AMD Reports 2016 Third Quarter Results

SUNNYVALE, Calif. 10/20/2016

AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the third quar짯ter of 2016 of $1,307 mil짯li짯on, ope짯ra짯ting loss of $293 mil짯li짯on, and net loss of $406 mil짯li짯on, or $0.50 per share. Non-GAAP1 ope짯ra짯ting inco짯me was $70 mil짯li짯on and non-GAAP1 net inco짯me was $27 mil짯li짯on, or $0.03 per share.

Our third quar짯ter finan짯cial results high짯light the pro짯gress we are making across our busi짯ness, said Lisa Su, AMD pre짯si짯dent and CEO.  쏻e now expect to deli짯ver hig짯her 2016 annu짯al reve짯nue based on stron짯ger demand for AMD semi-cus짯tom solu짯ti짯ons and Pola짯ris GPUs. This posi짯ti짯ons us well to acce짯le짯ra짯te our growth in 2017 as we intro짯du짯ce new high-per짯for짯mance com짯pu짯ting and gra짯phics products.

Q3 2016 Results

  • Q3 2016, Q2 2016, and Q3 2015 were 13-week fis짯cal quarters.
  • Reve짯nue of $1,307 mil짯li짯on, up 27 per짯cent sequen짯ti짯al짯ly and up 23 per짯cent year-over-year pri짯ma짯ri짯ly due to record semi-cus짯tom SoC and hig짯her GPU and mobi짯le APU sales, par짯ti짯al짯ly off짯set by cli짯ent desk짯top pro짯ces짯sor and chip짯set sales.
  • Gross mar짯gin was 5 per짯cent, down from 31 per짯cent from the pre짯vious quar짯ter due to a $340 mil짯li짯on char짯ge rela짯ted to the 6th amend짯ment to the Wafer Sup짯p짯ly Agree짯ment (WSA) with GLOBALFOUNDRIES (GF). Non-GAAP gross mar짯gin of 31 per짯cent was flat quarter-over-quarter.
  • Ope짯ra짯ting expen짯ses of $376 mil짯li짯on, com짯pared to $353 mil짯li짯on for the pri짯or quar짯ter. Non-GAAP ope짯ra짯ting expen짯ses of $353 mil짯li짯on, com짯pared to non-GAAP ope짯ra짯ting expen짯ses of $342 mil짯li짯on in Q2 2016, dri짯ven by increased invest짯ments in rese짯arch and development.
  • Ope짯ra짯ting loss of $293 mil짯li짯on, com짯pared to an ope짯ra짯ting loss of $8 mil짯li짯on in Q2 2016 due to a $340 mil짯li짯on WSA char짯ge. Non-GAAP1 ope짯ra짯ting inco짯me of $70 mil짯li짯on, com짯pared to non-GAAP1 ope짯ra짯ting inco짯me of $3 mil짯li짯on in Q2 2016, pri짯ma짯ri짯ly due to hig짯her revenue.
  • Net loss of $406 mil짯li짯on, net loss per share of $0.50, com짯pared to net inco짯me of $69 mil짯li짯on, net ear짯nings per share of $0.08 in Q2 2016. The decli짯ne was dri짯ven by a $340 mil짯li짯on WSA char짯ge and a $61 mil짯li짯on loss on debt redemp짯ti짯on off짯set by increased reve짯nue. Q2 2016 net inco짯me included a $150 mil짯li짯on pre-tax gain on the sale of 85 per짯cent of assem짯bly, test, mark, and pack (ATMP) faci짯li짯ties to Nan짯tong Fuji짯tsu Microelec짯tro짯nics (NFME).
  • Non-GAAP1 net inco짯me of $27 mil짯li짯on, non-GAAP1 ear짯nings per share of $0.03. This com짯pa짯res to non-GAAP1 net loss of $40 mil짯li짯on and non-GAAP1 loss per share of $0.05 in Q2 2016, pri짯ma짯ri짯ly due to increased reve짯nue in Q3 2016.
  • Cash and cash equi짯va짯lents were $1,258 mil짯li짯on at the end of the quar짯ter, up $301 mil짯li짯on from the end of the pri짯or quar짯ter. The quar짯ter-end cash balan짯ce includes appro짯xi짯m짯ate짯ly $274 mil짯li짯on of net pro짯ceeds from recent capi짯tal mar짯kets transactions.
  • Total debt at the end of the quar짯ter was $1,632 mil짯li짯on, down $606 mil짯li짯on from the pri짯or quar짯ter as a result of the timing and exe짯cu짯ti짯on of Q3 2016 debt reduc짯tion actions and due to bifur짯ca짯ti짯on of the new짯ly issued 2.125 per짯cent Con짯ver짯ti짯ble Notes due 2026 into equi짯ty and lia짯bi짯li짯ty com짯pon짯ents based on GAAP accoun짯ting regu짯la짯ti짯ons. We plan to fur짯ther redu짯ce debt by deploy짯ing a signi짯fi짯cant por짯ti짯on of the remai짯ning cash from our capi짯tal mar짯kets transactions.

Financial Segment Summary

  • Com짯pu짯ting and Gra짯phics seg짯ment reve짯nue of $472 mil짯li짯on increased 9 per짯cent sequen짯ti짯al짯ly and 11 per짯cent from Q3 2015. The sequen짯ti짯al and year-over-year increa짯ses were dri짯ven pri짯ma짯ri짯ly by increased sales of GPUs, off짯set by decreased sales of cli짯ent desk짯top pro짯ces짯sors and chip짯sets. The year-over-year increase was also dri짯ven by increased sales of cli짯ent mobi짯le processors. 
    • Ope짯ra짯ting loss was $66 mil짯li짯on, com짯pared with an ope짯ra짯ting loss of $81 mil짯li짯on in Q2 2016 and an ope짯ra짯ting loss of $181 mil짯li짯on in Q3 2015. The sequen짯ti짯al impro짯ve짯ment was dri짯ven pri짯ma짯ri짯ly by hig짯her GPU reve짯nue, and the year-over-year impro짯ve짯ment was pri짯ma짯ri짯ly due to hig짯her GPU reve짯nue and the absence of an inven짯to짯ry wri짯te-down charge.
    • Cli짯ent avera짯ge sel짯ling pri짯ce (ASP) decreased sequen짯ti짯al짯ly dri짯ven by lower mobi짯le and desk짯top pro짯ces짯sor ASPs and was flat year-over-year.
    • GPU ASP increased sequen짯ti짯al짯ly and year-over-year dri짯ven by hig짯her chan짯nel and pro짯fes짯sio짯nal gra짯phics ASPs.
  • Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment reve짯nue of $835 mil짯li짯on increased 41 per짯cent sequen짯ti짯al짯ly and 31 per짯cent year-over-year due to hig짯her sales of semi-cus짯tom SoCs. 
    1. Ope짯ra짯ting inco짯me was $136 mil짯li짯on com짯pared with $84 mil짯li짯on in Q2 2016 and $84 mil짯li짯on in Q3 2015. The sequen짯ti짯al impro짯ve짯ment was pri짯ma짯ri짯ly due to hig짯her reve짯nue and the year-over-year impro짯ve짯ment was pri짯ma짯ri짯ly due to hig짯her reve짯nue and a $24 mil짯li짯on IP licen짯sing gain.
  • All Other cate짯go짯ry ope짯ra짯ting loss was $363 mil짯li짯on in Q3 2016 com짯pared with $11 mil짯li짯on in Q2 2016 and $61 mil짯li짯on in Q3 2015. The sequen짯ti짯al increase was pri짯ma짯ri짯ly dri짯ven by a $340 mil짯li짯on WSA charge.

Q3 2016 Highlights

  • AMD com짯ple짯ted capi짯tal mar짯kets tran짯sac짯tions that rai짯sed appro짯xi짯m짯ate짯ly $1.4 bil짯li짯on in cash, befo짯re issu짯an짯ce cos짯ts, to lower over짯all debt, redu짯ce inte짯rest expen짯se pay짯ments, and fur짯ther sup짯port gro짯wing busi짯ness opportunities.
  • AMD announ짯ced a five-year amend짯ment to the WSA with GF that streng짯thens the stra짯te짯gic part짯ner짯ship, while pro짯vi짯ding AMD with fle짯xi짯bi짯li짯ty in sourcing foundry ser짯vices and grea짯ter finan짯cial predictability.
  • AMD dis짯c짯lo짯sed new details about its upco짯ming high-per짯for짯mance x86 쏾en core archi짯tec짯tu짯re and 쏾en-based pro짯ducts, including: 
    • A public pre짯view of the com짯pe짯ti짯ti짯ve per짯for짯mance of the 쏾en-based 쏶um짯mit Ridge desk짯top processor,
    • A first look at 쏯ap짯les, its 쏾en-based 32-core, 64-thread ser짯ver pro짯duct, and
    • A detail짯ed tech짯ni짯cal over짯view of the new grounds-up 쏾en core archi짯tec짯tu짯re at the 28th annu짯al Hot Chips conference.
  • AMD expan짯ded its fami짯ly of main짯stream and work짯sta짯tion class gra짯phics based on its new Pola짯ris archi짯tec짯tu짯re based on 14nm Fin짯FET technology. 
    • Laun짯ched the new Rade짯on꽓 RX 470 GPU, enab짯ling excep짯tio짯nal HD gam짯ing, true asyn짯chro짯no짯us com짯pu짯te, and sup짯port for high dyna짯mic ran짯ge (HDR) monitors.
    • Laun짯ched the Rade짯on꽓 RX 460 GPU for eSports gamers who demand pris짯ti짯ne HD gam짯ing, smooth bey짯ond-HD strea짯ming capa짯bi짯li짯ties, and an assort짯ment of future-rea짯dy gam짯ing technologies.
    • Unvei짯led the new Rade짯on꽓 Pro WX Series of pro짯fes짯sio짯nal gra짯phics cards, a set of new solu짯ti짯ons to address modern con짯tent crea짯ti짯on and engineering.
    • Intro짯du짯ced the upco짯ming Rade짯on꽓 Pro SSG (Solid Sta짯te Gra짯phics), a new Rade짯on꽓 Pro solu짯ti짯on with 1 tera짯byte of dedi짯ca짯ted memo짯ry desi짯gned for lar짯ge data짯set appli짯ca짯ti짯ons, which will be available initi짯al짯ly as a deve짯lo짯per kit.
  • Cus짯to짯mer adop짯ti짯on of Rade짯on꽓 RX GPUs expan짯ded with nota짯ble gam짯ing PC design wins with HP and Alienware. 
    • HP announ짯ced sup짯port for the Rade짯onRX 400-Series gra짯phics cards and intro짯du짯ced the HP OMEN X, a ful짯ly cus짯to짯mizable enthu짯si짯ast gam짯ing desk짯top PC desi짯gned for top-end gam짯ing and supe짯ri짯or VR expe짯ri짯en짯ces that can accom짯mo짯da짯te up to two Rade짯on꽓 R9 Fury X gra짯phics cards.
    • Ali짯en짯wa짯re intro짯du짯ced its latest line of pre짯mi짯um gam짯ing lap짯tops, inclu짯ding the new Ali짯en짯wa짯re 15 and new Ali짯en짯wa짯re 17 available with the future-pro짯of2 Rade짯on꽓 RX 470 gra짯phics card.
  • AMD con짯tin짯ued to gain momen짯tum in vir짯tu짯al rea짯li짯ty (VR) with the intro짯duc짯tion of the most afforda짯ble VR-rea짯dy PC to-date, the limi짯t짯ed edi짯ti짯on Cyber짯PowerPC, fea짯turing the AMD FX 4350 pro짯ces짯sor and Rade짯on꽓 RX 470 gra짯phics. Pri짯ced at $499 stan짯da짯lo짯ne or $999 when bund짯led with the Ocu짯lus Rift headset.
  • AMD streng짯the짯ned its GPUO짯pen initia짯ti짯ve with the addi짯ti짯on of AMD TrueAu짯dio Next and Rade짯on꽓 Pro짯Ren짯der.
    • TrueAu짯dio Next is an API that lets deve짯lo짯pers levera짯ge the GPU for audio ren짯de짯ring, allo짯wing deve짯lo짯pers and sound desi짯gners to add phy짯sics-based envi짯ron짯men짯tal audio to games and VR apps across platforms.
    • Rade짯on꽓 Pro짯Ren짯der is an open source pro짯fes짯sio짯nal GPU-opti짯mi짯zed pho짯to짯rea짯li짯stic ren짯de짯rer that gives deve짯lo짯pers access to the source code and enables crea짯tors to bring ide짯as to life through high-per짯for짯mance appli짯ca짯ti짯ons and work짯flows enhan짯ced by pho짯to짯rea짯li짯stic rendering.
  • AMD announ짯ced the avai짯la짯bi짯li짯ty of new con짯su짯mer and com짯mer짯cial desk짯top sys짯tems based on 7th Gene짯ra짯ti짯on AMD APUs and the new AM4 platform. 
    • The AMD AM4 socket is a new uni짯fied infra짯struc짯tu짯re that sup짯ports both 7th Gene짯ra짯ti짯on AMD A멣eries APUs and the upco짯ming 쏾en-based high-per짯for짯mance 쏶um짯mit Ridge AMD desk짯top CPU. AM4 plat짯forms fea짯ture DDR4 Memo짯ry and next-gen I/O and peri짯phe짯ral sup짯port, inclu짯ding PCIe짰 Gen 3, USB 3.1 Gen 2, NVMe, and SATA Express.
    • AMD 7th Gene짯ra짯ti짯on APU-based con짯su짯mer desk짯top sys짯tems are now available from HP, with other glo짯bal OEM designs to follow.
    • The com짯mer짯cial-focu짯sed HP Eli짯te짯De짯sk 705 G3 Series desk짯tops fea짯ture the new 7th Gene짯ra짯ti짯on AMD PRO APUs. 
      1. AMD 7th Gene짯ra짯ti짯on AMD PRO APUs deli짯ver up to 14 per짯cent more com짯pu짯te and 22 per짯cent more gra짯phic per짯for짯mance, and are 32 per짯cent more ener짯gy effi짯ci짯ent than the pre짯vious gene짯ra짯ti짯on3, while pro짯vi짯ding a secu짯re and sta짯ble plat짯form to pro짯tect cus짯to짯mers IT investments.
  • Sony announ짯ced a new, thin짯ner and ligh짯ter PS4, as well as the PS4 Pro with sup짯port for 4K game짯play, both powered by AMD semi-cus짯tom SoCs.
  • AMD announ짯ced two new, Pola짯ris-based Embedded Rade짯on꽓 dis짯crete GPU pro짯ducts with 4K and 3D sup짯port the E9260 and E9550 tar짯ge짯ting medi짯cal ima짯ging, digi짯tal signage and casi짯no gam짯ing appli짯ca짯ti짯ons, among others.
  • AMD rein짯forced its com짯mit짯ment to open stan짯dards by par짯ti짯ci짯pa짯ting in three con짯sor짯tia with the over짯ar짯ching goal of brin짯ging open stan짯dards to future ser짯vers and dat짯a짯cen짯ters through high-per짯for짯mance inter짯con짯nect tech짯no짯lo짯gies. Other tech짯no짯lo짯gy lea짯ders taking part in the짯se con짯sor짯tia include Dell EMC, Goog짯le, HPE, IBM, Leno짯vo, Qual짯comm, Sam짯sung and Xilinx.
  • AMD was reco짯gni짯zed for its com짯mit짯ment to cor짯po짯ra짯te respon짯si짯bi짯li짯ty by recei짯ving the Cata짯lyst Award by the Green Elec짯tro짯nics Coun짯cil for its 25x20 Ener짯gy Effi짯ci짯en짯cy Initia짯ti짯ve and being named to the Dow Jones Sus짯taina짯bi짯li짯ty Index for the 15th con짯se짯cu짯ti짯ve year.

Current Outlook

AMD셲 out짯look state짯ments are based on cur짯rent expec짯ta짯ti짯ons. The fol짯lo짯wing state짯ments are for짯ward-loo짯king, and actu짯al results could dif짯fer mate짯ri짯al짯ly depen짯ding on mar짯ket con짯di짯ti짯ons and the fac짯tors set forth under 쏞au짯tio짯na짯ry State짯ment below.

For Q4 2016, AMD expects reve짯nue to decrease 18 per짯cent sequen짯ti짯al짯ly, plus or minus 3 per짯cent. The mid짯point of gui짯dance would result in Q4 2016 reve짯nue incre짯asing appro짯xi짯m짯ate짯ly 12 per짯cent year-over-year and 2016 reve짯nue incre짯asing 6 per짯cent from 2015.

For addi짯tio짯nal details regar짯ding AMD셲 results and out짯look plea짯se see the CFO com짯men짯ta짯ry pos짯ted at quarterlyearnings.amd.com.

AMD Teleconference

AMD will hold a con짯fe짯rence call for the finan짯cial com짯mu짯ni짯ty at 2 p.m. PDT (5 p.m. EDT) today to dis짯cuss its third quar짯ter finan짯cial results. AMD will pro짯vi짯de a real-time audio broad짯cast of the tele짯con짯fe짯rence on the Inves짯tor Rela짯ti짯ons page of its web짯site at www.amd.com. The web짯cast will be available for 12 months after the con짯fe짯rence call.

About AMD

For more than 45 years, AMD has dri짯ven inno짯va짯ti짯on in high-per짯for짯mance com짯pu짯ting, gra짯phics, and visua짯liza짯ti짯on tech짯no짯lo짯gies the buil짯ding blocks for gam짯ing, immersi짯ve plat짯forms, and the dat짯a짯cen짯ter. Hundreds of mil짯li짯ons of con짯su짯mers, lea짯ding For짯tu짯ne 500 busi짯nesses, and cut짯ting-edge sci짯en짯ti짯fic rese짯arch faci짯li짯ties around the world rely on AMD tech짯no짯lo짯gy dai짯ly to impro짯ve how they live, work, and play. AMD employees around the world are focu짯sed on buil짯ding gre짯at pro짯ducts that push the boun짯da짯ries of what is pos짯si짯ble. For more infor짯ma짯ti짯on about how AMD is enab짯ling today and inspi짯ring tomor짯row, visit the AMD (NASDAQ: AMD) web짯site, blog, Face짯book and Twit짯ter pages.

Cautionary Statement

This press release con짯ta짯ins for짯ward-loo짯king state짯ments con짯cer짯ning Advan짯ced Micro Devices, Inc. (AMD) inclu짯ding AMD셲 expec짯ted fourth quar짯ter 2016 reve짯nue and expec짯ted 2016 reve짯nue, the fea짯tures, func짯tion짯a짯li짯ty, timing and avai짯la짯bi짯li짯ty of AMD셲 future pro짯ducts; AMD셲 expec짯ta짯ti짯on that it will deli짯ver hig짯her 2016 annu짯al reve짯nue based on stron짯ger demand for AMD semi-cus짯tom solu짯ti짯ons and Pola짯ris GPUs; AMD셲 abili짯ty to acce짯le짯ra짯te growth as it intro짯du짯ces new high-per짯for짯mance com짯pu짯ting and gra짯phics pro짯ducts in 2017; and AMD셲 plans to fur짯ther redu짯ce its debt by deploy짯ing a signi짯fi짯cant por짯ti짯on of its remai짯ning cash from its capi짯tal mar짯kets tran짯sac짯tions, which are made pur짯su짯ant to the Safe Har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995. For짯ward-loo짯king state짯ments are com짯mon짯ly iden짯ti짯fied by words such as 쐗ould, 쐌ay, 쐃xpects, 쐀elie짯ves, 쐏lans, 쐇ntends, 쐏ro짯jects and other terms with simi짯lar mea짯ning. Inves짯tors are cau짯tio짯ned that the for짯ward-loo짯king state짯ments in this docu짯ment are based on cur짯rent beliefs, assump짯ti짯ons and expec짯ta짯ti짯ons, speak only as of the date of this docu짯ment and invol짯ve risks and uncer짯tain짯ties that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons. Such state짯ments are sub짯ject to cer짯tain known and unknown risks and uncer짯tain짯ties, many of which are dif짯fi짯cult to pre짯dict and gene짯ral짯ly bey짯ond AMD셲 con짯trol, that could cau짯se actu짯al results and other future events to dif짯fer mate짯ri짯al짯ly from tho짯se expres짯sed in, or impli짯ed or pro짯jec짯ted by, the for짯ward-loo짯king infor짯ma짯ti짯on and state짯ments. Mate짯ri짯al fac짯tors that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons include, wit짯hout limi짯ta짯ti짯on, the fol짯lo짯wing: Intel Corporation셲 domi짯nan짯ce of the micro짯pro짯ces짯sor mar짯ket and its aggres짯si짯ve busi짯ness prac짯ti짯ces may limit AMD셲 abili짯ty to com짯pe짯te effec짯tively; AMD reli짯es on GLOBALFOUNDRIES INC. (GF) to manu짯fac짯tu짯re all of its micro짯pro짯ces짯sor and acce짯le짯ra짯ted pro짯ces짯sing unit (APU) pro짯ducts and a cer짯tain por짯ti짯on of its dis짯crete gra짯phics pro짯ces짯sing units (GPUs) pro짯ducts, with limi짯t짯ed excep짯ti짯ons. If GF is not able to satis짯fy AMD셲 manu짯fac짯tu짯ring requi짯re짯ments, its busi짯ness could be adver짯se짯ly impac짯ted; AMD reli짯es on third par짯ties to manu짯fac짯tu짯re its pro짯ducts, and if they are unable to do so on a time짯ly basis in suf짯fi짯ci짯ent quan짯ti짯ties and using com짯pe짯ti짯ti짯ve tech짯no짯lo짯gies, AMD셲 busi짯ness could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; fail짯ure to achie짯ve expec짯ted manu짯fac짯tu짯ring yields for AMD셲 pro짯ducts could nega짯tively impact its finan짯cial results; the suc짯cess of AMD셲 busi짯ness is depen짯dent upon its abili짯ty to intro짯du짯ce pro짯ducts on a time짯ly basis with fea짯tures and per짯for짯mance levels that pro짯vi짯de value to its cus짯to짯mers while sup짯port짯ing and coin짯ci짯ding with signi짯fi짯cant indus짯try tran짯si짯ti짯ons; if AMD can짯not gene짯ra짯te suf짯fi짯ci짯ent reve짯nue and ope짯ra짯ting cash flow or obtain exter짯nal finan짯cing, it may face a cash short짯fall and be unable to make all of its plan짯ned invest짯ments in rese짯arch and deve짯lo짯p짯ment or other stra짯te짯gic invest짯ments; the loss of a signi짯fi짯cant cus짯to짯mer may have a mate짯ri짯al adver짯se effect on AMD; AMD셲 receipt of reve짯nue from its semi-cus짯tom SoC pro짯ducts is depen짯dent upon its tech짯no짯lo짯gy being desi짯gned into third-par짯ty pro짯ducts and the suc짯cess of tho짯se pro짯ducts; glo짯bal eco짯no짯mic uncer짯tain짯ty may adver짯se짯ly impact AMD셲 busi짯ness and ope짯ra짯ting results; AMD may not be able to gene짯ra짯te suf짯fi짯ci짯ent cash to ser짯vice its debt obli짯ga짯ti짯ons or meet its working capi짯tal requi짯re짯ments; AMD has a sub짯stan짯ti짯al amount of indeb짯ted짯ness which could adver짯se짯ly affect its finan짯cial posi짯ti짯on and pre짯vent it from imple짯men짯ting its stra짯tegy or ful짯fil짯ling its con짯trac짯tu짯al obli짯ga짯ti짯ons; the agree짯ments gover짯ning AMD셲 notes and the Secu짯red Revol짯ving Line of Cre짯dit impo짯se rest짯ric짯tions on AMD that may adver짯se짯ly affect its abili짯ty to ope짯ra짯te its busi짯ness; the mar짯kets in which AMD셲 pro짯ducts are sold are high짯ly com짯pe짯ti짯ti짯ve; uncer짯tain짯ties invol짯ving the orde짯ring and ship짯ment of AMD셲 pro짯ducts could mate짯ri짯al짯ly adver짯se짯ly affect it; the demand for AMD셲 pro짯ducts depends in part on the mar짯ket con짯di짯ti짯ons in the indus짯tries into which they are sold. Fluc짯tua짯tions in demand for AMD셲 pro짯ducts or a mar짯ket decli짯ne in any of the짯se indus짯tries could have a mate짯ri짯al adver짯se effect on its results of ope짯ra짯ti짯ons; the com짯ple짯ti짯on and impact of the 2015 Res짯truc짯tu짯ring Plan, its trans짯for짯ma짯ti짯on initia짯ti짯ves and any future res짯truc짯tu짯ring actions could adver짯se짯ly affect it; AMD셲 abili짯ty to design and intro짯du짯ce new pro짯ducts in a time짯ly man짯ner is depen짯dent upon third-par짯ty intellec짯tu짯al pro짯per짯ty; AMD depends on third-par짯ty com짯pa짯nies for the design, manu짯fac짯tu짯re and sup짯p짯ly of mother짯boards, soft짯ware and other com짯pu짯ter plat짯form com짯pon짯ents to sup짯port its busi짯ness; if AMD loses Micro짯soft Corporation셲 sup짯port for its pro짯ducts or other soft짯ware ven짯dors do not design and deve짯lop soft짯ware to run on AMD셲 pro짯ducts, its abili짯ty to sell its pro짯ducts could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; AMD셲 reli짯ance on third-par짯ty dis짯tri짯bu짯tors and AIB part짯ners sub짯jects it to cer짯tain risks; AMD셲 ina짯bi짯li짯ty to con짯ti짯nue to attract and retain qua짯li짯fied per짯son짯nel may hin짯der its pro짯duct deve짯lo짯p짯ment pro짯grams; in the event of a chan짯ge of con짯trol, AMD may not be able to repurcha짯se its out짯stan짯ding debt as requi짯red by the appli짯ca짯ble inden짯tures and its Secu짯red Revol짯ving Line of Cre짯dit, which would result in a default under the inden짯tures and its Secu짯red Revol짯ving Line of Cre짯dit; the semi짯con짯duc짯tor indus짯try is high짯ly cycli짯cal and has expe짯ri짯en짯ced seve짯re down짯turns that have mate짯ri짯al짯ly adver짯se짯ly affec짯ted, and may con짯ti짯nue to mate짯ri짯al짯ly adver짯se짯ly affect its busi짯ness in the future; acqui짯si짯ti짯ons, dives짯ti짯tures and/or joint ven짯tures could dis짯rupt its busi짯ness, harm its finan짯cial con짯di짯ti짯on and ope짯ra짯ting results or dilute, or adver짯se짯ly affect the pri짯ce of, its com짯mon stock; AMD셲 busi짯ness is depen짯dent upon the pro짯per func짯tio짯ning of its inter짯nal busi짯ness pro짯ces짯ses and infor짯ma짯ti짯on sys짯tems and modi짯fi짯ca짯ti짯on or inter짯rup짯ti짯on of such sys짯tems may dis짯rupt its busi짯ness, pro짯ces짯ses and inter짯nal con짯trols; data brea짯ches and cyber-attacks could com짯pro짯mi짯se AMD셲 intellec짯tu짯al pro짯per짯ty or other sen짯si짯ti짯ve infor짯ma짯ti짯on, be cos짯t짯ly to reme짯dia짯te and cau짯se signi짯fi짯cant dama짯ge to its busi짯ness and repu짯ta짯ti짯on; AMD셲 ope짯ra짯ting results are sub짯ject to quar짯ter짯ly and sea짯so짯nal sales pat짯terns; if essen짯ti짯al equip짯ment, mate짯ri짯als or manu짯fac짯tu짯ring pro짯ces짯ses are not available to manu짯fac짯tu짯re its pro짯ducts, AMD could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; if AMD셲 pro짯ducts are not com짯pa짯ti짯ble with some or all indus짯try-stan짯dard soft짯ware and hard짯ware, it could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; cos짯ts rela짯ted to defec짯ti짯ve pro짯ducts could have a mate짯ri짯al adver짯se effect on AMD; if AMD fails to main짯tain the effi짯ci짯en짯cy of its sup짯p짯ly chain as it responds to chan짯ges in cus짯to짯mer demand for its pro짯ducts, its busi짯ness could be mate짯ri짯al짯ly adver짯se짯ly affec짯ted; AMD out짯sour짯ces to third par짯ties cer짯tain sup짯p짯ly-chain logi짯stics func짯tions, inclu짯ding por짯ti짯ons of its pro짯duct dis짯tri짯bu짯ti짯on, trans짯por짯ta짯ti짯on manage짯ment and infor짯ma짯ti짯on tech짯no짯lo짯gy sup짯port ser짯vices; AMD may incur future impairm짯ents of good짯will; AMD셲 world짯wi짯de ope짯ra짯ti짯ons are sub짯ject to poli짯ti짯cal, legal and eco짯no짯mic risks and natu짯ral dis짯as짯ters, which could have a mate짯ri짯al adver짯se effect on it; world짯wi짯de poli짯ti짯cal con짯di짯ti짯ons may adver짯se짯ly affect demand for AMD셲 pro짯ducts; unfa짯vorable cur짯ren짯cy exch짯an짯ge rate fluc짯tua짯tions could adver짯se짯ly affect AMD; AMD셲 ina짯bi짯li짯ty to effec짯tively con짯trol the sales of its pro짯ducts on the gray mar짯ket could have a mate짯ri짯al adver짯se effect on it; if AMD can짯not ade짯qua짯te짯ly pro짯tect its tech짯no짯lo짯gy or other intellec짯tu짯al pro짯per짯ty in the United Sta짯tes and abroad, through patents, copy짯rights, trade secrets, trade짯marks and other mea짯su짯res, it may lose a com짯pe짯ti짯ti짯ve advan짯ta짯ge and incur signi짯fi짯cant expen짯ses; AMD is a par짯ty to liti짯ga짯ti짯on and may beco짯me a par짯ty to other claims or liti짯ga짯ti짯on that could cau짯se it to incur sub짯stan짯ti짯al cos짯ts or pay sub짯stan짯ti짯al dama짯ges or pro짯hi짯bit it from sel짯ling its pro짯ducts; AMD셲 busi짯ness is sub짯ject to poten짯ti짯al tax lia짯bi짯li짯ties; and AMD is sub짯ject to envi짯ron짯men짯tal laws, con짯flict mine짯rals-rela짯ted pro짯vi짯si짯ons of the Dodd-Frank Wall Street Reform and Con짯su짯mer Pro짯tec짯tion Act as well as a varie짯ty of other laws or regu짯la짯ti짯ons that could result in addi짯tio짯nal cos짯ts and lia짯bi짯li짯ties. Inves짯tors are urged to review in detail the risks and uncer짯tain짯ties in AMD셲 Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on filings, inclu짯ding but not limi짯t짯ed to AMD셲 Quar짯ter짯ly Report on Form 10멡 for the quar짯ter ended June 25, 2016.