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Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. (“U.S. Tariffs”), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (“EU”), among others.

Taiwan Semiconductor Manufacturing Company Limited ("TSMC") is currently our sole source foundry for all of our advanced process-node wafers.

Our customer base is geographically concentrated, particularly in China, Taiwan and Korea, and export regulations that apply to customers in certain countries, such as those in China, have exposed and can further expose our business and operating results to greater volatility.

During the fiscal quarter ended February 1, 2026, approximately 95% of the wafers manufactured by our CMs were produced by Taiwan Semiconductor Manufacturing Company Limited (“TSMC”).

•International tensions (including China-Taiwan relations), U.S. foreign relations impacting customer willingness to buy U.S. products or our ability to procure components, trade protection measures such as tariffs, and government disruptions or shutdowns

During the first three months of fiscal 2026, approximately 77% of our net sales were made to foreign customers, including 19% in China and 14% in Taiwan.

In addition, during fiscal year 2026, our Taiwan subsidiary, where we maintain significant operations, increased its lines of credit, or entered into new lines of credit, with various commercial banks in Taiwan, including also entering into a credit agreement with CTBC Bank Co., Ltd. (“CTBC”) which provides for two revolving credit facilities totaling $1,765.0 million.

For example, the existing tariffs and continued threats of new or increased tariffs, sanctions, trade restrictions and trade barriers, ongoing changes in the United States and foreign government trade policies, various ongoing military conflicts and rising geopolitical tensions globally, including the ongoing military conflicts in the Middle East and between Russia and Ukraine as well as the rising tensions between C

In addition, certain of our operations or those of our customers could be impacted by militarization, war and other geopolitical disputes, including any renewal of the recent conflict in and around Israel, where we have a significant number of employees, any escalation of hostilities or conflict between China and Taiwan, which could adversely impact availability of computing components and resources, any of which cou

world, including China, Canada, Mexico, Taiwan, Japan, and member states of the European Union.

In addition, geopolitical tensions, such as those involving Taiwan and China, which comprise a significant portion of our revenue and have who