In 2025, the U.S. implemented a number of tariffs on goods imported into the U.S., on a country and industry-specific basis (including aluminum, copper and steel). While some of the U.S. Tariffs have been paused, certain U.S. Tariffs are currently in effect, including a base tariff on nearly all imports into the U.S., certain reciprocal tariffs by country, and certain sectoral tariffs on copper, aluminum and steel, among others. In retaliation to the tariffs imposed on U.S. imports, a number of other countries announced reciprocal tariffs on goods imported from the U.S. While most countries paused their reciprocal tariffs on U.S. imported goods, those reciprocal tariffs could be reinstated at any time. Tariffs imposed by the U.S. on goods imported into the U.S. and tariffs imposed by other countries on U.S. goods imported into those countries may continue to evolve.
In April 2025, Commerce announced the initiation of investigations into the effects on U.S. national security of imports of semiconductors under Section 232 of the Trade Expansion Act of 1962. The scope of the investigations include semiconductors, semiconductor manufacturing equipment and their derivative products including semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics and other components. While the results of the investigations are currently unknown, they may result in additional tariffs and trade restrictions which may adversely impact our business.
The U.S. Tariffs have increased our cost of revenues due to the increase in the cost of importing foreign sourced components to our U.S. facilities to build the products that we manufacture in the U.S. Tariffs imposed on U.S. goods by other countries may harm demand for our products from customers in those regions, or may cause our customers in those regions to push out or cancel previously placed purchase orders. In addition, we have had to return deposits given to us by our customers upon cancellation of their purchase orders. Moreover, tariffs can make it difficult for us and our customers and suppliers to make and execute business and capital equipment investment plans or increase supply chain complexity, which may have an impact on our ability to source the materials necessary to manufacture our products.
Our efforts to address these risks, such as through operational adjustments and pricing strategies, may not be successful. Such efforts may need time to take effect and may have an adverse impact on our results of operations.
Unless rescinded or exemptions apply, tariffs and any escalations in the trade war could significantly harm our business, financial condition and results of operations.