3 unchanged sentences
INDUSTRY AND CUSTOMER RISKS
+Added: We Depend on Creating New Products and Processes and Enhancing Existing Products and Processes for Our Success;
+Added: Consequently, We Are Subject to Risks Associated with Rapid Technological Change
+Added: Rapid technological changes in semiconductor manufacturing processes subject us to increased pressure to develop technological advances that enable those processes.
+Added: We believe that our future success depends in part upon our ability to develop and offer new products with improved capabilities and to continue to enhance our existing products.
+Added: If new products or existing products have reliability, quality, design, or safety problems, our performance may be impacted by reduced orders, higher manufacturing costs, delays in acceptance of and payment for new products, and additional service and warranty expenses.
+Added: We may be unable to develop and manufacture products successfully, or products that we introduce may fail in the marketplace.
+Added: For more than 25 years, the primary driver of technology advancement in the semiconductor industry has been to shrink the lithography that prints the circuit design on semiconductor chips.
+Added: 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.
+Added: In addition, the emergence of “big data” and new tools such as machine learning and artificial intelligence (“AI”) 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.
+Added: 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.
+Added: 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.
+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 products and technologies, to invest in or acquire businesses or technologies, and to pursue joint development relationships with customers, suppliers, or other members of the industry.
+Added: 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.
+Added: We may find that acquisitions are not available to us, for regulatory or other reasons, and that we must therefore limit ourselves to collaboration and joint venture development activities that do not have the same benefits as acquisitions.
+Added: Pursuing development through collaboration and/or joint development activities rather than through an acquisition may pose substantial challenges for management, including those related to aligning business objectives;
+Added: sharing confidential information, intellectual property and data;
+Added: sharing value with third parties;
+Added: and realizing synergies that might have been available in an acquisition but are not available through a joint development project.
+Added: 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, which could limit our market for products incorporating those technologies.
+Added: Future technologies, processes, or product developments may render our current product offerings obsolete, leaving us with non-competitive products, obsolete inventory, or both.
+Added: Moreover, customers may adopt new technologies or processes to address the complex challenges associated with next-generation devices.
+Added: This shift may result in a reduction in the size of our addressable markets or could increase the relative size of markets in which we either do not compete or have relatively low market share.
+Added: We Face a Challenging and Complex Competitive Environment
+Added: We face significant competition from multiple competitors, and our competitors may be able to develop products comparable or superior to those we offer or may adapt more quickly to new technologies or evolving customer requirements.
+Added: In particular, while we continue to develop product enhancements that we believe will address future customer requirements, we may fail in a timely manner to identify those future customer requirements, to devote appropriate resources to developing products to address those requirements, or to complete the development or introduction of these additional product enhancements successfully, or these product enhancements may not achieve market acceptance or be competitive.
+Added: Accordingly, competition may intensify, and we may be
+Added: Lam Research Corporation 2025 Q2 10-Q 25
+Added: unable to continue to compete successfully in our markets, which could have a material adverse effect on our revenues, operating results, financial condition, and/or cash flows.
+Added: With increased consolidation efforts in our industry, as well as the emergence and strengthening of new, regional competitors, we may face increasing competitive pressures.
+Added: Other companies continue to develop systems and/or acquire businesses and products that are competitive to ours and may introduce new products and product capabilities that may affect our ability to sell and support our existing products.
+Added: 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: 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.
+Added: Technological changes and developing technologies have required, and are expected to continue to require, new and costly investments.
+Added: Certain of our competitors, including those that are created and financially backed by foreign governments, have substantially greater financial resources and more extensive engineering, manufacturing, marketing, and customer service and support resources than we do and therefore have the potential to offer customers a more comprehensive array of products and/or product capabilities and to therefore achieve additional relative success in the semiconductor equipment industry.
+Added: These competitors may deeply discount or give away products similar to those that we sell, challenging or even exceeding our ability to make similar accommodations and threatening our ability to sell those products.
+Added: We also face competition from our own customers, who in some instances have established affiliated entities that manufacture equipment similar to ours.
+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 and potentially contributing to the strengthening of such companies’ ability to compete with us.
+Added: In many cases, speed to solution is necessary for customer satisfaction and our competitors may be better positioned to achieve these objectives.
+Added: For these reasons, we may fail to continue to compete successfully worldwide.
+Added: Once a Semiconductor Manufacturer Commits to Purchase a Competitor’s Semiconductor Manufacturing Equipment, the Manufacturer Typically Continues to Purchase That Competitor’s Equipment, Making It More Difficult for Us to Sell Our Equipment to That Customer
+Added: Semiconductor manufacturers must make a substantial investment to qualify and integrate wafer processing equipment into a semiconductor production line.
+Added: We believe that once a semiconductor manufacturer selects a particular supplier’s processing equipment, the manufacturer generally relies upon that equipment for that specific production line application for an extended period of time, especially for customers that are more focused on tool reuse.
+Added: Accordingly, we expect it to be more difficult to sell our products to a given customer for a product line application if that customer initially selects a competitor’s equipment for the same product line application.
The Semiconductor Capital Equipment Industry Is Subject to Variability and Periods of Rapid Growth or Decline;
3 unchanged sentences
The variability in our customers’ investments during any particular period is dependent on several factors, including, but not limited to, electronics demand, economic conditions (both general and in the semiconductor and electronics industries), industry supply and demand, prices for semiconductors, and our customers’ ability to develop and manufacture increasingly complex and costly semiconductor devices.
−Removed: The changes in demand may require our management to adjust spending and other resources allocated to operating activities.
+Added: The changes in demand may require our management to adjust spending and other resources allocated to operating activities, which can be made more challenging due to the multi-year nature of investments made in certain technology programs and other initiatives.
During periods of rapid growth or decline in demand for our products and services, we may 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.
4 unchanged sentences
Our success will depend, to a significant extent, on the ability of our executive officers and other members of our senior management to identify and respond to these challenges effectively.
+Added: Lam Research Corporation 2025 Q2 10-Q 26
Future Declines in the Semiconductor Industry, and the Overall World Economic Conditions on Which It Is Significantly Dependent, Could Have a Material Adverse Impact on Our Results of Operations and Financial Condition
5 unchanged sentences
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:
−Removed: • a decline in demand for our products or services;
+Added: • a decline in demand for our products and/or services;
• an increase in reserves on accounts receivable due to our customers’ inability to pay us;
4 unchanged sentences
• a decline in the value of our investments;
−Removed: Lam Research Corporation 2025 Q1 10-Q 23
• exposure to claims from our suppliers for payment on inventory that is ordered in anticipation of customer purchases that do not come to fruition;
8 unchanged sentences
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.
−Removed: We Face a Challenging and Complex Competitive Environment
−Removed: We face significant competition from multiple competitors, and our competitors may be able to develop products comparable or superior to those we offer or may adapt more quickly to new technologies or evolving customer requirements.
−Removed: In particular, while we continue to develop product enhancements that we believe will address future customer requirements, we may fail in a timely manner to identify those future customer requirements, to devote appropriate resources to developing products to address those requirements, or to complete the development or introduction of these additional product enhancements successfully, or these product enhancements may not achieve market acceptance or be competitive.
−Removed: Accordingly, competition may intensify, and we may be unable to continue to compete successfully in our markets, which could have a material adverse effect on our revenues, operating results, financial condition, and/or cash flows.
−Removed: With increased consolidation efforts in our industry, as well as the emergence and strengthening of new, regional competitors, we may face increasing competitive pressures.
−Removed: Other companies continue to develop systems and/or acquire businesses and products that are competitive to ours and may introduce new products and product capabilities that may affect our ability to sell and support our existing products.
−Removed: 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.
−Removed: 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.
−Removed: Technological changes and developing technologies have required, and are expected to continue to require, new and costly investments.
−Removed: Certain of our competitors, including those that are created and financially backed by foreign governments, have substantially greater financial resources and more extensive engineering, manufacturing, marketing, and customer service and support resources than we do and therefore have the potential to offer customers a more comprehensive array of products and/or product capabilities and to therefore achieve additional relative success in the semiconductor equipment industry.
−Removed: These competitors may deeply discount or give away products similar to those that we sell, challenging or even exceeding our ability to make similar accommodations and threatening our ability to sell those products.
−Removed: 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, 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 and potentially contributing to the strengthening of such companies’ ability to compete with us.
−Removed: In many cases, speed to solution is necessary for customer satisfaction and our competitors may be better positioned to achieve these objectives.
−Removed: For these reasons, we may fail to continue to compete successfully worldwide.
−Removed: Once a Semiconductor Manufacturer Commits to Purchase a Competitor’s Semiconductor Manufacturing Equipment, the Manufacturer Typically Continues to Purchase That Competitor’s Equipment, Making It More Difficult for Us to Sell Our Equipment to That Customer
−Removed: Semiconductor manufacturers must make a substantial investment to qualify and integrate wafer processing equipment into a semiconductor production line.
−Removed: We believe that once a semiconductor manufacturer selects a particular supplier’s processing equipment, the manufacturer generally relies upon that equipment for that specific production line application for an extended period of time, especially for customers that are more focused on tool reuse.
−Removed: Accordingly, we expect it to be more difficult to sell our products to a given customer for a product line application if that customer initially selects a competitor’s equipment for the same product line application.
−Removed: Lam Research Corporation 2025 Q1 10-Q 24
−Removed: We Depend on Creating New Products and Processes and Enhancing Existing Products and Processes for Our Success;
−Removed: Consequently, We Are Subject to Risks Associated with Rapid Technological Change
−Removed: Rapid technological changes in semiconductor manufacturing processes subject us to increased pressure to develop technological advances that enable those processes.
−Removed: We believe that our future success depends in part upon our ability to develop and offer new products with improved capabilities and to continue to enhance our existing products.
−Removed: If new products or existing products have reliability, quality, design, or safety problems, our performance may be impacted by reduced orders, higher manufacturing costs, delays in acceptance of and payment for new products, and additional service and warranty expenses.
−Removed: We may be unable to develop and manufacture products successfully, or products that we introduce may fail in the marketplace.
−Removed: For more than 25 years, the primary driver of technology advancement in the semiconductor industry has been to shrink the lithography that prints the circuit design on semiconductor chips.
−Removed: 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 (“AI”) 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.
−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 customers’ requirements.
−Removed: 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.
−Removed: 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 products and technologies, to invest in or acquire businesses or technologies, and to pursue joint development relationships with customers, suppliers, or other members of the industry.
−Removed: 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.
−Removed: We may find that acquisitions are not available to us, for regulatory or other reasons, and that we must therefore limit ourselves to collaboration and joint venture development activities that do not have the same benefits as acquisitions.
−Removed: Pursuing development through collaboration and/or joint development activities rather than through an acquisition may pose substantial challenges for management, including those related to aligning business objectives;
−Removed: sharing confidential information, intellectual property and data;
−Removed: sharing value with third parties;
−Removed: and realizing synergies that might have been available in an acquisition but are not available through a joint development project.
−Removed: 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, 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.
−Removed: Moreover, customers may adopt new technologies or processes to address the complex challenges associated with next-generation devices.
−Removed: This shift may result in a reduction in the size of our addressable markets or could increase the relative size of markets in which we either do not compete or have relatively low market share.
Strategic Alliances and Customer Consolidation May Have Negative Effects on Our Business
12 unchanged sentences
We manage our expense levels based in part on our expectations of future revenues.
−Removed: Because our operating expenses are based in part on anticipated future revenues, and a certain amount of those expenses are relatively fixed, a change in the timing of recognition of revenue and/or the level of gross profit from a small number of transactions can unfavorably
Lam Research Corporation 2025 Q2 10-Q 27
−Removed: affect operating results in a particular quarter or year.
+Added: operating expenses are based in part on anticipated future revenues, and a certain amount of those expenses are relatively fixed, a change in the timing of recognition of revenue and/or the level of gross profit from a small number of transactions can unfavorably affect operating results in a particular quarter or year.
Factors that may cause our financial results to fluctuate unpredictably include, but are not limited to:
• 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.
−Removed: government restricting exports to China) or changes in the interpretation or enforcement of existing requirements;
+Added: government restricting exports to China, or potential additional tariffs on imports) or changes in the interpretation or enforcement of existing requirements;
• macroeconomic, industry and market conditions, including those caused by war, conflict in the Middle East, bank failures;
15 unchanged sentences
• legal or technical challenges to our products and technologies;
−Removed: • 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, international conflict, or climate change;
+Added: • transportation, communication, demand, information technology, or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, international conflict, widespread outbreak of illness, or natural or man-made disasters (including disasters resulting from climate change), including earthquakes, wildfires, hurricanes, flooding, and heat waves;
• management of supply chain risks;
−Removed: • rising inflation or interest rates;
+Added: • effects of inflation or interest rates;
• changes in our estimated effective tax rate.
+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, any of which could have a material adverse effect on our business or operations.
+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, in each case with respect to us or the third-party product and service providers upon which we rely.
+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: In addition, to the extent AI capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and to implement increasingly sophisticated cybersecurity attacks.
+Added: Further, the use of AI by us, our customers, suppliers, and third-party providers, among others, may also introduce unique vulnerabilities whose existence or exploitation could have a material adverse effect on our business or operations.
+Added: Lam Research Corporation 2025 Q2 10-Q 28
+Added: We experience cybersecurity and other threats and incidents in the course of our operations.
+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: Cybersecurity or other incidents 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 International Organization for Standardization (“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, which could have a material adverse effect on our business or operations.
+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.
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 88%, 93%, and 91% of total revenue in the three months ended September 29, 2024 and fiscal years 2024, and 2023, respectively.
+Added: Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 89%, 93%, and 91% of total revenue in the six months ended December 29, 2024 and fiscal years 2024, and 2023, respectively.
We expect that international sales will continue to account for a substantial majority of our total revenue in future years.
16 unchanged sentences
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.
+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
Lam Research Corporation 2025 Q2 10-Q 29
−Removed: 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.
32 unchanged sentences
Since the majority of our cash is generated outside of the United States, this may impact certain business decisions and outcomes.
−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, any of which could have a material adverse effect on our business or operations.
−Removed: Such causes may include mistakes or unauthorized
−Removed: Lam Research Corporation 2025 Q1 10-Q 27
−Removed: 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, in each case with respect to us or the third-party product and service providers upon which we rely.
−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: In addition, to the extent AI capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and to implement increasingly sophisticated cybersecurity attacks.
−Removed: Further, the use of AI by us, our customers, suppliers, and third-party providers, among others, may also introduce unique vulnerabilities whose existence or exploitation could have a material adverse effect on our business or operations.
−Removed: We experience cybersecurity and other threats and incidents in the course of our operations.
−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: Cybersecurity or other incidents 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 International Organization for Standardization (“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, which could have a material adverse effect on our business or operations.
−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.
−Removed: 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
−Removed: In January 2023, we announced that we were implementing a restructuring plan consisting of a workforce reduction, and that we anticipated undertaking, and may in the future undertake, additional business restructuring, realignment and transformation initiatives.
−Removed: While the restructuring plan was 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.
−Removed: Implementation of such 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: For more information about our restructuring plan, see Note 14 to our Condensed Consolidated Financial Statements in Part I.
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
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
−Removed: Lam Research Corporation 2025 Q1 10-Q 28
−Removed: 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: 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.
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.
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• 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;
+Added: • volatility in the availability and cost of parts, materials or services, including increased costs due to tariffs, rising inflation or interest rates or other market conditions;
• difficulties or delays in obtaining required import or export approvals;
+Added: • restrictions on the import and sale of products that incorporate technologies developed or manufactured in whole or in part in certain countries;
+Added: Lam Research Corporation 2025 Q2 10-Q 30
• shipment delays and increased costs of shipment due to transportation interruptions, capacity constraints, or fuel shortages;
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• 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, international conflict, or climate change.
−Removed: 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: • transportation or supply disruptions based on factors outside our control, such as strikes, acts of God, wars, terrorist activities, international conflict, widespread outbreak of illness, or natural or man-made disasters (including disasters resulting from climate change), including earthquakes, wildfires, hurricanes, flooding, and heat waves.
+Added: Demand for electronic products and other factors, 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.
Such shortages, delays and unpredictability have adversely impacted, and may in the future impact, our suppliers’ ability to meet our demand requirements.
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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: 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 were implementing a restructuring plan consisting of a workforce reduction, and that we anticipated undertaking, and may in the future undertake, additional business restructuring, realignment and transformation initiatives.
+Added: While the restructuring plan was 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 such 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 14 to our Condensed Consolidated Financial Statements in Part I.
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, war, terrorist activities, political or governmental unrest or instability, disruptions of our information technology resources, utility interruptions, international conflict, the effects of climate change, or other events beyond our control.
−Removed: 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: The COVID-19 Pandemic Adversely Impacted, and May in the Future 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 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.
−Removed: While the exceptional
+Added: These locations are subject to disruption for a variety of reasons, such as natural or man-made disasters (including disasters resulting from climate change), including earthquakes, wildfires, hurricanes, flooding, and heat waves, widespread outbreaks of illness, war, terrorist activities, political or governmental unrest or instability, disruptions of our information technology resources, utility interruptions, international conflict, or other events beyond our control.
+Added: Such disruptions may cause delays in developing or shipping
Lam Research Corporation 2025 Q2 10-Q 31
−Removed: COVID-19 related challenges have mostly subsided, 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, previously affected and in the future may affect our business and operations by, among other things, causing facility closures, production delays and capacity limitations;
+Added: 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.
+Added: Epidemics, Pandemics or Outbreaks of Diseases May Adversely Impact Our Business, Operations, and Financial Results
+Added: Epidemics, pandemics or outbreaks of diseases may arise at any time and may have significant business, operational, and financial impacts.
+Added: For example, the COVID-19 pandemic has in the past and additional global heath crises may result in efforts by national, state and local governments worldwide to control the applicable disease’s spread.
+Added: Such governmental efforts may result in measures aimed at containing the applicable disease such as quarantines, travel bans, shutdowns, and shelter in place or “stay at home” orders, which collectively have the potential to significantly restrict the ability of businesses to operate.
+Added: In addition, restrictions resulting from global health crises and related measures aimed at containing the applicable disease, incidents of confirmed or suspected infections within our workforce or those of our suppliers or other business partners, and efforts to act in the best interests of our employees, customers, and suppliers, in connection with a pandemic or disease outbreak, may affect our business and operations by, among other things, causing facility closures, production delays and capacity limitations;
disrupting production by our supply chain;
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and necessitating teleworking by portions of our workforce.
−Removed: 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.
−Removed: 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.
+Added: These impacts may cause delays in product shipments and product development, increases in costs, and decreases in revenue, profitability and cash from operations, which may cause an adverse effect on our results of operations that may be material.
+Added: Global health crises may also have significant macroeconomic impacts, including, but not limited to, significant disruption of global financial markets, increases in levels of unemployment, and economic uncertainty.
+Added: This 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 Are Subject to Risks Relating to Product Concentration and Lack of Product Revenue Diversification
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or we may lose trade secret protection over valuable information due to our or third parties’ intentional or unintentional actions or omissions or even those of our own employees.
−Removed: Additionally, intellectual property litigation can be expensive and time-consuming and even when patents are issued, or trade secret processes are followed, the legal systems in certain of the countries in which we do business might not enforce patents and other intellectual property rights as rigorously or effectively as the United States or may favor local entities in their intellectual property enforcement.
+Added: Additionally, intellectual property litigation can be expensive and time-consuming and even when patents are issued, or trade secret processes are followed, the legal systems in certain of the countries in which we do business might not enforce patents and other intellectual property rights as rigorously or effectively as the United States or may favor local entities in
+Added: Lam Research Corporation 2025 Q2 10-Q 32
+Added: their intellectual property enforcement.
The rights granted or anticipated under any of our patents, pending patent applications, copyrights, or trade secrets may be narrower than we expect or, in fact, provide no competitive advantages.
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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 combination may result in cycles of hiring activity and workforce reductions.
−Removed: Our success in hiring depends on a variety of factors, including the attractiveness
−Removed: Lam Research Corporation 2025 Q1 10-Q 30
−Removed: 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.
+Added: This has been and may continue to be 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.
+Added: 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.
We periodically evaluate our overall compensation and benefit programs and make adjustments, as appropriate, to maintain or enhance their competitiveness.
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LEGAL, REGULATORY AND TAX RISKS
+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 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.
−Removed: Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 37%, 42%, and 26% of our total revenue for the three months ended September 29, 2024 and fiscal years 2024 and 2023, respectively.
+Added: Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 34%, 42%, and 26% of our total revenue for the six months ended December 29, 2024 and fiscal years 2024 and 2023, respectively.
and China have historically had a complex relationship that has included actions that have impacted trade between the two countries.
−Removed: In recent years, these actions have included an expansion of export license requirements imposed by the U.S.
+Added: In recent years, these actions have included an expansion of export license
+Added: Lam Research Corporation 2025 Q2 10-Q 33
+Added: requirements imposed by the U.S.
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.
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or China, or both, that have occurred and may occur in the future could weaken our competitive position and materially and adversely affect our results of operations.
−Removed: Lam Research Corporation 2025 Q1 10-Q 31
−Removed: We Are Exposed to Various Risks from Our Regulatory Environment
−Removed: We are subject to various risks related to (1) new, different, inconsistent, or even conflicting laws, rules, and regulations that may be enacted by legislative or executive bodies and/or regulatory agencies in the countries that we operate;
−Removed: (2) disagreements or disputes related to international trade;
−Removed: and (3) the interpretation and application of laws, rules, and regulations.
−Removed: As a public company with global operations, we are subject to the laws of multiple jurisdictions and the rules and regulations of various governing bodies, including those related to export controls, financial and other disclosures, corporate governance, privacy, anti-corruption, such as the Foreign Corrupt Practices Act and other local laws prohibiting corrupt payments to governmental officials, anti-boycott compliance, conflict minerals or other social responsibility legislation, immigration or travel regulations, antitrust regulations, and laws or regulations relating to carbon emissions, as well as other laws or regulations imposed in response to climate change concerns, among others.
−Removed: Each of these laws, rules, and regulations imposes costs on our business, including financial costs and potential diversion of our management’s attention associated with compliance, and may present risks to our business, including potential fines, restrictions on our actions, and reputational damage if we do not fully comply.
−Removed: To maintain high standards of corporate governance and public disclosure, we intend to invest appropriate resources to comply with evolving standards.
−Removed: Changes in or ambiguous interpretations of laws, regulations, and standards may create uncertainty regarding compliance matters.
−Removed: Efforts to comply with new and changing regulations have resulted in, and are likely to continue to result in, reduced operating income, and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
−Removed: If we are found by a court or regulatory agency not to be in compliance with the laws and regulations, our business, financial condition, and/or results of operations could be adversely affected.
Intellectual Property, Indemnity, and Other Claims Against Us Can Be Costly and We Could Lose Significant Rights That Are Necessary to Our Continued Business and Profitability
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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: We Are Exposed to Various Risks from Our Regulatory Environment
+Added: We are subject to various risks related to (1) new, different, inconsistent, or even conflicting laws, rules, and regulations that may be enacted by legislative or executive bodies and/or regulatory agencies in the countries that we operate;
+Added: (2) disagreements or disputes related to international trade;
+Added: and (3) the interpretation and application of laws, rules, and regulations.
+Added: As a public company with global operations, we are subject to the laws of multiple jurisdictions and the rules and regulations of various governing bodies, including those related to export controls, financial and other disclosures, corporate governance, privacy, anti-corruption, such as the Foreign Corrupt Practices Act and other local laws prohibiting corrupt payments to governmental officials, anti-boycott compliance, conflict minerals or other social responsibility legislation, immigration or travel regulations, antitrust regulations, and laws or regulations relating to carbon emissions, as well as other laws or regulations imposed in response to climate change concerns, among others.
+Added: Each of these laws, rules, and regulations imposes costs on our business, including financial costs and potential diversion of our management’s attention associated with compliance, and may present risks to our business, including potential fines, restrictions on our actions, and reputational damage if we do not fully comply.
+Added: To maintain high standards of corporate governance and public disclosure, we intend to invest appropriate resources to comply with evolving standards.
+Added: Changes in or ambiguous interpretations of laws, regulations, and standards may create uncertainty regarding compliance matters.
+Added: Efforts to comply with new and changing regulations have resulted in, and are likely to continue to result in, reduced operating income, and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
+Added: If we are found by a court or regulatory agency not to be in compliance with the laws and regulations, our business, financial condition, and/or results of operations could be adversely affected.
+Added: Lam Research Corporation 2025 Q2 10-Q 34
Our Financial Results May Be Adversely Impacted by Higher than Expected Tax Rates or Exposure to Additional Tax Liabilities
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If enacted, such changes could have a material impact on our effective tax rate.
−Removed: Lam Research Corporation 2025 Q1 10-Q 32
−Removed: Increasing and Evolving 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, sale, and disposal of toxic, volatile, or otherwise hazardous or potentially hazardous substances, and the regulatory environment is dynamic.
−Removed: 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.
−Removed: 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.
−Removed: 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
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• disruptions of relationships with key customers or suppliers.
+Added: Lam Research Corporation 2025 Q2 10-Q 35
In addition, the stock market experiences significant price and volume fluctuations.
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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.
−Removed: Lam Research Corporation 2025 Q1 10-Q 33
We May Incur Impairments to Goodwill or Long-lived Assets
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• enter into transactions with our affiliates;
+Added: Lam Research Corporation 2025 Q2 10-Q 36
+Added: • change the nature of our business;
• sell certain assets;
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In addition, our failure to comply with these covenants could result in a default under the Senior Notes, or our other debt, which could permit the holders to accelerate such debt.
−Removed: If any of our debt
−Removed: Lam Research Corporation 2025 Q1 10-Q 34
−Removed: is accelerated, we may not have sufficient funds available to repay such debt, which could materially and negatively affect our financial condition and results of operation.
+Added: If any of our debt is accelerated, we may not have sufficient funds available to repay such debt, which could materially and negatively affect our financial condition and results of operation.
There Can Be No Assurance That We Will Continue to Declare Cash Dividends or Repurchase Our Shares at All or in Any Particular Amounts
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.