927003--3/18/2008--ADVANCED_ENERGY_INDUSTRIES_INC

related topics
{customer, product, revenue}
{operation, international, foreign}
{cost, operation, labor}
{property, intellectual, protect}
{product, market, service}
{gas, price, oil}
{financial, litigation, operation}
{product, liability, claim}
{competitive, industry, competition}
We have transferred the production of substantially all of our product lines to our manufacturing facility in Shenzhen, China, and may experience unforeseen difficulties and challenges with these operations. We might not realize all of the intended benefits of transitioning our supply base to Asian suppliers. A significant portion of our sales is concentrated among a few customers. Raw material, part, component and subassembly shortages, exacerbated by our dependence on sole and limited source suppliers, could affect our ability to manufacture products and systems and could delay our shipments. We generally have no written long-term contracts with our customers requiring them to purchase any specified quantities from us. If we are unable to adjust our business strategy successfully for some of our product lines to reflect the increasing price sensitivity on the part of our customers, our business and financial condition could be harmed. The markets in which we operate are highly competitive. Our competitive position could be weakened if we are unable to convince end users to specify that our products be used in the equipment sold by our customers. Our products may suffer from defects or errors leading to damage or warranty claims We must achieve design wins to retain our existing customers and to obtain new customers, although design wins achieved do not necessarily result in substantial sales. We are subject to risks inherent in international operations. Unfavorable currency exchange rate fluctuations may lead to lower operating margins, or may cause us to raise prices which could result in reduced sales. Changes in the value of the Chinese yuan could impact the cost of our operation in Shenzhen, China. We are highly dependent on our intellectual property. We have been, and in the future may again be, involved in patent litigation. Patent litigation is costly and could result in further restrictions on our ability to sell certain products or an inability to prevent others from using technology we have developed.

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