AMD 2009 Annual Report Download - page 33

restructuring charges for the restructuring plans implemented during 2008 represent primarily severance and
costs related to the continuation of certain employee benefits in connection with the termination of employees,
contract or program termination costs, asset impairments and exit costs for facility site consolidations and
closures. If our restructuring activities are not effectively managed, we may experience unanticipated effects
causing harm to our business and customer relationships.
The loss of a significant customer may have a material adverse effect on us.
Collectively, our top five customers accounted for approximately 50 percent of our net revenue in 2009. We
expect that a small number of customers will continue to account for a substantial part of revenues of our
microprocessor and graphics businesses in the future. During 2009, five customers accounted for approximately
56 percent of the net revenue of our Computing Solutions segment and five customers accounted for
approximately 52 percent of the net revenue of our Graphics segment. If one of our top microprocessor or
graphics business customers decided to stop buying our products, or if one of these customers were to materially
reduce its operations or its demand for our products, we would be materially adversely affected.
The semiconductor industry is highly cyclical and has experienced severe downturns that materially
adversely affected, and may in the future materially adversely affect, our business.
The semiconductor industry is highly cyclical and has experienced significant downturns, often in
conjunction with constant and rapid technological change, wide fluctuations in supply and demand, continuous
new product introductions, price erosion and declines in general economic conditions. The current uncertainty in
global economic conditions has also impacted the semiconductor market as consumers and businesses have
deferred purchases, which negatively impacted demand for our products in 2009. Our financial performance has
been, and may in the future be, negatively affected by these downturns. We incurred substantial losses in recent
downturns, due to:
• substantial declines in average selling price;
• the cyclical nature of supply/demand imbalances in the semiconductor industry;
• a decline in demand for end-user products (such as PCs) that incorporate our products;
• excess inventory levels in the channels of distribution, including those of our customers; and
• excess production capacity.
If the current downturn in the semiconductor industry does not improve, we will be materially adversely
affected.
The demand for our products depends in part on continued growth in the industries and geographies into
which they are sold. Fluctuations in demand for our products or a market decline in any of these
industries or geographies would have a material adverse effect on our results of operations.
Our business is dependent upon the market for desktop and notebook PCs and servers. In 2009 and 2008, a
significant portion of our Computing Solutions revenue was related to desktop PCs. Industry-wide fluctuations in
the computer marketplace have materially adversely affected us in the past, are currently affecting us and may
materially adversely affect us in the future. Recently, as a result of macroeconomic challenges currently affecting
the global economy, end user demand for PCs and servers decreased significantly. Although end-user PC demand
stabilized in the second half of 2009, end-customers continue to demand value-priced products and spending by
enterprises has not rebounded to pre-recession levels. In addition, form factors have steadily shifted from desktop
PCs to notebook PCs over the past three years, and we expect that this trajectory will continue.
The growth of our business is also dependent on continued demand for our products from high-growth
global markets. If demand from these markets is below our expectations, sales of our products may decrease,
which could have a material adverse effect on us.
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