On May 1, 1969, Jerry Sanders and seven friends founded Advanced Micro Devices in the living room of one of the co-founders.

From his experience as an engineer and former worldwide marketing director at Fairchild Semiconductor, Jerry Sanders knew many electronic-equipment manufacturers personally. To him, they were more than monolithic companies - they were real people working hard to get ahead in the highly challenging technology marketplace. And they were going to need some help.

True to the unique philosophy with which they started, AMD's founders realized that customers were going to need a steady supply of the highest quality building blocks in order to succeed. To help meet customer needs as rapidly as possible, AMD began retooling existing products for greater speed and efficiency. At the same time, we set a precedent for superior quality by testing all AMD products at our own expense, according to stringent military (MIL-STD-883) standards - even if they were destined for the simplest of devices.

Our customers responded quickly. By the end of the fifth year, AMD boasted nearly 1,500 employees making more than 200 different products - many of them proprietary - that brought in nearly $26.5 million in annual sales.

To help AMD customers stay ahead of the innovation curve, we launched our first memory product in 1975 - a RAM (random-access memory) chip known as the Am9102. That same year, we also developed a reverse-engineered version of the 8080A standard processor, which provided a competitive alternative to the market and brought AMD into the microprocessor arena.

Also in 1975, we introduced the very popular bit-slice processor series - the Am2900 family. This design allowed customers to take advantage of wider data paths, reduce heat, and use bipolar chip technology to increase speed. At the same time, it enabled software designers to create their own instruction sets for their applications, greatly enhancing design flexibility and providing an opportunity for companies to differentiate their products.

Throughout this period, we increased our ability to serve AMD customers worldwide with new construction in Sunnyvale, CA; Austin, TX; and Manila, Philippines - along with expansions at our factory in Penang. Despite the recession in 1974-75, our business grew to $168 million, representing an average annual compound growth rate of over 60 percent.

As the concept of personal computing caught fire in the public imagination, AMD was an important part of the industry's growth - providing high-quality x86 processor alternatives for a hungry market. By the end of fiscal year 1981, sales had more than doubled over 1979 figures. To help meet customer demand, we expanded our plants and facilities worldwide, particularly in Texas, with new production facilities in San Antonio and additional fabrication space in Austin.

Technology innovations were rocketing along at an unprecedented rate, and we were dedicated to helping AMD customers keep up. To that end, we made a significant investment in research and development, and introduced INT.STD.1000 - the industry's highest manufacturing quality standard at the time.

In 1984, AMD celebrated our 15th anniversary with one of the best sales performances in company history.

The mid- to late-80s was a time of challenge for many of our customers, as they searched for new ways to stand out in a slumping PC market. AMD continued innovating technology designed to help them with their quest.

In 1986, AMD launched the industry's first one-million-bit EPROM (erasable programmable read-only memory) - enhancing capacity and flexibility for one of the most critical PC components and enabling additional opportunities for customers to differentiate their products. The next year, we expanded our ability to provide compelling memory solutions through a merger with Monolithic Memories, the pioneers of field-programmable logic. We also established a technological collaboration with Sony, gaining access to the CMOS (complementary metal oxide semiconductor) production technology, which helped reduce power consumption - providing our customers new solutions for battery-powered devices such as notebook computers.

Then, in 1988, work began on the AMD Submicron Development Center, which would become the driving force in our process-technology innovation efforts throughout the '90s. "Process technology" refers to the multitude of technologies used before, during, and after the process of manufacturing a product. By taking a proactive approach to process technology over the years, AMD has been able to keep manufacturing costs low while bringing many of the latest technical advances to our customers ahead of the industry at large. Time and again, AMD's process-technology leadership has enabled us to consistently provide customers with valuable competitive advantages.

The late '80s and early '90s marked a significant turning point for AMD. During eight years of legal wrangling, we struggled to uphold cross-licensing agreements that enabled AMD (and other companies) to compete and provide competitive alternatives in the PC semiconductor market. This difficult process led AMD to broaden our perspective into what we called "Spheres of Influence" - a multi-market approach that solidified AMD's commitment to programmable logic devices, high-performance memories, and networking and communication chips, in addition to our PC-compatible microprocessor offerings. By casting a wider net, we began to be able to offer more diverse solutions for our customers.

1991, effectively breaking the monopoly on 386 chips. Offering higher clock speeds and lower power dissipation than the competition, AMD shipped more than one million units of the Am386 processor family by the end of the year. In 1993, we launched the first members of the next-generation Am486® processor family, which went on to power Compaq computers and thousands of others. And when AMD technically won the legal battle, customers were the ones who really emerged victorious. The return of choice and competition in the marketplace empowered customers to take advantage of a wider range of innovations and greater cost savings.

In the 1990s, Flash memory took over from EEPROM ( electrically erasable programmable read-only memory ) as the dominant non-volatile memory solution. (Non-volatile memory retains its contents even if power is turned off.) Customers' need for innovative Flash memory solutions began to soar, particularly as growth in the communications and networking markets exploded. To meet those needs, AMD developed proprietary algorithms for greater endurance, along with innovative circuit designs built on leading-edge process technology that led to dramatically smaller die sizes. These AMD innovations offered our customers impressive cost savings, longer product lifecycles, and greater design flexibility.

Building strength on strength, AMD introduced the industry's first economically viable single-voltage Flash memory devices, leading the way to ever-lower voltages and lower-power products. And in 1993, we established a joint venture with Fujitsu Limited-known as Fujitsu AMD Semiconductor Limited, or Spansion. Spansion enabled volume production of AMD's Flash memory products, helping to ensure availability for our customers.

During this time period, AMD exp

To deliver the true innovations our customers deserve, AMD began forging critical relationships with infrastructure, software, technology, and OEM partners - the cornerstone of what we call our "connected business model" today.

First, AMD partnered with NexGen to create the AMD-K6® microprocessor family, designed to restore competition to the supply chain and offer an outstanding solution for desktop computing. After its introduction in 1997, the return of competition helped drive costs down low enough to enable a whole new market segment - PCs that are affordable for everyday people. Our aim was to offer the highest performance and lowest cost solution for the masses.

In 1998, AMD released the AMD-K6-2 processor, featuring 3DNow!%u2122 technology. Invented by AMD, 3DNow! technology was the first x86 innovation to significantly enhance 3D graphics, multimedia, and other floating-point-intensive applications for Windows®-compatible PCs. (AMD continues to make improvements to the instruction set today). The AMD-K6-2 processor offered a tremendous competitive difference to customers developing leading-edge hardware and software, and helped lay the groundwork for the future of processor design.

Our next step saw the culmination of a company dream - to design and produce an industry-leading, proprietary Microsoft® Windows®-compatible processor. Introduced in 1999, the AMD Athlon%u2122 processor empowered AMD customers with a compelling new alternative, the first-ever solution to use chipsets and motherboards optimized specifically for our processor. The multiple award-winning AMD Athlon processor family proved itself to be an outstanding platform across a wide variety of high-performance applications.

During the same period, AMD continued to forge ahead with performance-enhancing process technology and Flash memory innovations, entering into a strategic alliance with Motorola that included collaborative development of copper-interconnect technology platforms as well as co-development of process technology for embedded Flash memory. AMD also set an industry standard for dual-operation Flash memory devices, and expanded our product portfolio to fulfill the demands of customers in telecom, cable television, networking, and automotive telemetry markets.

2005 was a banner year for AMD as we continued to deliver innovative computing solutions, grow our market presence and capacity, promote fair-market practices, and expand global Internet and computing access.

February: The introduction of AMD Opteron processor Models 852 and 252 extended our leadership in the enterprise server market. The new models represented the world's highest performing processors for one-way to eight-way x86 servers and workstations and featured support for SSE3 software instructions
duplicators as well as an increase in the HyperTransport performance through expanded bus frequency.

March: AMD Turion 64 mobile technology ushered in a new era in 64-bit mobile computing. The newest addition to the AMD64 processor family is uniquely optimized to bring award-winning 32- and 64-bit performance to thinner and lighter notebook PCs with long battery life, enhanced security, and compatibility with the latest graphics and wireless solutions.

March: The U.S. Environmental Protection Agency (EPA) awarded AMD's Cool'n'Quiet technology with an ENERGY STAR® Certificate of Recognition for advancing computer energy efficiency.

April: Charting another industry first, we introduced the world's first 64-bit, x86 multi-core processors for servers and workstations at the second-anniversary AMD Opteron%u2122 processor celebration. Key OEM customers, including Sun, HP, and IBM, showcased ground-breaking dual-core platforms based on the new Dual-Core AMD Opteron 800 Series processor for four- to eight-way servers.

May: Completing the world's first broad dual-core client and server processor line-up, we introduced the AMD Athlon%u2122 64 X2 dual-core processor for desktop PCs and desktop replacement notebooks. The new processors target prosumers and digital media enthusiasts, as well as anyone who runs many software applications simultaneously. Leading OEMs including Acer, Alienware, HP, and Lenovo announced their support, as did more than 40 leading system-builder partners worldwide.

June: We filed landmark antitrust litigation against Intel Corporation in U.S. Federal District Court. AMD took action because consumers are currently paying more than they should, innovation is being constrained, and choice is artificially limited. Through our litigation, we're seeking to change the landscape of the computing industry for the better - for ourselves, for the market, and for consumers">

Hector de J. Ruiz, Ph.D.
Chairman of the Board and Chief Executive Officer

Dr.Ruiz also serves on the Eastman Kodak Company Board of Directors.

Dr. W. Michael Barnes
W. Michael Barnes served as senior vice president and chief financial officer of Rockwell International Corporation from 1991 until his retirement in 2001.

Bruce L. Claflin (photo)
Mr. Claflin retired as president, chief executive officer, and a member of the board of directors of 3Com Corporation in early 2006.

H. Paulett Eberhart
Until her retirement March 31, 2004, H. Paulett Eberhart, served as president, Americas at EDS.

Robert B. Palmer
Mr. Palmer was the Chairman and Chief Executive Officer of Digital Equipment Corporation (Digital) from 1995 to 1998.

Dr. Leonard M. Silverman
Dr. Silverman was Dean of the School of Engineering of the University of Southern California from 1984 through June 2001.

Morton L. Topfer
Mr. Topfer is the Managing Director of Castletop Capital L.P., an investment firm that focuses on private equity and real estate investments.