Income Taxes |
6 Months Ended |
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Jul. 05, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, deemed foreign income inclusions, change in the valuation allowance, and other permanent differences. Income tax expense was $2.5 million and $36.7 million for the three months ended July 5, 2025 and June 29, 2024, resulting in effective tax rates of (13.1)% and (80.6)%, respectively. Income tax expense was $4.4 million and $36.3 million for the six months ended July 5, 2025 and June 29, 2024, resulting in effective tax rates of (9.3)% and (35.4)%, respectively. The decrease in the provision for income taxes for the three and six months ended July 5, 2025 is primarily due to a decrease in tax expense related to the valuation allowance in the three and six months ended July 5, 2025 in comparison with the three and six months ended June 29, 2024. During the three months ended June 29, 2024, the Company incurred significant tax expense to record a valuation allowance in the U.S. and Singapore due to a three-year cumulative pre-tax loss in conjunction with the downturn in the semiconductor industry. The Company intends to maintain the valuation allowance until its ability to forecast sufficient future sources of taxable income is reestablished. On July 4, 2025, the U.S. government enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”). The OBBBA extends and/or modifies many provisions first enacted via the Tax Cuts and Jobs Act (“TCJA”) in 2017, as well as introduces new modifications to U.S. federal tax law. Beginning with the 2025 tax year, the OBBBA permanently restores current deductibility for U.S. research and experimental (“R&E”) expenditures. A number of other provisions of the OBBBA will not take effect until the 2026 tax year, including various changes to existing international tax provisions. In connection with its initial analysis of the OBBBA, the Company determined that its forecasted annual effective tax rate for the current year decreased, primarily due to U.S. R&E expenditures no longer being capitalized within net controlled foreign corporation tested income (formerly known as global intangible low-taxed income or “GILTI”), which the Company has elected to treat as a period cost. The Company did not identify any material discrete tax impacts related to beginning-of-the-year deferred tax assets and liabilities or valuation allowances due to the enactment of the OBBBA. Uncertain Tax Positions As of July 5, 2025, the Company had gross unrecognized tax benefits, inclusive of interest, of $5.7 million, of which $3.6 million would affect the effective tax rate if recognized. During the six months ended July 5, 2025, the Company did not release any unrecognized tax benefits. Tax years 2019 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company’s 2022 tax year is currently under examination in the U.S., and the Company’s 2021 through 2023 tax years are currently under examination in India. Although the outcome of tax audits is always uncertain, the Company believes that the results of these examinations will not materially impact its financial position or results of operations. The Company is not currently under audit in any other major taxing jurisdiction. The Company’s gross unrecognized tax benefits will decrease by approximately $1.8 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations.
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