Advanced Micro Devices
NYSE : AMD

Advanced Micro Devices

April 04, 2006 10:22 ET

AMD Begins First Revenue Shipments of AMD64 Products Manufactured at New Fab 36

MUNICH, GERMANY--(CCNMatthews - April 4, 2006) -

On-Plan, On-Time Startup of Volume Production Extends AMD's Track Record of Manufacturing Strategy Execution, Sets Stage for Rapid 65nm Transition

At a press conference held here today, AMD (NYSE:AMD) announced that in March it began first revenue shipments of AMD64 processors manufactured at Fab 36 in Dresden, Germany. AMD ramped the new 300 millimeter (mm) fab to 90 nanometer (nm) volume production in record time, hitting every major milestone on schedule and beginning production at mature yields.

The company also disclosed that it has been producing a significant number of 65nm development test chips in parallel with 90nm products at the fab, in preparation for volume 65nm production later this year. Fab 36 engineers, with the help of AMD's patented Automated Precision Manufacturing (APM) systems, are constantly analyzing data collected from the test chips and making consistent improvements. Fab 36 remains on track to begin 65nm production shipments in the second-half of this year, and be substantially converted to 65nm production by mid-2007.

"Our manufacturing strategy execution continues to be flawless," said Dirk Meyer, president and chief operating officer at AMD. "The increased capacity provided by Fab 36 will contribute to our goal of doubling total production output from 2005 through 2008. We are positioned better than ever to serve our customers' long-term needs and achieve our aggressive growth objectives."

The success of Fab 36 builds upon the tremendous achievements of Fab 30, which is located adjacent to Fab 36 and manufactures chips on 200mm wafers. Through the use of APM and other ongoing productivity and efficiency enhancements, AMD increased total production output at Fab 30 by approximately 80 percent from the first quarter of 2004 through the fourth quarter of 2005. The fab, which was originally designed to produce a maximum of 20,000 wafers per month, now produces approximately 30,000 wafers per month thanks to continuous improvements and innovative new operational methods developed and used at the fab.

Fab 30 and Fab 36 are the cornerstones of AMD's flexible capacity growth plan, which focuses on bringing the right amount of capacity online at the right time through ongoing, incremental increases to total output. Using this approach, AMD can continue to meet demand for its products and grow market share, while continuing to keep fab utilization levels high.

AMD continues to also increase its operational speed, accuracy and agility using APM, which includes hundreds of AMD patented technologies that dynamically and automatically optimize fab operations. Leveraging APM's unique capabilities, AMD continues to accelerate its responsiveness to customer needs, more quickly transition to new technologies, improve quality and operate at increasing levels of efficiency.

"Over the past decade we've perfected new, more innovative operational models such as APM that have made us faster, more accurate, more agile and more efficient," said Daryl Ostrander, senior vice president of manufacturing and technology at AMD. "As a result, we are introducing advanced technologies more seamlessly than ever before. We are ramping to high yields and volume production on new products faster. We are fully converting our fabs to the next technology generation at consistently accelerated rates."

About AMD

Advanced Micro Devices (NYSE:AMD) is a leading global provider of innovative microprocessor solutions for computing, communications and consumer electronics markets. Founded in 1969, AMD is dedicated to delivering superior computing solutions based on customer needs that empower users worldwide. For more information visit www.amd.com.

Cautionary Statement

This release contains forward-looking statements concerning Fab 36, including its production ramp, output and capacity, demand for AMD64-bit solutions, and capturing an increasing share of the x86 market, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that the forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from the company's current expectations. Risks that the company considers to be the important factors that could cause actual results to differ materially from those set forth in the forward-looking statements include the possibility that global business and economic conditions will worsen resulting in lower than currently expected demand for AMD products; that the AMD Fab 36 will not reach the manufacturing milestones set forth; that Intel Corporation's pricing, marketing programs, product bundling, new product introductions or other activities targeting the company's microprocessor business will prevent attainment of the company's current microprocessor sales plans; that demand for computers, and, in turn, demand for the company's microprocessors will be lower than currently expected; that adoption of AMD64 products by OEMs will not continue to occur as expected; that the company may not achieve its current product and technology introduction or implementation schedules; that the company will not be able to raise sufficient capital to enable it to establish leading-edge capacity to maintain its market positions and that solutions providers will not timely provide the infrastructure to support the company's AMD64 technology. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 26, 2004 and the Quarterly Report on Form 10-Q for the quarter ended June 26, 2005.

AMD, the AMD Arrow logo, AMD64 and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names are for are for informational purposes only and may be trademarks of their respective owners.

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