AMD 2007 Annual Report Download - page 43

Table of Contents
such laws, regulations and permits. If we violate or fail to comply with any of them, a range of consequences could result, including fines, suspension of
production, alteration of manufacturing processes, import/export restrictions, sales limitations, criminal and civil liabilities or other sanctions. We could also be
held liable for any and all consequences arising out of exposure to hazardous materials used, stored, released, disposed of by us or located at or under our
facilities or other environmental or natural resource damage.
Certain environmental laws, including the U.S. Comprehensive, Environmental Response, Compensation and Liability Act of 1980, or the Superfund Act,
impose strict, joint and several liability on current and previous owners or operators of real property for the cost of removal or remediation of hazardous
substances and impose liability for damages to natural resources. These laws often impose liability even if the owner or operator did not know of, or was not
responsible for, the release of such hazardous substances. These environmental laws also assess liability on persons who arrange for hazardous substances to be
sent to disposal or treatment facilities when such facilities are found to be contaminated. Such persons can be responsible for cleanup costs even if they never
owned or operated the contaminated facility. We have been named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale, California.
Although we have not yet been, we could be named a potentially responsible party at other Superfund or contaminated sites in the future. In addition,
contamination that has not yet been identified could exist at our other facilities.
Environmental laws are complex, change frequently and have tended to become more stringent over time. For example, the European Union and China are
two among a growing number of jurisdictions that have enacted in recent years restrictions on the use of lead, among other chemicals, in electronic
products. These regulations affect semiconductor packaging. There is a risk that the cost, quality and manufacturing yields of lead-free products may be less
favorable compared to lead-based products or that the transition to lead-free products may produce sudden changes in demand, which may result in excess
inventory. Other regulatory requirements potentially affecting our manufacturing processes and the design and marketing of our products are in development
throughout the world. While we have budgeted for foreseeable associated expenditures, we cannot assure you that future environmental legal requirements will
not become more stringent or costly in the future. Therefore, we cannot assure you that our costs of complying with current and future environmental and health
and safety laws, and our liabilities arising from past and future releases of, or exposure to, hazardous substances will not have a material adverse effect on us.
Our worldwide operations could be subject to natural disasters and other business disruptions, which could harm our future revenue and financial
condition and increase our costs and expenses.
All of our wafer fabrication capacity for microprocessors is located in Germany. Nearly all product assembly and final testing of our microprocessor
products is performed at manufacturing facilities in China, Malaysia and Singapore. The independent foundries we use to manufacture our graphics and chipset
products and products for consumer electronics devices are located in the Asia-Pacific region and inventory is stored there, particularly in Taiwan. Many of our
assembly, testing and packaging suppliers for our graphics products are also located in southern Taiwan. On September 22, 1999, Taiwan suffered a major
earthquake that measured 7.6 on the Richter scale and disrupted the operations of these manufacturing suppliers and contributed to a temporary shortage of
graphics processors. Additional earthquakes, fires or other occurrences that disrupt our manufacturing suppliers may occur in the future. To the extent that the
supply from our independent foundries or suppliers is interrupted for a prolonged period of time or terminated for any reason, we may not have sufficient time to
replace our supply of products manufactured by those foundries.
Moreover, our corporate headquarters are located near major earthquake fault lines in California. In the event of a major earthquake, or other natural or
manmade disaster, we could experience loss of life of our employees, destruction of facilities or business interruptions, any of which could materially adversely
affect us.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008