AMD 2012 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2012 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

features may rely on intellectual property acquired from third parties. The design requirements necessary to meet
consumer demand for more features and greater functionality from semiconductor products may exceed the
capabilities of the third-party intellectual property or development tools available to us. If the third-party
intellectual property that we use becomes unavailable or fails to produce designs that meet customer demands,
our business could be materially adversely affected.
We depend on third-party companies for the design, manufacture and supply of motherboards, BIOS software
and other computer platform components to support our microprocessor and graphics businesses.
We depend on third-party companies for the design, manufacture and supply of motherboards, BIOS
software and other components that our customers utilize to support our microprocessor and GPU offerings. We
also rely on our add-in-board partners (AIBs) to support our GPU business. In addition, our microprocessors are
not designed to function with motherboards and chipsets designed to work with Intel microprocessors. If the
designers, manufacturers, AIBs and suppliers of motherboards and other components decrease their support for
our product offerings, our business could be materially adversely affected.
If we lose Microsoft Corporation’s support for our products or other software vendors do not design and
develop software to run on our products, our ability to sell our products could be materially adversely affected.
Our ability to innovate beyond the x86 instruction set controlled by Intel depends partially on Microsoft designing
and developing its operating systems to run on or support our microprocessor products. With respect to our graphics
products, we depend in part on Microsoft to design and develop its operating system to run on or support our graphics
products. Similarly, the success of our products in the market, such as our APU products, is dependent on independent
software providers designing and developing software to run on our products. If Microsoft does not continue to design
and develop its operating systems so that they work with our x86 instruction sets or does not continue to develop and
maintain their operating systems to support our graphics products, independent software providers may forego
designing their software applications to take advantage of our innovations and customers may not purchase PCs with
our products. In addition, some software drivers sold with our products are certified by Microsoft. If Microsoft did not
certify a driver, or if we otherwise fail to retain the support of Microsoft or other software vendors, our ability to
market our products would be materially adversely affected.
The loss of a significant customer may have a material adverse effect on us.
Collectively, our top five customers accounted for approximately 51% of our net revenue in 2012. On a
segment basis, during 2012, five customers accounted for approximately 59% of the net revenue of our
Computing Solutions segment and five customers accounted for approximately 48% of the net revenue of our
Graphics segment. We expect that a small number of customers will continue to account for a substantial part of
revenues of our microprocessor and graphics businesses in the future. If one of our top microprocessor or
graphics business customers decided to stop buying our products, or if one of these customers were to materially
reduce its operations or its demand for our products, our business would be materially adversely affected
Our inability to attract and retain qualified personnel may hinder our business.
Much of our future success depends upon the continued service of numerous qualified engineering,
marketing, sales and executive personnel. In the fourth quarter of 2012, we implemented a restructuring plan that
includes a workforce reduction of approximately 14%. If we do not manage this headcount reduction effectively,
we may not able to retain qualified personnel or attract qualified personnel in the future necessary for our
operations, which could materially adversely affect our business.
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, 8.125% Notes
and 7.50% Notes then outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if
25