Sales for the first quarter of 1997 were $551,999,000, which resulted in net income of $12,951,000, or $0.09 per share, diluted. In the fourth quarter of 1997, AMD reported sales of $613,171,000, which resulted in a net loss of $12,334,000, or $0.09 per share.

"The first quarter of 1998 was an unusually difficult one for AMD," said W.J. Sanders III, chairman and chief executive officer. "We faced three major challenges: 1) remedying yield problems that limited production of AMD-K6® processors on our initial 0.35-micron technology; 2) achieving a successful transition to leading-edge 0.25-micron technology which is essential to producing higher-performance AMD-K6 processors; and 3) coping with the effects of a semiconductor industry slowdown.

"During the quarter, market conditions in the worldwide semiconductor industry were unsettled, characterized by excess capacity in memories with attendant severe price pressure, aggressive inventory reduction programs by customers, and weak demand in certain Asian economies -- notably Korea and Japan. These conditions contributed to a 9 percent aggregate decline in revenues from our three non-microprocessor businesses the Communications Group, the Memory Group, and our programmable logic company, Vantis'. These conditions continue.

"The outlook is brighter for our Computation Products Group," Sanders continued. "We have resolved the yield problems on the 0.35-micron process. More importantly, we have made excellent progress toward our top-priority goal of achieving a successful transition to 0.25-micron technology for AMD-K6 processors in Fab 25 in Austin, Texas. During the just-completed transition quarter, AMD-K6 unit production increased nominally over the 1.5 million units shipped in the immediate-prior quarter. More than 10 percent of unit shipments were 0.25-micron devices, including our first volume shipments of 300-megahertz AMD-K6 processors.

"Conversion of production wafer starts to 0.25-micron technology is progressing well, and more than half of our Fab 25 wafer starts are now on 0.25-micron technology. We remain on target to convert all of our production to this technology by the end of the current quarter. Current production rates and yields have encouraged us to communicate to our present customers that we expect to produce substantially more AMD-K6 processors in a higher-performance mix this quarter. Also, we are currently engaged in expanding our customer base to absorb the significant increases in output we plan for the second half of the year," Sanders concluded.

Cautionary Statement
Investors are cautioned that all forward-looking statements of management's expectations involve risks and uncertainties that could cause actual results to differ materially from current expectations.

Any forward-looking statements about the AMD-K6 processor involve risks and uncertainties, including whether: the company will successfully convert all of its production to 0.25-micron process technology as planned; the company will be able to significantly increase output of AMD-K6 processors, including higher-performance AMD-K6 processors; the company will maintain or increase the current production yields; the company will be successful in expanding its customer base; customer demand for the AMD-K6 processor will continue at current or greater levels; the company will have the financial and other resources necessary to continue to invest in the microprocessor business; and economic conditions will change and affect demand for microprocessors and other integrated circuits. Investors are urged to consult the risks and uncertainties detailed in the company's reports filed with the Securities and Exchange Commission.

About AMD
AMD is a global supplier of integrated circuits for the personal and networked computer and communications markets. AMD produces processors, flash memories, programmable logic devices, and products for communications and networking applications. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of $2.4 billion in 1997. (NYSE: AMD).