AMD 2012 Annual Report Download - page 36

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 is used in game consoles. The revenues that we receive from these products
generally 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.
If we fail to maintain the efficiency of our supply chain as we respond to changes in customer demand for our
products, our business could be materially adversely affected.
Our ability to meet customer demand for our products depends, in part, on our ability to deliver the products
our customers want on a timely basis. Accordingly, we rely on our supply chain for the manufacturing,
distribution and fulfillment of our products. As we continue to grow our business, acquire new customers and
strengthen relationships with existing customers, the efficiency of our supply chain will become increasingly
important because many of our customers tend to have specific requirements for particular products, and specific
time-frames in which they require delivery of these products. If we are unable to consistently deliver the right
products to our customers on a timely basis in the right locations, our customers may reduce the quantities they
order from us, which could have a material adverse effect on our business.
We outsource to third parties certain supply-chain logistics functions, including portions of our product
distribution, transportation management, and information technology support services.
We rely on third-party providers to operate our regional product distribution centers and to manage the
transportation of our work-in-process and finished products among our facilities, our manufacturing suppliers
and to our customers. In addition, we rely on third parties to provide certain information technology services to
us, including helpdesk support, desktop application services, business and software support applications, server
and storage administration, data center operations, database administration, and voice, video and remote access.
We cannot guarantee that these providers will fulfill their respective responsibilities in a timely manner in
accordance with the contract terms, in which case our internal operations and the distribution of our products to
our customers could be materially adversely affected. Also, we cannot guarantee that our contracts with these
third-party providers will be renewed, in which case we would have to transition these functions in-house or
secure new providers, which could have a material adverse effect on our business if the transition is not executed
appropriately.
We may be subject to disruptions, failures or cyber-attacks in our information technology systems and network
infrastructures that could have a material adverse effect on us.
We maintain and rely extensively on information technology systems and network infrastructures for the
effective operation of our business. We also hold large amounts of data in various data center facilities around
the world about us, our customers, suppliers, partners and other third parties, which our business depends upon.
A disruption, infiltration or failure of our information technology systems or any of our data centers as a result of
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