Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 – Income Taxes

The table below sets forth our income before taxes for the twelve months ended December 31:

Income (loss) before income taxes	2025		2024			2023
U.S.	$	24,306	$	(46,195	)	$	172,781
Foreign		59,653		108,877			105,152
Total	$	83,959	$	62,682		$	277,933

The table below sets forth the components of our income tax provision (benefit) for the twelve months ended December 31:

	2025			2024			2023
Current tax provision (benefit)
Federal	$	2,751		$	1,684		$	27,028
Foreign		16,420			41,052			34,408
State		(17	)		123			54
		19,154			42,859			61,490
Deferred tax provision (benefit)
Federal		1,439			(7,862	)		(8,273	)
Foreign		(2,449	)		(13,867	)		(10,463	)
State		(127	)		-			(5	)
		(1,137	)		(21,729	)		(18,741	)
Tax (benefit) provision for unrecognized tax benefits		(3,228	)		(9,290	)		4,536
Total income tax provision	$	14,789		$	11,840		$	47,285

Effective Tax Rate Reconciliation

The table below sets forth a reconciliation between the effective tax rate and the statutory tax rates for the twelve months ended December 31:

	2025						2024						2023
	Amount			Percent*			Amount			Percent*			Amount			Percent*
US federal statutory tax rate	$	17,632			21.0		$	13,163			21.0		$	58,366			21.0
State and local income taxes, net of federal income tax effect**		(144	)		(0.2	)		123			0.2			54			-
Foreign tax effects
United Kingdom
Statutory tax rate difference between United Kingdom and United States		303			0.4			815			1.3			628			0.2
Tax account adjustment		-			-			1,907			3.0			-			-
Other		523			0.6			631			1.0			752			0.3
China																	-
Statutory tax rate difference between China and United States		1,002			1.2			2,202			3.5			1,729			0.6
Tax holidays		(2,689	)		(3.2	)		(1,490	)		(2.4	)		(1,533	)		(0.6	)
Research and development tax incentives		(4,400	)		(5.2	)		(3,148	)		(5.0	)		(4,487	)		(1.6	)
Changes in valuation allowances		2,060			2.5			-			-			-			-
Withholding taxes		1,598			1.9			(3,479	)		(5.6	)		11,121			4.0
Other		163			0.2			(69	)		(0.1	)		183			0.1
Taiwan
Statutory tax rate difference between Taiwan and United States		(285	)		(0.3	)		(512	)		(0.8	)		(127	)		-
Changes in valuation allowances		(1,729	)		(2.1	)		(3,067	)		(4.9	)		1,864			0.7
Withholding taxes		(254	)		(0.3	)		1,092			1.7			(5,369	)		(1.9	)
Other		(672	)		(0.8	)		404			0.6			(1,520	)		(0.5	)
Germany
Statutory tax rate difference between Germany and United States		183			0.2			2,709			4.3			663			0.2
Other		(435	)		(0.5	)		1,545			2.5			413			0.1
Hong Kong
Statutory tax rate difference between Hong Kong and United States		283			0.3			325			0.5			(36	)		-
Other		(803	)		(1.0	)		1,045			1.7			(535	)		(0.2	)
Luxembourg
Statutory tax rate difference between Luxembourg and United States		571			0.7			430			0.7			(295	)		(0.1	)
Losses not benefitted		672			0.8			1,826			3.0			-			-
Other		-			-			-			-			13			-
Singapore
Statutory tax rate difference between Singapore and United States		272			0.3			-			-			-			-
Changes in valuation allowances		1,509			1.8			-			-			-			-
Other		387			0.5			-			-			-			-
Other foreign jurisdictions		108			0.1			1,176			1.9			102			-
Effect of cross-border tax laws
Global intangible low-taxed income		3,826			4.6			4,426			7.1			(379	)		(0.1	)
Foreign derived intangible income		(1,362	)		(1.7	)		-			-			(14,617	)		(5.3	)
Other		322			0.3			(130	)		(0.2	)		(2,159	)		(0.8	)
Tax credits
Research and development tax credits		(956	)		(1.1	)		(1,400	)		(2.2	)		(1,200	)		(0.4	)
Changes in valuation allowances		(792	)		(0.9	)		-			-			-			-
Nontaxable or nondeductible items
Share-based payment awards		2,212			2.6			953			1.5			227			0.1
Other		239			0.3			(347	)		(0.6	)		(1,109	)		(0.4	)
Tax account adjustment		(1,327	)		(1.6	)		-			-			-			-
Changes in unrecognized tax benefits		(3,228	)		(3.8	)		(9,290	)		(14.8	)		4,536			1.6
Effective tax rate	$	14,789			17.6		$	11,840			18.9		$	47,285			17.0

* The sum of the amounts in the table may not equal the effective rate due to rounding.

** State taxes in California and Texas made up the majority (greater than 50% of the tax effect in this category).

Income taxes paid, net of refunds

Jurisdiction	2025		2024		2023
Federal	$	-	$	-	$	39,000
State		4		-		36
Foreign
Taiwan		8,467		10,541		29,471
China		7,341		6,961		11,578
United Kingdom		2,692		640		12,224
Germany		5,163		2,275		(598	)
Hong Kong		-		1,013		5,908
Other jurisdictions		488		103		49
Total	$	24,157	$	21,534	$	97,668

Uncertain Tax Positions

In accordance with the provisions related to accounting for uncertainty in income taxes, we recognize the benefit of a tax position if the position is “more likely than not” to prevail upon examination by the relevant tax authority. The table below sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	2025			2024			2023
Balance at January 1,	$	44,391		$	48,838		$	48,072
Additions based on tax positions related to the    current year		2,838			4,955			11,370
Additions for prior year tax positions		10,677			6,900			110
Reductions for prior year tax positions		(9,519	)		(16,302	)		(10,714	)
Balance at December 31,	$	48,387		$	44,391		$	48,838

If the $48.4 million of unrecognized tax benefits as of December 31, 2025, is recognized, approximately $46.3 million would affect the effective tax rate. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of settlements of ongoing audits or competent authority proceedings. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2022. We are no longer subject to China income tax examinations by tax authorities for tax years before 2014. With respect to state and local jurisdictions and countries outside of the U.S., with limited exceptions, we are no longer subject to income tax audits for years before 2019. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties, if any, have been provided for in our reserve for any adjustments that may result from future tax audits. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. We had an immaterial amount of accrued interest and penalties at December 31, 2025, 2024, and 2023.

Deferred Taxes

The table below sets forth our deferred tax assets and liabilities as of December 31:

	2025			2024
Deferred tax assets
Inventory cost	$	32,895		$	30,128
Accrued expenses and accounts receivable		6,553			6,511
Research and development tax credits		12,864			11,769
Net operating loss carryforwards		46,784			47,386
Lease obligations		4,236			3,371
Accrued pension		227			1,882
Plant, equipment and intangible assets		644			-
Share based compensation and others		21,825			11,295
		126,028			112,342
Valuation allowances		(23,876	)		(22,101	)
Total deferred tax assets, non-current		102,152			90,241
Deferred tax liabilities
Plant, equipment and intangible assets		-			(4,773	)
Right of use assets		(7,292	)		(6,625	)
Outside basis differences and others		(12,940	)		(14,077	)
Total deferred tax liabilities, non-current		(20,232	)		(25,475	)
Net deferred tax assets	$	81,920		$	64,766

ASU No. 2013-11 provides that an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The $53.1 million net deferred tax asset presented in the balance sheet as of December 31, 2025, is net of $28.8 million of unrecognized tax benefits. The $81.9 million and $64.8 million net deferred tax asset presented above for December 31, 2025 and 2024, respectively, is prior to the net balance sheet presentation required by ASU 2013-11.

At December 31, 2025, we had $1.6 million federal research credit carryforward and approximately $11.2 million of state tax credit and research credit carryforwards which are available to offset future income tax liabilities. The state tax credit carryforwards began expiring in 2025. Consistent with prior years, we determined that it is more likely than not that our state research credit carryforwards will expire before they are utilized. The valuation allowances recorded against the related deferred tax assets totaled $11.8 million and $11.3 million as of December 31, 2025 and 2024, respectively

At December 31, 2025, we had state net operating loss (“NOL”) carryforwards of approximately $1.2 million, and foreign NOL carryforwards of $274.0 million which are available to offset future taxable income. The state NOL carryforward began to expire in 2025. We determined that it is more likely than not that the state NOL carryforwards will expire before they are fully utilized and recorded a full valuation allowance on the related deferred tax assets. The foreign NOL carryforwards began expiring in 2025. We determined that it is more likely than not that a portion of the foreign NOL carryforwards will expire before they are fully utilized. The valuation allowances recorded against the related deferred tax assets totaled $11.6 million and $10.5 million as of December 31, 2025 and 2024, respectively.

Several jurisdictions in which we operate have either enacted, or announced plans to enact, legislation consistent with the Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”) which introduced a global minimum effective tax rate of 15% applied on a jurisdiction-by-jurisdiction basis. We have analyzed enacted legislation, and it did not have a material impact on our consolidated financial statements for 2025; however, we continue to monitor future tax legislative changes in the jurisdictions in which we operate in order to evaluate the impacts to the consolidated financial statements.

Supplemental Information

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European and Asian subsidiaries. The impact of these exceptions on income tax expense is reflected within the withholding taxes line items of the effective tax rate reconciliation for the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, we had undistributed earnings from non-U.S. operations of approximately $1.3 billion (including approximately $112.7 million of restricted earnings, which are not available for dividends). Undistributed earnings of our China subsidiaries comprise $449.6 million of this total. Additional Chinese withholding taxes of approximately $49.2 million would be required should the $449.6 million of such earnings be distributed out of China as dividends.

Exclusive of one-time deferred tax charges of $0.9 million and $1.6 million for the twelve months ended December 31, 2025 and 2024, the impact of tax holidays decreased our tax expense by approximately $1.3 million, $1.1 million, and $0.7 million for the twelve months ended December 31, 2025, 2024, and 2023, respectively. There were no one-time deferred tax charges for the twelve months

ended December 31, 2023. Exclusive of the deferred tax charges, the benefit of the tax holidays on basic and diluted earnings per share was $0.03, $0.02, and $0.02 for the twelve months ended December 31, 2025, 2024, and 2023, respectively.