AMD 2015 Annual Report Download - page 19

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Manufacturing Arrangements and Assembly and Test Facilities
Third-Party Wafer Foundry Facilities
GLOBALFOUNDRIES Inc. On March 2, 2009, we entered into a Wafer Supply Agreement (WSA) with
GLOBALFOUNDRIES Inc. (GF). The WSA governs the terms by which we purchase products manufactured by
GF, a related party to us. Pursuant to the WSA, we are required to purchase all of our microprocessor and APU
product requirements, and a certain portion of our GPU product requirements from GF with limited exceptions.
For more information about the WSA, see “Part II, Item 7-Management’s Discussion and Analysis of Financial
Condition and Results of Operations-GLOBALFOUNDRIES,” below.
Taiwan Semiconductor Manufacturing Company. We also have foundry arrangements with Taiwan
Semiconductor Manufacturing Company (TSMC) for the production of wafers for certain products.
Other Third-Party Manufacturers. We outsource board-level graphics product manufacturing to third-
party manufacturers.
Assembly, Test, Mark and Packaging Facilities
We own and operate two assembly, test, mark and packaging facilities which are subject of the transaction
noted below. Some wafers for our products are delivered from third-party foundries to our assembly, test, mark
and packaging facilities. Our assembly, test, mark and packaging facilities are described in the chart set forth
below:
Facility Location
Approximate
Manufacturing
Area Square
Footage Activity
Penang, Malaysia ................................. 150,000 Assembly, Test, Mark & Packaging
Suzhou, China .................................... 115,000 Assembly, Test, Mark & Packaging
The remaining wafers for our products are delivered from third-party foundries to our test, assembly and
packaging partners located in the Asia-Pacific region who package and test our final semiconductor products.
On October 15, 2015, we entered into an Equity Interest Purchase Agreement (the Equity Interest Purchase
Agreement) with Nantong Fujitsu Microelectronics Co., Ltd., a Chinese joint stock company (JV Party), under
which we will sell to JV Party a majority of the equity interests in AMD Technologies (China) Co. Ltd., a
wholly-foreign owned enterprise incorporated as a limited liability company (the Chinese Target Company), and
Advanced Micro Devices Export Sdn. Bhd., a Malaysian limited liability company (the Malaysian Target
Company and, together with the Chinese Target Company, the Target Companies), thereby forming two joint
ventures (collectively, the JVs) with JV Party in a transaction valued at approximately $436 million (the
Transaction). The JV Party will acquire 85% of the equity interests in each JV for approximately $371 million
and we estimate we will receive approximately $320 million cash, net of taxes and other customary expenses.
After closing, JV Party’s affiliates will own 85% of the equity interests in each JV while certain of our
subsidiaries will own the remaining 15%. The Transaction will result in the JVs providing assembly, testing,
marking, packing and packaging services (ATMP) to us. We plan to account for our investment in the JVs under
the equity method of accounting.The Transaction is expected to close in the first half of 2016, pending successful
completion of regulatory and other approvals.
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 26, 2015, we had approximately
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