ENVX

Enovix Corp

NASDAQ · TECHNOLOGY · MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES

2.68

−0.11 −3.94%

USD · close Oct 26

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MKT CAP $588.1MP/E —DIV YIELD —FCF YIELD -21.12%REV TTM $35.9M +34.9%NET INCOME −$170MNET DEBT $487.5M52W 2.25 – 12.21SEC XBRL · TTM TO Invalid Date

How ENVX rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

69%

of sentences unchanged

Added

131

new sentences

Dropped

127

sentences removed

Length

+233

words, now 23,022

New in FY2025

Further, integration work may result in the delay in the scaling up of production or result in additional costs to our battery cells, particularly if we encounter issues with performance or if we are unable to customize products for certain of our customers.
Certain customers will likely require several months or longer to complete technology qualification before determining whether to accept a product that is manufactured at high volume, if at all .
In addition, even if we are able to achieve volume production for the existing uses of our batteries, we may face challenges relating to the scaling up of production for new uses of our batteries, including in the EV market and the market for AI-powered devices.
In 2024, we relocated our Fab1 manufacturing operations from Fremont, California to Fab2 in Malaysia.
We also completed site acceptance testing (“SAT”) and began production of batteries on our Agility line and completed factory acceptance testing (“FAT”), and SAT, for our High-Volume Manufacturing (“HVM”) line in Malaysia.
We expect that our current manufacturing lines will be sufficient to produce batteries on a commercial scale, but not in high enough volumes to meet our long-term expected customer demand.
Therefore, we are working to bring additional facilities online at Fab2 and in Korea, including evaluating additional or alternative manufacturing locations, as well as further refine our approach to improve yields over time.
To the extent we continue to experience manufacturing challenges, which can impact our ability to improve yields, we may have difficulty accepting additional customer demand due to capacity constraints, which could delay our growth.
Furthermore, our current manufacturing operations in Malaysia are conducted in facilities that we are leasing from a third party, which may subject us to risks associated with renewals and potentially increased costs associated with such renewals.
If we are unable to successfully build, manage, renew or expand our existing manufacturing lines and any additional lines we may establish, or otherwise further refine our approach to improve yields, our prospects, financial condition and results of operations will be negatively impacted and our business could fail.
If these assumptions are incorrect and/or customer demand is lower than expected, we may fail to achieve our target revenue and profitability goals and our results of operations and financial condition could be materially adversely affected.
We require significant capital to develop and grow our business and expect to incur significant expenses, including those relating to raw material procurement, leases, sales and distribution as we build our brand and market our batteries, and general and administrative costs as we scale our operations.
Our cost reduction initiatives are based on a variety of factors, including extensive discussions with vendors, customers, industry analysts and independent research; however, an assumed cost reduction over time may be inaccurate if our forecasted demand does not materialize as planned.
We intend to improve productivity and reduce the costs of our production lines compared to the first line we built.
Most recently, we completed a restructuring in 2024 designed to reduce our operating costs and support our strategic goals.
As part of the restructuring plan, we relocated our manufacturing operations from our Fab1 facility in Fremont, California to Malaysia, resulting in a plan of workforce reduction in the U.S., as well as significant restructuring charges associated with equipment disposals as part of the relocation.
Thus, we may in the future incur material costs and charges in connection with restructuring plans and initiatives and there can be no assurance that any such plans and initiatives will be successful, or that we will be able to adequately manage our operating expenses.
If we fail to achieve some or all of the expected benefits of any restructuring plans, which may be impacted by factors outside of our control, our business, operating results, and financial condition could be adversely affected.
For more information, see Note 15 “Restructuring Costs” of our Consolidated Financial Statements in this Annual Report.
If we are able to overcome the challenges in designing and refining our manufacturing process, we expect to operate multiple manufacturing lines, with YBS providing certain facility, staffing, and procurement support services, to meet our expected customer demands.
In October 2024, we entered into an amendment to the YBS Agreement, which modified certain payment terms and responsibilities of the parties.
Pricing under the YBS Agreement is set on a cost-plus basis and we are subject to a minimum purchase commitment.
We are obligated to pay a certain threshold amount each month over the term of the YBS Agreement depending on the level of orders we make to YBS for manufacturing.
Our manufacturing arrangement with YBS creates risks due to our reliance on YBS for various aspects of our manufacturing operations, including staffing, procurement and certain support services.
In addition, the YBS Agreement exposes us to risks because certain operational aspects are managed by YBS, which may reduce our direct control over the management of manufacturing processes, capacity constraints, delivery timetables, product quality assurance and costs.
Over the last three years, we have expanded our global footprint through acquisitions as well as a restructuring of our manufacturing operations.
Namely, in South Korea, we acquired a battery manufacturer in 2023, Routejade, as well as a second manufacturing facility and certain other related assets in 2025.
During this time, we have also established a research and development center in Hyderabad, India, which supports the product and manufacturing teams in our other locations, and relocated all of our manufacturing activities from Fremont, California to Malaysia, as well as established a subsidiary in Shenzhen, China.
Additionally, relationships with customers and potential customers outside of the U.S. accounted for a significant portion of our revenues during 2025.
In addition, effective collaboration between R&D and manufacturing teams located overseas, and other parts of the organization, may be hindered by distance, language and cultural differences, which may have a negative impact on product innovation and overall operational efficacy.
The current geopolitical climate and certain actions by the U.S. administration have created uncertainty regarding and fluctuations in trade policies, and our operations and business are subject to these uncertainties given the extent of our international operations and dependencies on international supply chains and access to international employees.
Changes in global trade policies, tariffs, export controls and other cross-border restrictions could materially adversely affect our revenues, operating results and ability to source materials and equipment.
Due to our international operations, we face heightened risks relating to trade policies and disputes that result in increased tariffs, trade barriers, retaliatory tariffs and other trade restrictions and protectionist measures, including export controls, licensing requirements and other regulatory restrictions on cross-border trade.
For example, the United States has recently imposed or proposed significant new tariffs on a large number of products and components imported into the U.S. and could propose additional tariffs or increases to those already in place.
It is unknown whether and to what extent these tariffs will remain in place or whether other new laws or regulations will be adopted.
While there is currently a trade pact with China, additional or new tariffs may be imposed reciprocally.
It is difficult to predict what further trade-related actions governments may take, including the extent of retaliatory actions, and our business may be negatively impacted if we are unable to quickly and effectively react to any such actions.
The overall tension in U.S.-China trade relations and the possibility of additional tariffs has created uncertainty in our industry and may negatively affect certain of our suppliers, as well as our ability to source components or raw materials.
If such materials and equipment do not fall under any exemption to the newly imposed tariffs or reciprocal tariffs, or are subject to other trade barriers or restrictions, such as China’s Regulation on Export Control of Dual-Use Items, it could materially impact our ability to obtain materials and equipment, or effective alternative sources of such items, on commercially reasonable terms or at all.
Due to the broad uncertainty regarding the timing, content and extent of global trade policy changes in the U.S. and internationally, we cannot accurately predict the full extent to which these changes will affect our business, financial condition and results of operations.

and 91 more.

Gone since FY2024

Further, the integration work may result in the delay in the scaling up of production or result in additional costs to our battery cells, particularly if we encounter issues with performance or if we are unable to customize products for certain of our customers.
We expect that certain customers may require several months or longer to complete technology qualification before accepting a product that is manufactured at high volume on the Gen2 lines, if at all.
In addition, even if we are able to achieve volume production for the existing uses of our batteries, we may face challenges relating to the scaling up of production for new uses of our batteries, including in the EV market.
In May 2024, we initiated a restructuring plan to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia and to accelerate manufacturing operations at Fab2 in Malaysia.
In 2024 we completed site acceptance testing (“SAT”) and began production of batteries on our Agility line, and completed factory acceptance testing (“FAT”), and SAT, for our High-Volume Manufacturing (“HVM”) line in Malaysia.
We expect that our current manufacturing lines will be sufficient to produce batteries in commercial scale, but not in high enough volumes to meet our expected customer demand.
Therefore, we anticipate bringing additional facilities online at Fab2 and further refining our approach to improve yields over time.
To the extent we continue to experience challenges with improving yields, we may have difficulty accepting additional customers due to capacity constraints, which could delay our growth.
If we are unable to successfully build and manage such additional manufacturing lines, or otherwise further refine our approach to improve yields, our business will be negatively impacted and could fail.
If these assumptions are incorrect and/or customer demand is lower than expected, we may fail to achieve our target revenue and profitability goals.
If we are able to overcome the challenges in designing and refining our manufacturing process, YBS will have multiple lines to produce commercial volumes of our lithium-ion batteries to meet our expected customer demands.
On October 29, 2024, we entered into an amendment to the YBS Agreement, which modified certain payment terms and responsibilities of the parties.
Pricing under the YBS Agreement is set on a cost-plus basis and we are subject to a minimum purchase commitment, which was mutually agreed to be reduced by the parties.
Regardless of the level of manufacturing services YBS provides to us under the Agreement, we are obligated to pay a certain threshold amount each month during the term of the YBS Agreement.
Our manufacturing arrangement with YBS creates risks due to our reliance on YBS for certain aspects of our manufacturing facility operations, including procurement and personnel.
In addition, the YBS Agreement exposes us to risks because it limits our control and oversight over the management of manufacturing processes, capacity constraints, delivery timetables, product quality assurance and costs.
In 2023 we acquired Routejade, a battery manufacturer in South Korea, and established a research and development center in Hyderabad, India, which supports the product and manufacturing teams in our other locations.
In the second half of 2024, we relocated all manufacturing activities to Malaysia and established a subsidiary in Shenzhen, China.
Additionally, relationships with customers and potential customers outside of the U.S. accounted for a significant portion of our revenues during 2024.
In addition, effective collaboration between R&D and manufacturing teams located overseas, and other parts of the organization, may be hindered by distance, language and cultural differences, which may have a negative impact on product innovation.
Given our international operations, we face heightened risks relating to trade policies and disputes that could result in increased tariffs, trade barriers, and other trade restrictions and protectionist measures, If the United States or other countries impose tariffs or other trade barriers, trade restrictions and protectionist measures, the costs of our products could increase, and the demand for our products could decrease.
Further, tariffs, trade restrictions and other protectionist measures could restrict our ability to source components or raw materials.
The current geopolitical climate has created uncertainty regarding and fluctuations in trade policies, and our operations and business are subject to these uncertainties given the extent of our international operations and dependencies on international supply chains and access to international employees.
We may not be able to source or establish supply relationships for necessary components and raw materials, or we may be required to pay costs for components and raw materials that are more expensive than anticipated, including as a result of trade barriers, trade sanctions, export restrictions, tariffs, embargoes or shortages and other general economic or political conditions, which could delay the introduction of our products and negatively impact our business.
We rely on third-party suppliers for components necessary to develop and manufacture our lithium-ion batteries, including key supplies, such as our anode, cathode, electrolyte, and separator materials.
If we are unable to enter into commercial agreements with these suppliers on beneficial terms, or these suppliers experience difficulties ramping up their supply of materials to meet our requirements, or delays in providing or developing the necessary materials, or cease providing or developing the necessary materials, we could experience delays in delivering on our timelines.
The unavailability of any equipment component could result in delays in constructing the manufacturing equipment, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our lithium-ion batteries production, as well as impact our capacity.
Moreover, significant increases in our production or product design changes by us may in the future require us to procure additional components in a short amount of time.
We have faced in the past, and may face in the future, suppliers who are unwilling or unable to sustainably meet our timelines or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources, which may further impact our timelines and costs.
While we believe that we will be able to secure additional or alternate sources for most of our components, there is no assurance that we will be able to do so quickly or at all.
Any inability or unwillingness of our suppliers to deliver necessary product components at timing, prices, quality and volumes that are acceptable to us could have a material impact on our business, prospects, financial condition, results of operations and cash flows.
Our business depends on the continued supply of certain materials for our products and we expect to incur significant costs related to procuring materials required to manufacture and assemble our batteries.
The cost of our batteries depends in part upon the prices and availability of raw materials such as lithium, silicon, graphite, nickel, cobalt, copper and/or other metals.
The prices for these materials fluctuate and their available supply has been, and may continue to be, unstable depending on market conditions and global demand for these materials, including as a result of increased global production of EVs and energy storage products, recent inflationary pressures, supply chain disruption caused by pandemics or other outbreaks, and war or other armed conflicts, including Russia’s invasion of Ukraine.
We have also experienced a need for expedited freight services associated with supply chain challenges, resulting in higher logistics costs.
Moreover, we may not be able to negotiate purchase agreements and delivery lead-times for such materials on advantageous terms.
In addition, several large battery companies are developing and manufacturing key supplies such as cathode material on their own, and as a result such supplies may be proprietary to these companies.
Reduced availability of these materials or substantial increases in the prices for such materials has increased, and may continue to increase, the cost of our components and consequently, the cost of our products.
There can be no assurance that we will be able to recoup increasing costs of our components, including as a result of recent inflationary pressures, by increasing prices, which in turn would increase our operating costs and negatively impact our prospects.
Any disruption in the supply of components or materials could temporarily disrupt production of our batteries until an alternative supplier is able to supply the required material.

and 87 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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