AMD 2010 Annual Report Download - page 34

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the public market by WCH of any shares owned by WCH could adversely affect prevailing market prices of our
common stock, and the anticipated exercise by WCH of the warrants could depress the price of our common
stock.
Moreover, the conversion of our remaining 5.75% Notes and 6.00% Notes may dilute the ownership
interests of our existing stockholders. The conversion of the 5.75% Notes and the 6.00% Notes could have a
dilutive effect on our earnings per share to the extent that the price of our common stock exceeds the conversion
price of the 5.75% Notes and 6.00% Notes. Any sales in the public market of our common stock issuable upon
conversion of the 5.75% Notes or 6.00% Notes could adversely affect prevailing market prices of our common
stock. In addition, the conversion of the 5.75% Notes or 6.00% Notes into cash and shares of our common stock
could depress the price of our common stock.
If our products are not compatible with some or all industry-standard software and hardware, we could be
materially adversely affected.
Our products may not be fully compatible with some or all industry-standard software and hardware.
Further, we may be unsuccessful in correcting any such compatibility problems in a timely manner. If our
customers are unable to achieve compatibility with software or hardware after our products are shipped in
volume, we could be materially adversely affected. In addition, the mere announcement of an incompatibility
problem relating to our products could have a material adverse effect on our business.
Costs related to defective products could have a material adverse effect on us.
Products as complex as those we offer may contain defects or failures when first introduced or when new
versions or enhancements to existing products are released. We cannot assure you that, despite our testing
procedures, errors will not be found in new products or releases after commencement of commercial shipments
in the future, which could result in loss of or delay in market acceptance of our products, material recall and
replacement costs, delay in recognition or loss of revenues, writing down the inventory of defective products, the
diversion of the attention of our engineering personnel from product development efforts, defending against
litigation related to defective products or related property damage or personal injury, and damage to our
reputation in the industry and could adversely affect our relationships with our customers. In addition, we may
have difficulty identifying the end customers of the defective products in the field. As a result, we could incur
substantial costs to implement modifications to correct defects. Any of these problems could materially adversely
affect our business.
We could be subject to potential product liability claims if one of our products causes, or merely appears to
have caused, an injury. Claims may be made by consumers or others selling our products, and we may be subject
to claims against us even if an alleged injury is due to the actions of others. A product liability claim, recall or
other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a
material adverse effect on our business.
Our receipt of royalty revenues is dependent upon our technology being designed into third-party
products and the success of those products.
Our graphics technology for game consoles is used in game consoles, including the Nintendo Wii and
Microsoft Xbox 360. The revenues that we receive from these products are in the form of non-recurring
engineering fees charged for design and development services, as well as royalties paid to us by these third
parties. Our royalty revenues are directly related to the sales of these products and reflective of their success in
the market. If these third parties do not include our graphics technology in future generations of their game
consoles, our revenues from royalties would decline significantly. Moreover, we have no control over the
marketing efforts of these third parties and we cannot make any assurances that sales of those products will
achieve expected levels in the current or future fiscal years. Consequently, the revenues from royalties expected
by us from these products may not be fully realized, and our operating results may be adversely affected.
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