Today, AMD is the world s second-largest supplier of PC processors and the only real alternative to an Intel monopoly on the most critical component of personal computers. Today, nine of the world s top 10 PC manufacturers offer systems based on the AMD Athlon processor. On March 6, AMD introduced the industry s first 1-gigahertz PC processor a processor operating at one billion clock cycles per second. In June, AMD introduced its AMD Duron processor family targeted at the value segment of the PC market. The Internet and mobile communications are driving demand for flash memory products.
Worldwide demand continues to exceed capacity.
Worldwide consumption of flash memory products, measured in total bits consumed, has approximately doubled each year since 1994 and we expect similar growth in demand for the next several years. Our current challenge is to add capacity rapidly enough to support our key customers. We have entered into multi-year agreements with dozens of strategic customers, guaranteeing volumes and pricing. The principal drivers of growth in the markets served by AMD are cellular telephones, Internet infrastructure equipment, automotive applications, and set-top boxes. To compete with Intel, we are pursuing what we call our virtual gorilla strategy.