Due to weak business conditions, the company paused most of its multi-year $800 million expansion and capital equipment investment plan at Fab 4 in Gresham, Oregon, and its $880 million silicon carbide capacity expansion at Fab 5 in Colorado Springs.

The company discontinued its Preferred Supply Program for new orders effective February 1, 2024, citing improved industry capacity conditions and reduced product lead times. This program offered customers prioritized capacity for a commitment.

The company continues to focus on selling proprietary products that cannot be quickly replaced, to a geographically diverse customer base across a broad range of market segments, to reduce exposure to industry cyclicality.

While the company has made efforts to balance manufacturing production, customer demand, and inventory levels, days of inventory increased significantly from 169 to 224.

The company is attempting to be more efficient with selling, general, and administrative expenses, but unabsorbed capacity charges of $40.7 million negatively impacted operating results due to operating below normal capacity.

Despite the decrease in net sales, the company continues to invest in new and enhanced products, including development systems software, and in design and manufacturing process technologies.

Slowing economic activity, increasing business uncertainty, persistent inflation and higher interest rates are cited as factors that may reduce net sales and profitability. The company also notes the risk of customers holding excess inventory.

Approximately 75% of net sales were made to foreign customers, including significant sales in China and Taiwan, exposing the company to various risks including economic uncertainty, political instability, trade restrictions, and currency fluctuations.

The company acknowledges being a target of cyber-attacks and emphasizes the risk of interruptions, unauthorized access, and security breaches impacting IT systems and data, which could adversely affect the business.

The semiconductor industry is intensely competitive and faces price erosion and rapid technological change. The company competes with major domestic and international semiconductor companies, some of which have greater resources.

The company's future operating results depend on its ability to develop and timely introduce new products that compete effectively on the basis of price and performance and which address customer requirements.

The company acknowledges that some governments, such as China, may provide significant assistance to some of its competitors, or to new entrants, and may intervene in support of national industries and/or competitors.

Integrated circuit manufacturing processes are complex and sensitive to many factors, including contaminants in the manufacturing environment or materials used, the performance of our personnel and equipment, and other quality issues.

Our ability to successfully transition to more advanced process technologies to reduce manufacturing costs is important for us to remain competitive.

The company relies on outside wafer foundries for a significant portion of its wafer fabrication needs and uses several contractors for a portion of the assembly and testing of its products.

The company is committed to investing in new and enhanced products, including development systems software, and in its design and manufacturing process technologies.

The company acknowledges the risks related to the use of Al, including the potential exposure of proprietary confidential information to unauthorized recipients and the misuse of intellectual property.

Compliance with existing and proposed government regulation of Al, including in jurisdictions such as the EU, may also increase the cost of related research and development, and create additional reporting and/or transparency requirements.

The Board of Directors has authorized share repurchases of up to $4.00 billion, of which $1.65 billion is still available. The company repurchased approximately 11.9 million shares for $982.1 million during fiscal 2024.

The Board of Directors has approved and instituted a quarterly cash dividend on the company's common stock. The current intent is to increase quarterly cash dividends depending upon market conditions, results of operations, and potential changes in tax laws.

Consistent with the slowing macroeconomic environment, most of our factory expansion actions remain paused and we have reduced our planned capital investments through fiscal 2025.

Failure to meet ESG expectations, standards or disclosure requirements or achieve corporate responsibility goals, could adversely affect our business, results of operations, financial condition, or stock price.

Sustained adverse changes in climate could have a direct adverse economic impact on us due to the effects of extreme weather and climate events on our production facilities, our supply chain and customers.

Customer demands and regulations related to conflict-free minerals may force the company to incur additional expenses, and if the company cannot certify its supply chain is free from the risk of irresponsible sourcing, customers may demand that the company change the sourcing of materials used in the manufacture of our products.

The semiconductor industry is characterized by seasonality and wide fluctuations of supply and demand. Historically, since a significant portion of our revenue is from international sales and consumer markets, our business generates stronger revenues in the first half and comparatively weaker revenues in the second half of our fiscal year.

Uncertain global economic and public health conditions, such as the COVID-19 pandemic, have caused and may in the future cause our operating results to fluctuate significantly and make comparisons between periods less meaningful.

Trade tensions between the U.S. and China, have continued to escalate from 2018 to present, and include the U.S. increasing tariffs on Chinese origin goods and China increasing tariffs on U.S. origin goods.