What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-04-24 compared with 2023-01-30 · 30 added, 21 removed, 446 unchanged (10% of the section changed)

129 unchanged sentences

sales, as reflected in Part I Item 2.

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.

Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 91%, 92%, and 94% of total revenue in the nine months ended March 26, 2023 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.

110 unchanged sentences

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.

Further, increased restrictions imposed on a class of chemicals known as per- and polyfluoroalkyl substances (“PFAS”), which are widely used in a large number of products, including parts and materials that are incorporated into our products, may negatively impact our supply chain due to the potentially decreased availability, or non-availability, of PFAS-containing products.

Proposed regulations under consideration could require that we transition away from the usage of PFAS-containing products, which could adversely impact our business, operations, revenue, costs, and competitive position.

There is no assurance that suitable replacements for PFAS-containing parts and materials will be available at similar costs, or at all.

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.

1 unchanged sentence

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.

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.

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.

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

Some key parts are subject to long lead-times or available only from a single supplier or limited group of

Lam Research Corporation 2023 Q3 10-Q 36

challenges resulting from quarantines, stay at home orders, facility closures, workforce challenges, and travel and logistics restrictions in connection with the pandemic.

suppliers, and some sourcing or subassembly is provided by suppliers located in countries other than the countries where we conduct our manufacturing.

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.

The COVID-19 Pandemic Has Adversely Impacted, and May in the Future Adversely Impact, Our Business, Operations, and Financial Results

33 unchanged sentences

This may impact our ability to maintain or expand our business with certain customers.

Such product concentration may also subject us to additional risks associated with technology changes.

Such product concentration may also subject us to additional risks

Lam Research Corporation 2023 Q3 10-Q 37

associated with technology changes.

Our business is affected by our customers’ use of our products in certain steps in their wafer fabrication processes.

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.

Lam Research Corporation 2023 Q2 10-Q 35

We May Fail to Protect Our Critical Proprietary Technology Rights, Which Could Affect Our Business

27 unchanged sentences

In addition, any acquisition could result in changes such as potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, the amortization of related intangible assets, and goodwill impairment charges, any of which could materially adversely affect our business, financial condition, results of operations, cash flows, and/or the price of our Common Stock.

Lam Research Corporation 2023 Q3 10-Q 38

LEGAL, REGULATORY AND TAX RISKS

1 unchanged sentence

China represents a large and fast-developing market for the semiconductor equipment industry and therefore is important to our business.

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.

and China have historically had a complex relationship that has included

Lam Research Corporation 2023 Q2 10-Q 36

actions that have impacted trade between the two countries.

Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 26%, 31%, and 35% of our total revenue for the nine months ended March 26, 2023 and fiscal years 2022 and 2021, respectively.

and China have historically had a complex relationship that has included 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.

32 unchanged sentences

We also face risks of claims arising from commercial and other relationships.

In addition, our bylaws and other indemnity obligations provide that we will indemnify officers and members of our Board of Directors against losses that they may incur in legal proceedings resulting from their service to us.

In addition, our bylaws

Lam Research Corporation 2023 Q3 10-Q 39

and other indemnity obligations provide that we will indemnify officers and members of our Board of Directors against losses that they may incur in legal proceedings resulting from their service to us.

From time to time, in the normal course of business, we indemnify third parties with whom we enter into contractual relationships, including customers and suppliers, with respect to certain matters.

1 unchanged sentence

In such cases, it is our policy either to defend the claims or to negotiate licenses or other settlements on commercially reasonable terms.

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

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.

8 unchanged sentences

In general, the provisions of the IRA will be effective beginning with our fiscal year 2024, with certain exceptions.

The IRA includes a new 15% corporate minimum tax as well as a 1% excise tax on corporate stock repurchases applicable to repurchases after December 31, 2022.

The IRA includes a new 15% corporate minimum tax.

We have evaluated the potential impacts of the IRA and do not expect it to have a material impact on our effective tax rate.

However, we expect future guidance from the Treasury Department and will further analyze when the guidance is issued.

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.

Recommendations made by the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting 2.0 (“BEPS 2.0”) project have the potential to lead to changes in the tax laws in numerous countries.

Several countries around the world have enacted or proposed changes to their existing tax laws based on these recommendations.

As each country in which we operate evaluates their alignment with the recommendations, the timing and ultimate impact of any such changes on our effective tax rate remain uncertain.

When fully enacted, such changes could have a material impact on our effective tax rate.

We will continue to monitor the progress of the BEPS 2.0 implementation.

In addition, President Joseph Biden has made several corporate income tax proposals, including changes in the taxation of non-U.S.

1 unchanged sentence

A Failure to Comply with Environmental Regulations May Adversely Affect Our Operating Results

We are subject to a variety of domestic and international governmental regulations related to the handling, discharge, and disposal of toxic, volatile, or otherwise hazardous chemicals.

Failure to comply with present or future environmental regulations could result in fines being imposed on us, require us to undertake remediation activities, suspend production, and/or cease operations, or cause our customers to not accept our products.

We are subject to a variety of domestic and international governmental regulations related to the handling, discharge, sale, and disposal of toxic, volatile, or otherwise hazardous or potentially hazardous substances.

Failure to comply with present or future environmental regulations (such as regulations imposed on the use or sale of PFAS or PFAS-containing products) could result in fines being imposed on us, require us to undertake remediation activities, suspend production, and/or cease operations, or cause our customers to not accept our products.

These regulations could require us to alter our current operations, acquire significant additional equipment, incur substantial other expenses to comply with environmental regulations, or take other actions.

Any failure to comply with regulations governing the use, handling, sale, transport, or disposal of hazardous substances could subject us to future liabilities that may adversely affect our operating results, financial condition, and ability to operate our business.

Any failure to comply with regulations governing the use, handling, sale, transport, or disposal of hazardous or potentially hazardous substances (including PFAS) could subject us to future liabilities that may adversely affect our operating results, financial condition, and ability to operate our business.

Our Bylaws Designate the Court of Chancery of the State of Delaware as the Sole and Exclusive Judicial Forum for Certain Legal Actions Between the Company and its Stockholders, Which May Discourage Lawsuits with Respect to Such Claims

3 unchanged sentences

While the forum provision does not generally apply to direct claims arising under the Securities Exchange Act of 1934 or the Securities Act of 1933, derivative lawsuits that assert legal claims arising under these statutes could fall within the provision, as recent court decisions have held.

Lam Research Corporation 2023 Q3 10-Q 40

As a Delaware corporation, Delaware law controls issues of our internal affairs, including duties that our directors, officers, employees, and others owe to the Company and its stockholders.

1 unchanged sentence

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.

Lam Research Corporation 2023 Q2 10-Q 38

FINANCIAL, ACCOUNTING AND CAPITAL MARKETS RISKS

30 unchanged sentences

Additionally, if our analysis indicates potential impairment, we may be required to record additional charges to earnings in our financial statements, which could negatively affect our results of operations.

Lam Research Corporation 2023 Q3 10-Q 41

Our Leverage and Debt Service Obligations May Adversely Affect Our Financial Condition, Results of Operations, and Earnings per Share

3 unchanged sentences

We may, in the future, decide to enter into additional debt arrangements.

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.

31 unchanged sentences

A reduction or suspension in our dividend payments or share repurchases could have a negative effect on the price of our Common Stock.

Lam Research Corporation 2023 Q3 10-Q 42

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-Q

Item 1A. Risk Factors