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What changed in SILICON LABORATORIES INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SILICON LABORATORIES INC.'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.

+217 added−230 removedSource: 10-K (2025-02-04) vs 10-K (2024-02-20)

Top changes in SILICON LABORATORIES INC.'s 2025 10-K

217 paragraphs added · 230 removed · 168 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+8 added−11 removed79 unchanged
Biggest changeOur smart city solutions enable cities to operate smarter, produce and distribute energy more efficiently, and prioritize renewable energy. ​ - Smart metering - Smart street lighting - Renewable energy - Electric vehicle supply equipment - Smart agriculture ​ ​ ​ Commercial IoT ​ ​ Commercial IoT, such as smart retail solutions, can increase retailer efficiency, reduce labor costs and provide consumer insights by merging digital online e-commerce and physical stores into an omnichannel experience.
Biggest changeThey simplify human-machine interfaces, improve convenience for electrical providers and consumers through smart metering, drives operational efficiency by adding wireless connectivity to street lights, sensors, and controls, optimize maintenance routines with IoT predictive maintenance, and enhance energy efficiency by allowing renewable energy integration in both residential and utility setting. – Industrial automation and control – Smart metering – Smart street lighting – Renewable energy – Electric vehicle supply equipment – Industrial wearables – Industrial equipment – Smart agriculture Commercial IoT Commercial IoT, such as smart retail solutions, can increase retailer efficiency, reduce labor costs, and provide consumer insights by merging digital online e-commerce and physical stores into an omnichannel experience.
In-house protocol stacks and Micrium® real-time operating system (“RTOS”) help simplify software development for IoT developers by coordinating and prioritizing multiprotocol connectivity, SoC peripherals and other system-level activities. ​ 3 Table of Contents We group our products as Industrial & Commercial or Home & Life based on the target markets they address.
In-house protocol stacks and the Micrium® real-time operating system (“RTOS”) help simplify software development for IoT developers by coordinating and prioritizing multiprotocol connectivity, SoC peripherals and other system-level activities. 3 Table of Contents We group our products as Industrial & Commercial or Home & Life based on the target markets they address.
Revenues during fiscal 2023, 2022 and 2021 were generated predominately by sales of our mixed-signal products. The following summarizes the products that we have introduced to customers: Wireless Microcontrollers and Sensor Products Our EFM32™, EFM8™, 8051, wireless MCUs and wireless SoCs are based on numerous wireless protocols, including Bluetooth, sub-GHz proprietary technologies, Thread, Wi-Fi, Zigbee and Z-Wave technologies.
Revenues during fiscal 2024, 2023 and 2022 were generated predominately by sales of our mixed-signal products. The following summarizes the products that we have introduced to customers: Wireless Microcontrollers and Sensor Products Our EFM32™, EFM8™, 8051, wireless MCUs and wireless SoCs are based on numerous wireless protocols, including Bluetooth, sub-GHz proprietary technologies, Thread, Wi-Fi, Zigbee, and Z-Wave technologies.
We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies, and improve lives. We are pioneers in wireless innovation and have spent the last two decades simplifying the complexity of radio frequency (“RF”) from silicon to cloud.
We make it easy for developers to solve complex wireless challenges throughout the product lifecycle and get to market quickly with innovative solutions that transform industries, grow economies, and improve lives. We are pioneers in wireless innovation and have spent over two decades simplifying the complexity of radio frequency (“RF”) from silicon to cloud.
We believe the development of our company culture, along with competitive compensation, career growth and development opportunities have helped increase employee tenure and reduce voluntary turnover. During fiscal 2023, our voluntary employee turnover rate was 8%. The well-being of our employees is of utmost importance to us.
We believe the development of our company culture, along with competitive compensation, career growth, and development opportunities have helped increase employee tenure and reduce voluntary turnover. During fiscal 2024, our voluntary employee turnover rate was 8%. The well-being of our employees is of utmost importance to us.
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the investor relations page of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities 11 Table of Contents Exchange Act of 1934 are available through the investor relations page of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).
Our low-power, high-performance wireless SoCs and modules simplify this process and accelerate time-to-market to develop secure, reliable, smart medical devices. ​ - Diabetes management - Consumer health & fitness (wearables) - Elderly care - Patient monitoring - Activity tracking ​ Customers, Sales and Marketing We market our products through our direct sales force and through a network of independent sales representatives and distributors.
Our low-power, high-performance wireless SoCs and modules simplify this process and accelerate time-to-market to develop secure, reliable, smart medical devices. – Diabetes management – Consumer health & fitness (wearables) – Elderly care – Patient monitoring – Activity tracking 4 Table of Contents Customers, Sales and Marketing We market our products through our direct sales force and through a network of independent sales representatives and distributors.
Our semiconductor devices leverage standard complementary metal oxide semiconductor (“CMOS”), a low-cost, widely available process technology. The use of CMOS technology enables smaller, more cost-effective, and energy-efficient solutions. Our software expertise allows us to develop products for markets where intelligent data capture, high-performance processing, and communication are increasingly important product differentiators.
Our semiconductor devices leverage standard complementary metal oxide semiconductor (“CMOS”), a low-cost, widely available process technology. CMOS technology enables smaller, more cost-effective, and energy-efficient solutions. Our software expertise allows us to develop products for markets where intelligent data capture, high-performance processing, and communication are increasingly important product differentiators.
We highly value our engineering talent and strive to maintain a very high bar when bringing new recruits to the company. Research and development expenses were $337.7 million, $332.3 million and $273.2 million in fiscal 2023, 2022 and 2021, respectively. Technology Our product development process facilitates the design of highly innovative, analog-intensive, mixed-signal ICs.
We highly value our engineering talent and strive to maintain a very high bar when bringing new recruits to the company. Research and development expenses were $332.2 million, $337.7 million and $332.3 million in fiscal 2024, 2023 and 2022, respectively. Technology Our product development process facilitates the design of highly innovative, analog-intensive, mixed-signal ICs.
We believe our demonstrated proficiency in the design of modules provides our customers with significant advantages such as fast time to market, reduced development cost, global wireless certifications and software reuse. 7 Table of Contents Silicon-to-Cloud Security Integration Expertise Security is of paramount importance to our customers.
We believe our demonstrated proficiency in the design of modules provides our customers with significant advantages such as fast time to market, reduced development cost, global wireless certifications, and software reuse. Silicon-to-Cloud Security Integration Expertise Security is of paramount importance to our customers.
Our smart lighting solutions use wireless access points to enable indoor location services which track assets and consumer behavior and speed up click-and-collect ordering. ​ - Asset tracking - Smart lighting - Electronic shelf labels - Theft protection - Enterprise access points ​ ​ ​ Home & Life ​ ​ ​ ​ ​ Smart Home ​ ​ Smart home devices provide functional, energy-efficient living spaces with secure, reliable, and robust wireless smart home solutions.
Our smart lighting solutions use wireless access points to enable indoor location services which track assets and consumer behavior and speed up click-and-collect ordering. – Smart buildings – Access controls – Asset tracking – Smart lighting – Electronic shelf labels – Theft protection – Power tools – Enterprise access points Home & Life Smart Home Smart home devices provide functional, energy-efficient living spaces with secure, reliable, and robust wireless smart home solutions.
We believe that reliable and precise analog and mixed-signal ICs can only be developed by teams of engineers who have significant analog experience and are familiar with the intricacies of designing these ICs for commercial volume production.
We believe that reliable and precise analog and mixed-signal ICs can only be developed by teams of engineers who have significant analog 5 Table of Contents experience and are familiar with the intricacies of designing these ICs for commercial volume production.
Direct and distribution customers buy on an individual purchase order basis, rather than pursuant to long-term agreements. We consider our customer to be the end customer purchasing either directly from a distributor, a contract manufacturer or us. During fiscal 2023, our ten largest end customers accounted for 22% of our revenues.
Direct and distribution customers buy on an individual purchase order basis, rather than pursuant to long-term agreements. We consider our customer to be the end customer purchasing either directly from a distributor, a contract manufacturer or us. During fiscal 2024, our ten largest end customers accounted for 32% of our revenues.
We demand excellence in our quality and environmental management systems, each respectively certified to ISO 9001:2015 and ISO 14001:2015 standards. We strive to deliver products that meet environmental regulations and requirements and have high standards for our global supply chain partners, prioritizing qualified suppliers who are socially and environmentally progressive.
We demand excellence in our quality and environmental management systems, each respectively certified to ISO 9001:2015 and ISO 14001:2015 standards. We are committed to delivering products that meet environmental regulations and requirements and have high standards for our global supply chain partners, prioritizing qualified suppliers who are socially and environmentally progressive.
Machine learning is bringing greater intelligence to the edge on battery-powered devices. The IoT is monitoring patients’ health 24/7 to send rich data to doctors miles away. Smart, connected devices are detecting water leaks to improve sustainability and managing bee colonies to strengthen the food supply. It’s an industry of variety and impact.
Machine learning is bringing greater intelligence to the edge on battery-powered devices. The IoT is monitoring patients’ health 24/7 to send rich data to doctors miles away. Smart, connected devices detect water leaks to improve sustainability and manage bee colonies to strengthen the food supply. It’s an industry of variety and impact.
As the IoT continues to mature, a new class of embedded applications is emerging, presenting feature-rich and task-intensive use cases. This growing complexity is driving the need for real-time operating systems to help simplify software development for IoT applications by coordinating and prioritizing multiprotocol connectivity, SoC peripherals and other system-level activities.
As the IoT continues to mature, a new class of embedded applications is emerging, presenting feature-rich and task-intensive use cases. This growing complexity is driving the need for RTOSs to help simplify software development for IoT applications by coordinating and prioritizing multiprotocol connectivity, SoC peripherals, and other system-level activities.
We strive to meet this objective by offering competitive compensation and benefits in a diverse, inclusive, equitable and safe workplace, with opportunities for our employees to grow and develop in their careers. As of December 30, 2023, we employed 1,846 people, of whom 71% were in engineering roles. Women represented 23% of our workforce and men represented 77%.
We strive to meet this objective by offering competitive compensation and benefits in a diverse, inclusive, equitable and safe workplace, with opportunities for our employees to grow and develop in their careers. As of December 28, 2024, we employed 1,889 people, of whom 71% were in engineering roles. Women represented 23% of our workforce and men represented 77%.
This system integration at the chip level leverages our deep expertise in mixed-signal and RF design, and low-power wireless MCU architectures pioneered for more than a decade.
This system 6 Table of Contents integration at the chip level leverages our deep expertise in mixed-signal and RF design, and low-power wireless MCU architectures pioneered for more than a decade.
Silicon Labs has the breadth in its portfolio, depth of wireless connectivity expertise, and the focus on IoT to help its customers bring their innovative ideas to market quickly. 2 Table of Contents Products We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications for the IoT.
We have the 2 Table of Contents breadth in our portfolio, depth of wireless connectivity expertise, and the focus on IoT to help its customers quickly bring our innovative ideas to market. Products We provide analog-intensive, mixed-signal solutions for use in a variety of electronic products in a broad range of applications for the IoT.
Such regulations include: ● The Restriction of Hazardous Substances Directive (“RoHS”), which restricts the use of certain hazardous substances in electrical and electronic equipment; ● General Data Protection Regulation (“GDPR”), which provides guidelines for the collection and processing of personal information from individuals who live in the European Union; ● The U.S.
Such laws and regulations include, but are not limited to: • The Restriction of Hazardous Substances Directive (“RoHS”), which restricts the use of certain hazardous substances in electrical and electronic equipment; • General Data Protection Regulation (“GDPR”), which provides guidelines for the collection and processing of personal information from individuals who live in the European Union; • The U.S.
Revenue is attributed to a geographic area based on the shipped-to location. The percentage of our revenues derived from outside of the United States was 88% in fiscal 2023.
Revenue is attributed to a geographic area based on the shipped-to location. The percentage of our revenues derived from outside of the United States was 90% in fiscal 2024.
Although we sell the products to, and are paid by distributors and contract manufacturers, we refer to such end customer as our customer. Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 34% and 15% of our revenues during fiscal 2023, respectively. We maintain numerous sales offices in Asia, the Americas and Europe.
Although we sell products to, and are paid by distributors and contract manufacturers, we refer to the end customer as our customer. Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 27% and 16% of our revenues during fiscal 2024, respectively. We maintain numerous sales offices in Asia, the Americas and Europe.
In addition, designs must meet numerous wireless standards deployed in various environments and serving diverse requirements. Our combined expertise in IC design and software development allows us to engineer modules that provide robust, high-performance connections in challenging wireless environments. We have developed wireless modules based on numerous wireless standards, including Bluetooth, sub-GHz, Thread, Wi-Fi, Zigbee and Z-Wave.
Our combined expertise in IC design and software development allows us to engineer modules that provide robust, high-performance connections in challenging wireless environments. We have developed wireless modules based on numerous wireless standards, including Bluetooth, sub-GHz, Thread, Wi-Fi, Zigbee, and Z-Wave.
This operation can be performed by the same contractor that assembled the IC, other third-party test subcontractors or within our internal facilities prior to shipping to our customers. During fiscal 2023, most of our units shipped were tested by offshore third-party test subcontractors.
This operation can be performed by the same contractor that assembled the IC, other third-party test subcontractors, or within our internal facilities prior to shipping to our customers. During fiscal 2024, most of our units shipped were tested by offshore third-party test subcontractors. We expect that our utilization of offshore third-party test subcontractors will remain substantial during fiscal 2025.
We benchmark for market practices, and regularly review our compensation and benefit programs against the market to ensure they remain competitive. 10 Table of Contents We support a high-performance culture through learning and development solutions aligned with our strategic priorities. Our approach is business-centric, accessible and inclusive.
Our benefits programs are tailored to the various countries in which we operate. We benchmark for market practices and regularly review our compensation and benefit programs against the market to ensure they remain competitive. We support a high-performance culture through learning and development solutions aligned with our strategic priorities. Our approach is business-centric, accessible, and inclusive.
Our philanthropy program prioritizes financial, volunteer and in-kind support to organizations that are helping to expand technology access and education to underrepresented groups, support advancements in sustainability and energy conservation, and invest in critical community needs where we work and live.
We also offer 24 hours of paid time off annually for employees to volunteer in their communities. Our philanthropy program prioritizes financial, volunteer and in-kind support to organizations that are helping to expand technology access and education to underrepresented groups, support advancements in sustainability and energy conservation, and invest in critical community needs where we work and live.
In 2022, we joined the Responsible Business Alliance® (“RBA®”), an industry coalition dedicated to responsible business conduct in the global supply chain. We support, and require our suppliers to support, the RBA Code of Conduct.
In 2022, we joined the Responsible Business Alliance® (“RBA®”), an industry coalition dedicated to responsible business conduct in the global supply chain. We support, and require our suppliers to support, the RBA Code of Conduct. Each year we donate to charitable organizations and allocate global site grants to support local community needs.
We believe the principal competitive factors in our industry are: ● Product size; ● Power requirement; ● Level of integration; ● Customer support; ● Product capabilities; ● Reputation; ● Reliability; ● Ability to rapidly introduce new products to market; ● Price; ● Intellectual property; and ● Performance; ● Software. ​ We believe that we are competitive with respect to these factors, particularly because our ICs typically are smaller in size, are highly integrated, achieve high-performance specifications at lower price points than competitive products and are manufactured in standard CMOS which generally enables us to supply them on a relatively rapid basis to customers to meet their product introduction schedules.
We believe that we are competitive with respect to these factors, particularly because our ICs typically are smaller in size, are highly integrated, achieve high-performance specifications at lower price points than competitive products, and are manufactured in standard CMOS, which generally enables us to supply them on a relatively rapid basis to customers to meet their product introduction schedules.
Accordingly, we do not believe that our backlog at any time is necessarily representative of actual sales for any succeeding period. Competition The markets for semiconductors generally, and for analog and mixed-signal ICs in particular, are intensely competitive. We anticipate that the market for our products will continually evolve and will be subject to rapid technological change.
Accordingly, we do not believe that our backlog at any time is necessarily representative of actual sales for any succeeding period. 8 Table of Contents Competition The markets for semiconductors generally, and for analog and mixed-signal ICs in particular, are intensely competitive.
We live by our promise to “do the right thing” for our employees, customers, shareholders, communities, and the planet. We strive to minimize resource use and reduce our environmental impact by designing smaller and more energy-efficient products, conserving energy and precious resources, and investing in sustainable technologies and energy conservation practices.
We strive to minimize resource use and reduce our environmental impact by designing smaller and more energy-efficient products, conserving energy and precious resources, and investing in sustainable technologies and energy conservation practices.
While advanced software tools exist to help automate digital IC design, there are far fewer tools for advanced analog and mixed-signal IC design. In many cases, our analog circuit design efforts begin at the fundamental transistor level.
While advanced software tools exist to help automate digital IC design, there are far fewer tools for advanced analog and mixed-signal IC design. In many cases, our analog circuit design efforts begin at the fundamental transistor level. We believe that we have a demonstrated ability to design the most difficult analog and RF circuits using standard CMOS technologies.
This integration generally results in lower costs, smaller die sizes, lower power demands and enhanced price/performance characteristics. We attempt to reuse successful techniques for integration in new applications where similar benefits can be realized. We believe that we have attracted many of the best engineers in our industry.
We attempt to reuse successful techniques for integration in new applications where similar benefits can be realized. We believe that we have attracted many of the best engineers in our industry.
Mixed-signal design requires specific expertise and relies on creative, experienced engineers to deliver solutions that optimize speed, power, and performance despite the noisy digital environment and within the constraints of standard manufacturing processes.
Because analog-intensive, mixed-signal design expertise is difficult to find, these manufacturers increasingly are turning to third parties, like us, to provide advanced mixed-signal solutions. Mixed-signal design requires specific expertise and relies on creative, experienced engineers to deliver solutions that optimize speed, power, and performance despite the noisy digital environment and within the constraints of standard manufacturing processes.
We expect that our utilization of offshore third-party test subcontractors will remain substantial during fiscal 2024. 8 Table of Contents If our suppliers, due to unpredictable factors outside their control, experience closures or reductions in their capacity utilization levels in the future, we may have difficulty sourcing materials necessary to fulfill production requirements.
If our suppliers, due to unpredictable factors outside their control, experience closures or reductions in their capacity utilization levels in the future, we may have difficulty sourcing materials necessary to fulfill production requirements.
While our ability to effectively compete depends in large part on our ability to protect our intellectual property, we believe that our technical expertise and ability to introduce new products in a timely manner will be an important factor in maintaining our competitive position.
In addition, the laws of other countries in which our products are sold may not protect our products and intellectual property rights to the same extent as the laws of the United States. 9 Table of Contents While our ability to effectively compete depends in large part on our ability to protect our intellectual property, we believe that our technical expertise and ability to introduce new products in a timely manner will be an important factor in maintaining our competitive position.
Our smart home solutions provide the functionality consumers demand while delivering features that accelerate adoption - privacy, simplicity, and performance. ​ - Home automation/security systems - Smart speaker - Smart lighting - HVAC control - Smart cameras - Smart appliances - Smart home sensing - Smart locks - Window/blinds controls ​ ​ ​ ​ 4 Table of Contents Target Market Applications ​ ​ ​ Connected Health ​ ​ Smart medical devices, such as continuous glucose monitors, pulse oximeters, ECG monitors, and fitness wearables, make healthcare more accessible and are improving lives around the world.
Our smart home solutions provide the functionality consumers demand while delivering features that accelerate adoption - privacy, simplicity, and performance. – Smart home cameras – Smart locks – Smart gateways – Smart residential lighting – Smart window shades/blinds – Smart heating, ventilation, and air conditioning (HVAC) – Smart switches – Smart sensors – Home security panels – Smart smoke/CO detectors Connected Health Smart medical devices, such as continuous glucose monitors, insulin pumps, pulse oximeters, ECG monitors, and fitness wearables, make healthcare more accessible and are improving lives around the world.
While we continue to file new patent applications with respect to our recent developments, existing patents are granted for prescribed time periods and will expire at various times in the future. We claim copyright protection for proprietary documentation for our products.
In addition, there can be no assurance that such patents will provide us with competitive advantages or adequately safeguard our proprietary rights. While we continue to file new patent applications with respect to our recent developments, existing patents are granted for prescribed time periods and will expire at various times in the future.
There can be no assurance that patents will ever be issued with respect to our patent applications. Furthermore, it is possible that any patents held by us may be invalidated, circumvented, challenged or licensed to others. In addition, there can be no assurance that such patents will provide us with competitive advantages or adequately safeguard our proprietary rights.
As our patent portfolio has been built over time, the remaining terms of the individual patents in our patent portfolio vary. There can be no assurance that patents will ever be issued with respect to our patent applications. Furthermore, it is possible that any patents held by us may be invalidated, circumvented, challenged or licensed to others.
Our compliance with these laws and regulations has not had a material impact on our financial position or results of operations. Available Information Our website address is www.silabs.com.
Although compliance with these laws has not had a material impact on our financial position and results of operations, the laws and regulations to which we are subject may differ among jurisdictions, and compliance with them may have a materially adverse impact on our business and results of operations in the future. Available Information Our website address is www.silabs.com.
In addition to developing specific security hardware and software capabilities, we also focus design and engineering efforts on technologies that simplify and accelerate adoption by customers of security features engineered into our silicon chips.
These specialized security components are designed to enhance cryptographic capabilities and exploit unique physical characteristics of CMOS to establish foundations of trust and enable device identity and assurance. 7 Table of Contents In addition to developing specific security hardware and software capabilities, we also focus design and engineering efforts on technologies that simplify and accelerate adoption by customers of security features engineered into our silicon chips.
For more information on our ESG commitments and progress, please visit the Environmental, Social and Governance (“ESG”) section of our website at www.silabs.com.
For more information on our Sustainability and ESG commitments and progress, please visit the Environmental, Social and Governance (“ESG”) section of our website at www.silabs.com. Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.
We believe that we have a demonstrated ability to design the most difficult analog and RF circuits using standard CMOS technologies. 6 Table of Contents Mixed-Signal, Firmware and System Design Expertise We consider the partitioning of a circuit to be a proprietary and creative design technique.
Mixed-Signal, Firmware and System Design Expertise We consider the partitioning of a circuit to be a proprietary and creative design technique.
The IoT requires interaction between the analog world we live in and the digital world of computing, which drives the need for analog-intensive, mixed-signal circuits in a wide range of electronic products. Traditional mixed-signal designs relied upon solutions built with numerous, complex discrete analog and digital components.
Whether in a door lock or a heart monitor, a smart home thermostat, or a municipal energy grid, our solutions are improving life and the planet’s sustainability. The IoT requires interaction between the analog world we live in and the digital world of computing, which drives the need for analog-intensive, mixed-signal circuits in a wide range of electronic products.
We have filed for registration, or are in the process of filing for registration, the visual images of certain ICs with the U.S. Copyright Office. We have registered the “Silicon Labs” logo and a variety of other product and product family names as trademarks in the United States and selected foreign jurisdictions.
We have registered the “Silicon Labs” logo and a variety of other product and product family names as trademarks in the United States and selected foreign jurisdictions. All other trademarks, service marks, or trade names appearing in this report are the property of their respective owners.
We provide our employees and their families with access to a variety of innovative, flexible programs that support their physical, mental, and financial health as well as providing flexible work arrangements and generous time off programs. Corporate Social Responsibility As a global corporate citizen, we are committed to advancing responsible and sustainable operations throughout our supply chain.
We provide our employees and their families with access to a variety of innovative, flexible programs that support their physical, mental, and financial health as well as providing flexible work arrangements 10 Table of Contents and competitive time off programs including vacation, holiday, volunteer time off and many types of leave to support our employees through various stages of their lives.
We hold our employees to high performance standards and our compensation plans are designed to deliver competitive base pay and attractive incentive opportunities. Our benefits programs are tailored to the various countries in which we operate.
These principles are also reflected in our employee training, in particular with respect to our policies against harassment, discrimination and the elimination of bias in the workplace. We hold our employees to high performance standards, and our compensation plans are designed to deliver competitive base pay and attractive incentive opportunities.
As of December 30, 2023, we had 1,496 issued or pending United States and foreign patents. Patents generally have a term of twenty years from the date they are filed. As our patent portfolio has been built over time, the remaining terms of the individual patents in our patent portfolio vary.
We seek to protect our technology through a combination of patents, copyrights, trade secrets, trademarks and confidentiality procedures. As of December 28, 2024, we had 1,558 issued or pending United States and foreign patents. Patents generally have a term of twenty years from the date they are filed.
Current and potential competitors have established or may establish financial and strategic relationships between themselves or with our existing or potential customers, resellers or other third parties.
Current and potential competitors have established or may establish financial and strategic relationships between themselves or with our existing or potential customers, resellers, or other third parties. Accordingly, it is possible that new competitors or alliances among competitors could emerge and rapidly acquire significant market share. Intellectual Property Our future success depends in part upon our proprietary technology.
While these traditional designs provide the required functionality, they are often inefficient and inadequate for use in markets where size, cost, power consumption, performance and security are increasingly important product differentiators. To improve their competitive position, electronics manufacturers must reduce the cost and complexity of their systems and enable new features or functionality to differentiate themselves from their competitors.
Traditional mixed-signal designs relied upon solutions built with numerous, complex discrete analog and digital components. While these traditional designs provide the required functionality, they are often inefficient and inadequate for use in markets where size, cost, power consumption, performance, and security are increasingly important product differentiators.
Our close collaboration with our customers provides us with knowledge of derivative product ideas or completely new product line offerings that may not otherwise arise in other new product discussions. 5 Table of Contents Research and Development Through our research and development efforts, we leverage experienced analog and mixed-signal engineering talent and expertise to create new ICs that integrate functions typically performed less efficiently by multiple discrete components.
Our close collaboration with our customers provides us with knowledge of derivative product ideas or completely new product line offerings that may not otherwise arise in other new product discussions.
These markets and their corresponding applications are described below: ​ Target Market Applications ​ ​ ​ Industrial & Commercial ​ ​ Industrial IoT ​ ​ The Industrial IoT market is highly fragmented with a diverse collection of products and applications.
These markets and their corresponding applications are described below: Target Market Applications Industrial & Commercial Industrial IoT The Industrial IoT market supports a diverse array of products and applications. Utilizing Industrial IoT enables companies to enhance production and efficiency, gain insights into processes, and predict faults before they lead to downtime.
Module Integration and Wireless Design Expertise The market for wireless modules has grown as customers search for solutions that provide turnkey wireless connectivity for their products. The development of modules is difficult due to stringent requirements, including high levels of integration, programmability, performance, reliability, security and power efficiency.
The development of modules is difficult due to stringent requirements, including high levels of integration, programmability, performance, reliability, security, and power efficiency. In addition, designs must meet numerous wireless standards deployed in various environments and serving diverse requirements.
All other trademarks, service marks or trade names appearing in this report are the property of their respective owners. We also attempt to protect our trade secrets and other proprietary information through agreements with our customers, suppliers, employees and consultants, and through other customary security measures.
We also attempt to protect our trade secrets and other proprietary information through agreements with our customers, suppliers, employees and consultants, and through other customary security measures. We intend to protect our rights vigorously, but there can be no assurance that our efforts will be successful.
In addition to being able to manage numerous application tasks, an RTOS enhances scalability, and makes complex applications predictable and reliable. To address these application needs, in 2016 we acquired Micrium, an embedded RTOS provider. Micrium has established itself as a reliable, high-performance and trusted RTOS software platform, with an installed base that has grown to millions of devices.
In addition to being able to manage numerous application tasks, an RTOS enhances scalability and makes complex applications predictable and reliable. Module Integration and Wireless Design Expertise The market for wireless modules has grown as customers search for solutions that provide turnkey wireless connectivity for their products.
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Whether in a door lock or a heart monitor, a smart home thermostat, or a municipal energy grid, Silicon Labs solutions are improving life and the sustainability of the planet.
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To improve their competitive position, electronics manufacturers must reduce the cost and complexity of their systems and enable new features or functionality to differentiate themselves from their competitors. Simultaneously, these manufacturers face accelerating time-to-market demands and must rapidly adapt to evolving industry standards and new technologies.
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Simultaneously, these manufacturers face accelerating time-to-market demands and must rapidly adapt to evolving industry standards and new technologies. Because analog-intensive, mixed-signal design expertise is difficult to find, these manufacturers increasingly are turning to third parties, like us, to provide advanced mixed-signal solutions.
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Our Industrial IoT solutions drive energy efficiency, operational excellence, and enables the intelligent and secure use of industrial assets.
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Leveraging the Industrial IoT allows companies to increase production and efficiency, understand and improve processes, and predict faults in processes before downtime occurs. Industrial IoT solutions address energy efficiency, operational excellence and smart usage of commercial spaces.
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Research and Development Through our research and development efforts, we leverage experienced analog and mixed-signal engineering talent and expertise to create new ICs that integrate functions typically performed less efficiently by multiple discrete components. This integration generally results in lower costs, smaller die sizes, lower power demands, and enhanced price/performance characteristics.
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Our industrial IoT solutions simplify human-machine interfaces and access controls; add wireless connectivity to commercial luminaires, sensors and controls; implement HVAC sensor and actuator networks in commercial buildings; provide increased convenience to electrical providers and consumers through submetering: improve maintenance routines using IoT predictive maintenance; and drive greater energy efficiency and safety with smart circuit breakers. ​ - Industrial automation and control - Smart buildings - Access control - HVAC control - Industrial wearables - Industrial power tools ​ ​ ​ ​ Smart Cities ​ ​ Cities are now using digitization and wireless technology to increase service capacity while decreasing carbon emissions.
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We anticipate that the market for our products will continually evolve and will be subject to rapid technological change.
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By leveraging smart city solutions, cities monitor municipal assets in real-time and residents actively track their energy consumption.
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We believe the principal competitive factors in our industry are: • Product size; • Level of integration; • Product capabilities; • Reliability; • Price; • Performance; • Power requirement; • Customer support; • Reputation; • Ability to rapidly introduce new products to market; • Intellectual property; and • Software.
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These specialized security components are designed to enhance cryptographic capabilities and exploit unique physical characteristics of CMOS to establish foundations of trust and enable device identity and assurance.
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We claim copyright protection for proprietary documentation for our products. We have filed for registration, or are in the process of filing for registration, the visual images of certain ICs with the U.S. Copyright Office.
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Accordingly, it is possible that new competitors or alliances among competitors could emerge and rapidly acquire significant market share. 9 Table of Contents Intellectual Property Our future success depends in part upon our proprietary technology. We seek to protect our technology through a combination of patents, copyrights, trade secrets, trademarks and confidentiality procedures.
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Corporate Sustainability As a global corporate citizen, we are committed to advancing responsible and sustainable operations throughout our supply chain. We live by our promise to “do the right thing” for our employees, customers, shareholders, communities, and the planet.
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We intend to protect our rights vigorously, but there can be no assurance that our efforts will be successful. In addition, the laws of other countries in which our products are sold may not protect our products and intellectual property rights to the same extent as the laws of the United States.
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Governmental Regulations We are subject to international, federal, state and local laws and regulations that are customary to businesses in the semiconductor industry, including those related to financial and other disclosures, accounting standards, corporate governance, intellectual property, tax, trade, including import, export and customs, antitrust, environment, health and safety, employment, immigration and travel, cybersecurity, privacy, data protection and localization, and anti-corruption.
Removed
We have focused attention on improving our environmental, social and governance (“ESG”) metrics. We included diversity and inclusion metrics as a component of senior management bonuses for fiscal 2023. These principles are also reflected in our employee training, in particular with respect to our policies against harassment, discrimination and the elimination of bias in the workplace.
Removed
Each year we donate a portion of our annual profits to charitable organizations, allocating global site grants to support local community needs, and providing corporate matching gifts for our US-based employees. We also offer 24 hours of paid time off annually for employees to volunteer in their communities.
Removed
Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. 11 Table of Contents Governmental Regulations We are subject to international, federal, state and local regulations that are customary to businesses in the semiconductor industry.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+18 added−11 removed91 unchanged
Biggest changeAny dispositions could harm our financial condition Any disposition of a business or product line would entail a number of risks that could materially and adversely affect our business and operating results, including: ● Diversion of management’s time and attention from our core business; ● Difficulties separating the divested business; ● Risks to relations with customers who previously purchased products from our disposed product line; ● Reduced leverage with suppliers due to reduced aggregate volume; ● Risks related to employee relations; ● Risks that the disposition is not completed on the expected timeline, or at all; ● Risks associated with the transfer and licensing of intellectual property; ● Risks that we do not realize the anticipated benefits from the disposition; ● Risks from third-party claims arising out of the disposition; ● Security risks and other liabilities related to the transition services provided in connection with the disposition; ● Tax issues associated with dispositions; and ● Disposition-related disputes, including disputes over earn-outs and escrows.
Biggest changeOur business, operating results, financial condition and cash flows could therefore be adversely affected by: • A decline in demand for any of our more significant products; • Failure of our products to achieve continued market acceptance; • Competitive products; • New technological standards or changes to existing standards that we are unable to address with our products; • A failure to release new products or enhanced versions of our existing products on a timely basis; and • The failure of our new products to achieve market acceptance. 21 Table of Contents Any dispositions could harm our financial condition Any disposition of a business or product line would entail a number of risks that could materially and adversely affect our business and operating results, including: • Diversion of management’s time and attention from our core business; • Difficulties separating the divested business; • Risks to relations with customers who previously purchased products from our disposed product line; • Reduced leverage with suppliers due to reduced aggregate volume; • Risks related to employee relations; • Risks that the disposition is not completed on the expected timeline, or at all; • Risks associated with the transfer and licensing of intellectual property; • Risks that we do not realize the anticipated benefits from the disposition; • Risks from third-party claims arising out of the disposition; • Security risks and other liabilities related to the transition services provided in connection with the disposition; • Tax issues associated with dispositions; and • Disposition-related disputes, including disputes over earn-outs and escrows.
A number of factors, in addition to those cited in other risk factors applicable to our business, may contribute to fluctuations in our revenues and operating results, including: ● The timing and volume of orders received from our customers; ● The timeliness of our new product introductions and the rate at which our new products may cannibalize our older products; ● The rate of acceptance of our products by our customers, including the acceptance of new products we may develop for integration in the products manufactured by such customers, which we refer to as “design wins”; ● The time lag and realization rate between “design wins” and production orders; ● Supplier capacity constraints; 14 Table of Contents ● The demand for, and life cycles of, the products incorporating our mixed-signal solutions; ● The rate of adoption of mixed-signal products in the markets we target; ● Deferrals or reductions of customer orders in anticipation of new products or product enhancements from us or our competitors or other providers of mixed-signal ICs; ● Changes in product mix; ● The average selling prices for our products could drop suddenly due to competitive offerings or competitive predatory pricing; ● The average selling prices for our products generally decline over time; ● Changes in market standards; ● Impairment charges related to inventory, equipment or other long-lived assets; ● The software used in our products, including software provided by third parties, may not meet the needs of our customers; ● Our customers may not be able to obtain other components such as capacitors that they need to incorporate in conjunction with our products, leading to potential downturn in the demand for our products; ● Significant legal costs to defend our intellectual property rights or respond to claims against us; and ● The rate at which new markets emerge for products we are currently developing or for which our design expertise can be utilized to develop products for these new markets.
A number of factors, in addition to those cited in other risk factors applicable to our business, may contribute to fluctuations in our revenues and operating results, including: • The timing and volume of orders received from our customers; • The timeliness of our new product introductions and the rate at which our new products may cannibalize our older products; • The rate of acceptance of our products by our customers, including the acceptance of new products we may develop for integration in the products manufactured by such customers, which we refer to as “design wins”; • The time lag and realization rate between “design wins” and production orders; • Supplier capacity constraints; • The demand for, and life cycles of, the products incorporating our mixed-signal solutions; • The rate of adoption of mixed-signal products in the markets we target; • Deferrals or reductions of customer orders in anticipation of new products or product enhancements from us or our competitors or other providers of mixed-signal ICs; • Changes in product mix; 14 Table of Contents • The average selling prices for our products could drop suddenly due to competitive offerings or competitive predatory pricing; • The average selling prices for our products generally decline over time; • Changes in market standards; • Impairment charges related to inventory, equipment or other long-lived assets; • The software used in our products, including software provided by third parties, may not meet the needs of our customers; • Our customers may not be able to obtain other components such as capacitors that they need to incorporate in conjunction with our products, leading to potential downturn in the demand for our products; • Significant legal costs to defend our intellectual property rights or respond to claims against us; and • The rate at which new markets emerge for products we are currently developing or for which our design expertise can be utilized to develop products for these new markets.
The impacts of public health crises on our business, customers, suppliers, employees, markets and financial results and condition are uncertain and dependent on numerous unpredictable factors outside of our control, including: ● The duration and impact of a global economic recession or depression that could reduce demand and/or pricing for our products; ● Disruptions to our business and supply chain (and the business and supply chains of our customers) in connection with the sourcing of materials, equipment and engineering support, and services from geographic areas impacted by the public health crisis, including disruptions caused by illnesses, quarantines and restrictions on people’s ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, and other travel or health-related restrictions; ● Delays or limitations on the ability of our customers to make timely payments; 20 Table of Contents ● Governmental actions to limit exposure to and spreading of such infectious diseases, such as travel restrictions, quarantines and business shutdowns or slowdowns, facility closures or other restrictions; ● Deterioration of worldwide credit and financial markets that could limit our ability to obtain external financing to fund our operations and capital expenditures or to refinance our existing indebtedness; ● Potential asset impairments, including goodwill, intangible assets, investments and other assets; ● Increased cyber-related risks due to hybrid working models and increased remote working; ● Challenges with implementing and managing a hybrid model of working from home or the office, establishing appropriate office safety protocols, maintaining our corporate culture, and continuing to attract, retain and motivate our employees; ● Potential failure of our computer systems or communication systems; and ● Investment-related risks, including difficulties in liquidating investments due to current market conditions and adverse investment performance.
The impacts of any future public health crises on our business, customers, suppliers, employees, markets and financial results and condition are uncertain and dependent on numerous unpredictable factors outside of our control, including: • The duration and impact of a global economic recession or depression that could reduce demand and/or pricing for our products; • Disruptions to our business and supply chain (and the business and supply chains of our customers) in connection with the sourcing of materials, equipment and engineering support, and services from geographic areas impacted by the public health crisis, including disruptions caused by illnesses, quarantines and restrictions on people’s ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, and other travel or health-related restrictions; • Delays or limitations on the ability of our customers to make timely payments; • Governmental actions to limit exposure to and spreading of such infectious diseases, such as travel restrictions, quarantines and business shutdowns or slowdowns, facility closures or other restrictions; • Deterioration of worldwide credit and financial markets that could limit our ability to obtain external financing to fund our operations and capital expenditures or to refinance our existing indebtedness; • Potential asset impairments, including goodwill, intangible assets, investments and other assets; • Increased cyber-related risks due to hybrid working models and increased remote working; • Challenges with implementing and managing a hybrid model of working from home or the office, establishing appropriate office safety protocols, maintaining our corporate culture, and continuing to attract, retain and motivate our employees; • Potential failure of our computer systems or communication systems; and • Investment-related risks, including difficulties in liquidating investments due to current market conditions and adverse investment performance.
Our international operations are subject to a number of risks, including: ● Complexity and costs of managing international operations and related tax obligations, including our headquarters for non-U.S. operations in Singapore; ● Protectionist laws and business practices, including trade restrictions, tariffs, export controls, quotas and other trade barriers, including China-U.S. trade policies; ● Trade tensions, geopolitical uncertainty, or governmental actions, including those arising from the trade dispute between the U.S. and China, may lead customers to favor products from non-US companies which could put us at a competitive disadvantage and result in decreased customer demand for our products and our customers’ products; ● Rising tensions and deteriorating military, political and economic relations between China and Taiwan could disrupt the operations of our third-party foundry, assembly and test subcontractors, which could severely impact our ability to manufacture the majority of our products and as a result, could adversely affect our business, revenues and results of operations; ● Restrictions or tariffs imposed on certain countries and sanctions or export controls imposed on customers or suppliers may affect our ability to sell and source our products; ● Difficulties related to the protection of our intellectual property rights in some countries; ● Public health crises, such as the COVID-19 pandemic, may affect our international operations, suppliers and customers and we may experience delays in product development, a decreased ability to support our customers and reduced design win activity if the travel restrictions or business shutdowns or slowdowns continue for an extended period of time in any of the countries in which we, our suppliers and our customers operate and do business; ● Multiple, conflicting and changing tax and other laws and regulations that may impact both our international and domestic tax and other liabilities and result in increased complexity and costs, including the impact of the Tax Cuts and Jobs Act, which increased our effective tax rate, in part due to the impact of the requirement to capitalize and amortize foreign research and development expenses beginning in 2022; ● Longer sales cycles; ● Greater difficulty in accounts receivable collection and longer collection periods; ● High levels of distributor inventory subject to price protection and rights of return to us; ● Political and economic instability; ● Risks that demand and the supply chain may be adversely affected by military conflict (including the ongoing conflicts in the Middle East and between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally; ● Greater difficulty in hiring and retaining qualified personnel; and ● The need to have business and operations systems that can meet the needs of our international business and operating structure.
Our international operations are subject to a number of risks, including: • Complexity and costs of managing international operations and related tax obligations, including our headquarters for non-U.S. operations in Singapore; • Protectionist laws and business practices, including trade restrictions, tariffs, export controls, quotas and other trade barriers, including China-U.S. trade policies; • Trade tensions, geopolitical uncertainty, or governmental actions, including those arising from the trade dispute between the U.S. and China, may lead customers to favor products from non-US companies which could put us at 16 Table of Contents a competitive disadvantage and result in decreased customer demand for our products and our customers’ products; • Rising tensions and deteriorating military, political and economic relations between China and Taiwan could disrupt the operations of our third-party foundry, assembly and test subcontractors, which could severely impact our ability to manufacture the majority of our products and as a result, could adversely affect our business, revenues and results of operations; • Restrictions or tariffs imposed on certain countries and sanctions or export controls imposed on customers or suppliers may affect our ability to sell and source our products; • Difficulties related to the protection of our intellectual property rights in some countries; • Public health crises may affect our international operations, suppliers and customers and we may experience delays in product development, a decreased ability to support our customers and reduced design win activity if the travel restrictions or business shutdowns or slowdowns continue for an extended period of time in any of the countries in which we, our suppliers and our customers operate and do business; • Multiple, conflicting and changing tax and other laws and regulations that may impact both our international and domestic tax and other liabilities and result in increased complexity and costs, including the impact of the Tax Cuts and Jobs Act, which increased our effective tax rate, in part due to the impact of the requirement to capitalize and amortize foreign research and development expenses beginning in 2022; • Longer sales cycles; • Greater difficulty in accounts receivable collection and longer collection periods; • High levels of distributor inventory subject to price protection and rights of return to us; • Political and economic instability; • Risks that demand and the supply chain may be adversely affected by military conflict (including the ongoing conflicts in the Middle East and between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally; • Greater difficulty in hiring and retaining qualified personnel; and • The need to have business and operations systems that can meet the needs of our international business and operating structure.
Successful product development and market acceptance of our products depend on a number of factors, including: ● Requirements of customers; ● Accurate prediction of market and technical requirements; ● Timely completion and introduction of new designs; 18 Table of Contents ● Timely qualification and certification of our products for use in our customers’ products; ● Commercial acceptance and volume production of the products into which our ICs will be incorporated; ● Availability of foundry, assembly and test capacity; ● Achievement of high manufacturing yields; ● Quality, price, performance, power use and size of our products; ● Availability, quality, price and performance of competing products and technologies; ● Our customer service, application support capabilities and responsiveness; ● Successful development of our relationships with existing and potential customers; ● Technology, industry standards or end-user preferences; and ● Cooperation of third-party software providers and our semiconductor vendors to support our chips within a system.
Successful product development and market acceptance of our products depend on a number of factors, including: • Requirements of customers; • Accurate prediction of market and technical requirements; • Timely completion and introduction of new designs; • Timely qualification and certification of our products for use in our customers’ products; • Commercial acceptance and volume production of the products into which our ICs will be incorporated; • Availability of foundry, assembly and test capacity; • Achievement of high manufacturing yields; • Quality, price, performance, power use and size of our products; • Availability, quality, price and performance of competing products and technologies; • Our customer service, application support capabilities and responsiveness; • Successful development of our relationships with existing and potential customers; • Technology, industry standards or end-user preferences; and • Cooperation of third-party software providers and our semiconductor vendors to support our chips within a system.
We depend on our customers to support our products, and some of our customers offer competing products We rely on our customers to provide hardware, software, intellectual property indemnification and other technical support for the products supplied by our customers.
We depend on our customers to support our products, and some of our customers offer competing products We rely on our customers to provide hardware, software, intellectual property indemnification and other technical support for the products supplied by them.
There can be no assurance that any decrease in sales resulting any public health crisis will be offset by increased sales in subsequent periods.
There can be no assurance that any decrease in sales resulting from any public health crisis will be offset by increased sales in subsequent periods.
Third parties with which we conduct business, such as foundries, assembly and test contractors, distributors and customers, have access to certain portions of our sensitive data. In the event that these third parties do not properly safeguard our data that they hold, security breaches could result and negatively impact our reputation, business operations and financial results.
Third parties with which we conduct business, such as foundries, assembly and test contractors, distributors and customers, have access to certain portions of our sensitive data. In the event that these third parties do not properly 13 Table of Contents safeguard our data that they hold, security breaches could result and negatively impact our reputation, business operations and financial results.
Similarly, a decrease in the value of the U.S. dollar could reduce our buying power with respect to international suppliers. 17 Table of Contents Our inability to manage growth could materially and adversely affect our business Our past growth has placed, and any future growth of our operations will continue to place, a significant strain on our management personnel, systems and resources.
Similarly, a decrease in the value of the U.S. dollar could reduce our buying power with respect to international suppliers. Our inability to manage growth could materially and adversely affect our business Our past growth has placed, and any future growth of our operations will continue to place, a significant strain on our management personnel, systems and resources.
Any acquisitions we make could disrupt our business and harm our financial condition As part of our growth and product diversification strategy, we continue to evaluate opportunities to acquire other businesses, intellectual property or technologies that would complement our current offerings, expand the breadth of our markets or enhance our technical capabilities.
Any acquisitions we make could disrupt our business and harm our financial condition As part of our growth and product diversification strategy, we continue to evaluate opportunities to acquire other businesses, intellectual property or technologies that would complement our current offerings, expand the breadth of our 18 Table of Contents markets or enhance our technical capabilities.
A number of companies are actively involved in the development of these new technologies and standards. Should any of these companies delay or abandon their efforts to develop commercially available products based on new technologies and standards, our research and development efforts with respect to these technologies and standards likely would have no appreciable value.
A number of companies are actively involved in the development of these new technologies and standards. Should any of these companies delay or abandon their efforts to develop commercially available products based on new technologies and standards, our research and development efforts with respect to these 17 Table of Contents technologies and standards likely would have no appreciable value.
The COVID-19 pandemic or other public health crises could adversely affect our business, results of operations, and financial condition The COVID-19 pandemic negatively impacted the global economy, disrupted our operations, global supply chains and the operations of our customers.
Public health crises could adversely affect our business, results of operations, and financial condition The COVID-19 pandemic negatively impacted the global economy, disrupted our operations, global supply chains and the operations of our customers.
Deteriorating general worldwide economic conditions, including reduced economic activity, concerns about credit, interest rates and inflation, increased energy costs, decreased consumer confidence, reduced corporate profits, decreased spending and similar adverse business conditions, would make it very difficult for our customers, our vendors, and us to accurately forecast and plan future business activities and could cause U.S. and foreign businesses to slow spending on our products.
Deteriorating general worldwide economic conditions, including reduced economic activity, concerns about credit, interest rates and inflation, increased energy costs, decreased consumer confidence, reduced corporate profits, decreased spending and similar adverse business conditions, have in the past and may in the future make it very difficult for our customers, our vendors, and us to accurately forecast and plan future business activities and could cause U.S. and foreign businesses to slow spending on our products.
In addition, the risk of cyber-attacks has increased in connection with the conflict between Russia and Ukraine and in the Middle East.
In addition, the risk of cyber-attacks has increased in connection with the conflicts between Russia and Ukraine and in the Middle East.
We believe the semiconductor industry is currently suffering a downturn due in large part to adverse macroeconomic conditions, characterized by a slowdown in overall GDP performance and factory activity in certain regions, higher levels of customer inventory, the impact of tariffs on trade relations, and greater overall uncertainty regarding the economy.
We believe the semiconductor industry recently suffered a downturn due in large part to adverse macroeconomic conditions, characterized by a slowdown in overall GDP performance and factory activity in certain regions, higher levels of customer inventory, the impact of tariffs on trade relations, and greater overall uncertainty regarding the economy.
Cybersecurity and Infrastructure Security Agency issued a “Shields Up” alert for American organizations noting the potential for Russia’s cyber-attacks on Ukrainian government and critical infrastructure organizations to impact organizations both within and beyond the United States, particularly in the wake of sanctions imposed by the United States and its allies.
Cybersecurity and Infrastructure Security Agency issued a “Shields Up” alert for American organizations noting the potential for Russia’s cyber-attacks on Ukrainian government and critical infrastructure organizations to impact organizations both within and beyond the United States, particularly in the wake of sanctions imposed by the United States and its allies. These circumstances increase the likelihood of cyber-attacks and/or security breaches.
As a result, we have devoted and expect to continue to devote a large amount of resources to develop products based on new and emerging technologies and standards that will be commercially introduced in the future. Research and development expense during fiscal 2023 was $337.7 million, or 43.2% of revenues.
As a result, we have devoted and expect to continue to devote a large amount of resources to develop products based on new and emerging technologies and standards that will be commercially introduced in the future. Research and development expense during fiscal 2024 was $332.2 million, or 56.9% of revenues.
If our customers do not provide the required functionality or if our customers do not provide satisfactory support for their products, the demand for these devices that incorporate our products may diminish or we may otherwise be materially adversely affected. Any reduction in the demand for these devices would significantly reduce our revenues.
If our customers do not provide the required functionality or satisfactory support for their products, the demand for these devices that incorporate our products may diminish or we may otherwise be materially adversely affected. Any reduction in the demand for these devices would significantly reduce our revenues. Additionally, in certain products, some of our customers offer their own competitive products.
During fiscal 2023, 78% of our revenue was derived from distributors (and 49% of our revenue was derived from our two largest distributors). As we execute our indirect sales strategy, we must manage the potential conflicts that may arise with our direct sales efforts.
During fiscal 2024, 67% of our revenue was derived from distributors (and 43% of our revenue was derived from our two largest distributors). As we execute our indirect sales strategy, we must manage the potential conflicts that may arise with our direct sales efforts.
Our ability to compete in the future will depend on our ability to identify and ensure compliance with these evolving industry standards. The emergence of new industry standards could render our products incompatible with products developed by other suppliers.
Products for certain applications are based on industry standards that are continually evolving. Our ability to compete in the future will depend on our ability to identify and ensure compliance with these evolving industry standards. The emergence of new industry standards could render our products incompatible with products developed by other suppliers.
There are significant risks associated with relying on these third-party foundries and subcontractors, including: ● Failure by us, our customers or their end customers to qualify a selected supplier; ● Disruption to our suppliers’ operations due to geopolitical changes, including risks related to deteriorating relations between China and Taiwan; ● Potential insolvency of the third-party subcontractors; ● Reduced control over delivery schedules and quality; ● Limited warranties on wafers or products supplied to us; ● Potential increases in prices or payments in advance for capacity; ● Increased need for international-based supply, logistics and financial management; ● Disruption to our supply chain resulting from cyber-attacks on our suppliers’ information technology systems; ● Their inability to supply or support new or changing packaging technologies; and ● Low test yields. 15 Table of Contents We typically do not have long-term supply contracts with our third-party vendors which obligate the vendor to perform services and supply products to us for a specific period, in specific quantities, and at specific prices.
There are significant risks associated with relying on these third-party foundries and subcontractors, including: • Failure by us, our customers or their end customers to qualify a selected supplier; • Disruption to our suppliers’ operations due to geopolitical changes, including risks related to deteriorating relations between China and Taiwan; • Potential insolvency of the third-party subcontractors; • Reduced control over delivery schedules and quality; • Limited warranties on wafers or products supplied to us; • Potential increases in prices or payments in advance for capacity; • Increased need for international-based supply, logistics and financial management; • Disruption to our supply chain resulting from cyber-attacks on our suppliers’ information technology systems; • Their inability to supply or support new or changing packaging technologies; and • Low test yields.
Any disruption resulting from these events, including the COVID-19 pandemic or any other public health crisis, could also cause significant delays in shipments of our products until we are able to shift our manufacturing, assembling or testing from the affected subcontractor to another third-party vendor.
Any disruption resulting from these events, could also cause significant delays in shipments of our products until we are able to shift our manufacturing, assembling or testing from the affected subcontractor to another third-party vendor.
Our failure to do so could cause our revenues and gross profit to decline. 19 Table of Contents Failure to manage our distribution channel relationships could impede our future growth The future growth of our business will depend in large part on our ability to manage our relationships with current and future distributors and sales representatives, develop additional channels for the distribution and sale of our products and manage these relationships.
Failure to manage our distribution channel relationships could impede our future growth The future growth of our business will depend in large part on our ability to manage our relationships with current and future distributors and sales representatives, develop additional channels for the distribution and sale of our products and manage these relationships.
Customers may decide not to purchase our products at all, purchase fewer products than they did in the past, or alter their purchasing patterns, particularly because: ● We do not have material long-term purchase contracts with our customers; ● Substantially all of our sales to date have been made on a purchase order basis, which permits our customers to cancel, change or delay product purchase commitments with little or no notice to us and without penalty; ● Some of our customers may have efforts underway to actively diversify their vendor base which could reduce purchases of our products; and ● Some of our customers have developed or acquired products that compete directly with products these customers purchase from us, which could affect our customers’ purchasing decisions in the future.
Customers may decide not to purchase our products at all, purchase fewer products than they did in the past, or alter their purchasing patterns, particularly because: • We do not have material long-term purchase contracts with our customers; • Substantially all of our sales to date have been made on a purchase order basis, which permits our customers to cancel, change or delay product purchase commitments with little or no notice to us and without penalty; • Some of our customers may have efforts underway to actively diversify their vendor base which could reduce purchases of our products; and • Some of our customers have developed or acquired products that compete directly with products these customers purchase from us, which could affect our customers’ purchasing decisions in the future. 19 Table of Contents We are subject to increased inventory risks and costs because we build our products based on forecasts provided by customers before receiving purchase orders for the products In order to ensure availability of our products for some of our largest customers, we start the manufacturing of our products in advance of receiving purchase orders based on forecasts provided by these customers.
To maintain our gross profit, we will need to develop and introduce new products and product enhancements on a timely basis and continually reduce our costs.
To maintain our gross profit, we will need to develop and introduce new products and product enhancements on a timely basis and continually reduce our costs. Our failure to do so could cause our revenues and gross profit to decline.
In the event that these vendors fail to meet our demand for whatever reason, we expect that it would take up to 12 months to transition performance of these services to new providers. Such a transition may also require qualification of the new providers by our customers or their end customers.
In the event that these vendors fail to meet our demand for whatever reason, we expect that it would take up to 12 months to transition performance of these services to new providers.
We may be unable to obtain adequate foundry, assembly or test capacity from our third-party subcontractors to meet our customers’ delivery requirements even if we adequately forecast customer demand. For example, foundry, assembly and test capacity is currently limited due to a spike in semiconductor demand.
We may be unable to obtain adequate foundry, assembly or test capacity from our third-party subcontractors to meet our customers’ delivery requirements even if we adequately forecast customer demand.
These circumstances increase the likelihood of cyber-attacks and/or security breaches. 13 Table of Contents We may be subject to information technology failures that could damage our reputation, business operations and financial condition We rely on information technology for the effective operation of our business.
We may be subject to information technology failures that could damage our reputation, business operations and financial condition We rely on information technology for the effective operation of our business.
If these patents are found to be invalid or unenforceable, our competitors could introduce competitive products that could reduce both the volume and price per unit of our products.
In addition, substantially all of our products that we have sold include technology related to one or more of our issued U.S. patents. If these patents are found to be invalid or unenforceable, our competitors could introduce competitive products that could reduce both the volume and price per unit of our products.
We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results Information technology system and/or network disruptions, regardless of the cause, but including acts of sabotage, error, or other actions, could harm the company’s operations.
In addition, large companies may restructure their operations to create separate companies or may acquire new businesses that are focused on providing the types of products we produce or acquire our customers. 12 Table of Contents We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results Information technology system and/or network disruptions, regardless of the cause, but including acts of sabotage, error, or other actions, could harm our operations.
Our products are typically sold at prices that are significantly lower than the cost of the end-products into which they are incorporated. A defect, failure or vulnerability in our product could cause failure in our customer’s end-product, so we could face claims for damages that are disproportionately higher than the revenues and profits we receive from the products involved.
A defect, failure or vulnerability in our products, including as a result of AI used in the development of our products, or by our customers in end-products that incorporate our products, could cause failure in our customer’s end-product, so we could face claims for damages that are disproportionately higher than the revenues and profits we receive from the products involved.
Our systems are subject to damage or interruption from a number of potential sources, including natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, theft, physical or electronic break-ins, cyber-attacks, sabotage, vandalism, or similar events or disruptions. Our security measures may not detect or prevent such security breaches.
Our systems are subject to damage or interruption from a number of potential sources, including natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, theft, physical or electronic break-ins, cyber-attacks, sabotage, vandalism, or similar events or disruptions, including those described in the risk factor entitled “ We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results ,” above.
The costs of compliance with the GDPR and the potential for fines and penalties in the event of a breach of the GDPR may have an adverse effect on our operations.
The costs of compliance with the GDPR and similar laws may have an adverse effect on our operations.
For example, new products and disruptive technologies are being developed, and companies with which we compete have implemented artificial intelligence strategies for products and service offerings.
We expect that the market for our products will continually evolve and will be subject to rapid technological change. For example, new products and disruptive technologies are being developed, and companies with which we compete have implemented artificial intelligence (“AI”) strategies for products and service offerings.
If larger companies do not support the same industry standards that we do, or if competing standards emerge, market acceptance of our products could be adversely affected which would harm our business. Products for certain applications are based on industry standards that are continually evolving.
Some industry standards may not be widely adopted or implemented uniformly, and competing standards may emerge that may be preferred by our customers or end users. If larger companies do not support the same industry standards that we do, or if competing standards emerge, market acceptance of our products could be adversely affected which would harm our business.
If we are unsuccessful or delayed in qualifying any of our products with a customer, such failure or delay would preclude or delay sales of such product to the customer, which may impede our growth and cause our business to suffer. 21 Table of Contents We are subject to risks relating to product concentration We derive a substantial portion of our revenues from a limited number of products, and we expect these products to continue to account for a large percentage of our revenues in the near term.
If we are unsuccessful or delayed in qualifying any of our products with a customer, such failure or delay would preclude or delay sales of such product to the customer, which may impede our growth and cause our business to suffer.
Our customers may also experience closures of their manufacturing facilities or inability to obtain other components, either of which could negatively impact demand for our solutions. 16 Table of Contents We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations We have established international subsidiaries and have opened offices in international markets to support our activities in Asia, the Americas and Europe.
We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations We have established international subsidiaries and have opened offices in international markets to support our activities in Asia, the Americas and Europe. This has included the establishment of a headquarters in Singapore for non-U.S. operations.
These companies may enter the mixed-signal semiconductor market by introducing their own products or by entering into strategic relationships with or acquiring other existing providers of semiconductor products. In addition, large companies may restructure their operations to create separate companies or may acquire new businesses that are focused on providing the types of products we produce or acquire our customers.
These companies may enter the mixed-signal semiconductor market by introducing their own products or by entering into strategic relationships with or acquiring other existing providers of semiconductor products.
Competition within the numerous markets we target may reduce sales of our products and reduce our market share The markets for semiconductors in general, and for mixed-signal products in particular, are intensely competitive. We expect that the market for our products will continually evolve and will be subject to rapid technological change.
This downturn has negatively affected, and may continue to have an adverse effect on, our business and operating results. Competition within the numerous markets we target may reduce sales of our products and reduce our market share The markets for semiconductors in general, and for mixed-signal products in particular, are intensely competitive.
We depend on companies that provide other components of the devices to support prevailing industry standards. Many of these companies are significantly larger and more influential in affecting industry standards than we are. Some industry standards may not be widely adopted or implemented uniformly, and competing standards may emerge that may be preferred by our customers or end users.
All components of such devices must uniformly comply with industry standards in order to operate efficiently together. We depend on companies that provide other components of the devices to support prevailing industry standards. Many of these companies are significantly larger and more influential in affecting industry standards than we are.
We rely primarily on our in-house testing personnel to design test operations and procedures to detect any errors or vulnerabilities prior to delivery of our products to our customers. Should problems occur in the operation or performance of our products, we may experience delays in meeting key introduction dates or scheduled delivery dates to our customers.
Any ineffective AI usage could negatively impact our or our customer’s business reputation and negatively impact our competitive standing. Should problems occur in the operation or performance of our products, we may experience delays in meeting key introduction dates or scheduled delivery dates to our customers.
If our suppliers experience closures or reductions in their capacity utilization levels in the future, we may have difficulty sourcing materials necessary to fulfill production requirements. Public health crises, such as the COVID-19 pandemic, may affect our suppliers’ production capabilities as a result of quarantines, closures of production facilities, lack of supplies or delays caused by restrictions on travel.
Such a transition may also require qualification of the new providers by our customers or their end customers. 15 Table of Contents If our suppliers experience closures or reductions in their capacity utilization levels in the future, we may have difficulty sourcing materials necessary to fulfill production requirements.
This has included the establishment of a headquarters in Singapore for non-U.S. operations. During fiscal 2023, the percentage of our revenues derived from outside of the United States was 88% (and the revenue associated with end customers in China was 12%, and revenue attributed to China based on shipped-to location was 28%).
During fiscal 2024, the percentage of our revenues derived from outside of the United States was 90% (and the revenue associated with end customers in China was 15%, and revenue attributed to China based on shipped-to location was 32%). We may not be able to maintain or increase global market demand for our products.
These customers may find it advantageous to support their own offerings in the marketplace in lieu of promoting our products. 22 Table of Contents Changes in the privacy and data security/protection laws could have an adverse effect on our operations Federal, state and international privacy-related or data protection laws and regulations could have an adverse effect on our operations.
These customers may find it advantageous to support their own offerings in the marketplace in lieu of promoting or using our products.
Most of the silicon wafers for the products that we have sold were manufactured either by Taiwan Semiconductor Manufacturing Co. (“TSMC”) or Semiconductor Manufacturing International Corporation (“SMIC”). Our customers typically complete their own qualification process.
Public health crises, such as the COVID-19 pandemic, may affect our suppliers’ production capabilities as a result of quarantines, closures of production facilities, lack of supplies or delays caused by restrictions on travel. Most of the silicon wafers for the products that we have sold were manufactured either by Taiwan Semiconductor Manufacturing Co. (“TSMC”) or Semiconductor Manufacturing International Corporation (“SMIC”).
Our products must conform to industry standards and technology in order to be accepted by end users in our markets Generally, our products comprise only a part of a device. All components of such devices must uniformly comply with industry standards in order to operate efficiently together.
Any failure or perceived failure by us to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal data, may result in governmental enforcement actions, litigation or negative publicity, and could have an adverse effect on our operating results and financial condition. 22 Table of Contents Our products must conform to industry standards and technology in order to be accepted by end users in our markets Generally, our products comprise only a part of a device.
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This downturn has negatively affected, and may continue to have an adverse effect, on our business and operating results. 12 Table of Contents In addition, the COVID-19 pandemic has caused further global economic uncertainty.
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Additionally, we use AI-driven efficiencies in our software development and customer support services. Our use of AI may increase vulnerability to cybersecurity risks, including through unauthorized use or misuse of AI tools and bad inputs or logic or the introduction of malicious code incorporated into AI generated code.
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Any future impacts due to COVID-19 or other public health crises, whether as a result of a resurgence of infection rates or the spread of new variants or viruses, is uncertain and could include disruptions to the business of our customers and suppliers, which could impact our business and operating results in the future.
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AI and machine learning also may be used for certain cybersecurity attacks, improving or expanding the existing capabilities of threat actors in manners we cannot predict at this time, resulting in greater risks of security incidents and breaches.
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As a result, we have recently experienced longer lead times at certain third-party foundry subcontractors. This is resulting in competing demand for capacity at our suppliers. Such conditions may adversely affect our revenue and increase our costs.
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Our security measures may not detect or prevent such security breaches.
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We may not be able to maintain or increase global market demand for our products.
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From time to time, governments around the world may provide incentives or make other investments that could benefit and give competitive advantages to our competitors. For example, in August 2022, the CHIPS and Science Act of 2022 (“CHIPS Act”) was signed into law to provide financial incentives to the U.S. semiconductor industry.
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In particular, the extent of the impact of the COVID-19 pandemic on our ability to complete and integrate any future acquisition into our business is unpredictable and will depend on future developments, including the duration, severity and spread of the pandemic, related restrictions on travel and transportation, and other actions that may be taken by governmental authorities.
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Government incentives, including any that may be offered in connection with the CHIPS Act, may not be available to us on acceptable terms or at all, and to the extent that the incoming administration modifies or repeals the CHIPS Act, the availability of any such incentives may be even less certain.
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We are subject to increased inventory risks and costs because we build our products based on forecasts provided by customers before receiving purchase orders for the products In order to ensure availability of our products for some of our largest customers, we start the manufacturing of our products in advance of receiving purchase orders based on forecasts provided by these customers.
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If our competitors can benefit from such government incentives and we cannot, it could strengthen our competitors’ relative position and have a material adverse effect on our reputation and business.
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Continued market acceptance of these products, is therefore, critical to our future success. In addition, substantially all of our products that we have sold include technology related to one or more of our issued U.S. patents.
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We typically do not have long-term supply contracts with our third-party vendors which obligate the vendor to perform services and supply products to us for a specific period, in specific quantities, and at specific prices.
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Our business, operating results, financial condition and cash flows could therefore be adversely affected by: ● A decline in demand for any of our more significant products; ● Failure of our products to achieve continued market acceptance; ● Competitive products; ● New technological standards or changes to existing standards that we are unable to address with our products; ● A failure to release new products or enhanced versions of our existing products on a timely basis; and ● The failure of our new products to achieve market acceptance.
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Our customers typically complete their own qualification process.
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In certain products, some of our customers offer their own competitive products.
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Our customers may also experience closures of their manufacturing facilities or inability to obtain other components, either of which could negatively impact demand for our solutions.
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Complying with these laws and the possibility of proceedings against us by governmental entities or others in relation to these laws could increase operational costs. In 2018, the European Union’s General Data Protection Regulation (“GDPR”) went into effect, replacing the EU’s 1995 Data Protection Directive.
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We rely primarily on our in-house testing personnel to design test operations and procedures to detect any errors or vulnerabilities prior to delivery of our products to our customers. 20 Table of Contents Additionally, we have used and may increase our use of new technology such as AI or generative AI to enhance our products, decrease our development times, or improve our customers’ efficiency.
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We have identified a material weakness in our internal control over financial reporting and if we are unable to implement and maintain effective internal control over financial reporting, or our independent registered public accounting firm is unable to provide an unqualified report thereon, we could be materially adversely effected As more fully disclosed in
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Although we maintain AI governance programs and internal oversight committees, the use of AI technologies is still in the early stages and these new technologies may not always operate as expected and deliver our intended results, may produce output that contain errors and incorrect information or other unintended consequences, including cyber security vulnerabilities.
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Our products are typically sold at prices that are significantly lower than the cost of the end-products into which they are incorporated.
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We are subject to risks relating to product concentration We derive a substantial portion of our revenues from a limited number of products, and we expect these products to continue to account for a large percentage of our revenues in the near term. Continued market acceptance of these products is critical to our future success.
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Changes in the privacy and data security/protection laws could have an adverse effect on our operations We are or may become subject to a variety of laws and regulations such as the European Union’s General Data Protection Regulation (“GDPR”) regarding privacy, data protection and data security.
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There are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
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Given that the scope, interpretation and application of these laws and regulations are often uncertain and may be in conflict across jurisdictions, it is possible they may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.
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We previously identified a material weakness in our internal control over financial reporting.
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Although we have remediated this material weakness, we may identify additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal controls, including disclosure controls and procedures, and this could result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations As more fully disclosed in

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity process is iterative, with regular reviews and updates to help improve and respond to a dynamic and continuously evolving threat landscape. ​ We describe whether and how risks from cybersecurity threats have materially affected or are reasonably likely to materially affect us, our business strategy, results of operations, or financial condition under the headings “We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results” and “We may be subject to information technology failures that could damage our reputation, business operations and financial condition” included as part of our risk factors disclosures in Item 1A.
Biggest changeWe describe whether and how risks from cybersecurity threats have materially affected or are reasonably likely to materially affect us, our business strategy, results of operations, or financial condition under the headings “We may be the victim of business disruptions and security breaches, including cyber-attacks, which could lead to liability or could damage our reputation and financial results” and “We may be subject to information technology failures that could damage our reputation, business operations and financial condition” included as part of our risk factors disclosures in “Risk Factors” above. 26 Table of Contents In the last three fiscal years, we have not identified material cybersecurity incidents, and the expenses we have incurred from cybersecurity incidents were immaterial, including penalties and settlements, of which there were none.
Members of management, including the Chief Executive Officer, Chief Financial Officer and Chief Legal Officer may also report directly to the Board of Directors on significant risk management issues, including cybersecurity threats and incidents. ​ We have an Information Security Steering Committee (the “ISSC”), comprised of members of our executive team, our Chief Information Officer, CSO, and Chief Legal Officer.
Members of management, including the Chief Executive Officer, Chief Financial Officer and Chief Legal Officer may also report directly to the Board of Directors on significant risk management issues, including cybersecurity threats and incidents. We have an Executive Security Steering Council (the “ESC”) comprised of members of our executive team, our Chief Information Officer, and CSO.
He also holds several relevant degrees and certifications, including as a Certified Information Systems Security Professional (“CISSP”) and a Certified Secure Software Lifecycle Professional (“CSSLP”), and holds Honors BSc degrees in Computer Science and Physics. 27 Table of Contents ​
He also holds several relevant degrees and certifications, including as a Certified Information Systems Security Professional (“CISSP”) and a Certified Secure Software Lifecycle Professional (“CSSLP”), and holds Honors BSc degrees in Computer Science and Physics.
Our CSO has over 25 years of security experience in multiple technology disciplines, including prior work experience leading cybersecurity teams, technology strategies and security architecture.
Our CSO has over 27 years of security experience in multiple relevant technology and leadership disciplines, including prior work experience leading cybersecurity teams, business strategies and security solution architecture.
Our CSO, in coordination with the ISSC, works collaboratively to implement our enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. Our SecOps team communicates with and reports to the CSO, enabling the CSO and the ISSC to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Our CSO, in coordination with the ESC, works collaboratively to implement our enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. Our Security Operations, Security Engineering, and Governance teams communicate with and report to the CSO, enabling the CSO and the ESC to monitor the detection, mitigation, and remediation of cybersecurity incidents.
We recognize the importance of the secure protection of our employee, customer, supplier and partner data and address material risks from cybersecurity threats through a cross-functional approach focused on preserving the confidentiality, security and availability of the information that we collect and store. ​ We have implemented cybersecurity processes, measures and controls to assist management in our assessment, identification and management of risks from cybersecurity threats.
We recognize the importance of the continued protection of our employee, customer, supplier and partner data and address operational risks from cybersecurity threats through a cross-functional approach focused on preserving the confidentiality, integrity and availability of the information that we collect, process and store.
We also assess and manage cybersecurity risks associated with third-party service providers, including those in our supply chain or who have access to our data or systems.
We have implemented regular security awareness training programs for employees to educate them on cybersecurity best practices and to recognize social engineering and phishing attempts. We also assess and manage cybersecurity risks associated with relevant third-party service providers, including those in our supply chain or who have access to our data or systems.
Our Security Operations (“SecOps”) team monitors events, analyzes threats, and coordinates our incident response pursuant to our incident response plan, which includes the process to be followed for reporting of incidents. Our cybersecurity risk management involves identifying information assets and potential threats, followed by assessing and prioritizing risks.
We have implemented cybersecurity policies, processes, and controls to assist management in our assessment, identification and management of risks from cybersecurity threats. Our Security Operations team scans the infrastructure, monitors events, analyzes threats, and coordinates our incident response pursuant to our incident response plan, which includes the process to be followed for reporting of incidents.
Risk Factors of this Annual Report on Form 10-K. ​ In the last three fiscal years, we have not identified any cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial, including penalties and settlements, of which there were none. ​ Governance ​ Our Board of Directors is responsible for risk management oversight and has delegated to our Audit Committee oversight responsibility for reviewing the effectiveness of our governance and management of cybersecurity risks.
Governance Our Board of Directors is responsible for risk management oversight and has delegated to our Audit Committee oversight responsibility for reviewing the effectiveness of our governance and management of cybersecurity risks.
We employ various tools and techniques like threat modeling, vulnerability scanners, and penetration testing. Based on the assessment, security measures are implemented. We have implemented regular security awareness training programs for employees to educate them on cybersecurity best practices and to recognize phishing attempts.
Our cybersecurity risk management involves identifying information assets, their sensitivity and potential threats, followed by assessing and prioritizing risks. We employ various tools and techniques like threat modeling, vulnerability scanners, and penetration testing. Based on the assessment, security measures are planned, prioritized and implemented.
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Our cybersecurity process is iterative, with regular reviews and updates to help improve and keep abreast of a dynamic and continuously evolving threat landscape.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe buildings contain approximately 441,000 square feet of floor space, of which approximately 89,000 square feet were leased to other tenants.
Biggest changeThe buildings contain approximately 441,000 square feet of floor space, of which approximately 47,000 square feet were leased to other tenants.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Information regarding legal proceedings is provided in Note 12, Commitments and Contingencies , to the Consolidated Financial Statements. Such information is incorporated by reference herein. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 28 Table of Contents Part II
Biggest changeItem 3. Legal Proceedings Information regarding legal proceedings is provided in Note 11, Commitments and Contingencies , to the Consolidated Financial Statements. Such information is incorporated by reference herein. Item 4. Mine Safety Disclosures Not applicable. 27 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The graph depicted below shows a comparison of cumulative total stockholder returns for an investment in Silicon Laboratories Inc. common stock, the NASDAQ Composite Index and the PHLX Semiconductor Index. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company / Index 12/29/18 ​ 12/28/19 ​ 01/02/21 ​ 01/01/22 ​ 12/31/22 ​ 12/30/23 Silicon Laboratories Inc. ​ $ 100.00 ​ $ 148.43 ​ $ 162.22 ​ $ 262.96 ​ $ 172.83 ​ $ 168.50 NASDAQ Composite Index ​ $ 100.00 ​ $ 138.27 ​ $ 199.64 ​ $ 243.92 ​ $ 164.56 ​ $ 238.01 PHLX Semiconductor Index ​ $ 100.00 ​ $ 165.17 ​ $ 252.58 ​ $ 360.81 ​ $ 234.96 ​ $ 392.39 (1) The graph assumes that $100 was invested in our common stock and in each index at the market close on December 29, 2018, and that all dividends were reinvested.
Biggest changeCompany / Index 12/28/19 01/02/21 01/01/22 12/31/22 12/30/23 12/28/24 Silicon Laboratories Inc. $ 100.00 $ 109.29 $ 177.15 $ 116.43 $ 113.52 $ 109.66 NASDAQ Composite Index $ 100.00 $ 144.38 $ 176.40 $ 119.01 $ 172.14 $ 227.78 PHLX Semiconductor Index $ 100.00 $ 152.93 $ 218.45 $ 142.26 $ 237.57 $ 294.12 _________________________________________________ (1) The graph assumes that $100 was invested in our common stock and in each index at the market close on December 28, 2019, and that all dividends were reinvested.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock is quoted on the NASDAQ National Market under the symbol “SLAB”. As of February 12, 2024, there were 53 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock is quoted on the NASDAQ National Market under the symbol “SLAB”. As of January 28, 2025, there were 46 holders of record of our common stock.
The program allows for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. ​ Item 6. [Reserved] ​ ​ ​ ​ 30 Table of Contents
Our share repurchase program authorized repurchases up to $100 million through December 2024. The program allowed for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. Item 6. [Reserved] 29 Table of Contents
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No cash dividends have been declared on our common stock.
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Stock Performance Graph The graph depicted below shows a comparison of cumulative total stockholder returns for an investment in Silicon Laboratories Inc. common stock, the NASDAQ Composite Index and the PHLX Semiconductor Index.
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(2) Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. 29 Table of Contents Issuer Purchases of Equity Securities The following table summarizes repurchases of our common stock during the three months ended December 30, 2023 (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ Approximate Dollar ​ ​ Total ​ ​ ​ ​ Shares Purchased as ​ ​ Value of Shares that ​ ​ Number of ​ ​ Average Price ​ Part of Publicly ​ ​ May Yet Be ​ ​ Shares ​ ​ Paid per ​ Announced Plans ​ ​ Purchased Under the Period Purchased ​ Share or Programs ​ Plans or Programs October 1, 2023 – October 28, 2023 — $ — — $ 100,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 29, 2023 – November 25, 2023 — $ — — $ 100,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ November 26, 2023 – December 30, 2023 — $ — — $ 100,000 Total — $ — — ​ ​ ​ Our previous share repurchase program authorized repurchases up to $600 million through December 2023, of which $500 million was repurchased.
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No cash dividends have been declared on our common stock. (2) Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. 28 Table of Contents Issuer Purchases of Equity Securities There were no repurchases of our common stock during the three months ended December 28, 2024.
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In January 2024, our Board of Directors authorized a program to repurchase up to $100 million of our common stock through December 2024.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following table sets forth our Consolidated Statements of Operations data as a percentage of revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 2022 2021 Revenues ​ 100.0 % 100.0 % 100.0 % Cost of revenues ​ 41.1 37.3 41.0 ​ Gross margin ​ 58.9 ​ 62.7 ​ 59.0 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 43.2 ​ 32.5 ​ 37.9 ​ Selling, general and administrative ​ 18.8 18.6 25.7 ​ Operating expenses ​ 62.0 51.1 63.6 ​ Operating income (loss) ​ (3.1) 11.6 (4.6) ​ Other income (expense): ​ ​ ​ ​ ​ Interest income and other, net ​ 2.4 1.4 0.8 ​ Interest expense ​ (0.7) (0.6) (4.3) ​ Income (loss) from continuing operations before income taxes ​ (1.3) 12.4 (8.1) ​ Provision for income taxes ​ 1.0 3.8 1.9 ​ Equity-method earnings (loss) ​ (2.0) ​ 0.3 ​ 1.9 ​ Income (loss) from continuing operations ​ (4.4) ​ 8.9 ​ (8.1) ​ Income from discontinued operations, net of income taxes ​ — ​ — ​ 301.8 ​ Net income (loss) ​ (4.4) % 8.9 % 293.7 % ​ 33 Table of Contents Comparison of Fiscal 2023 to Fiscal 2022 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ ​ ​ (in millions) 2023 2022 Change % Change Industrial & Commercial ​ $ 496.6 ​ $ 573.7 ​ $ (77.1) (13.4) % Home & Life ​ ​ 285.7 ​ ​ 450.4 ​ ​ (164.7) ​ (36.6) % ​ ​ $ 782.3 ​ $ 1,024.1 ​ $ (241.8) ​ (23.6) % ​ The decrease in revenues in fiscal 2023 was due to decreased revenues of $77.1 million from our Industrial & Commercial products and $164.7 million from our Home & Life products.
Biggest changeThe following table sets forth our Consolidated Statements of Operations data as a percentage of revenues for the periods indicated: Fiscal Year 2024 2023 2022 Revenues 100.0 % 100.0 % 100.0 % Cost of revenues 46.6 41.1 37.3 Gross profit 53.4 58.9 62.7 Operating expenses: Research and development 56.9 43.2 32.5 Selling, general and administrative 24.9 18.8 18.6 Operating expenses 81.7 62.0 51.1 Operating income (loss) (28.3) (3.1) 11.6 Other income (expense): Interest income and other, net 2.1 2.4 1.4 Interest expense (0.2) (0.7) (0.6) Income (loss) before income taxes (26.5) (1.3) 12.4 Provision for income taxes 6.2 1.0 3.8 Equity-method earnings (loss) — (2.0) 0.3 Net income (loss) (32.7) % (4.4) % 8.9 % Comparison of Fiscal 2024 to Fiscal 2023 Revenues Fiscal Year (in millions) 2024 2023 Change % Change Industrial & Commercial $ 338.5 $ 496.6 $ (158.1) (31.8) % Home & Life 245.9 285.7 (39.8) (13.9) % $ 584.4 $ 782.3 $ (197.9) (25.3) % The decrease in revenues in fiscal 2024 was due to decreased revenues of $158.1 million from our Industrial & Commercial products and $39.8 million from our Home & Life products.
Please see the “Cautionary Statement” and “Risk Factors” above for discussions of the uncertainties, risks and assumptions associated with these statements. Our fiscal year-end financial reporting periods are a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2023, 2022, and 2021 had 52 weeks.
Please see the “Cautionary Statement” and “Risk Factors” above for discussions of the uncertainties, risks and assumptions associated with these statements. Our fiscal year-end financial reporting periods are a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2024, 2023, and 2022 had 52 weeks.
An extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity and financial condition. Overview We are a leader in secure, intelligent wireless technology for a more connected world.
Any extended period of global supply chain and economic disruption could materially affect our business, results of operations, access to sources of liquidity, and financial condition. Overview We are a leader in secure, intelligent wireless technology for a more connected world.
Comparison of Fiscal 2022 to Fiscal 2021 ​ A discussion of changes in our results of operations and liquidity and capital resources from fiscal 2021 to fiscal 2022 has been omitted from this Form 10-K, but may be found in “Item 7.
Comparison of Fiscal 2023 to Fiscal 2022 A discussion of changes in our results of operations and liquidity and capital resources from fiscal 2022 to fiscal 2023 has been omitted from this Form 10-K, but may be found in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K filed with the Securities and Exchange Commission on February 1, 2023. Critical Accounting Estimates The preparation of financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires that we make estimates and assumptions that affect the amounts reported.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K filed with the Securities and Exchange Commission on February 20, 2024. Critical Accounting Estimates The preparation of financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires that we make estimates and assumptions that affect the amounts reported.
For a description of other contractual obligations, see Note 10, Debt , and Note 11, Leases , to the Consolidated Financial Statements.
For a description of other contractual obligations, see Note 9, Debt , and Note 10, Leases , to the Consolidated Financial Statements.
Interest income and other, net reflects interest earned on our cash, cash equivalents and investment balances, foreign currency remeasurement adjustments, and other non-operating income and expenses. Interest Expense. Interest expense consists of interest on our short and long-term obligations, including our convertible senior notes and credit facility.
Interest income and other, net reflects interest earned on our cash, cash equivalents and investment balances, foreign currency remeasurement adjustments, and other non-operating income and expenses. Interest Expense. Interest expense consists of interest on our short and long-term obligations, including our convertible senior notes that were previously outstanding and our credit facility.
Provision (benefit) for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, global intangible low-taxed income, Subpart F income inclusions, and other permanent differences. Equity-method Earnings (Loss). Equity-method earnings (loss) represents income or loss on our equity-method investment. Income from discontinued operations, net of income taxes.
Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, global intangible low-taxed income, Subpart F income inclusions, and other permanent differences. Equity-method Earnings (Loss). Equity-method earnings (loss) represents income or loss on our equity-method investment.
Our gross margin fluctuates depending on product mix, manufacturing yields, inventory valuation adjustments, average selling prices and other factors. 32 Table of Contents Research and Development.
Our gross margin fluctuates depending on product mix, manufacturing yields, inventory valuation adjustments, average selling prices and other factors. Research and Development.
We may enter into acquisitions or strategic arrangements in the future which also could require us to seek additional equity or debt financing. Contractual Obligations Our purchase obligations primarily include contractual arrangements in the form of purchase orders and purchase commitments with suppliers. As of December 30, 2023, such purchase obligations were $37.0 million.
We may enter into acquisitions or strategic arrangements in the future which also could require us to seek additional equity or debt financing. Contractual Obligations Our purchase obligations primarily include contractual arrangements in the form of purchase orders and purchase commitments with suppliers. As of December 28, 2024, such purchase obligations were $39.5 million.
However, rapid changes in our markets and across our product areas make it difficult for us to accurately estimate the impact of seasonal factors on our business. 31 Table of Contents Current Period Highlights of Continuing Operations Revenues decreased $241.8 million in fiscal 2023 compared to fiscal 2022 due to decreased revenues from both our Industrial & Commercial products and Home & Life products.
However, rapid changes in our markets and across our product areas make it difficult for us to accurately estimate the impact of seasonal factors on our business. 30 Table of Contents Current Period Highlights Revenues decreased $197.9 million in fiscal 2024 compared to fiscal 2023 due to decreased revenues from both our Industrial & Commercial products and Home & Life products.
Income taxes – We are required to calculate income taxes in each of the jurisdictions in which we operate. This process involves calculating the actual current tax liability together with assessing temporary differences in recognition of income (loss) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets.
This process involves calculating the actual current tax liability together with assessing temporary differences in recognition of income (loss) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets.
As part of this process, we analyze the performance obligations in a customer contract and estimate the variable consideration we expect to receive. The evaluation of performance obligations requires that we identify the promised goods and services in the contract.
In order to achieve this core principle, we apply a five-step process. As part of this process, we analyze the performance obligations in a customer contract and estimate the variable consideration we expect to receive. The evaluation of performance obligations requires that we identify the promised goods and services in the contract.
Fiscal 2023, 2022 and 2021 ended on December 30, 2023, December 31, 2022 and January 1, 2022, respectively. Impact of Macroeconomic Conditions The current global economic environment is experiencing inflationary pressure, relatively high interest rates, and geopolitical tension. We have experienced a decline in revenues, as our customers have slowed purchases to reduce existing inventories in a softening market.
Fiscal 2024, 2023, and 2022 ended on December 28, 2024, December 30, 2023 and December 31, 2022, respectively. Impact of Macroeconomic Conditions In recent years, the global economic environment has experienced inflationary pressure, high interest rates, and geopolitical tension, and we have experienced declines in revenues as our customers slowed purchases to reduce existing inventories in a softening market.
Operating loss in fiscal 2023 was $24.2 million compared to operating income of $119.3 million in fiscal 2022. Refer to “Results of Operations” below for further discussion. We ended fiscal 2023 with $439.2 million in cash, cash equivalents and short-term investments. Net cash used in operating activities was $30.3 million during fiscal 2023.
Operating loss in fiscal 2024 was $165.5 million compared to operating loss of $24.2 million in fiscal 2023. Refer to “Results of Operations” below for further discussion. We ended fiscal 2024 with $382.2 million in cash, cash equivalents and short-term investments. Net cash used in operating activities was $13.9 million during fiscal 2024.
If our estimates of variable consideration are inaccurate, we may recognize too much or too little revenue in a period. We may adjust assumptions used to estimate consideration periodically based on analysis of prior estimates. Stock-based compensation – We recognize the fair-value of stock-based compensation transactions in the Consolidated Statements of Operations.
If our estimates of variable consideration are inaccurate, we may recognize too much or too little revenue in a period. We may adjust assumptions used to estimate consideration periodically based on analysis of prior estimates. Income taxes – We are required to calculate income taxes in each of the jurisdictions in which we operate.
The extent of the impact of these macroeconomic conditions on our operational and financial performance will depend on future developments, including the duration and severity of any economic downturn, the impact to the business of our suppliers and/or customers, and other items identified under “Risk Factors” above, all of which are uncertain and cannot be predicted.
Although we saw sequential improvements in revenues over the course of fiscal 2024, the extent of the continued impact, or any new impact, of macroeconomic conditions on our operational and financial performance will depend on future developments, their impact to the business of our suppliers and/or customers, and other items identified under “Risk Factors” above, all of which are uncertain and cannot be predicted.
Accounts receivable decreased to $29.3 million at December 30, 2023 from $71.4 million at December 31, 2022. The decrease in accounts receivable resulted primarily from a decrease in shipments during the last quarter of fiscal 2023 compared to the last quarter of fiscal 2022. Our DSO was 30 days at December 30, 2023 and 25 days at December 31, 2022.
The increase in accounts receivable resulted primarily from an increase in shipments during the last quarter of fiscal 2024 compared to the last quarter of fiscal 2023. Our DSO was 29 days at December 28, 2024 and 30 days at December 30, 2023.
The first step requires us to determine whether the weight of available evidence indicates that the tax position has met the threshold for recognition. Therefore, we must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes.
Therefore, we must evaluate whether it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes.
Interest expense on our convertible senior notes included contractual interest, amortization of debt issuance costs, and for periods prior to fiscal 2022, amortization of the debt discount. Provision (Benefit) for Income Taxes.
Interest expense on our convertible senior notes included contractual interest and amortization of debt issuance costs. 31 Table of Contents Provision for Income Taxes.
Inventory increased to $194.3 million at December 30, 2023 from $100.4 million at December 31, 2022. Our inventory levels will vary based on the availability of supply and the impact of variations between forecasted demand used for purchasing inventory and actual demand.
Inventory decreased to $105.6 million at December 28, 2024 from $194.3 million at December 30, 2023, due to an intentional reduction of inventory holding levels in response to reduced demand. Our inventory levels will vary based on the availability of supply and the impact of variations between forecasted demand used for purchasing inventory and actual demand.
Research and Development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ ​ ​ (in millions) 2023 2022 Change % Change Research and development ​ $ 337.7 ​ $ 332.3 ​ $ 5.4 1.6 % Percent of revenue ​ 43.2 % 32.5 % ​ ​ ​ ​ The increase in research and development expense in fiscal 2023 was primarily due to an increase of $6.3 million for personnel-related expenses and an increase of $5.9 million for IT-related costs.
Research and Development Fiscal Year (in millions) 2024 2023 Change % Change Research and development $ 332.2 $ 337.7 $ (5.5) (1.6) % Percent of revenue 56.9 % 43.2 % The decrease in research and development expense in fiscal 2024 was primarily due to a decrease of $7.2 million for personnel-related expenses as a result of our workforce reductions implemented in the fourth quarter of fiscal 2023.
We believe that a majority of our revenues will continue to be derived from customers outside of the United States. Results of Operations The following describes the line items set forth in our Consolidated Statements of Operations: Revenues. Revenues are generated predominately by sales of our products.
Results of Operations The following describes the line items set forth in our Consolidated Statements of Operations: Revenues. Revenues are generated predominately by sales of our products.
Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to such end customer as our customer. Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 34% and 15% of our revenues during fiscal 2023 and 33% and 17% during fiscal 2022, respectively.
Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 27% and 16% of our revenues during fiscal 2024, 34% and 15% during fiscal 2023, and 33% and 17% during fiscal 2022, respectively.
Gross margin decreased primarily due to an increase in cost related to product mix. We may experience variations in the average selling prices of certain of our products. Increases in average selling prices may occur during periods of increased demand, but such demand may be short-lived and could be accompanied by higher product costs.
Increases in average selling prices may occur during periods of increased demand, but such demand may be short-lived and could be accompanied by higher product costs.
In June 2023, we paid $535.0 million in cash and issued 0.9 million shares of common stock in connection with the settlement of our 2025 convertible senior notes. 36 Table of Contents Capital Requirements Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies and the expansion of our sales and marketing activities.
Capital Requirements Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies and the expansion of our sales and marketing activities.
Operating cash flows during fiscal 2023 reflect our net loss of $34.5 million, adjustments of $104.4 million for depreciation, amortization, stock-based compensation, equity-method losses and deferred income taxes, and a net cash outflow of $100.3 million due to changes in our operating assets and liabilities.
Operating cash flows during fiscal 2024 reflect our net loss of $191.0 million, adjustments of $139.6 million for depreciation, amortization, stock-based compensation, and deferred income taxes, and a net cash inflow of $37.5 million due to changes in our operating assets and liabilities. Accounts receivable increased to $54.5 million at December 28, 2024 from $29.3 million at December 30, 2023.
Unit volumes of our products decreased while average selling prices increased compared to fiscal 2022. The average selling prices of our products may fluctuate significantly from period to period due to changes in product mix, pricing decisions and other factors. In general, as our products become more mature, we expect to experience decreases in average selling prices.
The average selling prices of our products may fluctuate significantly from period to period due to changes in product mix, customer mix, pricing decisions, and other factors.
Investing Activities Net cash provided by investing activities was $469.8 million during fiscal 2023, compared to $240.5 million during fiscal 2022. The increase in cash inflows was principally due to cash provided by net purchases, sales, and maturities of marketable securities of $492.6 million in fiscal 2023.
The decrease in cash inflows was principally due to a decrease in cash provided by net purchases, sales, and maturities of marketable securities of $380.1 million in fiscal 2024. 34 Table of Contents Financing Activities Net cash used in financing activities was $45.1 million during fiscal 2024, compared to $711.9 million during fiscal 2023.
We believe adequate provisions for income taxes have been made for all periods. 38 Table of Contents Recent Accounting Pronouncements Information regarding recent accounting pronouncements is provided in Note 2, Significant Accounting Policies , to the Consolidated Financial Statements. Such information is incorporated by reference herein. ​
These audits can involve complex issues which may require an extended period of time to resolve and could result in additional assessments of income tax. We believe adequate provisions for income taxes have been made for all periods. Recent Accounting Pronouncements Information regarding recent accounting pronouncements is provided in Note 2, Significant Accounting Policies , to the Consolidated Financial Statements.
We expect that selling, general and administrative expense will increase in absolute dollars in the first quarter of 2024 compared to the fourth quarter of 2023. Interest Income and Other, Net Interest income and other, net in fiscal 2023 was $19.2 million compared to $13.9 million in fiscal 2022.
The increase in selling, general and administrative expense as a percent of revenues in fiscal 2024 was due to our decreased revenues. Interest Income and Other, Net Interest income and other, net in fiscal 2024 was $12.0 million compared to $19.2 million in fiscal 2023.
Three of our distributors, Arrow Electronics, Edom Technology and Sekorm, represented 28%, 18% and 12% of our revenues during fiscal 2021, respectively. The percentage of our revenues derived from outside of the United States was 88% in fiscal 2023, 83% in fiscal 2022 and 86% in fiscal 2021. All of our revenues to date have been denominated in U.S. dollars.
The percentage of our revenues derived from outside of the United States was 90% in fiscal 2024, 88% in fiscal 2023 and 83% in fiscal 2022. All of our revenues to date have been denominated in U.S. dollars. We believe that a majority of our revenues will continue to be derived from customers outside of the United States.
Additionally, amortization of intangible assets decreased by $5.0 million and outside services decreased by $5.1 million, partially offset by an increase in IT-related costs of $1.3 million. The increase in selling, general and administrative expense as a percent of revenues in fiscal 2023 was due to our decreased revenues.
Selling, General and Administrative Fiscal Year (in millions) 2024 2023 Change % Change Selling, general and administrative $ 145.5 $ 147.0 $ (1.5) (1.0) % Percent of revenue 24.9 % 18.8 % The decrease in selling, general and administrative expense in fiscal 2024 was primarily due to a $2.0 million decrease in outside services, a $1.4 million decrease in IT-related costs, and a $0.8 million decrease in occupancy costs, partially offset by a $2.9 million increase in personnel-related costs.
Gross margin decreased to 58.9% in fiscal 2023 compared to 62.7% in fiscal 2022 primarily due to variations in the price and costs of our products and variations in product mix.
Gross margin decreased to 53.4% in fiscal 2024 compared to 58.9% in fiscal 2023 primarily due to variations in customer and product mix. Operating expenses decreased $7.1 million in fiscal 2024 compared to fiscal 2023 due primarily to continued efforts to contain costs.
Other decreases to research and development expense in fiscal 2023 were $4.5 million for new product introduction costs and $3.7 million for the amortization of intangible assets. The increase in research and development expense as a percent of revenues in fiscal 2023 was due to our decreased revenues.
The increase in research and development expense as a percent of revenues in fiscal 2024 was due to our decreased revenues.
The remaining balance was held by our foreign subsidiaries. Our cash equivalents and short-term investments consisted of government debt securities, which include agency bonds, municipal bonds, and U.S. government securities; corporate debt securities, which include asset-backed securities, corporate bonds, and Yankee bonds; and money market funds.
Our cash equivalents and short-term investments consisted of government debt securities, which include U.S. government securities; corporate debt securities, which include asset-backed securities, corporate bonds, and Yankee bonds; and money market funds. Operating Activities Net cash used in operating activities was $13.9 million during fiscal 2024, compared to net cash used in operating activities of $30.3 million during fiscal 2023.
We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, we are required to estimate the amount of expected future taxable income.
We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Judgment is inherent in this process, and differences between the estimated and actual taxable income could result in a material impact on our Consolidated Financial Statements.
Revenue recognition – We recognize revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. In order to achieve this core principle, we apply a five-step process.
In the event that actual demand is lower, or market conditions are worse than originally projected, additional inventory write-downs may be required. 35 Table of Contents Revenue recognition – We recognize revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
Financing Activities Net cash used in financing activities was $711.9 million during fiscal 2023, compared to $887.1 million during fiscal 2022. The decrease in cash outflows was principally due to a decrease of $666.3 million for repurchases of our common stock, partially offset by an increase of $571.1 million in payments on debt in fiscal 2023.
The decrease in cash outflows was principally due to $571.2 million in debt repayments and $217.1 million for repurchases of common stock, partially offset by $80.0 million in proceeds from our revolving line of credit, in fiscal 2023. Debt As of December 28, 2024, we had a $400 million revolving credit facility.
Business Outlook The following represents our business outlook for the first quarter of fiscal 2024. ​ ​ ​ ​ Income Statement Item Estimate ​ ​ ​ Revenues ​ $100 million to $110 million ​ ​ ​ Gross margin ​ 52% ​ ​ ​ Operating expenses ​ $118 million ​ ​ ​ Diluted loss per share ​ $(1.89) to $(2.05) ​ 35 Table of Contents Liquidity and Capital Resources Our principal sources of liquidity as of December 30, 2023 consisted of $439.2 million in cash, cash equivalents and short-term investments, of which $226.9 million was held by our U.S. entities.
Liquidity and Capital Resources Our principal sources of liquidity as of December 28, 2024 consisted of $382.2 million in cash, cash equivalents and short-term investments, of which $194.1 million was held by our U.S. entities. The remaining balance was held by our foreign subsidiaries.
Accounts receivable were $29.3 million at December 30, 2023, representing 30 days sales outstanding (“DSO”). Inventory was $194.3 million at December 30, 2023, representing 407 days of inventory (“DOI”).
Accounts receivable were $54.5 million at December 28, 2024, representing 29 days sales outstanding (“DSO”). Inventory was $105.6 million at December 28, 2024, representing 125 days of inventory (“DOI”). During fiscal 2024, 2023, and 2022, we had no customer that represented more than 10% of our revenues.
Provision for Income Taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ (in millions) 2023 2022 Change Provision for income taxes ​ $ 7.9 ​ $ 38.5 ​ $ (30.6) Effective tax rate ​ (29.9) % 29.6 % ​ ​ The decrease in the provision for income taxes for fiscal 2023 was primarily due to decreases in pre-tax book income and global intangible low-taxed income inclusions as compared to fiscal 2022.
Provision for Income Taxes Fiscal Year (in millions) 2024 2023 Change Provision for income taxes $ 36.2 $ 7.9 $ 28.3 Effective tax rate (23.4) % (29.9) % The increase in the provision for income taxes for fiscal 2024 as compared to fiscal 2023 was primarily due to the establishment of a valuation allowance against the majority of our U.S. and Singapore deferred tax assets during the second quarter of fiscal 2024.
Operating Activities Net cash used in operating activities was $30.3 million during fiscal 2023, compared to net cash provided by operating activities of $141.3 million during fiscal 2022.
Our DOI was 125 days at December 28, 2024 and 407 days at December 30, 2023. Investing Activities Net cash provided by investing activities was $113.1 million during fiscal 2024, compared to $469.8 million during fiscal 2023.
Removed
Operating expenses decreased $38.6 million in fiscal 2023 compared to fiscal 2022 due primarily to temporary cost containment measures taken in the third and fourth quarters of fiscal 2023, including the elimination of certain bonuses and certain other variable compensation, a reduction in the use of contract employees, and the suspension of all non-essential travel.
Added
While certain conditions improved during fiscal 2024, including deceleration of inflation and lowering of interest rates in certain geographies, there continues to be uncertainty regarding overall macroeconomic conditions, including increased geopolitical tensions, risk of recessions, and the effects of potential trade policies including tariffs.
Removed
Operating expenses also decreased due to reduced stock-based compensation from the expense reversal to adjust the estimated levels of achievement related to unvested performance stock units. In the fourth quarter of fiscal 2023, we implemented a workforce reduction of approximately 10% of our employees. We incurred total employee separation costs of $9.1 million.
Added
Although we actually sell the products to, and are paid by, the distributors and contract manufacturers, we refer to the end customer as our customer.
Removed
During the second quarter of 2023, we paid $535.0 million in cash and issued 0.9 million shares of common stock in connection with the extinguishment of the remaining principal of our 2025 convertible senior notes. In the third quarter of 2023, we repaid $35.0 million in borrowings under our revolving credit facility.
Added
Unit volumes and average selling prices of our products decreased compared to fiscal 2023.
Removed
In fiscal 2023, we acquired 1.5 million shares of our common stock for $212.9 million. We have continued to diversify our product portfolio and introduce new products and solutions with added functionality and integration.
Added
The weakness in the overall demand environment for our customers’ products we experienced in the second half of fiscal 2023 continued into fiscal 2024 as customers sought to reduce inventory levels that had become elevated as a result of the supply chain disruptions during fiscal 2021 and 2022.
Removed
In fiscal 2023, we introduced a new BB5 family of 8-bit microcontroller units optimized for price and performance, a dual-band SoC designed for long-range networks and protocols like Amazon Sidewalk, Wi-SUN®, and other proprietary protocols, and new integrated Bluetooth® SoC and MCU families that offer IoT device designers energy efficiency, high performance and trusted security for the smallest form factor IoT devices.
Added
In general, as our products become more mature, we expect to experience decreases in average selling prices. 32 Table of Contents Gross Profit Fiscal Year (in millions) 2024 2023 Change Gross profit $ 312.2 $ 460.6 $ (148.4) Gross margin 53.4 % 58.9 % (5.5) % Gross profit decreased in fiscal 2024 due primarily as a result of a decrease in revenues in the period.
Removed
We plan to continue introducing products that expand the capabilities we offer in order to serve both current and emerging applications, enabling us to address new markets and expand our total available market opportunity. During fiscal 2023, 2022 and 2021, we had no customer that represented more than 10% of our revenues.
Added
Gross margin decreased primarily due to variations in customer and product mix, with the percentage of revenues attributed to direct customers increasing as compared to revenue from distributors in fiscal 2024. We may experience variations in the average selling prices of certain of our products.
Removed
Income from discontinued operations, net of income taxes includes the results of operations of our former infrastructure and automotive business.
Added
Other decreases to research and development expense in fiscal 2024 were $2.3 million for the amortization of intangible assets, $2.0 million for technical services, and $1.4 million for IT-related costs, partially offset by an increase of $7.8 million in software expense.
Removed
The overall demand environment for our customers’ products is generally weak. Customers are also seeking to reduce inventory levels relative to the amounts they held during the recent period of widespread supply chain disruptions.
Added
The decrease in interest income and other, net in fiscal 2024 was primarily due to lower interest-bearing investment balances as a result of the sale of investments to fund the settlement of our 2025 convertible senior notes in the second quarter of fiscal 2023, stock repurchases in the first three quarters of fiscal 2023, and repayment of borrowing from our credit facility in the third quarter of fiscal 2023. 33 Table of Contents Interest Expense Interest expense in fiscal 2024 was $1.3 million compared to $5.6 million in fiscal 2023.
Removed
As a result, the current demand environment for our products is experiencing high volatility and general weakness, with customers more frequently requesting cancellations, changes to delivery dates, and price and payment term concessions.
Added
The decrease was primarily due to the settlement of our 2025 convertible senior notes in the second quarter of fiscal 2023.
Removed
Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ (in millions) 2023 2022 Change Gross profit ​ $ 460.6 ​ $ 642.6 ​ $ (182.0) ​ Gross margin ​ 58.9 % 62.7 % (3.8) % ​ Gross profit decreased in fiscal 2023 due primarily to decreased product sales across both of our product groups.
Added
There is a need for a valuation allowance in the U.S. and Singapore due to a forecasted three-year cumulative pre-tax loss for the current and two preceding years in conjunction with the recent downturn in the semiconductor industry.
Removed
Within personnel-related expenses, increases of $15.0 million in salary expense, $2.4 million in stock compensation, and $7.2 million in termination benefits primarily from the workforce reduction in the fourth quarter were partially offset by a $21.8 million decrease in bonus and variable compensation from lower attainment and the cost containment efforts in the third and fourth quarters.
Added
We intend to maintain the valuation allowance until sufficient future sources of taxable income are forecasted to realize the benefit of the deferred tax assets. Equity-method Loss Equity-method loss in fiscal 2023 was $16.0 million. Our equity-method investment was sold in the fourth quarter of fiscal 2023.
Removed
We expect that research and development expense will remain relatively stable in absolute dollars in the first quarter of 2024 compared to the fourth quarter of 2023. 34 Table of Contents Selling, General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ ​ ​ (in millions) 2023 2022 Change % Change Selling, general and administrative ​ $ 147.0 ​ $ 191.0 ​ $ (44.0) (23.0) % Percent of revenue ​ 18.8 % 18.6 % ​ ​ ​ ​ The decrease in selling, general and administrative expense in fiscal 2023 was primarily due to a $35.4 million decrease to personnel-related costs, which included a $20.7 million decrease in certain bonus and variable compensation as a result of the cost containment efforts in the third and fourth quarters and a $14.7 million reduction in stock compensation driven by a decline in expected achievement for certain performance-based awards.
Added
As of December 28, 2024, no amounts were outstanding on the revolving credit facility. We were granted a waiver of compliance for the minimum interest coverage ratio through March 29, 2025.
Removed
The increase in interest income and other, net in fiscal 2023 was primarily due to increased interest income earned as a result of higher market interest rates. Interest Expense Interest expense in fiscal 2023 was $5.6 million compared to $6.7 million in fiscal 2022.
Added
In the event we are not able to achieve compliance by the end of the waiver period, we may need to amend the covenant or obtain an additional waiver in order to access the revolving credit facility.
Removed
Equity-method Earnings (Loss) Equity-method loss in fiscal 2023 was $16.0 million compared to earnings of $3.4 million in fiscal 2022. The decrease in equity-method earnings in fiscal 2023 was due primarily to the loss recognized on the sale of an equity-method investment.
Added
Evaluating the need for a valuation allowance for deferred tax assets requires analysis of all positive and negative evidence available, including recent earnings history and taxable income in recent years, reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies to determine whether all or some portion of the deferred tax assets will not be realized.
Removed
Inventory has increased in part due to us investing in building inventory to minimize potential supply disruptions and meet forecasted future demand.
Added
We recognize liabilities for uncertain tax positions based on a two-step process. The first step requires us to determine whether the weight of available evidence indicates that the tax position has met the threshold for recognition.
Removed
Our DOI was 407 days at December 30, 2023 and 90 days at December 31, 2022; the increase is in part due to the lower cost of sales combined with higher inventory levels during the last quarter of fiscal 2023 compared to the last quarter of fiscal 2022.
Removed
Discontinued Operations Net cash used in discontinued operations was zero during fiscal 2023, compared to net cash used of $69.5 million during fiscal 2022 related to income tax payments. Debt As of December 30, 2023, we had a $400 million revolving credit facility.
Removed
In June 2023, we borrowed $80 million under the revolving credit facility. In the third quarter, we repaid $35.0 million in borrowings under our revolving credit facility. As of December 30, 2023, the outstanding balance in the revolving credit facility is $45.0 million.
Removed
In the event that actual demand is lower, or market conditions are worse than originally projected, additional inventory write-downs may be required.
Removed
Impairment of goodwill and other long-lived assets – We review long-lived assets which are held and used, including fixed assets and purchased intangible assets, for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
Removed
Such evaluations compare the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset over its expected useful life and are significantly impacted by estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast.
Removed
If the asset is considered to be impaired, we record an impairment charge equal to the amount by which the carrying value of the asset exceeds its fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were not effective as of December 30, 2023 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, as a result of the material weakness in our internal control over financial reporting described below. 39 Table of Contents Notwithstanding the material weakness in internal control over financial reporting described below, management believes and has concluded that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.
Biggest changeBased on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 28, 2024 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. This material weakness did not result in any material errors.
A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable 37 Table of Contents possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. This material weakness did not result in any material errors.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Income Our investment portfolio includes cash, cash equivalents and short-term investments. Our main investment objectives are the preservation of investment capital and the maximization of after-tax returns on our investment portfolio. Our interest income is sensitive to changes in the general level of U.S. interest rates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Income Our investment portfolio includes cash, cash equivalents and short-term investments. Our main investment objective is the preservation of investment capital. Our interest income is sensitive to changes in the general level of U.S. interest rates.
A 100 basis point decline in yield on our investment portfolio holdings as of December 30, 2023 would decrease our future annual interest income by approximately $3.6 million. A 100 basis point decline in yield on our investment portfolio holdings as of December 31, 2022 would decrease our future annual interest income by approximately $11.0 million.
A 100 basis point decline in yield on our investment portfolio holdings as of December 28, 2024 would decrease our future 36 Table of Contents annual interest income by approximately $3.0 million. A 100 basis point decline in yield on our investment portfolio holdings as of December 30, 2023 would decrease our future annual interest income by approximately $3.6 million.
Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are recorded in the Consolidated Statements of Operations. We use foreign currency forward contracts to manage exposure to foreign exchange risk.
Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are recorded in the Consolidated Statements of Operations. We use foreign currency forward contracts to manage exposure to foreign exchange risk. Gains and losses on foreign currency forward contracts are recognized in earnings in the same period during which the hedged transaction is recognized.
Changes in Internal Control over Financial Reporting There was no change in our internal controls during the fiscal quarter ended December 30, 2023 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Changes in Internal Control over Financial Reporting There was no change in our internal controls during the fiscal quarter ended December 28, 2024 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting, other than the remediation efforts of the material weakness discussed below.
Our management assessed the effectiveness of our internal control over financial reporting as of December 30, 2023. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 framework).
In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 framework). Based on our assessment we concluded that, as of December 28, 2024, our internal control over financial reporting is effective based on those criteria.
Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.
Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements. Our management assessed the effectiveness of our internal control over financial reporting as of December 28, 2024.
Gains and losses on foreign currency forward contracts are recognized in earnings in the same period during which the hedged transaction is recognized. ​ Item 8. Financial Statements and Supplementary Data The Financial Statements and supplementary data required by this item are included in Part IV, Item 15 of this Form 10-K and are presented beginning on page F-1.
Item 8. Financial Statements and Supplementary Data The Financial Statements and supplementary data required by this item are included in Part IV, Item 15 of this Form 10-K and are presented beginning on page F-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A.
Based on our assessment we concluded that, as of December 30, 2023, the material weakness described below existed. During the year-end financial reporting process of fiscal 2023, management identified a material weakness in internal control over financial reporting.
Controls and Procedures in our Annual Report on Form 10-K for the year ended December 30, 2023 filed with the SEC, our management, including our CEO and CFO, identified deficiencies in our internal control over financial reporting that we believe rose to the level of a material weakness.
Removed
The interest rate on the credit facility consists of a variable-rate of interest and an applicable margin. As of December 30, 2023, we had $45.0 million outstanding under our credit facility. A 100 basis point increase in interest rates would increase our future annual interest rate expense by approximately $0.5 million.
Added
The interest rate on the credit facility consists of a variable-rate of interest and an applicable margin. While we have drawn from the credit facility in the past, we have no borrowings as of December 28, 2024. If we borrow from the credit facility in the future, we will again be exposed to interest rate fluctuations.
Removed
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​ Item 9A.
Added
Such disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures.
Removed
The material weakness resulted from undue reliance on forecasted inventory demand information used in determining inventory carrying value adjustments without effectively designed controls over the evaluation of demand assumptions. These forecasts are used to determine inventory carrying value adjustments necessary to record such quantities at the lower of their cost or net realizable value.
Added
Remediation of Material Weakness in Internal Control over Financial Reporting As previously disclosed in Item 9A.
Removed
With respect to the material weakness above, management, under the oversight of the Audit Committee, is in the process of designing appropriate controls and the remediation plan specific to the inventory valuation process.
Added
To address the material weakness related to undue reliance on forecasted inventory demand information used in determining inventory carrying value adjustments, we completed the following: • Evaluated and reassessed the design of our inventory valuation methods, including key assumptions used in the determination of the net realizable value of our inventory; • Designed and implemented enhanced controls and documentation requirements during the quarter ended December 28, 2024 that support the completeness and accuracy of data used in the inventory valuation assessment; • Formalized management’s review and assessment of information used in the inventory valuation assessment; and • Refined the critical assumptions to be used in the inventory valuation assessment, including demand forecast information, historical results, market conditions, and aging of inventory.
Removed
The material weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that the related controls are effective. We will monitor the effectiveness of the remediation plan and refine the remediation plan as appropriate.
Added
During the quarter ended December 28, 2024, we successfully completed the testing necessary to conclude that this material weakness has been remediated. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

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