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Item 1. Business

2022-02-03 compared with 2021-01-29 · 168 added, 222 removed, 213 unchanged (65% of the section changed)

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the growth, change and competitive landscape of the markets in which AMD participates;

the expected amounts to be received by AMD under the IP licensing agreement and AMD’s expected royalty payments from future product sales of the two joint ventures AMD holds equity in with Higon Information Technology Co., Ltd.

(THATIC JVs) products to be developed on the basis of such licensed IP;

sales patterns of AMD’s products;

international sales will continue to be a significant portion of total sales in the foreseeable future;

that AMD’s cash, cash equivalents and short-term investment balances together with the availability under that certain revolving credit facility (the Revolving Credit Facility) made available to AMD and certain of its subsidiaries under the Credit Agreement, will be sufficient to fund AMD’s operations including capital expenditures over the next 12 months;

that AMD’s cash, cash equivalents and short-term investment balances, together with the availability under that certain revolving credit facility (the Revolving Credit Facility) made available to AMD and certain of its subsidiaries under the Credit Agreement, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures and purchase commitments over the next 12 months;

AMD’s ability to obtain sufficient external financing on favorable terms, or at all;

AMD’s expectation that based on the information presently known to management, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial condition, cash flows or results of operations;

any amounts in addition to what has been already accrued by AMD for future remediation costs under clean-up orders will not have a material effect on our financial condition, cash flows or results of operations;

we expect to file future patent applications in both the United States and abroad on significant inventions as we deem appropriate;

anticipated ongoing and increased costs related to enhancing and implementing information security controls;

revenue allocated to remaining performance obligations that are unsatisfied which will be recognized over the next 12 months;

all unbilled accounts receivables are expected to be billed and collected within 12 months;

revenue allocated to remaining performance obligations that are unsatisfied which will be recognized over the next 12 months;

a small number of customers will continue to account for a substantial part of AMD’s revenue in the future;

and the acquisition of Xilinx, Inc.

is currently expected to close by the end of calendar year 2021.

is currently expected to close in the first quarter of 2022.

For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part I, Item 1A-Risk Factors” and the “Financial Condition” section set forth in “Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings.

We assume no obligation to update forward-looking statements.

References in this Annual Report on Form 10-K to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc.

and our consolidated subsidiaries.

We are a global semiconductor company primarily offering:

• x86 microprocessors, as standalone devices or as incorporated into an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services;

• x86 microprocessors (CPUs), as standalone devices or as incorporated into accelerated processing units (APUs), chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services;

• server and embedded processors, semi-custom system-on-chip (SoC) products, development services and technology for game consoles.

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

For financial information about geographic areas and for segment information with respect to revenues and operating results, refer to the information set forth in Note 14 of our consolidated financial statements.

We use a 52 or 53 week fiscal year ending on the last Saturday in December.

References in this report to 2020, 2019 and 2018 refer to the fiscal year unless explicitly stated otherwise.

Pending Acquisition

On October 26, 2020, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Thrones Merger Sub, Inc., our wholly owned subsidiary (Merger Sub), and Xilinx, Inc.

(Xilinx), whereby Merger Sub will merge with and into Xilinx (the Merger), with Xilinx surviving such Merger as a wholly owned subsidiary of ours.

Under the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of common stock of Xilinx (Xilinx Common Stock) issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of Xilinx Common Stock held directly by us or Merger Sub) will be converted into the right to receive 1.7234 fully paid and non-assessable shares of our common stock and, if applicable, cash in lieu of fractional shares, subject to any applicable withholding.

As of the signing of the Merger Agreement, the transaction was valued at $35 billion .

The actual valuation of the transaction could differ significantly from the estimated amount due to movements in the price of our Common Stock, the number of shares of Xilinx common stock outstanding on the closing date of the Merger and other factors .

The closing of the Merger is subject to customary conditions, including regulatory approval and approval by our stockholders and Xilinx stockholders.

The transaction is currently expected to close by the end of calendar year 2021.

Additional Information

Advanced Micro Devices, Inc.

AMD was incorporated under the laws of Delaware on May 1, 1969 and became a publicly held company in 1972.

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Our mailing address and executive offices are located at 2485 Augustine Drive, Santa Clara, California 95054, and our telephone number is (408) 749-4000.

The SEC website, www.sec.gov, contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

References in this Annual Report on Form 10-K to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc.

and our consolidated subsidiaries.

AMD, the AMD Arrow logo, Athlon, AMD CDNA, AMD Instinct, AMD RDNA, EPYC, FirePro, FreeSync, Geode, Opteron, Radeon, Radeon Instinct, RDNA, Ryzen, Threadripper, Infinity Fabric, and combinations thereof are trademarks of Advanced Micro Devices, Inc.

We use a 52 or 53 week fiscal year ending on the last Saturday in December.

References in this report to 2021, 2020 and 2019 refer to the fiscal year unless explicitly stated otherwise.

AMD, the AMD Arrow logo, AMD CDNA, AMD Instinct, AMD RDNA, Athlon, EPYC, FirePro, FreeSync, Geode, Infinity Fabric, Radeon, Radeon Instinct, Ryzen, Threadripper, and combinations thereof are trademarks of Advanced Micro Devices, Inc.

Microsoft, Windows, DirectX and Xbox One are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

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PlayStation is a registered trademark or trademark of Sony Interactive Entertainment, Inc.

Arm is a registered trademark of ARM Limited (or its subsidiaries) in the US and/or elsewhere.

Arm is a registered trademark of ARM Limited (or its subsidiaries) in the United States and/or elsewhere.

Vulkan and the Vulkan logo are registered trademarks of Khronos Group Inc.

Apple and Mac Pro are trademarks of Apple Inc., registered in the United States and/or other countries.

Steam and the Steam logo are trademarks and/or registered trademarks of Valve Corporation in the United States and/or other countries.

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 Documents

On the Investor Relations pages of our Website, http://ir.amd.com , we post links to our filings with the SEC, our Principles of Corporate Governance, our Code of Ethics for our executive officers, all other senior finance executives and certain representatives from legal and internal audit, our Worldwide Standards of Business Conduct, which applies to our Board of Directors and all of our employees, and the charters of the Audit and Finance, Compensation and Leadership Resources, Nominating and Corporate Governance and Innovation and Technology committees of our Board of Directors.

On the Investor Relations pages of our website, http://ir.amd.com, we post links to our filings with the SEC, our Principles of Corporate Governance, our Code of Ethics for our executive officers, all other senior finance executives and certain representatives from legal and internal audit, our Worldwide Standards of Business Conduct, which applies to our Board of Directors and all of our employees, and the charters of the committees of our Board of Directors.

Our filings with 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 regarding issuers that file electronically with the SEC.

You can also obtain copies of these documents by writing to us at:

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The information contained on our website is not incorporated by reference in, or considered to be a part of, this report.

Pending Acquisition

On October 26, 2020, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Thrones Merger Sub, Inc., our wholly owned subsidiary (Merger Sub), and Xilinx, Inc.

(Xilinx), whereby Merger Sub will merge with and into Xilinx (the Merger), with Xilinx surviving such Merger as a wholly owned subsidiary of ours.

As of the signing of the Merger Agreement, the transaction was valued at $35 billion.

The actual valuation of the transaction could differ significantly from the estimated amount due to movements in the price of our common stock, the number of shares of Xilinx common stock outstanding on the closing date of the Merger and other factors.

The closing of the Merger is subject to customary conditions, including regulatory approval.

On April 7, 2021, our stockholders voted to approve all the proposals relating to the Merger at a special meeting of stockholders.

Xilinx stockholders also voted to approve their respective proposals relating to the Merger at a Xilinx special meeting held on the same day.

The Merger is currently expected to close in the first quarter of 2022.

We are a global semiconductor company.

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Since the invention of the transistor in 1948, improvements in IC process and design technologies have led to the development of smaller, more complex and more reliable ICs at a lower cost-per-function.

Computing and Graphics

AMD is focused on high performance computing technology, software and product leadership.

Our strategy is to create and deliver the world’s leading high-performance CPUs and GPUs, and to integrate these CPUs and GPUs with hardware and software to build differentiated solutions.

We invest in high-performance CPUs for client systems, as well as for high performance computing solutions, cloud infrastructure and the private and public cloud environment.

We also invest in high-performance GPUs and software for markets such as gaming, compute, artificial intelligence, cloud gaming, and virtual and augmented reality.

We combine our high-performance CPUs and GPUs to deliver solutions that are differentiated at the chip level, such as our semi-custom SoCs and APUs, and at the solution level, such as PC and server platforms.

Computing and Graphics Markets

The Computing and Graphics market addresses the need for computational and visual data processing in computing devices that include personal computers, laptops / notebooks, and workstations.

We service this market with our CPU, GPU, APU, system-on-chip and chipset product offerings.

Central Processing Unit (CPU) .

A microprocessor is an IC that serves as the CPU of a computer.

It generally consists of hundreds of millions or billions of transistors that process data in a serial fashion and control other devices in the system, acting as the “brain” of the computer.

The performance of a microprocessor is a critical factor impacting the performance of computing and entertainment platforms, such as desktop PCs, notebooks and workstations.

The principal elements used to measure CPU performance are work-per-cycle (or how many instructions are executed per cycle), clock speed (representing the rate at which a CPU’s internal logic operates, measured in units of gigahertz, or billions of cycles per second) and power consumption.

Other factors impacting microprocessor performance include the process technology used in its manufacture, the number and type of cores, the ability of the cores to process multi-thread or process multiple instructions simultaneously, the bit size of its instruction set, memory size and data access speed.

Developments in IC design and manufacturing process technologies have resulted in significant advances in microprocessor performance.

Since businesses and consumers require greater performance from their computer systems due to the growth of digital data and increasingly sophisticated software applications, multi-core microprocessors offer enhanced overall system performance and efficiency because computing tasks can be spread across two or more processing cores, each of which can execute a task at full speed.

Multi-core microprocessors can simultaneously increase performance of a computer system without greatly increasing the total amount of power consumed and the total amount of heat emitted.

Businesses and consumers also require computer systems with improved power management technology, which helps them to reduce the power consumption of their computer systems, enables smaller and more portable form factors, and can lower the total cost of ownership.

Graphics Processing Unit (GPU).

A GPU is a programmable logic chip that helps render images, animations and video and is increasingly being used to handle general computing tasks.

GPUs are located in plug-in cards, as a discrete processor or in a chip on the motherboard, or in the same chip as the CPU as part of an accelerated processing unit (APU) or System-on-Chip (SoC).

GPUs on stand-alone cards or discrete GPUs on the motherboard typically access their own memory, while GPUs in the chipset or CPU chip share main memory with the CPU.

GPUs perform parallel operations on data to render images for a video display and are essential to presenting computer generated images on that display, decoding and rendering animations and displaying video.

The more sophisticated the GPU, the higher the resolution and the faster and smoother moving objects can be displayed on a video display or in a virtual environment (e.g.

virtual reality (VR) and augmented reality (AR)).

In addition to graphics processing, GPUs are used to perform parallel operations on multiple sets of data and are increasingly used to perform vector processing for non-graphics applications that require repetitive computations such as high-performance computing (HPC), deep learning, artificial and machine intelligence, blockchain and various other applications (e.g., cryptocurrency mining and autonomous driving).

Accelerated Processing Unit (APU).

Consumers increasingly demand computing devices with improved end-user experience, system performance and energy efficiency.

Consumers also continue to demand thinner and lighter mobile devices, with better performance and longer battery life.

We believe that a computing architecture that optimizes the use of its components can provide these improvements.

An APU is a processing unit that integrates a CPU and a GPU onto one chip (or one piece of silicon), along with, in some cases, other special-purpose components.

This integration enhances system performance by “offloading” selected tasks to the best-suited component (i.e.

the CPU or the GPU) to optimize component use, increasing the

speed of data flow between the CPU and GPU through shared memory and allowing the GPU to function as both a graphics engine and an application accelerator.

Having the CPU and GPU on the same chip also typically improves energy efficiency by, for example, eliminating connections between discrete chips.

System-on-Chip (SoC) .

An SoC is a type of IC with a CPU, GPU and other components, such as a memory controller and peripheral management, comprising a complete computing system on a single chip.

By combining all of these elements as an SoC, system performance and energy efficiency are improved, similar to an APU.

A chipset is a generic term referring to a device or a collection of devices that allow the microprocessor to connect to a wider range of peripheral devices in the system (such as storage, optical drives, and Universal Serial Bus (USB) peripherals).

Chipsets can perform essential logic functions and operate in concert with the microprocessor to manage system control and power management functions of all the devices in the system.

Chipsets are most often found in larger form factor systems, typically desktop systems or larger notebook platforms, which require the expanded peripheral selection that is enabled by the chipset.

Typical notebook platforms and small form factor desktop platforms usually do not utilize a chipset and instead rely on the capabilities of the APU to connect to all the required devices on the platform.

Our Computing and Graphics Products

Our Computing and Graphics products address the need for computational and visual data processing in computing devices that include personal computers, laptops / notebooks, and workstations.

In the PC market, we design CPUs, APUs and GPUs for consumer and commercial desktops, notebooks and workstations.

Our CPUs and APUs are designed to bring performance, efficiency and modern security features to gamers, creators, consumers and commercial enterprises.

Our GPUs address the need for improved visual and data processing in various computing devices.

Many consumers use PCs as entertainment platforms, in addition to traditional productivity and communications uses, and therefore value a richer, more visually compelling and immersive experience.

As a result, visual realism and graphical display capabilities are key product differentiation elements among computing devices.

This has led to the increased creation and use of processing-intensive multimedia content for playing games, capturing media, viewing online videos, editing photos and managing digital content on computing devices.

In turn, these trends have contributed to higher consumer demand for performance graphics solutions and to manufacturers designing computing devices with these capabilities.

Our CPUs and APUs bring performance, efficiency and modern security features to gamers, creators, consumers and enterprises.

Industries that utilize computer assisted design (CAD), that develop content for media and entertainment markets and that generate professional visualizations and renderings can benefit greatly from graphics solutions optimized for the professional graphics market.

In addition to traditional graphics markets, there is a large and growing demand for accelerated computing, powered by graphics processors in markets such as high performance computing (HPC), artificial intelligence, and Cloud Visualization (Virtual Desktop Infrastructure & Cloud Gaming).

Another area of the market for graphics compute is blockchain technology, which is a decentralized digital ledger used to securely store, transmit and process sensitive and valuable data.

Blockchain applications are typically performed using specially designed application-specific integrated circuits (ASICs) or a general-purpose CPU or GPU.

Our Computing Products

Our microprocessors are incorporated into computing platforms, which are a collection of technologies that are designed to work together to provide a more complete computing solution.

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The use of intelligent, dynamic power management is designed to create lower energy use by allowing compute applications to be completed quickly and efficiently, enabling a return to the ultra-low power idle state.

We also continually strive to improve security features in our products to help our customers protect their sensitive information.

To that end, we offer integrated on-chip security features and other security features our customers can choose to enable.

Desktop Microprocessors .

Our microprocessors for desktop platforms currently include the AMD Ryzen series processors and AMD Athlon processors.

In April 2020, we expanded our 3rd Gen AMD Ryzen desktop processor family by adding AMD Ryzen 3 3100 and AMD Ryzen 3 3300X processors with “Zen 2” core architecture to business users, gamers and creators.

In June 2020, we announced further additions to the 3rd Gen AMD Ryzen desktop processor family, by introducing the AMD Ryzen 9 3900XT, AMD Ryzen 7 3800XT and AMD Ryzen 5 3600XT desktop processors designed for the enthusiast market.

In July 2020, we introduced for the consumer market, the AMD Ryzen 4000 series desktop processors and the AMD Athlon 3000 series desktop processors with built-in Radeon™ graphics.

The AMD Ryzen 4000 G-Series desktop processors offer power efficiency for consumers, gamers, streamers and creators and include multi-layered security features.

The AMD Athlon 3000 G-Series desktop processors provide responsive performance and features for entry-level PCs using “Zen” core architecture.

In October 2020, we introduced the AMD Ryzen 5000 Series desktop processor family powered by “Zen 3” core architecture.

The AMD Ryzen 5000 Series processors have up to 16 cores and deliver across the board leadership performance for gamers and content creators.

Notebooks and 2-in-1s.

We continue to invest in designing and developing high performing and low power APUs for notebook PC platforms and we offer AMD Ryzen and AMD Athlon mobile processors for the consumer and commercial markets.

In January 2020, we introduced the AMD Ryzen 4000 Series Mobile Processors for ultrathin and gaming laptops designed to deliver performance and power efficiency.

In September 2020, we introduced the

first mobile AMD Ryzen and AMD Athlon processors for Chromebooks.

The AMD Ryzen and Athlon 3000 C-Series mobile processors are designed to enable thinner and lighter Chromebook designs with long battery life and enhanced connectivity.

Our AMD Ryzen 5000 Series desktop processor family powered by our “Zen 3” core architecture has up to 16 cores and delivers across the board leadership performance for gamers and content creators.

Notebook Microprocessors .

Our mobile APUs, including AMD Ryzen and AMD Athlon mobile processors for the consumer and commercial markets, combine both high levels of performance and efficiency for notebook PC platforms.

In January 2021, we launched our AMD Ryzen 5000 Series Mobile Processors, which are powered with our “Zen 3” core architecture and are designed for gamers, creators and professionals.

Commercial Microprocessors .

We offer enterprise-class desktop and notebook PC solutions sold as AMD PRO Mobile and AMD PRO desktop processors with Radeon graphics for the commercial market.

These solutions are designed to provide enterprise customers with the performance, security capabilities and business features such as enhanced security and manageability, platform longevity and extended image stability.

In May 2020, we announced the global availability of the AMD Ryzen PRO 4000 series mobile family for commercial notebooks built with enterprise-grade AMD PRO technologies, which deliver a set of security and manageability features for Enterprise IT deployments.

In July 2020, we introduced the AMD Ryzen PRO 4000 series and AMD Athlon PRO 3000 series desktop processors with built-in Radeon graphics for the commercial market.

Also in July, we announced the new AMD Ryzen Threadripper™ PRO Processor family with up to 64 cores and built with enterprise grade AMD PRO technologies.

Designed for professional workstations from OEMs and system integrators, AMD Ryzen Threadripper PRO processors offer full spectrum compute capabilities for multi-threaded workloads and high frequency single core performance for lightly threaded workloads.

We offer a full suite of chipset products, including the X570 chipset which supports PCIe® 4.0 (fourth generation Peripheral Component Interconnect Express motherboard interface) designed for enthusiast desktop platforms.

We also introduced the B550 chipset in April 2020 and the A520 chipset in July 2020 for socket AM4 for 3rd Gen AMD Ryzen desktop processors and 5000 processors.

AMD Ryzen PRO, AMD Threadripper PRO and AMD Athlon PRO series solutions are designed to provide enterprise customers with the performance, security capabilities and business features such as enhanced security and manageability, platform longevity and extended image stability.

We launched the AMD Ryzen PRO 5000 Series Mobile Processors powered with our “Zen 3” core architecture for business laptops in March 2021.

We offer a full suite of chipset products to support our AMD Ryzen and Threadripper platforms, including the X570 chipset which supports PCIe® 4.0 (fourth generation Peripheral Component Interconnect Express motherboard interface) designed for enthusiast desktop platforms.

We offer the B550 chipset and the A520 chipset for socket AM4 for 3rd Gen AMD Ryzen desktop processors and 5000 processors.

In addition, we continue to offer the B450 and A320 chipsets that are combined with AMD Ryzen processors for the AM4 desktop platform for the performance and affordable mainstream platforms segments.

In the High-End Desktop (HEDT) and Workstation segments, we offer the TRX40 and the WRX80 chipsets, respectively, to support the 3rd generation Ryzen Threadripper and Threadripper Pro platforms offering high speed I/O and platform bandwidth.

Graphics Market

The semiconductor graphics market addresses the need for improved visual and data processing in various computing devices.

Many consumers use PCs as entertainment platforms, in addition to traditional productivity and communications uses, and therefore value a richer, more visually compelling and immersive experience.

As a result, visual realism and graphical display capabilities are key product differentiation elements among computing devices.

In turn, these trends have contributed to higher consumer demand for performance graphics solutions and to manufacturers designing computing devices with these capabilities.

Traditional HPC focused on scientific research, model simulation, and exploration is driving an increased need for computing throughput at universities and government research centers.

Artificial intelligence is a rapidly growing area of machine learning and deep learning workloads.

Graphics processors are used primarily in the training of machine learning models.

The cloud visualization market is fueled by the trend to in work from home and thus the increased need for remote accessibility, and the shift from traditional desktop and notebook workloads to the cloud.

The expansion of compute workloads on graphics processors is driving market expansion for traditional graphics silicon.

Another area of the market for graphics compute is blockchain technology, which is a decentralized digital ledger used to securely store, transmit and process sensitive and valuable data.

Blockchain applications are typically performed using specially designed application-specific integrated circuits (ASICs) or a general purpose CPU or GPU.

In the High-End Desktop (HEDT) and Workstation segments, we offer the TRX40 and the WRX80 chipsets, respectively, to support the 3rd Gen Ryzen Threadripper and Threadripper PRO platforms offering high speed I/O and platform bandwidth.

Our Graphics Products

Graphics processing is a fundamental component of almost everything we create and can be found in an APU, GPU, SoC or a combination of a discrete GPU with one of the other foregoing products working in tandem.

Our customers generally use our graphics solutions to enable or increase the speed of rendering images, to help improve image resolution and color definition, and increasingly to process massive data sets for cloud and data

center applications.

We develop our graphics products for use in various computing devices and entertainment platforms, including desktop PCs, notebook PCs, 2-in-1s, All-in-Ones (AIOs), professional workstations, and the data center.

Graphics processing is a fundamental component across many of our products and can be found in an APU, GPU, SoC or a combination of a discrete GPU with one of the other foregoing products working in tandem.

We develop our graphics products for use in various computing devices and entertainment platforms, including desktop PCs, notebook PCs, All-in-Ones (AIOs), professional workstations, and the data center.

With each of our graphics products, we have available drivers and supporting software packages that enable the effective use of these products under a variety of operating systems and applications.

We have developed RDNA™ 2, a high performing and power efficient graphics architecture, which is the foundation for next-generation PC gaming graphics, the PlayStation 5 and Xbox Series S and X consoles.

Additionally, the RDNA 2 architecture supports advanced graphics features such as ray tracing, Infinity Cache and variable rate shading.

Additionally, our RDNA 2 architecture supports advanced graphics features such as ray tracing, Infinity Cache and variable rate shading.

Our hardware and software components are used to implement ray tracing technology to simulate the paths of light rays moving through a movie or game scene, resulting in photorealistic 3D images.

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 as dGPUs) offer high-performance graphics processing across all platforms.

AMD Accelerated Parallel Processing or General Purpose GPU (GPGPU) refers to a set of advanced hardware and software technologies that enable discrete AMD GPUs, working in concert with the CPU, to accelerate computational tasks beyond traditional CPU processing by utilizing the vast number of discrete GPU cores while working with the CPU to process information cooperatively.

AMD Accelerated Parallel Processing or General Purpose GPU (GPGPU) refers to a set of advanced hardware and software technologies that enable discrete AMD GPUs, working in concert with the CPU, to accelerate computational tasks beyond traditional CPU processing by utilizing the vast number of GPU cores while working with the CPU to process information cooperatively.

In addition, computing devices with heterogeneous computing features can run computationally-intensive tasks more efficiently, which we believe provides a superior application experience to the end user.

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Discrete Desktop and Notebook Graphics .

Our discrete GPUs for desktop and notebook PCs support current generation application program interfaces (APIs) like DirectX® 12 Ultimate and Vulkan®, support new displays using AMD FreeSync™, AMD FreeSync Premium, and AMD FreeSync Premium Pro technologies, and are designed to support VR in PC platforms.

In August 2020, we announced the availability of the new AMD Radeon Pro 5000 series GPUs for the updated 27-inch iMac bringing a wide variety of graphically intensive applications and workloads to consumer and professional users.

In October 2020, we unveiled the AMD Radeon RX™ 6000 series graphics cards for enthusiast-class PC gaming experiences.

The AMD Radeon RX 6000 series includes the AMD Radeon RX 6800 and Radeon RX 6800 XT graphics cards as well as the Radeon RX 6900 XT built upon the AMD RDNA 2 gaming architecture that spans from game consoles to PCs.

The AMD RDNA 2 GPUs feature enhancements in the compute unit, advancements in the visual pipeline, and the introduction of a new high-speed cache called AMD Infinity Cache.

These architecture enhancements enable ultra-high performance and ultra-high fidelity in the latest games.

Complimenting the introduction of the new AMD RX 6000 Series graphics cards, AMD introduced AMD Smart Access Memory, which when combined with an AMD Ryzen 5000 series processor, offers an incremental performance boost in many games.

Our AMD Radeon™ series discrete GPU processors for desktop and notebook PCs support current generation application program interfaces (APIs) like DirectX® 12 Ultimate and Vulkan®, support new displays using AMD FreeSync™, AMD FreeSync Premium, and AMD FreeSync Premium Pro technologies, and are designed to support virtual reality (VR) in PC platforms.

Our AMD Radeon Software expands remote gaming functionality and enables new features and customization capabilities.

In addition, we also offer tools for game developers such as our AMD FidelityFX™ open-source image quality software toolkit that helps deliver improved visual quality with minimal performance overhead.

Our latest FidelityFX Super Resolution (FSR) uses upscaling technologies to help boost frame rates in games.

We offer AMD Radeon RX 6000M and RX 6000S series mobile graphics for high-performance gaming notebooks.

Our AMD Advantage Design™ Framework, a collaboration with our global PC partners, delivers high-performance gaming notebooks by combining AMD Radeon RX series mobile graphics, AMD Software and AMD Ryzen series mobile processors with AMD smart technologies to deliver best-in-class gaming experiences.

We continued the roll-out of the AMD RDNA 2 architecture in the desktop market that began in 2020 with additional Radeon RX 6000 series graphics card launches.

In July 2021, we announced the AMD Radeon RX 6600 XT graphics card, designed to deliver high-framerate, high-fidelity and highly responsive 1080p gaming experience.

Professional Graphics .

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AMD Radeon PRO supports end users utilizing GPU accelerated visualization for construction, architecture and mechanical design through gaming and visualization engines on high resolution displays;

Radeon VR Creator cards are also capable of supporting this functionality with VR and AR.

Radeon VR Creator cards are also capable of supporting this functionality with VR and augmented reality (AR).

Software drivers for AMD Radeon PRO cards are designed to deliver high stability and performance across a wide variety of software packages including those requiring professional software vendor certifications.

In February 2020, we announced the AMD Radeon Pro W5500 workstation graphics card for Design & Manufacturing and Architecture, Engineering & Construction (AEC) professionals.

We also announced the AMD Radeon Pro W5500M GPU designed and optimized to power next-generation, high-performance professional mobile workstations.

In May 2020, we announced the AMD Radeon Pro VII workstation graphics card for broadcast and engineering professionals.

In June 2020, we announced the AMD Radeon Pro 5600M mobile GPU built with 7 nanometer (nm) process technology and advanced AMD RDNA architecture for pro applications, including video editing, color grading, application development, game creation and more.

Our AMD Radeon PRO W6000 series workstation graphics include AMD RDNA 2 architecture and AMD Infinity Cache and are designed to reduce latency and power consumption and to optimize design workloads, complex design and engineering simulations along with image and video editing applications.

In July 2021, we announced the AMD Radeon RX 6600 XT graphics card, designed to deliver high-framerate, high-fidelity and highly responsive 1080p gaming experience.

In August 2021, we also introduced the Radeon PRO W6000X series GPUs for the Mac Pro to power a variety of professional applications and workloads, including 3D rendering, 8K video composition and color correction.

Data Center Graphics .

We offer two families of products to accelerate workloads in the data center.

Our AMD Instinct™ family of GPU products are specifically designed to address the growing demand for compute-accelerated data center workloads, including deep learning training and a range of HPC applications where the compute capabilities of GPUs provide additional performance.

Combined with our AMD ROCm™ open software platform, our customers can deliver differentiated acceleration platforms to address the next-generation of computing challenges while minimizing power and space needs in the data center.

In November, 2021, we introduced the AMD Instinct MI200 series accelerators based on the 2nd Gen AMD CDNA architecture, which is optimized for HPC and AI/ML (Artificial Intelligence/Machine Learning) workloads.

The MI200 series includes the MI250 Open Accelerator Module (OAM) form factor for purpose-built HPC/AI platforms and the MI210 PCIe form factor for mainstream server platforms.

We also introduced the AMD Infinity Hub which provides end users with a growing catalog of containerized HPC applications and ML frameworks that are ported and optimized for AMD Instinct accelerators and AMD ROCm.

Cloud Gaming and VDI .

Our visual cloud GPU offerings include products in the Radeon Instinct and Radeon PRO V families.

Our visual cloud data center GPUs include a range of solutions tailored towards workloads requiring remote visualization, such as Desktop-as-a-Service, Workstation-as-a-Service and Cloud Gaming.

These GPUs are designed to cover the full range of graphical application acceleration, from light desktop tasks, to workstation tasks, multi-GPU high end rendering, and cloud gaming activities.

These GPUs are designed to cover the full range of graphical application acceleration, from light desktop to workstation tasks, multi-GPU high end rendering, and cloud gaming activities.

Our software solutions carry certification for a number of professional software vendor applications as well as being optimized for modern gaming titles.

In December 2020 Amazon Web Services announced and made available their new “G4ad” instance, designed for graphics intensive applications such as virtual workstations, game streaming and graphics rendering.

G4ad utilizes both AMD EPYC processors and the AMD Radeon Pro V520 GPU.

The AMD Radeon Pro V520 is the first AMD RDNA based, 7 nm GPU

released for cloud environments.

Our AMD Radeon Instinct™ and AMD Instinct family of GPU products are specifically designed to address growing demand for compute-oriented data center applications, including deep learning training and traditional HPC workloads such as simulation where the compute capabilities of GPUs provide exceptional flexibility and performance.

Combined with our ROCm™ open software platform, our customers can deliver differentiated acceleration platforms to address the next-generation of computing challenges while minimizing power and space needs in the data center.

In November 2020, we announced the AMD Instinct MI100 accelerator built on the new AMD CDNA™ architecture.

The MI100 GPU is built to accelerate workloads in the scientific computing and AI markets.

Enterprise, Embedded and Semi-Custom

In November 2021, AMD introduced the Radeon PRO V620, a data center GPU using the RDNA 2 architecture and incorporating new capabilities including ray tracing acceleration and Infinity Cache.

The Enterprise, Embedded and Semi-Custom Markets

The Enterprise, Embedded and Semi-Custom Markets address the need for computational and visual data processing in the Server, Embedded computing device, and custom designed computing device markets.

We service these markets with our CPU, GPU, APU, and customized designed system-on-chips products.

Our Enterprise, Embedded and Semi-Custom products address the need for computational and visual data processing.

We serve these markets with our CPU, GPU, APU, and customized SoC products.

A server is a computer system that performs services for connected customers as part of a client-server architecture.

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Servers must be efficient, scalable and adaptable to meet the compute characteristics of new and changing workloads.

We leverage our technology to address the computational and visual data processing needs in the data center market where we design CPUs, GPUs, and software for HPC, cloud gaming, and cloud and enterprise customers.

Embedded products address computing needs in enterprise-class telecommunications, networking, security, storage systems and thin clients, which are computers that serve as an access device on a network.

Typically, AMD embedded products are used in applications that require high to moderate levels of performance, where key features may include relatively low power, small form factor, and 24x7 operations.

High-performance graphics are important in some embedded systems.

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Semi-Custom .

We leverage our core IP, including our graphics and processing technologies to develop semi-custom solutions for the PC and gaming markets.

We leverage our core IP, including our graphics and processing technologies to develop semi-custom solutions.

In this market, semiconductor suppliers work alongside system designers and manufacturers to enhance the performance and overall user experience for semi-custom customers.

We have used this type of collaborative co-development approach with many of today’s leading game console manufacturers and can also address customer needs in many other markets beyond game consoles.

We have used this collaborative co-development approach with many of today’s leading game console and handheld PC gaming manufacturers and can also address customer needs in many other markets.

We leverage our existing IP to create a variety of products tailored to a specific customer’s needs, ranging from complex fully-customized SoCs to more modest adaptations and integrations of existing CPU, APU or GPU products.

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Server Processors .

Our microprocessors for server platforms currently include the AMD EPYC™ Series processors and AMD Opteron™ X and A-Series processors.

The AMD Opteron™ X3000 Series APUs are a family of fully integrated CPU, GPU and I/O designed to provide processing and graphics performance for personal and small business needs.

The AMD EPYC 7001 Series of high-performance processors have up to 32 “Zen” compute cores with 2nd Gen AMD EPYC 7002 Series containing up to 64 “Zen 2” compute cores.

Both are designed to support a full range of integer, floating point, memory bandwidth and I/O benchmarks and workloads.

In April 2020, we announced the extension of the 2nd Gen AMD EPYC processor family with three new processors:

AMD EPYC 7F32 (8 cores), AMD EPYC 7F52 (16 cores) and AMD EPYC 7F72 (24 cores).

These new processors leverage up to 500 MHz of additional base frequency and large amounts of cache.

AMD EPYC processors are powering cloud

instances from leading cloud providers.

Our microprocessors for server platforms currently include the AMD EPYC™ Series processors.

We launched our 3rd Gen AMD EPYC processors, the AMD EPYC 7003 Series CPUs, in March 2021.

Our new AMD EPYC 7003 Series processors are powered by our “Zen 3” core architecture and are designed to support HPC, cloud and enterprise workloads.

Embedded Processors .

Our embedded processors are designed to support greater connectivity and security, and we believe they can be a strong driver for the high-performance bandwidth and storage requirements of enterprise and cloud infrastructure and “immersive computing” areas in the computing industry.

Our products for embedded platforms include AMD Embedded EPYC CPUs, AMD Embedded V-Series APUs, CPUs and SoCs, AMD Embedded R-Series APUs, CPUs and SoCs, AMD Embedded G-Series SoC platform and AMD Embedded Radeon GPUs.

In February 2020, we announced the expansion of the embedded family with two new AMD Ryzen Embedded R1000 low-power processors that provide customers with a thermal design power (TDP) range of 6 up to 10 watts.

The AMD Ryzen Embedded R1000 family now includes the Ryzen Embedded R1102G and R1305G processors, designed for efficient power envelopes and giving customers the ability to create fanless systems.

In November 2020, we launched the AMD Ryzen Embedded V2000 Series processor built with 7 nm process technology, up to eight “Zen 2” cores and seven AMD Radeon graphics CPU compute units, providing power efficiency and enterprise-class security features for embedded customers.

Semi-Custom .

Our products for embedded platforms include AMD Embedded EPYC CPUs, AMD Embedded Ryzen V-Series APUs, CPUs and SoCs, AMD Embedded Ryzen R-Series APUs, CPUs and SoCs, AMD Embedded Ryzen G-Series SoC platform and AMD Embedded Radeon GPUs .

Our embedded processors and GPUs are designed to support high performance and bandwidth network connectivity and security, high-performance storage requirements for enterprise and cloud infrastructure, 3D graphics performance and 4K multimedia requirements of automotive infotainment systems.

Semi-Custom Products .

Our semi-custom products are tailored, co-developed, high-performance, customer-specific solutions based on AMD CPU, GPU and multi-media technologies.

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® 4 and Sony PlayStation ® 5 as well as the Microsoft ® Xbox One X, Microsoft ® Xbox One S, Microsoft ® Xbox Series X™ and Xbox Series S™ game consoles.

Microsoft and Sony launched their new consoles in November 2020.

We developed the semi-custom SoC products that power both the Sony PlayStation® 5 as well as the Microsoft ® Xbox Series X™ and Microsoft ® Xbox Series S™ game consoles.

We also recently partnered with Valve to create a custom APU optimized for handheld gaming to power the Steam Deck™.

Sales and Marketing

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We market and sell our latest products under the AMD trademark.

Our desktop PC microprocessor product brands are AMD Ryzen™, AMD Ryzen™ PRO, Ryzen™ Threadripper™, AMD A-Series, AMD FX™, AMD Athlon™, AMD Athlon™ PRO, and AMD Pro A-Series.

Our notebook and 2-in-1s for microprocessors are AMD Ryzen™ processors with Radeon™ Vega Graphics, AMD A-Series, AMD Athlon, AMD Ryzen PRO with Radeon Vega Graphics, AMD Athlon™ PRO with Radeon Vega Graphics and AMD Pro A-Series processors.

Our server brands for microprocessors are AMD EPYC™ and AMD Opteron™ processors.

We also sell low-power versions of our AMD Opteron, AMD Athlon, as well as AMD Geode™, AMD Ryzen, AMD EPYC, AMD R-Series and G-Series processors as embedded processor solutions.

Our processors include:

AMD Ryzen™, AMD Ryzen™ PRO, Ryzen™ Threadripper™, Ryzen™ Threadripper™ PRO, AMD Athlon™, AMD Athlon™ PRO, AMD FX™, AMD A-Series, and AMD PRO A-Series.

These products service desktop and notebook personal computers.

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

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

Our product brand for data center graphics is Radeon Instinct™ and AMD Instinct accelerators for servers.

Our product brands for data center graphics are Radeon Instinct™, Radeon PRO V-series, and AMD Instinct™ accelerators for servers.

We also market and sell our chipsets under AMD 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 as embedded processor solutions.

We market our products through direct marketing and co-marketing programs.

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Under our co-marketing development programs, eligible customers can use market development funds as reimbursement for advertisements and marketing programs related to our products and third-party systems integrating our products, subject to meeting defined criteria.

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

domestic and international markets.

ODMs provide design and/or manufacturing services to branded and unbranded private label resellers, OEMs and system builders.

Customers of our microprocessor products also include online retailers.

Customers of our microprocessor products also include online and brick and mortar retailers.

Our graphics product customers include the foregoing as well as add-in-board manufacturers (AIBs).

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Certain customers pay us non-recurring engineering fees for design and development services and a purchase price for the resulting products.

No single customer accounted for more than 10% of our consolidated net revenue for the year ended December 26, 2020.

Two customers, A and B, accounted for 14% and 11%, respectively, of our consolidated net revenue for the year ended December 25, 2021.

Sales to Customer A consisted of products from our Enterprise, Embedded and Semi-Custom segment, and sales to Customer B consisted of products from our Computing and Graphics segment.

A loss of either of these customers would have a material adverse effect on our business.

Original Equipment Manufacturers

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Large multi-nationals and regional accounts are the core of our OEM partners’ business;

however, a growing focus for us is the Value Added Reseller (VAR) channel which resells OEM systems to the mid-market and the small and medium business (SMB) segments.

however, we are increasingly focused on the Value Added Reseller (VAR) channel which resells OEM systems to the mid-market and the small and medium business (SMB) segments.

Additionally, we have increased our focus on global system integrators, which resell OEM systems, coupled with their software and services solutions into Enterprise, HPC and Cloud Service Provider Customers.

Our OEM customers include numerous foreign and domestic manufacturers of servers and workstations, desktops, notebooks, PC motherboards and game consoles.

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SIs often use discrete graphics solutions as a means to differentiate their products and add value to their customers.

Competition in the Microprocessor and Chipset Market

Intel Corporation has been the market share leader for microprocessors for many years.

Intel’s market share, margins and significant financial resources enable it to market its products aggressively, to target our customers and our channel partners with special incentives and to influence customers who do business with us.

Intel exerts substantial influence over computer manufacturers and their channels of distribution through various brand and other marketing programs.

Additionally, Intel is able to drive de facto standards and specifications for x86 microprocessors that could cause us and other companies to have delayed access to such standards.

We expect Intel to continue to invest heavily in marketing, research and development, new manufacturing facilities and other technology companies.

Competition in the Computing and Graphics Segment

The markets in which we participate are highly competitive.

Our primary competitor in the supply of microprocessors is Intel Corporation (Intel).

A variety of companies provide or have developed ARM-based microprocessors and platforms.

ARM-based designs

are being used in the PC and server markets, which could lead to further growth and development of the ARM ecosystem.

In 2020, Nvidia announced that it had entered into an agreement to acquire ARM Holdings.

Nvidia is our principal competitor in the discrete graphics market.

ARM-based designs are being used in the PC market, which could lead to further growth and development of the ARM ecosystem.

In 2020, NVIDIA Corporation (NVIDIA), our principal competitor in the discrete graphics market, announced that it had entered into an agreement to acquire ARM Holdings.

Our ability to compete with companies who use ARM-based solutions depends on our ability to timely design and bring to market energy-efficient, high-performing products at an attractive price point.

Competition in the Graphics Markets

In the graphics market, our competitors include suppliers of discrete graphics, embedded graphics processors and integrated graphics processor (IGP) chipsets.

Intel manufactures and sells embedded graphics processors and IGP chipsets and is a dominant competitor with respect to this portion of our business.

Higher unit shipments of our APUs and Intel’s integrated graphics may drive computer manufacturers to reduce the number of systems they build paired with discrete graphics components, particularly for notebooks, because they may offer satisfactory graphics performance for most mainstream PC users at a lower cost.

Intel could take actions that place our discrete GPUs and IGP chipsets at a competitive disadvantage such as providing preferential access to its proprietary graphics interface or other useful information to our competitors in the graphics market or restricting access to external companies, while developing its own high-end discrete GPUs for both consumer and commercial applications.

Our principal competitor in the discrete graphics market is Nvidia and they are considered the market share leader.

In the graphics market, our principal competitor in the supply of discrete graphics is NVIDIA who is the market share leader.

Intel also manufactures and sells embedded graphics processors and integrated graphics processor (IGP) chipsets and is a dominant competitor with respect to this portion of our business.

Also, Intel has developed their own high-end discrete GPUs and has announced that they have developed gaming-focused discrete graphics that will release in 2022.

Other competitors include suppliers of discrete graphics, embedded graphics processors and integrated graphics processor (IGP) chipsets.

Some of our competitors are smaller companies, which may have greater flexibility to address specific market needs, but less financial resources to do so.

We believe that the growing complexity of graphics processors and the associated research and development costs represent a high and growing barrier to entry in this market.

Also, Intel has announced that it is developing their own high-end discrete GPUs.

Competition in the Enterprise, Embedded and Semi-Custom Markets

In the server market, we compete against Intel with our CPU server products and Nvidia with our GPU server products.

In the data center, our principal competitor is Nvidia as the adoption of its proprietary CUDA software platform established its market share in HPC and machine learning.

Another competitor is Intel as it builds products for acceleration in the data center, such as Intel Xe or Habana AI processors.

With respect to integrated graphics, higher unit shipments of our APUs and Intel’s integrated graphics may drive computer manufacturers to reduce the number of systems they build paired with discrete graphics components, particularly for notebooks, because they may offer satisfactory graphics performance for most mainstream PC users at a lower cost.

For GPU data center products, our principal competitor is NVIDIA, which established its market share in HPC and machine learning through its CUDA software platform.

Another competitor, Intel, builds products for acceleration in the data center, such as Intel Xe or Habana AI processors.

Other competitors include numerous deep learning accelerator companies, consisting mostly of early to late stage start-ups.

Large cloud service providers have also shown interest in building their own products to accelerate AI.

Competition in the Enterprise, Embedded and Semi-Custom Segment

In the server market, we compete against Intel with our CPU server products and NVIDIA with our GPU server products.

A variety of companies provide or have developed ARM-based microprocessors and platforms.

ARM-based designs are being used in the server market, which could lead to further growth and development of the ARM ecosystem.

In 2020, NVIDIA announced that it had entered into an agreement to acquire ARM Holdings.

Our ability to compete with companies who use ARM-based solutions depends on our ability to timely design and bring to market energy-efficient, high-performing products at an attractive price point.

We are the market share leader in semi-custom game console products, where graphics performance is critical, and where we compete primarily against NVIDIA.

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For example, we are focusing on improving the battery life of our APU products for notebooks and the performance and power efficiency of our discrete GPUs and our microprocessors for servers.

Another important area of focus is on HPC.

HPC has traditionally been synonymous with scientific computing and supercomputers, but we are seeing a blurring of boundaries between HPC and machine learning along with high-performance CPU and GPU deployments going into workstations and cloud computing data centers as well as supercomputers.

In September 2021, we announced our goal to deliver a 30x increase in energy efficiency of EPYC CPUs and Instinct GPU accelerators by 2025.

Another important area of focus is on HPC, which has traditionally focused on scientific computing and supercomputers.

We are also focusing on delivering a range of low-power integrated platforms to serve key markets, including commercial clients, mobile computing and gaming.

We believe these platforms will bring customers increased performance and energy efficiency.

We are also focusing on ways to increase cores and modularity in design through our implementation of chiplet technology, where the typical monolithic chip is broken into different smaller units called a chiplet.

We are also working on innovations in packaging technology for chiplets, such as 2D and 3D packaging.

For example, in November 2021 we announced our 3D V-Cache packaging technology which stacks dies three dimensionally for improved performance.

We also work on advanced memory technologies.

As SoC technology advances, the memory can sometimes limit CPU performance and we work on improving memory technology to improve performance.

AMD worked with the JEDEC standard bodies and participating companies to establish a new industry memory standard, high bandwidth memory (HBM).

HBM is a type of memory chip with lower power consumption and ultra-wide communication lanes to improve performance

and energy efficiency.

HBM memory chips are vertically stacked, like floors in a skyscraper to shorten the distance of the information being communicated.

Another area of focus is machine intelligence which is the platform for the growing field of machine learning.

Our CPUs, GPUs, accelerators, and APUs offer the computation capability and the flexibility required for various deployments of machine learning .

Our CPUs, GPUs, accelerators, and APUs offer the computation capability and flexibility required for various machine learning deployments.

We also work with industry leaders on process technology, software and other functional intellectual property and with others in the industry and industry consortia to conduct early stage research and development.

We conduct product and system research and development activities for our products in the United States with additional design and development engineering teams located in Canada, China, India, Taiwan and Singapore who undertake specific activities at the direction of our U.S.

We conduct product and system research and development activities for our products in the United States with additional design and development engineering teams, located in Canada, China, India, Singapore and Taiwan, who undertake specific activities at the direction of our U.S.

headquarters.

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Third-Party Wafer Foundry Facilities

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

We have foundry arrangements with Taiwan Semiconductor Manufacturing Company Limited (TSMC) for the production of wafers for our products at 7 nanometer (nm) or smaller nodes.

We are also a party to a Wafer Supply Agreement (WSA) with GLOBALFOUNDRIES Inc.

(GF), pursuant to which we are required to purchase all of our microprocessor and APU product requirements, and a certain portion of our GPU products, from GF manufactured at process nodes larger than 7 nm, with limited exceptions.

(GF), with respect to wafer purchases at the 12 nm and 14 nm technology nodes.

Other Third-Party Manufacturers

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Assembly, Test, Mark and Packaging Facilities

Wafers for our products are delivered from third-party foundries to our assembly, test, mark and packaging partners located in the Asia-Pacific region who package and test our final semiconductor products.

Wafers for our products under the Computing and Graphics and the Enterprise, Embedded and Semi-Custom segments are delivered from third-party foundries to our assembly, test, mark and packaging partners located in the Asia-Pacific region who package and test our final semiconductor products.

We are party to two assembly, test, mark and pack (ATMP) joint ventures (collectively, the ATMP JVs) with Tongfu Microelectronics Co., Ltd.

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As is typical in the semiconductor industry, we have numerous cross-licensing and technology exchange agreements with other companies under which we both transfer and receive technology and intellectual property rights.

One such agreement is the cross-license agreement that we entered into with Intel on November 11, 2009.

Under the cross-license agreement, we granted to Intel and Intel granted to us, non-exclusive, royalty-free licenses to all of each other’s patents that were first filed no later than November 11, 2014 and each party can exploit these patents anywhere in the world for making and selling certain semiconductor- and electronic-related products.

Under the cross-license agreement, Intel has rights to make semiconductor products for third parties, but the third-party product designs are not licensed as a result of such manufacture.

We have rights to perform assembly and testing for third parties but not rights to make semiconductor products for third parties.

The term of the cross-license agreement continues until the expiration of the last to expire of the licensed patents, unless earlier terminated.

A party can terminate the cross-license agreement or the rights and licenses of the other party if the other party materially breaches the cross-license agreement and does not correct the noticed material breach within 60 days.

Upon such termination, the terminated party’s license rights terminate but the terminating party’s license rights continue, subject to that party’s continued compliance with the terms of the cross-license agreement.

The cross-license agreement will automatically terminate if a party undergoes a change of control (as defined in the cross-license agreement), and both parties’ licenses will terminate.

Upon the bankruptcy of a party, that party may assume, but may not assign, the cross-license agreement, and in the event that the cross-license agreement cannot be assumed, the cross-license agreement and the licenses granted will terminate.

We have acquired various licenses from external parties to certain technologies that are implemented in our products, including our IP cores and devices.

These licenses support our continuing ability to make and sell our products.

We have also acquired licenses to certain proprietary software, open-source software, and related technologies, such as compilers, for our design tools.

Continued use of such software and technology is important to the operation of the design tools upon which our customers depend .

Sales are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time.

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Our operating results tend to vary seasonally.

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

Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact

these trends.

Human Capital

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The results are reviewed by the AMD Board of Directors and acted upon by our senior leadership team and individual managers at every level.

Results from our 2020 survey reported continued improvement across all categories, and scores were among the very best for global companies in the technology industry.

Our employees described our culture as innovative, open, and respectful, and rated the quality of our managers among the top 10% of our technology industry peers.

Belonging and Inclusion

Results from our 2021 survey reported scores that continued to be among the very best for global companies in the technology industry.

Our employees described our culture as inclusive, innovative, open, and respectful, and rated the quality of our managers among the top 10% of our technology industry peers.

Diversity, Belonging and Inclusion

Our diverse and inclusive workforce encourages employees to share their opinions and different perspectives.

We believe that building a diverse talent pipeline, encouraging a culture of respect and belonging, and increasing inclusion of unique and underrepresented voices makes AMD stronger.

AMD’s Employee Resource Groups encourage employee engagement and play an important role in our culture.

We are focused on hiring and developing under-represented minorities and women leaders.

We are proud to be led by a highly regarded CEO who has won many esteemed awards for her business and technical prowess.

In 2020, Lisa Su received the chip industry’s highest honor as the 2020 recipient of the Robert N.

Su also ranked #2 on Fortune’s Businessperson of the Year list for her strategic vision and successful company turn around.

Our Employee Resource Groups encourage employee engagement and play an important role in our culture.

In 2021, we were recognized for the fifth consecutive year by the Human Rights Campaign Foundation as a Best Place to Work for LGBTQ+ equality and were included in Bloomberg’s Gender Equality Index for the third consecutive year.

We are focused on hiring and developing underrepresented groups and women leaders.

We are proud to be led by a highly regarded CEO who has won many esteemed awards for her business and leadership prowess.

Lisa Su received the “Woman Innovation Award” from the Global Semiconductor Alliance and she was listed among Barron’s World’s Best CEOs and Forbes’ World’s Most Powerful Women for her strategic vision and successful company turn around.

In addition, Dr.

Su was appointed by President Biden to the President’s Council of Advisors on Science and Technology.

Total Rewards

We invest in our workforce by offering competitive salaries, incentives, and benefits that are determined based on employee’s preferences.

Our incentives are meritocracy-based and we have a strong pay for performance culture that we believe drives superior results.

We benchmark our total rewards annually to ensure our compensation and benefit programs remain competitive with our peers.

We invest in our workforce by offering competitive salaries, incentives, and benefits to ensure that we continue to attract and retain the industry’s best and brightest.

Our rewards are guided by employees’ preferences and the market for talent.

Based on this, we grew headcount by over 20% in 2021 to support the substantial growth in the business.

We have a strong pay for performance culture that we believe drives superior results.

Our employees have benefited from our robust financial results with very strong short-term and long-term incentives.

Cash bonuses have exceeded target levels.

Stock awards, which drive an ownership mentality among employees, create considerable income for our employees.

We offer our employees opportunities to advance their careers at AMD.

We are focused on leadership progression and encourage our employees take advantage of new opportunities.

We are focused on leadership progression and encourage our employees to take advantage of new opportunities.

Our manager and leadership development programs are highly rated and we provide specialized development programs for our employees.

Environmental Regulations

discharge of pollutants into the environment, the treatment, transport, storage and disposal of solid and hazardous wastes and remediation of contamination.

Our operations and properties have in the past been and continue to be subject to various United States and foreign laws and regulations, including those relating to materials used in our products and manufacturing processes, discharge of pollutants into the environment, the treatment, transport, storage and disposal of solid and hazardous wastes and remediation of contamination.

These laws and regulations require our suppliers to obtain permits for operations making our products, including the discharge of air pollutants and wastewater.

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The chemicals released into the groundwater were commonly 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 Board relating to the three sites.

We have entered into settlement agreements with other responsible parties on two of the orders.

During the term of such agreements, other parties have agreed to assume most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders.

We remain responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations under the settlement agreements.

To address anticipated future remediation costs under the orders, we have computed and recorded an estimated environmental liability of approximately $4 million and have not recorded any potential insurance recoveries in determining the estimated costs of the cleanup.

Costs could also increase as a result of additional test and remediation obligations imposed by the Environmental Protection Agency or California Regional Water Quality Control Board.

The progress of future remediation efforts cannot be predicted with certainty and these costs may change.

We believe that the potential liability, if any, in excess of amounts already accrued, will not have a material adverse effect on our financial condition, cash flows or results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business