Qualcomm 2014 Annual Report Download - page 26

While we have established alternate suppliers for certain technologies that we consider critical, we rely on sole- or limited-source suppliers
for some products, subjecting us to significant risks, including: possible shortages of raw materials or manufacturing capacity; poor product
performance; and reduced control over delivery schedules, manufacturing capability and yields, quality assurance, quantity and costs. To the
extent we have established alternate suppliers, these suppliers may require significant levels of support to bring complex technologies to
production. As a result, we may invest a significant amount of effort and resources and incur higher costs to support and maintain such alternate
suppliers. Further, any future consolidation of foundry suppliers could increase our vulnerability to sole- or limited-source arrangements. Our
arrangements with our suppliers may obligate us to incur costs to manufacture and test our products that do not decrease at the same rate as
decreases in pricing to our customers. Our ability, and that of our suppliers, to develop or maintain leading process technologies, including
transitions to smaller geometry process technologies, and to effectively compete with the manufacturing processes and performance of our
competitors, could impact our ability to introduce new products and meet customer demand, could increase our costs (possibly decreasing our
margins) and could subject us to the risk of excess inventories. Our inability to meet customer demand due to sole- or limited-
sourcing and/or the
additional costs that we incur because of these or other supply constraints or because of the need to support alternate suppliers could negatively
impact our business, our revenues and our results of operations.
Although we have long-term contracts with our suppliers, many of these contracts do not provide for long-term capacity commitments. To
the extent that we do not have firm commitments from our suppliers over a specific time period, or for any specific quantity, our suppliers may
allocate, and in the past have allocated, capacity to the production and testing of products for their other customers while reducing or limiting
capacity to manufacture or test our products. Accordingly, capacity for our products may not be available when we need it or at reasonable
prices. To the extent we do obtain long-term capacity commitments, we may incur additional costs related to those commitments and/or make
non-refundable payments for capacity commitments that are not used.
One or more of our suppliers or potential alternate suppliers may manufacture CDMA- or OFDMA-based integrated circuits that compete
with our products. In this event, the supplier could elect to allocate raw materials and manufacturing capacity to their own products and reduce or
limit deliveries to us to our detriment. In addition, we may not receive reasonable pricing, manufacturing or delivery terms. We cannot guarantee
that the actions of our suppliers will not cause disruptions in our operations that could harm our ability to meet our delivery obligations to our
customers or increase our cost of sales.
Our stock price and earnings are subject to substantial quarterly and annual fluctuations and to market downturns.
Our stock price and earnings have fluctuated in the past and are likely to fluctuate in the future. Factors that may have a significant impact
on the market price of our stock and/or earnings include those identified throughout this “Risk Factors” section, volatility of the stock market in
general and technology-based companies in particular, announcements concerning us, our suppliers, our competitors or our customers and
variations between our actual results and expectations of securities analysts, among others. Further, increased volatility in the financial markets
and/or overall economic conditions may reduce the amounts that we realize in the future on our cash equivalents and/or marketable securities
and may reduce our earnings as a result of any impairment charges that we record to reduce recorded values of marketable securities to their fair
values.
In the past, securities class action litigation often has been brought against a company following periods of volatility in the market price of
its securities. Due to changes in our stock price, we may be the target of securities litigation in the future. Securities litigation could result in
substantial uninsured costs and divert management’s attention and resources.
We may not be able to attract and retain qualified employees.
Our future success depends largely upon the continued service of our executive officers and other key management and technical personnel
and on our ability to continue to identify, attract, retain and motivate them. Implementing our business strategy requires specialized engineering
and other talent, as our revenues are highly dependent on technological and product innovations. The market for employees in our industry is
extremely competitive. Further, existing immigration laws make it more difficult for us to recruit and retain highly skilled foreign national
graduates of universities in the United States, making the pool of available talent even smaller. We continue to anticipate increases in human
resource needs, particularly in engineering. If we are unable to attract and retain qualified employees, our business may be harmed.
Global economic conditions that impact the mobile communications industry could negatively affect the demand for our products and
services and our customers
’ or licensees’ products and services, which may negatively affect our revenues.
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the loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules; and/or
• additional expense and/or production delays as a result of qualifying a new supplier and commencing volume production or testing in
the event of a loss of or a decision to add or change a supplier.