What Monolithic Power Systems, Inc. told the SEC could break it.

MPS has significant operations in Taiwan and many of its manufacturing partners, suppliers, and customers are located there; Taiwan's tense relationship with China creates political, military, and economic risk to both its supply chain and demand.

“We have significant business operations in Taiwan, and many of our manufacturing partners, suppliers and customers are located in Taiwan. Accordingly, our business, financial condition and results of operations may be affected by changes in governmental and economic policies in Taiwan, social instability and diplomatic and social developments in or affecting Taiwan due to its unique international political status.”

MPS derives the overwhelming majority of its revenue from Asia — 92% of total revenue in 2025 — through direct and distributor/VAR sales, concentrating its business in a single region's political, economic, and FX conditions (especially China).

“As a result, we are subject to significant risks due to this geographic concentration of business and operations. For the year ended December 31, 2025, 92% of our total revenue was from customers in Asia.”

With significant operations in both China and the U.S., MPS is exposed to U.S.-China tariffs (and retaliatory Chinese tariffs) and U.S. export controls; HTS classification and country-of-origin determinations add subjectivity and risk to its tariff exposure.

“If these tariffs continue or additional tariffs are imposed in the future, they could have a negative impact on us as we have significant operations in China and the U.S. Additionally, the imposition of tariffs is dependent upon the classification of goods under the U.S. Harmonized Tariff System (“HTS”) and the country of origin of the goods.”

MPS and many of its manufacturing partners and suppliers are subject to extensive Chinese government regulation; reduction or elimination of Chinese incentives could increase costs or limit MPS's ability to sell products and operate in China.

“We and many of our manufacturing partners and suppliers are subject to extensive Chinese government regulations, and the benefit of various incentives from Chinese governments that we and many of our manufacturing partners and suppliers receive may be reduced or eliminated, which could increase our costs or limit our ability to sell products and conduct activities in China.”

As a fabless designer, MPS depends on third-party suppliers for wafers and key components — manufactured in foundries in China, Taiwan, South Korea, and Singapore; supplier insolvency, capacity constraints, or yield/cost problems could cut revenue and gross margin.

“We currently depend on third-party suppliers to provide us with wafers and other key components for our products. If any of our suppliers are acquired, become insolvent or capacity constrained, or are otherwise unable to provide us with sufficient wafers and other key components at acceptable yields or at anticipated costs, our revenue and gross margin may decline or we may not be able to fulfill our customer orders.”