1161396--6/12/2007--GENESIS_MICROCHIP_INC

related topics

{customer, product, revenue}

{property, intellectual, protect}

{product, market, service}

{competitive, industry, competition}

{operation, international, foreign}

{condition, economic, financial}

{acquisition, growth, future}

{control, financial, internal}

{system, service, information}

{regulation, change, law}

{personnel, key, retain}

{financial, litigation, operation}

We have had significant senior management and key employee turnover, and may not be able to attract, retain and motivate the personnel we need to succeed. We must increase our revenues and reduce our operating expenses in order to return to profitability and we may not be able to achieve profitability on a quarterly or annual basis. We face intense competition in our market, especially from larger, better-known companies, and we may lack sufficient financial or other resources to maintain or improve our competitive position. Our failure to respond quickly to customer demand for technological improvements and integrate new features could have an adverse effect on our ability to compete. We do not have long-term commitments from our customers, so it is difficult for us to forecast our revenues, and could result in excess inventory. A limited number of our customers comprise a significant portion of our revenues and any decrease in revenue from these customers could have an adverse effect on our net revenues and operating results. Our success will depend on the growth of the market for flat-panel televisions and LCD monitors, and our customers commercial success in those markets. Our success may depend in part on market adoption of the DisplayPort digital interface standard. Our customers experience fluctuating product cycles and seasonality, which causes their sales to fluctuate. We must sell our current products in greater volumes, or introduce new products with improved margins. Our semiconductor products are complex and are difficult to manufacture cost-effectively. Product quality problems could increase our costs, cause customer claims, and delay our product shipments. We rely on distribution partners to sell our products, and disruptions to or our failure to effectively develop these channels could adversely affect our ability to generate revenues from the sale of our products. We subcontract our manufacturing, assembly and test operations. Our products require licenses of third-party technology that may not be available to us on reasonable terms, or at all. Because of the lengthy sales cycles for our products and the fixed nature of a significant portion of our expenses, we may incur substantial expenses before we earn associated revenue and may not ultimately achieve our forecasted sales for our products. We are subject to risks associated with international operations, which may harm our business. Our multi-jurisdictional tax structure is complex and we could be subject to increased taxation. Most of our revenues will come from sales to customers outside of the United States, which creates additional business risks. The cyclical nature of the semiconductor industry may lead to significant variances in the demand for our products. We have in the past and may in the future engage in acquisitions of companies, products or technologies, which involve numerous risks and the anticipated benefits of any acquisitions we make may never be realized. Intellectual property infringement suits brought against us or our customers may significantly harm our business. We may be required to indemnify our customers against claims of intellectual property infringement. We may be unable to adequately protect our intellectual property. We rely on a combination of patent, copyright, trademark and trade secret laws, as well as non-disclosure agreements and other methods to protect our proprietary technologies. We need to continually evaluate internal financial controls against evolving standards. We may become subject to judgments for securities class action suits. A breakdown in our information technology systems could cause a business interruption, impair our ability to manage our business or report results, or result in the unauthorized disclosure of our confidential and proprietary information. General economic conditions may reduce our revenues and harm our business.

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1161396--6/12/2007--GENESIS_MICROCHIP_INC_/DE