AMD 2015 Annual Report Download - page 25

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that our efforts to execute our product roadmap and address markets beyond our core PC market will result in
innovative products and technologies that provide value to our customers. If we fail to or are delayed in
developing, qualifying or shipping new products or technologies that provide value to our customers and address
these new trends or if we fail to predict which new form factors consumers will adopt and adjust our business
accordingly, we may lose competitive positioning, which could cause us to lose market share and require us to
discount the selling prices of our products. Although we make substantial investments in research and
development, we cannot be certain that we will be able to develop, obtain or successfully implement new
products and technologies on a timely basis.
Delays in developing, qualifying or shipping new products can also cause us to miss our customers’ product
design windows or, in some cases, breach contractual obligations or cause us to pay penalties. If our customers
do not include our products in the initial design of their computer systems or products, they will typically not use
our products in their systems or products until at least the next design configuration. The process of being
qualified for inclusion in a customer’s system or product can be lengthy and could cause us to further miss a
cycle in the demand of end-users, which also could result in a loss of market share and harm our business.
In addition, market demand requires that products incorporate new features and performance standards on
an industry-wide basis. Over the life of a specific product, the sale price is typically reduced over time. The
introduction of new products and enhancements to existing products is necessary to maintain the overall
corporate average selling price. If we are unable to introduce new products with sufficiently high sale prices or to
increase unit sales volumes capable of offsetting the reductions in the sale prices of existing products over time,
our business could be materially adversely affected.
If we cannot generate sufficient revenue and operating cash flow or obtain external financing, we may face a
cash shortfall and be unable to make all of our planned investments in research and development or other
strategic investments.
Our ability to fund research and development expenditures depends on generating sufficient revenue and
cash flow from operations and the availability of external financing, if necessary. Our research and development
expenditures, together with ongoing operating expenses, will be a substantial drain on our cash flow and may
decrease our cash balances. If new competitors, technological advances by existing competitors or other
competitive factors require us to invest significantly greater resources than anticipated in our research and
development efforts, our operating expenses would increase. If we are required to invest significantly greater
resources than anticipated in research and development efforts without an increase in revenue, our operating
results could decline.
We regularly assess markets for external financing opportunities, including debt and equity financing.
Additional debt or equity financing may not be available when needed or, if available, may not be available on
satisfactory terms. The health of the credit markets may adversely impact our ability to obtain financing when
needed. Any downgrades from credit rating agencies such as Moody’s or Standard & Poor’s may adversely
impact our ability to obtain external financing or the terms of such financing. In July 2015, Moody’s lowered our
corporate credit rating to Caa1 from B3 and our senior unsecured debt rating to Caa2 from Caa1. Furthermore, in
October 2015, Standard & Poor’s lowered our corporate credit rating to CCC+ from B- and our senior unsecured
debt rating to CCC from B-.
Credit agency downgrades or concerns regarding our credit worthiness may impact relationships with our
suppliers, who may limit our credit lines. Our inability to obtain needed financing or to generate sufficient cash
from operations may require us to abandon projects or curtail planned investments in research and development
or other strategic initiatives. If we curtail planned investments in research and development or abandon projects,
our products may fail to remain competitive and our business would be materially adversely affected.
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