AMD 2010 Annual Report Download - page 32

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In the event of a change of control, we may not be able to repurchase our outstanding debt as required by
the applicable indentures, which would result in a default under the indentures.
Upon a change of control, we will be required to offer to repurchase all of the 7.75% Notes and 8.125%
Notes then outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to,
but excluding, the repurchase date. Moreover, the indentures governing our 5.75% Notes and 6.00% Notes
require us to offer to repurchase these securities upon certain change of control events. As of December 25, 2010,
the aggregate outstanding principal amount of the outstanding 8.125% Notes, 5.75% Notes, 7.75% Notes and
6.00% Notes was $2.3 billion. Future debt agreements may contain similar provisions. We may not have the
financial resources to repurchase our indebtedness.
The semiconductor industry is highly cyclical and has experienced severe downturns that materially
adversely affected, and may in the future materially adversely affect, our business.
The semiconductor industry is highly cyclical and has experienced significant downturns, often in
conjunction with constant and rapid technological change, wide fluctuations in supply and demand, continuous
new product introductions, price erosion and declines in general economic conditions. We have incurred
substantial losses in recent downturns, due to:
• substantial declines in average selling prices;
• the cyclical nature of supply/demand imbalances in the semiconductor industry;
• a decline in demand for end-user products (such as PCs) that incorporate our products;
• excess inventory levels in the channels of distribution, including those of our customers; and
• excess production capacity.
Global economic uncertainty and weakness have also impacted the semiconductor market as consumers and
businesses have deferred purchases, which negatively impacted demand for our products. Our financial
performance has been, and may in the future be, negatively affected by these downturns.
The demand for our products depends in part on the market conditions in the industries and geographies
into which they are sold. Fluctuations in demand for our products or a market decline in any of these
industries or geographies would have a material adverse effect on our results of operations.
Our business is dependent upon the market for desktop and notebook PCs and servers. Historically, a
significant portion of our Computing Solutions revenue has been related to desktop PCs. Industry-wide
fluctuations in the computer marketplace have materially adversely affected us in the past, are currently affecting
us and may materially adversely affect us in the future. As a result of macroeconomic challenges that recently
affected the global economy in 2008 and 2009, end-user demand for PCs and servers decreased significantly.
Although end-user PC demand increased in the first half of 2010, the pace of that growth slowed in the second
half of 2010. In addition, form factors have steadily shifted from desktop PCs to mobile PCs over the past three
years, and we expect that this trajectory will continue.
The growth of our business is also dependent on continued demand for our products from high-growth
global markets. If demand from these markets is below our expectations, sales of our products may decrease,
which could have a material adverse effect on us.
The markets in which our products are sold are highly competitive.
The markets in which our products are sold are very competitive, and delivering the latest and best products
to market on a timely basis is critical to achieving revenue growth. We believe that the main factors that
determine our product competitiveness are timely product introductions, product quality, power consumption
(including battery life), reliability, selling price, speed, size (or form factor), cost, adherence to industry standards
(and the creation of open industry standards), software and hardware compatibility and stability and brand
awareness.
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