AMD 2004 Annual Report Download - page 20

Table of Contents
die into Spansion multi-chip package products. Some of these suppliers are also our competitors. Interruption of supply or increased demand in the industry could
cause shortages and price increases in various essential materials. If we are unable to procure certain of these materials, we may have to reduce our
manufacturing operations. Such a reduction could have a material adverse effect on us.
In June 2002, we formed Advanced Mask Technology Center GmbH and Co. KG, or AMTC, and Maskhouse Building Administration GmbH and Co.
KG, or BAC, two joint ventures with Infineon Technologies AG and Dupont Photomasks, Inc., for the purpose of constructing and operating an advanced
photomask facility in Dresden, Germany. Photomasks are used during the production of ICs. The purpose of AMTC is to conduct research, development and
pilot production of optical photomasks for advanced lithography technology. AMTC has commenced pilot production of optical photomasks and has provided
test photomasks to Fab 30 for qualification and production photomasks. We intend to procure advanced photomasks from AMTC pursuant to the terms of our
joint venture arrangement and use these photomasks in the manufacture of certain of our microprocessor products.
Environmental Regulations
Many aspects of our business operations and products are regulated by domestic and international environmental laws and regulations. These regulations
include limitations on discharge of pollutants to air, water, and soil; remediation requirements; product chemical content limitations; manufacturing chemical use
and handling restrictions; pollution control requirements; waste minimization considerations; and treatment, transport, storage and disposal of solid and
hazardous wastes. If we fail to comply with any of the applicable environmental regulations we may be subject to fines, suspension of production, alteration of
our manufacturing processes, sales limitations, and/or criminal and civil liabilities. Existing or future regulations could require us to procure expensive pollution
abatement or remediation equipment; to modify product designs; or to incur other expenses to comply with environmental regulations. Any failure to control the
use, disposal or storage, or adequately restrict the discharge of hazardous substances could subject us to future liabilities and could have a material adverse effect
on our business. We believe we are in material compliance with applicable environmental requirements, and do not expect those requirements to result in
material expenditures in the foreseeable future.
ITEM 2. PROPERTIES
Our principal engineering, manufacturing, warehouse and administrative facilities (excluding Spansion) comprise approximately 3.7 million square feet
and are located in the United States, Germany, Singapore, China and Malaysia. Approximately 2.2 million square feet of this space is in buildings we own. We
lease approximately 115,000 square feet of land in Singapore and 270,000 square feet of land in Suzhou, China for our microprocessor assembly and test
facilities, and we lease the building for our microprocessor assembly and test facility in Suzhou, China. We acquired approximately 9.7 million square feet of
land in Dresden, Germany for Fab 30. In August 2004, we transferred 5.4 million square feet to our German Subsidiary, AMD Fab 36 Limited Liability
Company & Co. KG, or AMD Fab 36 KG, for Fab 36. Fab 36 and the land owned by AMD Fab 36 KG is encumbered by a lien which will secure AMD Fab 36
KG’s obligations under the Fab 36 Term Loan. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Fab 36 Term
Loan and Guarantee and Fab 36 Partnership Agreements.”
Spansion’s principal engineering, manufacturing and administrative facilities comprise approximately 4.4 million square feet and are located in the United
States, France, Japan, Korea, Malaysia, Thailand and China. Approximately 4.2 million square feet of this space is in buildings Spansion owns. The remainder of
this space is leased, primarily from us. Spansion also leases approximately 625,000 square feet of land in Suzhou, China for its assembly and test facility and
approximately 3.9 million square feet of land in Japan for its wafer fabrication facilities. Spansion’s assembly and test facility in Suzhou, China is encumbered by
a lien securing the Spansion Term Loan and its Fab 25 facility in Austin, Texas is encumbered by a lien securing the July 2003 Spansion Term Loan. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—July 2003 Spansion Term Loan and Guarantee,” and “—Spansion
China Term Loan,” below.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005