AMD 2015 Annual Report Download - page 40

or that the transition to compliant products may not meet customer roadmaps, or produce sudden changes in
demand, which may result in excess inventory. A number of jurisdictions including the EU, Australia and China
are developing or have finalized market entry or public procurement regulations for computers and servers based
on ENERGY STAR specifications as well as additional energy consumption limits. There is the potential for
certain of our products being excluded from some of these markets which could materially adversely affect us.
Certain environmental laws, including the U.S. Comprehensive, Environmental Response, Compensation
and Liability Act of 1980, or the Superfund Act, impose strict or, under certain circumstances, joint and several
liability on current and previous owners or operators of real property for the cost of removal or remediation of
hazardous substances and impose liability for damages to natural resources. These laws often impose liability
even if the owner or operator did not know of, or was not responsible for, the release of such hazardous
substances. These environmental laws also assess liability on persons who arrange for hazardous substances to be
sent to disposal or treatment facilities when such facilities are found to be contaminated. Such persons can be
responsible for cleanup costs even if they never owned or operated the contaminated facility. We have been
named as a responsible party at three Superfund sites in Sunnyvale, California. Although we have not yet been,
we could be named a potentially responsible party at other Superfund or contaminated sites in the future. In
addition, contamination that has not yet been identified could exist at our other facilities.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and
Exchange Commission (“SEC”) adopted disclosure and reporting requirements for companies that use “conflict”
minerals originating from the Democratic Republic of Congo or adjoining countries. We continue to incur
additional costs associated with complying with these requirements, such as costs related to developing internal
controls for the due diligence process, determining the source of any conflict minerals used in our products,
auditing the process and reporting to our customers and the SEC. Also, since our supply chain is complex, we
may face reputational challenges if we are unable to sufficiently verify the origins of the subject minerals.
Moreover, we are likely to encounter challenges to satisfy those customers who require that all of the
components of our products are certified as “conflict free.” If we cannot satisfy these customers, they may
choose a competitor’s products.
Higher health care costs and labor costs could adversely affect our business.
With the passage in 2010 of the U.S. Patient Protection and Affordable Care Act (the ACA), we are required
to provide affordable coverage, as defined in the ACA, to all employees, or otherwise be subject to a payment per
employee based on the affordability criteria in the ACA. Additionally, some states and localities have passed
state and local laws mandating the provision of certain levels of health benefits by some employers. Increased
health care and insurance costs could have a material adverse effect on our business. In addition, changes in
federal or state workplace regulations could adversely affect our ability to meet our financial targets.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
At December 26, 2015, we owned research and development, engineering and manufacturing facilities
located in China and manufacturing and administrative facilities located in Malaysia. These facilities totaled
approximately 766,000 square feet and include approximately 265,000 square feet of assembly, test, mark and
packaging facilities. Our current microprocessor assembly and test facilities located in Malaysia and China are
described in further detail in the section entitled “Assembly, Test, Mark and Packaging Facilities,” above.
In some cases, we lease the land on which our facilities are located. We lease approximately 425,000 square
feet of land in Suzhou, China for our microprocessor assembly and test facilities.
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