AMD 2003 Annual Report Download - page 20

Table of Contents
semiconductor products worldwide. In addition, FASL LLC has granted us the right to sublicense FASL LLC patents and patent applications. FASL LLC has
entered into a similar cross-license agreement (without the grant of sublicense rights) with Fujitsu Limited. These patent cross-license agreements terminate upon
the later of July 1, 2013 or upon the transfer of all of the respective party’s ownership or economic interest in FASL LLC, unless earlier terminated upon 30 days
notice following a change of control of the other party. We have also entered into a patent cross-license with Fujitsu Limited whereby each party has been
granted a non-exclusive license under certain of the other party’s respective semiconductor-related patents. This patent cross-license agreement terminates upon
the tenth anniversary of the agreement, unless earlier terminated upon 30 days notice following a change of control of the other party.
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. Furthermore, 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 we will be able to obtain all necessary licenses 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 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
As of March 1, 2004, we (excluding FASL LLC and its subsidiaries) employed approximately 7,400 employees, none of whom are represented by
collective bargaining arrangements. Also, as of March 1, 2004, FASL LLC and its subsidiaries employed approximately 6,900 employees. In addition,
approximately an aggregate of 180 individuals remained employed by us or Fujitsu but were made available on a full-time basis to FASL LLC or its subsidiaries.
FASL LLC expects that substantially all of these individuals will become employees of FASL LLC or its subsidiaries in 2004 and 2005. Certain employees of
FASL JAPAN are represented by a company union. We believe that our relationship with our employees is good and that FASL LLC’s relationship with its
employees is good.
15
Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004