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IBM, AMD Extend Chip-Making Alliance Through 2008

Advanced Micro Devices Inc. and IBM Corp. have extended their chip-manufacturing technology agreement for an additional three years, paving the way for further chip process advancements from both companies.

The contract was supposed to expire next year. Under the terms of the extended deal, AMD will pay IBM between $250 million and $280 million from September 2004 through December 2008.

In return, AMD gets access to IBM's chip technologies. The contract remains subject to approval from IBM's board of directors.

"Under the development agreement, [AMD] and IBM agreed to continue to jointly develop new logic process technologies, including 65-nanometer and 45-nanometer technologies, to be implemented on silicon wafers," according to a Form 8-K filing from AMD.

"Furthermore, if the company and IBM jointly develop 32-nanometer technologies during the term of the development agreement, the 32-nanometer technology will be licensed to the company," according to the SEC document. "In addition, the company received a license from IBM to have its products made in 90-nanometer and 65-nanometer at a third-party foundry or a joint manufacturing facility owned by the company and a third-party foundry."

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