What changed in this filing

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Item 1A. Risk Factors

2024-08-08 compared with 2024-05-09 · 29 added, 24 removed, 487 unchanged (10% of the section changed)

72 unchanged sentences

In addition, the lead time required to qualify new suppliers for lasers and certain optics could be as long as a year, and the lead time required to qualify new suppliers of other components could be as long as nine months.

In some cases, we may need to purchase components in advance of receiving customer orders

In some cases, we may need to purchase components in advance of receiving customer orders for product.

If we are unable to accurately predict our component needs, or if our component supply is disrupted, we may miss market opportunities by not being able to meet the demand for our systems.

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As a result, any prolonged disruption in the operations of our manufacturing facilities could seriously harm our ability to satisfy our customer order deadlines.

Restrictions on our access to or operation of manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, may impact our ability to meet customer demand and could have

a material adverse effect on our financial condition and results of operations.

If we cannot timely deliver our systems, our results from operations and cash flows could be materially and adversely affected.

8 unchanged sentences

In addition, some of our third-party party services providers also have product designs, know-how, data files and other important confidential information regarding our products.

If a third-party service provider experiences a cybersecurity event in which such confidential information is publicly exposed or shared with bad actors, it could materially and adversely impact our competitive position in the market.

If a third-party service provider experiences a

cybersecurity event in which such confidential information is publicly exposed or shared with bad actors, it could materially and adversely impact our competitive position in the market.

Our ability to fulfill our backlog may have an effect on our long-term ability to procure contracts and fulfill current contracts.

16 unchanged sentences

We must also continue to refine our current systems so that they remain competitive.

We expect to continue to make significant investments in our research and development activities and at times may make inventory

investments prior to commercialization.

We expect to continue to make significant investments in our research and development activities and at times may make inventory investments prior to commercialization.

We may experience difficulties or delays in our development efforts with respect to new systems, and we may not ultimately be successful in our product enhancement efforts to improve and advance products or in responding effectively to technological change, as not all research and development activities result in viable commercial products.

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We own or have licensed a number of patents relating to our metrology, lithography, wafer and defect inspection systems, as well as artificial intelligence and machine learning systems, and software, including both embedded and application software, and have filed applications for additional patents.

Any of our pending patent applications may be rejected,

however, and we may be unable to develop additional proprietary technology that is patentable in the future.

In addition, the patents that we do own or that have been issued or licensed to us may not provide us with competitive advantages and/or may be invalidated, enforceable and/or challenged by third parties.

Any of our pending patent applications may be rejected, however, and we may be unable to develop additional proprietary technology that is patentable in the future.

In addition, the patents that we do own or that have been issued or licensed to us may not provide us with competitive advantages and/or may be invalidated, unenforceable and/or challenged by third parties.

Third parties may also design around our patents or copy our patented inventions without our knowledge.

9 unchanged sentences

In some countries, it can be difficult to register trademarks because of the strict examination process or blocking trademarks for other goods.

Costly and time-consuming litigation might be necessary to enforce and determine the scope of our intellectual property rights, and failure to obtain or maintain trade secret protection might adversely affect our ability to continue our research or bring products to market.

Costly and time-consuming litigation might be necessary to enforce and determine the scope

of our intellectual property rights, and failure to obtain or maintain trade secret protection might adversely affect our ability to continue our research or bring products to market.

Any of these circumstances could result in harm to our competitive position in the market.

5 unchanged sentences

Protection of our intellectual property rights, or the efforts of third parties to enforce their own intellectual property rights against us, may result in costly and time-consuming litigation, substantial damages, lost product sales and/or the loss of important intellectual property rights.

From time to time, we may be required to initiate litigation in order to enforce our intellectual property rights or to determine the noninfringement, scope or validity of a third party’s intellectual property rights.

From time to time, we may be required to initiate litigation in order to enforce our intellectual property rights or to determine the non-infringement, scope or validity of a third party’s intellectual property rights.

Any litigation, regardless of outcome, could be expensive and time consuming and could subject us to significant liabilities or require us to re-engineer our products or obtain expensive licenses from third parties.

12 unchanged sentences

We also rely on our information technology system for business operations.

If there is a breach as a result of third-party action, including through the use of artificial intelligence, employee error, malfeasance, break-ins or otherwise, of our security measures designed to protect this information and prevent data loss and other security breaches, and someone obtains unauthorized access to our customers’, vendors’ or employees’ data or disrupts our access to our own data and systems, we could face loss of business, regulatory investigations or court orders or damage to our reputation, and we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers.

If there is a breach as a result of third-party action, including through the use of artificial intelligence, employee misuse, human error, malfeasance, break-ins or otherwise, of our security measures designed to protect this information and prevent data loss and other security breaches, and someone obtains unauthorized access to our customers’, vendors’ or employees’ data or disrupts our access to our own data and systems, we could face loss of business, regulatory investigations or court orders or damage to our reputation, and we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers.

Cyber-attacks and other malicious internet-based activities continue to increase.

5 unchanged sentences

As a result of any of these events, our or our customers’ and vendors’ information could be accessed or disclosed improperly.

In addition, cybersecurity incidents affecting our customers could result in substantial delays in our ability to ship to those customers or install our products, which could result in delays in revenue recognition or the cancellation of orders.

As discussed herein under the heading “We outsource select manufacturing activities to third-party service providers, which decreases our control over the performance of these functions and may result in lower quality and functionality of our products,” cybersecurity incidents affecting our service providers could negatively impact our ability to timely and cost-effectively produce products and/or negatively impact our competitive position in the market.

In addition, cybersecurity incidents affecting our customers

could result in substantial delays in our ability to ship to those customers or install our products, which could result in delays in revenue recognition or the cancellation of orders.

As discussed herein under the heading “We outsource select manufacturing activities to third-party service providers, which decreases our control over the performance of these functions and may result in lower quality and functionality of our products, and exposes us to increased supply chain risks,” cybersecurity incidents affecting our service providers could negatively impact our ability to timely and cost-effectively produce products and/or negatively impact our competitive position in the market.

Likewise, cybersecurity events impacting our suppliers could result in substantial delays in our ability to obtain necessary components for our products from those suppliers, which could hamper our ability to ship our products to our customers, harming our results of operations and our customer relationships.

26 unchanged sentences

We have, from time to time, selectively reduced prices on our systems in order to protect our market share, and competitive pressures may necessitate further price reductions.

We expect our competitors in each product area to continue to improve the design and performance of their products and to introduce new products with competitive prices and performance characteristics.

We expect our competitors in each product area to continue to improve the design and performance of their products and to introduce new products with competitive prices and

performance characteristics.

These product introductions would likely require us to decrease the prices of our systems and increase the level of discounts that we grant our customers.

38 unchanged sentences

or based on U.S.

technology, in turn reducing demand for our products, which could have a material adverse effect on our business, financial condition and results of operations.

technology, in turn reducing demand for our products, which could have a material adverse effect on our business,

financial condition and results of operations.

Increased restrictions on China exports may also lead to regulatory retaliation by the Chinese government, which may adversely impact our business.

22 unchanged sentences

The occurrence of one or more natural disasters, such as hurricanes, tropical storms, fires, cyclones, earthquakes, tsunamis, flooding, typhoons, volcanic eruptions and weather conditions such as major or extended winter storms, droughts and tornadoes, whether as a result of climate change or otherwise, may disrupt manufacturing or other operations.

For example, our Milpitas operations are located near major earthquake fault lines in California.

For example, our Milpitas

operations are located near major earthquake fault lines in California.

We cannot provide any assurance that alternate means of conducting our operations (whether through alternate production capacity or service providers or otherwise) would be available if a major disruption were to occur or that, if such alternate means were available, they could be obtained on favorable terms.

4 unchanged sentences

disruptions to our supply chain in connection with the sourcing of materials, support, and services;

of operations due to unavailability of employees as a result of illness, travel restrictions and other factors;

disruption of operations due to unavailability of employees as a result of illness, travel restrictions and other factors;

and a decrease in demand for our products;

33 unchanged sentences

Our future annual and quarterly tax rates could be affected by numerous factors, including changes in the (1) applicable tax laws;

(2) composition of earnings in countries with differing tax

(2) composition of earnings in countries with differing tax rates;

or (3) recoverability of our deferred tax assets and liabilities.

7 unchanged sentences

Based on the nature of the uncertainties around specific legislation to be enacted, we have not quantified the impact of this risk.

Many countries and organizations such as the Organization for Economic Cooperation and Development are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

where we do business or cause us to change the way we operate our business.

Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our results of operations.

21 unchanged sentences

We have been from time to time, and in the future may be, involved in legal proceedings or claims regarding any number of matters, including intellectual property infringement, contract disputes, trade compliance, antitrust, environmental regulations, privacy and data protection, securities, product performance, product liability, employment and workplace safety, and other matters.

In addition, we may receive, and have received, inquiries, warrants, subpoenas, and other requests for information in connection with government investigations of potential or suspected violations of law by our company and/or other companies that we work with.

that we work with.

We have also received, and may receive in the future, claims from customers who believe we owe them product warranty protection, indemnification or other obligations.

50 unchanged sentences

If our customers have difficulties in obtaining capital or financing, this could result in lower sales.

Customers with liquidity issues could also result

in an increase in bad debt expense.

Customers with liquidity issues could also result in an increase in bad debt expense.

These conditions could also affect our key suppliers, which could affect their ability to supply parts and result in delays of our customer shipments.

26 unchanged sentences

• general economic conditions;

• political changes, hostilities or natural disasters such as hurricanes and floods;

• political changes or uncertainties, including as a result of the upcoming U.S.

presidential election, hostilities or natural disasters such as hurricanes and floods;

• the impact of infectious disease pandemics on the global economy and on our customers, suppliers, employees, and business;

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors