AMD 2009 Annual Report Download - page 43

We believe that our existing facilities are suitable and adequate for our present purposes, and that, except as
discussed above, the productive capacity of such facilities is substantially being utilized or we have plans to
utilize it.
In connection with the consummation of the GF manufacturing joint venture transaction in March 2009, we
transferred approximately 2.3 million square feet of engineering, manufacturing, warehouse and administrative
facilities in the United States and Germany to GF. In addition, GF is in the process of constructing a new
1.3 million square foot manufacturing facility in Saratoga County, New York.
ITEM 3. LEGAL PROCEEDINGS
In addition to ordinary routine litigation incidental to the business, AMD or its indirectly wholly-owned
subsidiary, ATI, is party to the following material legal proceedings. The outcome of any litigation is uncertain,
and, should any of the actions or proceedings where we are a defendant be successful, we may be subject to
significant damages awards which could have a material adverse effect on our financial condition.
AMD and AMDISS v. Intel Corporation and Intel Kabushiki Kaisha, Civil Action No. 05-441, in the United
States District Court for the District of Delaware.
On June 27, 2005, we filed an antitrust complaint against Intel Corporation and Intel Kabushiki Kaisha,
collectively “Intel,” in the United States District Court for the District of Delaware under Section 2 of the
Sherman Antitrust Act, Sections 4 and 16 of the Clayton Act, and the California Business and Professions Code.
The complaint alleges that Intel has unlawfully maintained a monopoly in the x86 microprocessor market by
engaging in anti-competitive financial and exclusionary business practices that in effect limit Intel’s customers’
ability and/or incentive to deal with us.
On November 11, 2009, we entered into a comprehensive settlement agreement with Intel. Pursuant to the
settlement agreement, Intel paid us $1.25 billion in December 2009. The settlement agreement also includes
mutual releases of all claims between us and Intel, including specified claims under the existing cross license
agreements between the parties. With respect to claims regarding Intel’s business practices, we released all
claims through the date of the settlement agreement. We also dismissed with prejudice our actions against Intel
that were pending in Delaware and Japan and withdrew all of our regulatory complaints against Intel worldwide.
Pursuant to the settlement agreement, Intel has agreed to abide by a set of prospective business practice
provisions. The settlement agreement terminates after ten years from the date of the settlement agreement. The
business practice restrictions terminate upon the earliest of (a) ten years from the date of the settlement
agreement, (b) the date upon which Mercury Research reports that Intel has less than a 65% market share in the
Worldwide PC Market Segment for four consecutive quarters and (c) any attempt by us to transfer our rights or
obligations under the settlement agreement, except as expressly provided in the settlement agreement. In
addition, in connection with the settlement, we entered into a cross license agreement. See
“Business—Intellectual Property and Licensing.”
U.S. Consumer Class Action Lawsuits
In February and March 2006, two consumer class actions were filed in the United States District Court for
the Northern District of California against ATI and three of its subsidiaries. The complaints allege that ATI had
misrepresented its graphics cards as being “HDCP ready” when they were not, and on that basis alleged
violations of state consumer protection statutes, breach of express and implied warranty, negligent
misrepresentation, and unjust enrichment. On April 18, 2006, the Court entered an order consolidating the two
actions. On June 19, 2006, plaintiffs filed a consolidated complaint, alleging violations of California’s consumer
protection laws, breach of express warranty, and unjust enrichment. On June 21, 2006, a third consumer class
action that was filed in the United States District Court for the Western District of Tennessee in May 2006
alleging claims that are substantially the same was transferred to the Northern District of California, and on
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