early 1988, is the main fruit of an intensive research and development effort that has sapped 20% of the Sunnyvale, California-based company’s revenues over the past three years. According to AMD, the chip will offer a sustained performance of 17 million instructions per second, three to five times the computing power of current 32-bit CMOS products offered by other manufacturers. A desktop workstation incorporating the chip would have a speed similar to IBM Corp’s 3090 mainframe.The Am29000 has been designed to run applications compiled from high-level languages such as Fortran, Pascal, Ada, and C, which means it will offer compatibility with the Unix operating system developed by AT&T Bell Labs. Although it pioneered the bit-slice microprocessor that was the salvation of so many minicomputer manufacturers in the 1970s, minis are sold in hundreds or at best thousands, so that in th

e area of logic chips, AMD has derived most of its business until now not from its own slices, but from making products for the personal computer and office automation markets under second source and cross-licensing pacts with Intel Corp. Sanders has no intention of ruffling any feathers at Intel. We decided not to target our product for office automation, he said. Our view is not to come up with something that competes with our cross-licence partner. Instead, Sanders said, he is taking aim at rival Motorola Inc. We want the Am29000 to rule in engineering and scientific applications, Motorola’s traditional turf.

Dream machines

AMD sees the new microprocessor acting as heart of a new generation of laser printer controllers, high-speed network switching systems, network protocol controllers, computer-aided design workstations, and desktop database management systems. In addition, Sanders likes to talk about the product’s potential for enabling engineers to develop such dream machines as intelligent robots, language translators, and speech-recognition devices.Although the product doesn’t really exist yet – its design has been tested through the use of extensive simulation techniques – AMD says it will have working silicon this summer and ship samples for beta-testing in September or October. The chip will be introduced at $500 and the company expects the price to drop to $100 by 1990.AMD is a latecomer to the CMOS game. Suppliers such as Intel, Motorola, and National Semiconductor already offer 32-bit products using CMOS – complementary metal-oxide semiconductor. It took us too long to develop CMOS processes, acknowledged Sanders. AMD started gearing up production in CMOS last year and Sanders says that every logic product the firm introduced during the past six months uses CMOS technology. AMD’s CMOS-dedicated plant in Austin, Texas, currently operates at less than 10% capacity, according to Sanders. We can easily shift to the new family, he assured. The technical specifications of the Am29000 will be discussed in detail in a future Computergram.

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