Dresden Fab 30.  AMD Saxony Manufacturing GmbH (AMD Saxony), an indirect
wholly owned German subsidiary of AMD, continues to facilitize Dresden Fab 30,
which began production in the second quarter of 2000. AMD, the Federal Republic
of Germany, the State of Saxony and a consortium of banks are providing credit
support for the project. We currently estimate construction and facilitization
costs of Dresden Fab 30 will be $2.5 billion when fully equipped by the end of
2003. As of December 30, 2001, we had invested $1.8 billion.

   In March 1997, AMD Saxony entered into a loan agreement and other related
agreements (the Dresden Loan Agreements) with a consortium of banks led by
Dresdner Bank AG in order to finance the project. Because most of the amounts
under the Dresden Loan Agreements are denominated in deutsche marks, the dollar
amounts set forth below are subject to change based on applicable conversion
rates. We used the exchange rate as of December 30, 2001, which was
approximately 2.17 deutsche marks to one U.S. dollar, to value the amounts
denominated in deutsche marks. The Dresden Loan Agreements provide for the
funding of the construction and facilitization of Dresden Fab 30. The funding
consists of:

  .  equity, subordinated loans and loan guarantees from AMD;

  .  loans from a consortium of banks; and

  .  grants, subsidies and loan guarantees from the Federal Republic of Germany
     and the State of Saxony.

   The Dresden Loan Agreements require that we partially fund Dresden Fab 30
project costs in the form of subordinated loans to, or equity investments in,
AMD Saxony. In accordance with the terms of the Dresden Loan Agreements, as of
December 30, 2001, we have invested $334 million in the form of subordinated
loans to and equity investments in AMD Saxony. In addition to support from us,
the consortium of banks referred to above has made available up to $692 million
in loans to AMD Saxony to help fund Dresden Fab 30 project costs. AMD Saxony
had $602 million of such loans outstanding through December 30, 2001.

   Finally, the Federal Republic of Germany and the State of Saxony are
supporting the Dresden Fab 30 project, in accordance with the Dresden Loan
Agreements, in the form of:

  .  guarantees equal to the lesser of 65 percent of AMD Saxony bank debt or
     $692 million;

  .  capital investment grants and allowances totaling $286 million; and

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  .  interest subsidies totaling $142 million.

   Of these amounts, AMD Saxony had received approximately $284 million in
capital investment grants and allowances and $64 million in interest subsidies
through December 30, 2001. The grants and subsidies are subject to conditions,
including meeting specified levels of employment by December 2001 and
maintaining those levels until June 2007. Noncompliance with the conditions of
the grants and subsidies could result in the forfeiture of all or a portion of
the future amounts to be received, as well as the repayment of all or a portion
of amounts received to date. As of December 30, 2001, we were in compliance
with all of the conditions of the grants and subsidies.

   In February 2001, we amended the Dresden Loan Agreements to reflect new
capacity and increased capital expenditure plans for Dresden Fab 30. Under the
February 2001 amendments, we agreed to increase and extend our guaranty of AMD
Saxony's obligations and to make available to AMD Saxony revolving loans of up
to $500 million. We expanded our obligation to reimburse AMD Saxony for the
cost of producing wafers for us, and we also agreed to cancel the cost overrun
facility made available by the banks. Under the February 2001 amendments, we
were released from financial covenants limiting capital expenditures and
requiring AMD Saxony to achieve capacity and production cost targets by the end
of 2001. As of December 30, 2001, $59 million of the revolving loans were
outstanding. The revolving loan amounts are denominated in European Union euros
and are, therefore, subject to change due to foreign exchange rate fluctuation.
We used the exchange rate on December 30, 2001, 1.11 euros to one U.S. dollar,
to translate the amount of the revolving loans.