Silicon Valley Historical Association

Customers should come first, at every stage of a company’s activities. This customer driven approach to doing business was at the core of AMD’s founding in 1969 and remains the central focus of the company’s policy today. States CEO and chairman Dr. Hector Ruiz, “Customer-centric innovation is the pre-eminent value at AMD. It is our reason for being and our strategy for success.”

That success wasn’t assured when former CEO Jerry Sanders and seven colleagues left Fairchild Semiconductor to start their own business. It took the group a year to overcome a stock market dip and raise $1,505,000 from doubtful venture capitalists. But Sanders and company understood that tremendous silicon-based advances were being made throughout the industry, including the first mini-computer and the first modem, and that customers needed a steady supply of the highest quality electronics in order to succeed. From his experience as an engineer and a worldwide marketing director at Fairchild, Sanders knew many of the electronic-equipment manufacturers personally and wanted to help them meet the new challenges.

AMD began by retooling existing products to make them more efficient and faster. Its first revenues came in 1970 from a 4-bit shift register. As the company added to its line, it also offered a plus, testing all of its products—even the simplest ones—at the company’s own expense, according to strict military standards. The customers came and the company expanded, opening an assembly plant in Malaysia and increasing the size of its headquarters in Sunnyvale. By the end of its fifth year, AMD was manufacturing more than 200 products, many of them proprietary, and had close to $25.5 million in annual sales.

By the mid 1970s, the demand for microprocessors and memory products was growing as developers put semiconductor technology to new uses in consumer and business products. Great changes in computing, in particular, were taking place as people moved from large mainframe computers to personal desktop models. To help its customers stay ahead of the curve, AMD continued to focus on their needs, working to improve product performance, reduce costs, and shorten customers’ time to market.

One of the ways the company did this was by launching its first memory product, the Am9102 RAM chip. In 1975 AMD also developed a reverse-engineered version of the 8080A standard processor, which gave the market a competitive alternative and brought AMD into the microprocessor field. The introduction of the Am2900 family of bit-slice processors greatly enhanced design capability and enabled companies to differentiate their products. Despite the recession in 1974 and 1975, AMD increased its business to $168 million.

The beginning of the new decade saw personal computing going mainstream and saw AMD supporting the explosive growth with high-quality x86 processor alternatives. To meet demand, AMD added more fabrication space as well as made significant investment in research and development. The company also introduced INT.STD.1000, the industry’s highest manufacturing quality standard of the time.

By the end of the 1980s, AMD had begun work on its Submicron Development Center, where process-technology innovations would be developed throughout the 1990s. These innovations, which affect manufacturing before, during, and after the process, have kept AMD’s manufacturing costs low as well as enabled the company to bring exciting technical advances to its customers ahead of their competitors.

The early 1990s also saw change in AMD’s approach to the market. To offer more diverse solutions to its customers, the company broadened its focus into “spheres of influence”: programmable logic devices, high-performance logic devices, high-performance memory, networking and communication chips, and PC-compatible microprocessors. After a long legal battle, it broke the monopoly on the x386 chip and shipped more than one million units of its Am386 processor family. In 1993 it began shipping its next generation Am486 processors, affording customers even greater opportunities for innovation and cost savings.

This history was written in 2008 by the Santa Clara Valley Historical Association.

Part One • Part Two