Company: GCTS
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0000929638-25-001279
Chunk: 117

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-03-26
Form: 424B3
Chunk 117
---
 The Company estimates the costs of warranty obligations based on historical experience of known product failure rates and anticipated rates of warranty claims, use of materials to repair or replace defective products, and service delivery costs incurred in correcting the product issues. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. During the years ended December 31, 2024 and 2023, the product warranty reserve activity and balances were not material.

Concentration of Credit Risk The Company’s financial instruments subject to credit risk concentration consist of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents primarily with one financial institution located in the United States and another located in South Korea, where amounts deposited may exceed Federal Deposit Insurance Corporation or Korea Deposit Insurance Corporation limits. The Company’s accounts receivable balances are primarily derived from revenues recognized from customers located in the United States, China, South Korea, Japan, and Taiwan. The Company performs ongoing credit evaluations of the financial condition of its customers and distributors and generally does not require collateral. The Company’s net revenues and accounts receivable are concentrated among a few significant customers, which could expose the Company to financial risk in the event of adverse developments. The following represents the concentration of the Company’s gross accounts receivable among key customers to the extent their share exceeds 10%:

|            | Customer |     | December 31, 
         2024 |   |     |     | December 31, 2023 |   |
|:-----------|:---------|:----|-------------:|:--|:----|:----|------------------:|:--|
| Customer B |          |     |           13 | % |     |     |                27 | % |
| Customer D |          |     |            — | % |     |     |                10 | % |
| Customer F |          |     |           22 | % |     |     |                19 | % |
| Customer H |          |     |           13 | % |     |     |                14 | % |
| Customer K |          |     |           27 | % |     |     |                 — | % |

The following table includes customers that individually accounted for more than 10% of the Company’s net revenues in the periods indicated:

|            | Customer | Year Ended   
 December 31, | 2024 |   |     |     | 2023 |    |
|:-----------|: