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Income Taxes | 6 Months Ended
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Jun. 29, 2024
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, global intangible low-taxed income, Subpart F income inclusions, and other permanent differences. Income tax expense was $36.7 million and $12.3 million for the three months ended June 29, 2024 and July 1, 2023, resulting in effective tax rates of (80.6)% and 53.0%, respectively. Income tax expense was $36.3 million and $20.1 million for the six months ended June 29, 2024 and July 1, 2023, resulting in effective tax rates of (35.4)% and 44.6%, respectively. The increase in the provision for income taxes for the three and six months ended June 29, 2024 is primarily due to a change in the Company’s valuation allowance assessment and subsequent recording of a valuation allowance against certain of the Company’s deferred tax assets. For the three months ended June 29, 2024, the Company’s provision for income taxes includes $43.9 million of non-cash tax expense to establish a valuation allowance against certain deferred tax assets in the U.S. and Singapore. The Company establishes a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In the three months ended June 29, 2024, the Company determined that there is a need for the valuation allowance due to a forecasted three-year cumulative pre-tax loss for the current and two preceding years 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. Uncertain Tax Positions As of June 29, 2024, the Company had gross unrecognized tax benefits, inclusive of interest, of $6.1 million, of which $5.5 million would affect the effective tax rate if recognized. During the six months ended June 29, 2024, the Company did not release any unrecognized tax benefits. Tax years 2015 through 2024 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company’s 2021 and 2022 tax years are currently under examination in India. Although the outcome of tax audits is always uncertain, the Company believes that the results of the examination 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 believes it is reasonably possible that its gross unrecognized tax benefits will decrease by approximately $1.9 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations.

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