AMD 2005 Annual Report Download - page 62

Table of Contents
significant market share to Intel or exited the business. If we are unable to secure sufficient support for our microprocessor products from these designers and
manufacturers, or if suppliers of chipsets cannot provide us with sufficient quantities of chipset products to meet our demand, our business would be materially
adversely affected.
If we are ultimately unsuccessful in any of our antitrust lawsuits against Intel, our business may be materially adversely affected.
On June 27, 2005, we filed an antitrust complaint against Intel Corporation and Intel’s Japanese subsidiary, Intel Kabushiki Kaisha, which we refer to
collectively as Intel, in the United States District Court for the District of Delaware under Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the
Clayton Act, and the California Business and Professions Code. Our complaint alleges that Intel has unlawfully maintained a monopoly in the x86
microprocessor market by engaging in anti-competitive financial and exclusionary business practices that limit the ability and/or incentive of Intel’s customers in
dealing with AMD. Also, on June 30, 2005, our subsidiary in Japan, AMD Japan K.K., filed an action in Japan against Intel K.K. in the Tokyo High Court and
the Tokyo District Court for damages arising from violations of Japan’s Antimonopoly Act.
If our antitrust lawsuits against Intel are ultimately unsuccessful, our business, including our ability to increase market share in the microprocessor market,
could be materially adversely affected.
The loss of a significant customer may have a material adverse effect on us.
Collectively, our top five OEM and distributor Computation Products customers accounted for a significant percentage of our total net sales in 2005. If one
of these customers decided to stop buying our products, or if one of these customers were materially to reduce its operations or its demand for our products, we
would be materially adversely affected.
If we fail to keep pace with new product designs and improvements or if we pursue technologies that do not become commercially accepted, customers
may not buy our products and we may be adversely affected.
Our success depends to a significant extent on the development, qualification, implementation and acceptance of new product designs and improvements
that provide value to our customers. Our ability to develop and qualify new products and related technologies to meet evolving industry requirements, at prices
acceptable to our customers and on a timely basis are significant factors in determining our competitiveness in our target markets. If we are delayed in
developing or qualifying new products or technologies, such as high performance, low-power processors, we could be materially adversely affected.
Our operating results are subject to quarterly and seasonal sales patterns.
A substantial portion of our quarterly sales have historically been made in the last month of the quarter. This uneven sales pattern makes prediction of net
sales for each financial period difficult and increases the risk of unanticipated variations in quarterly results and financial condition. In addition, our operating
results tend to vary seasonally. For example, demand in the retail sector of the PC market is often stronger during the fourth quarter as a result of the winter
holiday season. European sales are often weaker during the summer months. Many of the factors that create and affect seasonal trends are beyond our control.
Manufacturing capacity constraints and manufacturing capacity utilization rates may have a material adverse affect on us.
There may be situations in which our manufacturing facilities are inadequate to meet the demand for certain of our products. Our inability to obtain
sufficient manufacturing capacity to meet demand, either in our own facilities or through foundry or similar arrangements with third parties, could have a
material adverse effect on us.
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Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006