What Pacific Biosciences of California, Inc. told the SEC could break it.

Substantially all of PacBio's consumable chips are partly manufactured by a company in Taiwan; diplomatic, geopolitical or military developments in the China-Taiwan relationship could materially disrupt its supply of consumable chips and other critical components.

“Substantially all of our consumable chips are partly manufactured by a company based in Taiwan. Our supply of consumable chips and other critical components may be materially and adversely affected by diplomatic, geopolitical, military and other developments affecting the relationship between China”

PacBio faces escalating tariffs (Section 301/232 and IEEPA fentanyl-related duties on China/Canada/Mexico goods) and Chinese retaliation including rare-earth export controls that raise costs, plus BIS export-control scrutiny of its China sales (an April 2025 inquiry led to a voluntary self-disclosure, closed with a warning letter).

“since February 2025, under authority of the International Emergency Economic Powers Act (“IEEPA”), the U.S. government enacted an additional 10% to 35% “fentanyl-related” ad valorem tariffs on virtually all goods from China, Canada, and Mexico, with an exception for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement (“USMCA”).”

PacBio sources certain critical products and components — including its SMRT Cells, reagents and instruments — from single or sole sources; supply interruption, quality issues or loss of a sole-source manufacturer could limit product availability and require lengthy requalification.

“We have chosen to source certain products and critical components from a single source, including suppliers for our SMRT Cells, reagents, and instruments. We cannot assure you that products or product supplies will not be limited or interrupted, especially with respect to our sole source third-party manufacturing and supply collaborators, or that products or product supp”

PacBio derives a significant portion of revenue from a limited number of customers (early-adopter labs and service providers) who buy on a purchase-order basis without long-term contracts; although no customer exceeded 10% of revenue, this concentration and lumpy purchasing causes quarterly revenue volatility.

“We receive a significant portion of our revenue from a limited number of customers. While during the years ended December 31, 2025, 2024, and 2023, no customer accounted for 10% or more of our total revenue, many of our customers make large purchases on a purchase-order basis rather than pursuant to long-term contracts.”