Advanced Micro Devices, Inc. engages in the provision of semiconductor businesses. It operates through the Computing & Graphics and Enterprise, Embedded & Semi-Custom segments. The Computing and Graphics segment includes desktop and notebook processors and chipsets, and discrete and integrated graphics processing units. The Enterprise, Embedded and Semi-Custom segment comprises of server and embedded processors, semi-custom systems-on-chips products, development services, technology for game consoles and licensing portions of its intellectual property portfolio. The company was founded by W. J. Sanders III on May 1, 1969 and is headquartered in Santa Clara, CA.
Intel Corporation’s dominance of the microprocessor market and its aggressive business practices may limit our ability to compete effectively.
We rely on third parties to manufacture our products, and if they are unable to do so on a timely basis in sufficient quantities and using competitive technologies, our business could be materially adversely affected.
Failure to achieve expected manufacturing yields for our products could negatively impact our financial results.
We have a wafer supply agreement with GF with obligations to purchase all of our microprocessor and APU product requirements, and a certain portion of our GPU product requirements manufactured at process nodes larger than 7 nanometer from GF, with limited exceptions. If GF is not able to satisfy our manufacturing requirements, our business could be adversely impacted.
The success of our business is dependent upon our ability to introduce products on a timely basis with features and performance levels that provide value to our customers while supporting and coinciding with significant industry transitions.
If we cannot generate sufficient revenue and operating cash flow or obtain external financing, we may face a cash shortfall and be unable to make all of our planned investments in research and development or other strategic investments.
The loss of a significant customer may have a material adverse effect on us.
Our receipt of revenue from our semi-custom SoC products is dependent upon our technology being designed into third-party products and the success of those products.
Global economic and market uncertainty may adversely impact our business and operating results.
Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us.
Government actions and regulations such as export administration regulations, tariffs, and trade protection measures, may limit our ability to export our products to certain customers.
IT outages, data loss, data breaches and cyber-attacks could compromise our intellectual property or other sensitive information, be costly to remediate or cause significant damage to our business, reputation and operations.
Our operating results are subject to quarterly and seasonal sales patterns.
We may not be able to generate sufficient cash to service our debt obligations or meet our working capital requirements.
We have a large amount of indebtedness which could adversely affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations.
The agreements governing our notes and our Secured Revolving Facility impose restrictions on us that may adversely affect our ability to operate our business.
The markets in which our products are sold are highly competitive.
The conversion of the 2.125% Notes may dilute the ownership interest of our existing stockholders, or may otherwise depress the price of our common stock.
Uncertainties involving the ordering and shipment of our products could materially adversely affect us.
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.
Our ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property.
We depend on third-party companies for the design, manufacture and supply of motherboards, software and other computer platform components to support our business.
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 reliance on third-party distributors and AIB partners subjects us to certain risks.
We may incur future impairments of goodwill and technology license purchases.
Our inability to continue to attract and retain qualified personnel may hinder our business.
In the event of a change of control, we may not be able to repurchase our outstanding debt as required by the applicable indentures and our Secured Revolving Facility, which would result in a default under the indentures and our Secured Revolving Facility.
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.
Acquisitions, divestitures, joint ventures and/or investments could disrupt our business, and/or dilute or adversely affect the price of our common stock.
Our business is dependent upon the proper functioning of our internal business processes and information systems and modification or interruption of such systems may disrupt our business, processes and internal controls.
If essential equipment, materials or manufacturing processes are not available to manufacture our products, we could be materially adversely affected.
If our products are not compatible with some or all industry-standard software and hardware, we could be materially adversely affected.
Costs related to defective products could have a material adverse effect on us.
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.
We outsource to third parties certain supply-chain logistics functions, including portions of our product distribution, transportation management and information technology support services.
Our stock price is subject to volatility.
Worldwide political conditions may adversely affect demand for our products.
Unfavorable currency exchange rate fluctuations could adversely affect us.
Our inability to effectively control the sales of our products on the gray market could have a material adverse effect on us.
If we cannot adequately protect our technology or other intellectual property in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures, we may lose a competitive advantage and incur significant expenses.
We are party to litigation and may become a party to other claims or litigation that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products.
Our business is subject to potential tax liabilities.
We are subject to environmental laws, conflict minerals-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as a variety of other laws or regulations that could result in additional costs and liabilities.
We report our financial performance based on the following two reportable segments: the Computing and Graphics segment and the Enterprise, Embedded and Semi-Custom segment.
Additional information on our reportable segments is contained in Note 11: Segment Reporting of the Notes to Condensed Consolidated Financial Statements (Part I, Financial Information of this Form 10-Q).
Our operating results tend to vary seasonally. Historically, first quarter PC product sales have been generally lower than fourth quarter sales, and our semi-custom SoC products for game console sales pattern has reflected higher sales in the second and third quarters compared to the first and fourth quarters, although product transitions could impact these trends.