What changed in this filing

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Item 1. Business

2024-11-14 compared with 2023-11-16 · 66 added, 92 removed, 215 unchanged (42% of the section changed)

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Our customers primarily consist of integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), foundry service providers, and other electronics manufacturers and automotive electronics suppliers.

Our goal is to be the technology leader and the most competitive supplier in terms of cost and performance in each of our major product lines.

Our goal is to be the technology leader and the most competitive supplier in terms of performance, cost and quality in each of our major product lines.

Accordingly, we invest in research and engineering projects intended to expand our market access and enhance our leadership position in semiconductor, electronics and display assembly.

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Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are also available on the SEC's website at www.sec.gov .

Our year end for each of fiscal 2023, 2022 and 2021 was September 30, 2023, October 1, 2022, and October 2, 2021, respectively.

Current Events

Israel - Hamas War

On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip.

Additionally, since October 8, 2023, the Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa.

Our Company has a manufacturing facility and a business office in Haifa, and our capillaries are manufactured at our facilities in Israel and China.

As of the date of this report, our business and manufacturing operations in Israel have not been impacted and no material damage or utilities interruption have been noted at our Israeli facility.

Trade routes remain open, and our suppliers and business partners in Israel remain operational.

Furthermore, save for a handful of employees who have been mobilized as members of the Israeli military reserves to active duty, disruption to our workforce has been minimal.

We employ around 70 employees in Israel.

The safety and well-being of our employees and their families remain our top priority.

Our Company is actively providing support to employees and their families who have been impacted by these events, and employees in our Israeli facilities have the option of working from home to facilitate care-giving needs.

Given that the intensity, duration and outcome of the ongoing war is uncertain, any further escalation or other hostilities may result in government-mandated lockdowns and disrupt our business operations.

We continue to monitor the situation and remain ready to activate our Business Continuity Plan (“BCP”) if necessary.

Our year end for fiscal 2024, 2023 and 2022 was September 28, 2024, September 30, 2023, and October 1, 2022, respectively.

Key Events in Fiscal 2024

Acquisition of Advanced Jet Automation Co., Ltd.

As part of our corporate strategy, we continually evaluate our portfolio of businesses and may from time to time decide to buy or sell businesses or enter into joint ventures or other strategic alliances.

On February 22, 2023, we completed the acquisition of Advanced Jet Automation Co., Ltd.

(“AJA”), including the material business and assets formerly owned by its affiliate, Samurai Spirit Inc., a leading developer and manufacturer of high-precision micro-dispensing equipment and solutions in Taiwan.

The purchase price consisted of $38.1 million in cash paid at closing, of which $4.0 million from the purchase price is being held by us in escrow for a period of 24 months from the closing date.

This acquisition provides new access to adjacent process steps throughout the existing semiconductor, electronic assembly and advanced display portfolio, increasing market access to several exciting growth areas such as emerging advanced backlighting and direct-emissive display technologies utilizing mini and micro-LEDs, as well as advanced packaging opportunities which are demanding finer-pitch assembly capabilities.

As of February 22, 2023, AJA became our wholly-owned subsidiary and on March 30, 2023, AJA was renamed Kulicke and Soffa Hi-Tech Co., Ltd.

(“K&S Hi-Tech”).

The newly acquired business of K&S Hi-Tech is deemed a separate operating segment (advanced dispensing solutions) under the “All Others” category.

Please refer to Note 3―Business Combination for additional information related to our acquisition of AJA.

Cancellation of Project W

The Company was engaged by one of its customers (the "Customer") to support the Customer with the development and future mass production of certain technologies relating to advanced display (the "Project"), which project was previously referred to as Project W.

In connection with the Customer's strategic review of its business, the Customer informed the Company that it cancelled the Project.

In connection with the foregoing, on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of the Project.

As of September 28, 2024, the wind down activities have been substantially completed.

The cancellation of the Project resulted in the reduction of the Company's fiscal 2024 revenue by approximately $15 million.

The Company also incurred certain charges during the year ended September 28, 2024 and expects to incur an immaterial amount of additional related charges in fiscal year 2025.

For additional information, please see "Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 17:

Restructuring and Cancellation of Project".

Macroeconomic Headwinds

Supply chain disruptions and global shortages in electronic components are generally abating in many jurisdictions.

However, the cost of logistics remains high as a result of macroeconomic conditions, and labor shortages persist across layers of the supply chain.

Additionally, the Company’s management continues to monitor the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, especially in light of the impact it may have on the availability and cost of raw materials that are produced in the Middle East and Europe in general.

Management is also monitoring for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary costs resulting either directly or indirectly from the tensions in the Middle East and between Ukraine and Russia.

The cost of logistics remains high as a result of macroeconomic conditions, inflation and labor shortages across layers of the supply chain.

The Company’s management continues to monitor the economy for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary and logistical costs resulting either directly or indirectly from the tensions in the Middle East and between Ukraine and Russia.

The ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict did not have a material impact on our financial condition and operating results in fiscal 2024.

We believe that our existing cash, cash equivalents, short-term investments, existing facility agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict and other macroeconomic factors, for at least the next twelve months from the date of this Annual Report.

However, this is a highly dynamic situation.

As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand and supply conditions, our near- and long-term liquidity and our financial condition.

Consequentially, our operating results could deteriorate.

During fiscal years 2021 and 2022, semiconductor suppliers rapidly increased production output in response to increases in end-consumer demand.

Concerns surrounding supply availability have spurred defensive inventory purchases, which led to a heightened demand for our products.

The current macroeconomic conditions and declining consumer sentiment have resulted in significant inventory buildup in the semiconductor industry.

Many of our consumers who accumulated our products in the past three years are reducing their order rates as a result of inventory adjustment and shorter lead times.

The general reduction in demand within the semiconductor industry may also result in the instability of our key suppliers, as they struggle with oversupply and the rising cost of business.

Due to general inflationary pressures, declining consumer sentiment, and an economic downturn caused, directly or indirectly, by various macroeconomic factors, including the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict, the sector is seeing short-term volatility and disruption.

However, we believe that the semiconductor industry macroeconomics have not changed and we anticipate that the industry’s long-term growth projections will normalize.

The prolonged Ukraine/Russia conflict did not materially impact our financial condition and operating results in fiscal 2023.

We believe that our existing cash, cash equivalents, short-term investments, existing Facility Agreements, and anticipated cash flows from operations will be sufficient to meet our liquidity and capital requirements, notwithstanding the ongoing Israel-Hamas war and the prolonged Ukraine/Russia conflict and other macroeconomic factors, for at least the next twelve months from the date of filing.

However, this is a highly dynamic situation.

As the macroeconomic situation remains highly volatile and the geopolitical situation remains uncertain, there is uncertainty surrounding the operations of our manufacturing locations, our business, our expectations regarding future demand or supply conditions, our near- and long-term liquidity and our financial condition.

Consequently, our operating results could deteriorate.

The current macroeconomic conditions and declining consumer sentiment during fiscal years 2023 and 2024 have persisted, which continues to exacerbate inventory buildup in the semiconductor industry.

Many of our customers who accumulated our products in the past three years continue to reduce their order rates as a result of inventory adjustment.

Due to general inflationary pressures, declining consumer sentiment, and an economic downturn caused, directly or indirectly, by various macroeconomic factors, including the ongoing tensions in the Middle East and the prolonged Ukraine/Russia conflict, the sector continues to experience volatility and disruption.

However, we believe that the long-term semiconductor industry macroeconomics have not changed and we anticipate that the industry’s growth projections will normalize.

For other information, please see “Part I, Item 1A — Risk Factors”.

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On March 3, 2022, the Board of Directors increased the share repurchase authorization under the Program by an additional $400 million to $800 million, and extended its duration through August 1, 2025.

On May 7, 2022, the Company entered into a written trading plan under Rule 10b5-1 of the Exchange Act to facilitate repurchases under the Program.

This trading plan was most recently modified on May 29, 2023.

On November 17, 2023, the Company modified its written trading plan under Rule 10b5-1 of the Exchange Act, dated as of May 7, 2022, to facilitate repurchases under the Program.

The modification provided for the purchase of up to approximately $169 million of the Company’s common stock from November 20, 2023 through August 1, 2025.

The Program may be suspended or discontinued at any time and is funded using the Company’s available cash, cash equivalents and short-term investments.

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The timing and amount of repurchase transactions under the Program depend on market conditions as well as corporate and regulatory considerations.

During the fiscal year ended September 30, 2023, the Company repurchased a total of approximately 1,515.0 thousand shares of common stock at a cost of approximately $ 68.1 million.

During the fiscal year ended September 28, 2024, the Company repurchased a total of approximately 3,221.0 thousand shares of common stock at an aggregate cost of approximately $151.0 million.

The stock repurchases were recorded in the periods they were delivered and accounted for as treasury stock in the Company’s Consolidated Balance Sheets.

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As of September 28, 2024, our remaining stock repurchase authorization under the Program was approximately $30.3 million.

On August 23, 2023, June 8, 2023, March 2, 2023 and November 16, 2022, the Board of Directors declared a quarterly dividend of $0.19 per share of common stock.

During the fiscal year ended September 30, 2023, the Company declared dividends of $ 0.76 per share of common stock.

On August 26, 2024, May 16, 2024, March 14, 2024 and November 15, 2023, the Board of Directors declared a quarterly dividend of $0.20 per share of common stock, resulting in an aggregate dividend of $0.80 per share of common stock for the fiscal year ended September 28, 2024.

The declaration of any future cash dividend is at the discretion of the Board of Directors, subject to applicable laws, and will depend on the Company’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that such dividends are in the best interests of the Company’s shareholders.

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This growth is driven, in part, by regular advances in device performance and by price declines that result from improvements in manufacturing technology.

In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in latest generation capital equipment.

In order to exploit these trends, semiconductor manufacturers, both IDMs and OSATs, periodically invest aggressively in the latest generation capital equipment.

This buying pattern often leads to periods of excess supply and reduced capital spending — the so-called semiconductor cycle.

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While our customers have generally been impacted by the current global macroeconomic conditions, those with operations in China, an important manufacturing and supply chain hub, have witnessed a faster decline in demand and, accordingly, a faster decline in product shipments, compared to the rest of the world.

The shipments to customers headquartered in China are subject to heightened risks and uncertainties related to the respective policies of the governments of China and the U.S.

Furthermore, there is a potential risk of conflict and instability in the relationship between Taiwan and China that could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in Taiwan and China.

The shipments to customers headquartered in China are subject to heightened risks and uncertainties related to the respective trade and export control policies of the governments of China and the U.S.

Furthermore, there remains a potential risk of conflict and instability in the relationship between Taiwan and China that could disrupt the operations of our customers and/or suppliers in both Taiwan and China and our manufacturing operations in Taiwan and China.

and several other countries have levied tariffs on certain goods and have introduced other trade restrictions resulting in substantial uncertainties in the semiconductor, LED, memory and automotive markets.

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As of September 28, 2024, our total cash, cash equivalents and short-term investments were $577.1 million, a $182.3 million decrease from the prior fiscal year end.

Despite the slight decrease from the prior fiscal year end, we believe our strong cash position will allow us to continue to invest in product development, pursue non-organic growth opportunities and return capital to investors through our share repurchase and dividend programs Please see “Part II, Item 7.

We believe our ability to maintain a strong cash position will allow us to continue to invest in product development, pursue non-organic growth opportunities and return capital to investors through our share repurchase and dividend programs.

Please see “Part II, Item 7.

– Management Discussion and Analysis of Financial Condition - Liquidity and Capital Resources” for more information.

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Furthermore, we continually research adjacent market segments where our technologies could be used.

Many of these initiatives are in the early stages of development and some have yielded results such as the Asterion™ hybrid wedge bonder, which is built on an enhanced architecture that includes an expanded bond area, laser bonding, new robust pattern recognition capabilities and extremely tight process controls.

Our Asterion hybrid wedge bonder has demonstrated the capability to provide and enable an expanded bond area, laser bonding, new robust pattern recognition capabilities and extremely tight process controls.

Another example of our developing equipment for high-growth niche markets is our AT Premier PLUS .

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Typical applications include complementary metal-oxide semiconductor (“CMOS”) image sensors, surface acoustical wave (“SAW”) filters and high brightness LEDs.

These applications are commonly used in most, if not all, of the smartphones available today in the market.

These applications are commonly used in most, if not all,

of the smartphones available today in the market.

We also have expanded the use of AT Premier PLUS for wafer level wire bonding for micro-electro-mechanical systems (“MEMS”) and other sensors.

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This forms the foundation for our advanced packaging equipment development.

We are also developing and manufacturing advanced packaging solutions for the emerging 2.5-dimensional integrated circuit (“2.5D IC”) and 3-dimensional integrated circuit (“3D IC”) markets.

With the launch of our APAMA TM , APAMA Plus TM and APTURA TM , we are also developing and manufacturing advanced packaging solutions for the emerging 2.5-dimensional integrated circuit (“2.5D IC”) and 3-dimensional integrated circuit (“3D IC”) markets.

By reducing the interconnect dimensions, 2.5D ICs and 3D ICs are expected to provide form factor, performance and power efficiency enhancements over traditional flip-chip packages in production today.

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Our leadership in system-in-package (“SiP”), multi-chip module (“MCM”) and heterogeneous integration are well positioned to address the requirements of this emerging and growing trend.

Our latest fluxless capable bonding technology allows ultra-fine-pitch interconnects necessary for next-generation chiplet-based advanced packages.

We have also expanded our long-term advanced packaging partnership with the UCLA Center for Heterogeneous Integration and Performance Scaling (“CHIPS”) and Penn State Center for Heterogeneous Integration of Micro Electronic Systems (“CHIMES”).

The APTURA TM is a highly capable thermo-compression bonding system which supports ultra-fine-pitch fluxless direct-copper thermo-compression as well as the CuFirst TM hybrid bonding process.

Both fluxless thermo-compression ("FTC") as well as CuFirst TM are well positioned to enable growth of chiplet-based advanced packages.

We continue to expand technology partnerships with key customers and through engagements with institutions and consortiums, including the UCLA Center for Heterogeneous Integration and Performance Scaling (“CHIPS”), Penn State Center for Heterogeneous Integration of Micro Electronic Systems (“CHIMES”), and the “US-Joint” semiconductor consortium led by Resonac Holdings Corporation.

In addition to our growing heterogeneous opportunities, we have also broadened our mass reflow advanced packaging solutions to include high-accuracy flip chip and fan-out wafer level packaging (“FOWLP”) with Katalyst TM .

Our electronics assembly solutions are also capable of advanced package-on-package, wafer level packaging (“WLP”), embedded die, and active and passive die placement for SiP, enabling us to diversify our business while further expanding market reach into the automotive, LED lighting, medical and industrial segments.

During fiscal 2019, we entered into the emerging mini-LED market supporting display backlighting and direct emissive displays, with the launch of PIXALUX TM .

The PIXALUX TM is a high-speed die placement equipment, and one of the most mass production ready solutions for mini-LED placement in the market.

Mini-LEDs are used in TV, IT display, large display, signage display, consumer display and automotive markets.

The usage of mini-LEDs is expected to grow significantly over the next few years, followed by micro-LED adoption.

We intend to leverage the momentum we already have with PIXALUX TM to continue to innovate and provide solutions to the industry to meet the challenges of packaging and assembling the next-generation of electronic devices.

In order to help strengthen this position, we have developed LUMINEX TM which is a laser-based mini and micro-LED die transfer system.

It is a highly flexible system capable of a single die transfer, multi-die transfer and mass transfer for the various applications in the advanced display value chain.

LUMINEX TM combines laser technology, state-of-the-art optical systems, material engineering and high precision motion control to deliver industry leading throughput and placement accuracy.

As announced on August 8, 2023, we have commenced a collaboration on LUMINEX TM with Taiwan Surface Mounting Technology Corp, a worldwide leading LCD Surface Mount Technology (“SMT”) solutions provider, to advance mini-LED backlight and direct-emissive displays for high-volume adoption.

With the launch of LUMINEX TM , our high-speed die placement as well as mass die transfer are now available to support various applications in the integrated circuit and advanced display value chain.

In LUMINEX TM , we believe we remain well positioned to provide mini-LED and direct-emissive displays for high volume adoption.

We remain focused on driving innovation and delivering new solutions that directly address the next set of semiconductor assembly challenges assembling the next-generation of electronic devices.

We bring the same technology focus to our tools business, driving tool design and manufacturing technology to optimize the performance and process capability of the equipment in which our tools are used.

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Our major customers include IDMs, OSATs, foundry service providers, and other electronic manufacturers and automotive electronics suppliers.

Revenue from our customers may vary significantly from year-to-year based on their respective capital investments, operating expense budgets, and overall industry trends.

For other information regarding our concentrations and customers, please see “Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 17:

Commitments, Contingencies and Concentrations”.

Revenue from our customers may vary significantly from year-to-year based on their respective capital investments, and operating expense budgets, and overall industry trends.

There was no customer with sales representing more than 10% of our net revenue in fiscal 2024.

For additional information regarding our concentrations and customers, please see “Part II, Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements - Note 16:

Commitments, Contingencies and Concentrations”.

Sales and Customer Support

We believe long-term customer relationships are critical to our success, and comprehensive sales support and customer support are an important means of establishing those relationships.

To maintain these relationships, we primarily utilize our direct sales force, as well as distribution channels such as agents and distributors, depending on the product, region, or end-user application.

In all cases, our goal is to position our sales support and customer support resources near our customers’ facilities so as to provide support for customers in their own language and consistent with local customs.

Our sales support and customer support resources are located primarily in Singapore, Israel, Taiwan, China, Korea, Malaysia, the Philippines, Vietnam, Japan, Thailand, the U.S., Germany, Mexico, Switzerland and the Netherlands.

Our sales support and customer support resources are located primarily in Singapore, Israel, Taiwan, China, Korea, Malaysia, the Philippines, Vietnam, Japan, Thailand, India, the U.S., Germany, Mexico, Switzerland and the Netherlands.

Supporting these local resources, we have technology centers offering additional process expertise in Singapore, China, Switzerland, Israel, the U.S.

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By establishing relationships with semiconductor manufacturers, OSATs, and vertically integrated manufacturers of electronic systems, we gain insight into our customers' future semiconductor packaging strategies.

In addition, we also send our products and equipment to customers or potential customers for trial and evaluation.

In addition, we also send our products and equipment to customers and potential customers for trial and evaluation.

These insights assist us in our efforts to develop products and processes that address our customers' future assembly requirements.

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Because of the volatility of customer demand, possibility of customer changes in delivery schedules or cancellations and potential delays in product shipments, our backlog as of any particular date may not be indicative of net revenue for any succeeding period.

The following table reflects our backlog as of September 30, 2023 and October 1, 2022:

(in thousands) September 30, 2023 October 1, 2022

The following table reflects our backlog as of September 28, 2024 and September 30, 2023:

(in thousands) September 28, 2024 September 30, 2023

Backlog $ 148,585 $ 423,824

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however, many outsourced parts and components are only available from a single or limited number of sources.

Our ball bonder, wedge bonder, AT Premier, APAMA TM and Katalyst TM bonder manufacturing and assembly is done at our facility in Singapore.

Our ball bonder, wedge bonder, AT Premier, APAMA TM , APAMA Plus TM , APTURA TM and Katalyst TM bonder manufacturing and assembly is done at our facility in Singapore.

Our Hybrid and Electronic Assembly solutions manufacturing and assembly is done at our facility in the Netherlands.

We have ISO 9001 and ISO 14001 certifications for our equipment manufacturing facilities in Singapore and in the Netherlands.

Our advanced dispensing manufacturing and assembly is done at our facility in Taiwan.

We have ISO 9001, ISO 14001 and ISO 45001 certifications for our equipment manufacturing facilities in Singapore and in the Netherlands.

We manufacture dicing blades, capillaries and a portion of our bonding wedge inventory at our facility in China.

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We both produce and outsource the production of our bonding wedges.

Our China and Israel facilities are ISO 9001 certified.

Our China facility is also ISO 14001 and ISO 18001 certified.

Our China and Israel facilities are ISO 9001, ISO 14001 and ISO 45001 certified.

Research and Product Development

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Significant competitive factors in the semiconductor equipment market include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support, each of which contribute to lower the overall cost per package being manufactured.

Our major equipment competitors are ASM Pacific Technology, Hesse GmbH, Han's Laser Technology Co., Ltd., BE Semiconductor Industries N.V., Hanwha Precision Machinery Co., Ltd., Panasonic Holdings Corporation, Shinkawa Ltd.

and Nordson Corporation.

Ltd., and Nordson Corporation.

Significant competitive factors in the semiconductor packaging materials industry include performance, price, delivery, product life, and quality.

Our significant consumables competitors are PECO Co., Ltd.

, Disco Corporation, Small Precision Tools Co., Ltd.

Our significant consumables competitors are PECO Co., Ltd., Disco Corporation, Small Precision Tools Co., Ltd.

and Chaozhou Three-Circle (Group) Co., Ltd.

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The ESG council provides quarterly updates to our executive leadership, with the Nominating and Governance Committee (“NGC”) of the Board of Directors receiving summary reports on a semi-annual basis.

The NGC maintains ultimate oversight of all ESG activities and is responsible for reviewing and overseeing our ESG strategy, policies, and performance.

Through this structure, the Board of Directors has oversight of the impacts the organization has on its stakeholders and the environment.

In fiscal 2023, we performed an independent, limited external assurance of our direct (Scope 1) and purchased energy indirect (Scope 2) greenhouse gas emissions data under the operational control boundary of eight of our global operational sites.

For more information on our ESG efforts, please refer to our Sustainability Report 2023, which can be found on our website at https://www.kns.com/ESG.

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Diversity is important to the Company and we believe that the combined knowledge and diverse views that our employees contribute across our global locations strengthens our competitive edge.

We value different backgrounds, celebrate unique perspectives, and believe that diversity and inclusion are essential to creating an environment where we can achieve our best innovation essential to the success of the Company.

In fiscal 2022, the Company incorporated its Diversity & Inclusion (“D&I”) program into its ESG structure.

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It aims to foster an environment that acknowledges and celebrates their contributions and achievements in a unified and supportive setting.

Building upon the effective worldwide implementation of the Company’s equity assessment, extensive training sessions, and diversity events during fiscal year 2023, the next phase of the strategic plan involves a learning and development series titled “Inclusive Leader Mindset Change Training”.

This program is designed to equip all people managers with valuable perspectives and tools to cultivate inclusive leadership.

The Company implemented a learning and development series titled “Inclusive Leader Mindset Change Training”.

This program was designed to equip all people managers with valuable perspectives and tools to cultivate inclusive leadership.

Safe Workplace

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The health and safety of our employees is of paramount importance to the Company, and forms an integral part of our organizational culture.

In fiscal 2022, we established an Executive Safety Committee (the “Safety Committee”) to provide overall leadership and policy in discharging the Company’s safety responsibilities while promoting a culture of safety within the Company.

The Executive Safety Committee (the “Safety Committee”), that was established in fiscal 2022, provides overall leadership and policy in discharging the Company’s safety responsibilities while promoting a culture of safety within the Company.

The Safety Committee, together with key site and operations leadership responsible for the Company’s workplace safety and health, works together to establish and communicate a vision for the Company’s workplace safety.

Each of our key manufacturing and R&D sites have also established its Environment, Health and Safety (“EHS”) practices, objectives and performance targets, which are overseen by an EHS Committee, led by an EHS Manager or a Safety Representative from each key operations function.

To ensure that all employees are familiar with our safety standards and actions, we conduct regular health and safety-related trainings including an online based Corporate Safety Training module, as well as hands-on preparedness training comprising periodic fire drill evacuations, first-aid, fire-fighting and hazardous chemical spillage response drills.

To ensure that all employees are familiar with our safety standards and actions, we conduct regular health and safety-related trainings including an online-based Corporate Safety Training module, as well as hands-on emergency preparedness training comprising periodic fire drill evacuations, first-aid, fire-fighting and hazardous chemical spillage response drills.

This training is included in our new hire on-boarding programs with employee-wide refresher trainings conducted every two years.

As part of our business continuity measures and in response to the COVID-19 pandemic, we assembled a management-led COVID-19 Committee comprising directors and managers of various key departments to provide global oversight and guidance in implementing site-specific business continuity and risk mitigation plans across our key sites.

While we have ceased regular meetings of the COVID-19 Committee in light of the current global COVID-19 situation, we remain vigilant and continue to monitor the latest developments and guidelines provided by global authorities such as the World Health Organization (“WHO”), and remain ready to reactivate our resources, including the COVID-19 Committee or a similar committee, to deal with other global health situations if it becomes necessary to do so in the future.

As and when required, including as a response to a potential global health crisis, our Company will implement site specific business continuity and risk mitigation plans to help maintain the health and safety of our employees.

Human Resource (“HR”) Practices

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We encourage our employees to not only participate actively in technical and soft skill training programs, but also to learn through peer coaching and mentoring, and to develop professionally through various stretch assignments and projects.

In fiscal 2023, we launched a number of global leadership development programs designed to accelerate the development of our key leaders and prepare high potential talents to take on broader leadership roles.

In fiscal 2024, we continued with our global leadership development programs aimed at accelerating the development of our high potential mid-career professionals and managers to prepare them to assume broader leadership roles.

Following employee feedback in the last employee engagement survey, we introduced a formalized career progression framework and associated tools to provide clarity and guidance to both managers and employees.

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Survey results are reviewed by management teams to identify improvement opportunity areas.

In the most recent survey conducted in December 2022, 95% of our employees provided their feedback and we achieved an overall engagement score of 89%, an improvement of 11% from our last survey in 2019.

The engagement score is calculated based on responses to three questions that are designed to gauge an employee’s willingness to help the Company achieve its goals, pride in working at the Company and intentions to continue growing his or her career within the Company.

Work flexibility, which had been critical to our success throughout the COVID-19 pandemic, has now become part of our culture.

Flexible work arrangements, which had been critical to our success throughout the COVID-19 pandemic, has now become part of our culture.

We have provided tools and infrastructure to enable employees the choice and flexibility of a range of flexible work arrangement options that best meet their needs while allowing them to continue to fulfill the Company’s business objectives.

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Employees may report any grievances to their immediate supervisor, local HR representatives or the Global Vice President of HR.

Employees may also confidentially and anonymously raise any concerns of legal violation, violation of the Company ’ s codes and policies, improper or unethical business practices, or concealment of any wrong-doing through the whistleblower hotline or website.

Employees may also confidentially and anonymously raise any concerns of legal violation, violation of the Company’s codes and policies, improper or unethical business practices, or concealment of any wrong-doing through the whistleblower hotline, whistleblower website or the Company's General Counsel.

We take every raised complaint seriously and prohibit any form of retaliation against any employee for lodging a complaint in good faith.

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