COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Notes)

9 Months Ended

Jul. 01, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

16. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

Warranty Expense

The Company’s equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management’s estimate of future warranty costs, including product part replacement, freight charges and related labor costs expected to be incurred in correcting manufacturing defects during the warranty period.

The following table reflects the reserve for warranty activity for the three and nine months ended July 1, 2023 and July 2, 2022:


	Three months ended				Nine months ended
(in thousands)	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Reserve for warranty, beginning of period	$	10,468	$	15,518	$	13,443	$	16,961
Provision for warranty	4,007		2,842		8,989		9,001
Utilization of reserve	(3,908)		(4,118)		(11,865)		(11,720)
Reserve for warranty, end of period	$	10,567	$	14,242	$	10,567	$	14,242

Other Commitments and Contingencies

The following table reflects obligations not reflected on the Consolidated Condensed Balance Sheets as of July 1, 2023:


			Payments due by fiscal year
(in thousands)	Total		2023		2024		2025		2026		2027		thereafter
Inventory purchase obligation (1)	$	198,566	$	21,676	$	176,890	$	—	$	—	$	—	$	—

(1)The Company orders inventory components in the normal course of its business. A portion of these orders are non-cancelable and a portion may have varying penalties and charges in the event of cancellation.

From time to time, the Company is party to or the target of lawsuits, claims, investigations and proceedings, including for personal injury, intellectual property, commercial, contract, and employment matters, which are handled and defended in the ordinary course of business. The Company accrues a contingent loss liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, the Company accrues the minimum amount. The Company expenses legal costs, including those expected to be incurred in connection with a loss contingency, as incurred.

Unfunded Capital Commitments

As of July 1, 2023, the Company also has an obligation to fund uncalled capital commitments of approximately $9.6 million, as and when required, in relation to its investment in a private equity fund.

Concentrations

The following table reflects significant customer concentrations as a percentage of net revenue for the nine months ended July 1, 2023 and July 2, 2022:


	Nine months ended
	July 1, 2023		July 2, 2022


First Technology China Ltd.(1)	10.0	%	*

* Represents less than 10% of total net revenue

(1) Distributor of the Company's products

The following table reflects significant customer concentrations as a percentage of total accounts receivable as of July 1, 2023 and July 2, 2022:


	As of
	July 1, 2023		July 2, 2022
Intel Corporation	12.2	%	*
Apple Inc.	10.3	%	*
Tianshui Huatian Technology Co., Ltd.	*		20.6	%

* Represents less than 10% of total accounts receivable