What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-14 · 98 added, 104 removed, 489 unchanged (29% of the section changed)

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Our capacity expansion plans include

the expansion of the recently acquired Newport wafer fab, building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab , a new site in Mexico for power inductors and

non-linear resistors, a resistor manufacturing expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy.

the expansion of the recently acquired Newport wafer fab, building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, a new site in Mexico for power inductors and non-linear resistors, a resistor manufacturing

expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy.

There are demand-related risks associated with all growth initiatives.

There are also inherent execution risks in building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase

costs and negatively impact our operating results.

The risks include, but are not limited to, the following:

There are also inherent execution risks in

building and starting new wafer fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase costs and negatively impact our operating

The execution risks include, but are not limited to, the following:

design and construction delays and cost overruns;

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result in delays;

Impact on our workforce/employees due to the spread of the virus and any shelter-in-place orders;

Impact on our workforce/employees due to the spread of viruses or diseases and any shelter-in-place orders;

Cybersecurity risks as a result of extended periods of remote work arrangements.

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Due to our global supply chain, we are impacted by global trade disputes.

The governments of the U.S.

People’s Republic of China remain in a trade dispute that has resulted in tariffs and other trade restrictions including import / export prohibitions.

Disruptions to global trade could result in customers seeking different sources of product or

requiring us to seek different sources of supply.

New or revised trade agreements could require changes in operations in the long-term.

In 2025, the U.S.

imposed tariffs on almost all imported

These tariffs negatively impacted trade relationships between the governments of the U.S.

and the impacted countries, specifically the People’s Republic of China.

In response, many countries increased tariffs on U.S.

exports and implemented

other import / export barriers or prohibitions.

While many of these tariffs and reciprocal tariffs have been reduced or paused, the tariffs and any similar disruptions in the global supply chain in the future may adversely impact our business by

creating economic uncertainty, increasing the cost of materials, and reducing customer demand for our products.

We remain cognizant of these supply chain challenges and seek to minimize their effects whenever possible.

Despite our best efforts, there can be

no assurances we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations.

Despite our best efforts, there can be no

assurances we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations.

Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology and

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key assumptions, or actual performance compared with key assumptions, about our business and its future prospects could affect the fair value of one or more of our assets, which may result in an impairment charge.

The acquisitions of MaxPower Semiconductor, Inc.

and the Newport wafer fab, as well as the planned capacity expansions at Itzehoe and Newport, are

long-term investments which were not expected to generate significant income or cash flows in the near-term, but should greatly enhance the long-term position of our MOSFETs business.

Such investments have significantly increased the net

asset base of our MOSFETs business without a corresponding increase in current income or cash flows.

We performed a quantitative assessment of each of our reporting units as of September 28, 2024 and determined that the estimated fair value

of each reporting unit exceeded its carrying value, although the MOSFETs reporting unit’s fair value exceeded its carrying value by less than 10%.

Several factors, including a further decrease in our stock price, a further increase in the

asset base, and other negative internal and external factors, required us to test our MOSFETs goodwill for impairment again in the fourth fiscal quarter of 2024.

As a result, we recorded a non-cash impairment charge of $66.5 million to

write-off the goodwill of the MOSFETs reporting unit.

If we are not able to achieve our anticipated results or our stock price decreases further, the fair value of our other reporting units would be adversely affected, which may result in

future impairment.

We performed a qualitative annual assessment of each of our reporting units in 2025 and determined that the fair value of the reporting units were

not more likely than not less than their respective carrying amounts.

We continue to evaluate facts and circumstances to determine if interim impairment analyses are necessary.

If we are not able to achieve our anticipated results or we

experience a sustained decline in our stock price, we may determine that an interim impairment analysis is necessary.

There is $180.4 million of goodwill remaining on our balance sheet as of December 31, 2025.

Any impairment charges would adversely affect our results of operations in the periods an impairment is recognized.

Any impairment charges would

adversely affect our results of operations in the periods an impairment is recognized.

Regulatory and compliance related risks

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application could have an adverse impact on the net revenues and earnings attributable to that product.

Our credit facility restricts our current and future operations and requires compliance with certain financial covenants.

Our credit facility includes restrictions on, among other things, incurring indebtedness, incurring liens on assets, making investments and acquisitions, making asset

sales, and paying cash dividends and making other restricted payments.

Our credit facility limits or restricts our current and future operations and requires compliance with certain financial covenants.

Our credit facility limits or restricts, among other things, incurring indebtedness, incurring liens on assets, making investments and acquisitions, making asset sales,

and paying cash dividends and making other restricted payments.

Our credit facility also requires us to comply with other covenants, including the maintenance of specific financial ratios.

If we are not in compliance with all of such

covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable.

Additionally, our convertible senior notes due 2030 have cross-default provisions that

could accelerate repayment in the event the indebtedness under the credit facility is accelerated.

If we are not in compliance with all of such covenants, the

credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable.

Additionally, our convertible senior notes due 2030 have cross-default provisions that could accelerate

repayment in the event the indebtedness under the credit facility is accelerated.

Risks associated with our operations outside the United States

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Our business is subject to risks associated with U.S.

and foreign legislation and regulations relating to imports, including quotas, duties, tariffs or taxes, and other

import charges or restrictions, which could adversely affect our operations and our ability to import products.

has taken actions that impact U.S.

trade with China, including restricting the export of certain goods and equipment to China,

imposing tariffs on certain goods manufactured in China and imported into the U.S., including certain of our products.

has also threatened to impose tariffs on certain goods manufactured in Mexico and other countries.

Such actions may

impact our competitiveness and adversely affect the demand for these products, or if those costs cannot be passed on to our customers, could adversely impact our results of operations for affected segments and the Company as a whole.

and foreign legislation and regulations relating to imports, including quotas, duties, tariffs or

taxes, and other import charges or restrictions, which could adversely affect our operations and our ability to import products.

In 2025, the U.S.

imposed tariffs on almost all imported goods.

These tariffs negatively impacted trade relationships

between the governments of the U.S.

and the impacted countries, specifically the People’s Republic of China.

In response, many countries increased tariffs on U.S.

exports and implemented other import / export barriers or prohibitions.

While many of

these tariffs and reciprocal tariffs have been reduced or paused, the tariffs and any similar disruptions to the global supply chain in the future may adversely impact our business by creating economic uncertainty, increasing the cost of materials,

and reducing customer and end market demand.

New or revised trade agreements could require changes in operations in the long-term.

Further changes in U.S.

trade policy could trigger additional retaliatory actions by affected countries.

If these consequences are realized, it could result in a

general economic downturn or otherwise have a material adverse effect on our business.

If these consequences are realized, it could result

in a general economic downturn or otherwise have a material adverse effect on our business.

Risks related to our capital structure

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approximately 49.5% of the voting power of the Company.

The ownership of Class B common stock is highly concentrated, and holders of

Class B common stock effectively can cause the election of directors and approve other actions as stockholders.

Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our

Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7% of our Class B common stock and 44.4% of the total voting power of our capital stock as of December 31, 2024.

Holders of our Class B common stock may act in ways that are contrary to, or not in the best interests of, holders of our common stock.

The voting rights of the holders of our Class B

common stock effectively give such holders the ability to prevent transactions that would result in a change in control of us, including transactions in which holders of our common stock might otherwise receive a premium for their shares over the

then-current market price.

The ownership of Class B common stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approve other actions as stockholders.

Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a former member of our Board of Directors), approximately 89.7% of our Class B

common stock and 44.4% of the total voting power of our capital stock as of December 31, 2025.

Holders of our Class B common stock may

act in ways that are contrary to, or not in the best interests of, holders of our common stock.

The voting rights of the holders of our Class B common stock effectively give such holders the ability to prevent transactions that would result in a

change in control of us, including transactions in which holders of our common stock might otherwise receive a premium for their shares over the then-current market price.

Our acquisition strategy could be impeded if our Board of Directors were reluctant to authorize the issuance of substantial additional shares.

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convertible debt instruments as more attractive means of equity participation in us.

Conversion of our outstanding 2025 Notes and 2030 Notes may

dilute the ownership interest of our existing stockholders, including holders who had previously converted their notes.

The conversion of some or all of our outstanding 2.25% convertible senior notes due 2025 (the "2025 Notes") or our outstanding 2.25% convertible senior notes due 2030 (the "2030 Notes") may dilute the ownership

interests of our existing stockholders.

Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

Conversion of our outstanding 2030 Notes may dilute the ownership interest of our existing stockholders,

including holders who had previously converted their notes.

The conversion of some or all of our outstanding 2.25% convertible senior notes due 2030 (the "2030 Notes") may dilute the ownership interests of our existing stockholders.

Any sales in the public market of the

common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

We may not have the ability to raise the funds necessary to

settle conversions of our outstanding 2025 Notes and 2030 Notes in cash or to repurchase the notes upon a fundamental change or on a repurchase date, as applicable, and our current debt contains, and our future debt may contain, limitations on

our ability to pay cash upon conversion or repurchase of the 2025 Notes or 2030 Notes.

Holders of our outstanding 2025 Notes and 2030 Notes have the right to require us to repurchase all or a portion of their 2025 Notes or 2030 Notes, as the case may be, upon the occurrence of a fundamental change at

a fundamental change repurchase price equal to 100% of the principal amount of the 2025 Notes or 2030 Notes, as the case may be, to be repurchased, plus accrued and unpaid interest, if any.

In addition, upon conversion of the 2030 Notes, we will be

required to make cash payments for each $1,000 in principal amount of 2030 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values as described in the indenture governing the 2030 Notes.

Our outstanding 2025

Notes contain similar provisions concerning the holders’ rights to require us to repurchase their 2025 Notes upon a fundamental change and to pay cash to settle conversions of their 2025 Notes.

However, we may not have enough available cash or be

able to obtain financing at the time we are required to make repurchases of the 2030 Notes or the 2025 Notes surrendered therefor or notes being converted.

In addition, our ability to repurchase the 2025 Notes or the 2030 Notes or to pay cash upon

conversions of the 2025 Notes or 2030 Notes may be limited by law, by regulatory authority or by agreements governing our existing and future indebtedness, as described below.

For example, our credit facility in effect from time to time may prohibit us from making any cash payments on the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, upon a fundamental

change repurchase if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with the applicable financial

covenants under that facility.

settle conversions of our outstanding 2030 Notes in cash or to repurchase the notes upon a fundamental change or on a repurchase date, as applicable, and our current debt contains, and our future debt may contain, limitations on our ability to

pay cash upon conversion or repurchase of the 2030 Notes.

Holders of our outstanding 2030 Notes have the right to require us to repurchase all or a portion of their 2030 Notes, as the case may be, upon the occurrence of a fundamental change at a fundamental change

repurchase price equal to 100% of the principal amount of the 2030 Notes, as the case may be, to be repurchased, plus accrued and unpaid interest, if any.

In addition, upon conversion of the 2030 Notes, we will be required to make cash payments for

each $1,000 in principal amount of 2030 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values as described in the indenture governing the 2030 Notes.

However, we may not have enough available cash or be able

to obtain financing at the time we are required to make repurchases of the 2030 Notes surrendered therefor or notes being converted.

In addition, our ability to repurchase the 2030 Notes or to pay cash upon conversion of the 2030 Notes may be

limited by law, by regulatory authority or by agreements governing our existing and future indebtedness, as described below.

For example, our credit facility in effect from time to time may prohibit us from making any cash payments on the conversion or repurchase of the 2030 Notes, as the case may be, upon a fundamental change repurchase

if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with the applicable financial covenants under that

Any new credit facility into which we may enter may have similar restrictions unless certain conditions are met.

Our failure to make cash payments upon the conversion or repurchase of the 2025 Notes or the 2030

Notes, as the case may be, as required under the terms of the applicable indenture governing such notes would permit holders of the 2025 Notes or the 2030 Notes, as the case may be, to accelerate our obligations under the 2025 Notes or the 2030

Notes, as the case may be.

Our failure to repurchase the 2025 Notes or 2030 Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on future conversions of the 2025 Notes or the 2030 Notes as

required by the applicable indenture would constitute a default under such indenture.

A default under such indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness,

including our credit facility.

If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash

payments upon conversions thereof.

The repurchase of $53 million principal amount of the 2025 Notes in the fourth fiscal quarter of 2024 reduces the risk associated with the 2025 Notes.

Our failure to make cash payments upon the conversion or repurchase of the 2030 Notes, as the case may be, as required under

the terms of the applicable indenture governing such notes would permit holders of the 2030 Notes to accelerate our obligations under the 2030 Notes.

Our failure to repurchase the 2030 Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on future conversions of the 2030 Notes as required by the applicable

indenture would constitute a default under such indenture.

A default under such indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness, including our credit facility.

The conditional conversion feature of our outstanding

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holders elect to convert their notes, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity.

In addition, even if holders do not elect to convert their notes, we could be

required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

In addition, even if holders do not elect to convert their notes, we could

be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Certain provisions in the indentures governing the 2030

Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us.

For example, if a takeover would constitute a

fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash.

In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders

who convert their notes in connection with such takeover.

In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from

acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable.

Notes could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain provisions in the 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us.

For example, if a takeover would constitute a fundamental change,

holders of the notes will have the right to require us to repurchase their notes in cash.

In addition, if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their

notes in connection with such takeover.

In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or

removing incumbent management, including in a transaction that holders of the notes or holders of our common stock may view as favorable.

The capped call transactions may affect the market price of

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We can provide no assurance as to the financial stability or viability of the option counterparties.

Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may impede

or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even

if a change in control would be beneficial to our existing stockholders.

Our amended and restated certificate of incorporation and amended and restated bylaws also contain provisions that could delay or prevent a change in control of our company.

Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may

impede or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us,

even if a change in control would be beneficial to our existing stockholders.

Our amended and restated certificate of incorporation and amended and restated bylaws also contain provisions that could delay or prevent a change in control of our

These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board of Directors or take other corporate actions, including effecting changes in our management.

These provisions

the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling the

holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions;

the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause, each

of which could delay the ability of stockholders to change the membership of a majority of our board of directors;

provisions include:

the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling

the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the election of directors and change of control transactions;

the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause,

each of which could delay the ability of stockholders to change the membership of a majority of our board of directors;

the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and

voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal

of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or

removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting,

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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 1A. Risk Factors