−Removed: Item 1A of Part I of our Annual Report on Form 10-K for the year ended June 30, 2022, filed with the SEC on September 19, 2022, contains risk factors identified by the Company.
−Removed: Except as noted below, there have been no material changes to the risk factors we previously disclosed in our filings with the SEC.
+Added: Item 1A of Part I of our Annual Report on Form 10-K for the year ended June 30, 2022, filed with the SEC on September 19, 2022, contains risk factors identified by the Company, which were updated on the Quarterly Reports on Form 10-Q filed on November 7, 2022 and February 8, 2023.
+Added: There have been no material changes to the risk factors we previously disclosed in our filings with the SEC.
Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.
−Removed: Our business operations and financial performance have been, and may in the future continue to be, adversely affected by the COVID-19 pandemic and related events.
−Removed: Our business operations have been impacted by the global COVID-19 pandemic and the resulting economic downturn.
−Removed: Numerous governmental jurisdictions have imposed various restrictions on commercial activities, resulting in business closures, work stoppages, labor shortage, disruptions to ports, vaccine mandates and other shipping infrastructure, border closures, thereby negatively impacting our customers, suppliers, distributors, employees, offices, and the entire semiconductor ecosystem.
−Removed: At the early stages of the COVID-19 pandemic and as a result of changing consumer behaviors due to various government restrictions and the growing trend to provide remote-working options by employers, we experienced shifting market trends, including an increasing demand in markets for notebooks, PCs, gaming devices and other products.
−Removed: While we have benefited from the increasing demand for PC related products, there is no guarantee that this trend will continue, and such increasing demand may discontinue or decline as government authorities relax or terminate COVID-19 related restrictions and consumer behaviors change in response to the reopening of certain economic activities.
−Removed: Infection rates continued to fluctuate in various regions and new strains of the virus remain a risk, including a surge of COVID-19 cases and hospitalization due to the spread of Omicron variants in late 2021 and early 2022.
−Removed: During the first half of calendar year of 2022, COVID-19 cases and hospitalization rate continued to decline and governments in various jurisdictions, including the U.S.
−Removed: and Europe, have lifted various restrictions and limitations on economic activities.
−Removed: At the same time, however, new variants of COVID-19 continued to emerge and contributed to recent rise of infection rates in various jurisdictions in which we operate, including China and U.S.
−Removed: Additionally, during the first half of calendar year 2022, our financial results were negatively impacted temporarily by the suspension of operation of our Shanghai factories as a result of the city-lockdown imposed by Chinese government under the Zero-COVID Policy.
−Removed: Recently, the Chinese government lifted or eliminated most of its COVID-related restrictions, which caused a significant increase of infection rates among its population.
−Removed: While we have also experienced an increase of worker absence due to sickness, it has not resulted in any material effect on our operations.
−Removed: Nevertheless, we cannot predict the future trend of the pandemic, including whether additional restrictions will be imposed by the Chinese government or governments in other jurisdictions where we have operation.
−Removed: We may be subject to the ongoing global impacts resulting from the pandemic, including disruption of the product supply chains, shortages of semiconductor components and raw materials, and delays in shipments, product development, and product launches and rising inflation rates, any of which may adversely affect our operations.
−Removed: In addition, actions by United States federal, state and local governments, as well as by foreign governments, to address the COVID-19 pandemic, including travel bans, stay-at-home orders and school, business and entertainment venue closures, also had a significant adverse effect on the markets in which we conduct our businesses.
−Removed: COVID-19 poses the risk that our workforce, suppliers, and other partners may be prevented from conducting normal business activities for an extended period of time, including due to shutdowns or stay-at-home orders that may be requested or mandated by governmental authorities.
−Removed: The full extent of the future impact of the COVID-19 pandemic on our operational and financial performance is uncertain and will depend on many factors beyond our control, including, without limitation, the timing, extent, trajectory and duration of the pandemic;
−Removed: the availability, distribution and effectiveness of vaccines;
−Removed: the spread of new variants of COVID-19;
−Removed: the continued and renewed imposition of protective public safety measures such as lockdowns and quarantines;
−Removed: the continuing global disruption in supply chains in our industries and the impact of the pandemic on the global economy, inflation and demand for consumer products.
−Removed: Even after the pandemic has subsided and economic activities gradually increase, we may continue to experience material and adverse impacts to our business, operating results, and financial condition as a result of the pandemic’s lasting global economic impact, including any recession that may occur in the future in our industries, as well as possible continuing inflationary impacts resulting from these factors.
−Removed: We may be adversely affected by the cyclicality of the semiconductor industry and other industry-wide and market trends.
−Removed: The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change such as the introduction of smart phones and tablets that contributed to the decline in the PC market, product obsolescence and price erosion, evolving standards, uncertain product life cycles and wide fluctuations in product supply and demand.
−Removed: The industry has, from time to time, experienced significant and sometimes prolonged, downturns, which were often connected with or in anticipation of, maturing product cycles and declines in general economic conditions.
−Removed: These downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices.
−Removed: In addition, because our products target mostly applications in consumer electronics, including PCs and mobile devices, any micro environment and industry-wide trend affecting demand for consumer electronics may impact our business operations and financial results.
−Removed: For example, the semiconductor market experienced a significant inventory correction by our distributors and customers in the first quarter of 2023, driven primarily by excess inventory accumulated in the past two years in response to substantial growth in consumer electronic sales since the onset of COVID-19 pandemic.
−Removed: Such inventory correction is expected to result in a significant reduction of customer demand and revenue for our products for the quarter ending March 31, 2023.
−Removed: While we are projecting this downward trend to subside, and the market demand to recover significantly, during the second half of calendar 2023, there is no guarantee that this will occur.
−Removed: Any prolonged downturn in the consumer electronic market and further inventory correction will adversely affect our business operation and financial results.
−Removed: Any future downturns, in particular the PC markets or in any other markets in which we sell our products, may reduce our revenue and result in us having excess inventory.
−Removed: By contrast, any upturn in the semiconductor industry could result in increased competition for access to limited third-party foundry and packaging and testing capacity, which could prevent us from benefiting from such an upturn or reduce our profit margins.
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.