13 unchanged sentences
If we do not adequately meet these challenges during periods of increasing or declining demand, our gross margins and earnings may be negatively impacted.
−Removed: For example, the COVID-19 pandemic has impacted and could further impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
+Added: For example, the COVID-19 pandemic has impacted and could in the future impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
We continuously reassess our strategic resource allocation choices in response to the changing business environment.
78 unchanged sentences
Additional outcomes of such consolidation may include our customers re-evaluating their future supplier relationships to consider our competitors’ products and/or gaining additional influence over the pricing of products and the control of intellectual property or data.
−Removed: Lam Research Corporation 2023 Q1 10-Q 28
Similarly, our customers may partner with, or follow the lead of, educational or research institutions that establish processes for accomplishing various tasks or manufacturing steps.
If those institutions utilize a competitor’s equipment when they establish those processes, it is likely that customers will tend to use the same equipment in setting up their own manufacturing lines.
−Removed: Even if they select our equipment, the institutions and the customers that follow their lead could impose conditions on acceptance of that equipment, such as adherence to standards and requirements or limitations on how we license our proprietary rights, that increase our costs or require us to take on greater risk.
+Added: Lam Research Corporation 2023 Q2 10-Q 30
+Added: if they select our equipment, the institutions and the customers that follow their lead could impose conditions on acceptance of that equipment, such as adherence to standards and requirements or limitations on how we license our proprietary rights, that increase our costs or require us to take on greater risk.
These actions could adversely impact our market share and financial results.
BUSINESS AND OPERATIONAL RISKS
−Removed: The COVID-19 Pandemic Has Adversely Impacted, and May Continue to Adversely Impact, Our Business, Operations, and Financial Results
−Removed: The COVID-19 pandemic and efforts by national, state and local governments worldwide to control its spread have resulted in widespread measures aimed at containing the disease such as quarantines, travel bans, shutdowns, and shelter in place or “stay at home” orders, which collectively have significantly restricted the movement of people and goods and the ability of businesses to operate.
−Removed: These restrictions and measures, incidents of confirmed or suspected infections within our workforce or those of our suppliers or other business partners, and our efforts to act in the best interests of our employees, customers, and suppliers, have affected and are affecting our business and operations by, among other things, causing facility closures, production delays and capacity limitations;
−Removed: disrupting production by our supply chain;
−Removed: disrupting the transport of goods from our supply chain to us and from us to our customers;
−Removed: requiring modifications to our business processes;
−Removed: requiring the implementation of business continuity plans;
−Removed: requiring the development and qualification of alternative sources of supply;
−Removed: requiring the implementation of social distancing measures that require changes to existing manufacturing processes;
−Removed: disrupting business travel;
−Removed: disrupting our ability to staff our on-site manufacturing and research and development facilities;
−Removed: delaying capital expansion projects;
−Removed: and necessitating teleworking by a large proportion of our workforce.
−Removed: These impacts have caused and are expected to continue to cause delays in product shipments and product development, increases in costs, and decreases in revenue, profitability and cash from operations, which have caused and are expected to cause an adverse effect on our results of operations that may be material.
−Removed: The potential duration and impact of the pandemic on the global economy and on our business are difficult to predict and cannot be estimated with any degree of certainty, but the pandemic has resulted in significant disruption of global financial markets, increases in levels of unemployment, and economic uncertainty, which has adversely impacted our business and may continue to do so, and may lead to significant negative impacts on customer spending, demand for our products, the ability of our customers to pay, our financial condition and the financial condition of our suppliers, and our access to external sources of financing to fund our operations and capital expenditures.
Our Revenues and Operating Results Are Variable
3 unchanged sentences
Factors that may cause our financial results to fluctuate unpredictably include but are not limited to:
+Added: • legal, tax, accounting, or regulatory changes (including but not limited to changes in import/export regulations and tariffs, such as regulations imposed by the U.S.
+Added: government restricting exports to China) or changes in the interpretation or enforcement of existing requirements;
+Added: • macroeconomic conditions, increased risk of recession, and geopolitical issues;
+Added: • changes in average selling prices, customer mix, and product mix;
+Added: • foreign currency exchange rate fluctuations;
• economic conditions in the electronics and semiconductor industries in general and specifically the semiconductor equipment industry;
• the size and timing of orders from customers;
−Removed: • legal, tax, accounting, or regulatory changes (including but not limited to changes in import/export regulations and tariffs) or changes in the interpretation or enforcement of existing requirements;
• changes in our deferred revenue balance, including as a result of factors such as volume purchase agreements, multi-year service contracts, back orders, and down payments toward purchases;
6 unchanged sentences
• our customers’ reuse of existing and installed products, to the extent that such reuse decreases their need to purchase new products or services;
−Removed: • changes in average selling prices, customer mix, and product mix;
• our ability to develop, introduce, and market new, enhanced, and competitive products in a timely manner;
1 unchanged sentence
• legal or technical challenges to our products and technologies;
−Removed: Lam Research Corporation 2023 Q1 10-Q 29
• transportation, communication, demand, information technology, or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, widespread outbreak of illness, natural or man-made disasters, or climate change;
+Added: • rising inflation or interest rates;
• changes in our estimated effective tax rate.
−Removed: • foreign currency exchange rate fluctuations.
−Removed: For example, the COVID-19 pandemic has impacted and could further impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
−Removed: Disruptions to Our Supply Chain and Outsource Providers Could Impact Our Ability to Meet Demand, Increase Our Costs, and Adversely Impact Our Revenue and Operating Results
−Removed: Our supply chain has played and will continue to play a key role in our product development, manufacturing operations, field installation and support.
−Removed: Our business depends on our timely supply of products and services to meet the demand from our customers, which depends in significant part on the timely delivery of parts, materials and services, including components and subassemblies, from our direct suppliers to us, and to our direct suppliers by other companies.
−Removed: In addition, outsource providers have played and will continue to play a key role both in the manufacturing and customer-focused operations described above, and in many of our transactional and administrative functions, such as information technology, facilities management, and certain elements of our finance organization.
−Removed: These providers and suppliers might suffer financial setbacks, be acquired by third parties, become subject to exclusivity arrangements that preclude further business with us, or be unable to meet our requirements or expectation due to their independent business decisions or force majeure events that could interrupt or impair their continued ability to perform as we expect.
−Removed: We may also experience significant interruptions of our manufacturing operations, delays in our ability to deliver or install products or perform services or to recognize revenue, increased costs or customer order cancellations as a result of:
−Removed: • the failure or inability to accurately forecast demand and obtain sufficient quantities of quality parts on a cost-effective basis;
−Removed: • volatility in the availability and cost of parts, materials or services, including increased costs due to rising inflation or interest rates or other market conditions;
−Removed: • difficulties or delays in obtaining required import or export approvals;
−Removed: • shipment delays and increased costs of shipment due to transportation interruptions, capacity constraints, or fuel shortages;
−Removed: • shortages of semiconductor or other components or materials as a result of increases in demand;
−Removed: • information technology or infrastructure failures, including those of a third-party supplier or service provider;
−Removed: • transportation or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, widespread outbreak of illness, natural or man-made disasters, or climate change.
−Removed: Demand for electronic products and other factors, such as the COVID-19 pandemic and the conflict in Ukraine, have resulted in, and may continue to result in, a shortage of parts, materials and services needed to manufacture, deliver and install our products, as well as delays in and unpredictability of shipments due to transportation interruptions.
−Removed: Such shortages, delays and unpredictability have adversely impacted, and may continue to adversely impact, our suppliers’ ability to meet our demand requirements.
−Removed: Difficulties in obtaining sufficient and timely supply of parts, materials or services, and delays in and unpredictability of shipments due to transportation interruptions, have adversely impacted, and may continue to adversely impact, our manufacturing operations and our ability to meet customer demand.
−Removed: In addition, difficulties in obtaining parts, materials or services necessary to deliver or install products or perform services have adversely impacted, and may continue to adversely impact, our ability to recognize revenue, our gross margins on the revenue we recognize, and our other operating results.
−Removed: Although we are endeavoring to pass along some of the impact of increased costs to our customers to counteract adverse impacts to our gross margins and other operating results, such measures could be unsuccessful, or could have the effect of reducing demand, which would adversely impact our revenue.
−Removed: Although we attempt to select reputable providers and suppliers and we attempt to secure their performance on terms documented in written contracts, it is possible that one or more of these providers or suppliers could fail to perform as we expect, or fail to secure or protect intellectual property rights, and such failure could have an adverse impact on our business.
−Removed: In some cases, the requirements of our business mandate that we obtain certain components and sub-assemblies included in our products from a single supplier or a limited group of suppliers.
−Removed: Where practical, we endeavor to establish alternative sources to mitigate the risk that the failure of any single provider or supplier will adversely affect our business, but this is not feasible in all circumstances.
−Removed: Some key parts are subject to long lead-times or available only from a single supplier or limited group of suppliers, and some sourcing or subassembly is provided by suppliers located in countries other than the countries where we conduct our manufacturing.
−Removed: There is therefore a risk that a prolonged inability to obtain certain components or secure key services could impair our ability to manage operations, ship products, and generate revenues, which could adversely affect our operating results and damage our customer relationships.
−Removed: For example, the COVID–19 pandemic has impacted and could further impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
−Removed: Lam Research Corporation 2023 Q1 10-Q 30
−Removed: Our Business Relies on Technology, Data, Intellectual Property and Other Sensitive Information That is Susceptible to Cybersecurity and Other Threats or Incidents
−Removed: Our business is dependent upon the use and protection of technology, data, intellectual property and other sensitive information, which may be owned by, or licensed to, us or third parties, such as our customers and vendors.
−Removed: We maintain and rely upon certain critical information systems for the creation, transmission, use and storage of much of this information, and for the effective operation of our business.
−Removed: These information systems include but are not limited to, telecommunications, the Internet, our corporate intranet, various computer hardware and software applications, (some of which may be integrated into the products that we sell or be required in order to provide the services that we offer), network communications, and email.
−Removed: These information systems may be owned and maintained by us, our outsourced providers, or third parties such as vendors, contractors, customers and Cloud providers.
−Removed: In addition, we make use of Software-as-a-Service (SaaS) products for certain important business functions that are provided by third parties and hosted on their own networks and servers, or third-party networks and servers, all of which rely on networks, email and/or the Internet for their function.
−Removed: The technology, data, intellectual property and other sensitive information we seek to protect are subject to loss, release, misappropriation or misuse, and the information systems containing or transmitting such technology, data, intellectual property and other sensitive information are subject to disruption, breach or failure, in each case as a result of various possible causes.
−Removed: Such causes may include mistakes or unauthorized actions by our employees or contractors, phishing schemes and other third-party attacks, and degradation or loss of service or access to data due to viruses, malware, denial of service attacks, destructive or inadequate code, power failures, or physical damage to computers, hard drives, communication lines, or networking equipment.
−Removed: Such causes may also include the use of techniques that change frequently or may be disguised or difficult to detect, or designed to remain dormant until a triggering event, or that may continue undetected for an extended period of time.
−Removed: We have experienced cybersecurity and other threats and incidents in the past.
−Removed: Although past threats and incidents have not resulted in a material adverse effect, we may incur material losses related to cybersecurity and other threats or incidents in the future.
−Removed: If we were subject to a cybersecurity or other incident, it could have a material adverse effect on our business.
−Removed: Such adverse effects might include:
−Removed: • loss of (or inability to access, e.g.
−Removed: through ransomware) confidential and/or sensitive information stored on these critical information systems or transmitted to or from those systems;
−Removed: • the disruption of the proper function of our products, services and/or operations;
−Removed: • the failure of our or our customers’ manufacturing processes;
−Removed: • errors in the output of our work or our customers’ work;
−Removed: • the loss or public exposure of the personal or other confidential information of our employees, customers or other parties;
−Removed: • the public release of customer financial and business plans, customer orders and operational results;
−Removed: • exposure to claims from our employees or third parties who are adversely impacted by such incidents;
−Removed: • misappropriation or theft of our or a customer’s, supplier’s or other party’s assets or resources, including technology data, intellectual property or other sensitive information and costs associated therewith;
−Removed: • reputational damage;
−Removed: • diminution in the value of our investment in research, development and engineering;
−Removed: • our failure to meet, or violation of, regulatory or other legal obligations, such as the timely publication or filing of financial statements, tax information and other required communications.
−Removed: While we have implemented ISO 27001 compliant security procedures and virus protection software, intrusion prevention systems, identity and access control, and emergency recovery processes, and we carefully select our third-party providers of information systems, to mitigate risks to the information systems that we rely on and to the technology, data, intellectual property and other sensitive information we seek to protect, those security procedures and mitigation and protection systems cannot be guaranteed to be fail-safe, and we may still suffer cybersecurity and other incidents.
−Removed: It has been difficult and may continue to be difficult to hire and retain employees with substantial cybersecurity acumen.
−Removed: In addition, there have been and may continue to be instances of our policies and procedures not being effective in enabling us to identify risks, threats and incidents in a timely manner, or at all, or to respond expediently, appropriately and effectively when incidents occur and repair any damage caused by such incidents, and such occurrences could have a material adverse effect on our business.
+Added: For example, the COVID-19 pandemic has impacted and could in the future impact our ability to meet the demand for our products due to production, sourcing, logistics and other challenges resulting from quarantines, shelter in place or stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
Our Future Success Depends Heavily on International Sales and the Management of Global Operations
sales, as reflected in Part I Item 2.
−Removed: Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 94%, 92%, and 94% of total revenue in the three months ended September 25, 2022 and fiscal years 2022, and 2021, respectively.
+Added: Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 92%, 92%, and 94% of total revenue in the six months ended December 25, 2022 and fiscal years 2022, and 2021, respectively.
We expect that international sales will continue to account for a substantial majority of our total revenue in future years.
3 unchanged sentences
• developing customers and/or suppliers, who may have limited access to capital resources;
−Removed: Lam Research Corporation 2023 Q1 10-Q 31
• global or national economic and political conditions;
1 unchanged sentence
• differences in the enforcement of intellectual property and contract rights in varying jurisdictions;
+Added: Lam Research Corporation 2023 Q2 10-Q 31
• our ability to respond to customer and foreign government demands for locally sourced systems, spare parts, and services and develop the necessary relationships with local suppliers;
5 unchanged sentences
• our ability to secure and retain qualified people, and effectively manage people, in all necessary locations for the successful operation of our business.
−Removed: For example, the COVID-19 pandemic has impacted and could further impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
+Added: For example, the COVID-19 pandemic has impacted and could in the future impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
There is inherent risk, based on the complex relationships among China, Japan, Korea, Taiwan, and the United States, that political, diplomatic and national security influences can lead to trade disputes, impacts and/or disruptions, in particular those affecting the semiconductor industry.
20 unchanged sentences
However, we are exposed to foreign currency exchange rate fluctuations primarily related to revenues denominated in Japanese yen and expenses denominated in euro, Korean won, Malaysian ringgit, and Indian rupee.
+Added: Further, in periods in which the U.S.
+Added: dollar is strong relative to the local currencies of our international customers can potentially reduce demand for our products, which may compound the adverse effect of foreign exchange translation on our revenue.
Currently, we hedge certain anticipated foreign currency cash flows, primarily anticipated revenues denominated in Japanese yen and expenses dominated in euro, Korean won, Malaysian ringgit, and Indian rupee.
6 unchanged sentences
dollar-denominated monetary assets and liabilities (other than those currency exposures previously discussed), and currently we do not enter into foreign currency hedge contracts against these exposures.
+Added: In addition, our currency hedges do not necessarily mitigate the potential negative impact of a strong U.S.
+Added: dollar on demand for our products.
Therefore, we are subject to potential unfavorable foreign currency exchange rate fluctuations to the extent that we transact business (including intercompany transactions) in these currencies.
3 unchanged sentences
Since the majority of our cash is generated outside of the United States, this may impact certain business decisions and outcomes.
+Added: Our Business Relies on Technology, Data, Intellectual Property and Other Sensitive Information That is Susceptible to Cybersecurity and Other Threats or Incidents
+Added: Our business is dependent upon the use and protection of technology, data, intellectual property and other sensitive information, which may be owned by, or licensed to, us or third parties, such as our customers and vendors.
+Added: We maintain and rely upon certain critical information systems for the creation, transmission, use and storage of much of this information, and for the effective operation of our business.
+Added: These information systems include but are not limited to, telecommunications, the Internet, our corporate intranet, various computer hardware and software applications, (some of which may be integrated into the products that we sell or be required in order to provide the services that we offer), network communications, and email.
+Added: These information systems may be owned and maintained by us, our outsourced providers, or third parties such as vendors, contractors, customers and Cloud providers.
+Added: In addition, we make use of Software-as-a-Service (SaaS) products for certain important business functions that are provided by third parties and hosted on their own networks and servers, or third-party networks and servers, all of which rely on networks, email and/or the Internet for their function.
+Added: The technology, data, intellectual property and other sensitive information we seek to protect are subject to loss, release, misappropriation or misuse, and the information systems containing or transmitting such technology, data, intellectual property and other sensitive information are subject to disruption, breach or failure, in each case as a result of various possible causes.
+Added: Such causes may include mistakes or unauthorized actions by our employees or contractors, phishing schemes and other third-party attacks, and degradation or loss of service or access to data due to viruses, malware, denial of service attacks, destructive or inadequate code, power failures, or physical damage to computers, hard drives, communication lines, or networking equipment.
+Added: Such causes may also include the use of techniques that change frequently or may be disguised or difficult to detect, or designed to remain dormant until a triggering event, or that may continue undetected for an extended period of time.
+Added: We have experienced cybersecurity and other threats and incidents in the past.
+Added: Although past threats and incidents have not resulted in a material adverse effect, we may incur material losses related to cybersecurity and other threats or incidents in the future.
+Added: If we were subject to a cybersecurity or other incident, it could have a material adverse effect on our business.
+Added: Such adverse effects might include:
+Added: • loss of (or inability to access, e.g.
+Added: through ransomware) confidential and/or sensitive information stored on these critical information systems or transmitted to or from those systems;
+Added: • the disruption of the proper function of our products, services and/or operations;
+Added: • the failure of our or our customers’ manufacturing processes;
+Added: • errors in the output of our work or our customers’ work;
+Added: • the loss or public exposure of the personal or other confidential information of our employees, customers or other parties;
+Added: • the public release of customer financial and business plans, customer orders and operational results;
+Added: • exposure to claims from our employees or third parties who are adversely impacted by such incidents;
+Added: • misappropriation or theft of our or a customer’s, supplier’s or other party’s assets or resources, including technology data, intellectual property or other sensitive information and costs associated therewith;
+Added: • reputational damage;
+Added: • diminution in the value of our investment in research, development and engineering;
+Added: • our failure to meet, or violation of, regulatory or other legal obligations, such as the timely publication or filing of financial statements, tax information and other required communications.
+Added: While we have implemented ISO 27001 compliant security procedures and virus protection software, intrusion prevention systems, identity and access control, and emergency recovery processes, and we carefully select our third-party providers of information systems, to mitigate risks to the information systems that we rely on and to the technology, data, intellectual property and other sensitive information we seek to protect, those security procedures and mitigation and protection systems cannot be guaranteed to be fail-safe, and we may still suffer cybersecurity and other incidents.
+Added: It has been difficult and may continue to be difficult to hire and retain employees with substantial cybersecurity acumen.
+Added: In addition, there have been and may continue to be instances of our policies and procedures not being effective in enabling us to identify risks, threats and incidents in a timely manner, or at all, or to respond expediently, appropriately and effectively when incidents occur and repair any damage caused by such incidents, and such occurrences could have a material adverse effect on our business.
+Added: We May Not Achieve the Expected Benefits of Our Restructuring Plans and Business Transformation Initiatives, and These Efforts Could Have a Material Adverse Effect on Our Business, Operations, Financial Condition, Results of Operations and Competitive Position
+Added: In January 2023 we announced that we are implementing a restructuring plan consisting of a workforce reduction, and that we anticipate undertaking, and may in the future undertake, additional business restructuring, realignment and transformation initiatives.
+Added: We expect to incur material costs and charges in connection with these plans and initiatives.
+Added: While the restructuring plan is intended to better align our cost structure with the current economic environment and future business opportunities, and
+Added: Lam Research Corporation 2023 Q2 10-Q 33
+Added: our anticipated transformation initiatives have the goal of strengthening our operations and achieving operational efficiencies, there can be no assurance that we will be successful in these plans and initiatives.
+Added: Implementation of these plans and initiatives may be costly and disruptive to our business, we may not be able to complete them at the cost or within the time frame contemplated, and we may not be able to obtain the anticipated benefits within the projected timing or at all.
+Added: Restructuring and transformation may adversely affect our internal programs and our ability to recruit and retain skilled and motivated personnel, may result in a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods, may require a significant amount of management and other employees' time and focus, and may be distracting to employees and management, which may divert attention from operating and growing our business.
+Added: If we fail to achieve some or all of the expected benefits, it could have a material adverse effect on our business, operations, financial condition, results of operations and competitive position.
+Added: For more information about our restructuring plan, see Note 18 to our Condensed Consolidated Financial Statements in Part I.
+Added: Disruptions to Our Supply Chain and Outsource Providers Could Impact Our Ability to Meet Demand, Increase Our Costs, and Adversely Impact Our Revenue and Operating Results
+Added: Our supply chain has played and will continue to play a key role in our product development, manufacturing operations, field installation and support.
+Added: Our business depends on our timely supply of products and services to meet the demand from our customers, which depends in significant part on the timely delivery of parts, materials and services, including components and subassemblies, from our direct suppliers to us, and to our direct suppliers by other companies.
+Added: In addition, outsource providers have played and will continue to play a key role both in the manufacturing and customer-focused operations described above, and in many of our transactional and administrative functions, such as information technology, facilities management, and certain elements of our finance organization.
+Added: These providers and suppliers might suffer financial setbacks, be acquired by third parties, become subject to exclusivity arrangements that preclude further business with us, or be unable to meet our requirements or expectation due to their independent business decisions or force majeure events that could interrupt or impair their continued ability to perform as we expect.
+Added: We may also experience significant interruptions of our manufacturing operations, delays in our ability to deliver or install products or perform services or to recognize revenue, increased costs or customer order cancellations as a result of:
+Added: • the failure or inability to accurately forecast demand and obtain sufficient quantities of quality parts on a cost-effective basis;
+Added: • volatility in the availability and cost of parts, materials or services, including increased costs due to rising inflation or interest rates or other market conditions;
+Added: • difficulties or delays in obtaining required import or export approvals;
+Added: • shipment delays and increased costs of shipment due to transportation interruptions, capacity constraints, or fuel shortages;
+Added: • shortages of semiconductor or other components or materials as a result of increases in demand;
+Added: • information technology or infrastructure failures, including those of a third-party supplier or service provider;
+Added: • transportation or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, widespread outbreak of illness, natural or man-made disasters, or climate change.
+Added: Demand for electronic products and other factors, such as the COVID-19 pandemic and the conflict in Ukraine, have resulted in, and may continue to result in, a shortage of parts, materials and services needed to manufacture, deliver and install our products, as well as delays in and unpredictability of shipments due to transportation interruptions.
+Added: Such shortages, delays and unpredictability have adversely impacted, and may continue to adversely impact, our suppliers’ ability to meet our demand requirements.
+Added: Difficulties in obtaining sufficient and timely supply of parts, materials or services, and delays in and unpredictability of shipments due to transportation interruptions, have adversely impacted, and may continue to adversely impact, our manufacturing operations and our ability to meet customer demand.
+Added: In addition, difficulties in obtaining parts, materials or services necessary to deliver or install products or perform services have adversely impacted, and may continue to adversely impact, our ability to recognize revenue, our gross margins on the revenue we recognize, and our other operating results.
+Added: Although we are endeavoring to pass along some of the impact of increased costs to our customers to counteract adverse impacts to our gross margins and other operating results, such measures could be unsuccessful, or could have the effect of reducing demand, which would adversely impact our revenue.
+Added: Although we attempt to select reputable providers and suppliers and we attempt to secure their performance on terms documented in written contracts, it is possible that one or more of these providers or suppliers could fail to perform as we expect, or fail to secure or protect intellectual property rights, and such failure could have an adverse impact on our business.
+Added: In some cases, the requirements of our business mandate that we obtain certain components and sub-assemblies included in our products from a single supplier or a limited group of suppliers.
+Added: Where practical, we endeavor to establish alternative sources to mitigate the risk that the failure of any single provider or supplier will adversely affect our business, but this is not feasible in all circumstances.
+Added: Some key parts are subject to long lead-times or available only from a single supplier or limited group of suppliers, and some sourcing or subassembly is provided by suppliers located in countries other than the countries where we conduct our manufacturing.
+Added: There is therefore a risk that a prolonged inability to obtain certain components or secure key services could impair our ability to manage operations, ship products, and generate revenues, which could adversely affect our operating results and damage our customer relationships.
+Added: For example, the COVID–19 pandemic has impacted and could in the future impact our manufacturing operations, supply chain, and customer support due to production, sourcing, logistics and other
+Added: Lam Research Corporation 2023 Q2 10-Q 34
+Added: challenges resulting from quarantines, stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
+Added: The COVID-19 Pandemic Has Adversely Impacted, and May in the Future Adversely Impact, Our Business, Operations, and Financial Results
+Added: The COVID-19 pandemic and efforts by national, state and local governments worldwide to control its spread have resulted in measures aimed at containing the disease such as quarantines, travel bans, shutdowns, and shelter in place or “stay at home” orders, which collectively have significantly restricted the movement of people and goods and the ability of businesses to operate.
+Added: These restrictions and measures, incidents of confirmed or suspected infections within our workforce or those of our suppliers or other business partners, and our efforts to act in the best interests of our employees, customers, and suppliers, have affected and in the future may affect our business and operations by, among other things, causing facility closures, production delays and capacity limitations;
+Added: disrupting production by our supply chain;
+Added: disrupting the transport of goods from our supply chain to us and from us to our customers;
+Added: requiring modifications to our business processes;
+Added: requiring the implementation of business continuity plans;
+Added: requiring the development and qualification of alternative sources of supply;
+Added: requiring the implementation of social distancing measures that impede manufacturing processes;
+Added: disrupting business travel;
+Added: disrupting our ability to staff our on-site manufacturing and research and development facilities;
+Added: delaying capital expansion projects;
+Added: and necessitating teleworking by portions of our workforce.
+Added: These impacts have caused and in the future may cause delays in product shipments and product development, increases in costs, and decreases in revenue, profitability and cash from operations, which have caused and in the future may cause an adverse effect on our results of operations that may be material.
+Added: The potential duration and impact of the pandemic on the global economy and on our business are difficult to predict and cannot be estimated with any degree of certainty, but the pandemic has resulted at various times in significant disruption of global financial markets, increases in levels of unemployment, and economic uncertainty, which has adversely impacted our business and may do so in the future, and may lead to significant negative impacts on customer spending, demand for our products, the ability of our customers to pay, our financial condition and the financial condition of our suppliers, and our access to external sources of financing to fund our operations and capital expenditures.
We Face Risks Related to the Disruption of Our Primary Manufacturing and R&D Facilities
2 unchanged sentences
Such disruptions may cause delays in developing or shipping our products, in engaging with customers on new product applications, or in supporting customers, which could result in the loss of business or customer trust, adversely affecting our business and operating results.
−Removed: For example, the COVID-19 pandemic has impacted and could further impact our manufacturing operations, supply chain, R&D and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
+Added: For example, the COVID-19 pandemic has impacted and could in the future impact our manufacturing operations, supply chain, R&D and customer support due to production, sourcing, logistics and other challenges resulting from quarantines, “stay at home” orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.
We Are Subject to Risks Relating to Product Concentration and Lack of Product Revenue Diversification
16 unchanged sentences
Should technologies change so that the manufacture of semiconductors requires fewer steps using our products, this could have a larger impact on our business than it would on the business of our less concentrated competitors.
+Added: Lam Research Corporation 2023 Q2 10-Q 35
We May Fail to Protect Our Critical Proprietary Technology Rights, Which Could Affect Our Business
15 unchanged sentences
Our ability to compete successfully depends in large part on our ability to attract, retain, and motivate key employees with the appropriate skills, experiences and competencies.
−Removed: This is an ongoing challenge due to intense competition for top talent, fluctuations in industry or business economic conditions, as well as increasing geographic expansion, and these factors in
−Removed: Lam Research Corporation 2023 Q1 10-Q 33
−Removed: combination may result in cycles of hiring activity and workforce reductions.
+Added: This is an ongoing challenge due to intense competition for top talent, fluctuations in industry or business economic conditions, as well as increasing geographic expansion, and these factors in combination may result in cycles of hiring activity and workforce reductions.
Our success in hiring depends on a variety of factors, including the attractiveness of our compensation and benefit programs, global economic or political and industry conditions, our organizational structure, global competition for talent and the availability of qualified employees, the availability of career development opportunities, the ability to obtain necessary authorizations for workers to provide services outside their home countries, and our ability to offer a challenging and rewarding work environment.
12 unchanged sentences
China represents a large and fast-developing market for the semiconductor equipment industry and therefore is important to our business.
−Removed: Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 30%, 31%, and 35% of our total revenue for the three months ended September 25, 2022 and fiscal years 2022 and 2021, respectively.
−Removed: and China have historically had a complex relationship that has included actions that have impacted trade between the two countries.
+Added: Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 27%, 31%, and 35% of our total revenue for the six months ended December 25, 2022 and fiscal years 2022 and 2021, respectively.
+Added: and China have historically had a complex relationship that has included
+Added: Lam Research Corporation 2023 Q2 10-Q 36
+Added: actions that have impacted trade between the two countries.
Recently, these actions have included an expansion of export license requirements imposed by the U.S.
14 unchanged sentences
Department of Commerce could in the future add additional Chinese companies to its restricted entity list or unverified list or take other actions that could expand licensing requirements or otherwise impact the market for our products and our revenue.
−Removed: The implementation,
−Removed: Lam Research Corporation 2023 Q1 10-Q 34
−Removed: interpretation and impact on our business of these rules and other regulatory actions taken by the U.S.
+Added: The implementation, interpretation and impact on our business of these rules and other regulatory actions taken by the U.S.
government is uncertain and evolving, and these rules, other regulatory actions or changes, and other actions taken by the governments of either the U.S.
19 unchanged sentences
In such cases, it is our policy either to defend the claims or to negotiate licenses or other settlements on commercially reasonable terms.
−Removed: However, we may be unable in the future to negotiate necessary licenses or reach agreement on other settlements on commercially reasonable terms, or at all, and any litigation resulting from these claims by other parties may materially and adversely affect our business and financial results, and we may be subject to substantial damage awards and penalties.
+Added: However, we may be unable in the future to negotiate necessary licenses or reach agreement on other settlements on commercially reasonable terms, or at all, and any litigation resulting from these claims by other parties may materially and adversely affect our business and financial results, and we may be subject to substantial damage awards and
+Added: Lam Research Corporation 2023 Q2 10-Q 37
Moreover, although we have insurance to protect us from certain claims and cover certain losses to our property, such insurance may not cover us for the full amount of any losses, or at all, and may be subject to substantial exclusions and deductibles.
11 unchanged sentences
However we expect future guidance from the Treasury Department and will further analyze when the guidance is issued.
−Removed: Lam Research Corporation 2023 Q1 10-Q 35
Recommendations made by the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting project have the potential to lead to changes in the tax laws in numerous countries.
14 unchanged sentences
However, the forum provision limits a stockholder’s ability to bring a claim in a judicial forum that it believes may be more favorable than Delaware, and this could discourage the filing of such lawsuits.
+Added: Lam Research Corporation 2023 Q2 10-Q 38
FINANCIAL, ACCOUNTING AND CAPITAL MARKETS RISKS
5 unchanged sentences
• economic or political events, trends, and unexpected developments occurring nationally, globally, or in any of our key sales regions;
+Added: • changes in macroeconomic conditions, increased risk of recession, and geopolitical issues;
• variations in our quarterly operating results and financial condition, including our liquidity;
11 unchanged sentences
In the past, following volatile periods in the price of their stock, many companies became the object of securities class action litigation.
−Removed: If we are sued in a securities class action, we could incur substantial costs, and it could divert
−Removed: Lam Research Corporation 2023 Q1 10-Q 36
−Removed: management’s attention and resources and have an unfavorable impact on our financial performance and the price for our Common Stock.
+Added: If we are sued in a securities class action, we could incur substantial costs, and it could divert management’s attention and resources and have an unfavorable impact on our financial performance and the price for our Common Stock.
We May Incur Impairments to Goodwill or Long-lived Assets
13 unchanged sentences
We may, in the future, decide to enter into additional debt arrangements.
+Added: Lam Research Corporation 2023 Q2 10-Q 39
In addition, we have entered, and in the future may enter, into derivative instrument arrangements to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt.
18 unchanged sentences
• merge or consolidate with any person.
−Removed: Lam Research Corporation 2023 Q1 10-Q 37
Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions.
12 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.