AMD 2013 Annual Report Download - page 29

We may not be able to successfully implement our long-term business strategy.
We are implementing a long-term business strategy to refocus our business to address markets beyond our
core PC market to the faster growing ultra low-power client, embedded, professional graphics, semi-custom and
dense server markets. Currently, a significant portion of our business is focused on the consumer PC portions of
the market, and we believe that PC market conditions will remain challenging. The goal of our long-term strategy
is to derive approximately 50% of our revenue from high growth markets by the end of 2015. In the third and
fourth quarters of 2013, revenue from sales of our semi-custom SOC and embedded products represented more
than 30% of total net revenue. Despite our efforts, we may not be able to effectively implement our strategy in a
timely manner to exploit potential market opportunities or meet competitive challenges. However, if demand for
these products is below our expectations, or we are not able to improve cost efficiencies of this business model,
we may not realize benefits from our long-term business strategy.
Moreover, our business strategy is dependent on creating products that anticipate customer requirements and
emerging industry trends. We cannot assure you that our new strategic direction will result in innovative products
and technologies that provide value to our customers. In addition, we may be entering markets where current and
new competitors may be able to adapt more quickly to customer requirements and emerging technologies. We
cannot assure you that we will be able to compete successfully against current or new competitors who may have
stronger positions in these new markets. We may face delays or disruptions in research and development efforts,
or we may be required to significantly invest greater resources in research and development than anticipated.
Global economic uncertainty may adversely impact our business and operating results.
Uncertain global economic conditions have in the past and may in the future adversely impact our business.
Uncertainty in the worldwide economic environment may negatively impact consumer confidence and spending
causing our customers to postpone purchases. For example, our revenue in the second half of 2012 and in 2013 was
adversely affected, in part, by the overall weakness in the global economy and weak consumer demand for end-user
PC products, which impacted sales. We believe that consumer PC market conditions will remain challenging.
In addition, during challenging economic times, 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. The risk related to our customers’
potentially defaulting on or delaying payments to us is increased because we expect that a small number of
customers will continue to account for a substantial part of our revenue. 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. In addition, uncertain economic conditions may make it more difficult for us to raise funds through
borrowings or private or public sales of debt or equity securities.
We may not be able to generate sufficient cash to service our debt obligations or meet our working capital
requirements.
Our ability to make payments on and to refinance our debt will depend on our financial and operating
performance, which may fluctuate significantly from quarter to quarter, and is subject to prevailing economic
conditions and financial, business and other factors, many of which are beyond our control. We cannot assure you
that we will be able to generate cash flow or that we will be able to borrow funds, including under our senior
secured asset based line of credit for a principal amount up to $500 million (Secured Revolving Line of Credit), in
amounts sufficient to enable us to service our debt or to meet our working capital requirements. If we are not able to
generate sufficient cash flow from operations or to borrow sufficient funds to service our debt, we may be required
to sell assets or equity, reduce expenditures, refinance all or a portion of our existing debt or obtain additional
financing. We cannot assure you that we will be able to refinance our debt, sell assets or equity, borrow funds under
our Secured Revolving Line of Credit or borrow more funds on terms acceptable to us, if at all.
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