AMD 2014 Annual Report Download - page 34

Data breaches and cyber-attacks could compromise our intellectual property or other sensitive information
and cause significant damage to our business and reputation.
In the ordinary course of our business, we maintain sensitive data on our networks, including our intellectual
property and proprietary or confidential business information relating to our business and that of our customers
and business partners. The secure maintenance of this information is critical to our business and reputation. We
believe that companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and
other attempts to gain unauthorized access. These threats can come from a variety of sources, all ranging in
sophistication from an individual hacker to a state-sponsored attack. Cyber threats may be generic, or they may
be custom-crafted against our information systems. Over the past year, cyber-attacks have become more
prevalent and much harder to detect and defend against. Our network and storage applications may be subject to
unauthorized access by hackers or breached due to operator error, malfeasance or other system disruptions. It is
often difficult to anticipate or immediately detect such incidents and the damage caused by such incidents. These
data breaches and any unauthorized access or disclosure of our information or intellectual property could
compromise our intellectual property and expose sensitive business information. Cyber-attacks could also cause
us to incur significant remediation costs, result in product development delays, disrupt key business operations
and divert attention of management and key information technology resources. These incidents could also subject
us to liability, expose us to significant expense and cause significant harm to our reputation and business.
Our operating results are subject to quarterly and seasonal sales patterns.
A substantial portion of our quarterly sales have historically been made in the last month of the quarter. This
uneven sales pattern makes prediction of revenues for each financial period difficult and increases the risk of
unanticipated variations in quarterly results and financial condition. In addition, our operating results tend to vary
seasonally. For example, historically, first quarter PC product sales are generally lower than fourth quarter sales.
In addition, with respect to our semi-custom SoC products for game consoles, we expect sales patterns to follow
the seasonal trends of a consumer business with sales in the first half of the year being lower than sales in the
second half of the year. Many of the factors that create and affect quarterly and seasonal trends are beyond our
control.
If essential equipment or materials are not available to manufacture our products, we could be materially
adversely affected.
We purchase equipment and materials for our internal back-end manufacturing operations from a number of
suppliers and our operations depend upon obtaining deliveries of adequate supplies of equipment and materials
on a timely basis. Our third-party suppliers also depend on the same timely delivery of adequate quantities of
equipment and materials in the manufacture of our products. Certain equipment and materials that are used in the
manufacture of our products are available only from a limited number of suppliers, or in some cases, a sole
supplier. We also depend on a limited number of suppliers to provide the majority of certain types of integrated
circuit packages for our microprocessors, including our APU products. Similarly, certain non-proprietary
materials or components such as memory, printed circuit boards (PCBs), substrates and capacitors used in the
manufacture of our products are currently available from only a limited number of sources. Because some of the
equipment and materials that we and our third-party manufacturing suppliers purchase are complex, it is
sometimes difficult to substitute one supplier for another.
From time to time, suppliers may extend lead times, limit supply or increase prices due to capacity
constraints or other factors. Also, some of these materials and components may be subject to rapid changes in
price and availability. Interruption of supply or increased demand in the industry could cause shortages and price
increases in various essential materials. Dependence on a sole supplier or a limited number of suppliers
exacerbates these risks. If we are unable to procure certain of these materials for our back-end manufacturing
operations, or our third-party foundries or manufacturing suppliers are unable to procure materials for
manufacturing our products, our business would be materially adversely affected.
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