1114973--3/3/2006--ADVANCED_POWER_TECHNOLOGY

related topics

{customer, product, revenue}

{product, market, service}

{stock, price, operating}

{condition, economic, financial}

{operation, natural, condition}

{regulation, change, law}

{property, intellectual, protect}

{personnel, key, retain}

{operation, international, foreign}

{cost, regulation, environmental}

{acquisition, growth, future}

{control, financial, internal}

{product, liability, claim}

{provision, law, control}

Risk Factors Affecting Business and Results of Operations The semiconductor industry is very cyclical, and an industry downturn could reduce our revenue. Certain of the markets we serve are cyclical and our ability to grow and sustain growth levels may be adversely affected by a slowdown in the global economy. We have historically experienced fluctuations in our operating results and we expect these fluctuations to continue, which may cause our common stock price to decline. We have incurred significant losses in certain recent periods, and there can be no assurance that we will be able to sustain profitability in the future. If we cannot introduce new products on a timely basis, our financial results may suffer. If we cannot optimize our mix of product sales, our financial results may suffer. Our revenue depends upon our products being designed into our customers products. Strong competition in the power semiconductor market may reduce the demand for our products or the prices of our products, which could reduce our revenue and harm our business. Our financial results could be harmed if we were to lose one of our major customers or key distributors. We rely heavily on our key subcontractors. If they fail to produce needed goods and services, our business and results of operations may suffer. Interruptions in wafer production may harm our operating results. Intellectual property litigation may harm our business. If we cannot adequately protect our technologies and intellectual property rights, our financial results may suffer. If our manufacturing processes become obsolete, our margins and profitability may be harmed. Our business is subject to risks associated with operations in foreign countries. We depend on the availability of raw materials to manufacture our products, and a disruption in supply could harm our operating results. Our foundries may experience lower than expected yields, which could adversely affect our business. Our business may be harmed by acts of terrorism. An accident at our manufacturing facilities could cause serious damage for which we could be responsible. Our products are complex and could contain defects, which could reduce sales of those products or result in claims against us. Our manufacturing operations involve hazardous substances, and the costs of complying with applicable environmental laws could harm our financial results. Failure to attract and retain key technical and management personnel could harm our operating results. If we fail to manage our growth effectively, we may lose business and experience reduced profitability or increased losses. We may not be able to consummate future acquisitions or integrate acquisitions successfully into our business Our reported financial results may be harmed by changes in U.S. generally accepted accounting principles. Recently enacted and proposed changes in securities laws and regulations may increase our costs. The price of our common stock may fluctuate widely in the future. Five members of management, as a group, own a significant interest in our common stock. Our articles of incorporation and Delaware law contain provisions that may hinder or prevent a change in the control of our company.

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1114973--3/3/2006--ADVANCED_POWER_TECHNOLOGY_INC