AMD 2009 Annual Report Download - page 26

of the applicable environmental regulations we may be subject to fines, suspension of production, alteration of
our manufacturing processes, import/export restrictions, sales limitations, and/or criminal and civil liabilities.
Existing or future regulations could require us to procure expensive pollution abatement or remediation
equipment; to modify product designs; or to incur other expenses to comply with environmental regulations. Any
failure to adequately control the use, disposal or storage, or discharge of hazardous substances could expose us to
future liabilities that could have a material adverse effect on our business. We believe we are in material
compliance with applicable environmental requirements and do not expect those requirements to result in
material expenditures in the foreseeable future.
Environmental laws are complex, change frequently and have tended to become more stringent over time.
For example, the European Union (EU) and China are two among a growing number of jurisdictions that have
enacted in recent years restrictions on the use of lead, among other chemicals, in electronic products. These
regulations affect semiconductor packaging. Other regulatory requirements potentially affecting our
manufacturing processes and the design and marketing of our products are in development throughout the world.
For example, the EU is considering market entry requirements for computers based on the ENERGY STAR
specification (Version 5.0) as well as additional limits. The proposed requirements, which have not yet been
finalized by the EU Commission, could potentially be approved and implemented as early as the fourth quarter of
2011. If such requirements are implemented in the proposed time frame and to the proposed specification there is
the potential for certain of our microprocessor, chipset and GPU products, as incorporated in desktop and mobile
PCs, being excluded from the EU market.
We have management systems in place to identify and ensure compliance with such requirements and have
budgeted for foreseeable associated expenditures. However, we cannot assure you that future environmental legal
requirements will not become more stringent or costly in the future. Therefore, we cannot assure you that our
costs of complying with current and future environmental and health and safety laws, and our liabilities arising
from past and future releases of, or exposure to, hazardous substances will not have a material adverse effect on
us.
ITEM 1A. RISK FACTORS
The risks and uncertainties described below are not the only ones we face. If any of the following risks
actually occurs, our business, financials condition or results of operations could be materially adversely
affected. In addition, you should consider the interrelationship and compounding effects of two or more risks
occurring simultaneously.
Intel Corporation’s dominance of the microprocessor market and its aggressive business practices may
limit our ability to compete effectively.
Intel Corporation has dominated the market for microprocessors for many years. Intel’s market share,
margins and significant financial resources enable it to market its products aggressively, to target our customers
and our channel partners with special incentives, and to discipline customers who do business with us. These
aggressive activities have in the past and are likely in the future to result in lower unit sales and a lower average
selling price for our products and adversely affect our margins and profitability.
Intel exerts substantial influence over computer manufacturers and their channels of distribution through
various brand and other marketing programs. Because of its dominant position in the microprocessor market,
Intel has been able to control x86 microprocessor and computer system standards and bench marks and to dictate
the type of products the microprocessor market requires of us. Intel also dominates the computer system
platform, which includes core logic chipsets, graphics chips, motherboards and other components necessary to
assemble a computer system. As a result, OEMs that purchase microprocessors for computer systems are highly
dependent on Intel, less innovative on their own and, to a large extent, are distributors of Intel technology.
Additionally, Intel is able to drive de facto standards for x86 microprocessors that could cause us and other
companies to have delayed access to such standards.
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