Credo Technology Group Holding Ltd

Locations · Primary Use · Leased Facilities (1)

United States · Research and design, sales and marketing, administration and operations · 143,945

Mainland China · Research and design, administration and operations · 99,088

Taiwan · Research and design, administration and operations · 56,259

Canada · Research and design, administration and operations · 8,200

Hong Kong · Research and design, administration and operations · 7,083

Singapore · Administration and operations · 2,874

Total · 317,449

(1) Lease terms expire in various years from 2026 through 2033, and generally include renewals at our option.

We also lease smaller facilities in various domestic and international locations, which are occupied by administrative and sales personnel. We believe that our existing facilities are sufficient for our current needs. We intend to add new facilities and expand our existing facilities as we continue to add employees and grow our business. We believe that new spaces will be available at reasonable terms in the future in order to meet our needs.

• We may not accurately anticipate market trends and changing industry standards, and if we fail to develop and introduce products to adequately address these trends or prevailing industry standards on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
• We generally do not maintain long-term supply contracts with TSMC or other third-party manufacturers or suppliers, and any disruption in our supply of products or materials, including
• raw material price fluctuations could have a material adverse effect on our business, financial condition and results of operations.
• We rely on the ability to use and the success of third-party technologies to develop our products, and our inability to use such technologies in the future would harm our ability to remain competitive.
• We may not be able to meet manufacturing yields that allow us to meet customer demand and maintain our gross margins.
• We may be unable to develop or maintain our relationships with industry and technology leaders to enhance our product offerings.
• Average selling prices of our products generally decrease over time, which could negatively impact our revenue and gross margins.
• Our gross margins may fluctuate due to a variety of factors.
• We may not receive timely payments from our customers, which could adversely affect our business, financial condition and results of operations.
• We may not be able to accurately predict our future capital needs, and we may not be able to obtain additional financing to fund our operations.
• We may not be able to effectively manage our growth without incurring significant expenditures necessary to address the additional operational and control requirements of our growth.
• If we fail to retain any distributors upon which we rely to assist in selling our products, or if any of these parties fail to perform as expected, it could reduce our future sales.
• Changes in environmental laws or regulations, as well as sustainability initiatives, could impose substantial costs and may adversely affect our business.
• There is a risk that we will be a passive foreign investment company for the current or any future taxable year, which generally would result in adverse U.S. federal income tax consequences to U.S. investors in our ordinary shares.
• Changes in taxation, our tax rates or exposure to additional tax liabilities or assessments could affect our profitability, and audits by tax authorities could result in additional tax payments.
• Security breaches, cyberattacks and other disruptions to information technology systems owned or maintained by us or third parties, such as vendors or suppliers, could disrupt our operations, compromise the confidentiality of private customer data or our intellectual property, and adversely affect our business, reputation, operations, and financial results.
• Our business may be impacted by information technology system failures or network disruptions, and lack of redundancy.
• Risks Related to Our Industry
• Our target customer and product markets may not grow or develop as we currently expect.
• The market demand for our semiconductor solutions may not sufficiently develop or may develop more slowly than expected.
• Our business is dependent on continued capital expenditures by data centers and service providers, and any downturn that such centers or providers experience could negatively impact our business, financial condition and results of operations.
• We may be unable to make the substantial and productive research and development investments, which are required for our business to remain competitive.
• The general compute and Artificial Intelligence and Machine Learning (AI/ML) infrastructure market is an emerging market that will depend on the success of generative AI technologies, and this market may not develop as we currently expect, including due to regulatory uncertainty.
• We are subject to the cyclical nature of the semiconductor industry which is undergoing significant change due to artificial intelligence.
• Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may make our supply chain more complex and may adversely affect our relationships with customers and investors.
• Risks Related to Our International Operations
• Our business, financial condition and results of operations could be adversely affected by worldwide economic conditions, as well as political and economic conditions in the countries in which we conduct business.
• Our global operations expose us to numerous legal and regulatory requirements and failure to comply with such requirements, including unexpected changes to such requirements, could adversely affect our results of operations.
• We are subject to government regulation, including import, export and economic sanctions laws and regulations that may expose us to liability and increase our costs.
• Our business is affected by new U.S. government regulations restricting outbound investments in China.
• We face significant economic and political risks associated with doing business in Taiwan, particularly due to the geopolitical tension between Taiwan and mainland China, that could negatively affect our business and the trading price of our ordinary shares.
• We are subject to potential political, legal and economic instability in Hong Kong.
• We could be adversely affected by violations of applicable anti-corruption laws or violations of our internal policies designed to ensure ethical business practices.
• Any failure to comply with foreign exchange registration requirements may expose us or our PRC resident beneficial owners or PRC participants of employee stock incentive plans to liability and penalties under PRC law.
• We are subject to fluctuations in exchange rates between and among the currencies of the countries in which we do business.
• Risks Related to Our Intellectual Property
• We may face claims of intellectual property infringement, misappropriation or other violations, which could be time-consuming or costly to defend or settle, result in the loss of significant rights or harm our relationships with our customers or reputation in the industry.
• Any potential dispute involving patents or other intellectual property could affect our customers and vendors which could trigger our indemnification obligations to them and result in substantial expense to us.
• We face risks related to the protection of our intellectual property, particularly outside the United States. We use a significant amount of intellectual property in our business. Monitoring unauthorized use of our intellectual property can be difficult and costly and if we are unable to obtain, maintain and protect our intellectual property, our business could be adversely affected.
• A breach of our information technology systems or physical security systems, or any actual or perceived violation of privacy, data protection or cybersecurity laws, could harm our business and operating results.
• We use certain software governed by open-source licenses, which under certain circumstances could materially adversely affect our business, financial condition, operating results and cash flow.
• Risks Relating to Investments in Cayman Islands Companies
• We are a Cayman Islands exempted company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.
• Because we are incorporated under the laws of the Cayman Islands, you may find it difficult to enforce a judgment of U.S. courts for civil liabilities under U.S. federal securities laws against us in the Cayman Islands or against our PRC or Hong Kong subsidiaries.
• Provisions in our amended and restated memorandum and articles of association may have the effect of discouraging lawsuits against our directors and officers.
• Risks Related to Ownership of Our Ordinary Shares
• Our share price may be volatile and may decline, resulting in a loss of some or all of your investment.
• Substantial future sales of our ordinary shares could cause the market price of our ordinary shares to decline.
• Our actual operating results may not meet our guidance and investor expectations, which would likely cause our share price to decline.
• If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares.
• Our executive officers, directors and their affiliates, if they choose to act together, have the ability to control or significantly influence all matters submitted to shareholders for approval.
• Anti-takeover provisions in our organizational documents may discourage our acquisition by a third party, which could limit shareholders’ opportunity to sell their ordinary shares at a premium.
• If a United States person is treated as owning 10% or more of our outstanding equity, such holder may be subject to adverse U.S. federal income tax consequences.
• General Risk Factors
• We have pursued, and may in the future pursue, mergers, acquisitions, investments in other companies and dispositions, which could adversely affect our results of operations.
• We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract or retain highly skilled employees could adversely affect our business.
• Catastrophic events may disrupt our business.
• Litigation and other legal proceedings may adversely affect our business.
• Market conditions and changing circumstances, some of which may be beyond our control, could impair our ability to access our existing cash, cash equivalents and investments and to timely pay key vendors and others.
• If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.