AMD 2009 Annual Report Download - page 30

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failures. GF is responsible for developing manufacturing process technologies used to manufacture our
microprocessor products and other third-party foundries are responsible for the process technologies used to
manufacture our graphics and chipset products. We cannot be certain that GF or other third-party foundries will
be able to develop, obtain or successfully implement leading-edge process technologies needed to manufacture
future generations of our products profitably or on a timely basis or that our competitors will not develop new
technologies, products or processes earlier. During periods when foundries are implementing new process
technologies, their manufacturing facilities may not be fully productive. A substantial delay in the technology
transitions to smaller process technologies could have a material adverse effect on us, particularly if our
competitors transition to more cost effective technologies. Moreover, if foundries experience manufacturing
inefficiencies, we may fail to achieve acceptable yields or experience product delivery delays. Any decrease in
manufacturing yields could result in an increase in the per unit costs or force us to allocate our reduced product
supply among our customers, which could potentially harm our customer relationships, reputation and financial
results.
If we lose Microsoft Corporation’s support for our products, our ability to sell our products could be
materially adversely affected.
Our ability to innovate beyond the x86 instruction set controlled by Intel depends partially on Microsoft
designing and developing its operating systems to run on or support our microprocessor products. If Microsoft
does not continue to design and develop its operating systems so that they work with our x86 instruction sets,
independent software providers may forego designing their software applications to take advantage of our
innovations and customers may not purchase PCs with our microprocessors. In addition, software drivers sold
with our products are certified by Microsoft. If Microsoft did not certify a driver, or if we otherwise fail to retain
the support of Microsoft, our ability to market our products would be materially adversely affected.
If we do not fully realize the anticipated benefits of our GF manufacturing joint venture, our business
could be adversely impacted.
We anticipate realizing certain benefits to our business from the GF joint venture, including a more variable
cost model and the ability to take advantage, as a shareholder of GF, of the shift by integrated device
manufacturers to a fabless business model. We cannot assure you that our relationship with GF and ATIC will
result in the full realization of these or any other benefits.
The recent instability of the financial markets may adversely impact our business and operating results.
There is continued concern over the instability of the financial markets and their influence on the global
economy. As a result, our current or potential future customers may experience cash flow problems and as a
result may modify, delay or cancel plans to purchase our products. Additionally, if our customers are not
successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may
delay payment of, accounts receivable that they owe us. Any inability of our current or potential future customers
to pay us for our products may adversely affect our earnings and cash flow. Moreover, our key suppliers may
reduce their output or become insolvent, thereby adversely impacting our ability to manufacture our products.
For example, in 2009, Qimonda AG, a supplier of memory for our graphics products, commenced insolvency
proceedings. In addition, economic conditions may make it more difficult for us to raise funds through
borrowings or private or public sales of debt or equity securities. If global economic conditions deteriorate
further or do not show improvement, we may experience material adverse impacts to our business and operating
results.
If we cannot generate sufficient revenues and operating cash flow or obtain external financing, we may
face a cash shortfall and be unable to make all of our planned investments in research and development.
Although we make substantial investments in research and development, we cannot be certain that we will
be able to develop, obtain or successfully implement new products and technologies on a timely basis. Our
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