MCHP Microchip Technology Dashboard

Risks

• Our operating results are impacted by global economic conditions and may fluctuate in the future due to a number of factors that could reduce our net sales and profitability.
• Our operating results may be adversely impacted if economic conditions impact the financial viability of our licensees, customers, distributors, or suppliers.
• The future trading price of our common stock could be subject to wide fluctuations in response to a variety of factors.
• We may not fully realize the anticipated benefits of our completed or future acquisitions or divestitures including our acquisition of Microsemi.
• Our financial condition and results of operations could be adversely affected if we do not effectively manage our current or future debt.
• Servicing our current debt requires a significant amount of cash, we may not have sufficient cash flow from our business to fund future payments and any adverse changes in our credit ratings could increase our borrowing costs and could adversely affect our ability to access the debt markets.
• We are dependent on orders that are received and shipped in the same quarter and therefore have limited visibility to future product shipments.
• We may lose sales if suppliers of raw materials, components or equipment fail to meet our or our customers' needs or increase costs due to the impact of the COVID-19 virus, increased tariffs or other factors.
• Intense competition in the markets we serve may lead to pricing pressures, reduced sales of our products or reduced market share.
• We are dependent on wafer foundries and other contractors to perform key manufacturing functions for us, and our licensees of our SuperFlash and other technologies also rely on foundries and other contractors.
• Our operating results will suffer if we ineffectively utilize our manufacturing capacity or fail to maintain manufacturing yields.
• Our operating results are impacted by both seasonality and the wide fluctuations of supply and demand in the semiconductor industry.
• Our business is dependent on distributors to service our end customers.
• Our success depends on our ability to introduce new products on a timely basis.
• We continue to be the target of attacks on our data, attempts to breach our security and attempts to introduce malicious software into our IT systems and any interruptions in our IT systems, unauthorized access to our IT systems or improper handling of data, could adversely affect our business.
• If we fail to maintain proper and effective internal control and remediate future control deficiencies, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors' views of us.
• Our reported financial results may be adversely affected by new accounting pronouncements or changes in existing accounting standards and practices.
• Business interruptions to our operations or the operations of our key vendors, subcontractors, licensees or customers, whether due to public health concerns (such as the COVID-19 virus), natural disasters, cybersecurity incidents, or other events, could harm our business.
• We are exposed to various risks related to legal proceedings, investigations or claims.
• Failure to adequately protect our intellectual property could result in lost revenue or market opportunities.
• Regulatory authorities in jurisdictions into or from which we ship our products could levy fines, restrict or delay our ability to export or transfer products, or increase costs associated with the manufacture or transfer of products.
• We are highly dependent on foreign sales and operations, which exposes us to foreign political and economic risks including risks from increases in tariffs.
• Our contractual relationships with our customers expose us to risks and liabilities.
• Reliance on government contracts and sales to governmental agencies could have a material adverse effect on our results of operations.
• We must attract and retain qualified personnel to be successful, and competition for qualified personnel can be intense.
• The occurrence of events for which we are self-insured, or which exceed our insurance limits, may adversely affect our profitability and liquidity.
• We are subject to stringent environmental and other regulations, which may force us to incur significant expenses.
• Customer demands for us to implement business practices that are more stringent than existing legal requirements may reduce our revenue opportunities or cause us to incur higher costs.
• Customer demands and regulations related to conflict-free minerals may force us to incur additional expenses.
• The outcome of future examinations of our income tax returns could have an adverse effect on our results of operations.
• Exposure to greater than anticipated income tax liabilities, changes in tax rules and regulations (including the Act), changes in the interpretation of tax rules and regulations, or unfavorable assessments from tax audits could affect our effective tax rates, financial condition and results of operations.
• Anti-takeover defenses in our charter documents and under Delaware law could discourage takeover attempts, which could also reduce the market price of our common stock.
• As a result of our acquisition activity, our goodwill and intangible assets have increased significantly in recent years and we may in the future incur impairments to goodwill or intangible assets.
• Our foreign pension plans are unfunded, and any requirement to fund these plans in the future could negatively affect our cash position and operating capital.
• From time to time we receive grants from governments, agencies and research organizations. If we are unable to comply with the terms of those grants, we may not be able to receive or recognize grant benefits or we may be required to repay grant benefits previously paid to us and recognize related charges, which would adversely affect our operating results and financial position.
• Conversion of our debentures will dilute the ownership interest of our existing stockholders.
• Climate change regulations and sustained adverse climate change pose regulatory and physical risks that could harm our results of operations or affect the way we conduct business.