THIRD AMENDMENT

Exhibit 10.38(h-3)

THIRD AMENDMENT

TO

SPONSORS’ SUBORDINATION AGREEMENT

THIS THIRD AMENDMENT (this “Amendment”), dated 24 February 2004, is made between ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the laws of the State of Delaware, United States of America, with its chief executive office and principal place of business at One AMD Place, Sunnyvale, California 94088, United States of America (“AMD Inc.”), AMD SAXONY HOLDING GMBH, Dresden, registered in the Commercial Register of the Dresden County Court, HRB 13931 (“AMD Holding”; and, together with AMD Inc., collectively, the “Sponsors”), AMD SAXONY LLC, a limited liability company organised and existing under the laws of the State of Delaware, United States of America (“AMD Saxony LLC”); AMD SAXONY ADMIN GMBH registered in the Commercial Register of the Dresden County Court HRB 20738 (“AMD Admin,” together with AMD Saxony LLC, collectively, the “Additional Partner Companies”); AMD SAXONY LIMITED LIABILITY COMPANY & Co. KG (formerly AMD Saxony Manufacturing GmbH) registered in the Commercial Register of the Dresden County Court HRA 4896 (“AMD Saxonia”), DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to Dresdner Bank AG in such capacity) under the Loan Agreement referred to below (in such capacity, the “Agent”) for the Banks referred to below, and DRESDNER BANK AG, as Security Agent under such Loan Agreement (in such capacity, the “Security Agent”), for the Secured Parties referred to below.

W I T N E S S E T H:

WHEREAS, AMD Saxonia, an indirect wholly-owned Subsidiary of AMD Inc., has been formed for the purpose of constructing, owning, and operating (i) the Plant and (ii) the integrated Design Center;

WHEREAS, in order to finance the construction of the Plant and the Design Center, and start-up costs of the operation of the Plant, inter alia, (i) AMD Saxonia has entered into a Syndicated Loan Agreement, dated 11 March 1997, as amended, (the “Loan Agreement”) with the Agent, Dresdner Bank Luxembourg S.A. as Paying Agent (as defined in the Sponsors’ Subordination Agreement as hereinafter defined), the Security Agent and the Banks from time to time party thereto providing, inter alia, for a senior secured term facility aggregating up to DM 1,500,000,000 (one billion five hundred million Deutsche Marks), (ii) the Sponsors, the Additional Partner Companies, the Agent and the Security Agent have entered into that certain Sponsors’ Support Agreement dated 11 March 1997, as amended, (the “Sponsors’ Support Agreement”) providing (x) certain assurances to the Agent and Security Agent with respect to the completion of the Project, and (y) certain undertakings to and for the benefit of the Agent, the Paying Agent, the Security Agent and the Banks (collectively, the “Secured Parties” and individually a “Secured Party”);

WHEREAS, AMD Saxonia, the Sponsors, the Additional Partner Companies, the Security Agent and the Agent are party to a Sponsors’ Subordination Agreement dated March 11, 1997 among the Sponsors, the Agent and the Security Agent, as amended by the First Amendment to Sponsors’ Subordination Agreement dated 20 February 2001, among the Sponsors, the Agent and the Security Agent and the Accession Agreement and Second Amendment to Sponsors’ Subordination Agreement dated 3 June 2002 among the Sponsors, the Additional Partner Companies, the Agent and the Security Agent (as amended, the “Sponsors’ Subordination Agreement”);

WHEREAS, AMD Saxonia, the Agent, the Security Agent and the Banks wish, with the consent of the Sponsors and the Additional Partner Companies to, among other things, amend the Loan Agreement and AMD Saxonia, the Sponsors, the Additional Partner Companies, the Agent and the Security Agent wish to amend the Sponsors’ Subordination Agreement on the terms and subject to the conditions of this Amendment Agreement;

WHEREAS, contemporaneously with the execution and delivery of this Third Amendment, AMD Saxonia, Dresdner Bank AG, the other Banks and Financial Institutions named therein, Dresdner Bank Luxembourg S.A. as Agent and Paying Agent and Dresdner Bank AG, as Security Agent, are entering into Amendment No. 6 to the Syndicated Loan Agreement dated 11 March 1997, as amended from time to time (“Amendment No. 6”), and it is a condition to the effectiveness of said Amendment No. 6 (the date on which said Amendment No. 6 becomes effective being referred to herein as the “Amendment No. 6 Effective Date”) that a copy of this Third Amendment shall be delivered to the Agent;

NOW, THEREFORE, the Sponsors, the Additional Partner Companies, AMD Saxonia, the Agent (for itself and on behalf of the Banks), and the Security Agent (on behalf of the Secured Parties), agree as follows:

ARTICLE I

Definitions

SECTION 1.1 Definitions. Capitalized terms not otherwise defined in this Amendment are used with the definitions assigned to them in the Sponsors’ Subordination Agreement.

SECTION 1.2 Construction. In this Amendment, unless the context requires otherwise, references to Sections and Schedules are to Sections and Schedules of the Sponsors’ Support Agreement. Section headings are inserted for reference only and shall be ignored in construing this Amendment.

ARTICLE II

Amendments

SECTION 2.1 Amendments. With effect from the Amendment No. 6 Effective Date the Sponsors’ Subordination Agreement is hereby amended by deleting Section 3 (iii) of the Sponsors’ Subordination Agreement in its entirety and replacing said Section 3 (iii) as follows:

-2-

ARTICLE III

Miscellaneous

SECTION 3.1 Representations and Warranties. Each of the Sponsors, AMD Saxonia and the Additional Partner Companies hereby represents and warrants as of the date hereof that:

SECTION 3.2 Miscellaneous.

-3-

[Remainder of page intentionally left blank]

-4-

IN WITNESS WHEREOF, each of the parties set out below has caused this Amendment to be duly executed and delivered by its respective officer or agent thereunto duly authorised as of the date first above written.

-5-