UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

2485 Augustine Drive

Santa Clara, California 95054

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ 

PART I

Cautionary Statement Regarding Forward-Looking Statements

The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s consolidated financial statements; demand for AMD’s products; the growth, change and competitive landscape of the markets in which AMD participates; the expected amounts to be received by AMD under the IP licensing agreement and AMD’s expected royalty payments from future product sales of the two joint ventures AMD holds equity in with Higon Information Technology Co., Ltd. (THATIC JVs) products to be developed on the basis of such licensed IP; sales patterns of AMD’s products; international sales will continue to be a significant portion of total sales in the foreseeable future; that AMD’s cash, cash equivalents and short-term investment balances together with the availability under that certain revolving credit facility (the Revolving Credit Facility)Agreement) made available to AMD and certain of its subsidiaries, under the Credit Agreement,our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures and purchase commitments over the next 12 months;months and beyond; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that based on the information presently known to management,management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial condition, cash flows orposition, results of operations; any amounts in addition to what has been already accrued by AMD for future remediation costs under clean-up orders will not have a material effect on our financial condition,operation or cash flows or results of operations; we expect to file future patent applications in both the United States and abroad on significant inventions as we deem appropriate;flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; revenue allocated to remaining performance obligations that are unsatisfied which will be recognized over the next 12 months; all unbilled accounts receivables are expected to be billed and collected within 12 months; revenue allocated to remaining performance obligations that are unsatisfied which will be recognized in the next 12 months; and a small number of customers will continue to account for a substantial part of AMD’s revenue in the future; and the acquisition of Xilinx, Inc. is currently expected to close by the end of calendar year 2021.future. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part I, Item 1A-Risk Factors” and the “Financial Condition” section set forth in “Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements.

We are a global semiconductor company primarily offering:

From time to time, we may also sell or license portions of our intellectual property (IP) portfolio.

Additional Information

Advanced Micro Devices, Inc. (AMD)AMD was incorporated under the laws of Delaware on May 1, 1969 and became a publicly held company in 1972. Our common stock is currently listed on The NASDAQ Global Select Market (NASDAQ) under the symbol “AMD”. Our mailing address and executive offices are located at 2485 Augustine Drive, Santa Clara, California 95054, and our telephone number is (408) 749-4000. The SEC website, www.sec.gov, contains reports, proxyFor financial information about geographic areas and for segment information statements,with respect to revenues and otheroperating results, refer to the information regarding issuers that file electronically withset forth in Note 4 of our consolidated financial statements. We use a 52- or 53-week fiscal year ending on the SEC.

Microsoft, Windows, DirectX and Xbox One are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. PCIe is a registered trademark of PCI-SIG Corporation. Chromebook and Stadia are trademarks of Google Inc. Linux is the registered trademark of Linus Torvalds in the United States and other countries. PlayStation is a registered trademark or trademark of Sony Interactive Entertainment, Inc. Arm is a registered trademark of ARM Limited (or its subsidiaries) in the USUnited States and/or elsewhere. Vulkan and the Vulkan logo are registered trademarks of Khronos Group Inc. Steam and the Steam logo are trademarks and/or registered trademarks of Valve Corporation in the United States and/or other countries.

AMD is focused on high-performance and Graphicsadaptive computing technology, software and product leadership. Our strategy is to create and deliver the world’s leading high-performance and adaptive computing products across a diverse set of markets including the data center, embedded, client and gaming. Our strategy is focused on five strategic pillars: compute technology leadership, expanding data center leadership, enabling pervasive artificial intelligence (AI), providing software platforms and developer enablement, and designing custom silicon and solutions.

The Data Center segment primarily includes server CPUs, GPUs, DPUs, FPGAs, and Adaptive SoC products. We leverage our technology to address the computational and visual data processing GPUs are usedneeds in the data center market. Modern data centers require high performance, energy efficient, scalable and adaptable compute engines to perform parallel operations on multiple setsmeet the demand driven by the growing amount of data that needs to be stored, accessed, analyzed and are increasingly used to perform vector processing for non-graphics applications that require repetitive computations such as high-performance computing (HPC), deep learning, artificialmanaged. Different combinations of CPUs, GPUs, DPUs, FPGAs, and machine intelligence, blockchain and various other applications (e.g., cryptocurrency mining and autonomous driving).

Our Computing and Graphics Products

Gaming Market

The Enterprise, Embedded and Semi-Custom Markets

Sales and Marketing

We sell our products through our direct sales force and through independent distributors and sales representatives in both domestic and international markets. Our sales arrangements generally operate on the basis of product forecasts provided by the particular customer, but do not typically include any commitment or requirement for minimum product purchases. We primarily use product quotes, purchase orders, sales order acknowledgments and contractual agreements as evidence of our sales arrangements. Our agreements typically contain standard terms and conditions covering matters such as payment terms, warranties and indemnities for issues specific to our products.

We generally warrant that our products sold to our customers will conform to our approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. We offer up to three-year limited warranties for certain product types, and sometimes provide other warranty periods based on negotiated terms with certain customers.

We market and sell our latest products under the AMD trademark. Our desktop PC microprocessor product brands areclient processors include: AMD Ryzen™,Ryzen, AMD Ryzen™Ryzen PRO, Ryzen™ Threadripper™,Ryzen Threadripper, Ryzen Threadripper PRO, AMD A-Series,Athlon, AMD FX™, AMD Athlon™, AMD Athlon™Athlon PRO, and AMD ProPRO A-Series. OurThese products service desktop and notebook and 2-in-1s for microprocessors are AMD Ryzen™ processors with Radeon™ Vega Graphics, AMD A-Series, AMD Athlon, AMD Ryzen PRO with Radeon Vega Graphics, AMD Athlon™ PRO with Radeon Vega Graphics and AMD Pro A-Series processors. Our server brands for microprocessors are AMD EPYC™ and AMD Opteron™ processors. We also sell low-power versions of our AMD Opteron, AMD Athlon, as well as AMD Geode™, AMD Ryzen, AMD EPYC, AMD R-Series and G-Series processors as embedded processor solutions. personal computers.

Our product brand for the consumer graphics market is AMD Radeon graphics, and AMD Embedded Radeon graphics is our product brand for the embedded graphics market.

Our product brand for professional graphics products are AMD Radeon Pro and AMD FirePro™PRO graphics.

Our product brandbrands for data center graphics isare Radeon Instinct™Instinct, Radeon PRO V-series, and AMD Instinct accelerators for servers. We also market and sell our chipsets under AMD trademarks.

We market our products through direct marketing and co-marketing programs. In addition, we have cooperative advertising and marketing programs with customers and third parties, including market development programs, pursuant to which we may provide product information, training, marketing materials and funds. Under our co-marketing development programs, eligible customers can use market development funds as reimbursement for advertisements and marketing programs related to our products and third-party systems integrating our products, subject to meeting defined criteria.

Customers

Our microprocessor customers consist primarily of original equipment manufacturers (OEMs), large public cloud service providers, original design manufacturers (ODMs), system integrators and independent distributors in both

Customers of our chipset products consist primarily of PC OEMs, often through ODMs or other contract manufacturers, who build the OEM motherboards, as well as desktop and server motherboard manufacturers who incorporate chipsets into their channel motherboards. Our FPGA and Adaptive SOC products are sold to customers in a very wide range of markets such as Aerospace and Defense, Test and Measurement, Industrial, Automotive, Consumers, Broadcast, Communication Infrastructure and Data Center. For these products we either sell directly to our customers or through a network of distributors and OEM partners. We are also developing a network of Value Added Resellers (VARs) and Integrated Solution Vendors (ISVs) for our Alveo products.

We work closely with our customers to define product features, performance and timing of new products so that the products we are developing meet our customers’ needs. We also employ application engineers to assist our customers in designing, testing and qualifying system designs that incorporate our products. We believe that our commitment to customer service and design support improves our customers’ time-to-market and fosters relationships that encourage customers to use the next generation of our products.

We also work with our customers to create differentiated products that leverage our CPU, GPU and APU technology. Certain customers pay us non-recurring engineering fees for design and development services and a purchase price for the resulting products.

No singleOne customer accounted for more than 10%16% of our consolidated net revenue for the year ended December 26, 2020.31, 2022. Sales to this customer consisted of sales of products from our Gaming segment. A loss of this customer would have a material adverse effect on our business.

We focus on three types of OEM partners: multi-nationals, selected regional accounts and someselected global and local system integrators, who target commercial and consumer end customers of all sizes. Large multi-nationals and regional accounts are the core of our OEM partners’ business; however, a growing focus for us iswe are increasingly focused on the Value Added Reseller (VAR)VAR channel which resells OEM systems to the mid-market and the small and medium business (SMB) segments. Additionally, we have increased our focus on global system integrators, which resell OEM systems, coupled with their software and services solutions into Enterprise, high performance computing (HPC) and Cloud Service Provider Customers. Our OEM customers include numerous foreign and domestic manufacturers of servers and workstations, desktops, notebooks, PC motherboards and game consoles.

Our authorized channel distributors resell to sub-distributors and mid-sizedOEMs, ODMs, and smaller OEMs and ODMs.other customers. Typically, distributors handle a wide variety of products, and may include thoseproducts from other manufacturers that compete with our products. Distributors typically maintain an inventory of our products. In most instances, our agreements with distributors protect their inventory of our products against price reductions and provide certain return rights with respect to any product that we have removed from our price book that is less than 12 months older than the manufacturing code date.or otherwise subject to discontinuation. In addition, some agreements with our distributors may contain standard stock rotation provisions permitting limited levels of product returns.

We offer component-level graphics and chipset products to AIB manufacturers who in turn build and sell board-level products using our technology to system integrators (SIs), retail buyers and sub distributors. Our agreements with AIBs protect their inventory of our products against price reductions. We also sell directly to our SI customers. SIs typically sell from positions of regional or product-based strength in the market. They usually operate on short design cycles and can respond quickly with new technologies. SIs often use discrete graphics solutions as a means to differentiate their products and add value to their customers.

Competition in the Microprocessor and Chipset MarketData Center Segment

In Data Center, we compete against Intel Corporation has been the market share leader for microprocessors for many years. Intel’s market share, margins(Intel) with our FPGA, Adaptive SoC, CPU and significant financial resources enable it to market itsDPU server products aggressively, to targetand NVIDIA Corporation (NVIDIA) with our customersCPU, GPU and our channel partners with special incentives and to influence customers who do business with us. Intel exerts substantial influence over computer manufacturers and their channels of distribution through various brand and other marketing programs. Additionally, Intel is able to drive de facto standards and specifications for x86 microprocessors that could cause us and other companies to have delayed access to such standards. We expect Intel to continue to invest heavily in marketing, research and development, new manufacturing facilities and other technology companies.

Competition in the Graphics MarketsGaming Segment

In the graphics market, our competitors include suppliersprincipal competitor in the supply of discrete graphics is NVIDIA who is the market share leader. Intel also manufactures and sells embedded graphics processors and integrated graphics processor (IGP) chipsets. Also, Intel manufactureshas developed their own gaming-focused discrete GPUs and sells embeddedhas entered the market. Other competitors include suppliers of discrete graphics and integrated graphics processor (IGP) chipsets. Some of our competitors are smaller companies, which may have greater flexibility to address specific market needs, but less financial resources to address the growing complexity of graphics processors and IGP chipsetsthe associated research and is a dominant competitor withdevelopment costs. With respect to this portion of our business. Higherintegrated graphics, higher unit shipments of our APUs and Intel’s integrated graphics may drive computer manufacturers to reduce the number of systems they build paired with discrete graphics components, particularly for notebooks, because they may offer satisfactory graphics performance for most mainstream PC users at a lower cost. Intel could take actions that place our discrete GPUs and IGP chipsets at a competitive disadvantage such as providing preferential access to its proprietary graphics interface or other useful information to our competitors in the graphics market or restricting access to external companies, while developing its own high-end discrete GPUs for both consumer and commercial applications.

We expect continued competition from our primary FPGA competitors such as Intel, Lattice Semiconductor Corporation and whereMicrosemi Corporation (Microsemi, acquired by Microchip), from ASSP vendors such as Broadcom Corporation, Marvell Technology Group, Ltd., Analog Devices, Texas Instruments Incorporated and NXP Semiconductors N.V., and from NVIDIA. In addition, we compete primarily against Nvidia.expect continued competition from the ASIC market, which has been ongoing since the inception of FPGAs. Other competitors include manufacturers of:

Research and Development

We also work with industry leaders on process technology, design tools, intellectual property, software and other functional intellectual property and with others in the industry and industry consortia to conduct early stageearly-stage research and development. We are also actively contributing to numerous industry open-source software initiatives across a broad range of technologies. We conduct product and system research and development activities for our products in the United States with additional design and development engineering teams located in Canada, China, India, Taiwan and Singaporevarious countries who undertake specific activities at the direction of our U.S. headquarters.

We have foundry arrangements with Taiwan Semiconductor Manufacturing Company Limited (TSMC) for the production of wafers for certain products, including the production of all our 7 nmHPC, FPGA and Adaptive SoC products.

We are also a party to a Wafer Supply Agreement (WSA) with GLOBALFOUNDRIES Inc. (GF), pursuantwith respect to whichwafer purchases for our HPC products at the 12 nm and 14 nm technology nodes.

Additionally, we are required to purchase all of our microprocessorwafers from United Microelectronics Corporation (UMC) and APU product requirements, and a certain portion of our GPU products, from GF manufactured at process nodes larger than 7 nm, with limited exceptions.Samsung Electronics Co., Ltd.

We outsource board-level graphics product manufacturing to third-party manufacturers.

Wafers for our products are either sorted by the foundry or delivered from third-party foundriesby the foundry to our assembly, test, mark and packaging (ATMP) partners or subcontractors located in the Asia-Pacific region who package and test our final semiconductor products. We are party to two assembly, test, mark and pack (ATMP)ATMP joint ventures (collectively, the ATMP JVs) with Tongfu Microelectronics Co., Ltd. The majority of ourATMP JVs, Siliconware Precision Industries Ltd. (SPIL) and King Yuan Electronics Company (KYEC) provide ATMP services are provided by the ATMP JVs.for our products.

Intellectual Property and Licensing

Backlog

Sales are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time. Although such orders or agreements may provide visibility into future quarters, they may not necessarily be indicative of actual sales for any succeeding period as some of these orders or agreements may be revised or canceled without penalty. With respect to our semi-custom SoC products our orders and agreements are more stringent resulting in meaningful backlog for the coming quarter.

Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact these trends.

Human Capital

As of December 26, 2020,31, 2022, we had approximately 12,60025,000 employees in our global workforce. We believe we are at our best when our culture of innovation, creative minds and people from all kinds of backgrounds work together in an engaging and open environment. Areas of focus for us include the following:

Our History - Founded in 1969 as a Silicon Valley start-up, the AMD journey began with dozens of employees focused on leading-edge semiconductor products. From those modest beginnings, we have grown into a global company achieving many important industry firsts along the way. Today, we develop high-performance computing and visualization productsadaptive computing to solve some of the world’s toughest and most interesting challenges.

Our Mission - Build great products that accelerate next-generation computing experiences.

We conduct a confidential annual survey of our global workforce to measure our culture, engagement, and manager quality. The results are reviewed by the AMDour Board of Directors and acted upon by our senior leadership team and individual managers at every level. Results from our 20202022 survey reported scores that continued improvement across all categories, and scores wereto be among the very best for global companies in the technology industry. Our employees described our culture as inclusive, innovative, open, and respectful, and rated the quality of our managers among the top 10% of our technology industry peers.

Our diverse and inclusive workforce encourages employees to share their opinions and different perspectives. We believe that building a diverse talent pipeline, encouraging a culture of respect and belonging, and increasing inclusion of unique and underrepresented voices makes AMDour Company stronger. AMD’sOur Employee Resource Groups encourage employee engagement and play an important role in our culture. In 2022, we were recognized for the sixth consecutive year by the Human Rights Campaign Foundation as a Best Place to Work for LGBTQ+ equality and were included in Bloomberg’s Gender Equality Index for the fourth consecutive year.

We are focused on hiring and developing under-represented minoritiesunderrepresented groups and women leaders. We are proud to be led by a highly regarded CEO who has won many esteemed awards for her business and technicalleadership prowess. In 2020,2022, Dr. Lisa Su was listed among “Fortune’s Most Powerful Women”. In the last two years, she also received the chip industry’s highest honor as“Woman Innovation Award” from the 2020 recipient of the Robert N. Noyce Award.Global Semiconductor Alliance and was listed among Barron’s World’s Best CEOs and Forbes’ World’s Most Powerful Women. In addition, Dr. Su also ranked #2continues to support President Biden’s Council of Advisors on Fortune’s Businessperson of the Year list for her strategic visionScience and successful company turn around.Technology.

We invest in our workforce by offering competitive salaries, incentives, and benefits to ensure that we continue to attract and retain the industry’s best and brightest. Our rewards are determined based on employee’s preferences. Our incentives are meritocracy-basedguided by employees’ preferences and wethe market for talent. We have a strong pay for performance culture that we believe drives superior results. We benchmarkOur employees have benefited from our totalrobust financial results with very strong short-term and long-term incentives. Our rewards annuallyprograms enabled us to ensureattract, retain and motivate our compensationworkforce, including approximately 10,000 new AMDers who were added to the company through acquisitions and benefit programs remain competitive with our peers.direct hiring during fiscal year 2022.

We offer our employees opportunities to advance their careers at AMD.the Company and the majority of our new leaders are promoted from within. We are focused on leadership progression and encourage our employees to take advantage of new opportunities. Our manager and leadership development programs are highly rated, and we provide specialized development programs for our employees.

Environmental Regulations

Our operations and properties have in the past been and continue to be subject to various United States and foreign laws and regulations, including those relating to materials used in our products and manufacturing processes,

Certain environmental laws, including the U.S.United States 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.

In 1991, we received Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board relating to the three sites. We have entered into settlement agreements with other responsible parties on two of the orders. During the term of such agreements, other parties have agreed to assume most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders. We remain responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations under the settlement agreements.

To address anticipated future remediation costs under the orders, we have computed and recorded an estimated environmental liability of approximately $4$3.9 million and have not recorded any potential insurance recoveries in determining the estimated costs of the cleanup. Costs could also increase as a result of additional test and remediation obligations imposed by the Environmental Protection Agency or California Regional Water Quality Control Board. The progress of future remediation efforts cannot be predicted with certainty and these costs may change. We believe that the potential liability, if any amount in excess of amountsaddition to what has already been accrued willwould not have a material adverse effect on our financial condition, cash flows or results of operations.be material.

The risks and uncertainties described below are not the only ones we face. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously.

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.

Economic and Strategic Risks

Operational and Technology Risks

Legal and Regulatory Risks

Merger, Acquisition and AcquisitionIntegration Risks

Liquidity and Capital Resources Risks

General Risks

Intel Corporation’s dominance of the microprocessor market and its aggressive business practices may limit our ability to compete effectively on a level playing field.

Global economic and market uncertainty may adversely impact our business and operating results.

The loss of a significant customer may have a material adverse effect on us.

The ongoing novel coronavirus (COVID-19) pandemic could materially adversely affect our business, financial condition and results of operations.

The markets in which our products are sold are highly competitive.

Our operating results are subject to quarterly and seasonal sales patterns.

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.

Unfavorable currency exchange rate fluctuations could adversely affect us.

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.

If essential equipment, materials, substrates or manufacturing processes are not available to manufacture our products, we could be materially adversely affected.

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.

Our receipt of revenue from our semi-custom SoC products is dependent upon our semi-custom SoC products being incorporated into customer’scustomers’ products and the success of those products.

Our products may be subject to security vulnerabilities that could have a material adverse effect on us.

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.

Uncertainties involving the ordering and shipment of our products could materially adversely affect us.

Our ability to design and introduce new products in a timely manner is dependent uponincludes use of third-party intellectual property.

We depend on third-party companies for the design, manufacture and supply of motherboards, software, memory and other computer platform components to support our business.business and products.

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.

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 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 inability to effectively control the sales of our products on the gray market 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.

We have equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity. In June 2019, the Bureau of Industry and Security (BIS) of the United States Department of Commerce added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. In October 2019, the BIS added additional Chinese entities to the Entity List. Also,Since that time, the United States administration has called for changes to domestic and foreign policy.policy, including policies with respect to China and Russia. Specifically, United States-China trade relations remain uncertain. The United States administration has announced tariffs on certain products imported intouncertain as the United States with China as the country of origin, and China has imposed tariffs in responsecontinues to add more Chinese companies to the actions ofEntity List and more regulations targeted to advanced computing, semiconductor manufacturing, and AI. Further, the United States. We are taking stepsStates and other countries and coalitions have issued sanctions and revisions to mitigateexport control and other regulations against Russia, Belarus or the impactDNR or LNR regions of theseUkraine, due to the conflict in Ukraine. BIS has issued new requirements that prevent us from shipping MI250 and MI250X integrated circuits to China and Russia without a license. BIS may possibly issue new licensing requirements and regulatory controls in the future. A significant trade disruption or the establishment or increase of any tariffs, ontrade protection measures or restrictions could result in lost sales adversely impacting our businessreputation and AMD processor-based products.business. There is also a possibility of future tariffs, trade protection measures, import or export regulations or other restrictions imposed on our products or on our customers by the United States, China or other countries that could have a material adverse effect on our business. A significant trade disruptionExport control restrictions may adversely impact the ability of our research and development teams located outside of the United States from executing our product roadmaps in a timely manner or at all.

If we cannot realize our deferred tax assets, our results of operations could be adversely affected.

Our business is subject to potential tax liabilities.liabilities, and exposure to greater-than-anticipated income tax liabilities as a result of changes in tax rules and regulations, changes in interpretation of tax rules and regulations, or unfavorable assessments from tax audits, any of which could affect our effective tax rates, financial condition, and results of operations.

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.

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.

Acquisitions, joint ventures and/or investments including our recently announced acquisition of Xilinx, and the failure to integrate acquired businesses, could disrupt our business and/or dilute or adversely affect the price of our common stock.

Any impairment of the combined company’sour tangible, definite-lived intangible or indefinite-lived intangible

The agreements governing our notes, our guarantees of the Assumed Xilinx Notes, and our Revolving Credit FacilityAgreement impose restrictions on us that may adversely affect our ability to operate our business.

Our indebtedness could adversely affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations.

We may not be able to generate sufficient cash to service our debt obligations or meet our working capital requirements. Also, if we cannot generate sufficient revenue and operating cash flow, we may face a cash shortfall and be unable to make all of our planned investments in research and development or other strategic investments.

Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us.

We may incur future impairments of goodwill andour technology license purchases.

Our inability to continue to attract and retain qualified personnel may hinder our business.

Our stock price is subject to volatility.

Worldwide political conditions may adversely affect demand for our products.

As of December 26, 2020,31, 2022, we leased approximately 2.46have 6 million square feet of space for research and development, engineering, administrative and warehouse use including ourthroughout the world. These facilities include 5 million square feet of leased space and 1 million square feet of owned space. Our headquarters are located in Santa Clara, California, our principal administrative facilitiesand we have significant operations in Austin, Texas, our design center inTexas; San Jose, California; Shanghai, China, our main facility with respect to graphics and chipset products located inChina; Markham, Ontario, Canada, two design centers inCanada; Longmont, Colorado; Dublin, Ireland; Singapore; and Bangalore and Hyderabad, India, andIndia. We also have a number of smaller regional sales offices located in commercial centers near customers, principally in the United States, Europe, Asia and Latin America. These leases expire at varying dates through 2028, although some of these leases include optional renewals. We occupy approximately 251,000 square

We currently do not anticipate difficulty in either retaining occupancy of any of our facilities through lease renewals prior to expiration or through month-to-month occupancy or replacing them with equivalent facilities.

PART II

Performance Graph

Comparison of Five-Year Cumulative Total Returns

Advanced Micro Devices, S&P 500 Index and S&P 500 Semiconductor Index

The following graph shows a five-year comparison of cumulative total return on our common stock, the S&P 500 Index and the S&P 500 Semiconductor Index from December 26, 201530, 2017 through December 26, 2020.31, 2022. The past performance of our common stock is no indication of future performance.

The following discussion should be read in conjunction with the consolidated financial statements as of December 26, 202031, 2022 and December 28, 201925, 2021 and for each of the three years in the period ended December 26, 202031, 2022 and related notes, which are included in this Annual Report on Form 10-K as well as with the other sections of this Annual Report on Form 10-K, including “Part I, Item 1: Business,” “Part II, Item 6: Selected Financial Data” and “Part II, Item 8: Financial Statements and Supplementary Data.”

In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “us,” “our” or “AMD”), including a discussion of our results of operations for 20202022 compared to 2019,2021, an analysis of changes in our financial condition and a discussion of our contractual obligations and off-balance sheet arrangements. Discussions of 20182020 items and year-to-year comparisons between 20192021 and 20182020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2019.25, 2021.

Overview

Our 2022 financial results and further extendedreflect the strength of our industry-leading product portfoliodiversified business model despite the backdropchallenging PC market conditions in the second half of the COVID-19 pandemic.2022. Net revenue for 20202022 was $9.8$23.6 billion, an increase of 45%44% compared to 20192021 net revenue of $6.7$16.4 billion. The increase in net revenue was driven by a 64% increase in Data Center segment revenue primarily due to higher sales of our EPYC™ server processors, a 21% increase in Gaming segment revenue primarily due to higher semi-custom product sales, and a significant increase in Embedded segment revenue from the prior year period driven by the inclusion of Xilinx embedded product sales. This growth was partially offset by a 10% decrease in Client segment revenue primarily due to lower processor shipments driven by a weak PC market and significant inventory correction actions across the PC supply chain. Gross margin, as a percentage of net revenue for 2020,2022, was 45%, compared to 43%48% in 2019. Our operating2021. The decrease in gross margin was primarily due to amortization of intangible assets associated with the Xilinx acquisition. Operating income for 2020 improved to $1.42022 was $1.3 billion compared to operating income of $631 million$3.6 billion for 2019. Our net2021. The decrease in operating income was primarily driven by amortization of intangible assets associated with the Xilinx acquisition. Net income for 2020 improved to $2.52022 was $1.3 billion compared to $341 million$3.2 billion in the prior year. We recognized a $1.3 billionThe decrease in net income tax benefit upon the release of a portion of the valuation allowance on deferred tax assets. We made significant progress towards improving our balance sheet in 2020. was primarily driven by lower operating income.

Cash, cash equivalents and short-term investments as of December 26, 202031, 2022 were $2.3$5.9 billion, compared to $1.5$3.6 billion at the end of 2019. The2021. Our aggregate principal amount of total debt as of December 26, 202031, 2022 was $338 million,$2.5 billion, compared to $563$313 million as of December 28, 2019.25, 2021.

During 2020,the twelve months ended December 31, 2022, we consistently executedreturned a total of $3.7 billion to shareholders through the repurchase of 36.3 million shares of common stock under our stock repurchase program. As of December 31, 2022, $6.5 billion remained available for future stock repurchases under this program. The repurchase program does not obligate us to acquire any common stock, has no termination date and may be suspended or discontinued at any time.

WhileAlthough the current COVID-19 pandemic continues to impact our business operations and practices, and we expect that it may continue to impact our business, we experienced limited financial disruptiondisruptions during 2020. Although many of our offices remained open to enable critical on-site business functions in accordance with local government guidelines, most of our employees worked from home during 2020. During the second half of 2020, the majority of our employees in China returned to work and we maintained normal business operations subject to local government health measures.2022. We continue to monitor our operations and takepublic health measures implemented by governmental authorities in response to protect the health and safety of our employees, and support those employees who work from home so that they can be productive. We monitor demand signals as we adjust our supply chain requirements based on changing customer needs and demands. We also assess our product schedules and roadmaps to make any adjustments that may be necessary to support remote working requirements and address the geographic and market demand shifts caused by COVID-19.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an on-going basis, including those related to our revenue, inventories, business combination, goodwill, long-lived and intangible assets, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management’s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.

Management believes the following critical accounting estimates are the most significant to the presentation of our financial statements and require the most difficult, subjective and complex judgments.

We base our determination of necessary adjustments to the contract price by reference to actual historical activity and experience, including actual historical returns, rebates and credits issued to OEM and distributor customers adjusted, as applicable, to include adjustments, if any, for known events or current economic conditions, or both.

Our estimates of necessary adjustments for distributor price incentives and price protection on unsold products held by distributors are based on actual historical incentives provided to distributor customers and known future price movements based on our internal and external market data analysis.

Our estimates of necessary adjustments for OEM price incentives utilize, in addition to known pricing agreements, actual historical rebate attainment rates and estimates of future OEM rebate program attainment based on internal and external market data analysis.

We offer incentive programs through cooperative advertising and marketing promotions. Where funds provided for such programs can be estimated, we recognize a reduction to revenue at the time the related revenue is recognized; otherwise, we recognize such reduction to revenue at the later of when: i) the related revenue transaction occurs; or ii) the program is offered. For transactions where we reimburse a customer for a portion of the customer’s cost to perform specific product advertising or marketing and promotional activities, such amounts are recognized as a reduction to revenue unless they qualify for expense recognition.

We also provide limited product return rights to certain OEMs and to most distribution customers. These return rights are generally limited to a contractual percentage of the customer’s prior quarter shipments, although, from time to time we may approve additional product returns beyond the contractual arrangements based on the applicable facts and circumstances. In order to estimate adjustments to revenue to account for these returns, including product restocking rights provided to distributor and OEM customers, we utilize relevant, trended actual historical product return rate information gathered, adjusted for actual known information or events, as applicable.

Overall, our estimates of adjustments to contract price due to variable consideration under our contracts with OEM and distributor customers, based on our assumptions and include adjustments, if any, for known events, have been materially consistent with actual results; however, these estimates are subject to management’s judgment and actual provisions could be different from our estimates and current provisions, resulting in future adjustments to our revenue and operating results.

The most significant assumptions utilized in the determination of the estimated fair values of our reporting units are the sales and earnings growth rates (including long-term growth rates) and discount rates. Long-term growth rates are dependent on overall market growth rates, the competitive environment and inflation. As a result, long-term growth rates could be adversely impacted by a sustained deceleration in category growth or an increased competitive environment. Discount rates, which are consistent with a weighted average cost of capital that is likely to be expected by a market participant, are based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Our discount rates may be impacted by adverse changes in the macroeconomic environment, prolonged and continuing inflationary pressures, volatility in the equity and debt markets and other factors that otherwise create or exacerbate risks in our reporting units. Changes in operating marginsplans or adverse changes in the business or in the macroeconomic environment in the future could reduce the underlying cash flows used to calculate projectedestimate fair values and could result in a decline in fair value that would trigger future impairment charges of our reporting units’ goodwill. Based on our annual impairment testing, the fair values of all of our reporting units exceeded their carrying values.

We regularly assess the likelihood that we will be able to recover our deferred tax assets. Unless recovery is considered more-likely-than-not (a probability level of more than 50%), we will record a charge to income tax expense in the form of a valuation allowance for the deferred tax assets that we estimate will not ultimately be recoverable or maintain the valuation allowance recorded in prior periods. When considering all available evidence, if we determine it is more-likely-than-not we will realize our deferred tax assets, we will reverse some or all of the existing valuation allowance, which would result in a credit to income tax expense and the establishment of an asset in the period of reversal.

In determining the need to establish or maintain a valuation allowance, we consider the four sources of jurisdictional taxable income: (i) carryback of net operating losses to prior years; (ii) future reversals of existing taxable temporary differences; (iii) viable and prudent tax planning strategies; and (iv) future taxable income exclusive of reversing temporary differences and carryforwards.

Through the end of 2020,2022, we demonstrated consistent, continued and increasing profitability over the preceding three-year period. Our ability to sustain and grow our profitability is supported by the continued positive momentum of our consumer and commercial products, including our newly released desktop, mobile and graphics processors, greater market acceptance for our server products, the successful adoption of our new game console processor products, and our leadership in the continued development of HPC products. In assessing the realizability of the deferred tax assets, we considered the highly dynamic and competitive landscape of our industry, the continued performance and market acceptance of our new products, and the impact of such market acceptance on our estimates of future profitability. As a result, in the fourth quarter of 2020, we concluded that our history of profitable operating results, including the current period results, along with increasingly favorable forecasts of continued future profitability, provided sufficient positive evidence supporting the realizability of a certain amount of our U.S. deferred tax assets, accordingly, the release of the related valuation allowance previously recorded against these deferred tax assets, resulting in a tax benefit of $1.3 billion in the fourth quarter of 2020.

In addition, the calculation of our tax liabilities involves addressing uncertainties in the application of complex, multi-jurisdictional tax rules and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other taxing authorities. If our estimates

Gross margin as a percentage of net revenue was 45% in 20202022 compared to 43%48% in 2019.2021. The increasedecrease in gross margin was primarily driven by salesdue to amortization of Ryzen and EPYC processors in 2020, which have a higher gross margin thanintangible assets associated with the corporate average, partially offset by salesXilinx acquisition.

Through the end of 2020,fiscal year 2022, we demonstrated consistent, continued and increasing profitability over the preceding three-year period. Our ability to sustain and grow such profitability is supported by the continued positive momentum of our consumer and commercial products including our newly released desktop, mobile and graphics processors, greater market acceptance for our server products, the successful adoption of our new game console processor products, and our continued leadership in the development of HPC products. In assessing the realizability of the deferred tax assets, we considered the highly dynamic and competitive landscape of our industry, the continued performance and market acceptance of our new products, and the impact of such market acceptance on forecasts of future profitability. As a result, in the fourth quarter of 2020, we concluded that our history of profitable operating results, including the current period results, along with increasingly favorable forecasts of continued future profitability, provided sufficient positive evidence supporting the realizability of a certain amount of our U.S. deferred tax assets and, accordingly, the release of the related valuation allowance previously recorded against these deferred tax assets, resulting in a tax benefit of $1.3 billion in the fourth quarter of 2020.

Liquidity and Capital Resources

Our aggregate principal debt obligations were $338 million$2.5 billion as of December 31, 2022, which consisted primarily of $1.5 billion of the Xilinx Notes assumed as part of the Xilinx acquisition and $563$1.0 billion of 3.924% Notes and 4.393% Notes issued during the year, compared to $313 million as of December 26, 202025, 2021, respectively. We repaid $312 million of our 7.50% Senior Notes that matured in August 2022.

On April 29, 2022, we entered into a revolving credit agreement (Revolving Credit Agreement) with Wells Fargo Bank, N.A. as administrative agent and other banks identified therein as lenders. The Revolving Credit Agreement provides for a five-year unsecured revolving credit facility in the aggregate principal amount of $3.0 billion. There were no funds drawn from this facility during the year ended December 28, 2019, respectively.31, 2022.

We believe our cash, cash equivalents, and short-term investments balanceand cash flows from operations along with our Revolving Credit Facility entered into in June 2019 (refer to Note 6 of “Notes to Consolidated Financial Statements for additional information)and commercial paper program will be sufficient to fund operations, including capital expenditures and purchase commitments, over the next 12 months.months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all.

Our working capital cash inflows and outflows from operations areconsist primarily of cash collections from our customers, payments for inventory purchases and payments for employee-related expenditures.

Net cash provided by operating activities was $1.1$3.6 billion in 2020,2022, primarily due to our net income of $2.5$1.3 billion in 2022, adjusted for non-cash adjustments of $488 million$4.1 billion and net cash outflows of $1.8 billion from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $1.4 billion increase in inventories driven primarily by build of advanced process nodes to support the ramp of new products, a $1.1 billion increase in accounts receivable driven primarily by higher revenue in the fourth quarter of 2022 compared to the fourth quarter of 2021, and a $1.2 billion increase in prepaid expenses and other assets due primarily to prepayments under long-term supply agreements in 2022, offset by an $931 million increase in accounts payable primarily due to timing of payments to our suppliers, and a $546 million increase in accrued liabilities and other driven mainly by higher customer-related accruals.

Net cash provided by operating activities was $3.5 billion in 2021, primarily due to our higher net income of $3.2 billion in 2021, adjusted for non-cash adjustments of $1.1 billion and net cash outflows of $774 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $219$640 million increase in accounts receivable driven primarily by $1.1$1.6 billion higher revenue in the fourth quarter of 20202021 compared to the fourth quarter of 2019, partially offset by higher collections due to better revenue linearity in the fourth quarter of 2020, compared to the fourth quarter of 2019, a $417$556 million increase in inventories driven by anour continued increase in product build in support of customer demand, and a $231$920 million increase in prepaid expenses and other assets due primarily to prepayments under long-term supply agreements in 2021, offset by an increase in vendor credits, a $513$801 million decreaseincrease in accounts payable primarily due to timing of payments to our suppliers, offset byand a $574$526 million increase in accrued liabilities and other, both of which were driven mainly by higher marketing accruals, and higher accrued annual employee incentives due to improved financial performance.

Net cash provided by operatinginvesting activities was $493 million$2 billion in 2019,2022, which primarily due to our net incomeconsisted of $341 million, adjusted for non-cashhigher cash provided by maturities of short-term investments of $4.3 billion and non-operating charges of $694 million and net cash outflows of $542 million from changes in our operating assets and liabilities. The primary driversacquired as part of the changes in operating assets and liabilities included a $623 million increase in account receivable driven primarily by $708 million higher revenue during the fourth quarteracquisition of 2019 compared to the fourth quarterXilinx of 2018, a $137 million increase in inventories driven by an increase in wafer purchases during the fourth quarter of 2019 compared to the fourth quarter of 2018, and a $176 million increase in prepaid expenses and other assets due primarily to an increase in vendor credits and other non-current assets,$2.4 billion, partially offset by a $153higher cash used for purchases of short-term investments of $2.7 billion, cash used in the acquisition of Pensando of $1.5 billion and $450 million increase in accounts payable due to an increase in inventoryfor purchases of property and a $220 million increase in accrued liabilities and other driven by higher marketing accruals.

Net cash used in investing activities was $952$686 million in 2020,2021, which primarily consisted of $850 millionhigher cash used for purchases of short-term investments of $2.1 billion and $294$301 million for purchases of property and equipment, partially offset by $192 million forhigher cash provided by maturities of short-term investments.

Net cash provided byused in financing activities was $6 million$3.3 billion in 2020,2022, which primarily consisted of common stock repurchases of $3.7 billion under the Repurchase Program, higher repurchases to cover tax withholding on employee equity plans of $406 million and repayment of debt of $312 million, partially offset by proceeds from the issuance of debt of $991 million and higher proceeds from the issuance of common stock under our employee equity plans of $85$167 million.

Net cash used in financing activities was $1.9 billion in 2021, which primarily consisted of common stock repurchases of $1.8 billion under the Repurchase Program and higher repurchases to cover tax withholding on employee equity plans of $237 million, partially offset by $78 million of common stock repurchased to cover employee withholding taxes on vesting of employee equity grants. We borrowed $200 million of short-term debt during the second quarter of 2020 and paid off the balance during the third quarter of 2020.

As of December 26, 2020,31, 2022, all of our outstanding long-term debt had fixed interest rates. Consequently, our exposure to market risk for changes in interest rates on reported interest expense and corresponding cash flows is minimal.

We will continue to monitor our exposure to interest rate risk.

We actively monitor market conditions and developments specific to the securities and security classes in which we invest. We believe that we take a conservative approach to investing our funds in that we invest only in highly-rated debt securities with relatively short maturities and do not invest in securities which we believe involve a higher degree of risk. As of December 26, 2020,31, 2022, substantially all of our investments in debt securities were A-rated by at least one of the rating agencies. While we believe we take prudent measures to mitigate investment-related risks, such risks cannot be fully eliminated as there are circumstances outside of our control.

We maintain a foreign currency hedging strategy which uses derivative financial instruments to mitigate the risks associated with changes in foreign currency exchange rates. This strategy takes into consideration all of our exposures. We do not use derivative financial instruments for trading or speculative purposes.