AMD 2002 Annual Report Download - page 45

Table of Contents
instances, our agreements with distributors protect their inventory of our products against price reductions, as well as products that are slow moving or have been
discontinued. These agreements, which may be canceled by either party on a specified notice, generally allow for the return of our products. The price protection
and return rights we offer to our distributors could materially adversely affect us if distributors exercise these rights as a result of an unexpected significant
decline in the price of our products or otherwise.
If we cannot adequately protect our technology or other intellectual property, in the United States and abroad, through patents, copyrights, trade secrets,
trademarks and other measures, we may lose a competitive advantage and incur significant expenses. We may not be able to adequately protect our technology
or other intellectual property, in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures. 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 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, if 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 adverse effect on us. We cannot assure you that litigation related to the intellectual property rights of us and others
will always be avoided or successfully concluded.
Failure to comply with any of the applicable environmental regulations could result in a range of consequences including fines, suspension of production,
alteration of manufacturing process, cessation of operations or sales, and criminal and civil liabilities. Existing or future regulations could require us to
procure expensive pollution abatement or remediation equipment; to modify product designs; or to incur other expenses associated with compliance 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.
Terrorist attacks, such as the attacks that occurred in New York and Washington, DC on September 11, 2001, and other acts of violence or war may
materially adversely affect us. Terrorist attacks may negatively affect our operations. These attacks or armed conflicts may directly impact our physical
facilities or those of our suppliers or customers. Furthermore, these attacks may make travel and the transportation of our products more difficult and more
expensive and ultimately affect our sales.
Also as a result of terrorism, the United States may be included in armed conflicts that could have a further impact on our sales, our supply chain, and our
ability to deliver products to our customers. Political and economic instability in some regions of the world may also result and could negatively impact our
business. The consequences of armed conflicts are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business or
your investment.
More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and
worldwide financial markets and economy. They also could result in or exacerbate economic recession in the United States or abroad. Any of these occurrences
could have a significant impact on our operating results, revenues and costs and may result in the volatility of the market price for our securities and on the future
prices of our securities.
Our corporate headquarters, assembly and research and development activities are located in an earthquake zone and these operations could be
interrupted in the event of an earthquake. Our corporate
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003