AMDAdvanced Micro Devices

We note that you provided more expansive disclosure in your 2021-22 Corporate Responsibility Report and Environmental Sustainability section of your website than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in your 2021-22 Corporate Responsibility Report and website.

The Company notes that its 2021-22 Corporate Responsibility Report and the Environmental Sustainability section of the Company’s website (“Corporate Responsibility Reporting”) are based on 2021 data, with complementary narrative updates reflecting the first half of 2022. The Company’s 2022-23 Corporate Responsibility Report and related website sections reflect 2022 data, with complementary narrative updates reflecting the first half of 2023.

The Company prepares the information in its Forms

10-K and other SEC filings in accordance with existing SEC rules and regulations, including Items

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101, 103, 105 and 303 of Regulation S-K, as well as the U.S. federal securities laws that require the Company to provide investors with information that is “material,” as that term is defined by Basic Inc. v. Levinson, 485 U.S. 224 (1988) and subsequent case law (as referred to herein,

“Materiality” or “Material”). The Company also considers the Commission’s Guidance Regarding Disclosure Related to Climate Change, Release No. 33-9106 (Feb. 2, 2010). The

Company’s disclosure committee, comprised of senior personnel from multiple, key departments across the Company, assesses and determines the degree to which information, including relevant developments, events, trends, risks and opportunities, is Material to the Company for the purposes of the Company’s SEC filings. The Company considered whether to include the same type of climate-related disclosure from its Corporate Responsibility Reporting in its 2022 Form 10-K and chose not to on the basis that the purpose of the Corporate Responsibility Reporting and 2022 Form 10-K are different and the disclosure contained in each are based on different reporting frameworks and definitions of materiality.

The Company voluntarily reports on its corporate responsibility efforts in its Corporate Responsibility Report and related website sections, which address a range of topics of interest to various stakeholders. These stakeholders include investors, but also include employees, customers, suppliers, non-governmental organizations and communities in which the Company operates. In identifying topics for inclusion in the Company’s Corporate Responsibility Report and related website sections, the Company regularly engages with its various stakeholders about environmental, social and governance (“ESG”) matters, including matters of individual importance to them. Disclosures in the Company’s Corporate Responsibility Reporting respond to these interactions, as well as to voluntary third-party disclosures frameworks and standards, such as those issued by the Global Reporting Initiative, Sustainability Accounting Standards Board, Taskforce on Climate-related Financial Disclosures, and

United Nations Sustainable Development Goals secretariat. In addition, each of these voluntary frameworks and standards uses a definition of materiality that is distinct from, and in each case broader than, the U.S. federal securities law definition of Materiality.

The Company provides disclosures in its Corporate Responsibility Reporting voluntarily. The Company does not believe there is a substantial likelihood that these disclosures would have been viewed by the reasonable investor as significantly altering the ‘total mix’ of information made available to investors. The concepts of materiality used for the purposes of creating the disclosures in the Company’s Corporate Responsibility Reporting are broader than the definition of Materiality under the U.S. federal securities laws. The ESG materiality matrix in the Company’s Corporate

Responsibility Report reflects the key aspect of the distinctions between the definitions of materiality under these voluntary standards and the federal securities law definition of Materiality; specifically the materiality matrix in the

Company’s Corporate Responsibility Report measures not only the impact of issues on the Company but also the Company’s impact on the environment and society. The Company uses this approach to materiality in its voluntary reporting, both with respect to responding to areas of individual stakeholder interest and in reporting pursuant to the frameworks and standards mentioned above. The fact that the Company has addressed a topic or initiative in its Corporate Responsibility Reporting does not make that topic or initiative Material to its business or results of operations. To help advise its investors of the different purposes and approaches to disclosures in its Corporate Responsibility Reporting compared to its SEC filings, the

Company specifically states in its 2021-22 Corporate Responsibility Report and related website sections that the ESG materials in them “may contain information that is significant, however, any significance should not be read as necessarily rising to the level of the definition of materiality used for the purposes of our compliance with the U.S. federal securities laws.”

The Company understands the importance of climate change and stakeholder interest in this topic. As it relates to this question and other questions included in the Staff’s comment, the Company recognizes its obligation to continuously review these matters as part of its ongoing disclosure processes and disclose climate-related matters in its future filings, to the extent required under U.S. federal securities law.

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To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as the following: • decreased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; • increased demand for goods that result in lower emissions than competing products; • increased competition to develop innovative new products that

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result in lower emissions; • increased demand for generation and transmission of energy from alternative energy sources; and • any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.

to the Staff’s comment, the Company specifically addresses each of the individual items referenced in Staff’s comment below:

increased demand for goods that result in lower emissions than competing products increased demand for generation and transmission of energy from alternative energy sources

The Company works closely with its direct customers to define product features, performance and timing so that the Company can meet customers’ needs.

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Generally, these direct customers may include original equipment manufacturers, large public cloud service providers, original design manufacturers, independent distributors, and add-in-board manufacturers in both domestic and international markets. The Company communicates with direct customers about efforts and challenges worldwide to reduce greenhouse gas emissions and to use alternative energy sources (including renewable energy sources), and communicates with direct customers about product energy efficiency, including power consumption and battery life. While some of our direct customers express interest in understanding the Company’s focus on greenhouse gas emissions, products that result in lower emissions and alternative energy sources, this interest does not currently correlate to increases or decreases in demand for the Company’s products and technologies that are Material for the purposes of reporting under the U.S. federal securities law. Given this, the Company has decided currently to address this interest in its voluntary reporting. In addition, while our products and technologies are used in the renewable energy sector, including in wind energy, we have not, to date, seen increased interest in alternative sources of energy result in a Material change in demand for our products and technologies.

The Company contributes to and gains insights from these individual and ecosystem-level engagements but has not, to date, identified any climate change-related regulatory or market development Material for the Company’s disclosures under the U.S. federal securities law. In its 2022 Form 10-K (in both the section regarding environmental matters and in the risk factors section), the Company has identified that Energy Star-related regulations and similar regulations worldwide may have an impact on the Company in the future and the Company is monitoring these developments, but the Company did not identify any such adopted regulations or current related regulatory trends likely to have a Material impact on demand for the Company’s products or technologies for the purposes of reporting in its 2022

Form 10-K. However, the Company will continue to evaluate these matters for the purposes of future filings.

increased competition to develop innovative new products that result in lower emissions

Separately, to help inform the Company’s assessment of business opportunities and risks and competitive positioning, it regularly surveys end users. Those end users include consumers and enterprise IT decision makers that purchase devices from the Company’s direct customers. In recent surveys, end users indicated that their buying practices for the Company’s products and technologies are based primarily on timely product introductions, product quality, product features and capabilities, reliability, processor clock speed, performance, size (or form factor), selling price, cost, adherence to industry standards (and the creation of open industry standards), level of integration, software and hardware compatibility, ease of use and functionality of software design tools, completeness of applicable software solutions, security and stability, brand recognition and availability.

Although currently, indirect consequences of trends to develop innovative new products to lower emissions is not Material for the purposes of the Company’s disclosure under U.S. federal securities law, the Company recognizes the opportunity for its products to help enable direct customers and end users meet their environmental sustainability goals, including aims to address emissions. For instance, the Company designs products that power servers in data centers that enable climate research, as well as connected devices that power solutions used for renewable energy. The Company also powers seven of the top ten systems on the Green 500 list of most energy efficient supercomputers (June 2023). While the Company did not consider increased competition to develop products that result in lower emissions

Material for the purposes of reporting in its 2022 Form 10-K, the Company will continue to monitor the indirect impacts of climate change on its competitive landscape for the purposes of future filings.

emissions

The Company assesses risk primarily through its enterprise risk management (“ERM”) process and its disclosure controls review processes. Risks identified through these processes are reviewed regularly with the Company’s executive leadership and with the Company’s Board of Directors. The Company’s ERM process considers reputational risks as it integrates climate risks which are assessed through 1) periodic internal ESG readiness assessments, 2) monthly meetings among internal cross-functional teams, 3) quarterly emerging risks reports to the Audit and Finance

Committee of the Company’s Board of Directors and relevant Company executives, and 4) annual Enterprise Risk Assessment for the Company’s Board of Directors and relevant Company executives. Based on the Company’s ERM process and the

Company’s regular engagement with its stakeholders, as well as benchmarking of its peer companies, the Company does not currently anticipate any Material reputational risks resulting from its operations or products that produce Material greenhouse gas emissions.

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We note your disclosure on page 35 of your Form 10-K regarding the impact of the physical effects of climate change. If material, discuss the physical effects of climate change on your operations and results. This disclosure may include the following: • severity of weather, such as water availability and quality; • quantification of material weather-related damages to your property or operations; • potential for

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indirect weather-related impacts that have affected or may affect your customers; and • any weather-related impacts on the cost or availability of insurance. Your response should include quantitative information for each of the periods for which financial statements are presented in your Form 10-K and explain whether changes are expected in future periods.

While the Company is mindful that the impact of the physical effects arising from climate change are evolving, the Company believes that, except as to the future possibility of Material impacts identified in the Risk Factors section of the 2022 Form 10-K (see our risk factor “Our worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on us”), the physical effects of climate change are not Material to the Company’s business, financial condition and results of operations at this time.

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That being said, the Company has operations in regions that are subject to weather-related events that could disrupt its operations. There were only two weather-related events experienced by the Company during the periods covered by the 2022 Form 10-K. The Company’s office in Austin, Texas experienced a winter storm in 2021, in which the Company incurred approximately $36,000 in costs associated with minor property damage and business delays. In 2022,

Hurricane Ian caused minor damage to the Company’s office located in Orlando, Florida, in which the Company incurred approximately $5,000 in costs for equipment repairs. The Company did not consider these weather-related events or their impacts to be Material for the purposes of reporting in the 2022 Form 10-K. With respect to how the Company determines whether matters are Material to the Company and requiring disclosure in the Company’s SEC filings, please see the Company’s first response above.

With respect to water risks such as water availability and quality, while the Company has operations in regions that can face risks associated with water availability and quality, including certain Company sites in India, the Company believes that its use of recycled water (including reuse of gray water at certain facilities and utilization of rainwater harvesting at certain facilities) helps to mitigate its exposure to water risks. The Company did not consider water risks to be Material for the purposes of reporting in the 2022 Form

10-K; however, the Company will continue to assess risks associated with water availability, quantity and use for the purposes of future filings.

With respect to indirect weather-related impacts affecting the Company’s customers, the Company is unaware of the full extent to which indirect weather-related impacts may affect the full scope of its direct customers’ operations because its engagement with its customers often represents only a small portion of their total operations; however, the Company does assess the degree to which weather-related impacts may hinder its ability to deliver its products to its customers because this is one way in which both the Company and its direct customers’ operations could be Materially impacted. To date, no weather-related events have had a Material impact on the Company’s ability to deliver its products to its direct customers; however, the Company has built redundancy into its delivery mechanisms by working with logistics vendors to adjust delivery routes if necessary.

With respect to weather-related impacts on the cost of availability of insurance, the Company has not experienced a Material increase in the cost of property insurance premiums in connection with or as a reflection of any weather-related events. The Company’s property insurance premium costs for 2020 through 2022 are set forth below:

Year

Insurance premium costs

2020

$

4.6 million

2021

5.2 million

2022

10.9 million

The property insurance premiums described above covers fire and water damage to owned properties; leasehold improvements to leased properties; and owned contents, equipment and inventory, both at Company and third-party sites. The Company’s property insurance premiums for 2022 increased over 2021 primarily due to the Company’s acquisition of

Xilinx, Inc. in February 2022. As noted earlier, while the Company incurred approximately $36,000 in costs associated with minor property damage and business delays in connection with the Texas winter storm in 2021 and approximately $5,000 in costs associated with Hurricane Ian which caused minor damage to the Company’s office in Florida in 2022, these costs did not result in a Material increase in the Company’s property insurance premiums. The Company does not believe that any weather-related impacts on the cost or availability of insurance have caused or are reasonably likely to cause a Material impact on the Company’s business, financial condition or results of operation; however, the Company will continue to monitor the physical effects of climate change and will, in future filings, discuss these effects to the extent required.

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If material, please discuss any purchase or sale of carbon credits or offsets and the effects on your business, financial condition, and results of operations. To the extent applicable, ensure you provide quantitative information with your response for each of the periods for which financial statements are presented in your Form 10-K and for any future periods.

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We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

The Company did not purchase or sell carbon credits or offsets in fiscal years 2022, 2021 and 2020. To the extent applicable and if Material to the Company’s business, financial condition and results of operations, the Company will disclose in future filings the purchase or sale of carbon credits or offsets. Read in the reply ↗

We note your response to prior comment 2 states that you did not identify any indirect consequences of climate-related regulation or business trends for purposes of your reporting to the Commission. Please include a discussion explaining in greater detail your analysis and how you concluded on the materiality of each of the items for which disclosure was not deemed necessary.

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For example, explain how you determined that your customer's interest in reducing greenhouse gas emissions and using alternate energy sources did not correlate to increases or decreases in demand for your products and technologies. In that regard, we note your CDP Climate Change submission reflects that you work closely with customers to identify climate challenges and solutions and engage customers on matters related to energy efficiency and climate in order to inform your product design and other environmental initiatives. Please also tell us how you considered the impact that climate-related regulation or business trends of your suppliers, including the manufacturers of your wafer supplies, may have on your business and operations. In addition, we note your response reflects that you do not currently anticipate any material reputational risks resulting from your operations or products that produce material greenhouse emissions. Please expand your disclosure to discuss the potential adverse consequences to your reputation resulting from your operations that produce greenhouse gas emissions.

to the Staff’s specific question regarding the Company’s CDP Climate Change submission, the Company notes two considerations. First, as discussed above, the Company considers energy efficiency to be an issue that is broader than driving lower emissions, the use of alternative energy sources or the production of greenhouse gas emissions.

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As discussed above, the Company’s customers are focused predominantly on the performance of the Company’s products and also on the cost savings associated with higher efficiency products, with total cost of ownership being a key driver of demand and the Company’s competitive landscape. Second, the Company notes that while its CDP Climate Change submission provides that the Company’s product energy efficiency gains can help customers reduce emissions, and supply chain resource efficiency initiatives can reduce energy/emission impacts in the supply chain, including in wafer manufacturing, these were examples of ESG “material” risks and opportunities. Consistent with the Company’s Initial Response Letter, the approach the Company takes to materiality, including its use of the word “material” in the CDP Climate Change submission is different from the approach the Company takes for the purposes of reporting to the SEC under U.S. federal securities law. Respectfully, the Company notes to the Staff that while the Company can and does help its customers in this way, that does not mean that these matters rise to the level of being Material for the purposes of its reporting to the SEC nor to the level of having a Material impact on the Company’s business, financial condition or results of operations.

In summary, during the periods covered by the 2022 Form 10-K, the Company has not seen evidence of any meaningful effect on demand related to whether the Company’s products or technology may contribute to a customer’s production of greenhouse gas emissions or are related to carbon-based energy sources, nor any discernable trend of customers changing their demand in any meaningful way for products or technology specifically for the purpose of achieving lower emissions than competing products.

-increased competition to develop innovative new products that result in lower emissions.

The Company’s strategy is to create and deliver the world’s leading high-performance and adaptive computing products across a diverse set of markets to solve the world’s most important challenges. The Company continually focuses on innovation and on executing to its product technology roadmap to deliver leadership products. While the Company consistently strives to build innovative and impactful products for a sustainable future, consistent with the Company’s Initial Response Letter and its responses above, during the applicable periods, the Company did not experience increased competition to develop new products to purposefully result in lower emissions. Also consistent with its Initial Response Letter and its responses above, the Company assesses the Materiality of increases or decreases in competition, and degree to which underlying factors are likely to have a Material impact on the competitive landscape, by assessing the degree to which any such increases or decreases are likely to have a Material impact on the Company’s business, financial condition or results of operations. The Company assesses its competitive landscape through the customer engagement process described above and by conducting external market analyses and competitive market analyses. There are a variety of factors as listed above that can drive demand and therefore competition. As indicated above, while total cost of ownership can be a Material factor that drives demand, and therefore competition, and energy efficiency can be part of the total cost of ownership analysis, lower emissions alone have not been revealed by the Company’s customer engagements and analysis to be a meaningful driver of competition to date.

-increased demand for generation and transmission of energy from alternative energy sources.

While the Company has set and pursues environmental sustainability goals to reduce its carbon footprint and consistently strives to build innovative and impactful products with increased energy efficiency, consistent with the Company’s Initial Response Letter and responses above, the Company has not experienced meaningful increased demand for products relating to the generation and transmission of energy from alternative energy sources to date. Also consistent with its Initial Response Letter and responses above, the Company assesses the Materiality of increases or decreases in demand, and degree to which underlying factors are likely to have a Material impact on demand, by assessing the degree to which any such increases or decreases in demand are likely to have a Material impact on the Company’s business, financial condition or results of operations. Using the same methods described above that the Company uses to assess customer demand, the Company determined for the covered applicable periods that it did not experience an increased or decreased demand for products and technologies based on generation or transmission of energy from alternative energy sources. As discussed above, there are many business reasons why customers may demand the Company’s products, and although energy efficiency does play a role because it can relate to total cost of ownership, the Company has not seen energy sources play any meaningful role in driving customer demand to date.

-any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.

Consistent with the Company’s Initial Response Letter, the Company has not experienced reputational risks resulting from operations or products that produce Material greenhouse gas emissions to date. Also consistent with the Company’s Initial Response Letter and responses above, the Company assesses the Materiality of reputational risks, and degree to which underlying factors are likely to have a Material impact on its reputation, by assessing the degree to which any such risks are likely to have a Material impact on the Company’s business, financial condition or results of operations.

The Company monitors how its reputation, and any changes to sentiment about its reputation, may impact its business, financial results, results of operations and access to capital. The Company monitors its reputation, in the context of how its products or operations relate to its reputation, by engaging with a broad stakeholder base including investors, customers, suppliers, and employees. This engagement includes the customer engagement processes discussed above, as well as solicitation of input from major institutional investors and analysts, direct manufacturing suppliers and employees. The Company also respectfully refers the Staff to its Initial Response Letter, which provides detail on how the Company’s evaluation of reputational risk fits into its overall enterprise risk management process, and also refers the Staff to the responses above, which discusses in further detail the factors that the Company sees as directly relating to demand for its products and its competitive landscape, any of which could also impact its reputation.

Regarding the Company’s products specifically, as discussed above, while energy efficiency may be part of customers’ assessment of the total cost of ownership of its products and technology in comparison to others in the marketplace, the Company’s engagement with them has not indicated that greenhouse gas emissions resulting from the Company’s business processes, products or technology are meaningful factors in their decision to purchase the Company’s products or technology or to their assessment of the Company’s reputation.

Regarding the Company’s operations specifically, the Company has not experienced reputational risks resulting from its operations that produce greenhouse gas emissions, nor does the Company anticipate any Material adverse consequences to its reputation resulting from its operations that produce greenhouse gas emissions. The Company is pursuing, and annually reports its progress toward, a science-based target (aligned with a 1.5˚C scenario) of a 50 percent absolute reduction in greenhouse gas emissions from the Company’s operations (Scope 1 and 2) by 2030, from a 2020 base year. This goal has been informed by input from various Company stakeholders, including customers, investors and employees. The Company also surveys at least annually a large portion of its direct manufacturing suppliers to assess their environmental performance, which in turn may indirectly affect the Company’s reputation. Through its ESG Executive Steering Committee, the Company has established a forum consisting of cross-functional leaders in the Company to understand and reconcile the feedback received from the stakeholder outreach. Additionally, as part of the Company's market analysis, the Company found that end users who were surveyed believed that the Company’s commitment to environmental sustainability was perceived as being more favorable relative to other technology companies. Based on the methods described above to assess the Company’s reputation, including the Company’s market analysis, as well as the Company’s ongoing engagement efforts, the Company’s greenhouse gas emissions from its operations have not been raised as a Material reputational risk by its stakeholders.

The Company also notes in the Risk Factors of the 2022 Form 10-K (We are subject to environmental laws, conflict minerals related provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as a variety of other laws or regulations that could result in additional costs and liabilities) the reputational harm that the Company may experience if its suppliers are not in compliance with environmental laws. The Company also discusses in detail in the Risk Factors of the 2022 Form 10-K other factors that may have an impact on its reputation; for example, the Risk Factors address the Company’s ability to achieve expected manufacturing yields, the timely production of its products, IT outages, data loss, data breaches or cybersecurity attacks. The factors identified in the 2022 Form 10-K as potentially having an impact on the Company’s reputation, when taken together with all of the risk factors included in the 2022 Form 10-K, are the factors that the Company determined may have a Material impact on the Company’s financial condition, including through having an adverse impact on the Company’s reputation, at the time the 2022 Form 10-K was filed. The Company will continue to consider reputational risk and what factors may Materially impact its reputation, and revise its disclosure to the extent Material to the Company’s business, financial condition or results of operations.

With respect to the Staff’s specific question about the impact of climate-related regulation or business trends of the Company’s suppliers, the Company considers the impact that climate-related regulation or business trends of our suppliers, including our wafer suppliers, may have on the Company’s business and operations. The Company engages its direct suppliers on climate-related matters through its contractual terms and conditions, annual communication of the Company’s supplier code of conduct, periodic supplier business reviews and performance scorecards, and annual questionnaires on environmental matters. Although it is not feasible for the Company to predict all the ways in which future climate-related regulation or business trends may impact its suppliers, the Company, through its supplier engagement processes discussed above, has been able to estimate the degree to which its suppliers may have been impacted by climate-related regulation or business trends for the applicable periods. While some of the engagements the Company has with its suppliers are competitively sensitive, the Company has not found any impacts of climate-related regulation or business trends on its suppliers to be Material for the purposes of the Company’s business, financial condition or results of operations.

For all the reasons discussed above in each of the items requested to be addressed by the Staff, during the periods covered by the 2022 Form 10-K, the Company believes it has not experienced any Material indirect consequences of climate-related regulation or business trends. Further, at this time, the Company does not expect that any such consequences (should they materialize) are reasonably likely to have a Material impact to the Company’s business, financial condition or results of operations (including through an impact on the Company’s reputation) in the foreseeable future. The Company will continue to monitor the indirect consequences of climate-related regulation or business trends, and, to the extent Material to the Company’s business, financial condition or results of operations, the Company will disclose such consequences in future SEC filings, as required.

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We note your response to prior comment 3. Please further address the following: • Your response states that you did not consider water risks to be material for purposes of reporting in your Form 10-K, although your 2021-2022 Corporate Responsibility Report and CDP Water Submission indicates that the impact of water availability and quality is material to your direct wafer manufacturing suppliers.

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Please tell us how you considered disclosure regarding the impact of water availability and quality in the manufacturing of your products, including your determination of materiality on your business and operations. • Please revise your disclosure to more clearly address how you could be impacted if severe weather impacts your customers. In this regard, we note your disclosure on page 9 of your Form 10-K indicating that one customer accounted for 16% of your consolidated net revenue for the year ended December 31, 2022 and that a loss of this customer would have a material adverse effect on your business.

As noted in the Company’s Initial Response Letter and above, the Company’s approach to materiality in its voluntary reporting, including in its CDP Water Submission report, is different from the Company’s approach to Materiality in SEC reporting, even if the Company uses the word “material” or “materiality” in its voluntary reporting. The concepts of materiality used for the purposes of creating the disclosures in the Company’s Corporate Responsibility Reporting and CDP filings are broader than the definition of Materiality under the U.S. federal securities laws.

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While water availability and quality are relevant to the Company’s supply chain, the impacts of water availability and quality on the Company’s suppliers have not risen to the level where they are Material to the Company’s business, financial condition or results of operations to date.

In addition to the Company’s periodic business reviews and engagement with its suppliers, the Company conducts a regular water risk assessment to understand the related risks faced by its manufacturing suppliers as well as mitigating actions. In assessing water availability and quality risks of these suppliers, the Company conducts a screening process by: 1) identifying supplier manufacturing site locations in “extremely high” or “high” overall water risk regions based on the WRI Aqueduct water risk tool; 2) reviewing whether included sites are considered substantively strategic to the Company’s business; 3) soliciting and reviewing water use data from relevant suppliers; 4) reviewing relevant supplier water mitigation plans; and 5) taking additional measures if necessary, such as requesting further assessments, data or investments related to water risk mitigation measures from suppliers. Based on this risk assessment, the Company has determined that its suppliers located in “extremely high” or “high” water risk sites have adequate water conservation and risk mitigation measures to negate substantive impacts to the Company’s business operations, revenue or expenditures.

With respect to the Company’s direct wafer manufacturing suppliers specifically, the contracted wafer manufacturing stage is the point in the Company’s value chain at which the most amount of water is used and the most effluents generated. In addition to the assessment described above, the Company works closely with its wafer manufacturing suppliers to understand water risks, to track and manage water use, and to encourage its wafer manufacturing suppliers to continue to increase water use efficiency. The Company also is focused on collaborating in industry efforts to address responsible water use and water conservation.

The Company notes that in the 2022 Form 10-K, the Company’s Risk Factors discuss that the Company’s third-party manufacturers are subject to various environmental laws, including those relating to air pollutants and wastewater, and also notes that the Company discusses risks regarding its dependency on third-party manufacturers overall. In addition, the Company respectfully notes to the Staff that water availability and quality could be Material to its suppliers without being Material to the Company because of the Company’s supply chain redundancy, inventory management and other mitigations built into the Company’s supply chain. The Company will continue to monitor the potential impact of water availability and quality in the manufacturing of its products, including the determination of the Materiality on its business and operations.

-Please revise your disclosure to more clearly address how you could be impacted if severe weather impacts your customers. In this regard, we note your disclosure on page 9 of your Form 10-K indicating that one customer accounted for 16% of your consolidated net revenue for the year ended December 31, 2022 and that a loss of this customer would have a material adverse effect on your business.

The Company notes to the Staff that while the total loss of a significant customer may have a Material adverse effect on the Company, or severe weather could disrupt customer operations and therefore have an indirect Material impact on the Company’s business, each of these risks are discussed as potentially Material risks in the 2022 Form 10-K. The Company’s risk factor regarding the risk of catastrophic events within the Risk Factors section of the 2022 Form 10-K (“Our worldwide operations are subject to political, legal and economic risk and natural disasters, which could have a material adverse effect on us”), provides that natural events and climate change such as earthquakes, tsunamis, flooding, typhoons, droughts, fires, extreme heat and volcanic eruptions could disrupt the Company’s operations, or those of its manufacturers, vendors or customers. In addition, the Company risk factor concerning its customers (“The loss of a significant customer may have a material adverse effect on us”) provides clarity on the degree to which the Company is dependent on a small number of customers. The Company has a business continuity program designed to mitigate risks including impacts from severe weather events and notes that, to date, no severe weather events impacting the Company’s customers have resulted in a Material impact on the Company’s business. The Company also has contingency plans for each of the Company’s major sites designed to mitigate the impact of severe weather events and maintain operations during such disruptions. These contingency plans are based on engagements and input with customers who may also be impacted by severe weather events.

Moreover, many of the Company’s customers are highly sophisticated, multinational organizations with severe weather emergency and disaster plans of their own, including steps to diversify their business operations and operate in multiple locations and geographies. While additional information regarding its largest customer is competitively sensitive, the Company notes that its largest customer is a multinational corporation operating globally with a diverse supply chain and distribution network designed to mitigate risks, including severe weather. The Company regularly engages with its largest customer on these and related matters. In addition, the Company regularly engages with its other major customers to understand customer demand forecasts and logistics. The Company’s regular engagements with customers enables the Company to monitor, assess and respond to risks in the Company’s supply chain, including potential weather-related risks, and enables the Company to take a proactive approach in identifying and mitigating potential disruptions caused by events such as severe weather.

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We note your response to prior comment 4. Please tell us whether you expect to purchase carbon credits or offsets in future periods.

The Company does not currently have plans to purchase carbon credits or offsets in future periods. As noted in the Company’s Initial Response Letter, if the Company’s plans change in the future, the Company will disclose in future periods the purchase or sale of carbon credits or offsets if Material to the Company’s business, financial condition or results of operations. Read in the reply ↗

Please enhance your critical accounting estimate disclosures to more fully address the following: • We note you establish provisions for rights of return and price protection on unsold products held by distributors and we note certain OEMs may be entitled to rights of return and rebates under OEM agreements.

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Explain the material assumptions you used to estimate these provisions, quantify the impact these assumptions had during each period, and discuss the impact potential changes in these assumptions could have on future results. Your disclosures should consider addressing any material differences between assumptions related to distributors and OEMs. • We note your disclosures related to inventory valuation. Explain the material assumptions you used to estimate reserves, quantify the impact these assumptions had during each period, and discuss the impact potential changes in these assumptions could have on future results. • We note your disclosures related to income taxes. Explain the specific facts and circumstances that resulted in you concluding recovery of deferred tax assets is not more likely than not and discuss the potential facts and circumstances that may change that conclusion.

In response to the Staff’s comment, and based on our consideration of SEC Financial Release No. 72, Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations

(FRR-72) with respect to the disclosure of critical accounting estimates, including factors we considered to arrive at the estimates, how accurate the estimates have been in the past, how much the estimates have changed in the past, and whether the estimates are reasonably likely to change in the future, we advise the Staff that revenue contracts with our customers include

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variable amounts which we evaluate under ASC 606-10-32-8 through 14 in order to determine the net amount of consideration to which we are entitled and which we recognize as revenue. We determine the net amount of consideration to which we are entitled by estimating the most likely amount of consideration we expect to receive from the customer after adjustments to the contract price for rights of return and rebates provided to our OEM customers and rights of return, rebates and price protection on unsold merchandise provided to our distributor customers.

We base our determination of necessary adjustments to the contract price by reference to actual historical activity and experience, including actual historical returns, rebates and credits issued to OEM and distributor customers adjusted, as applicable, for known events and/or current economic conditions. Overall our estimates of adjustments to contract price due to variable consideration under our contracts with OEM and distributor customers, based on our assumptions and include adjustments, if any, for known events, have been materially consistent with actual results; however, these estimates are subject to management’s judgment and actual provisions could be different from our estimates and current provisions, resulting in future adjustments to our revenue and operating results.

We propose updating our critical accounting estimates disclosures for revenue allowances by describing the material assumptions used to estimate variable consideration and differences in assumptions between distributor and OEM customers, prospectively, in both our Form 10-K for the fiscal year ending December 26, 2020 (“2020 10-K”), as well as in our Form 10-Q for our third fiscal quarter ending September 26, 2020 (“Q3 10-Q”), which are marked to show changes against the disclosures included in our Form 10-K for the fiscal year ended December 28, 2019 (“2019 10-K”), as follows:

Proposed Updates to Critical Accounting Estimates Disclosures

Revenue recognition. We recognize revenue upon the shipment of the product to our distributors (sell-in), rather than upon the resale of the product by our distributors to their customers (sell-through). Accordingly, we have established provisions for rights of return and price protection on unsold product held by our distributors.

Revenue Allowances. We record a provision for estimated sales returns and allowances on product sales for estimated future price reductions and other customer incentives in the same period that the related revenues are recorded. We base these estimates on actual historical sales returns, historical allowances, historical price reductions, market activity and other known or anticipated trends and factors. Revenue contracts with our customers include variable amounts which we evaluate under ASC 606-10-32-8 through 14 in order to determine the net amount of consideration to which we are entitled and which we recognize as revenue. We determine the net amount of consideration to which we are entitled by estimating the most likely amount of consideration we expect to receive from the customer after adjustments to the contract price for rights of return and rebates to our OEM customers and rights of return, rebates and price protection on unsold merchandise to our distributor customers.

We base our determination of necessary adjustments to the contract price by reference to actual historical activity and experience, including actual historical returns, rebates and credits issued to OEM and distributor customers adjusted, as applicable, to include adjustments, if any, for known events or current economic conditions, or both.

Our estimates of necessary adjustments for distributor price incentives and price protection on unsold products held by distributors are based on actual historical incentives provided to distributor customers and known future price movements based on our internal and external market data analysis.

Our estimates of necessary adjustments for OEM price incentives utilize, in addition to known pricing agreements, actual historical rebate attainment rates and estimates of future OEM rebate program attainment based on internal and external market data analysis.

We also provide limited product return rights to certain OEMs and to most distribution customers. These return rights are generally limited to a contractual percentage of the customer’s prior quarter shipments, although, from time to time we may approve additional product returns beyond the contractual arrangements based on the applicable facts and circumstances. In order to estimate adjustments to revenue to account for these returns, including product restocking rights provided to distributor and OEM customers, we utilize relevant, trended actual historical product return rate information gathered, adjusted for actual known information or events, as applicable.

Overall our estimates of adjustments to contract price due to variable consideration under our contracts with OEM and distributor customers, based on our assumptions and include adjustments, if any, for known events, have been materially consistent with actual results; however, these estimates are subject to management’s judgment and actual provisions could be different from our estimates and current provisions, resulting in future adjustments to our revenue and operating results.

•We note your disclosures related to inventory valuation. Explain the material assumptions you used to estimate reserves, quantify the impact these assumptions had during each period, and discuss the impact potential changes in these assumptions could have on future results.

Response:

We value inventory at standard cost, adjusted to approximate the lower of actual cost or estimated net realizable value using assumptions about future demand and market conditions, which can be unique to each product and are based on specific facts and circumstances. The impact from applying the assumptions in calculating inventory carrying value adjustments was immaterial during each of three fiscal years ending December 28, 2019.

We propose updating our critical accounting estimates disclosures for inventory valuation to further explain the material assumptions used to estimate inventory reserves, prospectively, in both our 2020 10-K, as well as in our Q3 10-Q, which are marked to show changes against the disclosures in our 2019 10-K, as follows:

Inventory Valuation. At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence based on projected sales outlook. This evaluation includes analysis of historical sales levels by product and projections of future demand. These projections assist us in determining the carrying value of our inventory. In addition, we write off inventories that we consider obsolete. We adjust the remaining specific inventory balances We value inventory at standard cost, adjusted to approximate the lower of our actual cost or estimated net realizable value. Among other factors, management considers recent historical activity as well as anticipated or forecasted demand, estimates of future selling prices, competitiveness of product offerings, using assumptions about future demand and market and industry conditions. Material assumptions we use to estimate necessary inventory carrying value adjustments can be unique to each product and are based on specific facts and circumstances. In determining product excess or obsolescence reserves, we consider assumptions such as changes in business and economic conditions, other-than-temporary decreases in demand for our products, and changes in technology or customer requirements. and product life cycles when In determining excess, obsolescence and the lower of cost or net realizable value in relation to the inventory on hand. reserves, we consider assumptions such as recent historical sales activity and selling prices, as well as estimates of future selling prices. If, in any period, we anticipate a change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs may be required and would be reflected in cost of sales in the period the revision is made, This would have a negative impact on our gross margin resulting in a negative impact to our gross margin in that period. If, in any period, we are able to sell inventories that were not valued or that had been written down to a level below the ultimate realized selling price in a previous period, related revenue would be recorded without any with a lower or no offsetting charge to cost of sales, resulting in a net benefit to our gross margin in that period.

The impact from applying the above assumptions in calculating inventory carrying value adjustments was immaterial during each of three fiscal years ending December 28, 2019.

•We note your disclosures related to income taxes. Explain the specific facts and circumstances that resulted in you concluding recovery of deferred tax assets is not more likely than not and discuss the potential facts and circumstances that may change that conclusion.

Response:

In response to the Staff’s comment regarding enhancing our critical accounting estimates disclosures for income taxes, we provide the following background on how we assess the recovery of deferred tax assets, explain how we arrived at the conclusion that recovery was not more-likely-than-not at fiscal year end 2019, and describe what facts and circumstances might change that conclusion.

In determining the need to establish or maintain a valuation allowance, we considered the four sources of taxable income by jurisdiction listed in ASC 740-10-30-18 that may be available to realize the deferred tax assets: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) carryback of net operating losses to prior years; and (iv) tax planning strategies. In evaluating our sources of taxable income, we determined that we have no ability to carryback net operating losses to prior years nor any tax planning strategies to realize the deferred tax assets. We also considered the limited opportunities for the reversal of our temporary differences or deferred tax liabilities and concluded they would be insufficient to realize the deferred tax assets. The remaining source of taxable income to recognize the deferred tax assets is based on our estimated future taxable income through objectively verifiable forecasts of future income.

We evaluated the recoverability of our deferred tax assets for fiscal year end 2019 based on estimated future taxable income and concluded that the recovery of the deferred tax assets was not more-likely-than-not, as the negative evidence outweighed the positive evidence. We have a history of generating periods of substantial losses. Our recent three-year period of modest profitability was preceded by six years of substantial losses. Given the magnitude of our tax attributes, our position in the highly competitive semiconductor industry and our underlying history of uncertainty for sustained product performance, market acceptance and the resulting financial impact, we determined that we had insufficient positive evidence. We currently have positive momentum with our new products, and we are building high-performance computing leadership. However, given our historical experience, additional market success and a higher level of confidence in related profits are needed to establish the sustained profitability to objectively verify our forecasts of future taxable income. As a result, we concluded that substantially all our U.S. and foreign deferred tax assets, net of deferred tax liabilities, remained subject to valuation allowances at December 28, 2019.

In the future, positive evidence could outweigh negative evidence, and we may conclude that recovery of deferred tax assets is more-likely-than-not. The growing positive evidence of our recent period of modest profits could result in sustained profitability that outweighs historical negative evidence and objectively verify our estimates of future taxable income. If our financial results continue to improve from market acceptance of our products and we continue to build high-performance computing leadership and, in addition, if we conclude that estimates of our future taxable income are objectively verifiable, our assessment of the realization of our net deferred tax assets could result in the release of some or all of the valuation allowances.

We propose updating our critical accounting estimates disclosures for income taxes to further explain the facts and circumstances impacting the recoverability of our deferred tax assets, prospectively, in both our 2020 10-K, as well as in our Q3 10-Q, which are marked to show changes against the disclosures in our 2019 10-K, as follows:

Income Taxes. In determining taxable income for financial statement reporting purposes, we must make certain estimates and judgments. These estimates and judgments are applied in the calculation of certain tax liabilities and in the determination of the recoverability of deferred tax assets which arise from temporary differences between the recognition of assets and liabilities for tax and financial statement reporting purposes.

We must assess the likelihood that we will be able to recover our deferred tax assets. Unless recovery is considered more-likely-than-not (a probability level of more than 50%), we will record a charge to income tax expense in the form of a valuation allowance for the deferred tax assets that we estimate will not ultimately be recoverable or maintain the valuation allowance recorded in prior periods. In determining the need to establish or maintain a valuation allowance, we consider multiple factors including past performance, the reversal of deferred tax liabilities, tax planning strategies, and future expected taxable income. When considering all available evidence, if we it is determined we can more-likely-than-not realize our deferred tax assets, we will reverse some or all of the existing valuation allowance, which would result in a credit to income tax expense and the establishment of an asset in the period of reversal.

In determining the need to establish or maintain a valuation allowance, we considered the four sources of jurisdictional taxable income: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) carryback of net operating losses to prior years; and (iv) tax planning strategies. Given the lack of available taxable income from three of the other sources, our determination of taxable income sufficient to realize our deferred tax assets is based on estimated future taxable income. The incremental recognition of deferred tax assets is based upon estimated future taxable income through objectively verifiable forecasts of future income. The highly competitive landscape and cyclical nature of the semiconductor industry makes it difficult to create an objectively verifiable forecast for those companies not in a dominant position and, as a result, sustained profitability is difficult to forecast.

We regularly evaluate the realizability of our net deferred tax assets. We have a history of generating periods of substantial losses. Our recent three-year period of modest profitability was preceded by six years of substantial losses. Given the magnitude of our tax attributes, our position in the highly competitive semiconductor industry dominated by two larger competitors, the cyclical nature of the industry, and our underlying history of uncertainty for sustained product performance, market acceptance and the resulting financial impact, we do not have objectively verifiable forecasts. We are developing and have released new products with large market potential in areas such as server processors, mobile processors, and game consoles. We currently have positive momentum with our new consumer and commercial product offerings. We are building high-performance computing leadership. However, given our historical earnings patterns, additional market success and a higher level of confidence in related profits are needed to establish the sustained profitability to objectively verify our forecasts of future taxable income. As a result, substantially all our U.S. and foreign deferred tax assets, net of deferred tax liabilities, are subject to valuation allowances.

Our sustained profitability is dependent on the continued positive momentum of our consumer and commercial products including our newly released mobile processors, greater market acceptance for our server products, the successful adoption of our new game console products, and our continued development of high-performance computing products leadership. In assessing the realizability of the deferred tax assets, we will continue to monitor the highly dynamic and competitive landscape of our industry, the continued performance and market acceptance of our new products, and the impact of such market acceptance on profitability. If our financial results continue to improve and we conclude that estimates of our future taxable income are objectively verifiable, our assessment of the realization of our net deferred tax assets could result in the release of some or all of the valuation allowances.

In addition, the calculation of our tax liabilities involves dealing with addressing uncertainties in the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the Internal Revenue Service or other taxing authorities. If our estimates of these taxes are greater or less than actual results, an additional tax benefit or charge will result. We recognize the interest and penalties related to unrecognized tax benefits as interest expense and income tax expense, respectively.

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Please quantify and discuss the reasons for material fluctuations in working capital components, including the reasons for increases in accounts receivable, inventories, prepaid expenses and other assets, and accounts payable, accrued liabilities and other.

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In this regard, we note your reference to higher cash collections; however, we note accounts receivable have increased at a substantially higher rate than revenue. We also note your reference to the timing of accounts payable payments with no explanation why the timing changed. Please enhance your disclosures to discuss the reasons for material variations in working capital components.

In our discussion of cash used from operating activities, we explained the significant period-to-period changes within the context of the primary cash inflows and outflows of our business and the impact to working capital. Our working capital cash inflows and outflows from operations are primarily cash collections from our customers, payments for inventory purchases and payments for employee-related expenditures.

We had higher cash collections in 2019 compared to 2018 because our revenue grew significantly from 2018 to 2019.

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Accounts receivable in 2019 increased at a higher rate than the increase in 2019 revenue compared to 2018 revenue, as a result of higher revenue in the fourth quarter of 2019 compared to the fourth quarter of 2018. Our fourth quarter revenue was $2.1 billion and $1.4 billion in 2019 and 2018, respectively, representing an approximate 50% increase in revenue and commensurate with the approximate 50% increase in accounts receivable from 2018 to 2019.

The increase in accounts payable in 2019 compared to 2018 was primarily driven by the increase in inventory purchases in the fourth quarter of 2019 as compared to the fourth quarter of 2018. The increase in accounts payable in 2018 compared to 2017 was driven by timing of accounts payable payments, due in part to more inventory purchases late in the fourth quarter of 2018 compared to the fourth quarter of 2017.

We propose enhancing our Liquidity and Capital Resources Operating Activities disclosures to further quantify and discuss the reasons for material fluctuations in working capital components, prospectively, in both our 2020 10-K, as well as in our Q3 10-Q, which are marked to show changes against the disclosures in our 2019 10-K, as follows:

Proposed Updates to Liquidity and Capital Resources Operating Activities Disclosures

Operating Activities

Net cash provided by operating activities was $493 million in 2019 compared to net cash provided by operating activities of $34 million in 2018. The increase in net cash provided by operating activities was primarily due to changes in working capital, largely driven by higher cash collections, partially offset by timing of accounts payable payments and higher wafer purchases and payroll.

Our working capital cash inflows and outflows from operations are primarily cash collections from our customers, payments for inventory purchases and payments for employee-related expenditures.

Net cash provided by operating activities was $493 million in 2019, primarily due to our net income of $341 million, adjusted for non-cash and non-operating charges of $694 million and net cash outflows of $542 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $623 million increase in account receivable driven primarily by $708 million higher revenue during the fourth quarter of 2019 compared to the fourth quarter of 2018, a $137 million increase in inventories driven by an increase in wafer purchases during the fourth quarter of 2019 compared to the fourth quarter of 2018, and a $176 million increase in prepaid expenses and other assets due primarily to an increase in vendor credits and other non-current assets, partially offset by a $373 million increase in accounts payable, accrued liabilities and other driven by an increase in inventory purchases and accrued marketing due to higher revenue during the fourth quarter of 2019 compared to the fourth quarter of 2018.

Net cash provided by operating activities was $34 million in 2018, primarily due to our net income of $337 million, adjusted for non-cash and non-operating charges of $424 million and net cash outflows of $727 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $806 million increase in accounts receivable driven primarily by slower customer collections, higher unbilled receivables and higher revenue late in the fourth quarter of 2018 compared to the fourth quarter of 2017, and a $151 million increase in inventories driven by an increase in product build, partially offset by a $293 million increase in accounts payable, accrued liabilities and other driven by timing of accounts payable payments, due in part to more inventory purchases late in the fourth quarter of 2018 compared to the fourth quarter of 2017, and an increase in accrued marketing.

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Please provide roll-forwards of activity in your valuation and qualifying accounts in the notes to the financial statements or in the schedule required by Rule 12-09 of Regulation S-X.

We previously disclosed in Part IV, Item 15, 1. Financial Statements section of our 2019 10-K, the following:

“All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedules or because the information required is included in the Consolidated Financial Statements or related notes.”

For each of the three fiscal years ended December 28, 2019, with the exception of the valuation allowance against our deferred tax assets, the amounts of our valuation allowances against our qualifying accounts were

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immaterial. The changes in the valuation allowance for our deferred tax assets for each of the three fiscal years ended December 28, 2019, was separately disclosed in the notes to the consolidated financial statements, on a net basis.

To the extent material, we will include the roll-forwards of activity in our valuation and qualifying accounts, on a prospective basis, in the respective notes to our consolidated financial statements in our 2020 10-K. Currently, our material valuation and qualifying account is the valuation allowance against our deferred tax assets, and as such, we propose to include the valuation allowance roll-forwards, on a gross basis, in the income tax notes to our consolidated financial statements in our 2020 10-K. If the valuation amounts against our other qualifying accounts are immaterial, we will include a statement noting such in the respective notes to our consolidated financial statements in our 2020 10-K.

We will also revise the statement in Part IV, Item 15, 1. Financial Statements section of our 2020 10-K to state that all schedules have been omitted because the information is not required, is not applicable, or is included in the notes to the Consolidated Financial Statements.

We propose disclosing the roll-forward of our valuation allowance for deferred tax assets, prospectively, in the notes to our 2020 10-K and updating Part IV, Item 15. Exhibits, Financial Statement Schedules, 1. Financial Statements section of our 2020 10-K, which are marked to show changes against the disclosures in our 2019 10-K, as follows:

Proposed Updates to Notes to Financial Statements - Income Taxes and to Part IV of Form 10-K

Page 69 of the Company’s 2019 10-K, insert in Note 14: Income Taxes, after the table reflecting the components of deferred tax assets and liabilities, the below roll-forward:

The movement in the deferred tax valuation allowance is as follows:

Year Ended

(In Millions)

Balance at beginning of year Charges (reductions) to expenses/other accounts* Net (deductions) recoveries+ Balance at end of year

December 28, 2019 $ 2,580 $ (61) $ 224 $ 2,743

December 29, 2018 $ 2,621 $ (59) $ 18 $ 2,580

December 30, 2017 $ 3,526 $ (16) $ (889) $ 2,621

* Amounts recorded against other accounts are not material

+ The 2019 net recoveries were primarily related to net originating deferred tax assets and newly generated tax credits

The 2017 net deductions were primarily related to the reduction in the income tax rate due to US tax reform, partially offset by net originating deferred tax assets and newly generated tax credits.

Page 84, Part IV, Item 15, 1. Financial Statements of the Company’s 2019 10-K:

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

1. Financial Statements

The financial statements of AMD are set forth in Item 8 of this Annual Report on Form 10-K.

All schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedules or because the information required, is not applicable, or is included in the Notes to the Consolidated Financial Statements or related notes.

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Please enhance your revenue recognition disclosures to more fully address the following: • Describe your contracts and whether they include multiple elements or single products and services. • Explain how you determine each performance obligation and, if applicable, how you estimate standalone selling prices. • Address whether estimates for variable consideration are constrained.

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• Regarding revenue for custom products, explain why recognizing revenue over time based on the value of the inventory and expected margin is the most appropriate method. • Regarding revenue for licensing agreements, explain the nature of the arrangements that are used to determine whether revenue is recognized over time or at a point in time. Please refer to ASC 606-10-50.

In response to the Staff’s comment, we advise that revenue under contracts with customers is recognized when the customer obtains control of the promised goods or services, and is recognized in an amount that reflects the consideration that we expect to receive in exchange for those promised goods or services.

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Our microprocessors (CPUs), chipsets, graphics processing units (GPUs), data center and professional graphics products, accelerated processing units (APUs), server and embedded processors, and System-on-Chip (SoC) products may be sold as standard non-custom products, or custom products manufactured to the particular customer’s specifications. We also provide custom product development services and, on occasion, license portions of our intellectual property (IP) portfolio.

More specifically, in response to the Staff’s comments, we provide the information below:

We derive substantially all of our revenue from the sale of our custom or non-custom products under contracts with customers, representing a single performance obligation. From time to time, we may enter into arrangements with customers that combine the provision of development services and transfer of a license to use our functional IP. Generally, the license is not considered distinct and it is combined with the development services as a single performance obligation as the customer can only benefit from the license in conjunction with the related services. We may also enter into arrangements with customers that solely involve the licensing of our functional IP. Generally, there are no performance obligations beyond transferring the designated license to our functional IP.

As noted above, substantially all of our revenue contracts with customers include single performance obligations and, accordingly, we are not required to estimate standalone selling prices.

We estimate variable consideration in accordance with the guidance under ASC 606-10-32-11 through 14. Our revenue recognition disclosures and revenue allowances critical accounting estimates describe our process for estimating variable consideration and constraints of variable consideration have not been material.

•Regarding revenue for custom products, explain why recognizing revenue over time based on the value of the inventory and expected margin is the most appropriate method.

Revenue from the manufacture of custom products associated with our Enterprise, Embedded, and Semi-Custom segment (semi-custom products), sold under non-cancellable purchases orders, for which we have an enforceable right to payment, and which have no alternative use at contract inception, is recognized over the time of production of the products. We utilize an input method (cost incurred plus estimated margin), previously referred to as “value of the inventory and expected margin,” to determine the amount of revenue to recognize for products still in the manufacturing process at the end of each reporting period. We believe this cost-based input method is the most appropriate manner to measure the satisfaction of our performance obligations to the customer because the effort and costs incurred most faithfully depict our performance in transferring control of promised goods or services to the customer, that is, the satisfaction of our performance obligation.

•Regarding revenue for licensing agreements, explain the nature of the arrangements that are used to determine whether revenue is recognized over time or at a point in time.

As noted above, we may enter into arrangements with customers that combine the provision of development services and a license to the right to use our functional IP. Generally, the license is not considered distinct and it is combined with the development services as a single performance obligation and recognized over time as the customer can only benefit from the license in conjunction with the related services. We may also enter into arrangements with customers that solely involve the licensing of our functional IP. Generally, there are no performance obligations beyond transferring the designated license to our IP and, therefore, we recognize the related revenue at a point in time.

We propose updating our Summary of Significant Accounting Policies disclosures for revenue recognition by enhancing the description of the criteria discussed above, prospectively, in both our 2020 10-K, as well as in our Q3 10-Q, which are marked to show changes against the disclosures in our 2019 10-K, as follows:

Proposed Updates to Summary of Significant Accounting Policies Disclosures

Revenue Recognition. Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. Sales, value-added, and other taxes collected concurrently with the provision of goods or services are excluded from revenue. Shipping and handling costs associated with product sales are included in cost of sales.

Nature of products and services

The Company’s microprocessors (CPUs), chipsets, graphics processing unites (GPUs), data center and professional graphics products, accelerated processing units (APUs), server and embedded processors, and System-on-Chip (SoC) products may be sold as standard non-custom products, or custom products manufactured to customers’ specifications. The Company also provides development services and licenses portions of its intellectual property (IP) portfolio. Substantially all the Company’s revenue is derived from product sales, representing a single performance obligation.

Non-custom products: The Company transfers control and recognizes revenue when non-custom products are shipped to customers, which includes original equipment manufacturers (OEM) and distributors, in accordance with the shipping terms of the sale. Non-custom products arrangements generally comprise a single performance obligation. Certain OEMs may be entitled to rights of return and rebates under OEM agreements. The Company also sells to distributors under terms allowing the majority of distributors certain rights of return and price protection on unsold merchandise held by them. The Company estimates the amount of variable consideration under OEM and distributor arrangements and, accordingly, records a provision for product returns, allowances for price protection and rebates based on actual historical experience and any known events.

The Company offers incentive programs to certain customers, including cooperative advertising, marketing promotions, volume-based incentives, and special pricing arrangements. Where funds provided for such programs can be estimated, the Company recognizes a reduction to revenue at the time the related revenue is recognized; otherwise, the Company recognizes such reduction to revenue at the later of when: i) the related revenue transaction occurs; or ii) the program is offered. For transactions where the Company reimburses a customer for a portion of the customer’s cost to perform specific product advertising or marketing and promotional activities, such amounts are recognized as a reduction to revenue unless they qualify for expense recognition.

Constraints of variable consideration have not been material.

Custom products: Custom products which are associated with the Company’s Enterprise, Embedded, and Semi-Custom segment (semi-custom products), sold under non-cancellable purchases orders, for which the Company has an enforceable right to payment, and which have no alternative use to the Company at contract inception, are recognized as revenue, based on the value of the inventory and expected margin, over the time of production of the products by the Company. The Company utilizes an input method (cost incurred plus estimated margin) to determine the amount of revenue to recognize for in-process, but incomplete, customer orders at a reporting date. The Company believes that a cost-based input method is the most appropriate manner to measure how the Company satisfies its performance obligations to customers because the effort and costs incurred best depicts the Company’s performance in transferring control of goods or services promised to its customers (that is, the satisfaction of the Company’s performance obligation).

Sales of semi-custom products are not subject to a right of return. Custom products arrangements involve a single performance obligation. There are no variable consideration estimates associated with custom products.

Development and intellectual property licensing agreements: From time to time, the Company may enter into arrangements with customers that combine the provision of development services and a license to the right to use the IP. These arrangements are deemed to be single or multiple performance obligations based upon the nature of the arrangements. Revenue is recognized upon the transfer of control, over time or at a point in time, depending on the nature of the arrangements. The Company evaluates whether the licensing component is distinct. A licensing component is distinct if it is both (i) capable of being distinct and (ii) distinct in the context of the arrangement. If the license is not distinct it is combined with the development services as a single performance obligation and recognized over time. If the license is distinct, revenue is recognized at a point in time when the customer has the ability to benefit from the license.

From time to time, the Company may enter into arrangements with customers that solely involve the licensing of its patents or IP. Generally, there are no performance obligations beyond transferring the designated license to the Company’s patents or IP. Accordingly, revenue is recognized at a point in time when the customer has the ability to benefit from the license.

There are no variable consideration estimates associated with either combined development and intellectual property arrangements or for standalone arrangements involving either the sale or licensing of IP.

Total revenue recognized over time associated with custom products and development services accounted for approximately 19%, 29% and 38% of the Company’s revenue in 2019, 2018 and 2017, respectively.

Customers are generally required to pay for products and services within the Company’s standard contractual terms, which are typically net 30 to 60 days. The Company has determined that it does not have significant financing components in its contracts with customers.

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Please explain your consideration of providing additional disclosures that disaggregate revenue recognized from contracts with customers into categories that more fully depict how the nature, amount, timing and uncertainty of revenue and cash flows are effected by economic factors.

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For example, we note that you recognize revenue using both point in time and over time methods and that you sell products to both distributors and OEMs. We also note from your MD&A disclosures and earnings calls that revenue from certain products can substantially impact your margins and results. Please more fully explain your consideration of the provisions of ASC 606-10-50-5 and ASC 606-10-55-89 to 91. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

In accordance with ASC 606-10-50-5 through 6, we considered the appropriate level of disaggregated revenue information that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors, as well as sufficient information to enable users of financial statements to understand the relationship between the disclosure of disaggregated revenue and revenue information that is disclosed for each reportable segment.

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Additionally, we considered the implementation guidance in ASC 606-10-55-89 through 91 including the examples of categories found in the guidance that might be appropriate, as follows:

1.Type of good or service e.g. major product lines – We derive substantially all our revenue from sales of semiconductor devices for use by our customers across a range of end-user applications. As such there is not a significant level of disparity in the nature, amount, timing, and uncertainty of revenues and cash flows associated with our revenues and accordingly no product line information is disclosed.

2.Geographical region e.g. country or region – Our business is organized around geographic regions. In accordance with our segment disclosures under ASC 280-10-50-41, we disclose revenue from external customers attributed to the United States and significant foreign countries. Our revenue by non-U.S. countries exhibits similar economic characteristics of product sold in the United States. The nature, amount, timing and uncertainty of revenues and cash flows follow the same trend of seasonality in both the United States and in foreign countries, with typically higher revenue during the third and fourth quarters, representing seasonal and holiday-related trends.

3.Market or type of customer e.g. government and nongovernment customers – Our customers are OEMs and distributors who purchase similar products and sell into similar markets utilizing our semiconductor products.

We note that there is not a significant level of disparity in the nature, amount, timing, and uncertainty of revenues and cash flows within our categories of customers.

4.Type of contract e.g. fixed price and time-and-materials contracts – Substantially all our revenue contracts represent single performance obligation transactions and are governed by customer orders for our products. Net revenue reflects transaction prices based on our agreed selling price net of provisions for estimated product returns, price protection on unsold inventory at our distributors, rebates, discounts and other incentives. All of our contracts with customers, except for combined development and intellectual property licensing arrangements, are short term in nature. There are no other unique factors identified that would result in a variation of the nature, amount, timing and uncertainty of revenues and cash flows.

5.Contract duration e.g. short-term or long-term – Combined development and intellectual property licensing arrangements are typically of a longer term nature. All revenue associated with these contracts with customers, are also recognized over time. Refer to category 6 below which discusses our proposed update for longer term nature contracts that are recognized over time. There are no other unique factors identified that would result in a variation of the nature, amount, timing and uncertainty of revenues and cash flows.

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