Crucial 2015 Annual Report Download - page 16

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14
Our future success depends on our ability to develop and produce competitive new memory technologies.
Our key semiconductor memory technologies of DRAM, NAND Flash, and NOR Flash face technological barriers to
continue to meet long-term customer needs. These barriers include potential limitations on the ability to shrink products in
order to reduce costs, meet higher density requirements, and improve power consumption and reliability. To meet these
requirements, we expect that new memory technologies will be developed by the semiconductor memory industry. Our
competitors are working to develop new memory technologies that may offer performance and/or cost advantages to our
existing memory technologies and render existing technologies obsolete. Accordingly, our future success may depend on our
ability to develop and produce viable and competitive new memory technologies. There can be no assurance of the following:
• that we will be successful in developing competitive new semiconductor memory technologies;
• that we will be able to cost-effectively manufacture new products;
• that we will be able to successfully market these technologies; and
• that margins generated from sales of these products will allow us to recover costs of development efforts.
In the fourth quarter of 2015, we announced the development of new 3D XPoint technology, which is an entirely new class
of non-volatile memory. There is no assurance that our efforts to develop and market this new product technology will be
successful. If our efforts to develop new semiconductor memory technologies are unsuccessful, our business, results of
operations, or financial condition may be materially adversely affected.
New product development may be unsuccessful.
We are developing new products, including system-level memory products, that complement our traditional memory
products or leverage their underlying design or process technology. We have made significant investments in product and
process technologies and anticipate expending significant resources for new semiconductor product development over the next
several years. The process to develop DRAM, NAND Flash, NOR Flash, and certain specialty memory products, requires us to
demonstrate advanced functionality and performance, many times well in advance of a planned ramp of production, in order to
secure design wins with our customers. There can be no assurance of the following:
• that our product development efforts will be successful;
• that we will be able to cost-effectively manufacture new products;
• that we will be able to successfully market these products; or
• that margins generated from sales of these products will allow us to recover costs of development efforts.
If our efforts to develop new products are unsuccessful, our business, results of operations, or financial condition may be
materially adversely affected.
Products that fail to meet specifications, are defective, or that are otherwise incompatible with end uses could impose
significant costs on us.
Products that do not meet specifications or that contain, or are perceived by our customers to contain, defects or that are
otherwise incompatible with end uses could impose significant costs on us or otherwise materially adversely affect our
business, results of operations, or financial condition. From time to time we experience problems with nonconforming,
defective or incompatible products after we have shipped such products. In recent periods we have further diversified and
expanded our product offerings which could potentially increase the chance that one or more of our products could fail to meet
specifications in a particular application. As a result of these problems we could be adversely affected in several ways,
including the following:
• we may be required to compensate customers for costs incurred or damages caused by defective or incompatible
product or replace products;
• we could incur a decrease in revenue or adjustment to pricing commensurate with the reimbursement of such costs or
alleged damages; and
• we may encounter adverse publicity, which could cause a decrease in sales of our products.