8-KMaterial AgreementsExhibits & Filings

ADVANCED MICRO DEVICES INC 8-K Report, Material Agreement (Sep 21, 2004)

Filed September 21, 2004For Securities:AMD

Summary

This 8-K filing from Advanced Micro Devices, Inc. (AMD) on September 21, 2004, primarily details significant updates to its strategic technology development and manufacturing agreements with IBM. The company amended and restated its "S" Process Development Agreement, extending joint development of advanced logic process technologies (65nm, 45nm, and potentially 32nm) through December 31, 2008. This extended collaboration requires AMD to pay IBM between $250 million and $280 million over the period. Additionally, AMD secured new licensing rights from IBM for third-party foundry manufacturing of its products at 90nm and 65nm. A separate letter agreement with IBM further extends existing licensing arrangements, enabling AMD to bump 300mm wafers in its Dresden facility and manufacture/sell AMD-branded products using this technology, as well as provide bumping services for third parties. This also involves a $11 million payment to IBM. These agreements underscore AMD's commitment to advancing its manufacturing capabilities and securing access to critical technologies for future product development.

Key Highlights

  • 1AMD and IBM extended their joint "S" Process Development Agreement through December 31, 2008, focusing on 65nm and 45nm logic process technologies.
  • 2The agreement includes potential joint development of 32nm technology, which would be licensed to AMD.
  • 3AMD will pay IBM between $250 million and $280 million for joint development projects from September 2004 through December 2008.
  • 4AMD received expanded licensing rights from IBM for third-party foundry manufacturing of its products at 90nm and 65nm.
  • 5A separate letter agreement extends AMD's license to bump 300mm wafers in its Dresden facility and offer bumping services for third parties.
  • 6AMD paid $11 million for the extended licenses granted by IBM under the letter agreement.
  • 7AMD amended its credit facility, reducing the revolving line of credit from $125 million to $100 million and decreasing related fees and margin rates.

Frequently Asked Questions

The primary purpose is to continue and extend the joint development of advanced logic process technologies, specifically targeting 65-nanometer and 45-nanometer nodes, through December 31, 2008. It also includes provisions for potential development and licensing of 32-nanometer technology.

Under the extended "S" Process Development Agreement, AMD will pay IBM between $250 million and $280 million for joint development projects from September 2004 through December 2008. Additionally, AMD paid $11 million for the extended licenses granted under the separate letter agreement.

The agreements grant AMD enhanced flexibility in manufacturing. It secures rights to have its products manufactured at 90nm and 65nm at third-party foundries. Furthermore, AMD gains the ability to bump 300mm wafers in its own Dresden facility and to perform bumping services for third parties, which could generate revenue.

Yes, AMD entered into a Third Amendment to its Loan and Security Agreement. This amendment reduced the available revolving line of credit from $125 million to $100 million and decreased associated fees and margin rates. As of the filing date, no amounts were outstanding under this facility.