AMD 2012 Annual Report Download - page 35

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our microprocessors, including APU products. Similarly, certain non-proprietary materials or components such
as memory, printed circuit boards (PCBs), substrates and capacitors used in the manufacture of our graphics
products are currently available from only a limited number of sources. Because some of the equipment and
materials that we and our third party manufacturing suppliers purchase are complex, it is sometimes difficult to
substitute one supplier for another.
From time to time, suppliers may extend lead times, limit supply or increase prices due to capacity
constraints or other factors. Also, some of these materials and components may be subject to rapid changes in
price and availability. Interruption of supply or increased demand in the industry could cause shortages and price
increases in various essential materials. Dependence on a sole supplier or a limited number of suppliers
exacerbates these risks. If we are unable to procure certain of these materials for our back-end manufacturing
operations, or our third-party foundries or manufacturing suppliers are unable to procure materials for
manufacturing our products, our business would be materially adversely affected.
Our issuance to West Coast Hitech L.P. (WCH) of warrants to purchase 35,000,000 shares of our common
stock, if and when exercised by WCH, will dilute the ownership interests of our existing stockholders, and the
conversion of the remainder of our 6.00% Notes may dilute the ownership interest of our existing
stockholders.
The warrants issued to WCH became exercisable in July 2009. Any issuance by us of additional shares to
WCH upon exercise of the warrants will dilute the ownership interests of our existing stockholders. Any sales in
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 6.00% Notes may dilute the ownership interests of our existing
stockholders. The conversion of 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 6.00% Notes. Any sales in the
public market of our common stock issuable upon conversion of the 6.00% Notes could adversely affect
prevailing market prices of our common stock. In addition, the conversion of the 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.
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