Microchip Technology

“Although our sales in 18 Table of Contents the Chinese market have been strong in the past, competition in China is intense. Throughout fiscal 2024, fiscal 2025 and fiscal 2026, changes in the Chinese market adversely impacted our sales volumes in China.”

Annual report 2026A · The company itself

“As discussed above, the trade relationship between the U.S. and China remains challenging and could worsen, economic conditions in China remain uncertain, and we are unable to predict whether such uncertainty will continue or worsen in future periods.”

Annual report 2026A · The company itself

“For example, on September 13, 2025, China's Ministry of Commerce initiated an antidumping investigation of imports into China of analog semiconductors originating in the United States. While we were not a subject of this investigation and the Chinese government is expected to suspend these investigations pursuant to the latest trade deal with the U.S., the Chinese government may resume this investigation at its election. If this takes place, additional tariffs are likely to be imposed as a result of this investigation and could have an adverse impact on our revenue.”

Annual report 2026A · The company itself

“Further, increasing investment in the semiconductor industry by the Chinese government and various state-owned or affiliated entities are intended to advance China's stated national policy objectives. The Chinese government may restrict us from participating in the China market, or may prevent us from competing effectively with Chinese companies.”

Annual report 2026A · The company itself

“In addition, some governments, such as China, may provide, or have provided and may continue to provide, significant assistance financial or otherwise, to some of our competitors, or to new entrants, and may intervene in support of national industries and/or competitors, including trying to disrupt the U.S. semiconductor industry.”

Annual report 2026A · The company itself

“However, in the future, we may be unable to maintain average selling prices due to an oversupply of product in the market or increased pricing pressure, including as a result of tariffs being applied to the products we sell or purchase, or actions taken by foreign governments such as China to favor companies located in their own country through tariffs or other actions, which could adversely impact our operating results.”

Annual report 2026A · The company itself

“The U.S. and other countries have levied tariffs and taxes on certain goods, implemented trade restrictions, and introduced national security protection policies. Trade tensions between the U.S. and China, have continued to escalate from 2018 to present, and include the U.S. increasing tariffs on Chinese origin goods and China increasing tariffs on U.S. origin goods. Additionally, the U.S. has imposed a baseline 10% tariff on almost all imported goods globally. We continue to take steps to mitigate the costs of these tariffs on our business by adjusting our operations and supply chain but may be unable to completely mitigate the costs of such tariffs, including those imposed in recent years or in the future.”

Annual report 2026A · The company itself

“For example, the Chinese government has announced restrictions relating to sales of certain raw materials and to sales of products containing certain products made by Micron, and they may direct companies within China to purchase Chinese-made products. The Chinese government may also re-initiate the suspended antidumping investigation into imports of analog chips originating in the United States and aggressively enforce the new regulation intended to combat the extraterritorial application of foreign trade controls, sanctions and other measures, which would likely have an adverse impact on our 35 Table of Contents revenue if additional tariffs are imposed by the Chinese government on products subject to the investigation.”

Annual report 2026A · The company itself

“Having a strong position in the Chinese market is a key component of our global growth strategy.”

Annual report 2026A · The company itself

“Sales to foreign customers account for a substantial portion of our net sales. During fiscal 2026, approximately 75% of our net sales were made to foreign customers, including 18% in China and 15% in Taiwan.”

Annual report 2026A · The company itself

“As more companies focus on building leading edge products, our 17 Table of Contents manufacturing subcontractors are becoming capacity constrained in their ability to manufacture such products.”

Annual report 2026A · The company itself

“As a significant portion of our products are manufactured at foundries, foundry lead times may affect our ability to satisfy certain turns orders.”

Annual report 2026A · The company itself

“We are dependent on wafer foundries and other contractors, as are our SuperFlash and other licensees. We rely on outside wafer foundries for a significant portion of our wafer fabrication needs. Specifically, during fiscal 2026 and fiscal 2025, approximately 65% and 64%, respectively, of our net sales came from products that were produced at outside wafer foundries.”

Annual report 2026A · The company itself

“We also use several contractors for a portion of the assembly and testing of our products. Specifically, during fiscal 2026, approximately 33% of our assembly requirements and 31% of our test requirements were performed by third-party contractors compared to approximately 33% of our assembly requirements and 33% of our test requirements during fiscal 2025.”

Annual report 2026A · The company itself

“Additionally, if we have a need for greater manufacturing, assembly or test capacity in the future, or greater capacity for certain types of products, there can be no assurance that we will be able to secure the necessary allocation of capacity from our wafer foundries and other contractors with the process technologies that we need, or that such capacity will be available on acceptable terms. As our manufacturing subcontractors move to more advanced process technologies over time, we may find that they do not invest in some of the trailing edge process technologies on which a large portion of our products are manufactured.”

Annual report 2026A · The company itself

“We expect that our reliance on third party contractors may increase over time as our business grows, and any inability to secure necessary external capacity could adversely affect our operating results.”

Annual report 2026A · The company itself

“Transitioning production of products to new manufacturers may result in delayed product launches, reduced yields, or decreased product performance. If we encounter issues with product quality, insufficient capacity from a third-party manufacturer, or if we discontinue using a particular manufacturer or contractor, we may face challenges in securing an alternative supply for specific products in a timely manner. This could lead to significant delays in product shipments, potentially having an adverse impact on our results of operations.”

Annual report 2026A · The company itself

“In such event, we could experience an interruption in production, an increase in manufacturing costs or a decline in product reliability, and our business and operating results could be adversely affected.”

Annual report 2026A · The company itself

“Certain of our SuperFlash and other technology licensees rely on wafer foundries. If our licensees experienced disruption in supply at such foundries, this would reduce the revenue from our technology licensing business and would harm our operating results.”

Annual report 2026A · The company itself

“While we had approximately 101,000 customers, and our ten largest direct customers accounted for approximately 11% of our total revenue in fiscal 2026, and two of our top ten direct customers are contract manufacturers that perform manufacturing services for many customers, cancellation of customer contracts could have an adverse impact on our revenue and profits.”

Annual report 2026A · The company itself

“Competition for qualified personnel has intensified for a variety of reasons, including the high demand for employees in rapidly developing fields such as AI, the increase in work-from-home arrangements and increases in minimum wages and wage inflation in our industry.”

Annual report 2026A · The company itself

“Market dynamics and our product strategy are increasingly influenced by AI. Our ability to design, develop and timely introduce competitive products and processes - including those implementing new technologies such as AI, or complying with new governmental restrictions regarding implementation of new technologies - may be affected by how quickly we and our customers adapt to market changes driven by AI, and by the rate at which the markets we serve redesign and change their own products in response to AI and other market forces.”

Annual report 2026A · The company itself

“Demand for AI-related products is subject to concentration and investment-cycle risk, and any slowdown or shift in AI spending could reduce demand for our products, pressure margins, and adversely affect our operating results.”

Annual report 2026A · The company itself

“As AI and machine learning evolve, they may lead to the development of dramatically more effective security tools, and cyber‑attackers may leverage these tools to enhance attack methods, identify novel security vulnerabilities, develop malicious code, sophisticated phishing attempts, and convincing deep fakes that manipulate our content or the voices or images of our leaders.”

Annual report 2026A · The company itself

“In addition, competition for talent with AI expertise has intensified, and our ability to attract, retain and train personnel with appropriate AI skills and literacy is critical to our innovation and product roadmap.”

Annual report 2026A · The company itself

“There may be increased risk associated with the activities of the acquired company such as regulatory violations related to their use of AI in their operations, technology development or product offerings or cybersecurity or data governance risks.”

Annual report 2026A · The company itself

“Our success also depends upon our ability to develop and implement new design and process technologies. Semiconductor design and process technologies are subject to rapid technological change and require significant R&D expenditures.”

Annual report 2026A · The company itself

“In July 2024, we entered the 64-bit mixed-signal microprocessor market with our PIC64 family of high-performance multi-core processors. Our PIC64 family consists of 64-bit RISC-V microprocessors designed for high-performance, mission-critical applications across industrial, aerospace, defense and space sectors. These products integrate networking, virtualization support, AI/ML acceleration, security and high-speed networking and are designed to handle mixed-criticality workloads, requiring both real-time determinism and high-level operating systems, like Linux, simultaneously.”

Annual report 2026A · The company itself

“FPGAs are programmable integrated circuits that are used to implement complex logic functions and can be re-programmed at any time, allowing for multiple implementations and revisions during or after the customer system is manufactured. Some versions of FPGAs also include a mixed-signal microcontroller or microprocessor core to provide additional system on chip functionality to compute intensive tasks.”

Annual report 2026A · The company itself

“Because we built inventories in response to customer demand, the cancellation or deferral of product orders resulted in excess inventory, which then resulted in write-downs of inventory and an adverse effect on our gross margins in fiscal 2025 and fiscal 2026.”

Annual report 2026A · The company itself

“In December 2024, we announced our decision to close our Fab 2 manufacturing operations and the closure was completed in May 2025. The decision to close Fab 2 was driven by high inventory levels and ample manufacturing capacity at our other wafer fabrication facilities. All the process technologies that were running in Fab 2 will be transferred to Fab 4 and 8 Table of Contents Fab 5 and many such technologies are already running in Fab 4 and Fab 5, both of which have ample clean room space for expansion.”

Annual report 2026A · The company itself

“We have long-term commitment contracts with certain of our third-party suppliers to help ensure that we receive capacity from them to manufacture wafers and assemble and test our products. We may decide to still purchase products or services under these contracts even though we currently may not need all of them in order to take advantage of contract credits. This could result in excess inventory and inventory reserve charges that may negatively affect our gross margin and results of operations.”

Annual report 2026A · The company itself

“Starting in the first quarter of calendar 2022, we began entering into LTSAs, which offer our customers the ability to receive prioritized capacity. LTSAs are not a guarantee of supply; however, they were designed to provide the highest priority for those orders which were under this program, and the capacity priority was on a first-come, first-served basis until the available capacity was booked. This program and increases in customer order levels outside of this program resulted in some customers holding excess inventory of our products and thus decreased their need to place new orders, including turns 20 Table of Contents orders, in fiscal 2023 and fiscal 2024.”

Annual report 2026A · The company itself

“Competition The semiconductor industry is intensely competitive and has historically been characterized by price erosion and rapid technological change. We compete with major domestic and international semiconductor companies, some of which have greater market recognition and greater financial, technical, marketing, distribution and other resources than we have with which to pursue engineering, manufacturing, marketing and distribution of their products.”

Annual report 2026A · The company itself

“Intense competition in the markets we serve may lead to pricing pressures, reduced sales or reduced market share. The semiconductor industry is intensely competitive and faces price erosion and rapid technological change.”

Annual report 2026A · The company itself

“Historically, average selling prices in the semiconductor industry decrease over the life of a product. The average selling prices of our mixed-signal microcontroller, FPGA products, and proprietary products in our analog product line have remained relatively constant over time, while average selling prices of our memory and non-proprietary products in our analog product line have declined over time.”

Annual report 2026A · The company itself

“We have experienced, and may experience in the future, pricing declines in certain of our proprietary product lines, primarily due to competitive conditions.”

Annual report 2026A · The company itself

“Increases in worldwide supply of semiconductor products, if not accompanied by commensurate increases in demand, could lead to declines in average selling prices for our products, and could materially adversely affect our business, results of operations, or financial condition.”

Annual report 2026A · The company itself

“For example, as memory manufacturers transition to more advanced products, availability of the memory components we use may become constrained, have longer lead times, or become more expensive.”

Annual report 2026A · The company itself

“We believe that our mixed-signal microcontroller product families provide leading function and performance characteristics in the worldwide market.”

Annual report 2026A · The company itself

“Restrictions on emissions could result in significant costs such as the need for additional equipment, higher energy costs, carbon taxes, and emission cap and trade programs, and could also result in reduction or suspension of production, or even cessation of operations.”

Annual report 2026A · The company itself

“Regulations restricting greenhouse gas emissions could cause us to incur significant additional costs of compliance due to the need for changes in manufacturing methods or installation of abatement equipment, expanded data collection, analysis, and certification.”

Annual report 2026A · The company itself

“Voluntary actions we may take or have taken as part of our ESG initiatives could require us to limit emissions, change manufacturing processes, substitute materials which may cost more or be less available, fund offset projects, or undertake other costly activities. Voluntary restrictions on emissions could result in significant costs such as the need for additional equipment, higher energy costs, carbon taxes, and emission cap and trade programs.”

Annual report 2026A · The company itself

“Microchip is an industry leader in product families including storage controllers, memory controllers and switches designed to address high-performance compute, storage, and connectivity requirements in AI data center and enterprise infrastructure. Our storage controller portfolio includes Microchip Adaptec® and Microsemi® branded storage controllers, SAS/SATA expanders, and accelerators that enable reliable SAS/SATA and NVMe® storage connectivity, data protection, and workload offload.”

Annual report 2026A · The company itself

“Our memory controller portfolio includes Compute Express Link™ (CXL™) and PCIe® memory expansion and management devices that support disaggregated and scalable memory architectures.”

Annual report 2026A · The company itself

“Our switch and retimer portfolio includes PCIe® Gen 3, Gen 4, Gen 5, and Gen 6 solutions, including Switchtec™ branded products, that provide high-speed, low-latency interconnect, signal conditioning, and fabric expansion for server, storage, accelerator, and networking platforms.”

Annual report 2026A · The company itself

“Such sales are subject to federal contracting regulations as well as uncertainties regarding governmental spending levels, spending priorities, regulatory and policy changes.”

Annual report 2026A · The company itself

“The U.S. government and its contractors may terminate their contracts with us at any time. Uncertainty in government spending and termination of contracts for government related projects could have a material adverse impact on the revenue from our government-related business.”

Annual report 2026A · The company itself

“A significant portion of our sales are from or are derived from government agencies or customers who sell to U.S. or foreign government agencies.”

Annual report 2026A · The company itself

“Further, we sell to customers in industries such as automotive, aerospace, defense, safety, security, and medical, where failure of the application could cause damage to property or persons.”

Annual report 2026A · The company itself

“Further, we sell to customers in industries such as automotive, aerospace, defense, safety, security, and medical, where failure of the application could cause damage to property or persons.”

Annual report 2026A · The company itself

“Our technology licensing business generates license fees and royalties associated with technology licenses for the use of our SuperFlash® embedded flash and other technologies. We also generate fees for engineering services related to these technologies.”

Annual report 2026A · The company itself

“Further, we sell to customers in industries such as automotive, aerospace, defense, safety, security, and medical, where failure of the application could cause damage to property or persons.”

Annual report 2026A · The company itself

“A significant portion of our sales are from or are derived from government agencies or customers who sell to U.S. or foreign government agencies.”

Annual report 2026A · The company itself

“Our business is dependent on distributors to service our end customers. Sales to distributors accounted for approximately 47% of our net sales in fiscal 2026 and approximately 45% of our net sales in fiscal 2025.”

Annual report 2026A · The company itself

“Tariffs, trade restrictions, and evolving global trade policies pose risks to our supply chain, cost structure, and customer demand. Beginning in 2018 and continuing through 2026, the U.S. imposed additional tariffs on various imports, and several countries have imposed retaliatory tariffs on goods originating from the U.S. Although semiconductors currently remain exempt from certain U.S. tariffs under the ongoing Section 232 investigation, many inputs used in semiconductor manufacturing - including chemicals, metals, and equipment - remain subject to country specific tariffs or may become subject to new duties.”

Annual report 2026A · The company itself

“If customers face reduced availability of labor, materials, or components, whether due to trade restrictions, supplier disruptions, escalating shipping constraints, or public health issues, they may reduce or suspend production of their own products, leading to decreased demand for our products. For example, in 2025, government actions involving Nexperia (including export control measures and interventions affecting its operations and cross-border shipments) resulted in restricted availability of certain mature-node semiconductors (such as discrete devices and standard logic) that are widely used by automotive and consumer electronics manufacturers. As a result, some of our customers may experience shortages of these components which may reduce their production volumes and, in turn, reduce demand for our products.”

Annual report 2026A · The company itself

“Although Microchip was the importer of record for products that were subject to tariffs imposed under IEEPA and should be entitled to a refund, the timing and the amount of any such recovery is not yet clear. As such, this could have a favorable impact on our financial position, operations, or cash flows, but we cannot predict the timing, likelihood, or amount of any refunds or other recoveries we may realize.”

Annual report 2026A · The company itself

“Any increase in tariffs on semiconductors and raw materials that have the U.S. as their country of origin could lower demand for our products in China and other countries.”

Annual report 2026A · The company itself

“For example, on September 13, 2025, China's Ministry of Commerce initiated an antidumping investigation of imports into China of analog semiconductors originating in the United States. While we were not a subject of this investigation and the Chinese government is expected to suspend these investigations pursuant to the latest trade deal with the U.S., the Chinese government may resume this investigation at its election. If this takes place, additional tariffs are likely to be imposed as a result of this investigation and could have an adverse impact on our revenue.”

Annual report 2026A · The company itself

“Further changes in trade policy, tariffs, additional taxes, or restrictions on supplies, 19 Table of Contents equipment, and raw materials including rare earth minerals, may limit our ability to produce products, increase our selling and/or manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial conditions.”

Annual report 2026A · The company itself

“Because turns orders can be difficult to predict, especially in times of economic volatility and changes in tariffs, as experienced in current and recent quarters, where customers may change order levels within the quarter, varying levels of turns orders make it more difficult to forecast net sales.”

Annual report 2026A · The company itself

“However, in the future, we may be unable to maintain average selling prices due to an oversupply of product in the market or increased pricing pressure, including as a result of tariffs being applied to the products we sell or purchase, or actions taken by foreign governments such as China to favor companies located in their own country through tariffs or other actions, which could adversely impact our operating results.”

Annual report 2026A · The company itself

“Such sales are subject to federal contracting regulations as well as uncertainties regarding governmental spending levels, spending priorities, regulatory and policy changes.”

Annual report 2026A · The company itself

“A significant portion of our sales involve export and import activities. Our U.S.-manufactured products or products based on U.S. technology or U.S. software, or products incorporating U.S. content may be subject to laws and regulations administrated by various agencies including those under the U.S. Departments of State, Commerce, and Treasury, that govern international trade, including but not limited to the Foreign Corrupt Practices Act, Export Administration Regulations (EAR), International Traffic in Arms Regulations, economic embargoes and tariffs or other trade sanctions against certain countries and parties.”

Annual report 2026A · The company itself

“The U.S. and other countries have levied tariffs and taxes on certain goods, implemented trade restrictions, and introduced national security protection policies. Trade tensions between the U.S. and China, have continued to escalate from 2018 to present, and include the U.S. increasing tariffs on Chinese origin goods and China increasing tariffs on U.S. origin goods. Additionally, the U.S. has imposed a baseline 10% tariff on almost all imported goods globally. We continue to take steps to mitigate the costs of these tariffs on our business by adjusting our operations and supply chain but may be unable to completely mitigate the costs of such tariffs, including those imposed in recent years or in the future.”

Annual report 2026A · The company itself

“On August 1, 2025, the U.S. administration implemented additional changes to its tariff policy, including the suspension of the de minimis exemption, expiration of the 10% baseline tariff, implementation of revised reciprocal tariffs tailored to each trading partner, and the imposition of tariffs on particular goods (e.g., copper).”

Annual report 2026A · The company itself

“Although semiconductors remain exempt from most of the recent tariff actions, an increase in tariffs on semiconductors is expected to be imposed once the Section 232 investigation into the impact on U.S. national security by imports of semiconductors, semiconductor manufacturing equipment and their derivative products is concluded. Semiconductors may also be subject to tariffs resulting from ongoing trade negotiations.”

Annual report 2026A · The company itself

“Increased tariffs on our customers' products could adversely impact their sales, and increased tariffs on our products in comparison to those of our competitors could each result in lower demand for our products.”

Annual report 2026A · The company itself

“For example, the Chinese government has announced restrictions relating to sales of certain raw materials and to sales of products containing certain products made by Micron, and they may direct companies within China to purchase Chinese-made products. The Chinese government may also re-initiate the suspended antidumping investigation into imports of analog chips originating in the United States and aggressively enforce the new regulation intended to combat the extraterritorial application of foreign trade controls, sanctions and other measures, which would likely have an adverse impact on our 35 Table of Contents revenue if additional tariffs are imposed by the Chinese government on products subject to the investigation.”

Annual report 2026A · The company itself

“Further changes in trade or national security protection policy, tariffs, additional taxes, restrictions on exports or other trade barriers, including those taken against the U.S. in retaliation for U.S. policies, may limit our ability to obtain equipment, components or raw materials (including rare earth minerals), limit our ability to produce products, increase our selling and/or manufacturing costs, decrease margins, reduce the competitiveness of our products, reduce our ability to sell products, or reduce our ability to have mergers and acquisitions approved by governmental agencies, any of which could have a material adverse effect on our business, results of operations or financial conditions.”

Annual report 2026A · The company itself

“New or increased tariffs imposed on raw materials, components, equipment, or other inputs used in our production processes could increase our manufacturing costs. We may also incur incremental costs associated with supply chain adjustments undertaken to mitigate the effects of trade restrictions or tariffs.”

Annual report 2026A · The company itself

“Business interruptions to our operations or those of our key vendors, licensees or customers could harm our business. Operations at any of our facilities, at the facilities of any of our wafer fabrication or assembly and test subcontractors, or at any of our significant vendors, licensees or customers may be disrupted due to public health concerns (including outbreaks such as COVID-19), work stoppages or reduction in available labor, power loss, insufficient water, cyber-attacks, computer network compromises, incidents of terrorism or security risk, tariffs, political instability, governmental actions, telecommunications, transportation or other infrastructure failure, radioactive contamination, adverse changes in climate, or fires, earthquakes, floods, droughts, volcanic eruptions or other natural disasters.”

Annual report 2026A · The company itself

“For example, in August 2024, we determined that an unauthorized party disrupted our use of certain servers and some of our business operations. As a result, certain of our manufacturing facilities were operating at less than normal levels for a period of time, and our ability to fulfill orders was temporarily impacted.”

Annual report 2026A · The company itself

“Interruptions in and unauthorized access to our IT systems, security breaches or incidents impacting our systems or data that we or our service providers maintain or otherwise process including data belonging to us, or our customers, suppliers, contractors or employees, could adversely affect our business.”

Annual report 2026A · The company itself

“Due to the types of products we sell and the significant amount of sales we make to government agencies or customers whose principal sales are to U.S. government agencies, we have experienced and expect to continue to experience in the future, attacks on our IT systems and data, including attempts to breach our security, network compromises and attempts to introduce malicious software into our IT systems. Geopolitical events and tensions may increase these risks.”

Annual report 2026A · The company itself

“As AI and machine learning evolve, they may lead to the development of dramatically more effective security tools, and cyber‑attackers may leverage these tools to enhance attack methods, identify novel security vulnerabilities, develop malicious code, sophisticated phishing attempts, and convincing deep fakes that manipulate our content or the voices or images of our leaders.”

Annual report 2026A · The company itself

“Employees, consultants or partners may use AI tools in a manner posing risks to proprietary, confidential or regulated information and to intellectual property rights. The use of AI tools may result in allegations or claims relating to violation of third‑party IP rights, unauthorized access to or use or processing of proprietary, confidential or personal information, failure to comply with open‑source software requirements, or other legal or contractual obligations.”

Annual report 2026A · The company itself

“We face risks related to security vulnerabilities in our products. Our products, or IP that we purchase or license from third parties for use in our products, as well as industry-standard specifications that we implement in our products, may be subject to security vulnerabilities.”

Annual report 2026A · The company itself

“Our products are being used in application areas that create new or increased cybersecurity, privacy or safety risks including applications that gather and process data, such as the cloud or IoT, automotive applications, and applications that use AI.”

Annual report 2026A · The company itself

“There may be increased risk associated with the activities of the acquired company such as regulatory violations related to their use of AI in their operations, technology development or product offerings or cybersecurity or data governance risks.”

Annual report 2026A · The company itself

“The increasing use of our products in interconnected, autonomous, safety‑critical, defense‑related, and AI‑enabled systems may expose security vulnerabilities beyond traditional software exploits, including firmware, embedded functionality, or interactions with third‑party systems, which may only become apparent after large‑scale deployment.”

Annual report 2026A · The company itself

“In addition, employees and former employees, in particular former employees who become employees of our competitors, customers, licensees, or other third parties, including state actors, have in the past and may in the future misappropriate, wrongfully use, publish, access, process or provide to our competitors, customers, licensees or other third parties, including state actors, our technology, intellectual property, or other proprietary or confidential information.”

Annual report 2026A · The company itself

“These service providers also face significant cybersecurity threats, and they may be subject to cyber-attacks, disruptions, and interruptions to their networks and systems, and otherwise may suffer from security breaches and incidents. Any such breach or incident, including any involving misappropriation, loss or other unauthorized processing of data or software maintained or otherwise processed by our third-party service providers, or any perception any of these has occurred, could negatively impact our business, operations and financial results, as well as our relationship with our customers.”

Annual report 2026A · The company itself

“China is a predominant producer of many rare earth materials essential to the global electronics industry. In 2025, China imposed and later expanded export restrictions and licensing requirements on certain rare earth elements and related magnets.”

Annual report 2026A · The company itself

“Also, on April 13, 2026, China's State Council released a regulation intended to be a retaliatory measure to combat the extraterritorial application of foreign laws pertaining to trade controls, sanctions, and similar measures. This regulation may expose us to potential civil liability, administrative measures, and other remedial actions if the Chinese government determines that we caused harm by complying with certain foreign laws. This could have a material adverse effect on our business, results of operations or financial conditions.”

Annual report 2026A · The company itself

“In addition, some governments, such as China, may provide, or have provided and may continue to provide, significant assistance financial or otherwise, to some of our competitors, or to new entrants, and may intervene in support of national industries and/or competitors, including trying to disrupt the U.S. semiconductor industry.”

Annual report 2026A · The company itself

“National Defense Authorization Act for Fiscal Year 2023 (the FY2023 NDAA), signed into law on December 23, 2022, with provisions that go into effect in December 2027, prohibits U.S. government agencies from buying semiconductor products or services manufactured by SMIC, YMTC, CXMT and any other entity that the Secretary of Defense or the Secretary of Commerce determine is owned, controlled, or connected to the government of a foreign country of concern (Prohibited Companies). Some of our products are manufactured at SMIC, and some of our suppliers buy products manufactured at YMTC. If we are unable to alternately source or manufacture certain of our products, or discontinue use of products from Prohibited Companies, if any, when Section 5949 of the FY2023 NDAA go into effect in December 2027, this could adversely impact our sales to U.S. government agencies and their prime customers.”

Annual report 2026A · The company itself

“A significant portion of our sales involve export and import activities. Our U.S.-manufactured products or products based on U.S. technology or U.S. software, or products incorporating U.S. content may be subject to laws and regulations administrated by various agencies including those under the U.S. Departments of State, Commerce, and Treasury, that govern international trade, including but not limited to the Foreign Corrupt Practices Act, Export Administration Regulations (EAR), International Traffic in Arms Regulations, economic embargoes and tariffs or other trade sanctions against certain countries and parties.”

Annual report 2026A · The company itself

“Our inability to timely obtain a license, for any reason, not limited to a delay in license processing due to a federal government shutdown, or changes in government policies of approval or denial of licenses, could cause a delay in scheduled shipments which could have a material adverse impact on our revenue within the quarter of a shutdown, and in following quarters depending on the extent that license processing is delayed.”

Annual report 2026A · The company itself

“Export controls, sanctions, and trade restrictions are increasingly complex and subject to discretionary interpretation by regulatory authorities, with requirements that may change through guidance, enforcement, or licensing decisions. Even where we believe authorizations apply, differing or changing regulatory interpretations could disrupt shipments, delay revenue recognition, require product or customer changes, and adversely affect our operating results.”

Annual report 2026A · The company itself

“The EAR also effectively prohibits sales of items for a "military end use," to a "military end-user," or for a "military intelligence" end-user, or end-use to certain countries, such as Belarus, Burma, Cambodia, Cuba, China, Iran, North Korea, Russia, Syria and Venezuela. The U.S.”

Annual report 2026A · The company itself

“It is also possible that evolving U.S. export controls may encourage our non-U.S. customers to purchase from companies not subject to U.S. export controls, thereby harming our business, market position, and financial results. Excessive export controls increase the risk of investing in U.S. advanced semiconductor products, because by the time a new product is ready for market, it may be subject to new unilateral export controls restricting its sale. At the same time, such controls may increase investment in foreign competitors, which would be less likely to be restricted by U.S. controls.”

Annual report 2026A · The company itself

“Diversifying our wafer production geographically can help prevent disruptions that may be caused by geopolitical tensions, tariffs or natural disasters.”

Annual report 2026A · The company itself

“As discussed above, the trade relationship between the U.S. and China remains challenging and could worsen, economic conditions in China remain uncertain, and we are unable to predict whether such uncertainty will continue or worsen in future periods.”

Annual report 2026A · The company itself

“Also, on April 13, 2026, China's State Council released a regulation intended to be a retaliatory measure to combat the extraterritorial application of foreign laws pertaining to trade controls, sanctions, and similar measures. This regulation may expose us to potential civil liability, administrative measures, and other remedial actions if the Chinese government determines that we caused harm by complying with certain foreign laws. This could have a material adverse effect on our business, results of operations or financial conditions.”

Annual report 2026A · The company itself

“Geopolitical instability in the Middle East may disrupt critical semiconductor materials, increase fuel costs, and adversely affect our ability to meet customer demand. Geopolitical instability and conflicts in the Middle East, including military activity and escalating tensions involving Iran, create significant uncertainty for global markets, including energy and materials markets, and could adversely impact our operations and financial results.”

Annual report 2026A · The company itself

“The region is a major source of global oil production and a critical transit point for maritime shipping routes. Hostilities, infrastructure damage, sanctions, or blockages of key shipping lanes could disrupt oil production and distribution, reducing the availability of fuel or increasing fuel prices.”

Annual report 2026A · The company itself

“Business interruptions to our operations or those of our key vendors, licensees or customers could harm our business. Operations at any of our facilities, at the facilities of any of our wafer fabrication or assembly and test subcontractors, or at any of our significant vendors, licensees or customers may be disrupted due to public health concerns (including outbreaks such as COVID-19), work stoppages or reduction in available labor, power loss, insufficient water, cyber-attacks, computer network compromises, incidents of terrorism or security risk, tariffs, political instability, governmental actions, telecommunications, transportation or other infrastructure failure, radioactive contamination, adverse changes in climate, or fires, earthquakes, floods, droughts, volcanic eruptions or other natural disasters.”

Annual report 2026A · The company itself

“Due to the types of products we sell and the significant amount of sales we make to government agencies or customers whose principal sales are to U.S. government agencies, we have experienced and expect to continue to experience in the future, attacks on our IT systems and data, including attempts to breach our security, network compromises and attempts to introduce malicious software into our IT systems. Geopolitical events and tensions may increase these risks.”

Annual report 2026A · The company itself

“For example, in February 2022, the U.S. began implementing widescale sanctions against Russia due to Russia's invasion of Ukraine. Sanctions against Belarus and certain Ukrainian regions were later implemented. Because the actions by Russia against Ukraine are in conflict with our Guiding Values, we chose to cease shipments into Russia and Belarus, and we will continue to comply with applicable U.S. sanctions imposed on Russia, Belarus, and Russia-controlled areas of Ukraine. While sales of our products into these regions, and to customers that sell into these regions, have been negatively impacted, at this time, we have not experienced a material adverse impact on our revenue.”

Annual report 2026A · The company itself

“Certain materials used in semiconductor manufacturing, including rare earth elements, minerals, and metals, are available from a limited number of countries. Geopolitical tensions, trade disputes, economic conditions, transit disruptions, public health concerns, or regulatory actions may affect the availability or cost of these materials.”

Annual report 2026A · The company itself

“China is a predominant producer of many rare earth materials essential to the global electronics industry. In 2025, China imposed and later expanded export restrictions and licensing requirements on certain rare earth elements and related magnets.”

Annual report 2026A · The company itself

“Limited access to these materials could impair our ability to manufacture certain products, increase our production costs, or reduce our competitiveness relative to manufacturers with alternative supply sources.”

Annual report 2026A · The company itself

“Further changes in trade policy, tariffs, additional taxes, or restrictions on supplies, 19 Table of Contents equipment, and raw materials including rare earth minerals, may limit our ability to produce products, increase our selling and/or manufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial conditions.”

Annual report 2026A · The company itself

“Further changes in trade or national security protection policy, tariffs, additional taxes, restrictions on exports or other trade barriers, including those taken against the U.S. in retaliation for U.S. policies, may limit our ability to obtain equipment, components or raw materials (including rare earth minerals), limit our ability to produce products, increase our selling and/or manufacturing costs, decrease margins, reduce the competitiveness of our products, reduce our ability to sell products, or reduce our ability to have mergers and acquisitions approved by governmental agencies, any of which could have a material adverse effect on our business, results of operations or financial conditions.”

Annual report 2026A · The company itself

“Certain materials used in semiconductor manufacturing, including rare earth elements, minerals, and metals, are available from a limited number of countries. Geopolitical tensions, trade disputes, economic conditions, transit disruptions, public health concerns, or regulatory actions may affect the availability or cost of these materials.”

Annual report 2026A · The company itself

“Although we do not purchase significant amounts of materials, components or equipment from Russia, Belarus, or Ukraine, the broader semiconductor industry relies on raw materials sourced from these regions - such as neon, palladium, cesium, rubidium, and nickel. Current U.S. restrictions on imports of certain metals of Russian origin highlight the risk that geopolitical events or sanctions may limit access to critical materials.”

Annual report 2026A · The company itself

“Although some restrictions were subsequently suspended for certain U.S. end‑users, future restrictions or renewed implementation could constrain global supply. If China further restricts exports or pressures other countries to do so, our suppliers may face shortages, longer lead times, or increased costs.”

Annual report 2026A · The company itself

“In addition to fuel‑related risks, current conflict in the Middle East is disrupting supplies of critical semiconductor materials - including helium and bromine, both essential for wafer fabrication processes.”

Annual report 2026A · The company itself

“For example, Qatar accounts for more than one‑third of the world’s helium production, and recent Iranian drone strikes halted operations at major helium facilities. Additionally, bromine supplies are also at risk, as approximately two‑thirds of the global production originates from Israel and Jordan, and disruptions in the region could affect semiconductor etching, detection, and circuit‑formation processes.”

Annual report 2026A · The company itself

“We are subject to numerous laws and regulations in the U.S. and internationally regarding privacy, data protection and handling, and cybersecurity, such as the European Union’s (EU) General Data Protection Regulation (GDPR), the U.K. equivalent to the GDPR, and the California Consumer Privacy Act (CCPA) as amended by the California Privacy Rights Act (CPRA), the EU Cyber Resilience Act and Cybersecurity Act, and the CMMC program. The scope of such laws and regulations is rapidly evolving, subject to differing interpretations, and may be inconsistent among jurisdictions.”

Annual report 2026A · The company itself

“Additionally, other countries outside of the EEA have passed or are considering passing laws requiring local data residency, which could increase the cost and complexity of providing our products in those jurisdictions.”

Annual report 2026A · The company itself

“Furthermore, the GDPR and the U.K. equivalent of the GDPR expose us to two parallel data protection regimes in Europe, each of which potentially authorizes fines and enforcement actions for certain violations. Substantial fines may be imposed for breaches of data protection requirements, which can be up to 4% of a company’s worldwide revenue or 20 million Euros, whichever is greater, and classes of individuals or consumer protection organizations may initiate litigation related to our processing of their personal data.”

Annual report 2026A · The company itself

“The CPRA, which became operative January 1, 2023, expands the CCPA’s requirements, including applying to personal information of business representatives and employees and establishing a new regulatory agency to implement and enforce the law.”

Annual report 2026A · The company itself

“The CCPA, and other evolving legislation relating to privacy, data protection, and information security may impact our business activities and require us to modify our policies and practices.”

Annual report 2026A · The company itself

“Competition for qualified personnel has intensified for a variety of reasons, including the high demand for employees in rapidly developing fields such as AI, the increase in work-from-home arrangements and increases in minimum wages and wage inflation in our industry.”

Annual report 2026A · The company itself

“In addition, competition for talent with AI expertise has intensified, and our ability to attract, retain and train personnel with appropriate AI skills and literacy is critical to our innovation and product roadmap.”

Annual report 2026A · The company itself

“Human Capital Resources Our Employees We invest in our highly-skilled global workforce of approximately 17,900 people in accordance with our Guiding Value: employees are our greatest strength.”

Annual report 2026A · The company itself

“These competitive pressures and the resulting wage inflation may increase our labor costs and adversely impact our operational results.”

Annual report 2026A · The company itself

“New and existing frameworks in the United States, the European Union and China - including the EU AI Act’s risk‑based approach - may impose additional compliance, transparency, conformity assessment, monitoring or usage‑restriction obligations on AI‑enabled products. Conflicting regulatory requirements across jurisdictions increase compliance complexity and costs, and failure or perceived failure to comply could result in fines, penalties, investigations, restrictions on product offerings, reputational harm, or lost sales or talent.”

Annual report 2026A · The company itself

“Additionally, new and updated AI regulations could impose onerous obligations that may disadvantage us and require us to change our business practices.”

Annual report 2026A · The company itself

“New technology trends, such as cyber resiliency and security requirements and the rapid adoption of AI, require us, and our customers and suppliers, to keep pace with evolving regulations and industry standards. In the U.S., the EU, and China, there are various current and proposed regulatory frameworks relating to cybersecurity, AI development, and the deployment of automation and AI in products, services and operations, including the EU AI Act, China’s generative AI regulations, and various current or proposed U.S. federal and state AI and/or cybersecurity legislative or governance frameworks, executive orders, rules, regulations and laws.”

Annual report 2026A · The company itself

“Our operating results are adversely affected when we operate below normal capacity. In fiscal 2026 and in fiscal 2025, we operated at below normal capacity levels resulting in unabsorbed capacity charges of $200.8 million and $173.0 million, respectively.”

Annual report 2026A · The company itself

“Our operating results are impacted by seasonality and wide fluctuations of supply and demand in the industry. The semiconductor industry is characterized by seasonality and wide fluctuations of supply and demand.”

Annual report 2026A · The company itself

“Future adverse conditions in the U.S. or global economies, labor markets, or credit markets, whether resulting from tariffs or other factors, could materially impact distributor operations. Any deterioration in the financial condition, disruption in the operations of our distributors, or disruption of our ability to conduct business with our distributors would likely adversely impact the flow of our products to our end customers and adversely impact our results of operation.”

Annual report 2026A · The company itself

“To be awarded new contracts after November 10, 2025 for the U.S. government, we may be required to meet a CMMC level that we may not meet, or may choose not to meet. Over time, more government contracts may require higher Cybersecurity Maturity Model requirements and if we do not meet them, we will become ineligible for certain contracts.”

Annual report 2026A · The company itself

“Over time, failure to comply with CMMC requirements required by the U.S. Department of War and its prime customers may make us ineligible for government contracts.”

Annual report 2026A · The company itself

“New technology trends, such as cyber resiliency and security requirements and the rapid adoption of AI, require us, and our customers and suppliers, to keep pace with evolving regulations and industry standards. In the U.S., the EU, and China, there are various current and proposed regulatory frameworks relating to cybersecurity, AI development, and the deployment of automation and AI in products, services and operations, including the EU AI Act, China’s generative AI regulations, and various current or proposed U.S. federal and state AI and/or cybersecurity legislative or governance frameworks, executive orders, rules, regulations and laws.”

Annual report 2026A · The company itself

“Geopolitical instability in the Middle East may disrupt critical semiconductor materials, increase fuel costs, and adversely affect our ability to meet customer demand. Geopolitical instability and conflicts in the Middle East, including military activity and escalating tensions involving Iran, create significant uncertainty for global markets, including energy and materials markets, and could adversely impact our operations and financial results.”

Annual report 2026A · The company itself

“Recent armed conflicts have already forced key state sponsored fuel production facilities in the region offline, contributing to global fuel price volatility.”

Annual report 2026A · The company itself

“Our operations rely heavily on global logistics networks - including ocean freight, air freight, and long‑haul trucking - that depend on stable and cost‑effective fuel supplies. Significant increases in fuel costs, reductions in carrier capacity, or extended transit times could materially increase our transportation and distribution expenses.”

Annual report 2026A · The company itself

“Prolonged or severe disruption - whether due to fuel shortages, materials constraints, logistics delays, or increased energy costs, or reduced customer demand - could adversely affect our ability to meet customer commitments and could materially harm our business, financial condition, and results of operations.”

Annual report 2026A · The company itself

“The region is a major source of global oil production and a critical transit point for maritime shipping routes. Hostilities, infrastructure damage, sanctions, or blockages of key shipping lanes could disrupt oil production and distribution, reducing the availability of fuel or increasing fuel prices.”

Annual report 2026A · The company itself

“Our operations rely heavily on global logistics networks - including ocean freight, air freight, and long‑haul trucking - that depend on stable and cost‑effective fuel supplies. Significant increases in fuel costs, reductions in carrier capacity, or extended transit times could materially increase our transportation and distribution expenses.”

Annual report 2026A · The company itself

“Shipping carriers may impose fuel surcharges, reroute vessels, reduce service frequency, or experience delays, each of which could impair our ability to obtain raw materials or deliver finished products to customers on expected timelines.”

Annual report 2026A · The company itself

“Prolonged or severe disruption - whether due to fuel shortages, materials constraints, logistics delays, or increased energy costs, or reduced customer demand - could adversely affect our ability to meet customer commitments and could materially harm our business, financial condition, and results of operations.”

Annual report 2026A · The company itself

“In addition, we own product assembly and testing facilities, and finished goods warehouses near Bangkok, Thailand, which has experienced periods of political instability and severe flooding in the past. There can be no assurance that any future flooding or political instability in Thailand would not have a material adverse impact on our operations.”

Annual report 2026A · The company itself

“Also, Thailand has experienced periods of severe flooding in recent years. While our facilities in Thailand have continued to operate normally, there can be no assurance that future flooding in Thailand would not have a material adverse impact on our operations.”

Annual report 2026A · The company itself

“Sustained adverse changes in climate could have a direct adverse economic impact on us due to the effects of extreme weather and climate events on our production facilities, our supply chain and customers. Utility shortages, higher costs of utilities, and reduced availability of water could disrupt our operations as well as those of our customers and suppliers. Certain of our operations are located in arid or tropical regions, which some experts believe may become vulnerable to more frequent fires, storms, severe floods and droughts.”

Annual report 2026A · The company itself

“For example, in fiscal 2023 and fiscal 2022, we experienced cost increases from certain suppliers for materials used in our production processes; although conditions stabilized in fiscal 2024 and fiscal 2025, similar cost pressures may recur.”

Annual report 2026A · The company itself

“Additionally, our future operating results could suffer if our wafer foundries and other contractors increase the prices of the products and services that they provide to us.”

Annual report 2026A · The company itself

“Inflation Risk Inflation has not had a material adverse impact on our operating results in recent periods. However, if our costs were to continue to become subject to significant inflationary pressures, we may not be able to offset such higher costs through price increases which could adversely impact our operating results.”

Annual report 2026A · The company itself

“Business interruptions to our operations or those of our key vendors, licensees or customers could harm our business. Operations at any of our facilities, at the facilities of any of our wafer fabrication or assembly and test subcontractors, or at any of our significant vendors, licensees or customers may be disrupted due to public health concerns (including outbreaks such as COVID-19), work stoppages or reduction in available labor, power loss, insufficient water, cyber-attacks, computer network compromises, incidents of terrorism or security risk, tariffs, political instability, governmental actions, telecommunications, transportation or other infrastructure failure, radioactive contamination, adverse changes in climate, or fires, earthquakes, floods, droughts, volcanic eruptions or other natural disasters.”

Annual report 2026A · The company itself

“Any future pandemic could adversely impact our business in future periods if public health issues again becomes severe in one or more of our key markets such as China or in areas where our suppliers or manufacturing operations are located.”

Annual report 2026A · The company itself

“Our future operating results could suffer if a significant contractor were to experience production difficulties, insufficient capacity, decreased manufacturing, reduced availability of labor, assembly and test yields, or increased costs due to disruptions such as political upheaval, transit disruptions, infrastructure disruption or pandemics.”

Annual report 2026A · The company itself

“Our operations rely heavily on global logistics networks - including ocean freight, air freight, and long‑haul trucking - that depend on stable and cost‑effective fuel supplies. Significant increases in fuel costs, reductions in carrier capacity, or extended transit times could materially increase our transportation and distribution expenses.”

Annual report 2026A · The company itself

“Shipping carriers may impose fuel surcharges, reroute vessels, reduce service frequency, or experience delays, each of which could impair our ability to obtain raw materials or deliver finished products to customers on expected timelines.”

Annual report 2026A · The company itself

“Customer demands and regulations related to conflict-free minerals and other substances incorporated into or used to manufacture our products may force us to incur additional expenses. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, in August 2012, the SEC released investigation, and disclosure requirements regarding the use of "conflict" minerals mined from the Democratic Republic of Congo and adjoining countries.”

Annual report 2026A · The company itself

“In addition to concerns over "conflict" minerals mined from the Democratic Republic of Congo, our customers may require that other minerals and substances used within our supply chain, manufacturing processes, or contained in our products be evaluated and reported on. An increase in reporting obligations will increase associated operating costs.”

Annual report 2026A · The company itself

“On August 1, 2025, the U.S. administration implemented additional changes to its tariff policy, including the suspension of the de minimis exemption, expiration of the 10% baseline tariff, implementation of revised reciprocal tariffs tailored to each trading partner, and the imposition of tariffs on particular goods (e.g., copper).”

Annual report 2026A · The company itself

“We use forward currency exchange contracts in an attempt to reduce the adverse earnings impact from the effect of exchange rate fluctuations on our non-U.S. dollar net balance sheet exposures. Nevertheless, in periods when the U.S. dollar significantly fluctuates in relation to the non-U.S. currencies in which we transact business, the value of our non-U.S. dollar transactions can have an adverse effect on our results of operations and financial condition.”

Annual report 2026A · The company itself

“The number and complexity of laws and customer requirements focused on the energy efficiency of electronic products, the recycling of electronic products, the reduction of chemicals used in and to manufacture electronic products, and the reduction in the amount of packing materials and the increase in the required recycling of packing materials have expanded significantly. It may be difficult for us to timely comply with these laws and we may have insufficient quantities of compliant products to meet customers' needs, thereby adversely impacting our sales and profitability.”

Annual report 2026A · The company itself

“Regulations restricting greenhouse gas emissions could cause us to incur significant additional costs of compliance due to the need for changes in manufacturing methods or installation of abatement equipment, expanded data collection, analysis, and certification.”

Annual report 2026A · The company itself

“We have insurance coverage related to many different types of risk; however, we self-insure for some potentially significant risks and obligations, because we believe that it is more cost effective for us to self-insure than to pay the high 27 Table of Contents premium costs. The risks and exposures that we self-insure include, but are not limited to, employee health matters, certain property matters, product defects, cybersecurity matters, employment risks, environmental matters, political risks, and intellectual property matters.”

Annual report 2026A · The company itself

“Our future operating results could suffer if a significant contractor were to experience production difficulties, insufficient capacity, decreased manufacturing, reduced availability of labor, assembly and test yields, or increased costs due to disruptions such as political upheaval, transit disruptions, infrastructure disruption or pandemics.”

Annual report 2026A · The company itself

“The semiconductor industry has experienced significant consolidation which has resulted in several of our competitors becoming much larger in terms of revenue, product offerings and scale. We may be unable to compete successfully in the future, which could harm our business.”

Annual report 2026A · The company itself

“In periods when the U.S. dollar declines significantly relative to the British pound, Euro, Thai baht and Taiwan dollar, the 41 Table of Contents operational costs in our European and Thailand subsidiaries are adversely affected.”

Annual report 2026A · The company itself

“The number and complexity of laws and customer requirements focused on the energy efficiency of electronic products, the recycling of electronic products, the reduction of chemicals used in and to manufacture electronic products, and the reduction in the amount of packing materials and the increase in the required recycling of packing materials have expanded significantly. It may be difficult for us to timely comply with these laws and we may have insufficient quantities of compliant products to meet customers' needs, thereby adversely impacting our sales and profitability.”

Annual report 2026A · The company itself

“Our operating results may be adversely impacted by the inability of our key suppliers to provide us with necessary raw materials, components, or equipment. Our manufacturing operations require a continuous supply of raw and processed materials, components, and production equipment that must meet stringent performance and quality standards. Although we generally maintain multiple sources for these items, only a limited number of suppliers may be capable of meeting our technical requirements.”

Annual report 2026A · The company itself

“In fiscal 2026, approximately 35% of our sales came from products produced at our own wafer fabrication facilities that are located in the U.S. There are benefits to having our own U.S. wafer fabrication facilities such as increased IP protection and security, increased supply chain resilience and the ability to manage production costs.”

Annual report 2026A · The company itself

“Our direct sales force focuses on a wide variety of strategic accounts in three geographical markets: the Americas, Europe and Asia. We currently maintain sales and technical support centers in major metropolitan areas in all three geographic markets.”

Annual report 2026A · The company itself

“Wafer Fabrication Fab 4, located in Gresham, Oregon, currently produces 8-inch wafers using predominantly 0.11 microns to 0.5 microns manufacturing processes. While select investments are still being made, in the fourth quarter of fiscal 2024, we paused our expansion and capital equipment investment plan at Fab 4 through fiscal 2027. We plan to resume our expansion efforts to increase Fab 4's capacity as required to support the growth of our company in the future.”

Annual report 2026A · The company itself

“Fab 5, located in Colorado Springs, Colorado, currently manufactures discrete and specialty products in addition to a lower volume of a diversified set of standard products on 6-inch wafers. In February 2023, we announced our plan to expand our silicon carbide (SiC) and silicon production capacity, including the production of 8-inch wafers, at our Fab 5 facility. While select investments are still being made to reorganize our manufacturing capacity, in the fourth quarter of fiscal 2024, we paused our expansion activity through fiscal 2027. We plan to resume our expansion efforts as required to support the growth of our company in the future.”

Annual report 2026A · The company itself

“We have a test facility in Calamba, the Philippines, and specialized test and assembly facilities for our aerospace and defense products in Germany, France, Ireland, the United Kingdom, the Philippines, Thailand, and the United States.”

Annual report 2026A · The company itself

“During fiscal 2026, we increased capabilities at our Thailand and Philippines facilities to support more technologies by making process improvements, upgrading existing equipment, and adding equipment. During fiscal 2026, approximately 67% of our assembly requirements were being performed in our internal facilities and approximately 69% of our test requirements were performed in internal facilities.”

Annual report 2026A · The company itself

“Our direct sales force focuses on a wide variety of strategic accounts in three geographical markets: the Americas, Europe and Asia. We currently maintain sales and technical support centers in major metropolitan areas in all three geographic markets.”

Annual report 2026A · The company itself

“Sales to foreign customers account for a substantial portion of our net sales. During fiscal 2026, approximately 75% of our net sales were made to foreign customers, including 18% in China and 15% in Taiwan.”

Annual report 2026A · The company itself

“Our direct sales force focuses on a wide variety of strategic accounts in three geographical markets: the Americas, Europe and Asia. We currently maintain sales and technical support centers in major metropolitan areas in all three geographic markets.”

Annual report 2026A · The company itself

“We have a test facility in Calamba, the Philippines, and specialized test and assembly facilities for our aerospace and defense products in Germany, France, Ireland, the United Kingdom, the Philippines, Thailand, and the United States.”

Annual report 2026A · The company itself