AMD 1997 Annual Report Download - page 34

including expropriation, currency controls, exchange rate fluctuations,
changes in freight rates and changes in rates for taxes and tariffs. For
example, there is currently an economic crisis in Asia.
Domestic and International Economic Conditions. The Company's business is
subject to general economic conditions, both in the United States and abroad.
A significant decline in economic conditions in any significant geographic
area could have a material adverse effect on the Company. The further decline
of the economic condition in Asia could in the future affect demand for
microprocessors and other integrated circuits, which could have an adverse
effect on the Company's sales and operating results.
Volatility of Stock Price; Ability to Access Capital. Based on the trading
history of its stock, AMD believes factors such as quarterly fluctuations in
the Company's financial results, announcements of new products and/or pricing
by AMD or its competitors, the pace of new product manufacturing ramps,
production yields of key products and general conditions in the semiconductor
industry have caused and are likely to continue to cause the market price of
AMD common stock to fluctuate substantially. In addition, an actual or
anticipated shortfall in revenue, gross margins or earnings from securities
analysts' expectations could have an immediate effect on the trading price of
AMD common stock in any given period. Technology company stocks in general
have experienced extreme price and volume fluctuations that often have been
unrelated to the operating performance of the companies. This market
volatility may adversely affect the market price of the Company's common stock
and consequently limit the Company's ability to raise capital or to make
acquisitions. The Company's current business plan envisions substantial cash
outlays requiring external capital financing. There can be no assurances that
capital and/or long-term financing will be available on terms favorable to the
Company or in sufficient amounts to enable the Company to implement its
current plan.
Earthquake Danger. The Company's corporate headquarters, a portion of its
manufacturing facilities, assembly and research and development activities and
certain other critical business operations are located near major earthquake
fault lines. The Company could be materially adversely affected in the event
of a major earthquake.
Impact of Year 2000. The "Year 2000 Issue" is the result of computer
programs being written using two digits rather than four to define the
applicable year. If the Company's computer programs with date-sensitive
functions are not Year 2000 compliant, they may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Company will be required to modify or replace significant portions of
its software so that its computer systems will function properly with respect
to dates in the year 2000 and thereafter. The Company presently believes that
with modifications to existing software and conversions to new software, the
Year 2000 Issue will not pose significant operational problems for its
computer systems. However, if such modifications and conversions are not made,
or are not completed timely, the Year 2000 Issue could have a material impact
on the operations of the Company. The Company will use both internal and
external resources to reprogram or replace and test the software for Year 2000
modifications.
The Company has a plan to formally communicate with all of its significant
suppliers and/or subcontractors to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 Issues. The Company does not currently have any
information concerning the Year 2000 compliance status of its customers. In
the event that any of the Company's significant customers and suppliers do not
successfully and timely achieve Year 2000 compliance, the Company's business
or operations could be adversely affected. There can be no assurance that the
systems of other companies on which the Company's systems rely will be timely
converted and would not have an adverse effect on the Company's systems. The
Company is currently assessing its exposure to contingencies related to the
Year 2000 Issue for the products it has sold; however, it does not expect
these to have a material impact on the operations of the Company.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998