AMD 2004 Annual Report Download - page 391

PREAMBLE
The maintenance and development of Saxony as a center for microelectronics, in particular, of Dresden as a high-technology location, is a top priority political
and structural goal of Saxony, in order to maintain existing and secure new qualified jobs. AMD intends to build a new facility in Dresden for the production of
300mm silicon wafers on which integrated circuits, particularly for microprocessors, will be manufactured (the “Wafers”). In addition to production, own
research and development on a considerable scale to develop up to suitability for industrial production semiconductor manufacturing technology will be carried
out at the new facility.
In December 2002, AMD entered into an extensive agreement with IBM for joint development (the Joint Development Agreement, hereinafter referred to as the
“JDA”) of a technological basis for the production of chips for high-performance products of the future. The JDA encompasses cooperation on the 65- and 45
nm technology generations with the possibility of even smaller sized structures. This groundwork will be carried out on the basis of the 300 mm Wafers. AMD
intends to use the results of this groundwork under the JDA in a new wafer production facility in particular for micro processors to be built in Dresden
(hereinafter referred to as “Fab X”) with the support and participation of Saxony, to develop them to the industrial production stage and to manufacture them.
The manufacturing technology is intended to be adjusted, by continuous and rapid improvement, to the requirements of mass production and further developed in
accordance with market requirements. The management consultancy Arthur D. Little GmbH has on the instructions of Saxony examined and confirmed the
technical and economic feasibility of Fab X in a report (hereinafter referred to as the “ADL Report”).
Fab X is intended to be built beside the existing Fab 30. The commencement of industrial production is planned for 2006. The full capacity for the exclusive
requirements of AMD is intended to be 13,000 Wafer outs per month. Buildings and clean room are designed for a capacity of 20,000 Wafer outs per month,
which is to be used [***]*. Up to approx. 1,035, and [***]* up to 1,400 -qualified new jobs are intended to be created in Fab X. Additional jobs at suppliers will
also result. Saxony attaches particular importance on the fact that the technological and financial basis of Fab X is secured as much as possible and will be further
developed in Fab X and furthermore that its capital bears
*Confidential treatment has been requested for portions of this exhibit.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005