AMD reported sales of $ 1.523 billion and net income of $ 76 million, amounting
to $ 0.18 per diluted share, for the quarter ended September 25, 2005. Third
quarter sales were up 23 percent compared to the third quarter of 2004 and
increased 21 percent from the second quarter of 2005.

“This was another record-breaking quarter for AMD’s microprocessor business,”
said Robert J. Rivet, AMD’s chief financial officer. “Exceptional customer
demand for our server, mobile and desktop processors helped drive microprocessor
sales growth of 44 percent compared to the third quarter of 2004 and 26 percent
compared to the second quarter of 2005. We established new quarterly records in
unit and dollar sales, gross margin and operating income.”

AMD (NYSE:AMD) today reported sales of $ 1.523 billion and net income of $ 76
million, amounting to $ 0.18 per diluted share, for the quarter ended September
25, 2005.

Third quarter sales were up 23 percent compared to the third quarter of 2004 and
increased 21 percent from the second quarter of 2005. In the third quarter of
2004, AMD reported sales of $ 1.239 billion and net income of $ 44 million, or
$ 0.12 per diluted share. In the second quarter of 2005, AMD reported sales of
$ 1.260 billion and net income of $ 11 million, or $ 0.03 per share. Operating
income in the third quarter of 2005 was $ 79 million as compared to operating
income of $ 68 million in the third quarter of 2004 and an operating loss of $ 7
million in the second quarter of 2005.

“This was another record-breaking quarter for AMD’s microprocessor business,”
said Robert J. Rivet, AMD’s chief financial officer. “Exceptional customer
demand for our server, mobile and desktop processors helped drive microprocessor
sales growth of 44 percent compared to the third quarter of 2004 and 26 percent
compared to the second quarter of 2005. We established new quarterly records in
unit and dollar sales, gross margin and operating income.”

“Memory Products Group sales decreased 4 percent from the third quarter of 2004
but increased by 12 percent compared to the second quarter of 2005, driven by
higher overall unit sales and record MirrorBit™ Flash sales. Increased shipments
of high-density MirrorBit Flash solutions to the largest wireless OEM customers
and a more balanced supply and demand environment helped stabilize the average
selling price during the quarter,” Rivet continued.

BUSINESS OVERVIEW

Third quarter gross margin was 41 percent compared to 40 percent in the third
quarter of 2004 and 39 percent in the second quarter of 2005. The increase was
due to improved gross margins in both our microprocessor and Flash memory
businesses.

Record Computation Product Group (CPG) sales of $ 969 million increased 44
percent from $ 673 million in the third quarter of 2004 and increased 26 percent
from $ 767 million in the second quarter of 2005. CPG generated record operating
income of $ 209 million in the third quarter, up from $ 89 million in the third
quarter of 2004 and $ 110 million in the second quarter of 2005. CPG’s third
quarter sales growth was driven by record server, mobile and desktop processor
sales and a more than doubling of sales to large global OEM accounts compared to
the third quarter of 2004. Record mobile processor sales were largely the result
of a 72 percent increase quarter-on-quarter in AMD Turion 64™ mobile processor
sales. Geographically, sales were especially strong in high-growth markets
including Russia, India and Greater China.

Memory Products Group (MPG) sales of $ 516 million decreased 4 percent from $ 538
million in the third quarter of 2004 and increased 12 percent from $ 462 million
in the second quarter of 2005. MPG reduced its operating loss to $ 50 million,
from an operating loss of $ 90 million in the second quarter of 2005. The revenue
increase over the second quarter of 2005 was driven by record unit sales,
increased purchases by the largest global wireless OEMs, and a richer product
mix. MirrorBit Flash sales increased 35 percent from the second quarter of 2005
on improved unit volumes and ASPs.

ADDITIONAL HIGHLIGHTS OF THE QUARTER

  • AMD continued to expand the breadth of its industry-leading AMD64 product
    portfolio, introducing in the quarter more than 20 new AMD Opteron™, AMD
    Turion 64, and AMD Athlon™ 64 processors.
  • Based on overall performance and performance-per-watt leadership in the
    x86 server market, commercial adoption of AMD64 technology continues at a
    rapid pace. Today, more than 85 of the top 100 companies on the Forbes Global
    2000 or their subsidiaries use AMD products. Companies that have recently
    joined these growing ranks include Saudi Aramco, Fidelity National Financial,
    Liberty Media, Manulife Financial of Japan, SKF Group and United Parcel
    Service.
  • Key global OEMs continued to expand their portfolios of AMD Opteron
    processor-based systems. Sun Microsystems introduced its new “Galaxy” family
    of servers and workstations powered by AMD Opteron multi-core processors.
    Fujitsu Siemens Computers also launched a new series of workstations based on
    the AMD Opteron processor.
  • Sun named AMD “Supplier of the Year” for extraordinary contributions to
    Sun’s stellar record of delivering top-quality technology and service to its
    customers.
  • AMD introduced the AMD Commercial Stable Image Platform (AMD CSIP)
    program. The AMD CSIP program offers a 15-month disk image stability period
    that reduces the number of platform configurations an IT organization must
    support while improving system manageability, lowering IT costs and increasing
    end-user productivity.
  • The AMD64 platform added to its long roster of awards. AMD’s
    industry-leading dual-core processors received a 2005 Popular Mechanics
    Breakthrough Award and were chosen to power the 10th annual Maximum PC Dream
    Machine. AMD also received “Best of Show” honors for best overall presence and
    products at Gartner Group’s Mid-Size Enterprise Summit.
  • Spansion demonstrated 1Gb ORNAND™ Flash memory based on 90 nanometer (nm)
    MirrorBit technology.
  • Casio Hitachi Mobile Communications began selling cellular handsets
    incorporating 512 Mb of Spansion MirrorBit NOR Flash memory, the
    highest-performance two-bit-per-cell technology currently in production.
  • Spansion and Taiwan Semiconductor Manufacturing Company (TSMC) announced a
    manufacturing agreement that will augment Spansion’s internal production of
    its 110 nm MirrorBit technology.

CURRENT OUTLOOK

AMD’s outlook statements for the fourth quarter of 2005 are based on current
expectations. The following statements are forward looking, and actual results
could differ materially depending on market conditions.

  • AMD expects fourth quarter microprocessor sales to grow between seven and
    13 percent compared to the third quarter of 2005, which is a 42 to 50 percent
    increase from the fourth quarter of 2004.
  • Because of Spansion’s SEC Form S-1 filing, AMD is not providing guidance
    for the Flash memory business.