918386--5/25/2007--QLOGIC

related topics

{customer, product, revenue}

{product, market, service}

{property, intellectual, protect}

{system, service, information}

{stock, price, operating}

{condition, economic, financial}

{tax, income, asset}

{operation, international, foreign}

{personnel, key, retain}

{cost, regulation, environmental}

{acquisition, growth, future}

{competitive, industry, competition}

We expect gross margin to vary over time, and our recent level of gross margin may not be sustainable. Our revenues may be affected by changes in IT spending levels. Our stock price may be volatile. Our business is dependent on the continued growth of the SAN market and if this market does not continue to develop and expand as we anticipate, our business will suffer. Our financial condition will be materially harmed if we do not maintain and gain market or industry acceptance of our products. We depend on a limited 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 our product markets 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 distribute our products and their reseller customers may purchase products from our competitors, which could negatively affect our operations. We are dependent on sole source and limited source suppliers for certain key components. We depend on our relationships with silicon chip suppliers and a loss of any of these relationships may lead to unpredictable consequences that may harm our results of operations if alternative supply sources are not available. 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 may result in fluctuations of our operating results. Environmental compliance costs could adversely affect our net income. Because we 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. Dependance on third-party technology could 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 source code. Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns could adversely affect our net income.

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918386--5/25/2007--QLOGIC_CORP