Kulicke & Soffa Industries (KLIC)

Risks

• Our operating results and financial condition could be adversely impacted by volatile worldwide economic conditions and unpredictable spending by our customers due to uncertainties in the macroeconomic environment.
• The COVID-19 pandemic has adversely affected our business, and may in the future materially and adversely affect our results of operations and financial condition.
• We depend on our suppliers, including sole source suppliers, for critical raw materials, components and subassemblies. If our suppliers do not deliver their products to us, or deliver non-compliant or defective products, we would be unable to deliver our products to our customers.
• The semiconductor industry is volatile with sharp periodic downturns and slowdowns. Cyclical industry downturns are made worse by volatile global economic conditions.
• Difficulties in forecasting demand for our product lines may lead to periodic inventory shortages or excesses.
• Our quarterly operating results fluctuate significantly and may continue to do so in the future.
• Our average selling prices usually decline over time and may continue to do so.
• We may not be able to rapidly develop, manufacture and gain market acceptance of new and enhanced products required to maintain or expand our business.
• We may be unable to continue to compete successfully in the highly competitive semiconductor equipment and packaging materials industries.
• Substantially all of our sales, distribution channels and manufacturing operations are located outside of the U.S., which subjects us to risks, including risks from changes in trade regulations, currency fluctuations, political instability and conflicts.
• Catastrophic events, such as pandemics and extreme weather events as a result of climate change, can have a material adverse effect on our operations and financial results.
• We are subject to export restrictions that may limit our ability to sell to certain customers and the U.S.-China trade war could adversely affect our business.
• Because a small number of customers account for most of our sales, our net revenue could decline if we lose a significant customer.
• We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which may result in lower than expected revenues.
• Increased labor costs and competition for qualified personnel may reduce the efficiency of our flexible manufacturing model and adversely impact our operating results.
• Our business depends on attracting and retaining management, sales and technical employees as well as on the succession of senior management.
• Alternative packaging technologies may render some of our products obsolete and materially and adversely affect our overall business and financial results.
• We send products and equipment to customers or potential customers for trial, evaluation or other purposes which may result in retrofit charges, impairments or write-down of inventory value if the products and equipment are not subsequently purchased by the customers.
• Undetected problems in our products could directly impair our financial results.
• We may not be able to continue to consolidate manufacturing and other facilities or entities without incurring unanticipated costs and disruptions to our business.
• We may be materially and adversely affected by environmental and safety laws and regulations, including laws and regulations implemented in response to climate change.
• We may acquire or divest businesses or enter into joint ventures or strategic alliances, which may materially affect our business, financial condition and operating results.
• Our success depends in part on our intellectual property, which we may be unable to protect.
• Third parties may claim we are infringing on their intellectual property, which could cause us to incur significant litigation costs or other expenses, or prevent us from selling some of our products.
• We may be subject to disruptions or failures in our information technology systems and network infrastructures that could have a material adverse effect on us.
• We are implementing a new enterprise resource planning system. Our failure to implement it successfully, on time and on budget could have a material adverse effect on us.
• We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.
• Changes to our existing tax incentive in Singapore may materially reduce our reported results of operations in future periods.
• We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common shares.
• Anti-takeover provisions in our articles of incorporation and bylaws and under Pennsylvania law may discourage other companies from attempting to acquire us.