01AddedItem 1A › Business Model and Capital Structure Risks › Our business would be harmed if we do not receive parts, materials and subassemblies sufficient in number and performance to meet our production requirements and product specifications in a timely, cost-effective and compliant manner.
Added disclosure that supplier discontinuations and DRAM chip shortages may increase purchase commitments, procurement costs, inventory write-offs and reduce gross margin.
The new paragraph adds specific supplier discontinuation events, DRAM shortages, increased purchase commitments and continuing margin effects, substantively expanding supply-chain and financial-risk disclosure.
Why the model ranked it here
No corresponding language in the FY2025 10-K.
[added] A supplier may discontinue production of a particular part for any number of reasons, including the supplier's financial condition or business operational decisions, which would require us to purchase, in a single transaction, a large number of such discontinued parts in order to ensure that a continuous supply of such parts remains available to our customers. Such "end-of-life" parts purchases could result in significant expenditures by us in a particular period, and, ultimately, any unused parts may result in a significant inventory write-off, either of which could have an adverse impact on our financial condition and results of operations for the applicable periods. Recently, a few large suppliers have discontinued manufacturing certain DRAM chips that are incorporated in a number of our products, and the resulting shortage has caused a dramatic increase in the prices to acquire these chips. Our efforts to procure these chips contributed to an increase in purchase commitments in fiscal 2026. We estimate that the additional costs to procure these DRAM chips will continue to have an adverse impact on our gross margin in fiscal 2027. If we are unable to acquire adequate supply of such chips or acquire them in a timely or cost-controlled manner, our results of operations could be harmed.
Cite this change
"A supplier may discontinue production of a particular part for any number of reasons, including the supplier's financial condition or business operational decisions, which would require us to purchase, in a single transaction, a large number of such discontinued parts in order to ensure that a continuous supply of such parts remains available to our customers. Such "end-of-life" parts purchases could result in significant expenditures by us in a particular period, and, ultimately, any unused parts may result in a significant inventory write-off, either of which could have an adverse impact on our financial condition and results of operations for the applicable periods. Recently, a few large suppliers have discontinued manufacturing certain DRAM chips that are incorporated in a number of our products, and the resulting shortage has caused a dramatic increase in the prices to acquire these chips. Our efforts to procure these chips contributed to an increase in purchase commitments in fiscal 2026. We estimate that the additional costs to procure these DRAM chips will continue to have an adverse impact on our gross margin in"
Kla, Form 10-K for FY2026, Item 1A, accession 0000319201-26-000027, filed 6 August 2026.
Filing: https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm
Comparison: https://yearover.com/reports/klac/0000319201-26-000027?ref=quote
Summaries are written by a model and checked against the quoted text. The quotes are the record.