AMD 2015 Annual Report Download - page 36

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, expand to high-growth
adjacent markets, 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.
We may incur future impairments of goodwill.
We perform our annual goodwill impairment analysis as of the first day of the fourth quarter of each
year. Subsequent to our annual goodwill impairment analysis, we monitor for any events or changes in
circumstances, such as significant adverse changes in business climate or operating results, changes in
management’s business strategy, an inability to successfully introduce new products in the marketplace, an
inability to successfully achieve internal forecasts or significant declines in our stock price, which may represent
an indicator of impairment. The occurrence of any of these events may require us to record future goodwill
impairment charges.
Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could
have a material adverse effect on us.
We maintain operations around the world, including in the United States, Canada, Europe and Asia. We rely
on third-party wafer foundries in Europe and Asia. Nearly all product assembly and final testing of our products
is performed at manufacturing facilities, operated by us as well as third-party manufacturing facilities, in China,
Malaysia and Taiwan. We also have international sales operations. International sales, as a percent of net
revenue, were 75% in 2015. We expect that international sales will continue to be a significant portion of total
sales in the foreseeable future.
The political, legal and economic risks associated with our operations in foreign countries include, without
limitation:
• expropriation;
• changes in a specific country’s or region’s political or economic conditions;
• changes in tax laws, trade protection measures and import or export licensing requirements;
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