AMD REPORTS THIRD QUARTER RESULTS

Cites Improving Flash Outlook, Weak PC Market Demand,
Significant Reduction in Supply Chain Inventory

SUNNYVALE, CA - October 16, 2002 - AMD (NYSE: AMD) today reported sales
of $508,227,000 and a net loss of $254,171,000, for the quarter ended
September 29, 2002. The net loss amounted to $0.74 per share, presented
in accordance with generally accepted accounting principles (GAAP).

Third quarter sales declined by 34 percent from the third quarter of
2001 and by 15 percent from the second quarter of 2002. In the third
quarter of 2001, AMD reported total sales of $765,870,000 and a net loss
of $186,929,000, or $0.54 per share. Excluding the effects of
restructuring and other special charges1, the 2001 third quarter loss
was $97,424,000, or $0.28 per share. In the second quarter of 2002,
AMD reported sales of $600,299,000 and a net loss of $184,938,000, or
$0.54 per share.

For the first nine months of 2002, sales declined by 32 percent from the
first nine months of 2001. AMD reported sales for the first nine months
of 2002 of $2,010,599,000 and a net loss of $448,272,000 or $1.31 per
share. For the first nine months of 2001, AMD reported sales of
$2,939,881,000 and a net loss of $44,739,000, or $0.14 per share.
Excluding the effects of restructuring and other special charges1, net
income for the first nine months of 2001 was $44,766,000, or $0.13 per
diluted share.

"The sequential decline in third quarter sales was primarily due to the
aggressive actions we took in the PC supply chain to align our product
mix with current customer and end-user demand, which has been less than
we forecasted," said Robert J. Rivet, AMD's chief financial officer. "We
took more aggressive action in the third quarter than in the second
quarter, which masked the progress that AMD is achieving in the
marketplace. The sell-through, that is, actual consumption of AMD
microprocessors, was higher in the third quarter than in the second
quarter. While AMD's unit sales for desktop were hard hit by our
actions, we believe we held market share in mobile unit sales and made
substantial progress in server unit sales, increasing unit shipments by
17 percent. The improved alignment of inventory in the supply chain and
the increased availability of the highest performing AMD Athlon XP(tm)
processors on 130-nanometer technology should enable AMD and our
customers to take adv! antage of the anticipated fourth quarter seasonal
improvement in demand. Flash memory product sales grew in the third
quarter based on the strength of the high-end mobile phone market, as
bit demand for AMD Flash memory continued to increase. We are
accelerating our strategy to reset our business model and lower our
corporate breakeven point. We will begin to implement additional and
aggressive actions in the fourth quarter that are expected to
significantly reduce our quarterly breakeven point beginning in the
first quarter of 2003."

Business Overview

PC processor sales of $262 million for the quarter declined by 31
percent from the $380 million reported in the second quarter of 2002.
This decline was driven by a drop in both units and dollars of
microprocessors for desktop applications. AMD believes it held share in
the mobile segment and gained share in the server segment.

Conversion of AMD Athlon XP processors on 130-nanometer technology is
now complete, and the Company's Fab 30 plant in Dresden, Germany is now
producing 100 percent of its wafer-outs on 130-nanometer process
technology. AMD plans to begin production shipments of Hammer-based
processors in the mid first half of 2003.

AMD memory sales of $189 million were up 8 percent from the $175 million
in the second quarter of 2002. For the second quarter in a row, AMD
Flash memory bit shipments reached an all-time record level. In July,
AMD began production shipments of AMD MirrorBit(tm) Flash memory
products. AMD MirrorBit architecture is a breakthrough technology that
allows Flash memory devices to hold twice as much data as standard NOR
Flash devices without compromising device endurance, performance or
reliability.

Additional Highlights Of The Quarter

In July, Hewlett-Packard Company and Acer Europe unveiled powerful
systems based on the new mobile AMD Athlon XP processor 1800+. With
QuantiSpeed(tm) architecture and PowerNow(tm) technology, the mobile AMD
Athlon XP processor gives business and home consumers a dynamic power
management tool for performance on demand and enables a cooler, quieter
notebook PC.

In July, top tool vendors Etnus, MigraTEC, Numerical Algorithms Group
(NAG), and STMicroelectronics announced support for upcoming AMD Athlon
and AMD Opteron(tm) processors based on Hammer technology. Tools
developed will help hardware and software vendors easily deliver
applications and systems to support AMD processors based on Hammer
technology.

Also in July, AMD announced the 64-bit enablement of IBM's DB2 database
software for AMD Opteron processors based on Hammer technology. The
enterprise-class database solution features a DB2 database on a SuSE
Linux operating system, and was successfully enabled to support x86-64
technology in two days.

In August, AMD announced immediate availability of a 64 Megabit Flash
memory device that supports industry-leading levels of data throughput
while consuming significantly less power than competing products in all
modes, including up to 95 percent less power in standby mode.

In August, Red Hat, Inc. and AMD announced that Red Hat will offer
global support for AMD Athlon and AMD Opteron processors based on Hammer
technology in Red Hat Linux Advanced Server, and future enterprise Linux
offerings from Red Hat. Red Hat will provide native 64-bit support for
processors based on AMD's x86-64 technology, while providing support for
existing 32-bit Linux-based applications.

In August, the new Compaq D315 Business Desktop PC from Hewlett-Packard
Company followed the successful worldwide introduction of the HP N115
Evo business notebook PC earlier this year and continued to expand
customer choice for powerful and reliable business computing solutions
powered by AMD processors.

Also in August, AMD announced the world's highest-performing processor
for desktop PCs, the AMD Athlon XP processor 2600+, and the AMD Athlon
XP 2400+.

In September, AMD announced it had fabricated the smallest double gate
transistors reported to-date. These transistors, measuring ten
nanometers, are six times smaller than the smallest transistors then in
production. This research breakthrough could foster the placement of a
billion transistors on the same size chip that currently holds 100
million transistors, enabling a vastly richer computing experience.

Also in September, Hewlett-Packard Company, Fujitsu Siemens Computers,
and Packard Bell (the consumer division of NEC Computers International)
said they will begin offering later this year systems based on the
mobile AMD Athlon XP processor 1900+.

Current Outlook

AMD's outlook statements are based on current expectations. The
following statements are forward-looking, and actual results could
differ materially. Economic and industry conditions remain uncertain,
and continue to make it particularly difficult to forecast product
demand. The company's current outlook for the fourth quarter is based
on the following projections:
* Based on increased forecasted demand for high-end cell phones and AMD
Flash memory products, the company expects a significant increase in
sales of Flash memory devices.
* Based on anticipated seasonal patterns and the benefits of a
better-balanced inventory in the supply chain, and an improved product
mix, the company expects increased PC processor sales.
* Based on forecasted improved Flash and PC processor sales, AMD expects
fourth quarter sales to improve significantly.
* Based on expected overall sales improvement, AMD expects to
significantly reduce its operating loss in the fourth quarter compared
to the third quarter.

AMD Files 10-Q/A

In AMD's unaudited consolidated balance sheet as of June 30, 2002
reported on Form 10-Q quarterly report for the period ended June 30,
2002, AMD reflected Prepaid Expenses and Other Current Assets of
$166,963,000 and Accounts Payable of $258,641,000.

The correct balances, as of June 30, 2002, were: Prepaid Expenses and
Other Current Assets - $264,663,000 and Accounts Payable - $356,341,000.
These revised balances do not affect previously reported stockholders'
equity or working capital as of June 30, 2002 and do not affect AMD's
statement of operations for the periods ended June 30, 2002 or net cash
provided by operating activities for the six month period ended June 30,
2002.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:30 PM
Pacific Time today to discuss third quarter financial results. AMD will
provide a real-time audio broadcast of the teleconference on the
Investor Relations page of its web site at http://www.amd.com or
http://www.StreetEvents.com. The web-cast will be available for two
weeks after the conference call.

Cautionary Statement

This release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements in this release involve risks and uncertainty
that could cause actual results to differ materially from current
expectations. Risks include the possibility that global business and
economic conditions will worsen resulting in lower than currently
expected sales in the fourth quarter of 2002; that Intel Corporation
pricing, marketing programs, product bundling, new product introductions
or other activities targeting the company's processor business will
prevent attainment of the company's current PC processor sales plans;
that demand for personal computers and, in turn, demand for the
company's PC processors will be lower than currently expected; that the
sales of PC processors will not follow seasonal patterns and increase
from third quarter levels; that the compa! ny will not continue to be
successful in ramping production of the company's AMD Athlon processors
on 130-nanometer technology in Fab 30 in Dresden, Germany, on the
current schedule; that demand for the company's Flash memory products
will be lower than currently expected, particularly in the high-end
cellular telephone sector; that the company will not achieve sequential
growth in sales of Flash memory devices; and that the company may not
achieve its current product and technology introduction schedules. 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 report on Form 10-K for the year ended December 30, 2001
and the report on Form 10-Q for the quarter ended June 30, 2002.

About AMD

AMD is a global supplier of integrated circuits for the personal and
networked computer and communications markets with manufacturing
facilities in the United States, Europe, Japan, and Asia. AMD, a Fortune
500 and Standard & Poor's 500 company, produces microprocessors, Flash
memory devices, and support circuitry for communications and networking
applications. Founded in 1969 and based in Sunnyvale, California, AMD
had revenues of $3.9 billion in 2001. (NYSE: AMD).

AMD, the AMD Arrow logo, AMD Athlon, AMD Opteron and combinations
thereof are trademarks of Advanced Micro Devices, Inc. in the United
States and other jurisdictions.

1 Third quarter and the first nine months of 2001 special charges
included restructuring and other special charges of $89.3 million,
impaired investments of $22.0 million, and additional inventory
provisions of $6.9 million.