What changed in this filing

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Item 1A. Risk Factors

2024-02-02 compared with 2023-02-03 · 26 added, 27 removed, 154 unchanged (26% of the section changed)

8 unchanged sentences

revenue from end customers headquartered in China represents about 20% of our revenue.

Alternatively, based on product shipment destination, about 90% of our revenue comes from products shipped to locations outside the United States.

We also continue to expand our offerings of online transactions and services worldwide.

Certain countries where we operate have experienced, and other countries may experience, geopolitical tensions that affect global trade and macroeconomic conditions through the enactment of tariffs, import or export restrictions, trade embargoes and sanctions, restrictions on cross-border investment and other trade barriers.

Geopolitical tensions may impact our ability to deliver products, support customers, receive manufacturing equipment or cause customers to seek alternate suppliers, which could adversely affect our operations and financial results.

We are exposed to political, social and economic conditions (including inflation), security risks, acts of war, terrorism or other hostile acts, health conditions and epidemics, labor conditions, climate change risks and possible disruptions in transportation, communications and information technology networks of the various countries in which we operate.

We are exposed to political, social and economic conditions (including inflation), security risks, acts of war, terrorism or other hostile acts, pandemics, epidemics or other public health crises, labor conditions, climate change risks and possible disruptions in power, water supply, transportation, communications and information technology networks of the various countries in which we operate.

Any of these factors could adversely affect our results of operations, financial condition and reputation.

In addition, our global operations expose us to periods when the U.S.

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These actions, in conjunction with trade tensions, may restrict us from participating in the China market or may prevent us from competing effectively.

Certain competitors possess sufficient financial, technical and management resources to develop and market products that may compete favorably against our products, and consolidation among our competitors may allow them to compete more effectively.

Certain competitors possess sufficient financial, technical and management resources and utilize available incentives offered by various countries and government entities to develop and market products that may compete favorably against our products, and consolidation among our competitors may allow them to compete more effectively.

The price and product development pressures that result from competition may lead to reduced profit margins and lost business opportunities in the event that we are unable to match the price declines or cost efficiencies, or meet the technological, product, support, software or manufacturing advancements of our competitors.

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Additionally, the loss or significant curtailment of purchases by one or more of our large customers, including curtailments due to a change in the design or manufacturing sourcing policies or practices of these customers, the timing of customer or distributor inventory adjustments, changes in demand for customer products, or trade restrictions, may adversely affect our results of operations and financial condition.

Our results of operations also might suffer because of a general decline in customer demand resulting from, for example:

Our results of operations also might suffer because of a general decline or volatility in customer demand resulting from, for example:

uncertainty regarding the stability of global credit and financial markets;

natural events, epidemics or domestic or international political, social, economic or other conditions;

natural events, pandemics, epidemics or domestic or international political, social, economic or other conditions;

breaches of customer information technology systems that disrupt customer operations;

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result in corrupt or lost data or the unauthorized release of our, our customers’ or our suppliers’ confidential or proprietary information;

cause a disruption to our manufacturing and other operations;

cause a disruption to our manufacturing and other operations (including our online services, platforms and transactions);

result in the release of personal data;

6 unchanged sentences

Our results of operations could be affected by natural events in the locations in which we operate.

Climate change might exacerbate these occurrences or cause natural disasters to occur with greater frequency.

We have manufacturing, data and design facilities and other operations in locations subject to natural occurrences such as severe weather, geological events or epidemics that could adversely affect manufacturing capacity, availability and cost of key raw materials, utilities and equipment or otherwise disrupt operations.

Climate change might exacerbate these occurrences or cause natural disasters to occur with greater frequency and with more intense effects.

A natural disaster that results in a prolonged disruption, particularly where we have principal manufacturing and design operations, as listed in the Properties section in Item 2, may adversely affect our results and financial condition.

The effects of the COVID-19 pandemic could adversely affect our business, results of operations and financial condition.

The coronavirus (COVID-19) pandemic and related measures to curtail its spread have impacted, and may continue to impact, our operations across markets in which TI operates and those of our suppliers, customers and distributors.

The extent to which the COVID-19 pandemic will continue to affect our business, results of operations and financial condition is difficult to predict and depends on numerous evolving factors including the duration and scope of the pandemic;

government, social, business and other actions that have been and will be taken in response to the pandemic;

appearance of new variants of COVID-19;

the availability, adoption and efficacy of vaccines and treatments;

and the effect of the pandemic on short- and long-term general economic conditions.

We have experienced, and continue to experience, short- or long-term constrained supply or volatility in customer demand, which could materially and adversely affect our business and financial results.

Rapid technological change in markets we serve requires us to develop new technologies and products.

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Additionally, our costs may increase if one or more of our customers demand that we change the sourcing of materials we cannot identify as conflict-free.

Our inability to timely implement new manufacturing technologies or install manufacturing equipment could adversely affect our results of operations.

Our inability to timely implement new manufacturing technologies, install manufacturing equipment or secure necessary personnel for manufacturing operations could adversely affect our results of operations.

We have made and will continue to make significant investments in manufacturing capacity, and we might not realize our expected return on those investments.

We subcontract a portion of our wafer fabrication and assembly and testing of our products, and we depend on third parties to provide advanced logic manufacturing process technology development.

We subcontract a portion of our wafer fabrication and assembly and testing of our products, and we depend on third parties (including contractors and other service providers) to support key portions of our operations (including manufacturing operations and advanced logic manufacturing process technology development) and to construct our facilities.

We do not have long-term contracts with all of these suppliers, and the number of alternate suppliers is limited.

Reliance on these suppliers involves risks, including possible shortages of capacity in periods of high demand, suppliers’ inability to develop and deliver advanced logic manufacturing process technology in a timely, cost-effective, and appropriate manner, the possibility of suppliers’ imposition of increased costs on us and the unauthorized disclosure or use of our intellectual property.

Reliance on these suppliers involves risks, including possible shortages of capacity in periods of high demand, suppliers’ inability to develop and deliver advanced logic manufacturing process technology or build facilities in a timely, cost-effective, and appropriate manner, the possibility of suppliers’ imposition of increased costs on us and the unauthorized disclosure or use of our intellectual property.

In addition, failure by these suppliers to fulfill expectations, commitments and responsibilities in accordance with agreed terms or applicable laws, rules and regulations (including health, safety, forced labor, human trafficking and supply chain standards) could adversely affect our results of operations, financial condition and reputation.

Our continued success depends in part on our ability to retain and recruit a sufficient number of qualified employees in a competitive environment.

Our continued success depends in part on the retention and recruitment of skilled personnel, as well as the effective management of succession for key employees.

Our continued success depends in part on the retention and recruitment of skilled personnel as well as the contributions and effective succession of senior management and other key employees.

Skilled and experienced personnel in our industry, including engineering, management, sales, technical and staff personnel, are in high demand, and competition for their talents is intense.

There can be no assurance that we will be able to successfully retain and recruit the key engineering, management and technical personnel that we require to execute our business strategy.

There can be no assurance that we will be able to successfully retain, train and recruit the key engineering, management and technical personnel that we require to execute our business strategy.

Our ability to recruit internationally or deploy employees to various locations may be limited by immigration laws and policies, including changes to, or the administration or interpretation of, those laws and policies.

5 unchanged sentences

In addition, it is possible for a customer to recall a product containing a TI part, for example, with respect to products used in automotive applications or handheld electronics, which may cause us to incur costs and expenses relating to the recall.

Improper, incorrect, illicit or unauthorized storage, handling, modification or use of our products (including use in applications for which our products were not designed), or use of counterfeit products, by third parties could result in reputational harm.

Any of these events could adversely affect our results of operations, financial condition and reputation.

18 unchanged sentences

We are subject to complex laws, rules and regulations on an international, national and local level that affect our domestic and international operations relating to, for example, the environment and climate change;

trade, including import and export;

bribery and corruption;

4 unchanged sentences

market access;

pandemics, epidemics or other public health crises;

intellectual property ownership and infringement;

1 unchanged sentence

Compliance with these laws, rules and regulations may be onerous and expensive and could restrict our ability to manufacture or ship our products and operate our business.

If we do not comply or if we become subject to enforcement activity or government investigations, we could be subject to fines, penalties or other legal liability or disruptions to our operations.

From time to time, we receive inquiries from government entities regarding our compliance with laws and regulations.

If we do not comply with a law or regulation (or the same is alleged), or a government inquiry is unresolved, we could be subject to litigation, investigations or enforcement activity that can be unpredictable and time-consuming, as well as disruptions to our operations, or significant fines, penalties or other legal liability.

Furthermore, should these laws, rules and regulations be amended or expanded, or new ones enacted, we could incur materially greater compliance costs or restrictions on our ability to manufacture our products and operate our business.

24 unchanged sentences

If that performance forecast changes, our forecasted tax expense will change.

We have received and may in the future continue to receive government incentives, including but not limited to tax incentives, designed to encourage certain investments in our operations.

We may be subject to increased scrutiny from government entities, shareholders and others on how these incentives are used and spent.

Such incentives could be subject to reduction, modification, clawback or termination, and such changes to these incentives could adversely affect our results of operations, financial condition and reputation.

Our performance depends in part on our ability to enforce our intellectual property rights and to maintain freedom of operation.

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To the extent that we have to rely on technology from others for which a license is required, there can be no assurance that we will be able to obtain such a license at all or on terms we consider reasonable.

We, directly and indirectly, face infringement claims from third parties, including non-practicing entities that have acquired patents to pursue enforcement actions against other companies.

We, directly and indirectly, face infringement claims from third parties, including nonpracticing entities that have acquired patents to pursue enforcement actions against other companies.

We also face infringement claims where we or our customers make, use or sell products and where the intellectual property laws may be less established or less predictable.

1 unchanged sentence

We actively enforce and protect our own intellectual property rights.

However, our efforts cannot prevent all misappropriation or improper use of our protected technology and information, including, for example, third parties’ use of our patented or copyrighted technology, or our trade secrets in their products without the right to do so, or third parties’ sale of counterfeit products bearing our trademark.

The risk of unfair copying or cloning may impede our ability to sell our products.

However, our efforts cannot prevent all misappropriation or improper use of our protected technology and information, including, for example, third parties’ use of our patented or copyrighted technology, our trade secrets, or unauthorized copying and cloning, in their products without the right to do so, or third parties’ sale of counterfeit products bearing our trademark.

Activities such as those listed above may affect our reputation and impede our ability to sell our products.

The laws of countries where we operate may not protect our intellectual property rights to the same extent as U.S.

11 unchanged sentences

Charges associated with impairments of goodwill could adversely affect our financial condition and results of operations.

Unresolved staff comments

Not applicable.

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 1A. Risk Factors