Company: CRUS
Filing Date: 2025-05-23
Form Type: 10-K
Source: 0000772406-25-000014
Chunk: 35

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-05-23
Form: 10-K
Item: Item 1A
Chunk 35
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 yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used.  As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturer and us.  This risk could be compounded by the offshore location of certain of our manufacturers, increasing the effort and time required to identify, communicate, and resolve manufacturing yield problems.  Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls.  These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships.

Our products are increasingly complex and could contain defects, which could result in material costs to us.

              Product development in the markets we serve is becoming more focused on the integration of multiple functions on individual devices.  There is a general trend towards increasingly complex products, including software or firmware developed by us and/or third parties.  The greater integration of functions and complexity of operations of our products increases the risk that we or our customers or end users could discover latent defects or subtle faults after volumes of product have been shipped.  Quality and reliability issues could result in material costs and other adverse consequences to us, including, but not limited to:- reduced margins;- damage to our reputation;- replacement costs for product warranty and support;- payments to our customers related to recall claims, or the delivery of product replacements as part of a recall claim, as a result of various industry or business practices, contractual requirements, or in order to maintain good customer relationships;- an adverse impact to our customer relationships by the occurrence of significant defects;- a delay in recognition or loss of revenues, loss of market share, or failure to achieve market acceptance;

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- writing off or reserving the value of inventory of such products; and- a diversion of the attention of our engineering personnel from our product development efforts.              In addition, any defects or other problems with our products could result in financial losses or other damages to our customers who could seek damages from us for their losses.  A product liability or warranty claim brought against us, even if unsuccessful, would likely be time consuming and costly to defend.  In particular, the sale of systems and components that are incorporated into certain applications for the automotive industry involves a high degree of risk that such claims may be made.              While we believe that we are reasonably insured against some of these