Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 98

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 1A
Chunk 98
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Our operations of one wholly-owned packaging and testing facility are subject to risks that could adversely affect our business and financial results.

We have one wholly-owned packaging and testing facility located in Shanghai, China that handles the majority of our packaging and testing requirements. The operation of high-volume packaging and testing facility and implementation of our advanced packaging technology are complex and demand a high degree of precision and may require modification to improve yields and product performance. We have committed substantial resources to ensure that our packaging and testing facilities operate efficiently and successfully, including the acquisition of equipment and raw materials, and training and management of a large number of technical personnel and employees. Due to the fixed costs associated with operating our own packaging and testing facilities, if we are unable to utilize our in-house facility at a desirable level of production, our gross margin and results of operations may be adversely affected. For example, a significant decline in our market share or sales orders may negatively impact our factory utilization and reduce our ability to achieve profitability.

In addition, the operation of our packaging and testing facility is subject to a number of risks, including the following:

•unavailability of equipment, whether new or previously owned, at acceptable terms and prices;

•facility equipment failure, power outages or other disruptions;

•shortage of raw materials, including copper, gold and molding compound;

•failure to maintain quality assurance and remedy defects and impurities;

•changes in the packaging requirements of customers;

•compliance with local and regional legal and regulatory requirements; and

•unexpected customs, tax and other government audits and investigations concerning related party transactions, transfer pricing arrangements, IP license and royalty payments, etc.

Any of the foregoing risks could adversely affect our capacity to package and test our products, which could delay shipment of our products, result in higher expenses, reduce revenue, damage our relationships with customers and otherwise adversely affect our business, results of operations, financial condition and prospects.

Our business operations and financial conditions may be adversely affected by any disruption in our information technology systems, including any cyberattacks and breaches.

Our operations are dependent upon our information technology systems, which encompass all of our major business functions across offices internationally. We rely upon such information technology systems to manage and replenish inventory, complete and track customer orders, coordinate sales activities across all of our products and services, maintain vital data and information, perform financial and accounting tasks and manage and perform various administrative and human resources functions. A substantial disruption in our information technology systems for any extended time period (arising from, for example, system capacity limits from unexpected increases in