1161396--6/14/2006--GENESIS_MICROCHIP_INC

related topics

{customer, product, revenue}

{property, intellectual, protect}

{product, market, service}

{operation, international, foreign}

{acquisition, growth, future}

{system, service, information}

{condition, economic, financial}

{gas, price, oil}

{regulation, change, law}

{control, financial, internal}

{financial, litigation, operation}

{competitive, industry, competition}

{product, liability, claim}

Our success will depend on the growth of the market for flat panel televisions and LCD monitors, and our customers share of those markets. We must develop new products and enhance our existing products to react to rapid technological change and market demands. We face intense competition and may not be able to compete effectively. Our customers experience fluctuating product cycles and seasonality, which causes their sales to fluctuate. A loss of any of our major customers could have a significant impact on our business. 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. Defects in our products could increase our costs, cause customer claims, and delay our product shipments. We subcontract our manufacturing, assembly and test operations. 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. Our products require licenses of third-party technology that may not be available to us on reasonable terms, or at all. The processes used to manufacture our semiconductor products are periodically retired. We do not have long-term commitments from our customers, and we allocate resources based on our estimates of customer demand. Our lengthy sales cycle can result in uncertainty and delays in generating revenues. A large percentage of our revenues will come from sales outside of the United States, which creates additional business risks. 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. The cyclical nature of the semiconductor industry may lead to significant variances in the demand for our products. 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. We may make acquisitions where advisable, and acquisitions involve numerous risks. We may become subject to judgments for securities class action suits. We need to continually evaluate internal financial controls against evolving standards.

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1161396--6/14/2006--GENESIS_MICROCHIP_INC_/DE