GCTS

GCT Semiconductor Holding, Inc.

NYSE · TECHNOLOGY · SEMICONDUCTORS & RELATED DEVICES

1.12

−0.13 −10.40%

USD · close Oct 30

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MKT CAP $103MP/E —DIV YIELD —FCF YIELD -39.47%REV TTM $4.1M −32.8%NET INCOME −$53.1MNET DEBT $24.9M52W 0.99 – 3.73SEC XBRL · TTM TO Invalid Date

How GCTS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

74%

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Length

−264

words, now 17,283

New in FY2025

Additionally, the risks and uncertainties described in this Annual Report on Form 10-K (the “Annual Report”) or in any document incorporated by reference herein or therein are not the only risks and uncertainties that we face.
Risks Related to Our Business We may encounter difficulties or challenges in satisfying our obligations under our 5G development agreements and in scaling and sustaining commercialization of our 5G chipsets, which may adversely affect our ability to generate revenue.
Under these agreements, we have agreed to design, develop and collaborate with each respective customer to test, qualify and commercialize our chipsets and also to help these customers commercialize products that use our chipsets, and these agreements impose various obligations on us to deliver results and meet certain product development milestones.
We have completed certain development milestones and commenced initial commercial shipments of our 5G chipsets to select customers.
As we continue to perform under these agreements and expand commercialization, we may receive revenues and fees, including milestone payments upon the achievement of specified business and development objectives and follow-on sales of our chipsets to ODM and OEM suppliers as products using our chipsets ramp in volume.
However, we may encounter difficulties and challenges in meeting our obligations under these development agreements and our anticipated timeline and volumes for product shipments, such as delays in testing and qualifying our products, technical issues in the development and manufacturing of our products, lack of resources and funding to support the development and commercialization efforts, the rise of competitive technologies and products that cause the customers or partners to shift focus and attention elsewhere, lack of funding to support development activities, lack of cooperation by the customers or partners and lack of success of our customers’ products in the marketplace.
If the 5G market develops more slowly than expected, or if we fail to accurately predict market requirements or demand for our 5G solutions, our financial performance could be adversely affected.
We have invested substantial time and resources in developing products that support the 5G wireless communications market, and we have entered into various agreements and arrangements with potential customers and wireless operators to develop wireless communications products to serve the growing needs of this market.
Although we have commenced initial commercialization of our 5G solutions, our future growth depends on our ability to accurately anticipate customer requirements, application use cases, pricing sensitivity, and end-market demand, and to scale adoption of our solutions over time.
In addition, if 5G networks are deployed to a lesser extent or more slowly than we currently anticipate, or if other competing semiconductor solutions achieve greater market acceptance or if operators do not migrate to 5G as expected, we may not realize the expected benefits from this investment, which could have an adverse effect on our business, financial condition and results of operations.
Our products target primarily certain segments of the wireless markets, including fixed wireless access (“FWA”), mobile broadband and machine-to-machine (“M2M”) applications, and if these markets do not develop or grow as quickly as expected, or if other products or technologies displace or reduce the demands of such market segments, our business operations and financial condition could be negatively impacted.
FWA provides wireless coverage where there is no fixed line or where fixed line service is poor, including rural areas, where broadband access is limited.
Each of these factors may adversely affect our ability to sell products into such markets.
Similarly, the mobile broadband market can be affected by demand for mobile devices, such as smartphones, wireless modems, and portable wireless devices, and a slowdown in demand for these applications may reduce our ability to sell our products.
Furthermore, the growth of M2M applications depends on various factors that drive demand, including decisions by businesses, institutions, and regulatory authorities to implement and permit the establishment of infrastructure or systems that utilize M2M wireless communications.
These and other factors could adversely affect our business operations and financial condition.
We depend on the commercial deployment of 4th generation (“4G”) long term evolution (“LTE”) and 5G communications equipment, products and services to grow our business, and our business may be harmed if wireless carriers delay adoption of 5G standards, or deploy technologies that are not supported by our solutions.
If the rate of deployment of new networks by wireless carriers is slower than we expect, this could reduce sales of our products and could cause original equipment manufacturers (“OEMs”) and original design manufacturers (“ODMs”) to hold excess inventory.
The worldwide commercial deployment and adoption of narrow band LTE variants, Cat M and Cat NB, are expected to expand further the markets for IoT devices.
If deployments of the Cat M or Cat NB standards are delayed or if competing standards for IoT devices become favored by wireless carriers, we may not be able to successfully increase sales of our Cat M and Cat NB products, which would harm our revenues and financial results.
In addition, our OEM/ODM customers may experience difficulties, delays and other challenges in the transition from 4G to 5G markets, including loss of business opportunities because wireless operators decide to switch suppliers during this transition, which may cause such OEM/ODM customers to reduce demand from us.
If the transition from 4G to 5G market encounters disruption or delay, or if the roll off of our 4G business occurs faster than anticipated and /or the loss of our 4G business is not immediately replaced by our 5G sales, it may have an adverse effect on our operating result and financial condition.
The success of our new products will depend on accurate forecasts of long-term market demand, customer and consumer requirements and future technological developments, as well as a variety of specific implementation factors, including: • accurate prediction of the size and growth of the 4G and 5G markets; • accurate prediction of the growth of the IoT markets and the timing of commercial availability of 4G and 5G networks; • accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands and preferences; • timely and efficient completion of product design and transfer to manufacturing, assembly and test, and securing sufficient manufacturing capacity to allow us to continue to timely and efficiently deliver products to our customers; • market acceptance, adequate consumer demand and commercial production of the products in which our mobile and wireless broadband semiconductor solutions are incorporated; • the quality, performance and reliability of the product as compared to competing products and technologies; • effective marketing, sales and service; and • the ability to obtain licenses to use third-party technology to support the development of our products.
For the last several years, we have dedicated a large portion of our operating expenses to our development of 5G products, which we do not expect will result in significant product revenues before the second half of 2026.
For the year ended December 31, 2025, four customers accounted for 74% of our total revenues and for year ended December 31, 2024, four customers accounted for 73% of our total revenues.
The foundries may allocate capacity to the production of other companies’ products while reducing deliveries to us on short notice or without notice.
As we continue to grow our business, we intend to negotiate long-term supply agreements with our main foundries in order to secure capacity commitments.
These and other related factors could impair our ability to meet our customers’ needs and have an adverse effect on our operating results, including our ability to reduce net loss and achieve profitability.
See “Risk Related to Our Finances- We have a history of losses, and we may not achieve or sustain profitability in the future, on a quarterly or annual basis.” If our foundry vendors do not achieve satisfactory yields or quality, our reputation, customer relationships and financial performance could be harmed.
For the years ended December 31, 2025 and 2024, we had a net loss of $43.4 million and $12.4 million, respectively, and used cash in operating activities of $30.7 million and $31.0 million, respectively.
We had short-term debt in the amount of $56.6 million and $37.6 million, including borrowings as of December 31, 2025 and 2024, respectively.
As of December 31, 2025 and 2024, we had an accumulated deficit of $605.4 million and $562.0 million, respectively and negative working capital of approximately $67.7 million and $43.3 million.
Accordingly, if we do not generate a sufficient level of revenue or become profitable, we will be required to seek other sources of funding, such as issuance of equity or debt securities to raise capital.
We may be unable to raise additional capital on favorable terms, if at all, which would harm our ability to fund our operations and may force us to cease operations.
We have utilized, and may continue to utilize, equity financing transactions, including at-the-market offerings and registered direct offerings, to raise capital.
While these financing alternatives provide us with additional flexibility, our ability to raise capital through such transactions depends on market conditions, investor demand, and the trading price and liquidity of our common stock, and such transactions may result in significant dilution to existing stockholders.
In addition, we rely substantially on investors, banks, lenders and partners in South Korea to provide loans and fundings for our operations, and our ability to secure such funding may be affected by the economic, banking and capital market conditions and trends in South Korea.
While we have entered into equity financing arrangements, including an equity line of credit and other equity offering structures, our ability to raise capital under these arrangements may be constrained by trading volume, price volatility, contractual limitations, or market conditions.
As of December 31, 2025, we have borrowings with a total principal amount of $62.6 million, of which $56.6 million is contractually due within 12 months from the reporting date.
As of December 31, 2025, we hold 34 US patents, 34 Korean patents, 7 Taiwanese patents, 5 Japanese patents, 4 Chinese patents, and 2 patents issued in other countries.

and 35 more.

Gone since FY2024

Additionally, the risks and uncertainties described in this Annual Report on Form 10-K or in any document incorporated by reference herein or therein are not the only risks and uncertainties that we face.
Risks Related to Our Business We may encounter difficulties or challenges in satisfying our obligations under our 5G development agreements and may not be able to meet the anticipated timeline for commencing shipment of 5G chipsets, which may adversely affect our ability to generate revenue.
Under these agreements, we have agreed to design, develop and collaborate with each respective customers to test, qualify and commercialize our chipsets and also to help these customers commercialize products that use our chipsets, and these agreements impose various obligations on us to deliver results and meet certain product development milestones.
In the event that we complete the performance of our obligations and are able to commercialize and sell our products, we may receive significant revenues and fees as a result of such agreements, including but are not limited to, milestone payments upon the achievement of specified business and development objectives as well as follow-on sales of our chipsets to ODM/OEM suppliers when products (using our chipset) related to these development agreements begins to ramp.
In addition, we have previously announced that we expect to commence volume shipment of 5G chipsets in the first half of 2025, which will enable us to generate significant revenue and improve our financial performance.
However, we may encounter difficulties and challenges in meeting our obligations under these development agreements and our anticipated timeline for product shipments, such as delays in testing and qualifying our products, technical issues in the development and manufacturing products, lack of resources and funding to support the development efforts, the rise of competitive technologies and products that cause the customers or partners to shift focus and attention elsewhere, lack of funding to support development activities and lack of cooperation by the customers or partners.
If the 5th generation (“5G”) market does not develop or develops more slowly than expected, or if we fail to accurately predict market requirements or market demand for 5G solutions, our financial performance will be adversely affected.
We have invested substantial time and resources in developing products that support the 5G wireless communications markets, and we have entered into various agreements and arrangements with potential customers and wireless operators to develop wireless communications products to serve the growing needs of this market.
If we fail to accurately predict market requirements or market demand for 5G, or if our solutions are not successfully developed or adopted by our customers, then our ability to generate revenue will be harmed.
In addition, if the 5G networks are deployed to a lesser extent or more slowly than we currently anticipate, or if other competing semiconductor solutions achieve greater market acceptance or operators do not migrate to 5G as expected, we may not realize the expected benefits from this investment, which will have an adverse effect on our business, financial condition and results of operations.
Our products focus on certain segments of 5G wireless markets, including fixed wireless access (“FWA”), mobile broadband and machine-to-machine (“M2M”) applications, and if these markets do not develop or grow as quickly as expected, or if other products or technologies displace or reduce the demands of such market segments, our business operations and financial conditions will be negatively impacted.
FWA provides wireless coverage where there is no fixed line or a poor fixed line service, including rural areas, where broadband access is limited.
Each of these factors may adversely affect our ability to sell products into such market.
Similarly, the mobile broadband market can be affected by the demand for mobile devices, such as smartphones, wireless modems, and portable wireless devices, and a slowing demand for these applications may reduce our ability to sell our products.
Furthermore, the growth of M2M applications depends on various factors that drive demand, including decisions by businesses, institutions, and regulatory authorities to implement and permit establishment of infrastructures or systems that utilize M2M wireless communications.
These and other factors could adversely affect our business operations and financial conditions.
We depend on the commercial deployment of 4th generation (“4G”) long term evolution (“LTE”) and 5G communications equipment, products and services to grow our business, and our business may be harmed if wireless carriers delay in the adoption of 5G standards, or if they deploy technologies that are not supported by our solutions.
If the rate of deployment of new networks by wireless carriers is slower than we expect, this will reduce the sales of our products and could cause original equipment manufacturers (“OEMs”) and original design manufacturers (“ODMs”) to hold excess inventory.
The worldwide commercial deployment and adoption of the narrow band LTE variants, Cat M and Cat NB, are expected to expand further the markets for Internet of Things devices.
If deployments of the Cat M or Cat NB standards are delayed or if competing standards for Internet of Things devices become favored by wireless carriers, we may not be able to successfully increase sales of our Cat M and Cat NB products, which would harm our revenues and financial results.
The success of our new products will depend on accurate forecasts of long-term market demand, customer and consumer requirements and future technological developments, as well as a variety of specific implementation factors, including: • accurate prediction of the size and growth of the 4G and 5G markets; • accurate prediction of the growth of the Internet of Things markets and the timing of commercial availability of 4G and 5G networks; • accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands and preferences; • timely and efficient completion of product design and transfer to manufacturing, assembly and test, and securing sufficient manufacturing capacity to allow us to continue to timely and efficiently deliver products to our customers; • market acceptance, adequate consumer demand and commercial production of the products in which our mobile and wireless broadband semiconductor solutions are incorporated; • the quality, performance and reliability of the product as compared to competing products and technologies; • effective marketing, sales and service; and • the ability to obtain licenses to use third-party technology to support the development of our products.
For the last several years, we have dedicated a large portion of our operating expenses to our development of 5G products, which we do not expect will result in significant product revenues before the second half of 2025.
For the year ended December 31, 2024, four customers accounted for 74% of our total revenues and for year ended December 31, 2023, two customers accounted for 38% of our total revenues.
The foundries may allocate capacity to the production of other companies’ products while reducing deliveries to us on short or without notice.
As we continue to grow our business, we intend to negotiate long-term supply agreements with our main foundries in order to secure capacity commitment.
These and other related factors could impair our ability to meet our customers’ needs and have an adverse effect on our operating results.
If our foundry vendors do not achieve satisfactory yields or quality, our reputation, customer relationships and financial performance could be harmed.
For the years ended December 31, 2024 and 2023, we had a net loss of $12.4 million and $22.5 million, respectively, and used cash in operating activities of $31.0 million and $8.8 million, respectively.
We had short-term debt in the amount of $37.6 million and $72.3 million, including convertible promissory notes and borrowings as of December 31, 2024 and 2023, respectively.
As of December 31, 2024 and 2023, we had an accumulated deficit of $562.0 million and $549.7 million, respectively and negative working capital of approximately $43.3 million and $101.8 million.
Accordingly, if we do not generate sufficient level of revenue or become profitable, we will be required to seek other sources of funding, such as issuance of equity or debt securities to raise capital.
We may be unable to raise additional capital on favorable terms, if at all, which would harm our ability to fund our operations and may force us to cease operation.
In addition, we rely substantially on investors, banks, lenders and partners in South Korea to provide loans and fundings to our operations, and our ability to secure such funding may be affected by the economic, banking and capital market conditions and trends in South Korea.
While we currently have an equity line of credit (“ELOC”) that allows us to issue and sell up to $50 million of shares of common stock, our ability to raise capital under the ELOC has been limited due to the lower trading volume and volatility of trading price of our common stock.
As of December 31, 2024, we have outstanding convertible promissory notes and borrowings with a total principal amount of $42.6 million, of which $37.6 million is contractually due within 12 months from the reporting date.
As of December 31, 2024, we hold 33 US patents, 35 Korean patents, 9 Taiwanese patents, 2 Japanese patents, 2 Chinese patents, and 5 patents issued in other countries.
During the years ended December 31, 2024 and 2023, we recognized $4.4 million and $5.1 million, respectively, related to these NRE contracts and as a service revenue.
We cannot predict the extent to which a trading market will develop or how liquid that market might become.
Our major shareholder exerts significant influence over our business and affairs.
One of our major shareholders of Anapass, Inc.

and 41 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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