2488--2/24/2009--ADVANCED_MICRO_DEVICES

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{property, intellectual, protect}

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Intel Corporation s dominance of the microprocessor market and its aggressive business practices may limit our ability to compete effectively. If our proposed joint venture with ATIC is not consummated, our business could be adversely impacted. The recent instability of the financial markets may adversely impact our business and operating results. If we cannot generate sufficient revenues and operating cash flow or obtain external financing, we may face a cash shortfall and be unable to make all of our planned investments in research and development. We have a substantial amount of indebtedness that could adversely affect our financial position and prevent us from implementing our strategy or fulfilling our contractual obligations. We may not be able to generate sufficient cash to service our debt obligations. The agreements governing our borrowing arrangements impose restrictions on us that may adversely affect our ability to operate our business. If we are unable to successfully implement our cost cutting efforts, our business could be materially adversely affected. The success of our business is dependent upon our ability to introduce products on a timely basis with required features and performance levels that provide value to our customers and support and coincide with significant industry transitions. The loss of a significant customer may have a material adverse effect on us. The semiconductor industry is highly cyclical and has experienced severe downturns that materially adversely affected, and may in the future materially adversely affect, our business. The demand for our products depends in part on continued growth in the industries and geographies into which they are sold. Fluctuations in demand for our products or a market decline in any of these industries or geographies would have a material adverse effect on our results of operations. The markets in which our products are sold are highly competitive. If we fail to improve the efficiency of our supply chain in order to respond to changes in customer demand for our products, our business could be materially adversely affected. If we lose Microsoft Corporation s support for our products, our ability to sell our products could be materially adversely affected. We depend on third-party companies for the design, manufacture and supply of motherboards, BIOS software and other components. If we are ultimately unsuccessful in our antitrust lawsuit against Intel, our business may be materially adversely affected. Our operating results are subject to quarterly and seasonal sales patterns. Industry overcapacity and current macro-economic conditions could cause us to under-utilize our microprocessor manufacturing facilities and have a material adverse effect on us. Manufacturing capacity constraints and manufacturing capacity utilization rates may have a material adverse effect on us. We rely on third-party foundries and other contractors to manufacture our graphics and chipset products. Our ability to design and introduce new graphics products in a timely manner is dependent upon third-party intellectual property. If essential equipment or materials are not available to manufacture our products, we could be materially adversely affected. Unless we maintain manufacturing efficiency, our future profitability could be materially adversely affected. Our issuance to WCH of 58,000,000 shares of our common stock and warrants to purchase 35,000,000 shares of our common stock, if and when exercised by ATIC, will dilute the ownership interests of our existing stockholders, and the conversion of our 5.75% Notes and 6.00% Notes may dilute the ownership interest of our existing stockholders. If we are unable to comply with the covenants in the subsidy grant documents that we receive from the State of Saxony, the Federal Republic of Germany and/or the European Union for Fab 30, Fab 36, Fab 38 or other research and development projects we may undertake in Germany, we may forfeit or have to repay our subsidies, which could materially adversely affect us. If our products are not compatible with some or all industry-standard software and hardware, we could be materially adversely affected. Costs related to defective products could have a material adverse effect on us. Our receipt of royalty revenues is dependent upon the success of third-party products. Our inability to continue to attract and retain qualified personnel may hinder our product development programs. We outsource to third parties certain supply-chain logistics functions, including portions of our product distribution and transportation management, and co-source some information technology services. Uncertainties involving the ordering and shipment of, and payment for, our products could materially adversely affect us. Our reliance on third-party distributors subjects us to certain risks. Recent failures in the global credit markets may impact the liquidity of our auction rate securities (ARS). We have not realized all of the anticipated benefits of our acquisition of ATI and may continue to incur future impairments of goodwill and assets related to the business acquired from ATI. Our operations in foreign countries are subject to political and economic risks, which could have a material adverse effect on us. Worldwide economic and political conditions may adversely affect demand for our products. Unfavorable currency exchange rate fluctuations could continue to adversely affect us. Our inability to effectively control the sales of our products on the gray market could have a material adverse effect on us. If we cannot adequately protect our technology or other intellectual property in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures, we may lose a competitive advantage and incur significant expenses. We are party to litigation and may become a party to other claims or litigation that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products. We are subject to a variety of environmental laws that could result in liabilities. Our worldwide operations could be subject to natural disasters and other business disruptions, which could harm our future revenue and financial condition and increase our costs and expenses. Our business is subject to potential tax liabilities.

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2488--2/24/2009--ADVANCED_MICRO_DEVICES_INC