Form 10-Q ADVANCED MICRO DEVICES For: Sep 27

Article Stock Quotes (1)

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 4/26/2024

1. META
2. CMG
3. LRCX
4. IBM
5. SPY

6. BA
7. HCP
8. SNAP
9. TMUS
10. MSFT

Top News Most Read Special Reports

October 30, 2014 4:24 PM EDT

E-mail

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549�

�

Form 10-Q

�

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)�OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September�27, 2014

�

�	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)�OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from�� to ��

Commission File Number 001-07882

�

ADVANCED MICRO DEVICES, INC.

(Exact name of registrant as specified in its charter)

�


Delaware	�	94-1692300
(State or other jurisdiction of incorporation or organization)	�	(I.R.S. Employer Identification No.)

One AMD Place Sunnyvale, California	�	94088
(Address of principal executive offices)	�	(Zip Code)

Registrant�s telephone number, including area code: (408)�749-4000

�

Indicate by check mark whether the registrant: (1)�has filed all reports required to be filed by Section�13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)�has been subject to such filing requirements for the past 90 days.��Yes��x��No��

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (�232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).��Yes��x��No��

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of �large accelerated filer,� �accelerated filer� and �smaller reporting company� in Rule 12b-2 of the Exchange Act.

�


Large�accelerated�filer	�	x	��	Accelerated�filer	�	�

Non-accelerated filer	�	��(Do not check if a smaller reporting company)	��	Smaller�reporting�company	�	�

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).��Yes��No��x

Indicate�the�number�of�shares�outstanding�of�the�registrant�s�common�stock,� $0.01�par�value,�as�of�October�27, 2014: 775,340,409

INDEX

�


�	��	�	��	Page�No.		�
Part�I Financial Information			��

Item�1	��	Financial Statements (Unaudited)	��	�	3	��

	��	Condensed Consolidated Statements of Operations � Three Months and Nine Months Ended September 27, 2014 and September 28, 2013	��	�	3	��

	��	Condensed Consolidated Statements of Comprehensive Income (Loss) � Three Months and Nine Months Ended September 27, 2014 and September 28, 2013	��	�	4	��

	��	Condensed Consolidated Balance Sheets � September 27, 2014 and December 28, 2013	��	�	5	��

	��	Condensed Consolidated Statements of Cash Flows � Nine Months Ended September 27, 2014 and September 28, 2013	��	�	6	��

	��	Notes to Condensed Consolidated Financial Statements	��	�	7	��

Item�2	��	Management�s Discussion and Analysis of Financial Condition and Results of Operations	��	�	23	��

Item�3	��	Quantitative and Qualitative Disclosures about Market Risk	��	�	41	��

Item�4	��	Controls and Procedures	��	�	42	��

Part�II Other Information			��

Item�1A	��	Risk Factors	��	�	43	��

Item�6	��	Exhibits	��	�	60	��

Signature			��	�	61	��

�

PART I. FINANCIAL INFORMATION

�

ITEM�1.

FINANCIAL STATEMENTS

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In�millions,�except�per�share�amounts)

�

Net revenue

��

1,429

��

�

1,461

��

�

4,267

��

�

3,710

��

Cost of sales

��

�

935

��

�

940

��

�

2,788

��

�

2,285

��

�

Gross margin

��

�

494

��

�

521

��

�

1,479

��

�

1,425

��

Research and development

��

�

278

��

�

288

��

�

834

��

�

908

��

Marketing, general and administrative

��

�

150

��

�

155

��

�

460

��

�

505

��

Amortization of acquired intangible assets

��

�

��

�

��

�

��

�

��

Restructuring and other special charges (gains), net

��

�

��

�

(22

)�

�

��

�

��

�

Operating income (loss)

��

�

��

�

��

�

175

��

�

(32

)�

Interest income

��

�

��

�

��

�

��

�

��

Interest expense

��

�

(43

)�

�

(47

)�

�

(136

)�

�

(133

)�

Other income (expense), net

��

�

)�

�

��

�

(72

)�

�

)�

��

�

Income (loss) before income taxes

��

�

��

�

��

�

(31

)�

�

(164

)�

Provision for income taxes

��

�

��

�

��

�

��

�

��

�

Net Income (loss)

��

�

��

�

(39

)�

�

(172

)�

��

�

Net income (loss) per share

��

�

Basic

��

0.02

��

�

0.06

��

�

(0.05

)�

�

(0.23

)�

Diluted

��

0.02

��

�

0.06

��

�

(0.05

)�

�

(0.23

)�

Shares used in per share calculation:

��

�

Basic

��

�

770

��

�

757

��

�

765

��

�

753

��

Diluted

��

�

785

��

�

764

��

�

765

��

�

753

��

See accompanying notes to condensed consolidated financial statements.

�

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

�

��

Three Months Ended

�

��

Nine�Months�Ended

�

��

September�27,
2014

�

September�28,
2013

�

��

September�27,
2014

�

September�28,
2013

�

��

(In�millions)

�

Net income (loss)

��

�

��

(39

)�

�

(172

)�

��

�

��

�

Other comprehensive income (loss):

��

�

��

�

Unrealized gains (losses) on cash flow hedges:

��

�

��

�

Unrealized gains (losses) arising during the period, net of tax effects of $(1), $0, $0 and $(2)

��

�

)�

�

��

�

)�

�

��

Reclassification adjustment for (gains) losses realized and included in net income (loss), net of tax effects of zero

��

�

��

�

��

�

��

�

��

�

��

�

Total other comprehensive income (loss)

��

�

)�

�

��

�

��

�

��

�

��

�

Total comprehensive income (loss)

��

�

��

(38

)�

�

(171

)�

��

�

��

�

See accompanying notes to condensed consolidated financial statements.

�

Advanced Micro Devices, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

�


�	��	September�27, 2014		�	�	December�28, 2013*		�
�	��	(In�millions,�except�par�value�amounts)						�
ASSETS	��				�
Current assets:	��				�
Cash and cash equivalents	��	$	640	��	�	$	869	��
Marketable securities	��	�	298	��	�	�	228	��
Accounts receivable, net of allowances of $0 and $0	��	�	973	��	�	�	832	��
Inventories, net	��	�	897	��	�	�	884	��
Prepaid expenses and other current assets	��	�	212	��	�	�	71	��
	��	�	�	�	�	�	�	�
Total current assets	��	�	3,020	��	�	�	2,884	��
Long-term marketable securities	��	�	��	��	�	�	90	��
Property, plant and equipment, net	��	�	328	��	�	�	346	��
Acquisition related intangible assets, net	��	�	69	��	�	�	78	��
Goodwill	��	�	553	��	�	�	553	��
Other assets	��	�	355	��	�	�	386	��
	��	�	�	�	�	�	�	�
Total assets	��	$	4,325	��	�	$	4,337	��
	��	�	�	�	�	�	�	�

LIABILITIES AND STOCKHOLDERS� EQUITY	��				�
Current liabilities:	��				�
Short-term debt	��	$	102	��	�	$	60	��
Accounts payable	��	�	498	��	�	�	519	��
Payable to GLOBALFOUNDRIES	��	�	317	��	�	�	364	��
Accrued and other current liabilities	��	�	555	��	�	�	530	��
Deferred income on shipments to distributors	��	�	94	��	�	�	145	��
	��	�	�	�	�	�	�	�
Total current liabilities	��	�	1,566	��	�	�	1,618	��
Long-term debt	��	�	2,106	��	�	�	1,998	��
Other long-term liabilities	��	�	118	��	�	�	177	��
Commitments and contingencies (See Note 10)	��				�
Stockholders� equity:	��				�
Capital stock:	��				�
Common stock, par value $0.01; 1,500 shares authorized on September�27, 2014 and December�28, 2013; shares issued: 787 shares on September�27, 2014 and 735 shares on December�28, 2013; shares outstanding: 775 shares on September�27, 2014 and 725 shares on December�28, 2013	��	�	8	��	�	�	7	��
Additional paid-in capital	��	�	6,928	��	�	�	6,894	��
Treasury stock, at cost (12 shares on September�27, 2014 and 10 shares on December�28, 2013)	��	�	(118	)�	�	�	(112	)�
Accumulated deficit	��	�	(6,282	)�	�	�	(6,243	)�
Accumulated other comprehensive loss	��	�	(1	)�	�	�	(2	)�
	��	�	�	�	�	�	�	�
Total stockholders� equity	��	�	535	��	�	�	544	��
	��	�	�	�	�	�	�	�
Total liabilities and stockholders� equity	��	$	4,325	��	�	$	4,337	��
	��	�	�	�	�	�	�	�

�

*	Amounts were derived from the December�28, 2013 audited consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

�

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

�


�	��	Nine Months Ended						�
�	��	September�27, 2014		�	�	September�28, 2013		�
�	��	(In millions)						�
Cash flows from operating activities:	��				�
Net loss	��	$	(39	)�	�	$	(172	)�
Adjustments to reconcile net loss to net cash used in operating activities:	��				�
Depreciation and amortization	��	�	155	��	�	�	182	��
Net loss on disposals of property, plant and equipment	��	�	��	��	�	�	30	��
Stock-based compensation expense	��	�	65	��	�	�	67	��
Non-cash interest expense	��	�	11	��	�	�	18	��
Loss on debt redemptions	��	�	64	��	�	�	��	��
Other	��	�	(9	)�	�	�	1	��
Changes in operating assets and liabilities:	��				�
Accounts receivable	��	�	(144	)�	�	�	(242	)�
Inventories	��	�	(14	)�	�	�	(360	)�
Prepaid expenses and other assets	��	�	(156	)�	�	�	(85	)�
Payable to GLOBALFOUNDRIES	��	�	(47	)�	�	�	41	��
Accounts payable, accrued liabilities and other	��	�	(100	)�	�	�	351	��
	��	�	�	�	�	�	�	�
Net cash used in operating activities	��	�	(214	)�	�	�	(169	)�
	��	�	�	�	�	�	�	�
Cash flows from investing activities:	��				�
Purchases of available-for-sale securities	��	�	(646	)�	�	�	(985	)�
Purchases of property, plant and equipment	��	�	(73	)�	�	�	(63	)�
Proceeds from sales and maturities of available-for-sale securities	��	�	664	��	�	�	969	��
Proceeds from sale of property, plant and equipment	��	�	��	��	�	�	238	��
	��	�	�	�	�	�	�	�
Net cash provided by (used in) investing activities	��	�	(55	)�	�	�	159	��
	��	�	�	�	�	�	�	�
Cash flows from financing activities:	��				�
Proceeds from issuance of common stock	��	�	4	��	�	�	3	��
Proceeds from borrowings, net	��	�	1,080	��	�	�	��	��
Net proceeds from grants	��	�	5	��	�	�	6	��
Repayments of long-term debt and capital lease obligations	��	�	(1,043	)�	�	�	(4	)�
Other	��	�	(6	)�	�	�	(1	)�
	��	�	�	�	�	�	�	�
Net cash provided by financing activities	��	�	40	��	�	�	4	��
	��	�	�	�	�	�	�	�
Net decrease in cash and cash equivalents	��	�	(229	)�	�	�	(6	)�
	��	�	�	�	�	�	�	�
Cash and cash equivalents at beginning of period	��	�	869	��	�	�	549	��
	��	�	�	�	�	�	�	�
Cash and cash equivalents at end of period	��	$	640	��	�	$	543	��
	��	�	�	�	�	�	�	�

See accompanying notes to condensed consolidated financial statements.

�

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. and its subsidiaries (the Company or AMD) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the quarter and nine months ended September�27, 2014 shown in this report are not necessarily indicative of results to be expected for the full year ending December�27, 2014. In the opinion of the Company�s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company�s results of operations, financial position and cash flows. All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company�s Annual Report on Form 10-K for the year ended December�28, 2013.

The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. The quarters and nine months ended September�27, 2014 and September�28, 2013 each consisted of 13 and 39 weeks, respectively.

Principles of Consolidation.�The condensed consolidated financial statements include the Company�s accounts and those of its wholly-owned subsidiaries. Upon consolidation, all significant intercompany accounts and transactions are eliminated.

Change to Prior Period Information. During the third quarter of 2014, the Company realigned its organizational structure. As a result of this organizational change, beginning in third quarter of 2014, the Company is reporting its financial statements based on the new segments described in Note 8 - Segment Reporting with no other impact on the Company�s condensed consolidated financial statements. All prior-period amounts have been adjusted retrospectively to reflect the Company�s reportable segment changes.

Impairment of Goodwill. In accordance with Accounting Standards Codification (ASC) 350, �Goodwill and Other Intangible Assets,� the Company applies a fair value based impairment test to the net book value of goodwill as of the first day of the fourth quarter of each year and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The analysis of potential impairment of goodwill requires a two-step process. The first step of the impairment test is to compare the fair value of each reporting unit to its carrying value. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value.

The Company�s realignment of its organizational structure, effective July�1, 2014, caused a change in the composition of its reportable segments and reporting units. This represented a change in circumstance requiring an interim goodwill impairment analysis and the reassignment of the goodwill to the new reporting units using a relative fair value approach. The Company completed this goodwill impairment analysis during the third quarter of 2014. For purposes of this analysis, the Company�s estimates of fair value were based on the income approach, which estimates the fair value of the Company�s reporting units based on future discounted cash flows. The Company determined that each reporting unit�s estimated fair value exceeded its carrying value, indicating that there was no goodwill impairment. The Company will perform its annual goodwill impairment as of the first day of the fourth quarter of 2014.

Recently Issued Accounting Standards

Disclosure of Going Concern Uncertainties. In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.�2014-15, Disclosure of Uncertainties about an Entity�s Ability to Continue as a Going Concern (ASU 2014-15), which provides guidance on management�s responsibility in evaluating whether there is substantial doubt about a company�s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 will be effective in the fourth quarter of 2016, with early adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2014-15 on its condensed consolidated financial statements.

Share-Based Payments with Performance Targets. In June 2014, the FASB issued Accounting Standards Update No.�2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be

�

Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target be treated as a performance condition if it affects vesting and could be achieved after the requisite service period is rendered. ASU�2014-12 will be effective in the first quarter of 2016, with early adoption permitted. The Company may use either of two methods: (i)�prospective application to all awards granted or modified after the effective date or (ii)�retrospective application to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently evaluating the impact of its pending adoption of ASU 2014-12 on its condensed consolidated financial statements and has not yet determined which method it will apply.

Revenue Recognition.�In May 2014, the FASB issued Accounting Standards Update No.�2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), which creates a single source of revenue guidance under U.S. GAAP for all companies in all industries. The core principle of ASU 2014-09 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates. ASU 2014-09 also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. ASU 2014-09 will be effective for the Company in the first quarter of 2017 and early adoption is not permitted. The Company may adopt ASU 2014-09 either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company is currently evaluating the impact of its pending adoption of ASU�2014-09 on its condensed consolidated financial statements and has not yet determined which approach it will apply.

NOTE 2. GLOBALFOUNDRIES

Wafer Supply Agreement. The Wafer Supply Agreement (WSA) governs the terms by which the Company purchases products manufactured by GLOBALFOUNDRIES Inc. (GF).

Third Amendment to Wafer Supply Agreement. On December�6, 2012, the Company entered into a third amendment to the WSA. Pursuant to the third amendment, the Company modified its wafer purchase commitments for the fourth quarter of 2012 made pursuant to the second amendment to the WSA. In addition, the Company agreed to certain pricing and other terms of the WSA applicable to wafers for its microprocessor and accelerated processing unit (APU) products to be delivered by GF to the Company from the fourth quarter of 2012 through December�31, 2013. Pursuant to the third amendment, GF agreed to waive a portion of the Company�s wafer purchase commitments for the fourth quarter of 2012. In consideration of this waiver, the Company agreed to pay GF a fee of $320 million. As a result, the Company recorded a lower of cost or market charge of $273 million for the write-down of inventory to its market value in the fourth quarter of 2012. The cash impact of this $320 million fee was paid over several quarters, with $80 million paid on December�28, 2012, $40 million paid on April�1, 2013 and $200 million paid on December�31, 2013.

Fourth Amendment to Wafer Supply Agreement. On March�30, 2014, the Company entered into a fourth amendment to the WSA. The primary effect of the fourth amendment was to establish volume purchase commitments and fixed pricing for the 2014 calendar year as well as to modify certain other terms of the WSA applicable to wafers for some of the Company�s microprocessor, graphics processor and semi-custom game console products to be delivered by GF to the Company during the 2014 calendar year.

The Company�s total purchases from GF related to wafer manufacturing and research and development activities for the quarters ended September�27, 2014 and September�28, 2013 were $290 million and $221 million, respectively. The Company�s total purchases from GF related to wafer manufacturing and research and development activities for the nine months ended September�27, 2014 and September�28, 2013 were $843 million and $746 million, respectively.

�

At September�27, 2014, the Company had prepayments to GF of $128 million related to wafer purchases, which were included in prepaid expenses and other current assets on the Company�s condensed consolidated balance sheets.

The Company currently estimates that its wafer purchase obligation from GF will be approximately $1.2 billion for the 2014 calendar year. The Company is not able to meaningfully quantify or estimate its purchase obligations to GF beyond December�31, 2014, but it expects that its future purchases from GF will continue to be material.

GF is a related party of the Company because GF is affiliated with West Coast Hitech L.P. (WCH), the Company�s largest stockholder.

NOTE 3. Debt

7.00% Senior Notes Due 2024

On June�16, 2014, the Company issued $500 million of 7.00% Senior Notes due 2024 (7.00% Notes). The 7.00% Notes are general unsecured senior obligations of the Company. Interest is payable on January�1 and July�1 of each year beginning January�1, 2015 until the maturity date of July�1, 2024. The 7.00% Notes are governed by the terms of an indenture (the 7.00% Indenture) dated June�16, 2014 between the Company and Wells Fargo Bank, National Association, as trustee.

At any time before July�1, 2017, the Company may redeem up to 35% of the aggregate principal amount of the 7.00% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price equal to 107.000% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to July�1, 2019, the Company may redeem some or all of the 7.00% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 7.00% Indenture).

Starting July�1, 2019, the Company may redeem the 7.00% Notes for cash at the following specified prices plus accrued and unpaid interest:

�


Period	��	Price as Percentage�of Principal�Amount		�
Beginning on July�1, 2019 through June�30, 2020	��	�	103.500	%�
Beginning on July�1, 2020 through June�30, 2021	��	�	102.333	%�
Beginning on July�1, 2021 through June�30, 2022	��	�	101.167	%�
On July�1, 2022 and thereafter	��	�	100.000	%�

Holders have the right to require the Company to repurchase all or a portion of the 7.00% Notes in the event that the Company undergoes a change of control, as defined in the 7.00% Indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 7.00% Indenture) may result in the acceleration of the maturity of the 7.00% Notes.

The 7.00% Indenture contains certain covenants that limit, among other things, the Company�s ability and the ability of its subsidiaries, to:

�

incur additional indebtedness, except specified permitted debt;

�

pay dividends and make other restricted payments;

�

make certain investments if an event of a default exists, or if specified financial conditions are not satisfied;

�

create or permit certain liens;

�

create or permit restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;

�

use the proceeds from sales of assets;

�

enter into certain types of transactions with affiliates; and

�

consolidate, merge or sell its assets as entirety or substantially as an entirety.

The 7.00% Notes rank equally with the Company�s existing and future senior debt and are senior to all of the Company�s future subordinated debt. The 7.00% Notes rank junior to all of the Company�s future senior secured debt to the extent of the collateral securing such debt and are structurally subordinated to all existing and future debt and liabilities of the Company�s subsidiaries.

The Company may elect to purchase or otherwise retire the 7.00% Notes with cash, stock or other assets from time to time in open market or private negotiated transactions, either directly or through intermediaries, or by tender offer, when the Company believes the market conditions are favorable to do so.

6.75% Senior Notes Due 2019

On February�26, 2014, the Company issued $600 million of 6.75% Senior Notes due 2019 (6.75% Notes). The 6.75% Notes are general unsecured senior obligations of the Company. Interest is payable on March�1 and September�1 of each year beginning September�1, 2014 until the maturity date of March�1, 2019. The 6.75% Notes are governed by the terms of an indenture (the 6.75% Indenture) dated February�26, 2014 between the Company and Wells Fargo Bank, National Association, as trustee.

At any time before March�1, 2019, the Company may redeem some or all of the 6.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 6.75% Indenture).

Holders have the right to require the Company to repurchase all or a portion of the 6.75% Notes in the event that the Company undergoes a change of control, as defined in the 6.75% Indenture, at a price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 6.75% Indenture) may result in the acceleration of the maturity of the 6.75% Notes.

The 6.75% Indenture contains certain covenants that limit, among other things, the Company�s ability and the ability of its subsidiaries, to:

�

incur additional indebtedness, except specified permitted debt;

�

pay dividends and make other restricted payments;

�

make certain investments if an event of a default exists, or if specified financial conditions are not satisfied;

�

create or permit certain liens;

�

create or permit restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;

�

use the proceeds from sales of assets;

�

enter into certain types of transactions with affiliates; and

�

consolidate, merge or sell its assets as entirety or substantially as an entirety.

The 6.75% Notes rank equally with the Company�s existing and future senior debt and are senior to all of the Company�s future subordinated debt. The 6.75% Notes rank junior to all of the Company�s future senior secured debt to the extent of the collateral securing such debt and are structurally subordinated to all existing and future debt and liabilities of the Company�s subsidiaries.

The Company may elect to purchase or otherwise retire the 6.75% Notes with cash, stock or other assets from time to time in open market or private negotiated transactions, either directly or through intermediaries, or by tender offer, when the Company believes the market conditions are favorable to do so.

�

8.125% Senior Notes Due 2017

During the first quarter of 2014, the Company repurchased $48 million in aggregate principal amount of its 8.125% Senior Notes Due 2017 (8.125% Notes) pursuant to a partial tender offer for $51 million, which included payment of accrued and unpaid interest of $1 million. The Company incurred a total loss of $5 million in connection with the foregoing repurchase of the 8.125% Notes.

During the second quarter of 2014, the Company repurchased and redeemed the remaining $452 million in aggregate principal amount of the 8.125% Notes for $480 million, which included payment of accrued and unpaid interest of $7 million. The Company incurred a total loss of $49 million in connection with the foregoing repurchase and redemption of the 8.125% Notes. As of the end of the second quarter of 2014, the Company did not have any 8.125% Notes outstanding.

�

6.00% Convertible Senior Notes Due 2015

During the first quarter of 2014, the Company repurchased $64 million in aggregate principal amount of its 6.00% Convertible Senior Notes due 2015 (6.00% Notes) in open market transactions for $69 million, which included payment of accrued and unpaid interest of $1 million. Also, during the first quarter of 2014, the Company repurchased a portion of the 6.00% Notes through a partial tender offer. The Company repurchased $423 million aggregate principal amount of the 6.00% Notes for $460 million in cash, which included payment of accrued and unpaid interest of $10 million. The Company incurred a total loss of $10 million in connection with the foregoing repurchases of the 6.00% Notes. As of September�27, 2014, the outstanding aggregate principal amount and remaining carrying value of the 6.00% Notes were $42 million. The remaining $42 million of aggregate principal amount of 6.00% Notes has been reclassified as short-term debt on the condensed consolidated balance sheet as of September�27, 2014.

The agreements governing the Company�s 6.00% Notes, 6.75% Notes, 7.00% Notes, 7.50% Senior Notes due 2022 (7.50%�Notes), 7.75% Senior Notes due 2020 (7.75% Notes) and the Company�s senior secured asset based line of credit for a principal amount of up to $500 million (Secured Revolving Line of Credit) contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the Secured Revolving Line of Credit to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable, which would have a material adverse effect on us.

Subsequent to September�27, 2014, the Company repurchased $50 million�in principal amount of its 7.75% Notes and $17 million in principal amount of the 7.50% Notes.

NOTE 4. Supplemental Balance Sheet Information

Inventories

�


�	��	September�27, �� 2014��		�	��	December�28, �� 2013��		�
�	��	(In millions)						�
Raw materials	��	$	36	��	��	$	30	��
Work in process	��	�	648	��	��	�	727	��
Finished goods	��	�	213	��	��	�	127	��
	��	�	�	�	��	�	�	�
Total inventories, net	��	$	897	��	��	$	884	��
	��	�	�	�	��	�	�	�

�

Prepaid Expenses and Other Current Assets

�


�	��	September�27, �� 2014��		�	��	December�28, �� 2013��		�
�	��	(In millions)						�
Prepayments to GF	��	$	128	��	��	$	��	��
Other prepaid expenses and other current assets	��	�	84	��	��	�	71	��
	��	�	�	�	��	�	�	�
Total prepaid expenses and other current assets	��	$	212	��	��	$	71	��
	��	�	�	�	��	�	�	�

Property, Plant and Equipment

�


�	��	September�27, �� 2014��		�	�	December�28, �� 2013��		�
�	��	(In millions)						�
Land and land improvements	��	$	4	��	�	$	3	��
Buildings and leasehold improvements	��	�	252	��	�	�	246	��
Equipment	��	�	1,450	��	�	�	1,466	��
Construction in progress	��	�	34	��	�	�	18	��
	��	�	�	�	�	�	�	�
	��	�	1,740	��	�	�	1,733	��
Accumulated depreciation and amortization	��	�	(1,412	)�	�	�	(1,387	)�
	��	�	�	�	�	�	�	�
Total property, plant and equipment, net	��	$	328	��	�	$	346	��
	��	�	�	�	�	�	�	�

Other Assets

�


�	��	September�27, �� 2014��		�	��	December�28, �� 2013��		�
�	��	(In millions)						�
Software and technology licenses	��	$	238	��	��	$	280	��
Other	��	�	117	��	��	�	106	��
	��	�	�	�	��	�	�	�
Total other assets	��	$	355	��	��	$	386	��
	��	�	�	�	��	�	�	�

Accrued and Other Current Liabilities

�


�	��	September�27, �� 2014��		�	��	December�28, �� 2013��		�
�	��	(In millions)						�
Accrued compensation and benefits	��	$	178	��	��	$	186	��
Marketing programs and advertising expenses	��	�	132	��	��	�	150	��
Software and technology licenses payable	��	�	63	��	��	�	27	��
Other accrued and current liabilities	��	�	182	��	��	�	167	��
	��	�	�	�	��	�	�	�
Total accrued and other current liabilities	��	$	555	��	��	$	530	��
	��	�	�	�	��	�	�	�

NOTE 5. Net Income (Loss) Per Share

Basic net income (loss) per share is computed based on the weighted average number of shares outstanding and shares issuable upon exercise of a warrant issued by the Company to WCH in connection with the GF transaction in 2009. On March�7, 2014, the Company issued 34,906,166 shares of common stock pursuant to the cashless exercise in full by WCH of its warrant to purchase up to 35,000,000 shares of the Company�s common stock at an exercise price of $0.01 per share. As a result, the warrant is no longer outstanding. The issuance of the common stock did not have any effect on basic and dilutive earnings per share amounts because the full 35,000,000 shares of common stock issuable to WCH had already been included in the denominator for calculating basic and dilutive earnings per share for all periods presented prior to the exercise of the warrant.

�

Diluted net income (loss) per share is computed based on the weighted average number of shares outstanding plus any potentially dilutive shares outstanding. Potentially dilutive shares include stock options, restricted stock and restricted stock units.

The following table sets forth the components of basic and diluted income (loss) per share:

�

��

Three Months Ended

�

��

Nine Months Ended

�

��

September�27,
2014

�

��

September�28,
2013

�

��

September�27,
2014

�

September�28,
2013

�

��

(In�millions,�except�per�share�amounts)

�

Numerator � Net income (loss):

��

�

Numerator for basic and diluted net income (loss) per share

��

(39

)�

�

(172

)�

Denominator � Weighted average shares

��

�

Denominator for basic net income (loss) per share

��

�

770

��

�

757

��

�

765

��

�

753

��

Effect of potentially dilutive shares:

��

�

Employee stock options, restricted stock and restricted stock units

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Denominator for diluted net income (loss) per share

��

�

785

��

�

764

��

�

765

��

�

753

��

�

��

�

��

�

Net income (loss) per share:

��

�

Basic

��

0.02

��

0.06

��

(0.05

)�

�

(0.23

)�

Diluted

��

0.02

��

0.06

��

(0.05

)�

�

(0.23

)�

Potential shares�from employee stock options, restricted stock and restricted stock units totaling 28�million and 53�million were not included in the net income per share calculations for the quarters ended September�27, 2014 and September�28, 2013, respectively, because their inclusion would have been anti-dilutive.

Potential shares from employee stock options, restricted stock and restricted stock units totaling 46�million and 61�million were not included in the net loss per share calculations for the nine months ended September�27, 2014 and September�28, 2013, respectively, because their inclusion would have been anti-dilutive.

�

NOTE 6.�Financial Instruments

Cash, Cash Equivalents and Marketable Securities

Financial instruments measured and recorded at fair value on a recurring basis as of September�27, 2014 and December�28, 2013 are summarized below:

�

��

Total�Fair
Value

�

��

Cash and
Cash
Equivalents

�

��

Short-Term
Marketable
Securities

�

��

Long-Term
Marketable
Securities

�

��

(In millions)

�

September�27, 2014

��

Cash

��

362

��

362

��

Level 1^{(1) (2)}

��

Money market funds

��

�

��

�

��

�

��

�

Total level 1

��

�

��

�

��

�

��

�

Level 2^{(2) (3)}

��

Commercial paper

��

504

��

251

��

253

��

Corporate bonds

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Total level 2

��

549

��

251

��

298

��

�

��

�

��

�

��

�

Total

��

938

��

640

��

298

��

��

��

�

��

�

��

�

��

�

��

Total�Fair
Value

�

��

Cash and
Cash
Equivalents

�

��

Short-Term
Marketable
Securities

�

��

Long-Term
Marketable
Securities

�

��

(In millions)

�

December�28, 2013

��

Cash

��

429

��

429

��

Level 1^{(1) (2)}

��

Money market funds

��

�

��

�

��

�

��

�

Total level 1

��

�

��

�

��

�

��

�

Level 2^{(2) (3)}

��

Commercial paper

��

599

��

421

��

178

��

Time deposits

��

�

��

�

��

�

��

�

��

Corporate bonds

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Total level 2

��

737

��

421

��

228

��

�

��

�

��

�

��

�

Total

��

1,187

��

869

��

228

��

�

��

�

��

�

��

�


⁽¹⁾� ��	��	The Company�s Level 1 assets are valued using quoted prices for identical instruments in active markets.
� � ⁽²⁾� �� �	��	The Company did not have any transfers between Level 1 and Level�2 of the fair value hierarchy during the quarter and nine months ended September�27, 2014 or the year ended December�28, 2013.
� ^{(3)��} �	��	The Company�s Level 2 short-term investments are valued using broker reports that utilize quoted market prices for identical or comparable instruments. Brokers gather observable inputs for all of the Company�s fixed income securities from a variety of industry data providers and other third-party sources. The Company�s Level 2 long-term investments were valued using broker reports that utilize a third-party professional pricing service that gathers information from multiple market sources and integrates relevant credit information, observed market movements and sector news into their pricing evaluation. The Company validated, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of the Level 2 long-term investments against the fair values of the portfolio balances of another third-party professional�s pricing service, other than that utilized by the brokers, that use a similar technique as the brokers to derive pricing as described above.

Available-for-sale securities held by the Company as of September�27, 2014 and December�28, 2013 consisted of money market funds, commercial paper, time deposits, corporate bonds and mutual funds. The amortized cost of available-for-sale securities approximates the fair value for all periods presented.

�

In addition to those amounts presented above, at September�27, 2014 and December�28, 2013, the Company had approximately $18 million of available-for-sale investments in money market funds, used as collateral for leased buildings and letters of credit deposits, which were included in Other Assets on the Company�s condensed consolidated balance sheets. These money market funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized costs are the same as the fair value for all periods presented. The Company is restricted from accessing these deposits.

Also in addition to those amounts presented above, at September�27, 2014 and December�28, 2013, the Company had approximately $15 million and $14 million of available-for-sale investments in mutual funds held in a Rabbi trust established for the Company�s deferred compensation plan, which were included in Other Assets on the Company�s condensed consolidated balance sheets. These mutual funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized cost approximates the fair value for all periods presented. The Company is restricted from accessing these investments.

There were no sales of available-for-sale securities during the quarter and nine months ended September�27, 2014 or during the quarter ended September�28, 2013. During the nine months ended September�28, 2013, the Company did not realize any gain or loss on sales of available-for-sale securities of $14 million. The cost of securities sold is determined based on the specific identification method.

During the nine months ended September�27, 2014, the Company reclassified $45 million of its marketable securities that were previously classified as long-term to short-term. At September�27, 2014, the Company had no investments that were classified as long-term marketable securities. At December�28, 2013, $90 million of investments were classified as long-term marketable securities.

All contractual maturities of the Company�s available-for-sale marketable debt securities as of September�27, 2014 were within one year. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis.�The Company carries its financial instruments at fair value with the exception of its debt. Financial instruments that are not recorded at fair value are measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values of financial instruments not recorded at fair value are as follows:

�

��

September�27, 2014

�

��

December�28, 2013

�

��

Carrying
Amount

�

��

Estimated
Fair� Value

�

��

Carrying
Amount

�

��

Estimated
Fair� Value

�

��

(In millions)

�

Short-term debt (excluding capital leases)

��

Long-term debt (excluding capital leases)

��

2,100

��

2,149

��

1,986

��

2,132

��

The Company�s short-term and long-term debt are classified within Level 2. The fair value of the debt was estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the Company�s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing payment terms.

Hedging Transactions and Derivative Financial Instruments

Cash Flow Hedges

The following table shows the amount of gain (loss) included in accumulated other comprehensive income (loss), the amount of gain (loss) reclassified from accumulated other comprehensive income (loss) and included in earnings related to the

�

foreign currency forward contracts designated as cash flow hedges and the amount of gain (loss) included in other income (expense), net, related to contracts not designated as hedging instruments, which was allocated in the condensed consolidated statements of operations:

�

��

Three Months�Ended

�

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In millions)

�

Foreign Currency Forward Contracts

��

�

Contracts designated as cash flow hedging instruments

��

�

Other�comprehensive�income (loss)

��

)�

�

��

�

��

�

)�

Research and development

��

�

��

�

)�

�

)�

�

)�

Marketing,�general�and administrative

��

�

)�

�

��

�

)�

�

��

Contracts not designated as hedging instruments

��

�

Other income (expense), net

��

)�

�

��

�

)�

�

)�

The Company�s foreign currency derivative contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.

The following table shows the fair value amounts included in prepaid expenses and other current assets should the foreign currency forward contracts be in a gain position or included in accrued and other current liabilities should these contracts be in a loss position. These amounts were recorded in the Company�s condensed consolidated balance sheets as follows:

�


�	��	September�27, 2014		�	�	December�28, 2013		�
�	��	(In millions)						�
Foreign Currency Forward Contracts	��				�
Contracts designated as cash flow hedging instruments	��	$	(2	)�	�	$	(3	)�
Contracts not designated as hedging instruments	��	$	(1	)�	�	$	(1	)�

For the foreign currency contracts designated as cash flow hedges, the ineffective portions of the hedging relationship and the amounts excluded from the assessment of hedge effectiveness were immaterial.

As of September�27, 2014 and December�28, 2013, the notional values of the Company�s outstanding foreign currency forward contracts were $211 million and $124 million, respectively. All the contracts mature within 12 months, and, upon maturity, the amounts recorded in accumulated other comprehensive income (loss) are expected to be reclassified into earnings. The Company hedges its exposure to the variability in future cash flows for forecasted transactions over a maximum of 12 months. As of September�27, 2014, the Company�s outstanding contracts were in a net loss position of $3 million.

Fair Value Hedges

In the third quarter of 2014, the Company entered into fixed-to-floating interest rate swaps on a notional amount of $250 million to hedge a portion of the Company�s 6.75% Notes. The purpose of these swaps is to manage a portion of the Company�s exposure to interest rate risk by converting fixed rate interest payments to floating rate interest payments. The swaps effectively converted a portion of the fixed interest payments payable on the 6.75% Notes into variable interest payments based on LIBOR. The interest rate swaps are designated as a fair value hedge. Because the specific terms and notional amount of the swaps are intended to match the portion of the 6.75% Notes being hedged, it is assumed to be a highly effective hedge. Accordingly, changes in the fair value of the interest rate swaps are exactly offset by changes in the fair value of the 6.75% Notes. All changes in fair value of the swaps are recorded on the Company�s condensed consolidated balance sheets with no net impact to the Company�s condensed consolidated statements of operations.

�

The Company�s fair value hedge derivative contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets.

The following table shows the fair value amounts included in long-term other assets should the fair value hedge derivative contracts be in a gain position or included in other long-term liabilities should these contracts be in a loss position. These amounts were recorded in the Company�s condensed consolidated balance sheets as follows:

�


�	��	September�27, 2014		�	�	December�28, 2013		�
�	��	(In millions)						�
Interest Rate Swap Contracts	��				�
Contracts designated as fair value hedging instruments	��	$	(1	)�	�	$	��	��

NOTE 7. Income Taxes

In the third quarter of 2014, the Company recorded an income tax provision of $2 million, consisting of $2 million of foreign taxes in profitable locations. For the nine months ended September�27, 2014, the Company recorded an income tax provision of $8 million, arising from $9 million of foreign taxes in profitable locations, partially offset by $1 million of tax benefits arising from other comprehensive income and Canadian tax credits.

In the third quarter of 2013, the Company recorded an income tax provision of $3 million, consisting of $2 million of foreign taxes in profitable locations and $1 million related to the reversal of previously recognized tax benefits associated with other comprehensive income. For the nine months ended September�28, 2013, the Company recorded an income tax provision of $8 million, arising from $7 million of foreign taxes in profitable locations and $3 million related to the reversal of previously recognized tax benefits associated with other comprehensive income, partially offset by $2 million of tax benefits for Canadian tax credits and monetization of U.S. tax credits.

As of September�27, 2014, substantially all of the Company�s U.S. and Canadian deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, at September�27, 2014, in management�s estimate, is not more likely than not to be achieved.

The Company�s total gross unrecognized tax benefits as of September�27, 2014 were $61 million. The Company currently expects to reduce its unrecognized tax benefits by approximately $31 million, primarily as a result of the potential settlement of tax audits with certain foreign tax authorities over the next 12 months. The Company does not believe it is reasonably possible that other unrecognized tax benefits will materially change in the next 12 months. However, the settlement, resolution or closure of tax audits are highly uncertain.

NOTE 8. Segment Reporting

Management, including the Chief Operating Decision Maker, who is the Company�s Chief Executive Officer, reviews and assesses operating performance using segment net revenue and operating income (loss) before interest, other income (expense), net, and income taxes. These performance measures include the allocation of expenses to the operating segments based on management�s judgment. In connection with the Company�s continued strategic transformation, effective July�1, 2014, the Company realigned its organizational structure. As a result of this organizational change, the Company has the following two reportable segments:

�

the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete graphics processing units (GPUs) and professional graphics; and

�

the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, dense servers, semi-custom System-on-Chip (SoC) products, engineering services and royalties.

�

Effective October�8, 2014, Dr.�Lisa�T. Su became the Company�s Chief Executive Officer, succeeding Rory P. Read. This management change did not result in a change in the Company�s reportable segments or to the fact that the Chief Operating Decision Maker is the Chief Executive Officer.

In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. Also included in this category are amortization of acquired intangible assets, employee stock-based compensation expense, net, restructuring and other special charges (gains) and workforce rebalancing severance charges. The Company also reported the results of former businesses in the All Other category because the operating results were not material.

The following table provides a summary of net revenue and operating income (loss) by segment, the prior period results have been restated to reflect the Company�s new reportable segments:

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In millions)

�

Net revenue:

��

�

Computing and Graphics

��

781

��

�

925

��

�

2,470

��

�

2,832

��

Enterprise, Embedded and Semi-Custom

��

�

648

��

�

536

��

�

1,797

��

�

878

��

�

Total net revenue

��

1,429

��

�

1,461

��

�

4,267

��

�

3,710

��

�

Operating income (loss):

��

�

Computing and Graphics

��

(17

)�

�

��

�

(20

)�

�

(86

)�

Enterprise, Embedded and Semi-Custom

��

�

108

��

�

��

�

290

��

�

166

��

All Other

��

�

(28

)�

�

)�

�

(95

)�

�

(112

)�

��

�

Total operating income (loss)

��

�

��

�

175

��

�

(32

)�

��

�

NOTE 9. Stock-Based Incentive Compensation Plans

The following table summarizes stock-based compensation expense related to employee stock options, restricted stock and restricted stock units, which is allocated within the Company�s condensed consolidated statements of operations as follows:

�

��

Three Months Ended

�

��

Nine Months Ended

�

��

September�27,
�� 2014��

�

��

September�28,
�� 2013��

�

��

September�27,
�� 2014��

�

��

September�28,
�� 2013��

�

��

(In millions)

�

Cost of sales

��

Research and development

��

�

��

�

��

�

��

�

��

Marketing, general and administrative

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Stock-based compensation expense, net of tax of $0

��

�

��

�

��

�

��

�

For all periods presented, the Company did not realize any excess tax benefit related to stock-based compensation and therefore did not record any related financing cash flows.

�

Stock Options

The weighted average assumptions applied in the lattice-binomial model that the Company uses to estimate the fair value employee stock options are as follows:

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

Expected volatility

��

�

51.94

%�

�

57.98

%�

�

52.88

%�

�

58.71

%�

Risk-free interest rate

��

�

1.16

%�

�

1.05

%�

�

1.11

%�

�

0.75

%�

Expected dividends

��

�

0.00

%�

�

0.00

%�

�

0.00

%�

�

0.00

%�

Expected life

��

�

3.86�years

��

�

3.83�years

��

�

3.86�years

��

�

3.83�years

��

For the quarters ended September�27, 2014 and September�28, 2013, the Company granted 5,562,000 and 4,647,000 employee stock options, respectively, with weighted average grant date fair value per share of $1.59 and $1.62, respectively. For the nine months ended September�27, 2014 and September�28, 2013, the Company granted 5,716,000 and 5,974,000 employee stock options, respectively, with weighted average grant date fair values per share of $1.59 and $1.52, respectively.

Restricted Stock and Restricted Stock Units

For the quarters ended September�27, 2014 and September�28, 2013, the Company granted 17,736,000 and 8,702,000 restricted stock units, respectively, with weighted average grant date fair values per share of $4.12 and $3.89, respectively. For the nine months ended September�27, 2014 and September�28, 2013, the Company granted 19,905,000 and 25,299,000 restricted stock units, respectively, with weighted average grant date fair values per share of $4.11 and $3.78, respectively.

Performance-based Restricted Stock Units

For the quarters ended September�27, 2014 and September�28, 2013, the Company granted 2,890,000 and 2,450,000 performance-based restricted stock units (the pRSUs), respectively, to senior executives of the Company. Each pRSU award reflects a target number of shares that may be issued to the award recipient, which may be adjusted based on the Company�s financial performance. The actual number of shares the recipient receives is determined at the end of the specified performance period based on the actual financial results achieved by the Company versus certain pre-established Company financial performance goals and total shareholder return (TSR) relative to the S&P 500 IT Sector over the same performance period. The Company estimates the fair value of the pRSUs using a Monte Carlo simulation model, as the TSR modifier contains a market condition. The weighted-average grant date fair value per share of these pRSUs granted for the quarters ended September�27, 2014 and September�28, 2013 was $4.36 and $4.07, respectively. The following weighted-average assumptions, in addition to projections of market conditions, were used to measure the weighted-average fair value:

�


�	��	Three Months Ended						�
�	��	September�27, 2014		�	�	September�28, 2013		�
Expected volatility	��	�	46.68	%�	�	�	57.46	%�
Risk-free interest rate	��	�	0.24	%�	�	�	0.20	%�
Expected dividends	��	�	0.00	%�	�	�	0.00	%�
Expected life	��	�	1.39�years	��	�	�	1.44�years	��

�

NOTE 10. Commitments and Contingencies

Warranties and Indemnities

The Company generally warrants that its products sold to its customers will conform to the Company�s approved specifications and be free from defects in material and workmanship under normal use and service for one year. Subject to certain exceptions, the Company also offers a three-year limited warranty to end users for only those central processing unit (CPU) and AMD APU products that are commonly referred to as �processors in a box� and for PC workstations products. The Company also offered extended limited warranties to certain customers of �tray� microprocessor products and/or workstation graphics products who have written agreements with the Company and target their computer systems at the commercial and/or embedded markets.

Changes in the Company�s estimated liability for product warranty during the quarters and nine months ended September�27, 2014 and September�28, 2013 were as follows:

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In millions)

�

Beginning balance

��

�

��

�

��

�

��

New warranties issued

��

�

��

�

��

�

��

�

��

Settlements

��

�

)�

�

)�

�

(28

)�

�

(17

)�

Changes in liability for pre-existing warranties, including expirations

��

�

��

�

��

�

��

�

)�

��

�

Ending balance

��

�

��

�

��

�

��

�

In addition to product warranties, the Company, from time to time in its normal course of business, indemnifies other parties, with whom it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company, with respect to certain matters. In these limited matters, the Company has agreed to hold certain third parties harmless against specific types of claims or losses, such as those arising from a breach of representations or covenants, third-party claims that the Company�s products when used for their intended purpose(s) and under specific conditions infringe the intellectual property rights of a third party, or other specified claims made against the indemnified party. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material.

Contingencies

Securities Litigation

On March�20, 2014, a purported shareholder derivative lawsuit captioned Wessels v. Read, et al., Case No.�1:14-cv-262486 was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the Santa Clara County Superior Court of the State of California.�The complaint purports to assert claims against the Company and certain individual directors and officers for breach of fiduciary duty, waste of corporate assets and unjust enrichment.�The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual directors and officers regarding the Company�s 32nm technology and �Llano� product, which statements and omissions, the plaintiffs claim, allegedly operated to inflate artificially the price paid for the Company�s common stock during the period.�Based upon information presently known to the Company�s management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company�s financial condition, cash flows or results of operations.

On January�15, 2014, a class action lawsuit captioned Hatamian v. AMD, et al., C.A. No.�3:14-cv-00226 was filed against the Company in the United States District Court for the Northern District of California.�The complaint purports to assert claims against the Company and certain individual officers for alleged violations of Section�10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5 of the Exchange Act.�The plaintiff seeks to represent a proposed class of all persons who purchased or otherwise acquired the Company�s common stock during the period April�4, 2011 through October�18, 2012.�The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual officers regarding our 32nm technology and �Llano� product, which statements and omissions, the plaintiffs

�

claim, allegedly operated to inflate artificially the price paid for the Company�s common stock during the period.�The complaint seeks unspecified compensatory damages, attorneys� fees and costs. Based upon information presently known to the Company�s management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company�s financial condition, cash flows or results of operations.

Other Legal Matters

The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With respect to these matters, based on the management�s current knowledge, the Company believes that the amount or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company�s business, consolidated financial position, results of operations or cash flows.

NOTE 11. Accumulated Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the quarters and nine months ended September�27, 2014 and September�28, 2013.

�

��

Three Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

��

Unrealized
gains�(losses)
on available-
for-sale
securities

�

��

Unrealized
gains�(losses)
on cash flow
hedges

�

Total

�

Unrealized
gains�(losses)
on available-
for-sale
securities

�

��

Unrealized
gains
(losses) on
cash flow
hedges

�

Total

�

��

(In millions)

�

Beginning balance

��

�

��

�

��

�

��

)�

�

)�

Unrealized gains (losses) arising during the period, net of tax effects

��

�

��

�

)�

�

)�

�

��

�

��

�

��

Reclassification adjustment for (gains) losses realized and included in net income (loss), net of tax effects

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Total other comprehensive income (loss)

��

�

��

�

)�

�

)�

�

��

�

��

�

��

�

��

�

��

�

Ending balance

��

)�

�

)�

�

��

)�

�

)�

��

�

��

�

��

�

��

Nine Months Ended

�

��

September�27,
2014

�

September�28,
2013

�

��

Unrealized
gains�(losses)
on available-
for-sale
securities

�

��

Unrealized
gains�(losses)
on cash flow
hedges

�

Total

�

Unrealized
gains�(losses)
on available-
for-sale
securities

�

��

Unrealized
gains�(losses)
on cash flow
hedges

�

Total

�

��

(In millions)

�

Beginning balance

��

)�

�

)�

�

��

)�

�

)�

Unrealized gains (losses) arising during the period, net of tax effects

��

�

��

�

)�

�

)�

�

��

�

��

�

��

Reclassification adjustment for (gains) losses realized and included in net income (loss), net of tax effects

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Total other comprehensive income (loss)

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Ending balance

��

)�

�

)�

�

��

)�

�

)�

��

�

��

�

��

�

NOTE 12. Subsequent Events

In October 2014, the Company announced a restructuring plan (the 2014 Restructuring Plan). Under the 2014 Restructuring Plan, the Company expects to reduce global headcount by approximately 7 percent, largely expected to be completed by the end of the fourth quarter of 2014, and to align its real estate footprint with its reduced headcount, largely expected to be completed by the end of first half of 2015.

The Company currently estimates that it will record a restructuring and impairment charge of approximately $57 million in the fourth quarter of 2014, primarily related to severance, and a restructuring charge of approximately $13 million in the first half of 2015, primarily related to real estate actions. The Company expects to make cash payments related to the 2014 Restructuring Plan of approximately $34 million in the fourth quarter of 2014 and approximately $20 million in the first half of 2015.

�

ITEM�2.

MANAGEMENT�S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements in this report include forward-looking statements. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements should not be relied upon as predictions of future events as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including �believes,� �expects,� �may,� �will,� �should,� �seeks,� �intends,� �plans,� �pro forma,� �estimates,� �anticipates,� the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: demand for our products; the growth, change and competitive landscape of the markets in which we participate; the nature and extent of our future payments to GLOBALFOUNDRIES Inc. (GF) and the materiality of these payments; the materiality of our future purchases from GF; sales patterns of our semi-custom System-on-Chip products; consumer PC market conditions; the success of our transformation strategy; our ability to transform our business to attain revenue from high-growth markets; our restructuring plan announced in October 2014 (the 2014 Restructuring Plan), including the timing of actions implemented in connection with the 2014 Restructuring Plan and expected restructuring and impairment charges and cash payments; expected benefits of the 2014 Restructuring Plan and our transformation initiatives; the level of international sales as compared to total sales; our ability to reduce our unrecognized tax benefits over the next twelve months; that other unrecognized tax benefits will not materially change in the next 12 months; that our cash, cash equivalents and marketable securities balances and our senior secured asset based line of credit will be sufficient to fund our operations including capital expenditures over the next twelve months; our ability to obtain sufficient external financing on favorable terms, or at all; our dependence on a small number of customers; our hedging strategy; and our expenditures related to environmental compliance and conflict minerals disclosure requirements. Material factors and assumptions that were applied in making these forward-looking statements include, without limitation, the following: the expected rate of market growth and demand for our products and technologies (and the mix thereof); GF�s manufacturing yields and wafer volumes; our expected market share; our expected product costs and average selling price; our overall competitive position and the competitiveness of our current and future products; our ability to introduce new products, consistent with our current roadmap; our ability to make additional investment in research and development and that such opportunities will be available; the expected demand for computers; and the state of credit markets and macroeconomic conditions. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: that Intel Corporation�s pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact our plans; that we will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying our products or materially reduce their operations or demand for our products; that we may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that our third-party foundry suppliers will be unable to transition our products to advanced manufacturing process technologies in a timely and effective way or to manufacture our products on a timely basis in sufficient quantities and using competitive process technologies; that we will be unable to obtain sufficient manufacturing capacity or components to meet demand for our products or will not fully utilize our projected manufacturing capacity needs at GF�s microprocessor manufacturing facilities; that our requirements for wafers will be less than the fixed number of wafers that we agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die we receive from each wafer; that we are unable to successfully implement our long-term business strategy; that the completion and impact of the 2014 Restructuring Plan and our transformation initiatives could adversely affect us; that we inaccurately estimate the quantity or type of products that our customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that we are unable to manage the risks related to the use of our third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of our products; that we may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for our products and technologies in light of the product mix that we may have available at any particular time; that global business and economic conditions will not improve or will worsen; that PC market conditions will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on our sales or supply chain.

�

For a discussion of factors that could cause actual results to differ materially from the forward-looking statements, see �Part�II, Item�1A�Risk Factors� section beginning on page 43 and the �Financial Condition� section beginning on page�33 and other risks and uncertainties set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements.

AMD, the AMD Arrow logo, ATI, the ATI logo, AMD Opteron, Radeon, FirePro and combinations thereof are trademarks of Advanced Micro Devices, Inc. Microsoft is a registered trademark of Microsoft Corporation in the United States and other jurisdictions. Sony is a trademark of Sony Corporation. Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and�related notes included in this report and our audited consolidated financial statements and related notes as of December�28, 2013 and December�29, 2012, and for each of the three years in the period ended December�28, 2013 as filed in our Annual Report on Form�10-K for the year ended December�28, 2013.

Overview

We are a global semiconductor company with facilities around the world. Within the global semiconductor industry, we offer primarily:

�

x86 microprocessors, as standalone devices or as incorporated as an accelerated processing unit (APU), chipsets, discrete graphics processing units (GPUs) and processional graphics; and

�

server and embedded processors, dense servers, semi-custom System-on-Chip (SoC) products and technology for game consoles.

In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, �us,� �our� or �AMD�), including a discussion of our results of operations for the quarter and nine months ended September�27, 2014 compared to the quarter ended June�28, 2014 and the quarter and nine months ended September�28, 2013, an analysis of changes in our financial condition and a discussion of our contractual obligations.

Net revenue in the third quarter of 2014 was $1.4 billion, relatively flat compared to the second quarter of 2014, and a 2 percent decrease compared to the third quarter of 2013. Net revenue in the third quarter of 2014 included net revenue of $27 million related to technology licensing. Compared to the second quarter of 2014, a 6 percent increase of Enterprise, Embedded and Semi-Custom net revenue was offset by a 6 percent decrease in Computing and Graphics segment net revenue. The increase in Enterprise, Embedded and Semi-Custom segment net revenue was primarily due to higher revenue in connection with higher unit shipments of our semi-custom SoC products. Computing and Graphics segment net revenue decreased primarily due to lower unit shipments of our chipsets and GPU products. We believe that our Computing and Graphics segment results reflect the ongoing weakness in the consumer PC market.

Gross margin, as a percentage of net revenue, for the third quarter of 2014 was 35 percent, flat compared to the second quarter of 2014 and as compared to 36 percent in the third quarter of 2013. Gross margin in the third quarter of 2014 was favorably impacted by 2 percentage points as a result of the $27 million technology licensing revenue noted above. We continued to manage our operating expenses during the third quarter of 2014. Operating expenses were $431 million in the third quarter of 2014, compared to $435 million in the second quarter of 2014 and $426 million in the third quarter of 2013. Our cash, cash equivalents and marketable securities as of the end of the third quarter of 2014 were $938 million as compared to $948 million as of the end of the second quarter of 2014. Total debt as of the end of the third quarter of 2014 of $2.20 billion remained relatively flat as compared to the end of the second quarter of 2014.

During the third quarter of 2014, we continued to focus on our ongoing transformation to diversify our business. We launched new the AMD A10-7800 APU and the AMD A6-7800 APU in the third quarter of 2014. We designed the AMD A10-7800APU with HSA features and GCN architecture for system builders and the DIY market, and we designed the AMD A6-7800 APU for smaller form factor gaming and home theater PC systems. We also launched the AMD Radeon� R9 285 graphics card designed for our enthusiast gamers. We expanded our AMD FirePro� family of workstation graphics cards by

�

introducing the AMD FirePro W2100, AMD FirePro W4100, AMD FirePro W5100 and AMD FirePro W7100 for entry-level workstation users. We also launched the AMD FirePro S9150 and AMD FirePro S9050 server cards designed specifically for intense compute workloads. In the third quarter of 2014, we made available the AMD Opteron�A1100-Series development kit, featuring our first 64-bit ARM^�-based processor, formerly codenamed �Seattle� for software developers and integrators.

In October 2014, we announced a restructuring plan (the 2014 Restructuring Plan) designed to implement operational efficiencies and cost savings. Under the 2014 Restructuring Plan, we expect to reduce global headcount by approximately 7 percent, largely expected to be completed by the end of the fourth quarter of 2014. We intend to align our real estate footprint as a result of our reduced headcount, which we largely expect will be completed by the end of the first half of 2015.

GLOBALFOUNDRIES

Wafer Supply Agreement. The Wafer Supply Agreement (WSA) governs the terms by which we purchase products manufactured by GLOBALFOUNDRIES Inc. (GF).

Third Amendment to Wafer Supply Agreement. On December�6, 2012, we entered into a third amendment to the WSA. Pursuant to the third amendment, we modified the wafer purchase commitments for the fourth quarter of 2012 made pursuant to the second amendment to the WSA. In addition, we agreed to certain pricing and other terms of the WSA applicable to wafers for our microprocessor and APU products to be delivered by GF to us from the fourth quarter of 2012 through December�31, 2013. Pursuant to the third amendment, GF agreed to waive a portion of our wafer purchase commitments for the fourth quarter of 2012. In consideration of this waiver, we agreed to pay GF a fee of $320 million. As a result, we recorded a lower of cost or market charge of $273 million for the write-down of inventory to its market value in the fourth quarter of 2012. The cash impact of this $320 million fee was paid over several quarters, with $80 million paid on December�28, 2012, $40 million paid on April�1, 2013 and $200 million paid on December�31, 2013.

Fourth Amendment to Wafer Supply Agreement. On March�30, 2014, we entered into a fourth amendment to the WSA. The primary effect of the fourth amendment was to establish volume purchase commitments and fixed pricing for the 2014 calendar year as well as to modify certain other terms of the WSA applicable to wafers for some of our microprocessor, graphics processor and semi-custom game console products to be delivered by GF to us during the 2014 calendar year.

Our total purchases from GF related to wafer manufacturing and research and development activities for the quarters ended September�27, 2014 and September�28, 2013 were $290 million and $221 million, respectively. Our total purchases from GF related to wafer manufacturing and research and development activities for the nine months ended September�27, 2014 and September�28, 2013 were $843 million and $746 million, respectively. At September�27, 2014, we had prepayments to GF of $128 million related to wafer purchases, which were included in prepaid expenses and other current assets on our condensed consolidated balance sheets.

We currently estimate that our wafer purchase obligation from GF will be approximately $1.2 billion for the 2014 calendar year. We are not able to meaningfully quantify or estimate our purchase obligations to GF beyond December�31, 2014, but we expect that our future purchases from GF will continue to be material.

GF is a related party of us because GF is affiliated with West Coast Hitech L.P., our largest stockholder.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our condensed consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to our net revenue, inventories, asset impairments and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Although actual results have historically been reasonably consistent with management�s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.

�

Management believes there have been no significant changes during the quarter and nine months ended September�27, 2014 to the items that we disclosed as our critical accounting estimates in the Management�s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December�28, 2013.

Our realignment of our organizational structure, effective July�1, 2014, caused a change in the composition of our reportable segments and reporting units. This represented a change in circumstance requiring an interim goodwill impairment analysis and reassignment of the goodwill to the new reporting units using a relative fair value approach. We completed this goodwill impairment analysis during the third quarter of 2014. For the purposes of this analysis, our estimates of fair value were based on the income approach, which estimates the fair value of our reporting units based on future discounted cash flows. We determined that each reporting unit�s estimated fair value exceeded its carrying value, indicating that there was no goodwill impairment. We will perform an annual goodwill impairment as of the first day of the fourth quarter of 2014 pursuant to our accounting policy. If there are declines in our market capitalization, business climate or operating results, we may incur impairment charges that could be material.

Results of Operations

Management, including the Chief Operating Decision Maker, who is our Chief Executive Officer, reviews and assesses our operating performance using segment net revenue and operating income (loss) before interest, other income (expense), net, and income taxes. These performance measures include the allocation of expenses to the operating segments based on management�s judgment. In connection with our continued strategic transformation, effective July�1, 2014, we realigned our organizational structure. As a result of this organizational change, we have the following two reportable segments:

�

the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics; and

�

the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties.

Effective October�8, 2014, Dr.�Lisa�T. Su became our Chief Executive Officer, succeeding Rory P. Read. This management change did not result in a change in our reportable segments or to the fact that the Chief Operating Decision Maker is our Chief Executive Officer.

In addition to these reportable segments, we have an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. Also included in this category are amortization of acquired intangible assets, employee stock-based compensation expense, net restructuring and other special charges (gains) and workforce rebalancing severance charges. We also reported the results of former businesses in the All Other category because the operating results were not material.

We use a 52 or 53 week fiscal year ending on the last Saturday in December. The quarters ended September�27, 2014, June�28, 2014 and September�28, 2013 each consisted of 13 weeks. The nine months ended September�27, 2014 and September�28, 2013, each consisted of 39 weeks.

Our operating results tend to vary seasonally. For example, historically, first quarter PC product sales are generally lower than fourth quarter sales. In addition, with respect to our semi-custom SoC products for game consoles, we expect sales patterns to follow the seasonal trends of a consumer business with sales in the first half of the year being lower than sales in the second half of the year.

�

The following table provides a summary of net revenue and operating income (loss) by segment. The prior period results have been restated to reflect these new reportable segments.

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

June�28,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In millions)

�

Net revenue:

��

�

Computing and Graphics

��

781

��

�

828

��

�

925

��

�

2,470

��

�

2,832

��

Enterprise, Embedded and Semi-Custom

��

�

648

��

�

613

��

�

536

��

�

1,797

��

�

878

��

�

Total net revenue

��

1,429

��

�

1,441

��

�

1,461

��

�

4,267

��

�

3,710

��

�

Operating income (loss):

��

�

Computing and Graphics

��

(17

)�

�

)�

�

��

�

(20

)�

�

(86

)�

Enterprise, Embedded and Semi-Custom,

��

�

108

��

�

��

�

��

�

290

��

�

166

��

All Other

��

�

(28

)�

�

(28

)�

�

)�

�

(95

)�

�

(112

)�

��

�

Total operating income (loss)

��

�

��

�

��

�

175

��

�

(32

)�

��

�

Computing and Graphics

Computing and Graphics net revenue of $781 million in the third quarter of 2014 decreased by 16% compared to net revenue of $925 million in the third quarter of 2013 as a result of a 31% decrease in unit shipments, partially offset by a 22% increase in average selling price. The decrease in unit shipments was primarily attributable to lower unit shipments of our microprocessor products for desktop and notebook PCs and chipsets due to challenging consumer PC market conditions and our chipsets being integrated into our APU products. The increase in average selling price was primarily attributable to an increase in average selling price of our microprocessor products due to improved product mix in our microprocessor products for notebook PCs.

Computing and Graphics net revenue of $781 million in the third quarter of 2014 decreased by 6% compared to $828 million in the second quarter of 2014 as a result of an 8% decrease in unit shipments, partially offset by a 3% increase in average selling price. The decrease in unit shipments was primarily attributable to lower unit shipments of our chipsets and our GPU products due to challenging consumer PC market conditions. The increase in average selling price was primarily attributable to an increase in average selling price of our microprocessor products for notebook PCs due to improved product mix, partially offset by a decrease in average selling price of our GPU products primarily due to a decrease in the average selling price of our GPU desktop products.

Computing and Graphics net revenue of $2.5 billion in the first nine months of 2014 decreased by 13% compared to net revenue of $2.8 billion in the first nine months of 2013 as a result of a 26% decrease in unit shipments, partially offset by an 18% increase in average selling price. The decrease in unit shipments was primarily attributable to lower unit shipments of our microprocessor products for desktop and notebook PCs and chipsets due to challenging consumer PC market conditions and lower unit shipments of our chipset products due to chipsets being integrated into our APU products. The increase in average selling price was primarily attributable to an increase in average selling price of our microprocessor products, chipsets and GPU products due to improved product mix.

Computing and Graphics operating loss was $17 million in the third quarter of 2014 compared to operating income of $9 million in the third quarter of 2013. The decline in operating results was primarily due to the decrease in net revenue referenced above, partially offset by a $76 million decrease in cost of sales, a $34 million decrease in research and development expenses and an $8 million decrease in marketing, general and administrative expenses. Cost of sales decreased primarily due to lower unit shipments in the third quarter of 2014 compared to the third quarter of 2013. Operating loss for the third quarter of 2014 included a $19 million benefit from technology licensing revenue. In addition, operating income for the third quarter of 2013 included a $19 million benefit from sales of previously reserved inventory in the third quarter of 2012. Research and development expenses and marketing, general and administrative expenses decreased for the reasons set forth under �Expenses,� below.

�

Computing and Graphics operating loss was $17 million in the third quarter of 2014 compared to operating loss of $6 million in the second quarter of 2014. The decline in operating results was primarily due to the decrease in net revenue referenced above, partially offset by a $29 million decrease in cost of sales, a $5 million decrease in research and development expenses and a $2 million decrease in marketing, general and administrative expenses. Cost of sales decreased primarily due to lower unit shipments in the third quarter of 2014 compared to the second quarter of 2014. Operating loss for the third quarter of 2014 included a $19 million benefit from technology licensing revenue. In addition, operating loss for the second quarter of 2014 included a $3 million benefit from sales of inventory that had been previously reserved in the third quarter of 2012.

Computing and Graphics operating loss was $20 million in the first nine months of 2014 compared to operating loss of $86 million in the first nine months of 2013. The improvement in operating results was primarily due to a $215 million decrease in cost of sales, a $136 million decrease in research and development expenses and a $77 million decrease in marketing, general and administrative expenses, partially offset by the decrease in net revenue referenced above. Cost of sales decreased primarily due to lower unit shipments in the first nine months of 2014 compared to the first nine months of 2013. Operating loss for the first nine months of 2014 included a $19 million benefit from technology licensing revenue. In addition, operating loss for the first nine months of 2013 included a $50 million benefit from sales of inventory that had been previously reserved in the third quarter of 2012, as compared to a similar $7 million benefit for the first nine months of 2014. Research and development expenses and marketing, general and administrative expenses decreased for the reasons set forth under �Expenses,� below.

Enterprise, Embedded and Semi-Custom

Enterprise, Embedded and Semi-Custom net revenue of $648 million in the third quarter of 2014 increased by 21% compared to net revenue of $536 million in the third quarter of 2013. The increase was primarily due to an increase in net revenue received in connection with higher unit shipments of our semi-custom SoC products, partially offset by a decrease in net revenue received in connection with lower unit shipments of our server products.

Enterprise, Embedded and Semi-Custom net revenue of $648 million in the third quarter of 2014 increased by 6% compared to net revenue of $613 million in the second quarter of 2014. The increase was primarily due to an increase in net revenue received in connection with higher unit shipments of our semi-custom SoC products.

Enterprise, Embedded and Semi-Custom net revenue of $1.8 billion in the first nine months of 2014 increased by 105% compared to net revenue of $878 million in the first nine months of 2013. The increase was primarily due to an increase in net revenue received in connection with higher unit shipments of our semi-custom SoC products, which we began shipping in the second quarter of 2013, partially offset by a decrease in net revenue in connection with lower unit shipments of server products.

Enterprise, Embedded and Semi-Custom operating income was $108 million in the third quarter of 2014 compared to operating income of $92 million in the third quarter of 2013. The improvement in operating results was primarily due to the increase in net revenue referenced above, partially offset by a $70 million increase in cost of sales, a $23 million increase in research and development expenses and a $3 million increase in marketing, general and administrative expenses. The increase in cost of sales was primarily due to an increase in unit shipments of our semi-custom SoC products in the third quarter of 2014 compared to the third quarter of 2013. In addition, operating income for the third quarter of 2014 included an $8 million benefit from technology licensing revenue. Research and development expenses and marketing, general and administrative expenses increased for the reasons set forth under �Expenses,� below.

Enterprise, Embedded and Semi-Custom operating income was $108 million in the third quarter of 2014 compared to operating income of $97 million in the second quarter of 2014. The improvement in operating results was primarily due to the increase in net revenue referenced above, partially offset by a $19 million increase in cost of sales and a $5 million increase in research and development expenses. The increase in cost of sales was primarily due to an increase in unit shipments of our semi-custom SoC products in the third quarter of 2014 compared to the second quarter of 2014. In addition, operating income for the third quarter of 2014 included an $8 million benefit from technology licensing revenue.

�

Enterprise, Embedded and Semi-Custom operating income was $290 million in the first nine months of 2014 compared to operating income of $166 million in the first nine months of 2013. The improvement in operating results was primarily due to the increase in net revenue referenced above, partially offset by a $720 million increase in cost of sales, a $53 million increase in research and development expenses and a $22 million increase in marketing, general and administrative expenses. The increase in cost of sales was primarily due to an increase in unit shipments of our semi-custom SoC products in the first nine months of 2014 compared to the first nine months of 2013. In addition, operating income for the first nine months of 2014 included an $8 million benefit from interface technology license revenue. Research and development expenses and marketing, general and administrative expenses increased for the reasons set forth under �Expenses� below.

All Other

All Other operating loss of $28 million in the third quarter of 2014 included stock-based compensation expense of $21 million, $4 million related to other expenses and $3 million related to amortization of acquired intangible assets. All Other operating loss of $6 million in the third quarter of 2013 included stock-based compensation expense of $23 million and $5 million related to amortization of acquired intangible assets, offset by net restructuring and other special gains of $22 million. All Other operating loss of $28 million in the second quarter of 2014 included stock-based compensation expense of $21 million, $4 million related to amortization of acquired intangible assets and $3 million related to other expenses.

All Other operating loss of $95 million in the first nine months of 2014 included stock-based compensation expense of $65 million, $14 million related to workforce rebalancing severance charges, $10 million related to amortization of acquired intangible assets and $6 million related to other expenses. In the first quarter of 2014, workforce rebalancing charges were incurred as part of our ongoing transformation and diversification strategy. All Other operating loss of $112 million in the first nine months of 2013 included stock-based compensation expense of $67 million, net restructuring and other special charges of $30 million and $14 million related to amortization of acquired intangible assets.

International Sales

International sales as a percentage of net revenue were 82% in the third quarter of 2014, the third quarter of 2013 and the second quarter of 2014.

International sales as a percentage of net revenue were 82% in the first nine months of 2014 and 88% in the first nine months of 2013. The decrease in international sales as a percentage of net revenue in the first nine months of 2014 compared to the first nine months of 2013 was primarily driven by an increase in net revenue from domestic sales of our semi-custom SoC products.

We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.

�

Comparison of Gross Margin, Expenses, Interest Expense, Other Income (Expense), Net, and Income Taxes

The following is a summary of certain condensed consolidated statement of operations data for the periods indicated:

�

��

Three Months Ended

�

Nine Months Ended

�

��

September�27,
2014

�

June�28,
2014

�

September�28,
2013

�

September�27,
2014

�

September�28,
2013

�

��

(In millions except for percentages)

�

Cost of sales

��

935

��

�

943

��

�

940

��

�

2,788

��

�

2,285

��

Gross margin

��

�

494

��

�

498

��

�

521

��

�

1,479

��

�

1,425

��

Gross margin percentage

��

�

%�

�

%�

�

%�

�

%�

�

%�

Research and development

��

�

278

��

�

277

��

�

288

��

�

834

��

�

908

��

Marketing, general and administrative

��

�

150

��

�

154

��

�

155

��

�

460

��

�

505

��

Amortization of acquired intangible assets

��

�

��

�

��

�

��

�

��

�

��

Restructuring and other special charges (gain), net

��

�

��

�

��

�

(22

)�

�

��

�

��

Interest income

��

�

��

�

��

�

��

�

��

�

��

Interest expense

��

�

(43

)�

�

(46

)�

�

(47

)�

�

(136

)�

�

(133

)�

Other income (expense), net

��

�

)�

�

(49

)�

�

��

�

(72

)�

�

)�

Provision for income taxes

��

�

��

�

��

�

��

�

��

�

��

Gross Margin

Gross margin as a percentage of net revenue was 35% in the third quarter of 2014 compared to 36% in the third quarter of 2013. Gross margin in the third quarter of 2014 included a $27 million benefit from technology licensing revenue, which accounted for two gross margin percentage points. Gross margin in the third quarter of 2013 included a $19 million benefit from sales of previously reserved inventory in the third quarter of 2012, which accounted for one gross margin percentage point. Gross margin in the third quarter of 2014 was adversely impacted by lower average gross margins in our Enterprise, Embedded and Semi-Custom segment driven by lower margin semi-custom SoC products.

Gross margin as a percentage of net revenue of 35% in the third quarter of 2014 remained flat compared to the second quarter of 2014. Gross margin in the third quarter of 2014 included a $27 million benefit from technology licensing revenue, which accounted for two gross margin percentage points. Gross margin in the second quarter of 2014 included a $3 million benefit from sales of previously reserved inventory in the third quarter of 2012, which had a less than one percentage point impact.

Gross margin as a percentage of net revenue was 35% in the first nine months of 2014 compared to 38% in the first nine months of 2013. Gross margin in the first nine months of 2014 included a $27 million benefit from technology licensing revenue, which accounted for less than one gross margin percentage point.�Gross margin in the first nine months of 2013 included a $50 million benefit from sales of inventory that was previously reserved in the third quarter of 2012, which accounted for one gross margin percentage point as compared to $7 million in the first nine months of 2014 which had a less than one percentage point impact. Gross margin in the first nine months of 2014 was adversely impacted by lower average gross margins in our Enterprise, Embedded and Semi-Custom segment driven by lower margin semi-custom SoC products.

Expenses

Research and Development Expenses

Research and development expenses of $278 million in the third quarter of 2014 decreased by $10 million, or 3%, compared to $288 million in the third quarter of 2013. The decrease was primarily due to a $34 million decrease in research and development expenses attributable to our Computing and Graphics segment, partially offset by a $23 million increase in research and development expenses attributable to our Enterprise, Embedded and Semi-Custom segment. Research and development expenses attributable to our Computing and Graphics segment decreased primarily due to a $37 million decrease in product engineering and design costs, partially offset by a $5 million increase in other employee compensation and benefit expenses. Research and development expenses attributable to our Enterprise, Embedded and Semi-Custom segment increased primarily due to a $21 million increase in product engineering and design costs.

Research and development expenses of $278 million in the third quarter of 2014 remained relatively flat as compared to $277 million in the second quarter of 2014.

�

Research and development expenses of $834 million in the first nine months of 2014 decreased by $74 million, or 8%, compared to $908 million in the first nine months of 2013. The decrease was primarily due to a $136 million decrease in research and development expenses attributable to our Computing and Graphics segment, partially offset by a $53 million increase in research and development expenses attribute to our Enterprise, Embedded and Semi-Custom segment and a $9 million increase in the All Other category related to a workforce rebalancing severance charge recorded in the first quarter of 2014. Research and development expenses attributable to our Computing and Graphics segment decreased primarily due to a $127 million decrease in product engineering and design costs and an $8 million decrease in manufacturing process technology expenses. Research and development expenses attributable to our Enterprise, Embedded and Semi-Custom segment increased primarily due to a $46 million increase in product engineering and design costs and a $6 million increase in other employee compensation and benefit expenses.

Marketing, General and Administrative Expenses

Marketing, general and administrative expenses of $150 million in the third quarter of 2014 remained relatively flat as compared to $155 million in the third quarter of 2013 and $154 million in the second quarter of 2014.

Marketing, general and administrative expenses of $460 million in the first nine months of 2014 decreased by $45 million, or 9%, compared to $505 million in the first nine months of 2013. The decrease was primarily due to a $77 million decrease in marketing, general and administrative expenses attributable to our Computing and Graphics segment, partially offset by a $22 million increase in marketing, general and administrative expenses attributable to our Enterprise, Embedded and Semi-Custom segment and a $5 million increase in the All Other category related to a workforce rebalancing severance charge recorded in the first quarter of 2014. Marketing, general and administrative expenses attributable to our Computing and Graphics segment decreased primarily due to a $54 million decrease in sales and marketing activities and a $26 million decrease in other general and administrative expenses. Marketing, general and administrative expenses attributable to our Enterprise, Embedded and Semi-Custom segment increased primarily due to a $14 million increase in other general and administrative expenses and a $6 million increase in sales and marketing activities.

Restructuring and Other Special Charges (Gains), Net

Sale and Leaseback Transactions

In September 2013, we sold a light industrial building in Singapore and leased back a portion of the original space. We received net proceeds of $46 million in connection with the sale. The difference between the net proceeds and the $15 million carrying value of property sold resulted in a $17 million gain that we recorded in the third quarter of 2013 and a $14 gain deferred as of September�28, 2013 that we will amortize over the initial lease term. The initial lease term expires in September 2023 and provides for options to extend the lease for 4 years, at the end of the initial lease term, and for an additional 3.5 years thereafter. We accounted for the lease as an operating lease.

In September 2013, we also sold an office building in Austin, Texas. We received net proceeds of $10 million in connection with the sale and recorded a $5 million gain in the third quarter of 2013, primarily related to the difference between the sale proceeds and the $5 million carrying value of the property sold.

In March 2013, we sold and leased back land and office buildings in Austin, Texas. We received net cash proceeds of $164 million in connection with the sale and recorded a $52 million charge in the first quarter of 2013, primarily related to the difference between the sale proceeds and the $216 million carrying value of the property sold. The lease expires in March 2025 and provides for one 10-year optional renewal. We accounted for the transaction as an operating lease.

In March 2013, we also sold an office building in Markham, Ontario, Canada and leased back a portion of the original space. We received net cash proceeds of $13 million in connection with the sale and recorded a $6 million gain in the first quarter of 2013, primarily related to the difference between the sale proceeds and the $7 million carrying value of the property sold. The lease was to expire in March 2014 but contained an early termination provision, which we exercised effective June�30, 2013. While occupied, we accounted for the lease as an operating lease.

The $22 million gain recognized in the third quarter of 2013 and the net charge of $24 million recognized in the first nine months of 2013 related to the real estate transactions described above are recorded in the �Restructuring and other special charges (gains), net� line item on the condensed consolidated statements of operations.

�

2014 Restructuring Plan

In October 2014, we announced a restructuring plan, the 2014 Restructuring Plan designed to implement operating efficiencies and cost savings. Under the 2014 Restructuring Plan, we expect to reduce global headcount by approximately 7 percent, largely expected to be completed by the end of the fourth quarter of 2014, and to align our real estate footprint with our reduced headcount, largely expected to be completed by the end of the first half of 2015. We currently estimate that we will record a restructuring and impairment charge of approximately $57 million in the fourth quarter of 2014, primarily related to severance, and a restructuring charge of approximately $13 million in the first half of 2015, primarily related to real estate actions. We expect to make cash payments related to the 2014 Restructuring Plan of approximately $34 million in the fourth quarter of 2014 and approximately $20 million in the first half of 2015.

Interest Expense

Interest expense of $43 million in the third quarter of 2014 decreased by $4 million compared to $47 million in the third quarter of 2013, primarily due to a tax-related interest expense recorded in the third quarter of 2013.

Interest expense of $43 million in the third quarter of 2014 decreased by $3 million compared to $46 million in the second quarter of 2014, primarily due to the timing of the issuance of new debt and repurchases of other debt.

Interest expense of $136 million in the first nine months of 2014 increased by $3 million compared to $133 million in the first nine months of 2013, primarily due to the timing of the issuances of new debt and repurchases of other debt, partially offset by a tax-related interest expense recorded in the third quarter of 2013.

Other Income (Expense), Net

Other expense, net, of $2 million in the third quarter of 2014 compared to $2 million of other income, net, in the third quarter of 2013 resulted primarily from fluctuations of foreign currency exchange rates.

Other expense, net, of $2 million in the third quarter of 2014 decreased by $47 million compared to $49 million of other expense, net, in the second quarter of 2014 primarily due to a $49 million loss from debt repurchase recorded in the second quarter of 2014.

Other expense, net, of $72 million in the first nine months of 2014 increased by $69 million compared to $3 million of other expense, net, in the first nine months of 2013, primarily as a result of a $64 million loss from debt repurchases and $6 million loss from fluctuations of foreign currency exchange rates in the first nine months of 2014.

Income Taxes

In the third quarter of 2014, we recorded an income tax provision of $2 million, consisting of $2 million of foreign taxes in profitable locations. For the nine months ended September�27, 2014, we recorded an income tax provision of $8 million arising from $9 million of foreign taxes in profitable locations, partially offset by $1 million of tax benefits arising from other comprehensive income and Canadian tax credits.

In the third quarter of 2013, we recorded an income tax provision of $3 million, consisting of $2 million of foreign taxes in profitable locations and $1 million related to the reversal of previously recognized tax benefits associated with other comprehensive income. For the nine months ended September�28, 2013, we recorded an income tax provision of $8 million arising from $7 million of foreign taxes in profitable locations and $3 million related to the reversal of previously recognized tax benefits associated with other comprehensive income, partially offset by $2 million of tax benefits for Canadian tax credits and monetization of U.S. tax credits.

As of September�27, 2014, substantially all of our U.S. and Canadian deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income, which at September�27, 2014, in our estimate, is not more likely than not to be achieved.

Our total gross unrecognized tax benefits as of September�27, 2014 were $61 million. We currently expect to reduce our unrecognized tax benefits by approximately $31 million, primarily as a result of the potential settlement of tax audits with certain foreign tax authorities over the next 12 months. We do not believe it is reasonably possible that other unrecognized tax benefits will materially change in the next 12 months. However, the settlement, resolution or closure of tax audits are highly uncertain.

�

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to employee stock options, restricted stock and restricted stock units, which we allocated in the condensed consolidated statements of operations:

�

��

Three Months Ended

�

��

Nine Months Ended

�

��

September�27,
2014

�

��

June�28,
2014

�

��

September�28,
2013

�

��

September�27,
2014

�

��

September�28,
2013

�

��

(In millions)

�

Cost of sales

��

Research and development

��

�

��

�

��

�

��

�

��

�

��

Marketing, general and administrative

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Stock-based compensation expense, net of tax of $0

��

�

��

�

��

�

��

�

��

�

For all periods presented, we did not realize any excess tax benefit related to stock-based compensation and therefore did not record any related financing cash flows.

Stock-based compensation expense of $21 million in the third quarter of 2014 remained relatively flat as compared to $23 million in the third quarter of 2013 and $21 million in the second quarter of 2014.

Stock-based compensation expense of $65 million in the first nine months of 2014 remained relatively flat as compared to $67 million in the first nine months of 2013.

FINANCIAL CONDITION

Liquidity

As of September�27, 2014, our cash, cash equivalents and marketable securities of $938 million were lower compared to $1.2 billion as of December�28, 2013. The decrease was primarily due to the final $200 million cash payment made in the first quarter of 2014 related to GF�s waiver of a portion of our obligations for wafer purchase commitments for the fourth quarter of 2012 and the timing of sales and related collections. During the nine months ended September�27, 2014, we also used $73 million for purchases of property, plant and equipment. Also, during the nine months ended September�27, 2014, we reclassified $45 million of our marketable securities that were previously classified as long-term to short-term. The percentage of cash, cash equivalents and marketable securities held domestically was 89% as of September�27, 2014.

Our debt and capital lease obligations as of September�27, 2014 were $2.2 billion as compared to $2.1 billion as of December�28, 2013. During the second quarter of 2014, we issued $500 million of 7.00% Senior Notes due 2024 (7.00% Notes). We also repurchased and redeemed the remaining $452 million in aggregate principal amount of our 8.125% Senior Notes due 2017 (8.125% Notes) for $480 million in cash. As of the end of the second quarter of 2014, we did not have any 8.125% Notes outstanding.

During the first quarter of 2014, we issued $600 million of 6.75% Senior Notes due 2019 (6.75% Notes). We also repurchased $423 million in aggregate principal amount of our 6.00% Convertible Senior Notes due 2015 (6.00% Notes) pursuant to a partial tender offer for $460 million in cash, $64 million in aggregate principal amount of our 6.00% Notes in open market transactions for $69 million in cash and $48 million in aggregate principal amount of our 8.125% Notes pursuant to a partial tender offer for $51 million in cash.

Subsequent to September�27, 2014, we repurchased $50�million in principal amount of the 7.75% Notes and $17 million in principal amount of the 7.50% Notes.

�

We believe our cash, cash equivalents and marketable securities balance along with our Secured Revolving Line of Credit will be sufficient to fund operations, including capital expenditures, over the next twelve months. We believe that in the event we decide to obtain external funding, we will be able to access the capital markets on terms and in amounts adequate to meet our objectives. However, given the possibility of changes in market conditions or other occurrences, we cannot be certain that such funding will be available on terms favorable to us or at all.

Over the longer term, should additional funding be required, such as to meet payment obligations of our long-term debt when due, we may need to raise the required funds through borrowings or public or private sales of debt or equity securities, which may be issued from time to time under an effective registration statement, through the issuance of securities in a transaction exempt from registration under the Securities Act of 1933, as amended, or a combination of one or more of the foregoing. Uncertain global economic conditions have in the past and may in the future adversely impact our business. If market conditions deteriorate, we may be limited in our ability to access the capital markets to meet liquidity needs on favorable terms or at all, which could adversely affect our liquidity and financial condition, including our ability to refinance maturing liabilities.

Operating Activities

Net cash used in operating activities was $214 million in the first nine months of 2014. A net loss of $39 million was adjusted for non-cash charges consisting primarily of $155 million of depreciation and amortization expense, $65 million of employee stock-based compensation expense, $64 million net loss on debt redemptions related to our 6.00% Notes and 8.125% Notes and $11 million of non-cash interest expense related to our 6.00% Notes and 8.125% Notes. The net changes in operating assets as of September�27, 2014 compared to December�28, 2013 included an increase in prepaid expenses and other assets of $156 million, primarily due to prepayments to GF of $128 million, an increase in accounts receivable of $144 million, which was primarily due to timing of sales and collections, and an increase in inventories of $14 million. Accounts payable, accrued liabilities and other decreased by $100 million during the first nine months of 2014, primarily due to a $50 million decrease in deferred income on shipments to our distributor customers, a $22 million decrease in accrued and other liabilities, primarily driven by software and technology licenses payments of $47 million, partially offset by an increase in deferred revenue of $28 million, a $21 million decrease in accounts payable driven by timing of purchases and payments and a $7 million decrease in accrued compensation and benefits. Payable to GF, which included all amounts we owe to GF, decreased by $47 million during the first nine months of 2014. The decrease was primarily due to the final $200 million payment to GF made in the first quarter of 2014 related to GF�s waiver of a portion of our obligations for wafer purchase commitments for the fourth quarter of 2012, partially offset by an increase in accounts payable to GF due to timing of payments.

Net cash used in operating activities was $169 million in the first nine months of 2013. A net loss of $172 million was adjusted for non-cash charges consisting primarily of $182 million of depreciation and amortization expense, $67 million of employee stock-based compensation expense, a $30 million net loss on disposal of property, plant and equipment and $18 million of non-cash interest expense related to our 6.00% Notes and 8.125% Notes. The net changes in operating assets as of September�28, 2013 compared to December�29, 2012 included an increase in inventories of $360 million, largely driven by our customers� next generation game console ramps and preparation for fourth quarter shipments of our new graphics products, an increase in accounts receivable of $242 million, which was primarily due to higher sales during the first nine months of 2013, an increase in other assets of $67 million, primarily due to new software licenses, and an increase in prepaid expenses and other current assets of $18 million. During the first nine months of 2013, accounts payable, accrued liabilities and other increased by $351 million, primarily due to a $296 million increase in accounts payable driven by timing of purchases and payments, a $32 million increase in accrued compensation and benefits and a $31 million increase in deferred income on shipments to our distributor customers, partially offset by a $10 million decrease in accrued and other current liabilities. Payables to GF, which included all amounts we owe to GF, increased by $41 million. The increase was primarily due to an increase of $256 million of payables related to wafer purchases, offset by payments of $175 million related to the limited waiver of exclusivity from GF and $40 million related to our take-or-pay obligation to GF.

�

Investing Activities

Net cash used in investing activities was $55 million in the first nine months of 2014, which consisted of a cash outflow of $73 million for purchases of property, plant and equipment, offset by a net cash inflow of $18 million from purchases, sales and maturity of available for sale securities.

Net cash provided by investing activities was $159 million in the first nine months of 2013. A cash inflow from sales of property, plant and equipment of $238 million, which consisted primarily of net cash proceeds from the real estate transactions in Austin, Texas of $179 million, in Singapore of $46 million and in Markham, Ontario, Canada of $13 million, was partially offset by a cash outflow of $63 million for purchases of property, plant and equipment and a net cash outflow of $16 million from purchases, sales and maturity of available-for-sale securities.

Financing Activities

Net cash provided by financing activities was $40 million in the first nine months of 2014, primarily due to net proceeds from borrowings pursuant to our 6.75% Notes of $589 million and our 7.00% Notes of $491 million, partially offset by $518 million in payments to repurchase a portion of our 6.00% Notes, $522 million in payments to repurchase our 8.125% Notes and $3 million in payments for capital lease obligations. During the first nine months of 2014, we also received $5 million in net proceeds from U.S. government grants for research and development activities and $4 million from the exercise of employee stock options.

Net cash provided by financing activities was $4 million in the first nine months of 2013, primarily due to $6 million in net proceeds from U.S. government grants for research and development activities and $3 million from the exercise of employee stock options, partially offset by repayment of capital lease obligations of $4 million.

During the first nine months of 2014 and 2013, we did not realize any excess tax benefit related to employee stock-based compensation. Therefore, we did not record any effects relating to financing cash flows for these periods.

Contractual Obligations

The following table summarizes our consolidated principal contractual cash obligations, as of September�27, 2014, and is supplemented by the discussion following the table:

�

��

Payments due by period as of September�27, 2014

�

(In millions)

��

Total

�

��

Remainder
of 2014

�

��

2015

�

��

2016

�

��

2017

�

��

2018

�

��

2019 and
thereafter

�

6.00% Notes ⁽¹⁾

��

6.75% Notes

��

�

600

��

�

��

�

��

�

��

�

��

�

��

�

600

��

7.75% Notes

��

�

500

��

�

��

�

��

�

��

�

��

�

��

�

500

��

7.50% Notes

��

�

500

��

�

��

�

��

�

��

�

��

�

��

�

500

��

7.00% Notes

��

�

500

��

�

��

�

��

�

��

�

��

�

��

�

500

��

Secured Revolving Line of Credit

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

Other long-term liabilities

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

Aggregate interest obligation ⁽²⁾

��

�

1,116

��

�

��

�

156

��

�

154

��

�

154

��

�

154

��

�

458

��

Capital lease obligations ⁽³⁾

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

Operating leases

��

�

356

��

�

��

�

��

�

��

�

��

�

��

�

160

��

Purchase obligations ⁽⁴⁾

��

�

465

��

�

287

��

�

100

��

�

��

�

��

�

��

�

��

Obligations to GF ⁽⁵⁾

��

�

471

��

�

471

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

��

�

Total contractual obligations

��

4,693

��

869

��

354

��

281

��

249

��

221

��

2,719

��

�

��

�

��

�

��

�

��

�

��

�

��

�

⁽¹⁾�	Represents aggregate par value of the notes, without the effect of associated discounts.

�

⁽²⁾�

Represents estimated aggregate interest obligations for our outstanding debt obligations that are payable in cash, excluding capital lease obligations and our senior secured asset based line of credit for a principal amount up to $500 million (Secured Revolving Line of Credit). Also excludes non-cash amortization of debt discounts on our 6.00% Notes.

�

⁽³⁾�	Includes principal and imputed interest.

�

⁽⁴⁾�

We have purchase obligations for goods and services where payments are based, in part, on the volume or type of services we acquire. In those cases, we only included the minimum volume of purchase obligations in the table above. Purchase orders for goods and services that are cancelable upon notice and without significant penalties are not included in the amounts above. In addition we have obligations for software technology and licenses where payments are fixed and non-cancelable.

�

⁽⁵⁾�	This amount includes all our contractual obligations to GF through December�31, 2014. We are not currently able to meaningfully quantify or estimate our purchase obligations to GF beyond December�31, 2014, but we expect that our future purchases from GF will continue to be material.

6.00% Convertible Senior Notes Due 2015

On April�27, 2007, we issued $2.2 billion aggregate principal amount of our 6.00% Notes. Our 6.00% Notes are our general unsecured senior obligations. Interest is payable on May�1 and November�1 of each year beginning November�1, 2007 until the maturity date of May�1, 2015. The terms of our 6.00% Notes are governed by an indenture dated April�27, 2007, by and between us and Wells Fargo Bank, National Association, as trustee.

During the first quarter of 2014, we repurchased $64 million in aggregate principal amount of our 6.00% Notes in open market transactions for $69 million, which included payment of accrued and unpaid interest of $1 million. Also, during the first quarter of 2014, we repurchased a portion of our 6.00% Notes through a partial tender offer. We repurchased $423 million aggregate principal amount of our 6.00% Notes for $460 million in cash, which included payment of accrued and unpaid interest of $10 million. We incurred a total loss of $10 million in connection with the foregoing repurchases of our 6.00% Notes. As of September�27, 2014, the outstanding aggregate principal amount and remaining carrying value of our 6.00% Notes were $42 million. The remaining $42 million of aggregate principal amount of 6.00% Notes has been reclassified as short-term debt on the condensed consolidated balance sheet as of September�27, 2014.

8.125% Senior Notes Due 2017

On November�30, 2009, we issued $500 million of our 8.125% Notes at a discount of 10.204%.

During the first quarter of 2014, we repurchased $48 million in aggregate principal amount of our 8.125% Notes pursuant to a partial tender offer for $51 million, which included payment of accrued and unpaid interest of $1 million. We incurred a total loss of $5 million in connection with the foregoing repurchase of our 8.125% Notes.

During the second quarter of 2014, we repurchased and redeemed the remaining $452 million in aggregate principal amount of our 8.125% Notes for $480 million in cash, which included payment of accrued and unpaid interest of $7 million. We incurred a total loss of $49 million in connection with the foregoing repurchase and redemption of our 8.125% Notes. As of the end of the second quarter of 2014, we did not have any 8.125% Notes outstanding.

6.75% Senior Notes Due 2019

On February�26, 2014, we issued $600 million of our 6.75% Senior Notes due 2019 (6.75% Notes). Our 6.75% Notes are our general unsecured senior obligations. Interest is payable on March�1 and September�1 of each year beginning September�1, 2014 until the maturity date of March�1, 2019. Our 6.75% Notes are governed by the terms of an indenture (the 6.75% Indenture) dated February�26, 2014 between us and Wells Fargo Bank, National Association, as trustee.

At any time before March�1, 2019, we may redeem some or all of our 6.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 6.75% Indenture).

As of September�27, 2014, the outstanding aggregate principal amount of our 6.75% Notes was $600 million.

�

7.75% Senior Notes Due 2020

On August�4, 2010, we issued $500 million of our 7.75% Senior Notes due 2020 (7.75% Notes). Our 7.75% Notes are our general unsecured senior obligations. Interest is payable on February�1 and August�1 of each year beginning February�1, 2011 until the maturity date of August�1, 2020. Our 7.75% Notes are governed by the terms of an indenture (the 7.75% Indenture) dated August�4, 2010 between us and Wells Fargo Bank, National Association, as trustee.

At any time before August�1, 2015, we may redeem some or all of our 7.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 7.75% Indenture).

Starting August�1, 2015, we may redeem our 7.75% Notes for cash at the following specified prices plus accrued and unpaid interest:

�


Period	��	Price as Percentage�of Principal�Amount		�
Beginning on August�1, 2015 through July�31, 2016	��	�	103.875	%�
Beginning on August�1, 2016 through July�31, 2017	��	�	102.583	%�
Beginning on August�1, 2017 through July�31, 2018	��	�	101.292	%�
On August�1, 2018 and thereafter	��	�	100.000	%�

As of September�27, 2014, the outstanding aggregate principal amount of our 7.75% Notes was $500 million.

7.50% Senior Notes Due 2022

On August�15, 2012, we issued $500 million of our 7.50% Senior Notes due 2022 (7.50% Notes). Our 7.50% Notes are our general unsecured senior obligations. Interest is payable on February�15 and August�15 of each year beginning February�15, 2013 until the maturity date of August�15, 2022. Our 7.50% Notes are governed by the terms of an indenture (the 7.50% Indenture) dated August�15, 2012 between us and Wells Fargo Bank, National Association, as trustee.

At any time before August�15, 2022, we may redeem up to 35% of the aggregate principal amount of our 7.50% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price equal to 107.5% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. At any time before August�15, 2022, we may redeem some or all of our 7.50% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 7.50% Indenture).

As of September�27, 2014, the outstanding aggregate principal amount of our 7.50% Notes was $500 million.

7.00% Senior Notes Due 2024

On June�16, 2014, we issued $500 million of 7.00% Notes. The 7.00% Notes are our general unsecured senior obligations. Interest is payable on January�1 and July�1 of each year beginning January�1, 2015 until the maturity date of July�1, 2024. The 7.00% Notes are governed by the terms of an indenture (the 7.00% Indenture) dated June�16, 2014 between us and Wells Fargo Bank, National Association, as trustee.

At any time before July�1, 2017, we may redeem up to 35% of the aggregate principal amount of the 7.00% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price equal to 107.000% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to July�1, 2019, we may redeem some or all of the 7.00% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a �make whole� premium (as set forth in the 7.00% Indenture).

Starting July�1, 2019, we may redeem our 7.00% Notes for cash at the following specified prices plus accrued and unpaid interest:

�


Period	��	Price as Percentage�of Principal�Amount		�
Beginning on July�1, 2019 through June�30, 2020	��	�	103.500	%�
Beginning on July�1, 2020 through June�30, 2021	��	�	102.333	%�
Beginning on July�1, 2021 through June�30, 2022	��	�	101.167	%�
On July�1, 2022 and thereafter	��	�	100.000	%�

As of September�27, 2014, the outstanding aggregate principal amount of our 7.00% Notes was $500 million.

Potential Repurchase of Outstanding Notes

We may elect to purchase or otherwise retire our 6.00% Notes, 6.75% Notes, 7.00% Notes, 7.50% Notes and 7.75% Notes with cash, stock or other assets from time to time in open market or privately negotiated transactions, either directly or through intermediaries, or by tender offer when we believe the market conditions are favorable to do so. Subsequent to September�27, 2014, we repurchased $50�million in principal amount of our 7.75% Notes and $17 million in principal amount of our 7.50% Notes.

Secured Revolving Line of Credit

On November�12, 2013, we and our subsidiary, AMD International Sales�& Service, Ltd. (together, the Borrowers), entered into a loan and security agreement (the Loan Agreement) for a senior secured asset based line of credit for a principal amount up to $500 million (Secured Revolving Line of Credit) with up to $75 million available for issuance of letters of credit, with a group of lenders and Bank of America, N.A., acting as agent for the lenders (the Agent). Our Secured Revolving Line of Credit matures on November�12, 2018. Borrowings under our Secured Revolving Line of Credit are limited to up to 85% of eligible accounts receivable minus certain reserves and may be used for general corporate purposes, including working capital needs.

The Borrowers can elect that the borrowings under our Secured Revolving Line of Credit may bear interest at a rate per annum equal to (a)�London Interbank Offered Rate (LIBOR) plus an applicable margin ranging from 2.00% to 2.75%, or (b)�(i)�the greater of (x)�the Agent�s prime rate, (y)�the federal funds rate as published by the Federal Reserve Bank of New York plus 0.50%, and (z)�LIBOR for a one-month period plus 1.00%, plus (ii)�an applicable margin ranging from 1.00% to 1.75%. The applicable margin to be applied to the borrowings under our Secured Revolving Line of Credit is dependent on the Borrowers achieving a certain fixed charge coverage ratio. Our Secured Revolving Line of Credit may be optionally prepaid or terminated or unutilized commitments may be reduced, in each case at any time without premium or penalty. In connection with our Secured Revolving Line of Credit, the Borrowers are required to pay an unused line fee equal to 0.50%�per annum, payable monthly on the unused amount of the commitments under our Secured Revolving Line of Credit. The unused line fee decreases to 0.375%�per annum when more than 50% of our Secured Revolving Line of Credit is utilized. The Borrowers will pay (i)�a monthly fee on all letters of credit outstanding under our Secured Revolving Line of Credit equal to the applicable LIBOR margin and (ii)�a fronting fee to the Agent equal to 0.125% of all such letters of credit, payable monthly in arrears.

The obligations under the Loan Agreement are secured by a first priority basis in the Borrowers� account receivable, inventory and certain deposit accounts and specified related assets.

The Loan Agreement contains covenants that place certain restrictions on the Borrowers� ability to, among other things, amend or modify certain terms of any debt of $50 million or more or subordinated debt, create or suffer to exist any liens upon accounts or inventory, sell or transfer any of Borrowers� accounts or inventory other than certain ordinary-course transfers, make certain changes to either Borrower�s name or form or state of organization without notifying the Agent, or liquidate, dissolve, merge, combine or consolidate. Further restrictions apply during a domestic cash trigger period (a Domestic Cash Trigger Period), which occurs (i)�upon an event of default or (ii)�when the amount of domestic cash or cash equivalents held in certain accounts is at any time less than $500 million, and ends when both (a)�no event of default has existed for 45�days and (b)�the amount of domestic cash or cash equivalents held in such accounts has been equal to or greater than $500 million for 45�days. Such restrictions limit the Borrowers� ability to, among other things, allow certain subsidiaries that manufacture or process inventory for the Borrowers to borrow secured debt or unsecured debt beyond a certain amount, create any liens upon

�

any of the Borrowers� property (other than customary permitted liens and liens on up to $1.5�billion of secured credit facilities debt (which amount includes our Secured Revolving Line of Credit)), declare or make any distributions, create any encumbrance on the ability of a subsidiary to make any upstream payments, make asset dispositions other than certain ordinary course dispositions, make certain loans, make payments with respect to subordinated debt or certain borrowed money prior to its due date, become a party to certain agreements restricting the Borrowers� ability to incur or repay debt, grant liens, make distributions, or modify loan agreements or enter into any non-arm�s-length transaction with an affiliate.

During a Domestic Cash Trigger Period, the Borrowers are required to maintain a fixed charge coverage ratio each four-fiscal quarter periods ending on and after March�29, 2014.

At September�27, 2014, our Secured Revolving Line of Credit had an outstanding loan balance of $55 million, with an interest rate of 2.75%, and up to $445 million remained available for future borrowings. As of September�27, 2014, we were in compliance with all required covenants stated in the Loan Agreement, and we were not in a Domestic Cash Trigger Period.

The agreements governing our 6.00% Notes, 6.75% Notes, 7.00% Notes, 7.50% Notes and 7.75% Notes and our Secured Revolving Line of Credit contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the Secured Revolving Line of Credit to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable, which would have a material adverse effect on us.

Other Long-Term Liabilities

Other long-term liabilities in the contractual obligations table above primarily consists of $74 million of payments due under certain software and technology licenses that will be paid through 2018 and $1 million of payments related to employee compensation and benefit obligations that will be paid through 2019 and beyond.

Other long-term liabilities in the contractual obligations table above exclude amounts recorded on our condensed consolidated balance sheet that do not require us to make cash payments, which, as of September�27, 2014, primarily consisted of $20 million of deferred gains resulting from certain real estate transactions that occurred in Sunnyvale, California in 1998, in Markham, Ontario, Canada in 2008 and in Singapore in 2013. Deferred rent related to our facilities in Sunnyvale, California of $7 million and accruals related to facility consolidation and site closure costs under our 2012 restructuring plan of $6 million are excluded from other long-term liabilities in the contractual obligations table above as they are included in the operating leases obligations. Also excluded from other long-term liabilities in the contractual obligations table above are $4 million of environmental reserves and $4 million of non-current unrecognized tax benefits, which represent potential cash payments that could be payable by us upon settlements with the related authorities. We have not included these amounts in the contractual obligations table above because we cannot make reasonably reliable estimates regarding the timing of the settlements with the related authorities, if any.

Capital Lease Obligations

As of September�27, 2014, we had aggregate outstanding capital lease obligations of $12 million for one of our facilities in Canada, which is payable in monthly installments through 2017.

Operating Leases

We lease certain of our facilities and, in some jurisdictions, we lease the land on which our facilities are built under non-cancelable lease agreements that expire at various dates through 2025. We lease certain manufacturing and office equipment for terms ranging from one to five years. Total future non-cancelable lease obligations as of September�27, 2014 were $356 million, including $295 million of future lease payments and estimated operating costs related to the real estate transactions that occurred in Austin, Texas, Sunnyvale, California, and Singapore.

�

Purchase Obligations

Our purchase obligations primarily include our obligations to purchase wafers and substrates from third parties, excluding our wafer purchase commitments to GF under the WSA. As of September�27, 2014, total non-cancelable purchase obligations were $465 million.

Obligations to GF

Obligations to GF represent all our contractual obligations to GF through December�31, 2014. As of September�27, 2014, we currently estimate the remaining contractual obligations to GF will be $471 million through December�31, 2014. We are not able to meaningfully quantify or estimate our purchase obligations to GF beyond December�31, 2014, but we expect that our future purchases from GF will continue to be material.

Off-Balance Sheet Arrangements

As of September�27, 2014, we had no off-balance sheet arrangements.

�

ITEM�3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to �Part II, Item�7A, Quantitative and Qualitative Disclosures about Market Risk,� in our Annual Report on Form 10-K for the year ended December�28, 2013.

Interest Rate Risk

We have issued long-term debt in U.S. dollars based on market conditions at the time of financing. In the third quarter of 2014, we entered into interest rate swaps of $250 million, that are designed as fair value hedges, for a portion of our 6.75% Notes to reduce our potential exposure due to interest rate variability.�In effect, the hedge transaction converted a portion of the fixed interest payments payable on the 6.75% Notes into variable interest payments.

�

ITEM�4.

CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports made under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC�s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of September�27, 2014, the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There was no change in our internal controls over financial reporting during our third quarter of 2014 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

�

PART II. OTHER INFORMATION

�

ITEM�1A.

RISK FACTORS

The risks and uncertainties described below are not the only ones we face. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously.

Intel Corporation�s dominance of the microprocessor market and its aggressive business practices may limit our ability to compete effectively.

Intel Corporation has dominated the market for microprocessors for many years. Intel�s market share, margins and significant financial resources enable it to market its products aggressively, to target our customers and our channel partners with special incentives and to discipline customers who do business with us. These aggressive activities have in the past and are likely in the future to result in lower unit sales and a lower average selling price for our products and adversely affect our margins and profitability.

As long as Intel remains in this dominant position, we may be materially adversely affected by Intel�s:

�

business practices, including rebating and allocation strategies and pricing actions, designed to limit our market share and margins;

�

product mix and introduction schedules;

�

product bundling, marketing and merchandising strategies;

�

exclusivity payments to its current and potential customers and channel partners;

�

control over industry standards, PC manufacturers and other PC industry participants, including motherboard, memory, chipset and basic input/output system, or BIOS, suppliers and software companies as well as the graphics interface for Intel platforms; and

�

marketing and advertising expenditures in support of positioning the Intel brand over the brand of its OEM customers.

Intel exerts substantial influence over computer manufacturers and their channels of distribution through various brand and other marketing programs. As a result of Intel�s dominant position in the microprocessor market, Intel has been able to control x86 microprocessor and computer system standards and benchmarks and to dictate the type of products the microprocessor market requires of us. Intel also dominates the computer system platform, which includes core logic chipsets, graphics chips, motherboards and other components necessary to assemble a computer system. Original equipment manufacturers (OEMs) that purchase microprocessors for computer systems are highly dependent on Intel, less innovative on their own and, to a large extent, are distributors of Intel technology. Additionally, Intel is able to drive de facto standards for x86 microprocessors that could cause us and other companies to have delayed access to such standards.

Intel has substantially greater financial resources than we do and accordingly spends substantially greater amounts on marketing and research and development than we do. We expect Intel to maintain its dominant position and to continue to invest heavily in marketing, research and development, new manufacturing facilities and other technology companies. To the extent Intel manufactures a significantly larger portion of its microprocessor products using more advanced process technologies, or introduces competitive new products into the market before we do, we may be more vulnerable to Intel�s aggressive marketing and pricing strategies for microprocessor products. For example, Intel recently introduced microprocessors for low-cost notebooks, similar to products that we offer for low-cost notebooks.

�

Intel could also take actions that place our discrete GPUs at a competitive disadvantage, including giving one or more of our competitors in the graphics and visual solutions market, such as Nvidia Corporation, preferential access to its proprietary graphics interface or other useful information.

Intel�s dominant position in the microprocessor market and integrated graphics chipset market, its introduction of competitive new products, its existing relationships with top-tier OEMs and its aggressive marketing and pricing strategies could result in lower unit sales and a lower average selling price for our products, which could have a material adverse effect on us.

The success of our business is dependent upon our ability to introduce products on a timely basis with features and performance levels that provide value to our customers while supporting and coinciding with significant industry transitions.

Our success depends to a significant extent on the development, qualification, implementation and acceptance of new product designs and improvements that provide value to our customers. Our ability to develop, qualify and distribute, and have manufactured, new products and related technologies to meet evolving industry requirements, at prices acceptable to our customers and on a timely basis are significant factors in determining our competitiveness in our target markets. For example, form factors have increasingly shifted from desktop PCs and notebooks to tablets, and tablets have been one of the fastest growing form factors. Historically, a significant portion of our Computing and Graphics revenue has been related to desktop PCs. Currently, a significant portion of our business is focused on the consumer PC portions of the market, and we believe that consumer PC market conditions will continue to remain challenging. As consumers adopt new form factors, have new product feature preferences or have different requirements than those consumers in the PC market, PC sales could be negatively impacted, which could negatively impact our business. If we fail to or are delayed in developing, qualifying or shipping new products or technologies that provide value to our customers and address these new trends or if we fail to predict which new form factors consumers will adopt, we may lose competitive positioning, which could cause us to lose market share and require us to discount the selling prices of our products. Although we make substantial investments in research and development, we cannot be certain that we will be able to develop, obtain or successfully implement new products and technologies on a timely basis.

Delays in developing, qualifying or shipping new products can also cause us to miss our customers� product design windows or, in some cases, breach contractual obligations or cause us to pay penalties. If our customers do not include our products in the initial design of their computer systems or products, they will typically not use our products in their systems or products until at least the next design configuration. The process of being qualified for inclusion in a customer�s system or product can be lengthy and could cause us to further miss a cycle in the demand of end-users, which also could result in a loss of market share and harm our business.

Moreover, market demand requires that products incorporate new features and performance standards on an industry-wide basis. Over the life of a specific product, the sale price is typically reduced over time. The introduction of new products and enhancements to existing products is necessary to maintain the overall corporate average selling price. If we are unable to introduce new products with sufficiently high sale prices or to increase unit sales volumes capable of offsetting the reductions in the sale prices of existing products over time, our business could be materially adversely affected.

If we cannot generate sufficient revenue and operating cash flow or obtain external financing, we may face a cash shortfall and be unable to make all of our planned investments in research and development or other strategic investments.

Our ability to fund research and development expenditures depends on generating sufficient revenue and cash flow from operations and the availability of external financing, if necessary. Our research and development expenditures, together with ongoing operating expenses, will be a substantial drain on our cash flow and may decrease our cash balances. If new competitors, technological advances by existing competitors or other competitive factors require us to invest significantly greater resources than anticipated in our research and development efforts, our operating expenses would increase. If we are required to invest significantly greater resources than anticipated in research and development efforts without an increase in revenue, our operating results could decline.

�

We regularly assess markets for external financing opportunities, including debt and equity financing. Additional debt or equity financing may not be available when needed or, if available, may not be available on satisfactory terms. The health of the credit markets may adversely impact our ability to obtain financing when needed. Any downgrades from credit rating agencies such as Moody�s or Standard�& Poor�s may adversely impact our ability to obtain external financing or the terms of such financing. In addition, credit agency downgrades or concerns regarding our credit worthiness may impact relationships with our suppliers, who may limit our credit lines. Our inability to obtain needed financing or to generate sufficient cash from operations may require us to abandon projects or curtail planned investments in research and development or other strategic initiatives. If we curtail planned investments in research and development or abandon projects, our products may fail to remain competitive and our business would be materially adversely affected.

We rely on GF to manufacture most of our microprocessor and APU products and certain of our GPU and semi-custom products. If GF is not able to satisfy our manufacturing requirements, our business could be adversely impacted.

The WSA governs the terms by which we purchase products manufactured by GF. Pursuant to the WSA, we are required to purchase all of our microprocessor and APU product requirements from GF with limited exceptions. If GF is unable to achieve anticipated manufacturing yields, remain competitive using or implementing advanced leading-edge process technologies needed to manufacture future generations of our products, manufacture our products on a timely basis at competitive prices or meet our capacity requirements, then we may experience delays in product launches, supply shortages for certain products or increased costs and our business could be materially adversely affected.

On March�30, 2014, we entered into a fourth amendment to the WSA with GF. The primary effect of the fourth amendment was to establish volume purchase commitments and fixed pricing for the 2014 calendar year as well as to modify certain other terms of the WSA applicable to wafers for some of our microprocessor, graphics processor and semi-custom game console products to be delivered by GF to us during the 2014 calendar year. If our requirements are less than the number of wafers that we committed to purchase, we could have excess inventory or higher inventory unit costs, both of which will adversely impact our gross margin and our results of operations.

In addition, GF has relied on Mubadala Technology Investments LLC (Mubadala Tech), formerly known as Advanced Technology Investment Company, for its funding needs. If Mubadala Tech fails to adequately fund GF on a timely basis, or at all, GF�s ability to manufacture products for us could be materially adversely affected.

We rely on third parties to manufacture our products, and if they are unable to do so on a timely basis in sufficient quantities and using competitive technologies, our business could be materially adversely affected.

We rely on third-party wafer foundries to fabricate the silicon wafers for all of our products. We also rely on third-party manufacturers to assemble, test, mark and pack certain of our products. It is important to have reliable relationships with all of these third-party manufacturing suppliers to ensure adequate product supply to respond to customer demand.

We cannot assure you that these manufacturers or our other third-party manufacturing suppliers will be able to meet our near-term or long-term manufacturing requirements. If we experience supply constraints from our third-party manufacturing suppliers, we may be required to allocate the affected products amongst our customers, which could have a material adverse effect on our relationships with these customers and on our financial condition. In addition, if we are unable to meet customer demand due to fluctuating or late supply from our manufacturing suppliers, it could result in lost sales and have a material adverse effect on our business.

We do not have long-term commitment contracts with some of our third-party manufacturing suppliers. We obtain some of these manufacturing services on a purchase order basis and these manufacturers are not required to provide us with any specified minimum quantity of product beyond the quantities in an existing purchase order. Accordingly, we depend on these suppliers to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable quality and at acceptable manufacturing yields and to deliver those products to us on a timely basis and at acceptable prices. The manufacturers we use also fabricate wafers and assemble, test and package products for other companies, including certain of our competitors. They could choose to prioritize capacity for other users, increase the prices that they charge us on short notice or reduce or eliminate deliveries to us, which could have a material adverse effect on our business.

�

Other risks associated with our dependence on third-party manufacturers include limited control over delivery schedules and quality assurance, lack of capacity in periods of excess demand, misappropriation of our intellectual property, dependence on several small undercapitalized subcontractors and limited ability to manage inventory and parts. Moreover, if any of our third-party manufacturers suffer any damage to facilities, lose benefits under material agreements, experience power outages, lack sufficient capacity to manufacture our products, encounter financial difficulties, are unable to secure necessary raw materials from their suppliers or suffer any other disruption or reduction in efficiency, we may encounter supply delays or disruptions. If we are unable to secure sufficient or reliable supplies of products, our ability to meet customer demand may be adversely affected and this could materially affect our business.

If we transition the production of some of our products to new manufacturers, we may experience delayed product introductions, lower yields or poorer performance of our products. If we experience problems with product quality or are unable to secure sufficient capacity from a particular third-party manufacturer, or if we for other reasons cease utilizing one of those suppliers, we may be unable to secure an alternative supply for any specific product in a short time frame. We could experience significant delays in the shipment of our products if we are required to find alternative third-party manufacturers, which could have a material adverse effect on our business.

Failure to achieve expected manufacturing yields for our products could negatively impact our financial results.

Semiconductor manufacturing yields are a result of both product design and process technology, which is typically proprietary to the manufacturer, and low yields can result from design failures, process technology failures or a combination of both. Our third-party foundries, including GF, are responsible for the process technologies used to fabricate silicon wafers. If our third-party foundries experience manufacturing inefficiencies or encounter disruptions, errors or difficulties during production, we may fail to achieve acceptable yields or experience product delivery delays. We cannot be certain that our third-party foundries will be able to develop, obtain or successfully implement leading-edge process technologies needed to manufacture future generations of our products profitably or on a timely basis or that our competitors will not develop new technologies, products or processes earlier. Moreover, during periods when foundries are implementing new process technologies, their manufacturing facilities may not be fully productive. A substantial delay in the technology transitions to smaller process technologies could have a material adverse effect on us, particularly if our competitors transition to more cost effective technologies before us. Any decrease in manufacturing yields could result in an increase in per unit costs, which would adversely impact our gross margin and/or force us to allocate our reduced product supply amongst our customers, which could harm our relationships with our customers and reputation and materially adversely affect our business.

We may not be able to successfully implement our long-term business strategy.

We are implementing a long-term business strategy to refocus our business to address markets beyond our core PC market to the faster growing ultra low-power client, embedded, professional graphics, semi-custom and dense server markets. Currently, a significant portion of our business is focused on the consumer PC portions of the market, and we believe that the consumer PC market will continue to remain challenging. One of the goals of our long-term strategy is to derive approximately 50% of our revenue from high growth adjacent markets by the end of 2015. As part of our long-term business strategy, effective July�1, 2014, we realigned our organizational structure to create a Computing and Graphics Business Group and an Enterprise, Embedded and Semi-Custom Business Group. However, if demand for products from high growth adjacent markets is below our expectations or if we are not able to improve cost or operational efficiencies of this business model, we may not realize benefits from our long-term business strategy. Despite our efforts, we may not be able to effectively implement our strategy in a timely manner to exploit potential market opportunities, achieve the goals of our long-term business strategy or meet competitive challenges.

Moreover, our business strategy is dependent on creating products that anticipate customer requirements and emerging industry trends. For example, in our first quarter of 2014, we began sampling �Seattle,� our first 64-bit ARM server processor and in the second quarter of 2014, we announced a 64-bit ARM architectural license for the development of custom high-

�

performance cores for high-growth adjacent markets.�We cannot assure you that our new strategic direction, including our efforts to address markets beyond our core PC market and our efforts to create ARM-based products will result in innovative products and technologies that provide value to our customers. In addition, we may be entering markets where current and new competitors may be able to adapt more quickly to customer requirements and emerging technologies. We cannot assure you that we will be able to compete successfully against current or new competitors who may have stronger positions in these new markets. We may face delays or disruptions in research and development efforts, or we may be required to significantly invest greater resources in research and development than anticipated.

The completion and impact of the 2014 Restructuring Plan and our transformation initiatives could adversely affect us.

We have taken and plan to take a number of actions, including the 2014 Restructuring Plan announced in October 2014, designed to improve operating efficiencies and cost savings. Pursuant to the 2014 Restructuring Plan, we plan to reduce global headcount by approximately 7 percent and to align our real estate footprint with our reduced headcount. These restructuring actions could have an adverse impact on our business as a result of decreases in employee morale and the failure to meet operational targets due to the loss of employees. We cannot be sure that we will realize operational savings or any other benefits from the 2014 Restructuring Plan. Any operating savings are subject to assumptions, estimates and significant economic, competitive and other uncertainties, some of which are beyond our control. If these estimates and assumptions are incorrect, if we experience delays or if other unforeseen events occur, our business and financial results could be adversely affected. In addition, as a result of the 2014 Restructuring Plan, we expect to record a restructuring and impairment charge of approximately $57 million in the fourth quarter of 2014, primarily related to severance, and a restructuring charge of approximately $13 million in the first half of 2015, primarily related to real estate actions. We also expect to make cash payments related to the 2014 Restructuring Plan of approximately $34 million in the fourth quarter of 2014 and approximately $20 million in the first half of 2015.

Global economic uncertainty may adversely impact our business and operating results.

Uncertain global economic conditions have in the past and may in the future adversely impact our business. Uncertainty in the worldwide economic environment may negatively impact consumer confidence and spending causing our customers to postpone purchases. In addition, during challenging economic times, our current or potential future customers may experience cash flow problems and as a result may modify, delay or cancel plans to purchase our products. Additionally, if our customers are not successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may delay payment of, accounts receivable that they owe us. The risk related to our customers� potentially defaulting on or delaying payments to us is increased because we expect that a small number of customers will continue to account for a substantial part of our revenue. Any inability of our current or potential future customers to pay us for our products may adversely affect our earnings and cash flow. Moreover, our key suppliers may reduce their output or become insolvent, thereby adversely impacting our ability to manufacture our products. In addition, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or private or public sales of debt or equity securities.

We may not be able to generate sufficient cash to service our debt obligations or meet our working capital requirements.

Our ability to make payments on and to refinance our debt will depend on our financial and operating performance, which may fluctuate significantly from quarter to quarter, and is subject to prevailing economic conditions and financial, business and other factors, many of which are beyond our control. We cannot assure you that we will be able to generate cash flow or that we will be able to borrow funds, including under our Secured Revolving Line of Credit, in amounts sufficient to enable us to service our debt or to meet our working capital requirements. If we are not able to generate sufficient cash flow from operations or to borrow sufficient funds to service our debt, we may be required to sell assets or equity, reduce expenditures, refinance all or a portion of our existing debt or obtain additional financing. We cannot assure you that we will be able to refinance our debt, sell assets or equity, borrow funds under our Secured Revolving Line of Credit or borrow more funds on terms acceptable to us, if at all.

�

We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations.

Our total debt as of September�27, 2014 was $2.2 billion, which reflects the debt discount adjustment on our�6.00% Notes.

Our substantial indebtedness may:

�

make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments;

�

limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate and other purposes;

�

limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general corporate purposes;

�

require us to use a substantial portion of our cash flow from operations to make debt service payments;

�

place us at a competitive disadvantage compared to our less leveraged competitors; and

�

increase our vulnerability to the impact of adverse economic and industry conditions.

We enter into interest rate swap agreements from time to time to manage our exposure to interest rate risk. These swap agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements, the risk that these arrangements may not be effective in reducing our exposure to changes in interest rates and the risk that our exposure to interest rates may increase if interest rates increase.

The agreements governing our notes and our Secured Revolving Line of Credit impose restrictions on us that may adversely affect our ability to operate our business.

The indentures governing our 7.75% Notes, 7.50% Notes, 7.00% Notes and 6.75% Notes contain various covenants which limit our ability to, among other things:

�

incur additional indebtedness;

�

pay dividends and make other restricted payments;

�

make certain investments, including investments in our unrestricted subsidiaries;

�

create or permit certain liens;

�

create or permit restrictions on the ability of certain restricted subsidiaries to pay dividends or make other distributions to us;

�

use the proceeds from sales of assets;

�

enter into certain types of transactions with affiliates; and

�

consolidate or merge or sell our assets as an entirety or substantially as an entirety.

�

Our Secured Revolving Line of Credit also contains various covenants which limit our ability to, among other things, make certain investments, merge or consolidate with other entities and permit certain subsidiaries from incurring indebtedness. In addition, during a domestic cash trigger period (a Domestic Cash Trigger Period), which occurs (i)�upon an event of default or (ii)�when the amount of domestic cash or cash equivalents held in certain accounts is at any time less than $500 million, and ends when both (a)�no event of default has existed for 45�days and (b)�the amount of domestic cash or cash equivalents held in such accounts has been equal to or greater than $500 million for 45�days, we will become subject to various additional covenants which limit our ability to, among other things:

�

allow certain subsidiaries that manufacture or process inventory for us or AMD International Sales�& Service, Ltd. (together, the Borrowers) to borrow secured debt or unsecured debt beyond a certain amount;

�

create any liens upon any of the Borrowers� property (other than customary permitted liens and liens on up to $1.5�billion of secured credit facilities debt (which amount includes our Secured Revolving Line of Credit));

�

declare or make any distributions;

�

create any encumbrance on the ability of a subsidiary to make any upstream payments;

�

make asset dispositions other than certain ordinary course dispositions;

�

make certain loans, make payments with respect to subordinated debt or certain borrowed money prior to its due date;

�

become a party to certain agreements restricting the Borrowers� ability to incur or repay debt, grant liens, make distributions; and

�

modify loan agreements or enter into any non-arm�s-length transaction with an affiliate.

During a Domestic Cash Trigger Period, we also would be required to maintain a fixed charge coverage ratio each four-fiscal quarter period ending on and after March�29, 2014.

The agreements governing our notes and our Secured Revolving Line of Credit contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. For example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $50 million would cause a cross default under the indentures governing our 7.75% Notes, 7.50% Notes, 7.00% Notes, 6.75% Notes and 6.00% Notes, as well as under our Secured Revolving Line of Credit. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under our Secured Revolving Line of Credit to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable. If the note holders or the trustee under the indentures governing our 7.75% Notes, 7.50% Notes, 7.00% Notes, 6.75% Notes or 6.00% Notes or the lenders under our Secured Revolving Line of Credit accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay those borrowings.

The markets in which our products are sold are highly competitive.

The markets in which our products are sold are very competitive and delivering the latest and best products to market on a timely basis is critical to achieving revenue growth. We believe that the main factors that determine our product competitiveness are timely product introductions, product quality (including enabling state-of-the-art visual experience), power consumption (including battery life), reliability, selling price, processor clock speed, size (or form factor), cost, adherence to industry standards (and the creation of open industry standards), level of integration, software and hardware compatibility and stability and brand awareness.

We expect that competition will continue to be intense due to rapid technological changes, frequent product introductions by our competitors or new competitors of products that may provide better performance/experience or may include additional features that render our products uncompetitive. We may also face aggressive pricing by competitors, especially during challenging economic times. Some competitors may have greater access or rights to companion technologies, including interface, processor and memory technical information. With the introduction of our APU products and other competing solutions, we believe that demand for additional discrete graphic cards may decrease in the future due to both the improvement of the quality of our competitor�s integrated graphics and the graphics performance of our APUs. If competitors introduce competitive new products into the market before us, demand for our products could be adversely impacted and our business could be adversely affected.

�

We are implementing a long-term business strategy to refocus our business to address markets beyond our core PC market to the high-growth adjacent ultra low-power client, embedded, professional graphics, semi-custom and dense server markets. However, we are entering markets with new and different competitors who may be able to adapt more quickly to customer requirements and emerging technologies. We cannot assure you that we will be able to compete successfully against current or new competitors who may have stronger positions in these new markets or superior ability to anticipate customer requirements and emerging industry trends.

The loss of a significant customer may have a material adverse effect on us.

Collectively, our top five customers accounted for approximately 64% of our net revenue in the third quarter of 2014. On a segment basis, during the third quarter of 2014, five customers accounted for approximately 55% of the net revenue of our Computing and Graphics segment and five customers accounted for approximately 91% of the net revenue of our Enterprise, Embedded and Semi-Custom segment. We expect that a small number of customers will continue to account for a substantial part of revenues of our businesses in the future. If one of our key customers decides to stop buying our products, or if one of these customers materially reduces its operations or its demand for our products, our business would be materially adversely affected.

Our receipt of revenue from our semi-custom SoC products is dependent upon our technology being designed into third-party products and the success of those products.

The revenue that we receive from our semi-custom SoC products is in the form of non-recurring engineering fees charged to third parties for design and development services and revenue received in connection with sales of our semi-custom SoC products to these third parties. As a result, our ability to generate revenue from our semi-custom products depends on our ability to secure customers for our semi-custom design pipeline and our semi-custom SoC products being incorporated into those customer�s products. Any revenue from sales of our semi-custom SoC products is directly related to sales of the third-party�s products and reflective of their success in the market. Moreover, we have no control over the marketing efforts of these third parties, and we cannot make any assurances that sales of their products will be successful in current or future years. Consequently, the semi-custom SoC product revenue expected by us may not be fully realized and our operating results may be adversely affected.

The demand for our products depends in part on the market conditions in the industries into which they are sold. Fluctuations in demand for our products or a market decline in any of these industries could have a material adverse effect on our results of operations.

A significant portion of our business is currently dependent upon the market for desktop PCs and notebooks. Form factors have increasingly shifted from desktop PCs and notebooks to tablets, with tablets being one of the fastest growing form factors. Historically, a significant portion of our Computing Solutions revenue has been related to desktop PCs. Currently, a significant portion of our business is focused on the consumer PC portions of the market, and we believe that consumer PC market conditions will continue to remain challenging. Industry-wide fluctuations in the computer marketplace have materially adversely affected us in the past and may materially adversely affect us in the future. The success of our semi-custom SoC products is dependent on securing customers for our semi-custom design pipeline and consumer market conditions, including the success of the Sony PlayStation^�4 and Microsoft Xbox One game console systems.

Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property.

In the design and development of new products and product enhancements, we rely on third-party intellectual property such as software development tools and hardware testing tools. Furthermore, certain product features may rely on intellectual property acquired from third parties. The design requirements necessary to meet consumer demand for more features and greater functionality from semiconductor products may exceed the capabilities of the third-party intellectual property or development tools available to us. If the third-party intellectual property that we use becomes unavailable, is not available in the time frame or price point needed for our new products or fails to produce designs that meet customer demands, our business could be materially adversely affected.

�

We depend on third-party companies for the design, manufacture and supply of motherboards, BIOS software and other computer platform components to support our business.

We depend on third-party companies for the design, manufacture and supply of motherboards, BIOS software and other components that our customers utilize to support our microprocessor, GPU and APU offerings. We also rely on our add-in-boards (AIBs) to support our GPU and APU products. In addition, our microprocessors are not designed to function with motherboards and chipsets designed to work with Intel microprocessors. If the designers, manufacturers, AIBs and suppliers of motherboards and other components decrease their support for our product offerings, our business could be materially adversely affected.

If we lose Microsoft Corporation�s support for our products or other software vendors do not design and develop software to run on our products, our ability to sell our products could be materially adversely affected.

Our ability to innovate beyond the x86 instruction set controlled by Intel depends partially on Microsoft designing and developing its operating systems to run on or support our x86-based microprocessor products. With respect to our graphics products, we depend in part on Microsoft to design and develop its operating system to run on or support our graphics products. Similarly, the success of our products in the market, such as our APU products, is dependent on independent software providers designing and developing software to run on our products. If Microsoft does not continue to design and develop its operating systems so that they work with our x86 instruction sets or does not continue to develop and maintain their operating systems to support our graphics products, independent software providers may forego designing their software applications to take advantage of our innovations and customers may not purchase PCs with our products. In addition, some software drivers sold with our products are certified by Microsoft. If Microsoft did not certify a driver, or if we otherwise fail to retain the support of Microsoft or other software vendors, our ability to market our products would be materially adversely affected.

We may incur future impairments of goodwill.

We perform our annual goodwill impairment analysis as of the first day of the fourth quarter of each year. Subsequent to our annual goodwill impairment analysis, we monitor for any events or changes in circumstances, such as significant adverse changes in business climate or operating results, changes in management�s business strategy, an inability to successfully introduce new products in the marketplace, an inability to successfully achieve internal forecasts or significant declines in our stock price, which may represent an indicator of impairment. The occurrence of any of these events may require us to record future goodwill impairment charges.

Uncertainties involving the ordering and shipment of our products could materially adversely affect us.

We typically sell our products pursuant to individual purchase orders. We generally do not have long-term supply arrangements with our customers or minimum purchase requirements except that orders generally must be for standard pack quantities. Generally, our customers may cancel orders for standard products more than 30 days prior to shipment without incurring significant fees. We base our inventory levels in part on customers� estimates of demand for their products, which may not accurately predict the quantity or type of our products that our customers will want in the future or ultimately end up purchasing. Our ability to forecast demand is even further complicated when we sell indirectly through distributors, as our forecasts for demand are then based on estimates provided by multiple parties.

PC and consumer markets are characterized by short product lifecycles, which can lead to rapid obsolescence and price erosion. In addition, our customers may change their inventory practices on short notice for any reason. We may build inventories during periods of anticipated growth, and the cancellation or deferral of product orders or overproduction due to failure of anticipated orders to materialize, could result in excess or obsolete inventory, which could result in write-downs of inventory and an adverse effect on gross margins.

�

Factors that may result in excess or obsolete inventory, which could result in write-downs of the value of our inventory, a reduction in the average selling price or a reduction in our gross margin include:

�

a sudden or significant decrease in demand for our products;

�

a production or design defect in our products;

�

a higher incidence of inventory obsolescence because of rapidly changing technology and customer requirements;

�

a failure to accurately estimate customer demand for our products, including for our older products as our new products are introduced; or

�

our competitors taking aggressive pricing actions.

Because market conditions are uncertain and because we believe that consumer PC market conditions will continue to remain challenging, these and other factors could materially adversely affect our business.

Our reliance on third-party distributors and AIB partners subjects us to certain risks.

We market and sell our products directly and through third-party distributors and AIB partners pursuant to agreements that can generally be terminated for convenience by either party upon prior notice to the other party. These agreements are non-exclusive and permit both our distributors and AIBs to offer our competitors� products. We are dependent on our distributors and AIBs to supplement our direct marketing and sales efforts. If any significant distributor or AIB or a substantial number of our distributors or AIBs terminated their relationship with us, decided to market our competitors� products over our products or decided not to market our products at all, our ability to bring our products to market would be impacted and we would be materially adversely affected. If we are unable to manage the risks related to the use of our third-party distributors and AIB partners or offer the appropriate incentives to focus them on the sale of our products, our business could be materially adversely affected.

Additionally, distributors and AIBs typically maintain an inventory of our products. In most instances, our agreements with distributors protect their inventory of our products against price reductions, as well as provide return rights for any product that we have removed from our price book and that is not more than 12 months older than the manufacturing code date. Some agreements with our distributors also contain standard stock rotation provisions permitting limited levels of product returns. Our agreements with AIBs protect their inventory of our products against price reductions. We defer the gross margins on our sales to distributors and AIBs, resulting from both our deferral of revenue and related product costs, until the applicable products are re-sold by the distributors or the AIBs. However, in the event of a significant decline in the price of our products, the price protection rights we offer would materially adversely affect us because our revenue and corresponding gross margin would decline.

Our inability to continue to attract and retain qualified personnel may hinder our product development programs.

Much of our future success depends upon the continued service of numerous qualified engineering, marketing, sales and executive personnel. If we are not able to continue to attract, train and retain qualified personnel necessary for our business, the progress of our product development programs could be hindered, and we could be materially adversely affected. To help attract, retain and motivate qualified personnel, we use share-based incentive awards such as employee stock options and non-vested share units (restricted stock units). If the value of such stock awards does not appreciate as measured by the performance of the price of our common stock, or if our share-based compensation otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain and motivate personnel could be weakened, which could harm our results of operations. In addition, our current and any future restructuring plans may adversely impact our ability to attract and retain key employees.

�

In the event of a change of control, we may not be able to repurchase our outstanding debt as required by the applicable indentures and our Secured Revolving Line of Credit, which would result in a default under the indentures and our Secured Revolving Line of Credit.

Upon a change of control, we will be required to offer to repurchase all of our 7.75% Notes, 7.50% Notes, 7.00% Notes and 6.75% Notes then outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding, the repurchase date, and to offer to repurchase all of our 6.00% Notes then outstanding at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding the repurchase date. In addition, a change of control would be an event of default under our Secured Revolving Line of Credit. As of September�27, 2014, $55 million was outstanding under our Secured Revolving Line of Credit and $2.1 billion was outstanding under our notes. Future debt agreements may contain similar provisions. We may not have the financial resources to repurchase our outstanding notes and prepay all of our outstanding obligations under our Secured Revolving Line of Credit.

The semiconductor industry is highly cyclical and has experienced severe downturns that have materially adversely affected, and may continue to materially adversely affect, our business in the future.

The semiconductor industry is highly cyclical and has experienced significant downturns, often in conjunction with constant and rapid technological change, wide fluctuations in supply and demand, continuous new product introductions, price erosion and declines in general economic conditions. We have incurred substantial losses in recent downturns, due to:

�

substantial declines in average selling prices;

�

the cyclical nature of supply/demand imbalances in the semiconductor industry;

�

a decline in demand for end-user products (such as PCs) that incorporate our products; and

�

excess inventory levels.

Industry-wide fluctuations in the computer marketplace have materially adversely affected us in the past and may materially adversely affect us in the future. Currently, a significant portion of our business is focused on the consumer PC portions of the market, and we believe that consumer PC market conditions will continue to remain challenging.

Global economic uncertainty and weakness have also impacted the semiconductor market as consumers and businesses have deferred purchases, which negatively impacted demand for our products. Our financial performance has been, and may in the future be, negatively affected by these downturns.

The growth of our business is also dependent on continued demand for our products from high-growth adjacent emerging global markets. Our ability to be successful in such markets depends in part on our ability to establish adequate local infrastructure, as well as our ability to cultivate and maintain local relationships in these markets. If demand from these markets is below our expectations, sales of our products may decrease, which would have a material adverse effect on us.

Our operating results are subject to quarterly and seasonal sales patterns.

A substantial portion of our quarterly sales have historically been made in the last month of the quarter. This uneven sales pattern makes prediction of revenues for each financial period difficult and increases the risk of unanticipated variations in quarterly results and financial condition. In addition, our operating results tend to vary seasonally. For example, historically, first quarter PC product sales are generally lower than fourth quarter sales. In addition, with respect to our semi-custom SoC products for game consoles, we expect sales patterns to follow the seasonal trends of a consumer business with sales in the first half of the year being lower than sales in the second half of the year. Many of the factors that create and affect quarterly and seasonal trends are beyond our control.

If essential equipment or materials are not available to manufacture our products, we could be materially adversely affected.

We purchase equipment and materials for our internal back-end manufacturing operations from a number of suppliers and our operations depend upon obtaining deliveries of adequate supplies of equipment and materials on a timely basis. Our third-

�

party suppliers also depend on the same timely delivery of adequate quantities of equipment and materials in the manufacture of our products. Certain equipment and materials that are used in the manufacture of our products are available only from a limited number of suppliers, or in some cases, a sole supplier. We also depend on a limited number of suppliers to provide the majority of certain types of integrated circuit packages for our microprocessors, including our APU products. Similarly, certain non-proprietary materials or components such as memory, printed circuit boards (PCBs), substrates and capacitors used in the manufacture of our products are currently available from only a limited number of sources. Because some of the equipment and materials that we and our third-party manufacturing suppliers purchase are complex, it is sometimes difficult to substitute one supplier for another.

From time to time, suppliers may extend lead times, limit supply or increase prices due to capacity constraints or other factors. Also, some of these materials and components may be subject to rapid changes in price and availability. Interruption of supply or increased demand in the industry could cause shortages and price increases in various essential materials. Dependence on a sole supplier or a limited number of suppliers exacerbates these risks. If we are unable to procure certain of these materials for our back-end manufacturing operations, or our third-party foundries or manufacturing suppliers are unable to procure materials for manufacturing our products, our business would be materially adversely affected.

If our products are not compatible with some or all industry-standard software and hardware, we could be materially adversely affected.

Our products may not be fully compatible with some or all industry-standard software and hardware. Further, we may be unsuccessful in correcting any such compatibility problems in a timely manner. If our customers are unable to achieve compatibility with software or hardware, we could be materially adversely affected. In addition, the mere announcement of an incompatibility problem relating to our products could have a material adverse effect on our business.

Costs related to defective products could have a material adverse effect on us.

Products as complex as those we offer may contain defects or failures when first introduced or when new versions or enhancements to existing products are released. We cannot assure you that, despite our testing procedures, errors will not be found in new products or releases after commencement of commercial shipments in the future, which could result in loss of or delay in market acceptance of our products, material recall and replacement costs, delay in recognition or loss of revenues, writing down the inventory of defective products, the diversion of the attention of our engineering personnel from product development efforts, defending against litigation related to defective products or related property damage or personal injury and damage to our reputation in the industry and could adversely affect our relationships with our customers. In addition, we may have difficulty identifying the end customers of the defective products in the field. As a result, we could incur substantial costs to implement modifications to correct defects. Any of these problems could materially adversely affect our business.

We could be subject to potential product liability claims if one of our products causes, or merely appears to have caused, an injury. Claims may be made by consumers or others selling our products, and we may be subject to claims against us even if an alleged injury is due to the actions of others. A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business.

If we fail to maintain the efficiency of our supply chain as we respond to changes in customer demand for our products, our business could be materially adversely affected.

Our ability to meet customer demand for our products depends, in part, on our ability to deliver the products our customers want on a timely basis. Accordingly, we rely on our supply chain for the manufacturing, distribution and fulfillment of our products. As we continue to grow our business, expand to high-growth adjacent markets, acquire new customers and strengthen relationships with existing customers, the efficiency of our supply chain will become increasingly important because many of our customers tend to have specific requirements for particular products, and specific time-frames in which they require delivery of these products. If we are unable to consistently deliver the right products to our customers on a timely basis in the right locations, our customers may reduce the quantities they order from us, which could have a material adverse effect on our business.

�

We outsource to third parties certain supply-chain logistics functions, including portions of our product distribution, transportation management and information technology support services.

We rely on third-party providers to operate our regional product distribution centers and to manage the transportation of our work-in-process and finished products among our facilities, to our manufacturing suppliers and to our customers. In addition, we rely on third parties to provide certain information technology services to us, including help desk support, desktop application services, business and software support applications, server and storage administration, data center operations, database administration and voice, video and remote access. We cannot guarantee that these providers will fulfill their respective responsibilities in a timely manner in accordance with the contract terms, in which case our internal operations and the distribution of our products to our customers could be materially adversely affected. Also, we cannot guarantee that our contracts with these third-party providers will be renewed, in which case we would have to transition these functions in-house or secure new providers, which could have a material adverse effect on our business if the transition is not executed appropriately.

Our business is dependent upon the proper functioning of our internal business processes and information systems and modification or interruption of such systems may disrupt our business, processes and internal controls.

We rely upon a number of internal business processes and information systems to support key business functions, and the efficient operation of these processes and systems is critical to our business. Our business processes and information systems need to be sufficiently scalable to support the growth of our business and may require modifications or upgrades that expose us to a number of operational risks. We are currently pursuing initiatives to transform and optimize our business operations through the reengineering of certain processes, investment in automation and engagement of strategic partners or resources to assist with certain business functions. These changes may be costly and disruptive to our operations and could impose substantial demands on management time.

These changes may also require changes in our information systems, modification of internal control procedures and significant training of employees and third-party resources. We are currently implementing an initiative to transition certain key information technology applications and business systems from various development locations to centralized consolidated data centers. There can be no assurance that our business and operations will not experience any disruption in connection with this transition. Our information technology systems, and those of third-party information technology providers or business partners, may also be vulnerable to damage or disruption caused by circumstances beyond our control including catastrophic events, power anomalies or outages, natural disasters, viruses or malware, and computer system or network failures. There can be no assurance that our business systems or those of our third-party business partners would not be subject to similar incidents, including cyber-security incidents, exposing us to significant cost, reputational harm and disruption or damage to our business.

Data breaches and cyber-attacks could compromise our intellectual property or other sensitive information and cause significant damage to our business and reputation.

In the ordinary course of our business, we maintain sensitive data on our networks, including our intellectual property and proprietary or confidential business information relating to our business and that of our customers and business partners. The secure maintenance of this information is critical to our business and reputation. We believe that companies in the technology industry have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access. Our network and storage applications may be subject to unauthorized access by hackers or breached due to operator error, malfeasance or other system disruptions. In some cases, it is difficult to anticipate or immediately detect such incidents and the damage caused thereby. These data breaches and any unauthorized access or disclosure of our information or intellectual property could compromise our intellectual property and expose sensitive business information. Cyber-attacks could also cause us to incur significant remediation costs, disrupt key business operations and divert attention of management and key information technology resources. These incidents could also subject us to liability, expose us to significant expense and cause significant harm to our reputation and business.

�

Acquisitions could disrupt our business, harm our financial condition and operating results or dilute, or adversely affect the price of, our common stock.

Our success will depend, in part, on our ability to expand our product offerings and grow our business in response to changing technologies, customer demands and competitive pressures. In some circumstances, we may pursue growth through the acquisition of complementary businesses, solutions or technologies rather than through internal development. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to successfully complete identified acquisitions. Moreover, if such acquisitions require us to seek additional debt or equity financing, we may not be able to obtain such financing on terms favorable to us or at all. Even if we successfully complete an acquisition, we may not be able to assimilate and integrate effectively or efficiently the acquired business, technologies, solutions, assets, personnel or operations, particularly if key personnel of the acquired company decide not to work for us. Acquisitions may also involve the entry into geographic or business markets in which we have little or no prior experience. Consequently, we may not achieve anticipated benefits of the acquisitions which could harm our operating results. In addition, to complete an acquisition, we may issue equity securities, which would dilute our stockholders� ownership and could adversely affect the price of our common stock, as well as incur debt, assume contingent liabilities or have amortization expenses and write-downs of acquired assets, which could adversely affect our results of operations. Acquisitions may also reduce our cash available for operations and other uses, which could harm our business.

Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us.

We maintain operations around the world, including in the United States, Canada, Europe and Asia. We rely on third-party wafer foundries in Europe and Asia. Nearly all product assembly and final testing of our products is performed at manufacturing facilities, operated by us as well as third-party manufacturing facilities, in China, Malaysia and Taiwan. We also have international sales operations. International sales, as a percent of net revenue, were 82% in the third quarter of 2014. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future.

The political, legal and economic risks associated with our operations in foreign countries include, without limitation:

�

expropriation;

�

changes in a specific country�s or region�s political or economic conditions;

�

changes in tax laws, trade protection measures and import or export licensing requirements;

�

difficulties in protecting our intellectual property;

�

difficulties in managing staffing and exposure to different employment practices and labor laws;

�

changes in foreign currency exchange rates;

�

restrictions on transfers of funds and other assets of our subsidiaries between jurisdictions;

�

changes in freight and interest rates;

�

disruption in air transportation between the United States and our overseas facilities;

�

loss or modification of exemptions for taxes and tariffs; and

�

compliance with U.S. laws and regulations related to international operations, including export control and economic sanctions laws and regulations and the Foreign Corrupt Practices Act.

In addition, our worldwide operations (or those of our business partners) could be subject to natural disasters such as earthquakes, tsunamis, flooding, typhoons and volcanic eruptions that disrupt manufacturing or other operations. For example, our Sunnyvale operations are located near major earthquake fault lines in California. Any conflict or uncertainty in the

�

countries in which we operate, including public health issues (for example, an outbreak of a contagious disease such as Avian Influenza), safety issues, natural disasters, fire, disruptions of service from utilities, nuclear power plant accidents or general economic or political factors, could have a material adverse effect on our business. Any of the above risks, should they occur, could result in an increase in the cost of components, production delays, general business interruptions, delays from difficulties in obtaining export licenses for certain technology, tariffs and other barriers and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign laws, any of which could ultimately have a material adverse effect on our business.

Worldwide political conditions may adversely affect demand for our products.

Worldwide political conditions may create uncertainties that could adversely affect our business. The United States has been and may continue to be involved in armed conflicts that could have a further impact on our sales and our supply chain. The consequences of armed conflict, political instability or civil or military unrest are unpredictable, and we may not be able to foresee events that could have a material adverse effect on us. Terrorist attacks or other hostile acts may negatively affect our operations, or adversely affect demand for our products, and such attacks or related armed conflicts may impact our physical facilities or those of our suppliers or customers. Furthermore, these attacks or hostile acts may make travel and the transportation of our products more difficult and more expensive, which could materially adversely affect us. Any of these events could cause consumer spending to decrease or result in increased volatility in the United States economy and worldwide financial markets.

Unfavorable currency exchange rate fluctuations could adversely affect us.

We have costs, assets and liabilities that are denominated in foreign currencies, primarily the Canadian dollar and Chinese�renminbi. As a consequence, movements in exchange rates could cause our foreign currency denominated expenses to increase as a percentage of revenue, affecting our profitability and cash flows. Whenever we believe appropriate, we hedge a portion of our short-term foreign currency exposure to protect against fluctuations in currency exchange rates. We determine our total foreign currency exposure using projections of long-term expenditures for items such as payroll. We cannot assure you that these activities will be effective in reducing foreign exchange rate exposure. Failure to do so could have an adverse effect on our business, financial condition, results of operations and cash flow. In addition, the majority of our product sales are denominated in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the local currency can cause increases or decreases in the cost of our products in the local currency of such customers. An appreciation of the U.S. dollar relative to the local currency could reduce sales of our products.

Our inability to effectively control the sales of our products on the gray market could have a material adverse effect on us.

We market and sell our products directly to OEMs and through authorized third-party distributors. From time to time, our products are diverted from our authorized distribution channels and are sold on the �gray market.� Gray market products result in shadow inventory that is not visible to us, thus making it difficult to forecast demand accurately. Also, when gray market products enter the market, we and our distribution channels compete with these heavily discounted gray market products, which adversely affects demand for our products and negatively impact our margins. In addition, our inability to control gray market activities could result in customer satisfaction issues because any time products are purchased outside our authorized distribution channels there is a risk that our customers are buying counterfeit or substandard products, including products that may have been altered, mishandled or damaged, or are used products represented as new.

If we cannot adequately protect our technology or other intellectual property in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures, we may lose a competitive advantage and incur significant expenses.

We rely on a combination of protections provided by contracts, including confidentiality and nondisclosure agreements, copyrights, patents, trademarks and common law rights, such as trade secrets, to protect our intellectual property. However, we cannot assure you that we will be able to adequately protect our technology or other intellectual property from third-party infringement or from misappropriation in the United States and abroad. Any patent licensed by us or issued to us could be challenged, invalidated or circumvented or rights granted there under may not provide a competitive advantage to us.

�

Furthermore, patent applications that we file may not result in issuance of a patent or, if a patent is issued, the patent may not be issued in a form that is advantageous to us. Despite our efforts to protect our intellectual property rights, others may independently develop similar products, duplicate our products or design around our patents and other rights. In addition, it is difficult to monitor compliance with, and enforce, our intellectual property on a worldwide basis in a cost-effective manner. In jurisdictions where foreign laws provide less intellectual property protection than afforded in the United States and abroad, our technology or other intellectual property may be compromised, and our business would be materially adversely affected.

We are party to litigation and may become a party to other claims or litigation that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products.

From time to time, we are a defendant or plaintiff in various legal actions. For example, on January�15, 2014 and March�20, 2014, complaints were filed against us seeking damages for alleged securities law violations, which are described in Note 10 of our unaudited condensed consolidated financial statements, above. We also sell products to consumers, which could increase our exposure to consumer actions such as product liability claims. On occasion, we receive claims that individuals were allegedly exposed to substances used in our former semiconductor wafer manufacturing facilities and that this alleged exposure caused harm. Litigation can involve complex factual and legal questions, and its outcome is uncertain. Any claim that is successfully asserted against us, including claims in the January�15, 2014 and March�20, 2014 complaints filed against us, may result in the payment of damages that could be material to our business.

With respect to intellectual property litigation, from time to time, we have been notified of, or third parties may bring or have brought, actions against us and/or against our customers based on allegations that we are infringing the intellectual property rights of others, contributing to or inducing the infringement of the intellectual property rights of others or otherwise improperly using the intellectual property of others. If any such claims are asserted, we may seek to obtain a license under the third parties� intellectual property rights. We cannot assure you that we will be able to obtain all of the necessary licenses on satisfactory terms, if at all. In the event that we do not obtain a license, these parties may file lawsuits against us or our customers seeking damages (potentially up to and including treble damages) or an injunction against the sale of products that incorporate allegedly infringed intellectual property or against the operation of our business as presently conducted, which could result in our having to stop the sale of some of our products or to increase the costs of selling some of our products or which could damage our reputation. The award of damages, including material royalty payments, or the entry of an injunction against the manufacture and sale of some or all of our products could have a material adverse effect on us. We could decide, in the alternative, to redesign our products or to resort to litigation to challenge such claims. Such challenges could be extremely expensive and time-consuming regardless of their merit, could cause delays in product release or shipment and/or could have a material adverse effect on us. We cannot assure you that litigation related to our intellectual property rights or the intellectual property rights of others can always be avoided or successfully concluded.

Even if we were to prevail, any litigation could be costly and time-consuming and would divert the attention of our management and key personnel from our business operations, which could have a material adverse effect on us.

A variety of environmental laws that we are subject to could result in additional costs and liabilities.

Our operations and properties have in the past and continue to be subject to various United States and foreign environmental laws and regulations, including those relating to materials used in our products and manufacturing processes, discharge of pollutants into the environment, the treatment, transport, storage and disposal of solid and hazardous wastes and remediation of contamination. These laws and regulations require us to obtain permits for our operations, including the discharge of air pollutants and wastewater. Although our management systems are designed to maintain compliance, we cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with any of them, a range of consequences could result, including fines, suspension of production, alteration of manufacturing processes, import/export restrictions, sales limitations, criminal and civil liabilities or other sanctions. We could also be held liable for any and all consequences arising out of exposure to hazardous materials used, stored, released, disposed of by us or located at, under or emanating from our facilities or other environmental or natural resource damage.

�

Certain environmental laws, including the U.S. Comprehensive, Environmental Response, Compensation and Liability Act of 1980, or the Superfund Act, impose strict or, under certain circumstances, joint and several liability on current and previous owners or operators of real property for the cost of removal or remediation of hazardous substances and impose liability for damages to natural resources. These laws often impose liability even if the owner or operator did not know of, or was not responsible for, the release of such hazardous substances. These environmental laws also assess liability on persons who arrange for hazardous substances to be sent to disposal or treatment facilities when such facilities are found to be contaminated. Such persons can be responsible for cleanup costs even if they never owned or operated the contaminated facility. We have been named as a responsible party at three Superfund sites in Sunnyvale, California. Although we have not yet been, we could be named a potentially responsible party at other Superfund or contaminated sites in the future. In addition, contamination that has not yet been identified could exist at our other facilities.

Environmental laws are complex, change frequently and have tended to become more stringent over time. For example, the EU and China are two among a growing number of jurisdictions that have enacted restrictions on the use of lead and other materials in electronic products. These regulations affect semiconductor devices and packaging. As regulations restricting materials in electronic products continue to increase around the world, there is a risk that the cost, quality and manufacturing yields of products that are subject to these restrictions, may be less favorable compared to products that are not subject to such restrictions, or that the transition to compliant products may produce sudden changes in demand, which may result in excess inventory.

Recent U.S. legislation includes disclosure and reporting requirements for companies who use �conflict� minerals that originate from the Democratic Republic of Congo or adjoining countries. We will likely incur additional costs associated with complying with these requirements, such as costs related to determining the source of any conflict minerals used in our products, auditing the process and reporting to our customers and the U.S. government. Also, since our supply chain is complex, we may face reputational challenges if we are unable to sufficiently verify the origins of the subject minerals. Moreover, we are likely to encounter challenges to satisfy those customers who require that all of the components of our products are certified as �conflict free,� and if we cannot satisfy these customers, they may choose a competitor�s products. In May 2014, Intel reported that all of its client microprocessor and chipset products are �conflict free.�

A number of jurisdictions including the EU, Australia and China are developing or have finalized market entry or public procurement regulations for computers and servers based on ENERGY STAR specifications as well as additional energy consumption limits. There is the potential for certain of our products being excluded from some of these markets which could materially adversely affect us.

While we have budgeted for foreseeable associated expenditures, we cannot assure you that future environmental legal requirements will not become more stringent or costly in the future. Therefore, we cannot assure you that our costs of complying with current and future environmental and health and safety laws, and our liabilities arising from past and future releases of, or exposure to, hazardous substances will not have a material adverse effect on us.

Our business is subject to potential tax liabilities.

We are subject to income taxes in the United States, Canada and other foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, we cannot assure you that the final determination of any tax audits and litigation will not be materially different from that which is reflected in historical income tax provisions and accruals. Should additional taxes be assessed as a result of an audit or litigation, there could be a material adverse effect on our cash, income tax provision and net income in the period or periods for which that determination is made.

�

ITEM�6.

EXHIBITS

�



��4.1	��	Amendment to Indenture governing 6.75% Senior Notes due 2019, between Advanced Micro Devices, Inc. and Wells Fargo Bank, N.A., dated June�16, 2014.

��10.1	��	Form of Stock Option Agreement for Senior Vice Presidents and Above under the 2004 Equity Incentive Plan.

��10.2	��	Form of Restricted Stock Unit Agreement for Senior Vice Presidents and Above under the 2004 Equity Incentive Plan.

��10.3	��	Form of Performance-Based Restricted Stock Unit Agreement for Senior Vice Presidents and Above under the 2004 Equity Incentive Plan.

��31.1	��	Certification of the Chief Executive Officer pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.

��31.2	��	Certification of the Chief Financial Officer pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.

��32.1	��	Certification of the Principal Executive Officer pursuant to Section�906 of the Sarbanes-Oxley Act of 2002.

��32.2	��	Certification of the Principal Financial Officer pursuant to Section�906 of the Sarbanes-Oxley Act of 2002.

101.INS	��	XBRL Instance Document.

101.SCH	��	XBRL Taxonomy Extension Schema Document.

101.CAL	��	XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	��	XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB	��	XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	��	XBRL Taxonomy Extension Presentation Linkbase Document.

�

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

�


	�	ADVANCED MICRO DEVICES, INC.

October�30, 2014	�	By:	�	/s/ ��Devinder Kumar��
	�		�	Devinder Kumar
	�		�	Senior Vice President and Chief Financial Officer Signing on behalf of the registrant and as the principal financial and accounting officer

�

Exhibit 4.1

AMENDMENT TO

ADVANCED MICRO DEVICES, INC.

INDENTURE GOVERNING 6.75% SENIOR NOTES DUE 2019

This Amendment (this �Amendment�) to that certain Indenture, dated as of February�26, 2014 (the �Indenture�), by and between the Company and Wells Fargo Bank, National Association, as trustee (�Trustee�), governing the 6.75% Senior Notes due 2019 (the �Notes�) of Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), is made as of September�22, 2014, by and between the Company and Trustee.

RECITALS

WHEREAS: Pursuant to 8.01(g) of the Indenture, the Company and Trustee may amend the Indenture to makes any change that does not adversely affect the rights of any Holder of the Notes.

WHEREAS: Pursuant to 8.01(f) of the Indenture, the Company and Trustee may amend the Indenture to surrender any right or power conferred upon the Company.

WHEREAS: The Company desires to amend the Indenture to surrender its right under Section�3.01 of the Indenture to elect to redeem the Notes pursuant to Section�5(b) of the Notes, which provides for an equity clawback in favor of the Company.

WHEREAS: This Amendment does not adversely affect the rights of any Holder.

WHEREAS: This Amendment has not resulted in a material modification of the issuance of the Notes for FATCA purposes.

AGREEMENT

NOW, THEREFORE: The Company and Trustee hereby agree that the Indenture shall be, and hereby is, amended as follows:

ARTICLE I

AMENDMENT TO INDENTURE

Section�1.1 Amendment to Section�3.01. Section�3.01 of the Indenture is hereby amended by adding the following as the final sentence of Section�3.01: �Notwithstanding anything to the contrary above or elsewhere herein, the Company will not elect to exercise its rights set forth in Section�5(b) of the Notes.�

ARTICLE II

MISCELLANEOUS

SECTION�2.1 EFFECT OF THIS AMENDMENT. THIS AMENDMENT SHALL FORM A PART OF THE INDENTURE FOR ALL PURPOSES, AND EACH PARTY THERETO AND HERETO SHALL BE BOUND HEREBY. FROM AND AFTER THE EXECUTION OF THIS AMENDMENT BY THE PARTIES HERETO, ANY REFERENCE TO THE INDENTURE SHALL BE DEEMED A REFERENCE TO THE INDENTURE AS AMENDED HEREBY. THIS AMENDMENT SHALL BE DEEMED TO BE IN FULL FORCE AND EFFECT FROM AND AFTER THE EXECUTION OF THIS AMENDMENT BY THE PARTIES HERETO. EXCEPT AS SPECIFICALLY AMENDED AS SET FORTH HEREIN, EACH TERM AND CONDITION OF THE INDENTURE SHALL CONTINUE IN FULL FORCE AND EFFECT.

SECTION�2.2 DEFINED TERMS. CAPITALIZED TERMS USED HEREIN BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS AS SET FORTH IN THE INDENTURE.

SECTION�2.3 GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND ALL ACTIONS HEREUNDER SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.

SECTION�2.4 COUNTERPARTS; ELECTRONIC AND FACSIMILE SIGNATURES. THIS AMENDMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT. THIS AMENDMENT MAY BE EXECUTED AND DELIVERED ELECTRONICALLY (INCLUDING BY TRANSMISSION OF .PDF FILES) AND BY FACSIMILE AND, UPON SUCH DELIVERY, SUCH WILL BE DEEMED TO HAVE THE SAME EFFECT AS IF THE ORIGINAL SIGNATURE HAD BEEN DELIVERED TO THE OTHER PARTY.

SECTION�2.5 EFFECT OF HEADINGS. THE SECTION HEADINGS HEREIN HAVE BEEN INSERTED FOR CONVENIENCE OF REFERENCE ONLY, ARE NOT TO BE CONSIDERED A PART HEREOF AND SHALL IN NO WAY MODIFY OR RESTRICT ANY OF THE TERMS AND PROVISIONS HEREOF.

SECTION�2.6 THE TRUSTEE. THE TRUSTEE SHALL NOT BE RESPONSIBLE IN ANY MANNER WHATSOEVER FOR OR IN RESPECT OF THE VALIDITY OR SUFFICIENCY OF THIS AMENDMENT OR FOR OR IN RESPECT OF THE RECITALS CONTAINED HEREIN, ALL OF WHICH RECITALS ARE MADE SOLELY BY THE COMPANY.

(Signature Page Follows)

�

IN WITNESS WHEREOF, we have hereunto executed this Amendment as of the date first written above.

�


ADVANCED MICRO DEVICES, INC.

By:	�	/s/ Devinder Kumar
Name:	�	Devinder Kumar
Title:	�	Senior Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT TO 6.75% SENIOR NOTES DUE 2019]


WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

By:	�	/s/ Maddy Hall
Name:	�	Maddy Hall
Title:	�	Vice President

[SIGNATURE PAGE TO AMENDMENT TO 6.75% SENIOR NOTES DUE 2019]

Exhibit 10.1

FORM OF STOCK OPTION AGREEMENT

FOR SENIOR VICE PRESIDENTS AND ABOVE

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

�

STOCK OPTION GRANT NOTICE

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), pursuant to its 2004 Equity Incentive Plan (as amended and restated, the �Plan�), hereby grants to the holder listed below (�Participant�) an option to purchase the number of Shares (as defined in the Plan) set forth below (the �Option�). The Option is subject to all of the terms and conditions set forth herein, in the Terms and Conditions to the Option (the �Terms and Conditions�), in any terms and conditions for Participant�s country set forth in the appendix thereto, as applicable (the �Appendix�) and in the Plan, each of which are incorporated herein by reference.

�


Participant:	�	�

Grant Date:	�	�

Exercise�Price�per Share:	�	$

Total�Exercise�Price:	�	$

Total Number of Shares Subject�to�the�Option:	�	shares

Expiration Date:	�	�

Type of Option:	�	��Incentive Stock Option�� Non-Qualified Stock Option

Vesting Schedule:	�	[To be specified in individual agreements]

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Terms and Conditions, the Appendix and this Stock Option Grant Notice. Participant has reviewed the Plan, the Terms and Conditions, the Appendix and this Stock Option Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Stock Option Grant Notice and fully understands all provisions of the Plan, the Terms and Conditions, the Appendix and this Stock Option Grant Notice. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator (as defined in the Plan) upon any questions arising under the Plan, the Terms and Conditions, the Appendix or this Stock Option Grant Notice.

�


ADVANCED MICRO DEVICES, INC.			�	PARTICIPANT
By:	�	�	�	By:	�	�
Print�Name:	�	�	�	Print�Name:	�	�
Title:	�	�	�		�
Address:	�	�	�	Address:	�	�

�

TERMS AND CONDITIONS

STOCK OPTION AWARD

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

These Terms and Conditions (these �Terms and Conditions�), collectively with the Stock Option Grant Notice (the �Grant Notice�) and any terms and conditions for your country contained in the Appendix hereto, as applicable (the �Appendix�), comprise your agreement (the �Agreement�) with Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), regarding the grant of stock options (the �Options�) to purchase the number of shares of the Company�s common stock (the �Shares�), as set forth in the Grant Notice, at the exercise price per share set forth in the Grant Notice (the �Exercise Price�), awarded under the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended and restated, the �Plan�). Capitalized terms not specifically defined herein have the same meanings assigned to them in the Plan.

1. Vesting of Options. The Options will vest on the date(s) shown on the Grant Notice provided that you continue to be an active Service Provider through each vesting date.

2. Exercise of Options.

(a) Right to Exercise. The Options are exercisable during their term in accordance with the vesting schedule set out in the Grant Notice and the applicable provisions of the Plan and the Agreement. The Options may only be exercised for whole Shares.

(b) Method of Exercise. Unless otherwise determined by the Administrator, the Options are exercisable during your lifetime only by you, and after your death only by your legal representative. The Options may only be exercised by the delivery to the Company of a properly completed written notice, in the form specified by the Administrator or its designee, which notice must specify the number of Shares to be purchased and the aggregate Exercise Price for such Shares, together with payment in full of such aggregate Exercise Price and all applicable Tax-Related Items (as defined in Section�7). In the event the Options or a portion thereof are exercised by any person or persons other than you, the Options may only be exercised by the delivery to the Company of appropriate proof of the right of such person or persons to exercise the Options. Payment must be made in a manner permitted in Section�3 below or as authorized by the Administrator pursuant to the Plan and/or as specified in the Appendix. The Options may not be exercised unless you agree to be bound by such documents as the Administrator may reasonably require, including all Award Documentation.

(c) Exercise Price. The Exercise Price shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per Share subject to the Options shall not be less than 100% of the Fair Market Value of a Share on the Grant Date. Notwithstanding the foregoing, if these Options are designated as Incentive Stock Options and you own (within the meaning of Section�424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any �subsidiary corporation� of the Company or any �parent corporation� of the Company (each within the meaning of Section�424 of the Code), the price per Share subject to the Options shall not be less than 110% of the Fair Market Value of a Share on the Grant Date.

�

The Administrator may deny any exercise permitted hereunder if the Administrator determines, in its discretion, that such exercise could result in a violation of U.S. federal, state or foreign securities laws.

3. Method of Payment. Payment of the aggregate Exercise Price must be by any of the following, or a combination thereof, unless provided otherwise in the Appendix:

(a) cash;

(b) check; or

(c) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, including without limitation, to the extent permitted by Applicable Laws, (i)�other Shares which (A)�in the case of Shares acquired upon exercise of a stock option, have been owned by you for such period of time as may be required by the Administrator in order to avoid accounting consequences and (B)�have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option shall be exercised or (ii)�broker-assisted cashless exercise.

4. Nontransferability of Options. The Options may not be pledged, assigned, sold or otherwise transferred other than by will or by the laws of descent and distribution, unless and until the Shares underlying the Options have been issued, and all restrictions applicable to such Shares have lapsed. Neither the Options nor any interest or right therein shall be liable for the debts, contracts or engagements of you or your successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. The terms of the Plan and the Agreement will be binding upon your executors, administrators, heirs, successors and assigns.

5. Term of Option. The Options may be exercised only within the term set out in the Grant Notice, which shall in no event be more than seven years from the Grant Date, and may be exercised during such term only in accordance with the Plan and the terms of the Agreement. If these Options are designated as Incentive Stock Options and you owned (within the meaning of Section�424(d) of the Code), at the time the Options were granted, more than 10% of the total combined voting power of all classes of stock of the Company or any �subsidiary corporation� of the Company or any �parent corporation� of the Company (each within the meaning of Section�424 of the Code), the term shall be in no event more than five years from the Grant Date.

6. Termination as a Service Provider.

(a) Termination Generally. If your status as an active Service Provider terminates for any reason, other than death or Disability or for Misconduct, and you have not been serving as a vice president or Officer for at least ninety (90)�days (or not at all), vested Options may be exercised at any time before the expiration date set forth in the Grant Notice or the expiration of three months after the date of termination, whichever is the shorter period, but only to the extent you were entitled to exercise the Options at the date of termination, as described in Sections 1

�

and 2 hereof and in the Grant Notice. If you have been serving as a vice president or Officer for at least ninety (90)�days and your status as an active Service Provider terminates for any reason (as further described in Section�9(n) below), other than death or Disability or for Misconduct, vested Options may be exercised at any time before the expiration date set forth in the Grant Notice or the expiration of twelve (12)�months after the date of termination, whichever is the shorter period, but only to the extent you were entitled to exercise the Options at the date of termination, as described in Sections 1 and 2 hereof and in the Grant Notice.

You may have a longer period to exercise Options under the circumstances described below:

�

(i)

If you have not been a vice president or Officer for at least ninety (90)�days (or not at all) and are age fifty (50)�or more when your status as an active Service Provider terminates for any reason, other than death, Disability or Misconduct, and you have at least fifteen (15)�years of service but less than twenty (20)�years of service, you will have fifteen (15)�months to exercise vested Options after termination as a Service Provider.

�

(ii)

If you have not been a vice president or Officer for at least ninety (90)�days (or not at all) and are age fifty (50)�or more when your status as an active Service Provider terminates for any reason, other than death, Disability or Misconduct, and you have twenty (20)�years or more of service, you will have twenty-seven (27)�months to exercise vested Options after termination as a Service Provider.

�

(iii)

If you have been a vice president or Officer for at least ninety (90)�days and are age fifty (50)�or more when your status as an active Service Provider terminates for any reason, other than death, Disability or Misconduct, and you have at least fifteen (15)�years of service but less than twenty (20)�years of service, you will have twenty-four (24)�months to exercise vested Options after termination as a Service Provider.

�

(iv)

If you are have been a vice president or Officer for at least ninety (90)�days and are age fifty (50)�or more when your status as an active Service Provider terminates for any reason, other than death, Disability or Misconduct, and you have twenty (20)�years or more of service, you will have thirty-six (36)�months to exercise vested Options after termination as a Service Provider.

If you terminate your status as an active Service Provider to work for a competitor of the Company, the post-termination exercise period extensions described in Sections 6(a)(i) � (iv)�will not apply, and you will have three months to exercise your vested Options, unless you have been serving as a vice president or Officer for at least ninety (90)�days, in which case you will have twelve (12)�months to exercise your vested Options. In no case will the post-termination exercise periods extend beyond the term limit for the Options as set out in the Grant Notice.

�

(b) Termination Due to Death or Disability. If your status as an active Service Provider terminates due to your death or Disability (as defined in the Plan) and you were a Service Provider for at least fifteen (15)�years, your Options will vest as follows:

�

(i)

if you are on an unapproved leave of absence, any Options that would have vested in the calendar year in which your leave began are immediately vested; or

�

(ii)

if you are not on an unapproved leave of absence (i.e., you are on an approved leave of absence or you are serving as an active Service Provider), any Options that would have vested in the calendar year of your death or Disability are immediately vested.

You (or your heirs, as applicable) will generally have twelve (12)�months from the date your status as a Service Provider is terminated due to death or Disability to exercise any vested Options. However, if you are aged fifty (50)�or more and have at least fifteen (15)�years of service but less than twenty (20)�years of service when your status as a Service Provider is terminated due to death or Disability, you (or your heirs) will have twenty-four (24)�months from the date your status as a Service Provider is terminated to exercise any vested Options (provided that you do not go to work for a competitor of the Company, in which case you (or your heirs) will have twelve (12)�months from the date your status as a Service Provider is terminated to exercise any vested Options). If you are aged fifty (50)�or more and have at least twenty (20)�years of service when your status as a Service Provider is terminated due to death or Disability, you (or your heirs) will have thirty-six (36)�months from the date your status as a Service Provider is terminated to exercise any vested Options (provided that you do not go to work for a competitor of the Company, in which case you (or your heirs) will have twelve (12)�months from the date your status as a Service Provider is terminated to exercise any vested Options). In no case will the post-termination exercise periods extend beyond the term limit for the Options as set out in the Grant Notice.

(c) If the Company determines that the post-termination exercise period extensions described in Sections 6(a) or Section�6(b) could be deemed unlawful as discriminatory, then the Company will not apply the extensions and the Options will be treated as they would under the remaining provisions of this Section�6.

(d) Termination due to Misconduct. If your status as an active Service Provider is terminated due to Misconduct (as defined in the Plan), the Company reserves the right to cancel all of your Options, whether vested or unvested.

7. Responsibility for Taxes. Regardless of any action the Company or, if different, your employer (the �Employer�) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (�Tax-Related Items�), you acknowledge that the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1)�make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Options, including, but not limited to, the grant, vesting or exercise of the Options, the issuance of Shares upon exercise of the Options, the

�

subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2)�do not commit to and are under no obligation to structure the terms of the Award or any aspect of the Options to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to tax in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy their withholding obligations with regard to all Tax-Related Items by one or a combination of the following:

�

(a)

withholding from your wages or other cash compensation paid to you by the Company and/or the Employer;

�

(b)

withholding from proceeds of the sale of Shares acquired upon exercise of the Options either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent);

�

(c)

withholding in Shares to be issued upon exercise of the Options; or

�

(d)

payment in cash, check or wire transfer of the Tax-Related Items at the time of exercise.

Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the exercise, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.

Finally, you must pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise or deliver the Shares or the proceeds of the sale of Shares, if you fail to comply with your obligations in connection with the Tax-Related Items.

8. Other Terms and Conditions.

(a) The Plan. The Agreement is further subject to the terms and provisions of the Plan. Only certain provisions of the Plan are described in the Agreement. As a condition to your receipt and exercise of the Options, you acknowledge and agree to the terms and conditions of the Agreement and the terms and provisions of the Plan.

�

(b) Stockholder Rights. Until the Shares are issued upon exercise, you have no right to vote or receive dividends or any other rights as a stockholder with respect to the Options.

(c) Employment Relationship. Nothing in the Agreement will confer on you any right to continue in the employ of the Company or the Employer or interfere with or restrict rights of the Company or the Employer, which are hereby expressly reserved, to discharge you at any time.

(d) Change of Control. If your employment is terminated by the Company or the Employer for any reason other than for Misconduct or, if applicable, by you as a result of a Constructive Termination, within one year after a Change of Control, then the Options will become fully vested upon the date of termination.

(e) Declination of Options. If you wish to decline your Options, you must complete and file the Declination of Grant form with Corporate Compensation and Benefits by the deadline for such declination. Your declination is non-revocable, and you will not receive any other benefits or compensation as replacement for the declined Options.

(f) Recovery in the Event of a Financial Restatement. In the event the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, the Administrator will review all equity-based compensation (including the Options) awarded to employees at the Senior Vice President level and above. If the Administrator (in its sole discretion) determines that you were directly involved with fraud, misconduct or gross negligence that contributed to or resulted in such accounting restatement, the Administrator may, to the extent permitted by governing law and as appropriate under the circumstances, recover for the benefit of the Company all or a portion of the equity-based compensation awarded to you, including (without limitation) by cancelation, forfeiture, repayment and disgorgement of profits realized from the sale of securities of the Company; provided, however, the Administrator will not have the authority to recover any equity-based compensation awarded more than 18 months prior to the date of the first public issuance or filing with the U.S. Securities and Exchange Commission (the �SEC�) (whichever first occurs) of the financial document embodying such financial reporting requirement. In determining whether to seek recovery, the Administrator may take into account any considerations it deems appropriate, including Applicable Law and whether the assertion of a recovery claim may prejudice the interests of the Company in any related proceeding or investigation.

(g) Incentive Stock Options. The following provision applies to you only if you are a U.S. taxpayer and your Options are designated as Incentive Stock Options:

You acknowledge that, to the extent that the aggregate Fair Market Value (determined as of the time the Options are granted) of all Shares with respect to which Incentive Stock Options, including the Options (if applicable), are exercisable for the first time by you in any calendar year exceeds $100,000, the Options and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section�422(d) of the Code. You further acknowledge that the rule set forth in the preceding sentence shall be applied by taking the Options and other �incentive stock options� into account in the order in which they were granted, as determined under Section�422(d) of the Code and the Treasury Regulations thereunder. You acknowledge that an Incentive Stock Option exercised more than three months after your termination of employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option.

�

9. Nature of Grant. In accepting the grant, you acknowledge, understand and agree that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(b) the grant of the Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted in the past;

(d) your participation in the Plan will not create a right to further employment with the Company or the Employer and will not interfere with the ability of the Company or the Employer to terminate your employment relationship at any time;

(e) you are voluntarily participating in the Plan;

(f) the Options and the Shares subject to the Options, and the value of income of such Options and Shares, are not intended to replace any pension rights or compensation;

(g) the Options and the Shares subject to the Options, and the value of income of such Options and Shares, are not part of normal or expected compensation or salary for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

(h) the Option grant and your participation in the Plan will not be interpreted to form an employment contract or other service relationship with the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates;

(i) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(j) if the underlying Shares do not increase in value, the Options will have no value;

(k) if you exercise the Options and obtain Shares, the value of the Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price;

(l) no claim or entitlement to compensation or damages will arise from forfeiture of the Options resulting from termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), and in consideration of the grant of the Options to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, the Employer, any Parent or any of their respective Parents,

�

Subsidiaries or Affiliates, waive your ability, if any, to bring such claim against the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, and release the Company, the Employer and any of their respective Parents, Subsidiaries or Affiliates from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you will be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary, or reasonably requested by the Company, to request dismissal or withdrawal of such claims;

(m) in the event of termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), your right to vest in the Options under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or providing services and will not be extended by any notice period mandated under applicable local laws (e.g., active employment or service would not include a period of �garden leave� or similar period pursuant to Applicable Laws); the Administrator will have the exclusive discretion to determine when you are no longer actively employed or providing services for purposes of your Options (including whether you may still be considered to be providing services while on a leave of absence);

(n) the Options and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger of the Company with or into another company or the sale of substantially all of the assets of the Company; and

(o) the following provisions apply only if you are providing services outside the United States:

(1) the Options and the Shares subject to the Options, and the value and income of same, are not part of normal or expected compensation or salary for any purpose; and

(2) none of the Company, the Employer, or any of their respective Parents, Subsidiaries or Affiliates will be liable for any foreign exchange rate fluctuation between any local currency and the United States Dollar that may affect the value of the Options, any amounts due to you pursuant to the exercise of the Options or the subsequent sale of any Shares acquired upon exercise.

10. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

11. Data Privacy. You consent to the collection, use and transfer, in electronic or other form, of your personal data as described in the Agreement and any other Award Documentation by and among, as applicable, the Employer, the Company, and their respective Parents, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

�

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the exclusive purpose of implementing, administering and managing the Plan (�Data�).

You understand that Data may be transferred to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that if you reside outside the United States, you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Company or Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you Options or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

12. Compliance with Laws and Regulations. The issuance and transfer of the Shares will be subject to and conditioned upon compliance by the Company and you with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company�s Common Stock may be listed or quoted at the time of such issuance or transfer; and, you understand that the Company shall not be required to issue or deliver any Shares purchased upon the exercise of the Options or portion thereof prior to fulfillment of the following conditions: (a)�the admission of such Shares to listing on all stock exchanges on which the Company�s common stock is then listed; (b)�the completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the SEC or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; (c)�the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d)�the

�

lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience. The Shares deliverable upon the exercise of the Options shall be fully paid and nonassessable. You understand that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that the Company has unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary or advisable to comply with Applicable Laws.

13. Successors and Assigns. The Company may assign any of its rights under the Agreement. The Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer contained herein, the Agreement will be binding upon you and your heirs, executors, administrators, legal representatives, successors and assigns.

14. Administrator Authority. The Administrator has the power to interpret the Plan and the Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the Options have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon you, the Company and all other interested persons. The Administrator will not be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Agreement.

15. Governing Law; Jurisdiction; Severability. The Agreement is to be governed by and construed in accordance with the internal laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California, excluding that body of laws pertaining to conflict of laws. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by any grant of Options or the Agreement, the Company and you hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation will be conducted only in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. If any provision of the Agreement is determined by a court of law to be illegal or unenforceable, in whole or in part, that provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

16. Further Instruments. The parties agree to execute further instruments and to take further actions as may be reasonably necessary to carry out the purposes and intent of the Agreement.

17. Language. If you have received the Agreement or any other Award Documentation translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

18. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

�

19. Imposition of Other Requirements. The Company reserves the right to impose other requirements on your participation in the Plan, on the Options and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

20. Headings. The captions and headings of the Agreement are included for ease of reference only and will be disregarded in interpreting or construing the Agreement. All references herein to Sections will refer to Sections of these Terms and Conditions, unless otherwise noted.

21. Appendix. Notwithstanding any provisions in the Award Documentation, the Options grant will be subject to any special terms and conditions for your country set forth in an Appendix to these Terms and Conditions. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of the Agreement.

22. Waiver. You acknowledge that a waiver by the Company of breach of any provision of the Agreement will not operate or be construed as a waiver of any other provision of the Agreement, or of any subsequent breach by you or any other Participant.

23. Entire Agreement. The Plan, these Terms and Conditions, the Appendix and the Grant Notice constitute the entire agreement and understanding of the parties with respect to the subject matter of the Agreement, and supersede all prior understandings and agreements, whether oral or written, between the parties with respect to the specific subject matter hereof.

24. Insider Trading Restrictions/Market Abuse Laws. You acknowledge that, depending on your country of residence, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell Shares or rights to Shares under the Plan during such times as you are considered to have �inside information� regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter.

25. Notices. Any notice to be given under the terms of the Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company�s principal office, and any notice to be given to you shall be addressed to you at your last address reflected on the Company�s records. By a notice given pursuant to this Section�25, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to you shall, if you are then deceased, be given to the person entitled to exercise the Option by written notice under this Section�25. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service or similar local service in jurisdictions outside of the United States.

�

26. Limitations Applicable to Section�16 Persons. Notwithstanding any other provision of the Plan or the Agreement, if you are subject to Section�16 of the Exchange Act, the Plan, the Option and the Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section�16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

27. Section�409A. The Options are not intended to constitute �nonqualified deferred compensation� within the meaning of Section�409A of the Code (together with any U.S. Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, �Section 409A�). However, notwithstanding any other provision of the Plan or the Agreement, if at any time the Administrator determines that the Options (or any portion thereof) may be subject to Section�409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify you or any other person for failure to do so) to adopt such amendments to the Plan or the Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the Options to be exempt from the application of Section�409A or to comply with the requirements of Section�409A.

28. Limitation on Your Rights. Participation in the Plan confers no rights or interests other than as herein provided. The Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. You shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Options, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.

29. Notification of Disposition. If these Options are designated as Incentive Stock Options, you shall give prompt notice to the Company of any disposition or other transfer of any Shares acquired under the Agreement if such disposition or transfer is made (a)�within two years from the Grant Date with respect to such Shares or (b)�within one year after the transfer of such Shares to you. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by you in such disposition or other transfer.

By signing the Grant Notice or otherwise accepting the Option grant and any Shares acquired at exercise of the Options, you agree to be bound by terms of the Agreement and the Plan.

�

APPENDIX

Terms and Conditions

Stock Option Award

Advanced Micro Devices, Inc. 2004 Equity Incentive Plan

Capitalized terms not specifically defined in this Appendix (this �Appendix�) have the same meaning assigned to them in the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended, the �Plan�) and/or the Terms and Conditions to which this Appendix is attached (the �Terms and Conditions�).

Terms and Conditions

This Appendix includes additional terms and conditions that govern the grant of Options in your country. If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer to another country after the grant but prior to the vesting and/or exercise of the Options or are considered a resident of another country for local law purposes, the Company may, in its discretion, determine to what extent the additional terms and conditions contained herein will be applicable to you.

Notifications

In addition, the information is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the Options are granted to you or are considered a resident of another country for local law purposes, the information contained herein may not be applicable to you.

�

ARGENTINA

Notifications

Securities Law Information. Neither the Options nor the Shares underlying the Options are publicly offered or listed on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmental authority.

Exchange Control Information. Due to exchange control restrictions in Argentina, you understand that you are not permitted to remit funds out of Argentina to pay the Exercise Price. Therefore, you must either use funds maintained outside of Argentina to pay the Exercise Price or use a method of exercise which does not require the remittance of funds. Following the sale of Shares, you may be subject to certain restrictions in bringing such funds back into Argentina. The Argentine bank handling the transaction may request certain documentation in connection with the request to transfer sale proceeds into Argentina (e.g., evidence of the sale, proof of the source of the funds used to purchase the shares, etc.) and under certain circumstances may require that 30% of the amount transferred into Argentina be placed in a non-interest bearing dollar deposit account for a holding period of 365 days.

You are solely responsible for complying with the exchange control rules that may apply to you in connection with your participation in the Plan. Prior to exercising the Options or transferring sale proceeds into Argentina, you are strongly advised to consult your local bank and/or personal legal advisor to confirm the applicable requirements. You should note that the interpretations of the applicable Argentine Central Bank regulations vary by bank and that exchange control rules and regulations are subject to change without notice.

Foreign Asset/Account Reporting Information. You must report any Shares acquired and held by you on December�31 of each year on your annual tax return for that year.

BELGIUM

Terms and Conditions

Taxation of Option. The Options must be accepted in writing either (i)�within 60 days of the offer date (i.e., the date the written grant terms are communicated to you) (for tax at offer), or (ii)�after 60 days following the offer date (for tax at exercise). You have received a separate offer letter and undertaking form in addition to the Agreement and should refer to the offer letter for a more detailed description of the tax consequences corresponding with when you accept the Options. You should consult with your personal tax advisor regarding taxation of the Options and completion of the additional forms.

Notifications

Foreign Asset/Account Reporting Information. If you are a resident of Belgium, you are required to report any securities (e.g., Shares acquired under the Plan) or bank accounts (including brokerage accounts) opened and maintained outside of Belgium, on your annual tax return.

�

BRAZIL

Terms and Conditions

Compliance with Laws. By accepting the Options, you agree that you will comply with Brazilian law when you exercise the Options and sell Shares. You also agree to report and pay any and all taxes associated with the exercise of the Options, the receipt of any dividends and the sale of Shares.

Notifications

Exchange Control Information. If you are a resident or domiciled in Brazil, you will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. The assets and rights that must be reported include Shares. Please note that the US$100,000 threshold may be changed annually.

CANADA

Terms and Conditions

Method of Payment. The following provision supplements Section�3 of the Terms and Conditions:

Due to regulatory requirements you understand that you are prohibited from surrendering Shares that you already own to pay the Exercise Price or any Tax-Related Items in connection with exercise of the Options. The Company reserves the right to permit this method of payment depending upon the development of local law.

Termination of Service. The following provision replaces Section�9(m) of the Terms and Conditions:

In the event of the termination of your status as Service Provider for any reason (whether or not in breach of Applicable Laws) , except as otherwise set forth in the Agreement, your right to vest in the Options under the Plan will terminate effective as of the date that is the earlier of (1)�the date your status as a Service Provider is terminated, (2)�the date you receive notice of termination from the Employer, or (3)�the date you are no longer actively providing service, regardless of any notice period or period of pay in lieu of such notice required under Applicable Laws (including, but not limited to statutory law, regulatory law and/or common law); the Company has the exclusive discretion to determine when you are no longer actively providing service for purposes of the Options (including whether you may still be considered to be providing service while on a leave of absence).

�

The following provisions will apply if you are a resident of Quebec:

French Language Provision. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Les parties reconnaissent avoir exig� la r�daction en anglais de la Convention, ainsi que de tous documents, avis et proc�dures judiciaires, ex�cut�s, donn�s ou intent�s en vertu de, ou li�s directement ou indirectement �, la pr�sente convention.

Data Privacy. The following provision supplements Section�11 of the Terms and Conditions:

You hereby authorize the Company and the Company�s representatives to discuss with and obtain all relevant information from all personnel involved in the administration and operation of the Plan. You further authorize the Company, the Employer and any of their respective Parents, Subsidiaries and Affiliates and the Administrator of the Plan to disclose and discuss the Plan with their advisors. You further authorize the Company, the Employer and any of their respective Parents, Subsidiaries and Affiliates to record such information and to keep such information in your employee file.

Notifications

Securities Law Information. You will not be permitted to sell or otherwise dispose of the Shares acquired upon exercise of the Options within Canada. You will only be permitted to sell or dispose of any Shares if such sale or disposal takes place outside of Canada on the facilities on which such Shares are traded.

Foreign Asset/Account Reporting Information. If the total value of your foreign property (including cash held outside of Canada or Shares) exceeds C$100,000 at any time during the year, you must report all of your foreign property on Form T1135 (Foreign Income Verification Statement) by April�30 of the following year. Foreign property may also include your vested and unvested Options. You should consult with your personal tax advisor to determine your reporting requirements.

CHINA

The following terms and conditions will apply if you are subject to exchange control restrictions and regulations in China, as determined by the Company in its sole discretion.

Terms and Conditions

Method of Payment and Sale of Shares. The following provision supplements Section�3 of the Terms and Conditions:

�

proceeds to pay the Exercise Price, brokerage fees and any applicable Tax-Related Items; and (iii)�remit the balance in cash to you. You will not be permitted to hold Shares after exercise. Depending upon the development of laws and your status as a national of a country other than the People�s Republic of China, the Company reserves the right to modify the methods of exercising the Options and in its sole discretion, to permit cash exercises, cashless sell-to-cover exercises or any other method of exercise and payment of Tax-Related Items permitted under the Plan.

Exchange Control Requirements.�You understand and agree that, pursuant to local exchange control requirements, you will be required to exercise any outstanding Options (using the cashless sell-all exercise) within a certain period of time after termination of your status as Service Provider, as determined by the Company in its discretion. If you do not exercise the Options within this period, you acknowledge that the Company will instruct the designated broker to exercise the Options on your behalf pursuant to this authorization. You acknowledge that the broker is not required to sell the Shares subject to the Options at any particular price and that the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, as well as the broker, cannot be held responsible for any loss of Option proceeds due to the forced exercise/sale.

Furthermore, you acknowledge and agree that you will be required to repatriate the cash proceeds from the immediate sale of the Shares upon exercise of the Options to China. You further understand that, under Applicable Laws, such repatriation of your cash proceeds will need to be effectuated through a special exchange control account established by the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, and you hereby consent and agree that any proceeds from the sale of any Shares you acquire may be transferred to such special account prior to being delivered to you. You also understand that the Company will deliver the proceeds to you as soon as possible, but there may be delays in distributing the funds to you due to exchange control requirements in China. Proceeds may be paid to you in U.S. dollars or local currency at the Company�s discretion. If the proceeds are paid to you in U.S. dollars, you may be required to set up a U.S. dollar bank account in China so that the proceeds may be deposited into this account. If the proceeds are paid to you in local currency, the Company is under no obligation to secure any particular exchange conversion rate and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.

FINLAND

There are no country-specific provisions.

�

FRANCE

Terms and Conditions

French Language Provision. By accepting the Options, you confirm having read and understood the documents relating to the Plan which were provided to you in the English language and you accept the terms of those documents.

En acceptant les Options, vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont �t� communiqu�s en langue anglaise et vous en acceptez les termes en connaissance de cause.

Notifications

Tax Information. The Options are not intended to be French tax-qualified Awards.

Foreign Asset/Account Reporting Information. If you hold Shares outside of France or maintain a foreign bank or brokerage account, you are required to report such to the French tax authorities when filing your annual tax return.

GERMANY

Notifications

Exchange Control Information. Cross-border payments in excess of �12,500 must be reported monthly to the German Federal Bank. If you receive a cross-border payment in excess of �12,500 in connection with the exercise of the Options or the sale of Shares acquired under the Plan or the receipt of dividends paid on such Shares, the report must be made electronically by the fifth day of the month following the month in which the payment was made or received. The form of report can be accessed via the German Federal Bank�s website at www.bundesbank.de and is available in both German and English.

HONG KONG

Terms and Conditions

Warning: The Options and Shares issued at exercise do not constitute a public offering of securities under Hong Kong law and are available only to Service Providers of the Company, the Employer or their respective Parents, Subsidiaries or Affiliates. The Agreement, the Plan and other Award Documentation have not been prepared in accordance with and are not intended to constitute a �prospectus� for a public offering of securities under the applicable securities legislation in Hong Kong, nor has the Agreement, the Plan or the other Award Documentation been reviewed by any regulatory authority in Hong Kong. The Options are intended only for the personal use of each eligible Service Provider and may not be distributed to any other person. If you are in any doubt about any of the contents of the Agreement, the Plan or the other Award Documentation, you should obtain independent professional advice.

�

Sale of Shares. The following provision supplements Section�2 of the Terms and Conditions:

In the event your Options vest and are exercised within six months of the date of grant, you agree that you will not dispose of any Shares acquired prior to the six-month anniversary of the date of grant.

Notifications

Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

INDIA

Terms and Conditions

Method of Payment. The following provision supplements Section�3 of the Terms and Conditions:

Due to regulatory requirements you understand that you may not pay the Exercise Price by a sell-to-cover exercise (i.e., where enough Shares subject to the Options will be sold immediately upon exercise and the proceeds from the sale will be remitted to the Company to cover the Exercise Price for the purchased shares and any Tax-Related Items withholding). The Company reserves the right to permit this method of payment depending upon the development of local law.

Notifications

Exchange Control Information. You understand that you must repatriate any proceeds from the sale of Shares acquired under the Plan to India and convert the proceeds into local currency within a certain period after receipt. You will receive a foreign inward remittance certificate (the �FIRC�) from the bank where you deposit the foreign currency. You should maintain the FIRC as evidence of the repatriation of fund in the event the Reserve Bank of India, the Company or the Employer requests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.

Foreign Asset/Account Reporting Information. You are required to declare your foreign bank accounts and any foreign financial assets (including Shares held outside India) in your annual tax return. It is your responsibility to comply with this reporting obligation and you should consult with your personal tax advisor in this regard.

�

ISRAEL

Terms and Conditions

The following terms and conditions apply to you only if you are an Israeli tax resident at the time of grant of the Options, which were made under the capital gains trustee track of Section�102 of the Israeli Income Tax Ordinance.

Israeli Subplan. By accepting the Options, you understand and agree that the Options are offered subject to and in accordance with the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan Israeli Subplan (the �Israeli Subplan�) and the Options are intended to qualify as a 102 Capital Gains Track Grant (as defined in the Israeli Subplan). Notwithstanding the foregoing, the Company does not undertake to maintain the qualified status of the Options, and you acknowledge that you will not be entitled to damages of any nature whatsoever if the Options become disqualified and no longer qualify as a 102 Capital Gains Track Grant. In the event of any inconsistencies between the Israeli Subplan, the Agreement and/or the Plan, the terms of the Israeli Subplan will govern.

Further, to the extent requested by the Company or the Employer, you agree to execute any letter or other agreement in connection with the grant of the Options or any future awards granted under the Israeli Subplan. If you fail to comply with such request, the Options may not qualify as a 102 Capital Gains Track Grant.

Trust Arrangement. You acknowledge and agree that any Shares issued upon exercise of the Options will be subject to a supervisory trust arrangement with the Company�s designated trustee in Israel, ESOP Management and Trust Company Ltd., (the �Trustee�) in accordance with the terms of the trust agreement between the Company and the Trustee. You further agree that such Shares will be subject to the Required Holding Period (as defined in the Israeli Subplan), which shall be 24 months from the Grant Date. The Company may, in its sole discretion, replace the Trustee from time to time and instruct the transfer of all awards and Shares held and/or administered by such Trustee at such time to its successor. The provisions of the Agreement, including this Appendix, shall apply to the new Trustee mutatis mutandis.

Restriction on Sale. You acknowledge that any Shares underlying the Options may not be disposed of prior to the expiration of the Required Holding Period in order to qualify for tax treatment under the 102 Capital Gains Track. Accordingly, you shall not dispose of (or request the Trustee to dispose of) any such Shares prior to the expiration of the Required Holding Period, other than as permitted by applicable law. For purposes of this Appendix for Israel, �dispose� shall mean any sale, transfer or other disposal of the Shares by you (including by means of an instruction by you to the designated broker) or the Trustee, including a release of such Shares from the Trustee to you.

Responsibility for Taxes. The following provisions supplement Section�7 of the Terms and Conditions:

You agree that the Trustee may act on behalf of the Company or the Employer, as applicable, to satisfy any obligation to withhold Tax-Related Items applicable to you in connection with the Options granted under the Israeli Subplan.

�

The following provision applies to you only if you were not an Israeli tax resident at the time of grant of the Options and the Options do not qualify as Section�102 capital gains trustee track grants:

Cashless Exercise Restriction. Unless otherwise determined by the Administrator, you will be required to exercise the Options using the cashless sell-all exercise method whereby all Shares subject to the exercised Options will be sold immediately upon exercise and the proceeds of sale, less the Exercise Price, any Tax-Related Items and broker�s fees or commissions, will be remitted to you in accordance with any applicable exchange control laws and regulations. You will not be permitted to hold Shares after exercise. The Company reserves the right to provide additional methods of exercise to you depending on the development of local law.

Notifications

Securities Law Information. An exemption from the requirement to file a prospectus with respect to the Plan has been granted to the Company by the Israeli Securities Authority. Copies of the Plan and Form S-8 registration statement for the Plan filed with the U.S. Securities and Exchange Commission are available free of charge upon request with your local human resources representative.

ITALY

Terms and Conditions

Method of Payment. The following provision supplements Section�3 of the Terms and Conditions:

Due to local regulatory requirements, you understand that you will be restricted to the cashless sell-all method of exercise. To complete a cashless sell-all exercise, you understand that you must instruct the Plan broker to: (i)�sell all of the Shares issued upon exercise; (ii)�use the proceeds to pay the Exercise Price, brokerage fees and any applicable Tax-Related Items; and (iii)�remit the balance in cash to you. You will not be permitted to hold Shares after exercise. Depending upon the development of laws and your status as a national of a country other than Italy, the Company reserves the right to modify the methods of exercising the Options and, in its sole discretion, to permit cash exercises, cashless sell-to-cover exercises or any other method of exercise and payment of Tax-Related Items permitted under the Plan.

Data Privacy. The following provision replaces in its entirety Section�11 of the Terms and Conditions:

You understand that the Employer and/or the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security number (or any other social or national identification number), salary, nationality, job title, number of Shares held and the details of all Options or any other entitlement to Shares awarded, cancelled, exercised, vested, unvested or outstanding (the �Data�) for the purpose of implementing, administering and managing your participation in the Plan. You are aware that providing the Company with your Data is necessary for the performance of the Agreement and that your refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.

�

The controller of personal data processing is Advanced Micro Devices, Inc., One AMD Place, Sunnyvale, California 94088, USA, and, pursuant to D.lgs 196/2003, its representative in Italy is: Advanced Micro Devices, Spa. Via Polidoro da Caravaggio 6, 20156, Milano, Italy. You understand that the Data may be transferred to the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, including any transfer required to a broker or other third party with whom Shares acquired pursuant to the vesting of the Options or cash from the sale of such Shares may be deposited. Furthermore, the recipients that may receive, possess, use, retain and transfer such Data for the above mentioned purposes may be located in Italy or elsewhere, including outside of the European Union and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You hereby acknowledge that the processing activity, including the transfer of your personal data abroad, outside of the European Union, as herein specified and pursuant to Applicable Laws and regulations, does not require your consent because the processing is necessary for the performance of contractual obligations related to the implementation, administration and management of the Plan. You understand that Data processing relating to the above specified purposes will take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data are collected and with confidentiality and security provisions as set forth by Applicable Laws and regulations, with specific reference to D.lgs. 196/2003.

You understand that Data will be held only as long as is required by Applicable Laws or as necessary to implement, administer and manage your participation in the Plan. You understand that pursuant to art.7 of D.lgs 196/2003, you have the right, including but not limited to, access, delete, update, request the rectification of your Data and cease, for legitimate reasons, the Data processing. Furthermore, you are aware that your Data will not be used for direct marketing purposes. In addition, the Data provided can be reviewed and questions or complaints can be addressed by contacting a local representative available at the following address: Advanced Micro Devices, Spa. Via Polidoro da Caravaggio 6, 20156, Milano, Italy.

Plan Document Acknowledgment. In accepting the Options, you acknowledge that you have received a copy of the Plan and the Agreement and have reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understand and accept all provisions of the Plan and the Agreement, including this Appendix. You further acknowledge that you have read and specifically and expressly approve the following sections of the Terms and Conditions: Section�1: Vesting of Options, Section�2: Exercise of Options; Section�6: Termination as a Service Provider; Section�7: Responsibility for Taxes; Section�9: Nature of Grant; and the Data Privacy and Method of Payment provisions above.

�

Notifications

Foreign Asset/Account Reporting Information. If you hold investments abroad or foreign financial assets (e.g., cash, Shares, the Options) that may generate income taxable in Italy, you are required to report them on your annual tax returns (UNICO Form, RW Schedule) or on a special form if no tax return is due, irrespective of their value. The same reporting duties apply to you if you are beneficial owners of the investments, even if you do not directly hold investments abroad or foreign assets.

Foreign Asset Tax Information. The value of the financial assets held outside of Italy by individuals resident of Italy is subject to a foreign asset tax. Beginning in 2014, such tax is levied at an annual rate of 0.2%.�The taxable amount will be the fair market value of the financial assets (e.g., Shares) assessed at the end of the calendar year.

JAPAN

Notifications

Exchange Control Information. If you acquire Shares valued at more than �100�million in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance (the �MOF�) through the Bank of Japan within 20 days of the acquisition.

In addition, if you pay more than �30�million in a single transaction for the purchase of Shares when you exercise the Options, you must file a Payment Report with the MOF through the Bank of Japan within 20 days of the date that the payment is made. The precise reporting requirements vary depending on whether or not the relevant payment is made through a bank in Japan. Please note that a Payment Report is required independently from a Securities Acquisition Report. Therefore, you must file both a Payment Report and a Securities Acquisition Report if the total amount that you pay in a single transaction for exercising the Options and purchasing Shares exceeds �100 million.

Foreign Asset/Account Reporting Information. Pursuant to a new law, you will be required to report details of any assets held outside of Japan as of December�31 (including Shares acquired under the Plan), to the extent such assets have a total net fair market value exceeding �50 million. Such report will be due by March�15 each year. You should consult with your personal tax advisor as to whether the reporting obligation applies to you and whether you will be required to report details of your outstanding Options, as well as Shares, in the report.

KOREA

Notifications

Exchange Control Information. To remit funds out of Korea to exercise the Options by a cash-exercise method, you must obtain a confirmation of the remittance by a foreign exchange bank in Korea. This is an automatic procedure (i.e., the bank does not need to approve the remittance and the process should not take more than a single day). You likely will need to present the bank processing the transaction supporting documentation evidencing the nature of the remittance.

�

If you realize US$500,000 or more from the sale of Shares or the receipt of any dividends in a single transaction, Korean exchange control laws require you to repatriate the proceeds to Korea within 18 months of the sale or receipt of such proceeds.

Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 1 billion (or an equivalent amount in foreign currency).�You should consult with your personal tax advisor to determine your personal reporting obligations.

MALAYSIA

Terms and Conditions

Data Privacy. The following provision replaces in its entirety Section�11 of the Terms and Conditions:

�

You hereby explicitly, voluntarily and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in the Agreement and any other Award Documentation by and among, as applicable, you, the Employer, the Company and their respective Parents, Subsidiaries and Affiliates or any third parties authorized by same in assisting in the implementation, administration or management of your participation in the Plan.

�

You may have previously provided the Company and the Employer with, and the Company and the Employer may hold, certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and conditions of your participation in the Plan, details of all options or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in your favor (�Data�), for the exclusive purpose of implementing, administering and managing the Plan.

�

You also authorize any transfer of Data, as may be required, to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan and/or with whom any shares acquired upon exercise of the Options are deposited.�You acknowledge that these recipients may be located in your country or elsewhere, and that the recipient�s country (e.g., the United States) may have different data privacy laws and protections to your country, which may not give the same level of protection to Data.�You understand that you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the Company, the stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing your participation in the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case, without cost, by contacting in writing �Ask HR� at http://AskHR on AMD Central.�Further, you understand that you are providing the consents herein on a purely voluntary basis.�If you do not consent, or if you later seek to revoke the consent, your employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the consent is that the Company would not be able to grant future stock options or other equity awards to you or administer or maintain such awards.�Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of the refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

��

Anda dengan ini secara eksplisit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi anda seperti yang dinyatakan dalam Perjanjian dan apa-apa Dokumentasi Penganugerahan oleh dan di antara, sebagaimana yang berkenaan, Majikan, Syarikat dan Syarikat-syarikat Induk, Anak-anak Syarikat dan Syarikat-syarikat Sekutu masing masing, atau mana-mana pihak ketiga yang diberi kuasa oleh yang sama untuk membantu dalam pelaksanaan, pentadbiran dan pengurusan penyertaan andadalam Pelan tersebut.

�

Sebelum ini, andamungkin telah membekalkan Syarikat dan Majikan dengan, dan Syarikat dan Majikan mungkin memegang, maklumat peribadi tertentu tentanganda, termasuk, tetapi tidak terhad kepada, nama anda, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan andadalam Pelan, butir-butir semua opsyen atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun bagi faedahanda (�Data�), untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut.

�

Anda juga memberi kuasa untuk membuat apa-apa pemindahan Data, sebagaimana yang diperlukan, kepada broker Pelan yang ditetapkan oleh Syarikat, atau pembekal perkhidmatan pelan saham lain sebagaimana yang mungkin dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan dan/atau dengan sesiapa yang mendepositkan Saham yang diperolehi melalui pelaksanaan Opsyen. Anda mengakui bahawa penerima-penerima ini mungkin berada di negara andaatau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Andafaham bahawa andaboleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, pembekal perkhidmatan pelan saham dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda memahamibahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda memahamibahawa anda boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan anda, di mana butir-butir hubungannya adalah �Ask HR� at http://AskHR on AMD Central. Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela. Jika anda tidak bersetuju, atau jika anda kemudian membatalkan persetujuan anda, status pekerjaan atau perkhidmatan dan kerjaya anda dengan Majikan tidak akan terjejas; satunya akibat buruk jika anda tidak bersetuju atau menarik balik persetujuan anda adalah bahawa Syarikat tidak akan dapat memberikan opsyen saham pada masa depan atau anugerah ekuiti lain kepada anda atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, anda memahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda memahamibahawa anda boleh menghubungi wakil sumber manusia tempatan anda.

�

Notifications

Director Notification Obligation. If you are a director of the Company�s Malaysian Parent, Subsidiary or Affiliate, you are subject to certain notification requirements under the Malaysian Companies Act. Among these requirements is an obligation to notify the Malaysian Parent, Subsidiary or Affiliate in writing when you receive or dispose of an interest (e.g., an Award under the Plan or Shares) in the Company or any related company. Such notifications must be made upon receiving or disposing of any interest in the Company or any related company.

MEXICO

Terms and Conditions

No Entitlement or Claims for Compensation. The following provisions supplement Sections�8 and 9 of the Terms and Conditions:

Modification. By accepting the Options, you understand and agree that any modification of the Plan or the Agreement or its termination will not constitute a change or impairment of the terms and conditions of employment.

Policy Statement. The Award of Options the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

�

The Company, with principal executive offices at One AMD Place, Sunnyvale, CA 94088, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and the acquisition of Shares does not, in any way, establish an employment relationship between you and the Company since you are participating in the Plan on a wholly commercial basis and your sole employer is AMD Latin America, Ltd. � Mexico City Branch, Blvd. Manuel �vila Camacho No.�40, Torre Esmeralda 1, Piso 18 Col. Lomas de Chapultepec M�xico DF, CP 11000 � M�xico, nor does it establish any rights between you and the Employer.

Plan Document Acknowledgment. By accepting the Award of Options, you acknowledge that you have received copies of the Plan, have reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement.

In addition, by accepting the Agreement, you further acknowledge that you have read and specifically and expressly approve the terms and conditions in Section�9 of the Terms and Conditions, in which the following is clearly described and established: (i)�participation in the Plan does not constitute an acquired right, (ii)�the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis, (iii)�participation in the Plan is voluntary, and (iv)�the Company, the Employer and any of their respective Parents, Subsidiaries or Affiliates are not responsible for any decrease in the value of the Shares underlying the Options.

Finally, you hereby declare that you do not reserve any action or right to bring any claim against the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates for any compensation or damages as a result of your participation in the Plan and therefore grant a full and broad release to the Company, the Employer and each of their respective Parents, Subsidiaries and Affiliates with respect to any claim that may arise under the Plan.

Spanish Translation

T�minos y Condiciones

Ausencia de derecho para reclamar compenssaciones. Estas disposiciones complementan el apartado 8 y 9 de los T�rminos y Condiciones

Modificaci�n. Al aceptar las Opciones, usted reconoce y acuerda que cualquier modificaci�n del Plan o su terminaci�n no constituye un cambio o detrmineto en los t�rminos y condiciones de empleo.

Declaraci�n de Pol�tica. El Otorgamiento de las Opciones que hace la Compa��a en virtud del Plan es unilateral y discrecional y, por lo tanto, la Compa��a se reserva el derecho absoluto de modificar y discontinuar el mismo en cualquier tiempo, sin responsabilidad alguna.

La Compa��a, con oficinas registradas ubicadas en One AMD Place, Sunnyvale, CA 94088, U.S.A., es la �nica responsable de la administraci�n del Plan y de la participaci�n en el mismo y la adquisici�n de Acciones no establece de forma alguna una relaci�n de trabajo entre usted y la Compa��a, ya que su participaci�n en el Plan es completamente comercial y el �nico empleador es AMD Latin America, Ltd. � Mexico City Branch, Blvd. Manuel �vila Camacho No.�40, Torre Esmeralda 1, Piso 18 Col. Lomas de Chapultepec M�xico DF, CP 11000 � M�xico, as� como tampoco establece ning�n derecho entre Usted y su Empleador.

�

Reconocimiento del Documento del Plan. Al aceptar el Otorgamiento de las Opciones, usted reconoce que ha recibido copias del Plan, ha revisado el mismo, al igual que la totalidad del Acuerdo y, que ha entendido y aceptado completamente todas las disposiciones contenidas en el Plan y en el Acuerdo.

Adicionalmente, al aceptar el Acuerdo, reconoce que ha le�do, y que aprueba espec�fica y expresamente los t�rminos y condiciones contenidos en la�secci�n 7 de los T�minos y Condiciones Acuerdo, en el cual se encuentra claramente descrito y establecido lo siguiente: (i)�la participaci�n en el Plan no constituye un derecho adquirido; (ii)�el Plan y la participaci�n en el mismo es ofrecida por la Compa��a de forma enteramente discrecional; (iii)�la participaci�n en el Plan es voluntaria; y (iv)�la Compa��a, su Empleador y cualquier empresa Matriz, Subsidiaria o�Filiales�no son responsables por cualquier disminuci�n en el valor de las Acciones en relaci�n a las Unidades de Acci�n Restringida.

Finalmente, declara que no se reserva ninguna acci�n o derecho para interponer una demanda en contra de la Compa��a, su Matriz, Subsidiaria o Afiliada por compensaci�n, da�o o perjuicio alguno como resultado de su participaci�n en el Plan y, en consecuencia, otorga el m�s amplio finiquito al Empleador, as� como a la Compa��a, su Matriz, Subsidiaria o Filiales con respecto a cualquier demanda que pudiera originarse en virtud del Plan.

NETHERLANDS

There are no country-specific provisions.

POLAND

Notifications

Exchange Control Information. If you transfer funds in excess of �15,000 into Poland in connection with the sale of Shares or the receipt of dividends, the funds must be transferred via a bank account. You are required to retain the documents connected with a foreign exchange transaction for a period of five years, as measured from the end of the year in which such transaction occurred. If you hold Shares acquired under the Plan and/or maintain a bank account abroad, you will have reporting duties to the National Bank of Poland; specifically, if the aggregate value of Shares and cash held in such foreign accounts exceeds PLN7,000,000, you must file reports on the transactions and balances of the accounts on a quarterly basis. You should consult with your personal legal advisor to determine what you must do to fulfill any applicable reporting duties.

�

RUSSIA

Terms and Conditions

Method of Payment. The following provision supplements Section�3 of the Terms and Conditions:

Depending on the development of local regulatory requirements, the Company reserves the right to restrict you to the cashless sell-all method of exercise, whereby all Shares subject to the exercised Option will be sold immediately upon exercise and the proceeds of the sale, less the Exercise Price, any Tax-Related Items and broker�s fees or commissions, will be remitted to you in accordance with any Applicable Laws and regulations. If the Company restricts you to the cashless sell-all method of exercise, you will not be permitted to acquire and hold Shares after exercise. The Company reserves the right to provide additional methods of exercise to you depending on the development of local law.

Notifications

Exchange Control Information. In order to perform a cash exercise of the Option, you must remit the funds from a foreign currency account at an authorized bank in Russia. This requirement does not apply if you use a cashless method of exercise, such that there is no remittance of funds out of Russia. Upon the sale of Shares acquired under the Plan or the receipt of any cash dividends paid on such Shares, you must repatriate the proceeds back to Russia within a reasonably short time after receipt of the proceeds. You may remit proceeds to your foreign currency account at an authorized bank in Russia or in a foreign bank account opened in accordance with Russian exchange control laws. You are encouraged to contact your personal advisor before remitting your sale proceeds to Russia.

Securities Law Information. You are not permitted to sell Shares directly to other Russian legal entities or residents.

The grant of your Options and the distribution of the Plan and all other materials you may receive regarding participation in the Plan do not constitute an offering or the advertising of securities in Russia. The issuance of Shares pursuant to the Plan has not and will not be registered in Russia and, therefore, the Shares may not be used for an offering or public circulation in Russia.

Labor Law Information. If you continue to hold Shares acquired at exercise of the Options after an involuntary termination of your service, you may not be eligible to receive unemployment benefits in Russia.

Anti-Corruption Legislation Information. Individuals holding public office in Russia, as well as their spouses and dependent children, may be prohibited from opening or maintaining a foreign brokerage or bank account and holding any securities, whether acquired directly or indirectly, in a foreign company (including Shares acquired under the Plan). You are strongly advised to consult with your personal legal advisor to determine whether the restriction applies to you.

�

SINGAPORE

Notifications

Securities Law Information. The Award of Options is being made in reliance of section 273(1)(f) of the Securities and Futures Act (Cap. 289) (the �SFA�) for which it is exempt from the prospectus and registration requirements under the SFA. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Award of Options is subject to section 257 of the SFA and you will not be able to make (i)�any subsequent sale of Shares in Singapore or (ii)�any offer of such subsequent sale of Shares subject to the Options in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1)�Subdivision (4)�(other than section 280) of the SFA.

Director Notification Obligation. If you are a director, associate director or shadow director of the Company�s Singapore Parent, Subsidiary or Affiliate, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Company�s Singapore Parent, Subsidiary or Affiliate in writing when you receive an interest (e.g., an Award or Shares) in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, you must notify the Company�s Singapore Parent, Subsidiary or Affiliate when you sell Shares or shares of any Parent, Subsidiary or Affiliate (including when you sell Shares issued upon exercise of the Options). These notifications must be made upon acquiring or disposing of any interest in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, a notification of your interests in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates must be made upon becoming a director.

SWEDEN

There are no country-specific provisions.

TAIWAN

Notifications

Securities Law Information. The Options and the Shares to be issued upon exercise of the Options are available only for certain Service Providers. It is not a public offer of securities by a Taiwanese company. Therefore, it is exempt from registration in Taiwan.

Exchange Control Information. You may acquire and remit foreign currency (including proceeds from the sale of Shares or the receipt of any dividends) into and out of Taiwan up to US$5,000,000 per year.

If the transaction amount is TWD$500,000 or more in a single transaction, you must submit a foreign exchange transaction form and also provide supporting documentation to the satisfaction of the remitting bank. If the transaction amount is US$500,000 or more, you may be required to provide additional supporting documentation to the satisfaction of the remitting bank. Please consult your personal advisor to ensure compliance with applicable exchange control laws in Taiwan.

�

UNITED KINGDOM

Terms�& Conditions

Responsibility for Taxes. The following provisions supplement Section�7 of the Terms and Conditions:

You must pay to the Company or the Employer any amount of income tax due that the Company or the Employer may be required to account to Her Majesty�s Revenue and Customs (the �HMRC�) with respect to the event giving rise to the Tax-Related Items (the �Taxable Event�) that cannot be satisfied by the means described in this Section�7. If payment or withholding of the income tax is not made within 90 days of the end of the U.K. tax year in which the Taxable Event occurs or such other period as required under U.K. law (the �Due Date�), you agree that the amount of any uncollected income tax will (assuming you are not a director or executive officer of the Company (within the meaning of Section�13(k) of the U.S. Securities and Exchange Act of 1934, as amended)) constitute a loan owed by you to the Company or the Employer (as applicable), effective on the Due Date. You agree that the loan will bear interest at the then-current HMRC official rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to in this Section�7. If you fail to comply with your obligations in connection with the income tax due as described in this section, the Company may refuse to deliver the Shares acquired under the Plan.

Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section�13(k) of the U.S. Securities and Exchange Act of 1934, as amended), you will not be eligible for such a loan to cover the income tax due. In the event that you are a director or executive officer and the income tax due is not collected from or paid by you by the Due Date, the amount of any uncollected tax may constitute a benefit to you on which additional income tax and national insurance contributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Employer, as applicable, for the value of any national insurance contributions due on this additional benefit. You acknowledge that the Company or the Employer may recover any such national insurance contributions at any time thereafter by any of the means referred to in this Section�7.

�

Exhibit 10.2

FORM OF RESTRICTED STOCK UNIT AGREEMENT

FOR SENIOR VICE PRESIDENTS AND ABOVE

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

�

RESTRICTED STOCK UNIT GRANT NOTICE

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), pursuant to its 2004 Equity Incentive Plan (as amended and restated, the �Plan�), hereby grants to the holder listed below (�Participant�) this award of restricted stock units set forth below (the �RSUs�). This award of RSUs is subject to all of the terms and conditions set forth herein, in the Terms and Conditions to the RSUs (the �Terms and Conditions�), in any terms and conditions for Participant�s country set forth in the appendix thereto, as applicable (the �Appendix�) and in the Plan, each of which are incorporated herein by reference.

�


Participant:	�	�

Grant�Date:	�	�

Total�Number�of Restricted�Stock�Units:	�	units

Vesting Schedule:	�	[To be specified in individual agreements]

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Terms and Conditions, the Appendix and this Restricted Stock Unit Grant Notice. Participant has reviewed the Plan, the Terms and Conditions, the Appendix and this Restricted Stock Unit Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Restricted Stock Unit Grant Notice and fully understands all provisions of the Plan, the Terms and Conditions, the Appendix and this Restricted Stock Unit Grant Notice. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator (as defined in the Plan) upon any questions arising under the Plan, the Terms and Conditions, the Appendix or this Restricted Stock Unit Grant Notice.

�


ADVANCED MICRO DEVICES, INC.			�	PARTICIPANT
By:	�	�	�	By:	�	�
Print�Name:	�	�	�	Print�Name:	�	�
Title:	�	�	�		�
Address:	�	�	�	Address:	�	�

TERMS AND CONDITIONS

RESTRICTED STOCK UNIT AWARD

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

These Terms and Conditions (these �Terms and Conditions�), collectively with the accompanying Restricted Stock Unit Grant Notice (the �Grant Notice�) and any terms and conditions for your country contained in the Appendix hereto, as applicable (the �Appendix�), comprise your agreement (the �Agreement�) with Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), regarding restricted stock units (the �RSUs�) awarded under the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended and restated, the �Plan�). Capitalized terms not specifically defined herein have the same meanings assigned to them in the Plan.

1. Vesting of Restricted Stock Units. The RSUs will vest on the date(s) shown on the Grant Notice provided that you continue to be a Service Provider through each vesting date.

2. Issuance of Shares. After the RSUs vest, the shares (�Shares�) of Company common stock will be issued in your name as soon as practicable after you have satisfied any Tax-Related Items (as defined in Section�5) and subject to any country-specific terms and conditions set forth in the Appendix.

3. Nontransferability of Restricted Stock Units. Unless determined otherwise by the Administrator, the RSUs may not be pledged, assigned, sold or otherwise transferred.

4. Forfeiture of Restricted Stock Units. If your status as a Service Provider terminates for any reason before the vesting date(s) shown on the Grant Notice, your unvested RSUs will be cancelled and you will not have any right to receive Shares pursuant to the RSUs.

5. Responsibility for Taxes. Regardless of any action the Company or, if different, your employer (the �Employer�) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (�Tax-Related Items�), you acknowledge that the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1)�make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant, vesting or settlement of the RSUs, the issuance of Shares upon settlement of the RSUs, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or any dividend equivalents; and (2)�do not commit to and are under no obligation to structure the terms of the Award or any aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to tax in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(a) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer;

(b) withholding from proceeds of the sale of Shares acquired upon vesting/settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or

Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.

Finally, you must pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if you fail to comply with your obligations in connection with the Tax-Related Items.

6. Other Terms and Conditions.

(a) The Plan. The Agreement is further subject to the terms and provisions of the Plan. Only certain provisions of the Plan are described in the Agreement. As a condition to your receipt of the RSUs and the Shares upon vesting, you acknowledge and agree to the terms and conditions of the Agreement and the terms and provisions of the Plan.

(b) Stockholder Rights. Until the Shares are issued, you have no right to vote or receive dividends or any other rights as a stockholder with respect to the RSUs.

(d) Change of Control. If your employment is terminated by the Company or the Employer for any reason other than for Misconduct or, if applicable, by you as a result of a Constructive Termination, within one year after a Change of Control, then the RSUs will become fully vested upon the date of termination.

�

(e) Declination of RSUs. If you wish to decline your RSUs, you must complete and file the Declination of Grant form with Corporate Compensation and Benefits by the deadline for such declination. Your declination is non-revocable, and you will not receive a grant of stock options or other compensation as replacement for the declined RSUs.

(f) Recovery in the Event of a Financial Restatement. In the event the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under applicable securities laws, the Administrator will review all equity-based compensation (including the RSUs) awarded to employees at the Senior Vice President level and above.�If the Administrator (in its sole discretion) determines that you were directly involved with fraud, misconduct or gross negligence that contributed to or resulted in such accounting restatement, the Administrator may, to the extent permitted by Applicable Law, recover for the benefit of the Company all or a portion of the equity-based compensation awarded to you, including (without limitation) by cancelation, forfeiture, repayment and disgorgement of profits realized from the sale of securities of the Company; provided, however, the Administrator will not have the authority to recover any equity-based compensation awarded more than 18 months prior to the date of the first public issuance or filing with the U.S. Securities and Exchange Commission (the �SEC�) (whichever first occurs) of the financial document embodying such financial reporting requirement. In determining whether to seek recovery, the Administrator may take into account any considerations it deems appropriate, including Applicable Laws and whether the assertion of a recovery claim may prejudice the interests of the Company in any related proceeding or investigation.

7. Nature of Grant. In accepting the grant, you acknowledge, understand and agree that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(b) the grant of the RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted in the past;

(e) you are voluntarily participating in the Plan;

(f) the RSUs and the Shares subject to the RSUs, and the value and income of such RSUs and Shares, are not intended to replace any pension rights or compensation;

(g) the RSUs and the Shares subject to the RSUs, and the value and income of such RSUs and Shares, are not part of normal or expected compensation or salary for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

�

(h) the RSU grant and your participation in the Plan will not be interpreted to form an employment contract or other service relationship with the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates;

(i) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(j) no claim or entitlement to compensation or damages will arise from forfeiture of the RSUs resulting from termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), and in consideration of the grant of the RSUs to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, the Employer, any Parent or any of their respective Parents, Subsidiaries or Affiliates, waive your ability, if any, to bring such claim against the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, and release the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you will be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary, or reasonably requested by the Company, to request dismissal or withdrawal of such claims;

(k) in the event of termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), your right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or providing services and will not be extended by any notice period mandated under applicable local laws (e.g., active employment or service would not include a period of �garden leave� or similar period pursuant to Applicable Laws); the Administrator will have the exclusive discretion to determine when you are no longer actively employed or providing services for purposes of your RSU grant (including whether you may still be considered to be providing services while on a leave of absence);

(l) the RSUs and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger of the Company with or into another company or the sale of substantially all of the assets of the Company; and

(m) the following provisions apply only if you are providing services outside the United States:

(1) the RSUs and the Shares subject to the RSUs, and the value and income of same, are not part of normal or expected compensation or salary for any purpose; and

(2) none of the Company, the Employer, or any of their respective Parents, Subsidiaries or Affiliates will be liable for any foreign exchange rate fluctuation between any local currency and the United States Dollar that may affect the value of the RSUs, any amounts due to you pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement.

�

8. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

9. Data Privacy. You consent to the collection, use and transfer, in electronic or other form, of your personal data as described in the Agreement and any other Award Documentation by and among, as applicable, the Employer, the Company and their respective Parents, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all RSUs or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the exclusive purpose of implementing, administering and managing the Plan (�Data�).

You understand that Data may be transferred to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that if you reside outside the United States, you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Company or Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you RSUs or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

�

10. Compliance with Laws and Regulations. The issuance and transfer of the Shares will be subject to and conditioned upon compliance by the Company and you with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Common Stock may be listed or quoted at the time of such issuance or transfer; and, you understand that the Company shall not be required to issue or deliver any Shares prior to fulfillment of all of the following conditions: (a)�the admission of such Shares to listing on all stock exchanges on which the Company�s common stock is then listed; (b)�the completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the SEC or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and the lapse of such reasonable period of time following the vesting or settlement as the Administrator may from time to time establish for reasons of administrative convenience. The Shares shall be fully paid and nonassessable. You understand that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that the Company has unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary or advisable to comply with securities or other laws applicable to issuance of Shares.

11. Successors and Assigns. The Company may assign any of its rights under the Agreement. The Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer contained herein, the Agreement will be binding upon you and your heirs, executors, administrators, legal representatives, successors and assigns.

12. Governing Law; Jurisdiction; Severability. The Agreement is to be governed by and construed in accordance with the internal laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California, excluding that body of laws pertaining to conflict of laws. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the Company and you evidenced by this grant or the Agreement, the Company and you hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation will be conducted only in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. If any provision of the Agreement is determined by a court of law to be illegal or unenforceable, in whole or in part, that provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

13. Further Instruments. You agree to execute further instruments and to take further actions as may be reasonably necessary to carry out the purposes and intent of the Agreement.

14. Administrator Authority. The Administrator has the power to interpret the Plan and the Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the RSUs have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon you, the Company and all other interested persons. The Administrator will not be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Agreement.

�

15. Language. If you have received the Agreement or any other Award Documentation translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

16. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

17. Imposition of Other Requirements. The Company reserves the right to impose other requirements on your participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

18. Headings. The captions and headings of the Agreement are included for ease of reference only and will be disregarded in interpreting or construing the Agreement. All references herein to Sections will refer to Sections of these Terms and Conditions, unless otherwise noted.

19. Appendix. Notwithstanding any provisions in the Award Documentation, the RSU grant will be subject to any special terms and conditions for your country set forth in an Appendix to these Terms and Conditions. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of the Agreement.

20. Waiver. You acknowledge that a waiver by the Company of breach of any provision of the Agreement will not operate or be construed as a waiver of any other provision of the Agreement, or of any subsequent breach by you or any other Participant.

21. Entire Agreement. The Plan, these Terms and Conditions, the Appendix and the Grant Notice constitute the entire agreement and understanding of the parties with respect to the subject matter of the Agreement, and supersede all prior understandings and agreements, whether oral or written, between the parties with respect to the specific subject matter hereof.

22. Insider Trading Restrictions/Market Abuse Laws. You acknowledge that, depending on your country of residence, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell Shares or rights to Shares (e.g., RSUs) under the Plan during such times as you are considered to have �inside information� regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter.

�

23. Notices. Any notice to be given under the terms of the Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company�s principal office, and any notice to be given to you shall be addressed to you at your last address reflected on the Company�s records. By a notice given pursuant to this Section�23, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to you shall, if you are then deceased, be given to your legal representative. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service or similar local service in jurisdictions outside of the United States.

24. Limitations Applicable to Section�16 Persons. Notwithstanding any other provision of the Plan or the Agreement, if you are subject to Section�16 of the Exchange Act, the Plan, the RSUs and the Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section�16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

25. Section�409A. The RSUs are not intended to constitute �nonqualified deferred compensation� within the meaning of Section�409A of the Code (together with any U.S. Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, �Section 409A�). However, notwithstanding any other provision of the Plan or the Agreement, if at any time the Administrator determines that the RSUs (or any portion thereof) may be subject to Section�409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify you or any other person for failure to do so) to adopt such amendments to the Plan or the Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the RSUs to be exempt from the application of Section�409A or to comply with the requirements of Section�409A.

26. Limitation on Participant�s Rights. Participation in the Plan confers no rights or interests other than as herein provided. The Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. You shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to RSUs, as and when vested or settled pursuant to the terms hereof.

By signing the Grant Notice or otherwise accepting the RSU grant and the Shares issued upon vesting of the RSUs, you agree to be bound by terms of the Agreement and the Plan.

�

APPENDIX

Terms and Conditions

Restricted Stock Unit Award

Advanced Micro Devices, Inc. 2004 Equity Incentive Plan

Capitalized terms not specifically defined in this Appendix (this �Appendix�) have the same meaning assigned to them in the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended and restated, the �Plan�) and/or the Terms and Conditions to which this Appendix is attached (the �Terms and Conditions�).

Terms and Conditions

This Appendix includes additional terms and conditions that govern the grant of RSUs in your country. If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer to another country after the grant but prior to the vesting of the RSUs or are considered a resident of another country for local law purposes, the Company may, in its discretion, determine to what extent the additional terms and conditions contained herein will be applicable to you.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of June 2014. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information noted herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at vesting of the RSUs or the subsequent sale of the Shares or receipt of any dividends or dividend equivalents. In addition, the information is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation. If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the RSUs are granted to you or are considered a resident of another country for local law purposes, the notifications contained herein may not be applicable to you.

ARGENTINA

Notifications

Securities Law Information. Neither the RSUs nor the Shares subject to the RSUs are publicly offered or listed on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmental authority.

�

Exchange Control Information. If you transfer proceeds from the sale of Shares or the receipt of any dividends paid on such Shares into Argentina within ten (10)�days of receipt (i.e., the proceeds have not been held in the offshore bank or brokerage account for at least ten (10)�days prior to transfer), you must deposit 30% of the proceeds into a non-interest bearing account in Argentina for 365 days. If, however, you have satisfied the ten-day holding obligation, the Argentine bank handling the transaction may still request certain documentation in connection with your request to transfer proceeds into Argentina, including evidence of the sale or dividend payment and proof that no funds were remitted out of Argentina to acquire the Shares. If the bank determines that the ten-day rule or any other rule or regulation promulgated by the Argentine Central Bank has not been satisfied, it will require that 30% of the proceeds be placed in a non-interest bearing dollar denominated mandatory deposit account for a holding period of 365 days.

Please note that exchange control regulations in Argentina are subject to frequent change. You should consult with your personal legal advisor regarding any exchange control obligations you may have in connection with participation in the Plan.

Foreign Asset/Account Reporting Information. You must report any Shares acquired and held by you on December�31 of each year on your annual tax return for that year.

AUSTRALIA

Terms and Conditions

Data Privacy. This following provision supplements Section�9 of the Terms and Conditions:

The Company can be contacted at One AMD Place, Sunnyvale, CA, 94088, U.S.A. The Australian Employer can be contacted at Part Level 8, 15 Talavera Road, North Ryde, NSW 2113, Sydney, Australia.

Data will be held in accordance with the Company�s Worldwide Standards of Business Conduct, a copy of which can be obtained on the Company�s website or by contacting the Company or the Australian Employer at the address listed above.

You understand and agree that Data may be transferred to recipients of Data located outside of Australia, including the United States and any other country where the Company has operations.

Notifications

Securities Law Information. If you acquire Shares pursuant to the RSUs and you offer the Shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. You should obtain legal advice on disclosure obligations prior to making any such offer.

Exchange Control Information. Exchange control reporting is required for cash transactions exceeding A$10,000 and international fund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank is involved in the transfer, you will be required to file the report.

�

BELGIUM

Notifications

BRAZIL

Terms and Conditions

Compliance with Laws. By accepting the RSUs, you agree that you will comply with Brazilian law when you vest in your RSUs and sell Shares. You also agree to report and pay any and all taxes associated with the vesting of the RSUs, the receipt of any dividends and the sale of Shares.

Notifications

CANADA

Terms and Conditions

Settlement of Restricted Stock Units. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, RSUs will be settled in Shares only, not cash.

Termination of Service. The following provision replaces Section�7(k) of the Terms and Conditions:

In the event of the termination of your status as Service Provider for any reason (whether or not in breach of Applicable Laws), your right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that is the earlier of (1)�the date your status as a Service

�

Provider is terminated, (2)�the date that you receive notice of termination from the Employer, or (3)�the date you are no longer actively providing service, regardless of any notice period or period of pay in lieu of such notice required under Applicable Laws (including, but not limited to statutory law, regulatory law and/or common law); the Company has the exclusive discretion to determine when you are no longer actively providing service for purposes of the RSUs (including whether you may still be considered to be providing service while on a leave of absence).

The following provisions will apply if you are a resident of Quebec:

Data Privacy. The following provision supplements Section�9 of the Terms and Conditions:

Notifications

Securities Law Information. You will not be permitted to sell or otherwise dispose of the Shares acquired upon vesting of the RSUs within Canada. You will only be permitted to sell or dispose of any Shares if such sale or disposal takes place outside of Canada on the facilities on which such Shares are traded.

Foreign Asset/Account Reporting Information. If the total value of your foreign property (including cash held outside of Canada or Shares) exceeds C$100,000 at any time during the year, you must report all of your foreign property on Form T1135 (Foreign Income Verification Statement) by April�30 of the following year. Foreign property may also include your unvested RSUs. You should consult with your personal tax advisor to determine your reporting requirements.

�

CHINA

The following terms and conditions will apply if you are subject to exchange control restrictions and regulations in China, as determined by the Company in its sole discretion.

Terms and Conditions

Settlement of Restricted Stock Units and Sale of Shares. The following provision supplements Section�2 of the Terms and Conditions:

You agree to maintain any Shares you obtain upon vesting in an account with the designated broker prior to sale. Further, you agree to sell all Shares issued upon vesting of the RSUs either immediately after vesting or, if no immediate sale is required, promptly upon notice of termination of your status as a Service Provider. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such Shares (on your behalf pursuant to this authorization) and you expressly authorize the Company�s designated broker to complete the sale of such Shares. You agree to sign any forms and/or consents required by the Company�s designated broker to effectuate the sale of Shares. You acknowledge that the Company�s designated broker is under no obligation to arrange for the sale of the Shares at any particular price. Furthermore, you acknowledge that the sale of Shares upon termination of your status as a Service Provider will be made as soon as administratively possible after the Company�s stock plan administration is aware of your termination, but the Company is not committed to sell the Shares at any particular time after termination of your status as a Service Provider. However, you are always free to sell the Shares yourself at any time prior to the date the Company arranges for the sale of the Shares. Upon the sale of the Shares, the Company agrees to pay you the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Exchange Control Requirements.�You understand and agree that, pursuant to local exchange control requirements, you will be required to repatriate the cash proceeds from the sale of the Shares issued upon the vesting of the RSUs as well as any cash dividends paid on such Shares to China. You further understand that, under Applicable Laws, such repatriation of your cash proceeds will need to be effectuated through a special exchange control account established by the Company, the Employer or their respective Parents, Subsidiaries or Affiliates, and you hereby consent and agree that any proceeds from the sale of any Shares you acquire or from cash dividends paid on such Shares will be transferred to such special account prior to being delivered to you. You also understand that the Company will deliver the proceeds to you as soon as possible, but there may be delays in distributing the funds to you due to exchange control requirements in China. Proceeds may be paid to you in U.S. dollars or local currency at the Company�s discretion. If the proceeds are paid to you in U.S. dollars, you may be required to set up a U.S. dollar bank account in China so that the proceeds may be deposited into this account. If the proceeds are paid to you in local currency, the Company is under no obligation to secure any particular exchange conversion rate and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.

�

CZECH REPUBLIC

Notifications

Exchange Control Information. The Czech National Bank may require you to fulfill certain notification duties in relation to the opening and maintenance of a foreign account.

Because exchange control regulations change frequently and without notice, you should consult your personal legal advisor prior to the sale of Shares to ensure compliance with current regulations. It is your responsibility to comply with Czech exchange control laws, and neither the Company nor the Employer will be liable for any resulting fines or penalties.

FINLAND

There are no country-specific provisions.

FRANCE

Terms and Conditions

French Language Provision. By accepting the RSU grant and the Shares issued at vesting, you confirm having read and understood the documents relating to the Plan which were provided to you in the English language and you accept the terms of those documents.

En acceptant l�attribution des RSU et les actions �mises durant l�acquisition, vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont �t� communiqu�s en langue anglaise et vous en acceptez les termes en connaissance de cause.

Notifications

Tax Information. The RSUs are not intended to be French tax-qualified Awards.

Foreign Asset/Account Reporting Information. You must report all foreign accounts, whether open, current or closed (including any brokerage account established for purposes of your participation in the Plan), to the French tax authorities in your annual income tax section.

GERMANY

Notifications

Exchange Control Information. Cross-border payments in excess of �12,500 must be reported monthly to the German Federal Bank. If you receive a cross-border payment in excess of �12,500 in connection with the sale of Shares acquired under the Plan or the receipt of dividends paid on such Shares, the report must be made electronically by the 5th day of the month following the month in which the payment was received. The form of report can be accessed via the German Federal Bank�s website at www.bundesbank.de and is available in both German and English.

�

HONG KONG

Terms and Conditions

Warning: The RSUs and Shares issued at vesting do not constitute a public offering of securities under Hong Kong law and are available only to Service Providers of the Company, the Employer or their respective Parents, Subsidiaries or Affiliates. The Agreement, the Plan and other Award Documentation have not been prepared in accordance with and are not intended to constitute a �prospectus� for a public offering of securities under the applicable securities legislation in Hong Kong, nor has the Agreement, the Plan or the other Award Documentation been reviewed by any regulatory authority in Hong Kong. The RSUs are intended only for the personal use of each eligible Service Provider and may not be distributed to any other person. If you are in any doubt about any of the contents of the Agreement , the Plan or the other Award Documentation, you should obtain independent professional advice.

Settlement of Restricted Stock Units and Sale of Shares. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, RSUs will be settled in Shares only, not cash.

In the event your RSUs vest and Shares are issued to you within six months of the date of grant, you agree that you will not dispose of any Shares acquired prior to the six-month anniversary of the date of grant.

Notifications

Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

INDIA

Notifications

Exchange Control Information. You understand that you must repatriate any proceeds from the sale of Shares acquired under the Plan or the receipt of any dividends paid on such Shares to India and convert the proceeds into local currency within a certain period after receipt. You will receive a foreign inward remittance certificate (the �FIRC�) from the bank where you deposit the foreign currency. You should maintain the FIRC as evidence of the repatriation of fund in the event the Reserve Bank of India, the Company or the Employer requests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.

�

INDONESIA

Notifications

Exchange Control Information. If you remit proceeds from the sale of Shares or the receipt of dividends paid on such Shares into Indonesia, the Indonesian bank through which the transaction is made will submit a report on the transaction to the Bank of Indonesia for statistical reporting purposes. For transactions of US$10,000 or more, a description of the transaction must be included in the report. Although the bank through which the transaction is made is required to make the report, you must complete a Transfer Report Form. The Transfer Report Form will be provided to you by the bank through which the transaction is made.

ISRAEL

Terms and Conditions

The following terms and conditions apply to you only if you are an Israeli tax resident at the time of grant of the RSUs, which were made under the capital gains trustee track of Section�102 of the Israeli Income Tax Ordinance.

Israeli Subplan. By accepting the RSUs, you understand and agree that the RSUs are offered subject to and in accordance with the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan Israeli Subplan (the �Israeli Subplan�) and the RSUs are intended to qualify as a 102 Capital Gains Track Grant (as defined in the Israeli Subplan). Notwithstanding the foregoing, the Company does not undertake to maintain the qualified status of the RSUs, and you acknowledge that you will not be entitled to damages of any nature whatsoever if the RSUs become disqualified and no longer qualify as a 102 Capital Gains Track Grant. In the event of any inconsistencies between the Israeli Subplan, the Agreement and/or the Plan, the terms of the Israeli Subplan will govern.

Further, to the extent requested by the Company or the Employer, you agree to execute any letter or other agreement in connection with the grant of the RSUs or any future awards granted under the Israeli Subplan. If you fail to comply with such request, the RSUs may not qualify as a 102 Capital Gains Track Grant.

Trust Arrangement. You acknowledge and agree that any Shares issued upon vesting of the RSUs will be subject to a supervisory trust arrangement with the Company�s designated trustee in Israel, ESOP Management and Trust Company Ltd. (the �Trustee�) in accordance with the terms of the trust agreement between the Company and the Trustee. You further agree that such Shares will be subject to the Required Holding Period (as defined in the Israeli Subplan), which shall be 24 months from the Grant Date. The Company may, in its sole discretion, replace the Trustee from time to time and instruct the transfer of all awards and Shares held and/or administered by such Trustee at such time to its successor. The provisions of the Agreement, including this Appendix, shall apply to the new Trustee mutatis mutandis.

�

Restriction on Sale. You acknowledge that any Shares underlying the RSUs may not be disposed of prior to the expiration of the Required Holding Period in order to qualify for tax treatment under the 102 Capital Gains Track. Accordingly, you shall not dispose of (or request the Trustee to dispose of) any such Shares prior to the expiration of the Required Holding Period, other than as permitted by applicable law. For purposes of this Appendix for Israel, �dispose� shall mean any sale, transfer or other disposal of the Shares by you (including by means of an instruction by you to the designated broker) or the Trustee, including a release of such Shares from the Trustee to you.

Responsibility for Taxes. The following provisions supplement Section�5 of the Terms and Conditions:

The following provision applies to you only if you were not an Israeli tax resident at the time of grant of the RSUs and the RSUs do not qualify as Section�102 capital gains trustee track grants:

Settlement of Restricted Stock Units and Sale of Shares. Unless otherwise determined by the Administrator, you agree to the immediate sale of all Shares issued upon vesting of the RSUs. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such Shares (on your behalf pursuant to this authorization), and you expressly authorize the Company�s designated broker to complete the sale of such Shares. You agree to sign any forms and/or consents required by the Company�s designated broker to effectuate the sale of Shares. You acknowledge that the Company�s designated broker is under no obligation to arrange for the sale of the Shares at any particular price. Upon the sale of the Shares, the Company agrees to pay you the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Notifications

Securities Law Information. An exemption from the requirement to file a prospectus with respect to the Plan has been granted to the Company by the Israeli Securities Authority. Copies of the Plan and Form S-8 registration statement for the Plan filed with the SEC are available free of charge upon request with your local human resources representative.

�

ITALY

Terms and Conditions

Data Privacy. The following provision replaces in its entirety Section�9 of the Terms and Conditions:

You understand that the Employer and/or the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security number (or any other social or national identification number), salary, nationality, job title, number of Shares held and the details of all RSUs or any other entitlement to Shares awarded, cancelled, exercised, vested, unvested or outstanding (the �Data�) for the purpose of implementing, administering and managing your participation in the Plan. You are aware that providing the Company with your Data is necessary for the performance of the Agreement and that your refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.

The controller of personal data processing is Advanced Micro Devices, Inc., One AMD Place, Sunnyvale, California 94088, USA, and, pursuant to D.lgs 196/2003, its representative in Italy is Advanced Micro Devices S.p.a., Via Polidoro da Caravaggio 6, 20156, Milano, Italy. You understand that the Data may be transferred to the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, including any transfer required to a broker or other third party with whom Shares acquired pursuant to the vesting of the RSUs or cash from the sale of such Shares may be deposited. Furthermore, the recipients that may receive, possess, use, retain and transfer such Data for the above mentioned purposes may be located in Italy or elsewhere, including outside of the European Union and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You hereby acknowledge that the processing activity, including the transfer of your personal data abroad, outside of the European Union, as herein specified and pursuant to Applicable Laws and regulations, does not require your consent because the processing is necessary for the performance of contractual obligations related to the implementation, administration and management of the Plan. You understand that Data processing relating to the above specified purposes will take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data are collected and with confidentiality and security provisions as set forth by Applicable Laws and regulations, with specific reference to D.lgs. 196/2003.

You understand that Data will be held only as long as is required by Applicable Laws or as necessary to implement, administer and manage your participation in the Plan. You understand that pursuant to art.7 of D.lgs 196/2003, you have the right, including but not limited to, access, delete, update, request the rectification of your Data and cease, for legitimate reasons, the Data processing. Furthermore, you are aware that your Data will not be used for direct marketing purposes. In addition, the Data provided can be reviewed and questions or complaints can be addressed by contacting a local representative available at the following address: Advanced Micro Devices S.p.a., Via Polidoro da Caravaggio 6, 20156, Milano, Italy.

Plan Document Acknowledgment. In accepting the RSUs, you acknowledge that you have received a copy of the Plan and the Agreement and have reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understand and accept all provisions of the Plan and the Agreement, including this Appendix. You further acknowledge that you have read and specifically and expressly approve the following sections of the Terms and Conditions:

Section�1: Vesting of Restricted Stock Units, Section�2: Issuance of Shares; Section�4: Forfeiture of Restricted Stock Units; Section�5: Responsibility for Taxes; Section�7: Nature of Grant and the Data Privacy provisions above.

�

Notifications

Foreign Asset/Account Reporting Information. If you hold investments abroad or foreign financial assets (e.g., cash, Shares, RSUs) that may generate income taxable in Italy, you are required to report them on your annual tax returns (UNICO Form, RW Schedule) or on a special form if no tax return is due, irrespective of their value. The same reporting duties apply to you if you are beneficial owners of the investments, even if you do not directly hold investments abroad or foreign assets.

Foreign Asset Tax. The value of the financial assets held outside of Italy by individuals resident of Italy is subject to a foreign asset tax. Beginning in 2014, such tax is levied at an annual rate of 2�per thousand (0.2%).�The taxable amount will be the fair market value of the financial assets (e.g., Shares) assessed at the end of the calendar year.

JAPAN

Notifications

KOREA

Notifications

Exchange Control Information. If you realize US$500,000 or more from the sale of Shares or the receipt of any dividends in a single transaction, Korean exchange control laws require you to repatriate the proceeds to Korea within 18 months of the sale or receipt of such proceeds.

�

MALAYSIA

Terms and Conditions

Data Privacy. The following provision replaces Section�9 of the Terms and Conditions:

�

You hereby explicitly, voluntarily and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in the Agreement and any other Award Documentation by and among, as applicable, you, the Company, the Employer and any their respective Parents, Subsidiaries and Affiliates or any third parties authorized by same in assisting in the implementation, administration or management of your participation in the Plan.

�

You may have previously provided the Company and the Employer with, and the Company and the Employer may hold, certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and conditions of your participation in the Plan, details of all RSUs or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in your favor (�Data�), for the exclusive purpose of implementing, administering and managing the Plan.

�

You also authorize any transfer of Data, as may be required, to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan and/or with whom any Shares acquired upon vesting of the RSUs are deposited.�You acknowledge that these recipients may be located in your country or elsewhere, and that the recipient�s country (e.g., the United States) may have different data privacy laws and protections to your country, which may not give the same level of protection to Data.�You understand that you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the Company, the stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing your participation in the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case, without cost, by contacting in writing �Ask HR� at http://AskHR on AMD Central.�Further, you understand that you are providing the consents herein on a purely voluntary basis.�If you do not consent, or if you later seek to revoke the consent, your status as a Service Provider and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the consent is that the Company would not be able to grant future RSUs or other equity awards to you or administer or maintain such awards.�Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of the refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

��

Anda dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi anda seperti yang dinyatakan dalam Perjanjian Penganugerahan ini dan apa-apa Dokumentasi Penganugerahan oleh dan di antara, sebagaimana yang berkenaan, Syarikat, Majikan dan Syarikat Induk,Anak Syarikat dan Syarikat Sekutu lain atau mana-mana pihak ketiga yang diberi kuasa oleh yang sama untuk membantu dalam pelaksanaan, pentadbiran dan pengurusan penyertaan anda dalam Pelan tersebut.

�

Sebelum ini, anda mungkin telah membekalkan Syarikat dan Majikan dengan, dan Syarikat dan Majikan mungkin memegang, maklumat peribadi tertentu tentang anda, termasuk, tetapi tidak terhad kepada, nama anda, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan anda dalam Pelan tersebut, butir-butir semua RSUs atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun bagi faedah anda (�Data�), untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut.

�

Anda juga memberi kuasa untuk membuat apa-apa pemindahan Data, sebagaimana yang diperlukan, kepada broker Pelan yang ditetapkan oleh Syarikat, atau pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut dan/atau dengan sesiapa yang mendepositkan Saham yang diperolehi melalui pemberian hak RSUs. Anda mengakui bahawa penerima-penerima ini mungkin berada di negara anda atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Anda memahami bahawa anda boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, pembekal perkhidmatan pelan saham dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta dalam Pelan tersebut untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda faham bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda memahami bahawa anda boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan anda , di mana butir-butir hubungannya adalah �Ask HR� at http://AskHR on AMD Central. Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela. Jika anda tidak bersetuju, atau jika anda kemudian membatalkan persetujuan anda, status anda sebagai Pemberi Perkhidmatan dan kerjaya anda dengan Majikan tidak akan terjejas; satunya akibat buruk jika anda tidak bersetuju atau menarik balik persetujuan anda adalah bahawa Syarikat tidak akan dapat memberikan RSU pada masa depan atau anugerah ekuiti lain kepada anda atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, anda memahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda memahami bahawa anda boleh menghubungi wakil sumber manusia tempatan anda.

�

Notifications

MEXICO

Terms and Conditions

No Entitlement or Claims for Compensation. These provisions supplement Sections�6 and 7 of the Terms and Conditions:

Modification. By accepting the RSUs, you understand and agree that any modification of the Plan or the Agreement or its termination will not constitute a change or impairment of the terms and conditions of employment.

Policy Statement. The Award of RSUs the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

The Company, with principal executive offices at One AMD Place, Sunnyvale, CA 94088, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and the acquisition of Shares does not, in any way, establish an employment relationship between you and the Company since you are participating in the Plan on a wholly commercial basis and your sole employer is AMD Latin America, Ltd. � Mexico City Branch Blvd. Manuel �vila Camacho No.�40, Torre Esmeralda 1, Piso 18 Col. Lomas de Chapultepec M�xico DF, CP 11000 � M�xico, nor does it establish any rights between you and the Employer.

Plan Document Acknowledgment. By accepting the Award of RSUs, you acknowledge that you have received copies of the Plan, have reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement.

In addition, by accepting the Agreement, you further acknowledge that you have read and specifically and expressly approve the terms and conditions in Section�7 of the Terms and Conditions, in which the following is clearly described and established: (i)�participation in the Plan does not constitute an acquired right, (ii)�the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis, (iii)�participation in the Plan is voluntary, and (iv)�the Company, the Employer and any of their respective Parents, Subsidiaries and Affiliates are not responsible for any decrease in the value of the Shares underlying the RSUs.

�

Spanish Translation

T�minos y Condiciones

Ausencia de derecho para reclamar compenssaciones. Estas disposiciones complementan el apartado 6 y 7 de los T�rminos y Condiciones

Modificaci�n. Al aceptar las Unidades de Acci�n Restringida, usted reconoce y acuerda que cualquier modificaci�n del Plan o su terminaci�n no constituye un cambio o detrmineto en los t�rminos y condiciones de empleo.

Declaraci�n de Pol�tica. El Otorgamiento de Unidades de Acci�n Restringida de la Compa��a en virtud del Plan es unilateral y discrecional y, por lo tanto, la Compa��a se reserva el derecho absoluto de modificar y discontinuar el mismo en cualquier tiempo, sin responsabilidad alguna.

Reconocimiento del Documento del Plan. Al aceptar el Otorgamiento de las Unidades de Acci�n Restringida, usted reconoce que ha recibido copias del Plan, ha revisado el mismo, al igual que la totalidad del Acuerdo y, que ha entendido y aceptado completamente todas las disposiciones contenidas en el Plan y en el Acuerdo.

�

NETHERLANDS

There are no country-specific provisions.

POLAND

Notifications

RUSSIA

Notifications

Exchange Control Information. Upon the sale of Shares acquired under the Plan or the receipt of any cash dividends paid on such Shares, you must repatriate the proceeds back to Russia within a reasonably short time after receipt of the proceeds. You may remit proceeds to your foreign currency account at an authorized bank in Russia or in a foreign bank account opened in accordance with Russian exchange control laws. You are encouraged to contact your personal advisor before remitting your sale proceeds to Russia.

Securities Law Information. You are not permitted to sell Shares directly to other Russian legal entities or residents.

The grant of the RSUs and the distribution of the Plan and all other materials you may receive regarding participation in the Plan do not constitute an offering or the advertising of securities in Russia. The issuance of Shares pursuant to the Plan has not and will not be registered in Russia and, therefore, the Shares may not be used for an offering or public circulation in Russia.

�

Labor Law Information. If you continue to hold Shares acquired at vesting of the RSUs after an involuntary termination of your service, you may not be eligible to receive unemployment benefits in Russia.

SINGAPORE

Notifications

Securities Law Information. The Award of RSUs is being made in reliance of section 273(1)(f) of the Securities and Futures Act (Cap. 289) (the �SFA�) for which it is exempt from the prospectus and registration requirements under the SFA. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Award of RSUs is subject to section 257 of the SFA and you will not be able to make (i)�any subsequent sale of Shares in Singapore or (ii)�any offer of such subsequent sale of Shares subject to the RSUs in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1)�Subdivision (4)�(other than section 280) of the SFA.

Director Notification Obligation. If you are a director, associate director or shadow director of the Company�s Singapore Parent, Subsidiary or Affiliate, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Company�s Singapore Parent, Subsidiary or Affiliate in writing when you receive an interest (e.g., an Award or Shares) in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, you must notify the Company�s Singapore Parent, Subsidiary or Affiliate when you sell Shares or shares of any Parent, Subsidiary or Affiliate (including when you sell Shares issued upon vesting and settlement of the RSUs). These notifications must be made upon acquiring or disposing of any interest in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, a notification of your interests in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates must be made upon becoming a director.

SPAIN

Terms and Conditions

No Entitlement for Claims or Compensation. The following provision supplements Section�7 of the Terms and Conditions:

By accepting the RSUs, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan documents.

�

You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant RSUs under the Plan to individuals who may be Consultants, Directors and Employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any RSUs will not economically or otherwise bind the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the RSUs are granted on the assumption and condition that the RSUs are not, and will not become, part of any employment contract (whether with the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates) and will not be considered a mandatory benefit or salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever will arise from the grant of RSUs, which is gratuitous and discretionary, since the future value of the RSUs and the underlying Shares is unknown and unpredictable. You also understand that this grant of RSUs would not be made but for the assumptions and conditions set forth hereinabove; thus, you understand, acknowledge and freely accept that, should any or all of the assumptions be mistaken or any of the conditions not be met for any reason, the RSUs and any right to the underlying Shares will be null and void.

Further, the vesting of the RSUs is expressly conditioned on your status as an active Service Provider, such that if your status as a Service Provider terminates for any reason whatsoever, your RSUs cease vesting immediately effective the date of your termination of your status as a Service Provider. This will be the case, for example and without limitation, even if (i)�you are considered to be unfairly dismissed without good cause, (ii)�you are dismissed for disciplinary or objective reasons or due to a collective dismissal, (iii)�you terminate service due to a change of work location, duties or any other employment or contractual condition, (iv)�you terminate service due to the Company�s, the Employer�s or any of their respective Parents�, Subsidiaries� or Affiliates� unilateral breach of contract, or (v)�your status as a Service Provider terminates for any other reason whatsoever. Consequently, upon termination of your status as a Service Provider for any of the above reasons, you will automatically lose any rights to RSUs granted to you that were unvested on the date of termination of your status as a Service Provider, as described in the Plan or Agreement.

Notifications

Securities Law Information. No �offer to the public,� as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the RSUs. The Plan, the�Agreement (including this Appendix) and any other documents evidencing the grant of the�RSUs have not been, nor will they be, registered with the Comisi�n Nacional del Mercado de Valores (the Spanish securities regulator), and none of those documents constitutes a public offering prospectus.

Exchange Control Information. To participate in the Plan, you must comply with exchange control regulations in Spain. You must declare the acquisition of stock in a foreign company (including Shares acquired under the Plan) for statistical purposes to the Direcci�n General de Comercio e Inversiones (the �DGCI�), which is a department of the Ministry of Economy and Competitiveness. You must also declare ownership of any Shares by filing a Form D-6 with the Directorate of Foreign Transactions each January while the Shares are owned. In addition, the sale of Shares must also be declared on Form D-6 filed with the DGCI in January, unless the sale proceeds exceed the applicable threshold (currently �1,502,530), in which case, the filing is due within one month after the sale.

�

When receiving foreign currency payments derived from the ownership of Shares (i.e.,�as a result of the sale of the Shares or the receipt of dividends) exceeding �50,000, you must inform the financial institution receiving the payment of the basis upon which such payment is made. You will need to provide the institution with the following information: (i)�your name, address, and fiscal identification number, (ii)�Company name and corporate domicile, (iii)�the amount of the payment, (iv)�the currency used, (v)�the country of origin, (vi)�the reasons for the payment, and (vii)�any additional information that may be required.

Foreign Asset/Account Reporting Information. Effective January�1, 2013, to the extent that you hold rights or assets (e.g., Shares or cash held in a bank or brokerage account) outside of Spain with a value in excess of �50,000�per type of right or asset (e.g., Shares, cash, etc.) as of December�31 each year, you will be required to report information on such rights and assets on your tax return for such year. After such rights and assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than �20,000. The reporting must be completed by March�31 following the end of the relevant year. It is your responsibility to comply with these reporting obligations, and you should consult with your personal tax and legal advisors in this regard.

In addition, you are required to electronically declare to the Bank of Spain any securities accounts (including brokerage accounts held abroad), as well as the securities (including Shares acquired under the Plan) held in such accounts if the value of the transactions for all such accounts during the prior tax year or the balances in such accounts as of December�31 of the prior tax year exceeds �1,000,000.

SWEDEN

There are no country-specific provisions.

TAIWAN

Notifications

Securities Law Information. The RSUs and the underlying Shares are available only for certain Service Providers. It is not a public offer of securities by a Taiwanese company. Therefore, it is exempt from registration in Taiwan.

�

THAILAND

Notifications

Exchange Control Information. When you realize US$50,000 or more in a single transaction from the sale of Shares issued to you at vesting and settlement of the RSUs or you receive a cash dividend paid on such Shares, you must immediately repatriate all cash proceeds to Thailand and then either convert such proceeds to Thai Baht or deposit the funds into a foreign currency account opened with any commercial bank in Thailand within 360 days of repatriation. If the amount of your proceeds is US$50,000 or more in a single transaction, you must specifically report the inward remittance to the Bank of Thailand on a foreign exchange transaction form. If you fail to comply with these obligations, you may be subject to penalties assessed by the Bank of Thailand. You should consult your personal advisor before taking action with respect to remittance of proceeds from the sale of Shares into Thailand. You are responsible for ensuring compliance with all exchange control laws in Thailand.

TURKEY

Notifications

Securities Law Information. Under Turkish law, you are not permitted to sell any Shares acquired under the Plan in Turkey. The Shares are currently traded on the New York Stock Exchange, which is located outside of Turkey, under the ticker symbol �AMD� and Shares acquired under the Plan may be sold through this exchange.

Exchange Control Information. Under Turkish law, Turkish residents are permitted to purchase and sell securities or derivatives traded on exchanges abroad only through a financial intermediary licensed in Turkey.�Therefore, you may be required to appoint a Turkish broker to assist you with the sale of the Shares acquired under the Plan.�You should consult your personal legal advisor before selling any Shares acquired under the Plan to confirm the applicability of this requirement to you.

UNITED ARAB EMIRATES

Notifications

Securities Law Information. The Plan is only being offered to qualified Service Providers and is in the nature of providing equity incentives to Service Providers residing or working in the United Arab Emirates.

�

The Plan and the Agreement are intended for distribution only to such Service Providers and must not be delivered to, or relied on by, any other person. You should conduct your own due diligence on the Shares. If you do not understand the contents of the Plan and the Agreement, you should consult an authorized financial adviser. The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with the Plan. Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or the Agreement nor taken steps to verify the information set out therein, and have no responsibility for such documents.

UNITED KINGDOM

Terms�& Conditions

Settlement of Restricted Stock Units. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, RSUs will be settled in Shares only, not cash.

Responsibility for Taxes. The following provisions supplement Section�5 of the Terms and Conditions:

You must pay to the Company or the Employer any amount of income tax due that the Company or the Employer may be required to account to Her Majesty�s Revenue and Customs (�HMRC�) with respect to the event giving rise to the Tax-Related Items (the �Taxable Event�) that cannot be satisfied by the means described in this Section�5. If payment or withholding of the income tax is not made within 90 days of the end of the U.K. tax year in which the Taxable Event occurs or such other period as required under U.K. law (the �Due Date�), you agree that the amount of any uncollected income tax will (assuming you are not a director or executive officer of the Company (within the meaning of Section�13(k) of the U.S. Securities and Exchange Act of 1934, as amended)) constitute a loan owed by you to the Company or the Employer (as applicable), effective on the Due Date. You agree that the loan will bear interest at the then-current HMRC official rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to in this Section�5. If you fail to comply with your obligations in connection with the income tax due as described in this Section�5, the Company may refuse to deliver the Shares acquired under the Plan.

�

Exhibit 10.3

FORM OF PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

FOR SENIOR VICE PRESIDENTS AND ABOVE

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

�

PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT NOTICE

ADVANCED MICRO DEVICES, INC.

2004 EQUITY INCENTIVE PLAN

Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), pursuant to its 2004 Equity Incentive Plan (as amended and restated, the �Plan�), hereby grants to the holder listed below (�Participant�), this award of performance-based restricted stock units set forth below (the �PRSUs�). This award of PRSUs is subject to all of the terms and conditions set forth herein, in the Terms and Conditions to the PRSUs (the �Terms and Conditions�), in any terms and conditions for Participant�s country set forth in the appendix thereto, as applicable (the �Appendix�) and in the Plan, each of which are incorporated herein by reference.

�


Participant:	��	�

Grant Date:	��	�

Performance�Period:	��	�

Target�Number�of PRSUs:	��	units

Vesting�Schedule�and�Performance�Conditions: [To be specified in individual agreements]

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Terms and Conditions, the Appendix and this Performance-Based Restricted Stock Unit Grant Notice. Participant has reviewed the Plan, the Terms and Conditions, the Appendix and this Performance-Based Restricted Stock Unit Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Performance-Based Restricted Stock Unit Grant Notice and fully understands all provisions of the Plan, the Terms and Conditions, the Appendix and this Performance-Based Restricted Stock Unit Grant Notice. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator (as defined in the Plan) upon any questions arising under the Plan, the Terms and Conditions, the Appendix or this Performance-Based Restricted Stock Unit Grant Notice.

�


ADVANCED MICRO DEVICES, INC.			�	PARTICIPANT
By:	�	�	�	By:	�	�
Print�Name:	�	�	�	Print�Name:	�	�
Title:	�	�	�		�
Address:	�	�	�	Address:	�	�
	�		�		�	�

TERMS AND CONDITIONS

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD

ADVANCED MICRO DEVICES, INC. 2004 EQUITY INCENTIVE PLAN

These Terms and Conditions (these �Terms and Conditions�), collectively with the accompanying Performance-Based Restricted Stock Unit Grant Notice (the �Grant Notice�) and any terms and conditions for your country contained in the Appendix hereto, as applicable (the �Appendix�), comprise your agreement (the �Agreement�) with Advanced Micro Devices, Inc., a Delaware corporation (the �Company�), regarding performance-based restricted stock units (the �PRSUs�) awarded under the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended and restated, the �Plan�). Capitalized terms not specifically defined herein have the same meanings assigned to them in the Plan.

1. Vesting of Performance-Based Restricted Stock Units. The PRSUs will vest on the date(s) shown on the Grant Notice provided that (a)�all performance conditions for the vesting of such PRSUs have been satisfied and (b)�you continue to be a Service Provider through each vesting date. Without limiting the foregoing, the vesting of any PRSUs is conditioned on your performing the duties assigned to you by the Company�s management or Board, as applicable, in a manner and with results satisfactory to the Company�s management or Board, as applicable.

2. Issuance of Shares. After the PRSUs vest, shares (�Shares�) of Company common stock will be issued in your name as soon as practicable after you have satisfied any Tax-Related Items (as defined in Section�5) and subject to any country-specific terms and conditions set forth in the Appendix.

3. Nontransferability of PRSUs. Unless determined otherwise by the Administrator, the PRSUs may not be pledged, assigned, sold or otherwise transferred.

4. Forfeiture of PRSUs. If your status as a Service Provider terminates for any reason before the vesting date(s) shown on the Grant Notice, your unvested PRSUs will be cancelled and you will not have any right to receive Shares pursuant to the PRSUs.

5. Responsibility for Taxes. Regardless of any action the Company or, if different, your employer (the �Employer�) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (�Tax-Related Items�), you acknowledge that the ultimate liability for all Tax-Related Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1)�make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PRSUs, including, but not limited to, the grant, vesting or settlement of the PRSUs, the issuance of Shares upon settlement of the PRSUs, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or any dividend equivalents; and (2)�do not commit to and are under no obligation to structure the terms of the Award or any aspect of the PRSUs to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to tax in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(a) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer;

(b) withholding from proceeds of the sale of Shares acquired upon vesting/settlement of the PRSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or

Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested PRSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.

Finally, you must pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if you fail to comply with your obligations in connection with the Tax-Related Items.

6. Other Terms and Conditions.

(a) The Plan. The Agreement is further subject to the terms and provisions of the Plan. Only certain provisions of the Plan are described in the Agreement. As a condition to your receipt of the PRSUs and the Shares upon vesting, you acknowledge and agree to the terms and conditions of the Agreement and the terms and provisions of the Plan.

(b) Stockholder Rights. Until the Shares are issued, you have no right to vote or receive dividends or any other rights as a stockholder with respect to the PRSUs.

(d) Change of Control. If your employment is terminated by the Company or the Employer for any reason other than for Misconduct or, if applicable, by you as a result of a Constructive Termination, within one year after a Change of Control, then the PRSUs will become fully vested upon the date of termination.

�

(e) Declination of PRSUs. If you wish to decline your PRSUs, you must complete and file the Declination of Grant form with Corporate Compensation and Benefits by the deadline for such declination. Your declination is non-revocable, and you will not receive a grant of stock options or other compensation as replacement for the declined PRSUs.

(f) Recovery in the Event of a Financial Restatement. In the event the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under applicable securities laws, the Administrator will review all equity-based compensation (including the PRSUs) awarded to employees at the Senior Vice President level and above. If the Administrator (in its sole discretion) determines that you were directly involved with fraud, misconduct or gross negligence that contributed to or resulted in such accounting restatement, the Administrator may, to the extent permitted by Applicable Law, recover for the benefit of the Company all or a portion of the equity-based compensation awarded to you, including (without limitation) by cancelation, forfeiture, repayment and disgorgement of profits realized from the sale of securities of the Company; provided, however, the Administrator will not have the authority to recover any equity-based compensation awarded more than 18 months prior to the date of the first public issuance or filing with the U.S. Securities and Exchange Commission (the �SEC�) (whichever first occurs) of the financial document embodying such financial reporting requirement. In determining whether to seek recovery, the Administrator may take into account any considerations it deems appropriate, including Applicable Laws and whether the assertion of a recovery claim may prejudice the interests of the Company in any related proceeding or investigation.

7. Nature of Grant. In accepting the grant, you acknowledge, understand and agree that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(b) the grant of the PRSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of PRSUs, or benefits in lieu of PRSUs, even if PRSUs have been granted in the past;

(e) you are voluntarily participating in the Plan;

(f) the PRSUs and the Shares subject to the PRSUs, and the value and income of such PRSUs and Shares, are not intended to replace any pension rights or compensation;

(g) the PRSUs and the Shares subject to the PRSUs, and the value and income of such PRSUs and Shares, are not part of normal or expected compensation or salary for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

�

(h) the PRSU grant and your participation in the Plan will not be interpreted to form an employment contract or other service relationship with the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates;

(i) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(j) no claim or entitlement to compensation or damages will arise from forfeiture of the PRSUs resulting from termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), and in consideration of the grant of the PRSUs to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, the Employer, any Parent or any of their respective Parents, Subsidiaries or Affiliates, waive your ability, if any, to bring such claim against the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, and release the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you will be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary, or reasonably requested by the Company, to request dismissal or withdrawal of such claims;

(k) in the event of termination of your status as a Service Provider (for any reason whatsoever and whether or not in breach of Applicable Laws), your right to vest in the PRSUs under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or providing services and will not be extended by any notice period mandated under applicable local laws (e.g., active employment or service would not include a period of �garden leave� or similar period pursuant to Applicable Laws); the Administrator will have the exclusive discretion to determine when you are no longer actively employed or providing services for purposes of your PRSU grant (including whether you may still be considered to be providing services while on a leave of absence);

(l) the PRSUs and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger of the Company with or into another company or the sale of substantially all of the assets of the Company; and

(m) the following provisions apply only if you are providing services outside the United States:

(1) the PRSUs and the Shares subject to the PRSUs, and the value and income of same, are not part of normal or expected compensation or salary for any purpose; and

(2) none of the Company, the Employer, or any of their respective Parents, Subsidiaries or Affiliates will be liable for any foreign exchange rate fluctuation between any local currency and the United States Dollar that may affect the value of the PRSUs, any amounts due to you pursuant to the settlement of the PRSUs or the subsequent sale of any Shares acquired upon settlement.

�

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all PRSUs or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the exclusive purpose of implementing, administering and managing the Plan (�Data�).

You understand that Data may be transferred to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that if you reside outside the United States, you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Company or Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant you PRSUs or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

�

10. Compliance with Laws and Regulations. The issuance and transfer of the Shares will be subject to and conditioned upon compliance by the Company and you with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Common Stock may be listed or quoted at the time of such issuance or transfer; and, you understand that the Company shall not be required to issue or deliver any Shares prior to fulfillment of all of the following conditions: (a)�the admission of such Shares to listing on all stock exchanges on which the Company�s common stock is then listed; (b)�the completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the SEC or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; the obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and the lapse of such reasonable period of time following the vesting or settlement as the Administrator may from time to time establish for reasons of administrative convenience. The Shares shall be fully paid and nonassessable. You understand that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that the Company has unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary or advisable to comply with securities or other laws applicable to issuance of Shares.

13. Further Instruments. You agree to execute further instruments and to take further actions as may be reasonably necessary to carry out the purposes and intent of the Agreement.

14. Administrator Authority. The Administrator has the power to interpret the Plan and the Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the PRSUs have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon you, the Company and all other interested persons. The Administrator will not be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Agreement.

�

16. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

17. Imposition of Other Requirements. The Company reserves the right to impose other requirements on your participation in the Plan, on the PRSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

19. Appendix. Notwithstanding any provisions in the Award Documentation, the PRSU grant will be subject to any special terms and conditions for your country set forth in an Appendix to these Terms and Conditions. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of the Agreement.

22. Insider Trading Restrictions/Market Abuse Laws. You acknowledge that, depending on your country of residence, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell Shares or rights to Shares (e.g., PRSUs) under the Plan during such times as you are considered to have �inside information� regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter.

�

23. Notices. Any notice to be given under the terms of the Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company�s principal office, and any notice to be given to you shall be addressed to you at your last address reflected on the Company�s records. By a notice given pursuant to this Section�24, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to you shall, if you are then deceased, be given to your legal representative. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service or similar local service in jurisdictions outside of the United States.

24. Limitations Applicable to Section�16 Persons. Notwithstanding any other provision of the Plan or the Agreement, if you are subject to Section�16 of the Exchange Act, the Plan, the PRSUs and the Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section�16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

25. Section�409A. The PRSUs are not intended to constitute �nonqualified deferred compensation� within the meaning of Section�409A of the Code (together with any U.S. Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, �Section 409A�). However, notwithstanding any other provision of the Plan or the Agreement, if at any time the Administrator determines that the PRSUs (or any portion thereof) may be subject to Section�409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify you or any other person for failure to do so) to adopt such amendments to the Plan or the Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the PRSUs to be exempt from the application of Section�409A or to comply with the requirements of Section�409A.

26. Limitation on Participant�s Rights. Participation in the Plan confers no rights or interests other than as herein provided. The Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. You shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PRSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to PRSUs, as and when vested or settled pursuant to the terms hereof.

By signing the Grant Notice or otherwise accepting the PRSU grant and the Shares issued upon vesting of the PRSUs, you agree to be bound by terms of the Agreement and the Plan.

�

APPENDIX

Terms and Conditions

Performance-Based Restricted Stock Unit Award

Advanced Micro Devices, Inc. 2004 Equity Incentive Plan

Capitalized terms not specifically defined in this Appendix (this �Appendix�) have the same meaning assigned to them in the Advanced Micro Devices, Inc. 2004 Equity Incentive Plan (as amended and restated, the �Plan�) and/or the Terms and Conditions to which this Appendix is attached (the �Terms and Conditions�).

Terms and Conditions

This Appendix includes additional terms and conditions that govern the grant of PRSUs in your country. If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer to another country after the grant but prior to the vesting of the PRSUs or are considered a resident of another country for local law purposes, the Company may, in its discretion, determine to what extent the additional terms and conditions contained herein will be applicable to you.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of June 2014. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information noted herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at vesting of the PRSUs or the subsequent sale of the Shares or receipt of any dividends or dividend equivalents. In addition, the information is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation. If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the PRSUs are granted to you or are considered a resident of another country for local law purposes, the notifications contained herein may not be applicable to you.

ARGENTINA

Notifications

Securities Law Information. Neither the PRSUs nor the Shares subject to the PRSUs are publicly offered or listed on any stock exchange in Argentina. The offer is private and not subject to the supervision of any Argentine governmental authority.

Foreign Asset/Account Reporting Information. You must report any Shares acquired and held by you on December�31 of each year on your annual tax return for that year.

AUSTRALIA

Terms and Conditions

Data Privacy. This following provision supplements Section�9 of the Terms and Conditions:

The Company can be contacted at One AMD Place, Sunnyvale, CA, 94088, U.S.A. The Australian Employer can be contacted at Part Level 8, 15 Talavera Road, North Ryde, NSW 2113, Sydney, Australia.

You understand and agree that Data may be transferred to recipients of Data located outside of Australia, including the United States and any other country where the Company has operations.

Notifications

Securities Law Information. If you acquire Shares pursuant to the PRSUs and you offer the Shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. You should obtain legal advice on disclosure obligations prior to making any such offer.

�

BELGIUM

Notifications

BRAZIL

Terms and Conditions

Compliance with Laws. By accepting the PRSUs, you agree that you will comply with Brazilian law when you vest in your PRSUs and sell Shares. You also agree to report and pay any and all taxes associated with the vesting of the PRSUs, the receipt of any dividends and the sale of Shares.

Notifications

CANADA

Terms and Conditions

Settlement of Performance-Based Restricted Stock Units. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, PRSUs will be settled in Shares only, not cash.

Termination of Service. The following provision replaces Section�7(k) of the Terms and Conditions:

In the event of the termination of your status as Service Provider for any reason (whether or not in breach of Applicable Laws), your right to vest in the PRSUs under the Plan, if any, will

�

terminate effective as of the date that is the earlier of (1)�the date your status as a Service Provider is terminated, (2)�the date that you receive notice of termination from the Employer, or (3)�the date you are no longer actively providing service, regardless of any notice period or period of pay in lieu of such notice required under Applicable Laws (including, but not limited to statutory law, regulatory law and/or common law); the Company has the exclusive discretion to determine when you are no longer actively providing service for purposes of the PRSUs (including whether you may still be considered to be providing service while on a leave of absence).

The following provisions will apply if you are a resident of Quebec:

Data Privacy. The following provision supplements Section�9 of the Terms and Conditions:

Notifications

Securities Law Information. You will not be permitted to sell or otherwise dispose of the Shares acquired upon vesting of the PRSUs within Canada. You will only be permitted to sell or dispose of any Shares if such sale or disposal takes place outside of Canada on the facilities on which such Shares are traded.

Foreign Asset/Account Reporting Information. If the total value of your foreign property (including cash held outside of Canada or Shares) exceeds C$100,000 at any time during the year, you must report all of your foreign property on Form T1135 (Foreign Income Verification Statement) by April�30 of the following year. Foreign property may also include your unvested PRSUs. You should consult with your personal tax advisor to determine your reporting requirements.

�

CHINA

The following terms and conditions will apply if you are subject to exchange control restrictions and regulations in China, as determined by the Company in its sole discretion.

Terms and Conditions

Settlement of Performance-Based Restricted Stock Units and Sale of Shares. The following provision supplements Section�2 of the Terms and Conditions:

You agree to maintain any Shares you obtain upon vesting in an account with the designated broker prior to sale. Further, you agree to sell all Shares issued upon vesting of the PRSUs either immediately after vesting or, if no immediate sale is required, promptly upon notice of termination of your status as a Service Provider. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such Shares (on your behalf pursuant to this authorization) and you expressly authorize the Company�s designated broker to complete the sale of such Shares. You agree to sign any forms and/or consents required by the Company�s designated broker to effectuate the sale of Shares. You acknowledge that the Company�s designated broker is under no obligation to arrange for the sale of the Shares at any particular price. Furthermore, you acknowledge that the sale of Shares upon termination of your status as a Service Provider will be made as soon as administratively possible after the Company�s stock plan administration is aware of your termination, but the Company is not committed to sell the Shares at any particular time after termination of your status as a Service Provider. However, you are always free to sell the Shares yourself at any time prior to the date the Company arranges for the sale of the Shares. Upon the sale of the Shares, the Company agrees to pay you the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Exchange Control Requirements. You understand and agree that, pursuant to local exchange control requirements, you will be required to repatriate the cash proceeds from the sale of the Shares issued upon the vesting of the PRSUs as well as any cash dividends paid on such Shares to China. You further understand that, under Applicable Laws, such repatriation of your cash proceeds will need to be effectuated through a special exchange control account established by the Company, the Employer or their respective Parents, Subsidiaries or Affiliates, and you hereby consent and agree that any proceeds from the sale of any Shares you acquire or from cash dividends paid on such Shares will be transferred to such special account prior to being delivered to you. You also understand that the Company will deliver the proceeds to you as soon as possible, but there may be delays in distributing the funds to you due to exchange control requirements in China. Proceeds may be paid to you in U.S. dollars or local currency at the Company�s discretion. If the proceeds are paid to you in U.S. dollars, you may be required to set up a U.S. dollar bank account in China so that the proceeds may be deposited into this account. If the proceeds are paid to you in local currency, the Company is under no obligation to secure any particular exchange conversion rate and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.

�

CZECH REPUBLIC

Notifications

Exchange Control Information. The Czech National Bank may require you to fulfill certain notification duties in relation to the opening and maintenance of a foreign account.

FINLAND

There are no country-specific provisions.

FRANCE

Terms and Conditions

French Language Provision. By accepting the PRSU grant and the Shares issued at vesting, you confirm having read and understood the documents relating to the Plan which were provided to you in the English language and you accept the terms of those documents.

En acceptant l�attribution des PRSU et les actions �mises durant l�acquisition, vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont �t� communiqu�s en langue anglaise et vous en acceptez les termes en connaissance de cause.

Notifications

Tax Information. The PRSUs are not intended to be French tax-qualified Awards.

GERMANY

Notifications

�

paid on such Shares, the report must be made electronically by the 5th day of the month following the month in which the payment was received. The form of report can be accessed via the German Federal Bank�s website at www.bundesbank.de and is available in both German and English.

HONG KONG

Terms and Conditions

Warning: The PRSUs and Shares issued at vesting do not constitute a public offering of securities under Hong Kong law and are available only to Service Providers of the Company, the Employer or their respective Parents, Subsidiaries or Affiliates. The Agreement, the Plan and other Award Documentation have not been prepared in accordance with and are not intended to constitute a �prospectus� for a public offering of securities under the applicable securities legislation in Hong Kong, nor has the Agreement, the Plan or the other Award Documentation been reviewed by any regulatory authority in Hong Kong. The PRSUs are intended only for the personal use of each eligible Service Provider and may not be distributed to any other person. If you are in any doubt about any of the contents of the Agreement , the Plan or the other Award Documentation, you should obtain independent professional advice.

Settlement of PRSUs and Sale of Shares. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, PRSUs will be settled in Shares only, not cash.

In the event your PRSUs vest and Shares are issued to you within six months of the date of grant, you agree that you will not dispose of any Shares acquired prior to the six-month anniversary of the date of grant.

Notifications

Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

INDIA

Notifications

�

INDONESIA

Notifications

ISRAEL

Terms and Conditions

Settlement of Performance-Based Restricted Stock Units and Sale of Shares. Unless otherwise determined by the Administrator, you agree to the immediate sale of all Shares issued upon vesting of the PRSUs. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such Shares (on your behalf pursuant to this authorization), and you expressly authorize the Company�s designated broker to complete the sale of such Shares. You agree to sign any forms and/or consents required by the Company�s designated broker to effectuate the sale of Shares. You acknowledge that the Company�s designated broker is under no obligation to arrange for the sale of the Shares at any particular price. Upon the sale of the Shares, the Company agrees to pay you the cash proceeds from the sale of the Shares, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Notifications

Securities Law Information. An exemption from the requirement to file a prospectus with respect to the Plan has been granted to the Company by the Israeli Securities Authority. Copies of the Plan and Form S-8 registration statement for the Plan filed with the SEC are available free of charge upon request with your local human resources representative.

�

ITALY

Terms and Conditions

Data Privacy. The following provision replaces in its entirety Section�9 of the Terms and Conditions:

You understand that the Employer and/or the Company may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social security number (or any other social or national identification number), salary, nationality, job title, number of Shares held and the details of all PRSUs or any other entitlement to Shares awarded, cancelled, exercised, vested, unvested or outstanding (the �Data�) for the purpose of implementing, administering and managing your participation in the Plan. You are aware that providing the Company with your Data is necessary for the performance of the Agreement and that your refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.

The controller of personal data processing is Advanced Micro Devices, Inc., One AMD Place, Sunnyvale, California 94088, USA, and, pursuant to D.lgs 196/2003, its representative in Italy is Advanced Micro Devices S.p.a., Via Polidoro da Caravaggio 6, 20156, Milano, Italy. You understand that the Data may be transferred to the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates, or to any third parties assisting in the implementation, administration and management of the Plan, including any transfer required to a broker or other third party with whom Shares acquired pursuant to the vesting of the PRSUs or cash from the sale of such Shares may be deposited. Furthermore, the recipients that may receive, possess, use, retain and transfer such Data for the above mentioned purposes may be located in Italy or elsewhere, including outside of the European Union and that the recipients� country (e.g., the United States) may have different data privacy laws and protections than your country. You hereby acknowledge that the processing activity, including the transfer of your personal data abroad, outside of the European Union, as herein specified and pursuant to Applicable Laws and regulations, does not require your consent because the processing is necessary for the performance of contractual obligations related to the implementation, administration and management of the Plan. You understand that Data processing relating to the above specified purposes will take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data are collected and with confidentiality and security provisions as set forth by Applicable Laws and regulations, with specific reference to D.lgs. 196/2003.

You understand that Data will be held only as long as is required by Applicable Laws or as necessary to implement, administer and manage your participation in the Plan. You understand that pursuant to art.7 of D.lgs 196/2003, you have the right, including but not limited to, access, delete, update, request the rectification of your Data and cease, for legitimate reasons, the Data processing. Furthermore, you are aware that your Data will not be used for direct marketing purposes. In addition, the Data provided can be reviewed and questions or complaints can be addressed by contacting a local representative available at the following address: Advanced Micro Devices S.p.a., Via Polidoro da Caravaggio 6, 20156, Milano, Italy.

�

Plan Document Acknowledgment. In accepting the PRSUs, you acknowledge that you have received a copy of the Plan and the Agreement and have reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understand and accept all provisions of the Plan and the Agreement, including this Appendix. You further acknowledge that you have read and specifically and expressly approve the following sections of the Terms and Conditions: Section�1: Vesting of PRSUs; Section�2: Issuance of Shares; Section�4: Forfeiture of PRSUs; Section�5: Responsibility for Taxes; Section�7: Nature of Grant and the Data Privacy provisions above.

Notifications

Foreign Asset/Account Reporting Information. If you hold investments abroad or foreign financial assets (e.g., cash, Shares, PRSUs) that may generate income taxable in Italy, you are required to report them on your annual tax returns (UNICO Form, RW Schedule) or on a special form if no tax return is due, irrespective of their value. The same reporting duties apply to you if you are beneficial owners of the investments, even if you do not directly hold investments abroad or foreign assets.

Foreign Asset Tax. The value of the financial assets held outside of Italy by individuals resident of Italy is subject to a foreign asset tax. Beginning in 2014, such tax is levied at an annual rate of 2 per thousand (0.2%). The taxable amount will be the fair market value of the financial assets (e.g., Shares) assessed at the end of the calendar year.

JAPAN

Notifications

KOREA

Notifications

�

Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 1 billion (or an equivalent amount in foreign currency). You should consult with your personal tax advisor to determine your personal reporting obligations.

MALAYSIA

Terms and Conditions

Data Privacy. The following provision replaces Section�9 of the Terms and Conditions:

�

You hereby explicitly, voluntarily and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in the Agreement and any other Award Documentation by and among, as applicable, you, the Company, the Employer and any their respective Parents, Subsidiaries and Affiliates or any third parties authorized by same in assisting in the implementation, administration or management of your participation in the Plan.

�

You may have previously provided the Company and the Employer with, and the Company and the Employer may hold, certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and conditions of your participation in the Plan, details of all PRSUs or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in your favor (�Data�), for the exclusive purpose of implementing, administering and managing the Plan.

�

You also authorize any transfer of Data, as may be required, to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan and/or with whom any Shares acquired upon vesting of the PRSUs are deposited. You acknowledge that these recipients may be located in your country or elsewhere, and that the recipient�s country (e.g., the United States) may have different data privacy laws and protections to your country, which may not give the same level of protection to Data. You understand that you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the Company, the stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing your participation in the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case, without cost, by contacting in writing �Ask HR� at http://AskHR on AMD Central. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke the consent, your status as a Service Provider and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the consent is that the Company would not be able to grant future PRSUs or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of the refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

��

�

Sebelum ini, anda mungkin telah membekalkan Syarikat dan Majikan dengan, dan Syarikat dan Majikan mungkin memegang, maklumat peribadi tertentu tentang anda, termasuk, tetapi tidak terhad kepada, nama anda, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan anda dalam Pelan tersebut, butir-butir semua PRSUs atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun bagi faedah anda (�Data�), untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut.

�

Anda juga memberi kuasa untuk membuat apa-apa pemindahan Data, sebagaimana yang diperlukan, kepada broker Pelan yang ditetapkan oleh Syarikat, atau pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut dan/atau dengan sesiapa yang mendepositkan Saham yang diperolehi melalui pemberian hak PRSUs. Anda mengakui bahawa penerima-penerima ini mungkin berada di negara anda atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Anda memahami bahawa anda boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, pembekal perkhidmatan pelan saham dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta dalam Pelan tersebut untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda faham bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaan anda dalam Pelan tersebut. Anda memahami bahawa anda boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan anda , di mana butir-butir hubungannya adalah �Ask HR� at http://AskHR on AMD Central. Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela. Jika anda tidak bersetuju, atau jika anda kemudian membatalkan persetujuan anda, status anda sebagai Pemberi Perkhidmatan dan kerjaya anda dengan Majikan tidak akan terjejas; satunya akibat buruk jika anda tidak bersetuju atau menarik balik persetujuan anda adalah bahawa Syarikat tidak akan dapat memberikan PRSU pada masa depan atau anugerah ekuiti lain kepada anda atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, anda memahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda memahami bahawa anda boleh menghubungi wakil sumber manusia tempatan anda.

�

Notifications

MEXICO

Terms and Conditions

No Entitlement or Claims for Compensation. These provisions supplement Sections�6 and 7 of the Terms and Conditions:

Modification. By accepting the PRSUs, you understand and agree that any modification of the Plan or the Agreement or its termination will not constitute a change or impairment of the terms and conditions of employment.

Policy Statement. The Award of PRSUs the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

The Company, with principal executive offices at One AMD Place, Sunnyvale, CA 94088, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and the acquisition of Shares does not, in any way, establish an employment relationship between you and the Company since you are participating in the Plan on a wholly commercial basis and your sole employer is AMD Latin America, Ltd. � Mexico City Branch Blvd. Manuel �vila Camacho No.�40, Torre Esmeralda 1, Piso 18 Col. Lomas de Chapultepec M�xico DF, CP 11000 � M�xico, nor does it establish any rights between you and the Employer.

�

Plan Document Acknowledgment. By accepting the Award of PRSUs, you acknowledge that you have received copies of the Plan, have reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement.

Spanish Translation

T�minos y Condiciones

Ausencia de derecho para reclamar compenssaciones. Estas disposiciones complementan el apartado 6 y 7 de los T�rminos y Condiciones

Modificaci�n. Al aceptar las Unidades de Acci�n Restringida, usted reconoce y acuerda que cualquier modificaci�n del Plan o su terminaci�n no constituye un cambio o detrmineto en los t�rminos y condiciones de empleo.

�

NETHERLANDS

There are no country-specific provisions.

POLAND

Notifications

RUSSIA

Notifications

�

Securities Law Information. You are not permitted to sell Shares directly to other Russian legal entities or residents.

The grant of the PRSUs and the distribution of the Plan and all other materials you may receive regarding participation in the Plan do not constitute an offering or the advertising of securities in Russia. The issuance of Shares pursuant to the Plan has not and will not be registered in Russia and, therefore, the Shares may not be used for an offering or public circulation in Russia.

Labor Law Information. If you continue to hold Shares acquired at vesting of the PRSUs after an involuntary termination of your service, you may not be eligible to receive unemployment benefits in Russia.

SINGAPORE

Notifications

Securities Law Information. The Award of PRSUs is being made in reliance of section 273(1)(f) of the Securities and Futures Act (Cap. 289) (the �SFA�) for which it is exempt from the prospectus and registration requirements under the SFA. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Award of PRSUs is subject to section 257 of the SFA and you will not be able to make (i)�any subsequent sale of Shares in Singapore or (ii)�any offer of such subsequent sale of Shares subject to the PRSUs in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1)�Subdivision (4)�(other than section 280) of the SFA.

Director Notification Obligation. If you are a director, associate director or shadow director of the Company�s Singapore Parent, Subsidiary or Affiliate, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Company�s Singapore Parent, Subsidiary or Affiliate in writing when you receive an interest (e.g., an Award or Shares) in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, you must notify the Company�s Singapore Parent, Subsidiary or Affiliate when you sell Shares or shares of any Parent, Subsidiary or Affiliate (including when you sell Shares issued upon vesting and settlement of the PRSUs). These notifications must be made upon acquiring or disposing of any interest in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates. In addition, a notification of your interests in the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates must be made upon becoming a director.

�

SPAIN

Terms and Conditions

No Entitlement for Claims or Compensation. The following provision supplements Section�7 of the Terms and Conditions:

By accepting the PRSUs, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan documents.

You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant PRSUs under the Plan to individuals who may be Consultants, Directors and Employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any PRSUs will not economically or otherwise bind the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the PRSUs are granted on the assumption and condition that the PRSUs are not, and will not become, part of any employment contract (whether with the Company, the Employer or any of their respective Parents, Subsidiaries or Affiliates) and will not be considered a mandatory benefit or salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever will arise from the grant of PRSUs, which is gratuitous and discretionary, since the future value of the PRSUs and the underlying Shares is unknown and unpredictable. You also understand that this grant of PRSUs would not be made but for the assumptions and conditions set forth hereinabove; thus, you understand, acknowledge and freely accept that, should any or all of the assumptions be mistaken or any of the conditions not be met for any reason, the PRSUs and any right to the underlying Shares will be null and void.

Further, the vesting of the PRSUs is expressly conditioned on your status as an active Service Provider, such that if your status as a Service Provider terminates for any reason whatsoever, your PRSUs cease vesting immediately effective the date of your termination of your status as a Service Provider. This will be the case, for example and without limitation, even if (i)�you are considered to be unfairly dismissed without good cause, (ii)�you are dismissed for disciplinary or objective reasons or due to a collective dismissal, (iii)�you terminate service due to a change of work location, duties or any other employment or contractual condition, (iv)�you terminate service due to the Company�s, the Employer�s or any of their respective Parents�, Subsidiaries� or Affiliates� unilateral breach of contract, or (v)�your status as a Service Provider terminates for any other reason whatsoever. Consequently, upon termination of your status as a Service Provider for any of the above reasons, you will automatically lose any rights to PRSUs granted to you that were unvested on the date of termination of your status as a Service Provider, as described in the Plan or Agreement.

�

Notifications

Securities Law Information. No �offer to the public,� as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the PRSUs. The Plan, the Agreement (including this Appendix) and any other documents evidencing the grant of the PRSUs have not been, nor will they be, registered with the Comisi�n Nacional del Mercado de Valores (the Spanish securities regulator), and none of those documents constitutes a public offering prospectus.

SWEDEN

There are no country-specific provisions.

�

TAIWAN

Notifications

Securities Law Information. The PRSUs and the underlying Shares are available only for certain Service Providers. It is not a public offer of securities by a Taiwanese company. Therefore, it is exempt from registration in Taiwan.

THAILAND

Notifications

Exchange Control Information. When you realize US$50,000 or more in a single transaction from the sale of Shares issued to you at vesting and settlement of the PRSUs or you receive a cash dividend paid on such Shares, you must immediately repatriate all cash proceeds to Thailand and then either convert such proceeds to Thai Baht or deposit the funds into a foreign currency account opened with any commercial bank in Thailand within 360 days of repatriation. If the amount of your proceeds is US$50,000 or more in a single transaction, you must specifically report the inward remittance to the Bank of Thailand on a foreign exchange transaction form. If you fail to comply with these obligations, you may be subject to penalties assessed by the Bank of Thailand. You should consult your personal advisor before taking action with respect to remittance of proceeds from the sale of Shares into Thailand. You are responsible for ensuring compliance with all exchange control laws in Thailand.

TURKEY

Notifications

�

Exchange Control Information. Under Turkish law, Turkish residents are permitted to purchase and sell securities or derivatives traded on exchanges abroad only through a financial intermediary licensed in Turkey. Therefore, you may be required to appoint a Turkish broker to assist you with the sale of the Shares acquired under the Plan. You should consult your personal legal advisor before selling any Shares acquired under the Plan to confirm the applicability of this requirement to you.

UNITED ARAB EMIRATES

Notifications

UNITED KINGDOM

Terms�& Conditions

Settlement of Performance-Based Restricted Stock Units. The following provision supplements Section�2 of the Terms and Conditions:

Notwithstanding any discretion contained in Section�11(d) of the Plan, PRSUs will be settled in Shares only, not cash.

Responsibility for Taxes. The following provisions supplement Section�5 of the Terms and Conditions:

�

effective on the Due Date. You agree that the loan will bear interest at the then-current HMRC official rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to in this Section�5. If you fail to comply with your obligations in connection with the income tax due as described in this Section�5, the Company may refuse to deliver the Shares acquired under the Plan.

�

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section�302 of the Sarbanes-Oxley Act of 2002

I, Lisa T. Su, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Advanced Micro Devices, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company�s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the company�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the company�s internal control over financial reporting that occurred during the company�s most recent fiscal quarter (the company�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the company�s internal control over financial reporting; and

5. The company�s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company�s auditors and the audit committee of the company�s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company�s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company�s internal control over financial reporting.

Date: October 30, 2014

�

/s/ Lisa T. Su

Lisa T. Su

Chief Executive Officer,

President

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section�302 of the Sarbanes-Oxley Act of 2002

I, Devinder Kumar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Advanced Micro Devices, Inc.;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the company�s internal control over financial reporting.

Date: October 30, 2014

�

/s/ Devinder Kumar

Devinder Kumar

Senior Vice President and

Chief Financial Officer

Exhibit 32.1

Certification of Principal Executive Officer Pursuant to Section�906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. � 1350, as created by Section�906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Advanced Micro Devices, Inc. (the �Company�) hereby certifies, to such officer�s knowledge, that:

�

(i.)

the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September�27, 2014 (the �Report�) fully complies with the requirements of Section�13(a) or Section�15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

�

(ii.)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�

Date: October 30, 2014

�

/s/ Lisa T. Su

Lisa T. Su

Chief Executive Officer,

President

Exhibit 32.2

Certification of Principal Financial Officer Pursuant to Section�906 of the Sarbanes-Oxley Act of 2002

�

(i.)

�

(ii.)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�

Date: October 30, 2014

�

/s/ Devinder Kumar

Devinder Kumar

Senior Vice President and

Chief Financial Officer

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

Create E-mail Alert Related Categories

SEC Filings

Sign up for StreetInsider Free!

Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!

Form 10-Q ADVANCED MICRO DEVICES For: Sep 27

You May Also Be Interested In

Create E-mail Alert Related Categories

Sign up for StreetInsider Free!

Free News Feed