Formfactor (FORM) risk factors, FY2024 10-K

Risks Relating to our Operations and the Nature of Our Business

1. 01The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed
2. 02Existing competitors might introduce new competitive products for the same markets that our products currently serve. These products may have better performance, lower prices, shorter delivery times or broader acceptance than our products
3. 03If we do not innovate and keep pace with technological developments in the semiconductor industry, our products might not be competitive, and our revenues and operating results could suffer
4. 04We depend upon the sale of our probe card products for the substantial majority of our revenues
5. 05We derive a substantial portion of our revenues from a small number of customers
6. 06If our relationships with our customers deteriorate, our product development activities could be harmed
7. 07Consolidation in the semiconductor industry and within the semiconductor test equipment market could adversely affect the market for our products and negatively impact our ability to compete
8. 08Changes in customers’ test strategies, equipment and processes could decrease customer demand for our products
9. 09Cyclicality in the semiconductor industry has in the past and may in the future adversely impact our sales
10. 10Because we generally do not have a sufficient backlog of unfilled orders to meet our quarterly revenue targets, revenues in any quarter are substantially dependent upon customer orders received and fulfilled in that quarter
11. 11If our ability to forecast demand for our products or the predictability of our manufacturing yields deteriorates, we could incur high inventory losses
12. 12If we are unable to efficiently manufacture our existing and new products, our business may be materially adversely affected
13. 13If we are unable to continue to reduce the time it takes for us to design and produce products, our growth could be impeded
14. 14Products that do not meet specifications or that contain defects could damage our reputation, decrease market acceptance of our technology, cause us to lose customers and revenues, and result in liability to us
15. 15As part of our sales process, we could incur substantial sales and engineering expenses that do not result in revenues
16. 16We obtain some of the components and materials we use in our products from a sole source or a limited group of suppliers, and the partial or complete loss of one of these suppliers, or scarcity of raw materials from one of these suppliers, could cause production delays
17. 17Our operations, or those of our important suppliers, business partners and customers, could be adversely affected by events outside of our control such as natural disasters, pandemics and man-made disasters
18. 18Climate change, or legal, regulatory or market measures to address climate change, may negatively affect our business and operations
19. 19Adverse global, regional and national economic conditions could have a negative effect on our business, results of operations, financial condition, liquidity, and access to capital markets
20. 20Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity
21. 21We rely on the security and integrity of our electronic data systems, managed both internally and by third parties, for our business requirements, and our business can be damaged by disruptions, security breaches or compromises of these systems
22. 22Because we conduct most of our business internationally, we are subject to operational, economic, financial and political risks abroad
23. 23Our foreign operations expose us to additional risks relating to currency fluctuations
24. 24Increasingly restrictive export regulations and other trade barriers may materially harm our business
25. 25If we fail to protect our proprietary rights, our competitors might gain access to our technology, which could adversely affect our ability to compete successfully in our markets
26. 26We might be subject to claims of infringement of other parties’ proprietary rights
27. 27We have recorded restructuring, inventory write-offs and asset impairment charges in the past, and may do so again in the future, which could have a material negative impact on our business
28. 28We may not be able to recruit or retain qualified personnel
29. 29Our failure to comply with environmental laws and regulations could subject us to significant fines and liabilities, and new laws and regulations or changes in regulatory interpretation or enforcement could make compliance more difficult and costly
30. 30We are exposed to additional risks as a result of increased attention by our stakeholders to environmental, social and governance (“ESG”) matters

Risks Relating to Our Acquisitions

1. 31We have made acquisitions and investments, and may make additional acquisitions or investments in the future, which could put a strain on our resources, cause ownership dilution to our stockholders, or adversely affect our financial results
2. 32If goodwill or other intangible assets that we recorded, or will record, in connection with our acquisitions become impaired, we could be required to take significant charges against earnings

Risks Relating to Owning Our Stock

1. 33If we fail to maintain an effective system of internal and disclosure controls and procedures, we may not be able to accurately report our financial results or prevent fraud
2. 34The trading price of our common stock has been and is likely to continue to be volatile, and you might not be able to sell your shares at or above the price that you paid for them
3. 35Provisions of our certificate of incorporation and bylaws or Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock