−Removed: Advanced Energy provides highly engineered, mission-critical, precision power conversion, measurement, and control solutions to our global customers.
+Added: Advanced Energy provides highly engineered, critical, precision power conversion, measurement, and control solutions to our global customers.
We design, manufacture, sell and support precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of highly controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a wide range of complex equipment.
Many of our products enable customers to reduce or optimize their energy consumption through increased power conversion efficiency, power density, power coupling, and process control across a wide range of applications .
−Removed: Our plasma power solutions enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition.
−Removed: Our broad portfolio of high and low voltage power products are used in a wide range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data centers computing, networking, and telecommunications.
−Removed: We also supply related sensing, controls, and instrumentation products primarily for advanced measurement and calibration of power and temperature for multiple industrial markets.
−Removed: Our network of global service support centers provides repair services, calibration, conversions, upgrades, refurbishments, and used equipment to companies using our products.
−Removed: Advanced Energy is organized on a global, functional basis and operates in the single segment for power electronics conversion products.
+Added: Advanced Energy is organized on a global, functional basis and operates in the single segment of power electronics conversion products.
Within this segment, our products are sold into the Semiconductor Equipment, Industrial and Medical, Data Center Computing, and Telecom and Networking markets.
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This acquisition added complementary products to Advanced Energy’s medical power offerings and extends our presence in several advanced industrial markets.
−Removed: On June 1, 2021, we acquired 100% of the issued and outstanding shares of capital stock of TEGAM, Inc.
−Removed: (“TEGAM”), which is based in Geneva, Ohio.
−Removed: This acquisition added metrology and calibration instrumentation to Advanced Energy’s radio frequency (“RF”) process power solutions in our Semiconductor Equipment and Industrial and Medical markets.
For additional information, see Note 2.
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Products and Services
−Removed: Advanced Energy’s precision power products and solutions are designed to enable new process technologies, improve productivity, lower the cost of ownership, and provide critical power capabilities for our customers.
+Added: Our precision power products and solutions are designed to enable new process technologies, improve productivity, lower the cost of ownership, and provide critical power capabilities for our customers.
These products are designed to meet our customers’ demanding requirements in efficiency, flexibility, performance, and reliability.
+Added: The majority of Advanced Energy’s products are capable of meeting various customer requirements.
We also provide repair and maintenance services for our products.
−Removed: We principally serve global original equipment manufacturers (“OEM”) and end customers in a wide range of semiconductor and industrial technology applications with a broad range of advanced and embedded power products.
−Removed: Our plasma power solutions include RF power supplies, RF matching networks, RF instrumentation, direct current (“DC”) power systems, pulsed DC power systems, low frequency alternating current (“AC”) power systems, and remote plasma sources for reactive gas applications.
−Removed: These solutions are used in a wide range of thin film processes across multiple semiconductor applications, including plasma-based dry etch, dry strip, atomic layer etch, atomic layer deposition, chemical vapor deposition, physical vapor deposition, electro-chemical deposition, and ion implantation.
−Removed: In addition, these solutions are used in the processing of advanced materials in adjacent industries such as flat panel display, solar cell manufacturing, architectural glass coating, thin film coating, optical coating, and hard coatings.
−Removed: Our power control modules and thermal instrumentation products are used in semiconductor and industrial markets, in which time-temperature cycles affect material properties, productivity, and yield.
−Removed: These products are used in processes such as etch, deposition, thermal processing, epitaxy and crystal growing.
−Removed: They are also used in many industrial production applications for chemical processing, the manufacturing of metal, carbon fiber, and glass, as well as numerous other industrial power applications.
−Removed: Our RF, micro-ohm, and temperature metrology instruments and calibration systems are used to make critical measurements and calibrate customer hardware with speed and high accuracy in a wide range of applications, such as semiconductor manufacturing, medical, aerospace, and food processing industries.
−Removed: Our embedded power products are designed to maximize energy conversion efficiency, minimize physical sizes, and to meet a variety of standards, such as International Electrotechnical Commission (“IEC”) 60601-1 for medical equipment or IEC 60950-1 for information technology equipment.
−Removed: Our lower power RF power supplies are designed into surgical equipment for a range of therapeutic applications.
−Removed: Our low-voltage AC-DC and DC-DC power supply products maximize performance, lower energy costs, and minimize the form factor.
−Removed: These products target mission critical applications across a variety of industrial technology applications such as medical equipment, data center servers and storage systems.
−Removed: Our high and lower voltage DC-DC products are designed to meet the demanding requirements of OEMs worldwide.
−Removed: Our DC-DC solutions and custom-built power conversion products offer high and low voltage topology, ranging from benchtop and rackmount systems to micro-size printed circuit board mount modules.
−Removed: The high voltage power systems target applications including semiconductor equipment, electrostatic clamping of substrates, scientific instrumentation, mass spectrometry, and x-ray systems for industrial and analytical applications.
−Removed: The low voltage board mounted power solutions are designed for a wide range of industrial applications.
−Removed: Our programmable DC power supplies provide accurate power delivery and measurement for use in a wide range of test, measurement, and scientific research applications.
−Removed: PowerInsight, our big data analytics solution, transforms the data acquired from our power delivery systems into useable insights, through a combination of enhanced data sets and advanced analytics.
−Removed: These capabilities allow our customers to maximize performance, reduce costs and improve yield in their manufacturing processes.
−Removed: GLOBAL SUPPORT
−Removed: Our services group offers warranty and after-market repair services in the regions in which we operate, providing us with preventive maintenance opportunities.
−Removed: Our customers continue to pursue low cost of ownership of their capital equipment and are increasingly sensitive to the costs of system downtime.
−Removed: We meet these requirements by offering comprehensive local repair service and customer support through our worldwide support organization in the United States (“U.S.”), China, Japan, Korea, Taiwan, Germany, Ireland, Singapore, Israel, and United Kingdom.
−Removed: Support services include warranty and non-warranty repair services, calibration, upgrades, and refurbishments on the products we sell.
−Removed: Our products compete in markets for high tech applications using capital equipment.
−Removed: The majority of our markets are not generally subject to significant seasonality;
−Removed: however, these markets are cyclical due to changes in customers’ manufacturing capacity requirements and spending, which depend in part on capacity utilization, demand for
−Removed: customers’ products, inventory levels relative to demand, and access to affordable capital.
−Removed: Other factors, such as global economic and market conditions and technological advances in the applications we serve can also have an impact on our financial results, both positively and negatively.
−Removed: For more information related to the markets in which we compete and the current environment in those markets, see Business Environment and Trends in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
+Added: Our plasma power products offer solutions to enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition.
+Added: We have a broad portfolio of high and low voltage power products used in a wide range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data centers computing, networking, and telecommunications.
+Added: We also supply related sensing, controls, and instrumentation products primarily for advanced measurement and calibration of power and temperature for multiple industrial markets.
+Added: Our network of global service support centers provides repair services, calibration, conversions, upgrades, refurbishments, and used equipment to companies using our products.
+Added: Our service group offers warranty and after-market repair services, providing our customers with preventive maintenance opportunities to support a lower cost of ownership and higher utilization for their capital equipment.
+Added: We offer comprehensive repair service and customer support through our worldwide support organization in the United States, China, Japan, Korea, Taiwan, Germany, Ireland, Singapore, Israel, and the United Kingdom.
+Added: Support services include warranty and non-warranty repair services, calibration, upgrades, and refurbishments of our products.
+Added: Advanced Energy generates revenue from the sale of a broad range of advanced and embedded power products and services to global original equipment manufacturers (“OEM”) and end customers.
+Added: Our customers select our products based on various performance metrics such as high power conversion efficiency, high power density, and low noise emission, as well as our ability to customize our solutions to meet the unique requirements of a wide range of critical applications.
+Added: The future growth and demand for our products is driven by a combination of factors within each of the end markets we serve, as follows:
Semiconductor Equipment Market
−Removed: The Semiconductor Equipment market is driven by the long-term growing need for more semiconductor production capacity and new process technologies.
−Removed: While the semiconductor and semiconductor equipment industries are inherently cyclical, over the long-term, integrated circuits content is growing across many industries driven by increased demand for processing, storing, and transmitting the growing amount of data.
−Removed: To meet the growing demand, the chip industry continues to invest in production capacity for both leading-edge and trailing-edge nodes logic devices, the latest memory devices, back-end test, and advanced wafer-level packaging.
−Removed: The industry’s transition to advanced technology nodes and to increased layers in memory devices require an increased number of plasma-based etch and deposition process tools and higher content of our advanced power solutions per tool.
−Removed: As etching and deposition processes become more challenging due to shrinking device geometry and increasing aspect ratios in advanced 3D devices, more advanced RF and DC plasma generation technologies are needed.
−Removed: We strive to provide a broad range of best-in-class, industry-leading RF and DC power solutions.
−Removed: Beyond etch and deposition processes, growing complexity at advanced nodes also drives a higher number of other process steps across the wafer fab, including inspection, metrology, thermal, ion implantation, and semiconductor test and assembly, where Advanced Energy is actively participating as a critical technology provider.
−Removed: In addition, our global support services group offers comprehensive local repair service, upgrade, and retrofit offerings to extend the useable life of our customers’ capital equipment for additional technology generations.
−Removed: Our strategy in the Semiconductor Equipment market is to defend our proprietary positions in our core applications by capturing new design and product generations, growing our market position in applications where we have lower market share, such as remote plasma source and dielectric etch, and leveraging our product portfolio in areas including embedded power, high voltage power systems, and critical sensing and controls to grow our market share and content at our original OEM customers.
+Added: The semiconductor equipment market supports and enables the long-term growing need for more production capacity and new process technologies to meet expanding demand for semiconductors across many applications driven by megatrends such as artificial intelligence, Internet of Things (IoT) and automobile electrification.
+Added: Advanced Energy is a critical technology leader in the industry and provides one of the broadest portfolios of power conversion and related products, including plasma power, high-voltage power, embedded power, and adjacent sensing solutions.
+Added: Our plasma power solutions are used to create plasma-based etch and deposition processes, and transition to advanced technology nodes typically require higher content of our advanced power solutions per tool.
+Added: Our other semiconductor market products are incorporated in a wide range of applications including ion implant, inspection, metrology, thermal, epitaxy, and back-end test and packaging.
+Added: Our strategy is to strengthen our proprietary positions in our core applications with leading market share, such as conductor etch and deposition, grow our market position in targeted applications with lower market share, such as dielectric etch and remote plasma source, and leverage our broad product portfolio to expand our content at our OEM customers.
Industrial and Medical Market
−Removed: Advanced Energy serves the Industrial and Medical market with mission-critical power components that deliver high reliability, precise, low noise or differentiated power to the equipment they serve.
−Removed: Growth in the Industrial and Medical market is driven by investment in complex manufacturing processes or automation, increased adoption of smart power, sensing, and control solutions across many industrial applications, new investments in clean and sustainable technologies, and growing investment in medical devices and life science equipment.
−Removed: Our customers in the Industrial and Medical market are primarily global and regional original equipment manufacturers, incorporating our advanced power, embedded power, and measurement products into a wide variety of equipment used in applications, such as advanced material fabrication, medical devices, analytical instrumentation, test and measurement equipment, robotics, industrial production, and large-scale connected light-emitting diode applications.
−Removed: Examples of products sold into the Industrial and Medical market include high voltage and low voltage power supplies used in applications such as medical devices, scientific instrumentation and industrial equipment, power control modules and thermal instrumentation products for material fabrication, production process control and many precision industrial sensing applications.
−Removed: Our strategy in the Industrial and Medical market is to expand our product offerings and channel reach, leveraging common platforms, derivatives, and customizations to further penetrate a broader set of applications.
+Added: The growth in the industrial and medical market is fueled by continued investment in complex manufacturing processes, increased adoption of new industrial technologies such as automation and clean energy, and increased breadth and precision requirements of medical devices and life sciences equipment.
+Added: We supply this market with critical, precision power conversion products that deliver precise and highly reliable, low noise and/or differentiated power.
+Added: In addition, our sensing, control, and instrumentation products complement our power solutions.
+Added: Our products are used in a wide variety of applications, such as advanced material fabrication, medical devices, analytical instrumentation, test and measurement equipment, robotics, industrial production, and large-scale connected light-emitting diode applications.
+Added: We serve our broad customer base through both our direct sales force and indirect sales channels including independent sales representatives, channel partners, and distributors.
+Added: Our strategy in the market is to expand our product offerings and channel reach, leveraging common platforms, providing platform derivatives, and offering customizations to further penetrate a broader set of applications.
Data Center Computing Market
−Removed: Advanced Energy serves the Data Center Computing market with industry leading power conversion products and technologies, which we sell to OEMs and original design manufacturers (“ODMs”) of data center server and storage systems, as well as cloud service providers and their partners.
−Removed: Driven by the growing adoption of cloud computing, market demand for server and storage equipment has shifted from traditional enterprise on-premises computing to the data center, driving investments in data center infrastructure.
−Removed: Beyond the cloud, demand for edge computing is also growing, driven by the need for faster processing, lower latency, and higher data security at edge applications.
−Removed: addition, the data center industry has begun transitioning from 12 Volt to 48 Volt infrastructure in data center server racks to improve overall power efficiency.
−Removed: Advanced Energy benefits from these trends by being an industry leader in providing high-efficiency 48 Volt server power solutions to the data center industry.
−Removed: Further, the rapid growth and adoption of artificial intelligence and machine learning are driving accelerated demand for server and storage racks with increased power density and higher efficiency, which complements Advanced Energy’s strengths.
−Removed: With a growing presence at both cloud service providers and industry-leading data center server and storage vendors, our strategy in the Data Center and Computing market is to penetrate selected customers and applications based on our differentiated capability and competitive strengths in power density, efficiency, and controls.
+Added: The Data Center Computing Market is driven by the growing adoption of cloud computing, as the market shifts from traditional enterprise on-premises computing to the data center.
+Added: In addition, the rapid growth of artificial intelligence and machine learning are driving increased demand for substantially higher power in servers and racks, which has increased the importance of power efficiency and power density and accelerated the transition from 12 Volt to 48 Volt infrastructure in data center server racks.
+Added: Advanced Energy benefits from these trends as one of the leading providers of high-efficiency, high-density, 48 Volt server power conversion solutions and technologies.
+Added: Our products are designed into data center server and storage systems, as well as used by cloud service providers and their partners in their custom designed server racks and power shelves.
+Added: Our strategy in the market is to penetrate selected customers and applications based on our differentiated capabilities and competitive strengths in power density, efficiency, and controls.
Telecom and Networking Market
−Removed: Our customers in the Telecom and Networking market include many leading vendors of wireless infrastructure equipment, telecommunication equipment and computer networking.
−Removed: The wireless telecom market continues to evolve with more advanced mobile standards.
−Removed: 5G wireless technology promises to drive substantial growth opportunities for the telecom industry as it enables new advanced applications such as autonomous vehicles and virtual/augmented reality.
−Removed: Telecom service providers are investing in 5G infrastructure, and this trend is expected to drive demand for our products into the Telecom and Networking market.
−Removed: In datacom, demand is driven by networking investments by telecom service providers and enterprises upgrading their networks, as well as cloud service providers and data centers investing in their networks for increased bandwidth.
−Removed: Our strategy in the Telecom and Networking market is to optimize our portfolio of products to more differentiated applications, and to focus on 5G infrastructure applications.
−Removed: Our products are sold worldwide to OEMs, integrators, distributors and directly to end users.
−Removed: During the years ended December 31, 2022 and 2021, our ten largest customers, in the aggregate, accounted for over half of our total revenue.
+Added: Demand in the Telecommunication and Networking market is driven by adoption of more advanced mobile standards, such as 5G technologies, networking investments by telecommunication service providers, enterprises upgrading their communication networks, and data centers investing in their networks for increased bandwidth.
+Added: Advanced Energy serves this market by providing application-specific AC-DC and DC-DC power conversion products to many leading OEMs of wireless infrastructure equipment and computer networking equipment.
+Added: Our solutions are often customized with unique features such as ruggedization for mobile radio in the field.
+Added: Our strategy in the market is to optimize our portfolio of power conversion products to more differentiated applications, and to focus on 5G infrastructure applications.
+Added: Our products are sold worldwide to OEMs, distributors, and directly to end users.
During the year ended December 31, 2023, Applied Materials, Inc.
−Removed: and Lam Research Corporation accounted for 20% and 14%, respectively, of our total revenue compared to 20% and 10%, respectively, of our total revenue during the prior year.
−Removed: We expect that the sale of products to our largest customers will continue to account for a significant percentage of our sales for the foreseeable future.
+Added: accounted for 22% of our total revenue.
+Added: During the year ended December 31, 2022, Applied Materials, Inc.
+Added: and Lam Research Corporation accounted for 20% and 14%, respectively, of our total revenue.
+Added: We expect that the sale of products to our largest customers will continue to account for a significant percentage of our revenue for the foreseeable future.
The loss of a large customer could have a material adverse effect on our results of operations .
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We sell our products through direct and indirect sales channels.
−Removed: Our sales operations are primarily located in the U.S., China, the United Kingdom, Germany, Israel, Japan, South Korea, India, Singapore, Philippines, Hong Kong, Ireland, and Taiwan.
+Added: Our sales operations are primarily located in China, Germany, Hong Kong, India, Ireland, Israel, Japan, South Korea, Philippines, Singapore, Taiwan, the United Kingdom, and United States.
In addition to a direct sales force, we have independent sales representatives, channel partners and distributors that support our selling efforts.
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We believe that customer service and technical support are important competitive factors and are essential to building and maintaining close, long-term relationships with our customers.
−Removed: In October 2022, additional restrictions were announced by the U.S.
−Removed: Commerce Department related to the export of semiconductor equipment for advanced computing chips that have had a negative impact on our semiconductor distribution channels.
Refer to Note 3.
−Removed: Revenue in Part II, Item 8 “Financial Statements and Supplementary Data” for information regarding our revenue by geographic area and Part I, Item 1A “Risk Factors” for a discussion of certain risks related to our foreign operations.
+Added: Revenue in Part II, Item 8 “Financial Statements and Supplementary Data” for information regarding our revenue by geographic area.
+Added: See Part I, Item 1A “Risk Factors” for a discussion of certain risks related to our sales and marketing operations.
Manufacturing
−Removed: The manufacturing of our products is primarily performed at our sites in the Philippines, Malaysia, and China.
−Removed: In addition, we perform limited specialty manufacturing for some of our products in the U.S., Mexico, United Kingdom, and Europe.
−Removed: See Part I, Item 1A, “Risk Factors” for a discussion of certain risks related to our manufacturing operations.
−Removed: Manufacturing requires raw materials, including a wide variety of mechanical and electrical components, to be manufactured to our specifications.
+Added: We manufacture our products primarily in the Philippines, Malaysia, Mexico, and China.
+Added: We also perform limited specialty manufacturing for some of our products in the U.S., the United Kingdom, and Europe.
+Added: In 2023, we announced that we would be expanding our presence in our Mexico factory and beginning construction of a new factory located near Bangkok, Thailand as part of our multi-year factory optimization and consolidation plans.
+Added: Our manufacturing requires raw materials, mainly a wide variety of mechanical and electrical components, which are often made to our specifications.
We use numerous companies, including contract manufacturers, to supply parts for the manufacture and support of our products.
−Removed: Although we make reasonable efforts to assure that parts are available from multiple qualified suppliers, some key parts may be obtained from a sole supplier or a limited group of suppliers.
−Removed: Global supply chain constraints have impacted the availability of materials, parts, and subcomponents needed for production.
−Removed: In some cases, we paid premiums or expedite fees to obtain critical parts to meet urgent customer needs.
−Removed: In some of those instances, we passed the additional costs along to our customers.
−Removed: We expect the related supply chain challenges will continue into 2023.
−Removed: However, we seek to reduce costs, lower the risks of production and service interruptions, and mitigate key parts shortages by:
−Removed: ● selecting and qualifying alternate suppliers where practical for key parts using rigorous technical and commercial evaluation of suppliers’ products and business processes including testing their components’ performance, quality, and reliability on our power conversion products used in our customers’ and their customers’ processes.
−Removed: The qualification process for our process power products, particularly as it pertains to semiconductor customers, follows semiconductor industry standard practices, such as “copy exact;”
−Removed: ● monitoring the financial condition and overall performance of key suppliers from stable geographies;
−Removed: ● procuring alternate parts from commercial, widely available nodes and processes;
−Removed: ● maintaining appropriate inventories of key parts, including making last time purchases of key parts when notified by suppliers that they are ending the supply of those parts;
−Removed: ● qualifying new parts where possible and in geographies that reduce costs without degradation in quality;
−Removed: ● locating certain manufacturing operations in areas that are closer to suppliers and customers.
+Added: Although we make reasonable efforts to ensure that parts are available from multiple qualified suppliers and at the lowest possible cost, some key parts may only be obtained from a sole supplier or a limited group of suppliers.
+Added: We address supply challenges and reduce the associated risks to production by endeavoring to select and qualify alternate suppliers for key parts, maintain appropriate inventories of critical components, and competitively source parts through electronic bidding tools to find the lowest possible total cost.
+Added: See Part I, Item 1A, “Risk Factors” for a discussion of certain risks related to our manufacturing operations.
Intellectual Property
−Removed: We seek patent protection for inventions governing new products or technologies as part of our ongoing research and development.
−Removed: We currently hold 350 U.S.
−Removed: issued patents and 416 foreign issued patents, and we have 568 patent applications pending in the U.S., Europe, and Asia.
−Removed: A substantial majority of our patents are related to our process power products and solutions business.
−Removed: Generally, our efforts to obtain international patents have been concentrated in the industrialized countries within Europe and Asia because there are other manufacturers and developers of power conversion and control systems in those countries, as well as customers for those systems for which our intellectual property applies.
−Removed: In addition to patents, we possess other intellectual property, including trademarks, know-how, trade secrets, and copyrights.
−Removed: We leverage our proprietary technology and trade secrets to deliver on our strategy of selling differentiated products for our most important customer solutions.
−Removed: During 2022 we strengthened our trade secret and confidential information protection measures including by disabling USB drives on company-issued laptops, increasing the frequency of internal data loss protection searches, and we brought lawsuits against two former employees who misappropriated confidential data.
+Added: Protection of our technology assets through intellectual property rights is important for our competitive position.
+Added: We believe that continued research and development of technologically advanced solutions and applications is critical for us to compete effectively in the markets we serve.
+Added: Accordingly, we devote significant personnel and financial resources to the development of new products and the enhancement of existing products.
+Added: Our investments in research and development enable us to create intellectual property, including patents, know-how and trade secrets.
+Added: We hold numerous U.S.
+Added: and foreign patents and have multiple patent applications pending in the U.S., Europe, and Asia.
+Added: See Part I, Item 1A, “Risk Factors” for a discussion of certain risks related to our reliance on our intellectual property.
The markets we serve are highly competitive and characterized by rapid technological development and changing customer requirements.
We face a wide variety of competitors, and no single company dominates any of our markets.
−Removed: Significant competitive factors in our markets include product performance, compatibility with adjacent products, price, quality, reliability, and level of customer service and support.
+Added: Significant competitive factors in our markets include product performance, compatibility with adjacent products, price, quality, reliability, meeting customer demand, and level of customer service and support.
We encounter substantial competition from foreign and domestic companies for each of our product lines.
Some of our competitors have greater financial and other resources than we do.
−Removed: In some cases, competitors are smaller than we are, but are well established in specific product niches.
+Added: Other competitors are smaller than we are but may be well established in specific product niches.
+Added: Overall, our Industrial and Medical competitors tend to be smaller, and in other product markets we encounter mostly larger competitors.
Competitors in each of our market verticals include, but are not limited to, the following:
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Lite-On Technology Corp.
+Added: Acbel Polytech Inc.
Delta Electronics, Inc.
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Research and Development
−Removed: We perform research and development (“R&D”) on products to develop new or emerging applications, technological advances to provide higher performance, lower cost, or other attributes that we may expect to advance our customers’ products.
+Added: We perform research and development to develop products to address new or emerging applications, technological advances to provide higher performance, lower cost, or other attributes that we may expect to appeal to current or potential customers.
We believe that continued development of technological applications, as well as enhancements to existing products and related software to support customer requirements, are critical for us to compete in the markets we serve.
Accordingly, we devote significant personnel and financial resources to the development of new products and the enhancement of existing products, and we expect these investments to continue.
−Removed: The following table summarizes research and development expenses and the percentage of these expenses as compared to total sales (in thousands):
+Added: The following table summarizes research and development expenses and the percentage of these expenses as compared to total revenue (in thousands):
Years Ended December 31,
−Removed: Research and Development Expenses
+Added: Research and development
Human Capital
−Removed: Our people are our strength and AE is committed to a core set of values:
+Added: Our people are our strength, and we are committed to sustaining a culture grounded in our core values:
innovation, integrity, empowerment, partnership, accountability, and execution.
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We have a globally diverse workforce with approximately 10,000 employees as of December 31, 2023.
−Removed: Our employees are located worldwide in more than 20 countries and are comprised of approximately 55% male and 45% female employees.
+Added: Our employees are located across the globe in more than 20 countries and are comprised of approximately 55% male and 45% female employees.
Our employees are not represented by unions, except for statutory organization rights applicable to our employees in China, Germany, and Mexico.
Diversity, Equity, and Inclusion
−Removed: We are committed to creating an inclusive work environment where all our team members feel respected, valued, and empowered.
−Removed: We are also committed to expanding gender diversity.
−Removed: In 2022, our Board of Directors had three female members, and we added two females to our executive leadership team.
−Removed: In addition, through a combination of internal promotion and external hiring, we doubled the number of females represented at the vice president and above level, as compared with 2021.
−Removed: We have an active Corporate Diversity, Equity, and Inclusion (DE&I) Steering Committee to further increase our commitment to diversity and equity.
−Removed: We offer an annual Advanced Energy STEM (science, technology, engineering, and mathematics) Diversity Scholarship to support and develop emerging talent and promote greater ethnic, racial and gender diversity in STEM.
+Added: We are committed to creating an inclusive work environment where all of our employees feel respected, valued, and empowered.
+Added: We remain committed to expanding our diversity through targeted hiring and development initiatives.
+Added: Through a combination of internal promotions and external hiring, we continue to see increases in the number of female employees represented at the director and above level, as compared with 2022.
+Added: We also have an active Corporate Diversity & Inclusion Steering Committee to further increase our commitment to gender, ethnic and racial diversity.
+Added: We have an active Women’s Leadership Forum that is focused on career development and internal networking.
Health and Safety
−Removed: We are committed to providing a safe work environment for our employees and have a global team responsible for health and safety related to on-site operations, including hazard and risk identification.
−Removed: We are also committed to the standards of the Responsible Business Alliance Code of Conduct, which promotes labor, health and safety, environmental and ethics best practices.
+Added: We are committed to providing a safe work environment for our employees and have a global team that is responsible for health and safety related activities including hazard and risk identification.
+Added: We also strive to follow the standards of the Responsible Business Alliance Code of Conduct at selected manufacturing sites, which promotes labor, health, safety, environmental, and ethics best practices.
Employee Engagement
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In 2022, we conducted our biennial confidential employee survey on topics relating to confidence in company leadership, ethical conduct, career growth opportunities, and suggestions on how we can make our company a great place to work.
−Removed: Over 85% of employees participated in the 2022 survey, and we achieved higher scores across most dimensions compared to the 2020 survey with high employee engagement reported by over 85% of our employees.
−Removed: Results of the survey were shared with our employees, our executive team, and our Board of Directors, to help us make further improvements in 2023.
+Added: In 2023 we communicated the results of the employee survey with our employees, leaders, executive team, and Board of Directors.
+Added: We continue to invest in improving our employee experience through strategies targeted at improving communication, providing internal career development opportunities, and simplifying our internal business processes.
Total Rewards
−Removed: We offer competitive compensation and benefits to our employees to attract and retain a talented, highly engaged workforce.
−Removed: Our compensation programs are focused on equitable, fair pay practices including market-based base pay, an annual pay-for-performance incentive that over 40% of our non-manufacturing employees participate in, and a discounted employee stock purchase plan.
+Added: We provide market-competitive compensation and benefits to our employees to attract and retain a talented, highly engaged workforce.
+Added: Our compensation programs are focused on equitable and fair pay practices, including market-based compensation.
+Added: Additionally, we offer a discounted employee stock purchase plan.
Learning and Development
−Removed: We seek to create growth and development opportunities to support our employees in reaching their full potential and offer internal and external learning and development opportunities.
−Removed: In 2022, Advanced Energy launched a 10-week leadership essential training program for our people leaders across all corporate levels, providing the opportunity for employees to develop and enhance the essential competencies needed to empower, engage, and inspire high-performing teams.
−Removed: We also have an internship program designed to help develop our talent pipeline and perform internal talent reviews and succession planning to ensure we have a strong workforce for the future.
+Added: We create growth and development opportunities to support our employees and offer internal and external learning and development opportunities.
+Added: We also perform internal talent reviews and succession planning.
+Added: In 2023, Advanced Energy continued our 10-week leadership essential training program for our people leaders across all corporate levels.
+Added: We also have internship and graduate development programs designed to develop a talent pipeline.
Community Involvement
−Removed: We have an active Community Investment Steering Committee and offer each employee eight hours of paid time off to volunteer with a non-profit organization of their choice.
−Removed: Our Educational Scholarship Program, available to children of Advanced Energy employees, celebrates education accomplishments and supports them in pursuing their career and learning goals.
+Added: We have an active Community Investment Steering Committee and offer employees paid time off to participate in company-organized initiatives and volunteer with a non-profit organization of their choice.
+Added: Our Educational Scholarship Program, available to children of Advanced Energy employees, celebrates education accomplishments and provides financial support for them to pursue their career and learning goals.
+Added: We also offer an annual Advanced Energy STEM (science, technology, engineering, and mathematics) Scholarship in the United States to support and develop emerging talent in STEM.
Environmental Matters
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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.