What changed in this filing

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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-23 · 110 added, 99 removed, 418 unchanged (33% of the section changed)

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• We are subject to numerous environmental laws and regulations.

• Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.

• We previously identified material weaknesses in our internal control over financial reporting, and the failure to maintain an effective system of internal controls and procedures may cause investors to lose confidence in our financial reporting.

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• The issuance of preferred shares could adversely affect holders of ordinary shares.

• Our shareholders may face difficulties in protecting their interests under the laws of the Cayman Islands compared to the laws of the United States.

• Our shareholders may face difficulties in protecting their interests under the laws of the Cayman Islands compared to the laws of the U.S.

• There can be no assurance that we will not be a passive foreign investment company for any taxable year.

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In turn, the semiconductor capital equipment industry depends upon the current and anticipated market demand for semiconductor devices.

The semiconductor device industry is subject to cyclical and volatile fluctuations in supply and demand and in the past has experienced significant downturns, which often occur in connection with declines in general economic conditions, and which have resulted in significant volatility in the semiconductor capital equipment industry.

The semiconductor device industry is subject to cyclical and volatile fluctuations in supply and demand and in the past has experienced significant downturns, including in the fourth quarter of 2022, which often occur in connection with declines in general economic conditions, and which have resulted in significant volatility in the semiconductor capital equipment industry and resulted in weakened customer demand.

The semiconductor device industry has also experienced recurring periods of over-supply of products that have had a severe negative effect on the demand for capital equipment used to manufacture such products.

We have experienced, and anticipate that we will continue to experience, significant fluctuations in customer orders for our products and services as a result of such fluctuations and cycles.

Any downturns in the semiconductor device industry could have a material adverse effect on our business, financial condition and results of operations.

Even as the industry recovers from periods of downturns, inventory digestion at our customers and the relative spending levels within our primary served markets, in particular lower spending levels for deposition and etch equipment, may result in decreased demand from our customers, such as in 2023 and early 2024.

We anticipate that we will continue to experience significant fluctuations in customer orders for our products and services as a result of such fluctuations and cycles, which may have a material adverse effect on our business, financial condition and results of operations.

In addition, we must be able to appropriately align our cost structure with prevailing market conditions, effectively manage our supply chain and motivate and retain employees, particularly during periods of decreasing demand for our products.

We may be forced to reduce our prices during periods of decreasing demand.

During the fourth quarter of 2022, we initiated labor cost reduction initiatives to better align our resources with the decreased demand environment, which continued through the second quarter of 2024.

While we operate under a low fixed cost model, we may not be able to proportionally reduce all of our costs if we are required to reduce our prices.

The cyclical and volatile nature of the semiconductor device industry and the absence of long-term fixed or minimum volume contracts make any effort to project a material reduction in future sales volume difficult.

If we are not able to timely and appropriately adapt to the changes in our business environment, our business, financial condition and results of operations will be materially adversely affected as a result of, for example, underutilization of capacity, charges related to obsolete inventory, asset impairment or inventory write-downs, increased operating expenses or reduced margins.

Further, any capacity expansion by us or our competitors could also lead to overcapacity in our target markets, which could lead to price erosion that could adversely impact our operating results.

If we overbuild inventory in a period of decreased demand, or we expand our operations and workforce too rapidly, or procure excessive resources in anticipation of increased demand for our products, and that demand does not materialize at the pace at which we expect, or declines, our operating results may be adversely affected as a result of underutilization of capacity, charges related to excess or obsolete inventory, asset impairment or inventory write-downs, increased operating expenses or reduced margins.

For example, in the fourth quarter of 2024, gross margin was impacted by costs related to our efforts to ramp headcount and other resources to address expected incremental demand in early 2025, which were unable to be fully absorbed during the quarter.

Further, any future capacity expansion by us or our competitors could also lead to overcapacity and oversaturation in our target markets, which could lead to price erosion that could adversely impact our operating results.

We rely on a very small number of OEM customers for a significant portion of our sales.

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As a result, a relatively small number of OEM customers have historically accounted for a significant portion of our sales, and we expect this trend to continue for the foreseeable future.

For 2023, our top three customers accounted for a combined 82% of sales, and we expect that our sales will continue to be concentrated among a very small number of customers.

For 2024, two customers with individual sales over 10%, Lam Research and Applied Materials, accounted for a combined 73% of total sales, and we expect that our sales will continue to be concentrated among a very small number of customers.

We do not have any long-term contracts that require customers to place orders with us in fixed or minimum volumes.

Accordingly, the success of our business depends on the success of our customers and those customers and other OEMs continuing to outsource the manufacturing of critical subsystems and process solutions to us.

Because of the small number of OEMs in the markets we serve, a number of which are already our customers, it would be difficult to replace lost sales resulting from the loss of, or the reduction, cancellation or delay in purchase orders by, any one of these customers, whether due to a reduction in the amount of outsourcing they do, their giving orders to our competitors, an adverse change to their business or financial condition, their acquisition by an OEM who is not a customer or with whom we do less business, or otherwise.

Because of the small number of OEMs in the markets we serve, a number of which are already our customers, it is difficult to replace lost sales resulting from the loss of, or the reduction, cancellation or delay in purchase orders by, any one of these customers, whether due to a reduction in the amount of outsourcing they do, their giving orders to our competitors, an adverse change to their business or financial condition, their acquisition by an OEM who is not a customer or with whom we do less business, or otherwise.

We have in the past lost business from customers for a number of these reasons.

If we are unable to replace sales from customers who reduce the volume of products and services they purchase from us or terminate their relationship with us entirely, such events could have a material adverse impact on our business, financial condition and results of operations.

Because our customers generally require that they qualify our engineering, documentation, manufacturing and quality control procedures, our ability to add new customers quickly is limited.

Qualification is a time-consuming process that involves the inspection and approval by a customer of our engineering, documentation, manufacturing and quality control procedures before that customer will place orders with us.

Our ability to lessen the adverse effect of any loss of, or reduction in sales to, an existing customer through the rapid addition of one or more new customers is limited in part because of these qualification requirements.

Our ability to lessen the adverse effect of any loss of, or reduction in sales to, an existing customer through the rapid addition of one or more new customers is limited because onboarding a new customer is a time-consuming process as our customers generally require that they qualify our engineering, documentation, manufacturing and quality control procedures.

Consequently, the risk that our business, financial condition and results of operations would be materially adversely affected by the loss of, or any reduction in orders by, any of our significant customers is increased.

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Additionally, if one or more of the largest OEMs were to decide to single- or sole-source all or a significant portion of manufacturing and assembly work to a single equipment manufacturer, such a development would heighten the risks discussed above.

Our customers exert a significant amount of negotiating leverage over us, which may require us to accept lower prices and gross margins or take on increased liability risk in order to retain or expand our market share with them.

By virtue of our largest customers’ size and the significant portion of our sales that is derived from them, as well as the competitive landscape, our customers are able to exert significant influence and pricing pressure in the negotiation of our commercial arrangements and the conduct of our business with them.

Our customers often require reduced prices or other pricing, quality or delivery commitments as a condition to their purchasing from us in any given period or increasing their purchase volume, which can, among other things, result in reduced gross margins in order to maintain or expand our market share.

Our customers’ negotiating leverage also can result in customer arrangements that may contain significant liability risk to us.

Our customers exert a significant amount of negotiating leverage over us, which requires us to accept lower prices and gross margins or take on increased liability risk in order to retain or expand our market share with them.

By virtue of our largest customers’ size and the significant portion of our sales that is derived from them, as well as the competitive landscape, our customers exert significant influence and pricing pressure in the negotiation of our commercial arrangements and the conduct of our business with them.

Our customers often require price reductions and quality or delivery commitments as conditions to their purchasing from us, which have, among other things, resulted in reduced gross margins in order for us to maintain or expand our market share.

Our customers’ negotiating leverage also can result in customer arrangements that contain significant liability risk to us.

For example, some of our customers require that we provide them indemnification against certain liabilities in our arrangements with them, including claims of losses by their customers caused by our products.

Pursuant to certain of these arrangements, we indemnify, hold harmless, and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party for third party claims in connection with our breach of the agreement, our negligence or willful misconduct in connection with the agreement, or any trade secret, copyright, patent or other intellectual property infringement claim with respect to our products.

Any increase in our customers’ negotiating leverage may expose us to increased liability risk in our arrangements with them, which, if realized, may have a material adverse effect on our business, financial condition and results of operations.

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semiconductor industry.

Government incentives, including any that may be offered in connection with the CHIPS Act, may not be available to us on acceptable terms or at all.

Government incentives, including any that may be offered in connection with the CHIPS Act, may not be available to us on acceptable terms or at all and to the extent that the current administration modifies or repeals the CHIPS Act the availability of any such incentives may be even less certain.

If our competitors can benefit from such government incentives and we cannot, it could strengthen our competitors’ relative position and have a material adverse effect on our business.

We are exposed to risks associated with weakness in the global economy and geopolitical instability.

Our business is dependent upon manufacturers of semiconductor capital equipment, whose businesses in turn ultimately depend largely on consumer spending on semiconductor devices.

Continuing uncertainty regarding the global economy continues to pose challenges to our business.

The COVID-19 pandemic, geopolitical instability, including the conflict between Russia and Ukraine, the conflict in the Middle East, actual and potential shifts in U.S.

and foreign trade, economic and other policies, and rising trade tensions between the United States and China, as well as other global events, have significantly increased macroeconomic uncertainty at a global level.

The current macroeconomic environment is characterized by high inflation, supply chain challenges, shortages of skilled labor and higher labor costs, high interest rates, foreign currency exchange volatility, volatility in the global capital markets, uncertainty in debt markets, and the slow rate of recovery of many countries from recent recessions, which may exacerbate negative trends in business and consumer spending and may cause certain of our customers to push out, cancel or refrain from placing orders for products or services, which may reduce sales, reduce our backlog, increase our inventory and materially adversely affect our business, financial condition and results of operations.

Difficulties in obtaining capital, uncertain market conditions or reduced profitability may also cause some customers to scale back operations, exit businesses, merge with other manufacturers, or file for bankruptcy protection and potentially cease operations, leading to customers’ reduced research and development funding or capital expenditures and, in turn, lower orders from our customers or additional slow moving or obsolete inventory or bad debt expense for us.

Continuing uncertainty regarding the global economy and geopolitical instability continues to pose challenges to our business.

Geopolitical instability, including the conflict between Russia and Ukraine, the conflict in the Middle East, actual and potential shifts in U.S.

(including as a result of the 2024 U.S.

presidential and congressional elections) and foreign trade, economic and other policies, and rising trade tensions between the U.S.

and China, as well as other global events, have significantly increased macroeconomic uncertainty at a global level.

The current macroeconomic environment is characterized by high inflation, supply chain challenges, shortages of skilled labor and higher labor costs, high interest rates, foreign currency exchange volatility, volatility in the global capital markets, and uncertainty in debt markets, which exacerbates negative trends in business and consumer spending and causes certain of our customers to push out, cancel or refrain from placing orders for products or services, which may reduce sales, reduce our backlog, increase our inventory and materially adversely affect our business, financial condition and results of operations.

While inflation has slowed from its peak in 2022 and the U.S.

Federal Reserve decreased the federal funds rate in 2024, the rate continues to be elevated and there can be no assurances that the rate will continue to decrease or that it will not be increased in 2025 or beyond.

Further, difficulties in obtaining capital, uncertain market conditions or reduced profitability may also cause some customers to scale back operations, exit businesses, merge with other manufacturers, or file for bankruptcy protection and potentially cease operations, leading to customers’ reduced research and development funding or capital expenditures and, in turn, lower orders from our customers or additional slow moving or obsolete inventory or bad debt expense for us.

These conditions may also similarly affect our key suppliers, which could impair their ability to deliver parts and result in delays for our products or require us to procure products from higher-cost suppliers, or if no additional suppliers exist, to reconfigure the design and manufacture of our products, and we may be unable to fulfill some customer orders.

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Capital equipment manufacturers need to keep pace with these changes by refining their existing products and developing new products.

We believe that our future success will depend upon our ability to design, engineer and manufacture products that meet the changing needs of our current and potential customers, including potentially through the incorporation or use of software or artificial intelligence technology.

This requires that we successfully anticipate and respond to technological changes in design, engineering and manufacturing processes in a cost-effective and timely manner.

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We must design, develop, and introduce new products that are accepted by OEMs in order to retain our existing customers and obtain new customers.

The introduction of new products is inherently risky because it is difficult to foresee the adoption of new standards, coordinate our technical personnel and strategic relationships and win acceptance of new products by OEMs.

We attempt to mitigate this risk by collaborating with our customers during their design and development processes.

We cannot, however, ensure that we will be able to successfully introduce, market and cost-effectively manufacture new products, or that we will be able to develop new or enhanced products and processes that satisfy customer needs.

While we continue to invest in research and development initiatives for new products, the introduction of new products is inherently risky because it is difficult to foresee the adoption of new standards, coordinate our technical personnel and strategic relationships and win acceptance of new products by OEMs.

Further, we cannot ensure that we will be able to successfully introduce, market and cost-effectively manufacture new products, or that we will be able to develop new or enhanced products and processes that satisfy customer needs.

In addition, new capital equipment typically has a lifespan of five to ten years, and OEMs frequently specify which systems, subsystems, components and instruments are to be used in their equipment.

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The vast majority of our sales are denominated in U.S.

Many of the costs and expenses associated with our Singapore, Malaysian, Korean, U.K., and European Union operations are paid in Singapore dollars, Malaysian ringgit, Korean won, British pounds, or euros, respectively, and we expect our exposure to these currencies to increase as we increase our operations in those jurisdictions.

Many of the costs and expenses associated with our Singapore, Malaysian, Korean, U.K., Mexico and European Union operations are paid in Singapore dollars, Malaysian ringgit, Korean won, British pounds, Mexican pesos or euros, respectively, and we expect our exposure to these currencies to increase as we increase our operations in those jurisdictions.

As a result, our risk exposure from transactions denominated in non-U.S.

currencies is primarily related to the Singapore dollar, Malaysian ringgit, Korean won, British pound and euro.

currencies is primarily related to the Singapore dollar, Malaysian ringgit, Korean won, British pound, Mexican peso and euro.

In addition, because the majority of our sales are denominated in the U.S.

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We may also be subject to liability under our agreements with our customers if we or our suppliers fail to re-configure manufacturing processes or components in response to these modifications.

In addition, if we acquire inventory in excess of demand or that does not meet customer specifications, we could incur excess or obsolete inventory charges.

In addition, the acquisition of inventory in excess of demand, or that does not meet customer specifications, causes us to incur excess or obsolete inventory charges.

We have from time to time experienced bottlenecks and production difficulties that have caused delivery delays and quality control problems.

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Warranty or other performance guarantee or indemnification claims against us could cause us to incur significant expense to repair or replace defective products or indemnify the affected customer for losses.

In addition, quality issues can have various other ramifications, including delays in the recognition of sales, loss of sales, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, all of which could materially adversely affect our business, financial condition and results of operations.

In addition, quality issues have various other ramifications, including delays in the recognition of sales, loss of sales, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, all of which could materially adversely affect our business, financial condition and results of operations.

Our dependence on a limited number of suppliers may harm our production output and increase our costs, and may prevent us from delivering acceptable products on a timely basis.

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We may experience supply chain disruptions, significant interruptions of our manufacturing operations, delays in our ability to deliver or install products or services, increased costs, customer order cancellations or reduced demand for our products as a result of:

• global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs, international trade disputes and new and unchanging regulations for exports of certain technologies to China, where a portion of our supply chain is located, and any retaliatory measures, that adversely impact us or our suppliers;

• global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs (including uncertainty around increased, new, or retaliatory tariffs and trade restrictions resulting from the current presidential administration), international trade disputes and new and unchanging regulations for exports of certain technologies to China, where a portion of our supply chain is located, and any retaliatory measures, that adversely impact us or our suppliers;

• the failure or inability to accurately forecast demand and obtain quality parts on a cost-effective basis;

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If we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may strain our manufacturing and supply chain operations and negatively impact our working capital.

If we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for cancelling, postponing or expediting delivery of parts.

If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or such inventory is rendered obsolete by the rapid pace of technological change, or if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.

We are subject to order and shipment uncertainties, and any significant reductions, cancellations or delays in customer orders could have a material adverse effect on our business, financial condition and results of operations.

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In addition, to the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and to implement increasingly sophisticated cyber-attacks.

Further, the use of artificial intelligence by us, our customers, suppliers, and third-party service providers, among others, may also introduce unique vulnerabilities.

To date, cyber-attacks have not had a material impact on our financial condition, results or business;

however, we could suffer material financial or other losses in the future and we are not able to predict the severity of these attacks.

Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the outsourcing of some of our business operations, the ongoing shortage of qualified cyber-security professionals, and the interconnectivity and interdependence of third parties to our systems.

however, our efforts to maintain the security and integrity of our information technology systems may not be effective and security breaches or disruptions could result in material financial or other losses in the future, especially if we are not able to predict the probability and the severity of these attacks.

Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the outsourcing of some of our business operations to foreign jurisdictions, the ongoing shortage of qualified cyber-security professionals, and the interconnectivity and interdependence of third parties to our systems.

The occurrence of a cyber-attack, breach, unauthorized access, misuse, computer virus or other malicious code or other cyber-security event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, loss or destruction of confidential and other information that belongs to us, our customers, our counterparties, third-party service providers or borrowers that is processed and stored in, and transmitted through, our computer systems and networks.

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This could result in significant losses, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention, reimbursement or other compensatory costs, or otherwise materially adversely affect our business, financial condition or results of operations.

While we have purchased cyber-security insurance, there can be no assurance that the coverage will be sufficient to cover all financial losses.

Moreover, as cyber-security events increase in frequency and magnitude, we may be unable to obtain cyber-security insurance in amounts and on terms we view as appropriate for our operations.

The reliability and capacity of our information technology systems is critical to our operations and the implementation of our growth initiatives.

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Our business will suffer if we are unable to attract, hire, integrate and retain key personnel and other necessary employees, particularly in the highly competitive technology labor market, or if we experience labor disruptions at our facilities.

Our future success depends in part on the continued service of our key executive officers, as well as our research, engineering, sales and manufacturing personnel, most of whom are not subject to employment or non-competition agreements.

Our business will suffer if we are unable to attract, employ and retain highly skilled personnel as our future success depends in part on the continued service of our key executive officers, as well as our research, engineering, sales and manufacturing personnel, most of whom are not subject to employment or non-competition agreements.

Competition for qualified personnel in the technology industry is particularly intense, and we operate in geographic locations in which labor markets are competitive.

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The loss of any of our key executive officers or key engineers and other personnel, including our engineers working at our customers’ sites, or the failure to attract additional personnel as needed, could have a material adverse effect on our business, financial condition and results of operations and could lead to higher labor costs, the use of less-qualified personnel and the loss of customers.

We initiated labor cost reduction initiatives in the fourth quarter of 2022, continuing through the second quarter of 2024, which may adversely affect us as a result of decreased employee morale, the loss of institutional knowledge held by departing employees and the allocation of resources to reorganize and reassign job roles and responsibilities.

Furthermore, we do not maintain key person life insurance with respect to any of our employees.

In addition, if any of our key executive officers or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how and key personnel.

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As a result, labor disruptions at any of our facilities could materially adversely affect our business, financial condition and results of operations.

Furthermore, we do not maintain key person life insurance with respect to any of our employees.

Our business will suffer if we are unable to attract, employ and retain highly skilled personnel.

Our business is subject to the risks of severe weather, earthquakes, fire, power outages, floods, and other catastrophic events, including weather events resulting from climate change, and to interruption by man-made disruptions, such as terrorism.

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While we maintain disaster recovery plans, they might not adequately protect us.

Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attacks, pandemics, epidemics or outbreaks of a disease, hurricanes, fires, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities or the infrastructure on which such facilities rely.

These events, including terrorist attacks, pandemics, epidemics or outbreaks of a disease, hurricanes, fires, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities or the infrastructure on which such facilities rely.

Additionally, it could delay production and shipments, reduce sales, result in large expenses to repair or replace the facility, and we may experience extended power outages at our facilities.

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and international laws, rules, policies, and other obligations regarding privacy, data protection, and other matters.

We are subject to federal, state, and international laws relating to the collection, use, retention, security, and transfer of customer, employee, and business partner personally identifiable information, including the European Union’s General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”) and similar effective or proposed state legislation in the United States.

In many cases, these laws apply not only to third-party transactions, but also to transfers of information between one company and its subsidiaries, and among the subsidiaries and other parties with which we have commercial relations.

The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations.

Foreign data protection, privacy, and other laws and regulations, including GDPR, can be more restrictive than those in the United States.

Foreign data protection, privacy, and other laws and regulations, including GDPR, can be more restrictive than those in the U.S.

federal and state and foreign laws and regulations, including GDPR, which can be enforced by private parties or government entities, are constantly evolving and can be subject to significant change.

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Third parties have claimed and may in the future claim we are infringing their intellectual property, which could subject us to litigation or licensing expenses, and we may be prevented from selling our products if any such claims prove successful.

We may in the future receive claims that our products, processes or technologies infringe the patents or other proprietary rights of third parties.

In addition, we may be unaware of intellectual property rights of others that may be applicable to our products.

We have received claims, and may in the future, that our products, processes or technologies infringe the patents or other proprietary rights of third parties.

Any litigation regarding our patents or other intellectual property could be costly and time-consuming and divert our management and key personnel from our business operations, any of which could have a material adverse effect on our business, financial condition and results of operations.

The complexity of the technology involved in our products and the uncertainty of intellectual property litigation increase these risks.

Claims of intellectual property infringement may also require us to enter into costly license agreements.

However, we may not be able to obtain licenses on terms acceptable to us, or at all.

The complexity of the technology involved in our products, the uncertainty of intellectual property litigation, and the uncertainty of the intellectual property rights of others that may be applicable to our products increase these risks.

Claims of intellectual property infringement may also require us to enter into costly license agreements which we may not be able to obtain on terms acceptable to us, or at all.

We also may be subject to significant damages or injunctions against the development, manufacture and sale of certain of our products if any such claims prove successful.

We also rely on design specifications and other intellectual property of our customers in the manufacture of products for such customers.

We rely on design specifications and other intellectual property of our customers in the manufacture of products for such customers.

While our customer agreements generally provide for indemnification of us by a customer if we are subjected to litigation for third-party claims of infringement of such customer’s intellectual property, such indemnification provisions may not be sufficient to fully protect us from such claims, or our customers may breach such indemnification obligations to us, which could result in costly litigation to defend against such claims or enforce our contractual rights to such indemnification.

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Foreign economic downturns have adversely affected our business and results of operations in the past and could adversely affect our business and results of operations in the future.

In addition, other factors relating to the operation of our business outside of the United States may have a material adverse effect on our business, financial condition and results of operations in the future, including:

In addition, other factors relating to the operation of our business outside of the U.S.

may have a material adverse effect on our business, financial condition and results of operations in the future, including:

• the imposition of governmental controls or changes in government regulations, including tax regulations;

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• restrictions on transfers of funds and assets between jurisdictions;

• geo-political instability;

• geopolitical instability;

• change in currency controls;

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In the future, we may seek to expand our presence in certain foreign markets or enter emerging markets.

Evaluating or entering into an emerging market may require considerable management time, as well as start-up expenses for market development before any significant sales and earnings are generated.

Evaluating or entering an emerging market may require considerable management time, as well as start-up expenses for market development before any significant sales and earnings are generated.

Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local political, economic and market conditions.

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or international trade policy, tariffs, and import/export regulations may have a material adverse effect on our business, financial condition and results of operations.

Our international operations and transactions depend upon favorable trade relations between the United States and the foreign countries in which our customers and suppliers have operations.

Our international operations and transactions depend upon favorable trade relations between the U.S.

and the foreign countries in which our customers and suppliers have operations.

Changes in U.S.

or international social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories or countries where we currently sell our products or conduct our business, as well as any negative sentiment toward the United States as a result of such changes, could adversely affect our business.

Legislators in the United States may institute or propose changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the United States and other countries where we conduct our business.

It may be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with any such changes, and we may face competition from companies that exist in a more favorable legal or regulatory environment than we do who are able to sell products for certain applications to certain customers that we are prohibited from selling to under applicable export controls, for example.

As a result of recent trade policy changes in the United States, there may be greater restrictions and economic disincentives on international trade and a resulting impact on our operations, sales and financial condition.

For example, a recent Bureau of Industry and Security (“BIS”) rule (the “BIS Rule”), which restricts the export of products when provided for use in certain semiconductor manufacturing activities in China, has impacted and may continue to impact our sales and operations.

as a result of such changes, could adversely affect our business.

Legislators in the U.S.

may institute or propose changes to trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S.

and other countries where we conduct our business.

As a result of recent trade policy changes in the U.S., there may be greater restrictions and economic disincentives on international trade and a resulting impact on our operations, sales and financial condition.

For example, the Bureau of Industry and Security (“BIS") has issued multiple rules in the last several years (the "BIS Rules"), most recently on December 2, 2024, that restrict the export of advanced computing and semiconductor manufacturing items when provided for use in certain semiconductor manufacturing activities in China, which have impacted and may continue to impact our sales and operations.

We have had some delays in export activity as we analyze available emergency authorizations and assess the new licensing requirements for our business.

We anticipate we will need additional licenses from BIS for some of our exports as a result of the BIS Rule, and we are in the process of applying for those licenses, noting that BIS could revise or expand the BIS rule in response to public comments and BIS may issue guidance clarifying the scope of the rules.

Such revisions, expansions or guidance could change the impact of the rules for our business.

If BIS denies our license applications or there are delays in issuing licenses, we may have to cease or delay exports, which would cause a reduction in revenues.

Furthermore, to the extent any of our customers or counterparties are designated on the Entity List or Unverified List maintained by BIS, to which BIS may continue to add customers, we could suffer additional disruptions to sales and operations.

While we have applied and received licenses from the BIS for our products, we recognize that the BIS could revise or expand the BIS Rules in response to public comments and the BIS may issue guidance clarifying the scope of the BIS Rules.

Such revisions, expansions or guidance could change the impact of the BIS Rules on our business and require us to apply for additional licenses.

If the BIS denies our license applications or there are delays in issuing licenses, we may have to cease or delay exports, which would cause a reduction in revenue.

Furthermore, to the extent any of our customers or counterparties are designated on the Entity List or Unverified List maintained by the BIS, to which BIS may continue to add customers, we could suffer additional disruptions to sales and operations.

More broadly, if customers do not view us as a reliable supplier because we cannot obtain the necessary licenses, we may lose business opportunities to competitors.

In particular, competitors outside the United States whose products are not subject to the BIS Rule may replace us if we cannot obtain licenses in a timely manner.

In the longer term, if our supply is less reliable due to the BIS Rule, Chinese entities that currently purchase our products may begin to develop their own products instead.

In particular, competitors outside the U.S.

whose products are not subject to the BIS Rules may replace us if we cannot obtain licenses in a timely manner.

In the longer term, if our supply is less reliable due to the BIS Rules, Chinese entities that currently purchase our products may begin to develop their own products instead.

China's investments in technology development and manufacturing capability in support of its stated policy of reducing its dependence on foreign semiconductor manufacturers and other technology companies has likely already resulted, and we expect will continue to result, in reduced demand for our products in China and other key markets as well as reduced supply of critical materials for our products.

To the extent that BIS or other relevant regulators impose additional export restrictions that apply to our business, it will have an adverse impact on our revenues and operations as well.

To the extent that the BIS or other relevant regulators impose additional export restrictions that apply to our business, it will have an adverse impact on our revenues and operations as well.

In addition, geopolitical changes in China-Taiwan relations could disrupt the operations of companies in China or Taiwan that are suppliers to, or third-party partners of, the Company, our customers and our customers’ other suppliers.

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trade policy could trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S.

We do a significant amount of business that would be impacted by changes to the trade policies of the U.S.

and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions).

For example, further U.S.

government escalation of restrictions related to China and increased restrictions on Chinese exports, such as those tariffs contemplated by the current U.S.

administration on goods originating from China, may lead to regulatory retaliation by the Chinese government and possibly further escalate geopolitical tensions, and any such scenarios may adversely impact our business.

Such changes have the potential to adversely impact the U.S.

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These materials may have been or could be released into the environment at properties currently or previously owned or operated by us, at other locations during the transport of materials or at properties to which we send substances for treatment or disposal.

In addition, we may not be aware of all environmental laws or regulations that could subject us to liability in the United States or internationally.

In addition, we may not be aware of all environmental laws or regulations that could subject us to liability in the U.S.

or internationally.

If we were to violate or become liable under environmental laws and regulations or become non-compliant with permits required at some of our facilities, we could be held financially responsible and incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, third-party property damage or personal injury claims.

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In addition, our operations may be interrupted or restricted by the phase-out or ban of certain substances, materials or processes, which may impact the sourcing, supply and pricing of materials used in manufacturing our products.

Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change.

Concern over climate change may continue to result in new or increased legal and regulatory requirements to reduce or mitigate the effects of climate change.

Increased costs of energy or compliance with emissions standards due to legal or regulatory requirements related to climate change may cause disruptions in or increased costs associated with manufacturing our products.

Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

As a publicly traded company, we are required to comply with the SEC’s rules implementing Section 302 and 404 of the Sarbanes‑Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and to provide an annual management report on the effectiveness of controls over financial reporting.

Our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes‑Oxley Act.

Accordingly, we may incur additional costs to comply with Section 404(b).

If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by NASDAQ, the SEC or other regulatory authorities, which could require additional financial and management resources.

We previously identified material weaknesses in our internal control over financial reporting, and if we fail to maintain an effective system of internal controls, disclosure controls, and procedures, we may not be able to accurately report our financial results, prevent fraud, or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our share price.

In 2021, we identified material weaknesses related to ineffective information technology general controls (“ITGCs”) in the areas of user access and program change management over certain information technology systems that support our financial reporting processes.

Certain of these material weaknesses continued into 2023 and were remediated as of December 29, 2023.

For a detailed summary of these material weaknesses, including our remediation steps, please refer to Item 9A.

– Controls and Procedures.

In addition, we have identified material weaknesses in our internal controls over financial reporting in prior years.

Our independent registered public accounting firm is required to attest to the effectiveness of

our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act.

In 2021, we identified material weaknesses related to ineffective information technology general controls in the areas of user access and program change management over certain information technology systems that support our financial reporting processes.

Such weaknesses have since been remediated.

However, we cannot assure that the measures we have taken will be sufficient to avoid additional material weaknesses in future periods and that we will not identify other material weaknesses in the future.

If we are unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process, and report financial information accurately and to prepare financial statements within required time periods could be adversely affected, which could subject us to litigation, investigations, or penalties;

negatively affect our liquidity, our access to capital markets, perceptions of our creditworthiness, our ability to complete acquisitions, our ability to maintain compliance with covenants under our debt instruments or derivative arrangements regarding the timely filing of periodic reports, or investor confidence in our financial reporting, any of which may divert management resources or cause our stock price to decline.

Further, remediation of a material weakness does not provide assurance that our remediation or other controls will continue to operate properly or remain adequate.

Changes in tax laws, tax rates or tax assets and liabilities could materially adversely affect our financial condition and results of operations.

As a global company, we are subject to taxation in the United States and various other countries.

As a global company, we are subject to taxation in the U.S.

and various other countries.

Significant judgment is required to determine and estimate worldwide tax liabilities.

Our future annual and quarterly tax rates could be affected by numerous factors, including changes in applicable tax laws, the amount and composition of pre-tax income in countries with differing tax rates or valuation of our deferred tax assets and liabilities.

We have significant operations in the United States and our holding company structure includes entities organized in the Cayman Islands, Netherlands, Singapore and Scotland.

We have significant operations in the U.S.

and our holding company structure includes entities organized in the Cayman Islands, Netherlands, Singapore and Scotland.

As a result, changes in applicable tax laws in these jurisdictions could have a material adverse effect on our financial condition and results of operations.

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We do not expect to meet the CAMT threshold in the near term nor expect the IRA to have a material impact on our financial statements.

However, it is possible that the U.S.

On January 21, 2025, U.S.

President Trump signed an executive order to immediately pause the disbursement of funds appropriated under the IRA.

The pause applies to specific programs or activities related to climate change mitigation.

While this executive order is not expected to materially adversely affect our operations, there can be no assurance that our customers, counterparties and suppliers will not be negatively impacted.

In addition, it is possible that the U.S.

Congress could advance other tax legislation proposals in the future that could have a material impact on our financial statements.

In addition, in October 2021, the Organization for Economic Co-operation and Development (“OECD”) issued model rules for a new global minimum tax framework, commonly referred to as “Pillar Two,” which includes the introduction of a 15% global minimum to become effective beginning after January 1, 2024.

To date, approximately 140 countries have tentatively signed a framework agreeing in principle to this initiative several countries are in various stages of implementing Pillar Two proposals in local tax legislation.

The OECD continues to refine the technical guidance.

Our effective tax rate and cash tax payments could increase in future years as a result of these changes.

In October 2021, the Organization for Economic Co-operation and Development (“OECD”) issued model rules for a new global minimum tax framework, commonly referred to as “Pillar Two,” which includes the introduction of a 15% global minimum tax.

Certain jurisdictions in which we operate have adopted rules locally consistent with the Pillar Two framework, including Singapore, a jurisdiction in which we earn significant profit and were granted a tax holiday expiring in 2026.

Additionally, prior decisions by tax authorities regarding corporate tax treatments and positions could change, resulting in a change in tax policies or prior tax rulings.

While we are still evaluating the impact of Pillar Two, these rules and/or changes to prior tax treatments and positions may materially and adversely impact our provision for income taxes, net income, and cash flows.

Liquidity and Capital Resources Risks

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The agreement that governs our indebtedness contains covenants that could impact our ability to perform certain transactions without obtaining pre-approval from our lenders.

As of December 29, 2023, we had total principal outstanding of $135.0 million under our term loan facility and $115.0 million under our revolving credit facility (collectively “credit facilities”).

As of December 27, 2024, we had total principal outstanding of $129.4 million under our term loan facility and no outstanding balance under our revolving credit facility (collectively “credit facilities”).

We may incur additional indebtedness in the future.

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• write-offs of excess or obsolete inventory;

• increased fixed overhead;

• one-time expenses or charges;

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If any of the foregoing occurs, it could cause our share price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Our articles of association contain anti-takeover provisions that could adversely affect the rights of our shareholders.

Our articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions, including, among other things:

Our amended and restated memorandum and articles of association contains anti-takeover provisions that could adversely affect the rights of our shareholders.

Our amended and restated memorandum and articles of association contains provisions to limit the ability of others to acquire control of the Company or cause us to engage in change-of-control transactions, including, among other things:

• provisions that authorize our Board of Directors, without action by our shareholders, to issue additional ordinary shares and preferred shares with preferential rights determined by our Board of Directors;

• provisions that permit only a majority of our Board of Directors or the chairman of our Board of Directors to call shareholder meetings and therefore do not permit shareholders to call shareholder meetings;

• provisions that impose advance notice requirements, minimum shareholding periods and ownership thresholds, and other requirements and limitations on the ability of shareholders to propose matters for consideration at shareholder meetings.

These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction.

• provisions that impose advance notice requirements, grant the Board of Directors the right to decline to register any transfer of shares, and ownership thresholds, and other requirements and limitations on the ability of shareholders to propose matters for consideration at shareholder meetings.

These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of the Company in a tender offer or similar transaction.

The issuance of preferred shares could adversely affect holders of ordinary shares.

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If we issue preferred shares in the future that have preference over our ordinary shares with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that dilute the voting power of our ordinary shares, the rights of holders of our ordinary shares or the price of our ordinary shares could be adversely affected.

Our shareholders may face difficulties in protecting their interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United States.

Our shareholders may face difficulties in protecting their interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the U.S.

Our corporate affairs are governed by our amended and restated memorandum and articles of association and by the Companies Law (2013 Revision) and common law of the Cayman Islands.

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The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands.

The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States.

In particular, the Cayman Islands have a less exhaustive body of securities laws as compared to the United States.

In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the United States federal courts.

Furthermore, since we are a Cayman Islands company with a portion our assets located outside of the United States, it may be difficult or impossible for shareholders to bring an action against us in the United States in the event that shareholders believe that their rights have been infringed under U.S.

In particular, the Cayman Islands have a less exhaustive body of securities laws as compared to the U.S.

In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the U.S.

federal courts.

Furthermore, since we are a Cayman Islands company with a portion our assets located outside of the U.S., it may be difficult or impossible for shareholders to bring an action against us in the U.S.

in the event that shareholders believe that their rights have been infringed under U.S.

federal securities laws or otherwise.

Even if shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands may render shareholders unable to enforce a judgment against our assets.

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States.

As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

There is no statutory recognition in the Cayman Islands of judgments obtained in the U.S..

person is treated as owning at least 10% of our shares, such person may be subject to adverse U.S.

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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.

What changed 10-K

Item 1A. Risk Factors