What changed in this filing

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Item 1. Business

2022-05-18 compared with 2021-05-19 · 112 added, 103 removed, 453 unchanged (32% of the section changed)

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Our sensor ICs enable our customers to precisely measure motion, speed, position and current, while our power ICs include high-temperature and high-voltage capable motor driver, power management and light emitting diode (“LED”) driver ICs.

Our recently acquired photonics portfolio provides eye-safe distance measurement and 3D imaging solutions.

Our photonics portfolio provides eye-safe distance measurement and 3D imaging solutions.

We believe that our technology expertise combined with our deep applications knowledge and strong customer relationships enable us to develop solutions that provide more value to customers than typical ICs.

Our solutions are more highly integrated, more intelligent and sophisticated for complex applications are easier for customers to use.

Compared to a typical IC, our solutions are more integrated, intelligent and sophisticated for complex applications and are easier for customers to use.

Growth in the global semiconductor industry has traditionally been driven by the consumer market.

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This is a pattern we have repeated over consecutive generations of products, enabling us to establish a strong presence in the most rigorous and demanding automotive markets.

Our portfolio now includes more than 1,000 products, and we ship over one billion units annually to more than 10,000 customers worldwide.

Our portfolio now includes more than 1,000 products, and we ship over 1.5 billion units annually to more than 10,000 customers worldwide.

By developing sophisticated, analog mixed-signal IC solutions that incorporate our patented intellectual property, proprietary and robust process technologies and our unique packaging know-how, we believe we are well-positioned to compete across all of our target markets.

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In the industrial market, these technologies enable the automation at the heart of the industrial transformation commonly referred to as “Industry 4.0.” These innovations also improve reliability to avoid factory downtime, accurately measure current to support increased energy efficiency for high-density data centers and green energy applications and reduce the solution footprint to lower total system cost.

We have maintained our sensor IC leadership and built our emerging power IC business through successfully developing deep customer relationships over time.

We commonly collaborate with customers early on over a multi-year

period in order to design products capable of meeting demanding performance and quality requirements.

We have maintained our sensor IC leadership and built our power IC business through successfully developing deep customer relationships over time.

We commonly collaborate with customers early on over a multi-year period in order to

design products capable of meeting demanding performance and quality requirements.

Through this customer collaboration in product design, we believe we have unique insight into market trends and customer requirements for new, improved and innovative products.

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Beginning in 2016, we began a multi-year strategic transition to extend our market leadership in high-growth markets, improve our operating model through a fabless and asset-lite manufacturing strategy, increase our IC design footprint and capacity, and accelerate growth through enhanced sales operations.

To date, we believe we have begun to successfully realize many of the key objectives of this transition, and we expect to continue to benefit from measures put in place to further enhance our competitiveness, growth and profitability.

To date, we believe we have begun to successfully realize many of the key objectives of this transition, and we expect to continue to benefit from initiatives put in place to further enhance our competitiveness, growth and profitability.

As part of our strategic transformation, we began to streamline manufacturing to reduce fixed costs.

This resulted in the recent divestiture of our wafer manufacturing facility, Polar Semiconductor, LLC (“PSL”) (see “The PSL Divestiture” below), and the closure of our manufacturing facility in Thailand (the “AMTC Facility”) as of March 2021.

This resulted in the divestiture of our wafer manufacturing facility, Polar Semiconductor, LLC (“PSL”), in March 2020 (see “The PSL Divestiture” below), and the closure of our manufacturing facility in Thailand (the “AMTC Facility”) as of March 2021.

In our current fabless, asset-lite manufacturing model, we use external wafer manufacturing consisting of both standard and proprietary processes, along with internal and external assembly and test capabilities to provide both flexibility and scale.

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This presents a number of new socket opportunities for semiconductors, and we expect our content per vehicle will continue to increase, driven by research and development innovation to serve this high-growth market.

For example, we estimate that magnetic sensor IC content alone increases by more than 45% from an internal combustion engine (“ICE”) vehicle to an xEV.

Because the combination of an internal combustion engine and an electric powertrain balances efficiency and cost, production of vehicles that have both ICE and an electric powertrain are expected to represent the majority of xEV shipments through 2030.

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ADAS is a precursor to fully autonomous vehicles, and as ADAS features become more sophisticated, and adoption increases, demand for our sensor and power ICs is expected to expand from steering into additional braking and new radar and LiDAR applications.

Based on industry forecasts, we believe the transition to vehicles

that incorporate ADAS level 2 through 5 technologies and strong adoption of sensors and power management products to support these vehicles will enable us to increase our total available market related to ADAS and related Safety & Chassis technologies.

Based on industry forecasts, we believe the transition to vehicles that incorporate ADAS level 2 through 5 technologies and strong adoption of sensors and power management products to

support these vehicles will enable us to increase our total available market related to ADAS and related Safety & Chassis technologies.

Our devices play a key role in advanced driver assistance systems, which have three main functions:

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A steering system equipped with even a modest degree of automation utilizes products across our entire portfolio, including sensors, power management ICs and motor driver ICs, which we believe is indicative of the size of our potential market opportunity as ADAS applications become increasingly more sophisticated.

Our new portfolio of photonic and 3D sensing devices, through our recent acquisition of Voxtel, Inc.

Our portfolio of photonic and 3D sensing devices, through our acquisition of Voxtel, Inc.

(“Voxtel”), addresses the “sense” opportunity in ADAS systems.

Our newly acquired LiDAR components, which include ultra-miniature lasers, photodetectors and custom integrated circuits, focus on eye-safe technology that provides high-accuracy distance measurements used to generate 3D LiDAR images required for object detection and avoidance when driving at highway speeds.

Our LiDAR components, which include ultra-miniature lasers, photodetectors and custom integrated circuits, focus on eye-safe technology that provides high-accuracy distance measurements used to generate 3D LiDAR images required for object detection and avoidance when driving at highway speeds.

While the market is still in the early stages of adopting new ADAS technologies, we already ship more than 150 million devices every year that enable fundamental safety and drive features in ADAS applications.

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The advent of Industry 4.0, increasing demand for renewable energy and the adoption of green technologies represent additional meaningful growth opportunities for us.

We believe we can leverage our technology leadership in solutions optimized for high-temperature, high-voltage, high-reliability conditions to expand our presence in these markets.

We believe we can leverage our technology leadership in solutions optimized for high-temperature, high-voltage and high-reliability conditions to expand our presence in these markets.

In particular, we believe we have the potential to leverage the synergy between our power and sensor solutions, including motor drivers, voltage regulators, display drivers, and current, position and speed sensors, into under-penetrated opportunities within industrial automation, and personal mobility, as well as green energy opportunities including renewable energy applications, like solar.

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We are a market share leader in the magnetic sensor IC market and believe there is still considerable runway to expand our share and continue to grow this foundational business.

For example, over the last five years we introduced new position sensor ICs and quickly ramped revenue in motor control applications, particularly in the ADAS market.

For example, over the last five years, we introduced new position sensor ICs and quickly ramped revenue in motion control applications, particularly in the ADAS market.

We believe similar share growth opportunities exist in other adjacent areas of the magnetic sensor IC market.

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Our revenue in these new areas has grown approximately 50% faster than the overall growth of the brushless direct current (“BLDC”) motor market during the same period.

We believe this is indicative of the early success of our footprint expansion strategy and the potential for significant share gains with continued execution on that strategy.

We believe this is indicative of the success of our footprint expansion strategy and the potential for significant share gains with continued execution on that strategy.

Increasing our Served Available Market

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With the growth of semiconductor content opportunities related to xEV and ADAS penetration already accelerating, we have seen significant increases in our electronic system content per vehicle.

• We average nine devices per vehicle, with as many as 80 devices in a high-end, luxury vehicle adopting early ADAS features.

• We average thirteen devices per vehicle, with as many as 80 devices in a high-end, luxury vehicle adopting early ADAS features.

We believe the rapid increase in adoption of ADAS features will result in a similar increase in our average number of devices per vehicle as those features move into mid- and lower-range vehicles.

• In addition, in a popular mid-sized 2020 model sport utility vehicle shipped worldwide, our content per vehicle increased by over 40% as the vehicle model transitioned from ICE to a battery EV.

According to our internal estimates and third-party sources, in a standard ICE model we believe we have a total opportunity of $37 increasing up to $59 of potential content in xEV vehicles.

• In addition, in a popular mid-sized 2022 model sedan shipped worldwide, our content per vehicle increased by over 50% as the vehicle model transitioned from ICE to a battery EV.

According to our internal estimates and third-party sources, in a standard ICE model, we believe that we have a total opportunity of $37 increasing up to $59 of potential content in xEV vehicles.

• Furthermore, in a mainstream North American pickup truck platform, our content per vehicle nearly tripled from 2017 to 2020 as a result of design wins for our solutions that enable smarter systems for self-park, lane assist and other related ADAS features.

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We believe this diversity contributes to our growth opportunity by providing us early access to emerging customer applications and helping us to maintain relative stability in net sales across the business cycles common to the semiconductor industry.

During the most recent global recession in 2008, and now during the current COVID-19 pandemic, our regional and target market diversification enabled us to partially offset regional or customer demand weakness.

For example, recently, our presence in growing, high content electric vehicle systems has helped offset reductions in automotive production generally, and we have been able to capitalize on “work-from-home” related demand for data center infrastructure and printers despite underlying general market weakness due to the impact of the COVID-19 pandemic.

During the most recent global recession in 2008, and during the COVID-19 pandemic, our regional and target market diversification enabled us to partially offset regional or customer demand weakness.

Diversification, particularly geographically and within the automotive industry, has enabled us to continue to invest across business cycles, pursue multiple growth opportunities and employ our research and development efforts and technology expertise across multiple products and end markets.

Additionally, we believe no end customer, including those served through our distributors, exceeded 10% of our net sales during fiscal years 2021 and 2020 .

Unlike the consumer market, automotive and industrial markets are characterized by long design cycles and rigorous quality, reliability and safety testing.

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This has contributed to improving our historical gross margins over the last four years from the 40% range to the 54% range today.

Becoming a fabless semiconductor company will also enable us to access the technology base available through partnerships with strategic contract semiconductor wafer fabrication plants (“fabs”) to which we bring our advanced proprietary processes.

Becoming a fabless semiconductor company has also enabled us to access the technology base available through partnerships with strategic contract semiconductor wafer fabrication plants (“fabs”) to which we bring our advanced proprietary processes.

Wafers using our proprietary fabrication processes are very often manufactured at multiple wafer foundries, sometimes on dedicated customized tools.

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In addition, the closure of the AMTC Facility as of March 2021 reduced our remaining manufacturing square footage by approximately an additional 45%.

In addition to the implementation of our fabless, asset-light scalable manufacturing strategy, we believe the AMTC Facility closure as part of our manufacturing footprint optimization strategy will further enhance our gross margins in both the near term and in future periods.

Our primary internal assembly and test facility based in Manila, Philippines (the

“AMPI Facility”) provides high-volume production capacity while facilitating the protection of our proprietary process technology, particularly for the assembly and testing of our magnetic sensor products.

Additionally, we make use of other third-party assembly and second-source manufacturers for industry standard packaging.

In addition to the implementation of our fabless, asset-lite scalable manufacturing strategy, we believe the AMTC Facility closure as part of our manufacturing footprint optimization strategy further enhanced our gross margins.

Our primary internal assembly and test facility based in Manila, Philippines (the “AMPI Facility”) provides high-volume production capacity while facilitating the protection of our proprietary process technology, particularly for the assembly and testing of our magnetic sensor products.

Additionally, we make use of other third-party assembly and second-source

manufacturers for industry standard packaging.

We are certified under IATF 16949:2016, the automotive sector-specific quality management system standard, and are a major supplier to Japanese automotive manufacturers, who are recognized industry-wide as having very stringent quality standards with respect to safety and reliability.

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Experienced and established management team

Our executive management team averages over 20 years of semiconductor industry experience.

Our executive management team averages approximately 20 years of semiconductor industry experience.

We believe our team has a proven track record of operating in fast-paced, innovation-driven and values-based cultures.

Our management team is committed to innovating with purpose, supporting sustainability and managing with transparency.

After over 30 years with Allegro, Ravi Vig became our President and Chief Executive Officer in 2016.

During his career with us, Mr.

Vig has spearheaded significant advanced technology projects, moving up through the engineering ranks to ultimately lead our magnetic sensor business where we now hold the leading market position.

Vig’s leadership, we have undertaken a strategic transformation that includes initiatives to streamline operations, improve sales effectiveness and focus our research and development efforts with the ultimate goal of profitably accelerating growth.

We believe that our executive management team’s ability to successfully execute on our recent strategic transformation demonstrates their strong capabilities.

Additionally, their experience effectively managing through various industry cycles and technology transitions provides us with steady, reliable leadership, uniquely capable of identifying strong investments, executing through changes and maintaining stability during periods of market uncertainty.

We believe that our executive management team’s ability to successfully execute on our strategic transformation demonstrates their strong capabilities.

Additionally, their experience of effectively managing through various industry cycles and technology transitions provides us with steady, reliable leadership, uniquely capable of identifying strong investments, executing through changes and maintaining stability during periods of market uncertainty.

Company Strategy

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By designing our products from the ground up to operate at high temperatures and at high voltages, we have built a strong technical reputation among our automotive customers.

We believe our focus on meeting or exceeding industry standards as the baseline for product development increases our

opportunity in the automotive market as customers look for trusted suppliers to deliver highly reliable solutions for rapidly growing emerging markets.

We believe our focus on meeting or exceeding industry standards as the baseline for product development increases our opportunity in the automotive market as customers look for trusted suppliers to deliver highly reliable solutions for rapidly growing emerging markets.

For example, the rise in HEVs and EVs has dramatically increased the variety and complexity of components needed to support modern powertrains.

We believe our philosophy of designing for automotive safety and reliability gives us a meaningful lead over new entrants attempting to enter the automotive market by modifying existing solutions originally developed for consumer and other less demanding applications.

For example, we will apply this philosophy of innovation, quality and reliability to our new photonics portfolio which supplies components into safety-critical LiDAR applications.

We also believe we can use our expertise in designing for the automotive market and our expanding product portfolio to capitalize on increasing demand among industrial customers for ruggedized solutions that meet the highest quality and reliability standards.

Additionally, in our experience, demand for solutions that meet or exceed stringent safety and reliability specifications supports higher ASPs and lower ASP declines over time than are typical for our industry.

For example, we are applying this philosophy of innovation, quality and reliability to our photonics portfolio which supplies components into safety-critical LiDAR applications.

highest quality and reliability standards.

Additionally, in our experience, demand for solutions that meet or exceed stringent safety and reliability specifications supports higher ASPs and slower ASP declines over time than are typical for our industry.

Invest to lead in chosen markets and apply our intellectual property and technology to pursue adjacent growth markets

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We believe we can reduce our manufacturing costs by leveraging the advanced manufacturing capabilities of our strategic suppliers, implementing more cost-effective packaging technologies and leveraging both internal and external assembly and test capacity to reduce our capital requirements, lower our operating costs, enhance reliability of supply and support our continued growth.

We believe the AMTC Facility closure will further enhance our gross margins in both the near term and in future periods.

We intend to continue to choose the industry’s leading manufacturing partners to maintain the quality of our products for the automotive market, to ensure continuity of supply and to best protect our intellectual property.

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From time to time, we acquire companies, technologies or assets and participate in joint ventures when we believe they will cost effectively and rapidly improve our product development or manufacturing capabilities or complement our existing product offerings.

For example, our August 2020 acquisition of Voxtel and its affiliate LadarSystems, Inc.

brings together Voxtel’s laser and imaging expertise with our automotive leadership and scale to enable what we believe will be the next generation of ADAS sensing solutions.

Maintain commitment to sustainability

We intend to continue to innovate with purpose, addressing critical global challenges related to energy efficiency, vehicle emissions and clean and renewable energy with our sensing and power management product portfolio.

In addition, we strive to operate our business in a socially responsible and environmentally sustainable manner, and we strive to maintain a commitment to social responsibility in our supply chain and disclosure of the environmental impact of our business operations.

Maintain sustainability efforts

We intend to continue to innovate with purpose, aiming to address critical global challenges related to energy efficiency, vehicle emissions and clean and renewable energy with our sensing and power management product portfolio.

In addition, we strive to operate our business in a socially responsible and environmentally sustainable manner, and with the goals of maintaining a dedication to social responsibility in our supply chain and disclosing the environmental impact of our business operations.

Company Products and Solutions

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• Regulator and LED Driver ICs :

As the industry transitions to more highly integrated products, our portfolio of regulator ICs, and power management ICs (“PMICs”) is used extensively in under-hood automotive ADAS and powertrain systems.

As the industry transitions to more highly integrated products, our portfolio of regulator ICs, and power management ICs (“PMICs”) is used extensively in under-hood automotive ADAS and

powertrain systems.

Our LED driver ICs and modules are used in smart lighting systems to improve system safety, efficiency and size.

Photonic and 3D Sensing Components for LiDAR Applications

Through our acquisition of Voxtel, we provide photonic and advanced 3D imaging components for use in eye-safe, medium and long-range industrial and automotive LiDAR applications.

Our photonic components include high-performance avalanche photodiodes and photodiode arrays, ultra-miniature, eye-safe, diode-pumped solid-state (“DPSS”) lasers, laser rangefinders, and custom ROICs, such as TOF ICs.

We provide photonic and advanced 3D imaging components for use in eye-safe, medium- and long-range industrial and automotive LiDAR applications.

Our photonic components include high-performance avalanche photodiodes and photodiode arrays, ultra-miniature, eye-safe, diode-pumped solid-state (“DPSS”) lasers, and custom ROICs, such as TOF ICs.

Our components operate within the near-infrared and short-wavelength infrared wavelength ranges, including the important eye-safe region around 1550 nanometers, which we believe is an initiative gaining momentum across the industry.

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• Photodiodes :

Our APDs are used in detecting and processing the laser signal in LiDAR applications.

Our Avalanche Photodiodes (“APDs”) are used in detecting and processing the laser signal in LiDAR applications.

Our InGaAs APDs are highly sensitive, enabling images to be obtained at a long distance and wide field of view using an eye-safe laser.

• Eye-safe Lasers and Rangefinders:

• Eye-safe Lasers :

Our miniature erbium-glass DPSS lasers allow for eye-safe operation at wavelengths between 1500 and 1600 nm, delivering short, high-energy pulses, with diffraction-limited beam quality and low divergence, allowing for long-distance ranging.

Additionally, these lasers are much smaller and more cost efficient than the fiber lasers used in many current LiDAR systems.

• R eadout Integrated Circuits (ROIC):

• Readout Integrated Circuits (ROIC) :

Our silicon ROICs include low-noise, high speed analog and digital circuits including proprietary analog-to-digital converters (“ADCs”) and time-to-digital converters (“TDCs”) required for high performance time-of-flight (“TOF”) measurements.

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• ADAS, active safety, including steering and braking systems • Smart home/IoT • Personal electronics

• Automotive LiDAR • Cloud computing/data center • Energy Star household appliances including white goods

• Comfort and convenience including in-cabin motors, HVAC, infotainment, LED lighting • Wireless infrastructure

• Automotive LiDAR • Data center and 5G infrastructure • Energy Star household appliances including white goods

• Comfort and convenience including in-cabin motors, HVAC, infotainment, LED lighting • EV charging infrastructure

• Passive safety including seatbelt switches, wipers, door/window sensors, seat position, suspension • Personal mobility

• Green energy applications

• Industrial LiDAR / Rangefinders

• Industrial LiDAR

Sustainability Efforts

We strive to develop intelligent solutions that move the world toward a safer and more sustainable future.

Our ICs address global challenges related to CO2 emissions, energy efficiency and clean, renewable energy in a variety of applications, for example:

We believe our ICs help address global challenges related to CO2 emissions, energy efficiency and clean, renewable energy in a variety of applications, for example:

• Reduced vehicle emissions and improved fuel economy for internal combustion engines.

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We are a member of the Responsible Business Alliance, dedicated to social responsibility in the supply chain.

We also actively manage the carbon footprint of our operations and participate in the Carbon Disclosure Project to disclose our carbon emissions.

We also actively manage the carbon footprint of our operations and intend to participate in the CDP (formerly the Carbon Disclosure Project) to disclose our carbon emissions for the relevant questionnaire periods.

We also strive to adhere to international standards and regulations regarding manufacturing and business procedures and product composition.

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We sell our products to major global OEMs and their key suppliers, primarily in the automotive and industrial markets.

We sold to more than 10,000 end customers, directly and through distributors, during each of fiscal year 2021 and 2020.

Approximately half of our net sales during each of fiscal ye ars 2021 and 2020, respectively, were derived from sales to our top twenty customers.

We believe no end customer, including those served through our distributors, exceeded 10% of our net sales during fiscal years 2021 and 2020.

We sold to more than 10,000 end customers, directly and through distributors, during each of fiscal years 2022, 2021 and 2020.

Approximately half of our net sales during each of fiscal years 2022, 2021 and 2020, respectively, were derived from sales to our top twenty customers.

We believe that no end customer, including those served through our distributors, exceeded 10% of our net sales during fiscal years 2022, 2021 and 2020.

Research and Development Strategy

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We anticipate that we will continue to make research and development investments in order to enhance our leadership position and expand our markets with innovative, high-quality products and services (as exemplified through our acquisition of Voxtel).

In addition, our board of directors recently established an R&D committee, whose purpose is to provide guidance to management on various technological choices and research and development priorities to assist in implementing our strategic direction.

In addition, our board of directors has a standing R&D Committee, whose purpose is to provide guidance to management on various technological choices and research and development priorities to assist in implementing our strategic direction.

Process and Packaging Technology

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These have the benefit of advancing the feature, function and cost of ownership of our devices relative to those of our competitors.

For example, we recently released a unique 100V- and 175-degree Celsius capable BCD wafer technology designed to handle automotive voltage and temperature transients while also integrating high-density logic circuits and EEPROM memory to enable configurable and embedded algorithms, and various Hall-effect and xMR transducer technology on the same silicon wafer.

For example, we released a unique 100V- and 175-degree Celsius capable BCD wafer technology designed to handle automotive voltage and temperature transients while also integrating high-density logic circuits and EEPROM memory to enable configurable and embedded algorithms, and various Hall-effect and xMR transducer technology on the same silicon wafer.

These technologies are fundamental to the transition from 12-volt to 48-volt power supply required in the rapidly emerging mild HEV and EV markets, and to the next generation of ADAS systems.

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Our intellectual property includes patented inventions, trade secrets, accumulated technical know-how and trademarks.

As of March 26, 2021, we o wned 1,117 patents, including 596 active U.S.

As of March 25, 2022, we o w ned 1,256 patents, including 671 active U.S.

patents (with expiration dates between 2022 and 2041), with an additional 362 pending patent applications, including 151 U.S.

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Through the end of fisc al year 2020, we held a 100% ownership interest in PSL, a semiconductor wafer fabricator engaged in the manufacturing and testing of foundry wafers.

Prior to the divestiture transaction of PSL, PSL accounted for 11.1% of our net sales and supplied 44.2% of our wafer requirements in fiscal year 2020, respectively.

Prior to the divestiture transaction of PSL, PSL accounted for 11.1% of our net sales and supplied 44.2% of our wafer requirements, respectively, in fiscal year 2020.

In addition, through end of fiscal year 2020, we acted as a distributor of Sanken products in North America, South America and Europe on a low margin, buy-resale basis pursuant to the Sanken Products Distribution Agreement between AML, our wholly owned subsidiary, and Sanken.

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• In exchange for the extinguishment of all outstanding indebtedness owed by u s to Sanken under the PSL-Sanken Loans, we (i) divested 70% of the issued and outstanding equity interests in PSL to Sanken, as a result of which Sanken holds a 70% majority share in PSL and we hold a 30% interest, and (ii) amended and restated the existing limited liability company agreement of PSL to admit Sanken as a member, reflect the Recapitalization and otherwise reflect the rights and obligations of us and Sanken thereunder;

• AML entered into an amendment to a wafer foundry agreement, dated as of April 12, 2013, between AML and PSL (as amended, the “Wafer Foundry Agreement”), pursuant to which AML agreed, among other things, to a minimum wafer purchase obligation by us from PSL during the initial three-year term of the Wafer Foundry Agreement;AML entered into an amendment to a wafer foundry agreement, dated as of April 12, 2013, between AML and PSL (as amended, the “Wafer Foundry Agreement”), pursuant to which AML agreed, among other things, to a minimum wafer purchase obligation by us from PSL during the initial three-year term of the Wafer Foundry Agreement;

• AML entered into a letter agreement with PSL pursuant to which AML agreed, among other things, to make a one-time price support payment to PSL of approximately $5.9 million in cash or, at AML’s option, as a reduction of PSL’s existing debt obligations under the Consolidated Loan Agreement (such letter agreement, the “Price Support Agreement”);

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• We entered into certain other agreements with Sanken and PSL.

Acquisition of Voxtel

On August 28, 2020, we acquired Voxtel, a privately-held technology company located in Beaverton, Oregon that specializes in components for eye-safe LiDAR used in ADAS, fully autonomous vehicles, and industrial automation.

The total purchase price of the acquisition was $26.1 million, excluding certain earn outs that have a potential payout of $15.0 million.

As of March 25, 2022, the fair value of these earn-outs was $2.8 million.

In addition to the laser technology, Voxtel’s capabilities included its Indium Gallium Arsenide (“InGaAs”) APDs and APD photoreceivers—highly sensitive in the important eye-safe region around 1550 nanometers (“nm”).

This technology enables images to be obtained over a wide range of weather conditions and over a long-distance or a wide field of view using a laser that doesn’t pose an ocular hazard.

The combination of these highly-sensitive detectors and high-peak-power eye-safe lasers, combined with Voxtel’s custom integrated circuits and electro-optical packaging expertise, allows for cost-effective, compact laser-ranging and 3D-image sensing.

As of the acquisition, Voxtel held more than 38 US patents, representing a comprehensive laser detection and ranging (“LADAR”)/LiDAR photonic technology suite.

The semiconductor industry, particularly the market for high-performance analog mixed-signal semiconductors, is highly competitive.

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See “Risk Factors—Risks Related to our Business and Industry—We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability.”

Our business exhibits some seasonality.

Historically, our revenue has generally been higher in the second half of the year than in the first half.

However, various factors, such as market conditions, new product introductions and the supply chain environment, can impact the effects of seasonality on our business.

Employees and Human Capital Resources

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They contribute to Allegro’s success and, in particular, the skilled and experienced employees within our manufacturing, sales, service, research and development and quality assurance departments are instrumental in driving operational execution and strong financial performance, advancing innovation and maintaining a strong quality and compliance program.

As of March 26, 2021, we employed 3,874 full-time employees, including 520 in research and development, 2,964 in manufacturing (the overwhelming majority located at our AMPI facility in the Philippines), 201 in sales and marketing and 189 in general and administrative.

As of March 25, 2022, we emplo yed 4,036 full-time employees, including 549 in research and development, 3,069 in manufacturing (the overwhelming majority located at our AMPI facility in the Philippines), 211 in sales and marketing and 207 in general and administrative.

We consider our relationship with our employees to be good.

We have never experienced a labor-related work stoppage.

None of our employees is either represented by a labor union or subject to a collective bargaining agreement.

None of our employees are either represented by a labor union or subject to a collective bargaining agreement.

The success and growth of Allegro’s business is dependent in large part on our ability to attract, retain and develop a diverse population of talented and high-performing employees at all levels of our organization.

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Competitive Pay and Benefits .

Allegro’s compensation programs are designed to align the compensation of our employees, who operate in a highly competitive and technologically challenging environment, with Allegro’s business performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior performance.

to provide the proper incentives to attract, retain and motivate employees to achieve superior performance.

The structure of our compensation programs balances incentive earnings for both short-term and long-term performance.

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We also utilize social media, local job fairs and educational organizations to find diverse, motivated and responsible employees.

Allegro has made strides to increase diversity in management positions, building internal resources for potential future leadership openings.

Allegro has a strong employee value proposition that leverages our technology leadership, unique culture, collaborative working environment, shared sense of purpose, and desire to do the right thing to attract talent to our company.

In fiscal 2021, we hired approximatel y 835 new employees.

We believe we have made strides to increase diversity in management positions, building internal resources for potential future leadership openings.

Allegro has a strong employee value proposition that leverages our technology leadership, collaborative working environment, shared sense of purpose and culture, and desire to do the right thing to attract talent to our company.

In fiscal 2022, we hired approximately 513 new employees.

We monitor employee turnover rates, as our success depends upon retaining and investing in our highly trained manufacturing and technical staff.

Allegro strives to decrease voluntary turnover rates and thereby increase employee tenure by ensuring a combination of competitive compensation, individual developmental opportunities and personal career enrichment and growth.

Our retention at the technical, professional and managerial levels is high.

We believe our retention at the technical, professional and managerial levels is high.

In fiscal 2021, amidst global uncertainty and turmoil resulting from the COVID-19 pandemic, we introduced a number of special initiatives to minimize the impact on our employees and to safeguard their health and safety.

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50 Senior Vice President, Chief Financial Officer and Treasurer

Christopher E.

48 Senior Vice President, General Counsel and Secretary

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62 Senior Vice President of Operations and Quality

Joanne Valente 57 Senior Vice President and Chief Human Resources Officer

(1) As previously disclosed, Mr.

Vig is retiring from his position as President and Chief Executive Officer, effective on June 13, 2022.

Vineet Nargolwala has been appointed to serve as President and Chief Executive Officer of the Company, effective June 13, 2022.

Ravi Vig has served as our Chief Executive Officer and as a member of our board of directors since 2016.

Vig joined Allegro in 1984 as an Analog Design Engineer and then as a Design Manager.

Vig helped to launch the company’s magnetic sensor IC business.

Vig helped to launch the

Company’s magnetic sensor IC business.

Vig later spearheaded the marketing effort for these innovative products, where he became the Vice President of our Sensors Business Unit.

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from Southern New Hampshire University in 1991 and completed the Global Executive Leadership Program at Yale University in 2017.

has served as our Senior Vice President – Chief Financial Officer and Treasurer since he joined Allegro in April 2014.

Prior to joining Allegro, Mr.

Walsh served as the Chief Financial Officer for Rocket Software from 2013 to 2014.

From 2004 to 2013, Mr.

Walsh was employed at Silicon Laboratories, a publicly traded global technology company that designs and manufacturers semiconductors, other silicon devices and software and served in various senior financial leadership roles, including as the Senior Vice President, Chief Financial Officer from 2011 to 2013 and Vice President, Chief Accounting Officer from 2007 to 2011.

Walsh also served as Silicon Laboratories’ Interim Chief Financial Officer in 2006.

Walsh served on the board of directors for Nitero, a venture-backed startup semiconductor company, from 2012 to 2015.

Walsh served as the Audit Committee Chair of Grande Communications, a broadband communications provider of cable and internet services, from 2008 to 2010.

During his career, Mr.

Walsh has held various finance and operations positions at Perkin Elmer, Teradyne and Analog Devices.

Walsh received his B.S.

in Mechanical Engineering from the

University of Maine in 1986 and an M.B.A.

from Boston University in 1992.

Walsh also received a Graduate Certificate in Accountancy from Bentley College in 1996.

Walsh passed the CPA exam in 1997.

Christopher E.

Brown has served as our Senior Vice President, General Counsel since he joined Allegro in May 2020 and as our Secretary since November 2020.

D’Antilio has served as our Senior Vice President, Chief Financial Officer and Treasurer since he joined Allegro in January 2022.

Prior to joining Allegro, Mr.

Brown served as Executive Vice President and Chief Counsel of Finisar Corp., a manufacturer of components for optical networking and consumer 3D sensing applications, from 2008 to 2019.

Brown also served as the General Counsel of Optium Corporation, a manufacturer of components for telecom optical networking applications from 2006 to 2008.

Prior to his time as the General Counsel of Optium, Mr.

Brown was a partner at the law firms of Goodwin Procter LLP and McDermott Will & Emery LLP.

Brown received a B.A.

in Economics from the University of Massachusetts-Amherst in 1989 and a J.D.

from Boston College Law School in 1996.

Doogue has served as our Senior Vice President—Technology and Products since 2019.

D’Antilio most recently served as the Chief Financial Officer of a Summit Partners Portfolio Company and helped lead the recent sale and recapitalization of the company.

From February 2019 to March 2021, he served as the Chief Financial Officer of IDEX Biometrics, a publicly traded and global fabless semiconductor company, where he played an instrumental role in leading a Nasdaq listing and preparing the company to scale its production.

Prior to IDEX Biometrics, Mr.

D’Antilio spent eight years at MKS Instruments, a global equipment and service provider to semiconductor and industrial markets and held numerous leadership roles including Vice President & Corporate Controller, where he oversaw global accounting and reporting, FP&A, and treasury.

Earlier in his career, Mr.

D’Antilio was a CPA in public accounting and served as an audit manager at PwC.

D’Antilio holds a B.S.B.A.

in Accounting from Salem State University and an M.B.A.

from Babson College.

Briansky has served as our Senior Vice President, General Counsel and Secretary since she joined Allegro in December 2021.

Prior to joining Allegro, Ms.

Briansky served as the Vice President, Deputy General Counsel and Secretary at Thermo Fisher Scientific (“Thermo Fisher”) from 2017 to 2021.

Prior to that she served as Vice President, Associate General Counsel at Thermo Fisher from 2005 to 2017.

Briansky received a B.A.

in Political Science from the University of North Carolina in 1995 and a J.D.

from Boston University School of Law in 1998.

Doogue has served as our Senior Vice President of Technology and Products since 2019.

Doogue joined Allegro in 1998 as a Design Engineer facilitating the development of Allegro’s innovative speed and current sensor ICs.

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Doogue completed the Stanford Executive Program at the Stanford University Graduate School of Business.

Glover has served as our Senior Vice President—Worldwide Sales since he joined Allegro i n 2019.

Glover has served as our Senior Vice President of Worldwide Sales since he joined Allegro i n 2019.

Prior to joining Allegro, Mr.

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in Electrical Engineering from the University of Cincinnati in 2004.

has served as our Senior Vice President—Operations and Quality since 2017.

has served as our Senior Vice President of Operations and Quality since 2017.

Teebagy joined Allegro in 2005 and served as a Senior Director of Manufacturing Technology from January 2005 to May 2014.

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in Business Administration from Babson College in 1982.

Joanne Valente has served as our Senior Vice President and Chief Human Resources Officer (“CHRO”) since May 17, 2022.

Prior to her promotion, Ms.

Valente served as the Company’s Vice President and CHRO from October 2020 to May 2022.

Prior to that, she served as Director, Global Human Resources/Senior Human Resources Business Partner when she joined the Company in 2018.

Prior to Allegro, Ms.

Valente worked at Analog Devices, serving in a variety of global Human Resources Director roles across Sales, Marketing, Engineering and Talent Acquisition.

Additionally, Ms.

Valente has held various Human Resources leadership positions during her career with IBM, Lotus Development Corp.

and Digital Equipment Corporation working across multiple high-tech industries.

Valente earned her Bachelor’s degree in Management from Lesley University in Cambridge, MA, in 1992.

Environmental and Occupational Health and Safety Regulation

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For example, the European Union (“EU”) adopted its Restriction of Hazardous Substance Directive (“RoHS”) in 2003 and continues to develop evolving compliance standards, with its most recent restrictions announced as part of RoHS 3, which took effect in July 2019.

The EU also adopted the European Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”)

in 2007, which calls for the progressive substitution of dangerous chemicals in manufacturing.

The EU also adopted the European Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”) in 2007, which calls for the progressive substitution of dangerous chemicals in manufacturing.

In 2006, China first published its RoHS, the Administrative Measures on the Control of Pollution Cause by Electronic Information Products.

10 unchanged sentences

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

What changed 10-K

Item 1. Business