Crucial 2012 Annual Report Download - page 21

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If our manufacturing process is disrupted, our business, results of operations or financial condition could be materially
adversely affected.
We manufacture products using highly complex processes that require technologically advanced equipment and continuous
modification to improve yields and performance. Difficulties in the manufacturing process or the effects from a shift in product
mix can reduce yields or disrupt production and may increase our per gigabit manufacturing costs. Additionally, our control
over operations at our IMFT, Inotera and MP Mask joint ventures is limited by our agreements with our partners. From time to
time, we have experienced disruptions in our manufacturing process as a result of power outages, improperly functioning
equipment and equipment failures. If production at a fabrication facility is disrupted for any reason, manufacturing yields may
be adversely affected or we may be unable to meet our customers' requirements and they may purchase products from other
suppliers. This could result in a significant increase in manufacturing costs or loss of revenues or damage to customer
relationships, which could materially adversely affect our business, results of operations or financial condition.
Breaches of our network security could expose us to losses.
We manage and store on our network systems, various proprietary information and sensitive or confidential data relating to
our operations. We also process, store, and transmit large amounts of data for our customers, including sensitive personal
information. Computer programmers and hackers may be able to gain unauthorized access to our network system and steal
proprietary information, compromise confidential information, create system disruptions, or cause shutdowns. These parties
may also be able to develop and deploy viruses, worms, and other malicious software programs that disrupt our operations and
create security vulnerabilities. Attacks on our network systems could result in significant losses and damage our reputation
with customers.
We are subject to counterparty default risks.
We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash
deposits, investments, foreign currency option and forward contracts, and capped-call contracts on our stock. As a result, we
are subject to the risk that the counterparty to one or more of these arrangements will default on its performance obligations. A
counterparty may default rapidly and without notice to us, which could limit our ability to take action to mitigate our exposure.
Additionally, our ability to mitigate our exposures may be constrained by the terms of our contractual arrangements or because
market conditions prevent us from taking effective action. If one of our counterparties becomes insolvent or files for
bankruptcy, our ability to recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of
the counterparty or the applicable laws governing the bankruptcy proceeding. In the event of such default, we could incur
significant losses, which could adversely impact our business, results of operations or financial condition.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.