AMD 1999 Annual Report Download - page 132

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The table below provides information about our foreign currency forward and
option contracts as of December 26, 1999 and December 27, 1998. All of our
foreign currency forward contracts mature within the next 12 months.
1999 1998
----------------------------------------- ---------------------------------------
Notional Average Estimated Notional Average Estimated
(Thousands except contract rates) amount contract rate fair value amount contract rate fair value
--------------------------------------------------------------------------------------------------------------------
Foreign currency forward contracts:
Japanese yen $ 2,425 103.11 $ 4 $ 6,865 117.07 $ (22)
German mark -- -- -- 5,407 1.66 (7)
British pound 1,219 1.63 10 840 1.68 4
Swiss franc 318 1.57 (1) -- -- --
European Union euro 45,101 1.03 (611) -- -- --
Singapore dollar 8,382 1.67 17 -- -- --
Thai baht 1,245 40.18 48 -- -- --
--------------------------------------------------------------------------------------------------------------------
$58,690 $(533) $ 13,112 $ (25)
--------------------------------------------------------------------------------------------------------------------
Purchased call options contracts:
German mark $ -- -- $ -- $ 75,000 1.45 $ 45
Purchased put options contracts:
German mark $ -- -- $ -- $220,000 1.85 $ 1,547
Written call options contracts:
German mark $ -- -- $ -- $220,000 1.69 $(13,469)
--------------------------------------------------------------------------------------------------------------------
RISK FACTORS
Our business, results of operations and financial condition are subject to a
number of risk factors, including the following:
Microprocessor Products
Future Dependence on the AMD Athlon Microprocessor. We will need to successfully
market the AMD Athlon microprocessor, our seventh-generation Microsoft Windows
compatible microprocessor, in order to increase our microprocessor product
revenues in 2000 and beyond, and to benefit fully from the substantial financial
investments and commitments we have made and continue to make related to
microprocessors. We commenced initial shipments of AMD Athlon microprocessors in
June 1999 and began volume shipments in the second half of 1999. Our production
and sales plans for AMD Athlon microprocessors are subject to numerous risks and
uncertainties, including:
. our ability to produce AMD Athlon microprocessors in the volume and with
the feature set required by customers on a timely basis;
. our ability to design, manufacture and deliver processor modules through
subcontractors;
. the availability and acceptance of motherboards and chipsets designed for
AMD Athlon microprocessors;
. market acceptance of AMD Athlon microprocessors;
. our ability to maintain average selling prices of AMD Athlon
microprocessors despite aggressive Intel pricing, including market rebates and
product bundling of microprocessors, motherboards, chipsets and combination
thereof, or customer relationships which affect market demand;
. the successful development and installation of 0.18-micron process
technology and copper interconnect technology;
. the pace at which we are able to transition production in Fab 25 from 0.25-
to 0.18-micron process technology and to ramp production in Dresden Fab 30 on
0.18-micron copper interconnect process technology;
. the use and market acceptance of a non-Intel processor bus (adapted by us
from Digital Equipment Corporation's EV6 bus) in the design of the AMD Athlon
microprocessor, and the availability of chipsets from vendors who will develop,
manufacture and sell chipsets with the EV6 interface in volumes required by us;
. our ability to expand our chipset and system design capabilities; and
. the availability to our customers of cost and performance competitive
Static Random Access Memories (SRAMs) (including Tag chips) if Intel controls
the market for SRAM production capacity through its relationships with SRAM
manufacturers.
If we fail to achieve market acceptance of AMD Athlon microprocessors, if our
subcontractors are unable to provide the processor modules we require or if
chipsets and motherboards which are compatible with AMD Athlon microprocessors
are not made available, our business will be materially and adversely affected.
Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 2000