AMD welcomes Germany's moves toward more competitive IT Procurement in public sector -Action builds on steps taken by several EU member states to enhance competition and cost savings- Dresden, Germany. December 20, 2004. AMD (NYSE: AMD) strongly supports the German Federal Government's modification to its procurement policies as the latest in a series of steps European countries are taking towards greater competition in the public procurement of IT equipment. Since AMD launched a complaint with the European Commission in October 2003 about preferential treatment for one particular microprocessor brand and supplier in public tenders, a number of European countries have responded by updating their public procurement guidelines.

Past week, the German Federal Government published on the website of the Federal Ministry of Economy and Labor a specific guidance for procurement authorities. The document states that "German and European procurement law prohibit(s) the mentioning of brand names in description of required performance." The document goes on to say that the "mentioning of a specific brand name (e.g. supply of a computer with a processor of the brand xy) is always illegal." It also warns of requiring minimum clock rates in the performance description, as frequency is "only one criterion out of several which altogether determine the performance of a microprocessor."

Germany's announcement builds on similar changes from public authorities in Italy, Sweden, Belgium, and France. All five EU Member states are proposing to base future tenders on objective benchmarks that specify the level of performance required of PC and server systems. That in turn would allow OEMs to bid with system configurations achieving the required performance without being locked in on one particular microprocessor brand. The German paper gives an example of a legal technical specification: "A PC with an X86 microprocessor and a minimum performance of X-value under the X1-benchmark or Y-value under the Y1-benchmark." The Italian procurement agency CNIPA has gone further and specifically selected Sysmark 2004 for the evaluation of desktop systems.

In a similar move, Russian deputy minister for Economic Development and Trade Andrei Sharonov issued a strongly worded guidance document for the vendor-neutral procurement of computers within the Russian Federation. Mr. Sharonov is also the author of a wholesale modernizing law of public procurement in the Russian Federation that was recently adopted by the Duma in first reading.

"We strongly support these moves towards greater competition in a critical sector of IT procurement, public tenders. Everybody benefits when public procurement processes are opened to include a broader range of qualified suppliers. For too long, one microprocessor company has received preferential treatment. This hampers competition and adds unnecessary cost to the procurement authorities, which affects taxpayers. AMD also wholeheartedly embraces the concept of independent, application-based benchmarks as the fair and best way to determine optimal system performance for desktops, notebooks, workstations and servers," said Giuliano Meroni, Corporate Vice President, Sales and Marketing for AMD in Europe.

Meroni pointed at a recent EU Commission study stating that "existing EU public procurement Directives have increased cross-border competition in procurement markets and reduced by around 30% the prices paid by public authorities for goods and services... . There remains potential for significant further opening up of procurement markets and therefore for further gains for taxpayers in terms of value for money and strengthening defences against corruption and favouritism."