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AMD Reports Second Quarter Results

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AMD REPORTS SECOND QUARTER RESULTS
Company Reports Sales of $985 million, Earnings of $0.05 per Share,
and Record PC Processor Unit Sales


SUNNYVALE, CA - July 12, 2001. AMD today reported sales of $985,264,000 and
net income of $17,352,000 for the quarter ended July 1, 2001. Net income
amounted to $0.05 per diluted share, on 341 million fully diluted shares
outstanding.
Total sales declined by approximately 16 percent, and on continuing
businesses, by approximately 11 percent from the second quarter of 2000.
Results for the second quarter of 2000 included approximately $63 million in
sales from the company's voice communications business, which was sold on
August 4, 2000.
Sales declined by approximately 17 percent from the first quarter of 2001,
when AMD reported sales of $1,188,747,000 and net income of $124,837,000, or
$0.37 per diluted share.
For the first six months of 2001, AMD reported total sales of $2,174,011,000
and net income of $142,189,000, or $0.43 per diluted share. For the first
six months of 2000, AMD reported sales of $2,262,466,000 and net income of
$396,491,000, or $1.17 per diluted share.
AMD had record unit sales of more than 7.7 million PC processors during the
quarter. Unit sales of seventh-generation AMD Athlon(tm) and AMD Duron(tm)
processors were both at record levels. Average selling prices (ASPs) for PC
processors declined sharply from the first quarter in the face of very
aggressive pricing in a weak PC market.
Sales of AMD memory products declined by 13 percent from the second quarter
of 2000 and by 23 percent sequentially in a continuing weak demand
environment.
"In what proved to be a more challenging semiconductor business environment
than anticipated, we believe we gained market share in our two principal
product lines, flash memory devices and PC processors," said W.J. Sanders
III, chairman and chief executive officer.
"Demand for flash memory products continued to reflect severe weakness in
the communications and networking sectors," Sanders continued. "The
superiority of AMD flash memory products coupled with supply agreements with
more than two-dozen leading OEMs have mitigated the impact on AMD of a
severe downturn in the flash memory market. We believe we have gained market
share in the flash memory arena in the first half of 2001.
"In a weak PC market, we experienced strong demand for AMD Athlon and AMD
Duron processors. Continuing the steepest ramp of any AMD processor family,
unit sales of our seventh-generation PC processors grew 16 percent
sequentially. The strength and breadth of our PC processor products and the
superior performance and value proposition of AMD Athlon and AMD Duron
processors enabled AMD to achieve record PC processor unit sales. While
responding to aggressive competitive pricing depressed our revenues and
earnings, we believe we continued to gain unit market share in the PC
processor market during the quarter. PC processor revenues declined 11
percent sequentially, but grew nominally over the second quarter of 2000,"
said Sanders.
Other developments
AMD expanded its PC processor portfolio during the second quarter with the
introduction of the AMD Athlon 4 processor for mobile PCs and the AMD Athlon
MP(tm) and companion AMD 760 MP(tm) chipset for workstation and server
applications.

AMD introduced higher-performance AMD Duron and AMD Athlon processors. The
950-megahertz AMD Duron processor is the industry's highest-performance
processor for the value segment of the PC market, and the 1.4-gigahertz AMD
Athlon processor offers more delivered performance than any other PC
processor.

AMD announced a breakthrough in flash memory cell architecture, known as
Mirror Bit* architecture that enables a flash memory device to store twice
as much data as a standard flash memory device while maintaining complete
pin and software compatibility without compromising AMD's industry-leading
endurance of one million read-write cycles.

AMD retired $517 million of 6 percent convertible debentures.

The company's Fab 30 in Dresden, Germany was named "Fab of the Year" by the
prestigious industry publication Semiconductor International, the third time
an AMD facility has claimed this honor.

NEC Corporation (NEC Japan), Microsoft Co., Ltd. (Microsoft Japan), and
ASCII Network Technology Inc. introduced a jointly developed streaming
content server powered by the 1.33-GHz AMD Athlon processor that is targeted
at commercial applications.

AMD continued to gain support for its HyperTransport* technology, enhancing
its position as an industry standard. With a peak data rate of 6.4 gigabytes
per second, HyperTransport technology moves information faster within PCs,
networking systems, and communications devices. More than 100 companies now
support HyperTransport technology.
Current Outlook
The company's outlook statements are based on current expectations. The
following statements are forward-looking, and actual results could differ
materially. The company's current outlook is based on the following
projections.
Demand for flash memory products continues to be weak, driven primarily by
the continued severe weakness in the communications and networking sectors.
Visibility in this product segment is poor, and the company projects a
sequential decline in sales for the third quarter.
PC industry unit growth for 2001 is less than previously forecasted, and the
company now believes that industry unit shipments will be approximately flat
for the year. Based on a normal seasonal pattern, which would show a pick-up
in market demand for PCs in the third quarter, the company expects that unit
sales of its AMD PC processors in the current quarter will again be at
record levels with ASPs under continuing pressure.
Weakness in the communications and networking sectors continues to impact
the company's foundry services and other IC products, and the company
projects that these revenues will continue to decline in the third quarter.
If current conditions prevail, the company expects that overall revenues
could decline in the range of 10 to 15 percent in the current quarter. With
a decline in sales of this magnitude, the company would report an operating
loss.

Normal seasonality coupled with a recovery in some of the markets for flash
memory products should enable the company to increase revenues and return to
solid profitability in the fourth quarter.

AMD Teleconference

AMD will hold a teleconference for the financial community at 2:30 PM
Pacific Standard Time today to discuss second-quarter financial results. AMD
will provide a real-time audio broadcast of the teleconference on the
Investor Relations page of its web site at or
. The webcast will be available for two weeks
after the teleconference.

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; that demand for
personal computers and, in turn, demand for the company's seventh-generation
PC processors will be lower than currently expected; that Intel Corporation
pricing, marketing programs, 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 changes in customer needs
and the product introductions and capacity expansion of competitors will
continue to effect the demand for the company's flash memory products; that
the company will not continue to be successful in ramping production of the
company's highest-performance AMD Athlon processors in Fab 30; that the
company will not be able to produce seventh-generation processors in the
volume, performance mix or with the feature set necessary to meet market
requirements and the company's current plans and goals; that third parties
may not provide timely or adequate infrastructure solutions to support the
company's seventh-generation processors; and that the company will not be
able to continue to gain market share in its principal product lines. 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 31, 2000, and
the report on Form 10-Q for the quarter ended April 1, 2001.
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 $4.6 billion in 2000. (NYSE: AMD).
AMD, the AMD logo, AMD Athlon, AMD Duron and combinations thereof are
trademarks of Advanced Micro Devices, Inc. in the United States and other
jurisdictions.