AMD 2014 Annual Report Download - page 29

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The markets in which our products are sold are highly competitive.
The markets in which our products are sold are very competitive and delivering the latest and best products
to market on a timely basis is critical to achieving revenue growth. We believe that the main factors that
determine our product competitiveness are timely product introductions, product quality (including enabling
state-of-the-art visual experience), power consumption (including battery life), reliability, processor clock speed,
perfomance, size (or form factor), selling price, cost, adherence to industry standards (and the creation of open
industry standards), level of integration, software and hardware compatibility and stability, brand recognition and
availability.
We expect that competition will continue to be intense due to rapid technological changes, frequent product
introductions by our competitors or new competitors of products that may provide better performance/experience
or may include additional features that render our products uncompetitive. We may also face aggressive pricing
by competitors, especially during challenging economic times. Some competitors may have greater access or
rights to companion technologies, including interface, processor and memory technical information. With the
introduction of our APU products and other competing solutions, we believe that demand for additional discrete
graphic cards may decrease in the future due to both the improvement of the quality of our competitor’s
integrated graphics and the graphics performance of our APUs. If competitors introduce competitive new
products into the market before us, demand for our products could be adversely impacted and our business could
be adversely affected.
We are implementing a long-term business strategy to refocus our business to address markets beyond our core
PC market to the high-growth adjacent markets. However, we are entering markets with new and different competitors
who 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 or superior ability to anticipate customer requirements and emerging industry trends.
The loss of a significant customer may have a material adverse effect on us.
Collectively, our top five customers accounted for approximately 61% of our net revenue in 2014. On a
segment basis, during 2014, five customers accounted for approximately 54% of the net revenue of our
Computing and Graphics segment and five customers accounted for approximately 90% of the net revenue of our
Enterprise, Embedded and Semi-Custom segment. We expect that a small number of customers will continue to
account for a substantial part of revenues of our businesses in the future. If one of our key customers decides to
stop buying our products, or if one of these customers materially reduces its operations or its demand for our
products, our business would be materially adversely affected.
Our receipt of revenue from our semi-custom SoC products is dependent upon our technology being designed
into third-party products and the success of those products.
The revenue that we receive from our semi-custom SoC products is in the form of non-recurring engineering fees
charged to third parties for design and development services and revenue received in connection with sales of our
semi-custom SoC products to these third parties. As a result, our ability to generate revenue from our semi-custom
products depends on our ability to secure customers for our semi-custom design pipeline and our semi-custom SoC
products being incorporated into those customer’s products. Any revenue from sales of our semi-custom SoC products
is directly related to sales of the third-party’s products and reflective of their success in the market. Moreover, we have
no control over the marketing efforts of these third parties, and we cannot make any assurances that sales of their
products will be successful in current or future years. Consequently, the semi-custom SoC product revenue expected by
us may not be fully realized and our operating results may be adversely affected.
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