AMD Reports 2016 Third Quarter Results

About AMD
For more than 45 years, AMD has driven innovation in high-performance computing, graphics, and visualization technologies -- the building blocks for gaming, immersive platforms, and the datacenter. Hundreds of millions of consumers, leading Fortune 500 businesses, and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work, and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, Facebook and Twitter pages.

Cautionary Statement
This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) including AMD's expected fourth quarter 2016 revenue and expected 2016 revenue, the features, functionality, timing and availability of AMD's future products; AMD's expectation that it will deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs; AMD's ability to accelerate growth as it introduces new high-performance computing and graphics products in 2017; and AMD's plans to further reduce its debt by deploying a significant portion of its remaining cash from its capital markets transactions, 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 the forward-looking statements in this document are based on current beliefs, assumptions and expectations, speak only as of the date of this document and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD's control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation's dominance of the microprocessor market and its aggressive business practices may limit AMD's ability to compete effectively; AMD relies on GLOBALFOUNDRIES INC. (GF) to manufacture all of its microprocessor and accelerated processing unit (APU) products and a certain portion of its discrete graphics processing units (GPUs) products, with limited exceptions. If GF is not able to satisfy AMD's manufacturing requirements, its business could be adversely impacted; AMD relies on third parties to manufacture its products, and if they are unable to do so on a timely basis in sufficient quantities and using competitive technologies, AMD's business could be materially adversely affected; failure to achieve expected manufacturing yields for AMD's products could negatively impact its financial results; the success of AMD's business is dependent upon its ability to introduce products on a timely basis with features and performance levels that provide value to its customers while supporting and coinciding with significant industry transitions; if AMD cannot generate sufficient revenue and operating cash flow or obtain external financing, it may face a cash shortfall and be unable to make all of its planned investments in research and development or other strategic investments; the loss of a significant customer may have a material adverse effect on AMD; AMD's receipt of revenue from its semi-custom SoC products is dependent upon its technology being designed into third-party products and the success of those products; global economic uncertainty may adversely impact AMD's business and operating results; AMD may not be able to generate sufficient cash to service its debt obligations or meet its working capital requirements; AMD has a substantial amount of indebtedness which could adversely affect its financial position and prevent it from implementing its strategy or fulfilling its contractual obligations; the agreements governing AMD's notes and the Secured Revolving Line of Credit impose restrictions on AMD that may adversely affect its ability to operate its business; the markets in which AMD's products are sold are highly competitive; uncertainties involving the ordering and shipment of AMD's products could materially adversely affect it; the demand for AMD's products depends in part on the market conditions in the industries into which they are sold. Fluctuations in demand for AMD's products or a market decline in any of these industries could have a material adverse effect on its results of operations; the completion and impact of the 2015 Restructuring Plan, its transformation initiatives and any future restructuring actions could adversely affect it; AMD's ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property; AMD depends on third-party companies for the design, manufacture and supply of motherboards, software and other computer platform components to support its business; if AMD loses Microsoft Corporation's support for its products or other software vendors do not design and develop software to run on AMD's products, its ability to sell its products could be materially adversely affected; AMD's reliance on third-party distributors and AIB partners subjects it to certain risks; AMD's inability to continue to attract and retain qualified personnel may hinder its product development programs; in the event of a change of control, AMD may not be able to repurchase its outstanding debt as required by the applicable indentures and its Secured Revolving Line of Credit, which would result in a default under the indentures and its Secured Revolving Line of Credit; the semiconductor industry is highly cyclical and has experienced severe downturns that have materially adversely affected, and may continue to materially adversely affect its business in the future; acquisitions, divestitures and/or joint ventures could disrupt its business, harm its financial condition and operating results or dilute, or adversely affect the price of, its common stock; AMD's business is dependent upon the proper functioning of its internal business processes and information systems and modification or interruption of such systems may disrupt its business, processes and internal controls; data breaches and cyber-attacks could compromise AMD's intellectual property or other sensitive information, be costly to remediate and cause significant damage to its business and reputation; AMD's operating results are subject to quarterly and seasonal sales patterns; if essential equipment, materials or manufacturing processes are not available to manufacture its products, AMD could be materially adversely affected; if AMD's products are not compatible with some or all industry-standard software and hardware, it could be materially adversely affected; costs related to defective products could have a material adverse effect on AMD; if AMD fails to maintain the efficiency of its supply chain as it responds to changes in customer demand for its products, its business could be materially adversely affected; AMD outsources to third parties certain supply-chain logistics functions, including portions of its product distribution, transportation management and information technology support services; AMD may incur future impairments of goodwill; AMD's worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on it; worldwide political conditions may adversely affect demand for AMD's products; unfavorable currency exchange rate fluctuations could adversely affect AMD; AMD's inability to effectively control the sales of its products on the gray market could have a material adverse effect on it; if AMD cannot adequately protect its technology or other intellectual property in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures, it may lose a competitive advantage and incur significant expenses; AMD is a party to litigation and may become a party to other claims or litigation that could cause it to incur substantial costs or pay substantial damages or prohibit it from selling its products; AMD's business is subject to potential tax liabilities; and AMD is subject to environmental laws, conflict minerals-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as a variety of other laws or regulations that could result in additional costs and liabilities. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to AMD's Quarterly Report on Form 10-Q for the quarter ended June 25, 2016.

AMD, the AMD Arrow logo, Catalyst, FirePro, Radeon, and combinations thereof, are trademarks of Advanced Micro Devices, Inc. ARM is a registered trademark of ARM Limited in the EU and other countries. DirectX, Microsoft and Windows are registered trademarks of Microsoft Corporation in the US and other jurisdictions. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.

                                                                                                                                   
1.  In  this  earnings  press  release,  in  addition  to  GAAP  financial  results,      
      AMD  has  provided  non-GAAP  financial  measures  including  non-GAAP  gross        
      margin,  non-GAAP  operating  income  (loss),  non-GAAP  operating  expenses,      
      non-GAAP  net  income  (loss)  and  non-GAAP  earnings  (loss)  per  share.  These  
      non-GAAP  financial  measures  reflect  certain  adjustments  as  presented  in    
      the  tables  in  this  earnings  press  release.  AMD  also  provided  adjusted        
      EBITDA  and  non-GAAP  free  cash  flow  as  supplemental  measures  of  its              
      performance.  These  items  are  defined  in  the  footnotes  to  the  selected        
      corporate  data  tables  provided  at  the  end  of  this  earnings  press  release.
      AMD  is  providing  these  financial  measures  because  it  believes  this  non-    
      GAAP  presentation  makes  it  easier  for  investors  to  compare  its  operating  
      results  for  current  and  historical  periods  and  also  because  AMD  believes  
      it  assists  investors  in  comparing  AMD's  performance  across  reporting          
      periods  on  a  consistent  basis  by  excluding  items  that  it  does  not  believe
      are  indicative  of  its  core  operating  performance  and  for  the  other              
      reasons  described  in  the  CFO  Commentary.                                                                  
                                                                                                                                                        
2.  Statement  of  "future-proof"  refers  to  support  of  current  and  upcoming        
      technology  standards  including  14nm  FinFET  process  technology,  DirectX®12
      and  Vulkan™  API  support,  new  display  technology,  and  experiences  such  as  
      VR.  "Future-proof"  statement  is  not  meant  to  serve  as  a  warranty  or            
      indicate  that  users  will  never  have  to  upgrade  their  graphics  technology  
      again.  Support  of  current  and  upcoming  technology  standards  described        
      above  has  the  potential  to  reduce  frequency  of  graphics  upgrades  for  some
      users.                                                                                                                                      
                                                                                                                                                        
3.  Testing  by  AMD  Performance  labs.  PC  manufacturers  may  vary  configurations
      yielding  different  results.  3DMark  11  Performance  is  used  to  simulate        
      graphics  performance,  and  Cinebench  R11.5  1T  Performance  is  used  to            
      simulate  single  threaded  CPU  performance;  the  7th  Generation  AMD  PRO  A12-
      9800  at  65W  scored  3521.25  and  1.21  while  the  AMD  PRO  A10-8850B  at  95W      
      scored  2880  and  1.06  respectively.  CPU  Performance  improvement:                    
      1.21/1.06=1.14X  or  14%  more,  Graphic  Performance  improvement:                        
      3521.25/2880=1.22X  or  22%  more,  Power  Consumption  improvement:  (95W-          
      65W)/95W=0.32X  or  32%  less.  BRPD-4                                                                              
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS                                                          
(Millions  except  per  share  amounts  and  percentages)                                                  
                                                                                                                                                        
                                                  Three  Months  Ended                          Nine  Months  Ended      
                                  ----------------------------------    ----------------------  
                                    September      June  25,        September      September      September  
                                    24,  2016            2016            26,  2015        24,  2016        26,  2015    
                                  ----------    ----------    ----------    ----------    ----------  
Net  revenue            $        1,307    $        1,027    $        1,061    $        3,166    $        3,033  
Cost  of  sales                  1,248                  708                  822              2,519              2,236  
                                  ----------    ----------    ----------    ----------    ----------  
Gross  margin                          59                  319                  239                  647                  797  
Gross  margin  %                        5%                  31%                  23%                  20%                  26%
Research  and                                                                                                                                
  development                        259                  243                  241                  744                  718  
Marketing,                                                                                                                                    
  general  and                                                                                                                                
  administrative                  117                  117                  108                  339                  373  
Amortization  of                                                                                                                          
  acquired                                                                                                                                      
  intangible                                                                                                                                  
  assets                                      -                      -                      -                      -                      3  
Restructuring                                                                                                                              
  and  other                                                                                                                                    
  special                                                                                                                                        
  charges,  net                          -                    (7)                  48                  (10)                135  
Licensing  gain                    (24)                (26)                    -                  (57)                    -  
                                  ----------    ----------    ----------    ----------    ----------  
Operating  loss                  (293)                  (8)              (158)              (369)              (432)
Interest  expense                (41)                (41)                (39)              (122)              (119)
Other  income                                                                                                                                
  (expense),  net                  (63)                150                      -                    87                    (3)
                                  ----------    ----------    ----------    ----------    ----------  
Income  (loss)                                                                                                                              
  before  equity                                                                                                                            
  loss  and  income                                                                                                                        
  taxes                                  (397)                101                (197)              (404)              (554)
Provision  for                                                                                                                              
  income  taxes                          4                    29                      -                    34                      4  
Equity  in  income                                                                                                                        
  (loss)  of  ATMP                                                                                                                          
  JV                                            (5)                  (3)                    -                    (8)                    -  
                                  ----------    ----------    ----------    ----------    ----------  
Net  income                                                                                                                                    
  (loss)                    $          (406)  $              69    $          (197)  $          (446)  $          (558)
Net  income                                                                                                                                    
  (loss)  per                                                                                                                                  
  share                                                                                                                                            
    Basic                    $        (0.50)  $          0.09    $        (0.25)  $        (0.56)  $        (0.72)
    Diluted                $        (0.50)  $          0.08    $        (0.25)  $        (0.56)  $        (0.72)
                                  ----------    ----------    ----------    ----------    ----------  
Shares  used  in                                                                                                                            
  per  share                                                                                                                                    
  calculation                                                                                                                                
    Basic                                  815                  794                  785                  801                  780  
    Diluted                              815                  821                  785                  801                  780  
                                  ----------    ----------    ----------    ----------    ----------  
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  STATEMENTS  OF  COMPREHENSIVE  INCOME  (LOSS)                        
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                  Three  Months  Ended                          Nine  Months  Ended      
                                  ----------------------------------    ----------------------  
                                    September      June  25,        September      September      September  
                                    24,  2016            2016            26,  2015        24,  2016        26,  2015    
                                  ----------    ----------    ----------    ----------    ----------  
Total                                                                                                                                              
  comprehensive                                                                                                                            
  income  (loss)      $          (406)  $              72    $          (207)  $          (441)  $          (568)
                                  ----------    ----------    ----------    ----------    ----------  
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (1)  (2)                                                              
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                          --------------    --------------    --------------  
                                                            September  24,          June  25,            December  26,    
                                                                    2016                        2016                        2015            
                                                          --------------    --------------    --------------  
Assets                                                                                                                                            
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents    $                1,258    $                    957    $                    785  
    Accounts  receivable,  net                            640                          671                          533  
    Inventories,  net                                            772                          743                          678  
    Prepayment  and  other  -                                                                                                        
      GLOBALFOUNDRIES                                              13                            12                            33  
    Prepaid  expenses                                              63                            68                            43  
    Other  current  assets                                      78                            55                          248  
                                                                                                                                                        
                                                          --------------    --------------    --------------  
        Total  current  assets                            2,824                      2,506                      2,320  
Property,  plant  and                                                                                                                  
  equipment,  net                                                  161                          169                          188  
Goodwill                                                                289                          289                          278  
Investment  in  ATMP  JV                                        60                            62                              -  
Other  assets                                                        282                          290                          298  
                                                                                                                                                        
                                                          --------------    --------------    --------------  
Total  Assets                                  $                3,616    $                3,316    $                3,084  
                                                          ==============    ==============    ==============  
                                                                                                                                                        
Liabilities  and                                                                                                                          
  Stockholders'  Equity                                                                                                              
  (Deficit)                                                                                                                                    
Current  liabilities:                                                                                                                
    Short-term  debt                        $                        -    $                    226    $                    230  
    Accounts  payable                                            582                          616                          279  
    Payable  to  GLOBALFOUNDRIES                        284                            94                          245  
    Payable  to  ATMP  JV                                        144                          150                              -  
    Accrued  liabilities                                      384                          392                          472  
    Other  current  liabilities                            25                            61                          124  
    Deferred  income  on                                                                                                                
      shipments  to  distributors                          54                            42                            53  
                                                                                                                                                        
                                                          --------------    --------------    --------------  
        Total  current                                                                                                                      
          liabilities                                            1,473                      1,581                      1,403  
Long-term  debt,  net                                      1,632                      2,012                      2,007  
Other  long-term  liabilities                          126                          136                            86  
                                                                                                                                                        
Stockholders'  equity                                                                                                                
  (deficit):                                                                                                                                  
    Capital  stock:                                                                                                                        
        Common  stock,  par  value                              9                              8                              8  
        Additional  paid-in                                                                                                            
          capital                                                    8,258                      7,053                      7,017  
        Treasury  stock,  at  cost                        (127)                      (125)                      (123)
    Accumulated  deficit                                (7,752)                  (7,346)                  (7,306)
    Accumulated  other                                                                                                                  
      comprehensive  loss                                        (3)                          (3)                          (8)
                                                                                                                                                        
                                                          --------------    --------------    --------------  
        Total  Stockholders'                                                                                                          
          equity  (deficit)                                      385                        (413)                      (412)
                                                          --------------    --------------    --------------  
Total  Liabilities  and                                                                                                              
  Stockholders'  Equity                                                                                                              
  (Deficit)                                      $                3,616    $                3,316    $                3,084  
                                                          ==============    ==============    ==============  
                                                                                                                                                        
(1)    Amounts  reflected  adoption  of  FASB  ASU  2015-17,  Balance  Sheet                    
          Classification  of  Deferred  Taxes  beginning  in  the  first  quarter  of          
          2016.                                                                                                                                    
(2)    Amounts  reflected  adoption  of  FASB  ASU  2015-03,  Simplifying  the                
          Presentation  of  Debt  Issuance  Costs  beginning  in  the  first  quarter  of    
          2016.                                                                                                                                    
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  STATEMENT  OF  CASH  FLOWS                                                            
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                                                            Three  Months          Nine  Months    
                                                                                                    Ended                      Ended          
                                                                                          --------------    --------------  
                                                                                          September  24,      September  24,    
                                                                                                    2016                        2016            
                                                                                          --------------    --------------  
                                                                                                                                                        
Cash  flows  from  operating  activities:                                                                              
    Net  loss                                                                      $                  (406)  $                  (446)
    Adjustments  to  reconcile  net  loss  to  net                                                                    
      cash  provided  by  (used  in)  operating                                                                          
      activities:                                                                                                                            
        Net  gain  on  sale  of  equity  interests  in                                                                  
          ATMP  JV                                                                                            4                        (146)
        Equity  in  loss  of  ATMP  JV                                                          2                              1  
        Depreciation  and  amortization                                                33                            99  
        Provision  for  deferred  income  taxes                                      -                            11  
        Stock-based  compensation  expense                                          23                            57  
        Non-cash  interest  expense                                                          4                            11  
        Loss  on  debt  redemption                                                            61                            61  
        Fair  value  of  warrant  issued  related  to                                                                  
          sixth  amendment  to  the  WSA                                                  240                          240  
        Other                                                                                                  1                            (5)
    Changes  in  operating  assets  and                                                                                      
      liabilities:                                                                                                                          
        Accounts  receivable                                                                    31                        (107)
        Inventories                                                                                  (28)                        (94)
        Prepayment  and  other  -  GLOBALFOUNDRIES                              (1)                          20  
        Prepaid  expenses  and  other  assets                                      (17)                      (134)
        Payable  to  ATMP  JV                                                                      (6)                        144  
        Payable  to  GLOBALFOUNDRIES                                                    190                            39  
        Accounts  payable,  accrued  liabilities                                                                      
          and  other                                                                                  (102)                        151  
                                                                                          --------------    --------------  
Net  cash  provided  by  (used  in)  operating                                                                        
  activities                                                                    $                      29    $                    (98)
                                                                                          --------------    --------------  
                                                                                                                                                        
Cash  flows  from  investing  activities:                                                                              
    Purchases  of  property,  plant  and  equipment                          (9)                        (56)
    Net  proceeds  from  sale  of  equity  interests                                                                
      in  ATMP  JV                                                                                        (5)                        346  
    Other                                                                                                      4                              3  
                                                                                          --------------    --------------  
Net  cash  provided  by  (used  in)  investing                                                                        
  activities                                                                    $                    (10)  $                    293  
                                                                                          --------------    --------------  
                                                                                                                                                        
Cash  flows  from  financing  activities:                                                                              
    Proceeds  from  issuance  of  common  stock,                                                                      
      net  of  issuance  costs                                                                668                          668  
    Proceeds  from  issuance  of  convertible                                                                          
      senior  notes,  net  of  issuance  costs                                    681                          681  
    Proceeds  from  issuance  of  common  stock                                                                        
      under  stock-based  compensation  equity                                                                        
      plans                                                                                                  10                            12  
    Repayments  of  borrowings,  net                                                (226)                      (230)
    Repayments  of  long-term  debt                                                  (848)                      (848)
    Other                                                                                                    (3)                          (5)
                                                                                          --------------    --------------  
Net  cash  provided  by  financing  activities        $                    282    $                    278  
                                                                                          --------------    --------------  
Net  increase  in  cash  and  cash  equivalents                              301                          473  
                                                                                          --------------    --------------  
Cash  and  cash  equivalents  at  beginning  of                                                                      
  period                                                                            $                    957    $                    785  
                                                                                          --------------    --------------  
Cash  and  cash  equivalents  at  end  of  period      $                1,258    $                1,258  
                                                                                          --------------    --------------  
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
SELECTED  CORPORATE  DATA                                                                                                          
(Millions  except  headcount)                                                                                                  
                                                                                                                                                        
                                                  Three  Months  Ended                          Nine  Months  Ended      
----------------------------------------------------  -----------------------
Segment  and                                                                                                                                  
  Category                  September      June  25,        September      September      September  
  Information            24,  2016            2016            26,  2015        24,  2016        26,  2015    
----------------------------------------------------  -----------------------
                                                                                                                                                        
    Computing  and                                                                                                                          
      Graphics  (1)                                                                                                                          
        Net  revenue    $            472    $            435    $            424    $        1,367    $        1,335  
        Operating                                                                                                                              
          loss                $            (66)  $            (81)  $          (181)  $          (217)  $          (403)
                                                                                                                                                        
    Enterprise,                                                                                                                              
      Embedded  and                                                                                                                          
      Semi-Custom                                                                                                                            
      (2)                                                                                                                                            
        Net  revenue    $            835    $            592    $            637    $        1,799    $        1,698  
        Operating                                                                                                                              
          income            $            136    $              84    $              84    $            236    $            156  
                                                                                                                                                        
    All  Other  (3)                                                                                                                          
        Net  revenue                      -                      -                      -                      -                      -  
        Operating                                                                                                                              
          loss                            (363)                (11)                (61)              (388)              (185)
                                                                                                                                                        
    Total                                                                                                                                          
        Net  revenue    $        1,307    $        1,027    $        1,061    $        3,166    $        3,033  
        Operating                                                                                                                              
          loss                $          (293)  $              (8)  $          (158)  $          (369)  $          (432)
                                                                                                                                                        
----------------------------------------------------  -----------------------
                                                                                                                                                        
Other  Data                                                                                                                                    
                                                                                                                                                        
    Depreciation                                                                                                                            
      and                                                                                                                                            
      amortization,                                                                                                                        
      excluding                                                                                                                                
      amortization                                                                                                                          
      of  acquired                                                                                                                            
      intangible                                                                                                                              
      assets                $              33    $              33    $              42    $              99    $            130  
    Capital                                                                                                                                      
      additions          $                9    $              21    $              25    $              56    $              64  
    Adjusted                                                                                                                                    
      EBITDA  (4)        $            103    $              36    $            (55)  $            117    $            (84)
    Cash  and  cash                                                                                                                          
      equivalents      $        1,258    $            957    $            755    $        1,258    $            755  
    Non-GAAP  free                                                                                                                          
      cash  flow  (5)  $              20    $          (106)  $            (81)  $          (154)  $          (349)
    Total  assets      $        3,616    $        3,316    $        3,229    $        3,616    $        3,229  
    Total  debt          $        1,632    $        2,238    $        2,260    $        1,632    $        2,260  
    Headcount                      8,306              8,099              9,475              8,306              9,475  
----------------------------------------------------  -----------------------
                                                                                                                                                        
(1)    Computing  and  Graphics  segment  primarily  includes  desktop  and  notebook  
          processors,  chipsets,  discrete  graphics  processing  units  (GPUs)  and        
          professional  graphics.                                                                                                  
(2)    Enterprise,  Embedded  and  Semi-Custom  segment  primarily  includes  server  
          and  embedded  processors,  semi-custom  System-on-Chip  (SoC)  products,        
          development  services,  technology  for  game  consoles  and  licensing              
          portions  of  its  intellectual  property  portfolio.                                              
(3)    All  Other  category  primarily  includes  certain  expenses  and  credits  that
          are  not  allocated  to  any  of  the  operating  segments.  Also  included  in      
          this  category  are  stock-based  compensation  expense  and  restructuring      
          and  other  special  charges,  net.  In  addition,  the  Company  also  included  
          a  charge  related  to  the  sixth  amendment  to  the  WSA  with  GF  for  the          
          three  and  nine  months  ended  September  24,  2016  and  amortization  of          
          acquired  intangible  assets  for  the  nine  months  ended  September  26,          
          2015.                                                                                                                                    
                                                                                                                                                        
                                                                                                                                                        
(4)    Reconciliation  of  GAAP  Operating  Loss  to  Adjusted  EBITDA*                            
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                            -------------------------------    --------------------  
                                            September      June  25,    September    September    September  
                                              24,  2016          2016          26,  2015      24,  2016      26,  2015  
                                            ---------    ---------    ---------    ---------    ---------  
          GAAP  operating                                                                                                                  
            loss                        $        (293)  $            (8)  $        (158)  $        (369)  $        (432)
          Charge  related                                                                                                                  
            to  the  sixth                                                                                                                    
            amendment  to                                                                                                                    
            the  WSA  with  GF              340                    -                    -                340                    -  
          Technology  node                                                                                                                
            transition                                                                                                                        
            charge                                    -                    -                    -                    -                  33  
          Restructuring                                                                                                                    
            and  other                                                                                                                          
            special                                                                                                                              
            charges,  net                        -                  (7)                48                (10)              135  
          Stock-based                                                                                                                        
            compensation                      23                  18                  13                  57                  47  
          Amortization  of                                                                                                                
            acquired                                                                                                                            
            intangible                                                                                                                        
            assets                                    -                    -                    -                    -                    3  
          Depreciation  and                                                                                                              
            amortization                      33                  33                  42                  99                130  
                                            ---------    ---------    ---------    ---------    ---------  
          Adjusted  EBITDA    $          103    $            36    $          (55)  $          117    $          (84)
                                            =========    =========    =========    =========    =========  
                                                                                                                                                        
(5)    Non-GAAP  free  cash  flow  reconciliation**                                                              
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                            -------------------------------    --------------------  
                                            September      June  25,    September    September    September  
                                              24,  2016          2016          26,  2015      24,  2016      26,  2015  
                                            ---------    ---------    ---------    ---------    ---------  
          GAAP  net  cash                                                                                                                    
            provided  by                                                                                                                      
            (used  in)                                                                                                                          
            operating                                                                                                                          
            activities            $            29    $          (85)  $          (56)  $          (98)  $        (285)
          Purchases  of                                                                                                                      
            property,  plant                                                                                                              
            and  equipment                    (9)              (21)              (25)              (56)              (64)
                                            ---------    ---------    ---------    ---------    ---------  
          Non-GAAP  free                                                                                                                    
            cash  flow              $            20    $        (106)  $          (81)  $        (154)  $        (349)
                                            =========    =========    =========    =========    =========  
                                                                                                                                                        
                                                                                                                                                        
*        The  Company  presents  "Adjusted  EBITDA"  as  a  supplemental  measure  of  its
          performance.  Adjusted  EBITDA  for  the  Company  is  determined  by  adjusting
          operating  income  (loss)  for  depreciation  and  amortization,  stock-based  
          compensation  expense  and  restructuring  and  other  special  charges,  net.  
          In  addition,  the  Company  excluded  a  charge  related  to  the  sixth                
          amendment  to  the  WSA  with  GF  for  the  three  and  nine  months  ended              
          September  24,  2016,  a  technology  node  transition  charge  and                        
          amortization  of  acquired  intangible  assets  for  the  nine  months  ended      
          September  26,  2015.  The  Company  calculates  and  communicates  Adjusted      
          EBITDA  because  the  Company's  management  believes  it  is  of  importance  to
          investors  and  lenders  in  relation  to  its  overall  capital  structure  and  
          its  ability  to  borrow  additional  funds.  In  addition,  the  Company              
          presents  Adjusted  EBITDA  because  it  believes  this  measure  assists            
          investors  in  comparing  its  performance  across  reporting  periods  on  a      
          consistent  basis  by  excluding  items  that  the  Company  does  not  believe    
          are  indicative  of  its  core  operating  performance.  The  Company's                
          calculation  of  Adjusted  EBITDA  may  or  may  not  be  consistent  with  the      
          calculation  of  this  measure  by  other  companies  in  the  same  industry.      
          Investors  should  not  view  Adjusted  EBITDA  as  an  alternative  to  the  GAAP
          operating  measure  of  operating  income  (loss)  or  GAAP  liquidity  measures
          of  cash  flows  from  operating,  investing  and  financing  activities.  In      
          addition,  Adjusted  EBITDA  does  not  take  into  account  changes  in  certain
          assets  and  liabilities  as  well  as  interest  and  income  taxes  that  can      
          affect  cash  flows.                                                                                                          
                                                                                                                                                        
**      The  Company  also  presents  non-GAAP  free  cash  flow  as  a  supplemental        
          measure  of  its  performance.  Non-GAAP  free  cash  flow  is  determined  by      
          adjusting  GAAP  net  cash  provided  by  (used  in)  operating  activities  for  
          capital  expenditures.  The  Company  calculates  and  communicates  non-GAAP  
          free  cash  flow  in  the  financial  earnings  press  release  because  the          
          Company's  management  believes  it  is  of  importance  to  investors  to            
          understand  the  nature  of  these  cash  flows.  The  Company's  calculation  of
          non-GAAP  free  cash  flow  may  or  may  not  be  consistent  with  the                    
          calculation  of  this  measure  by  other  companies  in  the  same  industry.      
          Investors  should  not  view  non-GAAP  free  cash  flow  as  an  alternative  to  
          GAAP  liquidity  measures  of  cash  flows  from  operating  activities.  The      
          Company  has  provided  reconciliations  within  the  earnings  press  release  
          of  these  non-GAAP  financial  measures  to  the  most  directly  comparable      
          GAAP  financial  measures.                                                                                              
                                                                                                                                                        
 

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