AMD To Acquire Assets of National Semiconductor's Information Appliance Business Unit; Strategic Acquisition Extends AMD's Commitment to x86 From Embedded Appliances to High-End Servers.

Business Editors

SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 6, 2003

Advanced Micro Devices (NYSE:AMD) today announced that it has entered into definitive agreements to acquire substantially all of the assets of the Information Appliance (IA) business unit of National Semiconductor (NYSE: NSM) to enhance AMD's Personal Connectivity Solutions group's (PCS) product portfolio. Financial terms of the sale, which is expected to be completed by the end of August, were not disclosed.

Under the terms of the acquisition, AMD would acquire certain intellectual property and assets from National Semiconductor, consisting primarily of the Geode(TM) family of microprocessor products. In addition, it is anticipated that approximately 132 personnel from the IA business unit would join AMD's PCS group.

"With this acquisition, AMD would be the only company with the assets, dedicated resources and strategic vision to deliver a common, industry standard architecture from embedded applications to mobile, desktop and servers," said Hector Ruiz, president and chief executive officer, AMD.

The acquisition would allow AMD to offer the Geode product line in thin client, smart display and set-top box markets among others. The Geode product family includes an integrated silicon and system solution set designed with embedded x86 processors optimized for power and performance.

"With this acquisition we intend to expand our commitment to our current customer base and markets, while creating new opportunities for AMD to extend the x86 architecture into new low power and high performance applications as the market demands, " said Billy Edwards, vice president and general manager, Personal Connectivity Solutions group, AMD. "Customers are asking us to simplify their options - and our vision is to deliver a single industry-standard architecture that can be optimized for all form factors. We look forward to warmly welcoming the IA team to AMD. The addition of the talented IA team is expected to accelerate our ability to deliver value to our existing customers and in new markets."

"This deal makes sense for both companies," said Brian L. Halla, National's chairman, president and CEO. "This allows National to focus on growing our core analog business and improving our returns. At the same time, AMD will be able to leverage the Geode technology through their existing manufacturing and marketing infrastructure. We intend to work with AMD to ensure a rapid and successful transition for our customers."

About AMD

Founded in 1969 and based in Sunnyvale, California, AMD (NYSE: AMD) is a global supplier of integrated circuits for the personal and networked computer and communications markets with manufacturing facilities in the United States, Europe, Japan, and Asia. AMD, a Standard & Poor's 500 company, produces microprocessors, Flash memory devices, and silicon-based solutions for communications and networking applications.

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Cautionary Statement

This release contains forward-looking statements that 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 the transaction will not be completed because of the failure of certain closing conditions or dependencies, such as acceptance of employment offers by the required number of employees of National Semiconductor's IA business unit; and risks that, if completed, AMD's acquisition of the IA business unit will not result in AMD's attainment of the intended benefits of the transaction, customers of the Geode family of microprocessor products will not transition to AMD, and that demand for the Geode family of microprocessor products will be lower than currently expected. We urge investors to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings.

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