AMD Updates Third Quarter Guidance

SUNNYVALE, CA -- 8/29/2001 -- Rob Herb, executive vice president and chief sales and marketing officer of AMD, said today that AMD continues to expect that sales of flash memory products will decline by approximately $100 million - or 30 percent - from second-quarter levels. He projected aggregate sequential revenues will decline in the 15 percent range. In the company's second-quarter release, it had projected a revenue decline of 10 to 15 percent. As previously stated, a revenue decline in this range would result in an operating loss for the third quarter.

Herb said the company continues to believe that PC processor unit sales in the current quarter will remain at or near the record level of the second quarter, when AMD sold 7.8 million units.

Herb spoke at the Wit Soundview Semiconductor Conference in Santa Clara, California.

Cautionary Statement
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Risks include the possibility that global business and economic conditions will worsen; that changes in customer needs and the product introductions and capacity expansion of competitors will continue to affect demand for the company's flash memory products; that demand for personal computers and, in turn, demand for the company's seventh-generation PC processors will be lower than currently expected; and that Intel Corporation pricing, marketing programs, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current PC processor sales plans. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the report on Form 10-K for the year ended December 31, 2000, and the report on Form 10-Q for the quarter ended July 1, 2001.