AMD and Alcatel Business Systems Settle Lawsuit

AMD and Alcatel Business Systems Settle Lawsuit



SUNNYVALE, CA - July 2, 2001. AMD (NYSE: AMD) and Alcatel Business Systems

today announced the settlement of AMD's lawsuit against Alcatel Business

Systems.  In April, AMD filed the breach of contract suit asserting that

Alcatel Business Systems had not honored the terms of its 2000 flash memory

supply agreement, under which Alcatel Business Systems agreed to purchase

and AMD agreed to supply flash memory products over a two-year period.  The

litigation, originally filed in the Supreme Court of the State of New York,

had been pending in the U.S. District Court for the Southern District of New

York.  Terms of the settlement have been sealed as part of the agreement.



"This settlement acknowledges the validity and mutually-beneficial nature
of

our supply agreements," said Walid Maghribi, senior vice president of AMD

and president of the company's Memory Group.  "We are pleased with the
terms

of the settlement and look forward to cooperating with Alcatel Business

Systems to produce high quality Alcatel mobile phones containing AMD's Flash

architecture."



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 & Poors 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.



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