# Skyworks Solutions, Inc.: Form 10-Q for the period ended Dec 27, 2024

- Company: [Skyworks Solutions, Inc.](/companies/swks.md) (CIK 4127)
- Form: 10-Q
- Filed: 2025-02-05
- Accepted by EDGAR: Feb 5, 2025, 16:33 ET
- Period: 2024-12-27
- Accession: 0000004127-25-000010
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/4127/000000412725000010/swks-20241227.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/4127/000000412725000010/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-09-28 to 2024-12-27 | $1.07bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-09-28 to 2024-12-27 | $626.6m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-09-28 to 2024-12-27 | $441.9m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-09-28 to 2024-12-27 | $176.4m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-09-28 to 2024-12-27 | $82.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-09-28 to 2024-12-27 | $181.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-09-28 to 2024-12-27 | $6.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-09-28 to 2024-12-27 | $28.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-09-28 to 2024-12-27 | $162.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-09-28 to 2024-12-27 | $1.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-09-28 to 2024-12-27 | $1.01 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-09-28 to 2024-12-27 | 161,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-09-28 to 2024-12-27 | $377.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-09-28 to 2024-12-27 | $39.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2024-09-28 to 2024-12-27 | $112.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-12-27 | $1.60bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-27 | $3.44bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-27 | $8.33bn | us-gaap:Assets |
| Current liabilities | at 2024-12-27 | $579.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-27 | $1.93bn | us-gaap:Liabilities |
| Long-term debt | at 2024-12-27 | $994.7m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-12-27 | $6.40bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 17,159 characters.

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Words such as “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “may”, “plans”, “potential”, “predicts”, “projects”, “seek”, “should”, “targets”, “will”, “would”, and similar expressions or variations or negatives of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and global health crises, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known and understood by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual financial results and outcomes may differ materially and adversely from the results and outcomes discussed in or anticipated by the forward-looking statements. A number of important factors could cause actual financial results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in the 2024 10-K, under the heading “Risk Factors” and in the other documents filed by us with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

In this document, the words “we”, “our”, “ours”, “us”, “Skyworks”, and “the Company” refer only to Skyworks Solutions, Inc., and its consolidated subsidiaries and not any other person or entity.

### RESULTS OF OPERATIONS

### Three Months Ended December 27, 2024, and December 29, 2023

The following table sets forth the results of our operations expressed as a percentage of net revenue:

|  | Three Months Ended December 27, 2024 | December 29, 2023 |
| --- | ---: | ---: |
| Net revenue | 100.0% | 100.0% |
| Cost of goods sold | 58.6 | 57.8 |
| Gross profit | 41.4 | 42.2 |
| Operating expenses: |  |  |
| Research and development | 16.5 | 12.7 |
| Selling, general, and administrative | 7.7 | 6.6 |
| Amortization of intangibles | — | — |
| Restructuring, impairment, and other charges | 0.2 | 1.4 |
| Total operating expenses | 24.4 | 20.7 |
| Operating income | 17.0 | 21.5 |
| Interest expense | (0.6) | (0.8) |
| Other income, net | 1.5 | 0.3 |
| Income before income taxes | 17.9 | 20.9 |
| Provision for income taxes | 2.7 | 1.7 |
| Net income | 15.2% | 19.3% |

### OVERVIEW

We, together with our consolidated subsidiaries, are a leading developer, manufacturer and provider of analog and mixed-signal semiconductor products and solutions for numerous applications, including aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearables.

### General

During the three months ended December 27, 2024, the following key factors contributed to our overall results of operations, financial position, and cash flows:

- Net revenue decreased to $1,068.5 million for the three months ended December 27, 2024, as compared to $1,201.5 million for the corresponding period in fiscal 2024, driven primarily by a decrease in demand for our mobile products.
- Our ending cash, cash equivalents, and marketable securities balance increased to $1,754.8 million. The increase in cash, cash equivalents, and marketable securities during the three months ended December 27, 2024, was primarily due to cash generated from operations of $377.2 million, partially offset by dividend payments of $112.5 million and capital expenditures of $39.0 million.

### Net Revenue

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Net revenue | $1,068.5 | (11.1)% | $1,201.5 |

We market and sell our products indirectly through electronic components distributors and directly to OEMs of communications and electronics products, third-party original design manufacturers, and contract manufacturers. We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends. In addition, beginning in the fourth quarter of fiscal 2025, we expect revenues will be negatively impacted by a decrease in market share at a significant customer.

The decrease in net revenue for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was driven primarily by a decrease in demand for our mobile products.

### Gross Profit

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Gross profit | $441.9 | (12.8)% | $506.6 |
| % of net revenue | 41.4% |  | 42.2% |

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation expense, and amortization of acquisition intangibles) associated with product manufacturing. Erosion of average selling prices of established products is typical of the semiconductor industry. Consistent with trends in the industry, we anticipate that average selling prices for our established products will continue to decline over time. As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The decrease in gross profit for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily the result of lower unit volumes, unfavorable product mix, and lower average selling prices.

### Research and Development

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Research and development | $176.4 | 15.2% | $153.1 |
| % of net revenue | 16.5% |  | 12.7% |

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation units and testing of new devices, non-production masks, engineering prototypes, and design tool costs.

The increase in research and development expenses for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily related to increases in certain headcount-related expenses and costs for engineering prototypes as a result of our increased investment in developing new technologies and products.

### Selling, General, and Administrative

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Selling, general, and administrative | $82.6 | 4.8% | $78.8 |
| % of net revenue | 7.7% |  | 6.6% |

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The increase in selling, general, and administrative expenses for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily related to increased professional services costs.

### Amortization of Intangibles

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Amortization of intangibles | $0.2 | —% | $0.2 |
| % of net revenue | —% |  | —% |

Amortization expense of intangible assets was consistent for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024.

### Restructuring, Impairment, and Other Charges

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Restructuring, impairment, and other charges | $1.6 | (90.1)% | $16.2 |
| % of net revenue | 0.2% |  | 1.4% |

The decrease in restructuring, impairment, and other charges for the three months ended December 27, 2024 was primarily due to the abandonment of a previously capitalized IPR&D project during the corresponding period in fiscal 2024.

### Interest Expense

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Interest expense | $6.8 | (32.0)% | $10.0 |
| % of net revenue | 0.6% |  | 0.8% |

The decrease in interest expense for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was due to certain debt repayments in prior periods that reduced the amount of outstanding indebtedness.

### Other Income, Net

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Other income, net | $16.1 | 373.5% | $3.4 |
| % of net revenue | 1.5% |  | 0.3% |

The increase in other income, net for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily due to an increase in interest income generated from cash, cash equivalents, and marketable securities.

### Provision for Income Taxes

*(dollars in millions)*

|  | Three Months Ended December 27, 2024 | Change | December 29, 2023 |
| --- | ---: | ---: | ---: |
| Provision for income taxes | $28.4 | 39.2% | $20.4 |
| % of net revenue | 2.7% |  | 1.7% |

We recorded a provision for income taxes of $28.4 million (which consisted of $15.1 million and $13.3 million related to United States and foreign income taxes, respectively) for the three months ended December 27, 2024.

The increase in income tax expense for the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily due to higher foreign taxes and a lower Foreign-Derived Intangible Income (“FDII”) benefit, partially offset by a decrease in Global Intangible Low-Taxed Income (“GILTI”), net of foreign tax credits, and a decrease in tax expense related to a change in the reserve for uncertain tax positions.

The Company operates under a tax holiday in Singapore, which is effective through September 30, 2025, with the ability to extend through September 30, 2030. The current tax holiday is conditioned upon the Company’s compliance with certain conditions, including employment and investment thresholds in Singapore. The Company is currently re-assessing the structure of the tax holiday including certain compliance thresholds for fiscal 2025. As a result, we expect foreign taxes to increase in fiscal 2025.

We continue to monitor changes in tax laws that could arise related to the BEPS project of the OECD, including Pillar Two. Many countries have implemented laws based on Pillar Two which is effective for us beginning in fiscal 2025. While we do not expect these enacted laws to materially impact our effective tax rate for fiscal 2025, we continue to evaluate the impact of proposed and enacted legislative changes to our effective tax rate as new guidance becomes available.

### LIQUIDITY AND CAPITAL RESOURCES

*(in millions)*

|  | Three Months Ended December 27, 2024 | December 29, 2023 |
| --- | ---: | ---: |
| Cash and cash equivalents at beginning of period | $1,368.6 | $718.8 |
| Net cash provided by operating activities | 377.2 | 774.9 |
| Net cash provided by (used in) investing activities | 7.5 | (23.5) |
| Net cash used in financing activities | (150.8) | (440.5) |
| Cash and cash equivalents at end of period | $1,602.5 | $1,029.7 |

### Cash provided by operating activities:

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The $397.7 million decrease in cash provided by operating activities during the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily related to decreases in working capital of $315.3 million, due primarily to unfavorable changes in accounts receivables and inventory, and lower net income.

### Cash provided by investing activities:

Cash provided by investing activities consists primarily of cash received related to the sale or maturity of marketable securities, partially offset by cash paid to purchase marketable securities, capital expenditures, and cash paid to acquire intangible assets. The increase in cash provided by investing activities during the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily related to an increase of $201.7 million in the sale or maturity of marketable securities, partially offset by an increase of $149.6 million in purchases of marketable securities and an increase of $16.8 million in capital expenditures.

### Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The $289.7 million decrease in cash used in financing activities during the three months ended December 27, 2024, as compared with the corresponding period in fiscal 2024, was primarily related to a decrease of $300.0 million for the repayment of debt, partially offset by an increase of $5.6 million in payroll tax withholdings on equity awards and an increase of $3.6 million in dividend payments.

### Liquidity:

Cash, cash equivalents, and marketable securities totaled $1,754.8 million as of December 27, 2024, representing an increase of $180.7 million from September 27, 2024.

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”). We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of December 27, 2024, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and funds from our Revolver, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, potential acquisitions, working capital, quarterly cash dividend payments (if such dividends are declared by the Board of Directors), share repurchases, outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash on hand, cash generated from operations, and funds from our Revolver will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Our invested cash balances primarily consist of highly liquid marketable securities that are available to meet near-term cash requirements including: money market funds, U.S. Treasury and government securities, corporate bonds and notes, and municipal bonds.

Our contractual obligations disclosure in the 2024 10-K has not materially changed since we filed that report.

## Market risk

As filed, 3,782 characters.

We are subject to overall financial market risks, such as changes in market liquidity, credit quality, investment risk, interest rate risk, and foreign exchange rate risk as described below.

### Investment and Interest Rate Risk

Our exposure to interest rate and general market risks relates to our investment portfolio. Our investment portfolio consists of cash and cash equivalents (money market funds, corporate bonds and notes, and U.S. Treasury and government securities purchased with less than ninety days until maturity) that total approximately $1,602.5 million, and marketable securities (U.S. Treasury and government securities and corporate bonds and notes) that total approximately $136.7 million and $15.6 million within short-term and long-term marketable securities, respectively, as of December 27, 2024.

The main objectives of our investment activities are liquidity and preservation of capital. Our cash equivalent investments have short-term maturity periods that dampen the impact of market or interest rate risk. Our marketable securities have short-term and long-term maturity periods between 90 days and two years. Credit risk associated with our investments is not material because our investments are diversified across several types of securities with high credit ratings, which reduces the amount of credit exposure to any one investment.

Based on our results of operations for the three months ended December 27, 2024, a hypothetical reduction in the interest rates on our cash, cash equivalents, and other investments of 100 basis points would result in an immaterial reduction of interest income with a de minimis impact on income before taxes.

We do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations.

### Foreign Exchange Rate Risk

Substantially all sales to customers and arrangements with third-party manufacturers provide for pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate fluctuations on our results. A percentage of our international operational expenses are denominated in foreign currencies, and exchange rate volatility could positively or negatively impact those operating costs. Increases in the value of the United States dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the United States dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Given the relatively small number of customers and arrangements with third-party manufacturers denominated in foreign currencies, we do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

We may enter into foreign currency forward and options contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows, and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. For the three months ended December 27, 2024 and December 29, 2023, we had not entered into any outstanding foreign currency forward or options contracts with financial institutions.

## Controls and procedures

As filed, 2,040 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 27, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on management’s evaluation of our disclosure controls and procedures as of December 27, 2024, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control Over Financial Reporting

There are no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the first quarter of fiscal 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

## Risk factors

As filed, 11,776 characters.

In addition to the risk factors set forth below and the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in the 2024 10-K, which could materially affect our business, financial condition, or future results.

***If our upcoming chief executive officer transition is not successful, our business and future growth prospects could be harmed.***

On February 4, 2025, we appointed Philip Brace as our Chief Executive Officer (“CEO”), effective February 17, 2025. Any significant leadership change involves inherent risk, including potential disruptions to our operations or relationships with customers, suppliers, and key employees, and can be inherently difficult to implement. If the transition to our new CEO is not successful for any reason, it could have an adverse impact on our business.

***The risks of doing business internationally apply to all aspects of our operations.***

We derive significant revenues from customers located outside the United States, primarily in countries located in the Asia-Pacific region and Europe. We have suppliers located outside the United States, including third-party packaging, assembly, and test facilities and semiconductor foundries located in the Asia-Pacific region. We also operate our own wafer processing facilities in Osaka, Japan, as well as packaging, assembly, and test facilities in Singapore and in Mexicali, Mexico. Our international sales and operations are subject to a number of risks inherent in selling and operating in multiple jurisdictions. These include, but are not limited to, risks regarding:

- recession or economic downturn globally or in the jurisdictions in which we do business,
- currency controls and currency exchange rate fluctuations, including increases or decreases in commodities prices related to such fluctuations,
- inflation or deflation, as well as changes in existing and expected rates of inflation or deflation, which may vary across the jurisdictions in which we do business,
- interest rates, as well as changes in existing and expected interest rates, which may vary across the jurisdictions in which we do business,
- global, regional, and local economic and political conditions, including, but not limited to, social, economic, political, and supply chain instability related to the uncertainty regarding the relationships among the United States, China, Taiwan, Russia, Mexico, North Korea, Israel, other Middle Eastern countries, Japan, Singapore, Canada, and potentially other foreign countries, and the international community at large, as well as related to armed conflicts, such as the conflict between Russia and Ukraine and the conflicts in Israel and the Middle Eastern region, that exist, or in the future could exist, in various jurisdictions around the world,
- the imposition of or changes to tariffs, including the tariffs announced in February 2025 by the United States with respect to Canada, China and Mexico, and any retaliatory tariffs or measures, including any taken by Canada, China or Mexico, including countermeasures by China announced in February 2025, that could negatively impact trade between, or increase the cost of operating in, or increase the cost of or negatively impact the demand for our products or our customers’ products in, the countries in which we or our customers do business,
- other restrictive or punitive governmental actions (such as restrictions on transfer of funds, restrictions on individuals’ movement, including travel restrictions, quarantines, lockdowns, and curfews, trade protection measures, including export duties, quotas, customs duties, border taxes, border closures, increased import or export controls, export licenses, and restrictions on the purchase of products made or containing technology or components from certain companies or from companies located in certain jurisdictions), or actions by non-governmental individuals and groups (such as protests, boycotts, insurgencies, organized crime, and general civil unrest), that could negatively impact trade between, or increase the cost of operating in, the countries in which we do business,
- labor market conditions and laws,
- disruptions of capital and trading markets,
- difficulty in collecting, or failure to collect, accounts receivable, as well as longer collection periods,
- changes in, or non-compliance with, legal or regulatory import/export requirements, including restrictions on selling to certain customers or into certain jurisdictions,
- natural disasters and severe weather events, including, but not limited to, earthquakes, wildfires, droughts, hurricanes, tsunamis, floods, rising sea levels, as well as other impacts of climate change,
- acts of terrorism, widespread illness, the effects of global health crises on business conditions in our industry or in the jurisdictions in which we do business, or other deterioration of public health conditions, and war,
- misappropriation or other unauthorized transfers of our information and breaches of our information systems, as well as the potential lack of adequate remedies or enforcement mechanisms in certain jurisdictions,
- difficulty in engaging distribution partners or obtaining sales or other business support in certain jurisdictions,
- cultural differences in the conduct of business,
- direct or indirect government actions, subsidies, or policies aimed at supporting local industry,
- the laws and policies of the United States and other countries affecting trade, foreign investment and loans, foreign travel, and import or export licensing requirements, including, but not limited to, prohibitions on certain trade and other activities in China, Russia, Belarus, and portions of Ukraine,
- withdrawal from, or renegotiation of, existing trade agreements by the United States (or other jurisdictions) potentially affecting Mexico, China, Canada, and other countries in which we do business,
- changes in current or future tax law or regulations or new interpretations thereof, by federal or state agencies or foreign governments,
- changes in the effective tax rate as a result of our overall profitability and mix of earnings in countries with differing statutory tax rates,
- results of audits and examination of previously filed tax returns, and
- limitations on our ability under local laws to protect or enforce our intellectual property rights in a particular foreign jurisdiction.

Additionally, we are subject to risks in certain global markets in which wireless operators provide subsidies on handset sales to their customers. Increases in cellular handset prices that negatively impact handset sales can result from changes in regulatory policies or other factors, which could impact the demand for our products.

Some of the countries in which we operate and seek to expand are in emerging markets where legal systems may be less developed or familiar to us, potentially impacting our ability to obtain appropriate recourse in the event of a dispute. Other jurisdictions in which we conduct business have established, or may establish, legal and regulatory regimes that differ materially from United States laws and regulations. It is costly, time-consuming, and requires significant resources to comply with the numerous, and sometimes conflicting, legal regimes in the jurisdictions in which we conduct business on matters as diverse as anti-corruption, anti-bribery, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, intellectual property, sustainability, internal and disclosure control obligations, securities regulation, competition, data privacy and protection, employment, and labor relations. Violations of one or more of these legal regimes’ laws and regulations in the conduct of our business could result in significant fines, penalties, or monetary damages, criminal sanctions against us or our officers, prohibitions on doing business, unfavorable publicity and other reputational damage, restrictions on our ability to process information, and allegations by our counterparties that we have not performed our contractual obligations.

***We are subject to the risks of our and our customers and suppliers doing business in China.***

Demand from Chinese customers may be adversely affected by China’s evolving laws and regulations, including those relating to taxation, import and export tariffs and restrictions, currency controls, environmental regulations, privacy and information security, indigenous innovation, and intellectual property rights and enforcement of those rights. Enforcement of existing laws or agreements may be inconsistent, and the potential issuance of new laws and regulations creates uncertainty. In addition, changes in the political environment, economic environment, governmental policies, United States-China relations, or China-Taiwan relations could result in revisions to laws or regulations or their interpretation and enforcement, exposure of our intellectual property, increased taxation, restrictions on imports, import duties, or currency revaluations, any of which could have an adverse effect on our business plans and operating results. In particular, the imposition by the United States of new tariffs, including the tariffs announced in February 2025, on goods imported from China, or deemed to be of Chinese origin, and other government actions that restrict our ability to sell our products to Chinese customers or to manufacture or source components in China, and countermeasures imposed by China in response, including the countermeasures announced in February 2025, could directly or indirectly adversely impact our manufacturing costs, the availability and cost of materials, including gallium, germanium, antimony, tungsten, molybdenum, and rare earth metals, and the sales of our products in China, the United States and elsewhere. Such actions, including any threatened or actual tariffs and retaliatory measures, could also increase the prices of or negatively impact the demand for our customers’ products, which could negatively impact the sales of our products to those customers. In addition, the U.S. government has expanded export restrictions, and might continue expanding export restrictions, including by adding certain Chinese entities to the U.S. Bureau of Industry and Security’s Entity List (“Entity List”) or other entity lists, which has limited, and could in the future limit, our ability to sell to certain of those entities and to third parties that do business with those entities. These restrictions have negatively impacted, and may continue to negatively impact, sales of our products. In the future, we may be prevented from shipping, or be required to obtain a license to ship, our products to certain customers if they are added to the Entity List. In addition, geopolitical changes in China-Taiwan relations could disrupt the operations of several companies in Taiwan that are suppliers to, or third-party partners of, the Company, our customers, and our customers’ other suppliers. Disruption of certain critical operations in Taiwan would adversely affect our ability to manufacture certain products and would likely have substantial negative effects on the entire semiconductor industry. Finally, China’s investments in technology development and manufacturing capability in support of its stated policy of reducing its dependence on foreign semiconductor manufacturers and other technology companies has likely already resulted, and we expect will continue to result, in reduced demand for our products in China and other key markets as well as reduced supply of critical materials for our products.

Filed Feb 5, 2025.
Source: SEC EDGAR, the filing index for accession 0000004127-25-000010. Last ingested by Listed: Oct 30, 2026, 13:55 ET. No prices; not investment advice.