Income Taxes |
3 Months Ended |
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Apr. 04, 2026 | |
| 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. Typically, the Company’s interim provision for income taxes is determined using an estimated annual effective tax rate, adjusted for discrete tax items. When the Company is unable to make a reliable estimate of the annual effective tax rate, it uses the actual effective tax rate for the year-to-date period. For the three months ended April 4, 2026, the Company used an actual effective tax rate in jurisdictions where a small change in forecasted pre-tax income or loss has the potential to distort the estimated annual effective tax rate. Income tax expense was $2.2 million and $1.9 million for the three months ended April 4, 2026 and April 5, 2025, resulting in effective tax rates of (16.1)% and (6.6)%, respectively. The decrease in the effective tax rate for the three months ended April 4, 2026 is primarily due to a decrease in pre-tax book loss, as the impact of permanent items is relatively greater when the pre-tax loss is smaller. A valuation allowance is required to be established when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In 2024, the Company identified a need for valuation allowances in the U.S. and Singapore due to the presence of significant negative evidence, including recent operating losses and uncertainty around the timing of recovery in economic conditions within both the semiconductor industry and the broader economy. Because of the valuation allowance, we are unable to recognize the full tax benefit of the pre-tax losses incurred in those jurisdictions in the current year. We intend to maintain the valuation allowance until our ability to forecast sufficient future sources of taxable income is reestablished. Uncertain Tax Positions As of April 4, 2026, the Company had gross unrecognized tax benefits, inclusive of interest, of $4.7 million, of which $1.8 million would affect the effective tax rate if recognized. Tax years 2021 through 2026 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 2023 tax year is 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.
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