Changes in product demand can adversely affect our financial results. Our products are used in different market segments, and demand for our products varies within or among them. It is difficult to forecast these changes and their impact. For example, we expect the PC TAM to grow over time driven by factors such as a larger installed base, demand for Al capabilities, new platforms, shorter replacement cycles, and adoption in new markets; however, the PC industry has been highly cyclical in the past, and these growth expectations may not materialize, or we may fail to capitalize on them. Changes in the demand for our products, particularly our CCG, DCAI, and NEX platform products, have in the past and may in the future reduce our revenue, lower our gross margin, or require us to write down the value of our assets. Important factors that lead to variation in the demand for our products include: • business conditions, including downturns in the market segments in which we operate, or in global or regional economies; • consumer confidence, income levels, and customer capital spending, which can be impacted by changes in market conditions, including changes in government borrowing or spending, taxation, interest rates, the credit market, current or expected inflation, employment, and energy or other commodity prices; • geopolitical conditions, including trade policies and geopolitical tensions and conflicts; • our ability to timely introduce competitive products; • competitive and pricing pressures, including new product introductions and other actions taken by competitors; • the level of our customers' inventories and computing capacity; • customer order patterns and order cancellations, including as a result of maturing product cycles for our products, customers' products, and related products such as operating system upgrade cycles; and disruptions affecting customers, such as the delays in obtaining tools, components, and other supplies as a result of COVID-19-related port shutdowns in China that negatively impacted demand for our business in 2022, as well as the industry substrate and component shortages that negatively impacted demand across several of our businesses in 2021; • market acceptance and industry support of our products and services, including the introduction and availability of software and other products used together with our products, such as software to harness the new Al capabilities of our latest CPUs, as well as our foundry services offerings through IFS; and • customer product needs and emerging technology trends, including changes in the levels and nature of customer and end-user computing workloads, such as work- and learn-from-home trends. Our pricing and margins vary across our products and market segments due in part to marketability of our products and differences in their features or manufacturing costs. For example, our core product offerings range from lower-priced and entry-level platforms, such as those based on Intel Atom processors, to higher-end platforms based on Intel Xeon processors. Our ancillary product offerings that extend beyond our core product lines typically have significantly lower margins than our higher-priced products, and at times are not profitable. To the extent demand shifts from our higher-priced to lower-priced core products in any of our market segments, or our ancillary products represent a greater share of our mix of products sold, our gross margin percentage has decreased and may decrease again. Macroeconomic conditions and geopolitical tensions and conflicts, including changes to trade policies and regulations, present significant risks to us in many jurisdictions. We have manufacturing, assembly and test, R&D, sales, and other operations in many countries, and some of our business activities are concentrated in one or more geographic areas. Our operations rely upon a supply chain that is also highly distributed, and with reliance in some instances on supplies or materials available in only one or more geographic areas. Moreover, sales outside the US accounted for 74% of our revenue for the fiscal year ended December 30, 2023, with revenue from billings to China contributing 27% of our total revenue. As a result, our operations and our financial results, including our ability to execute our business strategy, manufacture, assemble and test, design, develop, or sell products, and the demand for our products, are at times adversely affected by a number of global and regional factors outside of our control. Adverse changes in global or regional economic conditions periodically occur, including recession or slowing growth; changes or uncertainty in fiscal, monetary, or trade policy; higher interest rates; tighter credit; inflation; lower capital expenditures by businesses, including on IT infrastructure; increases in unemployment; and lower consumer confidence and spending. Adverse changes in macroeconomic conditions can significantly harm demand for our products and make it more challenging to forecast our operating results and make business decisions, including regarding prioritization of investments in our business. An economic downturn or increased uncertainty may also lead to increased credit and collectability risks, higher borrowing costs or reduced availability of capital and credit markets, reduced liquidity, adverse impacts on our suppliers, failures of counterparties, including financial institutions and insurers, asset impairments, and declines in the value of our financial instruments. intel. Risk Factors and Other Key Information 52 K I NJ PIKLJ NI IKNJK NII NJKINK I JIJK JK% I NII NJKPIKRJ I JJKNJJ IKJ JK K JIJ IM%RMJJ$#'J I R PIJIP LJ IKKNKII KJ K% I# JK% RJ IK%K IJII JLK% J RIJK: RPI%J$ NKJILK LL JKJ% JKI RJMJJ KL JJIO% IRLJ JO J K J I NII NJK%IJNIL NI"% #% &=J II NJK%P JKJ L JNJNIIN NI IP N% RI NII KKI % IIQNINKJ RIJ R JPN NIKKJK IJ JJ IKJJJ PIJ J I NII NJK N9 W NK KK J K% N R JNI K JIJK JK RR IJ% I II K: W KNI % PK% NKJ IJK %R J L K IJ J K% N K PI J II R IK %JMJ % JIKJIJK%JIJIJ%NII J IMJ J % L J% IL I JI JLIK: W J J K% N JI K JJ K K JK: W NI JLJ JL JI N JJPI NJK: W JJP I IKKNIK% N RI NJ JI NJ K JIJ KJ L JJ IK: W JP NINKJ IK/ P J IK NJ JL: W NKJ I IIJJI K II J K% N KIKNJ JNI I NJLK I NII NJK%NKJ IK/ I NJK% IJI NJKKNK IJ KLKJNILK: KINJ KJ NKJ IK%KNKJ LK J J K% JK% JIKNKKIKNJ ? 7IJ IJKNJ R K JJ JPLJ I NI NK KK ***%KRKJ NKJILKN KJIJ JK IJKJJ JPL J I KKKPI NI NK KKK **: W IJJ NKJILKN IJ NII NJK KIPK% N J JI NJ P JL K JRI JII NJKNKJ JIRJ NII NJK%KNKK JRIJ I KKJ R# JK NIJKJ$1K%KR K NI N ILKIPK I KJI N: W NKJ II NJ K I J LJI K% N K JPK JNI NKJ I NKI NJ R I K%KNKR I I I JI K NII I KPILI KK NII NJK IJK JKN IJJ IJ JL NII NJK I K JIJNIK I NJNI KJK IM% NI II NJ I KI I RII JILPJ IK%KNK J K K J#J I KK IK%J I J IK K J= I KK IKNI ILI NJ I KJJMJ L NI II NJ KJLLPK JL RII KJ NIIII NJK% JJKI JI J JMJ J KJKI NIIIJ RII II NJK L NIIJK JK% I NI ILI NJK IIK JIJIKI NIM I NJKK % NII KKI I JKIK LIK 'I J K JJ K K JK% N KJ JI K INJ K%IK JK JIKKJ NK L8NIKJ K !P NJNI %KK L JKJ%( %KK% JI IJ K L N JIK% K NI NK KKJPJKI JIJ I I IIKNI IJ KILN KNL JJKK LKJI NJ% RJI K KJ K KNK IJIKP L I I IIK' I PI%KK NJKJ1 N J I .1
Trade policies and disputes at times result in increased tariffs, trade barriers, and other protectionist measures, which can increase our manufacturing costs, make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, limit our ability to procure components or raw materials, or impede or slow the movement of our goods across borders. Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, some markets. They can also result in declining consumer confidence and slowing economic growth or recession, and could cause our customers to reduce, cancel, or alter the timing of their purchases with us. Sustained geopolitical tensions could lead to long-term changes in global trade and technology supply chains, domestic sourcing initiatives, and decoupling of global trade networks, which could make it more difficult to sell our products in, or restrict our access to, some markets and have a material adverse effect on our business and growth prospects. In particular, geopolitical and trade tensions between the US and China, one of our largest markets, have led to increased tariffs and trade restrictions, including tariffs applicable to some of our products, and have affected customer ordering patterns. Further, the US has imposed restrictions on the export of US-regulated products and technology to certain Chinese technology companies, including certain of our customers. Specifically, in 2022 the US significantly increased US export controls on semiconductor manufacturing equipment and on artificial intelligence and advanced computing products. In 2023, the US added to the restrictions in all three areas and also worked with Japan and the Netherlands to align on additional restrictions on semiconductor manufacturing equipment. During this time, the US has increasingly added Chinese companies to prohibited lists. In response, China has restricted US access to certain minerals and has blocked certain companies that provide products to Taiwan's military from selling products in China. These restrictions have in some instances reduced our sales and in a number of instances required specific governmental authorizations or exceptions - $3.2 billion, or 6%, of our 2023 revenue was dependent upon US government export control authorizations, an amount that we expect may increase in future years. These and potential future restrictions could adversely affect our financial performance and result in reputational harm to us. In addition, a number of semiconductor companies in China, including Semiconductor Manufacturing International Corporation (SMIC), are making significant investments, in many instances with the support of the Chinese government, in advanced semiconductor technologies to enable such companies to develop products and technologies that compete with ours. It is difficult to predict what further trade-related actions governments may take, the extent to which we may be able to mitigate the effects of any such actions, and the longer-term implications of such actions on the market opportunities for us and the competition we may face. We can also be adversely affected by other global and regional factors that periodically occur, including: • geopolitical and security issues, such as armed conflict and civil or military unrest, political instability, human rights concerns, and terrorist activity, including, for example: Russia's war with Ukraine, initiated in 2022, which resulted: in the imposition of financial and other sanctions and export controls against Russia and Belarus that caused us and other companies to limit or suspend Russian operations (we had no exports to Russia in 2023); Russia-imposed currency restrictions and regulations and other retaliatory trade and other actions; increased supply, commodity, and other costs; and increased risk of cyberattacks; tensions and conflict affecting Israel, where we have multiple semiconductor development centers and a leading-edge manufacturing facility and where our Mobileye business is headquartered and has most of its operations, and in surrounding areas, such as past conflicts in Lebanon and the current conflict in the Red Sea; and rising tensions between China and Taiwan; • natural disasters, public health issues (including pandemics), and other catastrophic events; • inefficient infrastructure and other disruptions, such as supply chain interruptions, materials shortages or delays, and large-scale outages or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers; • formal or informal imposition of new or revised export, import, or doing-business regulations, including trade sanctions, tariffs, and changes in the ability to obtain export licenses, which could be changed without notice; • government restrictions on, or nationalization of, our operations in any country, or restrictions on our ability to repatriate earnings from or distribute compensation or other funds in a particular country; • adverse changes relating to government grants, tax credits, or other government incentives, including more favorable incentives provided to competitors; • differing employment practices and labor issues, including restricted access to talent; • ineffective legal protection of our IP rights in certain countries; • local business and cultural factors that differ from our current standards and practices; • continuing uncertainty regarding social, political, immigration, and tax and trade policies in the US and abroad; and • fluctuations in the market values of our domestic and international investments, and in the capital and credit markets, which can be negatively affected by liquidity, credit deterioration or losses, interest rate changes, financial results, political risk, sovereign risk, or other factors. intel. Risk Factors and Other Key Information 53 I K KNJKJJKIKNJ IKJIK%JI IIIK% JII JJ KJKNIK%R IK NI NJNI KJK% NII NJKKK JJP%IN I NII NJK%J NI JLJ KJ IJ NKJ IK% J NI JLJ I NI JK IIRJIK% I IK RJ P J NI KI KK IIK IK I JJ K J KLJ NIJI K JI K INJ K% KJK NI JJPK% I JI I IKNIKJJ NJ INJJ K NII NJK % IIKJIJ NIKKJ %K IJKL K IKNJ KNI K R I RJ IIKK % NNK NINKJ IKJ IN% % IJIJJ JINIKKRJNKNKJ JJ K K NJ JI K JI J LKNL K% KJK NI JJPK% N JI JR IK%R NJ INJJ K NII NJK % IIKJIJ NIKKJ %K IJK PJIPIKJ NI NK KK I RJI KJK IJNI% J JIJ K K JR J1 % NIIKJIJK%PJ IKJIK JI IKJIJ K% N JIK J K NII NJK% PJNKJ I II JJI KNIJI%J1K KIKJIJ K JM IJ 1INJI NJK J LJ IJ KJ L K% N IJ NINKJ IKL% ***J1K JL IK1M IJ JI K K NJ I NJNI QN J IJ J P NJ I NJK **+%J1J JIKJIJ K JIIK K R IRJ @ J&JI KJ J IKJIJ K K NJ I NJNI QN J NI JKJ%J1K IK L K KJ I JKJK IK K% KIKJIJ1KKJ IJ IK K IJ KJJI PI NJKJ R /KJILI K I NJK KIKJIJ KP K KJ KIN NIKK N I KJ KIQNIK PI JNJ IOJ K IMJ K;+* % I 3
We are subject to numerous risks associated with the evolving market for products with Al capabilities. The markets and use cases for products with Al capabilities have been rapidly evolving, are difficult to predict and may impact demand for our products. For example, in the last few years the demand for high-end GPUs for model training increased dramatically and has resulted and may continue to result in a significant shift in DCAI customer spend. The significant investments we have made to develop products and software to address what we believe will be increasing demand for Al capabilities may be insufficient, and we face significant hurdles, including whether demand will materialize, whether third-party developers will develop the software to utilize the Al capabilities of our products, and whether we will be successful in developing products that can compete with offerings by established competitors. Our use of Al technology may subject us to reputational, financial, legal, or regulatory risks. As we incorporate Al technology into our products and services, any failure to address concerns relating to the responsible use of the evolving Al technology in our products and services may cause harm to our reputation or financial liability and, as such, may increase our costs to address or mitigate such risks and issues. Al technology may create ethical issues, generate defective algorithms, and present other risks that create challenges with respect to its adoption. In addition, evolving rules, regulations, and industry standards governing Al may require us to expend significant resources to modify, maintain, or align our business practices or products to comply with US and non-US rules and regulations, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including the EU and certain US states, have already proposed or enacted laws governing Al. US federal agencies are likely to release Al regulations in the near future in light of the Biden administration's October 30, 2023 Executive Order on Al. The regulatory environment surrounding the impact of the implementation of Al on our products and services may adversely affect our ability to produce and export products and as a result may cause harm to our reputation and financial liability. We rely upon a complex global supply chain. We have a highly complex global supply chain composed of thousands of suppliers. These suppliers provide direct materials for our production processes; supply tools, equipment, and IP (via licenses) for our factories; deliver logistics and packaging services; and supply software, lab and office equipment, and other goods and services used in our business. We also rely on suppliers to provide certain components for our products and to manufacture and assemble and test some of our components and products. From time to time, we are negatively impacted by supply chain issues, including: • suppliers extending lead times, experiencing capacity constraints, limiting or canceling supply, allocating supply to other customers including competitors, delaying or canceling deliveries, or increasing prices; • supplier quality issues; • cybersecurity events, IP or other litigation, man-made or natural disasters, public health issues (including pandemics), operational failures, or other events that disrupt suppliers; • long lead times to qualify alternate or additional suppliers, or the unavailability of qualified alternate suppliers; and • increased legislation, regulation, or stakeholder expectations regarding responsible sourcing practices, such as heightened reporting and other obligations with regard to environmental impacts, the risk of forced labor, or supplier conduct that does not meet such standards, which can result in supply chain disruptions, the loss of a supplier, and the government seizure of goods. These and other supply chain issues can increase our costs, disrupt or reduce our production, delay our product shipments, prevent us from meeting customer demand, damage our customer relationships, or negatively affect our reputation. They may keep us from successfully implementing our business strategy and can materially harm our business, competitive position, results of operation, and financial condition. From time to time, our customers experience disruptions or shortages in their own supply chains that constrain their demand for our products. During the past several years, macroeconomic and geopolitical conditions, as well as outbreaks of COVID-19, caused supply chain disruptions and delays in obtaining tools and other components, and the semiconductor industry experienced widespread shortages of substrates and other components and available foundry manufacturing capacity. These shortages have previously limited our ability to supply customer demand in certain of our businesses, and have adversely affected customer demand for our products, as some customers have been unable to procure sufficient quantities of third-party components used together with our products to produce finished systems. It is difficult to predict the future impact of these shortages when they occur. To obtain future supply of certain materials and components, particularly substrates, and third-party foundry manufacturing capacity, we have entered into arrangements with some of our suppliers that involve long-term purchase commitments and/or large prepayments. These arrangements may not be adequate to meet our requirements, or our suppliers may fail to deliver committed volumes on time or at all, or their financial condition may deteriorate. If future customer demand over the horizon of such arrangements falls below our expectations, we could have excess or obsolete inventory, unneeded capacity, and increased costs, and our prepayments may not be fully utilized, and in some cases may not be fully recoverable. We utilize third-party foundries and component suppliers to manufacture or supply certain components and products for areas such as networking, communications, graphics, programmable semiconductor solutions, and memory. As part of our IDM 2.0 strategy, we expect to increase our use of third-party foundries. Delays in the development of foundries' future manufacturing processes could delay the introduction of products or components we design for such processes, and insufficient foundry capacity could prevent us from meeting customer demand. We typically have less control over delivery schedules, design and manufacturing co-optimization, yields, quality, product quantities, and costs for components and products that are manufactured by third parties. intel. Risk Factors and Other Key Information 54 !IKN 8JJ NI NKIKKKK JRJJP P IJ II NJKRJ# JK IJK NKKK II NJKRJ# JKP ILP P %INJJ IJ LJ I NII NJK IM% JKJRLIKJ I "$1K I JI IKIJL K IKNJ L J NJ IKNJ K JKJ #NKJ IK K J PKJ JKRPJ P I NJK K JRIJ IKKRJR PR IK I# JKL KN J% RK J NIK% N RJI RJIO%RJIJIIJLP IKRP JK JRIJ NJOJ# JK NII NJK% RJIRR KNKKN P I NJKJJ JRJ I K LKJ K JJ IK NINK #J LLKN 8JNKJ INJJ % %% IINJ ILIKK#KR I IJ#J L J NI I NJK KIPK% LNIJ IKK I KIJ J JIK K NK JP P #J L NII NJK KIPKLNKIJ NIINJJ I JL %KKN%L IK NI KJKJ IKK IJJKNIKK KKNK#J LLIJJKKNK% IJJP IJK% IK J JIIKKJJIJ KRJIKJ J JK J J %P P INK%INJ K% NKJILKJ IK PI #LIQNINKJ M K JIK NIK J L% J % I NI NK KKIJK II NJKJ LRJ1 1INK INJ K%J JNI R J JI JJKJPI8NIKJ KI N J % N J1 IJ 1KJJK%PILI K I JRK PI #1I KILJ IK#INJ K J INJNI J J) KJIJ TKJ I+%**+MNJPII #INJ IL PI JKNII N JJ J JJ # NII NJK KIPKLPIKLJ NI JLJ I N M IJI NJK KIKNJLNKIJ NI INJJ JL !ILN M KNL !PL M KNL K J NK K KNIKKKNIKI PIJJIK I NI I NJ I KKK:KNLJ K%QN J% $5P KK6 I NIJ IK:PI KJK KIPK: KNL K JRI% QN J% JI K KIPKNK NI NK KK!K IL KNIKJ I PIJ JK I NII NJK J NJNI KK JKJK NI JK I NJKI JJ J%R I JPLJ LKNL KKNK% N 9 W KNIKMJ JK%MI JL KJI JK%J I KNL% J KNLJ JI NKJ IK N JJ IK%L I PIK% I IK IK: W KNIQNJLKKNK: W L IKNIJLP JK%$ I JIJJ % I JNIKKJIK%N JKKNK5 N K6% IJ NIK% I JIP JKJJKINJKNIK: W JKJ QNLJI J IJ KNIK% IJN P JL QNJI JKNIK: W IKKJ %INJ % IKJ IMJJ KII IK K K NI IJK%KNKJ I IJ JI J KRJIIJ PI JJK%JIK I I% IKNI NJJJ K J JKNKJ IK%R IKNJ KNL KINJ K%J KK KNI% J PI JKONI K K JIKNL KKNK IK NI KJK%KINJ IIN NII NJ %L NII NJK JK%IP JNK I J NKJ I % NINKJ IIJ KK% I JPLJ NIINJJ LLNKI KNKKNL J NI NK KKKJIJL JILI NI NK KK% JJP KJ %IKNJK IJ % J I JJ J% NINKJ IKMI KINJ K IK IJK JI R KNL KJJ KJI JI I NII NJK NI JKJKPILIK%I J J K%KRK NJ IK ? 7% NKKNL KINJ K LK J J K JI JK% JK NJ I NKJILMI RKIK IJK KN KJIJK JI JK P N IL NJNI JLKK IJKP IP NKLJ NI JLJ KNLNKJ I IJ NI NK KKK% PPIKLJNKJ I I NII NJK%KK NKJ IKP N J I NIKN JQN JJK JIIJL JKNKJ JIRJ NI I NJKJ I N KKLKJKJKNJJ IJJNJNIJ JKK IJKR JL NI J NJNIKNL IJ JIK JK%IJNILKN KJIJK% JIIJL N IL NJNI JL%R P JI J II JKRJK NIKNIKJJ P P JINIK J JK 8 IIIL JK KII JKL J QNJJ J NIIQNI JK% I NIKNIKLJ PI JJP NK J IJ % IJI J LJI IJNJNINKJ I PIJ IO KNII JKK R NI MJJ K%R NPMKK I K J P J IL%N JL% IK KJK% NIIL JKL J NLNJO% K KKL J NLI PI !NJOJIIJL N IK JKNIKJ NJNI IKNLIJ JK I NJK IIKKNK JR I % N J K%IK%I I K NJ IK NJ K% IL#KIJ NI '*KJIJL%RMJ J IK NINK JIIJL N IK LK JP J N IKTNJNI NJNI I KKK NLJ JI NJ I NJK I JKRK IKNI KKK% KN J N ILJL NIP JNKI J NKJ I !JLLPKK JI PIPILKNK%K NJNI JOJ %LK%QNJL% I NJQN JJK% KJK I JK I NJKJJI NJNI LJIIJK KJ IK JIL IJ -1
Where possible, we seek to have several sources of supply. However, for certain components, services, materials, and equipment, we rely on a single or a limited number of suppliers, or upon suppliers in a single location, which can impact the nature, quality, availability, and pricing of the products and services available to us. For example, ASML Holding N.V. (ASML) is currently the sole supplier of EUV photolithography tools that we are deploying in our Intel 4 and subsequent manufacturing process nodes. These tools are highly complex to develop and produce, and increasingly costly, and from time to time there are increases in lead times or delays in their development and availability, which could delay the development or ramp of our future process nodes. As a further example, a limited number of third- party foundries offer leading-edge manufacturing processes, and these providers are geographically concentrated in Asia. Supplier consolidation or business failures can also reduce the pool of qualified suppliers. We are subject to the risks of product defects, errata, or other product issues. From time to time, we identify product defects, errata, and other product issues, which can result from problems in our product design or our manufacturing and assembly and test processes. Components and products we purchase or license from third-party suppliers, or gain through acquisitions, can also contain defects. Product issues also sometimes result from the interaction between our products and third- party products and software. We face risks if products that we design, manufacture, or sell, or that include our technology, cause personal injury or property damage, even where the cause is unrelated to product defects or errata. These risks may increase as our products are introduced into new devices, market segments, technologies, or applications, including transportation, autonomous driving, healthcare, communications, financial services, and other industrial, critical infrastructure, and consumer uses. Costs from defects, errata, or other product issues could include: • writing off some or all of the value of inventory; • recalling products that have been shipped; • providing product replacements or modifications; • providing consideration to customers, including reimbursement for certain costs they incur; • defending against litigation and/or paying resulting damages; • paying fines imposed by regulatory agencies; and • reputational harm. These costs could be large and may increase expenses and lower gross margin, and/or result in delay or loss of revenue. Mitigation techniques designed to address product issues, including software and firmware updates, are not always available on a timely basis—or at all—and do not always operate as intended or effectively resolve such issues for all applications. We and third parties, such as hardware and software vendors, make prioritization decisions about which product issues to address, which can delay, limit, or prevent development or deployment of a mitigation and harm our reputation and result in costs. Product defects, errata, or other product issues and/or mitigation techniques can result in product failures, adverse performance and power effects, reboots, system instability or unavailability, loss of functionality, data loss or corruption, unpredictable system behavior, decisions by customers and end users to limit or change the applications in which they use our products or product features, and other issues. Product issues can damage our reputation, negatively affect product demand, delay product releases or deployment, result in legal liability, or make our products less competitive, which could harm our business and financial results. Subsequent events or new information can develop that change our assessment of the impact of a product issue. In addition, our liability insurance coverage has certain exclusions or may not adequately cover liabilities incurred. Our insurance providers may be unable or unwilling to pay a claim, and losses not covered by insurance could be large, which could harm our financial condition. We face risks related to security vulnerabilities in our products. We or third parties regularly identify security vulnerabilities with respect to our processors and other products, as well as the operating systems and workloads that run on them and the components that interact with them. Components and IP we purchase or license from third parties for use in our products, as well as industry-standard specifications we implement in our products, are also regularly subject to security vulnerabilities. Our processors and other products are being used in application areas that create new or increased cybersecurity and privacy risks, including applications that gather and process large amounts of data, such as the cloud or Internet of Things, and critical infrastructure and automotive applications. The security vulnerabilities identified in our processors include a category known as side-channel vulnerabilities, such as the variants referred to as "Spectre" and "Meltdown." Additional categories and variants have been identified and are expected to continue to be identified. Publicity about these and other security vulnerabilities has resulted in, and is expected to continue to result in, increased attempts by third parties to identify additional vulnerabilities. Security and manageability features in our products cannot make our products absolutely secure, and these features themselves are subject to vulnerabilities and attempts by third parties to identify additional vulnerabilities. Vulnerabilities are not always mitigated before they become known. We, our customers, and the users of our products do not always promptly learn of or have the ability to fully assess the magnitude or effects of a vulnerability, including the extent, if any, to which a vulnerability has been exploited. Subsequent events or new information can develop that changes our assessment of the impact of a security vulnerability, including additional information learned as we develop and deploy mitigations or updates, become aware of additional variants, evaluate the competitiveness of existing and new products, and address future warranty or other claims or customer satisfaction considerations, as well as developments in the course of any litigation or regulatory inquiries or actions over these matters. intel. Risk Factors and Other Key Information 55 !I KK %RKJ PKPIK NIK KNL> RPI% IIJ JK%KIPK%JIK% QN J%R IL K IJ N I KNIK% IN KNIK K J %R JJ JNI%QNJL%P JL% I JI NJK KIPKP J NK IM%#'0> &?5#'06KNII JLJK KNI 1? J J ILJ KJJRI L NI J1 KN KQN J NJNI I KK KKJ KIL M J P I N% IK L KJL% I JJ JJII IKK JK ILK JIP J P JL%R NLJP J II NINJNII KK K#KNIJIM%J N I JI IJL N IK I NJNI I KKK% JKI PIKI IL JIJ #KNI K J I NK KKNIK K INJ QNKNIK !IKN 8JJ JIKK I NJJK%IIJ% I JII NJKKNK I JJ J%R JLI NJJK%IIJ% JII NJKKNK%R IKNJI I K NII NJK I NI NJNI KK L JKJI KKK JK I NJKRNIK I KI JIIJLKNIK% I JI NQNKJ K% K J JK$I NJKKNKK K JKIKNJI J JIJ JR NII NJK JI IJLI NJK K JRI!IKKI NJKJJRK % NJNI% IK% IJJ N NIJ L%NKIK 8NIL II IJL%P RIJNKKN IJJ I NJJK IIIJKIKKL IKK NII NJKI JI N J RPK%IJK JK%J K% IJ K% N JI K IJJ %NJ NKIP %JI% N J K% KIPK% JI NKJI%IJ IKJINJNI% KNINKK KJKI JK%IIJ% I JII NJKKNK N N9 W RIJ K I JPN P J IL: W I I NJKJJP K: W I P I NJI JK I J K: W I P KIJ J NKJ IK% N I NIK J IIJ KJKJL NI: W KJJJ 8 IL IKNJ K: W L K K LINJ IL K: W INJJ I K KJK N I L IKM KK RII KKI % 8 IIKNJ L I KK IP N'JJ J QNKK J IKKI NJKKNK% N K JRI IRINJK%I JRLKP JL KKZ I JZ JRLK IJK J IJPLIK PKNKKNK IJ K! JIIJK%KNK IRI K JRIP IK%I IJOJ K K NJRI NJKKNKJ IKK%R L%J% IIP J P J I L J JJ I NIINJJ IKNJ KJK$I NJJK%IIJ% I JII NJKKNK 8 IJJ J QNK IKNJ I NJNIK%PIKI I RIJK%I JK%KLKJ KJ JL I N P JL% KK N J JL%J KK I IINJ %N IJ KLKJ P I%K K LNKJ IK NKIKJ J I JJ K RJLNK NII NJK II NJJNIK% JIKKNK$I NJKKNK NIINJJ % JPLJI NJ %LI NJIKK I L J%IKNJ JL% I NII NJKKK JJP% R NI NI NK KK IKNJKN KQN JP JK I R IJ P JJ NIKKKK J JJ I NJKKN J % NI JL KNI PIKIJ MNK K IL JQNJL PI JK NIINI KNI I PIKL N IN R J L% KKK J PI L KNI N I%R NI NI J !IKKIJJ KNIJLPN I JK NII NJK ! IJIIJKINIL JLKNIJLPN I JKRJIKJJ NII KK IK JII NJK%KRKJ IJ KLKJK R I KJJIN J J JKJJ JIJRJJ JK $RNIK I KI JIIJK INK NII NJK%KRK NKJILKJ IKJ KR J NII NJK%IK INILKN 8JJ KNIJLPN I JKNII KK IK JII NJKI NK J IKJJIJ R I IKL IKNIJL IPLIKK% N J KJJJI I KKI N JK J%KNKJ N I JI J K% IJ IKJINJNI NJ JPJ KKNIJLPN I JK J NII KK IK NJ IL R K K PN I JK%KNKJPI JKIIIJ KEJIE E'J R E#J J IK PI JKP J IMJJ J NJ J$N JL NJJK JIKNIJLPN I JKKIKNJ % K MJJ J NJ IKNJ % IKJJJK LJIIJKJ JLJ PN I JKNIJL JL JNIK NII NJK J NII NJK K NJLKNI% JKJNIKJKPKIKN 8JJ PN I JK JJJK LJIIJKJ JLJ PN I JK?N I JKI JRLKJJ IJL R !% NI NKJ IK% JNKIK NII NJK JRLKI JLI IPJ JLJ NLKKKKJ JN IJK PN I JL% N JMJ J% L%J RPN I JLK M JN KQN JP JK I R IJ P JJ K NIKKKK J JJ KNIJLPN I JL% N J IJ I KRP L JJ K INJK% RI J PI JK%PNJJ JJP KK MKJ RI NJK% IKK NJNIRII JL I JIK INKJ IKJKJ KIJ K%KRKP JK J NIK LJJ I INJ IL QNIK IJ K PIJKJJIK KJ IK JIL IJ --
Mitigation techniques designed to address security vulnerabilities in our products, including software and firmware updates or other preventative measures, are not always available on a timely basis—or at all—and at times do not operate as intended or effectively resolve vulnerabilities for all applications. In addition, we are often required to rely on third parties, including hardware, software, and services vendors, as well as our customers and end users, to develop and/or deploy mitigation techniques, and the availability, effectiveness, and performance impact of mitigation techniques can depend solely or in part on the actions of these third parties in determining whether, when, and how to develop and deploy mitigations. Export restrictions may impede our ability to provide updates or patches to customers in certain geographies or that appear on sanctions lists, potentially leaving systems unpatched and open to exploitation. Further, sanctions lists may include third parties with whom we need to interact for coordinated vulnerability disclosure, which may impair our ability to receive information about vulnerabilities and to deliver mitigations for them. We and such third parties make prioritization decisions about which vulnerabilities to address, which can delay, limit, or prevent development or deployment of a mitigation and harm our reputation. Security vulnerabilities and/or mitigation techniques can result in adverse performance or power effects, reboots, system instability or unavailability, loss of functionality, data loss or corruption, unpredictable system behavior, decisions by customers and end users to limit or change the applications in which they use our products or product features, and/or the misappropriation of data by third parties. Security vulnerabilities and any limitations or adverse effects of mitigation techniques can adversely affect our results of operations, financial condition, customer relationships, prospects, and reputation in a number of ways, any of which may be material. For example, whether or not vulnerabilities involve attempted or successful exploits, they may result in our incurring significant costs related to developing and deploying updates and mitigations, writing down inventory value, defending against product claims and litigation, responding to regulatory inquiries or actions, paying damages, addressing customer satisfaction considerations, providing product replacements or modifications, or taking other remedial steps with respect to third parties. Adverse publicity about security vulnerabilities or mitigations could damage our reputation with customers or users and reduce demand for our products and services. These effects may be greater to the extent that competing products are not susceptible to the same vulnerabilities or if vulnerabilities can be more effectively mitigated in competing products. Moreover, third parties can release information regarding potential vulnerabilities of our products before mitigations are available, which, in turn, could lead to attempted or successful exploits, adversely affect our ability to introduce mitigations, or otherwise harm our business and reputation. We are subject to increasing and evolving cybersecurity threats and privacy risks. We face significant and persistent cybersecurity risks due to: the breadth of geographies, networks, and systems we must defend against cybersecurity attacks; the complexity, technical sophistication, value, and widespread use of our systems, products and processes; the attractiveness of our systems, products and processes to threat actors (including state-sponsored organizations) seeking to inflict harm on us or our customers; the substantial level of harm that could occur to us and our customers were we to suffer impacts of a material cybersecurity incident; and our use of third-party products, services and components. Such an incident, whether or not successful, could result in our incurring significant costs related to, for example, rebuilding our internal systems, writing down inventory value, implementing additional threat protection measures, providing modifications to our products and services, defending against litigation or enforcement proceedings, paying damages, providing customers with incentives to maintain a business relationship with us, or taking other remedial steps with respect to third parties, as well as incurring significant reputational harm. We regularly face attempts by malicious attackers who attempt to gain access to our network or data centers or those of our suppliers, customers, partners, end users, or other third parties; steal proprietary, personal, or confidential information related to our business, products, employees, suppliers, or customers; introduce malicious software to our systems or those of our suppliers, customers, partners, end users, or other third parties; interrupt our systems and services or those of our suppliers, customers, or others; or demand ransom to return control of such systems and services. As we grow certain emerging business lines, such as our foundry business and our cloud computing and software-as-a-service offerings, we expect to collect or host significant amounts of highly sensitive customer data, which may increasingly make us a target of attempts to steal or corrupt that data. Individuals and organizations, including malicious hackers, state-sponsored organizations, insider threats including employees and third-party service providers, and intruders into our physical facilities, at times attempt to gain unauthorized access to and/or corrupt the processes used to design and manufacture our hardware products and our associated software and services. We are also a frequent target of attackers that intend to sabotage, compromise, take control of, or otherwise corrupt our manufacturing or other processes, products, and services. In some instances, we, our suppliers, our customers, and the users of our products and services may be unaware of a threat or incident or its magnitude and effects, or we may be unable to timely mitigate the impacts of an incident. Cyber attack attempts are increasing in number, magnitude, and technical sophistication, and if successful may expose us and the affected parties to loss or misuse of proprietary or confidential information or disruptions to our business operations, including our manufacturing operations, and could impact our financial results. We expect emerging technologies to contribute to the increasing sophistication of attacks and to lead to new threats. For example, threat actors may leverage emerging Al technologies to develop new hacking tools and attack vectors, exploit vulnerabilities, obscure their activities, and increase the difficulty of threat attribution. As a developer of leading-node processes and widely utilized products, we have been, and expect to continue to be, the subject of intense efforts by sophisticated cyber adversaries, including state-sponsored organizations, who seek to compromise our systems, disrupt our operations or those of users of our products, or steal trade secrets. As geopolitical or armed global conflicts escalate, attacks against us, our customers, or our strategic allies may similarly intensify. For example, from 2019 to 2021, we, along with other companies with meaningful operations in Israel, were targets of concerted cyberattacks. In the fourth quarter of 2020, our Habana Labs subsidiary's network was breached in connection with a suspected unsuccessful ransomware attack, resulting in unauthorized third-party access of certain confidential information. intel. Risk Factors and Other Key Information 56 'JJ J QNKK J IKKKNIJLPN I JK NII NJK% N K JRI IRINJK I JI IP JJPKNIK%I JRLKP JL KKZ IJZ JJK J IJK J IJPL IK PPN I JK IJ K J %RI J IQNIJ IL JIIJK% N IRI%K JRI% KIPKP IK%KRK NINKJ IK NKIK%J P 8 I LJJ J QNK% JP JL% JP KK% I I J JJ J QNK K L I IJ JJ K JKJIIJK JI RJI%R % RJ P LJJ KM IJIKJIJ KL NI JLJ I PNJK I JKJ NKJ IK IJ IK IJJI K J KKJK% J JLP KLKJKN J J M JJ NIJI%K J KKJKL NJIIJKRJR R J JIJ I I JPN I JLK KNI%R LI NI JLJ IP IJ NJPN I JK J PIJJ K IJ! KNJIIJK I IJOJ K K NJRPN I JKJ IKK%R L%J% IIP JP J I L J JJ I NIINJJ NIJLPN I JK 8 IJJ J QNK IKNJ PIKI I I RIJK%I JK% KLKJ KJ JL IN P JL% KK N J JL%J KK I IINJ %N IJ KLKJ P I%K K LNKJ IK NKIKJ J I JJ K RJLNK NII NJK II NJJNIK% 8 IJKI IJ J L JIIJK NIJLPN I JK LJJ K IPIKJK JJ J QNK PIKLJ NIIKNJK IJ K% J %NKJ IIJ KK%I KJK% INJJ N I RLK% L RL JI IM% RJI I JPN I JK P PJJJ IKNKKNM JK%JLLIKNJ NI NII K J KJKIJJ P L NJK JJ K%RIJ R P J ILPN% KJI NJK JJ % IK J INJ IL QNIK IJ K%L K%IKK NKJ IKJKJ KIJ K%I P I NJ I JK I J K% IJ JIIKJKRJIKJJ JIIJK#PIKN JL NJKNIJLPN I JK IJJ K N NIINJJ RJNKJ IK INKIK IN I NII NJK KIPKKJKL IJIJ JMJ JJJ J I NJKI JKNKJ J JKPN I JK IPN I JK IJPL JJ J I NJK' I PI%JIIJK IK IJ II J JPN I JK NII NJK I JJ KIP %R% JNI % NJ JJJ IKNKKNM JK%PIKLJ NI JLJ JI NJJ K% I JIRKI NI NK KK INJJ !IKN 8JJ IK P P L IKNIJLJIJK IPLIKK !K J IKKJ JL IKNIJLIKKNJ 9J IJ IK% JR IK% KLKJKRNKJ KJ L IKNIJLJJK:J MJL%J K KJJ %PN% RKINK NIKLKJK%I NJK I KKK:J JJIJP KK NIKLKJK%I NJK I KKKJ JIJJ IK5 N KJJK K I I OJ K6K J JI NK I NINKJ IK:JKN KJ JP IJJ N NIJ NK NINKJ IKRIRJ KNIJK JI L IKNIJL J: NINK JIIJLI NJK%KIPK JKN J%RJI I JKNKKN% N IKNJ NI NII K J KJKIJJ % IM%I N NI JI KLKJK%RIJ R P J ILPN% J J JIJI JJ KNIK%I P J KJ NII NJK KIPK% KJJJ I I J I K%L K%I P NKJ IKRJ JPKJ J NK KKIJ KRJNK% IJ JII KJKRJIKJJ JIIJK%KRK NII K JINJJ I!INILJJJK L NKJJIK R JJJJ KKJ NI JR I IJ JIK IJ K NIKNIK%NKJ IK%IJ IK% NKIK% I JIJIIJK: KJI IJIL%IK % I J IJ IJJ NI NK KK%I NJK% LK%KNIK% INKJ IK: JI N NKK JRIJ NIKLKJK IJ K NIKNIK%NKJ IK%IJ IK% NKIK% I JIJIIJK: JIINJ NIKLKJK KIPK IJ K NIKNIK%NKJ IK% I JIK: I I K J IJNI JI KNKLKJK KIPK#KR I RIJ I NK KK K%KNK NI N IL NK KK NI N NJ K JRIKKIP I K%R MJJ J I KJK J N JK LK KJPNKJ IJ%RL IK LNKJIJ JJJKJ KJ I IINJJJJ PNK I OJ K% N NKIK%KJJK K I I OJ K% KIJIJK N LK JIIJLKIPI PIK% JINIK J NILKJK%JJKJJJJ N NJ IO KKJ 8 I IINJJI KKKNKJ K NJNI NIIRII NJK NIKK JK JRI KIPK !IK IQN JJIJ JJIKJJ J J K J% I K%J JI % I JIRK IINJ NI NJNI I JII KKK%I NJK% KIPK K KJ K%R% NIKNIK% NINKJ IK% JNKIK NII NJK KIPK L N RI JIJ I J IJK JN JK% IRL N J JLJJJJK J L IJJJJJKI IK N I% JN% J K KJJ % KNKKNLM KNK J JIJKJ KK IKNK I IJIL I J IJ IKINJ KJ NI NK KK IJ K% N NI NJNI IJ K% NJ NI IKNJK!MJI J KJ JI NJJ J IK K KJJ JJK J J RJIJK IM%JIJJ IKLPII #J KJ P R J K JJPJ IK%M JPN I JK% KNIJIJPJK% IKJNJL JIJJJI NJ #KP I I KKK RLNJOI NJK%RP % MJJ J NJ %JKN 8J J K IJK LK KJJL IPIKIK% N KJJK K I I OJ K%R KJ I K NIKLKJK%KINJ NI IJ K IJ K NKIK NII NJK% IKJJIKIJK#K J II JKKJ%JJK KJ NK% NINKJ IK% I NIKJIJKLKIL J KL IM%I *7J **%R% RJ JI KRJ N IJ K KI%RIJIJK IJL IJJK J NIJQNIJI **% NI> 0 KKN KILTK JR IRK I J RJKNKJN KNKKNI K RIJJ%IKNJ N NJ IOJIIJLKK IJ J IJ KJ IK JIL IJ -3
We are also subject to risks associated with attacks on products, services and components in our supply chain, such as the 2020 compromise of IT infrastructure management software provided by SolarWinds Corporation. These providers can experience breaches of their systems and products, or provide inadequate updates or support, which can impact the security of our systems and our proprietary or confidential information. Since 2021, we have observed an increase in ransomware attacks in our supply chain. In December 2021, a vulnerability named "Log4Shell" was reported for the widely used Java logging library, Apache Log4j* 2, and similar vulnerabilities affecting commonly used programs and tools were reported in 2022 and 2023. We are required to comply with stringent, complex, and evolving laws, rules, regulations, and standards in many jurisdictions, as well as contractual obligations, relating to cybersecurity and data privacy. Our compliance efforts are complicated by the fact that these requirements and obligations may be subject to uncertain or inconsistent interpretations and enforcement, and may conflict among various jurisdictions. Any failure or perceived failure by us to comply with applicable laws, rules, regulations, standards, certifications, or contractual obligations, or any compromise of security that results in unauthorized access to, or unauthorized loss, destruction, use, modification, acquisition, disclosure, release, or transfer of personal information, may result in outcomes such as: requirements to modify or cease certain operations or practices; the expenditure of substantial costs, time, and other resources; proceedings or actions against us; legal liability; governmental investigations; enforcement actions; claims; fines; judgments; awards; penalties; sanctions; and potentially costly litigation (including class actions). The theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our business, including data stored with vendors or other third parties, could result in significantly increased business and security costs or costs related to defending legal claims. Costs to comply with and implement privacy-related and data-protection measures are significant, and noncompliance could expose us to significant monetary penalties, damage to our reputation, suspension of online services or sites in certain countries, and even criminal sanctions. Even our inadvertent failure to comply with federal, state, or international privacy-related or data-protection laws and regulations could result in audits, regulatory inquiries, or proceedings against us by governmental entities or other third parties. We are subject to IP risks, including related litigation and regulatory proceedings. We cannot always protect our IP or enforce our IP rights. We regard our patents, copyrights, trade secrets, and other IP rights as important to the success of our business. We rely on IP law—as well as confidentiality and licensing agreements with our customers, employees, technology development partners, and others—to protect our IP and IP rights. Our ability to enforce these rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our IP rights in various countries and other geopolitical factors. We are not always able to obtain protection for our IP or enforce or protect our IP rights. When we seek to enforce our rights, we may be subject to claims that our IP rights are invalid, not enforceable, or licensed to an opposing party. Our assertion of IP rights may result in another party seeking to assert claims against us, which could harm our business. From time to time, governments adopt regulations— and governments or courts render decisions—requiring compulsory licensing of IP rights, or governments require products to meet standards that favor local companies. Our inability to enforce our IP rights under any of these circumstances can harm our competitive position and business. In some cases, our IP rights can offer inadequate protection for our innovations. In addition, the theft or unauthorized use or publication of our trade secrets and other confidential business information could harm our competitive position and reduce acceptance of our products; as a result, the value of our investment in R&D, product development, and marketing could be reduced. This risk is heightened as competitors for technical talent increasingly seek to hire our employees. Our licenses with other companies and participation in industry initiatives at times allow competitors to use some of our patent rights. Technology companies often bilaterally license patents between each other to settle disputes or as part of business agreements. Some of our competitors have in the past had, and may in the future have, licenses to some of our patents, and under current case law, some of the licenses can exhaust our patent rights as to licensed product sales under some circumstances. Our participation in industry standards organizations or with other industry initiatives at times requires us to offer to license our patents to companies that adopt industry-standard specifications. Depending on the rules of the organization, government regulations, or court decisions, we sometimes have to grant licenses to some of our patents for little or no cost, and as a result, we may be unable to enforce certain patents against others, and the value of our IP rights may be impaired. Third parties assert claims based on IP rights against us and our products, which could harm our business. We face claims based on IP rights from individuals, companies, investment litigation entities, other non-practicing entities, academic and research institutions, and other parties. We have seen an increase in patent assertions and lawsuits initiated by well-funded non-practicing entities, including entities funded by third-party investment firms. These lawsuits can increase our cost of doing business, impact our reputation or relationship with customers, and could disrupt our operations if they succeed in blocking the trade of our products. The patent litigation environment has also become more challenging due to the emergence of venues adopting procedural and substantive rules that make them more favorable for patent asserters and courts in which injunctions are available for non-competitors. As a result, we believe we are facing a more hostile IP litigation environment than in past years. We are typically engaged in a number of disputes involving IP rights. Claims that our products, technologies, or processes infringe the IP rights of others, regardless of their merits, cause us to incur large costs to respond to, defend, and resolve the claims, and they divert the efforts and attention of our management and technical personnel from our business and operations. In addition, we may face claims based on the alleged theft or unauthorized use or disclosure of third-party trade secrets, confidential information, or end-user data that we obtain in conducting our business. Any such incidents and claims could severely disrupt our business, and we could suffer losses, including the cost of product recalls and returns, and reputational harm. Furthermore, in many instances we agree to indemnify customers for certain IP rights claims against them. IP rights claims against our customers could also limit demand for our products or disrupt our customers' businesses, which could in turn adversely affect our results of operations. Intel. Risk Factors and Other Key Information 57 !IK KN 8JJ IKKKK JRJJJK I NJK%KIPK JK NIKNL %KNKJ** I K IKJINJNI JK JRII P L I! K I IJ KI PIK MI IK JIKLKJK I NJK% II P QNJNJK IKN IJ%R JJKNIJL NIKLKJK NII IJIL I J IJ **%RP KIP IK I K RIJJK NIKNL I**% PN I JL ]0 1^RKI IJ IJRLNK@P IIL%#0 18A*% KIPN I JK J LNKI IK J KRII IJ *** **+ !IIQNIJ LRJKJI J% M% P P RK%INK%INJ K% KJ IK L8NIKJ K%KRK JIJN J K%IJ J L IKNIJL JIPLNI IJKI J LJJJJJK IQNI JK J KL KN 8JJ N IJ I KKJ J JIIJJ K I J% L J PI NK8NIKJ K# LNI IIPNI LNKJ LRJ RK%INK%INJ K%KJ IK%IJJ K% I JIJN J K% I L I K KNIJLJJIKNJK N NJ IOKKJ % IN NJ IO KK%KJINJ %NK% J %QNKJ %K KNI%IK% IJI KI IK IJ %LIKNJ NJ KKNK9IQNI JKJ L IKIJ IJ K IIJK:JM JNI KN KJ J KJK%J% JIIK NIK:I K IJ K KJ NK: JL: PI J PKJJ K: I JJ K:K: K:8N JK:RIK: JK:K J K: J JL KJLJJ 5 N KKJ K6 JJ% KK% IKNK IK J J%NK%KJ I% IJI KII LNKJ IN NI NK KK% N JKJ IRJ P IK I JIJIIJK% NIKNJ K JL IK NK KK KNIJL KJK I KJKIJJ K KJKJ LRJ JIPLIJ JI JJ KNIKIK J% NM KNKJ K J JIL JK%J NIINJJ %KNK K KIPK IKJK IJ N JIK% P I K J KP NI PIJ JNIJ LRJI%KJJ% I JI J IPLIJ IJI JJ RK INJ K NIKNJ NJK%INJ IL QNIK% II K KJNK L PI J JJK I JIJIIJK !IKN 8JJ $IKK% N IJJJ INJ ILI K ! JRLKI JJ NI$ I I NI$IJK!II NIJ JK% LIJK%JIKIJK% JI$IJKK IJ JJ JKNKK NI NK KK!IL $RZKRK JJL K I JKRJ NINKJ IK% LK%J LP JIJ IK% JIKZJ I JJ NI$ $IJKNI JLJ IJKIJKKKN 8JJ IJJ IKK%KRKN IJ JLKJ J I JL NI$IJK PI NK N JIK JI JJ IK! I JRLK J J I JJ I NI$ I I II JJ NI$IJK! RKJ I NIIJK%RL KN 8JJ KJJ NI$IJKI P% J I % I KJ K IJLNIKKIJ $IJKLIKNJ JIIJLK J KKIJK KJNK%R NI NI NK KKI JJ J% PI JK JINJ KZ PI JK I NIJKI IK KZIQNI NK IL K $IJK% I PI JKIQNII NJKJ J KJ IKJJP I KNI JLJ I NI$IJKN I L JKINKJ K I NI JJP KJ NK KK K KK% NI$IJK I QNJI JJ I NI PJ K J %JJJ I N NJ IONK IN J NIJIKIJK JI J NK KK IJ NI NI JJP KJ INJ NII NJK:KIKNJ%JPN NI PKJ J ( %I NJP J% IJ N INKIKKJ K JJ IK IJ J J IK LKJ I NI LK NI KKRJ JI K IJJ NKJIL JJPKJJK R JJ IKJ NKK NIJ JIJK L K J JIL KJ JK JR JIJ KJJKNJK IKIJ NK KKI JK NI JJ IKP JKJ% L JNJNIP% KKJ K NIJ JK% N INII JKR%K J KK MNKJ NIJ JIJKKJ KI NJKKN IK INKJ KNIIJJ NKJILKJ IK I OJ K IRJ JI NKJIL JJPKJJKIQNIKNKJ IJ K NIJ JKJ KJJ J NKJILKJ I KJ K JINK J I OJ % PI JINJ K% I NIJK K%RK JKPJ I J KKJ K NIJ JK IJJ I KJ% KIKNJ%RL N J IIJ J JK KJ JIK% J PN NI$IJKL I IIJKKKIJK K $IJK KJNK NII NJK%R NI NI NK KK!K K $ IJKI PNK% K% PKJ JJJ JJK% JI IJ JJK% IKI KJJNJ K% JIIJK!PK IK J JKKIJ K RKNJK JJ LRN IJ JJK% N JJKN LJIIJL PKJ JIKKRKNJK IK NI KJ NK KK%J NIINJJ I IJ KRJNKJ IK% NKINJ NI IJ KJLKN JJI NII NJKJ JJJ PI JKK I NJ JI P NK J I NI KN KJ JPINKJJ J IP I IJ JKKIJIK NIJK R 8N J KIP I JJ IK#KIKNJ%R PRI I KJ$JJ PI JJ KJLIK !IJLL N I KNJK P P $IJKKJJ NII NJK%J K% II KKK I J$ IJK JIK%IIKK JIIJK%NKNKJ NII KJKJ IK J % % IK PJK% JLPIJJ IJK JJ J NI J J IK I NI NK KK IJ K J %RLK K JJJ IN NJ IONK IK KNI JIIJLJIKIJK% J IJ % I NKIJJJR J NJ NI NK KK# LKN JK K NKPILKINJ NI NK KK% R NKNI KKK% N J KJ I NJIK IJNI K% INJJ INIJI I% L KJ KRIJ LNKJ IK IIJ $IJKK KJJ$IJKK KJ NINKJ IK NK J I NII NJK IKINJ NI NKJ IK/ NK KKK%R N JNI PIKLJ NIIKNJK IJ K KJ IK JIL IJ -.
As a result of IP rights claims, we could: • pay monetary damages, payments to satisfy indemnification obligations, royalties, fines, or penalties; • stop manufacturing, using, selling, offering to sell, or importing products or technology subject to claims; • need to develop other products or technology not subject to claims, which could be time-consuming or costly; and/or • enter into settlement or license agreements, which may not be available on commercially reasonable terms and may be costly. These IP rights claims could harm our competitive position, result in expenses, or require us to impair our assets. If we alter or stop production of affected items, our revenue could be harmed. We rely on access to third-party IP, which may not be available to us on commercially reasonable terms, if at all. Many of our products are designed to include third-party technology or implement industry standards, which may require licenses from third parties. In addition, from time to time, third parties notify us that they believe we are using their IP. There is no assurance that any necessary licenses or our existing licenses to such third-party IP can be obtained or are available on commercially reasonable terms or at all. Failure to obtain the right to use third-party technology, or to license IP on commercially reasonable terms, could preclude us from selling certain products or otherwise have a material adverse impact on our financial condition and operating results. To the extent our products include software that contains or is derived from open-source software, we may be required to make the software's source code publicly available and/or license the software under open-source licensing terms. We are subject to risks associated with litigation and regulatory matters. From time to time, we face legal claims or regulatory matters involving stockholder, consumer, competition, commercial, IP, labor and employment, compliance, and other issues. As described in "Note 19: Commitments and Contingencies" within the Notes to Consolidated Financial Statements, we are engaged in a number of litigation and regulatory matters. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings, excessive verdicts, or other events could occur, including monetary damages, fines, penalties, or injunctions stopping us from manufacturing or selling certain products, engaging in certain business practices, or requiring other remedies, such as compulsory licensing of patents. An unfavorable outcome can result in a material adverse impact on our business, financial condition, and results of operations. Regardless of the outcome, litigation and regulatory proceedings can be costly, time-consuming, disruptive to our operations, harmful to our reputation, and distracting to management. We must attract, retain, and motivate key talent. We believe that hiring and retaining qualified executives, scientists, engineers, technical talent, sales representatives, and other professionals are critical to our business. The competition for highly skilled employees in our industry is intense, with the demand often exceeding supply. Competitors for technical talent increasingly seek to hire our employees, and the availability of flexible, hybrid, or work- from-home arrangements has both intensified and expanded competition. In addition, changes in immigration policies may further limit the pool of available talent and impair our ability to recruit and hire technical and professional talent. From time to time, we have intensified our efforts to recruit and retain talent, such as during 2021 and 1H 2022, and these efforts have increased our expenses. Further, we may not be successful in attracting, retaining, and motivating the workforce necessary to deliver on our strategy, and we have been required to curtail our planned hiring and reduce our workforce to respond to business conditions that differ from our expectations, which can be disruptive, compromise our ability to deliver on our strategy and workforce goals, and impact our ability to recruit in the future. Changes in employment-related laws applicable to our workforce practices may also result in increased expenses and less flexibility in how we meet our changing workforce needs. To help attract, retain, and motivate qualified employees, we use share-based awards, such as RSUs, and performance-based cash incentive awards. Sustained declines in our stock price or lower stock price performance relative to our competitors have been reducing the retention value of our share-based awards, which can impact the competitiveness of our compensation. Our employee hiring and retention also depend on our ability to build and maintain a diverse and inclusive workplace culture and be viewed as an employer of choice. To the extent our compensation programs and workplace culture are not viewed as competitive, or changes in our workforce and related restructuring, reduction-in-force or other initiatives are not viewed favorably, our ability to attract, retain, and motivate employees can be weakened, which could harm our results of operations. In addition, significant or prolonged turnover may negatively impact our operations and culture, as well as our ability to successfully maintain our processes and procedures, including due to the loss of historical, technical, and other expertise. Changes in our management team and any failure to successfully transition and assimilate key talent could disrupt our business and adversely affect our results of operations. To the extent we do not effectively hire, onboard, retain, and motivate key employees, our business can be harmed. We are subject to risks associated with our strategic transactions and investments. We routinely evaluate opportunities and enter into agreements for possible acquisitions, divestitures, and other strategic transactions, which are an important component of our financial allocation strategy. These transactions involve numerous risks, including: • our inability to identify opportunities in a timely manner or on terms acceptable to us; • failure of the transaction to advance our business strategy and failure of its anticipated benefits to materialize; • disruption of our ongoing operations and diversion of our management's attention; • failure of partners to satisfy financial or other obligations on which we rely; • our inability to exercise sole decision-making authority regarding a project, property, or entity; • failure to complete a transaction in a timely manner, or at all, due to our inability to obtain required government or other approvals on a timely basis or without materially burdensome conditions or mandated acquisitions, divestitures, or disposals, IP disputes or other litigation, difficulty in obtaining financing on terms acceptable to us, or other unforeseen factors; intel. Risk Factors and Other Key Information 58 #KIKNJ $IJKK%R N9 W L JILK%L JKJ KJKL J J K%I LJK% K% I JK: W KJ NJNI %NK %K % I J K% I IJ I NJK IJ LKN 8JJ K: W J P JII NJK IJ L JKN 8JJ K%R N J KN I KJL: 8 I W JI J KJJ J I KI JK%RL J P ILIK JIK L KJL K$IJKK NI NI JJP KJ %IKNJ M KK% IIQNINKJ I NIKKJKRJI IKJ I NJ JJK% NIIP N N I !IL KKJ JIIJL$%RL J P J NK ILIK JIK%J' L NII NJKI K J NJIIJLJ L I J NKJILKJ IK%RLIQNI KKI JIIJK J % I JJ J%JIIJK JLNKJJJL PRINK JI$IK KKNI JJ L KKIL KK I NI MKJ KKJ KNJIIJL$ J IIP ILIK JIK IJNIJ J J IJJ NKJIIJLJ L% IJ K$ ILIK JIK% NINNKI K IJ I NJK I JIRKPJIPIKJ NI J IJ IKNJK JMJ J NII NJK NK JRIJJ J K IKIPI K NIK JRI%RL IQNIJ JK JRI/KK NI N LP 8 I KJK JRIN I K NI K JIK !IKN 8JJ IKKKK JRJJJ INJ ILJJIKI JJ J%RK IINJ ILJJIK P P KJ I% KNI% JJ % I%$% I L J% % JIKKNK#KKI E& J 79 J JK J KERJ J& JKJ K J JJ JK%RI N I JJ INJ ILJJIK0JJ INJ ILI KI I JLN IJ % PIKIN K%MKKPPIJK% I JI P JK N NI% N JILK% K% JK% I 8N J KKJ NKI NJNI IK IJ I NJK% IJ NK KKIJK% IIQNI JIIK%KNK NK IL K J JK# N P I NJ IKNJ JIPIKJ NI NK KK% J % IKNJK IJ KIKK J NJ %JJ INJ ILI K KJL%J KN %KINJPJ NI IJ K%INJ NIINJJ % KJIJ J J !NKJJJIJ%IJ % JPJLJ J ! PJJI IJ QNMNJPK%K JKJK% IK%J J J%KKIIK JJPK% JI I KK KIIJJ NI NK KK JJ ILK LK NI NKJILK J K%RJJ J M KNL JJ IK IJ J J IK LKJ I NI LK% JP JL M %L I% IR I I II JKK J J K M JJ J % K IJ KLNIJIJJ P J J I NI JLJ IINJ IJ I KK J JI JJ J%RP J K NI IJKJ IINJ IJ J J%KNKNI ** >***% JK IJKP IK NIM KKNIJI%RL J KNKKN JJIJ %IJ % JPJ JR I I KKILJ PI NIKJIJL% RP IQNIJ NIJ NI I IN NIR I IJ IK J NK KK J KJJII NIMJJ K%R KINJP% I K NI JLJ PI NIKJIJL R I I K% J NI JLJ IINJ JNJNI K L JIJRK J NIR I IIJKLK IKNJ IKM KK KKM JL RRJ NI R I I K JJIJ%IJ % JPJQN LK%RNKKI KRIK%KNK1K% I I KK JPRIKNKJ K NIKJ I I RIKJ II I IJPJ NI JJ IKP IN JIJ J PN NIKI KRIK%R JJ JJP KK NI KJ NI LI IJ J K NI JLJ N J PIK NKPR I NJNI PRK LI JMJ J NI KJ I IK R INJNII JPRK JJP% I K NIR I I IJIKJINJNI %INJ I I JI JJPKI JPRP I L% NI JLJ JJIJ%IJ % JPJ LK R %R NI NIIKNJK IJ K J %K J I I JNI PIL JPLJ NI IJ K NJNI%KRK NI JLJ KNKKNL J NII KKK I NIK% N NJ J KK KJ I%J % JIMIJK K NI JJ LNIJ KNKKNLJI KJ KKJLJ J NKINJ NI NK KK PIKLJ NIIKNJK IJ K JMJ JR JJPLI% I%IJ % JPJL LK% NI NK KK I !IKN 8JJ IKKKK JRJ NIKJIJJI KJ K PKJ JK !I NJ LPNJ IJN JK JI J I JK I KK QNKJ K%PKJJNIK% JIKJIJJI KJ K% RI IJ J J NI J KJIJLKJI KJ K P P NI NKIKK% N 9 W NI JLJ JL IJN JK JL I I JIKJ J NK: W NI JJI KJ J P NI NK KKKJIJL NI JK JJ JKJ JIO: W KINJ NI IJ K PIK NI J/KJJ J : W NI IJ IKJ KJKL I JI J K RRIL: W NI JLJ MIKK K NJ IJLII I 8J%I IJL% I JJL: W NIJ JJI KJ JL I% IJ%NJ NI JLJ J IQNI PI J I JII PK JL KK IRJ NJJIL NI K J K I JQNKJ K%PKJJNIK% IK KK%$KNJK I JIJJ %NJL J JIKJ J NK% I JIN IK J IK: KJ IK JIL IJ -2
• our failure to realize a satisfactory return on our investment, potentially resulting in an impairment of goodwill and other assets, and restructuring charges; • our inability to effectively enter new market segments through our strategic transactions or retain customers and partners of acquired businesses; • our inability to retain key personnel of acquired or majority-owned businesses or our difficulty in integrating or separating employees, business systems, and technology or otherwise operating the acquired or majority-owned business; • controls, processes, and procedures of acquired or majority-owned businesses that do not adequately ensure compliance with laws and regulations and create complexity and inconsistency in application of controls, processes and procedures, and our failure to identify and/or address compliance issues, including accounting errors, or liabilities; • our inability to resolve impasses or disputes with partners, including as a result of differences in our interests or goals; • our failure to identify, or our underestimation of, commitments, liabilities, accounting and other risks associated with acquired businesses or assets, majority-owned businesses or novel transactions; and • the potential for our transactions to result in dilutive issuances of our equity securities or significant additional debt. Any of these risks could have a material adverse effect on our business, results of operations, financial condition, or cash flows, particularly in the case of a large acquisition, divestiture or partial divestiture, or several concurrent strategic transactions. Moreover, our resources are limited and our decision to pursue a transaction has opportunity costs; accordingly, if we pursue a particular transaction, we at times need to forgo the prospect of entering into other transactions or otherwise investing our resources in a manner that could help us achieve our financial or strategic objectives. Where an existing investment does not strategically align to our key priorities, we routinely evaluate opportunities for possible divestitures and other options. We may not realize the anticipated benefits of divestitures due to risks that include unfavorable prices and terms; changes in market, macroeconomic, or geopolitical conditions affecting the regions or industries in which we or counterparties operate; changes in applicable laws; failure to receive regulatory or governmental approvals; limitations or restrictions due to regulatory or governmental approvals, litigation, contractual terms, or other conditions; delays in closing; lack of support by third parties; actions by competitors; adverse effects on our business relationships, operating results, or business due to the announcement and pendency of such transactions; and continued financial obligations, unanticipated liabilities, or transition costs associated with such transactions. In some cases, we are not able to divest investments on acceptable terms or at all. In addition, we make investments in public and private companies to further our strategic and financial objectives and to support certain key business initiatives. These companies can include early-stage companies still defining their strategic direction. Many of the instruments in which we invest are non-marketable and illiquid at the time of our initial investment, and we are not always able to achieve a return in a timely fashion, if at all. Our ability to realize a return on our investment in a private company, if any, is typically dependent on the company participating in a liquidity event, such as a public offering or acquisition. To the extent any of the companies in which we invest are not successful, which at times includes bankruptcy, we could recognize an impairment and/or lose all or part of our investment. We are subject to sales-related risks. We face risks related to sales through distributors and other third parties. We sell a significant portion of our products through third parties, such as distributors, value-added resellers, and channel partners (collectively referred to as distributors), as well as OEMs and ODMs. We depend on many distributors to help us create end-customer demand, provide technical support and other value-added services to customers, fill customer orders, and stock our products. At times, we rely on one or more key distributors for a product, and a material change in our relationship with one or more of these distributors or their failure to perform as expected could reduce our revenue. Our ability to add or replace distributors for some of our products is limited. In addition, our distributors' expertise in the determination and stocking of acceptable inventory levels for some of our products is not always easily transferable to a new distributor; as a result, end customers may be hesitant to accept the addition or replacement of a distributor. Using third parties for distribution exposes us to many risks, including competitive pressure and concentration, credit, and compliance risks. Distributors and other third parties often sell products that compete with our products, and we sometimes need to provide financial and other incentives to focus them on the sale of our products. From time to time, they may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results. Further, any violations of the Foreign Corrupt Practices Act or similar laws by distributors or other third- party intermediaries could have a material impact on our business, including subjecting us to litigation or regulatory risk. Failure to manage risks related to our use of distributors and other third parties may reduce sales, increase expenses, and weaken our competitive position. From time to time, our products are resold by third parties in an unauthorized "gray market." Our policies and procedures designed to keep our products away from the gray market may not be successful in achieving this objective. Gray market products can distort demand and pricing dynamics in our distribution channel and certain geographies, which at times adversely affects our revenue opportunities. Gray market activity is difficult to monitor and can make forecasting demand more challenging. Gray market products also sometimes include parts that have been altered or damaged, and our reputation may be harmed when these products fail or are found to be substandard. We receive a significant portion of our revenue from a limited number of customers. Collectively, our three largest customers accounted for 40% of our net revenue in 2023, 42% of our net revenue in 2022 and 43% of our net revenue in 2021. We expect a small number of customers will continue to account for a significant portion of our revenue in the foreseeable future. intel. Risk Factors and Other Key Information 59 W NINIJ IOKJKJ ILIJNI NI PKJ J% J JLIKNJ I J R JIKKJK% IKJINJNI IK: W NI JLJ JPL JI RIJK JKJI N NIKJIJJI KJ K IIJ NKJ IK IJ IK QNI NK KKK: W NI JLJ IJ LIK QNI I8 IJL R NK KKK I NINJL JIJ IKIJ LK% NK KKKLKJK% J L I JIRK IJ JQNI I8 IJL R NK KK: W JI K%I KKK% I NIK QNI I8 IJL R NK KKKJJ JQNJL KNI RJ RK INJ K IJ MJL KKJ L J JI K%I KKK I NIK% NI NIJ JL 8 IIKK KKNK% N N J II IK% I JK: W NI JLJ IK PKKK IKNJKRJIJ IK% N KIKNJ I K NI JIKJK I K: W NINIJ JL% I NIN IKJJ % J JK% JK% N J JIIKKKK JRJQNI NK KKK IKKJK%8 IJL R NK KKK I PJI KJ K: W J J J I NIJI KJ KJ IKNJ NJPKKN K NIQNJLKNIJK IK JJ J # L JKIKK NPJIPIKJ NI NK KK%IKNJK IJ K% J % IK RK% IJNIL JK IQNKJ %PKJJNI IIJPKJJNI% IKPI NII JKJIJJI KJ K' I PI% NI IK NIKIJ NIK J NIKNJI KJ K IJN JL KJK: I L%RNIKNIJNIJI KJ %R JJK J I JI KJ JI J JIJI KJ K I JIRK PKJ NIIK NIK IJJ NNK P NI IKJIJ 8JPK !I MKJ PKJ J K JKJIJL J NILI IJK%RI NJ LPNJ IJN JK I KK PKJJNIK JI J K!L JIOJ JJ JK PKJJNIKNJ IKKJJ NN P I IK JIK: K IJ%I % I J J KJ JI K I NKJIK RR I N JIIJK IJ: K RK:NIJ IPINJ IL I PI JI PK:JJ K IIKJIJ KNJ INJ IL I PI JI PK%JJ % JIJNJIK% I JI J K:LK K : KN IJ LJIIJK:J K L JJ IK:PIKJK NI NK KKIJ KK% IJ IKNJK% I NK KKNJ J N J L KN JI KJ K: J N J K%N JJ JK% IJI KJ KJKKK JRJKNJI KJ K K KK%RI J J PKJ PKJ JK J JIK IJ J %R PKJ JK N IPJ KJ NIJI NIKJIJ 8JPK J KN IJIJ L NK KK JJPKK K NILKJ KKJ JIKJIJIJ ' L J KJIN JK RR PKJI IJ QNJJJ NI J PKJ J% RI JRLK J P IJNI JLK %JNI JLJ IOIJNI NI PKJ J IPJ L% L%KJLL J J LIJJ QNJLP J%KNKN I IQNKJ JMJ J L J K RR PKJI JKNKKN%RJJK NK INJL%R NI O I J 8 I K IIJ NI PKJ J !IKN 8JJ KKIJIKK !IKKIJJ KKJI NKJI NJ IK JIJIIJK!KK J IJ NII NJKJI NJIIJK% KNKKJI NJ IK%PNIKIK% IJ IK5 JPLIIIJ KKJI NJ IK6%KRK'K 'K! LKJI NJ IKJ NKIJ NKJ I %I PJ KN IJ JIPNKIPKJ NKJ IK%NKJ I IIK% KJ NII NJK#JJK%RIL I ILKJI NJ IK II NJ% JI NIIJ KRJ I I JKKJI NJ IK IJINIJ I IKMJ NIN NIIP NNI JLJ IIKJI NJ IK IK NII NJKKJ J % NIKJI NJ IK/MIJK JJI J KJ J P J ILPK IK NII NJKK JRLKKLJI KI J RKJI NJ I:KIKNJ% NKJ IKL KJ JJ JJJ II J KJI NJ I1K JIIJK IKJI NJ M KKNKJ L IKK% N JJPIKKNI JIJ %IJ% IKK KJI NJ IK JIJIIJK J K I NJKJJ JRJ NII NJK% RK JK J I P JI JPKJ NKJ JK NII NJKI JJ J%JLL NJK% N INJL%R NI NI J N JK IP IKNJKNIJI% LP J K J I IINJ$IJK#J IKIRK LKJI NJ IK I JIJI IJL JIIK NPJIJ NI NK KK% N KN 8J NKJ JJ IINJ ILIKNIJ IKKIJJ NINK KJI NJ IK JIJIIJKLINKK% IKM KK% R NI JJP KJ I JJ J% NII NJKIIK LJIIJK N NJ IOEILIJENI K I NIKK J NII NJKRLI JILIJL J KNKKN P JK 8JP"ILIJI NJK KJ IJ I L K NIKJI NJ IJ IK%RJJKPIKLJK NIIP N IJN JK "ILIJJPJLKNJJ J I IKJ I "ILIJI NJKK K JK NIJKJJP JI I% NIINJJ L IR JKI NJK II N J KN KJ I !IPK J IJ NIIP NI J N I NKJ IK JPL% NIJIIKJNKJ IK N J I1
Industry trends, such as the increasing shift of data center workloads to the public cloud, have increased the significance and purchasing power of certain customers, particularly hyperscalers, in some of our data center-focused businesses. The cloud and cloud applications represent an increasingly demanding computing environment. The further consolidation of computing workloads in the cloud, and consolidation among cloud service providers, can heighten the competitive importance of factors such as collaboration and customization with cloud service provider customers to optimize products for their environments; optimization for cloud services and applications; product performance; energy efficiency; feature differentiation; product quality, reliability, and factors affecting server uptime; and product security and security features. Our competitive position can be eroded to the extent we do not execute effectively across these factors. We are operating in an increasingly competitive environment, including serving cloud service provider customers, and the competitive environment adversely affected our results in DCAI in 2023 and 2022. Some cloud service provider customers have also internally developed, and may continue to develop, their own semiconductors, including designs customized for their specific computing workloads. In addition, cloud services can be marketed to end users based on service levels or features rather than hardware specifications, or they can abstract hardware under layers of software, which can make it more difficult to differentiate our products to customers and end users. The shift of data center workloads to the cloud has also adversely affected, and may continue to affect, sales to enterprise customers when end users have elected to migrate workloads from their own internal data center infrastructures to cloud service providers. To the extent we differentiate our products through customization to meet cloud customer specifications, order changes, delays, or cancellations may result in non-recoverable costs. The loss of key customers, a substantial reduction in sales to them, or changes in the timing of their orders can lead to a reduction in our revenue, increase the volatility of our results, and harm our results of operations and financial condition. For information about our customers who accounted for greater than 10% of our net consolidated revenue, see "Note 3: Operating Segments" within the Notes to Consolidated Financial Statements. We face risks related to transactions with government entities. We receive proceeds from both US and non-US governments associated with grants, incentives, and sales of our products and services, and we are seeking to increase our sales of products and services to governmental entities in the future. Government demand and payment are often affected by public sector budgetary cycles and funding authorizations, including, with respect to US government contracts, congressional approval of appropriations, and can be adversely impacted by shutdowns of the US federal government. Government contracts are subject to procurement laws and regulations relating to the award, administration, and performance of those contracts, as well as oversight and penalties for violations. For example, certain agreements with the US government are subject to special rules on accounting, IP rights, expenses, reviews, information handling, security, customers, and/or employees, and failure or inability to comply with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines, and suspension or debarment from future business with the US government. We face risks related to our debt obligations. As we pursue our IDM 2.0 strategy, we have incurred significant debt obligations that could adversely affect our business and financial condition, including our ability to fully implement our strategy. As of December 30, 2023, we had $50.3 billion in aggregate principal amount of senior unsecured notes and other borrowings outstanding. In addition, we have a commercial paper program of up to $10.0 billion and credit facilities to backstop these programs and otherwise provide access to committed capital of up to $10.0 billion. As we continue to pursue our IDM 2.0 strategy, we expect to incur additional indebtedness, refinance our existing debt, and issue additional notes or other debt securities in the future at a variety of interest rates, maturities, and terms. The semiconductor industry is a cyclical business and our revenue, cash flows, and outlook often fluctuate in accordance with this cycle, as well as prevailing macroeconomic conditions, our business strategy, and other risks described in these risk factors. These fluctuations, together with our debt level and related debt service obligations, could have the effect of, among other things, reducing our flexibility to respond to changing business and economic conditions and increasing the risk of a future downgrade in our credit ratings that can potentially impact the value of our outstanding debt and increase our borrowing costs. We may also be required to raise additional financing for working capital, capital expenditures, debt service obligations, debt refinancing, future acquisitions, or other general corporate purposes, which will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. Consequently, we may not be able to obtain additional financing or refinancing on terms acceptable to us, or at all, which could adversely impact our ability to finance our business strategy and service and repay outstanding indebtedness as it becomes due, all of which could adversely impact our business, financial condition, and the cost of borrowing. We have significantly reduced our return of capital to stockholders in recent years. In recent years, we have not made repurchases of our stock and reduced the amount of our quarterly dividend. There can be no assurance that we will continue to pay dividends at the current level, or at all. In addition, we are not obligated to make repurchases under our stock repurchase program and there can be no assurances as to the amount, timing, and execution of any future share repurchases, or that any repurchases will enhance long-term stockholder value. intel. Risk Factors and Other Key Information 60 NKJILJI K%KNKJ IK KJ J JIR I KJ JN N%P IKJK NIK RI IJ NKJ IK%IJNILLIKIK% K NIJ JI NK NK KKK N NJ K IIK J IK L NJ PI JNIJI K J NJ R I K J N% K J NKIPI PIK% J J JJP IJ J IKKNK IJ NKJ OJ RJ NKIPI PINKJ IKJ JOI NJK IJI PI JK: JOJ I NKIPK J K: I NJI I : IL L:JNII JJ :I NJQNJL%I JL% J IKJ KIPINJ: I NJ KNIJL KNIJLJNIKNI JJP KJ I J JMJ JR JMNJJPLI KKJKJ IK !I IJ IK L JJP PI J% N KIP NKIPI PINKJ IK% J JJP PI JPIKLJ NIIKNJK # **+ *** NKIPI PINKJ IKPK JI LP % L J NJ P %JI R K NJ IK% N K KNKJ O IJIK NJ R I K J % NKIPK IJJ NKIK K KIP PK IJNIKIJIJ IRIKJ K% IJL KJIJIRIN ILIK K JRI%R J I NJJ I JJ NII NJKJ NKJ IK NKIKKJ J JIR I KJ J NKK PIKL J% L J NJ J%KKJ JIIKNKJ IKR NKIKPJJ IJR I KI JI R JI J JI IKJINJNIKJ NKIPI PIK JMJ JRI JJ NII NJKJI NNKJ OJ J J NNKJ IKJ K% II K%LK% I J KLIKNJ I PI KJK KK LNKJ IK%KN KJ JINJ KKJ J% I K JJ JI IIK J INJ NI IP N% IKJP JJL NIIKNJK% I NIIKNJK IJ K J I IJ NJ NI NKJ IKR N J IIJIJ
Laws and regulations can have a negative impact on our business. We are subject to complex and evolving laws and regulations worldwide that differ among jurisdictions and affect our operations in areas including, but not limited to: IP ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; data privacy and localization requirements; competition; advertising; employment and labor; product regulations; environment, health, and safety requirements; and consumer laws. Compliance with such requirements can be onerous and expensive and may otherwise impact our business operations negatively. For example, unfavorable developments with evolving laws and regulations worldwide related to 5G or autonomous driving technology and MaaS may limit global adoption, impede our strategy, or negatively impact our long-term expectations for our investments in these areas. Expanding privacy legislation and compliance costs of privacy-related and data-protection measures could adversely affect our customers and their products and services, particularly in cloud, Internet of Things, and Al applications, which could in turn reduce demand for our products used for those workloads. Our policies, controls, and procedures designed to help provide for compliance with applicable laws cannot provide assurance that our employees, contractors, suppliers, or agents will not violate such laws or our policies. Violations of these laws and regulations can result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; and damage to our reputation. The technology industry is subject to intense media, political, and regulatory scrutiny, which can increase our exposure to government investigations, legal actions, and penalties. We are affected by fluctuations in currency exchange rates. We are exposed to adverse as well as beneficial movements in currency exchange rates. Although most of our sales occur in US dollars, expenses may be paid in local currencies. An increase in the value of the dollar can increase the real cost to our customers of our products in those markets outside the US where we sell in dollars, and a weakened dollar can increase the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as non-US dollar capital expenditures. We also conduct certain investing and financing activities in local currencies. Our hedging programs may not be effective to offset any, or more than a portion, of the adverse impact of currency exchange rate movements; therefore, changes in exchange rates can harm our results of operations and financial condition. Changes in our effective tax rate may impact our net income. A number of factors can impact our future effective tax rate or cash payments, which could cause significant variability in our financial results including: • changes in the volume and mix of profits earned and location of assets across jurisdictions with varying tax rates; • changes in our business or legal entity operating model; • the resolution of issues arising from tax audits, including payment of interest and penalties; • changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances; • adjustments to estimated taxes upon finalization of tax returns; • increases in expenses not deductible for tax purposes, including impairments of goodwill; • changes in available tax credits, including non-US tax credits, R&D credits and refundable tax credits; • expirations or changes in our ability to secure new tax holidays and incentives; • changes in US federal, state, or foreign tax laws or their interpretation, including the global implementation of a minimum tax under Pillar Two of the OECD BEPS initiative; • changes in US GAAP; and • our decision to repatriate non-US earnings for which we have not previously provided for incremental taxes including any local country withholding taxes incurred upon repatriation. Catastrophic events can have a material adverse effect on our operations and financial results. Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters; industrial accidents; public health issues and global pandemics such as COVID 19; cybersecurity incidents; interruptions of service from utilities, transportation restrictions or disruptions, telecommunications, or IT systems providers; manufacturing equipment failures; geopolitical conflict; terrorism; or other catastrophic events. For example, we have at times experienced disruptions in our manufacturing processes as a result of power outages, improperly functioning equipment, and disruptions in supply of raw materials or components, including cybersecurity incidents affecting our suppliers. Our headquarters and many of our operations and facilities are in locations that are prone to earthquakes and other natural disasters. Global climate change can result in certain natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities, including our facilities located in water-sensitive regions such as Arizona and Israel. In addition, to the extent we are unable to successfully manage and conserve water resources, our reputation could be harmed. In recent years, the west coast of the US has experienced significant wildfires, including in Oregon, where we have major manufacturing facilities, and in California, where we are headquartered. The long-term effects of climate change on the global economy and the technology industry in particular are unclear but could be severe. intel. Risk Factors and Other Key Information 61 0RK INJ K P JPJ NI NK KK !IKN 8JJ M P P RK INJ KR IRJJI 8NIKJ K J NI IJ K IK N % NJ JJJ 9$ R IK I J:JM: IJ M IJIQNI JK: J IINJ : I M JI K KIJIJ IKJIJ K:JIPL OJ IQNI JK: JJ :PIJK : L J I: I NJINJ K: PI J%J% KJLIQNI JK: KNIRK RJKNIQNI JK I NK M KP L JIRKJ NI NK KK IJ K JPL IM%N P I P JKRJ P P RK INJ KR IRIJJ -" INJ NKIP J L 'LJ J % NI KJIJL% I JPLJ NI JIMJJ K I NI PKJ JK JKIKM IPLKJ KJK IPLIJ JI JJ KNIK NPIKLJ NINKJ IK JII NJK KIPK% IJNIL N% JI J K% #J K%R N JNI IN I NII NJKNK IJ KR I K NI K% JI K% I NIKK J I P I RJ RK JI PKKNI JJ NI LK% JIJ IK%KNIK% I JKR JP JKNRK I NI K? J K JKRK INJ K IKNJ K:I K J K KJNK% NI IK% I NI LK:I J K J NJ NI NK KK: J NI INJJ J L NKJILKKN 8JJ J K% J% INJ ILKINJ L%R IK NIM KNIJ PI J PKJJ K%J K% JK !IJ LNJNJ K NII LM IJK !IM KJ PIKKRK P JK NII LM IJK#J N KJ NIKK NI 1 IK% M KKL NII K# IK JPN J I IKJI KJJ NINKJ IK NI I NJK J KIJK NJKJ1RIRK IK% R I IKJ KJ M KKKNK LI %NJJK%JM% IJ M KK%KRK 1 IJM JNIK!K NJIJ PKJ JPJK NII KNI I IKL J JPJ KJ L% I IJ IJ % JPIK J NII LM IJ P JK:JI I% K M IJK I NIIKNJK IJ K J K NIJPJMIJLJ NI J # N I J IK J NINJNIJPJMIJ IKL JK%R NNKK JPI JL NI IKNJK N 9 W K JP N M I JKI J KKJKI KK8NIKJ KRJPIL JMIJK: W K NI NK KK I JJL IJ : W JIK NJ KKNKIK I JMNJK% N L J JIKJ JK: W K JPNJ NIIIJMKKJK JK% IIJMPNJ R K: W 8NKJ JKJ KJJJMKN OJ JMIJNI K: W IKK M KK JNJ IJMNI KK% N I JK R: W K P JMIJK% N 1JMIJK%( IJK IN JMIJK: W MIJ K I K NI JLJ KNI RJM LK JPK: W K 1I%KJJ% I I JMRK IJI JIIJJ % N J JJ NJM N I$IR J )$ JJP: W K 1"##$: W NIK J IJIJ 1I K IRRP JIP NKLI P I I JJMK N L N JILRJ JMK NIIN IJIJ JKJI P JK PJIPIKJ NI IJ K IKNJK NI IJ K NK KK% J K NINKJ IK KNIK% KINJ L JNIKKJIK: NKJI JK:N JKKNK KKNK? 7:L IKNIJL JK: JIINJ K KIPI NJJK%JI K IJJ IKJIJ K IKINJ K%J N J K% IKLKJKI PIK: NJNI QN JNIK: J J:JII IK: I JIJKJI P JK IM%RPJJKMI KINJ K NI NJNI I KKKKIKNJ RI NJK%I ILN J QN J% KINJ K KNL IRJIK I JK% N L IKNIJL JK J NIKNIKNIQNIJIK L NI IJ K JKI J KJJII J IJQNK JI JNIKKJIK" J IKNJ IJ JNIKKJIK NII IIQN JL IRJIJI J KJL% KNKI NJ%RIK%KJ IK%KPIK% % NKINJJP JL RJI KKIL IJ IJ NI IJ JK% N NIJK J RJIK KJPI KKNK#IO KI J %J JMJ JR IN J KNKKNL KIPRJIIK NIK% NIINJJ N I I JLIK%JRKJ KJ J 1KMI K JRIK% N I %RIRP8 I NJNI JK% I %RIR IQNIJI JIJK J J L JJ L NKJIL IJNIIN I NJ N KPI KJ IK JIL IJ 3
Catastrophic events including global pandemics could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. The COVID-19 pandemic previously resulted in substantial economic uncertainty and volatility and disrupted historical patterns related to demand for our products and services that may impact our ability to accurately predict future demand, trends, or other matters that may impact our financial performance. While we maintain business recovery plans, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from such disruptions. Furthermore, even if our operations are unaffected or recover quickly, if our customers or suppliers cannot timely resume their own operations due to a catastrophic event, we may experience reduced or cancelled orders or disruptions to our supply chain that may adversely affect our results of operations. We are subject to risks associated with environmental, health, safety, and product regulations. The design, manufacturing, assembly and test of our products require the use and purchase of materials and chemicals that are subject to a broad array of environmental, health, and safety laws and regulations. Our operations and those of our suppliers are further governed by regulations prohibiting the use of forced labor (e.g., mining conflict minerals), and restrictions on other materials, as well as laws or regulations governing the operation of our facilities, sale and distribution of our products, and use of our real property. The scope and interpretation of such laws and regulations, including the materials they govern, are complex and continue to evolve. The procedures and processes in place under our compliance program may become onerous or increasingly expensive to maintain and cannot guarantee compliance by employees or third parties to whom such laws apply. The amendment or expansion of these laws or regulations, as well as our failure or inability to comply with them (including as a result of acquired entities) can result in regulatory penalties, fines, and legal liabilities; increased costs; additional remediation obligations; suspension of production; alteration, suspension, or termination of our manufacturing and assembly and test processes, including due to an inability to find, afford, or attain adequate substitute materials, equipment, or processes; damage to our reputation; and restrictions on our operations or sales. In addition, the failure or inability to comply by our suppliers of these materials can require us to suspend or alter our production processes and sources, and result in increased risks and costs. The failure or inability by us or our customers and suppliers to manage the use, transportation, emissions, discharge, storage, recycling, or disposal of hazardous materials can lead to increased costs or future liabilities. Environmental regulations, including with respect to the materials and processes we are permitted to use and as to air quality and wastewater requirements, may impede our ability to manufacture products or expand or modify our manufacturing capability in the future. Environmental laws and regulations sometimes require us to acquire additional pollution abatement or remediation equipment, modify product designs, cease the use of a particular material or process, remove or remediate hazardous substances, or incur other expenses or liabilities. Regulations in response to climate change could result in increased manufacturing costs associated with air pollution requirements. For example, semiconductor manufacturing uses perfluorocarbons, which have historically made up a large portion of our direct greenhouse gas emissions. New or increased regulations limiting the use of such compounds, or other greenhouse gas emissions, could require us to install additional abatement equipment, purchase carbon offsets, and/or alter, where feasible, our production processes and sources. In addition, new or increased climate change regulation could increase our energy costs, for example as a result of carbon pricing impacts on electrical utilities. Regulations in response to human health concerns may also limit or prohibit the use of a class of chemicals known as per- and polyfluoroalkyl substances (PFAS), which are found in parts, components, process chemicals and other materials used in semiconductor manufacturing. Such chemicals are critical to the manufacturing and functioning of many semiconductor products and there are limited technically and commercially feasible alternatives to them. As we expand our manufacturing capacity as part of our IDM 2.0 strategy, the impacts of future regulation could be magnified. Many new materials that we are evaluating for use in our operations are also subject to regulation under environmental laws and regulations. These restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter manufacturing and assembly and test processes. Our initiatives and new legal requirements with respect to corporate responsibility matters present various risks. Our corporate responsibility initiatives, including our RISE strategy and related goals, could expose us to heightened scrutiny and numerous financial, legal, reputational, operational, compliance, and other risks, including lost customer opportunities, which could negatively impact us. Our achievement of initiatives, aspirations, and goals related to corporate responsibility matters, including those related to sustainability, is not guaranteed and is subject to numerous conditions, risks, and expectations; as well as standards, processes, and methodologies that continue to evolve. Further, any failure to set or achieve corporate responsibility initiatives that meet our stakeholders' evolving expectations could also negatively impact us. In addition, we are or expect to become subject to various new or proposed climate-related and other sustainability laws and regulations, including, for example, the state of California's new climate change disclosure requirements, the EU's new Corporate Sustainability Reporting Directive and proposed climate-change disclosure requirements from the SEC. Compliance with such laws and regulations, as well as the overall increased focus and scrutiny from the SEC and other regulators, investors, customers, vendors, employees, and other stakeholders concerning ESG and climate matters, could impose additional costs on us and expose us to new risks, including resulting in changes to our current ESG goals. intel. Risk Factors and Other Key Information 62 JKJI P JK N K NJNJ I KK J NJNI IPII NJKJ NINKJ IK% IPI NJ JIKI NIKNIK% II IIJN J K%R NPIKLJ NIIP N IQNI K JI PILJ M JNIKJ IKN IJ K? 7 IP NKLIKNJ KN KJ J N IJ JL P JJL KINJKJ IJJI KIJJ I NII NJK KIPKJJLJ NI JLJ NIJLIJNJNI %JI K% I JIJJIKJJLJ NI I I !R J NK KK I PIL K%K NIKLKJKI JNLIN J R J KNIJJ NI KRNLI JJNKI KN KINJ KNIJI I%P NI IJ KIN J II PIQNL% NINKJ IK IKNIK JJLIKNJI R IJ KNJ JKJI P J%RLMI IN I IIK IKINJ KJ NIKNL JJL PIKLJ NIIKNJK IJ K !IKN 8JJ IKKKK JRJ PI J%J%KJL% I NJINJ K K % NJNI %KK L JKJ NII NJKIQNIJNK NIK JIK KJJIKN 8JJ I IIL PI J%J% KJLRK INJ KNI IJ K J K NIKNIKINIJI PI LINJ KI J JNK I I5% J IK6% IKJIJ K JIJIK%KRKRK I INJ K PI J IJ NIJK%K KJI NJ NII NJK% NK NIII IJLK JIIJJ KNRK INJ K% N JJIKJL PI %I M J NJ P PI NIK I KKK N I NI I IL I NK I IK LM KPJ J JNI J L LK IJIIJKJ R KNRKL J IM K JKRK IINJ K%KRK NINI I JLJ LRJJ5 N KIKNJ QNI JJK6 IKNJ INJ IL JK% K% JK: IK KJK:J IJ J K:KNK K I NJ :JIJ %KNK K % IJI J NI NJNI KK L JKJI KKK% N NJ JLJ % I% IJJ QNJKN KJJNJJIK% QN J% II KKK:J NIINJJ : IKJIJ K NI IJ K IKK J %JNI I JLJ L L NIKNIK JKJIK IQNINKJ KNK IJI NII NJ I KKK K NIK% IKNJ IKIKK KJK NI I JL LNK I NINKJ IK KNIKJ JNK%JI K IJJ %KK K%KI%KJ I%IL % IK K OI NKJIK J IK KJK INJNI JK PI JINJ K% N RJIKJJ J JIK I KKKRIIJJJ NK KJ IQNJL RKJRJIIQNI JK%L NI JLJ NJNII NJK IM I L NI NJNI JL JNJNI PI JRK INJ KK JK IQNINKJ QNIJ NJ J J IIJ QN J% LI NJK K%KJNK IJNI JI II KK%I P IIJOI NKKN KJ K% I NI JIM KK I JKNJ K IK KJ J NIKNJ IK NJNI KJKKK JRJI NJ IQNI JK IM%K NJ I NJNI NKKIN I I K%RPKJ ILNI IJ NIIJI NKKKK K&R I IKINJ KJ JNK KN N K% I JII NKKKK K% NIQNINKJ KJJ J JQN J%NIKI KJK% 8 IJI%RIK % NII NJ I KKK K NIK J % R I IKJ INJ N IK NI IL KJK% IMKIKNJ I I JK JI NJJKNJ K IK KJ N J I KLK J II JJNK KK K R KI LN I LKN KJ K5$#6%RI N IJK% JK%I KKK JIJIKNK K NJ I NJNI NKIIJJ J NJNI N J LK NJ II NJK JIIJ J L ILK JI JPKJ J#KRM NI NJNI JLKIJ NI '*KJIJL%J JK NJNIINJ N ' L RJIKJJRIPNJ INK NI IJ KIK KN 8JJ INJ N I PI JRK INJ KKIKJIJ K NI NI NK KK IKNJK IJ K L IK NIM KK IIQNI NKJ JI NJNI KK L JKJI KKK NI JJPK RIQNI JKRJIKJJ I IJIK K JLJJIKIK J PI NKIKK NI I IJIK K JL JJPK% N NIKJIJL IJ K% NM KNKJ J KINJ L NI NK %%INJJ % IJ % % JIIKK% N KJNKJ I IJN JK%R N JPLJNKNIP J JJPK%KIJ K% KIJJ I IJIK K JLJJIK% N J K IJJ KNKJ JL%K JNI J KKN 8JJ NI NK J K%IKK% MJJ K:KRKKJ IK% I KKK% J KJJ J NJ P PNIJI% LNIJ KJ IP I IJIK K JL JJPKJJJ NIKJ IK/P P MJJ K NK JPLJNK J %RI IMJJ KN 8JJ PI NK R II KJIJ JIKNKJ JLRK INJ K% N % IM%JKJJ I /K RJ K KNIIQNI JK%J1/K R I IJNKJ JL IJ IJP I KJ K KNIIQNI JKI J RJKNRK INJ K%K RKJ PI IK NK KINJ LI J JIINJ IK% PKJ IK%NKJ IK%P IK% LK% JI KJ IK I " JJJIK% N KJ KJK NK M KNKJ RIKK% N IKNJ KJ NINII J" K KJ IK JIL IJ 3*
Sales and Marketing Customers We sell our products primarily to OEMs, ODMs, and cloud service providers. ODMs provide design and manufacturing services to branded and unbranded private-label resellers. In addition, our customers include other manufacturers and service providers, such as industrial and communication equipment manufacturers and other cloud service providers who buy our products through distributor, reseller, retail, and OEM channels throughout the world. For information on customers who accounted for greater than 10% of our net consolidated revenue, see "Note 3: Operating Segments" within the Notes to Consolidated Financial Statements. Our worldwide reseller sales channel consists of thousands of indirect customers—systems builders that purchase Intel processors and other products from our distributors. Certain of our microprocessors and other products are also available in direct retail outlets. Sales Arrangements Our products are sold through distribution channels throughout the world. Sales of our products are frequently made via purchase order acknowledgments that contain standard terms and conditions covering matters such as pricing, payment terms, and warranties, as well as indemnities for issues specific to our products, such as patent and copyright indemnities. Because our customers generally order from us on a purchase order basis, they can typically cancel, change, or delay product purchase commitments with little or no notice to us and without penalty. From time to time, we may enter into additional agreements with customers covering, for example, changes from our standard terms and conditions, new product development and marketing, and private-label branding. Our sales are routinely made using electronic and web-based processes that allow customers to review inventory availability and track the progress of specific goods ordered. Pricing on particular products may vary based on volumes ordered and other factors. We also offer discounts, rebates, and other incentives to customers to increase acceptance of our products and technology. In accordance with contract terms, the revenue for combined performance obligations and standalone product sales is recognized at the time of product shipment from our facilities or delivery to the customer location, as determined by the agreed-upon shipping terms. Our standard terms and conditions of sale typically provide that payment is due at a later date, usually 30 days after shipment or delivery. We assess credit risk through quantitative and qualitative analysis. From this analysis, we establish shipping and credit limits and determine whether we will seek to use one or more credit support protection devices, such as obtaining a parent guarantee, standby letter of credit, or credit insurance. Credit losses may still be incurred due to bankruptcy, fraud, or other failure of the customer to pay. Our sales to distributors are typically made under agreements allowing for price protection on unsold merchandise and a right of return on stipulated quantities of unsold merchandise. Under the price protection program, we give distributors credits for the difference between the original price paid and the current price that we offer. Our products typically have no contractual limit on the amount of price protection, nor is there a limit on the time horizon under which price protection is granted. The right of return granted generally consists of a stock rotation program in which distributors can exchange certain products based on the number of qualified purchases made by the distributor. Distribution Distributors typically handle a wide variety of products, including those that compete with our products, and fill orders for many customers. Customers may place orders directly with us or through distributors. We have several distribution warehouses that are located in proximity to key customers. Seasonal Trends Historically, our net revenue has typically been higher in the second half of the year than in the first half of the year, accelerating in the third quarter and peaking in the fourth quarter. In 2021, continued strong COVID-driven notebook demand in the first half of the year contributed to a flatter trend than we historically observe. In 2022, we had a flatter trend than we historically observe as we experienced the uncertainty and impacts, including demand volatility and supply chain disruption, of macroeconomic conditions, the potential for a recession, and the risk for continued COVID-related disruptions or shutdowns. In 2023, our net revenue seasonality was more consistent with our historical pre-pandemic trend. Marketing Our global marketing objectives are to build a strong, well-known, differentiated, and meaningful Intel corporate brand that drives preference with businesses and consumers, and to offer a limited number of meaningful and valuable brands in our portfolio to aid businesses and consumers in making informed choices about technology purchases. The Intel Core processor family and the Intel Atom, Celeron®, Pentium®, Intel® Movidius TM , and Intel Xeon trademarks make up our key CPU brands. This year we introduced our new Intel® Core TM Ultra processors, powering the latest AI PCs, and our 5th Gen Intel Xeon processors, built with Al acceleration in every core. We also continue to bring to market new software services including independent attestation security with Intel® Trust Authority, Intel® Granulate TM for workload compute optimization, and Intel Developer Cloud to accelerate Al development. Our foundry services business aims to offer leading-edge packaging and process technology, geographically balanced manufacturing capacity and a world-class IP portfolio. Intel. Risk Factors and Other Key Information 63 K 'IJ NKJ IK !K NII NJKIILJ 'K% 'K% NKIPI PIK 'KI PK NJNI KIPKJ I N I IPJ IKIK J % NINKJ IK N JI NJNIIK KIPI PIK%KNK NKJI N J QN J NJNIIK JI NKIPI PIKR NL NII NJKJI NKJI NJ I% IKI%IJ% ' KJI N NJJR I I IJ NKJ IKR N J IIJIJ KJ IL% NI JIP NKJLL I JK JLIJ JIKJ JLI%IJ J JIQNIJI J NIJQNIJI **% J NKJI ? IP J JIKJ JLI JI NJJ JJIJI J RKJ IL KIP ***%RJJIJI J RKJ IL KIPKRMI JN IJ JL JK% N P JJL KNL KINJ % I J K%J J J I IKK % JIK I J N? IJKINJ K IKNJ R K **+% NI JIP NKK JLRK I KKJ J RJ NIKJ II JI 'IJ NI IJ 8JPKIJ NKJI %R R %I JJ% N J I IJ I JJIPK II RJ NK KKK KNIK% J IJ N I N PN I K NI IJ J NK KKK KNIK I K NJJ LNIKK J II KK IL J J#J % I X%$ JNX% JX' PNKY% J= JIIKN NIL$1 I KKLIR JI N NI R JX IY1JII KK IK% RI JJKJ#$K% NI-J" J= I KK IK% NJRJ#IJ PIL I! K J NJ I J IJ RK JRIKIPK N JJJKJJ KNIJLRJ JXINKJ#NJ IJL% JX "I NJY IR I NJ JOJ % J P I NJ IJ#P JNI N ILKIPK NK KK KJ I I KKJ L% IL NJNI JL R IKK$ IJ KJ IK JIL IJ 3+
We promote brand awareness and preference and generate demand through our own direct marketing, as well as through co-marketing programs. Our direct marketing activities primarily include advertising through digital and social media and television, as well as consumer and trade events, industry and consumer communications, and press relations. We market to consumer and business audiences and focus on building awareness and generating demand for our products. Our key messaging focuses on increased performance, improved energy efficiency, and other capabilities such as connectivity. Certain customers participate in cooperative advertising and marketing programs. These cooperative advertising and marketing programs broaden the reach of our brands beyond the scope of our own direct marketing. Certain customers are licensed to place Intel® logos on computing devices containing our microprocessors and processor technologies, and to use our brands in their marketing activities. The program partially reimburses customers for marketing activities for products featuring Intel brands, subject to customers meeting defined criteria. These marketing activities primarily include advertising through digital and social media and television, as well as press relations. We have also entered into joint marketing arrangements with certain customers. Quantitative and Qualitative Disclosures About Market Risk We are affected by changes in currency exchange and interest rates, as well as equity and commodity prices. Our risk management programs are designed to reduce, but may not eliminate, the impacts of these risks. All of the following potential changes are based on sensitivity analyses performed on our financial positions as of December 30, 2023 and December 31, 2022. Actual results may differ materially. Currency Exchange Rates We are exposed to currency exchange risks of non-US-dollar-denominated investments in debt and equity instruments, and may economically hedge this risk with foreign currency contracts, such as currency forward contracts or currency interest rate swaps. Gains or losses on these non-US-currency investments are generally offset by corresponding losses or gains on the related hedging instruments. Substantially all of our revenue is transacted in US dollars. However, a portion of our operating expenditures and capital purchases are incurred in other currencies, primarily the Israeli shekel, the Malaysian ringgit, the European Union euro, the Japanese yen, and the Chinese yuan. We have established currency risk management programs to protect against currency exchange rate risks associated with non-US-dollar forecasted future cash flows and existing non-US-dollar monetary assets and liabilities. We may also hedge currency risk arising from funding of foreign currency-denominated future investments. We may utilize foreign currency contracts, such as currency forwards or option contracts in these hedging programs. We considered the historical trends in currency exchange rates and determined that it was reasonably possible that a weighted average adverse change of 10% in currency exchange rates could be experienced in the near term. Such an adverse change, after taking into account balance sheet hedges only and offsetting recorded monetary asset and liability positions outstanding as of December 30, 2023 and December 31, 2022, would result in an adverse impact on income before taxes of less than $53 million and less than $64 million, respectively. Interest Rates We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt. The primary objective of our investment policy is to preserve principal and provide financial flexibility to fund our business while maximizing yields, which generally track the SOFR. We generally enter into interest rate contracts to convert the returns on our fixed-rate debt investment with remaining maturities longer than six months into SOFR-based returns. We also entered into swaps to convert fixed-rate coupon payments into floating-rate coupon payments for a portion of our existing indebtedness. Gains or losses on these instruments are generally offset by corresponding losses or gains on the related hedging instruments. A hypothetical change in benchmark interest rates of 1%, after taking into account investment hedges, would have resulted in a change in the fair value of our investment portfolio of less than $100 million as of December 30, 2023 and as of December 31, 2022. Taking into account fixed-rate debt that is swapped to floating-rate debt, a hypothetical increase in interest rates of 1% would result in an increase in annual interest expense of approximately $120 million from debt outstanding as of December 30, 2023 (a hypothetical increase of 1% would have resulted in an increase in annual interest expense of approximately $120 million from debt outstanding as of December 31, 2022). Equity Prices We are exposed to equity market risk through our investments in marketable equity securities, which we typically do not attempt to reduce or eliminate through hedging activities. intel. Risk Factors and Other Key Information 64 !I J I RI KK II IJ JI N NI R IJIJ %KRKJI N IJ I IKNIIJIJ JPJKIIL NPIJK JI NJ K JPK %KRK KNI JIP JK% NKJIL KNI N J K% IKKIJ K!IJJ KNI NK KKN K NK N RI KK IJ I NII NJKNILKK NKK IKI I %I P IL L% JI JKKNK JPJL IJ NKJ IKIJJ IJPPIJK IJ I IKK IJPPIJK IJ I IK I JI NI I K L JK NI R IJIJ IJ NKJ IKI KJ JX K NJ PK J NII I KK IK I KK IJ K% J NK NI I K JIIJ JPJK I IIJLI NIKKNKJ IK IIJ JPJK II NJKJNI J I K%KN 8JJ NKJ IKJ IJIKIJ JPJKIIL NPIJK JI NJ K JPK %KRKIKKIJ K !PK JI J 8 JIJ II JKRJIJ NKJ IK 4N JJJP 4NJJP K KNIK# NJ'IJK !IJ L K NII LM JIKJIJK%KRKQNJL JLIKNIIK J I IKIK J IN% NJL J J%JJK JKIKK# J R J J KI K K KJPJL LKKI I NI KJ KK I+%**+ I+%***#JNIKNJKLI JIL NII LM JK !IM KJ NII LM IKK 1 I J PKJ JK J QNJL KJIN JK% L LJKIKRJ I NII L JIJK%KNKNII L IRI JIJK INII L JIKJIJKRK" K I KKK JK 1NII L PKJ JKI IL KJ L IIK KKK I K JIJ KJIN JK N KJ JL NIIP NKJI KJ 1 IK> RPI% IJ NI IJ M JNIK JNIKKI NII JINII K%IILJKIK%J'LK I J%JNI 1 NI %J@ KL % J KLN !PKJ KNII LIK JI IKJ I JJ KJNII LM IJIKKKK JRJ 1 I IKJNJNIK RK MKJ 1 I JILKKJK JK!LK NII LIK IK I N I NII L JNJNI PKJ JK!LNJO I NII L JIJK%KNKNII L IRIK I J JIJK JK I IK! KIJKJ IJI K NII LM IJK JI JJJRKIK L KK JJRJPIPIK
As of December 30, 2023, the fair value of our marketable equity securities was $1.2 billion ($1.3 billion as of December 31, 2022). The substantial majority of our marketable equity securities portfolio as of December 30, 2023 was concentrated in securities traded on the Chinese Shanghai Stock Exchange Science and Technology Innovation Board. To determine reasonably possible decreases in the market value of our marketable equity securities, we have analyzed the historical market price sensitivity of our portfolio. Assuming a decline of 35% in market prices, the aggregate value of our marketable equity securities could decrease by $418 million, based on the value as of December 30, 2023 (a decrease in value of $670 million, based on the value as of December 31, 2022 using an assumed decline of 50%). We utilize total return swaps to offset changes in liabilities related to the equity market risks of certain deferred compensation arrangements. Gains or losses from changes in fair value of these total return swaps are generally offset by the losses or gains on the related liabilities. Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity investments, although we cannot always quantify the impacts directly. Financial markets are volatile, which could negatively affect the prospects of the companies we invest in, their ability to raise additional capital, and the likelihood of our ability to realize value in our investments through liquidity events such as IPOs, mergers, and private sales. These types of investments involve a great deal of risk, and there can be no assurance that any specific company will grow or become successful; consequently, we could lose all or part of our investment. Our non- marketable equity securities had a carrying amount of $4.6 billion as of December 30, 2023 ($4.6 billion as of December 31, 2022) and include our investment in Beijing Unisoc Technology Ltd. of $1.1 billion ($1.1 billion as of December 31, 2022). Commodity Price Risk Although we operate facilities that consume commodities, we are not directly affected by commodity price risk to a material degree. We have established forecasted transaction risk management programs to protect against fluctuations in commodity prices. We may use commodity derivatives contracts, such as commodity swaps, in these hedging programs. In addition, we have sourcing plans in place that are designed to mitigate the risk of a potential supplier concentration for our key commodities. Cybersecurity We face significant and persistent cybersecurity risks due to: the breadth of geographies, networks, and systems we must defend against cybersecurity attacks; the complexity, technical sophistication, value, and widespread use of our systems, products and processes; the attractiveness of our systems, products and processes to threat actors (including state-sponsored organizations) seeking to inflict harm on us or our customers; the substantial level of harm that could occur to us and our customers were we to suffer impacts of a material cybersecurity incident; and our use of third-party products, services and components. We are committed to maintaining robust governance and oversight of these risks and to implementing mechanisms, controls, technologies, and processes designed to help us assess, identify, and manage these risks. While we have not, as of the date of this Form 10-K, experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. Such incidents, whether or not successful, could result in our incurring significant costs related to, for example, rebuilding our internal systems, writing down inventory value, implementing additional threat protection measures, providing modifications or replacements to our products and services, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers with incentives to maintain a business relationship with us, or taking other remedial steps with respect to third parties, as well as incurring significant reputational harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures. We have seen an increase in cyberattack volume, frequency, and sophistication. We seek to detect and investigate unauthorized attempts and attacks against our network, products, and services, and to prevent their occurrence and recurrence where practicable through changes or updates to our internal processes and tools and changes or updates to our products and services; however, we remain potentially vulnerable to known or unknown threats. In some instances, we, our suppliers, our customers, and the users of our products and services can be unaware of a threat or incident or its magnitude and effects. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. See "Risk Factors" for more information on our cybersecurity risks and product vulnerability risks. We aim to incorporate industry best practices throughout our cybersecurity program. Our cybersecurity strategy focuses on implementing effective and efficient controls, technologies, and other processes to assess, identify, and manage material cybersecurity risks. Our cybersecurity program is designed to be aligned with applicable industry standards and is assessed annually by independent third-party auditors. We have processes in place to assess, identify, manage, and address material cybersecurity threats and incidents. These include, among other things: annual and ongoing security awareness training for employees; mechanisms to detect and monitor unusual network activity; and containment and incident response tools. We actively engage with industry groups for benchmarking and awareness of best practices. We monitor issues that are internally discovered or externally reported that may affect our products, and have processes to assess those issues for potential cybersecurity impact or risk. We also have a process in place to manage cybersecurity risks associated with third-party service providers. We impose security requirements upon our suppliers, including: maintaining an effective security management program; abiding by information handling and asset management requirements; and notifying us in the event of any known or suspected cyber incident. intel. Risk Factors and Other Key Information 65 #K I+%**+%JIPN NIIJ QNJLKNIJKRK;* 5;+ K I+%***6 KN KJ J8 IJL NIIJ QNJLKNIJK IJ K I+%**+RK JIJ KNIJKJI J K J M L PJ ) I JI IK L KK IKK JIJ PN NIIJ QNJLKNIJK%RP LOJKJ IIJIK KJPJL NI IJ #KKN +-
Our Board of Directors has ultimate oversight of cybersecurity risk, which it manages as part of our enterprise risk management program. That program is utilized in making decisions with respect to company priorities, resource allocations, and oversight structures. The Board of Directors is assisted by the Audit & Finance Committee, which regularly reviews our cybersecurity program with management and reports to the Board of Directors. Cybersecurity reviews by the Audit & Finance Committee or the Board of Directors generally occur at least twice annually, or more frequently as determined to be necessary or advisable. A number of Intel directors have experience in assessing and managing cybersecurity risk. Our cybersecurity program is run by our Chief Information Security Officer (CISO), who reports to our Executive Vice President and Chief Technology Officer (CTO). Our CISO is informed about and monitors prevention, detection, mitigation, and remediation efforts through regular communication and reporting from professionals in the information security team, many of whom hold cybersecurity certifications such as a Certified Information Systems Security Professional or Certified Information Security Manager, and through the use of technological tools and software and results from third party audits. Our CISO and CTO have extensive experience assessing and managing cybersecurity programs and cybersecurity risk. Our CISO has served in that position since 2015 and, before Intel, was previously the Chief Security Officer at McAfee and the Chief Information Officer and CISO for the US House of Representatives. Our CTO joined Intel in 2021 and was previously Senior Vice President and CTO at VMware, with responsibility for product security. Our CISO and CTO regularly report directly to the Audit & Finance Committee or the Board of Directors on our cybersecurity program and efforts to prevent, detect, mitigate, and remediate issues. In addition, we have an escalation process in place to inform senior management and the Board of Directors of material issues. Properties As of December 30, 2023, our major facilities consisted of: (Square Feet in Millions) United States Other Countries Total Owned facilities 38 28 66 Leased facilities 2 5 7 Total facilities 40 33 73 The facilities described above, including our principal executive offices located in the US, are suitable for our present purposes. The productive capacity in our facilities is being utilized or being prepared for utilization as we continue to make investments to expand our manufacturing capacity in support of our IDM 2.0 strategy. For more information on our manufacturing sites, see "Manufacturing Capital" within Fundamentals of Our Business. We do not identify or allocate assets by operating segment, as they are interchangeable in nature and used by multiple operating segments. For information on net property, plant, and equipment by country, see "Note 6: Other Financial Statement Details" within the Notes to Consolidated Financial Statements. Market for Our Common Stock The principal US market on which Intel's common stock (symbol INTC) is traded is the Nasdaq Global Select Market. As of January 19, 2024, there were approximately 97,000 registered holders of record of Intel's common stock. A substantially greater number of holders of Intel common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. intel. Risk Factors and Other Key Information 66 NI) I IJ IKKNJJ PIKJ L IKNIJLIK%RJ KKIJ NI JIIKIK JI I JI IKNJO K KRJIKJJ LI IJK%IK NI J K% PIKJKJINJNIK) I IJ IKKKKKJ LJ#NJ( JJ%RINILIPRK NIL IKNIJLI IRJ J I IJKJ J) I IJ IKL IKNIJLIPRK LJ#NJ( JJ IJ) I IJ IK IL NIJ KJJR NL% I IIQN JLKJI J KKIL IPK # N I JIJ IKPMI KKKK L IKNIJLIK NIL IKNIJLI IKIN L NI IJ NIJLI56%R I IJKJ NIMNJP?$IK J LI56NIK I NJ J IKIP J %JJ %JJ % IJ IJKJI N INI N J I IJ I I KK K J IJ KNIJLJ% L R L IKNIJLIJJ K KNKIJ IJ LKJKNIJL$I KK IIJ IJ NIJL' I% JI NJNK J J K K JRI IKNJKI JIIJLNJKNI PMJ KPMI KKKK L IKNIJLI IK L IKNIJLIKNIKKIP JJ KJ K *- % I J%RK IP NKLJNIJLIJ'# J IJ I IJ1> NK IK JJPKNI 8 J ** RKIP NKL I?$IK J J?'RI%RJIK K JL II NJKNIJLNI INILI IJIJLJ J#NJ( JJ IJ) I IJ IK NIL IKNIJLI I IJKJ IP J%JJ%JJ% IJKKNK J %RP KJ I KK J IK I J J ) I IJ IK JIKKNK $I IJK #K I+%**+% NI8 IJK KKJ 9 J>/8:::5232==2630 325:; 5/5:0 51:8 6>3582:0 65/= R JK +2 *2 33 0KJK * - . 65/=B/C2=252:0 " JKKI P% N NII MNJP K J J1%IKNJ I NIIK JNI KK I NJPJL NIJKK NJO I II INJOJ KR J NJ PKJ JKJ M NI NJNI JL KN IJ NI '*KJIJL I I IJ NI NJNI KJK%KE' NJNI JE RJ N JK NI)NK KK ! J JL I JKKJK L IJ K J%KJLI JI JNI NK LNJ IJ K JK I IJ JI IJL% J% QN J L N JIL%KE& J39JI JJ J JKERJ J & JKJ K J JJ JK 'IJ INI J I 1IJ R J/K KJ 5KL &6KJIKJ&KQ" J'IJ #K @ NIL7%**1%JIRII MJL7.%IKJI IK I I J/K KJ #KN KJ JLIJI N I IK J KJ IEKJIJ E I IK%R KKIK I II L K% I IK% JI KJJNJ K KJ IK JIL IJ 33
Stock Performance Graph The graph and table that follow compare the cumulative TSR of Intel's common stock with the cumulative total return of the S&P 100 Index*, the S&P 500 Index*, the S&P 500 IT Index*, and the SOX Index*' for the five years ended December 30, 2023. The cumulative returns shown on the graph are based on Intel's fiscal year. Comparison of Five-Year Cumulative Return for Intel, S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and SOX Index $400 $350 $300 $250 $200 $150 $100 $50 2018 2019 2020 2021 2022 2023 —C Intel Corporation Years Ended S&P 100 Index Dec 29, 2018 S&P 500 Index Dec 28, 2019 Dec 26, 2020 — S&P 500 IT Index Dec 25, 2021 Dec 31, 2022 SOX Index Dec 30, 2023 Intel Corporation $ 100 $ 132 $ 106 $ 118 $ 63 $ 123 S&P 100 Index $ 100 $ 134 $ 160 $ 209 $ 166 $ 221 S&P 500 Index $ 100 $ 133 $ 155 $ 200 $ 165 $ 209 S&P 500 IT Index $ 100 $ 152 $ 216 $ 292 $ 211 $ 333 SOX Index $ 100 $ 165 $ 248 $ 360 $ 235 $ 392 The graph and table assume that $100 was invested on the last day of trading for the fiscal year ended December 29, 2018 in Intel's common stock, the S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and PHLX Semiconductor Sector Index (SOX), and that all dividends were reinvested. Issuer Purchases of Equity Securities We have an ongoing authorization, originally approved by our Board of Directors in 2005 and most recently amended on October 24, 2019, to repurchase shares of our common stock in open market or negotiated transactions. Our last share repurchase under this authorization occurred in Q1 2021, and no shares were repurchased during the fiscal year ending December 30, 2023. As of December 30, 2023, we were authorized to repurchase up to $110.0 billion, of which $7.2 billion remained available. We issue RSUs as part of our equity incentive plans. In our Consolidated Financial Statements, we treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase program. Rule 10b5-1 Trading Arrangements Our directors and officers (as defined in Rule 16a-1 under the Exchange Act) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended December 30, 2023, no such plans or arrangements were adopted or terminated, including by modification. intel. Risk Factors and Other Key Information 67 J $I I "I I J JJ R IJNNJP J/K KJ RJJNNJPJ JIJNI J($ MA%J($- MA%J($- MA% J= MA IJPLIK I+%**+NNJP IJNI KK R JII K J/KKLI IK P,INNJPJNI I J%($ M%($- M%($- M% = M J I IJ ($ M ($- M ($- M = M *2 *7 ** ** *** **+ ;- ; ;- ;* ;*- ;+ ;+- ;1 F:/803;:; :C$ :C$ :C! :C :C :C J I IJ ; ; +* ; 3 ; 2 ; 3+ ; *+ ($ M ; ; +1 ; 3 ; *7 ; 33 ; ** ($- M ; ; ++ ; -- ; * ; 3- ; *7 ($- M ; ; -* ; *3 ; *7* ; * ; +++ = M ; ; 3- ; *12 ; +3 ; *+- ; +7* 2 * ; 9(* ; 9(* ;
Information About Our Executive Officers Name Current Title Age Experience Patrick P. Gelsinger Chief Executive Officer 62 Mr. Gelsinger has been our Chief Executive Officer and a member of our Board of Directors since February 2021. He has also served as a member and Chair of the Board of Directors of Mobileye, a subsidiary of Intel, since September 2022. He joined Intel from VMware, Inc., a provider of cloud computing and virtualization software and services, where he served as Chief Executive Officer from September 2012 to February 2021. Prior to VMware, Mr. Gelsinger served as President and Chief Operating Officer, EMC Information Infrastructure Products at EMC Corp., a data storage, information security, and cloud computing company, from September 2009 to August 2012. Mr. Gelsinger's career began at Intel, where he spent 30 years before joining EMC Corp. During his initial tenure at Intel, Mr. Gelsinger served in a number of roles, including Senior Vice President and Co-General Manager of the Digital Enterprise Group from 2005 to September 2009, Senior Vice President, Chief Technology Officer from 2002 to 2005, and leader of the Desktop Products Group prior to that. Michelle Johnston Holthaus Executive Vice President and General Manager, Client Computing Group Ms. Johnston Holthaus has been our Executive Vice President and General Manager of the Client 50 Computing Group since April 2022. She is responsible for running and growing the client business, including strategy, financial performance, and product development for the full portfolio of client technologies and platforms designed to enable exceptional personal computing experiences across mobile, desktop, and workstation devices. Ms. Johnston Holthaus previously served as Executive Vice President, Chief Sales Officer and General Manager, Sales, Marketing and Communications Group, from September 2019 to January 2022, and as Senior Vice President of Sales and Marketing and Acting Chief Marketing Officer from September 2017 to September 2019. In these roles, she was responsible for global sales and revenue and leading the company's efforts to foster innovative sales and marketing approaches that broaden Intel's business opportunities and enhance customer relationships worldwide. Ms. Johnston Holthaus joined Intel in 1996 and has served in a variety of sales and marketing, channel mobile, and channel desktop positions. April Miller Boise Executive Vice President, Chief Legal Officer and Corporate Secretary 55 Ms. Miller Boise has been our Executive Vice President and Chief Legal Officer since July 2022 and Corporate Secretary since August 2022. Ms. Miller Boise leads Intel's global legal, trade, and government affairs team, is a member of Intel's Executive Leadership Team, and is a strategic advisor to the Company and the Board of Directors. Prior to joining Intel, she was Executive Vice President and Chief Legal Officer at Eaton Corp, a power management company. Before joining Eaton in 2020, she was Senior Vice President, Chief Legal Officer, and Corporate Secretary at Meritor Inc., a supplier of drivetrain, mobility, braking, aftermarket and electric powertrain solutions acquired by Cummins Inc. Ms. Miller Boise has more than 25 years of experience and has served in executive leadership roles, including chief legal officer, general counsel, and head of global mergers and acquisitions. Christoph Schell Executive Vice President, Chief Commercial Officer and General Manager, Sales, Marketing and Communications Group 52 Mr. Schell has been our Executive Vice President and Chief Commercial Officer and General Manager of the Sales, Marketing and Communications Group since March 2022. In his role, he oversees Intel's global sales, business management, marketing, communications, corporate planning, customer support, and customer success teams, leading the company's efforts to foster innovative go-to-market approaches that broaden Intel's business opportunities and deepen customer and partner relationships and outcomes worldwide. Prior to joining Intel, Mr. Schell served as the Chief Commercial Officer of HP Inc., an American multinational information technology company, from November 2019 to March 2022. During his 25 years with HP, Mr. Schell held various senior management roles across the globe, including President of 3D Printing and Digital Manufacturing from November 2018 to October 2019 and President of the Americas region from November 2015 to November 2018. Prior to rejoining HP in 2014, Mr. Schell served as Executive Vice President of Growth Markets for Philips, a lighting solutions company, where he led the lighting business across Asia Pacific, Japan, Africa, Russia, India, Central Asia, and the Middle East. He started his career in his family's distribution and industrial solutions company before working in brand management at Procter & Gamble. David Zinsner Executive Vice President and Chief Financial Officer 55 Mr. Zinsner has been our Executive Vice President and Chief Financial Officer since January 2022, overseeing our global finance organization. He joined Intel from Micron Technology, Inc., a manufacturer of memory and storage products, where he most recently served as Executive Vice President and Chief Financial Officer from February 2018 to October 2021. From April 2017 to February 2018, he served as President and Chief Operating Officer of Affirmed Networks, Inc. From January 2009 to April 2017, he served as Chief Financial Officer of Analog Devices, Inc. From July 2005 to January 2009, Mr. Zinsner served as Chief Financial Officer of Intersil Corporation. intel. Risk Factors and Other Key Information 68 IJ # NJNIMNJPIK /<: ni ik in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Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934 Section 13(r) of the Exchange Act requires an issuer to disclose certain information in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions, or dealings with individuals or entities subject to specific US economic sanctions during the reporting period, even when the activities, transactions, or dealings are conducted in compliance with applicable law. On March 2, 2021, the US Secretary of State designated the Federal Security Service of the Russian Federation (FSB) as a party subject to one such sanction. Though Intel has suspended sales in Russia, there may be a need to file documents or engage with FSB as Intel winds up our local offices. All such dealings are explicitly authorized by General License 1B issued by the US Department of the Treasurys Office of Foreign Assets Control (OFAC), and there are no gross revenues or net profits directly associated with any such dealings by us with the FSB. On April 15, 2021, the US Department of the Treasury designated Pozitiv Teknolodzhiz, AO (Positive Technologies), a Russian IT security firm, as a party subject to one of the sanctions specified in Section 13(r). Prior to the designation, we communicated with Positive Technologies regarding its IT security research and coordinated disclosure of security vulnerabilities identified by the firm. Based on a license issued by OFAC, we resumed such communications. There are no gross revenues or net profits directly associated with any such activities. We plan to continue these communications in accordance with the terms and conditions of the OFAC license. intel. Risk Factors and Other Key Information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
Financial Statements and Supplemental Details We have defined certain terms and abbreviations used throughout our Form 10-K in "Key Terms" within this section. Index to Consolidated Financial Statements Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 71 Consolidated Statements of Income 74 Consolidated Statements of Comprehensive Income 75 Consolidated Balance Sheets 76 Consolidated Statements of Cash Flows 77 Consolidated Statements of Stockholders' Equity 78 Notes to Consolidated Financial Statements 79 Basis Note 1: Basis of Presentation 79 Note 2: Accounting Policies 79 Performance and Operations Note 3: Operating Segments 85 Note 4: Non-Controlling Interests 86 Note 5: Earnings Per Share 88 Note 6: Other Financial Statement Details 88 Note 7: Restructuring and Other Charges 90 Note 8: Income Taxes 91 Investments, Long-Term Assets, and Debt Note 9: Investments 93 Note 10: Acquisitions and Divestitures 95 Note 11: Goodwill 95 Note 12: Identified Intangible Assets 96 Note 13: Borrowings 96 Note 14: Fair Value 99 Risk Management and Other Note 15: Other Comprehensive Income (Loss) 100 Note 16: Derivative Financial Instruments 101 Note 17: Retirement Benefit Plans 103 Note 18: Employee Equity Incentive Plans 106 Note 19: Commitments and Contingencies 108 Key Terms 112 Index to Supplemental Details Controls and Procedures 114 Exhibits 115 Form 10-K Cross-Reference Index 120 intel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
Report of Independent Re•istered Public Accountin• Firm To the Stockholders and the Board of Directors of Intel Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Intel Corporation (the Company) as of December 30, 2023 and December 31, 2022, the related consolidated statements of income, comprehensive income, cash flows and stockholders' equity for each of the three years in the period ended December 30, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January 25, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. intel. Auditor's Reports 71 IJ JKJI$N # N J I JJ IK J) I IJ IK J I IJ J JJ JK !PNJJ L K J KJK J I IJ 5J L6K I+%**+ I+%***%JIJ K JKJJ JK % I KP %K RK KJ IK/QNJL I JJILIK JI I+%**+% JIJ JK5 JPLIIIJ KJE K J KJJ JKE6 NI %J K J KJJ JKIK JIL% JIIKJK%J KJ J LJ I+%**+ I+%***% JIKNJK JK IJ K JKK RK I JJILIK JI I+%**+% IJLRJ1 ILJ N J I K !K PNJ% I RJJKJ IK J$N L# N J PIKJ) I51 JJJK65$#)6% J L/K JI JI PI I IJ K I+%**+% K IJIKJ K JI JI Z JIJIR IKKN LJ JJ K I I OJ K JIRL KK 5*+IR I6 NI I IJJ@ NIL*-%**1MIKK N QN JI )KK I K KJJ JKIJIK K JL J L/K JNIIK K JLKJ MIKK J L/K KJJ JK K NINJK!IN N J IIKJIRJJ$#) IIQNIJ JRJIKJJ J L I RJJ1IKNIJKRK J INK INJ K JNIJK M KK J$#) ! NJ NINJK I RJJKJ IK J$#) KKJ IKIQNIJJR I IJNJJ J IK KKNI NJRJIJ KJJ JKII JIKKJJ J%RJINJ II I IINNI NJK NI I I NIKJ KKKKJIKK JIKKJJ J J KJJ JK%RJINJ II I I IN% I I I NIKJJIK J J KIKKNI NIK NM % JKJ KK%P II J N JK K KNIK J KJJ JKNINJKK NPNJ J N J I KNK K JKJJK L J%KRKPNJ J PIIK JJ J KJJ JK! PJJ NI NJKI PIK KK I NI IJ#NJ'JJI IJNJJJI N J RKJJIIK I JNII JI NJ J KJJ JKJJRK N J IIQNIJ N JJ JNJ JJ JJ956IJKJ N JK IK KNIKJJIJIJ J KJJ JK 5*6 P P NIKL %KN 8JP I M8N JK N J JIJ NJJJI K JJI LRL NI J K J KJJ JK%J KR % RI J% L N J JIJNJJJI R%I P KIJ JIJNJJJI I J N JK IK KNIKJ RJIJK #NJ I/K IJK .
Description of the Matter Inventory Valuation The Company's net inventory totaled $11.1 billion as of December 30, 2023, representing 5.8% of total assets. As explained in "Note 2: Accounting Policies" within the consolidated financial statements, the Company computes inventory cost on a first-in, first-out basis, and applies judgment in determining saleability of products and the valuation of inventories. The Company assesses inventory at each reporting date in order to assert that it is recorded at net realizable value, giving consideration to, among other factors: whether the products have achieved the substantive engineering milestones to qualify for sale to customers; the determination of normal capacity levels in its manufacturing process to determine which manufacturing overhead costs can be included in the valuation of inventory; whether the product is valued at the lower of cost or net realizable value; and the estimation of excess and obsolete inventory or that which is not of saleable quality. Auditing management's assessment of net realizable value for inventory was challenging because the determination of excess and obsolete inventory reserves and lower of cost or net realizable value is judgmental and considers a number of factors that are affected by market and economic conditions, such as customer forecasts, dynamic pricing environments, and industry supply and demand. Additionally, for certain new product launches there is limited historical data with which to evaluate forecasts. How We Addressed We evaluated and tested the design and operating effectiveness of the Company's internal controls over the the Matter in Our costing of inventory, the determination of whether inventory is of saleable quality, the determination of demand Audit forecasts and related application against on hand inventory, and the calculation of lower of cost or net realizable value reserves including related estimated costs and selling prices. Our audit procedures included, among others, testing the significant assumptions (e.g., estimated product demand forecasts, costs and selling prices) of the underlying data used in management's inventory valuation assessment. We compared the significant assumptions used by management to current industry and economic trends. We assessed whether there were any potential sources of contrary information, including historical forecast accuracy or history of significant revisions to previously recorded inventory valuation adjustments, and performed sensitivity analyses over significant assumptions to evaluate the changes in inventory valuation that would result from changes in the assumptions. /s/ Ernst & Young LLP We have served as the Company's auditor since 1968. San Jose, California January 25, 2024 intel. Auditor's Reports 72 ,&!C:$ 1$#& 6"!#4#&&?2 7$! L/K J P J ILJ J; K I+%**+%IIK J -2
Report of Independent Re•istered Public Accountin• Firm To the Stockholders and the Board of Directors of Intel Corporation Opinion on Internal Control Over Financial Reporting We have audited Intel Corporation's internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Intel Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 30, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated January 25, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Jose, California January 25, 2024 intel. Auditor's Reports 73 IJ JKJI$N # N J I JJ IK J) I IJ IK J I IJ JI JI PI IJ !PNJ J I IJ /K JI JI PI I IJ K I+%**+% K IJIKJ K JI JI Z JIJIR IKKN LJ JJ K I I OJ K JIRL KK 5*+ IR I65JIJI6 NI % J I IJ 5J L6 J % JIIKJK%JP JI JI PI I IJ K I+%**+% K JIJI !K PNJ% I RJJKJ IK J$N L# N J PIKJ) I51 JJJK65$#)6% J**+ K J KJJ JK J L NII IJJ@ NIL*-%**1MIKK N QN JI )KK I L/K JKIK K I J JP JI JI PI I IJ IJKKKKK J J JP KK JI JI PI I IJ N J L ' J IJ JI JI PI IJ NIIK K JLKJ MIKK J L/K JI JI PI I IJ K NI NJ!IN N J IIKJIRJJ$#) IIQNIJ JRJIKJJ J L I RJJ1IKNIJKRK J INK INJ K JNIJK M KK J$#) ! NJ NINJ I RJJKJ IK J$#) KKJ IKIQNIJJR I IJNJJ J IK KKNI NJRJIJP JI JI PI I IJ RK J JIIKJK NINJ N J N IKJ JI JI PI I IJ %KKKK JIKJJJIR KK MKJK%JKJ PNJ JK IJ JP KK JI JI K JKKKKIK% I I KN JII NIKKR KI KKIL JINKJ K! PJJ NINJI PKIK KK I NI J 0JJ K JI JI PI IJ # L/K JI JI PI I IJ KI KKK J I PIK KKNI II JI JL I IJ JIIJ KJJ JK IMJI NI KK I RJ ILJ N J I K# L/K JI JI PI I IJ NKJ K K I NIKJJ56IJ J J J I IKJJ% IK J%NIJL ILIJJJI KJ K K KJ K JKKJK J L:5*6 I PIK KKNI JJJI KJ KII IK KKILJ IJIIJ KJJ JK I RJ ILJ N J I K% JJIJK M JNIK J LI L I RJ NJ IOJ K J IJ IK J L: 5+6I PIK KKNI II IP J IJL JJ N NJ IOQNKJ %NK% IK KJ J L/KKKJKJJ NPJIJ J KJJ JK )NK JK I JJJ K% JI JI PI I IJ L JIP J IJJKKJJ JK#K %I 8J K LPNJ JP KKJ NJNII KIKN 8JJ JIKJJ JI KL QNJ NK K J K% IJJJI RJJ K II NIKLJI IJ 8K8I KJ(, N 00$ @ K% I @ NIL*-%**1 #NJ I/K IJK .+
Consolidated Statements of Income Years Ended (In Millions, Except Per Share Amounts) Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Net revenue $ 54,228 $ 63,054 $ 79,024 Cost of sales 32,517 36,188 35,209 Gross margin 21,711 26,866 43,815 Research and development 16,046 17,528 15,190 Marketing, general, and administrative 5,634 7,002 6,543 Restructuring and other charges (62) 2 2,626 Operating expenses 21,618 24,532 24,359 Operating income 93 2,334 19,456 Gains (losses) on equity investments, net 40 4,268 2,729 Interest and other, net 629 1,166 (482) Income before taxes 762 7,768 21,703 Provision for (benefit from) taxes (913) (249) 1,835 Net income 1,675 8,017 19,868 Less: Net income (loss) attributable to non-controlling interests (14) 3 Net income attributable to Intel $ 1,689 $ 8,014 $ 19,868 Earnings per share attributable to Intel-basic $ 0.40 $ 1.95 $ 4.89 Earnings per share attributable to Intel-diluted $ 0.40 $ 1.94 $ 4.86 Weighted average shares of common stock outstanding: Basic 4,190 4,108 4,059 Diluted 4,212 4,123 4,090 See accompanying notes. Intel. Financial Statements I Consolidated Statements of Income 74 K JJJ JK F:/803;:;32==2630EC:H5:81/8: 350 :C :C :C :58:A:3>: % $ % ! % " KJ KK +*%-. +3%22 +-%*7 86008423 " !$!! $ KI P J 3%13 .%-*2 -%7 'IJ % I% KJIJP -%3+1 .%* 3%-1+ KJINJNI JIIK 53*6 * *%3*3 H:8/5234:EH:30:0 !$ H:8/523423C6<: kk j p i kk6 nj z>5/?=:5635:= % !$ % $ % $!$ /832340H:801/8:/5582?>5/?=:5635:=I?/02C % 7 % 7 % 7$ /832340H:801/8:/5582?>5/?=:5635:=I;2=>5:; % 7 % 7 % 7$! !JPIKIK KJ NJKJ 9 #/02C $ 2=>5:; *$""&)4$C#'&6 JJ JK K JJJ JK .1
Consolidated Statements of Comprehensive Income Years Ended (In Millions) Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Net income $ 1,675 $ 8,017 $ 19,868 Changes in other comprehensive income (loss), net of tax: Net unrealized holding gains (losses) on derivatives 272 (510) (520) Actuarial valuation and other pension benefits (expenses), net 66 855 451 Translation adjustments and other 9 (27) (60) Other comprehensive income (loss) 347 318 (129) Total comprehensive income 2,022 8,335 19,739 Less: comprehensive income (loss) attributable to non-controlling interests (14) 3 Total comprehensive income attributable to Intel $ 2,036 $ 8,332 $ 19,739 See accompanying notes. Intel. Financial Statements I Consolidated Statements of Comprehensive Income 75 K JJJ JK I KP F:/803;:;32==2630 :C :C :C :523C6<: j kk6 kk nj z>5/?=:5635:= % ! % $ % " *$""&)4$C#'&6 JJ JK K JJJ JK I KP .-
Consolidated Balance Sheets (In Millions, Except Par Value) Dec 30, 2023 Dec 31, 2022 Assets Current assets: Cash and cash equivalents $ 7,079 $ 11,144 Short-term investments 17,955 17,194 Accounts receivable, net 3,402 4,133 Inventories 11,127 13,224 Other current assets 3,706 4,712 Total current assets 43,269 50,407 Property, plant, and equipment, net 96,647 80,860 Equity investments 5,829 5,912 Goodwill 27,591 27,591 Identified intangible assets, net 4,589 6,018 Other long-term assets 13,647 11,315 Total assets $ 191,572 $ 182,103 Liabilities and stockholders' equity Current liabilities: Short-term debt $ 2,288 $ 4,367 Accounts payable 8,578 9,595 Accrued compensation and benefits 3,655 4,084 Income taxes payable 1,107 2,251 Other accrued liabilities 12,425 11,858 Total current liabilities 28,053 32,155 Debt 46,978 37,684 Other long-term liabilities 6,576 8,978 Commitments and Contingencies (Note 19) Stockholders' equity: Preferred stock, $0.001 par value, 50 shares authorized; none issued Common stock, $0.001 par value, 10,000 shares authorized; 4,228 shares issued and outstanding (4,137 issued and outstanding in 2022) and capital in excess of par value 36,649 31,580 Accumulated other comprehensive income (loss) (215) (562) Retained earnings 69,156 70,405 Total Intel stockholders' equity 105,590 101,423 Non-controlling interests 4,375 1,863 Total stockholders' equity 109,965 103,286 Total liabilities and stockholders' equity $ 191,572 $ 182,103 See accompanying notes. Intel. Financial Statements I Consolidated Balance Sheets 76 K J) JK 32==2630EC:H5/8(/=>: :C :C 00:50 NII JKKJK9 K KQNP JK ; .%.7 ; %11 IJJI PKJ JK .%7-- .%71 # N JKIP % J +%1* 1%++ P J IK %*. +%**1 JINII JKKJK +%.3 1%.* 65/=C>88:35/00:50 ! " 86H:85DH=/35/3;:J>2H<:35>25D23A:05<:350>25D NII J JK9 IJJI J ; *%*22 ; 1%+3. # N JKL 2%-.2 7%-7- #IN KJ JK +%3-- 1%21 JMKL %. *%*- JIIN JK *%1*- %2-2 65/=C>88:35=2/?2=252:0 $ :?5 !"$ "!$ 51:8=6345:825D 63C63586==234235:8:050 " $! 65/=056C916=;:80):J>25D ! $! 65/==2/?2=252:0/3;056C916=;:80):J>25D % " % $ *$""&)4$C#'&6 JJ JK K J) JK .3
Consolidated Statements of Cash Flows Years Ended (In Millions) Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Cash and cash equivalents, beginning of period $ 11,144 $ 4,827 $ 5,865 Cash flows provided by (used for) operating activities: Net income 1,675 8,017 19,868 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 7,847 11,128 9,953 Share-based compensation 3,229 3,128 2,036 Restructuring and other charges (424) 1,074 2,626 Amortization of intangibles 1,755 1,907 1,839 (Gains) losses on equity investments, net (42) (4,254) (1,458) (Gains) losses on divestitures (1,059) Changes in assets and liabilities: Accounts receivable 731 5,327 (2,674) Inventories 2,097 (2,436) (2,339) Accounts payable (801) (29) 1,190 Accrued compensation and benefits (614) (1,533) 515 Prepaid customer supply agreements - (24) (1,583) Income taxes (3,531) (4,535) (441) Other assets and liabilities (451) (1,278) (76) Total adjustments 9,796 7,416 9,588 Net cash provided by operating activities 11,471 15,433 29,456 Cash flows provided by (used for) investing activities: Additions to property, plant, and equipment (25,750) (24,844) (18,733) Additions to held for sale NAND property, plant, and equipment (206) (1,596) Proceeds from capital-related government incentives 1,011 246 166 Purchase of short-term investments (44,414) (43,647) (40,554) Maturities and sales of short-term investments 44,077 48,730 35,299 Purchases of equity investments (399) (510) (613) Sales of equity investments 472 4,961 581 Proceeds from divestitures - 6,579 - Other investing 962 (1,540) 1,167 Net cash used for investing activities (24,041) (10,231) (24,283) Cash flows provided by (used for) financing activities: Issuance of commercial paper, net of issuance costs 3,945 Repayment of commercial paper (3,944) - Payments on finance leases (96) (345) Partner contributions 1,511 874 Proceeds from sales of subsidiary shares 2,959 1,032 - Issuance of long-term debt, net of issuance costs 11,391 6,548 4,974 Repayment of debt (423) (4,984) (2,500) Proceeds from sales of common stock through employee equity incentive plans 1,042 977 1,020 Repurchase of common stock (2,415) Payment of dividends to stockholders (3,088) (5,997) (5,644) Other financing (847) (935) (1,646) Net cash provided by (used for) financing activities 8,505 1,115 (6,211) Net increase (decrease) in cash and cash equivalents (4,065) 6,317 (1,038) Cash and cash equivalents, end of period $ 7,079 $ 11,144 $ 4,827 Supplemental disclosures: Acquisition of property, plant, and equipment included in accounts payable and accrued liabilities $ 4,804 $ 5,431 $ 1,619 Cash paid during the year for: Interest, net of capitalized interest $ 613 $ 459 $ 545 Income taxes, net of refunds $ 2,621 $ 4,282 $ 2,263 See accompanying notes. Intel. Financial Statements I Consolidated Statements of Cash Flows 77 K JJJ JK K RK /01/3;C/01:J>2A/=:350?:42332346BH:826; % % $" % $! K RKI P L5NK I6 IJ JPJK9 &J %3.- 2%. 7%232 #8NKJ JKJ I J J JKI P L IJ JPJK9 IJ .%21. %*2 7%7-+ I K KJ +%**7 +%*2 *%+3 KJINJNI JIIK 51*16 %.1 *%3*3 # IJOJ J K %.-- %7. %2+7 5" K6 KKK QNJL PKJ JK% J 51*6 51%*-16 5%1-26 5" K6 KKK PKJJNIK Z 5%-76 Z K KKJK JK9 # N JKIP .+ -%+*. 5*%3.16 P J IK *%7. 5*%1+36 5*%++76 # N JKL 526 5*76 %7 #IN KJ JK 5316 5%-++6 -- $INKJ IKNLI JK Z 5*16 5%-2+6 JMK 5+%-+6 51%-+-6 5116 JIKKJK JK 51-6 5%*.26 5.36 J8NKJ JK 7%.73 .%13 7%-22 :5C/01H86A2;:;?D6H:8/5234/C52A252:0 " ! K RKI P L5NK I6 PKJ JPJK9 #J KJ I IJL% J% QN J 5*-%.-6 5*1%2116 52%.++6 #J KJ IK& I IJL% J% QN J Z 5*36 5%-736 $I KI JIJ PI J JPK % *13 33 $NIK K IJJI PKJ JK 511%116 51+%31.6 51%--16 'JNIJK KK K IJJI PKJ JK 11%.. 12%.+ +-%*77 $NIKK QNJL PKJ JK 5+776 5-6 53+6 K QNJL PKJ JK 1.* 1%73 -2 $I KI PKJJNIK Z 3%-.7 Z JI PKJ 73* 5%-16 %3. :5C/01>0:;B6823A:05234/C52A252:0 $ K RKI P L5NK I6 JPJK9 KKN II% J KKN KJK Z +%71- Z L J II 5+%7116 Z Z $L JK KK 5736 5+1-6 Z $IJ I JI NJ K %- 2.1 Z $I KI KK KN KILKIK *%7-7 %+* Z KKN JI J% J KKN KJK %+7 3%-12 1%7.1 L J J 51*+6 51%7216 5*%-6 $I KI KK KJ JI N LQNJL JP K %1* 7.. %* NIK KJ Z Z 5*%1-6 $L J P KJ KJ IK 5+%226 5-%77.6 5-%3116 JI 521.6 57+-6 5%3136 :5C/01H86A2;:;?D>0:;B68B23/3C234/C52A252:0 $ ! :523C8:/0:;:C8:/0:23C/01/3;C/01:J>2A/=:350 ! !" $ /01/3;C/01:J>2A/=:350:3;6BH:826; % "" % % $" N JK KNIK9 #QNKJ I IJL% J% QN J N N JKL IN JK ; 1%21 ; -%1+ ; %37 KNI JLI I9 JIKJ% J JO JIKJ ; 3+ ; 1-7 ; -1- JMK% J IN K ; *%3* ; 1%*2* ; *%*3+ F:/803;:;32==2630 :C :C :C *$""&)4$C#'&6 JJ JK K JJJ JK K RK ..
Consolidated Statements of Stockholders' Equit (In Millions, Except Per Share Amounts) Common Stock and Capital in Excess of Par Value Accumulated Other Comprehensive Income (Loss) Retained Earnings Non- Controlling Interests Total Number of Shares Amount Balance as of December 26, 2020 4,062 $ 25,556 (751) $ 56,233 $ - $ 81,038 Adjustment to opening balance for change in accounting principle 35 35 Opening Balance as of December 27, 2020 4,062 25,556 (751) 56,268 81,073 Net income (loss) 19,868 19,868 Other comprehensive income (loss) (129) (129) Employee equity incentive plans and other 54 1,022 1,022 Share-based compensation 2,036 2,036 Repurchase of common stock (40) (249) (2,166) (2,415) Restricted stock unit withholdings (6) (359) (61) (420) Cash dividends declared ($1.39 per share of common stock) (5,644) (5,644) Balance as of December 25, 2021 4,070 28,006 (880) 68,265 95,391 Net income (loss) 8,014 3 8,017 Other comprehensive income (loss) 318 318 Proceeds from sales of subsidiary shares and partner contributions 75 1,831 1,906 Employee equity incentive plans and other 79 1,009 1,009 Share-based compensation 3,099 29 3,128 Restricted stock unit withholdings (12) (609) 123 (486) Cash dividends declared ($1.46 per share of common stock) (5,997) (5,997) Balance as of December 31, 2022 4,137 31,580 (562) 70,405 1,863 103,286 Net income (loss) 1,689 (14) 1,675 Other comprehensive income (loss) 347 347 Proceeds from sales of subsidiary shares and partner contributions 1,620 2,385 4,005 Employee equity incentive plans and other 107 1,044 1,044 Share-based compensation 3,088 141 3,229 Restricted stock unit withholdings (16) (683) 150 (533) Cash dividends declared ($0.74 per share of common stock) (3,088) (3,088) Balance as of December 30, 2023 4,228 $ 36,649 $ (215) $ 69,156 $ 4,375 $109,965 See accompanying notes. Intel. Financial Statements I Consolidated Statements of Stockholders' Equity 78 K JJJ JK J IK/QNJL 6: CC>=/5:; 51:8 6
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