AMD 2014 Annual Report Download - page 26

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Embedded and Semi-Custom segment. However, if demand for products from high growth adjacent markets is
below our expectations or if we are not able to improve cost or operational efficiencies of this business model,
we may not realize benefits from our business strategy. Despite our efforts, we may not be able to effectively
implement our strategy in a timely manner to exploit potential market opportunities, achieve the goals of our
business strategy or meet competitive challenges.
Moreover, our business strategy is dependent on creating products that anticipate customer requirements and
emerging industry trends. For example, throughout 2014, we sampled “Seattle,” our first 64-bit ARM server
processor and in the second quarter of 2014, we announced a 64-bit ARM architectural license for the
development of custom high-performance cores for high-growth adjacent markets. Also in the second quarter of
2014 we announced our third generation mainstream and low powered mobile APUs, formerly codenamed
“Mullins” and “Beema,” and we released our new embedded APU, formerly codenamed “Bald Eagle,” which is
our first embedded processor to incorporate HSA features. We cannot assure you that our new strategic direction,
including our efforts to address markets beyond our core PC market and our efforts to create ARM-based
products, will result in innovative products and technologies that provide value to our customers. In addition, we
may be entering markets where current and new competitors may be able to adapt more quickly to customer
requirements and emerging technologies. We cannot assure you that we will be able to compete successfully
against current or new competitors who may have stronger positions in these new markets. We may face delays
or disruptions in research and development efforts, or we may be required to significantly invest greater
resources in research and development than anticipated.
The completion and impact of the 2014 Restructuring Plan and our transformation initiatives could adversely
affect us.
In October 2014, we implemented a restructuring plan (the 2014 Restructuring Plan) designed to improve
operating efficiencies. The 2014 Restructuring Plan involved a reduction of global headcount by approximately
6%, largely completed by the end of 2014, and an alignment of our real estate footprint with the reduced
headcount, largely expected to be completed by the end of the first half of 2015. These restructuring actions
could have an adverse impact on our business as a result of decreases in employee morale and the failure to meet
operational targets due to the loss of employees. We cannot be sure that we will realize operational savings or
any other benefits from the 2014 Restructuring Plan. Any operating savings are subject to assumptions, estimates
and significant economic, competitive and other uncertainties, some of which are beyond our control. If these
estimates and assumptions are incorrect, if we experience delays or if other unforeseen events occur, our business
and financial results could be adversely affected. In addition, as a result of the 2014 Restructuring Plan, we
recorded a restructuring and impairment charge of $57 million in the fourth quarter of 2014, and we expect to
record a restructuring charge of approximately $13 million in 2015, primarily related to real estate actions. We
also made cash payments related to the 2014 Restructuring Plan of $19 million in the fourth quarter of 2014 and
expect to make cash payments related to the 2014 Restructuring Plan of approximately $34 million in 2015 and
approximately $8 million in 2016.
Global economic uncertainty may adversely impact our business and operating results.
Uncertain global economic conditions have in the past and may in the future adversely impact our business.
Uncertainty in the worldwide economic environment may negatively impact consumer confidence and spending
causing our customers to postpone purchases. In addition, during challenging economic times, our current or
potential future customers may experience cash flow problems and as a result may modify, delay or cancel plans
to purchase our products. Additionally, if our customers are not successful in generating sufficient revenue or are
unable to secure financing, they may not be able to pay, or may delay payment of, accounts receivable that they
owe us. The risk related to our customers’ potentially defaulting on or delaying payments to us is increased
because we expect that a small number of customers will continue to account for a substantial part of our
revenue. Any inability of our current or potential future customers to pay us for our products may adversely
affect our earnings and cash flow. Moreover, our key suppliers may reduce their output or become insolvent,
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