What changed in this filing

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Item 1A. Risk Factors

2023-11-01 compared with 2023-07-26 · 18 added, 18 removed, 430 unchanged (8% of the section changed)

41 unchanged sentences

and foreign businesses to slow spending on our products.

In recent months, inflation and interest rates have increased significantly.

Such pressures could impact demand for our customers’ end products and increase our costs.

Increases in inflation and interest rates can impact demand for our customers’ end products and increase our costs.

If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenues.

6 unchanged sentences

We believe the semiconductor industry is currently suffering a downturn due in large part to adverse macroeconomic conditions, characterized by a slowdown in overall GDP performance and factory activity in certain regions, higher levels of customer inventory, the impact of tariffs on trade relations, and greater overall uncertainty regarding the economy.

This downturn could have a material adverse effect on our business and operating results.

This downturn has negatively affected, and may continue to have an adverse effect, on our business and operating results.

In addition, the COVID-19 pandemic has caused further global economic uncertainty.

The impact from the rapidly changing market and economic conditions due to the COVID-19 outbreak is uncertain, disrupting the business of our customers and suppliers, and could impact our business and operating results in the future.

Any future impacts due to COVID-19,including a resurgence of infection rates or the spread of new variants or viruses is uncertain, and could include disrupting the business of our customers and suppliers, which could impact our business and operating results in the future.

We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations

1 unchanged sentence

This has included the establishment of a headquarters in Singapore for non-U.S.

During six months ended July 1, 2023, the percentage of our revenues derived from outside of the United States was 86% (and the revenue associated with end customers in China was 10%, and revenue attributed to China based on shipped-to location was 26%).

During nine months ended September 30, 2023, the percentage of our revenues derived from outside of the United States was 87% (and the revenue associated with end customers in China was 11%, and revenue attributed to China based on shipped-to location was 28%).

We may not be able to maintain or increase global market demand for our products.

9 unchanged sentences

● Difficulties related to the protection of our intellectual property rights in some countries;

● Public health crises, such as the COVID-19 pandemic, may affect our international operations, suppliers and customers and we may experience delays in product development, a decreased ability to support our customers and reduced design win activity if the travel restrictions or business shutdowns or slowdowns continue for an extended period of time in any of the countries in which we, our suppliers and our customers operate and do business;

activity if the travel restrictions or business shutdowns or slowdowns continue for an extended period of time in any of the countries in which we, our suppliers and our customers operate and do business;

● Multiple, conflicting and changing tax and other laws and regulations that may impact both our international and domestic tax and other liabilities and result in increased complexity and costs, including the impact of the Tax Cuts and Jobs Act, which increased our effective tax rate, in part due to the impact of the requirement to capitalize and amortize foreign research and development expenses beginning in 2022;

3 unchanged sentences

● Political and economic instability;

● Risks that demand and the supply chain may be adversely affected by military conflict (including between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally;

● Risks that demand and the supply chain may be adversely affected by military conflict (including the recent events in the Middle East and the ongoing conflict between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally;

● Greater difficulty in hiring and retaining qualified personnel;

14 unchanged sentences

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.

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.

If such an event 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 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.

6 unchanged sentences

These competitors may be able to leverage their existing relationships to discourage their customers from purchasing products from us or persuade them to replace our products with their products.

Our competitors may also offer bundled solutions offering a more complete product despite the technical merits or advantages of our products.

Our competitors may also offer bundled solutions offering a more complete

product despite the technical merits or advantages of our products.

These competitors may elect not to support our products which could complicate our sales efforts.

31 unchanged sentences

Attempted or successful attacks against our products and services could damage our reputation with customers or users and reduce demand for our products and services.

Additionally, there is an increased risk that we may experience cybersecurity-related events such as COVID-19 themed phishing attacks and other security challenges as a result of most of our employees and our service providers working remotely from non-corporate managed networks during the ongoing COVID-19 pandemic and potentially continuing working remotely even after the COVID-19 pandemic has subsided.

In addition, the risk of cyber-attacks has increased in connection with the military conflict between Russia and Ukraine and the resulting geopolitical conflict.

Additionally, there is an increased risk that we may experience cybersecurity-related events such as phishing attacks and other security challenges as a result of new hybrid working arrangements and employees and our service providers working remotely.

In addition, the risk of cyber-attacks has increased in connection with the conflict between Russia and Ukraine and in the Middle East.

In light of those and other geopolitical events, nation-state actors or their supporters may launch retaliatory cyber-attacks, and may attempt to cause supply chain and other third-party service provider disruptions, or take other geopolitically motivated retaliatory actions that may disrupt our business operations, result in data compromise, or both.

15 unchanged sentences

We may also experience significant period-to-period fluctuations in our revenues and operating results in the future due to a number of factors, and any such variations may cause our stock price to fluctuate.

In some future period our revenues or operating results may be below the expectations of public market analysts or investors.

If this occurs, our stock price may drop, perhaps significantly.

If our revenues or operating results are below the expectations of public market analysts or investors, our stock price may drop, perhaps significantly.

A number of factors, in addition to those cited in other risk factors applicable to our business, may contribute to fluctuations in our revenues and operating results, including:

24 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.

Research and development expense during six months ended July 1, 2023 was $175.3 million, or 35.7% of revenues.

Research and development expense during nine months ended September 30, 2023 was $254.3 million, or 36.6% of revenues.

A number of companies are actively involved in the development of these new technologies and standards.

55 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.

During six months ended July 1, 2023, 80% of our revenue was derived from distributors (and 50% of our revenue was derived from our two largest distributors).

During nine months ended September 30, 2023, 80% of our revenue was derived from distributors (and 52% 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.

28 unchanged sentences

● Potential asset impairments, including goodwill, intangible assets, investments and other assets;

● Complexities related to our employees temporarily working from home as well as increased cyber-related risks due to our employees working from home;

● 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;

● Increased cyber-related risks due to hybrid working models and increased remote working;

● Challenges with implementing and managing 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;

● Potential failure of our computer systems or communication systems;

120 unchanged sentences

Disruptions in the financial services industry could adversely affect our operations and financial condition

In March 2023, banking regulators closed two U.S.

In the first half of 2023, banking regulators closed three U.S.

banks and appointed the Federal Deposit Insurance Corporation (“FDIC”) to act as receiver.

50 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