Qualcomm Inc

Industry regulation · Safety and environmental regulations

We are subject to many complex environmental, health and safety laws, regulations and rules. New, or changes in, environmental and climate change laws, regulations or rules could lead to new or additional investments in production processes and could increase environmental compliance expenditures.

Industry regulation · Licensing and permits

The continued and future success of our licensing programs requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring. It is critical that we continue to evolve our patent portfolio, particularly in 5G and next-generation technologies.

Legal and litigation · Product liability and warranty claims

Such defects, errors or security vulnerabilities could give rise to significant costs, including costs related to developing solutions, recalling products or participating in customer recalls.

Legal and litigation · Litigation and legal proceedings

Our business may suffer as a result of adverse rulings in governmental investigations or proceedings or other legal proceedings. We have been in the past and currently are subject to various governmental investigations and/or legal proceedings.

Economic and market conditions · Inflation and deflation pressures

Inflationary pressure may increase our costs, including employee compensation costs, reduce demand for our products or those of our customers or licensees due to increased prices of those products.

Natural and catastrophic events · Natural disasters and extreme weather

If tsunamis, flooding, earthquakes, volcanic eruptions, drought or other natural disasters, effects of climate change, acts of war or other geopolitical conflicts were to damage, destroy or disrupt any of these facilities, it could disrupt our operations, cease or delay production and shipments of inventory.

Natural and catastrophic events · Pandemic and public health crises

Health crises, including epidemics or pandemics, and government and business responses thereto, could affect our manufacturing facilities, including by resulting in quarantines and/or closures, which could result in disruptions to and potential closures of our manufacturing operations.

Digital transformation and innovation · Technology obsolescence and evolution

We do not continue to maintain our intellectual property and technical leadership in 5G, including in ongoing 5G standardization efforts, or we fail to establish such leadership in future generations of wireless technology.

Customer and revenue · Changing customer preferences and behavior

Consumers' rates of replacement of smartphones and other devices decline; or there is a shift in consumer demand away from new devices in favor of refurbished or secondhand devices.

Strategic execution · Joint venture and partnership risks

We have also provided and may continue to provide access to certain of our technology, intellectual property and other proprietary or confidential information to certain joint venture partners, including those affiliated with state actors in foreign jurisdictions. Such joint venture partners may wrongfully use such technology or information.

Customer and revenue · Customer concentration and key customer dependence

We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium-tier handset devices. If revenues derived from these customers or licensees decrease or the timing of such revenues fluctuates, our business and results of operations could be negatively affected.

Innovation and product development · Product development and randd investment risks

Our growth depends in part on our ability to extend our technologies and products into new and expanded product areas, and industries and applications beyond mobile handsets. Our research, development and other investments in these new and expanded product areas, industries and applications, and related technologies and products, as well as in our existing technologies and products, and new technologies, may not generate operating income or contribute to future results of operations that meet our expectations.

Strategic execution · Merger acquisition and divestiture risks

We may engage in acquisitions and other strategic transactions or make investments, or be unable to consummate planned strategic acquisitions, which could adversely affect our results of operations or fail to enhance stockholder value. Achieving the anticipated benefits of business acquisitions depends in part upon our ability to integrate the businesses in an efficient and effective manner and achieve anticipated synergies, and we may not be successful in these efforts.

Core operations · Capacity utilization and efficiency

Our manufacturing processes are highly complex, require advanced and costly equipment and must be continuously modified to improve yields and performance. Difficulties in the production process can reduce yields or interrupt production.

Supply chain and procurement · Supplier operation and dependance

We rely on sole- or limited-source suppliers for certain products, which may exacerbate the risks identified above, and subject us to other significant risks, including poor product performance and reduced control over delivery schedules, manufacturing capability and yields.

Supply chain and procurement · Raw material availability and cost volatility

Additionally, our suppliers have in the past and may in the future increase their prices during periods of capacity constraints, or for other reasons, thus increasing our costs. We expect leading process technology nodes to continue to drive product cost increases from certain of our key semiconductor wafer suppliers.

Supply chain and procurement · Supplier financial distress and capability

A decline in global, regional or local economic conditions could result in the inability of our suppliers to deliver on their supply commitments to us.

Credit and liquidity · Liquidity and cash flow constraints

If we are unable to generate sufficient cash flow from operations to service our debt, we may be required to reduce or delay planned capital or operating expenditures.

International and currency · Transfer pricing and taxation

Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting (BEPS) project. The OECD has made certain changes, including the Pillar Two framework, which imposes a minimum tax of 15% in each taxing jurisdiction.

Reputation and brand · Esg environmental social governance performance

Certain customers have adopted, and other customers may adopt, policies that require us to achieve certain sustainability, climate or other environmental, social and governance (ESG)-related targets. If we fail to achieve ESG-related targets that meet our customers' requirements or expectations, these customers may not purchase products or services from us.