AMD 2001 Annual Report Download - page 18

we were unable to procure certain of these materials, we might have to reduce
our manufacturing operations. Such a reduction could have a material adverse
effect on our business. To date, we have not experienced significant difficulty
in obtaining the raw materials required for our manufacturing operations.
Environmental Regulations
Our business involves the use of hazardous materials. If we fail to comply
with governmental regulations related to the use, storage, handling, discharge
or disposal of toxic, volatile or otherwise hazardous chemicals used in our
manufacturing processes, we may be subject to fines, suspension of production,
alteration of our manufacturing processes or cessation of our operations. Such
regulations could require us to procure 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. Violations of
environmental laws may result in criminal and civil liabilities.
Intellectual Property and Licensing
We have been granted over 4,300 United States patents and have several
thousand patent applications pending in the United States. In certain cases, we
have filed corresponding applications in foreign jurisdictions. We expect to
file future patent applications in both the United States and abroad on
significant inventions, as we deem appropriate.
In May 2001, we signed a 10-year cross-licence agreement with Intel
Corporation. In addition, we have entered into numerous cross-licensing and
technology exchange agreements with other companies under which we both
transfer and receive technology and intellectual property rights. Although we
attempt to protect our intellectual property rights, in the United States and
abroad, through patents, copyrights, trade secrets and other measures, we may
not be able to adequately protect our technology or other intellectual property
or prevent others from independently developing similar technology. Any patent
licensed by us or issued to us could be challenged, invalidated or
circumvented, or rights granted thereunder may not provide a competitive
advantage to us. Further, patent applications that we file may not be issued.
Despite our efforts to protect our rights, others may independently develop
similar products, duplicate our products or design around our patents and other
rights. In addition, it is difficult to cost-effectively monitor compliance
with, and enforce, our intellectual property rights on a worldwide basis.
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 cannot assure you that all necessary licenses can be
obtained on satisfactory terms, or at all. 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 and adverse
effect on us. We cannot assure you that litigation related to the intellectual
property rights of us or others will always be avoided or successfully
concluded.
Backlog
We manufacture and market standard lines of products. Consequently, a
significant portion of our sales are made from inventory on a current basis.
Sales are made primarily pursuant to purchase orders for current delivery or
agreements covering purchases over a period of time, which orders or agreements
may be revised or canceled without penalty. Generally, in light of current
industry practice and experience, we do not believe that such agreements
provide meaningful backlog figures or are necessarily indicative of actual
sales for any succeeding period.
Employees
On January 27, 2002, we employed approximately 14,415 employees, none of
whom are represented by collective bargaining arrangements. We believe that our
relationship with our employees is good.
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002