EXHIBIT 10.36
FOUNDRY AGREEMENT
BETWEEN
DIGITAL EQUIPMENT CORPORATION
AND
ADVANCED MICRO DEVICES, INC.
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
TABLE OF CONTENTS
SECTION 1 - DEFINITIONS..................................................... 1
SECTION 2 - NATURE OF THIS AGREEMENT........................................ 3
SECTION 3 - DEVELOPMENT PROCEDURE........................................... 4
SECTION 4 - DEVICE QUALIFICATION............................................ 5
SECTION 5 - PRODUCTION...................................................... 6
SECTION 6 - OWNERSHIP AND LICENSES.......................................... 8
SECTION 7 - MASK WORKS RIGHTS............................................... 9
SECTION 8 - PURCHASE ORDERS AND FORECASTS................................... 9
SECTION 9 - PAYMENT......................................................... 10
SECTION 10 - DELIVERY AND ACCEPTANCE........................................ 11
SECTION 11 - TERM AND TERMINATION........................................... 12
SECTION 12 - WARRANTY AND INDEMNITY......................................... 13
SECTION 13 - CONFIDENTIALITY................................................ 15
SECTION 14 - FORCE MAJEURE.................................................. 17
SECTION 15 - PARTIAL INVALIDITY............................................. 17
SECTION 16 - NOTICES........................................................ 17
SECTION 17 - NON-WAIVER..................................................... 18
SECTION 18 - NON-ASSIGNABILITY/TRANSFERABILITY.............................. 19
SECTION 19 - SECTION HEADINGS............................................... 19
SECTION 20 - GOVERNING LAW.................................................. 19
SECTION 21 - PUBLICITY...................................................... 19
SECTION 22 - ENTIRE AGREEMENT............................................... 19
SECTION 23 - LIMITATION OF LIABILITY........................................ 19
EXHIBIT A DEVICES AND DEVICE SPECIFICATIONS................................ 21
EXHIBIT B SECTION 1: DEVICE TRANSFER AND QUALIFICATION PLAN
SECTION 2: DEVICE TECHNOLOGY PACKAGE............................ 22
EXHIBIT C QUALIFIED PROCESS(ES) SPECIFICATION
PRODUCT QUALIFICATION SPECIFICATION.............................. 23
EXHIBIT D WAFER ACCEPTANCE CRITERIA........................................ 24
EXHIBIT E PAYMENT CALCULATION.............................................. 26
EXHIBIT F [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]...................................................... 28
DEC-AMD
FOUNDRY AGREEMENT
This Foundry Agreement, together with the Exhibits referenced herein and
attached hereto ("Agreement") is between Digital Equipment Corporation, a
Massachusetts corporation having a principal place of business of 146 Main
Street, Maynard, Massachusetts, 01754 and all of its majority owned subsidiaries
("DIGITAL") and Advanced Micro Devices, Inc., a Delaware corporation having a
principal place of business at 901 Thompson Place, P.O. Box 3453, Sunnyvale,
California, 94088-3453 and all of its majority owned subsidiaries ("AMD").
WHEREAS, AMD has developed certain technology relating to microprocessors; and
WHEREAS, DIGITAL is, among other things, in the business of designing,
developing, manufacturing and selling computer systems and associated software,
and components thereof, including semiconductor integrated circuits; and
WHEREAS, DIGITAL has also developed manufacturing processes, capabilities and
foundry capabilities to produce silicon wafers containing integrated circuit die
for microprocessors designed and laid out by other parties, such as AMD; and
WHEREAS, DIGITAL and AMD desire to enter into this Agreement for the manufacture
by DIGITAL of microprocessor wafers containing AMD microprocessor technology for
AMD;
IN CONSIDERATION of the mutual promises in this Agreement, the parties agree as
follows:
SECTION 1 - DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth
below:
1.1 DEVICE shall mean a fully qualified, semiconductor integrated circuit,
embodying a specific unique design provided to DIGITAL by AMD which corresponds
to an AMD microprocessor product and which has successfully completed Product
Qualification. The different types and speed classes of microprocessors to be
produced under this Agreement are set forth in Exhibit A as amended from time to
time.
1.2 INTELLECTUAL PROPERTY RIGHTS shall mean all PATENTS, TRADE SECRETS,
COPYRIGHTS, MASK WORKS RIGHTS AND KNOW-HOW which have been, or will be, acquired
or otherwise secured by either party before or during the TERM of this
Agreement, throughout the world:
1.2.1 PATENTS shall mean all right, title and interest in and to all
Letters Patent and applications for Letters Patent, Industrial Models,
Industrial Designs, Petty Patents, Patents of Importation, Utility Models,
Certificates of Invention, and other indicia of invention ownership, including
any such rights granted upon any reissue, division, continuation or
continuation-in-part applications now or hereafter filed; and
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1.2.2 TRADE SECRETS shall mean all right, title and interest in and to
all trade secret rights arising under the common law, state law, federal law or
the laws of any foreign country; and
1.2.3 MASK WORKS RIGHTS shall mean all right, title and interest in
and to all MASK WORKS as MASK WORKS are defined in Section 901(a) (2) of the
Semiconductor Chip Protection Act of 1984.
1.2.4 COPYRIGHT RIGHTS shall mean all right, title and interest in and
to all copyright rights and all other literary property and author rights; and
1.2.5 KNOW-HOW shall mean all right, title and interest in and to all
know-how and show-how.
1.3 LOT shall mean twenty four (24) WAFER starts.
1.4 WAFER shall mean the six inch (6") diameter or six inch (6") diameter
equivalent silicon wafers produced by DIGITAL for AMD.
1.5 QUALIFIED PROCESS(ES) shall mean DIGITAL's CMOS process(es), with
modification, if any, made by DIGITAL with the mutual agreement of the parties,
which has been demonstrated to meet the objective reliability and quality
specifications referred to as AMD process qualification specification as set
forth in Exhibit C.
1.6 PRODUCT QUALIFICATION shall mean the determination that DEVICES
manufactured in the QUALIFIED PROCESS(ES) meet the objective criteria and
specification for the DEVICE as specified in AMD's PRODUCT QUALIFICATION
specification set forth in Exhibit C.
1.7 MASK WORK shall mean any mask set or work created and produced by or for
DIGITAL and utilized in the fabrication of a DEVICE, and shall include both
physical mask works, e.g., reticles, and any electronic form of a mask work,
originally created by DIGITAL from information, data bases or the like provided
by AMD to DIGITAL in the TECHNOLOGY PACKAGE.
1.8 AMD DEVICE SPECIFICATION shall mean the document which shall define the
specific function, electrical, timing, mechanical, environmental, reliability
and other requirements of a DEVICE.
1.9 TERM shall mean the period of time during which this Agreement is in
effect. Such period shall commence upon the execution of this Agreement by both
parties.
1.10 SEMICONDUCTOR CHIP PROTECTION LAW(S) shall mean the Semiconductor Chip
Protection Act of 1984 in the United States and any associated regulations and
any amendments or revisions to such law or regulations, or any corresponding law
and regulations in a country other than the United States.
1.11 PREQUALIFICATION DEVICE shall mean a DEVICE produced by DIGITAL on the
line upon which it intends to produce the DEVICE, but prior to final
qualification of
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the DEVICE. A PREQUALIFICATION DEVICE must meet all of the requirements of the
applicable requirements of the applicable AMD GENERAL SPECIFICATION, with the
exception of environmental and reliability requirements and other requirements
which are being tested during qualification.
1.12 TECHNOLOGY PACKAGE shall mean (i) layout design data bases utilized for
the creation of a DEVICE, (ii) DEVICE specific test programs/patterns for wafer
functional and electrical test, (iii) DEVICE specific electrical and probe
information, and (iv) logic/circuit schematics as the parties shall agree are
necessary for DIGITAL to convert layout designs for fabrication in the QUALIFIED
PROCESS(ES) and/or to complete any agreed upon design modifications, or
alternatively a mechanism to verify electrical and logical correctness of the
data base conversion and/or design modifications.
1.13 CONFIDENTIAL INFORMATION shall mean the confidential and proprietary
information of either party marked as such and treated in accordance with the
provisions of Section 13, CONFIDENTIAL INFORMATION.
1.14 PROTOTYPE shall mean a preliminary form of a DEVICE which is fabricated
for the purpose of functional and electrical verification. A PROTOTYPE is not
warranted for other than workmanship.
1.15 [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] .
SECTION 2 - NATURE OF THIS AGREEMENT
2.1 This Agreement shall constitute the basic terms and conditions which can
be used for the production of multiple DEVICES.
2.2 For each DEVICE transaction, as may occur, the parties will separately
negotiate the schedules, terms, conditions, development processes and the like
of an Exhibit A, an Exhibit B, and an Exhibit C, as appropriate. Each such
Exhibit A, Exhibit B, and Exhibit C, as appropriate, shall, become amendments to
this Agreement.
SECTION 3 - DEVELOPMENT PROCEDURE
3.1 DIGITAL, with such participation and cooperation from AMD as the parties
shall agree is appropriate, and as set forth in the pertinent Exhibit B, shall
produce an electronic data base from which physical MASK WORKS (reticles) for
its fabrication process, can be produced, and shall produce or have produced on
AMD's behalf such physical MASK WORKS (reticles). The process for DIGITAL to
produce such MASK WORKS (and for AMD's participation in such process, if any)
from the information in the TECHNOLOGY PACKAGE for a given DEVICE shall be
defined in its appropriate Exhibit B. Exhibit B for each DEVICE shall define,
(1) the specific elements of the TECHNOLOGY PACKAGE needed to be provided by AMD
to DIGITAL, or access to the results of the utilization of which are needed to
be provided by AMD to DIGITAL, to convert an AMD DEVICE electronic layout design
data base to DIGITAL's fabrication process design rules and parameters, and
fabricate PROTOTYPES and
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PREQUALIFICATION DEVICES and DEVICES, (2) a set of Milestone events in the
DIGITAL layout design development process, with assignments for which party or
parties will be responsible for what steps in achieving each Milestone, (3) an
indication of where such work will occur, and (4) the projected completion dates
for each Milestone.
3.2 As proof of capability, DIGITAL will manufacture one LOT of each DEVICE
using the process described in Exhibit B at a fee of [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] on an
expedited hot lot basis after AMD provides DIGITAL with the TECHNOLOGY PACKAGE.
The LOT will be considered a noncommercial PROTOTYPE order.
3.2.1 AMD will inspect and test PROTOTYPES in accordance with a test
program as part of the development process outlined in Exhibit B. AMD will
provide DIGITAL with the results of such inspection and testing in writing,
accepting or rejecting the PROTOTYPES within thirty (30) days after receipt of
the PROTOTYPES by AMD. This PROTOTYPE development process will be repeated until
AMD provides DIGITAL with approval of the PROTOTYPE or terminates development of
the DEVICE corresponding to the PROTOTYPE because the parties determine that the
DEVICE cannot be effectively produced on fabrication process.
3.3 DIGITAL shall modify DIGITAL's semiconductor fabrication process as
necessary to enable DIGITAL to fabricate DEVICES, which meet the AMD
specifications for such DEVICES.
3.4 DIGITAL shall provide specific design engineering services to incorporate
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] . AMD shall pay DIGITAL [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] within thirty
(30) days of completion [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] and delivery of a copy of the
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] to AMD.
3.4.1 DIGITAL acknowledges that as between DIGITAL and AMD, AMD owns
and shall retain all right, title and interest in and to all
INTELLECTUAL PROPERTY RIGHTS in and to the [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] upon which DIGITAL will incorporate
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] .
3.4.2 AMD acknowledges that as between DIGITAL and AMD, DIGITAL owns
and shall retain all right, title and interest in and to all
INTELLECTUAL PROPERTY RIGHTS in and to [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
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3.5 AMD will provide to DIGITAL such test programs and patterns, as shall be
agreed upon by the parties are needed by DIGITAL to produce DEVICES, and as
shall be listed in Exhibit B as part of the TECHNOLOGY PACKAGE.
3.6 While an employee of one party is on the premises of the other party in
order to perform its obligations under this Agreement, such employee shall obey
all reasonable personnel, safety and security policies and procedures of the
other party. Each party hereby indemnifies and holds harmless the other party
for any loss, damage or other award, arising from any suit, claim or cause of
action resulting from any injury or harm, including loss of life, to such
employee of the other party, other than that resulting from the gross negligence
or willful or wanton act of any employee, officer, director, agent or other
representative of the other party.
SECTION 4 - DEVICE QUALIFICATION
4.1 DIGITAL and AMD will agree upon a qualification plan for each DEVICE to be
manufactured pursuant to this Agreement, and incorporated in Exhibit B, clearly
specifying which party will be responsible for each part of the qualification
plan. Such plan will be shown in Exhibit B and will address both QUALIFIED
PROCESS(ES) and PRODUCT QUALIFICATION.
4.2 Qualification tests shall be performed in accordance with the
qualification specifications as mutually agreed upon by the parties and as set
forth in Exhibit C. AMD will notify DIGITAL in writing of such QUALIFIED
PROCESS(ES) and PRODUCT QUALIFICATION or failure of such for each specific
DEVICE. In case of failure of qualification, AMD shall notify DIGITAL in writing
specifying the reasons for the failure of qualification of the specific DEVICE,
and both parties shall faithfully cooperate in order to resolve problems causing
the failure of qualification. AMD shall pay for one initial MASK WORKS and any
sets required due to changes required by AMD. Any other MASK WORKS will be paid
for by DIGITAL.
4.3 Upon acceptance by AMD of a DEVICE PROTOTYPE, DIGITAL shall run, upon
request by AMD, a mutually agreed upon number of qualification engineering LOTS
using the same reticle set as the accepted PROTOTYPE at a fee of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] per LOT. Any qualification engineering LOTS using reticle sets
incorporating any design modifications will also be run at a fee of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] per LOT.
4.4 Prior to PRODUCT QUALIFICATION, AMD may stop production for any or all AMD
DEVICES by providing written notice to DIGITAL. DIGITAL will stop production
following completion of the process steps at which the appropriate WAFERS reside
at the time of written notification. As long as the production is stopped at
AMD's request, through no fault of DIGITAL, AMD will pay DIGITAL for all such
WAFERS started prior to DIGITAL receiving the written notice. Prices for such
work in progress (WIP) WAFERS will be prorated based on the stage of production,
but in no event shall the price exceed the completed price as stated in the
Section covering price. Upon payment, the WIP WAFERS will be delivered to AMD.
The parties will work together to
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determine the best course of stopping production in accordance with good
manufacturing practice to prevent waste.
4.5 As part of the PRODUCT QUALIFICATION, DIGITAL and AMD shall agree upon
parametric and process flow specifications prior to the production of DEVICES.
DIGITAL will not modify the agreed upon specifications or routine process
control steps without the prior written consent of AMD.
4.6 After approval of a PROTOTYPE, but before full qualification of the
corresponding DEVICE, AMD may order from DIGITAL PREQUALIFICATION DEVICES, in
anticipation of successful qualification of such DEVICE. Such orders shall be
effected by a Purchase Order, which denominates the DEVICES being ordered as
PREQUALIFICATION DEVICES.
SECTION 5 - PRODUCTION
5.1 DIGITAL will manufacture the DEVICES as WAFERS with tested die.
5.2 Upon successful completion of PRODUCT QUALIFICATION:
5.2.1 As part of the production ramp up, DIGITAL shall reserve for AMD
a QUALIFIED PROCESS production capacity of at least the following DEVICE WAFER
outs per week:
2Q94 3Q94 4Q94 1Q95 After 1Q95
---- ---- ---- ---- ----------
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
5.2.2 Upon the achievement of [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] WAFER outs per
week as stated in Section 5.2.1 above, DIGITAL shall reserve for AMD a QUALIFIED
PROCESS production capacity so as to be able to provide AMD with at least the
following minimum good DEVICE die outs per year:
5.2.2.1 [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] good DEVICE
die outs per year using the initial Mask Works; or
5.2.2.2 The equivalent to [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] good DEVICE die outs per year as indicated by
a change in the die size and defect density using Mask
Works after the initial Mask Works.
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5.2.3 AMD agrees to purchase, at a minimum, a number of WAFERS per
week equal to [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] of the manufacturing capacity reserved in
Section 5.2.1 above provided the Acceptance Criteria of Exhibit D are met.
5.3 In the event AMD reduces its purchases to a level below that of Section
5.2.2, DIGITAL may reduce its reservation of manufacturing capacity to a level
proportionate to the AMD purchase level. The purchase level shall be evaluated
on a monthly basis. If, during any sixty (60) day period AMD does not purchase,
on an average, at least [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] WAFERS per week, DIGITAL has the
option to terminate this Agreement.
5.4 If die fail to meet parametric specifications, and in AMD's reasonable
opinion such failure is deemed material, AMD may request that DIGITAL stop
production. If DIGITAL is unable to correct such failures within a reasonable
time not to exceed three (3) months, AMD may cancel orders for subsequent DEVICE
production. AMD will notify DIGITAL in writing of its intention to cancel such
orders for subsequent production and include any substantiating data.
5.5 AMD and DIGITAL will work together to install a mutually agreed upon Wafer
Level Reliability (WLR) program. The results of the program will be used to
monitor the process, identify problems, and make improvements.
5.6 AMD representatives shall be allowed to visit DIGITAL's manufacturing
facility during normal working hours upon reasonable prior notice to DIGITAL.
DIGITAL representatives shall be allowed to visit AMD's probe, assembly, and
final test facilities upon reasonable prior notice.
5.7 At AMD's request, DIGITAL will allow AMD to perform periodic audits and
operational reviews of DIGITAL's manufacturing facility. Such an audit will be
subject to supervision by DIGITAL. The audit will encompass at a minimum
Quality Systems, Document Control, Performance to Specifications, Statistical
Process Control (SPC), Wafer Level Reliability (WLR), Calibration, and
preventative maintenance. In no event shall the foregoing include detailed
proprietary process recipes.
SECTION 6 - OWNERSHIP AND LICENSES
6.1 DIGITAL acknowledges and agrees that as between the parties AMD owns and
shall retain all INTELLECTUAL PROPERTY RIGHTS in the TECHNOLOGY PACKAGE and AMD
INFORMATION disclosed to DIGITAL. DIGITAL agrees the information and data
contained in the TECHNOLOGY PACKAGE constitutes AMD CONFIDENTIAL INFORMATION to
be treated in accordance with Section 12. AMD acknowledges and agrees that as
between the parties, DIGITAL owns and shall retain all INTELLECTUAL PROPERTY
RIGHTS in DIGITAL INFORMATION disclosed to AMD.
6.2 The physical medium (e.g., reticles, data bases, etc.) upon which reside
all MASK WORKS generated by DIGITAL in its performance under this Agreement
shall be the property of AMD. However, possession of those physical embodiments
of the
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MASK WORKS shall not be deemed to give DIGITAL any INTELLECTUAL PROPERTY RIGHTS
in any of the contents of the TECHNOLOGY PACKAGE, even though such content may
be fixed in such physical embodiments of such MASK WORKS. DIGITAL agrees that
such physical embodiments of MASK WORKS created by DIGITAL in performance under
this Agreement shall not be disclosed by DIGITAL to any third party, nor used or
reproduced by DIGITAL for itself or any third party for any purpose during the
TERM of this Agreement or thereafter, except that, pursuant to the licenses
granted hereunder, DIGITAL may fabricate semiconductor integrated circuits
utilizing such MASK WORKS solely for sale to AMD. Upon request from AMD, after
the termination of this Agreement, unless otherwise provided herein, DIGITAL
agrees at AMD's request to send to AMD or destroy such MASK WORKS and notify AMD
in writing that such destruction has occurred, or, in the case of any backup,
archive, or other copy of any electronic form of such MASK WORK, which DIGITAL
is unable to send to AMD or destroy, without destruction of other data or
information contained on the media containing such archive, backup, or other
copy, DIGITAL agrees that it will not access or otherwise use such electronic
form to produce physical MASK WORKS (e.g., reticles).
6.3 AMD hereby grants to DIGITAL an exclusive, worldwide, personal,
irrevocable, nontransferable, fully paid-up, royalty free right and license,
without the right to grant sublicenses to third parties, under all of AMD's
rights to MASK WORKS, created by AMD or DIGITAL, to utilize any such MASK WORKS
solely for the fabrication of DEVICES by DIGITAL solely for sale to AMD.
6.4 AMD hereby grants to DIGITAL a non-exclusive, worldwide, personal,
irrevocable, nontransferable, fully paid-up, royalty free right and license,
without the right to grant sublicenses to third parties, under all of AMD's
INTELLECTUAL PROPERTY RIGHTS embodied in the TECHNOLOGY PACKAGE, solely for the
purposes of making and selling DEVICES to AMD.
6.5 DIGITAL hereby grants to AMD a non-exclusive, worldwide, personal,
irrevocable, nontransferable, fully paid-up, royalty free right and license,
without the right to grant sublicenses to third parties under all of DIGITAL's
INTELLECTUAL PROPERTY RIGHTS in QUALIFIED PROCESS(es) solely for the purposes of
using and selling DEVICES manufactured by DIGITAL.
6.6 DIGITAL grants to AMD a nonexclusive, worldwide, personal, irrevocable,
nontransferable, right and license, without the right to grant sublicenses to
third parties, under all of DIGITAL's INTELLECTUAL PROPERTY RIGHTS in
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] , to make, have made, use, sell or otherwise dispose of AMD
products which incorporate [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] . AMD products include,
without limitation, those products sold under the AMD name for which AMD is
licensed to make, have made, use, sell, or otherwise dispose of. This license
shall be considered to be fully paid-up if this Agreement is not terminated
prior to its initial term. If the Agreement is terminated prior to its initial
term and AMD continues to use DIGITAL's INTELLECTUAL PROPERTY RIGHTS in
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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EXCHANGE COMMISSION] , the royalty for the license granted in this Section 6.6
shall be fully paid-up upon payment by AMD of [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] , which shall
become due and payable upon termination.
SECTION 7 - MASK WORKS RIGHTS
7.1 DIGITAL agrees that AMD is the owner of all MASK WORKS RIGHTS in MASK
WORKS created by DIGITAL under this Agreement, including MASK WORKS rights under
all SEMICONDUCTOR CHIP PROTECTION LAWS.
7.2 DIGITAL grants to AMD a non-exclusive, worldwide, personal, irrevocable,
nontransferable, right and license, without the right to grant sublicenses to
third parties, under all of DIGITAL's INTELLECTUAL PROPERTY RIGHTS in
improvements or modifications made by DIGITAL to the MASK WORKS, data base
tapes, or test tapes to make, have made, use, sell, or otherwise dispose of AMD
products.
SECTION 8 - PURCHASE ORDERS AND FORECASTS
8.1 AMD shall issue rolling blanket purchase orders which estimate in detail
the total volume of DEVICES required for six (6) months of production. All
purchase orders and releases shall reference the DIGITAL assigned part number
for the specific DEVICE to be supplied.
8.1.1 Purchase Orders issued by AMD shall contain a minimum of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of demand forecast by DEVICE type and die level part number
with firm delivery dates and locations for the first [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], with
the [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] delivery dates and locations to be submitted on a
monthly basis.
8.2 AMD shall submit a twelve (12) month rolling forecast, by month. This
forecast shall be non-binding.
8.3 AMD may reschedule orders on a one time basis provided that DIGITAL
receives notice of such rescheduling at least [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior to the
originally scheduled date and provided that the rescheduled date is within
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of the original shipment date.
8.4 AMD may not cancel any purchase orders for DEVICES or PREQUALIFICATION
DEVICES once production has begun by DIGITAL. At any time, AMD may stop
production for any or all AMD DEVICES by providing written notice to DIGITAL.
DIGITAL will stop production following completion of the process steps at which
the
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appropriate WAFERS reside at the time of written notification. As long as the
production is stopped at AMD's request, through no fault of DIGITAL, AMD will
pay DIGITAL for all such WAFERS started prior to DIGITAL receiving the written
notice. Prices for such work in progress (WIP) WAFERS will be prorated based on
the stage of production, but in no event shall the price exceed the completed
price as stated in the Section covering price. Upon payment, the WIP WAFERS
will be delivered to AMD. The parties will work together to determine the best
course of stopping production in accordance with good manufacturing practice to
prevent waste.
SECTION 9 - PAYMENT
9.1 AMD will pay DIGITAL in accordance with the formula set forth in Exhibit E
no later than thirty (30) days after invoice.
9.2 AMD shall keep reasonable and accurate business records from which it is
possible to audit the payments pursuant to Section 9.1 remitted to DIGITAL
pursuant to this Agreement. DIGITAL shall have the right, not more than once
per twelve (12) month period during the TERM of this Agreement or thereafter
following termination of this Agreement, at its own expense, and through a
certified public accounting firm chosen by DIGITAL and reasonably acceptable to
AMD, to examine such books and records for auditing the payments and fees due
and owing under this Agreement. Such auditor shall report only the amount of
payments payable for the period of the audit and such records shall be
maintained for a period of two (2) years after the period the records record.
9.3 With each payment, AMD shall furnish DIGITAL with a payment report. Such
payment report shall be duly certified by an authorized representative of AMD,
specifying the total amount of payments due to DIGITAL. It is expressly
understood and agreed by the parties that all computations relating to
determination of the payments due shall be made in accordance with accounting
principles as reflected in the practices of certified independent public
accountants of international reputation. Each such report shall contain
sufficient detail to verify the accuracy of the payments submitted hereunder.
At a minimum, the payment report shall contain the numbers used for each factor
in the payment calculation.
9.3.1 Payment reports shall be submitted to:
Digital Equipment Corporation
77 Reed Road
Hudson, MA 01749
Attn: Semiconductor Manufacturing Finance Manager
Digital Equipment Corporation
77 Reed Road
Hudson, MA 01749
Attn: Semiconductor Operations Marketing Manager
9.4 All other payments from AMD to DIGITAL are due and payable thirty (30)
days from the date of invoice.
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SECTION 10 - DELIVERY AND ACCEPTANCE
10.1 Unless otherwise provided herein, title, and liability and risk of loss or
damage to the die and/or WAFERS shall pass to AMD upon DIGITAL's tender of
delivery F.O.B. DIGITAL's plant of such die and/or WAFERS to a carrier which has
been approved by AMD for shipment to AMD and any loss or damage thereafter shall
not relieve AMD from any obligation hereunder. Delivery shall be made in
installments as agreed by the parties. The date of any receipt issued by the
carrier shall be conclusive proof of the date of such shipment or delivery to
AMD.
10.2 Default or delay by DIGITAL in shipping or delivering the whole or any
part or installment of the die and/or WAFERS under the purchase orders shall not
affect any other portion thereof nor shall it affect any other purchase order
between AMD and DIGITAL. If any delay in delivery by DIGITAL of an order or
portion thereof, exceeds [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION], AMD may cancel the corresponding
order or portion without liability to AMD.
10.3 Purchase acceptance tests shall be performed by AMD as set forth in
Exhibit D. If any die and/or WAFERS are not either accepted or rejected by AMD
within [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] of receipt of such die and/or WAFERS, then
such shipments shall be deemed accepted.
10.4 WAFERS are to be provided to AMD with tested die accompanied by electrical
test data and yield sort information. Copies of such information will be
retained for one (1) year after the TERM hereof at which time AMD may obtain
such information upon request. Shipping materials and methods are to be
consistent with AMD's materials and methods.
SECTION 11 - TERM AND TERMINATION
11.1 The TERM of this Agreement shall be two (2) years from the date of its
execution by both parties. The TERM hereof may be renewed for one (1) year by
the mutual agreement of the parties.
11.2 In the event of any breach of this Agreement by either party hereto, if
such breach is not corrected within sixty (60) days after written notice
describing such breach, this Agreement may be terminated forthwith by further
written notice to that effect from the party noticing the breach.
11.3 Either party hereto shall also have the right to terminate this Agreement
forthwith by giving written notice of termination to the other party at any
time, upon or after:
11.3.1 the filing by such other party of a petition in
bankruptcy or insolvency; or
11.3.2 any adjudication that such other party is bankrupt or
insolvent; or
11
11.3.3 the filing by such other party of any legal action or document
seeking reorganization, readjustment or arrangement of its
business under any law relating to bankruptcy or insolvency; or
11.3.4 the appointment of a receiver for all or substantially all of
the property of such other party; or
11.3.5 the making by such other party of any assignment for
the benefit of creditors; or
11.3.6 the institution of any proceedings for the liquidation or
winding up of such other party's business or for the
termination of its corporate charter; or
11.3.7 the majority ownership or the controlling entity of the
other party is changed.
11.4 Termination shall not rescind any payment which has been made or which has
become due and owing prior to the date of such termination, nor shall it relieve
any party of any obligation for performance or payment due and owing which has
accrued prior to the date of termination, unless a remedy for such non-
performance or non-payment is otherwise provided for in this Agreement. The
rights and obligations of the parties under Sections 6, 7, 9, 11.4, 12, 13, and
23 shall survive termination for any reason.
11.5 DIGITAL and AMD agree to discuss potential cooperation in design, process,
and manufacturing as an addition to this Agreement or another agreement as
appropriate.
SECTION 12 - WARRANTY AND INDEMNITY
12.1 DIGITAL warrants any DEVICES delivered hereunder will meet the AMD DEVICE
SPECIFICATION and shall be free from defects in material and workmanship, under
normal use and service, from the time of shipment to AMD through a period of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. If during such warranty period (i) DIGITAL is notified
promptly in writing upon discovery of any defect or nonconformance in the
DEVICE, including a detailed description of the defect or nonconformance; (ii)
samples of such DEVICES are returned to DIGITAL pursuant to a DIGITAL Return
Material Authorization (RMA); (iii) DIGITAL's examination of such DEVICES
discloses that such DEVICES are defective or nonconforming, and such defects or
nonconformance are not caused by accident, abuse, misuse, neglect, improper
installation, repair or alteration by someone other than DIGITAL, improper
testing or use contrary to any instructions issued by DIGITAL within a
reasonable time, DIGITAL shall, at DIGITAL's sole option, either replace or
credit AMD for such DEVICES. This warranty extends to AMD only and may be
invoked by AMD only for itself or its customers. DIGITAL will not issue RMAs
to, or accept warranty returns directly from, customers or users of AMD's
products. Prior to the return of any DEVICES by AMD, AMD shall afford DIGITAL
the opportunity to inspect such DEVICES at AMD's location.
12
12.2 In the event of a dispute as to conformance, at DIGITAL's request, AMD
shall provide an agreed upon number of Data-Logged samples to DIGITAL.
12.3 The foregoing warranty constitutes DIGITAL's exclusive liability, and the
exclusive remedy of AMD, for any breach of warranty of the DEVICES. THIS
WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, WHICH ARE EXPRESSLY DISCLAIMED.
12.4 AMD shall indemnify, defend, and hold DIGITAL harmless against all
expenses, damages, costs, or other losses to DIGITAL contained in the judgment
or settlement of any suit or proceeding brought against DIGITAL for infringement
of copyright, patent, trademark or other INTELLECTUAL PROPERTY RIGHTS arising
from (i) compliance with AMD's design, specifications, processes or DEVICE
related instructions, in designing and/or producing DEVICES or (ii) sale to AMD
of such DEVICES. AMD will defend at its own expense, including reasonable
attorney's fees, any suit or proceeding brought against DIGITAL alleging any
such infringement, provided that DIGITAL (i) gives AMD immediate notice of any
such suit or proceeding and permits AMD through counsel of its own choice,
reasonably acceptable to DIGITAL, to defend such suit or proceeding and (ii)
gives AMD all needed information, assistance and authority, including the right
to settle such suit or proceeding on such terms as AMD deems acceptable, at AMD
expense, necessary for AMD to defend any such suit or proceeding.
12.5 Except as provided for in Section 12.4, and limited to copyright, patent,
trademark or other INTELLECTUAL PROPERTY RIGHTS held or used by DIGITAL in the
process of providing foundry services, to AMD under this Agreement, DIGITAL
shall indemnify, defend, and hold harmless against all expenses, damages, costs,
or other losses to AMD contained in the judgment or settlement of any suit or
proceeding brought against AMD for infringement of copyright, patent, trademark
or other INTELLECTUAL PROPERTY RIGHTS arising from AMD's purchase, sale, or use
of die, WAFERS or DEVICES manufactured by DIGITAL. DIGITAL will defend at its
own expense, including reasonable attorney's fees, any suit or proceeding
brought against AMD alleging any such infringement, provided that AMD (i) gives
DIGITAL immediate notice of any such suit or proceeding and permits DIGITAL
through counsel of its own choice, reasonably acceptable to AMD, to defend such
suit or proceeding and (ii) gives DIGITAL all needed information, assistance and
authority, including the right to settle such suit or proceeding on such terms
as DIGITAL deems acceptable, at DIGITAL's expense, necessary for DIGITAL to
defend any such suit or proceeding. Additionally, if use of die, WAFERS, or
DEVICES is enjoined or ceases in accordance with a settlement of any suit or
proceeding, DIGITAL will, at its expense, procure for AMD the right to continue
using and selling the previously delivered die, WAFERS, or DEVICES or modify
them to become noninfringing, or if the first two options are not reasonably
available, to refund the purchase price for such previously delivered die,
WAFERS, or DEVICES. This indemnification obligation by DIGITAL shall not apply
if the alleged infringement is based upon the combination of the DIGITAL process
with AMD design, specifications, processes or DEVICE related instructions where
the asserted
13
infringement would not exist but for such AMD design, specifications, processes
or DEVICE related instructions.
12.6 In the event of a ruling by any court that AMD does not have the license
rights necessary for AMD to have a DEVICE manufactured by DIGITAL for AMD,
DIGITAL shall have the option to immediately terminate its manufacture of any
DEVICE impacted by such ruling. If a party in good faith believes that an
adverse decision in current litigation imposes too great of a business risk to
continue this Agreement, such party may terminate this Agreement in its
entirety. This option shall apply even if AMD is not enjoined from operating
under such disputed license while the matter is on appeal. In the event of a
termination under the terms of this Section, AMD shall pay DIGITAL for any
DEVICES already ordered by AMD and in the process of production as provided for
in Section 8.4.
12.7 AMD warrants to the best of its knowledge that AMD has the right to
contract with DIGITAL to have DIGITAL manufacture DEVICES for AMD.
SECTION 13 - CONFIDENTIALITY
13.1 DIGITAL and AMD have developed and will develop certain confidential
information, ("INFORMATION" or "CONFIDENTIAL INFORMATION") including, by way of
example, described in Exhibit A. Both party's exchange of INFORMATION is for
the sole purpose of performance under this Agreement.
13.2 Unless otherwise agreed upon by the parties as to the length of time for
maintaining confidentiality as to a particular item of INFORMATION, for a period
of seven (7) years from the date of disclosure, Recipient shall maintain in
confidence Discloser's INFORMATION, provided that it (a) is clearly marked with
Discloser's name and "Confidential", "Proprietary" or the substantial equivalent
and the date of disclosure; and (b) if orally disclosed, is summarized in
writing or corporeal form and is clearly marked with Discloser's name and
"Confidential", "Proprietary" or the substantial equivalent and the date of
disclosure and delivered to Recipient within thirty (30) days thereafter. Upon
delivery of INFORMATION so marked (or such summary in the case of oral
disclosure), Discloser, at its option, may furnish to the receiving party an
acknowledgment of receipt of such INFORMATION (or such summary) which contains
the identity, media, and disclosure date of each separate tangible item of such
INFORMATION (or such summary) and a place for Recipient's signature
acknowledging such receipt. Recipient shall, within ten (10) working days of
receipt of such acknowledgment, either sign the acknowledgment and return it to
Discloser, or indicate in writing that the acknowledgment cannot be so signed
and returned due to the inaccuracy of the identification of each or any of such
items of INFORMATION (or such summary). In the event that Discloser discloses
INFORMATION which is agreed by the parties to be subject to a requirement of
confidentiality for more than seven (7) years, it shall be Discloser's
responsibility to include in the above noted marking, the period of time
different from seven (7) years. The date of disclosure shall be deemed to be
no earlier than the date of the execution of this Agreement, or, the date of the
creation of the corporeal form of the INFORMATION, if clearly shown on the face
of such corporeal form or any physical or electronic image generated from such
corporeal form of the INFORMATION. During the confidentiality period of
INFORMATION
14
disclosed by Discloser, Recipient agrees that Recipient may disclose such
INFORMATION only to Recipient's employees having a need to know such INFORMATION
for performance of this Agreement, that Recipient shall use the same degree of
care to avoid disclosure of INFORMATION as it employs with respect to its own
confidential/proprietary information, using at least a reasonable standard of
care, and that Recipient shall notify its employees who receive such INFORMATION
of the obligations hereunder.
13.3 Discloser shall prevent Recipient from being exposed to third party
confidential information which is in Discloser's possession.
13.4 Recipient shall have no obligation as to Discloser's INFORMATION that (a)
is known to Recipient at the time of disclosure; or (b) is independently
developed by Recipient, provided Recipient can show that such development was
accomplished by or on behalf of Recipient without the use of or any reference to
such INFORMATION; or (c) becomes known to Recipient from another source without
confidentiality restriction on subsequent disclosure or use; or (d) is or
becomes part of the public domain through no wrongful act of Recipient; or (e)
is disclosed with the prior written approval of Discloser; or (f) is disclosed
pursuant to any judicial or governmental request, requirement or order; provided
that Recipient takes reasonable steps to give Discloser sufficient prior notice
in order to contest such request, requirement or order; or (g) is furnished to a
third party by Discloser without similar confidentiality restriction on the
third party.
13.5 Title to all tangible forms of Discloser's INFORMATION and any copies
thereof shall be and remain with Discloser. Recipient shall not copy or
reproduce in whole or in part any such INFORMATION without written approval of
Discloser, except as is necessary to fulfill the purposes of this Agreement.
Upon written request or termination of this Agreement, all such tangible forms
of such INFORMATION, with the exception of an archive copy to be used solely for
complying with Recipient's obligations hereunder, shall be promptly returned to
Discloser or destroyed at Discloser's option.
13.6 Recipient shall not remove any proprietary, copyright, semiconductor chip
protection, trade secret, or other legend ("Proprietary Rights Legend") from any
form of Discloser's INFORMATION. Recipient, when reasonably possible and at
Discloser's expense, will add to such INFORMATION any Proprietary Rights Legend
(or modify same) which Discloser deems necessary to protect its INTELLECTUAL
PROPERTY RIGHTS and requests in writing to be so added or modified.
13.7 The confidentiality obligations under this Section 13 shall survive
termination of this Agreement.
13.8 No rights or obligations other than expressly recited herein are to be
implied solely from the transfer and/or receipt of INFORMATION. Nothing except
that expressly stated herein shall affect either party's present or prospective
rights under any country's patent, copyright or mask works rights laws, or be
construed as granting any license under any present or future patent or
copyright rights or mask works rights, or application therefor, or preclude
marketing an product unless such marketing constitutes unauthorized use and/or
disclosure of INFORMATION.
15
13.9 Consistent with other provisions herein, each party assures that it will
not knowingly, without obtaining prior authorization from the U.S. Dept. of
Commerce, Office of Export Administration, transmit directly or indirectly the
technical data received pursuant hereto or the immediate product (including
technical data to Afghanistan, People's Republic of China, or any Country Group
Q, S, W, Y, or Z country specified in Supplement No.1 to Part 370 U.S. Dept. of
Commerce Export Administration Regulations.
13.10 Each party shall insure, to the extent that it employs any sub-
contractor to perform any of its obligations under this Agreement, and in the
performance thereof, such sub-contractor needs to have access to the INFORMATION
of the other party, that a confidentiality agreement is in place between the one
party and the sub-contractor of that one party, which obligates the sub-
contractor to protect the INFORMATION of the other party at least to the same
degree that the one party is so obligated under this Agreement.
SECTION 14 - FORCE MAJEURE
14.1 Neither party to this Agreement shall be liable for its failure to perform
any of its obligations hereunder during any period in which such performance is
delayed by fire, drought, earthquake, floods, war, embargo, strike, riot, or
other causes beyond the reasonable control of either party, or the intervention
of any government authority, provided that the party suffering such delay
immediately notifies the other party of the delay and diligently works to end
such delay.
SECTION 15 - PARTIAL INVALIDITY
15.1 If any provision of this Agreement is held to be ineffective,
unenforceable or illegal for any reason, such decision shall not affect the
validity or enforceability of any or all of the remaining portions hereof,
provided that the economic equity of the parties under this Agreement is not
substantially affected thereby and provided further that the parties shall
negotiate in good faith with respect to alternative or modified provisions which
will accomplish the objectives of this Agreement consistent with applicable law.
SECTION 16 - NOTICES
16.1 Except as otherwise expressly provided herein, any notice which may be or
is required to be given under this Agreement shall be written or telegraphic,
and any written notices shall be sent by telephonic facsimile machine (e.g.,
FAX) or by registered mail or certified mail, postage prepaid, return receipt
requested. Any telephonic facsimile machine notice must be followed within five
(5) working days by an original of the facsimile, and any telegraphic notice
must be followed within five (5) working days by written notice. All such
notices shall be deemed to have been given when such notice is received. Any
notice given hereunder shall be in writing and addressed as follows:
16
If to DIGITAL:
Digital Equipment Corporation
Semiconductor Operations Group
77 Reed Road
Hudson, MA 01749
Attn: Semiconductor Operations Group Manager
With a copy to:
Digital Equipment Corporation
Law Department
111 Powdermill Road
Maynard, MA 01754
Attn: Semiconductor Operations Counsel
If to AMD:
Advanced Micro Devices, Inc.
901 Thompson Place
P.O. Box 3453
Sunnyvale, CA 94088-3453
Attn: General Counsel
Either party hereto may change its address by a notice given to the other party
in the manner set forth above.
SECTION 17 - NON-WAIVER
17.1 No waiver by either party, expressed or implied, of any right or remedy or
cause of action resulting from a breach of any term, condition or obligation of
this Agreement by the other party shall be construed as a waiver of any right or
remedy or cause of action for any subsequent breach of that term, condition or
obligation or of any other term, condition or obligation of this Agreement of
the same or different nature.
SECTION 18 - NON-ASSIGNABILITY/TRANSFERABILITY
Neither this Agreement nor any right, obligation, or interest hereunder is
assignable or otherwise transferrable by either party without the prior written
consent of the other party.
SECTION 19 - SECTION HEADINGS
19.1 Section headings are for convenience purposes only and shall not affect
the interpretation of this Agreement.
17
SECTION 20 - GOVERNING LAW
20.1 This Agreement, and any Purchase Orders issued hereunder, and the rights
and obligations of the parties hereto shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
its law as to conflicts of laws.
SECTION 21 - PUBLICITY
21.1 Neither party will disclose to any third party and/or otherwise publicly
announce the existence of or terms and conditions of this Agreement without the
prior written consent of the other party. However, the parties will issue a
public announcement and a mutually agreed to press release upon execution of
this Agreement and contemplate that there will be occasions when public
announcements will be mutually agreed to be made by the parties, together or
separately, concerning the existence of, aspects of and/or the progress of the
parties under this Agreement.
SECTION 22 - ENTIRE AGREEMENT
22.1 The terms and conditions contained herein constitute the entire agreement
between the parties and shall supersede all previous communications, either oral
or written, between the parties with respect to the foundry relationship for
DEVICES, set forth in this Agreement. No oral explanation or oral information
by either party hereto shall alter the meaning or interpretation of this
Agreement. No amendment, modification, alteration, addition or change in the
terms hereof, or addition of new Exhibits, shall be binding on either party
unless reduced to writing and duly executed by authorized representatives of all
the parties hereto.
18
SECTION 23 - LIMITATION OF LIABILITY
23.1 In no event will either party be subject to any indirect, special,
incidental or consequential damages resulting from its performance or failure to
perform under this Agreement, or the furnishing, performance, or use of any
goods or services sold pursuant hereto, whether due to a breach of contract,
breach of warranty, negligence or otherwise.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of this day 4 of Feb , 1994.
-------- ------
DIGITAL EQUIPMENT CORPORATION ADVANCED MICRO DEVICES, INC.
/s/ R.E. Caldwell /s/ Gene Conner
- - ------------------------ ----------------------------
Signature Signature
R.E. Caldwell Gene Conner
- - ------------------------ ----------------------------
Printed Name Printed Name
V.P. Semiconductor OPS Sr. Vice President
- - ------------------------ --------------------------------
Title Title
2/4/94 Feb. 4, 1994
- - ------------------------ -----------------
Date Date
19
EXHIBIT A
DEVICES AND DEVICE SPECIFICATIONS
DEVICES
- - -------
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
DEVICE SPECIFICATIONS
- - ---------------------
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
20
EXHIBIT B
SECTION 1: DEVICE TRANSFER AND QUALIFICATION PLAN
SECTION 2: DEVICE TECHNOLOGY PACKAGE
SECTION 1: Device Transfer and Qualification Plan
The Device Transfer and Qualification Plan is defined by the "Macallan Project
Plan". The project plan will be updated and tracked by the joint AMD-DIGITAL
start-up team.
SECTION 2: Device Technology Package
As a part of the start-up of AM486 manufacturing at DIGITAL, AMD will transfer
to DIGITAL certain information necessary for the manufacturing of the product at
DIGITAL. This information is considered proprietary and is to be used
exclusively in the manufacture of AM486 product for AMD. AMD will transfer to
DIGITAL information to the following:
--Product design rules
--Product CD targets
--Product Database including schematic database and all labels
--Database fracturing detail
--Product test patterns
--Product test programs at source level, and documentation
--Probe Card specifications
21
EXHIBIT C
QUALIFIED PROCESS(ES) SPECIFICATION
PRODUCT QUALIFICATION SPECIFICATION
The process and product qualification requirements are described in the
following AMD controlled documents:
--Fab Process Technology Qualification Specification # 00.021.2 Revision D
--Product Reliability Qualification Specification # 00.021.4 Revision A
22
EXHIBIT D
WAFER ACCEPTANCE CRITERIA
DIGITAL will be manufacturing sorted die for AMD. The Acceptance Criteria for
the die will be based on three criteria. The criteria will be Wafer Electrical
Test (WET), Wafer Sort Yield, and Die Visual Quality.
A. WET criteria will be based on the measurements of DIGITAL test structures
---
prior to wafer sort. All test structures will reside on nine sites per wafer.
The test structure minimum, maximum, and target will be defined and agreed upon
by the parties and be incorporated by reference in this Exhibit
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of the wafers will be tested at WET. If a test is outside
of the minimum - maximum range, that will constitute a failure at that site. If
there are greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] failures on a wafer for the same
test, the wafer will be considered as failing the WET criteria. If the wafer is
outside the WET range due to engineering tests, it will be accepted; if it is
outside the range due to processing issues, then it will be a candidate for
scrap. The final decision on scrap will be made by the joint AMD-DIGITAL
disposition review process.
B. The Wafer Sort Criteria will initially be set such that any wafers with a
-----------------------
yield of less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] and any lots with an average yield of
less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (for the lot size of those wafers entering
sort--accounting for fab yield and WET rejection) will be scrapped. (Changes in
die size can trigger a review of these initial scrap limits if requested by
DIGITAL). Recognizing that product reliability is heavily dependent on defect
levels, these scrap limits will be reviewed by AMD and DIGITAL on a semi-annual
basis and adjusted upward as yield improves. New limits should be set based on
------
yield data from the latest six (6) months of production.
The lot-scrap limit should be set at the greater of the following (Use the
distribution of lot-yield averages for items (2) and (3)):
(1) the present lot-scrap limit,
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] -standard deviations less
than the mean, or
23
Exhibit D--Wafer Acceptance Criteria (continued)
(3) the lower [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] point of the
distribution (point where [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of
all lots pass).
The wafer-scrap limit should be set at the greater of the following (Use
the distribution of wafer yields for items (2) and (3) after removing scrapped
-----
lots from the distribution):
(1) The present wafer-scrap limit,
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]-standard deviations less
than the mean (excluding lot scraps, or
(3) the lower [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] point of the
distribution (excluding lot scraps), (point where [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of all wafers pass).
DIGITAL has the option to request a material review for disposition with
AMD of any scrap material.
C. Die Visual criteria will be based on AMD Product Assurance Outgoing
----------
Inspection specification #306-005, or as modified by mutual agreement of the
parties. DIGITAL has the option on any questionable material, that does not
meet the inspection criteria, to request a joint disposition review by AMD and
DIGITAL.
24
EXHIBIT E
PAYMENT CALCULATION
As per Section 9.1, AMD will pay DIGITAL for DEVICES according to the following
formula:
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
25
EXHIBIT F
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
26