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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934.For the fiscal year ended December 30,2023ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1
2、934.For the transition period from to Commission File Number 001-07882 ADVANCED MICRO DEVICES,INC.(Exact name of registrant as specified in its charter)Delaware94-1692300(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)2485 Augustine DriveSanta Clara,C
3、alifornia 95054(Address of principal executive offices)(Zip Code)(408)749-4000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:(Title of each class)(Trading symbol)(Name of each exchange on which registered)Common Stock,$0.01 par value per s
4、hareAMDThe NASDAQ Global Select MarketSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pu
5、rsuant to Section 13 or Section 15(d)of the Exchange Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for suchshorter period that the registrant was req
6、uired to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 mo
7、nths(or for such shorter period that the registrant was required to submit such files):Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitionsof“large
8、accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the re
9、gistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment o
10、f the effectiveness of its internal control over financial reporting under Section404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark
11、whether the financial statements of the registrant included in the filing reflect the correction of an error topreviously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation recei
12、ved by any of the registrants executive officersduring the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined by Rule 12b-2 of the Exchange Act).Yes No As of June 30,2023,the aggregate market value of the registrants common s
13、tock held by non-affiliates of the registrant was approximately$182.9 billion based on the reported closing sale price of$113.91 per share as reported on The NASDAQ Global Select Market(NASDAQ)on June 30,2023,which was the last business day of the registrants most recently completed second fiscal qu
14、arter.Indicate the number of shares outstanding of each of the registrants classes of common stock,as of the latest practicable date:1,615,786,841 shares of common stock,$0.01 par value per share,asof January 25,2024.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants proxy statement for
15、the 2024 Annual Meeting of Stockholders(2024 Proxy Statement)are incorporated into Part III hereof.The 2024 Proxy Statement will be filed with theU.S.Securities and Exchange Commission within 120 days after the registrants fiscal year ended December 30,2023.INDEXPART I1ITEM 1.Business1ITEM 1A.Risk F
16、actors14ITEM 1B.Unresolved Staff Comments40ITEM 1C.Cybersecurity40ITEM 2.Properties41ITEM 3.Legal Proceedings41ITEM 4.Mine Safety Disclosures41PART II42ITEM 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities42ITEM 6.Reserved43ITEM 7.Managemen
17、ts Discussion and Analysis of Financial Condition and Results of Operations44ITEM 7A.Quantitative and Qualitative Disclosure About Market Risk53ITEM 8.Financial Statements and Supplementary Data54ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure93ITEM 9A.Con
18、trols and Procedures94ITEM 9B.Other Information95ITEM 9C.Disclosures Regarding Foreign Jurisdictions that Prevent Inspections95PART III96ITEM 10.Directors,Executive Officers and Corporate Governance96ITEM 11.Executive Compensation96ITEM 12.Security Ownership of Certain Beneficial Owners and Manageme
19、nt and Related Stockholder Matters96ITEM 13.Certain Relationships and Related Transactions and Director Independence96ITEM 14.Principal Accountant Fees and Services96PART IV97ITEM 15.Exhibits and Financial Statement Schedules97ITEM 16.Form 10-K Summary104SIGNATURES.105Table of ContentsPART IITEM 1.B
20、USINESSCautionary Statement Regarding Forward-Looking StatementsThe statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.These forward-looking statements are based on current expectations and beliefs and involve numer
21、ous risks and uncertainties that could cause actual results to differmaterially from expectations.These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should notbe relied upon as predictions of future events,as we cannot assure you that
22、 the events or circumstances reflected in these statements will be achieved or willoccur.You can identify forward-looking statements by the use of forward-looking terminology including“believes,”“expects,”“may,”“will,”“should,”“seeks,”“intends,”“plans,”“pro forma,”“estimates,”“anticipates,”or the ne
23、gative of these words and phrases,other variations of these words and phrases orcomparable terminology.The forward-looking statements relate to,among other things:possible impact of future accounting rules on AMDs consolidatedfinancial statements;demand for AMDs products;AMDs strategy and expected b
24、enefits;the growth,change and competitive landscape of the markets inwhich AMD participates;international sales will continue to be a significant portion of total sales in the foreseeable future;that AMDs cash,cash equivalentsand short-term investment balances together with the availability under th
25、at certain revolving credit facility(the Revolving Credit Agreement)made available toAMD and certain of its subsidiaries,our commercial paper program,and our cash flows from operations will be sufficient to fund AMDs operations includingcapital expenditures and purchase commitments over the next 12
26、months and beyond;AMDs ability to obtain sufficient external financing on favorable terms,or at all;AMDs expectation that based on managements current knowledge,the potential liability related to AMDs current litigation will not have a materialadverse effect on its financial position,results of oper
27、ation or cash flows;anticipated ongoing and increased costs related to enhancing and implementinginformation security controls;all unbilled accounts receivables are expected to be billed and collected within 12 months;revenue allocated to remainingperformance obligations that are unsatisfied which w
28、ill be recognized in the next 12 months;a small number of customers will continue to account for asubstantial part of AMDs revenue in the future;the expected implications from the development of the legal and regulatory environment relating to emergingtechnologies such as AI;AMDs expectation that it
29、 will not pay dividends in the near future;AMDs ability to achieve its corporate responsibility initiatives;expected future AI technology trends and developments.For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements,see“Part I,Item 1
30、A-Risk Factors”and the“Financial Condition”section set forth in“Part II,Item 7-Managements Discussion and Analysisof Financial Condition and Results of Operations,”or MD&A,and such other risks and uncertainties as set forth below in this report or detailed in our otherSecurities and Exchange Commiss
31、ion(SEC)reports and filings.We assume no obligation to update forward-looking statements.Additionally,we make certain voluntary disclosures in this report and on our website,which are informed by various standards and frameworks(includingstandards for the measurement of underlying data),and the inte
32、rests of various stakeholders.As such,these voluntary disclosures may not necessarily be“material”under the federal securities laws for SEC reporting purposes.Furthermore,much of this information is subject to methodological considerations orinformation,including from third-parties,that is still evo
33、lving and subject to change,and which AMD does not independently verify.For example,our disclosuresbased on any standards may change due to revisions in framework requirements,availability of information,changes in our business or applicable governmentpolicies,or other factors,some of which may be b
34、eyond our control.References in this Annual Report on Form 10-K to“AMD,”“we,”“us,”“management,”“our”or the“Company”mean Advanced Micro Devices,Inc.and ourconsolidated subsidiaries.OverviewWe are a global semiconductor company primarily offering:server microprocessors(CPUs),graphics processing units(
35、GPUs),accelerated processing units(APUs),data processing units(DPUs),FieldProgrammable Gate Arrays(FPGAs),Smart Network Interface Cards(SmartNICs),Artificial Intelligence(AI)accelerators and Adaptive System-on-Chip(SoC)products for data centers;1Table of ContentsCPUs,APUs and chipsets for desktop,no
36、tebook,and handheld personal computers;discrete GPUs,and semi-custom SoC products and development services;andembedded CPUs,GPUs,APUs,FPGAs,System on Modules(SOMs),and Adaptive SoC products.From time to time,we may also sell or license portions of our intellectual property(IP)portfolio.Additional In
37、formationAMD was incorporated under the laws of Delaware on May 1,1969 and became a publicly held company in 1972.Our common stock is currently listed on TheNASDAQ Global Select Market(NASDAQ)under the symbol“AMD”.Our mailing address and executive offices are located at 2485 Augustine Drive,SantaCla
38、ra,California 95054,and our telephone number is(408)749-4000.For financial information about geographic areas and for segment information withrespect to revenues and operating results,refer to the information set forth in Note 4 of our consolidated financial statements.We use a 52-or 53-week fiscaly
39、ear ending on the last Saturday in December.References in this report to 2023,2022 and 2021 refer to the fiscal year unless explicitly stated otherwise.AMD,the AMD Arrow logo,AMD CDNA,AMD Instinct,RDNA,Alveo,Artix,Athlon,CoolRunner,EPYC,FidelityFX,FirePro,FreeSync,Geode,Infinity Fabric,Kinex,Kria,Pe
40、nsando,Radeon,ROCm,Ryzen,Spartan,Threadripper,UltraScale,UltraScale+,V-Cache,Versal,Virtex,Vitis,Vivado,Xilinx,XDNA,Zynq andcombinations thereof are trademarks of Advanced Micro Devices,Inc.Microsoft,Windows,DirectX and Xbox One are either registered trademarks or trademarks of Microsoft Corporation
41、 in the United States and/or other countries.PCIe is a registered trademark of PCI-SIG Corporation.Linux is the registered trademark of Linus Torvalds in the United States and/or other countries.PlayStation is a registered trademark or trademark of Sony Interactive Entertainment,Inc.Arm is a registe
42、red trademark of ARM Limited(or its subsidiaries)inthe United States and/or other countries.Vulkan and the Vulkan logo are registered trademarks of Khronos Group Inc.Steam Deck and the Steam Deck logoare trademarks and/or registered trademarks of Valve Corporation in the United States and/or other c
43、ountries.Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners.Website Access to Our SEC Filings and Corporate Governance DocumentsOn the Investor Relations pages of our website,http:/,we post links to our fil
44、ings with the SEC,our Principles of Corporate Governance,our Codeof Ethics for our executive officers,all other senior finance executives and certain representatives from legal and internal audit,our Worldwide Standards ofBusiness Conduct,which applies to our Board of Directors and all of our employ
45、ees,and the charters of the committees of our Board of Directors.Our filingswith the SEC are posted as soon as reasonably practical after they are electronically filed with,or furnished to,the SEC.The SEC website,www.sec.gov,contains reports,proxy and information statements,and other information reg
46、arding issuers that file electronically with the SEC.You can also obtain copies ofthese documents by writing to us at:Corporate Secretary,AMD,2485 Augustine Drive,Santa Clara,California 95054,or emailing us at:Corporate.S.All of these documents and filings are available free of charge.If we make sub
47、stantive amendments to our Code of Ethics or grant any waiver,including any implicit waiver,to our principal executive officer,principal financialofficer,principal accounting officer,controller or persons performing similar functions,we intend to disclose the nature of such amendment or waiver on ou
48、rwebsite.The information contained on our website is not incorporated by reference in,or considered to be a part of,this report.Our IndustryWe are a global semiconductor company.Semiconductors are components used in a variety of electronic products and systems.An integrated circuit(IC)is asemiconduc
49、tor device that consists of many interconnected transistors on a single chip.Since the invention of the transistor in 1948,improvements in ICprocess and design technologies have led to the development of smaller,more complex and more reliable ICs at a lower cost-per-function.2Table of ContentsOur St
50、rategyAMD drives innovation through high-performance and adaptive computing technology,software and product leadership.Our strategy is to create and deliver theworlds leading high-performance and adaptive computing products across a diverse set of customer markets including data center,client,gaming
51、 andembedded.Our strategy is focused on five strategic pillars:extend leadership in foundational technology and IP,provide competitive software,tools and open-source enablement,re-use core technology across platforms to achieve economies of scale,build effective ecosystems with disciplined partnersh
52、ips,and drivecustomer-centric go-to-market that leverages all of AMDs capabilities.With our high-performance product portfolios,we deliver solutions that are differentiated at the chip level,such as our semi-custom SoCs,Adaptive SoCs,andAPUs,and at the platform level,such as in our customers client
53、computing devices,embedded platforms and servers.We offer a deep portfolio of data centercomputing solutions including CPUs,GPUs,DPUs,SmartNICs,FPGAs,AI accelerators and Adaptive SoCs to meet the vast computing performancerequirements of todays data centers,supercomputers,AI and Machine Learning(ML)
54、data center environments and cloud environments.AMD is a leader inadaptive and embedded computing,CPUs,APUs,FPGAs,SOMs and Adaptive SoCs for a variety of markets,including health care,automotive,industrial,storage and networking.We drive innovation with our line-up of CPUs,APUs and chipsets for desk
55、top,notebook,commercial and handheld PCs to bringperformance,efficiency and modern security features to gamers,creators,consumers and enterprises.Our GPUs,including discrete GPUs,semi-custom SoCproducts and development services,work together with software to power immersive gaming experiences for pe
56、rsonal PCs,handheld PCs,the latest gameconsoles and cloud gaming services.We believe that AI capabilities are central to products and solutions across our markets and we have a broad technology roadmap and products targeting AItraining and inference spanning cloud,edge and intelligent endpoints.We o
57、ffer products that include capabilities to support AI deployment and we expect thispart of our business to grow.Our AI product portfolio caters to customers across strategic markets,from data center to enterprise to client.We achieve thisthrough our family of CPUs,GPUs,FPGAs,and Adaptive SoCs.With t
58、he acquisitions of Mipsology SAS and Nod,Inc.in 2023,we expanded our AI softwarecapabilities to accelerate our AI growth strategy centered on an open software ecosystem to help lower the barriers of entry for customers through developertools,libraries and models.We develop world-class software platf
59、orms that are used to enable our high-performance products.Our software platforms include development tools,compilers,and drivers for our CPUs,APUs,GPUs and FPGAs.We work closely with our customers to define and develop customized solutions to preciselymatch their requirements.We enable this by comb
60、ining our broad portfolio of high-performance IP with our leadership design and packaging to deliver world-class customized solutions to our customers.We invest in innovative technology and solutions such as our custom-ready chiplet platform and AMD InfinityArchitecture to maintain our leadership po
61、sition as a custom-design silicon provider of choice.Our four reportable segments are:the Data Center segment,which primarily includes server CPUs,GPUs,APUs,DPUs,FPGAs,SmartNICs,AI accelerators and Adaptive SoC productsfor data centers;the Client segment,which primarily includes CPUs,APUs,and chipse
62、ts for desktop,notebook and handheld personal computers;the Gaming segment,which primarily includes discrete GPUs,semi-custom SoC products and development services;andthe Embedded segment,which primarily includes embedded CPUs,GPUs,APUs,FPGAs,SOMs,and Adaptive SoC products.In addition to these repor
63、table segments,we have an All Other category,which is not a reportable segment.3Table of ContentsData Center SegmentData Center MarketThe Data Center segment primarily includes server-class CPUs,GPUs,AI accelerators,DPUs,FPGAs,SmartNICs,and Adaptive SoC products.We leverageour technology to address
64、the computational,visual data processing and AI workload acceleration needs in the data center market.Modern data centersrequire high performance,energy efficient,scalable and adaptable compute engines to meet the demand driven by the growing amount of data that needs to bestored,accessed,analyzed a
65、nd managed.Different combinations of CPUs,GPUs,DPUs,FPGAs,SmartNICs,and Adaptive SoCs enable the optimization ofperformance and power for a diverse set of workloads.Data Center ProductsServer CPUs.Our CPUs for server platforms currently include the AMD EPYC Series processors AMD EPYC 9004 Series,AMD
66、 EPYC 8004 Series,AMDEPYC 7003 Series and AMD EPYC 7002 Series.Our 4 Gen AMD EPYC 9004 Series processors are built on the“Zen 4”5 nanometer(nm)process node andre designed to deliver leadership performance and energy efficiency across a range of market segments and workloads.The AMD EPYC 97x4,cloud n
67、ative-optimized data center CPUs,formerly codenamed“Bergamo,”are built with our“Zen 4c”architecture core and further extend the EPYC 9004 Series ofprocessors to deliver the thread density and scale needed for cloud native computing.Our AMD EPYC 8004 Series processors,formerly codenamed“Siena”,are al
68、so built on the“Zen 4c”core into a workload-optimized CPU.Our 3 Gen AMD EPYC and 4th Gen AMD EPYC portfolios both include processors thatfeature AMD 3D V-Cache technology for leadership performance in technical computing workloads.Data Center GPUs.Our AMD Instinct family of GPU accelerator products,
69、including AMD Instinct MI200 and MI300 Series which are based on AMD CDNAarchitecture.AMD Instinct accelerators are designed to address the growing demand for compute-accelerated data center workloads,including AI training andinferencing,and a range of supercomputing applications where the compute c
70、apabilities of GPUs can provide additional performance.Combined with our AMDROCm open software platform,our customers can deliver differentiated accelerated platforms to address the next-generation of computing challenges whileminimizing power and space needs in the data center.Our visual cloud GPU
71、offerings include products in the Radeon PRO V families.Our visual cloud datacenter GPUs include a range of solutions tailored towards workloads requiring remote visualization,such as Desktop-as-a-Service,Workstation-as-a-Serviceand Cloud Gaming.FPGAs and Adaptive SoCs.We offer a wide range of FPGAs
72、,Adaptive SoCs and acceleration cards for the data center.Devices include the Virtex andKintex FPGA products,as well as Zynq,Zynq MPSoC,and Versal Adaptive SoC products.Our Alveo accelerator cards provide a platform foraccelerating workloads including AI processing in the data center,at the edge or
73、the cloud.Our AMD Alveo MA35D media accelerator is designed to deliverhigh channel density,power efficiency and ultra-low-latency performance.To make it accessible for developers,Alveo is available on most major OEM serverplatforms,as well as a growing presence across all major cloud providers who p
74、rovide FPGA-as-a-Service(FaaS).DPUs.Our P4 programmable AMD Pensando DPUs are designed to help offload data center infrastructure services from the host CPU,and coupled with ourcomprehensive networking software stack,AMD DPUs help enable cloud and enterprise customers to optimize performance for net
75、work,storage,and securityservices at cloud scale.Designed for minimal latency,jitter and power impact,our DPUs can help large Infrastructure as a Service(IaaS)cloud providersimprove workload performance for hosted virtualized and bare-metal offerings.thrd4Table of ContentsClient SegmentClient Market
76、Our CPUs are incorporated into computing platforms,which are a collection of technologies that are designed to work together to provide a more completecomputing solution.We believe that integrated,balanced computing platforms consisting of CPUs,chipsets,GPUs(either as discrete GPUs or integrated int
77、oan APU or SoC)and AI accelerators that work together at the system level bring end users improved system stability,increased performance and enhancedpower efficiency.In addition,we believe customers also benefit from an all-AMD platform(consisting of an APU or CPU,a discrete GPU,a chipset and AMDso
78、ftware),as we are able to optimize interoperability,provide our customers a single point of contact for the key platform components and enable them to bringthe platforms to market quickly in a variety of PC form factors.We currently base our CPUs,APUs and chipsets on the x86 instruction set architec
79、ture and theAMD Infinity Fabric,which connects an on-chip memory controller and input/output(I/O)channels directly to our compute engines and domain specificaccelerators.Client ProductsDesktop CPUs.Our CPUs and APUs for desktop platforms currently include the AMD Ryzen and AMD Athlon series processo
80、rs.Our Ryzen 7000 Seriesdesktop processors are based on“Zen 4”architecture and deliver leadership performance for gamers and content creators.Our AMD Ryzen 5000 Seriesdesktop processor family powered by our“Zen 3”core architecture has up to 16 cores and provides price-performance for all levels of c
81、ustomers.For gamingenthusiasts,both the Ryzen 7000 Series and 5000 Series feature models with the AMD 3D V-Cache technology designed to improve gaming performance.AMD has returned to the high end desktop(HEDT)segment with Ryzen Threadripper 7000 Series processors featuring up to 64 cores.Notebook CP
82、Us.Our mobile APUs,including AMD Ryzen and AMD Athlon mobile processors for the commercial and consumer markets,combine both highlevels of performance and efficiency for notebook PCs.Our AMD Ryzen 7045 Series processors are designed to deliver high performance gaming solutions.Our AMD Ryzen 7040 Ser
83、ies processors for mobile applications have up to 8“Zen 4”architecture cores,are built on 4 nm process technology,and featureAMD RDNA 3 graphics.Our Ryzen 7040 Series mobile processors also feature dedicated AI hardware in an x86 processor,with our XDNA architecture.Builton advanced 6 nm technology,
84、our AMD Ryzen and Athlon 7020 C-Series processors have up to four cores and eight threads built on“Zen 2”architecture andAMD RDNA 2 integrated graphics to deliver fast and responsive performance for modern productivity,video conferencing,learning apps and streamingapplications.We also offer AMD Ryze
85、n 6000 Series mobile processors,built on“Zen 3+”architecture and AMD Ryzen 5000 Series mobile processors,whichare powered by both our“Zen 2”and“Zen 3”core architectures,which are designed for mainstream solutions in both consumer and commercial markets.OurAMD Ryzen Z1 Series processors bring high-pe
86、rformance to handheld Windows-based PC gaming platforms.These processors feature“Zen 4”processortechnology combined with RDNA 3 graphics to deliver fast PC gaming,incredible battery life,and immersive experiences in handheld systems.Commercial CPUs.We offer enterprise-class desktop and mobile PC sol
87、utions sold as AMD PRO Mobile and AMD PRO desktop processors with Radeongraphics for the commercial market.AMD Ryzen PRO,AMD Threadripper PRO and AMD Athlon PRO processors solutions are designed to provide enterprisecustomers with the performance,security capabilities and business features such as e
88、nhanced security and manageability,platform longevity and extendedimage stability.Our AMD Ryzen Threadripper PRO 7000 WX-Series processors with“Zen 4”core architecture and 5000 WX-Series processors with“Zen 3”core architecture provide full-spectrum performance across multiple workstation workloads d
89、ue to the performance and efficiency of the Zen CPU core withcore count scaling up to 96 cores in the 7000 WX-Series.Our Ryzen PRO 7040 Series Mobile processors are built on“Zen 4”architecture,AMD RDNA 3integrated graphics,AMD PRO technologies and Ryzen AI,on select models.Our AMD Ryzen Threadripper
90、 PRO 7000 WX-Series processors are built on 5 nm“Zen 4”architecture.Chipsets.We offer a full suite of chipset products to support our AMD Ryzen and Threadripper platforms,including chipsets for the AM5 socket like the X670chipsets which support PCIe5.0(fifth generation Peripheral Component Interconn
91、ect Express motherboard interface)designed for enthusiast desktopplatforms.In the AM5 platform we also offer B650 chipsets to enable a broader range of solutions in the market.In the AM4 ecosystem for 5000-seriesprocessors and prior,we offer the X570,B550 and A520 chipsets.In addition,we continue to
92、 offer the B450 chipsets that are combined with AMD Ryzenprocessors for the AM4 desktop platform for the performance and affordable mainstream platforms segments.In HEDT and Workstation segments,we offer theWRX90 and TRX50 chipsets to support 7000-series Threadripper and Threadripper PRO platforms,a
93、s well as the WRX80 chipsets to support the 5000-seriesThreadripper PRO platforms.5Table of ContentsGaming SegmentGaming MarketGraphics processing is a fundamental component across many of our products and can be found in APU,GPU,SoC or a combination of a discrete GPU withanother product working in
94、tandem.Our customers generally use our graphics solutions to enable or increase the speed of rendering images,to help improveimage resolution and color definition and/or to process AI/ML based workloads.We develop our graphics products for use in various computing devices andentertainment platforms,
95、including desktop PCs,notebook PCs,handheld PCs,All-in-Ones(AIOs),professional workstations,and the data center.With each ofour graphics products,we have available drivers and supporting software packages that enable the effective use of these products under a variety of operatingsystems and applica
96、tions.We have developed AMD RDNA 3,a high performing and power efficient graphics architecture,featuring a chiplet design,AIaccelerators and the Radiance Display Engine.This generation continues to support advanced graphics features introduced with RDNA 2,such as raytracing,AMD Infinity Cache and va
97、riable rate shading.The Sony PlayStation 5 and Microsoft Xbox Series S and X game consoles also feature ourRDNA graphics architecture.Our APUs deliver visual processing functionality for value and mainstream PCs by integrating a CPU and a GPU on a single chip,while discrete GPUs(which are also known
98、 as dGPUs)offer high-performance graphics processing across all platforms.We leverage our core IP,including ourgraphics and processing technologies to develop semi-custom solutions.Here,semiconductor suppliers work alongside system designers and manufacturers toenhance the performance and overall us
99、er experience for semi-custom customers.We have used this collaborative co-development approach with many oftodays leading game console and handheld PC gaming manufacturers and can also address customer needs in many other markets.We leverage our existingIP to create a variety of products tailored t
100、o a specific customers needs,including complex fully-customized SoCs to more modest adaptations and integrationsof existing CPU,APU or GPU products.Gaming ProductsSemi-Custom Products.Our semi-custom products are tailored,high-performance,customer-specific solutions based on our CPU,GPU and multi-me
101、diatechnologies.We work closely with our customers to define solutions to precisely match the requirements of the device or application.We developed the semi-custom SoC products that power both the Sony PlayStation 5 as well as the Microsoft Xbox Series S and X game consoles.We partnered with Valve
102、to create asemi-custom APU optimized for handheld gaming to power the Steam Deck.Discrete Desktop and Notebook GPUs.Our AMD Radeon series discrete GPU processors for desktop and notebook PCs support current generationapplication program interfaces(APIs)like DirectX 12 Ultimate and Vulkan,support hig
103、h-refresh rate displays using AMD FreeSync,AMD FreeSyncPremium,and AMD FreeSync Premium Pro technologies,and are designed to support VR in PC platforms.Our AMD Radeon Software offers performanceenhancing tools and enables new features and customization capabilities to customers and end-users.In addi
104、tion,we also offer tools for game developers suchas our AMD FidelityFX open-source image quality software toolkit that helps deliver improved visual quality with minimal performance overhead.FidelityFXSuper Resolution(FSR)uses upscaling technologies to help boost frame rates in games.Our FSR 2.0 tec
105、hnology uses temporal data and optimized anti-aliasing to boost frame rates in supported games while delivering similar or better image quality than native resolution without the requirement of dedicatedmachine learning hardware.Our FSR 3.0 technology combines the upscaling features of prior version
106、s while introducing our AMD Fluid Motion FramesTechnology which generates interpolated frames between native frames to increase the frame rate of games for a smoother gaming experience.Varyingversions of FSR are supported in over 250 games and multiple products including Radeon GPUs,Ryzen APUs,and m
107、any of our Semi-custom solutions.Beingan open-source technology FSR works across competing hardware solutions as well.Our AMD Radeon RX 7000 series are built on the high-performance,energy-efficient AMD RDNA3 architecture which provides up to 96 compute units,secondgeneration high-bandwidth,low-late
108、ncy AMD Infinity Cache technology as well as dedicated AI and ray tracing hardware.The AMD RDNA 3 architectureprovides process optimizations plus firmware and software enhancements and supports AI-accelerated video encoding and hardware-accelerated AV1encoding.It uses high-speed GDDR6 video RAM(VRAM
109、)and targets discrete desktop GPUs with up to 24GB of VRAM,notebook GPUs with up to 16GB ofVRAM.We continue to offer AMD Radeon RX 6000 series discrete graphics,based on our RDNA2 architecture,for high-performance gaming desktops andnotebooks.Our AMD Advantage Design Framework is a collaboration wit
110、h our global PC partners,delivering high-performance gaming notebooks bycombining our AMD Radeon RX series mobile graphics,AMD Software:Adrenalin Edition,AMD Ryzen series mobile processors and utilizing AMD smarttechnologies to provide best-in-class gaming experiences.6Table of ContentsProfessional
111、GPUs.Our AMD Radeon W7000 PRO family of professional graphics products are based on the AMD RDNA3 architecture and are designed forintegration in mobile and desktop workstations.AMD Radeon PRO graphics cards are designed to optimize design workloads across demanding use casessuch as 3D rendering,des
112、ign and manufacturing for CAD,and media and entertainment for broadcast and animation pipelines on high resolution displays.OurAMD Radeon PRO W7000 series supports workstation GPUs with up to 48GB of VRAM and features the AMD Radiance Display Engine featuringDisplayPort 2.1 that delivers very high r
113、esolution and refresh rates,image fidelity and color accuracy.We continue to offer our AMD Radeon PRO W6000series workstation graphics products based on our AMD RDNA 2 architecture for high-performance workstations.Embedded SegmentThe Embedded MarketThe Embedded segment primarily includes embedded C
114、PUs,GPUs,APUs,FPGAs,and Adaptive SoC products.Embedded products address computingneeds in automotive,industrial,test,measurement,emulation,medical,broadcast,professional audio visual(ProAV),aerospace,defense,communications,networking,security,and storage markets as well as thin clients,which are com
115、puters that serve as an access device on a network.Typically,our embeddedproducts are used in applications that require varying levels of performance,where key features may include relatively low power,small form factors,and 24x7operations.High-performance graphics are important in some embedded sys
116、tems.Support for Linux,Windows and other operating systems as well as forincreasingly sophisticated applications are also critical for some customers.Other requirements may include meeting rigid specifications for industrialtemperatures,shock,vibration and reliability.The embedded market has moved f
117、rom developing proprietary,custom designs to leveraging industry-standardinstruction set architectures and processors as a way to help reduce costs and speed time to market.Embedded ProductsEmbedded CPUs,APUs and GPUs.Our products for embedded platforms include AMD EPYC Embedded CPUs,AMD Ryzen Embed
118、ded V-Series APUs andCPUs,AMD Ryzen Embedded R-Series APUs and CPUs,AMD Ryzen Embedded 5000 Series processors and AMD Ryzen Embedded 7000 Seriesprocessors.Our embedded processors and GPUs are designed to support high performance and bandwidth network connectivity and security,high-performance storag
119、e requirements for enterprise and cloud infrastructure,3D graphics performance and 4K multimedia requirements of automotiveinfotainment systems.Our AMD Ryzen Embedded 5000 Series processors use“Zen 3”x86 CPU core architecture and are designed for enterprise reliability tosupport the consistent uptim
120、e requirements needed by security and networking customers.Our AMD Ryzen Embedded 7000 Series processor family combines“Zen 4”architecture and integrated Radeon RDNA 2 graphics for a wide range of embedded applications,including industrial automation,machine vision,robotics and edge servers.FPGAs an
121、d Adaptive SoCs.Our FPGA products are hardware-customizable devices that can be tailored to meet the specific needs of each customer,enabling them to differentiate their products and accelerate time-to-market.Our FPGA families include UltraScale+(based on 16 nm technology),UltraScale(20 nm),7 Series
122、(28 nm)and older series.Adaptive SoC products include the Zynq SoC and UltraScale+Multi-Processing System on a Chip(MPSoCs)which combine FPGA technology with a heterogeneous processing system,as well as the industrys first RFSoC architecture with integrated radiofrequency(RF)data converters.The Vers
123、al portfolio is composed of software-programmable Adaptive SoCs,with a heterogeneous compute platform thatcombines Scalar Engines,Adaptable Engines,and Intelligent Engines to achieve dramatic performance improvements over todays fastest FPGA andaccelerate applications in a wide variety of markets,in
124、cluding data center,wired network,5G wireless infrastructure,automotive,industrial,scientific,medical,aerospace and defense.Development Boards,Kits and Configuration Products.We offer development kits for all our FPGA and Adaptive SoC products that include hardware,development tools,IP and reference
125、 designs that are designed to streamline and accelerate the development of domain-specific and market-specificapplications.Our AMD Kria K24 SOM provides high determinism and low latency for powering electric drives and motor controllers used in compute-intensivedigital signal processing(DSP)applicat
126、ions at the edge.Coupled with our KD240 Drives Starter Kit,an out-of-the-box-ready motor control-based developmentplatform,the products offer a seamless path to production deployment with the K24 SOM.7Table of ContentsLegacy Product Families.Prior generation high-end Virtex FPGA families include Vir
127、tex-6,Virtex-5,Virtex-4,Virtex-II Pro,Virtex-II and the original Virtexfamily.Prior generation low end Spartan FPGA families include Spartan-6,Spartan-3,the Spartan-3E and Spartan-3A,Spartan-IIE,Spartan-II,Spartan XLand the original Spartan family.Complex Programmable Logic Devices(CPLDs)operate on
128、the lowest end of the programmable logic density spectrum.CPLDsare single-chip,nonvolatile solutions characterized by instant-on and universal interconnect.Prior generations of CPLDs include the CoolRunner and XC9500product families.Design Platforms and ServicesAdaptable Platforms.We offer two types
129、 of platforms that support our customers designs and reduce their development efforts:FPGAs and Adaptive SoCs.All devices feature adaptable hardware that enables our customers to implement customized,domain-specific architectures.With both hardware-acceleratedperformance and flexibility beyond what
130、CPUs,GPUs,application-specific standard parts(ASSPs),and application-specific integrated circuits(ASICs)canoffer,customers can introduce new innovations to the market quickly.FPGAs feature reconfigurable hardware as well as integrated memory,digital signalprocessing,analog mixed signal,high-speed se
131、rial transceivers,and networking cores coupled with advanced software for a broad range of applications in allof our end markets.Our Adaptive SoCs feature a heterogeneous processing subsystem with integrated programmable hardware fabric targeting embeddedsystems needing real-time control,analytics,s
132、ensor fusion,and adaptable hardware for differentiation and acceleration.Our Zynq UltraScale+RFSoCs featureintegrated high-performance RF data converters targeting wireless,radar,and cable access applications.Enabled by both hardware and software design toolsand an extensive operating system,middlew
133、are,software stack,and IP ecosystem,SoC platforms target software developers as well as traditional hardwaredesigners.Versal is the most recent addition to the silicon portfolio.Versal combines Scalar Processing Engines,Adaptable Hardware Engines,and IntelligentEngines with leading-edge memory and i
134、nterfacing technologies to deliver powerful heterogeneous acceleration for any application.This product family isideally suited to accelerate a broad set of applications in the emerging era of big data and AI.Versal hardware and software can be programmed and optimizedby software developers,data sci
135、entists,and hardware developers alike,enabled by a host of tools,software,libraries,IP,middleware,and frameworks thatenable industry-standard design flows.Software Development Platform.To accommodate hardware and software designers,as well as software developers and AI scientists,we provide designto
136、ols and software stacks tailored to each user profile.Our Vivado ML Edition provides hardware design teams with the tools and methodology needed toprogram FPGAs and Adaptive SoCs.Our Vitis unified software platform enables the development and deployment of embedded software and acceleratedapplicatio
137、ns,on our FPGAs and Adaptive SoCs.Our Vitis AI unified software platform enables the development and deployment of AI software on our FPGAsand Adaptive SoCs.Sales and MarketingWe sell our products through our direct sales force and through independent distributors and sales representatives in both d
138、omestic and international markets.Our sales arrangements generally operate on the basis of product forecasts provided by the particular customer,but do not typically include any commitment orrequirement for minimum product purchases.We primarily use product quotes,purchase orders,sales order acknowl
139、edgments and contractual agreements asevidence of our sales arrangements.Our agreements typically contain standard terms and conditions covering matters such as payment terms,warranties andindemnities for issues specific to our products.We generally warrant that our products sold to our customers wi
140、ll conform to our approved specifications and be free from defects in material and workmanshipunder normal use and conditions for one year.We offer up to three-year limited warranties for certain product types,and sometimes provide other warrantyperiods based on negotiated terms with certain custome
141、rs.We market and sell our latest products under the AMD trademark.Our client processors include:AMD Ryzen,AMD Ryzen PRO,AMD Ryzen Threadripper,AMD Ryzen Threadripper PRO,AMD Athlon,AMD Athlon PRO,and AMD PRO A-Series.These products service desktop and notebook personal computers.Our product brand fo
142、r the consumer graphics market is AMD Radeon graphics,and AMD Embedded Radeon graphics is our product brand for the embeddedgraphics market.Our product brand for professional graphics products is AMD Radeon PRO graphics.8Table of ContentsOur product brands for data center graphics are Radeon PRO V-s
143、eries,and AMD Instinct accelerators for servers.We also market and sell our chipsets underAMD trademarks.Our product brand for server microprocessors is AMD EPYC processors.We also sell low-power versions of our AMD Athlon,as well as AMD Geode,AMD Ryzen,AMD EPYC,AMD R-Series and G-Series processors
144、as embeddedprocessor solutions.Our FPGA product brands are Virtex-6,Virtex-7,Virtex UltraScale+,Kintex-7,Kintex UltraScale,Kintex UltraScale+,Artix-7,Artix UltraScale+,Spartan-6 andSpartan-7.Our product brands for Adaptive SoCs are Zynq-7000,Zynq UltraScale+MPSoC,Zynq UltraScale+RFSoCs,Versal HBM,Ve
145、rsal Premium,Versal Prime,Versal AI Core,Versal AI Edge,Vitis and Vivado.Our product brand for System-on-Module(SOM)is Kria.Our compute and network acceleration board products are sold under the Alveo and Pensando brands.We market our products through direct marketing and co-marketing programs.In ad
146、dition,we have cooperative advertising and marketing programs withcustomers and third parties,including market development programs,pursuant to which we may provide product information,training,marketing materials andfunds.Under our co-marketing development programs,eligible customers can use market
147、 development funds as reimbursement for advertisements andmarketing programs related to our products and third-party systems integrating our products,subject to meeting defined criteria.CustomersOur Data Center Segment customers consist primarily of hyperscale data centers,original equipment manufac
148、turers(OEMs),original design manufacturers(ODMs),system integrators and independent distributors in both domestic and international markets.ODMs provide design and/or manufacturing services tobranded and unbranded private label resellers,OEMs and system builders.Customers of our Client Segment produ
149、cts consist primarily of PC OEMs,a network of independent distributors and,for chipset products,ODMs thatmanufacture motherboards.Our Gaming Segment customers include PC OEMs and independent distributors as well as add-in-board manufacturers(AIBs),independent game console and portable gaming devices
150、 manufacturers and contract manufacturers for AMD branded graphics cards.Our Embedded Segment products are sold to customers in a very wide range of markets such as Aerospace and Defense,Test and Measurement,Industrial,Automotive,Consumers,Broadcast,Communication Infrastructure and Data Center.For t
151、hese products we either sell directly to our customers or through anetwork of distributors and OEM partners.We are also developing a network of Value Added Resellers(VARs)and Integrated Solution Vendors(ISVs)for ourAlveo products.We work closely with our customers to define product features,performa
152、nce and timing of new products so that the products we are developing meet ourcustomers needs.We also employ application engineers to assist our customers in designing,testing and qualifying system designs that incorporate ourproducts.We believe that our commitment to customer service and design sup
153、port improves our customers time-to-market and fosters relationships thatencourage customers to use the next generation of our products.We also work with our customers to create differentiated products that leverage our CPU,GPU,DPU and APU technology.Certain customers pay us non-recurring engineerin
154、g fees for design and development services and a purchase price for the resulting products.One customer accounted for 18%of our consolidated net revenue for the year ended December 30,2023.Sales to this customer consisted of sales of productsfrom our Gaming segment.A loss of this customer would have
155、 a material adverse effect on our business.9Table of ContentsOriginal Equipment ManufacturersWe focus on three types of OEM partners:multi-nationals,selected regional accounts and selected global and local system integrators,who target commercialand consumer end customers of all sizes.Large multi-na
156、tionals and regional accounts are the core of our OEM partners business;however,we areincreasingly focused on the VAR channel which resells OEM systems to the mid-market and the small and medium business(SMB)segments.Additionally,wehave increased our focus on global system integrators,which resell O
157、EM systems,coupled with their software and services solutions into Enterprise,highperformance computing(HPC)and Cloud Service Provider customers.Our OEM customers include numerous foreign and domestic manufacturers of serversand workstations,desktops,notebooks,PC motherboards and game consoles.Hyper
158、scale Data CentersLarge multi-national public cloud service providers and hyperscale private data centers directly and indirectly purchase a substantial portion of our data center-focused products,including server CPUs,GPU accelerators,DPUs,FPGAs and Adaptive SOCs.These products are incorporated int
159、o servers and other datacenter appliances sold by OEMs to the hyperscale customers or into custom servers or hardware designed by or for these customers and manufactured byODMs or contract manufacturers.Hyperscale data centers use these products to operate web-based applications or to support public
160、 cloud computing andstorage service offerings,including but not limited to AI workloads such as generative AI models.Third-Party DistributorsOur authorized channel distributors resell to sub-distributors and OEMs,ODMs,and other customers.Typically,distributors handle a wide variety of products,and m
161、ay include products from other manufacturers that compete with our products.Distributors typically maintain an inventory of our products.In mostinstances,our agreements with distributors protect their inventory of our products against price reductions and provide certain return rights with respect t
162、o anyproduct that we have removed from our price book or otherwise subject to discontinuation.In addition,some agreements with our distributors may containstandard stock rotation provisions permitting limited product returns.Add-in-Board(AIB)Manufacturers and System IntegratorsWe offer component-lev
163、el graphics and chipset products to AIB manufacturers who in turn build and sell board-level products using our technology to systemintegrators(SIs),retail buyers and sub distributors.Our agreements with AIBs protect their inventory of our products against price reductions.We also selldirectly to ou
164、r SI customers.SIs typically sell from positions of regional or product-based strength in the market.They usually operate on short design cyclesand can respond quickly with new technologies.SIs often use discrete graphics solutions as a means to differentiate their products and add value to theircus
165、tomers.CompetitionThe markets in which our products are sold are highly competitive and delivering the latest and best products to market on a timely basis is critical to achievingrevenue growth.We believe that the main factors that determine our product competitiveness are total cost of ownership,t
166、imely product introductions,productquality,product features and capabilities(including accelerations for key workloads such as AI,energy efficiency(including power consumption and battery life,given their impact on total cost of ownership),reliability,processor clock speed,performance,size(or form f
167、actor),selling price,cost,adherence to industrystandards(and the creation of open industry standards),level of integration,software and hardware compatibility,ease of use and functionality of softwaredesign tools,completeness of applicable software solutions,security and stability,brand recognition
168、and availability.We expect that competition will continue tobe intense due to rapid technological changes,frequent product introductions by our competitors or new competitors of products that may provide betterperformance or experience or that may include additional features that render our products
169、 comparatively less competitive.Competition in Data Center SegmentIn Data Center,we compete against Intel Corporation(Intel)and NVIDIA Corporation(NVIDIA)with our CPU,GPU and DPU server products.In addition,wecompete against Intel with our FPGA and Adaptive SoC server products.A variety of smaller f
170、abless silicon companies offer proprietary accelerator solutionsand ARM based CPUs targeting data center use-cases.In addition,some of our customers are internally developing their own data center microprocessorproducts and accelerator products which could impact the available market for our product
171、s.10Table of ContentsCompetition in Client SegmentOur primary competitor in the supply of CPUs and APUs is Intel.A variety of companies provide or have developed ARM-based microprocessors and platforms.ARM-based designs are being used in the PC market,which could lead to further growth and developme
172、nt of the ARM ecosystem.Competition in Gaming SegmentIn the graphics market,our principal competitor in the supply of discrete graphics is NVIDIA,who is the market share leader,and Intel,who manufactures andsells integrated graphics processors and gaming-focused discrete GPUs.With respect to integra
173、ted graphics,higher unit shipments of our APUs and Intelsintegrated graphics may drive computer manufacturers to reduce the number of systems they build paired with discrete graphics components,particularly fornotebooks,because they may offer satisfactory graphics performance for most mainstream PC
174、users at a lower cost.We are the market share leader in semi-custom game console products,where graphics performance is critical.Competition in Embedded SegmentWe expect continued competition from our primary FPGA competitors such as Intel,Lattice Semiconductor Corporation and Microsemi Corporation(
175、Microsemi,acquired by Microchip),from ASSP vendors such as Broadcom Corporation,Marvell Technology Group,Ltd.,Analog Devices,Texas Instruments Incorporatedand NXP Semiconductors N.V.,and from NVIDIA.In addition,we expect continued competition from the ASIC market,which has been ongoing since theince
176、ption of FPGAs.Intel is our main competitor for embedded CPUs.Other competitors include manufacturers of high-density programmable logic productscharacterized by FPGA-type architectures;high-volume and low-cost FPGAs as programmable replacements for ASICs and ASSPs;ASICs and ASSPs withincremental am
177、ounts of embedded programmable logic;high-speed,low-density complex programmable logic devices(CPLDs);high-performance digital signalprocessing(DSP)devices;products with embedded processors;products with embedded multi-gigabit transceivers;discrete general-purpose GPUs targetingdata center and autom
178、otive applications;and other new or emerging programmable logic products.Research and DevelopmentWe focus our research and development(R&D)activities on designing and developing products.Our main area of focus is on delivering the next generation ofprocessors(CPU and GPU),FPGAs and Adaptive SoCs,acc
179、elerators(adaptive,graphics and DPU),System on Modules(SOMs)and SmartNICs andassociated software.We focus on designing new ICs with improved performance and performance-per-watt in advanced semiconductor manufacturingprocesses,the design of logic and interface IP,advanced packaging technologies,and
180、heterogeneous integration technologies.We also focus on software aspart of the development of our products,including design automation tools for hardware,embedded software,optimized software tools and libraries that extendthe reach of our platforms to software and AI developers.Through our R&D effor
181、ts,we were able to introduce a number of new products and enhance our IPcore offerings and software.We also work with industry leaders on process technology,design tools,intellectual property,software and other industry consortia to conduct early-stageresearch and development.We are also actively co
182、ntributing to numerous industry open-source software initiatives across a broad range of technologies.Weconduct product and system research and development activities for our products in the United States with additional design and development engineeringteams located in various countries who undert
183、ake specific activities at the direction of our U.S.headquarters.Manufacturing Arrangements and Assembly and Test FacilitiesThird-Party Wafer Foundry FacilitiesWe have foundry arrangements with Taiwan Semiconductor Manufacturing Company Limited(TSMC)for the production of wafers for our HPC,FPGA andA
184、daptive SoC products.We are also a party to a Wafer Supply Agreement(WSA)with GLOBALFOUNDRIES Inc.(GF),with respect to wafer purchases for ourHPC products at the 12 nm and 14 nm technology nodes.Additionally,we utilize TSMC,United Microelectronics Corporation(UMC)and Samsung ElectronicsCo.,Ltd.for t
185、he production of our integrated circuits(IC)in the form of programmable logic devices.11Table of ContentsOther Third-Party ManufacturersWe outsource board-level graphics product manufacturing to third-party manufacturers.Assembly,Test,Mark and Packaging FacilitiesWafers for our products are either s
186、orted by the foundry or delivered by the foundry to our assembly,test,mark and packaging(ATMP)partners orsubcontractors located in the Asia-Pacific region who package and test our final semiconductor products.We are party to two ATMP joint ventures(collectively,the ATMP JVs)with Tongfu Microelectron
187、ics Co.,Ltd.The ATMP JVs,Siliconware Precision Industries Ltd.(SPIL)and King Yuan Electronics Company(KYEC)provide ATMP services for our products.Intellectual Property and LicensingWe rely on contracts and intellectual property rights to protect our products and technologies from unauthorized third-
188、party copying and use.Intellectualproperty rights include copyrights,patents,patent applications,trademarks,trade secrets and mask work rights.As of December 30,2023,we hadapproximately 7,500 patents in the United States and approximately 2,000 patent applications pending in the United States.In cer
189、tain cases,we have filedcorresponding applications in foreign jurisdictions.Including United States and foreign matters,we have approximately 18,500 patent matters worldwideconsisting of approximately 12,800 issued patents and 5,600 patent applications pending.We expect to file future patent applica
190、tions in both the United Statesand abroad on significant inventions,as we deem appropriate.We do not believe that any individual patent,or the expiration of any patent,is or would bematerial to our business.As is typical in the semiconductor industry,we have numerous cross-licensing and technology e
191、xchange agreements with othercompanies under which we both transfer and receive technology and intellectual property rights.We have acquired various licenses from external parties tocertain technologies that are implemented in our products,including our IP cores and devices.These licenses support ou
192、r continuing ability to make and sellour products.We have also acquired licenses to certain proprietary software,open-source software,and related technologies,such as compilers,for our designtools.Continued use of such software and technology is important to the operation of the design tools upon wh
193、ich our customers depend.BacklogSales are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time.Although such orders oragreements may provide visibility into future quarters,they may not necessarily be indicative of actual sales for an
194、y succeeding period as some of these ordersor agreements may be revised or canceled without penalty.SeasonalityOur operating results tend to vary seasonally.Historically,our net revenue has been generally higher in the second half of the year than in the first half of theyear,although market conditi
195、ons and product transitions could impact these trends.Human CapitalAs of December 30,2023,we had approximately 26,000 employees in our global workforce.We believe we are at our best when our culture of innovation,creative minds and people from all kinds of backgrounds work together in an engaging an
196、d open environment.Areas of focus for us include the following:Mission,Culture,and EngagementOur History-Founded in 1969 as a Silicon Valley start-up,the AMD journey began with dozens of employees focused on leading-edge semiconductorproducts.From those modest beginnings,we have grown into a global
197、company achieving many important industry firsts along the way.Today,we develophigh-performance and adaptive computing to solve some of the worlds toughest and most interesting challenges.Our Vision-High performance and adaptive computing is transforming our lives.Our Mission-Build great products th
198、at accelerate next-generation computing experiences.Our employees are driven by this vision and mission.Innovation occurs when creative minds and diverse perspectives from all over the world work together.This is the foundation of our unique culture and the reason why we believe our employees are am
199、ong the most engaged in our industry.12Table of ContentsWe conduct a confidential annual survey of our global workforce to measure our culture,engagement,and manager quality.The results are reviewed by ourBoard of Directors and acted upon by our senior leadership team and individual managers at ever
200、y level.Results from our 2023 survey reported scores thatcontinued to be among the very best for global companies in the technology industry.Our employees described our culture as inclusive,innovative,open,andrespectful,and rated the quality of our managers among the top 10%of our technology industr
201、y peers.Diversity,Belonging and Inclusion(DB&I)Our diverse and inclusive workforce encourages employees to share their opinions and different perspectives.We believe that building a diverse talent pipeline,encouraging a culture of respect and belonging,and increasing inclusion of unique and underrep
202、resented voices makes our company stronger.Our EmployeeResource Groups,which are open to all our employees,encourage employee engagement and play an important role in our culture.More than 85%of all newhires join at least one of AMDs employee resource groups when starting employment.We are focused o
203、n hiring and developing underrepresented groups and women leaders.In 2023,we increased focus on developing our female engineeringcommunity by launching an experiential program,“Advancing Women in Technology,”that aims to support career development.We are proud to be led by Dr.Lisa Su,a highly regard
204、ed CEO who has won many esteemed awards for her business and leadership prowess.Total RewardsWe invest in our workforce by offering competitive salaries,incentives,and benefits to ensure that we continue to attract and retain the industrys best andbrightest in an equitable manner.We perform pay equi
205、ty analysis regularly and act on results,if warranted.Our rewards are guided by employees preferencesand the market for talent.We focus on flexibility and choice in our benefits that resonate with a multi-generational workforce as well as offering inclusivebenefits that support our DB&I objectives,s
206、uch as global parental and bereavement leave,and financial assistance to build a family through adoption orsurrogacy.While we believe that there is unique collaboration that can occur when employees meet in person,we have not mandated that all employees returnto the office five days a week,allowing
207、flexibility with hybrid and remote work as options for our employees.We have a strong pay for performance culture that we believe drives superior results.Our employees have benefited from our robust financial results throughour strong short-term and long-term incentive programs.Our rewards programs
208、enable us to attract,retain and motivate our workforce.DevelopmentWe offer our employees opportunities to advance their careers at the Company and the majority of our new leaders are promoted from within.We are focusedon leadership progression and encourage our employees to take advantage of new opp
209、ortunities.Our manager and leadership development programs arehighly rated,and we provide specialized development programs for our employees as well as educational assistance in the form of tuition reimbursement foreligible employees to continue their university education or achieve advanced certifi
210、cations.We have an enterprise-wide mentoring program where employees have the opportunity to learn from experienced colleagues,develop new skills,and buildtheir professional networks.The program also supports effective onboarding,helping new hires more quickly acclimate to our company culture and wo
211、rkprocesses.We believe that our mentoring program is a valuable investment in our workforce,and we are committed to its ongoing success.Employee VoiceAt AMD,we value the importance of employee voice and actively engage in efforts to ensure that our employees opinions and perspectives are heard andco
212、nsidered.Our employee voice strategy includes an annual AMDer Survey(engagement survey).Our scores rank AMD in the top 10%of high tech firms onlike questions,categories and overall score.Additionally,we measure effectiveness across all elements of the employee lifecycle,including onboarding,exit,and
213、 various ad hoc surveys including benefits and total rewards satisfaction.Further,our executive team holds frequent employee roundtables,town halls andglobal team meetings with question-and-answer segments which facilitates open communication and feedback from our workforce.13Table of ContentsGovern
214、ment RegulationsOur global operations are subject to various United States and foreign laws and regulations,including,but not limited to,those relating to export control,customs,intellectual property,data privacy and security,climate,environmental,health and safety requirements,cybersecurity,tax,emp
215、loyment,competitionand anti-trust,anti-corruption,anti-bribery,conflict minerals,corporate governance,financial and other disclosures,and AI.Compliance with thesegovernmental laws and regulations do not presently have a material adverse impact on our capital expenditures,results of operations or com
216、petitive position.However,compliance with changes to existing or new regulations may have a material adverse impact on our future capital expenditures,results of operationsor competitive position.In addition,the failure to comply with government laws and regulations may subject us to consequences in
217、cluding fines,limits on ourability to sell our products,suspension of certain of our business activities,reputational damage,criminal and civil liabilities,and sanctions,which may have amaterial adverse effect on our capital expenditures,results of operations or competitive position.For additional i
218、nformation about government regulationsapplicable to our business,and their potential impacts see Risk Factors in Item 1A.Environmental RegulationsOur operations and properties are subject to various United States and foreign laws and regulations,including those relating to materials used in our pro
219、ductsand the manufacturing processes of our products,discharge of pollutants into the environment,the treatment,transport,storage and disposal of solid andhazardous wastes and remediation of contamination.These laws and regulations require our suppliers to obtain permits for operations making our pr
220、oducts,including the discharge of air pollutants and wastewater.Environmental laws are complex,change frequently and tend to become more stringent over time.Forexample,the European Union(EU)and China are among a growing number of jurisdictions that have enacted restrictions on the use of lead and ot
221、hermaterials in electronic products.These regulations affect semiconductor devices and packaging.Jurisdictions including the EU,Australia,California and Chinaare developing or have finalized market entry or public procurement regulations for computers and servers based on ENERGY STAR specifications
222、as well asadditional energy consumption limits.Certain environmental laws,including the United States Comprehensive,Environmental Response,Compensation and Liability Act of 1980,or the SuperfundAct,impose strict or,under certain circumstances,joint and several liability on current and previous owner
223、s or operators of real property for the cost of removalor remediation of hazardous substances and impose liability for damages to natural resources.These laws often impose liability even if the owner or operatordid not know of,or was not responsible for,the release of such hazardous substances.These
224、 environmental laws also assess liability on persons who arrangefor hazardous substances to be sent to disposal or treatment facilities when such facilities are found to be contaminated.Such persons can be responsible forcleanup costs even if they never owned or operated the contaminated facility.We
225、 have been named as a responsible party on Superfund clean-up orders forthree sites in Sunnyvale,California that are on the National Priorities List.Since 1981,we have discovered hazardous material releases to the groundwaterfrom former underground tanks and proceeded to investigate and conduct reme
226、diation at these three sites.The chemicals released into the groundwater werecommonly used in the semiconductor industry in the United States in the wafer fabrication process prior to 1979.In 1991,we received Final Site Clean-up Requirements Orders from the California Regional Water Quality Control
227、Board relating to the three sites.We haveentered into settlement agreements with other responsible parties on two of the orders.During the term of such agreements,other parties have agreed toassume most of the foreseeable costs as well as the primary role in conducting remediation activities under t
228、he orders.We remain responsible for additionalcosts beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations under the settlementagreements.To address anticipated future remediation costs under the orders,we have computed
229、and recorded an estimated environmental liability of approximately$4.8million and have not recorded any potential insurance recoveries in determining the estimated costs of the cleanup.The progress of future remediation effortscannot be predicted with certainty and these costs may change.We believe
230、that any amount in addition to what has already been accrued would not bematerial.14Table of ContentsITEM 1A.RISK FACTORSThe risks and uncertainties described below are not the only ones we face.If any of the following risks actually occurs,our business,financial condition orresults of operations co
231、uld be materially adversely affected.In addition,you should consider the interrelationship and compounding effects of two or more risksoccurring simultaneously.Risk Factors SummaryThe following is a summary of the principal risks that could adversely affect our business,financial condition and resul
232、ts of operations.Economic and Strategic RisksIntel Corporations dominance of the microprocessor market and its aggressive business practices may limit our ability to compete effectively on a levelplaying field.Economic and market uncertainty may adversely impact our business and operating results.Th
233、e semiconductor industry is highly cyclical and has experienced severe downturns.The demand for our products depends in part on the market conditions in the industries into which they are sold.There may be fluctuations in demand forour products or a market decline in any of these industries.The loss
234、 of a significant customer may have a material adverse effect on us.We are subject to risks associated with public health crises,such as pandemics and epidemics.The markets in which our products are sold are highly competitive.Our operating results are subject to quarterly and seasonal sales pattern
235、s.If we cannot adequately protect our technology or other intellectual property through patents,copyrights,trade secrets,trademarks and other measures,wemay lose a competitive advantage and incur significant expenses.Unfavorable currency exchange rate fluctuations could adversely affect us.Operation
236、al and Technology RisksWe rely on third parties to manufacture our products,and if they are unable to do so on a timely basis in sufficient quantities and using competitivetechnologies,our business could be materially adversely affected.Essential equipment,materials,substrates or manufacturing proce
237、sses may not be available to us.We may fail to achieve expected manufacturing yields for our products.The success of our business is dependent upon our ability to introduce products on a timely basis with features and performance levels that provide valueto our customers while supporting significant
238、 industry transitions.Our revenue from our semi-custom System-on-Chip(SoC)products is dependent upon our semi-custom SoC products being incorporated into customersproducts and the success of those products.Our products may be subject to security vulnerabilities that could have a material adverse eff
239、ect on us.IT outages,data loss,data breaches and cyberattacks could disrupt operations and compromise our intellectual property or other sensitive information,becostly to remediate or cause significant damage to our business,reputation,financial condition and results of operations.We may encounter d
240、ifficulties in operating our newly upgraded enterprise resource planning(ERP)system.Uncertainties involving the ordering and shipment of our products could materially adversely affect us.Our ability to design and introduce new products includes the use of third-party intellectual property.We depend
241、on third-party companies for the design,manufacture and supply of motherboards,software,memory and other computer platform componentsto support our business and products.15Table of ContentsIf we lose Microsoft Corporations support for our products or other software vendors do not design and develop
242、software to run on our products,our abilityto sell our products could be materially adversely affected.Our reliance on third-party distributors and add-in-board(AIB)partners subjects us to certain risks.Our business depends on the proper functioning of our internal business processes and information
243、 systems.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.We may fail to maintain the efficiency of our supply chain as we respond to changes in customer demand.We outsource to t
244、hird parties certain supply-chain logistics functions.We may be unable to effectively control the sales of our products on the gray market.Climate change may have a long-term impact on our business.Legal and Regulatory RisksGovernment actions and regulations may limit our ability to export our produ
245、cts to certain customers.If we cannot realize our deferred tax assets,our results of operations could be adversely affected.Our business is subject to potential tax liabilities,including as a result of tax regulation changes.We are party to litigation and may become a party to other claims or litiga
246、tion.We are subject to environmental laws,conflict minerals-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act,and otherlaws or regulations that could result in additional costs and liabilities.Evolving expectations from governments,investors,customers and other stak
247、eholders regarding corporate responsibility matters could result in additionalcosts,harm to our reputation and a loss of customers.Issues related to the responsible use of AI may result in reputational,competitive and financial harm and liability.Merger,Acquisition and Integration RisksAcquisitions,
248、joint ventures,and/or investments,and the failure to integrate acquired businesses may fail to materialize their anticipated benefits and disruptour business.Any impairment of our tangible,definite-lived intangible or indefinite-lived intangible assets,including goodwill,may adversely impact our fin
249、ancial positionand results of operations.Liquidity and Capital Resources RisksThe agreements governing our notes,our guarantees of Xilinxs notes,and our Revolving Credit Agreement impose restrictions on us that may adverselyaffect our ability to operate our business.Our indebtedness could adversely
250、affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations.We may not generate sufficient cash to meet our working capital requirements.If we cannot generate sufficient revenue and operating cash flow,we mayface a cash shortfall.Also,our cas
251、h and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cashequivalents fail.General RisksOur worldwide operations are subject to political,legal and economic risks and natural disasters.We may incur future impairments of our technology license
252、purchases.Our inability to continue to attract and retain qualified personnel may hinder our business.Our stock price is subject to volatility.For a more complete discussion of the material risks facing our business,see below.16Table of ContentsEconomic and Strategic RisksIntel Corporations dominanc
253、e of the microprocessor market and its aggressive business practices may limit our ability to compete effectively on alevel playing field.Intels microprocessor market share position,significant financial resources,introduction of competitive new products,and existing relationships with top-tierOEMs
254、have enabled it to market and price its products aggressively,to target our customers and our channel partners with special incentives and to influencecustomers who do business with us.These aggressive activities have in the past resulted in lower unit sales and a lower average selling price for man
255、y of ourproducts and adversely affected our margins and profitability.Intel also dominates the computer system platform and has a heavy influence on PCmanufacturers,other PC industry participants,and benchmarks.It is able to drive de facto standards and specifications for x86 microprocessors that co
256、uldcause us and other companies to have delayed access to such standards.We may be materially adversely affected by Intels business practices,includingrebating and allocation strategies and pricing actions,designed to limit our market share and margins;product mix and introduction schedules;productb
257、undling,marketing and merchandising strategies;and exclusivity payments to its current and potential customers,retailers and channel partners.We expectIntel to continue to heavily invest substantial resources in marketing,research and development,new manufacturing facilities and other technology com
258、panies.To the extent Intel manufactures a significantly larger portion of its microprocessor products using more advanced process technologies or introducescompetitive new products into the market before we do,we may be more vulnerable to Intels aggressive marketing and pricing strategies for microp
259、rocessorproducts.We also compete with Intel in field programmable gate arrays(FPGAs)and Adaptive SoC products.In the graphics processing unit(GPU)market,Intel hasdeveloped and released their own high-end discrete GPUs,including gaming focused discrete GPUs.Intel could take actions that place our GPU
260、s at acompetitive disadvantage,including giving one or more of our competitors in the graphics market preferential access to its proprietary graphics interface orother useful information or restricting access to external companies.Economic and market uncertainty may adversely impact our business and
261、 operating results.Uncertain global or regional economic conditions have and may in the future adversely impact our business.Uncertainty in the economic environment or otherunfavorable changes in economic conditions,such as inflation,higher interest rates,recession,slowing growth,increased unemploym
262、ent,tighter creditmarkets,changes in fiscal monetary or trade policy,or currency fluctuations,may negatively impact consumer confidence and spending causing our customersto stop or postpone purchases.For example,our Client segment revenue decreased due to a decline in the PC market in the second hal
263、f of 2022 and the firsthalf of 2023,and our Embedded segment revenue decreased as a result of an inventory correction in several end markets in the second half of 2023.Duringchallenging economic times,our current or potential future customers may experience cash flow problems and as a result may mod
264、ify,delay or cancel plans topurchase our products.Additionally,if our customers are not successful in generating sufficient revenue or are unable to secure financing,they may not be ableto pay,or may delay payment of,accounts receivable that they owe us.The risk related to our customers potentially
265、defaulting on or delaying payments to us isincreased because we expect that a small number of customers will continue to account for a substantial part of our revenue.Any inability of our current orpotential future customers to pay us for our products may adversely affect our earnings and cash flow.
266、Moreover,our key suppliers may reduce their output orbecome insolvent,thereby adversely impacting our ability to manufacture our products.Adverse changes in economic conditions could increase costs ofmemory,equipment,materials or substrates and other supply chain expenses.If we are not able to procu
267、re a stable supply of materials on an ongoing basisand at reasonable costs to meet our production requirements,we could experience a supply shortage or an increase in production costs,which couldnegatively impact our gross margin and materially adversely affect our business.In addition,uncertain eco
268、nomic conditions could lead to higher borrowingcosts and reduced availability of capital and credit markets,making it more difficult for us to raise funds through borrowings or private or public sales of debt orequity securities.An economic downturn or increased uncertainty could also lead to failur
269、es of counterparties including financial institutions and insurers,assetimpairments and declines in the value of our financial instruments.17Table of ContentsThe semiconductor industry is highly cyclical and has experienced severe downturns that have materially adversely affected,and may continue to
270、materially adversely affect,our business in the future.The semiconductor industry is highly cyclical and has experienced significant downturns,often in conjunction with constant and rapid technological change,wide fluctuations in supply and demand,continuous new product introductions,price erosion a
271、nd declines in general economic conditions.We have incurredsubstantial losses in previous downturns,due to substantial declines in average selling prices;the cyclical nature of supply and demand imbalances in thesemiconductor industry;a decline in demand for end-user products that incorporate our pr
272、oducts;and excess inventory levels and periods of inventoryadjustment.Such industry-wide fluctuations may materially adversely affect us in the future.Global economic uncertainty and weakness have in the past impacted the semiconductor market as consumers and businesses have deferred purchases,which
273、 negatively impacted demand for our products.For example,our Client segment revenue decreased due to a decline in the PC market in the second halfof 2022 and the first half of 2023,and our Embedded segment revenue decreased as a result of an inventory correction in several end markets in the secondh
274、alf of 2023.Our financial performance has been,and may in the future be,negatively affected by these downturns.The growth of our business is also dependent on continued demand for our products from high-growth adjacent emerging global markets.Our ability to besuccessful in such markets depends in pa
275、rt on our ability to establish adequate local infrastructure,as well as our ability to cultivate and maintain localrelationships in these markets.If demand from these markets is below our expectations,sales of our products may decrease,which would have a materialadverse effect on us.The demand for o
276、ur products depends in part on the market conditions in the industries into which they are sold.Fluctuations in demand for ourproducts or a market decline in any of these industries could have a material adverse effect on our results of operations.Industry-wide fluctuations in the computer marketpla
277、ce have materially adversely affected us in the past and may materially adversely affect us in the future.We offer products that are used in different end markets and the demand for our products can vary among our Data Center,Client,Gaming and Embedded endmarkets.For instance,in our Data Center segm
278、ent,we offer products that are optimized for generative AI applications and in the fourth quarter of 2023,weexperienced significant demand for our AI accelerators.The demand for such products will depend on the extent to which our customers utilize generative AIsolutions in a wide variety of applica
279、tions.Also,in our Client segment revenue is focused on the consumer desktop and notebook PC segments.Our Clientsegment revenue decreased due to a decline in the PC market in the second half of 2022 and the first half of 2023.In the past,revenues from the Client andGaming segments have experienced a
280、decline driven by,among other factors,the adoption of smaller and other form factors,increased competition andchanges in replacement cycles.In addition,our GPU revenue in the past has been affected in part by the volatility of the cryptocurrency mining market.If weare unable to manage the risks rela
281、ted to the volatility of the cryptocurrency mining market(including potential actions by global monetary authorities),our GPUbusiness could be materially adversely affected.The success of our semi-custom SoC products in our Gaming segment is dependent on securing customersfor our semi-custom design
282、pipeline and consumer market conditions,including the success of game console systems and next generation consoles for Sonyand Microsoft.Our Embedded segment primarily includes embedded CPUs and GPUs,APUs,FPGAs and Adaptive SoC products some of which are subject tomacroeconomic trends and volatile b
283、usiness conditions.To the extent our embedded customers are faced with higher inventory levels,they may choose todraw down their existing inventory and order less of our products.Our Embedded segment revenue decreased as a result of an inventory correction in severalend markets in the second half of
284、 2023.The loss of a significant customer may have a material adverse effect on us.We depend on a small number of customers for a substantial portion of our business and we expect that a small number of customers will continue to accountfor a significant part of our revenue in the future.If one of ou
285、r key customers decides to stop buying our products,materially reduces its operations or itsdemand for our products,or has operations that are materially impaired for a significant period of time such that it is unable to receive or utilize our products,our business would be materially adversely aff
286、ected.18Table of ContentsWe are subject to risks associated with public health crises,such as pandemics and epidemics,including the COVID-19 pandemic,which may havea material adverse effect on our business.We are subject to risks associated with public health crises,such as pandemics and epidemics,w
287、hich may have a material adverse effect on our business.Global health outbreaks,such as COVID-19,have and may continue to adversely affect our employees,disrupt our business operations and practices,as wellthose of our customers,partners,vendors and suppliers.Public health measures by government aut
288、horities such as travel bans,social-distancing,lockdownmeasures,vaccination requirements may cause us to incur additional costs,limit our operations,modify our business practices,diminish employee productivityor disrupt our supply chain,which may have a material adverse effect on our business.To the
289、 extent a public health crisis will impact our business,financialcondition and results of operations depends on factors outside of our control,including severity,duration and the measures to contain the health outbreak.The markets in which our products are sold are highly competitive.The markets in
290、which our products are sold are highly competitive and delivering the latest and best products to market on a timely basis is critical to achievingrevenue growth.We believe that the main factors that determine our product competitiveness are total cost of ownership,timely product introductions,produ
291、ctquality,product features and capabilities(including accelerations for key workloads such as artificial intelligence(AI),energy efficiency relating to powerconsumption and battery life given their impact on total cost of ownership,reliability,processor clock speed,performance,size(or form factor),s
292、elling price,cost,adherence to industry standards(and the creation of open industry standards),level of integration,software and hardware compatibility,ease of use andfunctionality of software design tools,completeness of applicable software solutions,security and stability,brand recognition and ava
293、ilability.We expect that competition will continue to be intense due to rapid technological changes,frequent product introductions by our competitors or new competitorsof products that may provide better performance/experience or that may include additional features that render our products comparat
294、ively less competitive.Wemay also face aggressive pricing by competitors,especially during challenging economic times.In addition,our competitors have significant marketing andsales resources which could increase the competitive environment in a declining market or during challenging economic times,
295、leading to lower prices andmargins.Some competitors may have greater access or rights to complementary technologies,including interface,processor and memory technicalinformation.For instance,with our APU products and other competing solutions with integrated graphics,we believe that demand for addit
296、ional discretegraphics chips and cards may decrease in the future due to improvements in the quality and performance of integrated graphics.If competitors introducecompetitive new products into the market before us,demand for our products could be adversely impacted and our business could be adverse
297、ly affected.Inaddition,Intel is expanding its position in integrated graphics for the PC market with high-end discrete graphics solutions for a broad range of computingmarkets,which may negatively impact our ability to compete in these computing markets,and Nvidia has added an ARM CPU offering which
298、 adds competitionin the CPU market.Also,increased adoption of ARM-based semiconductor designs could lead to further growth and development of the ARM ecosystem.Whilewe see significant opportunity in AI,we expect intense competition from companies such as Nvidia in the supply of GPUs and other accele
299、rators for the AImarket.In addition,we are entering markets with current and new competitors who may be able to adapt more quickly to customer requirements and emergingtechnologies.We cannot guarantee that we will be able to compete successfully against current or new competitors who may have strong
300、er positions in thesenew markets or superior ability to anticipate customer requirements and emerging industry trends.Furthermore,we may face competition from some of ourcustomers who internally develop the same products as us.We may face delays or disruptions in research and development efforts,or
301、we may be required toinvest significantly greater resources in research and development than anticipated.Also,the semiconductor industry has seen several mergers andacquisitions over the last number of years.Further consolidation could adversely impact our business due to there being fewer suppliers
302、,customers andpartners in the industry.From time to time,governments provide incentives or make other investments that could benefit and give a competitive advantage to our competitors.Forexample,the United States government enacted the Creating Helpful Incentives to Produce Semiconductors for Ameri
303、ca and Science Act(CHIPS Act)of 2022to provide financial incentives to the U.S.semiconductor industry.Government incentives,including the CHIPS Act,may not be available to us on acceptableterms or at all.If our competitors can benefit from such government incentives and we cannot,it could strengthen
304、 our competitors relative position and have amaterial adverse effect on our business.19Table of ContentsOur operating results are subject to quarterly and seasonal sales patterns.The profile of our sales may be weighted differently during the year.A large portion of our quarterly sales have historic
305、ally been made in the last month of thequarter.This uneven sales pattern makes prediction of revenue for each financial period difficult and increases the risk of unanticipated variations in quarterlyresults and financial condition.In addition,our operating results tend to vary seasonally with the m
306、arkets in which our products are sold.For example,historically,our net revenue has been generally higher in the second half of the year than in the first half of the year,although market conditions and producttransitions could impact these trends.Many of the factors that create and affect quarterly
307、and seasonal trends are beyond our control.If we cannot adequately protect our technology or other intellectual property in the United States and abroad,through patents,copyrights,tradesecrets,trademarks and other measures,we may lose a competitive advantage and incur significant expenses.We rely on
308、 a combination of protections provided by contracts,including confidentiality and nondisclosure agreements,copyrights,patents,trademarks andcommon law rights,such as trade secrets,to protect our intellectual property.However,we cannot assure you that we will be able to adequately protect ourtechnolo
309、gy or other intellectual property from third-party infringement or from misappropriation in the United States and abroad.Any patent licensed by us orissued to us could be challenged,invalidated,expire,or circumvented or rights granted thereunder may not provide a competitive advantage to us.Furtherm
310、ore,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 isadvantageous to us.Despite our efforts to protect our intellectual property rights,others may independently develop similar products,duplicate our produc
311、ts ordesign around our patents and other rights.In addition,it is difficult to monitor compliance with,and enforce,our intellectual property on a worldwide basis in acost-effective manner.In jurisdictions where foreign laws provide less intellectual property protection than afforded in the U.S.and a
312、broad,our technology orother intellectual property may be compromised,and our business would be materially adversely affected.Unfavorable currency exchange rate fluctuations could adversely affect us.We have costs,assets and liabilities that are denominated in foreign currencies.As a consequence,mov
313、ements in exchange rates could cause our foreigncurrency denominated expenses to increase as a percentage of revenue,affecting our profitability and cash flows.Whenever we believe appropriate,we hedgea portion of our foreign currency exposure to protect against fluctuations in currency exchange rate
314、s.We determine our total foreign currency exposure usingprojections of long-term expenditures for items such as payroll.We cannot assure you that these activities will be effective in reducing foreign exchange rateexposure.Failure to do so could have an adverse effect on our business,financial condi
315、tion,results of operations and cash flow.In addition,the majority of ourproduct sales are denominated in U.S.dollars.Fluctuations in the exchange rate between the U.S.dollar and the local currency can cause increases ordecreases in the cost of our products in the local currency of such customers.An
316、appreciation of the U.S.dollar relative to the local currency could reduce salesof our products.Operational and Technology RisksWe rely on third parties to manufacture our products,and if they are unable to do so on a timely basis in sufficient quantities and using competitivetechnologies,our busine
317、ss could be materially adversely affected.We utilize third-party wafer foundries to fabricate the silicon wafers for all of our products.We rely on Taiwan Semiconductor Manufacturing Company Limited(TSMC)for the production of all wafers for microprocessor and GPU products at 7 nanometer(nm)or smalle
318、r nodes,and we rely primarily onGLOBALFOUNDRIES Inc.(GF)for wafers for microprocessor and GPU products manufactured at process nodes larger than 7 nm.We also utilize TSMC,United Microelectronics Corporation(UMC)and Samsung Electronics Co.,Ltd.for our integrated circuits(IC)in the form of programmabl
319、e logic devices.Wealso rely on third-party manufacturers to assemble,test,mark and pack(ATMP)our products.Our third-party package assembly partners are responsible forpackaging technology used to fabricate our products.It is important to have reliable relationships with all of these third-party manu
320、facturing suppliers to ensureadequate product supply to respond to customer demand.20Table of ContentsWe cannot guarantee that these manufacturers or our other third-party manufacturing suppliers will be able to meet our near-term or long-term manufacturingrequirements.If we experience supply constr
321、aints from our third-party manufacturing suppliers,we may be required to allocate the reduced quantities ofaffected products amongst our customers,which could have a material adverse effect on our relationships with these customers and on our financial condition.In addition,if we are unable to meet
322、customer demand due to fluctuating or late supply from our manufacturing suppliers,it could result in lost sales and have amaterial adverse effect on our business.For example,if TSMC is not able to manufacture wafers for our microprocessor and GPU products at 7 nm or smallernodes and our newest IC p
323、roducts in sufficient quantities to meet customer demand,it could have a material adverse effect on our business.We do not have long-term commitment contracts with some of our third-party manufacturing suppliers.We obtain many of these manufacturing services on apurchase order basis and these manufa
324、cturers are not required to provide us with any specified minimum quantity of product beyond the quantities in anexisting purchase order.Accordingly,we depend on these suppliers to allocate to us a portion of their manufacturing capacity sufficient to meet our needs,toproduce products of acceptable
325、quality and at acceptable manufacturing yields and to deliver those products to us on a timely basis and at acceptable prices.The manufacturers we use also fabricate wafers and ATMP products for other companies,including certain of our competitors.They could choose to prioritizecapacity for other cu
326、stomers,increase the prices that they charge us on short notice,require onerous prepayments,or reduce or eliminate deliveries to us,which could have a material adverse effect on our business.Other risks associated with our dependence on third-party manufacturers include limited control over delivery
327、 schedules,yield,cycle times,quality assurance,price increases,lack of capacity in periods of excess demand,misappropriation of our intellectual property,dependence on several subcontractors,and limitedability to manage inventory and parts.Moreover,if any of our third-party manufacturers(or their su
328、bcontractors)suffer any damage to facilities,lose benefitsunder material agreements,experience power outages,water shortages,or high heat events,lack sufficient capacity to manufacture our products,encounterfinancial difficulties,are unable to secure necessary raw materials from their suppliers,suff
329、er any other disruption or reduction in efficiency,or experienceuncertain environmental,social,atmospheric or natural,economic or political circumstances or conditions,we may encounter supply delays or disruptions.If weare unable to secure sufficient or reliable supplies of products,our ability to m
330、eet customer demand may be adversely affected and this could materially affectour business.If we transition the production of some of our products to new manufacturers,we may experience delayed product introductions,lower yields or poorerperformance of our products.If we experience problems with pro
331、duct quality or are unable to secure sufficient capacity from a particular third-partymanufacturer,or if we for other reasons cease utilizing one of those manufacturers,we may be unable to timely secure an alternative supply for any specificproduct.We could experience significant delays in the shipm
332、ent of our products if we are required to find alternative third-party manufacturers,which couldhave a material adverse effect on our business.We are a party to a wafer supply agreement(WSA)with GF that governs the terms by which we purchase products manufactured by GF and this agreement isin place
333、through 2025.GF will provide a minimum annual capacity allocation to us through 2025 and we have corresponding annual wafer purchase targets.Ifwe do not meet the annual wafer purchase target,we will be required to pay to GF a portion of the difference between the actual wafer purchases and the waferpurchase target for such year.AMD and GF also have agreed to wafer pricing through 2025.We do not ha