What changed in this filing

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Item 1A. Risk Factors

2024-11-04 compared with 2024-07-24 · 32 added, 32 removed, 423 unchanged (13% of the section changed)

13 unchanged sentences

None of our third-party foundry, assembly or test subcontractors have provided assurances that adequate capacity will be available to us.

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.

We believe the semiconductor industry recently suffered 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 has negatively affected, and may continue to have an adverse effect, on our business and operating results.

7 unchanged sentences

We expect to face competition in the future from our current competitors, other manufacturers and designers of semiconductors, and start-up semiconductor design companies.

As the markets for communications products grow, we also may face competition from traditional communications device companies.

As the markets for

communications products grow, we also may face competition from traditional communications device companies.

These companies may enter the mixed-signal semiconductor market by introducing their own products or by entering into strategic relationships with or acquiring other existing providers of semiconductor products.

In addition, large companies

may restructure their operations to create separate companies or may acquire new businesses that are focused on providing the types of products we produce or acquire our customers.

In addition, large companies may restructure their operations to create separate companies or may acquire new businesses that are focused on providing the types of products we produce or acquire our customers.

We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results

Information technology system and/or network disruptions, regardless of the cause, but including acts of sabotage, error, or other actions, could harm the company’s operations.

Information technology system and/or network disruptions, regardless of the cause, but including acts of sabotage, error, or other actions, could harm our operations.

Failure to effectively prevent, detect, and recover from security breaches, including cyber-attacks, could result in the misuse of company assets, disruption to the company, diversion of management resources, regulatory inquiries, legal claims or proceedings, reputational damage, loss of sales and other costs to the company.

21 unchanged sentences

Third parties with which we conduct business, such as foundries, assembly and test contractors, distributors and customers, have access to certain portions of our sensitive data.

In the event that these third parties do not properly safeguard our data that they hold, security breaches could result and negatively impact our reputation, business operations and financial results.

In the event that these third parties do not properly safeguard our data that they hold, security breaches could result and negatively impact our reputation, business operations

and financial results.

Additionally, a successful cyber-attack against one of these third parties’ information technology systems may disrupt our supply chain.

49 unchanged sentences

We may be unable to obtain adequate foundry, assembly or test capacity from our third-party subcontractors to meet our customers’ delivery requirements even if we adequately forecast customer demand.

For example, foundry, assembly and test capacity is currently limited due to a spike in semiconductor demand.

As a result, we have recently experienced longer lead times at certain third-party foundry subcontractors.

This is resulting in competing demand for capacity at our suppliers.

Such conditions may adversely affect our revenue and increase our costs.

There are significant risks associated with relying on these third-party foundries and subcontractors, including:

37 unchanged sentences

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

During the six months ended June 29, 2024, the percentage of our revenues derived from outside of the United States was 94% (and the revenue associated with end customers in China was 15%, and revenue attributed to China based on shipped-to location was 30%).

During the nine months ended September 28, 2024, the percentage of our revenues derived from outside of the United States was 93% (and the revenue associated with end customers in China was 15%, and revenue attributed to China based on shipped-to location was 33%).

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

33 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 the six months ended June 29, 2024 was $85.9 million, or 59.1% of revenues.

Research and development expense during the nine months ended September 28, 2024 was $83.2 million, or 50.0% of revenues.

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

54 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 the six months ended June 29, 2024, 68% of our revenue was derived from distributors (and 44% of our revenue was derived from our two largest distributors).

During the nine months ended September 28, 2024, 69% of our revenue was derived from distributors (and 44% 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.

89 unchanged sentences

We depend on our customers to support our products, and some of our customers offer competing products

We rely on our customers to provide hardware, software, intellectual property indemnification and other technical support for the products supplied by our customers.

If our customers do not provide the required functionality or if our customers do not provide satisfactory support for their products, the demand for these devices that incorporate our products may diminish or we may otherwise be materially adversely affected.

We rely on our customers to provide hardware, software, intellectual property indemnification and other technical support for the products supplied by them.

If our customers do not provide the required functionality or satisfactory support for their products, the demand for these devices that incorporate our products may diminish or we may otherwise be materially adversely affected.

Any reduction in the demand for these devices would significantly reduce our revenues.

In certain products, some of our customers offer their own competitive products.

These customers may find it advantageous to support their own offerings in the marketplace in lieu of promoting our products.

Additionally, in certain products, some of our customers offer their own competitive products.

These customers may find it advantageous to support their own offerings in the marketplace in lieu of promoting or using our products.

Changes in the privacy and data security/protection laws could have an adverse effect on our operations

Federal, state and international privacy-related or data protection laws and regulations could have an adverse effect on our operations.

Complying with these laws and the possibility of proceedings against us by governmental entities or others in relation to these laws could increase operational costs.

In 2018, the European Union’s General Data Protection Regulation (“GDPR”) went into effect, replacing the EU’s 1995 Data Protection Directive.

The costs of compliance with the GDPR and the potential for fines and penalties in the event of a breach of the GDPR may have an adverse effect on our operations.

We are or may become subject to a variety of laws and regulations such as the European Union’s General Data Protection Regulation (“GDPR”) regarding privacy, data protection and data security.

There are numerous U.S.

federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data.

Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

The costs of compliance with the GDPR and similar laws may have an adverse effect on our operations.

Given that the scope, interpretation and application of these laws and regulations are often uncertain and may be in conflict across jurisdictions, it is possible they may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.

Any failure or perceived failure by us to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental enforcement actions, litigation or negative publicity, and could have an adverse effect on our operating results and financial condition.

Our products must conform to industry standards and technology in order to be accepted by end users in our markets

44 unchanged sentences

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights.

We also enter into confidentiality or license agreements with our employees, consultants, intellectual property providers and business partners, and control access to and distribution of our documentation and other proprietary information.

We also enter into

confidentiality or license agreements with our employees, consultants, intellectual property providers and business partners, and control access to and distribution of our documentation and other proprietary information.

Despite these efforts, unauthorized parties may attempt to copy or otherwise obtain and use our proprietary technology.

Monitoring unauthorized use of our technology is difficult, and we cannot be certain that the steps we have taken will prevent unauthorized use of our technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the

United States.

We cannot be certain that patents will be issued as a result of our pending applications nor can we be certain that any issued patents would protect or benefit us or give us adequate protection from competing products.

11 unchanged sentences

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

Although we have no direct exposure to the closed banks, uncertainty remains over the broader financial services industry.

If other financial institutions enter receivership or become insolvent in the future, our ability to access our cash and investments or to draw on our existing lines of credit could be impacted.

Although we had no direct exposure to the closed banks, any uncertainty over the broader financial services industry could result in adverse impact.

For example, if other financial institutions enter receivership or become insolvent in the future, our ability to access our cash and investments or to draw on our existing lines of credit could be impacted.

Concerns regarding the financial services industry may result in less favorable financing terms, including higher interest rates, tighter financial covenants or systemic limitations on access to credit sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

6 unchanged sentences

If any such customer or distributor, or a material portion of our smaller customers or distributors, were to become insolvent or otherwise not satisfy their obligations to us, we could be materially harmed.

Our debt could adversely affect our operations and financial condition

We believe we have the ability to service our debt, but our ability to make the required payments thereunder when due depends upon our future performance, which will be subject to general economic conditions, industry cycles and other factors affecting our operations, including risk factors described herein, many of which are beyond our control.

Any borrowings under our credit agreement or other indebtedness could adversely affect our operations and financial condition

Our ability to make the required payments when due on any debt we may incur depends upon our future performance, which will be subject to general economic conditions, industry cycles and other factors affecting our operations, including risk factors described herein, many of which are beyond our control.

Our credit facility also contains covenants, including financial covenants.

If we breach any of the covenants under our credit facility and do not obtain appropriate waivers, then, subject to any applicable cure periods, our outstanding indebtedness thereunder could be declared immediately due and payable.

If we breach any of the covenants under our credit facility and do not obtain appropriate waivers, then, subject to any applicable cure periods, any outstanding indebtedness thereunder could be declared immediately due and payable.

We could seek to raise additional debt or equity capital in the future, but additional capital may not be available on terms acceptable to us, or at all

We believe that our existing cash, cash equivalents, investments, and credit under our credit facility will be sufficient to meet our working capital needs, capital expenditures, investment requirements and commitments for at least the next 12 months.

However, our ability to borrow further under the credit facility is dependent upon our ability to satisfy various conditions, covenants and representations.

However, our ability to borrow further under the credit facility is dependent upon our ability to satisfy various

conditions, covenants and representations.

It is possible that we may need to raise additional funds to finance our activities or to facilitate acquisitions of other businesses, products, intellectual property or technologies.

1 unchanged sentence

In addition, even though we may not need additional funds, we may still elect to sell additional equity or debt securities or obtain credit facilities for other reasons.

However, we may not be able to obtain additional funds on favorable terms, or at all, particularly during

periods of financial market instability.

However, we may not be able to obtain additional funds on favorable terms, or at all, particularly during periods of financial market instability.

If we decide to raise additional funds by issuing equity or convertible debt securities, the ownership percentages of existing shareholders would be reduced.

26 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