AMD 1997 Annual Report Download - page 17

BACKLOG
AMD manufactures and markets standard lines of products. Consequently, a
significant portion of its sales are made from inventory on a current basis.
Sales are made primarily pursuant to purchase orders for current delivery, or
agreements covering purchases over a period of time, which are frequently
subject to revision and cancellation without penalty. Generally, in light of
current industry practice and experience, AMD does not believe that such
agreements provide meaningful backlog figures or are necessarily indicative of
actual sales for any succeeding period.
EMPLOYEES
On January 25, 1998, AMD and its subsidiaries employed approximately 12,800
employees, none of whom are represented by collective bargaining arrangements.
The Company believes that its relationship with its employees is generally
good.
ITEM 2. PROPERTIES
The Company's principal engineering, manufacturing, warehouse and
administrative facilities comprise approximately 3.33 million square feet and
are located in Sunnyvale, California and Austin, Texas. Over 2.26 million
square feet of this space is in buildings owned by the Company.
The Company leases property containing two buildings with an aggregate of
approximately 360,000 square feet, located on 45.6 acres of land in Sunnyvale,
California (One AMD Place). These leases provide the Company with an option to
purchase One AMD Place for $40 million during the lease term. The lease term
ends in December 1998. At the end of the lease term, the Company is obligated
to either purchase One AMD Place or to arrange for its sale to a third party
with a guarantee of residual value to the seller equal to the option purchase
price. Alternatively, the Company may seek to renegotiate the terms of the
lease. In 1993, the Company entered into a lease agreement for approximately
175,000 square feet located adjacent to One AMD Place (known as AMD Square) to
be used by the product groups as engineering offices and laboratory
facilities. In addition, the Company entered into lease agreements for
approximately 83,950 square feet, also located adjacent to One AMD Place
(known as the Vantis Facility). A portion of AMD Square was allocated to
Vantis in 1995 and is currently used as its corporate headquarters. Vantis is
expected to relocate to the Vantis Facility in the first half of 1998.
The Company also owns or leases facilities containing approximately 805,000
square feet for its operations in Malaysia, Thailand and Singapore. The
Company leases approximately 15 acres of land in Suzhou, China. In 1996, the
Company acquired approximately 103 acres of land in Dresden, Germany. Dresden
Fab 30 is encumbered by a lien securing borrowings of AMD Saxony. Fab 25 is
encumbered by a lien securing the Company's $400 million Senior Secured Notes
and its $400 million syndicated bank loan agreement.
AMD leases 28 sales offices in North America, 9 sales offices in Asia
Pacific, 12 sales offices in Europe and one sales office in South America for
its direct sales force. These offices are located in cities in major
electronics markets where concentrations of the Company's customers are
located.
Leases covering the Company's facilities expire over terms of generally one
to twenty years. The Company currently does not anticipate significant
difficulty in either retaining occupancy of any of its facilities through
lease renewals prior to expiration or through month-to-month occupancy, or
replacing them with equivalent facilities.
ITEM 3. LEGAL PROCEEDINGS
1. Environmental Matters. Since 1981, the Company has discovered,
investigated and begun remediation of three sites where releases from
underground chemical tanks at its facilities in Santa Clara County,
California, adversely affected the groundwater. The chemicals released into
the groundwater were commonly in use in the semiconductor industry in the
wafer fabrication process prior to 1979. At least one of the released
chemicals (which is no longer used by the Company) has been identified as a
probable carcinogen.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998