10q10k10q10k.net

What changed in Monolithic Power Systems's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Monolithic Power Systems's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+293 added−294 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-03)

Top changes in Monolithic Power Systems's 2025 10-K

293 paragraphs added · 294 removed · 241 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

51 edited+5 added−3 removed37 unchanged
Biggest changeThe following table is a summary of the various key end market applications for our products, and those markets’ contribution as a percentage of our total revenue: Percentage of Total Revenue End Markets Applications 2024 2023 2022 Enterprise Data Cloud-based and on-premises CPU server and workstation applications, and server artificial intelligence (“AI”) applications 32.5 % 17.7 % 14.0 % Storage and computing Storage applications, notebooks, and graphics cards 22.7 % 27.0 % 25.3 % Automotive Advanced driver assistance systems, infotainment, USB connectors, body electronics, motion control and lighting systems 18.8 % 21.7 % 16.7 % Communications Network infrastructure, satellite communications, optical modules, and other wireless applications 10.2 % 11.3 % 14.0 % Consumer Home appliances, gaming, smart TVs, lighting, monitors, and stereos 9.1 % 12.9 % 17.8 % Industrial Power sources, industrial meter, security applications, and other industrial equipment 6.7 % 9.4 % 12.2 % 5 Table of Contents Product Families Our proprietary process and packaging technologies enable us to design and deliver smaller, single-chip power management ICs.
Biggest changeThe following table is a summary of the various key end market applications for our products, and those markets’ contribution as a percentage of our total revenue for the periods presented: Percentage of Total Revenue End Markets Applications 2025 2024 2023 Storage and Computing Memory, storage solutions, notebooks, and graphics cards 26.3 % 22.7 % 27.0 % Enterprise Data Cloud-based and on-premises CPU servers and workstations, and artificial intelligence (“AI”) systems 25.2 % 32.5 % 17.7 % Automotive Advanced driver assistance systems, infotainment, USB connectors, body electronics, motion control, and lighting systems 21.2 % 18.8 % 21.7 % Communications Network infrastructure, satellite communications, optical modules, switches, and other wireless solutions 11.1 % 10.2 % 11.3 % Consumer Home appliances, gaming, smart TVs, lighting, monitors, and stereos 9.1 % 9.1 % 12.9 % Industrial Power sources, industrial meters, security, and other industrial equipment 7.1 % 6.7 % 9.4 % 7 Table of Contents Product Families Our proprietary process and packaging technologies enable us to design and deliver smaller, single-chip power management solutions.
We have targeted product and market areas that we believe allow us to operate at above-average growth over the long term compared to the semiconductor industry as a whole. End Markets and Applications We design and develop our products for the enterprise data, storage and computing, automotive, communications, consumer, and industrial end markets.
We have targeted product and market areas that we believe allow us to operate at above-average growth over the long term compared to the semiconductor industry as a whole. End Markets and Applications We design and develop our products for the storage and computing, enterprise data, automotive, communications, consumer, and industrial end markets.
These technologies simplify the design process and are applicable across a wide range of analog applications within the storage and computing, enterprise data, automotive, industrial, communications and consumer end markets.
These technologies simplify the design process and are applicable across a wide range of analog applications within the storage and computing, enterprise data, automotive, communications, consumer, and industrial end markets.
These include the development of high efficiency power devices, the design of precision analog circuits and systems, expertise in mixed-signal design, packaging and solution development, integration and the development of proprietary semiconductor process technologies. Our research and development efforts are generally targeted at three areas: systems architecture, circuit design and implementation, and process technologies.
These include the development of high efficiency power devices, the design of precision analog circuits and systems, expertise in mixed-signal design, packaging and solution development, integration and the development of proprietary semiconductor process technologies. Our research and development efforts are generally targeted at three areas: systems architecture, circuit design and implementation, and process and packaging technologies.
In contrast to many fabless semiconductor companies, which utilize standard process technologies and design rules established by their foundry partners, we have developed our own proprietary process and packaging technologies and collaborate with our foundry partners to install our technologies on their equipment in their facilities for use on our behalf.
In contrast to many fabless semiconductor companies, which utilize standard process technologies and design rules established by their foundry partners, we have developed our own proprietary process and packaging technologies and collaborate with our foundry partners to install our technologies on equipment in their facilities for use on our behalf.
We also offer free exercise classes, strength training and yoga in some of our offices. 8 Table of Contents Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports that are filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge.
We also offer free exercise classes, strength training and yoga in some of our offices. 10 Table of Contents Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports that are filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge.
Our efforts to comply with these government regulations could have material impacts on our capital expenditures, operating expenses, revenue, resource allocation, operations, competitive position, or financial condition, and the magnitude and duration of such impacts are uncertain and difficult to quantify. Refer to “Item 1A.
Our efforts to comply with these government regulations could have material impacts on our capital expenditures, operating expenses, revenue, margins, resource allocation, operations, competitive position, or financial condition, and the magnitude and duration of such impacts are uncertain and difficult to quantify. Refer to “Item 1A.
Our key product families include, but not limited to, the Direct Current (“DC”) to DC, Alternating Current (“AC”) to DC, driver metal-oxide-semiconductor field-effect transistor, power management IC, current limit switch and lighting control products.
Our key product families include, but are not limited to, the Direct Current (“DC”) to DC, Alternating Current (“AC”) to DC, driver metal-oxide-semiconductor field-effect transistor, power management IC, current limit switch and lighting control products.
Manufacturing We utilize a fabless business model, working with third parties to manufacture and assemble our ICs. This fabless approach allows us to focus our engineering and design resources on our strengths and to reduce our fixed costs and capital expenditures.
Manufacturing We utilize a fabless business model, working with third parties to manufacture, assemble and test our ICs. This fabless approach allows us to focus our engineering and design resources on our strengths and to reduce our fixed costs and capital expenditures.
Mixed-signal ICs combine digital and analog functions onto a single chip and play an important role in bridging real world applications to digital systems. We focus on the market for high performance analog and mixed-signal ICs.
Mixed-signal ICs combine digital and analog functions onto a single chip and play an important role in bridging real world applications to digital systems. We focus on the market for high performance analog and mixed-signal solutions.
We believe that we are competitive in the markets in which we sell, because our ICs typically are smaller in size, are highly integrated with lower energy consumption, and achieve higher performance specifications than most of our competitors.
We believe that we are competitive in the markets in which we sell because our ICs and solutions are typically smaller in size, are highly integrated with lower energy consumption, and achieve higher performance specifications than most of our competitors.
We believe process technologies are key strategic components to our future growth. 6 Table of Contents Our growth is fueled by our customers’ need for our power-efficient solutions. Consequently, we focus on continually improving the energy efficiency of our products in our research and development efforts in all three targeted areas.
We believe process technologies are key strategic components to our future growth. 8 Table of Contents Our growth is fueled by our customers’ need for our power-efficient solutions. Consequently, we focus on continually improving the energy efficiency of our products in our research and development efforts in all three targeted areas.
We consider our primary competitors to include Analog Devices, Infineon Technologies, NXP Semiconductors, ON Semiconductor, Power Integrations, Renesas Electronics, ROHM Semiconductor, Semtech, STMicroelectronics and Texas Instruments. 7 Table of Contents We expect continued competition from existing competitors as well as competition from new entrants into the semiconductor market.
We consider our primary competitors to include Analog Devices, Infineon Technologies, NXP Semiconductors, ON Semiconductor, Power Integrations, Renesas Electronics, ROHM Semiconductor, Semtech, STMicroelectronics and Texas Instruments. 9 Table of Contents We expect continued competition from existing competitors as well as competition from new entrants into the semiconductor market.
Government Regulations We are subject to international, federal and local legislation, regulations, and other requirements relating to the discharge of substances into the environment; the treatment, transport, and disposal of hazardous wastes; recycling and product packaging; worker health and safety; and other activities affecting the environment, our workforce, and the management of our manufacturing operations.
Government Regulations We are subject to international, federal and local legislation, regulations, and other requirements relating to the discharge of substances into the environment; the treatment, transport, and disposal of hazardous wastes; recycling and product packaging; worker health and safety; and other activities affecting the environment, our workforce, and the management of our manufacturing operations and research and development.
If excess inventory exists, it may be necessary for us to sell it at a substantial discount, take a significant write-down or dispose of it altogether, all of which would negatively affect our profit margins.
If excess inventory exists, it may be necessary for us to sell it at a substantial discount, take a significant write-down or dispose of it altogether, any of which would negatively affect our profit margins.
Once our silicon wafers have been produced, they are shipped to the facilities in China, Taiwan, and Singapore that we and our partners utilize for wafer sort, which is a testing process performed to identify non-functioning dies. Our semiconductor products are then assembled and packaged by independent subcontractors in China, Taiwan and Malaysia.
Once our silicon wafers have been produced, they are shipped to facilities in China, Taiwan, Singapore, Malaysia and South Korea that we and our partners utilize for wafer sort, which is a testing process performed to identify non-functioning dies. Our semiconductor products are then assembled and packaged by independent subcontractors in China, Taiwan, Malaysia and South Korea.
Our issued patents are scheduled to expire at various times through December 2044. Our patents are material to our business, but we do not rely on any one particular patent for our success.
Our issued patents are scheduled to expire at various times through December 2045. Our patents are material to our business, but we do not rely on any one particular patent for our success.
We believe that we differentiate ourselves by offering solutions that are more highly integrated, smaller in size, more energy-efficient, more accurate with respect to performance specifications and, consequently, more cost-effective than many competing solutions. We plan to continue to introduce new products within our existing product families, as well as in new innovative product categories.
We believe that we differentiate ourselves by offering solutions that are more highly integrated, smaller in size, more energy-efficient, more accurate and more reliable with respect to performance specifications and, consequently, more cost-effective than many competing solutions. We plan to continue to introduce new products within our existing product families, as well as new, innovative products that expand our market.
High performance products generally are differentiated by functionality and performance factors, which include integration of higher levels of functionality onto a single chip, greater precision, better power efficiency and density, higher speed and lower heat and noise. There are several key factors that distinguish the analog and mixed-signal IC markets from digital IC markets.
High performance products generally are differentiated by functionality and performance factors, which include integration of higher levels of functionality into a single chip or module, greater precision, better power efficiency and density, higher speed, and lower heat and noise. There are several key factors that distinguish the analog and mixed-signal IC markets from digital IC markets.
Item 1. Business General Monolithic Power Systems, Inc. (“MPS,” “we,” or “us”) is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. Incorporated in 1997, our three core strengths include deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.
Item 1. Business General Monolithic Power Systems, Inc. is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. Incorporated in 1997, our three core strengths include deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.
As of December 31, 2024, we employed 4,017 employees in various locations in Asia, Europe and the U.S., compared with 3,564 employees as of December 31, 2023. Certain employees are subject to collective bargaining agreements. We have never experienced an employee-based work stoppage or strike.
As of December 31, 2025, we employed 4,501 employees in various locations in Asia, Europe and the U.S., compared with 4,017 employees as of December 31, 2024. Certain employees are subject to collective bargaining agreements. We have never experienced an employee-based work stoppage or strike.
We maintain a staff of applications engineers who work directly with our customers’ engineers in the development of their systems’ electronics containing our products. Once we secure our product positioning through our technical sales and applications engineers’ efforts, we then sell our products through third-party distributors and value-added resellers.
We maintain a staff of applications engineers who work directly with our customers’ engineers in the development of their systems’ electronics containing our products. Once we secure our product positioning through our technical sales and applications engineering efforts, we then sell our products to end customers primarily through third-party distributors and value-added resellers.
In the area of circuit design and implementation, our initiatives include expanding our portfolio of products and adding new features to our products. In the area of process technologies, we are investing in research and development resources to provide leading-edge analog power processes for our next generation of ICs.
In the area of circuit design and implementation, our initiatives include expanding our portfolio of products and adding new features to our products. In the area of process and packaging technologies, we are investing in research and development resources to provide leading-edge analog power processes for our next generation of ICs, as well as innovative packaging technologies for integrated solutions.
Government regulations and import/export controls can be complex and are subject to change in the future, and in some cases unexpectedly, and accordingly, we are unable to assess the possible effect of compliance with future requirements.
Government regulations and import/export controls can be complex and are subject to change in the future, in some cases unexpectedly, and accordingly, we are unable to assess the possible effect on our business and financial results of compliance with future requirements.
In general, we have elected to pursue patent protection for aspects of our circuit and device designs that we believe are patentable and to protect our manufacturing process technologies by maintaining those process technologies as trade secrets. As of December 31, 2024, we had 1,917 patents/applications issued or pending, of which 608 patents have been issued in the U.S.
In general, we have elected to pursue patent protection for aspects of our circuit and device designs that we believe are patentable and to protect our manufacturing process technologies by maintaining those process technologies as trade secrets. As of December 31, 2025, we had 2,231 patents/applications issued or pending, of which 654 patents have been issued in the U.S.
For example, DC to DC ICs are used to convert and control voltages within a broad range of electronic systems, such as cloud-based and on-premises CPU servers and workstation applications, server AI applications, storage applications, notebooks, infotainment, power sources, home appliances, network infrastructure and satellite communications applications.
For example, DC to DC solutions are used to convert and control voltages within a broad range of electronic systems, such as cloud-based and on-premises CPU servers and workstations, AI systems, memory, storage solutions, notebooks, infotainment, power sources, home appliances, network infrastructure and satellite communications.
This close collaboration and control over the manufacturing process has historically resulted in favorable yields and product performance for our ICs. We currently contract with several suppliers to manufacture our wafers in foundries located in China, Taiwan, South Korea and Singapore.
This close collaboration and control over the manufacturing process have historically resulted in favorable yields and product performance for our ICs. We maintain a diversified and adaptable supply chain. We currently contract with several suppliers to manufacture our wafers in foundries located in China, Taiwan, South Korea and Singapore.
The assembled ICs are then sent for final testing to the facilities in China, Taiwan and Malaysia that we and our partners utilize prior to shipping to our customers. Our strategy is to maintain a diversified supply chain. The manufacturing facilities we utilize in Asia enable us to benefit from shorter manufacturing cycle times and lower labor and overhead costs.
The assembled ICs are then sent for final testing to facilities in China, Taiwan, Singapore, Malaysia and South Korea that we and our partners utilize prior to shipping to our customers. The manufacturing facilities we utilize in Asia enable us to benefit from shorter manufacturing cycle times and lower labor and overhead costs.
Typical supply chain lead times for orders are generally 16 to 26 weeks. We often build inventory in advance based on our forecast of future customer orders. This subjects us to certain risks, most notably the possibility that sales will not meet our forecast, which could lead to inventories in excess of demand.
We often build inventory in advance based on our forecast of future customer orders. This subjects us to certain risks, most notably the possibility that sales will not meet our forecast, which could lead to inventories in excess of demand.
They include our standards for chemical and hazardous waste management, rules on the use of personal protective equipment, and safety training plans. Our largest testing facilities in Chengdu, China are ISO 14001 and ISO 45001 certified. • We support the well-being of our employees. In certain offices, we offer onsite flu shot clinics and other annual health checkups and workshops.
They include our standards for chemical and hazardous waste management, rules on the use of personal protective equipment, and safety training plans. Our largest testing facilities in Chengdu, China are ISO 14001 and ISO 45001 certified. • We support the well-being of our employees.
We strive to maintain a culture that encourages innovation and create a workplace that values diverse skill sets and experience, a healthy and safe environment, and professional growth opportunities. • We continue to recruit new talent from a diverse candidate pool through various university recruitment programs and employment websites targeting underrepresented groups.
We strive to maintain a culture that encourages innovation and create a workplace that values a broad range of skill sets and experience, a healthy and safe environment, and professional growth opportunities: • We continue to recruit and sponsor talent from a broad candidate pool through various university recruitment programs and partnerships.
Our principal executive office is located in Kirkland, Washington. We have over 4,000 employees worldwide, with various locations in Asia, Europe and the U.S. Industry Overview Semiconductors comprise the basic building blocks of electronic systems and equipment.
We have over 4,500 employees worldwide, with various locations in Asia, Europe and the U.S. Industry and Product Overview Semiconductors comprise the basic building blocks of electronic systems and equipment.
Our backlog consists of orders that we have received from customers which have not yet shipped. Because orders in backlog are subject to cancellation or postponement, and backlog at any particular date is not necessarily representative of actual sales for any succeeding period, we believe that our backlog is not necessarily a reliable indicator of future revenue.
Because orders in backlog may be subject to cancellation or postponement, and backlog at any particular date is not necessarily representative of actual sales for any succeeding period, we believe that our backlog may not necessarily be a reliable indicator of future revenue. Typical supply chain lead times for orders are generally 16 to 26 weeks.
He holds a B.S.E.E. degree from San Jose State University. Saria Tseng previously served as our Vice President, General Counsel and Corporate Secretary since 2004 and additionally as our Vice President, Strategic Corporate Development since 2009. Ms. Tseng joined the Company from MaXXan Systems, Inc., where she was Vice President and General Counsel from 2001 to 2004. Previously, Ms.
He has also held positions at Micrel, Inc. He holds a B.S.E.E. degree from San Jose State University. Saria Tseng currently serves as Executive Vice President, Strategic Corporate Development, General Counsel and Corporate Secretary. She has served as our Vice President, General Counsel and Corporate Secretary since 2004 and additionally as our Vice President, Strategic Corporate Development since 2009. Ms.
However, because a majority of our revenue is attributable to sales to customers in Asia, changes in the relative value of the dollar may create pricing pressures for our products. In 2024, 2023 and 2022, our revenue from sales to customers in Asia was 94%, 87% and 86%, respectively. Our sales are made primarily pursuant to standard individual purchase orders.
However, because a majority of our revenue is attributable to sales to customers in Asia, increases in the relative value of the dollar may create pricing pressures for our products. Our revenue from sales to customers in Asia was 92%, 94% and 87% of our total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
These agreements provide that payment for purchases from us will generally occur within 30 to 90 days from the date of invoice. In addition, we allow for limited stock rotation in certain agreements. Because our sales are primarily billed and payable in U.S. dollars, our sales are generally not subject to fluctuating currency exchange rates.
In addition, we allow for limited stock rotation in certain agreements. Because our worldwide sales are primarily billed and payable in U.S. dollars, the reporting of our sales is not subject to fluctuating currency exchange rates.
Sciammas joined MPS in July 1999 and served as Vice President of Products and Vice President of Sales (excluding greater China) until he was appointed to his current position. Before joining MPS, he was Director of IC Products at Supertex from 1990 to 1999. He has also held positions at Micrel, Inc.
Maurice Sciammas currently serves as our Executive Vice President of Worldwide Sales and Marketing. Mr. Sciammas joined us in July 1999 and served as Senior Vice President of Worldwide Sales and Marketing until he was appointed to his current position. Before joining us, he was Director of IC Products at Supertex from 1990 to 1999.
Blegen held a number of executive finance and accounting positions for other publicly traded technology companies, including Xilinx, Inc. and Credence Systems. Mr. Blegen holds a B.A. from the University of California, Santa Barbara. Deming Xiao previously served as our President of Asia Operations since January 2008. Since joining us in May 2001, Mr.
Blegen holds a B.A. from the University of California, Santa Barbara. Deming Xiao currently serves as our Executive Vice President of Global Operations. He served as our President of Asia Operations since January 2008. Since joining us in May 2001, Mr. Xiao held several executive positions, including Foundry Manager and Senior Vice President of Operations.
Hsing holds a B.S.E.E. from the University of Florida. Bernie Blegen has served as our Chief Financial Officer since July 2016 and is responsible for finance, accounting, tax, treasury and investor relations. From August 2011 to June 2016, Mr. Blegen served as our Corporate Controller. Prior to joining MPS, Mr.
Bernie Blegen currently serves as Executive Vice President and Chief Financial Officer. He has served as our Chief Financial Officer since July 2016 and is responsible for finance, accounting, tax, treasury and investor relations. From August 2011 to March 2016, Mr. Blegen served as our Corporate Controller, and from March 2016 to July 2016, as our interim Chief Financial Officer.
Tseng holds Master of Laws degrees from the University of California at Berkeley and the Chinese Culture University in Taipei. 9 Table of Contents
Tseng is a member of the state bar in both California and New York and is a member of the bar association of the Republic of China (Taiwan). Ms. Tseng holds Master of Laws degrees from the University of California at Berkeley and the Chinese Culture University in Taipei. 11 Table of Contents
Our total compensation packages are competitive, fair, and structured to encourage employees to invest in our future. • We provide employees with access to various learning tools and resources to explore their interests and develop their business skills and knowledge. • We have occupational health and safety management systems and environmental management plans in place.
We also sponsor a 401(k) retirement savings plan for our U.S. employees with matching employer contributions. • We provide employees with access to various learning tools and resources to explore their interests and develop their business skills and knowledge. • We have occupational health and safety management systems and environmental management plans in place.
Our revenue from indirect sales to this customer was below 10% in both 2023 and 2022. Current distribution agreements with several of our major distributors provide that each distributor has the non-exclusive right to sell and shall use its best efforts to promote and develop our products in various markets.
Current distribution agreements with several of our major distributors provide that each of them has the non-exclusive right to sell and shall use its best efforts to promote and develop our products in various markets. These agreements provide that payment for purchases from us will generally occur within 30 to 90 days from the date of invoice.
Information About Executive Officers Information regarding our executive officers as of March 3, 2025 is as follows: Name Age Position Michael Hsing 65 President, Chief Executive Officer and Director Bernie Blegen 67 Executive Vice President and Chief Financial Officer Deming Xiao 62 Executive Vice President, Global Operations Maurice Sciammas 65 Executive Vice President, Worldwide Sales and Marketing Saria Tseng 54 Executive Vice President, Strategic Corporate Development, General Counsel and Corporate Secretary Michael Hsing has served as the chairman of our Board of Directors and has served as our President and Chief Executive Officer since founding MPS in August 1997.
Information About Executive Officers Information regarding our executive officers as of February 27, 2026 is as follows: Name Age Position Michael Hsing 66 President, Chief Executive Officer and Director Bernie Blegen (1) 68 Executive Vice President, Chief Financial Officer Deming Xiao 63 Executive Vice President, Global Operations Maurice Sciammas 66 Executive Vice President, Worldwide Sales and Marketing Saria Tseng 55 Executive Vice President, Strategic Corporate Development, General Counsel and Corporate Secretary (1) Effective immediately following the filing of this Annual Report on Form 10-K, Mr.
In addition, we sell directly to certain original equipment manufacturers (“OEMs”), original design manufacturers (“ODMs”) and end customers. Our third-party distributors are subject to distribution agreements with us, which allow the distributors to sell our products to end customers and other resellers, including OEMs and ODMs. Our value-added resellers may second source other products and provide other services to customers.
Our third-party distributors are subject to distribution agreements with us, which allow the distributors to sell our products to end customers and other resellers. Our resellers may second source other products and provide other services to customers. In 2025, three distributors accounted for 26%, 18% and 10% of our total revenue.
Xiao has held several executive positions, including Foundry Manager and Senior Vice President of Operations. Before joining MPS, from June 2000 to May 2001, Mr. Xiao was Engineering Account Manager at Chartered Semiconductor Manufacturing, Inc. Prior to that, Mr. Xiao spent six years as Manager of Process Integration Engineering at Fairchild Imaging Sensors. Mr.
Before joining us, from June 2000 to May 2001, Mr. Xiao was Engineering Account Manager at Chartered Semiconductor Manufacturing, Inc. Prior to that, Mr. Xiao spent 6 years as Manager of Process Integration Engineering at Fairchild Imaging Sensors. Mr. Xiao holds a B.S. in Semiconductor Physics from Sichuan University, Chengdu, China and an M.S.E.E. from Wayne State University.
Enterprise data was our largest end market in 2024.
Storage and computing was our largest end market in 2025, closely followed by enterprise data.
We have expanded our product testing capabilities in these facilities and are able to take advantage of the rich pool of local engineering talent to expand our manufacturing support and engineering operations. Competition The analog and mixed-signal semiconductor industry is highly competitive, and we expect competitive pressures to continue.
We have expanded our product testing capabilities in these facilities and are able to take advantage of the rich pool of local engineering talent to expand our manufacturing support and engineering operations. In addition, diversifying our manufacturing footprint across multiple countries helps mitigate operational risks and enhances our ability to adapt and maintain continuity.
No other direct customers accounted for more than 10% of our full-year, total revenue in any of the periods presented. Our revenue from indirect sales to one customer, which primarily comprised power management solutions for AI applications, was 17% of our total revenue in 2024.
In 2024, two distributors accounted for 31% and 20% of our total revenue. In 2023, three distributors accounted for 26%, 19% and 10% of our total revenue. No other direct customers accounted for more than 10% of our full-year, total revenue in any of the periods presented.
Our largest facilities have amenities including fitness centers, sports courts and private rooms for nursing.
In certain offices, we offer onsite flu and vaccine shot clinics and other annual health checkups and workshops. Our largest facilities have amenities including fitness centers, sport courts and private rooms for nursing.
Prior to founding MPS, Mr. Hsing was a Senior Silicon Technology Developer at several analog IC companies, where he developed and patented key technologies, which set new standards in the power electronics industry. Mr. Hsing is an inventor on numerous patents related to the process development of bipolar mixed-signal semiconductor manufacturing. Mr.
Hsing was a Senior Silicon Technology Developer at several analog IC companies, where he developed and patented key technologies, which set new standards in the Power Electronics industry. In 2004, Mr. Hsing took the company through its IPO. Under his leadership, we are constantly creating cutting-edge products to improve the quality of life with green, easy-to-use systems solutions.
Tseng was an attorney at Gray Cary Ware & Freidenrich, LLP and Jones, Day, Reavis & Pogue. Ms. Tseng is a member of the state bar in both California and New York and is a member of the bar association of the Republic of China (Taiwan). Ms.
Tseng joined the Company from MaXXan Systems, Inc., where she was Vice President and General Counsel from 2001 to 2004. Previously, Ms. Tseng was an attorney at Gray Cary Ware & Freidenrich, LLP and Jones, Day, Reavis & Pogue. Ms.
Removed
ODMs typically design and manufacture electronic products on behalf of OEMs. In 2024, our two largest distributors accounted for 31% and 20% of our total revenue. In 2023, our three largest distributors accounted for 26%, 19% and 10% of our total revenue. In 2022, our two largest distributors accounted for 24% and 19% of our total revenue.
Added
Our sales are made primarily pursuant to standard individual purchase orders. Our backlog consists of orders that we have received from customers that have not yet shipped.
Removed
Historically, our revenue has generally been higher in the second half of the year than in the first half although various factors, such as market conditions and the timing of key product introductions, could impact this trend.
Added
Competition The analog and mixed-signal semiconductor industry is highly competitive, and we expect competitive pressures to continue.
Removed
Xiao holds a B.S. in Semiconductor Physics from Sichuan University, Chengdu, China and an M.S.E.E. from Wayne State University. Maurice Sciammas previously served as our Senior Vice President of Worldwide Sales and Marketing since 2007. Mr.
Added
Our total compensation packages are competitive, fair, and structured to encourage employees to invest in our future.
Added
Blegen will cease to serve as Executive Vice President and Chief Financial Officer. Mr. Rob Dean, our current Corporate Controller, will commence serving as the Interim Chief Financial Officer at that time. Michael Hsing founded MPS in 1997 and currently serves as our President, Chief Executive Officer, Chairman of the Board of Directors. Prior to founding MPS, Mr.
Added
Mr. Blegen joined us with more than 25 years of experience in corporate strategy, mergers and acquisitions, tax, finance and accounting in the semiconductor, software and publishing industries. Prior to joining us, Mr. Blegen held a number of executive finance and accounting positions for other publicly traded technology companies, including Xilinx, Inc. and Credence Systems. Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

120 edited+36 added−33 removed167 unchanged
Biggest changeDollar relative to other currencies, including the Renminbi; • our reliance on key suppliers in China, which may expose us to political, cultural, regulatory, economic, foreign currency, operational and capacity shortage risks; • our ability to achieve growth rates or financial performance comparable to past years; • changes in general demand for electronic products in the end markets that we serve; • our ability to accurately forecast sales and expenses due to the nature of our business as a component supplier; • our ability to timely develop and introduce new products, and the acceptance of our new products in the marketplace; • our dependency on a limited number of customers for a significant portion of our revenue; • potential product liability risks due to defects or failures to meet specifications; • lengthy sales cycles for our products balanced against the fixed nature of a substantial portion of our expenses; • availability of adequate manufacturing capacity from our suppliers, and our ability to increase product sales in spite of capacity issues; 10 Table of Contents • increases in unanticipated costs as a result of increasing manufacturing capacity; • our dependency on third-party suppliers for wafer purchases and potential increases in prices for wafers due to general capacity shortages; • our ability to deliver products on a timely basis despite disruptions in our relationships with assembly and test subcontractors; • our ability to manage our inventory levels, including the levels of inventory held by our distributors; • increases in manufacturing costs due to commodity price increases; • the highly cyclical nature of the semiconductor industry, and increased competition due to industry consolidation; • competition from companies with greater financial and technological resources, and customers developing products internally; • the impact of system upgrades, cyberattacks or other system security, data protection and privacy breaches on our business operations; • the impact of various U.S. and international laws and regulations regarding data protection on our business operations; • our significant investment of resources in research and development that may not result in increased future sales; • our ability to realize the anticipated benefits of any business acquisitions and other strategic investments; • the impact of new tax laws and interpretations of those laws on our tax provision and tax planning; • the complexity of certain accounting areas; • risks in connection with our internal control over financial reporting; • our failure to comply with various governmental laws and regulations related to environmental, social and governance (“ESG”) initiatives or our failure to meet our own ESG goals and targets; • our ability to successfully defend ourselves in legal proceedings and protect our intellectual property, and the significant increase in legal expenses as a result of such proceedings; • risks in connection with the use of open-source code software; • the loss of key personnel; • risks associated with owning our stock, including volatility in our trading price due to our business and financial performance, analyst downgrades, failure to meet our own or analyst expectations, changes to our stock repurchase or dividend program, and dilution from issuance of additional shares; and • economy and geopolitical uncertainties and risks associated with business continuity in the event of natural or other disasters including pandemics, war, climate crises and other natural disasters. 11 Table of Contents Risks Associated with Our Significant Operations in Asia, Particularly in China We derive most of our revenue from direct or indirect sales to customers in Asia and have significant operations in Asia, which may expose us to political, cultural, regulatory, economic, foreign exchange, and operational risks.
Biggest changeDollar relative to other currencies, including the Renminbi; • our reliance on key suppliers in China, which may expose us to political, cultural, regulatory, economic, foreign exchange, operational and capacity shortage risks; • our ability to achieve growth rates or financial performance comparable to past years; • changes in general demand for electronic products in the end markets that we serve; • our ability to accurately forecast sales and expenses due to the nature of our business as a component supplier; • our ability to timely develop and introduce new products, and the acceptance of our new products in the marketplace; • our dependency on a limited number of customers for a significant portion of our revenue; • potential product liability risks due to defects or failures to meet specifications; • lengthy sales cycles for our products balanced against the fixed nature of a substantial portion of our expenses; • availability of adequate manufacturing capacity from our suppliers, and our ability to increase product sales in spite of capacity challenges; 12 Table of Contents • increases in unanticipated costs as a result of increasing manufacturing capacity; • our dependency on third-party suppliers for wafer purchases and other key components, and potential increases in prices for such materials due to general capacity shortages; • our ability to deliver products on a timely basis despite disruptions in our relationships with assembly and test subcontractors; • our ability to manage our inventory levels, including the levels of inventory held by our distributors; • increases in manufacturing costs due to commodity price increases; • the highly cyclical nature of the semiconductor industry, and increased competition due to industry consolidation; • competition from companies with greater financial and technological resources, and customers developing products internally; • the impact of system upgrades, cyberattacks or other system security, data protection and privacy breaches on our business operations; • our significant investment of resources in research and development that may not result in increased future sales; • our ability to realize the anticipated benefits of any business acquisitions and other strategic investments; • the impact of new tax laws and interpretations of those laws on our tax provision and tax planning; • examination of our income tax returns, which could result in changes in effective tax rates or other adverse outcomes; • the complexity of certain accounting areas; • risks in connection with our internal control over financial reporting, the identified material weakness and the restatement of our prior financial statements; • our failure to comply with various governmental laws and regulations, including anti-corruption laws, export control laws, environmental laws, regulation and reporting standards related to environmental, social and governance (“ESG”); • our ability to successfully defend ourselves in legal proceedings and protect our intellectual property, and the significant increase in legal expenses as a result of such proceedings; • risks in connection with the use of open source code software; • the loss of key personnel and our ability to retain key employees to maintain or upgrade our business systems and maintain internal controls; • risks associated with owning our stock, including volatility in our trading price due to our business and financial performance, analyst downgrades, failure to meet our own or analyst expectations, short positions in our common stock, changes to our stock repurchase or dividend program, and dilution from issuance of additional shares; and • economy and geopolitical uncertainties and risks associated with business continuity in the event of natural or other disasters including pandemics, war, climate crises and other natural disasters. 13 Table of Contents Risks Associated with Our Significant Operations in Asia, Particularly in China We derive most of our revenue from direct or indirect sales to customers in Asia and have significant operations in Asia, which may expose us to political, cultural, regulatory, economic, foreign exchange, and operational risks.
In addition, a negative trend in market conditions could lead us to decrease the manufacturing volume of our products to avoid excess inventory. If we inaccurately assess market conditions for our products, we could have insufficient inventory to meet our customer demands resulting in lost potential revenue.
In addition, a negative trend in market conditions could lead us to decrease the manufacturing volume of our products to avoid excess inventory. If we inaccurately assess market conditions for our products, we could have insufficient inventory to meet our customer demands resulting in potential lost revenue.
While the new U.S. administration has suspended the commencement of new investigations and enforcement actions under the FCPA, the FCPA remains in effect and it is uncertain whether enforcement actions and investigations will re-commence or whether the law will be changed or re-interpreted.
While the U.S. administration has suspended the commencement of new investigations and enforcement actions under the FCPA, the FCPA remains in effect and it is uncertain whether enforcement actions and investigations will re-commence or whether the law will be changed or re-interpreted.
Furthermore, we may not be able to maintain or increase sales to our key direct or indirect customers for other reasons, including: • many of our customers have pre-existing or concurrent relationships with our current or potential competitors, including, in some cases, suppliers with a broader array of products than we offer, that may affect our customers’ decisions to purchase our products; • our customers face intense competition from other manufacturers that do not use our products; • our customers may be subject to investigations and litigation that could result in injunctive or other relief that negatively impacts sales of their products, which in turn would result in a decrease in demand for our products; and • our customers regularly evaluate alternative sources of supply in order to diversify their supplier base, which could result in lower sales of our products, and increase their negotiating leverage with us.
Furthermore, we may not be able to maintain or increase sales to our key direct or indirect customers for other reasons, including: • many of our customers have pre-existing or concurrent relationships with our current or potential competitors, including, in some cases, suppliers with a broader array of products than we offer, that may affect our customers’ decisions to purchase our products; • our customers face intense competition from other manufacturers that do not use our products; • our customers may be subject to investigations and litigation that could result in injunctive or other relief that negatively impacts sales of their products, which in turn would result in a decrease in demand for our products; and • our customers regularly evaluate alternative sources of supply in order to diversify their supplier base, which could result in lower sales of our products or a decrease in growth of sales of our products, and increase their negotiating leverage with us.
The need for additional manufacturing, assembly and testing involves numerous risks, including: • the costs and expense associated with such increased capacity, including requirements to make long-term purchase commitments including upfront cash deposits to our suppliers; • the availability of modern foundries to be developed, acquired, leased or otherwise made available to us or our third-party suppliers; • the ability of foundries and our third-party suppliers to obtain the advanced equipment used in the production of our products; • delays in identifying and negotiating agreements with new foundries and suppliers; and • environmental, engineering or manufacturing qualification problems relating to existing or new foundry facilities, including delays in qualification of new foundries by our customers.
The need for additional manufacturing, assembly and testing involves numerous risks, including: • the costs associated with such increased capacity, including requirements to make long-term purchase commitments including upfront cash deposits to our suppliers; • the availability of modern foundries to be developed, acquired, leased or otherwise made available to us or our third-party suppliers; • the ability of foundries and our third-party suppliers to obtain the advanced equipment used in the production of our products; • delays in identifying and negotiating agreements with new foundries and suppliers; and • environmental, engineering or manufacturing qualification problems relating to existing or new foundry facilities, including delays in qualification of new foundries by our customers.
The Chinese government and provincial and local governments have also provided, and may continue to provide, various incentives to encourage the development of the semiconductor industry in China. Such incentives include cash awards, tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to our manufacturing partners, suppliers and us.
The Chinese provincial and local governments have also provided, and may continue to provide, various incentives to encourage the development of the semiconductor industry in China. Such incentives include cash awards, tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to our manufacturing partners, suppliers and us.
We conduct our international operations through wholly-owned subsidiaries, branches and representative offices and report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Such corporate structures are subject to complex transfer pricing, permanent establishment challenges and other local regulations administered by taxing authorities in various jurisdictions.
We conduct our international operations through wholly-owned subsidiaries, branches and representative offices and report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Such corporate structures are subject to complex transfer pricing, permanent establishment challenges and other global and local regulations administered by taxing authorities in various jurisdictions.
Item 1A. Risk Factors Our business involves numerous risks and uncertainties, including but not limited to the material risks described below. This section should be read in conjunction with all of the other information in this Annual Report on Form 10-K and our other filings with the SEC.
Item 1A. Risk Factors Our business involves numerous risks and uncertainties, including but not limited to the material risks described below. This section should be read in conjunction with all the other information in this Annual Report on Form 10-K and our other filings with the SEC.
The introduction of new products presents significant business challenges because product development plans and expenditures may be made up to two years or more in advance of any sales. It generally takes us up to 12 months or more to design and manufacture a new product prototype.
The introduction of new products presents significant business challenges because product development plans and expenditures may be made up to two years or more in advance of any sales. It generally takes us up to 12 months or more for us to design and manufacture a new product prototype.
The analog and mixed-signal semiconductor industry is highly competitive, and we expect competitive pressures to continue. Our ability to compete effectively and to expand our business will depend on our ability to continue to recruit application engineers and design talent, introduce new products, and maintain the rate at which we introduce new products.
The analog and mixed-signal semiconductor industry is highly competitive, and we expect competitive pressures to continue. Our ability to compete effectively and to expand our business will depend on our ability to continue to recruit application and design engineers, introduce new products, and maintain the rate at which we introduce new products.
The success of a new product depends on our ability to achieve design wins with key distributors and end-customers, as well as our ability to accurately forecast long-term market demand and future technological developments, as well as on a variety of other factors, including: • timely and efficient completion of process design and device structure improvements; • timely and efficient implementation of manufacturing, assembly, and test processes; • the ability to secure and effectively utilize fabrication capacity in different geometries; 15 Table of Contents • product performance; • integration with other components and technologies; • product availability and pricing; • product quality and reliability; and • effective marketing, sales and services.
The success of a new product depends on our ability to achieve design wins with key distributors and end customers, as well as our ability to accurately forecast long-term market demand and future technological developments, as well as on a variety of other factors, including: • timely and efficient completion of process design and device structure improvements; 17 Table of Contents • timely and efficient implementation of manufacturing, assembly, and test processes; • the ability to secure and effectively utilize fabrication capacity in different geometries; • product performance; • integration with other components and technologies; • product availability and pricing; • product quality and reliability; and • effective marketing, sales and services.
These operational, legal, compliance and other risks could damage our reputation and materially and adversely affect our business, financial condition and results of operations. 24 Table of Contents Given our inability to control the timing and nature of significant events in our legal proceedings that either have arisen or may arise, our legal expenses are difficult to forecast and may vary substantially from our publicly disclosed forecasts with respect to any given quarter, and we could be liable for significant damages or other expenses, which could harm our stock price and financial condition.
These operational, legal, compliance and other risks could damage our reputation and materially and adversely affect our business, financial condition and results of operations. 25 Table of Contents Given our inability to control the timing and nature of significant events in our legal proceedings that either have arisen or may arise, our legal expenses are difficult to forecast and may vary substantially from our publicly disclosed forecasts with respect to any given quarter, and we could be liable for significant damages or other expenses, which could harm our stock price and financial condition.
Therefore, there can be no assurance that the OEMs and/or ODMs will continue to incorporate our ICs into their products, even if we may have secured a design win with them.
Therefore, there can be no assurance that the OEMs and ODMs will continue to incorporate our ICs into their products, even if we may have secured a design win with them.
Significant deterioration in the liquidity or financial condition of any of our major customers or any group of our customers could have a material adverse impact on the collectability of our accounts receivable and our future financial condition and operating results.
Significant deterioration in the liquidity or financial condition of any of our major customers or any group of our customers could have a material adverse impact on the collectability of our accounts receivable and our financial condition and operating results.
Such unpredictability regarding our contractual, property and procedural rights and any failure to quickly respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations and execute on our business plans in China. 13 Table of Contents We are subject to export laws, trade policies and restrictions including international tariffs that could materially and adversely affect our business and results of operations.
Such unpredictability regarding our contractual, property and procedural rights and any failure to quickly respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations and execute on our business plans in China. 15 Table of Contents We are subject to export laws, trade policies and restrictions including international tariffs that could materially and adversely affect our business and results of operations.
Some of the risks that may adversely affect our ability to integrate or realize any anticipated benefits from the acquired companies, businesses or assets include those associated with: • unexpected losses of key employees or customers of the acquired companies or businesses; • integrating the acquired company’s standards, processes, procedures and controls with our operations; • coordinating new product and process development; • hiring additional management and other critical personnel; • increasing the scope, geographic diversity and complexity of our operations; • difficulties in consolidating facilities and transferring processes and know-how; • difficulties in the assimilation of acquired operations, technologies or products; • undisclosed liabilities of the acquired businesses and potential legal disputes with founders or stockholders of acquired companies; • our inability to commercialize acquired technologies; • the projected business potential is not realized and as a result, we may be required to take an impairment charge related to goodwill or acquired intangibles that would impact our profitability; • difficulties in assessing the fair value of earn-out arrangements; • diversion of management’s attention from other business concerns; and • adverse effects on existing business relationships with customers. 22 Table of Contents Alternatively, third parties may be interested in acquiring us.
Some of the risks that may adversely affect our ability to integrate or realize any anticipated benefits from the acquired companies, businesses or assets include those associated with: • unexpected losses of key employees or customers of the acquired companies or businesses; • integrating the acquired company’s standards, processes, procedures and controls with our operations; • integrating the acquired company’s technology or products into our products or product offerings; • coordinating new product and process development; • hiring additional management and other critical personnel; • increasing the scope, geographic diversity and complexity of our operations; • difficulties in consolidating facilities and transferring processes and know-how; • difficulties in the assimilation of acquired operations, technologies or products; • undisclosed liabilities of the acquired businesses and potential legal disputes with founders or stockholders of acquired companies; • our inability to commercialize acquired technologies; • the projected business potential is not realized and as a result, we may be required to take an impairment charge related to goodwill or acquired intangibles that would impact our profitability; • difficulties in assessing the fair value of earn-out arrangements; • diversion of management’s attention from other business concerns; and • adverse effects on existing business relationships with customers. 23 Table of Contents Alternatively, third parties may be interested in acquiring us.
All of these factors could have a material and adverse impact on our business, financial condition and results of operations. 16 Table of Contents Because of the lengthy sales cycles for our products and the fixed nature of a significant portion of our expenses, we may incur substantial expenses before we earn associated revenue and may not ultimately achieve our forecasted sales for our products.
All of these factors could have a material and adverse impact on our business, financial condition and results of operations. 18 Table of Contents Because of the lengthy sales cycles for our products and the fixed nature of a significant portion of our expenses, we may incur substantial expenses before we earn associated revenue and may not ultimately achieve our forecasted sales for our products.
Additionally, if our stock price declines, it may be more difficult for us to raise capital and may have other adverse effects on our business. 27 Table of Contents There can be no assurance that we will continue to declare cash dividends in any particular amounts or at all.
Additionally, if our stock price declines, it may be more difficult for us to raise capital and may have other adverse effects on our business. 28 Table of Contents There can be no assurance that we will continue to declare cash dividends in any particular amounts or at all.
Dollar relative to other currencies, which could affect the competitiveness of our products; • transportation delays and other supply chain issues; • changes in tax regulations in China that may impact our tax status in Chengdu, Hangzhou and other regions where we have significant operations; • multi-tiered distribution channels that may diminish visibility to end customer pricing and purchase patterns; • international political relationships and acts or threats of war; • terrorism and threats of terrorism; • adverse weather conditions or other natural disasters that may cause work stoppages and affect our operations in China; • work stoppages; • economic, social and political instability; • longer accounts receivable collection cycles; • currency exchange rate fluctuations impacting intercompany transactions; • enforcing contracts generally; and • less effective protection of intellectual property and contractual arrangements.
Dollar relative to other currencies, which could affect the competitiveness of our products; • transportation delays and other supply chain issues; • changes in tax regulations in China that may impact our tax status in Chengdu, Hangzhou and other regions where we have significant operations; • multi-tiered distribution channels that may diminish visibility to end customer pricing and purchasing patterns; • international political relationships and acts or threats of war; • terrorism and threats of terrorism; • adverse weather conditions or other natural disasters that may cause work stoppages and affect our operations in China; • work stoppages due to economic, social and political instability; • longer accounts receivable collection cycles; • currency exchange rate fluctuations impacting intercompany transactions; • enforcing contracts; and • less effective protection of intellectual property and contractual arrangements.
If any of these situations were to occur, our business, financial condition and results of operations could be materially and adversely affected. 19 Table of Contents Risks Associated with IT and Cybersecurity Implementation of enhanced enterprise resource planning (“ERP”) or other IT systems could result in significant disruptions to our operations.
If any of these situations were to occur, our business, financial condition and results of operations could be materially and adversely affected. 21 Table of Contents Risks Associated with IT and Cybersecurity Implementation of enhanced enterprise resource planning (“ERP”) or other IT systems could result in significant disruptions to our operations.
In addition, if our customers fail to comply with these regulations, we may be required to suspend sales to these customers, which could negatively impact our results of operations. We must conform the manufacture and distribution of our products to various laws and adapt to regulatory requirements in many countries as these requirements change.
In addition, if our customers fail to comply with these regulations, we may be required to suspend sales to these customers, which could negatively affect our results of operations. We must conform the manufacture and distribution of our products to various laws and adapt to regulatory requirements in many countries as these requirements change.
We are subject to numerous risks and factors that could cause a decrease in our growth rates, or a decline in revenue compared to past periods, including increased competition, loss of certain of our customers, unfavorable changes in our operations, changing technologies and customer requirements and demand, reduced global electronics demand, a deterioration in market conditions including as a result of the global economic uncertainties and tariffs, end-customer market downturns, market acceptance and penetration of our current and future products, and litigation.
We are subject to numerous risks and factors that could cause a decrease in our growth rates, or a decline in revenue compared to past periods, including increased competition, loss of, or reductions in demand or the growth rate of demand from, certain of our customers, unfavorable changes in our operations, changing technologies and customer requirements and demand, reduced global electronics demand, a deterioration in market conditions including as a result of the global economic uncertainties and tariffs, end customer market downturns, market acceptance and penetration of our current and future products, and litigation.
Due to the nature of our business as a component supplier, we may have difficulty both in accurately predicting our future revenue and appropriately managing our expenses. Because we provide components for end products and systems, demand for our products is influenced by our customers’ end product demand.
Due to the nature of our business as a component and solution supplier, we may have difficulty both in accurately predicting our future revenue and appropriately managing our expenses. Because we provide components and solutions for end products and systems, demand for our products is influenced by our customers’ end product demand.
While we could partner with other distributors or value-added resellers to replace any of our customers, the change in business partners could interrupt our operations, cause us to have to identify and qualify new partners, and have a materially adverse impact on our business, financial condition and results of operations.
While we could partner with other distributors or value-added resellers to replace any of our customers, the change in business partners could interrupt our operations, require us to identify and qualify new partners, and have a materially adverse impact on our business, financial condition and results of operations.
Dollar relative to foreign currencies could increase the amount of foreign currency exchange losses we record, which could have an adverse and material impact on our results of operations. 14 Table of Contents A significant portion of our manufacturing, testing, assembly and packaging capacity comes from suppliers in China, which exposes us to political, cultural, regulatory, economic, foreign exchange, and operational risks.
Dollar relative to foreign currencies could increase the amount of foreign currency exchange losses we record, which could have an adverse and material impact on our results of operations. 16 Table of Contents A significant portion of our manufacturing, testing, assembly and packaging capacity comes from suppliers in China, which exposes us to political, cultural, regulatory, economic, foreign exchange, operational risks and capacity shortage risks.
If we lose a major customer or a major customer changes their products or technologies or chooses to purchase our competitors’ products such that they decrease, or eliminate the amount of our products they purchase, and we are not able to replace such customers with additional orders from existing customers or new customers, this could result in a material adverse impact on our financial condition and results of operations.
If we lose a major customer or a major customer changes their products or technologies or chooses to purchase our competitors’ products such that they decrease, or eliminate the amount of our products they purchase, and we are not able to replace such customers with additional orders from other customers, this could result in a material adverse impact on our financial condition and results of operations.
System security risks, data protection or privacy breaches, cyberattacks, systems integration issues and unauthorized use of AI tools could disrupt our internal operations and/or harm our reputation, and any such disruption or harm could cause a reduction in our expected revenue, increase our expenses, negatively impact our results of operation or otherwise adversely affect our stock price.
Cybersecurity risks, data protection or privacy breaches, cyberattacks, systems integration issues and unauthorized use of AI tools could disrupt our internal operations and/or harm our reputation, and any such disruption or harm could cause a reduction in our expected revenue, increase our expenses, negatively impact our results of operation or otherwise adversely affect our stock price.
If we fail to comply with these requirements in the manufacture or distribution of our products, we could be required to pay civil penalties, face criminal prosecution and, in some cases, be prohibited from distributing our products commercially until the products are brought into compliance. Environmental laws and regulations could cause a disruption in our business and operations.
If we fail to comply with these requirements in the manufacture or distribution of our products, we could be required to pay civil penalties, face criminal prosecution and, in some cases, be prohibited from distributing our products commercially until the products are brought into compliance. Compliance with environmental laws and regulations could cause disruptions in our business and operations.
Although we provide our suppliers with rolling forecasts of our production requirements, their ability to provide wafers to us is limited by their available capacity, particularly capacity in the geometries we require, at the facilities in which they manufacture wafers for us. As a result, this lack of capacity has at times constrained our product sales and revenue growth.
Although we provide our suppliers with rolling forecasts of our production requirements, their ability to provide wafers to us is limited by their available capacity, particularly capacity in the geometries we require, at the facilities in which they manufacture wafers for us. This lack of capacity has at times constrained our product sales and revenue growth.
These laws and regulations are complex, change frequently and have generally become more stringent over time. We may be required to incur significant expense to comply with these regulations or to remedy violations of these regulations.
These laws and regulations are complex, change frequently and have generally become more stringent over time. We may be required to incur significant expenses to comply with these regulations or to remedy violations of these regulations.
The trading price of our common stock has been, and is likely to continue to be, highly volatile and could be subject to wide fluctuations in response to various factors, many of which are beyond our control, including: • actual or anticipated results of operations and financial performance, including our ability to accurately forecast future demand for our products; • actual or anticipated manufacturing capacity limitations; • our ability to develop new products, enter new market segments, gain market share, manage litigation risk, diversify our customer base and successfully secure manufacturing capacity; • our ability to maintain or increase our gross margins; • costs of increasing wafer capacity and qualifying additional third-party wafer fabrication facilities; • the loss of, or a material reduction in sales to, our key customers, or rumors with respect thereto; • investments in sales and marketing resources to enter new markets; • commencement of or developments relating to litigation; • cyberattacks or other system security, data protection and privacy breaches; • the inclusion, exclusion or deletion of our common stock from any major trading indices, such as the S&P 500 Index; • our sale of common stock or other securities in the future; • any mergers, acquisitions or divestitures of assets undertaken by us; • our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; • our ability to meet or exceed the guidance that we provide to our investors and analysts; • the extent to which we execute the stock repurchase program and continue payment of quarterly cash dividends to stockholders; • our ability to meet or exceed our, investors’ or analysts’ expectations; • market reactions to guidance from other semiconductor companies or third-party research groups; • market reactions to merger and acquisition activities in the semiconductor industry, and rumors or expectations of further consolidation in the industry; • investor perceptions of us and our business strategies; • the breadth and liquidity of the market for our common stock; • trading activity in our common stock, including short positions; 26 Table of Contents • actions by institutional or other large stockholders; • changes in the estimation of the future size and growth rate of our markets; • introduction of new products by us or our competitors; • general economic, industry and market conditions worldwide, including any global economic downturn; • developments generally affecting the semiconductor industry or specific segments of the industry in which we compete; • terrorist acts or acts of war, including the ongoing Ukraine-Russia and Middle East conflicts; • epidemics and pandemics; • developments with respect to intellectual property rights; • conditions and trends in technology industries; • changes in market valuation or earnings of our competitors; • government debt default; • changes in corporate tax laws; • government policies and regulations on international trade policies and restrictions, including tariffs on imports of foreign goods; • export controls, trade and economic sanctions and regulations, and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; • ratings published by third-party organizations with respect to our ESG compliance efforts; • our compliance with regulatory mandates focusing on ESG issues, including climate risks and social initiatives; and • our performance against the ESG guidelines set by institutional stockholders and customers, and our ability to meet or exceed their expectations.
The trading price of our common stock has been, and is likely to continue to be, highly volatile and could be subject to wide fluctuations in response to various factors, many of which are beyond our control, including: • actual or anticipated results of operations and financial performance, including our ability to accurately forecast future demand for our products; • actual or anticipated manufacturing capacity limitations; • our ability to develop new products, enter new markets, gain market share, manage litigation risk, diversify our customer base and successfully secure manufacturing capacity; • our ability to maintain or increase our gross margins; • costs of increasing manufacturing capacity and qualifying additional third-party wafer fabrication facilities; • the loss of, or a material reduction in sales to, our key customers, or rumors with respect thereto; • investments in sales and marketing resources to enter new markets; • commencement of, or developments relating to, litigation; • cyberattacks or other system security, data protection and privacy breaches; • the inclusion, exclusion or deletion of our common stock from any major trading indices, such as the S&P 500 or NASDAQ 100 Indices; • our sale of common stock or other securities in the future; • any mergers, acquisitions or divestitures of assets undertaken by us; • our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; • our ability to meet or exceed the guidance that we provide to our investors and analysts; • the extent to which we continue to execute the stock repurchase program and continue payment of quarterly cash dividends to stockholders; • our ability to meet or exceed our investors’ or analysts’ expectations; • market reactions to guidance from other semiconductor companies or third-party research groups; • market reactions to merger and acquisition activities in the semiconductor industry, and rumors or expectations of further consolidation in the industry; 27 Table of Contents • investor perceptions of us and our business strategies; • the breadth and liquidity of the market for our common stock; • trading activity in our common stock, including short positions; • actions by institutional or other large stockholders; • changes in the estimation of the future size and growth rate of our markets; • introduction of new products by us or our competitors; • general economic, industry and market conditions worldwide, including any global economic downturn; • developments generally affecting the semiconductor industry or specific segments of the industry in which we compete; • terrorist acts or acts of war, including ongoing and potential global conflicts; • epidemics and pandemics; • developments with respect to intellectual property rights; • conditions and trends in technology industries; • changes in market valuation or earnings of our competitors; • government debt default; • changes in corporate tax laws; • government policies and regulations on international trade policies and restrictions, including tariffs on imports of foreign goods; • export controls, trade and economic sanctions and regulations, and other regulatory or contractual limitations on our ability to sell or develop our products or invest in certain foreign markets, particularly in China; • our compliance with regulatory mandates focusing on ESG issues, including climate risks and social initiatives; • our performance against the ESG guidelines set by institutional stockholders and customers, and our ability to meet or exceed their expectations; and • our ability to timely and adequately remediate our material weakness.
Also, if we are unable to properly manage and effectively utilize our research and development resources, we could see material adverse effects on our business, financial condition and operating results.
Also, if we are unable to properly manage and effectively utilize our research and development resources, we could experience material adverse effects on our business, financial condition and operating results.
If we are unable to increase or maintain our manufacturing capacity, we may be unable to meet demand, which would harm our revenue and results of operations and may result in a loss of customers as they seek supply from other sources. 17 Table of Contents We currently depend on third-party suppliers to provide us with wafers for our products.
If we are unable to increase or maintain our manufacturing capacity, we may be unable to meet demand, which would harm our revenue and results of operations and may result in a loss of customers as they seek supply from other sources. 19 Table of Contents We currently depend on third-party suppliers to provide us with wafers and other key components for our products.
Specifically, there have been several rounds of U.S. tariffs on Chinese goods that have taken effect in the past few years, as well as additional tariffs imposed by the new U.S. administration in January 2025, some of which prompted, and could prompt additional, retaliatory Chinese tariffs on U.S. goods.
There have been several rounds of U.S. tariffs on Chinese goods that have taken effect in the past few years, as well as additional tariffs imposed by the U.S. administration in 2025, some of which prompted, and could prompt additional, retaliatory Chinese tariffs on U.S. goods.
Our business is subject to various significant laws and other legal requirements imposed by the U.S. and other countries we conduct business in, including export control laws such as the Export Administration Act, the Export Administration Regulations and other laws, regulations and requirements governing international trade and technology transfer.
Our business is subject to various significant laws and other legal requirements imposed by the U.S. and other countries we conduct business in, including export control laws such as the Export Administration Act, the Export Administration Regulations and other laws, regulations and requirements governing international trade, investments and technology transfers.
Our business is subject to various governmental laws and regulations, and compliance with these regulations may impact our revenue and cause us to incur significant expense.
Our business is subject to various governmental laws and regulations, and compliance with these regulations may impact our revenue and cause us to incur significant expenses.
Our business, results of operations and financial condition, as well as your investment in our common stock, could be materially and adversely affected by any of the following material risks: • our dependence on the markets in Asia for our customer base, which may expose us to political, cultural, regulatory, economic, foreign currency and operational risks; • changes in general economic conditions in the countries where our products are sold or used, particularly those in China; • the impact of extensive Chinese government regulations, reduction or elimination of incentives, and uncertainties with respect to China’s legal system, on us and our manufacturing partners and suppliers; • changes in international trade policy, such as tariffs on imports of foreign goods and regulations restricting the export of goods and services, between the U.S. and China; • political and other risks in Taiwan and Hong Kong due to their tense relationships with China; • fluctuations in the value of the U.S.
Our business, results of operations and financial condition, as well as your investment in our common stock, could be materially and adversely affected by any of the following material risks: • our dependence on the markets in Asia for our customer base, which may expose us to political, cultural, regulatory, economic, foreign currency and operational risks; • inherent risks associated with the operation in China, which could increase product costs or cause a delay in product shipments; • changes in general economic conditions in the countries where our products are sold or used, particularly those in China; • the impact of extensive Chinese government regulations, reduction or elimination of incentives, and uncertainties with respect to China’s legal system, on us and our manufacturing partners and suppliers; • changes in international trade policy, such as tariffs on imports of foreign goods and regulations restricting the export of goods and services, between the U.S. and China or other countries; • political and other risks in Taiwan and Hong Kong due to their tense relationships with China; • fluctuations in the value of the U.S.
The loss of any significant distributors, value-added resellers or direct or indirect customers, or failure to collect accounts receivable from them could adversely affect our financial position and results of operations. We market our products either through distribution arrangements and value-added resellers, or through our direct sales to customers that include OEMs and ODMs.
The loss of any significant distributors, value-added resellers or direct or indirect customers, or failure to collect accounts receivable from them could adversely affect our financial position and results of operations. We market our products either through distribution arrangements and value-added resellers, or through our direct sales to customers.
Determination of the HTS and the origin of the goods is a technical matter that can be subjective in nature. Accordingly, although we believe our classifications of both HTS and origin are appropriate, there is no certainty that our assessment will be consistent with that of the U.S. government, particularly under the new U.S. administration.
Determination of the HTS and the origin of the goods is a technical matter that can be subjective in nature. Accordingly, although we believe our classifications of both HTS and origin are appropriate, there is no certainty that our assessment will be consistent with that of the U.S. government.
Although we make significant efforts to maintain the security and integrity of our systems and solutions, any destructive or intrusive breach could compromise our networks, creating system disruptions or slowdowns, and the information stored on our networks could be accessed, publicly disclosed, lost or stolen.
Although we make significant efforts to maintain the security and integrity of the systems and solutions that we use, any destructive or intrusive breach could compromise our or third-party networks, creating system disruptions or slowdowns, and the information stored on our or third-party networks could be accessed, publicly disclosed, lost or stolen.
If the U.S. government does not agree with our determinations, we could be required to pay additional amounts, our ability to sell products in the U.S. may be restricted or eliminated and we may incur substantial additional costs or potential penalties.
If the U.S. government does not agree with our determinations, we could be required to pay additional amounts, our ability to sell products in the U.S. may be restricted or eliminated, we may be required to change our suppliers or supply routes and we may incur substantial additional costs or potential penalties.
In addition, the delays inherent in lengthy sales cycles raise additional risks that customers may cancel or change their orders, particularly as our customers are exposed to economic risks in connection with global economic uncertainty and political tensions, including tariffs, as well as the risks inherent in introducing new products or entering new markets.
In addition, the delays inherent in lengthy sales cycles raise additional risks that customers may cancel or change their orders, particularly as our customers are exposed to economic risks in connection with global economic uncertainty and political tensions, including tariffs, or move to another supplier, in whole or in part, as well as the risks inherent in introducing new products or entering new markets.
We face the following risks, among others, with respect to our operations in China: • challenges to hire and maintain a qualified workforce; • natural disasters such as earthquakes, flooding, severe heatwaves or droughts, which could result in power shortages or water restrictions in our facilities; • challenges to maintain appropriate and acceptable manufacturing controls; and • higher than anticipated overhead and other operational costs.
We face the following risks, among others, with respect to our operations in China: • challenges to hire and maintain a qualified workforce; • natural disasters such as earthquakes, flooding, severe heatwaves or droughts, which could result in power outages, water restrictions or grid constraints that impact our facilities; • challenges to maintain appropriate and acceptable manufacturing controls; and • higher than anticipated overhead and other operational costs.
An increase in the price or a decrease in the availability of these commodities and similar commodities that we use could negatively impact our business and results of operations. 18 Table of Contents Risks Associated with Industry Dynamics and Competition The highly cyclical nature of the semiconductor industry, which has resulted in significant and sometimes prolonged downturns, could materially and adversely affect our financial condition and results of operations.
A significant increase in pricing or a decrease in the availability of these commodities that we use could negatively impact our business and results of operations. 20 Table of Contents Risks Associated with Industry Dynamics and Competition The highly cyclical nature of the semiconductor industry, which has resulted in significant and sometimes prolonged downturns, could materially and adversely affect our financial condition and results of operations.
In addition, many of our customers increasingly include stringent environmental and other non-standard compliance requirements in their contracts with us or request significant amount of data from us for their Scope 3 emissions reporting and supply chain compliance.
In addition, many of our customers increasingly include stringent environmental and other compliance requirements in their contracts with us or request significant amounts of data from us for their Scope 3 emissions reporting and supply chain compliance.
If any of our wafer suppliers are acquired, become insolvent or capacity constrained, or are otherwise unable to provide us sufficient wafers at acceptable yields or at anticipated costs, our revenue and gross margin may decline or we may not be able to fulfill our customer orders.
If any of our suppliers are acquired, become insolvent or capacity constrained, or are otherwise unable to provide us with sufficient wafers and other key components at acceptable yields or at anticipated costs, our revenue and gross margin may decline or we may not be able to fulfill our customer orders.
Historically, the semiconductor industry has been highly cyclical and, at various times, has experienced significant downturns and wide fluctuations in supply and demand. Certain segments of the semiconductor market may also experience significant downturns while other segments are growing.
Historically, the semiconductor industry has been highly cyclical and, at various times, has experienced significant downturns and wide fluctuations in supply and demand. Certain segments of the semiconductor market may experience significant downturns while other segments could be growing.
Historically, there have been “short” positions in our common stock. The anticipated downward pressure on our stock price due to actual or anticipated sales of our stock by some institutions or individuals who engage in short sales of our common stock could cause our stock price to decline.
There are “short” positions in our common stock. The anticipated downward pressure on our stock price due to actual or anticipated sales of our stock by some institutions or individuals who engage in short sales of our common stock could cause our stock price to decline.
If our suppliers extend lead times, limit supplies or the types of capacity we require, or increase prices due to capacity constraints or other factors, our gross margin may materially and unexpectedly decline.
If our suppliers extend lead times, limit supplies or the types of capacity we require, or increase prices due to capacity constraints or other factors, our revenues and our gross margin may materially decline in the future.
In addition, we rely heavily on our internal information and communications systems and on systems or support services from third parties to manage our operations efficiently and effectively. Any of these are subject to failure due to a natural disaster or other disruptions.
In addition, we rely heavily on our internal information and communications systems and on systems or support services from third parties to manage our operations efficiently and effectively. Any of these are subject to failure due to a natural disaster, intentional acts, technical or power outages or other disruptions.
A deferred tax benefit of approximately $1.3 billion, net of $0.1 billion of valuation allowance, was recorded in the year ended December 31, 2024 to reflect the estimated future reductions in cash tax paid in that jurisdiction associated with the incentive.
A deferred tax benefit of $1.1 billion, net of $0.2 billion of deferred tax liability and $0.1 billion of valuation allowance, was recorded in the year ended December 31, 2024 to reflect the estimated future reductions in cash tax paid in that jurisdiction associated with the incentive.
Bribery Act and various anti-corruption laws of other jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business and/or other benefits.
Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act and various anti-corruption laws of other jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business and/or other benefits.
If we are not successful in any of our intellectual property defenses, we may have to cease production of certain products, design around such technologies, or pay royalty payments to license technology, any of which could harm our financial condition and our business.
If we are not successful in any intellectual property litigation or claims against us, we may have to cease production and sale of certain products, design around such technologies, or pay royalty payments to license technology, any of which could harm our financial condition and our business.
There are risks inherent in doing business in Asia, and internationally in general, including: • changes in, or impositions of, legislative or regulatory requirements or restrictions, including tax and trade laws in the U.S., particularly those associated with the recent change in administration, and in the countries in which we manufacture or sell our products, and governmental action or restrict our ability to sell to foreign customers where sales of products may require export licenses; • trade restrictions imposed by the U.S. related to goods imported from regions in China with records of forced labor and other human rights issues; • fluctuations in the value of the U.S.
There are risks inherent in doing business in Asia, and internationally in general, including: • changes in, or impositions of, legislative or regulatory requirements or restrictions, including tax and trade laws in the U.S., and in the countries in which we manufacture or sell our products, and governmental action or restrict our ability to sell to foreign customers where sales of products may require export licenses; • trade restrictions imposed by the U.S. related to goods imported from regions in China with records of forced labor and other human rights issues; • changes in U.S. laws, or the interpretation and enforcement of these laws, regarding investment in China or other countries; • fluctuations in the value of the U.S.
Experienced hackers may be able to penetrate our network security and misappropriate or compromise our confidential and proprietary information, create system disruptions or cause shutdowns. As AI capabilities improve, threat actors may quickly develop more sophisticated and convincing attacks.
Threat actors may be able to penetrate our network security and misappropriate or compromise our confidential and proprietary information, create system disruptions or cause shutdowns, among other things. Further, as AI capabilities improve, threat actors may quickly develop more sophisticated and convincing attacks.
If any of these types of security breaches were to occur and we were unable to protect sensitive data, our reputation and relationships with our business partners and customers could be materially harmed, and we could be exposed to risks of litigation and possible significant liability.
If any of these types of cybersecurity incidents, security breaches, or other attacks were to occur and we were unable to protect our data, our reputation and relationships with our business partners and customers could be materially harmed, and we could be exposed to risks of litigation and possible significant liability.
Any significant or prolonged downturns, whether in the overall semiconductor industry or in a specific market segment, would have a material adverse effect on our business, financial condition and results of operations. Industry consolidation may lead to increased competition and may harm our operating results. In recent years, there has been a trend toward semiconductor industry consolidation.
Any significant or prolonged downturns, whether in the overall semiconductor industry or in a specific market segment, would have a material adverse effect on our business, financial condition and results of operations. Industry consolidation may lead to increased competition and may harm our operating results.
We cannot predict the timing, strength or duration of any economic disruptions, such as those resulting from global economic uncertainties, changes to trade laws and policies as a result in changes in the U.S. administration, and geopolitical tensions, or the rate or magnitude of economic recovery worldwide, in our industry, or in the different markets that we serve.
We cannot predict the timing, strength or duration of any economic disruptions, such as those resulting from global economic uncertainties, changes to trade laws and policies by the U.S. administration, and current and potential global conflicts, or the rate or magnitude of economic recovery worldwide, in our industry, or in the different markets that we serve.
If defects and failures occur in our products, we could experience a loss of customers and/or a decrease in revenue, increased costs, including warranty expense and costs associated with customer support, cancellations or rescheduling of orders or shipments, and product returns or discounts, any of which would harm our operating results.
If defects and failures occur in our products, we could experience a loss of revenue and/or customers, increased costs, including warranty expense and costs associated with customer support, cancellations or rescheduling of orders or shipments, and product returns or discounts, any of which would harm our operating results. In addition, product liability claims may be asserted by our customers.
Our sales are made by purchase orders. Because industry practice allows customers to reschedule or cancel orders on relatively short notice, backlog is not always a good indicator of our future sales. If customer cancellations or purchase order changes occur, we could lose anticipated sales and not have sufficient time to reduce our inventory and operating expenses.
Our sales are made by purchase orders. Because industry practice allows customers to reschedule or cancel orders on relatively short notice, backlog is not always a good indicator of our future sales. If customer cancellations or purchase order changes occur, we could lose anticipated sales.
A relatively small number of distributors account for a significant portion of our revenues. Specifically, our top three customers, all of which are distributors, accounted for 61%, 55% and 52% of our revenue in each of the years ended December 31, 2024, 2023 and 2022, respectively.
A relatively small number of distributors account for a significant portion of our revenues. Specifically, our top three customers, all of which are distributors, accounted for an aggregate of 54%, 61% and 55% of our revenue in the years ended December 31, 2025, 2024 and 2023, respectively.
We are in direct and active competition, with respect to one or more of our product lines, with many manufacturers of varying size and financial strength. The number of our competitors has grown due to the expansion of the market segments in which we participate.
We are in direct and active competition with many manufacturers of varying size and financial strength. The number of our competitors has grown due to the expansion of the market segments in which we participate.
Because we operate a fabless business model, we were not eligible for such investments. Many of our competitors benefitted from the investments, which will help increase their production capacities, shorten their lead times and gain market share. These competitive pressures could materially and adversely affect our business, financial condition and results of operations.
Because we operate a fabless business model, we are not eligible for such investments. Many of our competitors benefit from these and other investments, which helps increase their production capacities, shorten their lead times and gain market share. These competitive pressures could materially and adversely affect our business, financial condition and results of operations.
We expect this trend to continue as companies attempt to improve the leverage of growing research and development costs, strengthen or hold their market positions in an evolving industry, or become unable to continue operations unless they find an acquirer or consolidate with another company.
The semiconductor industry has a history of consolidation as companies attempt to improve the leverage of growing research and development costs, strengthen or hold their market positions in an evolving industry, or become unable to continue operations unless they find an acquirer or consolidate with another company.
Moreover, we believe a high percentage of our products are eventually sold to a number of OEMs and ODMs. Although we communicate with OEMs and/or ODMs in an attempt to achieve “design wins,” which are decisions by OEMs and/or ODMs to incorporate our products, we do not have purchase commitments from these customers.
Moreover, we believe a high percentage of our products are eventually sold to a number of original equipment manufacturers (“OEMs”) and original design manufacturers (“ODMs”). Although we communicate with OEMs and ODMs to achieve “design wins,” which are decisions by OEMs and ODMs to incorporate our products, we do not have purchase commitments from these customers.
For example, due to the complexity associated with the calculation of our tax provision, including the effects of the enactment of new tax laws, we engage third-party tax advisors to assist us in the calculation.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. For example, due to the complexity associated with the calculation of our tax provision, including the effects of the enactment of new tax laws, we engage third-party tax advisors to assist us in the calculation.
We may also be subject to unanticipated legal proceedings, which would result in us incurring unexpected legal expenses.
We have been, and may continue to be, subject to unanticipated legal proceedings, which would result in us incurring unexpected legal expenses.
In addition, events such as the Russia-Ukraine conflict, the Middle East conflict and supply chain disruptions may materially impact our assembly or testing suppliers’ ability to operate. Any future product delivery delays or disruptions in our relationships with our subcontractors could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, current and potential global conflicts and supply chain disruptions may materially impact our assembly or testing suppliers’ ability to operate. Any future product delivery delays or disruptions in our relationships with our subcontractors could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, if we were to combine our proprietary software solutions with open-source software in certain circumstances, we could, under certain open-source licenses, be required to publicly release the source code of our proprietary software solutions, which could harm our business and ability to compete.
If we combine our proprietary software with open source software in certain ways, we could, under certain open source licenses, be required to release the source code of our proprietary software, and make our proprietary software available under the same open source licenses, which could harm our business and ability to compete.
Although such measures have not significantly affected our business or operations, future developments could adversely affect our operating results and financial condition. 28 Table of Contents
Although such measures have not significantly affected our business or operations, future developments in this conflict or in other global conflicts could adversely affect our operating results and financial condition. 29 Table of Contents
From time to time, we are a party to various legal proceedings. If we are not successful in litigation that could be brought against us or our customers, we could be ordered to pay monetary fines and/or damages, including expenses and damages against our customers. If we are found liable for willful patent infringement, damages could be significant.
From time to time, we are a party to various legal proceedings. If we are not successful in litigation that has been or could be brought against us or our customers, we could be ordered to pay monetary fines and/or damages, including expenses and damages incurred by our customers.
For the year ended December 31, 2024, 94% of our revenue was from customers in Asia.
For the year ended December 31, 2025, 92% of our total revenue was from customers in Asia.
Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent that the effective tax rate is less than the minimum rate.
Many aspects of Pillar Two were effective for tax years 2024 and 2025. Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent that the effective tax rate is less than the minimum rate.
There can be no assurance that similar laws and regulations will not be implemented in other jurisdictions resulting in additional costs, possible delays in delivering products, and even the discontinuance of existing and planned future products if the costs were to become prohibitive.
There can be no assurance that similar laws and regulations will not be implemented in other jurisdictions resulting in additional costs, possible delays in delivering products, and even the discontinuance of existing and planned future products if the costs were to become prohibitive. We are subject to regulatory and reporting standards related to ESG matters, which could increase our expenses.
Remote working arrangements, the Russia-Ukraine conflict, the Middle East conflict, and AI-powered cybersecurity threats have also heightened our potential exposure to cyberattacks, which could put the sensitive data we store on our internal systems at risk.
Remote working arrangements, current and potential global conflicts, and AI-powered cybersecurity threats have also heightened our potential exposure to cyberattacks, which could put the data we store on our internal or third-party systems at risk.
In addition, we may be unable to identify or complete prospective acquisitions for various reasons, including competition from other companies in the semiconductor industry, the valuation expectations of acquisition candidates and applicable antitrust or other policies, laws or regulations.
In addition, we may be unable to identify or complete prospective acquisitions for various reasons, including competition from other companies or financial investors, the valuation expectations of acquisition candidates and applicable antitrust or other policies, laws or regulations. If we are unable to identify and complete acquisitions, we may not be able to successfully expand our business and product offerings.
Sales cycles for our products are lengthy for a number of reasons, including: • our customers usually complete an in-depth technical evaluation of our products before they place a purchase order; • the commercial adoption of our products by OEMs and ODMs is typically limited during the initial release of their product to evaluate product performance and consumer demand; • our products must be designed into our customers’ products or systems; and • the development and commercial introduction of our customers’ products incorporating our products are frequently delayed.
Sales cycles for our products are lengthy for a number of reasons, including: • our products must be designed to operate with and into our customers’ products or systems, which usually includes an in-depth technical evaluation of our products by our customers before they place a purchase order; • delays attributable to the development of our customers’ products; and • delays attributable to commercial adoption by our end customers upon the initial release of our products in order for our customers to evaluate product performance and consumer demand.
Our ability to mitigate these risks will depend on our continued effective maintaining, training, monitoring and enforcement of appropriate policies and procedures governing the use of AI tools, and the results of any such use, by us or our partners. AI technology may also give rise to significant legal and regulatory liability.
Our ability to mitigate these risks will depend on our continued effective maintenance, training, monitoring and enforcement of appropriate policies and procedures governing the use of AI tools, the results of any such use by us or our partners, and the compliance with such policies and procedures by our workforce.
Future sales prospects also are dependent upon acceptance and qualification of third-party sourcing for products as an alternative to in-house development. Customers may continue to increase their use of internally developed components. They may also decide to develop or acquire components, technologies or products that are similar to, or that may be substituted for, our products.
The prospects for our products in these markets are dependent in part upon our customers’ acceptance of our products as an alternative to their internally developed products. Our future sales prospects also are dependent upon acceptance and qualification of third-party sourcing for products as an alternative to in-house development. Customers may continue to increase their use of internally developed components.
Such stock price decreases could encourage further short-sales that could place additional downward pressure on our stock price. This could lead to further increases in the existing short position in our common stock and cause decreases and volatility in our stock price. The volatility of our stock may cause the value of a stockholder’s investment to decline rapidly.
Such stock price decreases could encourage further short sales and cause additional declines and volatility in our stock price. The volatility of our stock may cause the value of a stockholder’s investment to decline rapidly.

… 109 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−1 removed9 unchanged
Biggest changeOur cybersecurity risk management and strategy processes are overseen by the Cybersecurity Steering Committee, which includes individuals with an average of over 18 years of prior work experience in various roles involving IT governance and management, cybersecurity, auditing, and compliance.
Biggest changeThe NCG Committee also provides updates on our cybersecurity risk management and strategy programs to the Board of Directors on a quarterly basis. The Cybersecurity Steering Committee includes individuals with an average of over 20 years of prior work experience in various roles involving IT governance and management, cybersecurity, auditing, and compliance.
Removed
The NCG Committee also provides updates to our cybersecurity risk management and strategy programs to the Board of Directors on a quarterly basis.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 2. Properties As of December 31, 2024, our owned and leased facilities each in excess of 10,000 square feet consisted of: U.S.
Biggest changeItem 2. Properties As of December 31, 2025, our owned and leased facilities in the U.S. and other countries that are individually in excess of 10,000 square feet consisted of: U.S.
Other Countries Total (In square feet) Owned facilities 216,000 948,000 1,164,000 Leased facilities 23,000 302,000 325,000 Total facilities 239,000 1,250,000 1,489,000 We also lease other sales and marketing, and research and development offices in Asia, Europe and the U.S. We believe that our existing facilities are suitable for our current operations. 29 Table of Contents
Other Countries Total (In square feet) Owned facilities 216,000 973,000 1,189,000 Leased facilities 23,000 469,000 492,000 Total facilities 239,000 1,442,000 1,681,000 We also lease other smaller sales and marketing, and research and development offices in Asia, Europe and the U.S. We believe that our existing facilities are suitable for our current operations. 30 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+2 added−1 removed0 unchanged
Biggest changeWash.), and alleges that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, by making material misstatements or omissions relating to our business, including with respect to our business relationship with Nvidia. The lawsuit seeks an unspecified amount of damages as well as attorneys’ fees and other relief.
Biggest changeMonolithic Power Systems, Inc., et al., No. 25-cv-220 (W.D. Wash.) (the “Securities Action”) and alleges that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, by making material misstatements or omissions relating to our business. We believe the lawsuit is meritless and currently intend to defend against it vigorously.
Item 3. Legal Proceedings We are a party to actions and proceedings in the ordinary course of business, including challenges to the enforceability or validity of our intellectual property, claims that our products infringe on the intellectual property rights of others, and employment matters. We may also be subject to litigation initiated by our stockholders.
Item 3. Legal Proceedings We are a party to actions and proceedings in the ordinary course of business, including challenges to the enforceability or validity of our intellectual property, claims that our products infringe on the intellectual property rights of others, and employment matters. We are also subject to litigation initiated by our stockholders.
These proceedings often involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources to prosecute and defend. We defend ourselves vigorously against any such claims. As of December 31, 2024 , there were no material pending legal proceedings to which we were a party.
These proceedings often involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources to prosecute and defend. We defend ourselves vigorously against any such claims.
On February 4, 2025, a purported class action lawsuit was filed against us and certain of our executives. The lawsuit is captioned Waterford Twp. Gen. Emps. Ret. Sys. v. Monolithic Power Systems, Inc., et al. , No. 25-cv-220 (W.D.
Based on current information and management assessment, we do not believe that a material loss from known matters is probable as of December 31, 2025. On February 4, 2025, a class action lawsuit was filed against us and certain of our executives. The lawsuit is captioned Waterford Twp. Gen. Emps. Ret. Sys. v.
Removed
We believe the lawsuit is meritless and intend to defend against it vigorously.
Added
Related to the Securities Action, two shareholder derivative suits were also filed, against current – and one former – director, and certain executives, alleging breaches of their fiduciary duties. The shareholder derivative suits have been consolidated under the caption Miller v. Hsing, et al., No. 25-cv-527 (W.D. Wash.), filed on March 26, 2025 (the “Derivative Litigation”).
Added
The Securities Action and Derivative Litigation seek unspecified amounts of damages and/or attorneys’ fees and other relief. The Derivative Litigation is stayed pending developments in the Securities Action.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed3 unchanged
Biggest changeThe following table represents details of our stock repurchase transactions during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In thousands, except per share amounts) October 1, 2024 – October 31, 2024 2 $ 911.51 2 $ 620,002 November 1, 2024 – November 30, 2024 980 $ 632.89 980 $ - Total 982 $ 633.55 982 In February 2025, the Board of Directors approved a new stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028.
Biggest changeThe following table represents details of our stock repurchase transactions during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In thousands, except per share amounts) October 1, 2025 – October 31, 2025 1 $ 1,004.20 1 $ 494,629 November 1, 2025 – November 30, 2025 - (a) $ 932.64 - (a) $ 494,045 December 1, 2025 – December 31, 2025 1 $ 952.85 1 $ 493,366 Total 2 $ 964.61 2 (a) Represents less than one thousand shares.
The timing and the number of any repurchased common stock will be determined by our management based on the evaluation of market conditions, legal requirements, stock price, and other factors. The repurchase program does not obligate us to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.
The timing and the number of shares of any repurchased common stock will be determined by our management based on the evaluation of market conditions, legal requirements, stock price, and other factors. The repurchase program does not obligate us to purchase any particular number of shares and may be suspended, modified, or discontinued at any time without prior notice.
The declaration of any future cash dividends is at the discretion of our Board of Directors and will depend on, among other things, our financial condition, results of operations, capital requirements, business conditions and other factors that our Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of the stockholders. 31 Table of Contents Stock Performance Graph The following graph compares the cumulative five-year total return on our common stock relative to the cumulative total returns of the Nasdaq Composite Index and the PHLX Semiconductor Sector Index.
The declaration of any future cash dividends is at the discretion of our Board of Directors and will depend on, among other things, our financial condition, results of operations, capital requirements, business conditions and other factors that our Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of the stockholders. 32 Table of Contents Stock Performance Graph The following graph compares the cumulative five-year total return on our common stock relative to the cumulative total returns of the Nasdaq Composite Index and the PHLX Semiconductor Sector Index.
The information contained in this stock performance graph section shall not be deemed to be “ soliciting material, ” or “ filed ” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. 32 Table of Contents
The information contained in this stock performance graph section shall not be deemed to be “ soliciting material, ” or “ filed ” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. 33 Table of Contents
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Common Stock Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “MPWR”. Holders of Common Stock As of February 21, 2025, there were 81 registered holders of record of our common stock.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Common Stock Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “MPWR”. Holders of Common Stock As of February 20, 2026, there were 91 registered holders of record of our common stock.
An investment of $100 is assumed to have been made in our common stock on December 31, 2019, and its performance relative to the performance of a similar investment in the two indexes is shown through December 31, 2024, assuming the reinvestment of dividends. Historic stock performance is not indicative of future performance.
An investment of $100 is assumed to have been made in our common stock on December 31, 2020, and its performance relative to the performance of the same investment in the two indexes is shown through December 31, 2025, assuming the reinvestment of dividends. Historic stock performance is not indicative of future performance.
Issuer Purchases of Equity Securities In October 2023, our Board of Directors approved a stock repurchase program authorizing us to repurchase up to $640.0 million of our common stock through October 29, 2026. Shares were retired upon repurchase.
Issuer Purchases of Equity Securities In February 2025, our Board of Directors approved a stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028. Shares are retired upon repurchase.
Shares are retired upon repurchase. The repurchases, if any, will be funded from available working capital and cash repatriation from its subsidiaries. Stock repurchases under the program may be made through open market repurchases, privately negotiated transactions or other structures in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate.
Stock repurchases under the program may be made through open market repurchases, privately negotiated transactions or other structures in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate.
We repurchased approximately 1.0 million and 7,000 shares of our common stock for an aggregate purchase price of $636.2 million and $3.7 million during the years ended December 31, 2024 and 2023, respectively.
We repurchased approximately 8,000 shares of our common stock for an aggregate purchase price of $6.6 million during the year ended December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+9 added−15 removed18 unchanged
Biggest changeResults of Operations The following table summarizes our results of operations: Year Ended December 31, 2024 2023 2022 (In thousands, except percentages) Revenue $ 2,207,100 100.0 % $ 1,821,072 100.0 % $ 1,794,148 100.0 % Cost of revenue 986,230 44.7 799,953 43.9 745,596 41.6 Gross profit 1,220,870 55.3 1,021,119 56.1 1,048,552 58.4 Operating expenses: Research and development 324,748 14.7 263,643 14.5 240,171 13.4 Selling, general and administrative 356,764 16.2 275,740 15.1 281,596 15.6 Total operating expenses 681,512 30.9 539,383 29.6 521,767 29.0 Operating income 539,358 24.4 481,736 26.5 526,785 29.4 Other income (expense), net 33,554 1.6 24,105 1.3 (1,848 ) (0.1 ) Income before income taxes 572,912 26.0 505,841 27.8 524,937 29.3 Income tax expense (benefit), net (1,213,788 ) (55.0 ) 78,467 4.3 87,265 4.9 Net income $ 1,786,700 81.0 % $ 427,374 23.5 % $ 437,672 24.4 % Revenue The following table summarizes our revenue by end market: Year Ended December 31, End Market 2024 % of Revenue 2023 % of Revenue 2022 % of Revenue (In thousands, except percentages) Enterprise Data $ 716,264 32.5 % $ 322,980 17.7 % $ 251,415 14.0 % Storage and Computing 501,576 22.7 491,139 27.0 452,594 25.3 Automotive 413,973 18.8 394,665 21.7 300,016 16.7 Communications 225,905 10.2 204,911 11.3 251,452 14.0 Consumer 202,015 9.1 234,660 12.9 319,492 17.8 Industrial 147,367 6.7 172,717 9.4 219,179 12.2 Total $ 2,207,100 100.0 % $ 1,821,072 100.0 % $ 1,794,148 100.0 % Revenue for the year ended December 31, 2024 was $2.2 billion, an increase of $386.0 million, or 21.2%, from $1.8 billion for the year ended December 31, 2023.
Biggest changeResults of Operations The following table summarizes our results of operations for the periods presented: Year Ended December 31, 2025 2024 (As Restated) 2023 (In thousands, except percentages) Revenue $ 2,790,459 100.0 % $ 2,207,100 100.0 % $ 1,821,072 100.0 % Cost of revenue 1,250,718 44.8 986,230 44.7 799,953 43.9 Gross profit 1,539,741 55.2 1,220,870 55.3 1,021,119 56.1 Operating expenses: Research and development 382,263 13.7 324,748 14.7 263,643 14.5 Selling, general and administrative 428,842 15.4 356,764 16.2 275,740 15.1 Total operating expenses 811,105 29.1 681,512 30.9 539,383 29.6 Operating income 728,636 26.1 539,358 24.4 481,736 26.5 Other income, net 37,580 1.4 33,554 1.6 24,105 1.3 Income before income taxes 766,216 27.5 572,912 26.0 505,841 27.8 Income tax expense (benefit), net 144,733 5.2 (1,019,146 ) (46.1 ) 78,467 4.3 Net income $ 621,483 22.3 % $ 1,592,058 72.1 % $ 427,374 23.5 % Revenue The following table summarizes our revenue by end market for the periods presented: Year Ended December 31, End Market 2025 % of Revenue 2024 % of Revenue 2023 % of Revenue (In thousands, except percentages) Storage and Computing $ 732,522 26.3 % $ 501,576 22.7 % $ 491,139 27.0 % Enterprise Data 701,846 25.2 716,264 32.5 322,980 17.7 Automotive 592,518 21.2 413,973 18.8 394,665 21.7 Communications 309,064 11.1 225,905 10.2 204,911 11.3 Consumer 255,155 9.1 202,015 9.1 234,660 12.9 Industrial 199,354 7.1 147,367 6.7 172,717 9.4 Total $ 2,790,459 100.0 % $ 2,207,100 100.0 % $ 1,821,072 100.0 % Revenue for the full year ended December 31, 2025 was $2.8 billion, an increase of $583.4 million, or 26.4%, from $2.2 billion for the year ended December 31, 2024.
In December 2024, we completed an intercompany transaction that resulted in one of our foreign subsidiaries recording a step up in the tax basis of intangible assets of approximately $23.2 billion. This resulted in a deferred tax difference between the U.S. GAAP basis and local tax basis of the specified intangibles.
In December 2024, we completed an intercompany transaction that resulted in one of our foreign subsidiaries recording a step up in the tax basis of intangible assets of $23.2 billion. This resulted in a deferred tax difference between the U.S. GAAP basis and local tax basis of the specified intangibles.
Selling, General and Administrative ( “ SG&A ” ) SG&A expenses primarily include cash compensation and benefits, stock-based compensation and deferred compensation for sales, marketing and administrative personnel, sales commissions, travel expenses, facilities costs, third party service fees and legal expenses.
Selling, General and Administrative ( “ SG&A ” ) SG&A expenses primarily include cash-based compensation and benefits, stock-based compensation and deferred compensation for sales, marketing and administrative personnel, travel expenses, facilities costs, third-party service fees and legal expenses.
(“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis, including those related to income taxes valuation allowances, inventory valuation and stock-based compensation.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis, including those related to income taxes valuation allowances and stock-based compensation.
These combined advantages are designed to enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. We operate in the cyclical semiconductor industry.
These combined advantages are designed to enable us to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. We operate in the cyclical semiconductor industry.
Overview We are a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future.
Overview We are a fabless global company that provides high-performance, semiconductor-based power electronics solutions. Our mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future.
We believe our ability to achieve revenue growth will depend, in part, on our ability to develop new products, enter new market segments, gain market share, manage litigation risk, diversify our customer base and continue to secure manufacturing capacity.
We believe our ability to achieve revenue growth will depend, in part, on our ability to develop new products, enter new markets, gain market share, manage litigation risk, diversify our customer base and continue to secure manufacturing capacity.
As a result, our stock-based compensation expense is subject to volatility and may fluctuate significantly each quarter due to changes in our probability assessment of achievement of the performance conditions or actual results being different from projections made by management. 34 Table of Contents Recent Accounting Pronouncements See Note 1 of the Notes to Consolidated Financial Statements regarding a recently adopted accounting pronouncement and recent accounting pronouncements not yet adopted as of December 31, 2024.
As a result, our stock-based compensation expense is subject to volatility and may fluctuate significantly each quarter due to changes in our probability assessment of achievement of the performance conditions or actual results being different from projections made by management. 35 Table of Contents Recent Accounting Pronouncements See Note 1 of the Notes to Consolidated Financial Statements regarding a recently adopted accounting pronouncement and a recent accounting pronouncement not yet adopted as of December 31, 2025.
The proceeds are primarily used to fund our stock repurchase program, dividend program and ongoing business operations. We may repatriate additional cash from certain foreign subsidiaries to fund our expenditures in future periods.
The proceeds are primarily used to fund our stock repurchase program, dividend program and ongoing business operations. We may repatriate additional cash from certain of our foreign subsidiaries in future periods.
Typical supply chain lead times for orders are generally 16 to 26 weeks. These factors, combined with the fact that our customers can cancel or reschedule orders without significant penalty to the customer, make the forecasting of our orders, revenue and expenses difficult.
Typical supply chain lead times for orders are generally 16 to 26 weeks. These factors, combined with the fact that our customers can cancel or reschedule orders without incurring a significant penalty, make the forecasting of our orders, revenue and expenses difficult.
As of December 31, 2024 and 2023, we had a valuation allowance of $3.6 billion and $35.0 million, respectively, attributable to management’s determination that it is more likely than not that certain deferred tax assets will not be fully realized. In 2024, one of the Company’s foreign subsidiaries was granted a ten-year tax incentive, beginning in tax year 2025.
As of both December 31, 2025 and 2024, we had a valuation allowance of $3.6 billion attributable to management’s determination that it is more likely than not that certain deferred tax assets will not be fully realized. In 2024, one of the Company’s foreign subsidiaries was granted a ten-year tax incentive, beginning in tax year 2025.
Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.
Founded in 1997 by our CEO Michael Hsing, we have three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.
Discussions of 2022 results and year-to-year comparisons between 2023 and 2022 that are omitted in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
Discussions of 2023 results and year-to-year comparisons between 2024 and 2023 that are omitted in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.
We do not expect to realize the deferred tax asset for U.S. GAAP purposes; therefore, we have recorded a full valuation allowance as of December 31, 2024. In January 2025, the OECD released new Administrative Guidance on the application of the Global Anti-Base Erosion Model Rules.
We do not expect to realize the deferred tax asset for U.S. GAAP purposes; therefore, we have recorded a full valuation allowance of $23.2 billion as of December 31, 2024 which remains the same as of December 31, 2025. In January 2025, the OECD released new Administrative Guidance on the application of the Global Anti-Base Erosion Model Rules.
In February 2025, our Board of Directors approved an increase in the quarterly cash dividend from $1.25 per share to $1.56 per share, which amount will be paid on April 15, 2025 to all stockholders of record as of the close of business on March 31, 2025.
In February 2026, our Board of Directors approved an increase in the quarterly cash dividend from $1.56 per share to $2.00 per share, which amount will be paid on April 15, 2026 to all stockholders of record as of the close of business on March 31, 2026.
Based on our historical practice, stockholders of record as of the last business day of the quarter are entitled to receive the quarterly cash dividends when and if declared by the Board of Directors, which are payable to the stockholders in the following month. As of December 31, 2024, accrued dividends totaled $59.8 million.
Based on our historical practice, stockholders of record as of the last business day of the quarter are entitled to receive the quarterly cash dividends when and if declared by the Board of Directors, which are payable to the stockholders in the following month. As of December 31, 2025, accrued dividends totaled $76.0 million.
We derive most of our revenue from sales through distribution arrangements and direct sales to customers in Asia, where our products are incorporated into end-user products. Our revenue from direct or indirect sales to customers in Asia was 94%, 87% and 86% for the years ended December 31, 2024, 2023 and 2022, respectively.
We derive most of our revenue from sales through distribution arrangements and direct sales to customers in Asia, where our products are incorporated into end-user products. Our revenue from sales to customers in Asia was 92%, 94% and 87% for the years ended December 31, 2025, 2024 and 2023, respectively.
Year Ended December 31, 2024 2023 2022 (In thousands, except percentages) R&D expenses $ 324,748 $ 263,643 $ 240,171 As a percentage of revenue 14.7 % 14.5 % 13.4 % R&D expenses were $324.7 million, or 14.7% of revenue, for the year ended December 31, 2024, and $263.6 million, or 14.5% of revenue, for the year ended December 31, 2023.
Year Ended December 31, 2025 2024 2023 (In thousands, except percentages) R&D expenses $ 382,263 $ 324,748 $ 263,643 As a percentage of revenue 13.7 % 14.7 % 14.5 % R&D expenses were $382.3 million, or 13.7% of revenue, for the year ended December 31, 2025, and $324.7 million, or 14.7% of revenue, for the year ended December 31, 2024.
Cash Requirements Although consequences of economic uncertainties and macroeconomic conditions and other factors could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above, we believe that our balances of cash, cash equivalents and short-term investments of $862.9 million as of December 31, 2024, along with cash generated by ongoing operations, will be sufficient to satisfy our liquidity requirements for the next 12 months and beyond.
Cash Requirements Although consequences of economic uncertainties and macroeconomic conditions, including tariffs and retaliatory measures and announcements regarding the same, and many other factors could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above, we believe that our balances of cash, cash equivalents and short-term investments of $1.3 billion as of December 31, 2025, along with cash generated by ongoing operations, will be sufficient to satisfy our liquidity requirements for the next 12 months.
Year Ended December 31, 2024 2023 2022 (In thousands, except percentages) SG&A expenses $ 356,764 $ 275,740 $ 281,596 As a percentage of revenue 16.2 % 15.1 % 15.6 % SG&A expenses were $356.8 million, or 16.2% of revenue, for the year ended December 31, 2024, and $275.7 million, or 15.1% of revenue, for the year ended December 31, 2023.
Year Ended December 31, 2025 2024 2023 (In thousands, except percentages) SG&A expenses $ 428,842 $ 356,764 $ 275,740 As a percentage of revenue 15.4 % 16.2 % 15.1 % SG&A expenses were $428.8 million, or 15.4% of revenue, for the year ended December 31, 2025, and $356.8 million, or 16.2% of revenue, for the year ended December 31, 2024.
We anticipate that earnings from other foreign subsidiaries will continue to be indefinitely reinvested. 37 Table of Contents Summary of Cash Flows The following table summarizes our cash flow activities: Year Ended December 31, 2024 2023 2022 (In thousands) Net cash provided by operating activities $ 788,410 $ 638,213 $ 246,674 Net cash provided by (used in) investing activities 223,047 (178,726 ) (12,510 ) Net cash used in financing activities (872,227 ) (183,725 ) (128,785 ) Effect of change in exchange rates (8,470 ) (3,310 ) (6,039 ) Net increase in cash, cash equivalents and restricted cash $ 130,760 $ 272,452 $ 99,340 For the year ended December 31, 2024, the $150.2 million increase in cash provided by operating activities compared to the prior period was primarily due to increased accounts receivable collections, partially offset by increased inventory purchases.
We anticipate that earnings from other foreign subsidiaries will continue to be indefinitely reinvested. 38 Table of Contents Summary of Cash Flows The following table summarizes our cash flow activities for the periods presented: Year Ended December 31, 2025 2024 2023 (In thousands) Net cash provided by operating activities $ 838,202 $ 788,410 $ 638,213 Net cash provided by (used in) investing activities (157,269 ) 223,047 (178,726 ) Net cash used in financing activities (285,863 ) (872,227 ) (183,725 ) Effect of change in exchange rates 12,510 (8,470 ) (3,310 ) Net increase in cash, cash equivalents and restricted cash $ 407,580 $ 130,760 $ 272,452 For the year ended December 31, 2025, the $49.8 million increase in net cash provided by operating activities compared to the prior period was primarily due to increased accounts receivable collections, partially offset by increased inventory purchases and other changes in working capital.
We are subject to industry downturns, but we have targeted product and market areas that we believe allow us to operate at above average industry performance levels over the long term.
We are subject to industry downturns, but we have targeted product and market areas that we believe allow us to operate at above average industry performance levels over the long term. We work with third parties to manufacture, assemble and test our ICs.
We will continue to monitor any changes or developments to export control laws, trade regulations and other trade requirements, or interpretations thereof and are committed to complying with all applicable trade laws, regulations and other requirements. 33 Table of Contents Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S.
We are committed to complying with all applicable trade laws, regulations and other requirements. 34 Table of Contents Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Other Long-Term Obligations Other long-term obligations primarily include payments for deferred compensation plan liabilities and accrued dividend equivalents. As of December 31, 2024, these obligations totaled $98.6 million.
Other Long-Term Obligations Other long-term obligations primarily include deferred compensation plan liabilities and accrued dividend equivalents. As of December 31, 2025, these obligations totaled $107.9 million.
Year Ended December 31, 2024 2023 2022 (In thousands, except percentages) Cost of revenue $ 986,230 $ 799,953 $ 745,596 As a percentage of revenue 44.7 % 43.9 % 41.6 % Gross profit $ 1,220,870 $ 1,021,119 $ 1,048,552 Gross margin 55.3 % 56.1 % 58.4 % Cost of revenue was $986.2 million, or 44.7% of revenue, for the year ended December 31, 2024, and $800.0 million, or 43.9% of revenue, for the year ended December 31, 2023.
Year Ended December 31, 2025 2024 2023 (In thousands, except percentages) Cost of revenue $ 1,250,718 $ 986,230 $ 799,953 As a percentage of revenue 44.8 % 44.7 % 43.9 % Gross profit $ 1,539,741 $ 1,220,870 $ 1,021,119 Gross margin 55.2 % 55.3 % 56.1 % Cost of revenue was $1,250.7 million, or 44.8% of revenue, for the year ended December 31, 2025, and $986.2 million, or 44.7% of revenue, for the year ended December 31, 2024.
As of December 31, 2024, $611.9 million of cash and cash equivalents and $164.4 million of short-term investments were held by our foreign subsidiaries. For the years ended December 31, 2024 and 2023, we repatriated $642 million and $140 million, respectively, of cash from a foreign subsidiary to the U.S. with minimal tax impact.
As of December 31, 2025, $672.9 million of cash and cash equivalents and $157.2 million of short-term investments were held by our foreign subsidiaries. For the years ended December 31, 2025 and 2024, we repatriated $275 million and $642 million, respectively, of cash from certain of our foreign subsidiaries to the U.S. with immaterial tax impact.
The effective tax rate was partially offset by the inclusion of the global intangible low-taxed income (“GILTI”) tax, the addition of a valuation allowance against foreign tax assets, and excess tax benefits from stock-based compensation. The income tax expense for the year ended December 31, 2023 was $78.5 million, or 15.5% of pre-tax income.
Furthermore, the effective tax rate for the year ended December 31, 2024 benefited from lower statutory tax rates at certain of our foreign subsidiaries. The effective tax rate was partially offset by the inclusion of the global intangible low-taxed income (“GILTI”) tax, the addition of a valuation allowance against foreign tax assets, and excess tax benefits from stock-based compensation.
The $81.0 million increase in SG&A expenses was driven by a $50.1 million increase in stock-based compensation expenses and related payroll taxes, a $16.4 million increase in cash compensation expenses and benefits, and a $6.7 million increase in professional services. 36 Table of Contents Other Income (Expense), Net Other income, net, was $33.6 million for the year ended December 31, 2024, compared with $24.1 million for the year ended December 31, 2023.
The $72.0 million increase in SG&A expenses was primarily driven by a $37.3 million increase in cash-based compensation and benefits, and a $23.8 million increase in stock-based compensation and related payroll taxes. 37 Table of Contents Other Income, Net Other income, net, was $37.6 million for the year ended December 31, 2025, compared with $33.6 million for the year ended December 31, 2024.
A deferred tax benefit of approximately $1.3 billion, net of $0.1 billion of valuation allowance, was recorded during the year ended December 31, 2024 to reflect the estimated future reductions in cash tax paid in that jurisdiction associated with the incentive. Furthermore, the 2024 effective tax rate benefited from lower statutory tax rates at certain of our foreign subsidiaries.
A deferred tax benefit of $1.1 billion, net of $0.2 billion of deferred tax liability and $0.1 billion of valuation allowance, was recorded during the year ended December 31, 2024 to reflect the estimated future reductions in cash tax paid in that jurisdiction associated with the incentive.
The repurchases, if any, will be funded from available working capital and cash repatriation from our subsidiaries. We currently have a dividend program approved by our Board of Directors, pursuant to which we intend to pay quarterly cash dividends on our common stock.
We currently have a dividend program approved by our Board of Directors, pursuant to which we intend to pay quarterly cash dividends on our common stock.
Estimates and judgments used in the preparation of our financial statements are, by their nature, uncertain and unpredictable, and depend upon, among other things, many factors outside of our control, including demand for our products, economic conditions and other current and future events, such as macroeconomic factors, global economic uncertainties and geopolitical tensions.
Estimates and judgments used in the preparation of our financial statements are, by their nature, uncertain and unpredictable, and depend upon, among other things, many factors outside of our control.
The $186.2 million increase in cost of revenue was primarily driven by increases in shipment volume and the average costs due to product mix. Gross margin was 55.3% for the year ended December 31, 2024, compared with 56.1% for the year ended December 31, 2023.
The $264.5 million increase in cost of revenue was primarily driven by higher shipment volume. Gross margin was 55.2% for the year ended December 31, 2025, compared with 55.3% for the year ended December 31, 2024.
For the year ended December 31, 2024, the $688.5 million increase in cash used in financing activities compared to the prior period was primarily due to a $632.5 million increase in stock repurchases and a $54.8 million increase in dividends and dividend equivalent payments.
For the year ended December 31, 2025, the $586.4 million decrease in net cash used in financing activities compared to the prior period was primarily due to a $628.6 million decrease in stock repurchases, partially offset by a $44.2 million increase in dividends and dividend equivalent payments.
The decrease in gross margin was mainly driven by higher inventory write-downs as a percentage of revenue. Research and Development ( “ R&D ” ) R&D expenses primarily consist of cash compensation and benefits, stock-based compensation and deferred compensation for design and product engineers, expenses related to new product development and supplies, and facility costs.
Research and Development ( “ R&D ” ) R&D expenses primarily consist of cash-based compensation and benefits, stock-based compensation and deferred compensation for design and product engineers, expenses related to new product development and supplies, and facility costs.
Management performs the probability assessment on a quarterly basis by reviewing external factors, such as macroeconomic conditions and the analog industry revenue forecasts, and internal factors, such as our business and operational objectives and revenue forecasts.
Stock-Based Compensation For equity awards with performance conditions, we recognize compensation expense when it becomes probable that the performance goals will be achieved. Management performs the probability assessment on a quarterly basis by reviewing external factors, such as macroeconomic conditions and analog industry revenue forecasts, and internal factors, such as our business and operational objectives and revenue forecasts.
The $61.1 million increase in R&D expenses was primarily due to a $27.7 million increase in cash compensation expenses and benefits, an $11.0 million increase in stock-based compensation expenses and related payroll taxes, a $7.6 million increase in new product development expenses and a $5.0 million increase consisting mostly of software licensing fees.
The $57.6 million increase in R&D expenses was primarily due to a $30.1 million increase in cash-based compensation and benefits, a $9.1 million increase in new product development expenses, a $5.8 million increase in laboratory and other supplies, and a $4.1 million increase in stock-based compensation and related payroll taxes.
The extent and duration of the direct and indirect impact of macroeconomic events on our business, results of operations and overall financial position remain uncertain and depend on future developments. We closely monitor changes to export control laws, tariffs, trade regulations and other trade requirements.
We remain cautious in light of continued challenging global macroeconomic conditions and will continue to monitor the potential impact on our operations. The extent and duration of the direct and indirect impact of macroeconomic events on our business, results of operations and overall financial position remain uncertain and depend on future developments.
Liquidity and Capital Resources December 31, 2024 2023 (In thousands, except percentages) Cash and cash equivalents $ 691,816 $ 527,843 Short-term investments 171,130 580,633 Total cash, cash equivalents and short-term investments $ 862,946 $ 1,108,476 Percentage of total assets 23.9 % 45.5 % Total current assets $ 1,565,053 $ 1,819,499 Total current liabilities (294,567 ) (235,035 ) Working capital $ 1,270,486 $ 1,584,464 As of December 31, 2024, we had cash and cash equivalents of $691.8 million and short-term investments of $171.1 million, compared with cash and cash equivalents of $527.8 million and short-term investments of $580.6 million as of December 31, 2023.
Liquidity and Capital Resources December 31, 2025 2024 (As Restated) (In thousands, except percentages) Cash and cash equivalents $ 1,099,302 $ 691,816 Short-term investments 157,243 171,130 Total cash, cash equivalents and short-term investments $ 1,256,545 $ 862,946 Percentage of total assets 30.0 % 24.5 % Total current assets $ 2,183,802 $ 1,565,053 Total current liabilities (369,365 ) (294,567 ) Working capital $ 1,814,437 $ 1,270,486 As of December 31, 2025, we had cash and cash equivalents of $1.1 billion and short-term investments of $157.2 million, compared with cash and cash equivalents of $691.8 million and short-term investments of $171.1 million as of December 31, 2024.
Revenue from the automotive market increased $19.3 million, or 4.9%, from the same period in 2023. This increase was primarily driven by increased sales of our highly integrated applications supporting advanced driver assistance systems, partially offset by lower sales of applications supporting body electronics and infotainment.
Revenue from the enterprise data market decreased $14.4 million, or 2.0%, from the same period in 2024. Full year 2025 automotive revenue of $592.5 million increased $178.5 million, or 43.1%, from the same period in 2024. This increase was broad-based and primarily driven by increased sales of our highly integrated applications supporting advanced driver assistance systems and infotainment.
We will continue to evaluate the impact of this release or of other prospective guidance on our future global tax provision. In December 2023, Bermuda Corporate Income Tax Act of 2023 (the “Bermuda CIT Act”) was enacted and signed into law.
We will continue to evaluate the impact of this release and of other future guidance on our future global tax provision.
Our purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements. In May 2022, we entered into a long-term supply agreement in order to secure manufacturing production capacity for silicon wafers over a four-year period.
Our purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.
Cost of Revenue and Gross Margin Cost of revenue primarily consists of costs incurred to manufacture, assemble and test our products, as well as warranty costs, inventory-related and other overhead costs, and stock-based compensation expenses.
Revenue of $199.4 million from the industrial market increased $52.0 million, or 35.3%, from the same period in 2024 due to higher sales for power sources and instrumentation applications. 36 Table of Contents Cost of Revenue and Gross Margin Cost of revenue primarily consists of costs incurred to manufacture, assemble and test our products, as well as warranty costs, inventory-related and other overhead costs, and stock-based compensation expenses.
Macroeconomic Conditions and Regulations The semiconductor industry has historically been impacted by various macro-economic challenges including fluctuations in consumer spending, fluctuations in demand for semiconductors, rising inflation, increased interest rates, and fluctuations in currency rates. We remain cautious in light of continued challenging macroeconomic conditions and will continue to monitor the potential impact on our operations.
Macroeconomic Conditions and Regulations The semiconductor industry is impacted by various macroeconomic challenges including fluctuations in consumer spending, fluctuations in demand for semiconductors, rising inflation, global tariffs and retaliatory measures and announcements regarding the same, increased interest rates, and fluctuations in currency rates.
As of December 31, 2024 and through the date we filed this Annual Report, no restrictions or requirements have had a material impact on our revenue and operations; however, such restrictions can be enacted quickly and unexpectedly and could impact our business in the future.
We closely monitor changes to export control laws, tariffs, trade regulations and other trade requirements. For the year ended December 31, 2025 and through the date we filed this Annual Report, no restrictions or requirements have had a material impact on our revenue and operations.
For the year ended December 31, 2024, the $401.8 million increase in cash provided by investing activities compared to the prior period was primarily due to a $1.0 billion year-over-year increase in the sale of investments, partially offset by a $500.8 million increase in the purchase of investments, an increase of $88.5 million in property and equipment purchases and a $33.3 million acquisition in the year ended December 31, 2024.
For the year ended December 31, 2025, the $380.3 million decrease in net cash provided by investing activities compared to the prior period was primarily due to $403.3 million in lower net sales of investments.
As of December 31, 2024, these obligations totaled $15.8 million, of which $3.6 million was short-term. 38 Table of Contents Capital Return to Stockholders In October 2023, our Board of Directors approved a stock repurchase program authorizing us to repurchase up to $640.0 million of our common stock through October 29, 2026.
As of December 31, 2025, total estimated future unconditional purchase commitments to all suppliers and other parties were $442.2 million, of which $389.8 million was due within a year. 39 Table of Contents Capital Return to Stockholders In February 2025 , our Board of Directors approved a new stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028 .
This increase was primarily due to higher sales of our power management solutions for AI applications. Revenue from the communications market increased $21.0 million, or 10.2%, from the same period in 2023. The increase was a result of higher sales of power solutions for optical modules and routers, partially offset by lower sales of networking solutions.
Communications revenue of $309.1 million increased $83.2 million, or 36.8%, from the same period in 2024 due to higher sales of power solutions for optical modules and routers. Full year 2025 consumer revenue of $255.2 million increased $53.2 million, or 26.3%, from the same period in 2024.
Revenue from the storage and computing market increased $10.4 million, or 2.1%, from the same period in 2023. This increase was primarily driven by increased sales of products for notebooks. Revenue from the consumer market decreased $32.6 million, or 13.9%, from the same period in 2023. This decrease was a result of broad market weakness.
The increase in revenue was primarily due to increases in shipment volume. By end market, full year 2025 revenue for storage and computing of $732.5 million increased $230.9 million, or 46.0%, from the same period in 2024. This increase was primarily driven by increased sales of power solutions for memory, storage, notebooks and graphic cards.
The increase was primarily due to an increase in amortization of discounts on available-for-sale securities, partially offset by an increase in charitable contributions. Income Tax Expense (Benefit), Net The net income tax benefit for the year ended December 31, 2024 was $1.2 billion, or 211.9% of pre-tax income.
The lower effective tax rate relative to the federal statutory rate was partially offset by the U.S. taxation of foreign earnings and non-deductible stock-based compensation. The income tax benefit for the year ended December 31, 2024 was $1.0 billion, or 177.9% of pre-tax income.
Removed
Historically, our revenue has generally been higher in the second half of the year than in the first half although various factors, such as market conditions and the timing of key product introductions, could impact this trend. We work with third parties to manufacture and assemble our ICs.
Added
We believe that our diverse, agile and resilient supply chain is structured in a way to minimize the impact of tariffs; however, such restrictions or requirements can be enacted quickly and unexpectedly and could impact our business in the future.
Removed
Inventory Valuation Inventories are stated at the lower of standard cost (which approximates actual cost determined on a first-in first-out basis) and estimated net realizable value.
Added
To the extent tariffs, trade regulations or retaliatory measures or announcements regarding the same that affect us are implemented, we will seek to take mitigating actions in the near- and medium-term, as necessary, but there can be no assurance we will be successful.
Removed
We write down excess and obsolete inventories based on their age and forecasted demand, which includes estimates taking into consideration our revenue forecast, outlook on market and economic conditions, technology changes, new product introductions and changes in strategic direction. If actual demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required.
Added
These factors include demand for our products, economic conditions and other current and future events, such as macroeconomic factors, global economic uncertainties, current and potential global conflicts and global tariffs, export controls and retaliatory measures and announcements regarding the same.
Removed
Conversely, if actual demand or market conditions are more favorable, inventories may be sold that were previously written down. Stock-Based Compensation For equity awards with performance conditions, as well as awards containing both market and performance conditions, we recognize compensation expense when it becomes probable that the performance goals will be achieved.
Added
This increase was a result of higher sales of products for home appliances and gaming.
Removed
The increase in revenue was primarily due to increases in shipment volume and average selling prices resulting primarily from product mix. 35 Table of Contents For the year ended December 31, 2024, revenue from the enterprise data market increased $393.3 million, or 121.8%, from the same period in 2023.
Added
The decrease in gross margin was mainly driven by higher warranty expenses as a percentage of revenue, partially offset by lower inventory write-downs as a percentage of revenue.
Removed
Revenue from the industrial market decreased $25.4 million, or 14.7%, from the same period in 2023. This decrease primarily reflected lower sales of products related to industrial meter and security applications.
Added
Income Tax Expense (Benefit), Net The budget reconciliation bill H.R.1 (“H.R.1 Act”) signed into law on July 4, 2025, makes permanent certain expiring provisions of the 2017 Tax Cuts and Jobs Act and makes modifications to the existing tax framework.
Removed
The effective tax rate was lower than the federal statutory rate of 21% primarily due to lower statutory tax rates at certain of our foreign subsidiaries and a return to provision true-up adjustment which primarily resulted from a calculation refinement of our capitalization of research and experimental expenditures under Section 174 of the Internal Revenue Code (the “IRC”).
Added
The primary impact for the current year is the immediate tax expensing of prior year unamortized and current year domestic R&D expenses and accelerated depreciation in the year ended December 31, 2025. Our tax provision for the year ended December 31, 2025 includes the estimated impact of the H.R.1 Act.
Removed
The lower effective tax rate relative to the federal statutory rate was partially offset by the inclusion of the GILTI tax, the addition of a valuation allowance against foreign subsidiaries’ deferred tax assets arising from the indefinite extension of an R&D super deduction policy, and excess tax benefits from stock-based compensation.
Added
The income tax expense for the year ended December 31, 2025 was $144.7 million, or 18.9% of pre-tax income. The effective tax rate was lower than the federal statutory rate of 21% primarily due to income generated by our subsidiaries in lower tax jurisdictions and research tax credits.
Removed
The Bermuda CIT Act includes a 15% corporate income tax (“CIT”) applicable to Bermuda businesses that are multinational enterprise (“MNE”) groups with annual revenue of €750M or more beginning in 2025.
Added
Shares are retired upon repurchase. We repurchased approximately 8,000 shares of our common stock for an aggregate purchase price of $6.6 million during the year ended December 31, 2025. As of December 31, 2025, $493.4 million remained available for future repurchases under the program.
Removed
As the Bermuda CIT Act is not effective until January 1, 2025, and we do not expect to realize material taxable income in Bermuda in 2025, no changes to income tax expense related to the Bermuda CIT Act have been recorded as of December 31, 2024. See Note 12 of the Notes to Consolidated Financial Statements for further discussion.
Removed
The increase was also contributed by the receipt of prepaid wafer expenses in the year ended December 31, 2024 and other changes in working capital.
Removed
As of December 31, 2024, we had remaining prepayments under this agreement of $60.0 million reported in other long-term assets on the Consolidated Balance Sheets. As of December 31, 2024, total estimated future unconditional purchase commitments to all suppliers and other parties, net of the $60.0 million prepayment, were $616.8 million, of which $569.6 million was due within a year.
Removed
Transition Tax Liability The transition tax liability represents the one-time, mandatory deemed repatriation tax imposed on previously deferred foreign earnings under the U.S. Tax Cuts and Jobs Act enacted in December 2017 (the “2017 Tax Act”) . As permitted by the 2017 Tax Act, we have elected to pay the tax liability in installments on an interest-free basis through 2025.
Removed
As of December 31, 2024, the remaining liability totaled $6.2 million, all of which was short-term. Operating Leases Operating lease obligations represent the undiscounted remaining lease payments primarily for our leased facilities and equipment.
Removed
As of December 31, 2024, the authorized amount under this program was utilized. In February 2025 , our Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $500.0 million of our common stock through February 2028 . Shares are retired upon repurchase.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed3 unchanged
Biggest changeThe functional currency of our offshore operations is generally the local currency, primarily including the Renminbi, the New Taiwan Dollar and the Euro. We incur foreign currency exchange gains or losses related to certain transactions, including intercompany transactions between the U.S. and our foreign subsidiaries, that are denominated in a currency other than the functional currency.
Biggest changeWe incur foreign currency exchange gains or losses related to certain transactions, including intercompany transactions between the U.S. and our foreign subsidiaries, that are denominated in a currency other than the functional currency. Gains or losses from the remeasurement and settlement of the balances are reported in other income, net, on the Consolidated Statements of Operations.
Such guidelines include security type, credit quality and maturity and are intended to limit market risk by restricting our investments to high quality debt instruments with relatively short-term maturities. Based on our investment positions as of December 31, 2024, the impact of changes in interest rates on our interest income was immaterial.
Such guidelines include security type, credit quality and maturity and are intended to limit market risk by restricting our investments to high quality debt instruments with relatively short-term maturities. Based on our investment positions as of December 31, 2025, the impact of changes in interest rates on our interest income was immaterial.
Based on our investment positions as of December 31, 2024, a hypothetical 100 basis point increase in interest rates would result in a $0.1 million decline in the fair value of our investments. Any losses resulting from such interest rate changes would only be realized if we sold the investments prior to maturity.
Based on our investment positions as of December 31, 2025, there was no impact of changes in interest rates on the fair value of our investments. Any losses resulting from such interest rate changes would only be realized if we sold the investments prior to maturity. We do not use derivative financial instruments in our investment portfolio.
Gains or losses from the remeasurement and settlement of the balances are reported in other income (expense), net, on the Consolidated Statements of Operations. Fluctuations in foreign currency exchange rates have not had a material impact on our results of operations for the periods presented. 39 Table of Contents
Fluctuations in foreign currency exchange rates have not had a material impact on our results of operations for the periods presented. 40 Table of Contents
We do not use derivative financial instruments in our investment portfolio. Foreign Currency Exchange Risk Our sales outside the U.S. are primarily transacted in U.S. dollars. Accordingly, our sales are not generally impacted by foreign currency rate changes.
Foreign Currency Exchange Risk Our worldwide sales are primarily denominated in U.S. dollars. Accordingly, the reporting of our sales is not subject to foreign currency rate changes. The functional currency of our offshore non-sales operations is generally the local currency, primarily the Renminbi, the New Taiwan Dollar and the Euro.

Other MPWR 10-K year-over-year comparisons