This is a summary of the second quarter fiscal 2008 earnings call conducted by Advanced Micro Device Inc (AMD: chart) on July 17, 2008

Management:

- Chairman, CEO: Hector De J. Ruiz
- President, COO: Dirk R. Meyer
- EVP, CFO: Bob J. Rivet
- Director, IR: Ruth Cotter

Key Investors Issues:

- Revenue from continuing operations of $1.349 billion, up 3%.
- The company reported a net loss of $1.189 billion, or $1.96 per share
- The company decided to divest its Handheld and DTV product businesses.

Second Quarter Highlights:

Revenue was $1.35 billion, down 7% sequentially and up 3% year-over-year with gross margin of 52%, up from 41% in 2007 including a 14 percentage point positive impact associated with the sale of 200 mm Equipment.

- The sequential decline was due to lower unit volumes and ASP’s and changes in product mix as we sold older generation products to make way for our new offerings.
- The challenging economic environ resulted in a net loss of $1.2 billion, or $1.96 per share, down from a loss of $600 million or $1.09 a share in 2007.
- Losses from continuing operations were $269 million or 44 cents per share which included a net favorable impact of $97 million or 16 cents per share, with the favorable impact consisting of a gain of $193 million from the sale of 200 mm Tools partially offset by $96 million in charges.
-The loss from discontinued operations was $920 million or $1.52 per share, largely made up of non-cash goodwill and intangible asset impairment charges of $876 million.

Business Segment Analysis

- Computing solutions revenue was $1.1 billion down 8% from the prior quarter and flat compared to the same period a year ago primarily due to weaker sales.
- Operating loss for the computing solutions group was $9 million; however this includes a $192 million gain from 200 mm Tool sales.
- The server business saw 5% unit growth over the prior quarter and a 19% increase over the same period a year ago, a positive sign in light of the recently launched OEM products.
- Quad-Core and Triple Core processor shipments were up significantly while microprocessor ASPs were down.

- In graphics which now includes game console royalties revenue for the quarter was $248 million, down 5% sequentially and up 18% year-over-year.
- Operating loss was $38 million in a very competitive pricing environment particularly on the older generation products.
- The new highly acclaimed HD4800 series has been well received in the market since its launch in late June.

Cash and marketable securities balance at the end of the quarter was $1.57 billion,
down from $186 million from the prior quarter.

- Capital expenditures were $104 million down from $322 million in the prior quarter.
- The firm has an excess of $200 million in future, non-operational cash generating opportunities based primarily on administrative assets.
- This does not include any proceeds from the sale of discontinued operations or the execution of asset smart strategy.

Earnings guidance for the fourth quarter:

- Advanced Micro Device expects revenue from continuing operations to increase in line with seasonality.
- Operating expenses are expected to be approximately 4% down from the second quarter.
- Amortization of acquired intangibles is expected to be approximately $30 million.

Depreciation and amortization is expected to be approximately $300 million.

- The company expects to make ongoing progress as it continues to focus on achieving the goal early next year.
-The company remains on track with its planned capital expenditures for the year of approximately $900 million.

Key questions and answers for the second quarter fiscal 2008 earnings call, conducted by Advanced Micro Devices Inc. (AMD: chart) on July 17, 2008

John Pitzer: About demonstrating a pattern of sustainable profitability, what timeline would you share?

Dirk Meyer: We believe on the strength of the momentum we are seeing in the marketplace based on the new products introduced in the second quarter that we can expect to remain profitable at the operating level in the second half.

Robert Rivet: Our goal is to get to the $1.5 billion in the beginning of next year.

John Pitzer: Relative to those targets does that imply more work around the asset smart strategy or do you think the strength in the top line demand in the back half of the year of gets you there?

Robert Rivet: It is a combination of both. Our strategy of continuing to execute on 45 nanometer improves our cost structure but it incorporate asset smart execution.

John Pitzer: Around 45 nanometers, what makes us comfortable that you are spending at an appropriate level to stay competitive?