918386--5/20/2010--QLOGIC

related topics

{product, market, service}

{customer, product, revenue}

{system, service, information}

{property, intellectual, protect}

{stock, price, operating}

{cost, regulation, environmental}

{operation, natural, condition}

{operation, international, foreign}

{personnel, key, retain}

{loan, real, estate}

{tax, income, asset}

{acquisition, growth, future}

We expect gross margin to vary over time, and our recent level of gross margin may not be sustainable. Our stock price may be volatile. Our business is dependent, in large part, on the continued growth of the networking markets that we serve and if these markets do not continue to develop, our business will suffer. Our business could be adversely affected by a significant increase in the market acceptance of blade servers. Our financial condition will be materially harmed if we do not maintain and gain market acceptance of our products. We depend on a small number of customers, and any decrease in revenues or cash flows from any one of our major customers could adversely affect our results of operations and cause our stock price to decline. Our business may be subject to seasonal fluctuations and uneven sales patterns in the future. Competition within the markets for our products is intense and includes various established competitors. We expect the pricing of our products to continue to decline, which could reduce our revenues, gross margins and profitability. Our distributors may not adequately stock and sell our products and their reseller customers may purchase products from our competitors, which could negatively affect our results of operations. We are dependent on sole source and limited source suppliers for certain key components. We are dependent on worldwide third-party subcontractors and contract manufacturers. Our investment securities portfolio could experience a decline in market value, which could materially and adversely affect our financial results. Our products are complex and may contain undetected software or hardware errors that could lead to an increase in our costs, reduce our net revenues or damage our reputation. The migration of our customers toward new products could adversely affect our results of operations. Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns could adversely affect our results of operations. Environmental compliance costs could adversely affect our results of operations. Because we have operations in foreign countries and depend on foreign customers and suppliers, we are subject to international economic, currency, regulatory, political and other risks that could harm our business, financial condition and results of operations. We may engage in mergers, acquisitions and strategic investments and these activities may adversely affect our results of operations and stock price. If we are unable to attract and retain key personnel, we may not be able to sustain or grow our business. We may experience difficulties in transitioning to smaller geometry process technologies. Our proprietary rights may be inadequately protected and difficult to enforce. Disputes relating to claimed infringement of intellectual property rights may adversely affect our business. If we fail to carefully manage the use of open source software in our products, we may be required to license key portions of our products on a royalty-free basis or expose key parts of our source code. Our business could be materially adversely affected by changes in regulations or standards regarding energy use of our products. Computer viruses and other forms of tampering with our computer systems or servers may disrupt our operations and adversely affect our business. Our facilities and the facilities of our suppliers and customers are located in regions that are subject to natural disasters.

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918386--5/20/2010--QLOGIC_CORP