AMD 2000 Annual Report Download - page 393

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
there can be no assurance that a new agreement will be successfully negotiated.
The lack of a patent cross-license with Intel could lead to expensive and time-
consuming litigation the outcomes of which could have a material effect on our
business.
Intel aside, it is possible that:
. we will be unable to protect our technology or other intellectual property
adequately through patents, copyrights, trade secrets, trademarks and other
measures;
. patent applications that we may file will not be issued;
. foreign intellectual property laws will not protect our intellectual
property rights;
. any patent licensed by or issued to us will be challenged, invalidated or
circumvented or that the rights granted thereunder will not provide
competitive advantages to us; and
. others will independently develop similar products, duplicate our products
or design around our patents and other rights.
From time to time, we have been notified that we may be infringing intellectual
property rights of others. If any such claims are asserted against us, we may
seek to obtain a license under the third party's intellectual property rights.
We could decide, in the alternative, to resort to litigation to challenge such
claims. Such challenges could be extremely expensive and time-consuming and
could have a material adverse effect on our business. We cannot give any
assurance that all necessary licenses can be obtained on satisfactory terms, or
whether litigation may always be avoided or successfully concluded.
California Energy Crisis. California's two largest power companies are currently
experiencing a power shortage that has resulted in "rolling" blackouts to
maintain the stability of the state power grid. Certain of AMD's California
facilities, including headquarters, product design, sales and process technology
development facilities, are susceptible to power interruptions as long as the
energy crisis continues. One of the power companies, PG&E, has filed an
additional contingency plan with the California Public Utilities Commission that
would, if implemented, result in lengthy and routine power interruptions that
would directly impact our leading-edge process technology development efforts,
which could have a material adverse impact on our business. We are continuing to
assess the impact of the energy crisis on our operations.
Environmental Regulations. We could possibly be subject to fines, suspension of
production, alteration of our manufacturing processes or cessation of our
operations if we fail to comply with present or future governmental regulations
related to the use, storage, handling, discharge or disposal of toxic, volatile
or otherwise hazardous chemicals used in the manufacturing process. Such
regulations could require us to acquire expensive remediation equipment or to
incur other expenses to comply with environmental regulations. Any failure to
control the use of, disposal or storage of, or adequately restrict the discharge
of, hazardous substances could subject us to future liabilities and could have a
material adverse effect on our business.
International Sales. Our international sales operations entail political and
economic risks, including expropriation, currency controls, exchange rate
fluctuations, changes in freight rates and changes in rates and exemptions for
taxes and tariffs.
-26-
Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001