AMD 2010 Annual Report Download - page 40

Environmental laws are complex, change frequently and have tended to become more stringent over time.
For example, the European Union (EU) 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 with other
countries considering similar restrictions. 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. The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to
improve the transparency and accountability concerning the supply of minerals coming from the conflict zones of
the DRC. As a result, the SEC is required to promulgate by April 15, 2011, new annual disclosure and reporting
requirements for those companies who use “conflict” minerals mined from the DRC and adjoining countries in
their products. The implementation of these requirements could affect the sourcing and availability of minerals
used in the manufacture of semiconductor devices. As a result, there may only be a limited pool of suppliers who
provide conflict free metals, and we cannot assure you that we will be able to obtain products in sufficient
quantities or at competitive prices. Also, since our supply chain is complex, we may face reputational challenges
with our customers and other stakeholders if we are unable to sufficiently verify the origins for all metals used in
our products through the due diligence procedures that we implement.
Other regulatory requirements potentially affecting our back-end manufacturing processes and the design
and marketing of our products are in development throughout the world. In addition, a number of jurisdictions
including the EU, Australia and China are considering market entry requirements for computers based on the
ENERGY STAR specification (Version 5.0) as well as additional limits. The proposed requirements, which have
not yet been finalized, could potentially be approved and implemented as early as the fourth quarter of 2011. If
such requirements are implemented in the proposed time frame and to the proposed specification there is the
potential for certain of our microprocessor, chipset and GPU products, as incorporated in desktop and mobile
PCs, being excluded from these markets which could materially adversely affect us.
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 business is subject to potential tax liabilities.
We are subject to income taxes in the United States, Canada and other foreign jurisdictions. Significant
judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our
business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Although we believe our tax estimates are reasonable, we cannot assure you that the final determination of any
tax audits and litigation will not be materially different from that which is reflected in historical income tax
provisions and accruals. Should additional taxes be assessed as a result of an audit or litigation, there could be a
material adverse effect on our cash, income tax provision and net income in the period or periods for which that
determination is made.
ITEM 1B. UNRESOLVED STAFF COMMENTS
We have not received any written comments that were issued not less than 180 days before December 25,
2010, the end of the fiscal year covered by this report, from the Securities and Exchange Commission staff
regarding our periodic or current reports under the Securities Exchange Act of 1934 that remain unresolved.
ITEM 2. PROPERTIES
At December 25, 2010, we owned principal research and development, engineering, manufacturing,
warehouse and administrative facilities located in the United States, Canada, Taiwan, China, Singapore and
Malaysia. These facilities totaled approximately 2.4 million square feet.
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