Company: COHU
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001437749-25-004612
Chunk: 27

Company: COHU INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1
Chunk 27
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 global political and economic instability or foreign conflicts, including trade wars, that involve or affect the countries of our customers;

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			natural disasters and other climate risks;

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			varied environmental laws and regulations at each of our principal locations; and

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			complex tax laws and potentially adverse tax consequences, including restrictions on repatriating earnings and the threat of “double taxation.”

Additionally, managing geographically dispersed operations presents difficult challenges associated with organizational alignment and infrastructure, communications and information technology, inventory control, customer relationship management, terrorist threats and related security matters and cultural diversities. If we are unsuccessful in managing such operations effectively, our business and results of operations will be adversely affected.

We have observed a continuing trend of increasing risks and challenges in the conduct of our international business activities, including expanded tariffs and other trade barriers affecting the United States and China. Additionally, we are required to comply with foreign import and export requirements, customs and value added tax standards that can be unclear or complex. Our failure to meet these requirements and standards could negatively impact our business operations. If one or more of these risks occurs, it could require us to dedicate significant resources to remedy, and if we are unsuccessful in finding a solution, our financial results will suffer.

17

Geopolitical instability in locations critical to Cohu and its customers may adversely impact our operations, sales and profitability.

The majority of our export sales are made to destinations in Asia. Political or economic instability, particularly in Asia, may adversely impact the demand for capital equipment, including equipment of the type we manufacture and market. In addition, we face intense competition from a number of Asian suppliers that have certain advantages over U.S. suppliers, including us. These advantages include, among other things, proximity to customers, lower cost structures, a willingness to compete solely on price, favorable tariffs and other government preferences or subsidy programs, and affiliation with significantly larger organizations. In addition, changes in the amount or price of semiconductors produced in Asia could negatively impact the profitability or capital equipment spending programs of our foreign and domestic customers.

An increase in geopolitical tensions in Asia, particularly in the Taiwan Strait, could disrupt existing semiconductor chip manufacturing and increase the prospect of an interruption to the semiconductor chip supply across the world. A setback to the current state of relative peace and stability in the region could compromise existing semiconductor chip production and have downstream implications for our Company. The world’s largest semiconductor chip manufacturer is located in Taiwan and is a top supplier for many U.S. companies