A clip from EFNT's 10Q..........
We obtain certain parts, components and equipment used in our products from sole sources of supply. For example, we obtain certain semiconductor chipsets from Alcatel Microelectronics, Motorola, Inc., Analog Devices, Inc., Texas Instruments Incorporated, and Conexant Systems, Inc. We also rely on Texas Instruments Incorporated, Samsung Semiconductor Inc., and VLSI Technology, Inc. to manufacture our application specific integrated circuits.
Although we have agreements with many of these component providers, these agreements do not require the vendors to meet our supply demands. In recent periods we have experienced difficulties in obtaining adequate supplies of certain components, particularly chipsets from Alcatel and Motorola. In addition, certain standard components, such as flash memory, have been in short supply and, as a result, have not always been available to us in our desired quantities and time frames and/or have been more expensive than anticipated.
Although these difficulties have not resulted in revenue shortfalls in prior periods, they have lead to higher costs and to extended delivery times for customer orders. In future periods, we could continue to experience component supply difficulties which could continue to result in higher than anticipated costs, extended delivery cycles and, if sufficiently severe, could cause our revenues to fail to meet analyst expectations. Moreover, to the extent that we experience component supply difficulties and our competitors do not, our customers may elect to move their business to a competitor in order to ensure timely delivery. Recapturing any business lost due to delayed deliveries may be difficult or impossible. Any of these outcomes could harm our business.
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