AMD 2015 Annual Report Download - page 32

The semiconductor industry is highly cyclical and has experienced severe downturns that have materially
adversely affected, and may continue to materially adversely affect, our business in the future.
The semiconductor industry is highly cyclical and has experienced significant downturns, often in
conjunction with constant and rapid technological change, wide fluctuations in supply and demand, continuous
new product introductions, price erosion and declines in general economic conditions. We have incurred
substantial losses in recent downturns, due to:
• substantial declines in average selling prices;
• the cyclical nature of supply and demand imbalances in the semiconductor industry;
• a decline in demand for end-user products (such as PCs) that incorporate our products; and
• excess inventory levels.
Industry-wide fluctuations in the computer marketplace have materially adversely affected us in the past and
may materially adversely affect us in the future. For example, form factor devices continue to shift from desktop
PCs and notebooks to smaller form factor devices. A large portion of our Computing and Graphics revenue is
focused on 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.
Global economic uncertainty and weakness have also impacted the semiconductor market as consumers and
businesses have deferred purchases, which negatively impacted demand for our products. Our financial
performance has been, and may in the future be, negatively affected by these downturns.
The growth of our business is also dependent on continued demand for our products from high-growth
adjacent emerging global markets. Our ability to be successful in such markets depends in part on our ability to
establish adequate local infrastructure, as well as our ability to cultivate and maintain local relationships in these
markets. If demand from these markets is below our expectations, sales of our products may decrease, which
would have a material adverse effect on us.
Acquisitions, divestitures and/or joint ventures could disrupt our business, harm our financial condition and
operating results or dilute, or adversely affect the price of, our common stock.
Our success will depend, in part, on our ability to expand our product offerings and grow our business in
response to changing technologies, customer demands and competitive pressures. In some circumstances, we
may pursue growth through the acquisition of complementary businesses, solutions or technologies or through
divestitures or joint ventures rather than through internal development. The identification of suitable acquisition
or joint venture candidates can be difficult, time-consuming and costly, and we may not be able to successfully
complete identified acquisitions or joint ventures. Moreover, if such acquisitions or joint ventures require us to
seek additional debt or equity financing, we may not be able to obtain such financing on terms favorable to us or
at all. Even if we successfully complete an acquisition or a joint venture, we may not be able to assimilate and
integrate effectively or efficiently the acquired business, technologies, solutions, assets, personnel or operations,
particularly if key personnel of the acquired company decide not to work for us. Acquisitions and joint ventures
may also involve the entry into geographic or business markets in which we have little or no prior experience.
Consequently, we may not achieve anticipated benefits of the acquisitions or joint ventures which could harm our
operating results. In addition, to complete an acquisition, we may issue equity securities, which would dilute our
stockholders’ ownership and could adversely affect the price of our common stock, as well as incur debt, assume
contingent liabilities or have amortization expenses and write-downs of acquired assets, which could adversely
affect our results of operations. Acquisitions and joint ventures may also reduce our cash available for operations
and other uses, which could harm our business. We may not achieve the objectives and expectations with respect
to future operations, products and services.
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