AMD 2008 Annual Report Download - page 27

Supply Agreement, including its minimum purchase obligations, where competitive, with respect to GPU
products. After reviewing forecasts provided by us, as agreed by the parties, The Foundry Company would
allocate such additional capacity sufficient to produce our microprocessor product volumes set forth in the
rolling, binding forecasts that we provide. The parties would establish capacity requirements in advance for GPU
products. The Foundry Company will use commercially reasonable efforts to fill any capacity allocated to but
unutilized by us with production for third parties so as to offset and reduce our fixed cost reimbursement
obligations to The Foundry Company; provided that such efforts will not be required if there exists any
unutilized capacity that has not been allocated to us. At our request, The Foundry Company will also provide sort
services to us on a product-by-product basis. The price for microprocessor products will be related to the
percentage of our microprocessor-specific total cost of goods sold. The price for GPU products will be
determined by the parties when The Foundry Company is able to begin manufacturing GPU products for us.
The Wafer Supply Agreement would terminate no later than February 2024. The Wafer Supply Agreement
may also be terminated if and when a business plan deadlock with The Foundry Company exists and ATIC elects
to enter into a transition period pursuant to the Funding Agreement. The Foundry Company will agree to use
commercially reasonable efforts to assist us to transition the supply of products to another provider, and continue
to fulfill purchase orders for up to two years following the termination or expiration of the Wafer Supply
Agreement. During the transition period, pricing for microprocessor products will remain as set forth in the
Wafer Supply Agreement, but our purchase commitments to The Foundry Company will no longer apply.
We currently own and operate three microprocessor assembly and test facilities. Our current microprocessor
assembly and test facilities are described in the chart set forth below:
Facility Location
Approximate
Manufacturing
Area Square
Footage Activity
Penang, Malaysia .......................................... 206,000 Assembly
Singapore ................................................. 380,000 Test, Mark & Packaging
Suzhou, China ............................................. 44,000 Test, Mark & Packaging
Some assembly and final testing of our microprocessor and embedded processor products is performed by
subcontractors in the United States and Asia.
Wafers for our graphics products are delivered from the third party foundry to our test, assembly and
packaging partners, which include Advanced Semiconductor Engineering Group, Amkor, King Yuan Electronics,
Siliconware Precision Industries and STATS-Chippac, who package and test the final application-specific
integrated circuit.
Intellectual Property and Licensing
We rely on contracts and intellectual property rights to protect our products and technologies from
unauthorized third-party copying and use. Intellectual property rights include copyrights, patents, patent
applications, trademarks, trade secrets and maskwork rights. As of December 27, 2008, we had more than 7,000
patents in the United States and over 1,900 patent applications pending in the United States. In certain cases, we
have filed corresponding applications in foreign jurisdictions. We expect to file future patent applications in both
the United States and abroad on significant inventions, as we deem appropriate. We do not believe that any
individual patent, or the expiration thereof, is or would be material to our business.
In connection with the formation of Spansion LLC as of June 2003 and the closing of Spansion Inc.’s initial
public offering, or IPO, in December 2005, we and Fujitsu Limited transferred to Spansion various intellectual
property rights pursuant to an Intellectual Property Contribution and Ancillary Matters Agreement, or
IPCAAMA. Under the IPCAAMA, Spansion became the owner or joint owner with each of us and Fujitsu, of
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