Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 152

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 7A
Chunk 152
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 in the future will differ from those quantified above. 

Commodity Price Risk

We are subject to risk from fluctuating market prices of certain commodity raw materials, particularly gold and silver, that are used in our manufacturing process and incorporated into our end products.  Supplies for such commodities may from time-to-time become restricted, or general market factors and conditions may affect the pricing of such commodities.  Over the past few years, the price of gold increased significantly and certain of our supply chain partners assess surcharges to compensate for the rising commodity prices.  We have been converting some of our products to use copper wires instead of gold wires.  Our results of operations may be materially and adversely affected if we have difficulty obtaining these raw materials, the quality of available raw materials deteriorates, or there are significant price changes for these raw materials.  For periods in which the prices of these raw materials are rising, we may be unable to pass on the increased cost to our customers which would result in decreased margins for the products in which they are used and could have a material adverse effect on our net earnings.  We also may need to record losses for adverse purchase commitments for these materials in periods of declining prices.  We do not enter into formal hedging arrangements to mitigate against commodity risk.  We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk, such as gold and silver, would decrease or increase our current year's net earnings by $1.0 million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals at fixed prices.

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