AMD 1995 Annual Report Download - page 9

companies in the high technology industry may be more difficult to accomplish
than in other industries. The combination of the companies will require, among
other matters, integration of AMD's and NexGen's respective engineering
personnel and product offerings, coordination of their sales and marketing and
research and development efforts and implementation of the manufacturing of
NexGen's products in AMD's facilities. There can be no assurance that the
integration will be accomplished smoothly or successfully. The difficulties of
the integration may be increased by the necessity of coordinating geographically
separated organizations. The integration of certain operations will require the
dedication of management resources which may divert the efforts of AMD personnel
from other matters. The inability of management to integrate the operations of
the two companies successfully could have a material adverse effect on the
business and results of operations of the Corporation. In addition, as commonly
occurs with mergers of technology companies, aggressive competitors may
undertake formal initiatives during the integration phase to attract customers
and to recruit key employees through various incentives.
Prior to the Merger, NexGen granted limited manufacturing rights regarding
certain of its current and future products, including the Nx586(R) and Nx686
(tm) microprocessors, to IBM and Compaq Computer Corporation (Compaq). The
rights of IBM and Compaq to produce NexGen products for their own use and the
rights of IBM to produce limited volumes of NexGen products for sale to third
parties could reduce the potential market for NexGen products produced by AMD,
the profit margin achievable with respect to such products, or both.
Products
AMD began over twenty-five years ago as an alternate-source manufacturer of
integrated circuits originally developed by other suppliers. Over time, AMD has
become a manufacturer of proprietary products. The Corporation has made a
significant investment in research and development, which has contributed to its
becoming a leader in manufacturing and process
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Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 1996