What changed in this filing

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Item 1. Business

2023-02-01 compared with 2022-02-02 · 86 added, 60 removed, 267 unchanged (35% of the section changed)

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is a leader in secure, intelligent wireless technology for a more connected world.

Our integrated hardware and software platform, intuitive development tools, industry leading ecosystem and robust support enable customers in building advanced industrial, commercial, home and life applications.

Our integrated hardware and software platform, intuitive development tools, industry-leading ecosystem, and robust support help customers build advanced industrial, commercial, home, and life applications.

We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies, and improve lives.

We are pioneers in wireless innovation and have spent the last two decades simplifying the complexity of radio frequency (“RF”) from silicon to cloud.

Our leading IoT platform helps customers quickly create secure, intelligent connected devices that solve some of the world’s biggest challenges.

Our team and technology assist customers to build connected devices that measurably solve development challenges, including energy efficiency, economic growth, better health, infrastructure innovation, sustainable cities and responsible production.

Our leading Internet of Things (“IoT”) platform helps customers quickly create secure, intelligent connected devices.

Our team and technology assist customers to build connected devices that measurably solve development challenges, including energy efficiency, and enable applications that support better health, innovative infrastructure and sustainable cities.

Our semiconductor devices leverage standard complementary metal oxide semiconductor (“CMOS”), a low-cost, widely available process technology.

Use of CMOS technology enables smaller, more cost-effective and energy-efficient solutions.

The use of CMOS technology enables smaller, more cost-effective, and energy-efficient solutions.

Our software expertise allows us to develop products for markets where intelligent data capture, high-performance processing, and communication are increasingly important product differentiators.

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As a result, manufacturers of electronic devices value providers that can supply them with mixed-signal solutions offering greater functionality, smaller size, and lower power requirements at a reduced cost and shorter time-to-market.

We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications for the IoT including connected home and security, industrial automation and control, smart metering, smart lighting, commercial building automation, consumer electronics, asset tracking and medical instrumentation.

We have built a leading wireless development platform and product portfolio for the IoT based on Zigbee®, sub-GHz proprietary technologies, Bluetooth®, Z-Wave®, Thread, and Wi-Fi®.

We have developed a fully integrated, certified Wi-SUN® solution simplifying Low Power Wide Area Network (LPWAN) deployment for smart cities.

We have continued to diversify our product portfolio and introduce new products and solutions through both organic investment and acquisitions.

Mergers and acquisitions are an important part of our growth strategy.

We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications for the IoT.

We have built a leading wireless development platform and product portfolio for the IoT based on Bluetooth®, sub-GHz proprietary technologies, Thread, Wi-Fi®, Zigbee® and Z-Wave®.

Our products integrate complex mixed-signal functions that are frequently performed by numerous discrete components in competing products into a single chip, chipset or system-on-chip (SoC).

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● Reduce system power requirements enabling smaller form factors and/or longer battery life.

We have continued to diversify our product portfolio and introduce new products and solutions through both organic investment and acquisitions.

Revenues during fiscal 2022, 2021 and 2020 were generated predominately by sales of our mixed-signal products.

The following table summarizes the diverse product areas and applications for the various products that we have introduced to customers:

Product Areas and Description

The following summarizes the products that we have introduced to customers:

Wireless Microcontrollers and Sensor Products

Our EFM32™, EFM8™, 8051, wireless MCUs and wireless SoCs are based on numerous wireless protocols, including Zigbee, sub-GHz proprietary, Bluetooth, Z-Wave, Thread and Wi-Fi technologies.

Our EFM32™, EFM8™, 8051, wireless MCUs and wireless SoCs are based on numerous wireless protocols, including Bluetooth, sub-GHz proprietary technologies, Thread, Wi-Fi, Zigbee and Z-Wave technologies.

Our family of products are ideally suited to ultra-low power IoT embedded systems that include energy friendly 8-bit mixed-signal microcontrollers, ultra-low power 32-bit microcontroller and wireless MCU connectivity solutions using the ARM® Cortex-M0+/M3/M4 and newer M33 cores.

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We bring enhanced capability to the industry protecting user data, system keys and manufacturer brands from malicious threats both hands-on and internet-based.

Our broad portfolio addresses a variety of target markets, including smart home, commercial (building automation and retail) and industrial (smart energy, factory automation, smart cities).

Our broad portfolio addresses a variety of target markets.

Our sensor products include optical sensors (proximity, ambient light gestures and heart rate monitoring), as well as relative humidity (RH) / temperature sensors and Hall effect magnetic sensors.

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In-house protocol stacks and Micrium® real-time operating system (RTOS) help simplify software development for IoT developers by coordinating and prioritizing multiprotocol connectivity, SoC peripherals and other system-level activities.

- Home automation /security systems

We group our products as Industrial & Commercial or Home & Life based on the target markets they address.

These markets and their corresponding applications are described below:

Target Market

Industrial & Commercial

Industrial IoT

The Industrial IoT market is highly fragmented with a diverse collection of products and applications.

Leveraging the Industrial IoT allows companies to increase production and efficiency, understand and improve processes, and predict faults in processes before downtime occurs.

Industrial IoT solutions address energy efficiency, operation excellence and smart usage of commercial spaces.

Our industrial IoT solutions simplify human-machine interfaces and access controls;

add wireless connectivity to commercial luminaires, sensors and controls;

implement HVAC sensor and actuator networks in commercial buildings;

provide increased convenience to electrical providers and consumers through submetering:

improve maintenance routines using IoT predictive maintenance;

and drive greater energy efficiency and safety with smart circuit breakers.

- Industrial automation and control

- Smart buildings

- Access control

- HVAC control

- Industrial wearables

- Industrial power tools

Cities are now using digitization and wireless technology to increase service capacity while decreasing carbon emissions.

By leveraging smart city solutions, cities monitor municipal assets in real-time and residents actively track their energy consumption.

Our smart city solutions enable cities to operate smarter, produce and distribute energy more efficiently, and prioritize renewable energy.

- Smart metering

- Smart street lighting

- Renewable energy

- Electric vehicle supply equipment

- Smart agriculture

Commercial IoT

Commercial IoT, such as smart retail solutions, can increase retailer efficiency, reduce labor costs and provide consumer insights by merging digital online e-commerce and physical stores into an omnichannel experience.

Our smart retail solutions, such as electronic shelf labels, increase productivity and profitability via centralized and dynamic price management without the labor-intensive manual price updates.

Our smart lighting solutions use wireless access points to enable indoor location services which track assets and consumer behavior and speed up click-and-collect ordering.

- Asset tracking

- Smart lighting

- Commercial building automation

- Patient monitoring

- Connected medical products

- Smart appliances

- Electronic shelf labels

- Theft protection

- Enterprise access points

Smart home devices provide functional, energy-efficient living spaces with secure, reliable, and robust wireless smart home solutions.

Sensors collect real-time data continuously to automate lighting, heating, and appliances, minimizing energy consumption while maximizing convenience.

Our smart home solutions provide the functionality consumers demand while delivering features that accelerate adoption - privacy, simplicity, and performance.

- Home automation/security systems

- Smart speaker

- Access control

- Smart lighting

- HVAC control

- Asset tracking

- Medical instrumentation

- Consumer health & fitness (wearables)

- Smart cameras

- Smart appliances

- Smart home sensing

- Toys and consumer electronics

- Monitors and lavatory controls

On April 22, 2021, we entered into an Asset Purchase Agreement pursuant to which Skyworks Solutions, Inc.

agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising our infrastructure and automotive business for $2.75 billion in cash.

The transaction closed on July 26, 2021.

See Note 3, Discontinued Operations , to the Consolidated Financial Statements for additional information.

Target Market

Connected Health

Smart medical devices, such as pulse oximeters, ECG monitors, and fitness wearables, make healthcare more accessible and are improving lives around the world.

Crowded RF environments, regulatory requirements, and security make development of these connected medical devices challenging for device manufacturers.

Our low-power, high-performance wireless SoCs and modules simplify this process and accelerate time-to-market to develop secure, reliable, smart medical devices.

- Consumer health & fitness (wearables)

- Connected medical products

- Medical instrumentation

- Patient monitoring

Customers, Sales and Marketing

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Although we sell the products to, and are paid by distributors and contract manufacturers, we refer to such end customer as our customer.

Three of our distributors who sell to our customers, Arrow Electronics, Edom Technology and Sekorm, each represented 28%, 18% and 12% of our revenues during fiscal 2021, respectively.

Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 33% and 17% of our revenues during fiscal 2022, respectively.

We maintain numerous sales offices in Asia, the Americas and Europe.

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In addition to being able to manage numerous application tasks, an RTOS enhances scalability, and makes complex applications predictable and reliable.

To address these application needs, in 2016 we acquired Micrium, an embedded RTOS provider.

To address these application needs, we acquired Micrium, an embedded RTOS provider.

Micrium has established itself as a reliable, high performance and trusted RTOS software platform, with an installed base that has grown to millions of devices.

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We seek to protect our technology through a combination of patents, copyrights, trade secrets, trademarks and confidentiality procedures.

As of January 1, 2022, we had approximately 1,377 issued or pending United States and foreign patents.

As of December 31, 2022, we had 1,459 issued or pending United States and foreign patents.

Patents generally have a term of twenty years from the date they are filed.

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Our success depends on our ability to continue to attract, retain and motivate qualified employees, particularly highly skilled analog and mixed-signal engineers and senior management personnel.

We strive to meet this objective by offering competitive compensation and benefits in a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers.

As of January 1, 2022, we employed 1,667 people, of whom more than 60% are in engineering roles.

Women represent approximately 20% of our workforce and men represent approximately 80%.

We strive to meet this objective by offering competitive compensation and benefits in a diverse, inclusive, equitable and safe workplace, with opportunities for our employees to grow and develop in their careers.

As of December 31, 2022, we employed 1,964 people, of whom 67% were in engineering roles.

Women represented 22% of our workforce and men represented 78%.

We are a multi-national and multi-ethnic workforce, with sites and employees in more than a dozen countries.

We are committed to fostering a diverse and inclusive workplace that attracts and retains exceptional talent.

We actively promote diversity in our recruitment, development and promotion practices.

We actively promote representation in our organization and equity in our recruitment, development, promotion and compensation practices.

We have focused attention on improving our environmental, social and governance (“ESG”) metrics.

We included diversity, equity and inclusion (“DEI”) metrics as a component of senior management bonuses for fiscal 2022.

These principles are also reflected in our employee training, in particular with respect to our policies against harassment, discrimination and the elimination of bias in the workplace.

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We believe the development of our company culture, along with competitive compensation, career growth and development opportunities have helped increase employee tenure and reduce voluntary turnover.

During fiscal 2021, our voluntary employee turnover rate was approximately 10%.

During fiscal 2022, our voluntary employee turnover rate was 9%.

The health and safety of our employees is of utmost important to us.

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We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support their physical and mental health by providing tools and resources to help them improve or maintain their health status.

In response to the COVID-19 pandemic, we implemented a response plan that we believe was in the best interest of our employees and the communities in which we operate.

This included largely transitioning our global workforce to a remote work model, while implementing additional safety measures for essential employees continuing critical on-site work.

We have taken additional health and safety measures due to the COVID-19 pandemic and will continue to adjust these as needed based upon health authority guidelines.

Corporate Social Responsibility

As a global corporate citizen, we are committed to environmental sustainability, operational excellence, and providing support for people and communities around the world.

We live by our promise to "do the right thing"

for our employees, customers, shareholders, communities and planet.

We strive to minimize resource use and reduce the environmental impact of our production processes by designing smaller and more energy-efficient products, conserving energy and precious resources, and investing in sustainable technologies and energy conservation practices.

Innovative solutions don’t stop at our products – we are focused on addressing complex community challenges through collaborative, actionable and results-driven programs.

Our philanthropy program provides financial, volunteer and in-kind support to organizations that are solving critical community needs, improving the quality of life, including those promoting diversity, inclusion and social justice, and expanding STEM opportunities for underrepresented groups.

Actions we have taken in pursuit of these commitments include:

Environmental Programs

● Adopted and require our suppliers to support the Responsible Business Alliance® (RBA®) Code of Conduct;

● Prioritized qualified suppliers who are socially and environmentally progressive;

● Delivered products that met environmental regulations and requirements;

● Demanded excellence in our quality and environmental management systems, each certified to ISO 9001 and ISO 14001 standards.

Social Programs

● Donated a portion of our annual profits to charitable organizations;

● Allocated funds to our global sites for grants supporting critical causes locally;

● Provided corporate matching gifts to expand the impact of individual employee donations;

● Offered 24 hours of paid time off per year for employees to volunteer in their communities;

● Sponsored community service projects and supported relief efforts when disasters occur;

● Partnered with organizations committed to building diverse, equitable, and inclusive environments;

● Provided financial grants to nonprofits offering STEM education programs for underrepresented and underserved groups;

● Supported research to improve safety, sustainability, and overall quality of life in densifying cities.

As a global corporate citizen, we are committed to advancing responsible and sustainable operations throughout our supply chain.

We live by our promise to “do the right thing” for our employees, customers, shareholders, communities, and the planet.

We strive to minimize resource use and reduce our environmental impact by designing smaller and more energy-efficient products, conserving energy and precious resources, and investing in sustainable technologies and energy conservation practices.

We believe our products enable sustainable IoT solutions across home, medical, industrial and commercial environments, including air pollution and waste management monitoring, water integrity, residential irrigation monitoring, street lighting networks, advanced metering infrastructure and building energy management.

Innovative solutions don’t stop at our products – we are also actively supporting research to improve safety, sustainability, and overall quality of life in densifying cities as the founding corporate partner for the Smart City Living Lab at The International Institute of Information Technology in Hyderabad, India.

We demand excellence in our quality and environmental management systems, each respectively certified to ISO 9001:2015 and ISO 14001:2015 standards.

We strive to deliver products that meet environmental regulations and requirements and have high standards for our global supply chain partners, prioritizing qualified suppliers who are socially and environmentally progressive.

In 2022, we joined the Responsible Business Alliance® (“RBA®”), an industry coalition dedicated to responsible business conduct in the global supply chain.

We support, and require our suppliers to support, the RBA Code of Conduct.

Each year we donate a portion of our annual profits to charitable organizations, allocating global site grants to support local community needs, and providing corporate matching gifts for our US-based employees.

We also offer 24 hours of paid time off annually for employees to volunteer in their communities.

Our philanthropy program prioritizes financial, volunteer and in-kind support to organizations that are helping to expand technology access and education to underrepresented groups, support advancements in sustainability and energy conservation, and invest in critical community needs where we work and live.

For more information on our ESG commitments and progress, please visit the Environmental, Social and Governance (“ESG”) section of our website at www.silabs.com.

Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

Governmental Regulations

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● General Data Protection Regulation (“GDPR”), which provides guidelines for the collection and processing of personal information from individuals who live in the European Union;

Foreign Corrupt Practices Act ("FCPA"), which prohibits companies and their individual officers from influencing foreign officials with any personal payments or rewards;

Foreign Corrupt Practices Act (“FCPA”), which prohibits companies and their individual officers from influencing foreign officials with any personal payments or rewards;

● Conflict minerals reporting, which imposes disclosure requirements regarding the use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in products.

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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-K

Item 1. Business