2010 ANNUAL REPORT ON FORM 10-K To Our Stockholders: 2010 was a year of significant accomplishments for AMD. We delivered differentiated products and platforms that expanded customer relationships and drove solid financial results. Our 2010 results demonstrate the benefits of our new business model as a fabless design company. The year also marked the start of the AMD Fusion Era of Computing as we shipped the first Accelerated Processing Units (APUs) to customers worldwide. APUs combine an unprecedented level of processing performance with low power consumption, enabling incredibly vivid and lifelike computing experiences. We believe that as we enter 2011, we are well positioned to drive profitable growth. We plan to capitalize on our position in the industry as the only company with both leading-edge graphics and x86 microprocessors. We plan to seize the opportunity ahead and lead this next era of the industry based on our AMD Fusion family of processors. Consistent financial results with a new fabless business model We achieved many financial milestones in 2010, increasing revenue 20 percent year-over-year, restructuring our balance sheet, reducing our overall debt, improving our gross margin and delivering positive adjusted non-GAAP free cash flow. Most importantly, we demonstrated that our fabless business model works, generating profitability at the operating income level every quarter in 2010. We improved our balance sheet by reducing our overall debt. Without taking into account GLOBALFOUNDRIES’ indebtedness, we reduced our debt by approximately $357 million during 2010. We remain focused on adhering to strong financial discipline and believe that we are positioned for continued profitable growth in 2011. Delivering on a compelling roadmap with record achievements Throughout 2010, we showed a consistent focus on execution and a commitment to delivering innovative and compelling products. AMD remains an industry leader in graphics technology at a time when visual computing has become a critical part of the PC experience. We shipped more than 35 million DirectX® 11-capable graphics processor units (GPUs) in 2010, and are currently shipping a second generation of cutting-edge products based on this important technology. Our DirectX® 11 leadership helped generate record annual GPU shipments and revenue. We also posted an all-time company high for annual GPU unit shipments, setting company records for both mobile discrete graphics and professional graphics products. In addition, our award-winning AMD Eyefinity multi- display technology continued to win the hearts and minds of gamers as it redefined the visual computing experience. We also achieved record client annual revenue for 2010. The launch of the “Danube” platform was among the most successful client platform introductions in our history, contributing to record notebook CPU unit shipments for the year. We expanded our business with Lenovo to notebook platforms when Lenovo selected VISION PRO technology as the platform for their AMD-based ThinkPad laptops for the commercial market. We also were pleased to gain Sony back as a customer with the introduction of new AMD-based Sony Vaio notebooks. In total, we secured more than 130 design wins as part of our VISION 2010 launch, spanning multiple price points across both the consumer and commercial markets. In servers, we implemented a strategy to focus on the most important workloads where we have a compelling competitive advantage. For cloud datacenters and value-conscious markets, we have the AMD Opteron™ 4000 series. For performance-driven applications and large enterprises, the AMD Opteron™ 6000 series delivers exceptional compute capability. In November 2010, the Top 500 supercomputer list compiled by Top500.org showed that AMD powers more of the top 50 supercomputers in the world than any other processor vendor. Our goal for 2011 is to improve our traction in the server market. We exited 2010 with more than 70 server designs shipping from our major global customers and we are now focusing our marketing and sales resources to translate these design wins into sales growth for 2011. Leading the AMD Fusion Era of Computing We kicked off 2011 with the launch of the world’s first APU, changing the trajectory of processor design and development. The AMD Fusion Family of APUs signifies an innovation landmark, combining our leadership and expertise in x86 computing and graphics into a single new architecture that we believe is the most significant advancement in processor architecture in decades. APUs are specifically designed to provide better experiences on the types of visual and data-intensive applications that are becoming increasingly popular. We shipped more than one million APUs in the fourth quarter of 2010 to world-class OEMs including Acer, Asus, Dell, HP, Lenovo, MSI, Samsung, Sony and Toshiba. Our new low power C-Series and E-Series APUs received high marks for technical performance as they offer a unique combination of stutter-free 1080P HD video playback and long battery life thanks to AMD AllDay™ Power. Our product lineup for the rest of 2011 only gets better. We plan to launch our A-Series APU, formerly codenamed “Llano,” for the mainstream notebook and desktop segments in the second quarter of 2011 followed by our brand new core, “Bulldozer,” bringing a new level of performance-per-watt capability across enthusiast-class clients and servers in the second half of 2011. 2011: Seizing the Opportunity As I reflect on my role as interim CEO and the opportunity ahead in 2011, I am more confident than ever in this company and our capacity to succeed. We have a global team of highly-talented employees, unparalleled technology assets that represent the strongest combination of computing and graphics technology in the world, a business model attuned to embrace industry shifts and an expanding group of customers. Our priorities for the year remain clear. We intend to execute our 2011 plans, expanding our AMD Fusion Family of processors and delivering our newest generation of server platforms. In the coming months, we will launch technology that is superior for today’s content-rich computing environment. We plan to build on our strong customer and partner relationships and work with the industry to leverage the impressive computing capabilities unleashed in this new era of AMD Fusion. We plan to continue our strong financial discipline while looking for opportunities to accelerate our pace. We remain focused on growing in our traditional markets while looking into new opportunities in which we can rapidly leverage our technology assets. We believe that our IP provides an ideal combination for supporting the multiple types of computing devices that will enter the market in the coming quarters and years. 2010 demonstrated yet again that the computing industry continues to evolve. As a design leader, AMD is well attuned to respond with the solutions and technologies that provide the best experiences. Regards, Thomas Seifert Senior Vice President, Chief Financial Officer and Interim CEO AMD March 2011 Cautionary Statement This letter contains forward-looking statements concerning AMD, its 2011 goals, including growth, sales growth in servers, profitability, the timing of the launch and ramp of new products and technologies and the features and functionality of these products, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “would,” “may,” “expects,” “believes,” “plans,” “intends,” “projects,” and other terms with similar meaning. Investors are cautioned that these forward-looking statements are based on current beliefs, assumptions and expectations, speak only as of the date of this letter and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation’s pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities targeting the company’s business will prevent attainment of the company’s current plans; 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 foundries will be unable to manufacture our products on a timely basis in sufficient quantities and using competitive technologies; that we will be unable to obtain sufficient manufacturing capacity or components to meet demand for our products or will under-utilize our commitment with respect to GLOBALFOUNDRIES’ microprocessor manufacturing facilities; that we may be unable to realize the anticipated benefits of our fabless business model or our relationship with GLOBALFOUNDRIES because, among other things, the synergies expected from the transaction may not be fully realized or may take longer to realize than expected; that customers stop buying our products or materially reduce their operations or demand for 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 or a decline in demand; that our substantial indebtedness could adversely affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations; that we will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that global business and economic conditions will not continue to 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. Investors are urged to review in detail the risks and uncertainties in the company’s Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 25, 2010.