What changed in this filing

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Item 1A. Risk Factors

2025-10-24 compared with 2025-04-25 · 50 added, 47 removed, 434 unchanged (18% of the section changed)

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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, which could limit our market for products incorporating those technologies.

Future technologies, processes, or product developments may render our current product offerings obsolete, leaving us with non-competitive products, obsolete inventory, or both.

Future technologies, processes, or product developments, including as a result of adoption of AI, 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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• 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.

government restricting exports to China, or potential additional tariffs on imports, and tariffs imposed by other countries) or changes in the interpretation or enforcement of existing requirements;

government restricting exports to China or regulations imposed by other countries restricting the export of certain materials or the re-export of products containing such materials, or potential additional tariffs on imports, and tariffs imposed by other countries) 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;

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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.

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.

Further, the use of AI by us, our customers,

In addition, to the extent AI capabilities improve and are increasingly adopted, they may be used to identify

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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.

vulnerabilities and to implement increasingly sophisticated cybersecurity attacks.

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.

We experience cybersecurity and other threats and incidents in the course of our operations.

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sales, as reflected in Part I Item 2.

Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 92%, 93%, and 91% of total revenue in the nine months ended March 30, 2025 and fiscal years 2024, and 2023, respectively.

Results of Operations of this quarterly report on Form 10-Q, accounted for approximately 94%, 93%, and 93% of total revenue in the three months ended September 28, 2025 and fiscal years 2025, and 2024, 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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Certain of our international sales depend on our ability to obtain export licenses from the U.S.

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.

or foreign governments.

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.

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.

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all of which could adversely impact our ability to compete as well as our revenues and margins.

For example, recently the Chinese government has implemented export controls applicable to certain products containing Chinese-origin rare earth elements, which, if implemented in their current or similar form, may require us to obtain export licenses for certain of our products that are manufactured outside of China, and may have an adverse impact on our business, revenues, and margins.

Our customers (and their customers and other downstream parties) may also be adversely affected by the tariffs, export controls and other trade issues described above.

Additionally, certain materials are primarily available in a limited number of countries, including rare earth elements, minerals, and metals.

The supplies, equipment, raw materials and other inputs necessary for the businesses of our customers and other downstream parties could become more difficult to obtain for various reasons, not limited to business interruptions of suppliers, reduced availability of labor, transit disruptions, consolidation in their supply chain, export controls (including the Chinese export controls on rare earth elements described above), sanctions, trade restrictions, tariffs, geopolitical tensions, economic circumstances, conflict, or political conditions.

If the ability of downstream parties to source the inputs needed to produce their products is impaired, then demand for our products may be adversely impacted.

This could have a material adverse effect on our business, results of operations or financial condition.

We are exposed to potentially adverse movements in foreign currency exchange rates.

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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.

Further, in periods in which the U.S.

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 denominated in euro, Korean won, Malaysian ringgit, and Indian rupee.

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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.

In addition, our currency hedges do not necessarily mitigate the potential negative impact of a strong U.S.

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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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.

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

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of our transactional and administrative functions, such as information technology, facilities management, and certain elements of our finance organization.

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.

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• the failure or inability to accurately forecast demand and obtain sufficient quantities of quality parts on a cost-effective basis;

• 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;

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• difficulties or delays in obtaining required import or export approvals;

• volatility in the availability and cost of parts, materials or services, including increased costs due to tariffs, foreign export controls, rising inflation or interest rates or other market conditions;

• difficulties or delays in obtaining required import or export approvals (including those that may be required under the Chinese export controls on rare earth elements described above);

• restrictions on the import and sale of products that incorporate technologies developed or manufactured in whole or in part in certain countries;

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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

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.

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.

We have in the past undertaken, and may in the future undertake, business restructuring, realignment and transformation plans or initiatives.

While such plans or initiatives would generally have the goal of strengthening our operations and/or achieving operational efficiencies, there can be no assurance that we will be successful in these plans and initiatives.

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.

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.

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.

Additionally, reductions in our workforce may cause a reduction in our

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production output capabilities which could impact our ability to manufacture or ship products to customers within a mutually beneficial timeline.

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.

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.

These locations are subject to disruption for a variety of reasons, such as natural or man-made disasters (including disasters

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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.

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.

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.

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Epidemics, pandemics or outbreaks of diseases may arise at any time and may have significant business, operational, and financial impacts.

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.

For example, the COVID-19 pandemic has in the past and additional global heath crises may in the future result in efforts by national, state and local governments worldwide to control the applicable disease’s spread.

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.

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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.

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

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these governments may fail to issue patents for pending applications;

or we may lose trade

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secret protection over valuable information due to our or third parties’ intentional or unintentional actions or omissions or even those of our own employees.

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.

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.

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

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LEGAL, REGULATORY AND TAX RISKS

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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.

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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.

Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 33%, 42%, and 26% of our total revenue for the nine months ended March 30, 2025 and fiscal years 2024 and 2023, respectively.

Revenue in China, which includes global customers and domestic Chinese customers with manufacturing facilities in China, represented approximately 43%, 34%, and 42% of our total revenue for the three months ended September 28, 2025 and fiscal years 2025 and 2024, respectively.

and China have historically had a complex relationship that has included actions that have impacted trade between the two countries.

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However, we may be unable in the future to negotiate necessary licenses or reach agreement on other settlements on commercially reasonable terms, or at all, and any litigation resulting from these claims by other parties may materially and adversely affect our business and financial results, and we may be subject to substantial damage awards and penalties.

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.

Moreover, although we have insurance to protect us from certain claims

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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.

We Are Exposed to Various Risks from Our Regulatory Environment

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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 such as the recent reporting requirements imposed by the State of California that will require corporations to provide climate-related disclosures, as well as other laws or regulations imposed in response to climate change concerns, among others.

Each of these laws, rules, and regulations imposes costs on our business, including financial costs and

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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.

To maintain high standards of corporate governance and public disclosure, we intend to invest appropriate resources to comply with evolving standards.

Changes in or ambiguous interpretations of laws, regulations, and standards may create uncertainty regarding compliance matters.

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.

There have been, and may continue to be, instances of our compliance policies and procedures not being effective to ensure full compliance with all of the laws, rules and regulations to which we are subject, which non-compliance has presented and may present risks to our business, including potential fines, restrictions on our actions, and reputational damage.

To maintain high standards of corporate governance and public disclosure, we intend to continue to invest appropriate resources to comply with evolving standards.

Changes in or ambiguous interpretations of laws, regulations, and standards, and the speed with which new regulations may be enacted and come into effect, may create uncertainty regarding compliance matters or instances where we may not be in compliance.

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.

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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.

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.

Recommendations made by the BEPS 2.0 project have the potential to lead to changes in the tax laws in numerous countries, including the implementation of a GMT.

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

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

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

In addition, the United States and the other six countries which make up the G7 nations announced the intent to implement a side-by-side system related to the GMT, which would exempt U.S.-parented multinationals from the GMT.

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

The impact of the currently enacted legislation which is applicable to us has been reflected in our fiscal period results.

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

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

In addition, the U.S.

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.

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

We believe that our exclusive forum provision benefits us, and our stockholders, by permitting relatively prompt resolution of lawsuits concerning our internal affairs, promoting consistent application of Delaware law in these lawsuits, and reducing the possibility of duplicative, costly, multi-jurisdictional litigation with the potential for inconsistent outcomes.

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inconsistent outcomes.

However, the forum provision limits a stockholder’s ability to bring a claim in a judicial forum that it believes may be more favorable than Delaware, and this could discourage the filing of such lawsuits.

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• economic or political events, trends, and unexpected developments occurring nationally, globally, or in any of our key sales regions such as uncertainty regarding economic and other policies and priorities;

• macroeconomic, industry and market conditions, including those caused by war, conflict in the Middle East, or bank failures;

• macroeconomic, industry and market conditions, including those caused by war, conflict in the Middle East or elsewhere, or bank failures;

and geopolitical issues;

• the impact of reductions in government spending;

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• variations in our quarterly operating results and financial condition, including our liquidity;

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Additionally, we have funding available to us under our $1.5 billion commercial paper program and our $2.0 billion revolving credit facility, which serves as a backstop to our commercial paper program.

Our revolving credit facility also includes an option to increase the amount up to an additional $750.0 million, for a potential total commitment of $2.75 billion.

Our revolving credit facility also includes an option to increase the amount up to an

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additional $750.0 million, for a potential total commitment of $2.75 billion.

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

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As a result, we may need to enter into new financing arrangements to obtain the necessary funds.

If we determine it is necessary to seek additional funding for any reason, we may not be able to obtain such funding or, if

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funding is available, obtain it on acceptable terms.

If we determine it is necessary to seek additional funding for any reason, we may not be able to obtain such funding or, if funding is available, obtain it on acceptable terms.

If we fail to make a payment on our debt, we could be in default on such debt, and this default could cause us to be in default on our other outstanding indebtedness.

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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.

What changed 10-Q

Item 1A. Risk Factors