AMD 2013 Annual Report Download - page 36

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.
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.
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, to our manufacturing suppliers
and to our customers. In addition, we rely on third parties to provide certain information technology services to
us, including help desk 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.
Our business is dependent upon the proper functioning of our internal business processes and information
systems and modification or interruption of such systems may disrupt our business, processes and internal
controls.
We rely upon a number of internal business processes and information systems to support key business
functions, and the efficient operation of these processes and systems is critical to our business. Our business
processes and information systems need to be sufficiently scalable to support the growth of our business and may
require modifications or upgrades that expose us to a number of operational risks. We are currently pursuing
initiatives to transform and optimize our business operations through the reengineering of certain processes,
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