Consistent with the weak macroeconomic environment, most of our factory expansion activity remains paused and we have reduced our planned capital investments through fiscal 2026.

We recently settled an ongoing legal matter with one of our licensees. The impact of this settlement was the release of an accrual, which increased both our revenue and profits by $13.3 million in the September 2024 quarter.

With the cancellation of the Preferred Supply Program, turns orders are once again key to our ability to meet our business objectives.

We continue to prioritize our efforts to manage our high inventory levels, and our global production facilities continue to run at lower utilization rates.

We plan to continue to selectively invest in assembly and test equipment to increase our internal capacity capabilities and transition certain outsourced assembly and test capacity to our internal facilities.

The Company actively seeks to obtain new tax holidays.

We continue to be the target of attacks on our IT systems. Interruptions in and unauthorized access to our IT systems, security breaches or incidents impacting our systems or data that we or our service providers maintain or otherwise process including data belonging to us, customers, suppliers, contractors or employees, could adversely affect our business.

Trade restrictions and increase in tariffs, including those on business in China, or focused on specific companies, disrupt our business, our supply chain or our customers' businesses due to public health concerns

Our reliance on foreign operations, foreign suppliers, maintenance of substantially all of our finished goods inventory at foreign locations and significant foreign sales exposes us to foreign political and economic risks, including, but not limited to: economic uncertainty in the worldwide markets we serve; political instability

The semiconductor industry is intensely competitive and faces price erosion and rapid technological change. We compete with major domestic and international semiconductor companies, many of which have greater market recognition and substantially greater financial, technical, marketing, distribution and other resources than we do.

We have taken steps to attempt to mitigate the costs of these tariffs on our business.

We consider a majority of the products in our analog product line to be proprietary in nature, where prices are relatively stable, similar to the pricing stability experienced in our mixed-signal microcontroller products.

We plan to continue to selectively invest in assembly and test equipment to increase our internal capacity capabilities and transition certain outsourced assembly and test capacity to our internal facilities.

The impact of unabsorbed capacity charges was an adverse impact of $40.0 million and $76.0 million in the three and six months ended September 30, 2024, respectively, compared to the three and six months ended September 30, 2023, respectively.

Inventory holding patterns at our distributors may have a material impact on our net sales.

We are committed to continuing our investment in new and enhanced products, including development systems, and in our design and manufacturing process technologies. We believe these investments are significant factors in maintaining our competitive position.

R&D expenses decreased $51.9 million, or 17.7%, for the three months ended September 30, 2024 over the same period last year. R&D expenses decreased $108.7 million, or 18.4%, for the six months ended September 30, 2024 over the same period last year. The primary reason for the decreases in R&D expenses was lower employee compensation costs.

We have taken steps to attempt to mitigate the costs of these tariffs on our business.

In November 2021, our Board of Directors authorized the repurchase of up to $4.00 billion of our common stock in the open market or in privately negotiated transactions. In the first six months of fiscal 2025, we repurchased approximately 1.0 million shares of our common stock for $90.0 million under this authorization.

A quarterly cash dividend of $0.455 per share was declared on November 5, 2024 and will be paid on December 6, 2024 to stockholders of record as of November 22, 2024.

Consistent with the weak macroeconomic environment, most of our factory expansion activity remains paused and we have reduced our planned capital investments through fiscal 2026.

We must comply with federal, state, local and foreign governmental regulations related to the use, storage, emissions, discharge and disposal of hazardous substances used in our products and manufacturing processes, or that are the result of our manufacturing operations, such as greenhouse gases.

We are committed to corporate responsibility and actively manage these issues including through our guiding values and our internal policies.

Though we continue to improve our processes and procedures to prevent the unauthorized flow of our products, our actions have not been fully successful. We operate in an extensive, ever-changing global supply chain, an expectation of complete traceability of standard semiconductor products to every end use and prevention of product misuse and diversion is unachievable.

The decreases in net sales in the three and six months ended September 30, 2024 compared to the three and six months ended September 30, 2023 were primarily due to adverse economic conditions, including slowing economic activity, increasing business uncertainty, persistent inflation, high interest rates, and shorter product lead times

Other factors that we believe contributed to changes in our reported net sales for the three and six months ended September 30, 2024 compared to the three and six months ended September 30, 2023 and which are drivers of long-term trends in our net sales but which factors we are not able to quantify include: semiconductor industry conditions; adverse geopolitical conditions and trade restrictions.

We have taken steps to attempt to mitigate the costs of these tariffs on our business.