AMD 2001 Annual Report Download - page 20

ITEM 2. PROPERTIES
Our principal engineering, manufacturing, warehouse and administrative
facilities comprise approximately 5.1 million square feet and are located in
Sunnyvale, California; Austin, Texas; and Dresden, Germany. Over 3.1 million
square feet of this space is in buildings we own.
We have an operating lease on property containing two buildings with an
aggregate of approximately 364,000 square feet, located on 45.6 acres of land
in Sunnyvale, California (One AMD Place). This operating lease ends in December
2018. In 2000, we renewed 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.
We also own or lease facilities containing approximately 1.2 million square
feet for our operations in Malaysia, Thailand, Singapore and China. We lease
approximately 15 acres of land in Suzhou, China for our assembly and test
facility. We acquired approximately 115 acres of land in Dresden, Germany for
Dresden Fab 30. This property is encumbered by a lien securing borrowings of
AMD Saxony.
We lease 24 sales offices in North America, 11 sales offices in Asia
Pacific, 11 sales offices in Europe and one sales office in South America for
our direct sales force. These offices are located in cities in major
electronics markets where concentrations of our customers are located.
Leases covering our facilities expire over terms of generally one to 20
years. We currently do not anticipate significant difficulty in either
retaining occupancy of any of our 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, we have discovered, investigated and
begun remediation of three sites where releases from underground chemical tanks
at our 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 we no longer use) has been
identified as a probable carcinogen.
In 1991, we received four Final Site Clean-up Requirements Orders from the
California Regional Water Quality Control Board, San Francisco Bay Region,
relating to the three sites. One of the orders named us as well as TRW
Microwave, Inc. and Philips Semiconductors Corporation. In January 1999, we
entered into a settlement agreement with Philips whereby Philips assumed costs
allocated to us under this order, although we are responsible for these costs
in the event that Philips does not fulfill its obligations under the settlement
agreement. Another of the orders named us as well as National Semiconductor
Corporation. In December 2001, we entered into a settlement agreement with
National pursuant to which National will take the lead for a period of time on
certain groundwater remediation required under that order, but we remain a
responsible party for all purposes under the order and retain specific
responsibilities.
The three sites in Santa Clara County are on the National Priorities List
(Superfund). If we fail to satisfy federal compliance requirements, or
inadequately perform the compliance measures, the government (1) can bring an
action to enforce compliance or (2) can undertake the desired response actions
itself and later bring an action to recover its costs, and penalties, which is
up to three times the costs of clean-up activities, if appropriate. The statute
of limitations has been tolled on the claims of landowners adjacent to the
Santa Clara County Superfund sites for causes of action such as negligence,
nuisance and trespass.
We have computed and recorded the estimated environmental liability in
accordance with applicable accounting rules and have not recorded any potential
insurance recoveries in determining the estimated costs of the cleanup. The
amount of environmental charges to earnings has not been material during any of
the last three fiscal years. We believe that the potential liability, if any,
in excess of amounts already accrued with respect to the foregoing
environmental matters will not have a material adverse effect on us.
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002