What the changes say
- AI risks now cover unpredictable AI infrastructure demand, internal AI use, intellectual property, cybersecurity, privacy and evolving regulation.
- Automotive customers represented 70.6% of fiscal 2026 sales, down from 73.8% in fiscal 2025.
- Supply-chain exposure now expressly includes energy shortages, war, export restrictions and climate change.
- Climate-change, ESG, unsolicited-acquisition and product/customer/channel-mix risks were removed as standalone factors.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Industry
We depend on growth in the end markets that use our products. Any slowdown in such growth, including as a result of volatility in demand for emerging technologies or changes in government incentives, could adversely affect our financial results
Growth depends on automotive, industrial and emerging AI infrastructure markets, where demand, customer health, incentives and supply costs may fluctuate.
- NewRisks Related to Our Business and Industry
We focus on winning competitive bid selection processes, called “design wins,” to develop products for use in our customers’
Failure to win initial semiconductor design mandates could waste engineering spending and exclude Allegro from customers’ future products.
- NewRisks Related to Our Business and Industry
Future sales of our common stock by large stockholders, or the possibility of such sales, may cause the trading price of our common stock to decline
Large stockholders’ actual or perceived sales of common stock could depress the share price and impair future capital raising.
- NewRisks Related to Our Business and Industry
We are exposed to risks related to the use of AI Technologies by us and others
Using AI in chip design, manufacturing and administration creates risks involving competition, confidential information, intellectual property, privacy, cybersecurity and defective models.
- NewRisks Related to Regulatory Compliance
Our use of AI subjects us to a legal framework that is rapidly evolving and our failure to monitor and comply with the laws and regulations to which we are or may become subject could have a material adverse effect on our business and operations
Changing AI laws and enforcement in the United States, European Union and elsewhere could increase costs, restrict AI use or create liability.
Dropped
- DroppedRisks Related to Our Business and Industry
Shifts in our product mix, customer mix or channel mix may result in declines in gross margin
- DroppedRisks Related to Our Business and Industry
We depend on growth in the end markets that use our products. Any slowdown in the growth of these end markets could adversely affect our financial results
- DroppedRisks Related to Our Business and Industry
The nature of the design win process requires us to incur expenses without any guarantee that research and development efforts will generate net sales, and even if design wins are secured, such design wins may not generate timely or sufficient net sales or margins, which could adversely affect our financial results
- DroppedRisks Related to Our Business and Industry
Our business could be negatively affected as a result of unsolicited acquisition proposals
Gross-margin pressure from product, customer and channel mix changes.
- DroppedGeneral Risks
Climate change presents risks that could disrupt our business operations and force us to incur increased costs and expenses, which could have a material adverse effect on our business, financial condition, results of operations and liquidity
- DroppedGeneral Risks
We are subject to a series of risks related to ESG matters
Reworded
- 83% rewrittenRisks Related to Our Business and Industry
increased exposure to general market and economic conditions outside of the U.S
The supplied prior-year and current-year risk text is substantively unchanged; no specific new international threat appears.
- 71% rewrittenRisks Related to Our Business and Industry
Events beyond our control impacting us, our key suppliers, our manufacturing partners or other third-party suppliers of components, materials or subassemblies incorporated into the same end products as our devices could have an adverse effect on our business, financial condition, results of operations and cash flows
The supply-disruption list now expressly includes energy shortages, climate change and war.
Was: Events beyond our control impacting us, our key suppliers or our manufacturing partners could have an adverse effect on our business, financial condition, results of operations and cash flows
- 66% rewrittenRisks Related to Our Business and Industry
We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability
The competitive-technology discussion now specifically includes integrated-circuit development technologies.
- 55% rewrittenRisks Related to Our Business and Industry
Our gross margins may be adversely affected by decreases in average selling prices of our products, increases in input costs and shifts in product, customer or channel mix
Gross-margin volatility now expressly covers product, customer and channel mix, while the prior cost-reduction and new-product discussion is omitted.
Was: Decreases in average selling prices of our products and increases in input costs may reduce our gross margins
- 49% rewrittenRisks Related to Our Business and Industry
Warranty claims, customer quality claims, product liability claims and product recalls could harm our business, results of operations and financial condition
The risk now adds automotive and industrial customer quality claims, including charge-backs, set-offs, indemnification, cost-sharing and incentives.
Was: Warranty claims, product liability claims and product recalls could harm our business, results of operations and financial condition
- 45% rewrittenRisks Related to Our Business and Industry
Substantial portions of our sales are made to automotive industry suppliers. Downturns or disruptions in the automotive market or industry have harmed, and in the future could significantly harm, our financial results
Automotive-related sales fell to 70.6% from 73.8%, and the growth examples now specify ADAS and xEV powertrains.
- 44% rewrittenGeneral Risks
Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity
The inflation discussion now specifically identifies gold as a raw-material cost and otherwise retains the pricing-pressure risk.
- 42% rewrittenRisks Related to Our Business and Industry
We rely on a limited number of third-party semiconductor wafer fabrication facilities and a limited number of suppliers of other materials, and the failure of any of these suppliers to supply wafers or other materials on a timely basis could harm our business and our financial results
The supplier discussion updates Polar’s name and adds prior shortages, delays and export restrictions affecting wafers, components and materials.
- 40% rewrittenRisks Related to Our Business and Industry
We may lose sales if we are unable to obtain government authorization to export certain technology for our products, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations
- 40% rewrittenRisks Related to Our Business and Industry
Our ability to compete successfully depends in part on our ability to commercialize our products without infringing the patent, trade secret or other IP rights of others
Was: Our ability to compete successfully depends in part on our ability to commercialize our products without infringing the patent, trade secret or other intellectual property rights of others
- 37% rewrittenRisks Related to Our Business and Industry
Cybersecurity incidents that we or our critical third-party service providers experience could irreparably damage our reputation and business and materially affect our operating results and financial condition
- 35% rewrittenRisks Related to Our Business and Industry
If we are unable to protect our proprietary technology and inventions, our ability to compete successfully and our financial results could be adversely impacted
- 33% rewrittenGeneral Risks
We could be subject to changes in tax rates or the adoption of new tax legislation, whether in or out of the United States, or could otherwise have exposure to additional tax liabilities, which could adversely affect our results of operations or financial condition
- 33% rewrittenRisks Related to Our Business and Industry
If we encounter sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products, we may lose sales and damage our customer relationships
- 31% rewrittenRisks Related to Our Business and Industry
The cyclical nature of the semiconductor industry may limit our ability to maintain or improve our net sales and profitability
- 30% rewrittenRisks Related to Our Business and Industry
Our dependence on our manufacturing operations in the Philippines exposes us to certain risks that may harm our business
- 29% rewrittenRisks Related to Our Business and Industry
Our ability to identify, enter and expand in new markets may be unsuccessful, and our investments in these opportunities may not generate expected returns, which could adversely affect our business and financial results
- 28% rewrittenRisks Related to Our Business and Industry
A significant portion of our net sales are generated through distributors, which subjects us to certain risks
- 26% rewrittenRisks Related to Our Business and Industry
Downturns or volatility in general economic conditions could have a material adverse effect on our business, financial condition, results of operations and liquidity
- 24% rewrittenRisks Related to Our Business and Industry
Our dependence on international customers and operations also subjects us to a range of other additional regulatory, operational, financial and political risks that could adversely affect our financial results
- 21% rewrittenRisks Related to Our Business and Industry
Our quarterly net sales and operating results are difficult to predict accurately and may fluctuate significantly from period to period. As a result, we may fail to meet the expectations of investors, which could cause our stock price to decline
All 36 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Industry
- 01Downturns or volatility in general economic conditions could have a material adverse effect on our business, financial condition, results of operations and liquidity26% rewritten
- 02We face intense competition and may not be able to compete effectively, which could reduce our market share and decrease our net sales and profitability66% rewritten
- 03We rely on a limited number of third-party semiconductor wafer fabrication facilities and a limited number of suppliers of other materials, and the failure of any of these suppliers to supply wafers or other materials on a timely basis could harm our business and our financial results42% rewritten
- 04The cyclical nature of the semiconductor industry may limit our ability to maintain or improve our net sales and profitability31% rewritten
- 05Substantial portions of our sales are made to automotive industry suppliers. Downturns or disruptions in the automotive market or industry have harmed, and in the future could significantly harm, our financial results45% rewritten
- 06Acquisitions of other companies or technologies, may create additional risks, including risks associated with our ability to successfully integrate these acquisitions into our business
- 07Our gross margins may be adversely affected by decreases in average selling prices of our products, increases in input costs and shifts in product, customer or channel mix55% rewritten
- 08If we encounter sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products, we may lose sales and damage our customer relationships33% rewritten
- 09Our quarterly net sales and operating results are difficult to predict accurately and may fluctuate significantly from period to period. As a result, we may fail to meet the expectations of investors, which could cause our stock price to decline21% rewritten
- 10Our dependence on our manufacturing operations in the Philippines exposes us to certain risks that may harm our business30% rewritten
- 11A significant portion of our net sales are generated through distributors, which subjects us to certain risks28% rewritten
- 12Events beyond our control impacting us, our key suppliers, our manufacturing partners or other third-party suppliers of components, materials or subassemblies incorporated into the same end products as our devices could have an adverse effect on our business, financial condition, results of operations and cash flows71% rewritten
- 13If we fail in a timely and cost-effective manner to develop new product features or new products that address customer preferences and achieve market acceptance, our operating results could be adversely affected
- 14We depend on growth in the end markets that use our products. Any slowdown in such growth, including as a result of volatility in demand for emerging technologies or changes in government incentives, could adversely affect our financial resultsNew
- 15Our ability to identify, enter and expand in new markets may be unsuccessful, and our investments in these opportunities may not generate expected returns, which could adversely affect our business and financial results29% rewritten
- 16We focus on winning competitive bid selection processes, called “design wins,” to develop products for use in our customers’New
- 17Warranty claims, customer quality claims, product liability claims and product recalls could harm our business, results of operations and financial condition49% rewritten
- 18Our dependence on international customers and operations also subjects us to a range of other additional regulatory, operational, financial and political risks that could adversely affect our financial results24% rewritten
- 19increased exposure to general market and economic conditions outside of the U.S83% rewritten
- 20We may lose sales if we are unable to obtain government authorization to export certain technology for our products, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations40% rewritten
- 21Changing currency exchange rates may adversely affect our business, financial condition, results of operations and cash flows
- 22Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy
- 23Our indebtedness may limit our flexibility to operate our business and adversely affect our financial health and competitive position
- 24Future sales of our common stock by large stockholders, or the possibility of such sales, may cause the trading price of our common stock to declineNew
- 25Our business and operating results could be harmed as the result of undertaking restructuring activities
- 26If we are unable to protect our proprietary technology and inventions, our ability to compete successfully and our financial results could be adversely impacted35% rewritten
- 27Our ability to compete successfully depends in part on our ability to commercialize our products without infringing the patent, trade secret or other IP rights of others40% rewritten
- 28Cybersecurity incidents that we or our critical third-party service providers experience could irreparably damage our reputation and business and materially affect our operating results and financial condition37% rewritten
- 29We are exposed to risks related to the use of AI Technologies by us and othersNew
- 30We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and consumer protection laws across different markets where we conduct our business. Our actual or perceived failure to comply with such obligations could harm our business
Risks Related to Regulatory Compliance
- 31Failure to comply with the large body of laws and regulations to which we are subject could adversely impact our business
- 32Our use of AI subjects us to a legal framework that is rapidly evolving and our failure to monitor and comply with the laws and regulations to which we are or may become subject could have a material adverse effect on our business and operationsNew
- 33Our failure to comply with anti-corruption and anti-bribery laws could subject us to penalties and other adverse consequences
General Risks
- 34We could be subject to changes in tax rates or the adoption of new tax legislation, whether in or out of the United States, or could otherwise have exposure to additional tax liabilities, which could adversely affect our results of operations or financial condition33% rewritten
- 35Failure to comply with requirements to maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price
- 36Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity44% rewritten
Other Allegro Microsystems 10-Ks
- FY2025 10-K risk factors37 risks
Automotive market concentration drives 73.8% of sales, exposing the company to cyclical sector downturns.
Filed May 22, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.