ADVANCED MICRO DEVICES INC Annual Report, Year Ended Dec 25, 2005

Advanced Micro Devices, Inc. (AMD) reported strong financial performance for the fiscal year ended December 25, 2005, driven by a significant 50% increase in net sales for its Computation Products segment, primarily due to higher unit shipments and improved average selling prices for its microprocessors. This growth reflects increasing customer adoption of AMD's AMD64 technology, particularly its dual-core processors, across desktop, mobile, and server markets. Despite overall sales growth, the Memory Products segment experienced an 18% decline in net sales, largely attributed to competitive pricing pressures in the Flash memory market and the deconsolidation of Spansion Inc. following its IPO in December 2005. Key strategic developments for AMD in 2005 included the successful initial public offering of its majority-owned subsidiary, Spansion Inc., which is expected to allow AMD to focus more on its core computing business while still retaining an equity interest in Spansion. AMD also made substantial progress on its Fab 36, a 300mm wafer fabrication facility in Dresden, Germany, nearing completion and expected to contribute to future production capacity. The company continues to invest heavily in research and development, with a focus on next-generation microprocessors and advanced manufacturing process technologies, underscoring its commitment to innovation and competitiveness in the semiconductor industry.