AMD 1996 Annual Report Download - page 18

In addition, AMD has entered into numerous cross-licensing and technology
exchange agreements with other companies under which it both transfers and
receives technology and intellectual property rights. Although the Company
attempts to protect its intellectual property rights through patents,
copyrights, trade secrets and other measures, there can be no assurance that
the Company will be able to protect its technology adequately or that
competitors will not be able to develop similar technology independently.
There can be no assurance that any patent applications that the Company may
file will be issued or that foreign intellectual property laws will protect
the Company's intellectual property rights. There can be no assurance that any
patent licensed by or issued to the Company will not be challenged,
invalidated or circumvented, or that the rights granted thereunder will
provide competitive advantages to the Company. Furthermore, there can be no
assurance that others will not independently develop similar products,
duplicate the Company's products or design around the patents issued to or
licensed by the Company.
From time to time, AMD has been notified that it may be infringing
intellectual property rights of others. If any such claims are asserted
against the Company, the Company may seek to obtain a license under the third
party's intellectual property rights. The Company could decide, in the
alternative, to resort to litigation to challenge such claims. Such challenges
could be extremely expensive and time-consuming and could materially adversely
affect the Company. No assurance can be given that all necessary licenses can
be obtained on satisfactory terms, nor that litigation may always be avoided
or successfully concluded.
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 28, 1997, AMD and its subsidiaries employed approximately 12,200
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 3.11 million square feet and
are located in Sunnyvale, California and Austin, Texas. Over 2.56 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 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.
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
in connection with One AMD Place.
The Company also owns or leases facilities containing approximately 804,000
square feet for its operations in Malaysia, Thailand and Singapore. The
Company leases approximately 15 acres of land in Suzhou, China. The Company
owns 74 undeveloped acres of land in the Republic of Ireland. The Company also
has an equity interest in 58 acres of land in Albuquerque, New Mexico. In
1996, the Company acquired approximately 103 acres of land in Dresden,
Germany. Fab 25 is encumbered by a lien securing the Company's $400 million
Senior Secured Notes and its $400 million bank credit arrangements. The
planned Dresden Facility will be encumbered by a lien securing borrowings of
AMD Saxony.
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997