AMD 2015 Annual Report Download - page 30

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marketing efforts of these third parties, and we cannot make any assurances that sales of their products will be
successful in current or future years. Consequently, the semi-custom SoC product revenue expected by us may
not be fully realized and our operating results may be adversely affected.
The demand for our products depends in part on the market conditions in the industries into which they are
sold. Fluctuations in demand for our products or a market decline in any of these industries could have a
material adverse effect on our results of operations.
Industry-wide fluctuations in the computer marketplace have materially adversely affected us in the past and
may materially adversely affect us in the future. A large portion of our Computing and Graphics revenue is
focused on the consumer desktop PC and notebook segments, which have experienced and continue to
experience a decline driven by, among other factors, the adoption of smaller form factors, increased competition
and changes in replacement cycles. The success of our semi-custom SoC products is dependent on securing
customers for our semi-custom design pipeline and consumer market conditions, including the success of the
Sony PlayStation®4 and Microsoft Xbox One game console systems worldwide.
Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual
property.
In the design and development of new products and product enhancements, we rely on third-party
intellectual property such as software development tools and hardware testing tools. Furthermore, certain product
features may rely on intellectual property acquired from third parties. The design requirements necessary to meet
consumer demand for more features and greater functionality from semiconductor products may exceed the
capabilities of the third-party intellectual property or development tools available to us. If the third-party
intellectual property that we use becomes unavailable, is not available in the time frame or price point needed for
our new products or fails to produce designs that meet customer demands, our business could be materially
adversely affected.
We depend on third-party companies for the design, manufacture and supply of motherboards, software and
other computer platform components to support our business.
We depend on third-party companies for the design, manufacture and supply of motherboards, software (e.g.
BIOS, operating systems) and other components that our customers utilize to support our microprocessor, GPU
and APU offerings. We also rely on AIBs to support our GPU and APU products. In addition, our
microprocessors are not designed to function with motherboards and chipsets designed to work with Intel
microprocessors. If the designers, manufacturers, AIBs and suppliers of motherboards, software and other
components decrease their support for our product offerings, our business could be materially adversely affected.
If we lose Microsoft Corporation’s support for our products or other software vendors do not design and
develop software to run on our products, our ability to sell our products could be materially adversely affected.
Our ability to innovate beyond the x86 instruction set controlled by Intel depends partially on Microsoft
designing and developing its operating systems to run on or support our x86-based microprocessor products.
With respect to our graphics products, we depend in part on Microsoft to design and develop its operating system
to run on or support our graphics products. Similarly, the success of our products in the market, such as our APU
products, is dependent on independent software providers designing and developing software to run on our
products. If Microsoft does not continue to design and develop its operating systems so that they work with our
x86 instruction sets or does not continue to develop and maintain their operating systems to support our graphics
products, independent software providers may forego designing their software applications to take advantage of
our innovations and customers may not purchase PCs with our products. In addition, some software drivers sold
with our products are certified by Microsoft. If Microsoft did not certify a driver, or if we otherwise fail to retain
the support of Microsoft or other software vendors, our ability to market our products would be materially
adversely affected.
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