Global Business Risks
−Removed: The COVID-19 pandemic could adversely affect our business, results of operations, and financial condition
−Removed: The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets.
−Removed: The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration, severity and spread of the pandemic, related restrictions on travel and transportation and other actions that may be taken by governmental authorities, the impact to the business of our suppliers or customers and other items identified in the risk factors below, all of which are uncertain and cannot be predicted.
−Removed: The impacts of the COVID-19 pandemic, or a similar public health crisis, on our business, customers, suppliers, employees, markets and financial results and condition are uncertain, evolving and dependent on numerous unpredictable factors outside of our control, including:
−Removed: ● The duration and impact of a global economic recession or depression that could reduce demand and/or pricing for our products;
−Removed: ● Disruptions to our business and supply chain (and the business and supply chains of our customers) in connection with the sourcing of materials, equipment and engineering support, and services from geographic areas impacted by the public health crisis, including disruptions caused by illnesses, quarantines and restrictions on people’s ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, and other travel or health-related restrictions;
−Removed: ● Delays or limitations on the ability of our customers to make timely payments;
−Removed: ● Governmental actions to limit exposure to and spreading of such infectious diseases, such as travel restrictions, quarantines and business shutdowns or slowdowns, facility closures or other restrictions;
−Removed: ● Deterioration of worldwide credit and financial markets that could limit our ability to obtain external financing to fund our operations and capital expenditures or to refinance our existing indebtedness;
−Removed: ● Potential asset impairments, including goodwill, intangible assets, investments and other assets;
−Removed: ● Complexities related to our employees temporarily working from home as well as increased cyber-related risks due to our employees working from home;
−Removed: ● Challenges with reopening our offices, including implementing a hybrid model of working from home or the office, establishing appropriate office safety protocols, maintaining our corporate culture, and continuing to attract, retain and motivate our employees;
−Removed: ● Potential failure of our computer systems or communication systems;
−Removed: ● Investment-related risks, including difficulties in liquidating investments due to current market conditions and adverse investment performance.
−Removed: There can be no assurance that any decrease in sales resulting from the COVID-19 pandemic or a similar public health crisis will be offset by increased sales in subsequent periods.
−Removed: Even after the COVID-19 pandemic or a similar public health crisis has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession, economic downturn or increased unemployment that has occurred or may occur in the future.
−Removed: An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition.
We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations
1 unchanged sentence
The industry has experienced significant fluctuations, often connected with, or in anticipation of, maturing product cycles and new product introductions of both semiconductor companies’ and their customers’ products and fluctuations in general economic conditions.
−Removed: Deteriorating general worldwide economic conditions, including reduced economic activity, concerns about credit and inflation, increased energy costs, decreased consumer confidence, reduced corporate profits, decreased spending and similar adverse business conditions, would make it very difficult for our customers, our vendors, and us to accurately forecast and plan future business activities and could cause U.S.
+Added: Deteriorating general worldwide economic conditions, including reduced economic activity, concerns about credit, interest rates and inflation, increased energy costs, decreased consumer confidence, reduced corporate profits, decreased spending and similar adverse business conditions, would make it very difficult for our customers, our vendors, and us to accurately forecast and plan future business activities and could cause U.S.
and foreign businesses to slow spending on our products.
+Added: In recent months, inflation and interest rates have increased significantly.
+Added: Such pressures could impact demand for our customers’ end products and increase our costs.
+Added: If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenues.
We cannot predict the timing, strength, or duration of any economic slowdown or economic recovery.
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None of our third-party foundry, assembly or test subcontractors have provided assurances that adequate capacity will be available to us.
+Added: The semiconductor industry has recently experienced an economic up-cycle.
+Added: This recent up-cycle could be followed by a downturn, and historically, such down-cycles have resulted in a decline in overall GDP performance and greater overall uncertainty regarding the economy.
+Added: If such a downturn occurs, it could have a material adverse effect on our business and operating results.
In addition, the COVID-19 pandemic has caused further global economic uncertainty.
3 unchanged sentences
This has included the establishment of a headquarters in Singapore for non-U.S.
−Removed: During the six months ended July 2, 2022, the percentage of our revenues derived from outside of the United States was 85% (and the revenue associated with end customers in China was 29%, and revenue attributed to China based on shipped-to location was 38%).
+Added: During the nine months ended October 1, 2022, the percentage of our revenues derived from outside of the United States was 84% (and the revenue associated with end customers in China was 15%, and revenue attributed to China based on shipped-to location was 36%).
We may not be able to maintain or increase global market demand for our products.
25 unchanged sentences
As a result, we have devoted and expect to continue to devote a large amount of resources to develop products based on new and emerging technologies and standards that will be commercially introduced in the future.
−Removed: Research and development expense during the six months ended July 2, 2022 was $161.1 million, or 32.4% of revenues.
+Added: Research and development expense during the nine months ended October 1, 2022 was $245.7 million, or 32.0% of revenues.
A number of companies are actively involved in the development of these new technologies and standards.
143 unchanged sentences
The future growth of our business will depend in large part on our ability to manage our relationships with current and future distributors and sales representatives, develop additional channels for the distribution and sale of our products and manage these relationships.
−Removed: During the six months ended July 2, 2022, 81% of our revenue was derived from distributors (and 48% of our revenue was derived from our two largest distributors).
+Added: During the nine months ended October 1, 2022, 81% of our revenue was derived from distributors (and 49% of our revenue was derived from our two largest distributors).
As we execute our indirect sales strategy, we must manage the potential conflicts that may arise with our direct sales efforts.
18 unchanged sentences
A resulting write-off of unusable or excess inventories would adversely affect our operating results.
+Added: The COVID-19 pandemic could adversely affect our business, results of operations, and financial condition
+Added: The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets.
+Added: The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration, severity and spread of the pandemic, related restrictions on travel and transportation and other actions that may be taken by governmental authorities, the impact to the business of our suppliers or customers and other items identified in the risk factors below, all of which are uncertain and cannot be predicted.
+Added: The impacts of the COVID-19 pandemic, or a similar public health crisis, on our business, customers, suppliers, employees, markets and financial results and condition are uncertain, evolving and dependent on numerous unpredictable factors outside of our control, including:
+Added: ● The duration and impact of a global economic recession or depression that could reduce demand and/or pricing for our products;
+Added: ● Disruptions to our business and supply chain (and the business and supply chains of our customers) in connection with the sourcing of materials, equipment and engineering support, and services from geographic areas impacted by the public health crisis, including disruptions caused by illnesses, quarantines and restrictions on people’s ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, and other travel or health-related restrictions;
+Added: ● Delays or limitations on the ability of our customers to make timely payments;
+Added: ● Governmental actions to limit exposure to and spreading of such infectious diseases, such as travel restrictions, quarantines and business shutdowns or slowdowns, facility closures or other restrictions;
+Added: ● Deterioration of worldwide credit and financial markets that could limit our ability to obtain external financing to fund our operations and capital expenditures or to refinance our existing indebtedness;
+Added: ● Potential asset impairments, including goodwill, intangible assets, investments and other assets;
+Added: ● Complexities related to our employees temporarily working from home as well as increased cyber-related risks due to our employees working from home;
+Added: ● Challenges with reopening our offices, including implementing a hybrid model of working from home or the office, establishing appropriate office safety protocols, maintaining our corporate culture, and continuing to attract, retain and motivate our employees;
+Added: ● Potential failure of our computer systems or communication systems;
+Added: ● Investment-related risks, including difficulties in liquidating investments due to current market conditions and adverse investment performance.
+Added: There can be no assurance that any decrease in sales resulting from the COVID-19 pandemic or a similar public health crisis will be offset by increased sales in subsequent periods.
+Added: Even after the COVID-19 pandemic or a similar public health crisis has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession, economic downturn or increased unemployment that has occurred or may occur in the future.
+Added: An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition.
Our products are complex and may contain errors which could lead to liability, an increase in our costs and/or a reduction in our revenues
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Any disruption resulting from these events, including the COVID-19 pandemic, could also cause significant delays in shipments of our products until we are able to shift our manufacturing, assembling or testing from the affected subcontractor to another third-party vendor.
−Removed: If the COVID-19 pandemic continues to progress in ways that significantly disrupt the manufacture, shipment and sales of our products or the products of our customers, this may materially negatively impact our operating results for subsequent periods.
−Removed: For example, if the travel restrictions or business shutdowns or slowdowns continue for an extended period of time in Taiwan, South Korea or the other countries in which our current manufacturers, assemblers, test service providers, distributors and customers are located, we may experience delays in product production, a decreased ability to support our customers, reduced design win activity, and overall lack of productivity.
+Added: If the COVID-19 pandemic significantly disrupts the manufacture, shipment and sales of our products or the products of our customers, this may materially negatively impact our operating results for subsequent periods.
+Added: For example, if travel restrictions or business shutdowns or slowdowns occur for an extended period of time in Taiwan, South Korea or the other countries in which our current manufacturers, assemblers, test service providers, distributors and customers are located, we may experience delays in product production, a decreased ability to support our customers, reduced design win activity, and overall lack of productivity.
Our customers may also experience closures of their manufacturing facilities or inability to obtain other components, either of which could negatively impact demand for our solutions.
139 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.