Adaptec 2008 Annual Report Download - page 11

Over the next few years, it is possible for additional competitors to enter the market with new products,
some of which may also have greater financial and other resources than us.
We are also continuing to expand into certain markets, such as the Enterprise Networking market that have
established incumbents with substantial financial and other resources. Some of these incumbents derive a
majority of their earnings from these markets. We expect continued strong competition in these markets.
L ICENSES ,P ATENTS AND T RADEMARKS
We rely in part on patents to protect our intellectual property and have a total of 269 U.S. and 86 foreign
patents for circuit designs and other innovations used in the design and architecture of our products. In addition,
we have 98 patent applications pending in the U.S. Patent and Trademark office. Our patents typically expire 20
years from the patent application date, with our existing patents expiring between 2009 and 2028.
We do not consider our business to be materially dependent upon any one patent. We believe that a strong
portfolio of patents combined with other factors such as our ability to innovate, technological expertise and the
experience of our personnel are important to compete effectively in our industry. Our patent portfolio also
provides the flexibility to negotiate or cross license intellectual property with other semiconductor companies to
broaden the features in our products.
We also rely on mask work protection, trademarks, copyrights, trade secret laws, employee and third-party
nondisclosure agreements, and licensing arrangements to protect our intellectual property.
PMC, PMC-Sierra and our logo are registered trademarks and service marks. We own other trademarks and
service marks not appearing in this Annual Report. Any other trademarks used in this Annual Report are owned
by other entities.
E MPLOYEES
As of December 28, 2008, we had 1,064 employees, including 632 in Research and Development, 86 in
Production and Quality Assurance, 214 in Sales and Marketing and 132 in Administration. Our employees are
not represented by a collective bargaining agreement and we have never experienced any related work stoppage.
ITEM 1A. Risk Factors.
Our company is subject to a number of risks—some are normal to the fabless semiconductor industry, some
are the same or similar to those disclosed in previous SEC filings, and some may be present in the future. You
should carefully consider all of these risks and the other information in this report before investing in PMC. The
fact that certain risks are endemic to the industry does not lessen the significance of the risk.
As a result of the following risks, our business, financial condition, operating results and/or liquidity could
be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose
part or all of your investment.
Our global growth is subject to a number of economic risks.
As widely reported, financial markets in the United States, Europe and Asia have been experiencing extreme
disruption in recent months, including among other things, extreme volatility in security prices, severely
diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of
others. Governments have taken unprecedented actions intended to address extreme market conditions that
include severely restricted credit and declines in real estate values. We have experienced delays in redemptions
of our money market funds and we have recognized an $11.8 million loss on investment securities on our shares
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