KLA CORP (KLAC) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that KLA CORP surfaced in its latest filing.

• Revenue from China was 30%, 33%, and 43% of total revenue for fiscal years 2026, 2025, and 2024, respectively.2024, 2025, 2026
• The 2022 BIS Rules restrict our ability to sell, ship, and support equipment to China-based companies involved in advanced semiconductor manufacturing.2022
• The 2023 BIS Rules update controls on advanced computing semiconductors and semiconductor manufacturing equipment to certain countries including China.2023
• December 2024 and January 2025 BIS Rules added more companies to the U.S. Entity List and revised the definition of advanced DRAM, restricting provisions to facilities in China producing advanced DRAM ICs.2024-12, 2025-01
• September 2025 interim final rule expands export restrictions for foreign entities 50% or more owned by listed parties (Entity List, Military End-User List, SDN List), labeled the Affiliates Rule.2025-09
• BIS suspended the Affiliates Rule in November 2025 for one year until November 2026.2025-11
• U.S. implemented tariffs in 2025 on country and industry-specific basis including aluminum, copper and steel.2025
• In April 2025, Commerce initiated Section 232 investigations into national security effects of semiconductor imports, which may result in additional tariffs and trade restrictions.2025-04
• In February 2026, the U.S. Supreme Court ruled that IEEPA tariffs were not authorized, creating uncertainty around prior tariffs, potential refunds, and future presidential tariff authority.2026-02
• We are pursuing recovery of duties previously paid through the administrative refund process established by U.S. Customs and Border Protection and have begun receiving refunds.
• In February 2023, one of our suppliers experienced a ransomware event that caused delays in its manufacturing operations, resulting in shipment delays to us for components we ordered, which caused delays in some of our outbound shipments during the quarter.2023-02
• We are currently upgrading our ERP system, with implementation expected to be completed in the first quarter of fiscal year 2027.2027 Q1
• In April 2025, the Chinese government imposed export controls on seven rare earth elements.2025-04
• In October 2025, the Chinese government imposed additional restrictions and licensing requirements on certain rare earth elements, some effective immediately and others in November 2025.2025-10
• Recently, a few large suppliers discontinued certain DRAM chips used in our products, causing a shortage and dramatic price increases; procuring these DRAM chips increased purchase commitments in fiscal 2026 and will continue to adversely impact gross margin in fiscal 2027.
• As of June 30, 2026, we had $5.95 billion aggregate principal amount of outstanding indebtedness consisting of senior, unsecured long-term notes.2026-06-30
• Issuance in February 2024 of $750.0 million aggregate principal amount of senior, unsecured notes, consisting of $500.0 million of 4.700% notes due February 1, 2034 and an additional $250.0 million of 4.950% notes due July 15, 2052 originally issued in June 2022.2024-02
• Credit Agreement and Revolving Credit Facility with a maturity date of July 3, 2030, two one-year extension options, allowing borrowing up to $1.50 billion, with no outstanding borrowings as of June 30, 2026.2030-07-03
• We announced a stock repurchase program with $9.74 billion remaining available for repurchases as of June 30, 2026.2026-06-30
• In 2026, entered interest rate swaps designated as fair value hedges converting fixed-rate payments on 2022 Senior Notes to floating-rate payments based on Daily Secured Overnight Financing Rate swap rate plus a fixed number of basis points.2026
• The One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025 modifies GILTI and FDII, and may subject us to corporate alternative minimum tax (CAMT).2025-07-04
• Recorded material impairment charges related to goodwill and purchased intangible assets in the second quarter of fiscal 2025.2025 Q2
• We have entered into settlement arrangements related to historical stock option practices that explicitly require compliance with certain laws, such as the books and records provisions of the federal securities laws.