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What changed in SILICON LABORATORIES INC.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of SILICON LABORATORIES INC.'s 2025 and 2026 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 2026 report.

+249 added−180 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-04)

Top changes in SILICON LABORATORIES INC.'s 2026 10-K

249 paragraphs added · 180 removed · 133 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have built a leading wireless development platform and product portfolio for the IoT based on Bluetooth®, sub-GHz proprietary technologies, Wi - SUN, Thread, Wi-Fi®, Zigbee®, and Z-Wave®. Our products integrate complex mixed-signal functions that are frequently performed by numerous discrete components in competing products into a single chip, chipset or system-on-chip (“SoC”).
Biggest changeProducts 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 built a leading wireless development platform and product portfolio for the IoT based on Bluetooth®, sub-GHz proprietary technologies, Wi - SUN, Thread, Wi-Fi®, Zigbee®, and Z-Wave®.
Innovative solutions do not stop at our products – we are also actively supporting research to improve safety, sustainability, and overall quality of life in densifying cities as the founding corporate partner for the Smart City Living Lab at The International Institute of Information Technology in Hyderabad, India.
Innovative solutions do not stop at our products, as we are also actively supporting research to improve safety, sustainability, and overall quality of life in densifying cities as the founding corporate partner for the Smart City Living Lab at The International Institute of Information Technology in Hyderabad, India.
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 many 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.
Our leading platform, purpose-built for the Internet of Things (“IoT”), helps customers quickly create secure, intelligent, connected devices. Our team and technology assist customers in solving development challenges, including energy efficiency, to build connected devices for applications that support better health, innovative infrastructure, and sustainable cities.
Our leading platform, purpose-built for the Internet of Things (“IoT”), helps customers quickly create secure, intelligent, wireless connected devices. Our team and technology assist customers in solving development challenges, including energy efficiency, to build connected devices for applications that support better health, innovative infrastructure, and sustainable cities.
We compete with Broadcom, Espressif, Infineon, MediaTek, Microchip, Nordic Semiconductor, NXP, Qualcomm, Renesas, STMicroelectronics, Synaptics, Telink, Texas Instruments and others. We expect to face competition in the future from our current competitors, other manufacturers, designers of semiconductors, and start-up semiconductor design companies.
We compete with Espressif, Infineon, MediaTek, Microchip, Nordic Semiconductor, NXP, Qualcomm, Renesas, STMicroelectronics, Synaptics, Telink, Texas Instruments and others. We expect to face competition in the future from our current competitors, other manufacturers, designers of semiconductors, and start-up semiconductor design companies.
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 experience closures or reductions in their capacity utilization levels in the future, including due to unpredictable factors outside their control, we may have difficulty sourcing materials necessary to fulfill production requirements.
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.
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 2025, 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 2026.
Item 1. Business Overview Silicon Laboratories Inc. is a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platform, intuitive development tools, industry-leading ecosystem, and robust support help customers build advanced industrial, commercial, home, and life applications.
Item 1. Business Overview Silicon Laboratories Inc. is a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platforms, intuitive development tools, industry-leading ecosystem, and robust support help customers build advanced devices for industrial, commercial, home, and life applications.
However, disadvantages we face include our relatively short operating history in certain of our markets and the need for customers to redesign their products and modify their software to implement our ICs in their products. Due to our diversified product portfolio and the numerous markets and applications we serve, we target a relatively large number of competitors.
However, disadvantages we face include our relatively short operating history in certain of our markets and the need for customers to redesign their products and modify their software to implement our ICs in their products. Due to our diversified product portfolio and the numerous markets and applications we serve, we compete against a relatively large number of competitors.
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.
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. 2 Table of Contents Simultaneously, these manufacturers face accelerating time-to-market demands and must rapidly adapt to evolving industry standards and new technologies.
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 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 $353.2 million, $332.2 million and $337.7 million in fiscal 2025, 2024 and 2023, respectively. Technology Our product development process facilitates the design of highly innovative, analog-intensive, mixed-signal ICs.
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.
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 2025, our ten largest end customers accounted for 25% of our revenues.
We believe that our future success will be dependent on retaining the services of our key personnel, developing their successors and properly managing the transition of key roles when they occur. Our key technical personnel represent a significant asset and serve as the primary source for our technological and product innovations.
We believe that our future success depends on retaining the services of our key personnel, developing their successors and properly managing the transition of key roles when they occur. Our key technical personnel represent a significant asset and serve as the primary source for our technological and product innovations.
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.
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 (“RTOS”) to help simplify software development for IoT applications by coordinating and prioritizing multiprotocol connectivity, SoC peripherals, and other system-level activities.
We use employee surveys to better understand and improve the employee experience and identify opportunities to continually strengthen our work philosophy. We use employee feedback to drive and improve processes and ensure a deep understanding of our culture and vision among our employees.
We use employee surveys to better understand and improve the employee experience and identify opportunities to continually strengthen our company culture. We use employee feedback to drive and improve processes and ensure a deep understanding of our mission and vision among our employees.
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.
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. It’s an industry of variety and impact.
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.
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 28% and 21% of our revenues during fiscal 2025, respectively. We maintain numerous sales offices in Asia, the Americas and Europe.
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.
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 91% in fiscal 2025.
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.
We believe our continued focus on a strong, differentiated company culture, along with competitive compensation, career growth, and development opportunities have helped increase employee tenure and reduce voluntary turnover. During fiscal 2025, our voluntary employee turnover rate was 8%. The well-being of our employees is of utmost importance to us.
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.
We demand excellence in our quality and environmental management systems, which are certified to ISO 9001:2015 and ISO 14001:2015 standards, respectively. We are committed to delivering products that meet environmental regulations and requirements, and we maintain high standards for our global supply chain partners, prioritizing qualified suppliers who are socially and environmentally aligned with our sustainability approach.
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.
We seek to protect our technology through a combination of patents, copyrights, trade secrets, trademarks and confidentiality procedures. As of January 3, 2026, we had greater than 1,575 issued or pending United States and foreign patents. Patents generally have a term of twenty years from the date they are filed.
Our expertise in analog-intensive, mixed-signal integrated chip (“IC”) design in CMOS, as well as in software development allows us to create new and innovative products that are highly integrated and secure, simplifying our customers’ designs and improving their time-to-market. Industry Background The Internet of Things is about connecting embedded applications to the Internet.
Our expertise in analog-intensive, mixed-signal integrated chip (“IC”) design in CMOS, as well as in software development allows us to create new and innovative products that are highly integrated and secure, simplifying our customers’ designs and improving their time-to-market.
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%.
We strive to meet this objective by offering competitive compensation and benefits in an inclusive, equitable and safe workplace, with opportunities for our employees to grow and develop in their careers. As of January 3, 2026, we employed 1,930 people, of whom 72% were in engineering roles. Women represented 23% of our workforce and men represented 77%.
Those capabilities are designed to help customers develop products and solutions with chip-to-cloud security integration, enable faster time to market and reduce security defects, risks and losses due to security attacks and incidents. We are creating innovative security solutions that enable customers to develop best-in-class, simple and economical solutions.
Those capabilities are designed to help customers develop products and solutions with chip-to-cloud security integration, enable faster time to market and reduce security defects, risks and losses due to security attacks and incidents.
We have continued to diversify our product portfolio and introduce new products and solutions through both organic investment and acquisitions. The life cycles of our products are relatively long, given the amount of effort and time required in the design in process for our customers.
We have continued to diversify our product portfolio and introduce new products and solutions through both organic investment and acquisitions. The life cycles of our products are relatively long, given the amount of effort and time required in the design-in process for our customers. Revenues during fiscal 2025, 2024 and 2023 were generated predominately by sales of our mixed-signal products.
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.
The following summarizes the products that we have introduced to customers: Wireless Microcontrollers 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.
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.
Our secure, reliable, and robust smart home solutions also include support for emerging applications like Matter and Amazon Sidewalk that are designed to streamline customer adoption while providing functionality that reinforces privacy, simplicity, and performance. – Home cameras – Locks – Gateways – Residential lighting – Window shades/blinds – HVAC (heating, ventilation, and air conditioning) – Appliances – Switches – Sensors – 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.
We will continue investing in security-specific research and development that addresses a dynamic threat landscape, emerging regulatory requirements, and evolving customer security and privacy needs.
We continue to create innovative security solutions that enable customers to develop best-in-class, simple and economical solutions and will continue investing in security-specific research and development that addresses a dynamic threat landscape, emerging regulatory requirements, and evolving customer security and privacy needs.
The introduction of our Series 2 portfolio provides a greater focus on updatable device security which is becoming vital to the evolution and success of IoT. We bring enhanced capability to the industry, protecting user data, system keys, and manufacturer brands from malicious threats, both hands-on and internet-based. Our broad portfolio addresses a variety of target markets.
We bring enhanced capability to the industry, protecting user data, system keys, and manufacturer brands from malicious threats, both hands-on and internet-based. Our broad portfolio addresses a variety of target markets.
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.
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 The Smart Home market is transforming everyday living through greater comfort, efficiency, and peace of mind.
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.
Our products are supported by Simplicity Studio™, which provides one-click access to design tools, documentation, software, and support resources, and 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.
As a result, manufacturers of electronic devices value providers that can supply them with mixed-signal solutions offering greater functionality, smaller size, and lower power requirements at a reduced cost and shorter time-to-market.
As a result, manufacturers of electronic devices value providers that can supply them with mixed-signal solutions offering greater functionality, smaller size, and lower power requirements at a reduced cost and shorter time-to-market. We have the breadth in our portfolio, depth of wireless connectivity expertise, and the focus on IoT to help our customers quickly bring their innovative ideas to market.
We believe our products enable sustainable IoT solutions across home, medical, industrial and commercial environments, including air pollution and waste management monitoring, water integrity, residential irrigation monitoring, street lighting networks, advanced metering infrastructure and building energy management.
We design smart, energy-efficient products that enable battery-powered, ultra-low-power wireless communications for our customers across industries where technology can meaningfully influence environmental and societal outcomes across home, medical, industrial, and commercial environments, including air pollution and waste management monitoring, water integrity, residential irrigation monitoring, street lighting networks, advanced metering infrastructure and green energy solutions.
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.
We live by our promise to “do the right thing” for all: our employees, customers, shareholders, communities, and the planet.
We offer comprehensive benefits resources and tools to address the healthcare and wellness needs of our employees and their families, enable them to manage their work-life balance, and plan for a secure future.
We offer comprehensive benefits, resources, and personalized tools to address the healthcare and wellness needs of our employees and their families. We provide access to a variety of global programs that promote physical, mental and financial health, encouraging employees to take time off when needed, sustain a healthy work-life balance, personalize work arrangements, and plan for a secure future.
We are a multi-national and multi-ethnic workforce, with sites and employees in more than a dozen countries. We are committed to fostering a diverse and inclusive workplace that attracts and retains exceptional talent. We actively promote representation in our organization and equity in our recruitment, development, promotion and compensation practices.
We are a multi-national and multi-ethnic workforce, with sites and employees in more than a dozen countries. We are committed to fostering an environment where people feel valued, respected, and empowered to do their best work. We actively promote fair and equitable practices in our recruitment, development, promotion and compensation programs.
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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.
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Pending Merger with Texas Instruments On February 4, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Texas Instruments Incorporated, a Delaware corporation (“Parent”), and Caldwell Merger Corp., a Delaware corporation and wholly-owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which Merger Subsidiary will merge with and into Silicon Laboratories Inc.
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Our sensor products include optical sensors (proximity, ambient light, gestures, and heart rate monitoring), as well as relative humidity (“RH”) / temperature sensors and Hall effect magnetic sensors. These devices leverage our mixed-signal capability to provide high accuracy process technology to improve performance and lower power consumption than competing parts.
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(the “Merger”), and we will survive the Merger as a wholly-owned direct subsidiary of Parent.
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Our products are supported by Simplicity Studio™, which provides one-click access to design tools, documentation, software, and support resources.
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At the effective time of the Merger, each share of our common stock outstanding as of immediately prior to the effective time (other than dissenting shares or any shares of our common stock held by us as treasury stock or owned by Parent or any of our or Parent’s subsidiaries) will be cancelled and converted into the right to receive $231.00 in cash, without interest.
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Sensors collect real-time data continuously to automate lighting, heating, and appliances, minimizing energy consumption while maximizing convenience.
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The transactions contemplated by the Merger Agreement were unanimously approved by our board of directors, and the Merger is expected to close in the first half of 2027, subject to customary closing conditions, including approval by our stockholders and the receipt of required regulatory approvals. Industry Background The Internet of Things is about connecting embedded applications to the Internet.
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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.
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Our products integrate complex mixed-signal functions that are frequently performed by numerous discrete components in competing products into a single chip, chipset or system-on-chip (“SoC”).
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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.
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The introduction of our Series 2 portfolio in 2019 provided a greater focus on updatable device security which is becoming vital to the evolution and success of IoT. Now, our Series 3 portfolio, which released its first product in 2025, leverages the 22 nm process node to provide greater compute, interoperability, and energy efficiency for even more advanced workloads.
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Consumers are embracing connected devices that make homes safer, more energy-efficient, and easier to manage, from lighting and climate control to security and entertainment. As smart technology becomes more intelligent, intuitive, and interoperable, it enables seamless automation that enhances quality of life while supporting sustainability and cost savings.
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By 10 Table of Contents inserting flexibility into our programs, we are best able to support employees and their families through various stages of their lives. Corporate Sustainability As a global corporate citizen, we are committed to advancing responsible and sustainable operations throughout our supply chain.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe acquisitions that we have made and may make in the future entail a number of risks that could materially and adversely affect our business and operating results, including: • Problems integrating the acquired operations, technologies or products with our existing business and products; • Diversion of management’s time and attention from our core business; • Need for financial resources above our planned investment levels; • Difficulties in retaining business relationships with suppliers and customers of the acquired company; • Risks associated with entering markets in which we lack prior experience; • Risks associated with the transfer of licenses of intellectual property; • Increased operating costs due to acquired overhead; • Tax issues associated with acquisitions; • Acquisition-related disputes, including disputes over earn-outs and escrows; • Potential loss of key employees of the acquired company; and • Potential impairment of related goodwill and intangible assets.
Biggest changeIntegrating acquired operations, technologies, or products may prove difficult and could divert management’s attention, require greater financial resources than planned, and strain relationships with suppliers and customers. Entering unfamiliar markets, transferring intellectual property licenses, absorbing additional overhead, addressing tax complexities, resolving acquisition‑related disputes, retaining key employees, and managing potential impairment of goodwill or other intangible assets all pose additional risks.
Our security measures may not detect or prevent such security breaches.
Our security measures may not prevent or detect such security breaches.
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.
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 regarding privacy, data protection and data security, such as the European Union’s General Data Protection Regulation (“GDPR”).
We compete with Broadcom, Espressif, Infineon, MediaTek, Microchip, Nordic Semiconductor, NXP, Qualcomm, Renesas, STMicroelectronics, Synaptics, Telink, Texas Instruments and others. We expect to face competition in the future from our current competitors, other manufacturers and designers of semiconductors, and start-up semiconductor design companies. As the markets for communications products grow, we also may face competition from traditional communications device companies.
We compete with Espressif, Infineon, MediaTek, Microchip, Nordic Semiconductor, NXP, Qualcomm, Renesas, STMicroelectronics, Synaptics, Telink, Texas Instruments and others. We expect to face competition in the future from our current competitors, other manufacturers and designers of semiconductors, and start-up semiconductor design companies. As the markets for communications products grow, we also may face competition from traditional communications device companies.
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.
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 tensions 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.
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.
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 17 Table of Contents • Cooperation of third-party software providers and our semiconductor vendors to support our chips within a system.
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.
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 16 Table of Contents and financial results.
These inventory risks are exacerbated when our customers purchase indirectly through contract manufacturers or hold component inventory levels greater than their consumption rate because this causes us to have less visibility regarding the accumulated levels of inventory for such customers. A resulting write-off of unusable or excess inventories would adversely affect our operating results.
These inventory risks are exacerbated when our customers purchase indirectly through contract manufacturers or hold component inventory levels greater than their consumption rate because this causes us to have less visibility regarding the accumulated levels of inventory for such customers. A resulting write-off of unusable or excess inventories would adversely affect our operating result.
We anticipate that we will need to implement a variety of new and upgraded sales, operational and financial enterprise-wide systems, information technology infrastructure, procedures and controls, including the improvement of our accounting and other internal management systems to manage this growth and maintain compliance with regulatory guidelines, including Sarbanes-Oxley Act requirements.
We anticipate that we will need to implement a variety of new and upgraded sales, operational and financial enterprise-wide systems, information technology infrastructure, procedures and 22 Table of Contents controls, including the improvement of our accounting and other internal management systems to manage this growth and maintain compliance with regulatory guidelines, including Sarbanes-Oxley Act requirements.
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.
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. 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.
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.
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.
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.
Additionally, we use artificial intelligence (“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.
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.
Any ineffective AI usage could negatively impact our or our customer’s business reputation and negatively impact our competitive standing. 24 Table of Contents 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.
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.
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 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; • 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 conflict between Russia and Ukraine and tensions in the Middle East), terrorism, sanctions or other geopolitical events globally; • Greater difficulty in hiring and retaining qualified personnel; and 20 Table of Contents • The need to have business and operations systems that can meet the needs of our international business and operating structure.
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.
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; • 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; • Volatility in foreign currency exchange rates and any requirements for buying and/or selling in currencies other than the U.S. dollar; • 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.
For example, the IoT market is relatively new and is continuously evolving. Furthermore, products in the IoT market frequently require interoperability across multiple standards. We may need to adjust our portfolio to meet the needs of this evolving market through acquisitions or significant new investments in research and development.
For example, the IoT market is continuously evolving and products in the IoT market frequently require interoperability across multiple 26 Table of Contents standards. We may need to adjust our portfolio to meet the needs of this evolving market through acquisitions or significant new investments in research and development.
None of our third-party foundry, assembly or test subcontractors have provided assurances that adequate capacity will be available to us.
None of our third-party foundry, assembly or test subcontractors have provided assurances that adequate capacity will be available 21 Table of Contents to us.
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.
During fiscal 2025, the percentage of our revenues derived from outside of the United States was 91% (and the revenue associated with end customers in China was 15%, and revenue attributed to China based on shipped-to location was 33%). We may not be able to maintain or increase global market demand for our products.
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.
If our competitors can benefit 18 Table of Contents 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.
Item 1A. Risk Factors Global Business Risks We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.
We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.
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.
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 2025 was $353.2 million, or 45.0% of revenues.
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.
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 risks related to intellectual property infringement or misappropriation, data privacy and cyber security vulnerabilities.
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.
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. Future downturns may adversely effect our business and operating results.
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.
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.
In light of those and other geopolitical events, nation-state actors or their supporters may launch retaliatory cyber-attacks, and may attempt to cause supply chain and other third-party service provider disruptions, or take other geopolitically motivated retaliatory actions that may disrupt our business operations, result in data compromise, or both.
In addition, the risk of cyber-attacks has increased in recent years in connection with geopolitical events, and nation-state actors or their supporters may launch retaliatory cyber-attacks, and may attempt to cause supply chain and other third-party service provider disruptions, or take other geopolitically motivated retaliatory actions that may disrupt our business operations, result in data compromise, or both.
Earthquakes, tsunamis, fire, flooding, lack of water or other natural disasters, an epidemic such as the COVID-19 outbreak, political unrest, war, labor strikes or work stoppages in countries where our semiconductor manufacturers, assemblers and test subcontractors are located, likely would result in the disruption of our foundry, assembly or test capacity.
Earthquakes, tsunamis, fire, flooding, lack of water or other natural disasters, a public health crisis, political unrest, war, labor strikes or work stoppages in countries where our semiconductor manufacturers, assemblers and test subcontractors are located, likely would result in the disruption of our foundry, assembly or test capacity.
There is currently a shortage of qualified personnel with significant experience in the design, development, manufacturing, marketing and sales of analog and mixed-signal products, and competition for such personnel is intense. Our key technical personnel represent a significant asset and serve as the primary source for our technological and product innovations.
Competition for qualified personnel with significant experience in the design, development, manufacturing, marketing and sales of analog and mixed-signal products has been, and continues to be, intense. Our key technical personnel represent a significant asset and serve as the primary source for our technological and product innovations.
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.
During fiscal 2025, 71% of our revenue was derived from distributors (and 49% of our revenue 23 Table of Contents 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.
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.
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.
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.
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 preceding risk factor.
The average selling prices of our products could decrease rapidly which may negatively impact our revenues and gross profit We may experience substantial period-to-period fluctuations in future operating results due to the erosion of our average selling prices.
Future acquisitions may also result in debt, contingent liabilities, or the issuance of equity that could dilute existing shareholders. The average selling prices of our products could decrease rapidly which may negatively impact our revenues and gross profit We may experience substantial period-to-period fluctuations in future operating results due to the erosion of our average selling prices.
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.
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.
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.
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 the current administration’s creation of the US Investment Accelerator and its negotiations of grants under the CHIPS Act may make the availability of any such incentives even less certain.
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.
In the event that these vendors fail to meet our demand for 19 Table of Contents 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.
Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition, which may include price concessions, delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.
See the risk factor entitled “ Our business, financial condition, and results of operations could be materially and adversely affected by tariffs, trade restrictions, and other barriers to international trade. ” Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition, which may include price concessions, delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.
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.
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.
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.
Because substantially all of our products incorporate technology covered by one or more of our issued U.S. patents, a finding that these patents are invalid or unenforceable could allow competitors to introduce products that reduce both the volume and price per unit of our products.
Because demand for our products may not materialize, manufacturing based on forecasts subjects us to increased risks of high inventory carrying costs, increased obsolescence and increased operating costs.
However, these forecasts do not represent binding purchase commitments. As a result, we incur inventory and manufacturing costs in advance of anticipated sales. Because demand for our products may not materialize, manufacturing based on forecasts subjects us to increased risks of high inventory carrying costs, increased obsolescence and increased operating costs.
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 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.
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
Any material weaknesses or other deficiencies or otherwise failing to maintain an effective system of internal controls, including disclosure controls and procedures, could result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations We previously identified a material weakness that existed as of the end of our fiscal 2023 and management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 30, 2023.
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.
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.
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.
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.
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 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.
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.
For example, new products and disruptive technologies are being developed, and companies with which we compete have implemented AI strategies for products and service offerings.
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.
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 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.
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.
Additionally, the amount of fees and costs of defense, including costs associated with the indemnification of directors and officers, and other liabilities that may be incurred in connection with lawsuits and other negative effects, such as diversion of resources from the Merger and ongoing business activities, negative publicity or damage to our relationships with business partners, suppliers and customers, could have a material adverse effect on our business, results of operations, cash flows and financial condition. 15 Table of Contents Global Business Risks 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.
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”).
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.
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.
Any acquisitions we make could disrupt our business and harm our financial condition Any acquisition we pursue as part of our growth and product‑diversification strategy could disrupt our business and negatively affect our financial condition.
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In addition, the risk of cyber-attacks has increased in connection with the conflicts between Russia and Ukraine and in the Middle East.
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Risk Factors Risk Factors Summary Risks Related to the Proposed Merger • We may not complete the proposed Merger within the time frame we anticipate, or at all, which could have an adverse effect on our business, financial condition, results of operations, cash flows and stock price • Uncertainties associated with the Merger could adversely affect our business, results of operations, cash flows and financial condition • The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger and that could deter or discourage a competing acquirer from making a favorable alternative transaction proposal • While the Merger Agreement is in effect, we are subject to restrictions on our business activities • Lawsuits may arise in connection with the Merger, which could delay or prevent completion of the Merger and adversely affect our business, results of operations, cash flows and financial condition Global Business Risks • 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 • We may be subject to information technology failures that could damage our reputation, business operations and financial condition • Our business, financial condition, and results of operations could be materially and adversely affected by global or industry-specific shortages of memory components or other key components necessary for our customers’ products • Competition within the numerous markets we target may reduce sales of our products and reduce our market share • If we are unable to develop or acquire new and enhanced products that achieve market acceptance in a timely manner, our operating results and competitive position could be harmed • Our research and development efforts are focused on a limited number of new technologies and products, and any delay in the development, or abandonment, of these technologies or products by industry participants, or their failure to achieve market acceptance, could compromise our competitive position • We have limited resources compared to some of our current and potential competitors and we may not be able to compete effectively and increase market share • Our business, financial condition, and results of operations could be materially and adversely affected by tariffs, trade restrictions, and other barriers to international trade • We rely on third parties to manufacture, assemble and test our products, which subjects us to risks of disruptions in our supply chain • We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations • Most of our current manufacturers, assemblers, test service providers, distributors and customers are concentrated in the same geographic region, which increases the risk that a natural disaster, epidemic, labor strike, war or political unrest could disrupt our operations or sales • We are subject to the cyclical nature of the semiconductor industry, which has been subject to significant fluctuations • We may not be able to maintain our historical growth and may experience significant period-to-period fluctuations in our revenues and operating results, which may result in volatility in our stock price • Our inability to manage growth could materially and adversely affect our business • We depend on our key personnel to manage our business effectively in a rapidly changing market, and if we are unable to retain our current personnel and hire additional personnel, our ability to develop and successfully market our products could be harmed • Any acquisitions we make could disrupt our business and harm our financial condition • The average selling prices of our products could decrease rapidly which may negatively impact our revenues and gross profit 12 Table of Contents • Failure to manage our distribution channel relationships could impede our future growth • We do not have long-term commitments from our customers • 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 • Our products are complex and may contain errors which could lead to liability, an increase in our costs and/or a reduction in our revenues • Our customers require our products to undergo a lengthy and expensive qualification process without any assurance of product sales • We are subject to risks relating to product concentration • Any dispositions could harm our financial condition • The semiconductor manufacturing process is highly complex and, from time to time, manufacturing yields may fall below our expectations, which could result in our inability to satisfy demand for our products in a timely manner and may decrease our gross profit due to higher unit costs • We depend on our customers to support our products, and some of our customers offer competing products • Changes in the privacy and data security/protection laws could have an adverse effect on our operations • Our products must conform to industry standards and technology in order to be accepted by end users in our markets • Any material weaknesses or other deficiencies or otherwise failing to maintain an effective system of internal controls, including disclosure controls and procedures, could result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations Intellectual Property Risks • Significant litigation over intellectual property in our industry may cause us to become involved in costly and lengthy litigation which could adversely affect our business • We may be unable to protect our intellectual property, which would negatively affect our ability to compete Liquidity and Credit Risks • Disruptions in the financial services industry could adversely affect our operations and financial condition • We are subject to credit risks related to our accounts receivable • Any borrowings under our credit agreement or other indebtedness could adversely affect our operations and financial condition • We could seek to raise additional debt or equity capital in the future, but additional capital may not be available on terms acceptable to us, or at all Stock and Governance Risks • Our stock price may be volatile • Provisions in our charter documents and Delaware law could prevent, delay or impede a change in control of us and may reduce the market price of our common stock 13 Table of Contents Risk Factors Risks Related to the Proposed Merger We may not complete the proposed Merger within the time frame we anticipate, or at all, which could have an adverse effect on our business, financial condition, results of operations, cash flows and stock price On February 4, 2026, we entered into the Merger Agreement with Parent and Merger Subsidiary, pursuant to which Merger Subsidiary will be merged with and into us, with us continuing as the surviving company and a wholly owned subsidiary of Parent.
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Our customers typically complete their own qualification process.
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If the Merger is completed, we will become a privately held company, meaning that our common stock will be delisted from the NASDAQ National Market and deregistered under the Securities Exchange Act of 1934.
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If the industry cannot agree on a common set of standards, then the growth of the IoT market may be slower than expected.
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Completion of the Merger is subject to a number of closing conditions, including obtaining approval of our stockholders at a special meeting of stockholders and the receipt of required regulatory approvals. The failure to satisfy these closing conditions could jeopardize or delay the consummation of the Merger.
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Future acquisitions also could cause us to incur debt or contingent liabilities or cause us to issue equity securities that could negatively impact the ownership percentages of existing shareholders.
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Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to certain materiality qualifications) and the performance in all material respects of the other party’s covenants under the Merger Agreement, including, with respect to us, covenants regarding operation of our business prior to closing.
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However, these forecasts do not represent binding purchase commitments and we do not recognize sales for these products until they are shipped to the customer. As a result, we incur inventory and manufacturing costs in advance of anticipated sales.
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In addition, the Merger Agreement may be terminated under certain specified circumstances. Certain conditions to the completion of the pending Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, as applicable). As a result, we cannot assure you that the Merger will be completed.
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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.
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If the Merger is not completed within the expected time frame, or at all, we may be subject to a number of material risks.
Removed
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.
Added
To the extent that the current market price of our common stock reflects an assumption that the Merger will be completed, the price of our common stock could decrease if the Merger is not completed and stockholders may not recover their investment or receive a price for their shares of our common stock similar to what has been offered under the Merger Agreement.
Removed
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.
Added
Further, investor confidence in us could decline, and stockholder litigation could be brought against us. Additionally, we may be required to pay a termination fee under certain circumstances that give rise to a termination of the Merger Agreement.
Removed
Even after any public health crisis has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession, economic downturn or increased unemployment that has occurred or may occur in the future.
Added
In addition, we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger, including for activities that we would have not undertaken other than to complete the Merger.
Removed
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.
Added
As a result, to the extent the Merger is not completed, we will receive little or no benefit from incurring these costs.
Removed
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. 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.
Added
Even if successfully completed, there are certain risks to our stockholders from the Merger, including: the amount of cash per outstanding share of our common stock to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock; receipt of the all-cash per share Merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and if the Merger is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current business strategy as an independent company.
Removed
We previously identified a material weakness in our internal control over financial reporting.
Added
Uncertainties associated with the Merger could adversely affect our business, results of operations, cash flows and financial condition The announcement and pendency of the Merger, as well as any delays in the expected timeframe, could cause disruption in our business and create uncertainties, which could have an adverse effect on our business, results of operations, cash flows and financial condition, regardless of whether the Merger is completed.
Added
These risks and uncertainties include, but are not limited to: • the possibility that our relationship with suppliers, customers and employees could be adversely affected, including if our suppliers, customers or others attempt to negotiate changes in existing business relationships, consider entering into business relationships with parties other than us, delay or defer decisions concerning their business with us, or terminate their existing business relationships with us during the pendency of the Merger; • uncertainties caused by any negative sentiment in the marketplace with respect to the Merger, which could adversely impact investor confidence in the Company; 14 Table of Contents • a diversion of a significant amount of management time and resources toward the completion of the Merger; • a distraction of our current employees as a result of the Merger, which could result in a decline in their productivity or cause distractions in the workplace; • being subject to certain restrictions on the conduct of our business; • possibly foregoing certain business opportunities that we might otherwise pursue absent the pending Merger; • difficulties in attracting and retaining key employees due to uncertainties related to the Merger; • impact of costs related to completion of the Merger; and • other developments beyond our control, including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the Merger.
Added
The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.
Added
As a result, there can be no assurance that our business, results of operations, cash flows and financial condition will not be adversely affected, as compared to prior to the announcement of the Merger Agreement.
Added
The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger and that could deter or discourage a competing acquirer from making a favorable alternative transaction proposal Under the Merger Agreement, we are subject to “no-shop” restrictions and are not permitted, subject to certain exceptions set forth in the Merger Agreement, to initiate, solicit or knowingly encourage or facilitate any inquiries or the making of any proposal or offer by or with a third party with respect to an acquisition proposal and to furnish nonpublic information to, or engage in discussions or negotiations with, a third party interested in pursuing an alternative transaction.
Added
Further, our board of directors is required to recommend that our stockholders vote in favor of the Merger, subject to exceptions for superior proposals and other situations where failure to effect a recommendation change would be inconsistent with the board of directors’ fiduciary duties.
Added
Upon the termination of the Merger Agreement under specified circumstances, including, among others, the termination by the Parent in the event of a Change of Recommendation (as defined in the Merger Agreement) by our board of directors, we would be required to pay Parent a termination fee of $259 million.
Added
Such provisions of the Merger Agreement could discourage or deter a third party that may be willing to pay more than Parent for our outstanding common stock from considering or proposing such an acquisition of the Company.
Added
While the Merger Agreement is in effect, we are subject to restrictions on our business activities Under the terms of the Merger Agreement, we are subject to restrictions on our business activities, including, among other things, restrictions on our ability to pay dividends; acquire other businesses and assets; dispose of our assets; enter into or materially modify certain contracts; repurchase, adjust the terms of or issue securities; make certain capital expenditures; settle certain legal actions; take certain actions relating to intellectual property; take certain action related to employee benefit plans; amend our organizational documents; and incur certain indebtedness.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+6 added−1 removed10 unchanged
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.
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.
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 recognize the importance of the continued protection of our employee, customer, 29 Table of Contents 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.
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.
Our CSO, in coordination with the ESC, works collaboratively to implement our enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes, including oversight of our ISMS and SSMF programs. 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.
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.
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. 30 Table of Contents
The Audit Committee regularly reviews our policies and practices with respect to risk management, including cybersecurity risks, and reports to the full Board of Directors based on these reviews.
The Audit Committee regularly reviews our policies and practices with respect to risk management, including cybersecurity risks, our ISO/IEC 27001:2022-certified ISMS and our SSMF program, and reports to the full Board of Directors based on these reviews.
Removed
The scope of cybersecurity risk management encompasses all aspects of business operations, including supply chain risks and production manufacturing operations. Our cybersecurity practices are based on industry practices and frameworks such as those established by the International Organization for Standardization and the National Institute of Standards and Technology.
Added
The scope of cybersecurity risk management encompasses all aspects of business operations, including supply chain risks and production manufacturing operations. We maintain an information security management system (“ISMS”) that is certified to ISO/IEC 27001:2022.
Added
Our ISO/IEC 27001:2022 certification covers the broadest scope of information security management and information cyber risk management, including all aspects of semiconductor hardware and software design, development, validation and quality assurance, operations, manufacturing, and technology supply chain risk management.
Added
In addition, we operate a Secure Software Maturity Framework (“SSMF”) program that is intended to provide a structured, risk-based framework for identifying, assessing and mitigating security risks across the lifecycle of our software components, products and related manufacturing services and operational processes.
Added
Through the SSMF program, we seek to integrate “security-by-design” requirements into product and process design, validation and quality assurance, operations and supply chain activities; perform periodic assessments of critical assets and suppliers; and track remediation of identified issues to completion.
Added
The SSMF program is designed to align with, and complement, our ISO/IEC 27001:2022-certified ISMS and other elements of our enterprise risk management program.
Added
To date, 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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
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
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. 31 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed2 unchanged
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.
Biggest changeCompany / Index 01/02/21 01/01/22 12/31/22 12/30/23 12/28/24 01/03/26 Silicon Laboratories Inc. $ 100.00 $ 162.10 $ 106.54 $ 103.87 $ 100.35 $ 103.60 NASDAQ Composite Index $ 100.00 $ 122.18 $ 82.43 $ 119.22 $ 157.76 $ 187.09 PHLX Semiconductor Index $ 100.00 $ 142.85 $ 93.02 $ 155.35 $ 192.33 $ 278.99 _________________________________________________ (1) The graph assumes that $100 was invested in our common stock and in each index at the market close on January 2, 2021, 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 January 28, 2025, there were 46 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 30, 2026, there were 44 holders of record of our common stock.
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.
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. 32 Table of Contents Issuer Purchases of Equity Securities There were no repurchases of our common stock during the three months ended January 3, 2026. Item 6. [Reserved] 33 Table of Contents
Removed
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

Item 7. Management's Discussion & Analysis

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

35 edited+18 added−15 removed39 unchanged
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.
Biggest changeThe following table sets forth our Consolidated Statements of Operations data as a percentage of revenues for the periods indicated: Fiscal Year 2025 2024 Revenues 100.0 % 100.0 % Cost of revenues 41.8 46.6 Gross profit 58.2 53.4 Operating expenses: Research and development 45.0 56.9 Selling, general and administrative 22.2 24.9 Operating expenses 67.2 81.7 Operating loss (9.0) (28.3) Other income (expense): Interest income and other, net 1.7 2.1 Interest expense (0.1) (0.2) Loss before income taxes (7.4) (26.5) Provision for income taxes 0.9 6.2 Net loss (8.3) % (32.7) % Comparison of Fiscal 2025 to Fiscal 2024 Revenues Fiscal Year (in millions) 2025 2024 Change % Change Industrial & Commercial $ 444.9 $ 338.5 $ 106.4 31.4 % Home & Life 339.9 245.9 94.0 38.2 % $ 784.8 $ 584.4 $ 200.4 34.3 % 36 Table of Contents The increase in revenues in fiscal 2025 was due to increased revenues of $106.4 million from our Industrial & Commercial products and $94.0 million from our Home & Life products.
Cost of revenues includes the cost of purchasing finished silicon wafers processed by independent foundries; costs associated with assembly, test and shipping of those products; costs of personnel and equipment associated with manufacturing support, logistics and quality assurance; costs of software royalties, other intellectual property license costs and certain acquired intangible assets; and an allocated portion of our occupancy costs.
Cost of revenues includes the cost of purchasing finished silicon wafers processed by independent foundries; costs associated with assembly, test and shipping of those products; costs of personnel and equipment associated with manufacturing support, logistics and quality assurance; costs of software royalties, other intellectual property license costs and amortization of certain acquired intangible assets; and an allocated portion of our occupancy costs.
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.
Although we saw sequential improvements in revenues over the course of fiscal 2025, 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.
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.
Comparison of Fiscal 2024 to Fiscal 2023 A discussion of changes in our results of operations and liquidity and capital resources from fiscal 2023 to fiscal 2024 has been omitted from this Form 10-K, but may be found in “Item 7.
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.
In the event that actual demand is lower, or market conditions are worse than originally projected, additional inventory write-downs may be required. 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.
We believe our existing cash, cash equivalents, investments, credit under our credit facility, and cash generated from operations are sufficient to meet our short-term (i.e., over at least the next twelve months) and long-term capital requirements, although we could be required, or could elect, to seek additional funding prior to that time.
We believe our existing cash, cash equivalents, investments, credit under our credit facility, and cash generated from operations are sufficient to meet our short-term (i.e., over at least the next twelve months) and long-term capital requirements, although we could be required, or could elect, to seek additional funding.
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.
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 39 Table of Contents obligations requires that we identify the promised goods and services in the contract.
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.
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 4, 2025. 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.
Each wafer contains numerous die, which are cut from the wafer to create a chip for an IC. We rely on third parties in Asia to assemble, package, and, in most cases, test these devices and ship these units to our customers.
Each wafer contains numerous die, which are cut from the wafer to create a chip for an IC. We rely on third parties in Asia to 34 Table of Contents assemble, package, and, in most cases, test these devices and ship these units to our customers.
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.
The percentage of our revenues derived from outside of the United States was 91% in fiscal 2025, 90% in fiscal 2024 and 88% in fiscal 2023. 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.
Our gross margin fluctuates depending on product mix, manufacturing yields, inventory valuation adjustments, average selling prices and other factors. Research and Development.
Our gross margin fluctuates depending on product mix, manufacturing yields, inventory valuation adjustments, average selling prices and other factors. 35 Table of Contents Research and Development.
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.
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 2025 had 53 weeks with the extra week occurring in the first quarter of the year.
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.
Two of our distributors who sell to our customers, Arrow Electronics and Edom Technology, represented 28% and 21% of our revenues during fiscal 2025, 27% and 16% during fiscal 2024, and 34% and 15% during fiscal 2023, respectively.
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.
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 with suppliers. As of January 3, 2026, such purchase obligations were $75.8 million.
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.
Operating cash flows during fiscal 2025 reflect our net loss of $64.9 million, adjustments of $119.3 million for depreciation, amortization, stock-based compensation, and deferred income taxes, and a net cash inflow of $41.3 million due to changes in our operating assets and liabilities. Accounts receivable increased to $64.5 million at January 3, 2026 from $54.5 million at December 28, 2024.
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.
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. In general, as our products become more mature, we expect to experience decreases in average selling prices.
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 increase in accounts receivable resulted primarily from an increase in shipments during the last quarter of fiscal 2025 compared to the last quarter of fiscal 2024. Our DSO was 28 days at January 3, 2026 and 29 days at December 28, 2024. Inventory decreased to $95.6 million at January 3, 2026 from $105.6 million at December 28, 2024.
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.
Liquidity and Capital Resources Our principal sources of liquidity as of January 3, 2026 consisted of $443.6 million in cash, cash equivalents and short-term investments, of which $218.6 million was held by our U.S. entities. The remaining balance was held by our foreign subsidiaries.
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.
Our cash equivalents and short-term investments consisted of government debt securities, which include U.S. government securities; time deposits; and money market funds. Operating Activities Net cash provided by operating activities was $95.7 million during fiscal 2025, compared to net cash used in operating activities of $13.9 million during fiscal 2024.
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.
Interest expense on our convertible senior notes included contractual interest and amortization of debt issuance costs. Provision for 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.
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.
Net cash provided by operating activities was $95.7 million during fiscal 2025. Accounts receivable were $64.5 million at January 3, 2026, representing 28 days sales outstanding (“DSO”). Inventory was $95.6 million at January 3, 2026, representing 113 days of inventory (“DOI”). During fiscal 2025, 2024, and 2023, we had no end customer that represented more than 10% of our revenues.
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.
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. There continues to be uncertainty regarding international trade relations and trade policy, including those related to tariffs.
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.
Provision for Income Taxes Fiscal Year (in millions) 2025 2024 Change Provision for income taxes $ 7.0 $ 36.2 $ (29.2) Effective tax rate (12.1) % (23.4) % The decrease in the provision for income taxes for fiscal 2025 as compared to fiscal 2024 was primarily due to a decrease in tax expense related to the U.S. and Singapore valuation allowance.
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.
Investing Activities Net cash used in investing activities was $12.0 million during fiscal 2025, compared to $113.1 million net cash provided during fiscal 2024. The decrease in cash outflows was principally due to a decrease in cash provided by net purchases, sales, and maturities of marketable securities of $91.2 million in fiscal 2025.
Because some of our ICs are designed for use in consumer products, we expect that the demand for our products will be typically subject to some degree of seasonal demand.
Because some of our ICs are designed for use in consumer products, we expect that the demand for our products will be typically subject to some degree of seasonal demand. 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.
Our integrated hardware and software platform, intuitive development tools, industry leading ecosystem and robust support enable customers in building advanced industrial, commercial, home and life applications. 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 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.
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.
Selling, General and Administrative Fiscal Year (in millions) 2025 2024 Change % Change Selling, general and administrative $ 174.3 $ 145.5 $ 28.8 19.8 % Percent of revenue 22.2 % 24.9 % The increase in selling, general and administrative expense in fiscal 2025 was primarily due to $26.4 million for personnel-related costs as a result of lower expenses in the prior fiscal year due to cost containment measures and a $1.8 million increase in IT-related costs.
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.
Operating expenses increased $49.8 million in fiscal 2025 compared to fiscal 2024 due primarily to higher personnel-related costs. Operating loss in fiscal 2025 was $70.5 million compared to operating loss of $165.5 million in fiscal 2024. Refer to “Results of Operations” below for further discussion. We ended fiscal 2025 with $443.6 million in cash, cash equivalents, and short-term investments.
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.
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. Our DOI was 113 days at January 3, 2026 and 125 days at December 28, 2024.
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.
Gross margin increased as our indirect and overhead expenses decreased as a percentage of revenues in fiscal 2025 as a result of the increase in revenues. We may experience variations in the average selling prices of certain of our products.
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.
Research and Development Fiscal Year (in millions) 2025 2024 Change % Change Research and development $ 353.2 $ 332.2 $ 21.0 6.3 % Percent of revenue 45.0 % 56.9 % Research and development expense in fiscal 2025 increased $43.4 million for personnel-related costs as a result of lower expenses in the prior fiscal year due to cost containment measures, offset primarily by $8.5 million of government incentives and decreases of $9.6 million for amortization of intangible assets and $6.2 million for new product introduction and software expense.
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.
The increase in interest income and other, net in fiscal 2025 was primarily due to a higher cash and cash equivalents balance in the current fiscal year as compared to the prior fiscal year. 37 Table of Contents Interest Expense Interest expense in fiscal 2025 was $1.0 million compared to $1.3 million in fiscal 2024.
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.
Gross Profit Fiscal Year (in millions) 2025 2024 Change Gross profit $ 457.0 $ 312.2 $ 144.8 Gross margin 58.2 % 53.4 % 4.8 % Gross profit increased in fiscal 2025 primarily as a result of an increase in revenues in the period.
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.
The decrease in cash outflows was principally due to a $45.0 million repayment of borrowings under the revolving credit facility in the prior fiscal year. 38 Table of Contents Debt As of January 3, 2026, we had a $400 million revolving credit facility.
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.
As of January 3, 2026, we were in compliance with all of the covenants and no amounts were outstanding on the revolving credit facility.
Removed
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.
Added
Fiscal 2024 and 2023 had 52 weeks. Fiscal 2025, 2024, and 2023 ended on January 3, 2026, December 28, 2024, and December 30, 2023, respectively.
Removed
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.
Added
Recent Developments As announced on February 4, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Texas Instruments Incorporated (“Parent”) and Caldwell Merger Corp., a wholly-owned direct subsidiary of Parent (“Merger Subsidiary”), pursuant to which Merger Subsidiary will merge with and into Silicon Laboratories Inc.
Removed
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.
Added
(the “Merger”), and we will survive the Merger as a wholly-owned direct subsidiary of Parent.
Removed
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.
Added
At the effective time of the Merger, each share of our common stock outstanding as of immediately prior to the effective time (other than dissenting shares or any shares of our common stock held by us as treasury stock or owned by Parent or any of our or Parent’s subsidiaries) will be cancelled and converted into the right to receive $231.00 in cash, without interest.
Removed
Interest expense on our convertible senior notes included contractual interest and amortization of debt issuance costs. 31 Table of Contents Provision for Income Taxes.
Added
The transactions contemplated by the Merger Agreement were unanimously approved by our board of directors, and the Merger is expected to close in the first half of 2027, subject to customary closing conditions, including approval by our stockholders and the receipt of required regulatory approvals.
Removed
Unit volumes and average selling prices of our products decreased compared to fiscal 2023.
Added
In connection with the proposed Merger, we have incurred significant costs in the first quarter of fiscal 2026 and expect to continue to incur financial advisory, legal, accounting, and other professional fees prior to the completion of the Merger, which could be significant.
Removed
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.
Added
The situation concerning the imposition of additional tariffs and trade restrictions by the U.S. and other jurisdictions continues to evolve, and we cannot be certain of the outcome, which could adversely impact demand for our products, costs, customers, suppliers, and general economic conditions.
Removed
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.
Added
Additionally, continued geopolitical instability, including the ongoing war in Ukraine and conflicts in the Middle East, as well as the risk of inflation, slower GDP growth, or recession, and the weakening U.S. dollar, have added to the uncertainty.
Removed
The increase in research and development expense as a percent of revenues in fiscal 2024 was due to our decreased revenues.
Added
The extent of the impact of the macroeconomic and geopolitical environment on our operational and financial performance will depend on future developments, which are uncertain, but could materially affect our business, results of operations, access to sources of liquidity, and financial condition.
Removed
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.
Added
Overview We are a leader in secure, intelligent wireless technology for a more connected world. Our integrated hardware and software platform, intuitive development tools, industry leading ecosystem and robust support enable customers in building advanced industrial, commercial, home and life applications.
Removed
The decrease was primarily due to the settlement of our 2025 convertible senior notes in the second quarter of fiscal 2023.
Added
Current Period Highlights Revenues increased $200.4 million in fiscal 2025 compared to fiscal 2024 due to increased revenues from both our Industrial & Commercial products and Home & Life products. Gross margin increased to 58.2% in fiscal 2025 compared to 53.4% in fiscal 2024 primarily as our indirect and overhead expenses decreased as a percentage of revenues.
Removed
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.
Added
Revenues increased as a result of increases in unit volumes and average selling prices of our products, as the current demand environment has improved relative to the prior year, which was impacted by customers reducing inventory levels relative to amounts they held during the period of widespread supply chain disruptions.
Removed
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.
Added
Interest Income and Other, Net Interest income and other, net in fiscal 2025 was $13.6 million compared to $12.0 million in fiscal 2024.
Removed
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.
Added
The decrease was primarily due to a balance on the revolving credit facility for a portion of the prior fiscal year.
Removed
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.
Added
Because of the valuation allowance, we are unable to recognize the full tax benefit of the pre-tax losses incurred in those jurisdictions in the current year. A valuation allowance is required to be established when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Added
We identified a need for the valuation allowance due to the presence of significant negative evidence, including recent operating losses and uncertainty around future economic conditions within both the semiconductor industry and the broader economy. We intend to maintain the valuation allowance until our ability to forecast sufficient future sources of taxable income is reestablished.
Added
Purchases of property and equipment increased $18.2 million during fiscal 2025 compared to fiscal 2024. Financing Activities Net cash used in financing activities was $1.1 million during fiscal 2025, compared to $45.1 million during fiscal 2024.
Added
The credit facility contains various conditions, covenants, and representations with which we must be in compliance in order to borrow funds, including financial covenants that we must maintain a consolidated net leverage ratio (funded indebtedness less cash and cash equivalents up to $750 million and divided by EBITDA, as defined within the covenants) of no more than 4.25 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−12 removed2 unchanged
Biggest changeAccordingly, 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.
Biggest changeAccordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are recorded in the Consolidated Statements of Operations. We occasionally use foreign currency forward contracts to manage exposure to foreign exchange risk.
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.
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.
We believe that our investment policy, which defines the duration, concentration, and minimum credit quality of the allowable investments, meets our investment objectives. Interest Expense We are exposed to interest rate fluctuations in the normal course of our business, including through our credit facility.
We believe that our investment policy, which defines the duration, concentration, and minimum credit quality of the allowable investments, meets our investment objectives. 40 Table of Contents Interest Expense We are exposed to interest rate fluctuations in the normal course of our business, including through our credit facility.
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.
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 had no borrowings as of January 3, 2026. If we borrow from the credit facility in the future, we will again be exposed to interest rate fluctuations.
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.
A 100 basis point decline in yield on our investment portfolio holdings as of January 3, 2026 would decrease our future annual interest income by approximately $3.5 million. A 100 basis point decline in yield on our investment portfolio holdings as of December 28, 2024 would decrease our future annual interest income by approximately $3.0 million.
Removed
Controls and Procedures Evaluation of Disclosure Controls and Procedures We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act).
Added
Gains and losses on foreign currency forward contracts designated as hedges are recognized in earnings in the same period during which the hedged transaction is recognized. Item 8.
Removed
Based 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.
Removed
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
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.
Removed
Remediation of Material Weakness in Internal Control over Financial Reporting As previously disclosed in Item 9A.
Removed
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
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.
Removed
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
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.
Removed
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.
Removed
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.
Removed
Our independent registered public accounting firm, Ernst & Young LLP, issued an attestation report on our internal control over financial reporting. This report appears on page F-3.

Other SLAB 10-K year-over-year comparisons