Skyworks Solutions Inc.: 10-K Risk Factor Changes

We rely on foundries to provide silicon-based products and to supplement our gallium arsenide wafer manufacturing capacity. There are significant risks associated with reliance on third-party foundries, including: • the lack of wafer supply, potential wafer shortages, and higher wafer prices, • required minimum purchase commitments, • limited ability to respond to unanticipated changes in customer demand, • limited control over delivery schedules, manufacturing yields, production costs, process technologies, and quality assurance, and • the inaccessibility of, or delays in obtaining access to, key process technologies, materials, and IP blocks. Even in cases where we have long-term supply arrangements to obtain additional external manufacturing capacity, the third-party foundries we use for our standby manufacturing capacity may allocate their limited capacity to the production requirements of other customers and in general we have no contractual right to prevent them from making such allocations. If we choose to use a new foundry to replace either existing or backup capacity, it will typically take an extended period of time for us to complete our qualification process for that foundry, which will result in a significant passage of time before we can begin shipping products from that new foundry. Further, the third-party foundries may experience financial difficulties or changes in control, be unable to deliver products to us in a timely manner, be unwilling to invest in processes that meet our needs, or suffer damage or destruction to their facilities, particularly since some of them are located in areas prone to natural disasters or to severe weather events and other impacts of climate change. If any disruption of manufacturing capacity occurs, we may not have alternative manufacturing sources immediately available. We may therefore experience difficulties, delays, or additional costs in securing an adequate supply of our products, which could impair our ability to meet our customers’ needs and have a material adverse effect on our operating results. Although we own and operate assembly and test facilities, as part of our supply resilience and business continuity strategies, we still depend on subcontractors to package, assemble, and test certain of our products at cost-competitive rates. For those assembly and test subcontractors with whom we do not have long-term agreements, we typically procure services on a per-order basis. If any of our subcontractors experiences capacity constraints or financial difficulties, suffers any damage to its facilities, experiences power outages or any other disruption of assembly or testing capacity, we may not be able to obtain alternative assembly and testing services in a timely manner and/or at cost-competitive rates. Due to the amount of time that it usually takes us to qualify assembly and test subcontractors, we could experience significant delays and/or increased costs in product shipments if we are required to find alternative assembly and test subcontractors for our components. Any problems that we may encounter with the delivery, quality, or cost of our products could damage our customer relationships and materially and adversely affect our business, results of operations, and financial condition. During fiscal 2022, we entered into long-term capacity reservation and supply agreements with certain third-party foundries, under which we agreed to certain minimum purchase commitments. As a result of reduced overall market demand, we recorded impairment charges during fiscal 2023. These long-term capacity reservation agreements may have an additional adverse effect on our operating results in the event our future supply needs are reduced below the minimum purchase commitments as a result of further reduction in overall market demand. 16 16 16 16 16 16

We rely on foundries to provide silicon-based products and to supplement our gallium arsenide wafer manufacturing capacity. There are significant risks associated with reliance on third-party foundries, including: •the lack of wafer supply, potential wafer shortages, and higher wafer prices, •required minimum purchase commitments, •limited ability to respond to unanticipated changes in customer demand, •limited control over delivery schedules, manufacturing yields, production costs, process technologies, and quality assurance, and •the inaccessibility of, or delays in obtaining access to, key process technologies, materials, and IP blocks. 15 15 15 15 15 15 Even in cases where we have long-term supply arrangements to obtain additional external manufacturing capacity, the third-party foundries we use for our standby manufacturing capacity may allocate their limited capacity to the production requirements of other customers and in general we have no contractual right to prevent them from making such allocations. If we choose to use a new foundry to replace either existing or backup capacity, it will typically take an extended period of time for us to complete our qualification process for that foundry, which will result in a significant passage of time before we can begin shipping products from that new foundry. Further, the third-party foundries may experience financial difficulties or changes in control, be unable to deliver products to us in a timely manner, be unwilling to invest in processes that meet our needs, or suffer damage or destruction to their facilities, particularly since some of them are located in areas prone to natural disasters or to severe weather events and other impacts of climate change. If any disruption of manufacturing capacity occurs, we may not have alternative manufacturing sources immediately available. We may therefore experience difficulties, delays, or additional costs in securing an adequate supply of our products, which could impair our ability to meet our customers’ needs and have a material adverse effect on our operating results. Although we own and operate assembly and test facilities, as part of our supply resilience and business continuity strategies we still depend on subcontractors to package, assemble, and test certain of our products at cost-competitive rates. For those assembly and test subcontractors with whom we do not have long-term agreements, we typically procure services on a per-order basis. If any of our subcontractors experiences capacity constraints or financial difficulties, suffers any damage to its facilities, experiences power outages or any other disruption of assembly or testing capacity, we may not be able to obtain alternative assembly and testing services in a timely manner and/or at cost-competitive rates. Due to the amount of time that it usually takes us to qualify assembly and test subcontractors, we could experience significant delays and/or increased costs in product shipments if we are required to find alternative assembly and test subcontractors for our components. Any problems that we may encounter with the delivery, quality, or cost of our products could damage our customer relationships and materially and adversely affect our business, results of operations, and financial condition. During fiscal 2022, we entered into long-term capacity reservation and supply agreements with certain third-party foundries. These agreements may cease to be commercially reasonable if overall market demand or pricing is reduced, and they may have an adverse effect on our operating results in the event our future supply needs are reduced below the minimum order commitments. Furthermore, even with such agreements, we remain subject to risks that a supplier will be unable to meet its supply commitments, achieve acceptable manufacturing yields, operate or deliver on a timely basis, or provide additional capacity beyond its current contractual commitments to meet our requirements, any of which could adversely affect our ability to satisfy customer obligations.

The global COVID-19 pandemic—including the measures taken to limit the spread of the virus and its variants, and the resulting global supply chain challenges—has adversely affected, and may continue to adversely affect, our business operations. The pandemic’s impacts on our business operations and workforce, and the duration of such impacts, are uncertain, constantly evolving, and difficult to quantify, but have thus far included, or in the future may include, disruptions to our supply chain and increased costs in connection with the sourcing of materials, components, equipment, assembly and test services, engineering support, shipping and logistics services, and other services. Our business operations would also be negatively impacted if one or more of our major customers were to significantly decrease its orders for our products due to disruptions to its business operations or other pandemic-related issues. The degree to which the pandemic continues to impact us will depend on future developments that are highly uncertain and cannot be predicted, including, but not limited to, the existence of new variants of the virus that causes COVID-19, the duration and spread of the pandemic, its severity, the actions to contain COVID-19 or treat its impact, and how quickly and to what extent normal economic and operating conditions resume. Even after the pandemic has subsided as a public health matter, we may experience material adverse impacts to our business operations, results of operations and financial condition as a result of its adverse impact on the global economy.

The global COVID-19 pandemic—including the public health crisis, the measures taken by governments, businesses, and individuals in an effort to limit COVID-19’s spread, and the resulting global supply chain challenges—has adversely affected, and continues to adversely affect, our business operations. The impacts on our business operations and workforce of the pandemic, including as a result of more contagious variants of the virus that causes COVID-19, and the duration of such impacts, are uncertain, constantly evolving, and difficult to quantify, but have thus far included, or in the future may include, the following: •We have experienced, and may continue to experience, disruptions to our supply chain and increased costs in connection with the sourcing of materials, components, equipment, assembly and test services, engineering support, shipping and logistics services, and other services, caused in part by the pandemic. To the extent we are unable to pass these costs on to our customers, we experience reduced profitability. Given that our customers and suppliers are facing similar supply chain challenges, we expect continued difficulty in forecasting demand and supply needs for the foreseeable future. As a result of these uncertainties, we have increased, and may continue to increase, our inventory levels and purchase commitments. •We have recently experienced, and expect to continue experiencing, reduced demand for certain of our products as a result of certain customers’ difficulty obtaining materials, components, and services due to disruptions in such customers’ supply chains. While the government-mandated shutdowns in various regions of China during fiscal 2022 did not directly impact any of our manufacturing facilities, the shutdowns did result in limited supply constraints within our supply chain, as well as significant supply constraints for certain of our customers, which resulted in short-term reductions in such customers’ demand for our products. We may continue to experience large fluctuations in demand for certain of our products, which could be exacerbated by global supply chain challenges or by a continued or deepening global economic downturn or recession. •In the event that our manufacturing operations in Mexicali, Mexico, become subject to significant restrictions or are suspended again, as they were for two weeks in April 2020 pursuant to a government order, or in the event that one or more of our other facilities is forced to suspend or limit its activities, we may again experience reductions in production levels, which would limit our ability to meet customer demand and impact our operating results. •Over the course of the pandemic, we have implemented certain measures at our facilities worldwide in an effort to protect our employees’ health and well-being, some of which have reduced the overall efficiency of our operations and increased manufacturing costs. Many of our non-manufacturing employees transitioned to working from home on a mandatory or voluntarily basis for a prolonged period of time, and our return-to-office plans have in some cases led to employee attrition. We expect that pandemic-related changes in workforce patterns may result in additional attrition, difficulty in hiring, and reduced productivity. •We have experienced, and likely will continue to experience, disruptions to global transportation networks, limiting or delaying our ability, and/or increasing our cost, to send or receive products and materials at one or more of our facilities, including as a result of trade restrictions, border closures, disruptions in the operations of third-party carriers, or carriers’ decisions to prioritize other customers’ orders over ours. •Significant portions of our sales are concentrated among a limited number of customers. We may experience negative impacts to our business operations if one or more of these major customers were to significantly decrease its orders for our products due to disruptions to its business operations or other pandemic-related issues. 12 12 12 12 12 12 These effects, alone or taken together, could have a material adverse effect on our business, results of operations, customer and supplier relations, employee relations, cash flows, and financial condition. The resumption of normal business operations after any such interruptions may be delayed or constrained by lingering effects of the pandemic on our customers, suppliers, and other third-party service providers. The degree to which the pandemic continues to impact us will depend on future developments that are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain COVID-19 or treat its impact, and how quickly and to what extent normal economic and operating conditions resume. Even after the pandemic has subsided as a public health matter, we may experience material adverse impacts to our business as a result of its adverse impact on the global economy.