Intel 2007 Annual Report Download - page 21

Table of Contents
Our global operations subject us to risks that may harm our results of operations and financial condition.
We have sales offices, R&D, manufacturing, and assembly and test facilities in many countries, and as a result, we are subject
to risks associated with doing business globally. Our global operations may be subject to risks that may limit our ability to
manufacture, assemble and test, design, develop, or sell products in particular countries, which could, in turn, harm our results
of operations and financial condition, including:
In addition, although most of our products are priced and paid for in U.S. dollars, a significant amount of certain types of
expenses, such as payroll, utilities, tax, and marketing expenses, are paid in local currencies. Our hedging programs reduce,
but do not entirely eliminate, the impact of currency exchange rate movements, and therefore fluctuations in exchange rates
could harm our business operating results and financial condition. In addition, changes in tariff and import regulations and to
U.S. and non-U.S. monetary policies may harm our operating results and financial condition by increasing our expenses and
reducing our revenue. Varying tax rates in different jurisdictions could harm our operating results and financial condition by
increasing our overall tax rate.
We also maintain a program of insurance coverage for various types of property, casualty, and other risks. We place our
insurance coverage with various carriers in numerous jurisdictions. The types and amounts of insurance that we obtain vary
from time to time and from location to location, depending on availability, cost, and our decisions with respect to risk
retention. The policies are subject to deductibles and exclusions that result in our retention of a level of risk on a self-
insurance
basis. Losses not covered by insurance may be substantial and may increase our expenses, which could harm our results of
operations.
Failure to meet our production targets, resulting in undersupply or oversupply of products, may harm our business and
results of operations.
Production of integrated circuits is a complex process. Disruptions in this process can result from interruptions in our
processes, errors, and difficulties in our development and implementation of new processes; defects in materials; disruptions in
our supply of materials or resources; and disruptions at our fabrication and assembly and test facilities due to, for example,
accidents, maintenance issues, or unsafe working conditions—all of which could affect the timing of production ramps and
yields. We may not be successful or efficient in developing or implementing new production processes. The occurrence of any
of the foregoing may result in our failure to meet or increase production as desired, resulting in higher costs or substantial
decreases in yields, which could affect our ability to produce sufficient volume to meet specific product demand. The
unavailability or reduced availability of certain products could make it more difficult to implement our platform strategy. We
may also experience increases in yields. A substantial increase in yields could result in higher inventory levels and the
possibility of resulting excess capacity charges as we slow production to reduce inventory levels. The occurrence of any of
these events could harm our business and results of operations.
We may have difficulties obtaining the resources or products we need for manufacturing, assembling and testing our
products, or operating other aspects of our business, which could harm our ability to meet demand for our products and
may increase our costs.
We have thousands of suppliers providing various materials that we use in the production of our products and other aspects of
our business, and we seek, where possible, to have several sources of supply for all of those materials. However, we may rely
on a single or a limited number of suppliers, or upon suppliers in a single country, for these materials. The inability of such
suppliers to deliver adequate supplies of production materials or other supplies could disrupt our production processes or could
make it more difficult for us to implement our business strategy. In addition, production could be disrupted by the
unavailability of the resources used in production, such as water, silicon, electricity, and gases. The unavailability or reduced
availability of the materials or resources that we use in our business may require us to reduce production of products or may
require us to incur additional costs in order to obtain an adequate supply of those materials or resources. The occurrence of any
of these events could harm our business and results of operations.
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security concerns, such as armed conflict and civil or military unrest, crime, political instability, and terrorist activity;
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health concerns;
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natural disasters;
• inefficient and limited infrastructure and disruptions, such as large-scale outages or interruptions of service from
utilities or telecommunications providers and supply chain interruptions;
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differing employment practices and labor issues;
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local business and cultural factors that differ from our normal standards and practices;
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regulatory requirements and prohibitions that differ between jurisdictions; and
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restrictions on our operations by governments seeking to support local industries, nationalization of our operations, and
restrictions on our ability to repatriate earnings.