Income Taxes (Tables)

12 Months Ended

Jul. 03, 2026

Schedule of Income Before Income Tax Expense (Benefit)

Income before income taxes consisted of the following:


	Fiscal Years Ended
(Dollars in millions)	July 3, 2026		June 27, 2025		June 28, 2024
U.S.	$	316	$	233	$	249
Non-U.S.	3,374		1,280		196
	$	3,690	$	1,513	$	445

Schedule of Provision For (Benefits From) Income Taxes

The provision for income taxes consisted of the following:


	Fiscal Years Ended
(Dollars in millions)	July 3, 2026		June 27, 2025		June 28, 2024
Current income tax expense:
U.S.	$	23	$	16	$	2
Non-U.S.	520		32		30
Total Current	543		48		32
Deferred income tax expense:
U.S.	(50)		(5)		71
Non-U.S.	13		1		7
Total Deferred	(37)		(4)		78
Provision for income taxes	$	506	$	44	$	110

Schedule of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities were as follows:


	Fiscal Years Ended
(Dollars in millions)	July 3, 2026		June 27, 2025
Deferred tax assets
Accrued warranty	$	44	$	32
Inventory carrying value adjustments	30		37
Receivable allowances	6		15
Accrued compensation and benefits	72		66
Capitalized research expenses	230		110
Depreciation	—		4
Restructuring accruals	2		—
Lease liabilities	62		64
Other accruals and deferred items	32		10
Net operating losses	297		477
Tax credit carryforwards	609		598
Capital loss carryforwards	68		72
Other assets	53		55
Gross: Deferred tax assets	1,505		1,540
Less: Valuation allowance	(337)		(423)
Net: Deferred tax assets	1,168		1,117
Deferred tax liabilities
Unremitted earnings of certain non-U.S. entities	(7)		(5)
Depreciation	(18)		—
Right-of-use assets	(55)		(59)

Net: Deferred tax liabilities	(80)		(64)

Total net deferred tax assets	$	1,088	$	1,053

Schedule of Reconciliation Between the Provision for Income Taxes at the Statutory Rate and the Effective Tax Rate

The Company established Singapore as its principal executive offices in fiscal year 2024. The Singaporean statutory tax rate of 17% is used for purposes of the reconciliation between the provision for income taxes at the statutory rate and the effective tax rate. The following table presents a reconciliation to our effective tax rate pursuant to the prospective adoption of ASU 2023-09 for the fiscal year ended July 3, 2026:


	Fiscal Year Ended
(Dollars in millions)	July 3, 2026
Provision (benefit) at Singapore federal statutory rate	$	627	17.00	%
Foreign Tax Effects:
United States
Changes in valuation allowances	(42)		(1.14)	%
Share-based Compensation	(55)		(1.49)	%
Other	11		0.30	%
Other foreign jurisdictions	21		0.57	%
Changes in Valuation Allowance	(44)		(1.19)	%
Nontaxable or nondeductible items
Interest Expense	39		1.06	%
Other	19		0.52	%
Changes in unrecognized tax benefits	47		1.27	%
Other adjustments
Effect of Rates different than statutory	(591)		(16.02)	%
Internal Re-organization	48		1.30	%
Other	4		0.11	%
Qualified Domestic Minimum Top-up Tax	422		11.44	%
Effective Tax Rate	$	506	13.73	%

The following table presents a reconciliation between the provision for income taxes at the statutory rate and the effective tax rate for the fiscal years ended June 27, 2025 and June 28, 2024:


	Fiscal Years Ended
(Dollars in millions)	June 27, 2025		June 28, 2024
Provision at statutory rate	$	257	$	76

Permanent differences	4		5


Valuation allowance	(18)		47

Effect of rates different than statutory	(190)		(2)
Research credit	(6)		(9)
Capital loss carryforward	(2)		(11)


Other individually immaterial items	(1)		4
Provision for income taxes	$	44	$	110

Schedule of Unrecognized Tax Benefits Roll Forward

The following table summarizes the activities related to the Company’s gross unrecognized tax benefits:


	Fiscal Years Ended
(Dollars in millions)	July 3, 2026		June 27, 2025		June 28, 2024
Balance of unrecognized tax benefits at the beginning of the year	$	107	$	112	$	116
Gross increase for tax positions of prior years	—		2		3
Gross decrease for tax positions of prior years	—		(17)		(12)
Gross increase for tax positions of current year	48		11		5


Lapse of statutes of limitation	—		(1)		—

Balance of unrecognized tax benefits at the end of the year	$	155	$	107	$	112

Schedule of Cash Flow, Supplemental Disclosures

The following table summarizes the cash paid for income taxes for the period indicated:


	Fiscal Year Ended
(Dollars in millions)	July 3, 2026
U.S.	$	19
Non-U.S.	21
Total Cash Paid for Income Taxes (Net of Refunds)	$	40