KLAC — what changed in the latest 10-K

Text added vs the prior filing · source: 10-K · 2026-08-06

• Our core focus is enabling technological advances and improving manufacturing yields in the semiconductor industry. Semiconductors, or ICs, are fabricated on silicon wafers through a highly sophisticated sequence of process steps, including deposition of film layers, patterning, material removal, he…

• Our business depends upon the capital expenditures of semiconductor, semiconductor-related and electronic device manufacturers, which are driven by current and anticipated market demand for ICs and the products that use them. While we do not consider our business to be seasonal, it has historically …

• significantly increased both the performance and cost requirements of the capital equipment used to manufacture these devices, with construction of an advanced IC fabrication facility today costing well above $10 billion. In this environment, accelerating the yield ramp and reaching high-volume prod…

• The semiconductor industry continues to experience market expansion and diversification. High-performance computing (“HPC”) and data centers, supported by increasing adoption of AI, are contributing to industry growth and these trends are expected to continue to influence industry investment during …

• The markets for semiconductor and electronics technologies are characterized by rapid technological development and product innovation. These innovations are inherently complex and require long development cycles and appropriate professional staffing. We make significant investments in product R&D f…

Text removed vs the prior filing · source: 10-K · 2025-08-08

• Our core focus is enabling technological advances and improving manufacturing yields in the semiconductor industry. The semiconductor fabrication process begins with a bare silicon wafer - a round disk typically 200 millimeters or 300 millimeters in diameter, about as thick as a credit card and gray…

• The manufacturing cycle of an IC is grouped into three phases: design, fabrication and testing. IC design involves the architectural layout of the circuit, as well as design verification and reticle generation. The fabrication of a semiconductor chip (or “semiconductor”) is accomplished by depositin…

• on bare wafers. The deposition of these film layers is interspersed with numerous other process steps that create circuit patterns, remove portions of the film layers, and perform other functions such as heat treatment, measurement and inspection. Most advanced chip designs require hundreds of indiv…

• Our business depends upon the capital expenditures of semiconductor, semiconductor-related and electronic device manufacturers. This is driven by the current and anticipated market demand for ICs, products utilizing ICs and other electronic components. We do not consider our business to be seasonal.…

• Companies anticipating future market demands by developing and advancing new technologies and manufacturing processes are better positioned to lead in the semiconductor market. Accelerating the yield ramp and maximizing production yields of high-performance devices are critical goals of modern semic…

Text added vs the prior filing · source: 10-K · 2026-08-06

• Macroeconomic, International Trade, Operational and Regulatory Risks

• •Tariffs, retaliatory trade measures and other trade restrictions, including uncertainty related to tariff authority, implementation and refund processes;

• •IP disputes can be expensive and could result in an inability to use or sell our products in certain jurisdictions;

• •Legal, regulatory and tax environments in which we conduct our business;

• •System failures, ERP system implementation risks or limited access to critical information could disrupt our operations and financial reporting processes;

Text removed vs the prior filing · source: 10-K · 2025-08-08

• •IP disputes can be expensive and could result in an inability to sell our products in certain jurisdictions;

• •We may face disruptions if we cannot access critical information in a timely manner due to system failures;

• •Economic, political or other conditions in the jurisdictions where we earn profits can impact the tax laws and taxes we pay in those jurisdictions, subsequently impacting our effective tax rate, cash flows and results of operations;

• •Changes in accounting pronouncements and laws could have unforeseen effects.

• •Prevailing local and global economic conditions may negatively affect the purchasing decisions of our customers; and

Text added vs the prior filing · source: 10-K · 2026-08-06

• We are a leading supplier of process control and yield management solutions and services for the semiconductor and related electronics industries. Our broad portfolio of inspection and metrology products, along with related services, software and other offerings, supports R&D and manufacturing of IC…

• We also offer advanced technology solutions across a range of adjacent markets, including PCBs, advanced packaging, specialty semiconductors (such as LEDs, power devices and compound semiconductors), data storage and general materials research. In addition, our services business has grown consistent…

• The semiconductor industry continues to experience market expansion and diversification. HPC and data centers, supported by increasing adoption of AI, are contributing to industry growth and these trends are expected to continue to influence industry investment into fiscal year 2027. AI represents a…

• While we continue to invest in technological innovation, demand for our products may be affected by the timing of customer adoption decisions and changes in delivery schedules, which can result in variability in our operating results. In addition, geopolitical factors, including government regulatio…

• We are continuously assessing the aggregate potential impact of government regulations, tariffs and other geopolitical risks on our financial results and operations. See Part I Item 1A “Risk Factors” for more information regarding how such actions by the U.S. government or another country could sign…

Text removed vs the prior filing · source: 10-K · 2025-08-08

• We are a leading supplier of process control and yield management solutions and services for the semiconductor and related electronics industries. Our broad portfolio of inspection and metrology products, and related service, software and other offerings, support R&D and manufacturing of ICs, wafers…

• Our semiconductor customers generally operate in one or both of the major semiconductor device manufacturing markets: memory and foundry/logic. End-market demand drivers that are expected to continue to benefit KLA in the long term include adoption of EUV in HVM for Logic and DRAM memory, which driv…

• A majority of our revenues are derived from outside the U.S., and include geographic regions such as China, Taiwan, Korea, Japan, Europe and Israel, and Rest of Asia. China remains a major region for manufacturing of legacy node logic and memory chips, adding to its role as the world’s largest consu…

• The recent imposition of tariffs by the U.S. government, along with countermeasures taken by foreign countries, have had an adverse impact on our results of operations, though the impact was not material in fiscal year 2025. There continues to be uncertainty around the ultimate duration, size and su…

• countries. However, despite headwinds from tariffs, our gross margin and overall financial performance improved in fiscal year 2025 compared to fiscal year 2024 due to higher revenue volume on products and services sold and cost management.

Text added vs the prior filing · source: 10-K · 2026-08-06

• The fair market value of our long-term fixed interest rate Senior Notes is subject to interest rate risk. Generally, the fair market value of fixed interest rate notes will increase as market interest rates fall and decrease as market interest rates rise. As of June 30, 2026, our fixed rate Senior N…

Text removed vs the prior filing · source: 10-K · 2025-08-08

• The fair market value of our long-term fixed interest rate Senior Notes is subject to interest rate risk. Generally, the fair market value of fixed interest rate notes will increase as market interest rates fall and decrease as market interest rates rise. As of June 30, 2025, our fixed rate Senior N…