AMD 1998 Annual Report Download - page 224

or in the ability to process transactions, send invoices or engage in other
normal business activities.
Our multi-step Year 2000 readiness plan includes development of corporate
awareness, assessment of internal systems, project planning, project
implementation (including remediation, upgrading and replacement), validation
testing and contingency planning for both information technology (IT) and non-IT
internal systems.
The Plan. Our plan covers four areas that are critical to our business
operations:
. Information Technology, which includes application software,
infrastructure and network engineering and telecommunications;
. Manufacturing, which includes wafer fabrication facilities, assembly and
test facilities, and third-party foundries;
. Products and product design, which includes our commercial products and
the hardware and software tools used specifically for product design; and
. Organizational support, which includes nonfabrication facilities,
security, corporate supply management, shipping, quality and
environmental health and safety (EHS) departments.
. Information Technology. We will be required to modify or replace significant
portions of our application software so that our systems will function properly
with respect to dates in the year 2000 and thereafter. Application software
consists of business software required for our corporate business systems,
including our accounts payable and receivable, payroll, order management,
general ledger and shipping applications. In December 1998, we installed new,
Year 2000 capable order management and accounts receivable systems. In addition,
we are utilizing internal resources and have contracted with a software
reengineering company which specializes in Year 2000 remediation to remediate
noncompliant code in our other application systems. The reengineering company
has completed remediation of approximately 75 percent of the remaining
application systems. Our goal is to complete remediation by June 30, 1999. It is
also our goal to complete testing and put all application systems into
production by September 30, 1999. If required modifications to existing software
are not made, or are not completed in a timely manner, the Year 2000 issue could
have a material impact on our business.
IT infrastructure consists of hardware and software other than application
software that supports our mainframe and distributed computer systems, including
PCs, operating systems and system utilities. We have tested Year 2000 capable
versions of all our infrastructure software and are in the process of
transitioning such software into productive use. Our goal is to have 95 percent
of our infrastructure hardware and software installed and in production by March
31, 1999, with the remaining 5 percent to be completed by September 30, 1999. If
we are unable to successfully transition our infrastructure software or to
install and put our infrastructure hardware and software into production as
anticipated, our business could be materially and adversely affected.
Network engineering and telecommunications consist of components in our data and
voice communication networks. Approximately 95 percent of the data components
and 70 percent of the voice components in our communication networks were Year
2000 capable as of January 31, 1999. Our goal is to make all data and voice
network components Year 2000 capable by March 31, 1999. However, we do not
currently have all of the information necessary to determine if certain of our
international network service providers will be Year 2000 capable in a timely
manner. If they are not Year 2000 capable, our business could be materially and
adversely affected.
. Manufacturing. We are dedicating substantial resources to Year 2000 issues
with respect to our wafer fabrication facilities worldwide to ensure continued
operation of all critical wafer fabrication systems in the year 2000 and
thereafter. We have retained an outside firm to provide Year 2000 program
management and implementation assistance in connection with problem assessment,
remediation and compliance testing. It is our goal that 60 percent of the
critical wafer fabrication equipment will be Year 2000 capable by June 30, 1999,
and the remaining critical equipment will be Year 2000 capable by year-end 1999.
Fabrication equipment software testing and installation is ongoing and will
continue through the fourth quarter of 1999. However, some vendors have
indicated that Year 2000 capable upgrades will not be available until mid to
late 1999. If these vendors do not provide Year 2000 capable upgrades in time
for us to install the products and to do adequate testing, or if the products do
not adequately address the Year 2000 problem, our business will be materially
and adversely affected.
Our assembly and test facilities are located in Malaysia, Thailand, China and
Singapore. The remediation and replacement process for noncompliant systems and
equipment in these facilities was approximately 75 percent complete as of
January 31, 1999. Our goal is to complete this remediation by March 31, 1999.
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Source: ADVANCED MICRO DEVIC, 10-K, March 29, 1999