Crucial 2015 Annual Report Download - page 21

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19
Our operations are dependent on our ability to procure advanced semiconductor manufacturing equipment that enables the
transition to lower cost manufacturing processes. For certain key types of equipment, including photolithography tools, we are
sometimes dependent on a single supplier. From time to time we have experienced difficulties in obtaining some equipment on
a timely basis due to the supplier's limited capacity. Our inability to obtain this equipment timely could adversely affect our
ability to transition to next generation manufacturing processes and reduce costs. Delays in obtaining equipment could also
impede our ability to ramp production at new facilities and increase our overall costs of the ramp. If we are unable to obtain
advanced semiconductor manufacturing equipment in a timely manner, our business, results of operations, or financial
condition could be materially adversely affected.
A downturn in the worldwide economy may harm our business.
Downturns in the worldwide economy have harmed our business in the past and future downturns could also adversely
affect our business. Adverse economic conditions affect demand for devices that incorporate our products, such as personal
computers, mobile devices, solid-state drives, and servers. Reduced demand for these products could result in significant
decreases in our average selling prices and product sales. A deterioration of current conditions in worldwide credit markets
could limit our ability to obtain external financing to fund our operations and capital expenditures. In addition, we may
experience losses on our holdings of cash and investments due to failures of financial institutions and other parties. Difficult
economic conditions may also result in a higher rate of loss on our accounts receivables due to credit defaults. As a result, our
business, results of operations, or financial condition could be materially adversely affected.
Our results of operations could be affected by natural disasters and other events in the locations in which we or our
customers or suppliers operate.
We have manufacturing and other operations in locations subject to natural occurrences such as severe weather and
geological events including earthquakes or tsunamis that could disrupt operations. In addition, our suppliers and customers also
have operations in such locations. A natural disaster, fire, explosion, or other event that results in a prolonged disruption to our
operations, or the operations of our customers or suppliers, may materially adversely affect our business, results of operations,
or financial condition.
We face risks associated with our international sales and operations that could materially adversely affect our business,
results of operations, or financial condition.
Sales to customers outside the United States approximated 84% of our consolidated net sales for 2015. In addition, a
substantial portion of our manufacturing operations are located outside the United States. In particular, a significant portion of
our manufacturing operations are concentrated in Singapore, Taiwan, and Japan. Our international sales and operations are
subject to a variety of risks, including:
• export and import duties, changes to import and export regulations, customs regulations and processes, and restrictions
on the transfer of funds;
• compliance with U.S. and international laws involving international operations, including the Foreign Corrupt
Practices Act, export and import laws, and similar rules and regulations;
• protection of intellectual property;
• political and economic instability;
• problems with the transportation or delivery of our products;
• issues arising from cultural or language differences and labor unrest;
• longer payment cycles and greater difficulty in collecting accounts receivable;
• compliance with trade, technical standards, and other laws in a variety of jurisdictions;
• contractual and regulatory limitations on our ability to maintain flexibility with our staffing levels;
• disruptions to our manufacturing operations as a result of actions imposed by foreign governments;
• changes in economic policies of foreign governments; and
• difficulties in staffing and managing international operations.
These factors may materially adversely affect our business, results of operations, or financial condition.