In addition to the other information in this Annual Report on Form 10-K (“2023 Form 10-K”), the following risk factors should be carefully considered in evaluating us and our business because such factors may significantly impact our business, operating results, and financial condition.
−Removed: Many of the following risk factors have been, and could be further, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result.
−Removed: As a result of these risk factors, as well as other
−Removed: Lam Research Corporation 2022 10-K 12
−Removed: risks discussed in our other SEC filings, our actual results could differ materially from those projected in any forward-looking statements.
+Added: As a result of these risk factors, as well as other risks discussed in our other SEC filings, our actual results could differ materially from those projected in any forward-looking statements.
No priority or significance is intended by, nor should be attached to, the order in which the risk factors appear.
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The semiconductor capital equipment industry has historically been characterized by rapid changes in demand.
−Removed: The industry environment has moved toward being more characterized by variability across segments and customers, accentuated by consolidation within the industry.
Variability in our customers’ business plans may lead to changes in demand for our equipment and services, which could negatively impact our results.
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The changes in demand may require our management to adjust spending and other resources allocated to operating activities.
+Added: Lam Research Corporation 2023 10-K 12
During periods of rapid growth or decline in demand for our products and services, we face significant challenges in maintaining adequate financial and business controls, management processes, information systems, and procedures for training, assimilating, and managing our workforce, and in appropriately sizing our supply chain infrastructure and facilities, work force, and other components of our business on a timely basis.
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.
We continuously reassess our strategic resource allocation choices in response to the changing business environment.
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With the consolidation of customers within the industry, the semiconductor capital equipment market may experience rapid changes in demand driven both by changes in the market generally and the plans and requirements of particular customers.
−Removed: The economic, political, and business conditions occurring nationally, globally, or in any of our key sales regions, which are often unpredictable, have historically impacted customer demand for our products and normal commercial relationships with our customers, suppliers, and creditors.
+Added: The economic, regulatory, political, and business conditions occurring nationally, globally, or in any of our key sales regions, which are often unpredictable, have historically impacted customer demand for our products and normal commercial relationships with our customers, suppliers, and creditors.
Additionally, in times of economic uncertainty, our customers’ budgets for our products, or their ability to access credit to purchase them, could be adversely affected.
This would limit their ability to purchase our products and services.
−Removed: As a result, changing economic, political or business conditions can cause material adverse changes to our results of operations and financial condition, including but not limited to:
+Added: As a result, changing economic, regulatory, political or business conditions can cause material adverse changes to our results of operations and financial condition, including but not limited to:
• a decline in demand for our products or services;
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Where appropriate, we will attempt to respond to these fluctuations with cost management programs aimed at aligning our expenditures with anticipated revenue streams, which sometimes result in restructuring charges.
−Removed: Even during periods of
−Removed: Lam Research Corporation 2022 10-K 13
−Removed: reduced revenues, we must continue to invest in R&D and maintain extensive ongoing worldwide customer service and support capabilities to remain competitive, which may temporarily harm our profitability and other financial results.
+Added: Even during periods of reduced revenues, we must continue to invest in R&D and maintain extensive ongoing worldwide customer service and support capabilities to remain competitive, which may temporarily harm our profitability and other financial results.
We Have a Limited Number of Key Customers
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As a result, the actions of even one customer may subject us to variability in those areas that is difficult to predict.
−Removed: In addition, large customers may be able to negotiate requirements that result in decreased pricing, increased costs, and/or lower margins for us;
−Removed: compliance with specific environmental, social, and corporate governance standards;
−Removed: and limitations on our ability to share technology with others.
+Added: In addition, large customers may be able to negotiate requirements that result in decreased pricing, increased costs, and/or lower margins for us and limitations on our ability to share technology with others.
Similarly, significant portions of our credit risk may, at any given time, be concentrated among a limited number of customers so that the failure of even one of these key customers to pay its obligations to us could significantly impact our financial results.
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We face a greater risk if our competitors enter into strategic relationships with leading semiconductor manufacturers covering products similar to those we sell or may develop, as this could adversely affect our ability to sell products to those manufacturers.
+Added: Lam Research Corporation 2023 10-K 13
We believe that to remain competitive we must devote significant financial resources to offer products that meet our customers’ needs, to maintain customer service and support centers worldwide, and to invest in product and process R&D.
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We also face competition from our own customers, who in some instances have established affiliated entities that manufacture equipment similar to ours.
−Removed: In addition, we face competition from companies that exist in a more favorable legal or regulatory environment than we do, allowing the freedom of action in ways that we may be unable to match.
+Added: In addition, we face competition from companies that exist in a more favorable legal or regulatory environment than we do, who are able to sell products for certain applications at certain customers that we are prohibited from selling to under applicable export controls, allowing the freedom of action in ways that we may be unable to match.
In many cases speed to solution is necessary for customer satisfaction and our competitors may be better positioned to achieve these objectives.
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That driver could be approaching its technological limit, leading semiconductor manufacturers to investigate more complex changes in multiple technologies in an effort to continue technology development.
−Removed: In addition, the emergence of “big data” and new tools such as machine learning and artificial intelligence that capitalize on the availability of large data sets is leading semiconductor manufacturers and equipment manufacturers to pursue new products and approaches that exploit
−Removed: Lam Research Corporation 2022 10-K 14
−Removed: those tools to advance technology development.
−Removed: In the face of uncertainty on which technology solutions will become successful, we will need to focus our efforts on developing the technology changes that are ultimately successful in supporting our customer requirements.
+Added: In addition, the emergence of “big data” and new tools such as machine learning and artificial intelligence that capitalize on the availability of large data sets is leading semiconductor manufacturers and equipment manufacturers to pursue new products and approaches that exploit those tools to advance technology development.
+Added: In the face of uncertainty on which technology solutions will become successful, we will need to focus our efforts on developing the technology changes that are ultimately successful in supporting our customers’ requirements.
Our failure to develop and offer the correct technology solutions in a timely manner with productive and cost-effective products could adversely affect our business in a material way.
Our failure to commercialize new products in a timely manner could result in loss of market share, unanticipated costs, and inventory obsolescence, which would adversely affect our financial results.
−Removed: In order to develop new products and processes and enhance existing products and processes, we expect to continue to make significant investments in R&D, to investigate the acquisition of new products and technologies, to invest in or acquire such business or technologies, and to pursue joint development relationships with customers, suppliers, or other members of the industry.
+Added: In order to develop new products and processes and enhance existing products and processes, we expect to continue to make significant investments in R&D, to investigate the acquisition of new products and technologies, to invest in or acquire such businesses or technologies, and to pursue joint development relationships with customers, suppliers, or other members of the industry.
Our investments and acquisitions may not be as successful as we may expect, particularly in the event that we invest in or acquire product lines and technologies that are new to us.
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We must manage product transitions and joint development relationships successfully, as the introduction of new products could adversely affect our sales of existing products and certain jointly developed technologies may be subject to restrictions on our ability to share that technology with other customers, which could limit our market for products incorporating those technologies.
−Removed: Future technologies, processes, or product developments may render our current product offerings obsolete, leaving us with non-competitive products, obsolete inventory, or both.
+Added: Future technologies, processes, or product developments
+Added: Lam Research Corporation 2023 10-K 14
+Added: may render our current product offerings obsolete, leaving us with non-competitive products, obsolete inventory, or both.
Moreover, customers may adopt new technologies or processes to address the complex challenges associated with next-generation devices.
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Strategic Alliances and Customer Consolidation May Have Negative Effects on Our Business
−Removed: Increasingly, semiconductor manufacturing companies are entering into strategic alliances or consolidating with one another to expedite the development of processes and other manufacturing technologies and/or achieve economies of scale.
+Added: Semiconductor manufacturing companies from time to time enter into strategic alliances or consolidate with one another to expedite the development of processes and other manufacturing technologies and/or achieve economies of scale.
The outcomes of such an alliance can be the definition of a particular tool set for a certain function and/or the standardization of a series of process steps that use a specific set of manufacturing equipment, while the outcomes of consolidation can lead to an overall reduction in the market for semiconductor manufacturing equipment as customers’ operations achieve economies of scale and/or increased purchasing power based on their higher volumes.
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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
−Removed: Lam Research Corporation 2022 10-K 15
−Removed: 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
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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, industry, and market conditions, including those caused by the Russian invasion of Ukraine or bank failures, 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;
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• 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;
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• 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;
−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;
+Added: • management of supply chain risks;
+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;
Lam Research Corporation 2023 10-K 15
−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: 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: Lam Research Corporation 2022 10-K 17
−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.
Our Future Success Depends Heavily on International Sales and the Management of Global Operations
sales, as reflected in Part II Item 7.
−Removed: Results of Operation of this 2022 Form 10-K, accounted for approximately 92%, 94%, and 92% of total revenue in fiscal years 2022, 2021, and 2020, respectively.
+Added: Results of Operations of this 2023 Form 10-K, accounted for approximately 91%, 92%, and 94% of total revenue in fiscal years 2023, 2022, and 2021, respectively.
We expect that international sales will continue to account for a substantial majority of our total revenue in future years.
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• 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.
−Removed: 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 might lead to trade disputes, impacts and/or disruptions, in particular those affecting the semiconductor industry.
−Removed: This would adversely affect our business with China, Japan, Korea, and/or Taiwan and perhaps the entire Asia Pacific region or global economy.
+Added: 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.
+Added: This can adversely affect our business with China, Japan, Korea, and/or Taiwan and perhaps the entire Asia Pacific region or global economy.
A significant trade dispute, impact and/or disruption in any area where we do business could have a materially adverse impact on our future revenue and profits.
−Removed: Tariffs, export controls, additional taxes, trade barriers, sanctions, or the termination or modification of trade agreements, trade zones, and other duty mitigation initiatives, may increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial conditions.
+Added: Tariffs, export controls, additional taxes, trade barriers, sanctions, the termination or modification of trade agreements, trade zones, and other duty mitigation initiatives, and any reciprocal retaliatory actions, can increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, disrupt our supply chain operations, or inhibit our ability to sell products or provide services, which has had and in the future could have a material adverse effect on our business, results of operations, or financial conditions.
Certain of our international sales depend on our ability to obtain export licenses from the U.S.
−Removed: or foreign governments, and our inability to obtain such licenses, or an expansion of the number or kinds of sales for which export licenses are required, could potentially limit the market for our products and adversely impact our revenues.
−Removed: As is discussed below under the heading “Our Sales to Customers in China, a Region of Growing Significance to Us, Could be Materially and Adversely Affected by Export License Requirements and Other Regulatory Changes, or Other Governmental Actions in the Course of the Trade Relationship Between the U.S.
+Added: or foreign governments, and our inability to obtain such licenses, or an expansion of the number or kinds of sales for which export licenses are required, has limited and could in the future further limit the market for our products and has had and could in the future have an adverse impact on our revenues.
+Added: As is discussed below under the heading “Our Sales to Customers in China, a Significant Region for Us, Have Been Impacted, and are Likely to Be Materially and Adversely Affected by Export License Requirements and Other Regulatory Changes, or Other Governmental Actions in the Course of the Trade Relationship Between the U.S.
and China,” the U.S.
−Removed: government has recently expanded export license requirements that impact trade with China.
+Added: government has recently imposed new controls, including expanded export license requirements, that significantly impact trade with China.
In addition, the U.S.
−Removed: government is in the process of assessing technologies that may be subject to new or additional export controls, and it is possible that such controls, if and when imposed, could adversely impact our ability to sell our products outside the U.S.
−Removed: Furthermore, there are risks that foreign governments may, among other things, insist on the use of local suppliers;
+Added: government has an ongoing process of assessing technologies that may be subject to new or additional export controls, and it is possible that such additional controls, if and when imposed, could further adversely impact our ability to sell our products outside the U.S.
+Added: The implementation by the U.S.
+Added: government of broad export controls restricting access to our technology (such as recent controls limiting exports to China) may cause customers with international operations to reconsider their use of and reliance on our products, which could adversely impact our future revenue and profits.
+Added: Furthermore, there are risks that foreign governments may, among other things, take retaliatory actions;
+Added: insist on the use of local suppliers;
compel companies to partner with local companies to design and supply equipment on a local basis, requiring the transfer of intellectual property rights and/or local manufacturing;
−Removed: utilize their influence over their judicial systems to
−Removed: Lam Research Corporation 2022 10-K 18
−Removed: respond to intellectual property disputes or issues;
+Added: utilize their influence over their judicial systems to respond to intellectual property disputes or issues;
and provide special incentives to government-backed local customers to buy from local competitors, even if their products are inferior to ours;
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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, this 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.
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However, these hedging transactions may not achieve their desired effect because differences between the actual timing of the underlying exposures and our forecasts of those exposures may leave us either over or under hedged on any given transaction.
−Removed: Moreover, by hedging these foreign currency denominated revenues, expenses, monetary assets, and liabilities, we may miss favorable currency trends that would have been advantageous to us but for the hedges.
+Added: Moreover, by hedging these foreign currency denominated revenues, expenses, monetary
+Added: Lam Research Corporation 2023 10-K 16
+Added: assets, and liabilities, we may miss favorable currency trends that would have been advantageous to us but for the hedges.
Additionally, we are exposed to short-term foreign currency exchange rate fluctuations on non-U.S.
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.
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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: Lam Research Corporation 2023 10-K 17
+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 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: Additionally, reductions in our workforce may cause a reduction in our production output capabilities which could impact our ability to manufacture or ship products to customers within a mutually beneficial timeline.
+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 22 of our Consolidated Financial Statements in Part II, Item 8 of this 2023 Form 10-K.
+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, have resulted in, and may in the future 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 in the future 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 in the future 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 in the future 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: 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.
+Added: 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.
+Added: There is no assurance that suitable replacements for PFAS-containing parts and materials will be available at similar costs, or at all.
+Added: Lam Research Corporation 2023 10-K 18
+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: The COVID-19 Pandemic 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 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 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, 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 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 caused and in the future may cause an adverse effect on our results of operations that may be material.
+Added: The pandemic resulted at various times in significant disruption of global financial markets, increases in levels of unemployment, and economic uncertainty, which 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
While we maintain business continuity plans, our manufacturing and R&D facilities are concentrated in a limited number of locations.
−Removed: These locations are subject to disruption for a variety of reasons, such as natural or man-made disasters, widespread outbreaks of illness, terrorist activities, political or governmental unrest or instability, disruptions of our information technology resources, utility interruptions, the effects of climate change, or other events beyond our control.
+Added: These locations are subject to disruption for a variety of reasons, such as natural or man-made disasters, widespread outbreaks of illness, war, terrorist activities, political or governmental unrest or instability, disruptions of our information technology resources, utility interruptions, the effects of climate change, or other events beyond our control.
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.
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 10-K 19
We May Fail to Protect Our Critical Proprietary Technology Rights, Which Could Affect Our Business
3 unchanged sentences
and providing comprehensive support and service to our customers.
−Removed: As part of our
−Removed: Lam Research Corporation 2022 10-K 19
−Removed: strategy to protect our technology, we currently hold a number of U.S.
+Added: As part of our strategy to protect our technology, we currently hold a number of U.S.
and foreign patents and pending patent applications, and we keep certain information, processes, and techniques confidential and/or as trade secrets.
22 unchanged sentences
LEGAL, REGULATORY AND TAX RISKS
−Removed: Our Sales to Customers in China, a Region of Growing Significance to Us, Could be Materially and Adversely Affected by Export License Requirements and Other Regulatory Changes, or Other Governmental Actions in the Course of the Trade Relationship Between the U.S.
+Added: Our Sales to Customers in China, a Significant Region for Us, Have Been Impacted, and are Likely to Be Materially and Adversely Affected by Export License Requirements and Other Regulatory Changes, or Other Governmental Actions in the Course of the Trade Relationship Between the U.S.
China represents a large and fast-developing market for the semiconductor equipment industry and therefore is important to our business.
2 unchanged sentences
Recently, these actions have included an expansion of export license requirements imposed by the U.S.
−Removed: government, which have limited the market for our products, adversely impacted our revenues, and increased our exposure to foreign competition, and could potentially do so to an even greater extent in the future.
−Removed: For example, since the start of calendar year 2020, the U.S.
−Removed: Department of Commerce enacted a new rule that expanded export license requirements for U.S.
−Removed: companies to sell certain items to companies and other end-users in China that are designated as military end-users or have operations that could support military end-uses, added additional Chinese companies to its restricted entity list under suspicions of military-civil fusion, support of Russia, or other factors associated with a broadening scope of national security concerns (including Semiconductor Manufacturing International
+Added: government, which have limited the market for our products, adversely impacted our revenues, and increased our exposure to foreign competition,
Lam Research Corporation 2023 10-K 20
−Removed: Corporation, or SMIC, and related entities), and expanded an existing rule (referred to as the foreign direct product rule) in a manner that could cause foreign-made wafers, chipsets, and certain related items produced with many of our products to be subject to U.S.
+Added: and could potentially do so to an even greater extent in the future.
+Added: Most recently, the U.S.
+Added: government has enacted new rules aimed at restricting China’s ability to manufacture advanced semiconductors, which include restrictions on exports, reexports or transfers to, or shipping, transmitting, transferring, or facilitating such movement to, or performing services at, customer facilities in China engaged in certain technology end-uses, without appropriate authorizations obtained from U.S.
+Added: In addition, the U.S.
+Added: Department of Commerce has enacted new rules that have expanded export license requirements for U.S.
+Added: companies to sell certain items to companies and other end-users in China that are designated as military end-users or have operations that could support military end uses;
+Added: has added additional Chinese companies to its restricted entity list and unverified list under suspicion of military-civil fusion, support of Russia, or other factors associated with a broadening scope of national security concerns (including Semiconductor Manufacturing International Corporation, or SMIC, and related entities, and Yangtze Memory Technologies Co., Ltd., or YMTC, and related entities);
+Added: and has expanded an existing rule (referred to as the foreign direct product rule) in a manner that could cause foreign-made wafers, chipsets, and certain related items produced with many of our products to be subject to U.S.
licensing requirements if Huawei Technologies Co.
Ltd (“Huawei”) or its affiliates are parties to a transaction involving the items.
−Removed: These rules have required and may require us to apply for and obtain additional export licenses to supply certain of our products to specified customers in China, such as SMIC (where those products would not otherwise require an export license to China), and there is no assurance that we will be issued licenses that we apply for on a timely basis or at all.
+Added: These rules have required and may require us to apply for and obtain additional export licenses to supply certain of our products to customers in China, such as SMIC, YMTC and ChangXin Memory Technologies, Inc., and there is no assurance that we will be issued licenses that we apply for on a timely basis or at all.
In addition, our customers (including but not limited to Chinese customers) may require U.S.
1 unchanged sentence
Huawei and its affiliates) that are subject to the expanded foreign direct product rule, which may adversely impact the demand for our products.
−Removed: Department of Commerce could in the future add additional Chinese companies to its restricted entity list or take other actions that could expand licensing requirements or otherwise impact the market for our products and our revenue.
+Added: 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.
The implementation, interpretation and impact on our business of these rules and other regulatory actions taken by the U.S.
22 unchanged sentences
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.
+Added: Lam Research Corporation 2023 10-K 21
Our Financial Results May Be Adversely Impacted by Higher than Expected Tax Rates or Exposure to Additional Tax Liabilities
2 unchanged sentences
As a global company, our effective tax rate is highly dependent upon the geographic composition of worldwide earnings and tax regulations governing each region.
−Removed: Our effective tax rate could be adversely affected by changes in the split of earnings between countries with differing statutory tax rates, in the valuation allowance of deferred tax assets, in tax laws, by material audit assessments, or by changes in or expirations of agreements with tax authorities.
−Removed: These factors could affect our profitability.
−Removed: In particular, the carrying value of deferred tax assets, which are predominantly in the United States, is dependent on our ability to generate future taxable income in the United States.
−Removed: Lam Research Corporation 2022 10-K 21
+Added: Changes in the split of earnings between countries with differing statutory tax rates, in the valuation allowance of deferred tax assets, in tax laws, in material audit assessments, or in expirations of agreements with tax authorities could adversely affect our effective tax rate.
+Added: In particular, the carrying value of deferred tax assets, which are predominantly in the United States, is dependent upon our ability to generate future taxable income in the United States.
On August 16, 2022, the Inflation Reduction Act (the “IRA”) was signed into law.
In general, the provisions of the IRA will be effective beginning with our fiscal year 2024, with certain exceptions.
−Removed: 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.
−Removed: We are in the process of evaluating the potential impacts of the IRA.
−Removed: While we do not currently expect the IRA to have a material impact on our effective tax rate, our analysis is ongoing and incomplete, and it is possible that the IRA could have a material adverse effect on our tax liability.
−Removed: 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.
−Removed: In addition, President Joseph Biden has made several corporate income tax proposals, including a significant increase to the U.S.
−Removed: corporate income tax rate and changes in the taxation of non-U.S.
+Added: The IRA includes a new 15% corporate minimum tax.
+Added: We have evaluated the potential impacts of the IRA and do not expect it to have a material impact on our effective tax rate.
+Added: However, we expect future guidance from the Treasury Department and will further analyze when the guidance is issued.
+Added: 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, including the implementation of a global minimum tax.
+Added: Several countries around the world have enacted or proposed changes to their existing tax laws based on these recommendations.
+Added: 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.
+Added: When fully enacted, such changes could have a material impact on our effective tax rate.
+Added: We will continue to monitor the progress of the BEPS 2.0 implementation.
+Added: In addition, the U.S.
+Added: has made several corporate income tax proposals, including changes in the taxation of non-U.S.
If enacted, such changes could have a material impact on our effective tax rate.
−Removed: A Failure to Comply with Environmental Regulations May Adversely Affect Our Operating Results
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Increasing and Evolving Environmental Regulations May Adversely Affect Our Operating Results
+Added: 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, and the regulatory environment is dynamic.
+Added: Failure to comply with present or future environmental regulations (such as future 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.
+Added: These regulations could require us to alter or discontinue our current operations in certain jurisdictions, acquire significant additional equipment, incur substantial other expenses to comply with environmental regulations, or take other actions.
+Added: Compliance obligations, as well as any failure to comply with current or future regulations governing the use, handling, sale, transport, or disposal of hazardous or potentially hazardous substances (including, but not limited to, PFAS) could subject us to future costs and 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
11 unchanged sentences
These factors include but are not limited to the following:
+Added: Lam Research Corporation 2023 10-K 22
• general market, semiconductor, or semiconductor equipment industry conditions;
• economic or political events, trends, and unexpected developments occurring nationally, globally, or in any of our key sales regions;
+Added: • macroeconomic, industry and market conditions, including those caused by the Russian invasion of Ukraine or bank failures;
+Added: 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: Lam Research Corporation 2022 10-K 22
−Removed: 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.
+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
16 unchanged sentences
Our indebtedness could have adverse consequences, including:
−Removed: • risk associated with the alternative reference rate reform (e.g.
−Removed: LIBOR transition);
• risk associated with any inability to satisfy our obligations;
1 unchanged sentence
• impairment of our ability to obtain additional financing in the future.
+Added: Lam Research Corporation 2023 10-K 23
Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory, and other factors.
10 unchanged sentences
• merge or consolidate with any person.
−Removed: Lam Research Corporation 2022 10-K 23
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.
11 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.
+Added: If One or More of Our Counterparty Financial Institutions Default on Their Obligations To Us or Fail, We May Incur Significant Losses.
+Added: As part of our hedging activities, we enter into transactions involving derivative financial instruments, which may include forward contracts, option contracts, collars and swaps with various financial institutions.
+Added: In addition, we have significant amounts of cash, cash equivalents and other investments on deposit or in accounts with banks or other financial institutions both in and out of the United States.
+Added: As a result, we are exposed to the risk of default by or failure of counterparty financial institutions, which may be heightened during economic downturns and periods of uncertainty in the financial markets.
+Added: If one of our counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of default, or our assets deposited or held in accounts with such counterparty, may be limited by the counterparty's liquidity or the applicable laws governing the insolvency or bankruptcy proceedings.
+Added: In the event of default or failure of one or more of our counterparties, we could incur significant losses, which could negatively impact our results of operations and financial condition.
Unresolved Staff Comments
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.