AMD 2012 Annual Report Download - page 32

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• enter into certain types of transactions with affiliates; and
• consolidate or merge or sell our assets as an entirety or substantially as an entirety.
The agreements governing our borrowing arrangements contain cross-default provisions whereby a default
under one agreement would likely result in cross defaults under agreements covering other borrowings. For
example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an
amount in excess of $50 million would cause a cross default under the indentures governing our 7.75% Notes,
8.125% Notes, 7.50% Notes and 6.00% Notes. The occurrence of a default under any of these borrowing
arrangements would permit the applicable note holders to declare all amounts outstanding under those borrowing
arrangements to be immediately due and payable. If the note holders or the trustee under the indentures
governing our 7.75% Notes, 8.125% Notes, 7.50% Notes or 6.00% Notes accelerate the repayment of
borrowings, we cannot assure you that we will have sufficient assets to repay those borrowings.
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 (including enabling state
of the art visual experience), 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.
We expect that competition will continue to be intense due to rapid technological changes, frequent product
introductions by our competitors of products that may provide better performance or may include additional
features that render our products uncompetitive and aggressive pricing by competitors, especially during
challenging economic times. For instance, with the introduction of our APU products and other competing
solutions, we believe that demand for additional discrete graphic cards may decrease in the future due to both the
improvement of the quality of Intel’s integrated graphics and the graphics performance of our APUs. Using a
more advanced process technology can contribute to lower product manufacturing costs and improve a product’s
performance and power efficiency. If competitors introduce competitive new products into the market before us,
our business could be adversely affected. Some competitors may have greater access or rights to companion
technologies, including interface, processor and memory technical information. Competitive pressures could
adversely impact the demand for our products, which could harm our business.
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 mobile PCs and servers. Form factors have
increasingly shifted from desktop PCs to mobile PCs, with tablets being one of the fastest growing form factors.
Historically, a significant portion of our Computing Solutions revenue has been related to desktop PCs.
Currently, approximately 85% of our business is focused on the legacy PC portions of the market, projected to
have slowing growth over the next several years. Industry-wide fluctuations in the computer marketplace have
materially adversely affected us in the past and may materially adversely affect us in the future. For example, our
revenue in the second half of 2012 was adversely affected, in part, by the overall weakness in the global economy
and weak consumer demand for end-user PC products, which impacted sales. We do not expect PC market
conditions to improve during the first half of 2013.
Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual
property.
In the design and development of new products and product enhancements, we rely on third-party
intellectual property such as software development tools and hardware testing tools. Furthermore, certain product
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