Risk factor changes · AMD

What changed in AMD's risk factors

Item 1A (Risk Factors) of AMD's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-04 · Older: 10-K filed 2025-02-05

124new sentences

138reworded

87removed

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New in the latest 10-K 124

Our products may not be compatible with some or all industry-standard software and hardware. 15 Table of Conten t s Costs related to defective products could have a material adverse effect on us.
The agreements governing our notes, our guarantee of Xilinx s notes and the Revolving Credit Agreement.
We may be required to satisfy financial obligations under guarantees and other commercial commitments.
For a more complete discussion of the material risks facing our business, see below. 16 Table of Conten t s Economic and Strategic Risks The markets in which our products are sold are highly competitive and rapidly evolving.
Delivering the latest and best products to market on time is critical to revenue growth.
Competition is expected to remain intense, driven by rapid technological change, evolving standards, shifting customer preferences, product obsolescence, and frequent product launches from both established and new competitors.
Some of our competitors may possess stronger market positions, larger customer bases, more design wins, and greater financial, sales, marketing, and distribution resources than us.
As a result, they may be able to acquire market share or limit our ability to do so, more effectively capitalize on new market opportunities, and transition their products more efficiently than we can.
Some competitors are pursuing alternative computing architectures, such as Arm, which could grow the Arm ecosystem and increase competition in consumer, commercial and data center, reducing demand for our products.
Additionally, we may encounter competition from customers who internally develop products to support similar AI workloads to those supported by ours.
Our competitors may use their market position and financial resources to market and price their products in a way to dissuade customers from purchasing from us.
For example, Intel Corporation (Intel) uses its microprocessor market position to price its products aggressively and target our customers and channel partners with special incentives.
These aggressive activities have reduced and may reduce our unit sales and average selling prices for many of our products, adversely affecting our business.
Similarly, Nvidia Corporation (Nvidia) leverages its market position in data center GPU, financial resources, and proprietary software ecosystem to promote its systems and influences customers who do business with us.
Our competitors business practices, including allocation strategies, pricing actions, product mix and introduction schedules, licensing terms, marketing arrangements, product bundling strategies, lack of software inoperability and business acquisitions can limit customers ability to choose alternative products, including ours.
In addition, strategic partnerships, acquisitions and business collaborations by and between our competitors may increase competition and adversely affect our business.
For example, in September 2025, Nvidia announced a partnership and investment in Intel to partner on new data center and client platform products.
This partnership may result in increased competition and pricing pressure for our products or could prevent us from participating in other opportunities, which could materially adversely impact our business, financial condition and margins.
The growth of AI is further creating pressure on the semiconductor industry to timely design, manufacture and deliver semiconductor products and solutions to meet customer demand for computing power and AI infrastructure.
Some customers in AI markets may be unable to secure access to internal and external infrastructure, including availability of sufficient data center capacity or energy for the buildout of data centers that use our products.
In addition, construction delays in the scheduled buildout of data centers could impact the timing of customer demand.
Such delays in the buildout of data centers could have a material adverse effect on our business, financial condition and future growth strategy.
Customers may also lack, or be unable to, secure capital to fund their required AI infrastructure and may request alternative financing or deferred payment arrangements from vendors and suppliers.
These limitations could delay or reduce the demand for our products, which could negatively impact our revenue.
In addition, our GPU revenue in the past has been affected in part by the volatility of the cryptocurrency mining market.
Moreover, while AI adoption is likely to continue and may accelerate, the long-term trajectory of this technological trend is uncertain.
Product transition risks may increase as the computing industry shifts toward shorter launch cycles and a broader range of accelerated computing platforms.
Product transitions are complex and as such we may ship both new and prior-generation products concurrently.
Customer adoption patterns can vary and while some customers may shift to newer products more quickly and reduce demand for current-generation offerings, other customers may lower their inventory of existing products before purchasing new ones.
The increased frequency of product transitions and expansion of our product portfolio heightens the challenges of managing our supply and demand, which could adversely affect our revenue and inventory management.
If current or prospective customers default on or delay payments to us, our earnings and cash flow could be adversely impacted.
For example, there is currently an industry-wide memory shortage as the demand for such components has outpaced supply.
The price of memory has also increased as a result of the shortage.
Our operating results are subject to quarterly and seasonal sales patterns.
It is important to have reliable relationships with all of these third-party manufacturing suppliers to ensure adequate product supply to respond to customer demand.
For example, there is currently an industry-wide memory shortage as the demand for such components has outpaced supply.
The price of memory has also increased as a result of the shortage.
Our revenue from our semi-custom SoC products is dependent upon our semi-custom SoC products being incorporated into customers products and the success of those products.
Users access credentials can be compromised by phishing, vishing, smishing, multi-factor authentication (MFA) prompt bombing, hacking, or other social engineering, cybersecurity, theft activities, or unintentional disclosure due to a human error.
We leverage AI tools and systems to help support our internal functions and operations.

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These systems are increasingly vulnerable to cybersecurity threats, which can significantly impact data security.
As product complexity has increased, manufacturing lead times have extended and longer production cycles, combined with short product cycles, increase the risk that customer demand for products may change between wafer order and finished good availability, which could result in significant mismatches between supply and demand.
In April 2025, the U.S. government implemented a new license requirement for the export of certain semiconductor products to China (including Hong Kong and Macau) and D5 countries, or to companies headquartered in or with an ultimate parent located in such countries.
This restriction impacts our AMD Instinct MI308 products.
As a result of the restriction, we incurred approximately $800 million in inventory and related charges in the second quarter of 2025.
We applied for and were granted some licenses by the U.S. government that allow us to ship our MI308 products to certain China-based customers.
Sales of our MI308 products into China depend on customer demand, China s import control rules and our ability to obtain licenses.
As such, our revenues and results of operation could be negatively affected.
Our ability to design and introduce new products in a timely manner includes the use of third-party intellectual property.
Additionally, distributors and AIB partners typically maintain an inventory of our products.
Any of these problems could materially adversely affect our business.
We market and sell our products through a global, multi-tier network of authorized distributors, resellers and OEMs.
Despite programmatic controls, audits and contractual restrictions, our pricing programs may be misused, and unauthorized resellers or unauthorized resale can occur on the gray market .
These substandard gray market products may have higher-than-expected failure rates and as a result, we may face brand protection risks, reputational harm or unauthorized warranty claims.
We also face risks of product diversion into restricted markets, including reexports or sales to prohibited end users/end uses.
Despite our compliance programs and procedures for mitigating these risks through customer and transaction screening, distributor audits, law enforcement and NGO cooperation and export control compliance (including licensing where required), we may not fully eliminate these risks. 29 Table of Conten t s Climate change may have an impact on our business.
Climate change may adversely affect our business, as well as that of our suppliers and customers.
Data centers depend on access to clean water and reliable energy.
Customers ability to obtain sufficient energy capacity to meet demand is a complicated, multi-year process that involves regulatory and technical challenges.
If customers cannot secure sufficient power or water, or experience outages or shortages of these resources, they may be unable to expand their data center capacity and may reduce or stop purchases from us.
Although we maintain property, casualty, and other insurance, coverage varies by type, availability and cost.
Failure to comply with such reporting obligations may result in enforcement actions, litigation or reputational harm and could have a material adverse effect on us. 30 Table of Conten t s Legal and Regulatory Risks Government actions and regulations such as export regulations, import tariffs, and trade protection measures may limit our ability to export our products to certain customers.
We are subject to U.S. laws and regulations, including the Export Administration Regulations (EAR) administered by the Bureau of Industry and Security (BIS) of the U.S.
Department of Commerce, which restrict the export of certain products and technologies to certain countries, including China, Russia, and Belarus, among others.
These restrictions may limit our ability to sell certain products or technologies in these markets or to certain customers.
Evolving U.S. government policy toward semiconductor exports, particularly in the context of national security and foreign policy priorities could adversely affect our business.
Accordingly, there is a risk that new products which exceed current licensing thresholds, or even those below current licensing thresholds, may not succeed because BIS could determine they are subject to licensing requirements.
U.S. export restrictions on semiconductors and semiconductor technology to China and Chinese customers negatively impact our ability to sell to customers in China and make it easier for our China-based competitors to develop and sell their own solutions and reduce the need for our products.
In April 2025, the U.S. government implemented a new license requirement for the export of certain semiconductor products to a D5 Country, and to companies headquartered in, or with an ultimate parent located in such D5 Country.
This restriction impacts our AMD Instinct MI308 products.
As a result of the restriction, we incurred approximately $800 million in inventory and related charges in the second quarter of 2025.
We applied for and were granted some licenses by the U.S. government that allow us to ship our MI308 products to certain China-based customers.
During the fourth quarter of fiscal year 2025, we began shipping products and reversed approximately $360 million of the charges recorded earlier in the year.
Sales of our MI308 products into China depend on customer demand, China s import control rules and our ability to obtain licenses.
In August 2025, U.S. government officials expressed an expectation that the U.S. government will receive 15% of the revenue generated from licensed MI308 sales to China.
However, to date, the U.S. government has not published a regulation establishing such requirement.
Any request for a percentage of the revenue by the U.S. government could subject us to litigation, increase our costs and harm our competitive position and benefit competitors that are not subject to such arrangements.
Additional export restrictions imposed in the future may not only impact our ability to serve China but could also impact our ability to serve other markets.
If any new export controls impact more of our products, we may be unable to sell our inventory of such products and we may further incur inventory and related charges since there is no assurance that the U.S. government will grant licenses at all or in a timely manner.
Even if we are granted licenses, the licenses may be temporary or could impose onerous conditions for us or our customers.
If we are not granted licenses, we may be unable to develop a competitive product for the China market that is not subject to licensing requirements.
Limits on sales of our offerings in the China market due to export controls could impact our competitive position compared to domestic Chinese competitors and other companies or competitors not subject to the same restrictions.
As such, we could lose market position and our business, operating results, and financial condition would be adversely impacted.
In January 2025, BIS issued a final rule, commonly referred to as the AI Diffusion Rule, that would have imposed new restrictions on the export, reexport and in-country transfer of certain advanced semiconductor devices and technology.
In May 2025, BIS announced its intention to rescind the AI Diffusion Rule, publish a regulation formalizing the rescission, and issue replacement rules in the future.
The replacement rules may limit our ability to engage in certain business transactions, require new export licenses, delay shipments, or necessitate changes in our compliance processes and product designs to ensure regulatory compliance.
Additionally, BIS s announced plans introduce uncertainty as we evaluate whether specific products, technologies, or software fall within the scope of any new restrictions, and whether BIS will grant licenses in a timely matter or at all.
Compliance with the planned or existing rules could result in increased costs, disruption of key customer and supplier relationships, loss of competitive positioning in international markets or reputational harm. 31 Table of Conten t s The implementation or increase of any tariffs, trade protection measures or restrictions, or retaliatory actions from foreign governments could result in lost sales and adversely impact our reputation and business.
The U.S. government has instituted or proposed changes in trade policies that include higher tariffs on imports into the U.S. and other government regulations affecting trade between the United States and other countries where we conduct our business.
Such changes to U.S. trade policy have the potential to adversely impact the U.S. economy or sectors thereof and could significantly impact our business, in particular the import of products used in our business that are manufactured outside the U.S.
Any retaliatory actions by affected countries and foreign governments could result in tariffs, trade protection measures or other restrictions imposed on our current and future products.
Our customers costs of doing business may increase or their sales may be negatively affected.
As such, customer demand for our products may decline, which could adversely impact our ability to generate revenue and result in inventory impairment changes.
For instance, tariffs on hardware required for data centers could raise costs for our customers, potentially causing them to delay or cancel AI infrastructure investments.
Further, to the extent that the United States, China or other countries seek to promote products that are produced domestically or reduce their dependence on products from another country, they may implement regulations or policies that may negatively affect our business.
The United States and other countries export control regulations continue to focus on targeting semiconductors associated with AI, including GPUs and associated products and services, by restricting or prohibiting their unlicensed sale or supply to U.S. embargoed or sanctioned countries, governments, persons and entities.
Continued changes to export control regulations that we are subject to, or changes to their interpretation and enforcement, could result in greater compliance costs and other compliance burdens on our business and our customers which could adversely impact our business.
Export controls have and may continue to encourage customers in China and other markets subject to those controls to pursue alternatives to U.S. semiconductors for their product designs to limit compliance burdens and potential impact on their product roadmaps.
Moreover, as the U.S. government continues adding companies to the Entity List, our supply chain may be negatively impacted as we may be required to suspend purchasing from such suppliers or selling to such customers or otherwise unable to fulfill our contractual obligations to them.
For example, in September 2025, BIS issued a new rule designating any entity that is at least 50% owned by one or more entities on the Entity List will be subject to Entity List restrictions and this rule similarly applies to entities at least 50% owned by listed military end users and certain sanctioned parties.
In October 2025, the U.S. government announced that it planned to suspend enforcement of this new rule for one year.
However, the restrictions can be reimposed at any time.
These restrictive governmental actions and any similar measures that may be imposed on U.S. companies by other governments, especially in light of ongoing trade tensions with U.S. trading partners, will likely limit or prevent us from doing business with certain of our customers or suppliers and harm our ability to compete effectively or otherwise negatively affect our ability to sell our products.
If we were ever found to have violated these laws or similar applicable non-U.S. laws, even if the violation occurred without our knowledge, we may be subject to penalties, which could adversely affect our reputation, business, operating results and financial condition.
In January 2026, the OECD released a "side-by-side" package introducing new safe harbors and providing an exemption for U.S.-based multinational companies from parts of the global minimum tax framework.
This guidance is intended to simplify compliance with a permanent simplified Effective Tax Rate safe harbor, a one-year extension of the transitional Country-by-Country Reporting safe harbor and reinforce the role of Qualified Domestic Minimum Top-up Taxes (QDMTT).
While these rules are generally favorable to the Company, they need to be adopted by each country to be considered enacted for financial accounting purposes.
As new guidance becomes available in each country, we will continue to evaluate the impact of the proposed and enacted legislative changes to our effective tax rate and cash flows.
We may be required to satisfy financial obligations under guarantees and other commercial commitments.
From time to time, we enter into commercial arrangements such as long-term capacity purchase agreements, financial guarantees and leases to support customers or commercial partners infrastructure development.
These arrangements may increase our exposure to counterparty risk, such as their inability to secure the necessary capital or financing, delays in project execution and downturns in their business, including insolvency.
For example, in March 2025, we completed our acquisition of ZT Systems.
While we believe that our acquisitions will result in certain benefits, including certain operational synergies, accretion and cost efficiencies, and drive product innovations, achieving these anticipated benefits depends on our ability to successfully integrate the acquired businesses into our business.
From time to time, we may also seek to divest or wind down portions of our business, either acquired or otherwise.
Such dispositions involve risks and uncertainties, including our ability to sell such businesses on terms acceptable to us, or at all; litigation; disruption of our ongoing business and distraction of management; failure to effectively transfer liabilities, contracts, facilities and employees to buyer; continued financial obligations and unanticipated liabilities; and closing delays.
For example, purchase price consideration received from divestitures can be subject to customary post-closing adjustments, and if such adjustments are material, we may be exposed to losses, which could have a material impact on our financial position and results of operations.
All tangible and intangible assets including goodwill, are subject to impairment testing when events or changes in circumstances suggest that their carrying amounts may not be recoverable.
Changes in the public perception of the U.S. government in the regions where we operate or plan to operate could also negatively impact our business and results of operations.
Geopolitical tensions, such as the Ukraine-Russia, Israel-Hamas and Venezuela conflicts, could escalate and expand, which in turn could have negative impacts on the global economy and financial markets.
Any of these events could cause consumer spending to decrease or result in increased volatility in the U.S. economy and worldwide financial markets. 41 Table of Conten t s Any of the above risks, should they occur, could result in increased costs, shipment delays, general business interruptions, the inability to obtain, or delays in obtaining export licenses for certain technology, penalties or a loss of export privileges.
Our competitors have targeted individuals in our organization that have desired skills and experience.
Our ability to attract and retain qualified employees could also be impacted by changes in immigration law and regulations, or interpretation of new or existing laws.
United States immigration controls could affect the employment status of key technical and professional employees, as well as our ability to hire talent globally.
Our stock price is subject to volatility.

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Economic and Strategic Risks The markets in which our products are sold are highly competitive and rapidly evolving.
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~~ ~~and~~ ~~products.~~ 14 ~~Table~~ of ~~Contents~~ 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.
Climate change may have a ~~long-term~~ an impact on our business.
Legal and Regulatory Risks Government actions and ~~regulations~~ regulations, including but not limited to export regulations, import tariffs and trade protection measures, may limit our ability to export our products to certain customers.
The agreements governing our notes, our guarantee of the Assumed Xilinx s ~~notes,~~ Notes and ~~our~~ the Revolving Credit Agreement impose restrictions on us that may adversely affect our ability to operate our business.
Merger, Acquisition, Divestiture, and Integration Risks Acquisitions, joint ventures, and/or ~~strategic~~ investments, and the failure to integrate acquired businesses may fail to materialize their anticipated benefits and could disrupt our business.
Our inability to continue to attract and retain ~~qualified~~ ~~personnel~~ key employees may hinder our business.
~~Nvidia~~ s ~~practices~~ ~~can~~ ~~limit~~ ~~customers~~ ~~ability~~ to ~~choose~~ ~~non-Nvidia~~ ~~products,~~ ~~including~~ ~~our~~ ~~products,~~ ~~and~~ in ~~turn,~~ This may limit our market share and decrease our margins and profitability, which ~~could~~ may have a material adverse effect on our business.
~~Further~~ ~~consolidation~~ ~~could~~ ~~adversely~~ ~~impact~~ The competitiveness of our ~~business~~ ~~due~~ to ~~there~~ ~~being~~ ~~fewer~~ ~~suppliers,~~ ~~customers~~ ~~and~~ ~~partners~~ in ~~the~~ ~~industry.~~ 16 ~~Table~~ products depends on a number of ~~Contents~~ We ~~believe~~ ~~that~~ ~~the~~ ~~main~~ factors ~~that~~ ~~determine~~ ~~our~~ ~~product~~ ~~competitiveness~~ ~~are~~ including, performance, total cost of ownership, timely product introductions, product ~~quality,~~ quality and reliability, product features and ~~capabilities~~ ~~(including~~ ~~accelerations~~ ~~for~~ ~~key~~ ~~workloads~~ ~~such~~ as ~~AI,~~ capabilities, energy efficiency (including power consumption and battery life, given their impact on total cost of ownership), ~~reliability,~~ ~~performance,~~ size (or form factor), selling price, cost, adherence to industry standards (and the creation of open industry standards), level of integration, software and hardware compatibility, ease of use and functionality of software design tools, completeness of applicable software solutions, security and stability, brand recognition and availability.
From time to time, governments provide incentives or make other investments that could benefit and give a competitive advantage to our competitors.
Government ~~incentives,~~ ~~including~~ ~~the~~ ~~CHIPS~~ ~~Act,~~ incentives may not be available to us on acceptable terms or at all.
If our competitors can benefit from such government incentives and we cannot, it could strengthen our competitors relative position and have a material adverse effect on our business. 32 Table of Conten t s We have equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd.
The semiconductor industry is highly cyclical and has experienced significant downturns, often in ~~conjunction~~ ~~with~~ alongside constant and rapid technological change, wide fluctuations in supply and demand, continuous new product introductions, price erosion and declines in general economic conditions.
If demand from these markets is below our expectations, sales of our products may decrease, which would have a material adverse effect on us. 17 Table of Conten t s The demand for our products depends in part on the market conditions in the industries into which they are sold.
~~For~~ ~~instance,~~ in In our Data Center segment, we offer products that are optimized for generative AI applications and since ~~the~~ ~~fourth~~ ~~quarter~~ of ~~2023,~~ 2024, we have experienced significant demand for our AI accelerators.
The demand for such products will in part ~~will~~ depend on the extent to which our customers utilize generative AI solutions in a wide variety of applications, and both the near-term and long-term trajectory of such generative AI solutions is unknown.
~~Also,~~ ~~our~~ Our Client and Gaming segment revenue is focused on the consumer desktop and notebook PC segments and will depend in part on the market s adoption of AI PCs.
In the past, ~~revenues~~ revenue from the Client and Gaming ~~segments~~ ~~have~~ segment has experienced a decline driven by, among other factors, the adoption of smaller and other form factors, increased competition and changes in replacement cycles. 17 ~~Table~~ of ~~Contents~~ In ~~addition,~~ ~~our~~ ~~GPU~~ ~~revenue~~ in ~~the~~ ~~past~~ ~~has~~ ~~been~~ ~~affected~~ in ~~part~~ by ~~the~~ ~~volatility~~ of ~~the~~ ~~cryptocurrency~~ ~~mining~~ ~~market.~~
The success of our semi-custom SoC products in our Client and Gaming segment is dependent on securing customers for our semi-custom design pipeline and consumer market conditions, including the success of game console systems and next generation consoles for Sony and Microsoft.
Our Embedded segment primarily includes embedded ~~CPUs~~ ~~and~~ ~~GPUs,~~ CPUs, APUs, ~~FPGAs~~ FPGAs, System on Modules (SOMs) and ~~Adaptive~~ adaptive SoC products some of which are subject to macroeconomic trends and volatile business conditions.
To the extent our embedded customers are faced with higher inventory levels, they may choose to draw down their existing inventory and order less of our products. 18 Table of Conten t s The success of our business depends on 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 fail to or are delayed in identifying, developing, qualifying or shipping new products or technologies that provide value to our customers and address these new trends, or if we fail to predict which new form factors, product features preferences or requirements consumers will adopt and adapt our business accordingly, we may lose competitive positioning, which could cause us to lose market ~~share~~ ~~and~~ ~~require~~ us to ~~discount~~ ~~the~~ ~~selling~~ ~~prices~~ of ~~our~~ ~~products.~~ share.
New investments may not generate sufficient ~~revenue,~~ revenue and we may incur unanticipated ~~liabilities~~ ~~and~~ ~~may~~ ~~divert~~ ~~our~~ ~~limited~~ ~~resources~~ ~~and~~ ~~distract~~ ~~management~~ ~~from~~ ~~our~~ ~~current~~ ~~operations.~~ liabilities.
In our Data Center segment, we offer products that are optimized for generative AI applications and ~~since~~ ~~the~~ ~~fourth~~ ~~quarter~~ of ~~2023,~~ we have experienced significant demand for our AI accelerators.
The demand for such products in part will depend on the extent to which our customers utilize generative AI solutions in a wide variety of ~~applications,~~ ~~and~~ applications as both the near-term and long-term trajectory of such generative AI solutions is unknown.
~~Moreover,~~ ~~while~~ AI ~~adoption~~ is ~~likely~~ to ~~continue~~ ~~and~~ ~~may~~ ~~accelerate,~~ ~~the~~ ~~long-term~~ ~~trajectory~~ of ~~this~~ ~~technological~~ ~~trend~~ is ~~uncertain.~~ 18 ~~Table~~ of ~~Contents~~ Delays in developing, qualifying or shipping new products ~~can~~ ~~also~~ may cause us to miss our customers product design windows or, in some cases, breach contractual obligations.
If our ~~customers~~ do products are not ~~include~~ selected by our ~~products~~ customers in the initial design of their computer systems or products, they ~~will~~ are typically ~~not~~ ~~use~~ ~~our~~ ~~products~~ in ~~their~~ ~~systems~~ or ~~products~~ excluded until at least the next design ~~configuration.~~ cycle.
The process of being qualified for inclusion in a customer s system or product can be lengthy and could cause us to further miss a cycle in the demand of end-users, which ~~also~~ could result in a loss of market share and harm our business.
We also depend on the ~~success~~ ~~and~~ timing and success of our customers platform launches.
The increasing frequency and complexity of our newly introduced products may also result in unanticipated quality or production issues that could result in product delays. 19 Table of Conten t s The loss of a significant customer may have a material adverse effect on us.
In addition, as market demand requires that products incorporate new features and performance standards on an industry-wide ~~basis.~~ basis, product pricing declines over the life of a specific product.
We depend on a small number of customers for a substantial portion of our ~~business,~~ business and we expect that a small number of customers will continue to account for a significant part of our revenue and receivables in the future.
Uncertainty in the economic environment or other unfavorable changes in economic conditions, such as inflation, ~~higher~~ fluctuating interest rates, recession, slowing growth, increased unemployment, tighter credit markets, changes or uncertainty in fiscal monetary or trade policy, implementation of new or increased tariffs, retaliatory tariffs by other countries or other trade restrictions, or currency fluctuations, may negatively impact consumer confidence and spending causing our customers to stop or postpone purchases.
~~The~~ This risk ~~related~~ to ~~our~~ ~~customers~~ ~~potentially~~ ~~defaulting~~ on or ~~delaying~~ ~~payments~~ to us is ~~increased~~ ~~because~~ heightened as we expect that a small number of customers will continue to account for a substantial part of our revenue.
If we are not able to procure a stable supply of ~~materials~~ materials, including memory, on an ongoing basis and at reasonable costs to meet our production requirements, we could experience a supply shortage or an increase in production costs, which could negatively impact our gross margin and materially adversely affect our business.
If a banking institution in which we hold funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds, which in turn could adversely impact our short-term liquidity and ability to meet our operating expense obligations. 19 ~~Table~~ of ~~Contents~~ ~~Our~~ ~~operating~~ ~~results~~ ~~are~~ ~~subject~~ to ~~quarterly~~ ~~and~~ ~~seasonal~~ ~~sales~~ ~~patterns.~~
Any patent licensed by us or issued to us could be challenged, invalidated, expire, or circumvented or rights granted thereunder may not provide a competitive advantage to us. 20 Table of Conten t s Furthermore, patent applications that we file may not result in issuance of a patent or, if a patent is issued, the patent may not be issued in a form that is advantageous to us.
Fluctuations in the exchange rate between the U.S. dollar and the local currency ~~can~~ ~~cause~~ ~~increases~~ or ~~decreases~~ in may impact the cost of our products in the local currency of ~~such~~ for international customers.
It is ~~important~~ to ~~have~~ ~~reliable~~ ~~relationships~~ ~~with~~ ~~all~~ of ~~these~~ ~~third-party~~ ~~manufacturing~~ ~~suppliers~~ to ~~ensure~~ ~~adequate~~ ~~product~~ ~~supply~~ to ~~respond~~ to ~~customer~~ ~~demand.~~ 20 ~~Table~~ of ~~Contents~~ We cannot guarantee that these manufacturers or our other third-party manufacturing suppliers will be able to meet our near-term or long-term manufacturing requirements.
For example, if TSMC is not able to manufacture wafers for our microprocessor and GPU products at 7 nm or smaller nodes and our newest IC products in sufficient quantities to meet customer demand, it could have a material adverse effect on our business. 21 Table of Conten t s We do not have long-term commitment contracts with some of our third-party manufacturing suppliers.

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If we are unable to meet customer demand due to fluctuating or late supply from the ATMP JVs, it could result in lost sales and have a material adverse effect on our business. 21 22 Table of ~~Contents~~ Conten t s If essential equipment, materials, substrates or manufacturing processes are not available to manufacture our products, we could be materially adversely affected.
If we are unable to procure certain of these materials for our back-end manufacturing operations, or our third-party manufacturers are unable to procure materials for manufacturing our products, our business would be materially adversely affected. 23 Table of Conten t s Failure to achieve expected manufacturing yields for our products could negatively impact our results of operations.
Any decrease in manufacturing yields could result in an increase in per unit costs, which would adversely impact our gross margin and/or force us to allocate our reduced product supply amongst our customers, which could harm our relationships and reputation with our customers and materially adversely affect our business. 22 ~~Table~~ of ~~Contents~~ ~~Our~~ ~~revenue~~ ~~from~~ ~~our~~ ~~semi-custom~~ ~~SoC~~ ~~products~~ is ~~dependent~~ ~~upon~~ ~~our~~ ~~semi-custom~~ ~~SoC~~ ~~products~~ ~~being~~ ~~incorporated~~ ~~into~~ ~~customers~~ ~~products~~ ~~and~~ ~~the~~ ~~success~~ of ~~those~~ ~~products.~~
We may also depend on third parties, such as customers and ~~end~~ ~~users,~~ end-users, to deploy our mitigations alone or as part of their own mitigations, and they may delay, decline or modify the implementation of such mitigations.
Actual or perceived security vulnerabilities of our products may subject us to adverse publicity, damage to our brand and reputation, and could materially harm our business or results of operations. 24 Table of Conten t s IT outages, data loss, data breaches and cyberattacks could disrupt operations and compromise our intellectual property or other sensitive information, be costly to remediate or cause significant damage to our business, reputation, financial condition and results of operations.
~~Threat~~ Risks and threat factors range in sophistication from ~~individual~~ negligent or bad acts by individuals, hackers ~~and~~ ~~insiders~~ or insiders, to ransom gangs and state-sponsored attackers.
Cyberattacks have and may come into our IT Systems through the compromise of users access ~~credentials.~~ credentials or those of third-party IT systems or untrusted assets.
~~Users~~ ~~access~~ ~~credentials~~ ~~can~~ be ~~compromised~~ by ~~phishing,~~ ~~vishing,~~ ~~smishing,~~ ~~multi-factor~~ ~~authentication~~ ~~(MFA)~~ ~~prompt~~ ~~bombing,~~ ~~hacking,~~ or ~~other~~ ~~social~~ ~~engineering,~~ ~~cybersecurity,~~ or ~~theft~~ ~~activities.~~ 23 ~~Table~~ of ~~Contents~~ Threat actors are also increasingly using tools and techniques that circumvent controls, evade detection, and remove forensic evidence, which means that we and others may be unable to implement adequate preventative measures ~~against,~~ against cyberattacks or to anticipate, detect, deflect, contain or recover from ~~cyberattacks~~ them in a timely or effective manner.
Cyberattacks that breach our security measures, or those of our third-party service providers, customers or business partners, could result in any or all of the following, which individually or collectively could materially adversely affect our financial ~~condition,~~ ~~our~~ condition and competitive position; unauthorized access to, misuse or disclosure of Confidential Data (such as intellectual property, sensitive business information or personally identifiable information (PII)); reputational harm and/or diminution in our competitiveness; loss of existing and/or future customers; litigation and/or regulatory investigations or enforcement; significant remediation, restoration and compliance costs; and the diversion of management s attention and key information technology resources.
We anticipate ongoing and increasing costs related to enhancing and implementing information security controls, including costs related to upgrading application, computer, and network security components; training workers to maintain and monitor our security controls; investigating, responding to and remediating any data security breach, and addressing any related litigation or regulatory proceedings; mitigating reputational harm; and complying with external regulations. 25 Table of Conten t s Uncertainties involving the ordering and shipment of our products could materially adversely affect us.
Factors that may result in excess or obsolete inventory, a reduction in the average selling price, or a reduction in our gross margin include: a sudden or significant decrease in demand for our products; a production or design defect in our products; a higher incidence of inventory obsolescence because of rapidly changing technology and customer requirements; a failure to accurately estimate customer demand for our products, including for our older products as our new products are introduced; or our competitors introducing new products or taking aggressive pricing actions. 24 ~~Table~~ of ~~Contents~~ ~~Our~~ ~~ability~~ to ~~design~~ ~~and~~ ~~introduce~~ ~~new~~ ~~products~~ in a ~~timely~~ ~~manner~~ ~~includes~~ ~~the~~ ~~use~~ of ~~third-party~~ ~~intellectual~~ ~~property.~~
If the third-party intellectual property that we use becomes unavailable, is not available with required functionality or performance in the time frame, manufacturing technology, or price point needed for our new products or fails to produce designs or functionality that meet customer demands, or laws are adopted that affect our use of third party intellectual property in certain regions or products, our business could be materially adversely affected. 26 Table of Conten t s 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 and products.
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 and products.
If the designers, manufacturers, AIBs and suppliers of motherboards, graphics cards, software, memory and other components cease or reduce their design, quality, manufacture or production of current or future products that are based on, utilized in, or support our products, or laws are adopted that result in the same, our business could be materially adversely affected.
If Microsoft does not continue to design and develop its operating systems so that they work with our x86 instruction sets or does not continue to develop and maintain their operating systems to support our graphics products, independent software providers may forego designing their software applications to take advantage of our innovations and customers may not purchase PCs with our x86 products.
In addition, some software drivers licensed for use with our x86 products are certified by Microsoft.
If Microsoft did not certify a driver, or if we otherwise fail to retain the support of Microsoft or other software vendors, our ability to market our x86 products would be materially adversely affected.
If we are unable to manage the risks related to the use of our third-party distributors and AIB partners or offer appropriate incentives to focus them on the sale of our products, our business could be materially adversely affected. 25 ~~Table~~ of ~~Contents~~ ~~Additionally,~~ ~~distributors~~ ~~and~~ ~~AIB~~ ~~partners~~ ~~typically~~ ~~maintain~~ an ~~inventory~~ of ~~our~~ ~~products.~~
In the event of a significant decline in the price of our products, the price protection rights we offer would materially adversely affect us because our revenue and corresponding gross margin would decline. 27 Table of Conten t s Our business depends on 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.
~~Any~~ of ~~these~~ ~~problems~~ ~~could~~ ~~materially~~ ~~adversely~~ ~~affect~~ ~~our~~ ~~business.~~ 26 ~~Table~~ of ~~Contents~~ We could be subject to potential product liability claims if one of our products causes, or merely appears to have caused, an injury, whether tangible or intangible.
A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business. 28 Table of Conten t s 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~~ ~~inability~~ to ~~control~~ ~~gray~~ Gray market activities could result in customer satisfaction issues because any time products are purchased outside our authorized distribution channels there is a risk that our customers are buying counterfeit or substandard products, including products that may have been altered, mishandled or damaged, or are used products represented as new.
~~Additionally,~~ ~~products~~ Products acquired on the gray market or through other unauthorized channels are at higher risk of being re-sold to prohibited end-users, misused, and deployed for uses that do not align with AMD s ethics, values or compliance standards.
Also, when gray market products enter the market, we and our distribution channels compete with these heavily discounted gray market products, which adversely affects demand for our products and negatively impacts our margins. 27 ~~Table~~ of ~~Contents~~ ~~Climate~~ ~~change~~ ~~may~~ ~~have~~ a ~~long-term~~ ~~impact~~ on ~~our~~ ~~business.~~
~~Global~~ ~~climate~~ ~~change~~ ~~may~~ ~~result~~ in ~~certain~~ Increasing frequency and severity of natural disasters and climate-related events ~~occurring~~ ~~with~~ ~~increasing~~ ~~frequency~~ ~~and~~ ~~severity~~ ~~and~~ ~~its~~ ~~physical~~ could impact on the major regions where we have operations ~~has~~ ~~the~~ ~~potential~~ to and could disrupt our business and ~~those~~ that of our customers and suppliers.
Our headquarters and some of our operations and facilities are located in areas that are susceptible to earthquakes and tsunamis, wildfires, extreme storms, flooding, extreme heat, drought, freezing, tropical cyclones and other natural disasters.
Water and energy availability and reliability in the regions where we have facilities and where our suppliers and customers have operations is important to our business.
Certain natural ~~disasters,~~ ~~including~~ ~~drought,~~ ~~wildfires,~~ ~~storms,~~ ~~sea-level~~ ~~rise~~ ~~and~~ ~~flooding~~ disasters could disrupt our operations and our suppliers or customers operations, including by disrupting, the availability of energy or water necessary for the operations of our business or those of our suppliers and customers.
Such disruptions could ~~cause~~ ~~delays~~ in ~~manufacturing~~ or ~~shipping~~ ~~our~~ ~~products,~~ ~~affect~~ interrupt our supply ~~chain~~ chain, delay manufacturing and ~~may~~ ~~result~~ in ~~the~~ product shipments, lead to a loss of ~~business,~~ business and ~~additional~~ higher costs to maintain or ~~resume~~ restore operations, any of which could adversely affect our business and ~~results~~ of ~~operation.~~ operating results.
We ~~may~~ ~~also~~ ~~experience~~ ~~contractual~~ ~~disputes~~ ~~relating~~ to ~~supply~~ Supply chain delays resulting from climate change related ~~disruptions,~~ ~~which~~ ~~could~~ ~~result~~ in ~~increased~~ disruptions may lead to contractual disputes, litigation and increasing costs.
Losses not covered by insurance may be ~~large,~~ significant, which could materially harm our results of operations and financial condition.
Our business and the business of our suppliers and customers may also be subject to current and future climate-related regulations, ~~and~~ contract ~~terms,~~ ~~and~~ ~~may~~ be ~~subject~~ to ~~additional~~ ~~regulations~~ ~~and~~ ~~contract~~ terms and ~~lawsuits~~ in ~~the~~ ~~future.~~ lawsuits.
~~New~~ ~~increased~~ Increased regulations ~~regarding~~ on carbon taxes, greenhouse gas emissions, fuel or energy taxes ~~and~~ ~~other~~ ~~climate-related~~ ~~risks~~ will likely result in greater ~~costs;~~ ~~for~~ ~~example,~~ costs, such as a ~~result~~ of through carbon pricing ~~impacts~~ impact on ~~electrical~~ utilities ~~and/or~~ ~~necessitating~~ ~~that~~ we ~~purchase~~ ~~more~~ or through requiring greater renewable energy purchases than otherwise planned.
Our supply chain manufacturing suppliers may be ~~exposed~~ to incur increased costs of doing business should they be affected by new climate-related expectations such as those affecting abatement equipment, renewable energy, and/or alter production processes and materials selections.
These costs and restrictions could materially harm our business and results of operations by increasing our expenses, ~~impacting~~ damaging our reputation if ~~there~~ is for actual or perceived non-compliance, or requiring us to alter our operations and products.
(THATIC), a third-party Chinese entity.
In June 2019, ~~the~~ ~~Bureau~~ of ~~Industry~~ ~~and~~ ~~Security~~ ~~(BIS)~~ of ~~the~~ ~~United~~ ~~States~~ ~~Department~~ of ~~Commerce~~ BIS added certain Chinese entities to the Entity List, including THATIC and the THATIC JV.
Since that time, the United States administration has called for changes to domestic and foreign policy, including policies with respect to China and Russia.
Specifically, United States-China trade relations remain uncertain as the United States continues to add more Chinese companies to the Entity List and ~~more~~ introduce new regulations ~~targeted~~ to on advanced computing, semiconductor manufacturing, and ~~emerging~~ ~~technologies~~ ~~such~~ as ~~AI.~~ AI, while China has imposed retaliatory tariffs.
~~Further,~~ ~~the~~ ~~United~~ ~~States~~ ~~and~~ ~~other~~ ~~countries~~ ~~and~~ ~~coalitions~~ ~~have~~ ~~issued~~ ~~sanctions~~ ~~and~~ ~~revisions~~ to ~~export~~ ~~control~~ ~~and~~ ~~other~~ ~~regulations~~ ~~against~~ ~~Russia,~~ ~~Belarus~~ ~~and~~ In October 2023, the ~~DNR~~ Bureau of Industry and ~~LNR~~ ~~regions~~ Security (BIS) of ~~Ukraine,~~ ~~due~~ to the ~~conflict~~ in ~~Ukraine.~~ 28 ~~Table~~ United States Department of ~~Contents~~ In ~~October~~ ~~2023,~~ ~~BIS~~ Commerce issued ~~new~~ requirements for the export of certain advanced computing items ~~that~~ ~~apply~~ to ~~the~~ ~~export~~ of ~~products~~ ~~classified~~ ~~ECCN~~ ~~3A090~~ or ~~4A090~~ to a party headquartered in, or with an ultimate parent headquartered in, any of Country Groups D1, D4 or D5, including ~~China.~~ China (a D5 Country).
These controls prevent us from shipping certain AMD Instinct integrated circuits and certain AMD Versal FPGAs to China, or to customers outside of the United States who are headquartered in or whose ultimate parent is headquartered in a D5 ~~country~~ ~~(including~~ ~~China),~~ Country, without a license.
BIS may not timely update performance-based licensing thresholds in the 2023 export requirements and/or may issue new licensing requirements and regulatory controls in the future.
The United States has imposed unilateral controls restricting GPUs and associated products, and in ~~the~~ ~~future~~ is likely to further adopt other unilateral or multilateral controls.
The scope and application of such controls have been and may ~~again~~ continue to be ~~very~~ broad, which may prohibit us from exporting or providing access to our products to ~~any~~ or ~~all~~ customers in one or more markets, including but not limited to China, and could negatively impact our manufacturing, testing and warehousing locations, or could impose other conditions that limit our ability to meet demand abroad.
If ~~these~~ export controls targeting semiconductors associated with AI including GPUs and associated products and services are further tightened, or the classification of our products under those controls changes, our ability to export our technology, products or services could be further restricted.
We may also be at a competitive disadvantage if our competitors are not subject to the same or similar ~~restrictions.~~ restrictions or classifications.
~~Additionally,~~ ~~such~~ Such export controls have, and may in the future, subject downstream recipients of our products to additional restrictions on the use, resale, repair or transfer of our products and may have a material adverse effect on us.
Our deferred tax assets include ~~net~~ ~~operating~~ ~~losses~~ ~~and~~ tax credit carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods.
If we determine that some or all of our deferred tax assets are not realizable, it could result in a material expense in the period in which this determination is made which may have a material adverse effect on our financial condition and results of operations. 29 ~~Table~~ of ~~Contents~~ In ~~addition,~~ a ~~significant~~ ~~amount~~ of ~~our~~ ~~deferred~~ ~~tax~~ ~~assets~~ ~~related~~ to ~~net~~ ~~operating~~ ~~losses~~ or ~~tax~~ ~~credits~~ ~~which~~ ~~remain~~ ~~under~~ a ~~valuation~~ ~~allowance~~ ~~could~~ be ~~subject~~ to ~~limitations~~ ~~under~~ ~~Internal~~ ~~Revenue~~ ~~Code~~ ~~Section~~ ~~382~~ or ~~383,~~ ~~separate~~ ~~return~~ ~~loss~~ ~~year~~ ~~rules,~~ or ~~dual~~ ~~consolidated~~ ~~loss~~ ~~rules.~~
Our income tax obligations could be affected by many factors, including, but not limited to, changes to our corporate operating structure, intercompany arrangements, and tax planning strategies. 33 Table of Conten t s Our income tax expense is computed based on tax rates enacted at the time of the respective financial period.
From time to time, we are a defendant or plaintiff in various legal actions, as described in Note 18 12 - Commitments and Contingencies of the Notes to our Consolidated Financial Statements.
It is possible that if a claim is successfully asserted against us, it could result in the payment of damages that could be material to our business. 30 34 Table of ~~Contents~~ Conten t s With respect to intellectual property litigation, from time to time, we have been notified of, or third parties may bring or have brought, actions against us and/or against our customers based on allegations that we are infringing the intellectual property rights of others, contributing to or inducing the infringement of the intellectual property rights of others, improperly claiming ownership of intellectual property or otherwise improperly using the intellectual property of others.
As such, the costs of complying with current and future environmental and health and safety laws, and our liabilities arising from past and future releases of, or exposure to, hazardous substances may increase and could have a material adverse effect on us. 31 35 Table of ~~Contents~~ Conten t s Environmental laws are complex, change frequently and tend to become more stringent over time.
We expect that the legal and regulatory environment relating to emerging technologies such as AI will continue to develop and could increase ~~the~~ ~~cost~~ costs and burdens to us and our customers, delay or halt deployment of ~~doing~~ ~~business,~~ new systems using our products, reduce the number for entrants and customers and create compliance risks and potential liability, all which may have a material adverse effect on our financial condition and results of operations.
Governments are also considering the new issues in intellectual property law that AI creates, which could result in different intellectual property rights in technology we create with AI and development processes and procedures and could have a material adverse effect on our business. 32 36 Table of ~~Contents~~ Conten t s Evolving expectations from governments, investors, customers and other stakeholders regarding corporate responsibility matters could result in additional costs, harm to our reputation and a loss of customers.
There are evolving expectations from governments, investors, customers and other stakeholders regarding corporate responsibility matters including those involving the environment and climate, energy and water consumption, diversity and inclusion, human ~~rights~~ rights, governance and cybersecurity.
Additionally, we are and expect to continue to be subject to various new and proposed climate-related and sustainability laws and requirements that may impact how we and our suppliers and customers conduct ~~business~~ or and report on our business by requiring the disclosure and tracking of greenhouse gas emissions, climate change-related risks and other sustainability ~~matters~~ ~~related~~ to ~~our~~ ~~business.~~ matters.
As ~~the~~ ~~nature,~~ ~~scope~~ ~~and~~ ~~complexity~~ of corporate responsibility reporting and disclosure requirements continue to evolve, we may incur additional compliance costs and indirect compliance costs ~~from~~ that our customers ~~and,~~ and suppliers ~~that~~ ~~are~~ ~~passed~~ may pass on to us.
In ~~addition,~~ ~~certain~~ ~~corporate~~ ~~responsibility~~ ~~laws~~ ~~and~~ ~~regulations~~ As a result, we may ~~require~~ us be required to modify our business or supply chain in ways that are costly or less efficient.
For example, the state of California has passed reporting requirements that will require corporations to report on climate data and risks, and these laws include data assurance requirements that entail third-party verifications.
While we have engaged, and in ~~the~~ ~~future~~ may continue to engage, in voluntary initiatives (such as voluntary disclosures, certifications, goals, or targets, among others) or commitments to improve our corporate responsibility profile and/or products or to respond to stakeholder expectations, such initiatives or achievement of such commitments may be costly, may not have the desired effect or may impact our reputation with other stakeholders and have a material adverse effect on our business.
Any failure to achieve such goals, failure to achieve these goals within the set timeframe, or in the ~~means~~ ~~expected,~~ or ~~the~~ perception by stakeholders of such failure to achieve these goals may result in reputational or financial harm.
Simultaneously, there are efforts by some stakeholders to reduce companies efforts on certain environmental, social and ~~sustainability-related~~ governance matters.
Both advocates and opponents of environmental, social and ~~sustainability~~ governance matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
Stakeholder groups may find our stated goals to be insufficiently responsive to the implications of issues, ~~such~~ as ~~climate~~ ~~change,~~ and any failure to ~~set~~ or ~~achieve~~ ~~corporate~~ ~~responsibility~~ ~~initiatives~~ ~~that~~ meet stakeholder expectations may result in loss of customers or in investors selling their shares, which could harm our reputation and could have a material adverse effect on our business. 33 37 Table of ~~Contents~~ Conten t s Issues related to the responsible use of AI may result in reputational, competitive and financial harm and liability.
The ~~indenture~~ indentures governing our 3.924% Senior Notes due ~~2032~~ ~~and~~ 2032, 4.393% Senior Notes due ~~2052~~ ~~contains~~ 2052, 4.212% Senior Notes due 2026 and 4.319% Senior Notes due 2028 contain various covenants that limit our ability to, among other things: create liens on certain assets to secure debt, enter into certain sale and leaseback transactions; and consolidate with, merge into or sell, convey or lease all or substantially all of our assets to any other person.
We ~~could~~ ~~become~~ ~~obligated~~ to ~~repurchase~~ ~~such~~ ~~accounts~~ ~~receivables~~ or ~~otherwise~~ ~~incur~~ ~~liability~~ If we are required to ~~the~~ ~~counterparties~~ satisfy our financial obligations under these ~~arrangements~~ ~~under~~ ~~certain~~ ~~circumstances,~~ ~~such~~ as ~~where~~ a commercial ~~dispute~~ ~~arises~~ ~~between~~ us arrangements, our business, operating results, financial and an ~~account~~ ~~debtor.~~ 34 condition may be adversely affected. 38 Table of ~~Contents~~ Conten t s Merger, Acquisition, Divestiture, and Integration Risks Acquisitions, joint ventures, and/or ~~strategic~~ investments, and the failure to integrate acquired businesses, may fail to materialize their anticipated benefits and could disrupt our business, which could adversely affect our results of operation and financial condition.
~~Any~~ ~~acquisitions~~ we ~~may~~ ~~undertake,~~ ~~including~~ ~~Silo~~ AI ~~and~~ ZT ~~Systems,~~ ~~involve~~ We cannot be certain ~~integration~~ ~~risks~~ ~~and~~ ~~uncertainties~~ that our acquisitions can be successfully integrated with our business in a timely manner or at all, for a variety of reasons, including, but not limited to: difficulty in integrating the technology, systems, products, policies, processes or operations and integrating and retaining the employees including key personnel of the acquired business; diversion of capital and other resources, including management s attention from our existing business; unanticipated costs or liabilities, such as increased interest expense and compliance with debt covenants or other obligations; coordinating and integrating in countries in which we have not previously operated; the potential impact of the acquisitions on our relationships with employees, vendors, suppliers and customers; our inability to effectively retain suppliers, vendors and customers of the acquired businesses; entry into geographic or business markets in which we have little or no experience; adverse changes in general economic conditions in regions in which we and the acquired companies operate; potential litigation associated with the acquisitions; difficulties in the assimilation of employees and culture; difficulties in managing the expanded operations of a larger and more complex company; and difficulties with integrating and upgrading our and the acquired companies financial reporting systems.
If we cannot successfully integrate or are delayed in integrating newly acquired businesses, it could result in increased costs, decreases in expected revenues, diversion of management s time and attention, negatively impact our ability to develop or sell new products and impair our ability to grow our business, which could materially adversely affect our financial ~~conditions,~~ ~~results~~ of ~~operations~~ or ~~cash~~ ~~flows.~~ conditions and operating results.
To complete an acquisition, as ~~contemplated~~ by ~~our~~ ~~intent~~ to ~~acquire~~ ZT ~~Systems,~~ we may issue equity securities, which would dilute our stockholders ownership and could adversely affect the price of our common stock, and/or incur debt, assume contingent liabilities or have amortization expenses and write-downs of acquired assets, which could adversely affect our results of operations.
We Moreover, we may not adequately assess the risks of new business initiatives and subsequent events may arise that alter the risks that were initially considered.
We may not realize the expected benefits from the THATIC JV s expected future performance, including the receipt of any ~~future~~ ~~milestone~~ ~~payments~~ ~~and~~ ~~any~~ royalties from certain licensed intellectual property.
We are complying with U.S. law pertaining to the Entity List designation. 35 39 Table of ~~Contents~~ ~~Furthermore,~~ we Conten t s We invest in both public and private companies to further our strategic objectives and to support certain key business initiatives.
~~Adverse~~ Our investment portfolio is concentrated in specific sectors and adverse developments in one or any of these sectors due to regulatory changes, technology disruptions or market downturns could negatively impact the performance of our investment portfolio.
Any ~~one~~ of ~~these~~ ~~factors~~ ~~could~~ ~~delay~~ ~~the~~ ~~achievement~~ of ~~our~~ ~~strategic~~ ~~objectives~~ or ~~cause~~ us to ~~incur~~ ~~additional~~ ~~transaction~~ ~~expenses.~~ 36 ~~Table~~ of ~~Contents~~ ~~Any~~ impairment of our tangible, definite-lived intangible or indefinite-lived intangible assets, including goodwill, may adversely impact our financial position and results of operations.
~~(Pensando)~~ ~~and~~ ~~Silo~~ AI ~~acquisitions,~~ We account for certain acquisitions using the acquisition method of accounting under the provisions of ASC 805, Business Combinations, with AMD ~~representing~~ as the accounting ~~acquirer~~ ~~under~~ ~~this~~ ~~guidance.~~ acquirer.
In ~~connection~~ ~~with~~ ~~the~~ ~~Xilinx,~~ ~~Pensando~~ ~~and~~ ~~Silo~~ AI ~~acquisitions,~~ we ~~recorded~~ These acquisitions resulted in recognition of significant goodwill and other intangible assets on our Consolidated Balance Sheets.
~~Indefinite-lived~~ Goodwill and indefinite-lived intangible ~~assets,~~ ~~including~~ ~~goodwill,~~ assets are tested for impairment at least ~~annually,~~ ~~and~~ ~~all~~ ~~tangible~~ ~~and~~ ~~intangible~~ ~~assets~~ ~~including~~ ~~goodwill~~ ~~will~~ be ~~tested~~ ~~for~~ ~~impairment~~ ~~when~~ ~~certain~~ ~~indicators~~ ~~are~~ ~~present.~~ annually.
Impairment testing of particularly for goodwill requires significant ~~use~~ of judgment and ~~assumptions,~~ ~~particularly~~ as it ~~relates~~ to ~~the~~ ~~determination~~ of assumptions in determining fair value.
~~Subsequent~~ to ~~our~~ ~~annual~~ ~~goodwill~~ ~~impairment~~ ~~analysis,~~ we We monitor for any events or changes in ~~circumstances,~~ ~~such~~ as circumstances that may be indicators of impairment, including but not limited to: significant adverse changes in business climate or operating ~~results,~~ results; changes in management s business ~~strategy,~~ strategy; an inability to successfully introduce new products in the ~~marketplace,~~ marketplace; an inability to successfully achieve internal ~~forecasts~~ or forecasts; significant declines in our stock ~~price,~~ ~~which~~ ~~may~~ ~~represent~~ an ~~indicator~~ of ~~impairment.~~ price; significant negative industry; or macroeconomic trends.
A ~~decrease~~ deterioration in the long-term economic outlook ~~and~~ or expected future cash flows of our business could ~~significantly~~ ~~impact~~ ~~asset~~ ~~values~~ ~~and~~ ~~potentially~~ result in ~~the~~ impairment of ~~tangible~~ ~~and~~ ~~intangible~~ ~~assets,~~ ~~including~~ ~~goodwill,~~ ~~and~~ ~~may~~ ~~require~~ us to ~~record~~ ~~future~~ ~~impairment~~ charges, which may have a material adverse impact on our financial position and results of operations. 40 Table of Conten t s General Risks Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us.
International sales, as a percent of net revenue, were ~~66%~~ 67% for the year ended December ~~28,~~ ~~2024.~~ 27, 2025.
The political, legal and economic risks associated with our worldwide operations 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 and restrictions; imposition of new and increased tariffs; worsening trade relationship between the United States and China (or other countries); volatile global economic conditions, including downturns or recessions in which some competitors may become more aggressive in their pricing practices; difficulties in protecting our intellectual property; difficulties in managing staffing and exposure to different employment practices and labor laws; changes in immigration law and regulations; changes in foreign currency exchange rates; restrictions on transfers of funds and other assets of our subsidiaries between jurisdictions; changes in freight rates; changes to macroeconomic conditions, including interest rates, inflation and recession; transportation restrictions or disruptions; loss or modification of exemptions for taxes and tariffs; and compliance with U.S. laws and regulations related to international operations, including export control and economic sanctions laws and regulations and the Foreign Corrupt Practices Act.
Also, in addition to restrictions imposed by the United States or China on exports or imports from one another, geopolitical changes between China and Taiwan could disrupt the operations of our Taiwan-based third-party wafer foundries, manufacturing facilities and subcontractors, and materially adversely affect delivery of products and our business, financial condition and/or operating results.
~~Moreover,~~ ~~the~~ ~~Ukraine-Russia~~ ~~and~~ ~~Israel-Hamas~~ ~~conflicts~~ ~~could~~ ~~escalate~~ ~~and~~ ~~expand,~~ ~~which~~ in ~~turn~~ ~~could~~ ~~have~~ ~~negative~~ ~~impacts~~ on ~~the~~ ~~global~~ ~~economy~~ ~~and~~ ~~financial~~ ~~markets.~~ 37 ~~Table~~ of ~~Contents~~ In addition, our worldwide operations (or those of our business partners) could be subject to natural disasters and climate change such as earthquakes, tsunamis, flooding, tropical cyclones, droughts, fires, sea-level rise, extreme heat and volcanic eruptions that disrupt our operations, or those of our manufacturers, vendors or customers.
Global health outbreaks, such as COVID-19, have and may ~~continue~~ to adversely affect our ~~employees,~~ employees and disrupt our business operations, as well as those of our customers and suppliers.
~~Any~~ of ~~the~~ ~~above~~ ~~risks,~~ ~~should~~ ~~they~~ ~~occur,~~ ~~could~~ ~~result~~ in ~~increased~~ ~~costs,~~ ~~shipment~~ ~~delays,~~ ~~general~~ ~~business~~ ~~interruptions,~~ ~~the~~ ~~inability~~ to ~~obtain,~~ or ~~delays~~ in ~~obtaining~~ ~~export~~ ~~licenses~~ ~~for~~ ~~certain~~ ~~technology,~~ ~~penalties~~ or a ~~loss~~ of ~~export~~ ~~privileges,~~ as ~~well~~ as Additionally, stringent licensing restrictions ~~that~~ may make our products less attractive to international customers, tariffs and other barriers and restrictions, longer payment cycles, increased taxes, restrictions on the repatriation of funds and the burdens of complying with a variety of foreign ~~laws,~~ ~~any~~ of ~~which~~ laws are all factors that could ~~ultimately~~ have a material adverse effect on our business.
We report the value of those licenses as other non-current assets on ~~the~~ our Consolidated Balance ~~Sheets,~~ Sheets and we periodically evaluate the carrying value of those licenses based on their future economic benefit to us.
Our inability to continue to attract and retain ~~qualified~~ ~~personnel~~ key employees may hinder our business.
~~Much~~ of ~~our~~ ~~future~~ Our success depends upon the continued service of numerous qualified engineering, marketing, sales and executive employees.
~~Competition~~ The market for ~~highly~~ qualified and skilled executives and employees in the technology industry, especially in the areas of AI and machine learning, is ~~intense~~ ~~and~~ ~~our~~ ~~competitors~~ ~~have~~ ~~targeted~~ ~~individuals~~ in ~~our~~ ~~organization~~ ~~that~~ ~~have~~ ~~desired~~ ~~skills~~ ~~and~~ ~~experience.~~ highly competitive.
If we are ~~not~~ ~~able~~ unable to continue to attract, ~~train~~ develop and retain our leadership team and our qualified employees necessary for our business, the progress of our product development programs could be hindered, and we could be materially adversely affected.
If the value of such stock awards does not appreciate as measured by the performance of the price of our common stock, or if our share-based compensation otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain and motivate our executives and employees could be ~~weakened,~~ affected, which could harm our results of operations.
~~Also,~~ if If the value of our stock awards increases substantially, this could potentially create great personal wealth for our executives and ~~employees~~ key talent and affect our ability to retain our ~~personnel.~~ employees.
In ~~addition,~~ ~~any~~ Any future restructuring plans may also adversely impact our ability to attract and retain key employees. 38 ~~Table~~ of ~~Contents~~ ~~Our~~ ~~stock~~ ~~price~~ is ~~subject~~ to ~~volatility.~~
The trading price of our stock may fluctuate widely due to various factors ~~including~~ including: actual or anticipated fluctuations in our financial conditions and operating ~~results,~~ results; failure to meet expectations related to future growth; changes in financial estimates by us or financial estimates and ratings by securities ~~analysts,~~ analysts; changes in our capital structure, including issuance of additional debt or equity to the ~~public,~~ ~~interest~~ ~~rate~~ ~~changes,~~ ~~inflation,~~ public; competitive landscape; news regarding our products or products of our ~~competitors,~~ ~~and~~ competitors or other actions taken by competitors; broad market ~~and~~ industry ~~fluctuations.~~ and competitor-related fluctuations; and general economic, political and market conditions, including imposition of new or increased tariffs and other trade restrictions, interest rate changes and inflation.
We have an approved stock repurchase program that authorizes repurchases of up to ~~$12~~ $14 billion of our common stock (Repurchase Program).
As of December ~~28,~~ ~~2024,~~ ~~$4.7~~ 27, 2025, $9.4 billion remained available for future stock repurchases under the Repurchase Program.

Removed since the previous 10-K 87

Economic and Strategic 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.
Nvidia s dominance in the graphics processing unit market and its aggressive business practices may limit our ability to compete effectively on a level playing field.
Our products may not be compatible with some or all industry-standard software and hardware.
Costs related to defective products could have a material adverse effect on us.
Our ability to complete the acquisition of ZT Systems is subject to closing conditions.
For a more complete discussion of the material risks facing our business, see below. 15 Table of Contents Economic and Strategic 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.
Intel s microprocessor market share position, significant financial resources, introduction of competitive new products, and existing relationships with top-tier OEMs have enabled it to market and price its products aggressively, to target our customers and our channel partners with special incentives and to influence customers who do business with us.
These aggressive activities have in the past resulted in lower unit sales and a lower average selling price for many of our products and adversely affected our margins and profitability.
Intel also dominates the computer system platform and has a heavy influence on PC manufacturers, other PC industry participants, and benchmarks.
It 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 may be materially adversely affected by Intel s business practices, including rebating and allocation strategies and pricing actions designed to limit our market share and margins; product mix and introduction schedules; product bundling, marketing and merchandising strategies; and exclusivity payments to its current and potential customers, retailers and channel partners.
We expect Intel to continue to heavily invest substantial resources in marketing, research and development, new manufacturing facilities and other technology companies.
Nvidia s dominance in the graphics processing unit market and its aggressive business practices may limit our ability to compete effectively on a level playing field.
Nvidia s Data Center GPU market share position, significant financial resources, introduction of competitive new products and proprietary software ecosystem have enabled it to market and price its products in a manner to encourage the selection of Nvidia-based systems and to influence customers who do business with us.
We may be materially adversely affected by Nvidia s business practices, including allocation strategies and pricing actions; product mix and introduction schedules; and product bundling strategies.
We expect Nvidia to continue to heavily invest substantial resources in research and development, marketing and other technology companies.
The markets in which our products are sold are highly competitive and rapidly evolving.
The markets in which our products are sold are highly competitive and rapidly evolving.
We expect that competition will continue to be intense due to rapid technological changes, new and evolving industry standards, changing customer preferences and requirements, and frequent introductions by our competitors or new competitors of products that may provide better performance/experience or that may include additional features that render our products comparatively less competitive.
In addition, we are entering markets with current and new competitors who may be able to adapt more quickly to customer requirements and emerging technologies.
For example, the AI market is subject to rapid technological change, product obsolescence, frequent new product introductions and feature enhancements, changes in end-user requirements and evolving industry trends and legal standards.
We cannot guarantee that we will be able to compete successfully against current or new competitors who may have stronger positions in these new markets or superior ability to anticipate customer requirements and emerging industry trends.
While we see significant opportunity in AI, we expect intense competition from companies such as Nvidia in the supply of GPUs and other accelerators for the AI market.
We may face competition from some of our customers who internally develop the same products as us.
Increased adoption of Arm-based semiconductor designs could lead to further growth and development of the Arm ecosystem.
We may also face delays or disruptions in research and development efforts, or we may be required to invest significantly greater resources in research and development than anticipated.
In addition, the semiconductor industry has seen several mergers and acquisitions over the last number of years.
If competitors introduce competitive new products into the market before us, demand for our products could be adversely impacted and our business could be adversely affected.
Further, our competitors have significant marketing and sales resources which could increase the competitive environment in a declining market or during challenging economic times, leading to lower prices and a reduction in our margins.
To the extent our competitors introduce competitive new products and technologies into the market before we do, or introduce products and technologies that provide better performance/experience or at better prices, our products and technologies may be comparatively less competitive and our competitive position may weaken, which could adversely harm our business and results of operations.
For example, the United States government enacted the Creating Helpful Incentives to Produce Semiconductors for America and Science Act (CHIPS Act) of 2022 to provide financial incentives to the U.S. semiconductor industry.
The demand for our products depends in part on the market conditions in the industries into which they are sold.
To the extent our embedded customers are faced with higher inventory levels, they may choose to draw down their existing inventory and order less of our products.
For example, our Embedded segment revenue decreased in 2024 as customers continued to normalize their inventory levels.
Over the life of a specific product, the sale price is typically reduced over time.
The loss of a significant customer may have a material adverse effect on us.
For example, our Embedded segment revenue decreased in 2024 as customers continued to normalize their inventory levels.
Any inability of our current or potential future customers to pay us for our products may adversely affect our earnings and cash flow.
Furthermore, patent applications that we file may not result in issuance of a patent or, if a patent is issued, the patent may not be issued in a form that is advantageous to us.
We do not have long-term commitment contracts with some of our third-party manufacturing suppliers.

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Failure to achieve expected manufacturing yields for our products could negatively impact our results of operations.
Actual or perceived security vulnerabilities of our products may subject us to adverse publicity, damage to our brand and reputation, and could materially harm our business or results of operations.
Uncertainties involving the ordering and shipment of our products could materially adversely affect us.
For example, our Embedded segment revenue decreased in 2024 as customers continued to normalize their inventory levels.
Our business depends on 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 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 market and sell our products directly to OEMs and through authorized third-party distributors.
From time to time, our products are diverted from our authorized distribution channels and are sold on the gray market.
Climate change may have an adverse impact on our business and the business of our suppliers and customers.
Global climate change is also resulting in chronic changes that result in certain natural disasters occurring more frequently or with greater intensity, which could disrupt our operations, or the operations of our third parties.
Data centers depend on access to clean water and reliable energy, thus potential power or water shortages could impair our customers ability to expand their data center capacity and consume our products and services, which in turn could adversely impact our ability to generate revenue.
Although we maintain insurance coverage for a variety of property, casualty, and other risks, the types and amounts of insurance we obtain vary depending on coverage, availability and cost.
Failure to accurately comply with such reporting obligations may result in enforcement actions, reputational harm or private litigation that could have a material adverse effect on us.
Legal and Regulatory Risks Government actions and regulations such as export 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.
These controls also require us to file a Notified Advanced Computing (NAC) notification with BIS 25 days before shipping certain Versal FPGAs to China, or to customers outside of the United States whose ultimate parent is headquartered in a D5 country (including China).
The NAC notification process could result in BIS prohibiting a shipment or requiring a license application before shipping a product that is the subject of a NAC notification.
Even new products that fall below the licensing thresholds may not be successful because we have no assurances BIS will agree that the alternative products are not subject to the new licensing requirements or that future regulations will not control the alternative products.
A significant trade disruption or the establishment or increase of any tariffs, trade protection measures or restrictions, or retaliatory actions from foreign governments could result in lost sales adversely impacting our reputation and business.
There is also a possibility of future tariffs, trade protection measures, import or export regulations or other restrictions imposed on our current and future products, customers, or suppliers by the United States, China or other countries that could have a material adverse effect on our business.
United States export control regulations include restrictions or prohibitions on the sale or supply of certain AI technologies to United States embargoed or sanctioned countries, governments, persons and entities.
If there are changes to those regulations, or to the categorization of our products under those regulations, our ability to sell our products and services outside the United States may be harmed.
The United States and its allies continue to focus on export restrictions targeting semiconductors associated with AI, including GPUs and associated products and services.
The limitations could reduce our ability to utilize the net operating losses or tax credits before the expiration of the tax attributes.
Our income tax expense is computed based on tax rates enacted at the time of the respective financial period.
Many countries we do business in have implemented laws based on Pillar Two, which may materially adversely impact our provision for income taxes, net income and cash flows.
As a result of this heightened scrutiny, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to review and inquiry, which could also result in changes in tax policies or existing tax rulings, and may have a material adverse effect on us.
The agreements governing our notes, our guarantee of the Assumed Xilinx Notes, and our Revolving Credit Agreement impose restrictions on us that may adversely affect our ability to operate our business.
For example, in August 2024, we completed our acquisition of Silo AI Oy (Silo AI), and we entered into an agreement to acquire ZT Group Int l, Inc.
(ZT Systems), which is currently expected to close in the first half of 2025, subject to certain regulatory approvals and other customary closing conditions.
Our ability to realize any of the anticipated benefits from an acquisition depends on us successfully integrating the acquired business into our business.
Our investment portfolio is concentrated in specific sectors.
Our ability to complete the acquisition of ZT Systems is subject to closing conditions, including the receipt of consents and approvals from government authorities, which may impose conditions that could adversely affect us or cause the acquisition to not be completed.
Our acquisition of ZT Systems (the Acquisition), which is expected to occur in the first half of 2025, is subject to the satisfaction or waiver of a number of customary conditions as specified in the purchase agreement (the Agreement), including receipt of certain specified required regulatory approvals and the absence of laws or orders restraining the consummation of the Agreement, among others.
We cannot assure you that we will receive the necessary regulatory approvals at all or in a timely manner or that closing conditions will be satisfied.
Any delay in completing the Acquisition could cause us to not realize, or to be delayed in realizing, some or all of the benefits we expect to achieve from this transaction.
Additionally, if the Acquisition is not completed, we may incur significant acquisitions costs that we may be unable to recover, which could negatively affect our business and results of operations.
We would be required to pay ZT Systems a termination fee of $300 million if the Agreement is terminated in certain circumstances related to the failure to obtain required regulatory approvals.
We intend to seek a strategic partner to acquire ZT Systems' manufacturing business, and we may not realize the anticipated benefits of this transaction.
We may not be able to divest the ZT Systems manufacturing business on acceptable terms or at all.
Divestitures involve certain risks and uncertainties such as: inability to find potential buyers on favorable terms; failure to receive regulatory or governmental approvals, or delay in receiving such approvals; restrictions due to regulatory or governmental approval, litigation, contractual terms, or other conditions; changes in market conditions or geopolitical conditions affecting the regions or industries in which we or our counterparties operate; distraction of management; failure to effectively transfer liabilities, contracts, facilities and employees to buyer; continued financial obligations and unanticipated liabilities; and closing delays.
We account for certain acquisitions, including the Xilinx, Inc.
(Xilinx), Pensando Systems Inc.
If, in the future, we determine that tangible or intangible assets, including goodwill, are impaired, we would record an impairment charge at that time.
General Risks Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us.
Recently, the U.S. and other countries and coalitions have issued sanctions and revisions to export control and other regulations against Russia, Belarus, and the DNR and LNR regions of Ukraine, due to the conflict in Ukraine.
Any of these events could cause consumer spending to decrease or result in increased volatility in the U.S. economy and worldwide financial markets.

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Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.