Super Micro Computer (SMCI) 10-K risk factor changes: FY2022 vs FY2021

- The effects of the COVID-19 pandemic [added: and other macroeconomic factors exacerbated by the COVID-19 pandemic] adversely affected our business operations, financial condition and results of operations, and there are no assurances adverse effects will not continue.

- As we increasingly target larger customers and larger sales opportunities, our customer base may become more concentrated, our cost of sales may increase, our margins may be [removed: lower] [added: lower, our borrowings may be higher with effects on our cash flow, we are exposed to inventory risks,] and our sales may be less predictable.

[removed: - Increases] [added: Increases] in average selling prices for our [removed: server] solutions have historically significantly contributed to increases in net sales in some of the periods covered by this Annual Report.

[removed: - We depend upon the development of new products and enhancements to our existing products, and if] [added: If] we fail to predict or respond to emerging technological trends [removed: and] [added: &] our customers’ changing needs, our operating results and market share may suffer.

- If we are unable to maintain [removed: and further develop] effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decrease.

- Resolution of claims that we have violated or may violate the intellectual property rights of others could require us to indemnify [removed: others,] [added: others] or pay significant royalties to third parties.

- We incurred significant expenses related to the matters that led to the delay in the filing of our 2017 10-K and may incur [added: additional] expenses related to [removed: any] resulting litigation.

- Our [removed: research and development] [added: R&D] expenditures, as a percentage of our net sales, are considerably higher than many of our competitors.

- The concentration of our capital stock ownership with insiders [removed: will] likely [removed: limit] [added: limits] your ability to influence corporate matters.

The effects of the COVID-19 pandemic [added: and other macroeconomic factors exacerbated by the COVID-19 pandemic] adversely affected our business operations, financial condition and results of operations, and there are no assurances adverse effects will not continue.

During the [added: COVID-19] pandemic, we continued our manufacturing operations and customers’ orders processing and services, although our productivity at times [removed: slowed] [added: slowed,] especially in the United States and in the Netherlands.

The [added: COVID-19] pandemic also [added: adversely] impacted shipments to our customers [removed: and (to] [added: and, to] a lesser [removed: extent)] [added: extent,] our ability to provide services and support to our customers.

We have invested capital to procure key components [added: (such as CPUs, memory, SSDs and GPUs)] so we can maintain reasonable lead times to fulfill orders for our customers.

[removed: While there] [added: There] are positive signs with [added: the expiration of various COVID-19 mandates,] vaccine availability and [removed: reductions in infection rates, particularly in] the [removed: United States,] [added: rollout of boosters; however, with] the possibility of [added: the emergence of other] new virus [removed: strains,] [added: strains and] vaccine supply constraints, [removed: and high infection rates, particularly in other places around the world makes us] [added: we are] unable to predict the ultimate extent to which the global COVID-19 pandemic [added: (or other potential infectious diseases, such as the currently spreading monkeypox virus)] may further impact our business operations, financial performance and results of operations.

The extent to which the effects of the COVID-19 pandemic [added: and other macroeconomic factors exacerbated by the COVID-19 pandemic] will continue to impact our business, operations, financial condition and results of operations will depend on numerous evolving factors that we may not be able to control or predict, including:

- [removed: the length of heightened unemployment and] [added: The global] economic recession [added: and/or inflation] pressures;

- The occurrence of global pandemics, including COVID-19, and other events that impact the global economy or one or more sectors of the global [removed: economy;][added: economy, such as the global economic downturn and recent events in eastern Europe;]

- Fluctuations in availability and costs associated with key components, particularly semiconductors, memory, storage solutions, and other materials needed to satisfy customer requirements, especially during a period of global market disruption, and, in particular, the impact of the extended duration of [added: both] the COVID-19 [removed: pandemic] [added: pandemic, the global economic downturn and recent events in eastern Europe] on our supply chain and the supply chain of our suppliers;

- Geopolitical tensions, including trade wars, tariffs and/or sanctions in our geographic markets; [added: and]

- Impact of regulatory changes on our cost of doing [removed: business; and][added: business.]

As a result of a variety of factors discussed in this Annual Report, our revenue and margins for a particular quarter are difficult to predict, especially in light of a challenging and inconsistent global macroeconomic environment, the significant impacts of the COVID-19 pandemic, [added: the global economic downturn and recent events in eastern Europe,] steps we are taking in response [removed: to the COVID-19 pandemic,] [added: thereto,] increased competition, the effects of the ongoing trade disputes between the United States and China and related market uncertainty.

As we increasingly target larger customers and larger sales opportunities, our customer base may become more concentrated, our cost of sales may increase, our margins may be [removed: lower] [added: lower, our borrowings to fund purchases of key components may be higher, we are exposed to inventory risks] and our sales may be less predictable.

No single customer accounted for 10% or more of net sales in [added: any of] fiscal years [removed: 2021, 2020] [added: 2022, 2021] or [removed: 2019.][added: 2020.]

If our largest customers do not purchase our products, or we are unable to supply such customers with products, at the levels, in the timeframes or within the geographies that we expect, including as a result of the impact of [removed: COVID-19] [added: COVID-19, the global economic downturn or recent events in eastern Europe] on their or our businesses, our ability to maintain or grow our net sales will be adversely affected.

Our sales cycle may become [removed: longer] [added: longer,] and more expensive, as larger customers typically spend more time negotiating contracts than smaller customers.

[removed: Larger] [added: Furthermore, larger] customers also often seek greater levels of support in the implementation and use of our server solutions.

[removed: Before the COVID-19 pandemic, we provided] [added: We generally provide] forward looking financial guidance when we [removed: announced] [added: announce] our financial results for the prior quarter.

If issued, we undertake no obligation to update any [removed: forward looking] [added: forward-looking] guidance at any time.

There are a number of reasons why we have [added: at times] failed to meet guidance in the past and might fail again in the future, including, but not limited to, the factors described in these Risk Factors.

[removed: Increases] [added: - Increases] in average selling prices for our [removed: server solutions] [added: Total IT Solutions] have historically significantly contributed to increases in net sales in some of the periods [removed: covered by this Annual Report.][added: covered.]

Recently, the market for key components has become more volatile during the COVID-19 [removed: pandemic.][added: pandemic, the global economic downturn and recent events in eastern Europe.]

As with most [removed: electronics based] [added: electronics-based] products, average selling prices of server and storage products are typically highest at the time of introduction of new products, which utilize the latest technology, and tend to decrease over time as such products become commoditized and are ultimately replaced by even newer generation products.

We cannot predict the timing or amount of any decline in the average selling prices of our server solutions that we may experience in the future, which may be exacerbated by continued effects from the COVID-19 [removed: pandemic.][added: pandemic, the global economic downturn and recent events in eastern Europe.]

If we are unable to [added: either (i)] decrease the average per unit manufacturing costs faster than the rate at which average selling prices [removed: continue to decline,] [added: decline or (ii) increase the average selling prices at the same pace at which average per unit manufacturing costs increase,] our business, financial condition and results of operations will be harmed.

While we have increased our purchases of certain critical materials and core components in response to the supply and demand uncertainties associated with the COVID-19 pandemic, [added: the global economic downturn and recent events in eastern Europe,] we do not have long-term supply contracts for all critical materials and core components, but instead often purchase these materials and components on a purchase order basis.

In addition, if our business growth renders it necessary or appropriate to transition to longer term contracts with materials and core component suppliers, our costs may [removed: increase] [added: increase,] and our gross margins could correspondingly decrease.

Our industry has experienced materials shortages and delivery delays in the past, including as a result of the negative impact of [removed: COVID-19] [added: COVID-19, the global economic downturn and recent events in eastern Europe] on global supply chains, and we may experience shortages or delays of critical materials or increased logistics costs to obtain necessary materials in a timely manner in the future.

The COVID-19 pandemic [added: and other macroeconomic factors exacerbated by the COVID-19 pandemic] has resulted in widely reported shortages of semiconductors.

There are uncertainties and risks related to COVID-19, [added: the global economic downturn and recent events in eastern Europe,] for which we have taken certain actions including our increased purchase of certain critical materials and components as a part of our [removed: pandemic] response planning.

Specifically, we sought to actively manage our supply chain for potential risks of shortage by first building inventories of critical components required for our motherboards and other system printed circuit boards [removed: in response] [added: and continued] to [removed: the early outbreak] [added: add to our inventories] of [removed: COVID-19 in China.][added: key components such as CPUs, memory, SSDs and to a lesser extent GPUs such that customer orders can be fulfilled as they are received.]

- Recent events in eastern Europe and the Taiwan Strait present challenges and risks to us, and no assurances can be given that current or future developments would not have a material adverse effect on our business, results of operations and financial condition.

- Adverse economic conditions may harm our business.

SMCI | 2022 Form 10-K | 10

- We depend upon the development of new products & enhancements to existing products.

SMCI | 2022 Form 10-K | 11

Logistics has continued to be a challenge during the COVID-19 pandemic as the global transportation industry, and particularly ocean transportation, has been constrained by shortages of containers, labor, truckers and crowded ports.

As a result, shipping by air has been used more frequently despite that it is more expensive and there are fewer flights during the COVID-19 pandemic than there were previously.

We have experienced increased costs in freight.

In addition, we also experienced increased direct labor costs as we incentivized our employees to continue to work and assist us in serving our customers, many of whom are in critical industries.

We expect both of these trends to continue until the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic end.

- Factors affecting the availability of human capital, including either shortage of labor and/or heightened unemployment;

SMCI | 2022 Form 10-K | 12

Recent events in eastern Europe and the Taiwan strait present challenges and risks to us, and no assurances can be given that current or future developments will not have a material adverse effect on our business, results of operations and financial condition.

The crisis in eastern Europe continues to be a challenge to global companies, including us, which have customers in the impacted regions.

The U.S. and other global governments have placed restrictions on how companies may transact with businesses in these regions, particularly Russia, Belarus and restricted areas in Ukraine.

Because of these restrictions and the growing logistical and other challenges, we have paused sales to Russia, Belarus and the restricted areas in Ukraine.

This decision, which is in line with the approach of other global technology companies, helps us comply with our obligations under the various requirements in the U.S. and around the world.

While it is difficult to estimate the impact on our business and financial position of both (i) our pause in sales to Russia, Belarus and the restricted areas in Ukraine and the current or future sanctions and (ii) tensions in the Taiwan strait, our pause in sales and these sanctions and continuing rising tensions could have adverse impacts on us in future periods, although they have not been material to date.

For example, with respect to Russia, Belarus and the restricted areas in Ukraine, we do not make a material portion of our sales or acquire a material portion of our parts or components directly from impacted regions; however, our suppliers and their suppliers may acquire raw materials for parts or components from the impacted regions.

Supply disruptions may make it harder for them to find favorable pricing and reliable sources for materials they need, which may put upward pressure on their costs and increasing the risks that our costs may increase and that it may be more difficult, or we may be unable, to acquire materials needed.

In addition, the crises may further exacerbate inflationary pressures that have indirect impacts on our business, such as further increasing our logistics costs from rising fuel prices and/or continuing to increase our compensation expense.

In addition, no assurances can be given that additional developments in the impacted regions, and responses thereto from the U.S. and other global governments, would not have a material adverse effect on our business, results of operations and financial condition.

Adverse economic conditions may harm our business.

Our business depends on the overall demand for accelerated compute platforms.

Global financial developments and downturns seemingly unrelated to us or our industry may harm us.

If economic conditions, including inflation, increased interest rates, economic output and currency exchange rates, in these markets and other key potential markets for our Total IT Solutions remain uncertain or further deteriorate, including as a result of the downturn in the global economy, the Russia-Ukraine conflict and related sanctions and trade restrictions, the effects of the COVID-19 pandemic or other reasons, customers may delay or reduce their spending.

General economic weakness may also lead to longer collection cycles for payments due from our customers, an increase in customer bad debt, and impairment of investments.

Furthermore, the continued weakness and uncertainty in worldwide credit markets may harm our customers’ available budgetary spending, which could lead to cancellations or delays in planned purchases of our Total IT Solutions.

If our customers or potential customers experience economic hardship, this could reduce the demand for our Total IT Solutions, delay and lengthen sales cycles, lower prices for our Total IT Solutions, and lead to slower growth or even a decline in our revenues, operating results and cash flows.

Inflation in the U.S. has recently increased at a rate not seen in several decades, which may result in decreased demand for our Total IT Solutions, increases in our operating costs including our labor costs, constrained credit and liquidity, reduced spending and volatility in financial markets.

Inflation may continue to increase, both in the U.S. and globally, which could increase our operating costs and reduce demand for our Total IT Solutions.

The Federal Reserve has significantly raised, and may again raise, interest rates in response to concerns over inflation risk, which may increase our own borrowing costs and/or reduce our clients’ access to debt financing, reduce technology expenditures and demand for our Total IT Solutions.

SMCI | 2022 Form 10-K | 13

SMCI | 2022 Form 10-K | 14

Such larger orders may require greater commitments of working capital, which may require increased borrowings under our credit facilities to fund purchases of key components (such as CPUs, memory, SSDs and GPUs) necessary for such orders, which could adversely affect our cash flow and expose us to the risk of holding excess and obsolete inventory, if there are delays or cancellations.

SMCI | 2022 Form 10-K | 15

SMCI | 2022 Form 10-K | 16

We have taken steps to enhance the security of our network and computer systems and we provide regular updates to our Board at our quarterly meetings with respect to cyber-security matters.

SMCI | 2022 Form 10-K | 17

We have also entered into a tripartite agreement with Ablecom and Compuware related to a three-way purchase of land in proximity to our campus in Bade, Taiwan.

- The matters leading to the delay in the filing of our 2017 10-K and adverse publicity and potential concerns from our customers have had and could continue to have an adverse effect on our business and financial condition.

Travel restrictions and logistics challenges impacted, and continue to have an impact on, our supply chain.

- difficulty in adding new customers due to inability to gain direct access;

- Costs associated with remediation and legal proceedings related to restatement of our financial statements in prior years.

Since that time we have continued to add to our inventories of key components such as CPUs, memory, SSDs and to a lesser extent GPUs such that customer orders can be fulfilled as they are received.

research and development efforts.

notice, without penalty.

If we fail to manage these additional

While in the past we have had significant growth in headcount, particularly during periods of rapid growth, our headcount has remained relatively flat in recent periods.

The COVID-19 pandemic may also result in long-term changes in customer needs for our products in various sectors, along with capital spending reductions or shifts in spending focus, that could materially adversely affect us if we are unable to adjust our product offerings to match customer needs.

pressures on sales of our server solutions.

We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our business, including with respect to user privacy, rights of publicity, data protection, content, protection of minors and consumer protection.

These laws can be particularly restrictive in countries outside the United States.

Both in the United States and abroad, these laws and regulations constantly evolve and remain subject to significant change.

In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate.

At the same time, certain developing countries in which we do business have already or are also currently considering adopting privacy and data protection laws and regulations.

While we have implemented policies and procedures to address GDPR and other data privacy requirements, failure to comply or concerns about our practices or compliance with GDPR or other privacy-related laws and regulations could materially adversely affect our business, results of operations and financial condition.

The matters leading to the delay in the filing of our 2017 10-K and adverse publicity and potential concerns from our customers, including from our prior lack of effective internal control over financial reporting, have had and could continue to have an adverse effect on our business and financial condition.

We have been and could continue to be the subject of negative publicity focused on the matters that led to the delay in the filing of our 2017 10-K.

We may be adversely impacted by negative reactions to this publicity from our customers or others with whom we do business.

Concerns include the time and effort required to address our accounting and control environment and our ability to be a long-term provider to our customers.

The continued occurrence of any of the foregoing could harm our business and have an adverse effect on our financial condition.

never occur, as the only way to realize any future gains on their investment.

We are a [removed: global leader and innovator] [added: Silicon Valley-based provider] of [added: accelerated compute platforms that are] application-optimized high performance and high-efficiency server and storage systems for a variety of markets, including enterprise data centers, cloud computing, artificial intelligence, 5G and edge computing.

Our [removed: solutions] [added: Total IT Solutions] include complete servers, storage systems, modular blade servers, blades, workstations, full [removed: racks,] [added: rack scale solutions,] networking devices, server [added: sub-systems, server] management [removed: software,] and [removed: server sub-systems.][added: security software.]

For fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] our net income was [removed: $111.9] [added: $285.2] million, [removed: $84.3] [added: $111.9] million and [removed: $71.9] [added: $84.3] million, respectively.

[removed: Coronavirus (COVID-19)] [added: COVID-19] Pandemic Impact

[removed: The global spread of the coronavirus (COVID-19)] [added: COVID-19] and [removed: the various attempts to contain it] [added: its variants] have [removed: created significant] [added: continued to create] volatility, uncertainty and economic disruption for many businesses worldwide.

In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, including orders that govern the operations of [removed: businesses, require masks be worn and define shelter in place and social distancing protocols.][added: businesses.]

Our first priority is the safety of our workforce and we have [added: therefore] implemented numerous health precautions and work practices to be in compliance with the law and to operate in a safe manner.

We [removed: continue] [added: have continued] to see ongoing demand [added: for our IT solutions] and do not have significant direct exposure to industries [removed: such as retail, oil and gas and hospitality,] which have been impacted the greatest.

We have actively managed our supply chain for potential shortage risk by building inventories of critical components required [removed: for our motherboards] [added: such as CPUs, memory, SSDs] and [removed: other system printed circuit boards in response] [added: GPUs] to [removed: the early outbreak of COVID-19 in China.][added: support our ability to fulfill customer orders.]

[removed: We] [added: In addition, we also] experienced increased [removed: costs in freight as well as] direct labor costs as we incentivized our employees to continue to work and assist us in serving our customers, many of whom are in critical industries.

[removed: We] [added: This increase in costs negatively impacts our gross margin, and we] expect [removed: this trend] [added: these higher costs] to continue for the duration of the COVID-19 pandemic.

In June 2021, we negotiated an extension of our credit facility with Bank of America to extend the maturity date to June [removed: 2026.][added: 2026 and, in March 2022, further negotiated an increase in the size of our credit facility with Bank of America from $200 million to $350 million.]

In July 2021, we replaced our prior credit facility and term loan facility with [removed: China Trust and Bank Corp ("CTBC Bank"),] [added: CTBC Bank,] with a new facility for omnibus credit lines.

Our management team is focused on guiding our company through the ongoing challenges presented by [removed: COVID-19.][added: the COVID-19 pandemic, including the emergence of any new variants.]

[removed: Currently, there] [added: There] are positive signs with [added: the expiration of various COVID-19 mandates,] vaccine availability and [removed: reductions in infection rates;] [added: the rollout of boosters;] however, with the possibility of [added: the emergence of other] new virus strains and [removed: vaccine supply constraints,] [added: ongoing adverse impacts of the COVID-19 pandemic on economic recovery,] we are unable to predict the ultimate extent to which the global COVID-19 pandemic may further impact our business operations, financial performance and results of [removed: operations within the next 12 months.][added: operations.]

The following is a summary of financial highlights of fiscal years [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

- Net sales increased by [removed: 6.5%] [added: 46.1%] in fiscal year [removed: 2021] [added: 2022] as compared to fiscal year [removed: 2020.][added: 2021.]

- Gross margin [removed: declined] [added: increased] to [removed: 15.0%] [added: 15.4%] in fiscal year [removed: 2021] [added: 2022] from [removed: 15.8%] [added: 15.0%] in fiscal year [removed: 2020,] [added: 2021,] primarily due to product and customer mix and [added: was offset by] increased logistic costs.

- Net income increased to [removed: $111.9] [added: $285.2] million in fiscal year [removed: 2021] [added: 2022] as compared to [removed: $84.3] [added: $111.9] million in fiscal year [removed: 2020,] [added: 2021,] which was primarily due to the higher net sales and lower operating expenses [added: as a percentage of revenues] in fiscal year [removed: 2021] [added: 2022] as compared to fiscal year [removed: 2020.][added: 2021.]

- Our cash and cash equivalents were [removed: $232.3] [added: $267.4] million and [removed: $210.5] [added: $232.3] million at the end of fiscal years [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

We evaluate our estimates on an on-going [removed: basis,] [added: basis] and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making the judgments we make about the carrying values of assets and liabilities that are not readily apparent from other sources.

We recognize the amount of transaction price allocated to each performance obligation within a customer contract as revenue [removed: as each] [added: at the time the respective] performance obligation is [removed: delivered.][added: satisfied by transferring control of the promised good or service to a customer.]

These estimates and judgements have not fluctuated significantly for the fiscal year ended June 30, [removed: 2021] [added: 2022] compared to prior fiscal years.

[added: In general, deferred tax assets] represent future tax benefits to be received when certain expenses previously recognized in our consolidated statements of income become deductible expenses under applicable income tax laws, or when loss or credit carryforwards are utilized.

If we later determine that our exposure is lower or that the liability is not sufficient to cover our revised expectations, we adjust the liability and [removed: effect] [added: reflect] a related charge in our tax provision during the period in which we make such a determination.

[added: Also, as a result of the substantial related party relationships between us and] these two companies, we considered whether any implicit arrangements exist that would cause us to protect these related parties’ interests from suffering losses.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Cost of sales | | | [removed: 85.0] [added: 84.6] | | % | | | | [removed: 84.2] [added: 85.0] | | % | | | | [removed: 85.8] [added: 84.2] | | % |

| Gross profit | | | [removed: 15.0] [added: 15.4] | | % | | | | [removed: 15.8] [added: 15.0] | | % | | | | [removed: 14.2] [added: 15.8] | | % |

| Research and development | | | [removed: 6.3] [added: 5.2] | | % | | | | [removed: 6.6] [added: 6.3] | | % | | | | [removed: 5.1] [added: 6.6] | | % |

| Sales and marketing | | | [removed: 2.4] [added: 1.7] | | % | | | | [removed: 2.5] [added: 2.4] | | % | | | | [removed: 2.2] [added: 2.5] | | % |

| General and administrative | | | [removed: 2.8] [added: 2.0] | | % | | | | [removed: 4.1] [added: 2.8] | | % | | | | [removed: 4.0] [added: 4.1] | | % |

| Total operating expenses | | | [removed: 11.5] [added: 8.9] | | % | | | | [removed: 13.2] [added: 11.5] | | % | | | | [removed: 11.3] [added: 13.2] | | % |

| Income from operations | | | [removed: 3.5] [added: 6.5] | | % | | | | [removed: 2.6] [added: 3.5] | | % | | | | [removed: 2.9] [added: 2.6] | | % |

| Other (expense) income, net | | | [removed: (0.1)] [added: 0.2] | | % | | | | [removed: —] [added: (0.1)] | | % | | | | — | | % |

| Interest expense | | | (0.1) | | % | | | | (0.1) | | % | | | | [removed: (0.2)] [added: (0.1)] | | % |

| Income before income tax provision | | | [removed: 3.3] [added: 6.6] | | % | | | | [removed: 2.5] [added: 3.3] | | % | | | | [removed: 2.7] [added: 2.5] | | % |

| Income tax provision | | | [removed: (0.2)] [added: (1.0)] | | % | | | | [removed: (0.1)] [added: (0.2)] | | % | | | | [removed: (0.4)] [added: (0.1)] | | % |

| Share of income [removed: (loss)] from equity investee, net of taxes | | | — | | % | | | | [removed: 0.1] [added: —] | | % | | | | [removed: (0.1)] [added: 0.1] | | % |

| Net income | | | [removed: 3.1] [added: 5.6] | | % | | | | [removed: 2.5] [added: 3.1] | | % | | | | [removed: 2.2] [added: 2.5] | | % |

The COVID-19 pandemic has created additional demand for many server applications that support the global movement towards a digital economy.

These applications include greater use of online transactions for everyday purchases by consumers of food, clothing, entertainment from gaming and video streaming, as well as tele-health, social networking, messaging, email, autonomous driving solutions and video conferencing companies.

Our architecture, which is based on a “Building Block Solutions” design approach, has also assisted us during the COVID-19 pandemic, to qualify different components for compatibility with our systems to help us overcome some shortages.

Logistics has continued to be a challenge during the COVID-19 pandemic as the global transportation industry, and particularly ocean transportation, has been constrained by shortages of containers, labor, truckers and crowded ports.

As a result, shipping by air, has been used more frequently despite that it is more expensive and there are fewer flights during the COVID-19 pandemic than there were previously.

We have experienced increased costs in freight.

We expect both of these trends to continue until the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic end.

SMCI | 2022 Form 10-K | 37

In September 2021, we replaced our prior credit facility with E.SUN Bank, with new credit facility and term facility.

In September 2021 and April 2022, we entered into a term loan facility and credit line, respectively, with Mega Bank which will be used to support our manufacturing activities (including the purchase of materials and components) and provide medium-term working capital.

In October 2021, we entered into a credit facility with Chang Hwa Bank and in January 2022 we entered into a loan agreement with HSBC Bank, each of which will be used to support the growth of our Taiwan business.

In May 2022, we also entered into a line of credit with Cathay Bank to be used for general corporate purposes to support our growth.

In August 2022, we entered into a new general credit agreement with E.Sun Bank which replaced the prior E.Sun Bank credit facility which will also support the growth of our Taiwan business.

Refer to Part II, Item 8, Note 9, “Short-term and Long-term Debt” in our notes to consolidated financial statements in this Annual Report on Form 10-K for further information on our outstanding debt

- Operating expenses increased by 13.2% in fiscal year 2022 as compared to fiscal year 2021, primarily due to the increase in personnel expenses as a result of salary increases and a higher headcount.

In fiscal year 2022, we generated net cash of $35.1 million and $522.9 million in cash provided by financing activities primarily due to the proceeds from borrowings and invested $45.2 million in purchases of property and equipment.

We used $440.8 million in operating activities primarily related to the increase in inventories and accounts receivables.

SMCI | 2022 Form 10-K | 38

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SMCI | 2022 Form 10-K | 42

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | | | | | 2021 over 2020 Change | | | | | | | | |

| Total net sales | | | $ | 5,196.1 | | | | | $ | 3,557.4 | | | | | $ | 3,339.3 | | | | | $ | 1,638.7 | | | | | 46.1 | | % | | | | $ | 218.1 | | | | | 6.5 | | % |

*Fiscal Year 2022 Compared with Fiscal Year 2021*

The year over year increase in overall net sales is the result of increased selling prices and quantities of product shipments.

Asia experienced the highest percentage growth among all regions.

China, Japan and Korea exceeded the overall regional average of growth, which was the primary driver of the increases in net sales in Asia.

Russia experienced a year over year decrease due to the conflict in that region, which decrease had an immaterial impact on our overall performance.

SMCI | 2022 Form 10-K | 43

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | | | | | 2021 over 2020 Change | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2022 Compared with Fiscal Year 2021*

The year-over-year increase in cost of sales was primarily attributed to an increase of $1,262.6 million in costs of materials and contract manufacturing expenses primarily related to the increase in net sales volume, a $54.9 million increase in freight charges, a $23.6 million increase in overhead costs, a $18.9 million increase due to lower cost recovery of cost paid in prior periods, a $8.3 million increase in excess and obsolete inventory charges and a $4.9 million increase in other cost of sales.

The year-over-year increase in the gross margin percentage was primarily due to sales prices increases, product and customer mix and higher capitalization of manufacturing overhead due to higher inventory levels, offset by higher costs from freight, overhead, other cost of sales, excess and obsolete inventory charges, and lower recovery of costs from prior periods.

SMCI | 2022 Form 10-K | 44

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | | | | | 2021 over 2020 Change | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

| *Percentage of total net sales* | | | 5.2 | | % | | | | 6.3 | | % | | | | 6.6 | | % | | | | | | | | | | | | | | | | | | | | | | | | |

| *Percentage of total net sales* | | | 1.7 | | % | | | | 2.4 | | % | | | | 2.5 | | % | | | | | | | | | | | | | | | | | | | | | | | | |

Accordingly, in late March 2020, we responded to the directives from Santa Clara County and the State of California regarding instructions to combat the spread of COVID-19.

We quickly transitioned certain of our indirect labor forces to work from home at the earlier phase of the pandemic and continued to operate our local assembly in Taiwan and, after an initial period of disruption, in the United States and Europe.

We operate in the critical industry of IT infrastructure and we assessed our customer base to identify priority customers who operate in critical industries.

As time passes, we may discover greater indirect exposure to distressed industries through our channel partners and OEM customers.

Since that time, we have continued to add to our inventories of key components such as CPUs, memory, SSDs and GPUs such that customer orders can be fulfilled as they are received.

Logistics has emerged as a new challenge as globally the transportation industry restricted the frequency of departures and increased logistics costs.

In December 2020, our Taiwan subsidiary entered into a general credit agreement with E.SUN Bank in Taiwan.

This general credit agreement provides for the issuance of loans, advances, acceptances, bills, bank guarantees, overdrafts, letters of credit, and other types of drawdown instruments up to a credit limit of $30 million.

The term of this general credit agreement was through September 18, 2021.

See also “Business–Employees and Human Capital Resources.”

- Operating expenses declined by 6.8% in fiscal year 2021 as compared to fiscal year 2020, primarily due to the special performance bonuses to our employees and the accrual for our settlement with the SEC incurred in fiscal year 2020.

In fiscal year 2021, we generated net cash of $21.1 million, of which $123.0 million was provided by operating activities related primarily to the increase in net income.

We also invested $58.0 million in purchases of property and equipment, including construction of a new facility in San Jose, California, and used $44.4 million in financing activities primarily due to the repurchase of $130.0 million of our common stock, which was offset by the proceeds from borrowings.

In general, deferred tax assets

Also, as a result of the substantial related party relationships between us and

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

We typically adjust our prices as component costs rise and fall.

The decline in average selling prices was primarily due to substantially lower costs for key components, specifically for memory and storage, as compared to the previous fiscal year.

The year-over-year decrease in net sales in the United States was primarily due to a decrease in net sales of our server and storage systems to our direct customers and OEMs.

The year-over-year decrease in net sales in Asia was primarily due to a decrease in net sales of our server and storage systems to OEMs in China, India and Japan, partially offset by a slight increase in the net sales of subsystems and accessories in China and of server and storage systems in the rest of Asia region.

The year-over-year decrease in net sales in Europe was primarily due to a decrease in net sales of our server and storage systems to our direct customers and OEMs in the Netherlands, partially offset by an increase in net sales of our subsystems and accessories to our indirect sales channel in Germany and an increase in sales to our indirect sales channel in France.

During the fiscal year 2021, we continued to expand manufacturing and service operations in Taiwan primarily to support our Asian and European customers and have continued to work on improving our utilization of our overseas manufacturing capacity.

materials and contract manufacturing expenses primarily related to the increase in net sales volume and an increase of $8.9 million of freight.

This increase in costs negatively impacts our gross margins, and we expect these higher costs to continue for the duration of the COVID-19 pandemic.

The year-over-year decrease in cost of sales was primarily attributable to a decrease of $214.3 million in inventory costs related primarily to the decrease in the prices of components and a decrease of $14.6 million in the provision of excess inventory and obsolescence due to fewer excess and obsolescence items identified in the fiscal year 2020.

This was offset by an increase of $19.6 million in overhead costs attributable primarily to increased tariffs and an increase of $11.3 million in personnel expenses, which included a special performance bonus of $4.1 million.

Warranty and repairs costs also increased by $5.7 million in the fiscal year 2020 as compared to the fiscal year 2019.

The period-over-period increase in the gross margin percentage was primarily due to sales prices declining at a slower rate than the decline in the costs of components and due to the increase in services and software revenue which have higher margins than product sales.

The year-over-year increase in research and development expenses was primarily due to an increase of $41.3 million in personnel expenses as a result of an increase in the number of research and development employees and a special performance bonus of $17.3 million, a decrease of $0.7 million in reimbursements received for certain research and development costs that we incurred as part of joint product development; an increase of $6.7 million in costs mainly related to materials, supplies and equipment used in product development, and an increase of $1.8 million in facilities expenses.

During fiscal year 2020, we also recorded a $9.5 million net settlement fee as a reduction in the research and development expenses related to the reimbursement of previously incurred expenses for one canceled joint product development agreement.

The year-over-year increase in sales and marketing expenses was primarily due to an increase of $8.1 million in personnel expenses as a result of an increase in the number of sales and marketing personnel and a special performance bonus of $1.8 million.

The year-over-year change in interest expense of $4.5 million is primarily a result of lower interest rates and reduced levels of borrowings in fiscal year 2020 as compared to fiscal year 2019.

The change of $2.4 million in other (expense) income, net was attributable to an increase of $1.6 million in interest income on our interest bearing deposits and a decrease of $0.8 million in other expenses.

The year-over-year decrease in the effective tax rate was primarily due to an increase in tax benefits from research and development tax credits, stock based compensation, releases of uncertain tax positions, and U.S. sales to foreign jurisdictions, partially offset by the tax impact from the non-deductible settlement with the SEC.

We expect to pay a special performance bonus of approximately $4.0 million to our CEO within the next year.

During the fiscal year 2021, the target average closing price of our common stock condition for the bonus was satisfied but no determination has been made if the specified performance condition has been satisfied.

During the fiscal year ended June 30, 2021, we retired 1,333,125 shares of common stock repurchased in prior years.

Additionally, we repurchased and retired 4,209,211 shares of common stock for an aggregated $130.0 million under multiple share repurchase programs.

As of June 30, 2021, we still had $150.0 million available to be used by July 31, 2022.

Non-cash charges related to excess and obsolete inventory decreased by $14.6 million, related to bad debt reserve decreased by $10.1 million, related to income (loss) from equity investee decreased by $5.1 million, and related to impairment of investments decreased by $2.7 million in fiscal year 2020 compared to fiscal year 2019.

As of June 30, [removed: 2021,] [added: 2022,] our investments were in money market funds, certificates of deposits and auction rate securities.

The interest rates for the term loans and the revolving lines of credit ranged from [removed: 0.45%] [added: 0.83%] to [removed: 1.5%] [added: 4.0%] at June 30, [removed: 2021.][added: 2022.]

Based on the outstanding principal indebtedness of [removed: $98.2] [added: $596.8] million under our credit facilities as of June 30, [removed: 2021,] [added: 2022,] we believe that a 10% change in interest rates would not have a significant impact on our results of operations.

Foreign exchange [removed: (loss)] gain [added: (loss)] for fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] was [removed: $(3.2)] [added: $7.7] million, [removed: $(1.4)] [added: $(3.2)] million and [removed: $0.5] [added: $(1.4)] million, respectively.

SMCI | 2022 Form 10-K | 50

We are a Silicon Valley-based provider of [added: accelerated compute platforms that are] application-optimized high-performance and high-efficiency server and storage systems for various markets, including enterprise data centers, cloud computing, artificial intelligence, 5G and edge computing.

Our [removed: solutions] [added: solutions, which we refer to as Total IT Solutions,] include complete servers, storage systems, modular blade servers, blades, workstations, complete rack scale plug and play solutions delivering pre-defined and pre-tested full rack [added: scale] solutions, networking devices, [added: server sub-systems,] system management [removed: software,] and [removed: server sub-systems.][added: security software.]

Our in-house design competencies, design control [removed: of] [added: over] many of the components used within our server and storage systems, and our Server Building Block Solutions® (an innovative, modular and open architecture) enable us to rapidly develop, build and test [added: our compute platforms along with our] server and storage systems, sub-systems and accessories with unique configurations.

We conduct our operations principally from our Silicon Valley [removed: headquarters in California and in our] [added: headquarters,] Taiwan and [removed: the] Netherlands facilities.

Our sales and marketing activities operate through a combination of our direct sales force and indirect [added: sales channel partners.]

Our objective is to be the world’s leading provider of [removed: application-optimized,] [added: solutions using accelerated compute platforms that are application-optimized offering] high-performance server, storage and [removed: networking solutions.][added: networking.]

Achieving this objective requires continuous development and innovation of our [removed: solutions] [added: Total IT Solutions] with better price-performance and architectural advantages compared with our prior generation of solutions and with solutions offered by our competitors.

As of June 30, [removed: 2021,] [added: 2022,] we [removed: employed] [added: had] over [removed: 1,800 persons] [added: 2,000 employees] in our research and development organization.

We plan to continue to increase our worldwide manufacturing capacity and logistics abilities in the United States, [added: Taiwan and] the Netherlands [removed: and Taiwan] to more efficiently serve our customers and lower our overall manufacturing costs.

We offer a broad range of [added: accelerated compute platforms that are] application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories, which can be used to build complete server and storage systems.

These [removed: solutions] [added: Total IT Solutions] and products are designed to serve a variety of markets, such as enterprise data centers, cloud computing, artificial intelligence [removed: (“AI”),] [added: (“AI”) and] 5G/edge computing.

The percentage of our net sales represented by sales of server and storage systems [removed: was flat] [added: increased to 85.9%] in fiscal year [removed: 2021] [added: 2022] compared to [added: 78.4% in] fiscal year [removed: 2020] [added: 2021] and [removed: decreased to] 78.5% in fiscal year [removed: 2020 from 81.7% in fiscal year 2019,] [added: 2020,] and the percentage of our net sales represented by sales of subsystems and accessories was [removed: 21.6%] [added: 14.1%] in fiscal year [removed: 2021, 21.5%] [added: 2022, 21.6%] in fiscal year [removed: 2020] [added: 2021] and [removed: 18.3%] [added: 21.5%] in fiscal year [removed: 2019.][added: 2020.]

We complement our [added: accelerated compute platforms inclusive of] server and storage system offerings with software [removed: management solutions as well as] [added: management/security solutions,] global services and support, the revenue for which is included in our server and storage systems revenue.

We sell [added: accelerated compute platforms comprised of a combination of] server and storage systems in rackmount, blade, multi-node and embedded form factors, which support single, dual, and multiprocessor architectures.

- [removed: MicroCloud] [added: MicroCloud] server systems that deliver node density in environments with space and power constraints.

In addition to our [removed: complete server and storage systems] [added: accelerated compute platforms] business, we offer a large array of modular server subsystems and accessories, such as server boards, chassis, power supplies and other accessories.

These subsystems are the foundation of [removed: our server] [added: platform] solutions and span product offerings from the entry-level single and dual-processor server segment to the high-end multiprocessor market.

The majority of the subsystems and accessories we sell individually are designed to work together to improve [removed: performance,] [added: performance] and are ultimately integrated into complete server and storage systems.

Our open industry-standard remote system management solutions, such as our Server Management suite, including Supermicro Server Manager (“SSM”), Supermicro Power Management software (“SPM”), Supermicro Update Manager (“SUM”), [added: SuperCloud Composer] and SuperDoctor 5, have been designed to help manage large-scale heterogeneous data center environments.

We continue to invest in reducing our design and manufacturing costs and improving the performance, cost-effectiveness and power- and space-efficiency of our [removed: solutions.][added: Total IT Solutions.]

During [added: each of] fiscal year [added: 2022 and fiscal year] 2021, we sold to over 1,000 direct customers in over 100 countries.

During [removed: each of] fiscal [removed: years 2020 and 2019,] [added: year 2020,] we sold to over 820 [removed: and 850] direct [removed: customers respectively.][added: customers.]

In addition, over the three years ended June 30, [removed: 2021] [added: 2022,] we have sold to thousands of end users through our indirect sales channel.

In [added: each of] fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] no customer represented greater than 10% of our total net sales.

Our direct sales force is primarily focused on selling [removed: complete systems and solutions,] [added: Total IT Solutions,] including management software and global services to large scale cloud, enterprise and OEM customers.

Our global sales efforts are supported both by our international offices in the Netherlands, Taiwan, [added: South Korea,] United Kingdom, China and Japan as well as by our United States based sales team.

Sales to customers located outside of the United States represented [removed: 40.7%, 41.4%] [added: 41.6%, 40.7%] and [removed: 41.9%] [added: 41.4%] of net sales in fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively.

We believe we are the only major [removed: server and] [added: server,] storage [added: and accelerated compute platform] vendor that designs, develops, and manufactures a significant portion of their systems in the United States.

See Part II, Item 8, Note [removed: 13,] [added: 12,] “Related Party Transactions,” to the consolidated financial statements and Part III, Item 13, “Certain Relationships and Related Transactions and Director Independence.”

In recent years, we have experienced increased competition from original design manufacturers ("ODMs”) that benefit from their scale and very [removed: low cost] [added: low-cost] manufacturing and are increasingly offering their own branded products.

- Global technology vendors, such as Cisco, Dell, Hewlett-Packard Enterprise, and Lenovo; [removed: and]

- ODMs, such as Foxconn, Quanta Computer, and Wiwynn [removed: Corporation.][added: Corporation; and]

- OEMs, such as [removed: Inspur][added: Inspur.]

[removed: Employees and Human] [added: Human] Capital [removed: Resources][added: Resources and Management]

As of June 30, [removed: 2021,] [added: 2022,] we employed [removed: 4,155] [added: 4,607] full time employees, consisting of [removed: 1,858] [added: 2,089] employees in research and development, [removed: 460] [added: 525] employees in sales and marketing, [removed: 425] [added: 456] employees in general and administrative and [removed: 1,412] [added: 1,537] employees in manufacturing.

Of these employees, [removed: 2,367] [added: 2,222] employees are based in our San Jose facilities.

“The key to success in technology is designing a company around people committed to work that they [removed: love”, quote from] [added: love,” said] Charles Liang, [removed: our] [added: Supermicro Founder,] President, Chief Executive [removed: Officer] [added: Officer,] and [removed: Chairman.][added: Chairman of the Board.]

Our recruiting process actively sources talent supporting our ability to hire candidates with professional qualifications and [removed: potentials.][added: potential.]

We identify opportunities through tracking and analyzing data from various sources such as annual performance reviews to assess our progress in ensuring critical [removed: talents] [added: talent] are in critical roles.

Outside of the U.S., we provide benefits based on local [removed: requirement] [added: requirements] and needs.

SMCI | 2022 Form 10-K | 1

In November 2021, we announced the Universal GPU server; which enables customers to choose the most suitable CPUs and GPUs, and switch configurations for their specific applications and workloads.

In February 2022, we introduced the SuperEdge multi-node Server for 5G, IoT, and edge applications.

This 2U, 3-node, short-depth design increases node density by 50% for high-density computing at the intelligent edge.

SMCI | 2022 Form 10-K | 2

During fiscal year 2022, we experienced increased revenue from server and storage systems, particularly from our large enterprise and datacenter customers.

The year-over-year decrease in net sales of subsystems and accessories was primarily due to the emphasis of selling full systems and servers which require utilization of the subcomponents.

SMCI | 2022 Form 10-K | 3

In addition, we are planning to offer optimized products with our command-center-based services, starting with a comprehensive product auto-configurator.

The command center is the foundation of our expanding B2C and B2B programs.

SMCI | 2022 Form 10-K | 4

SMCI | 2022 Form 10-K | 5

Government Regulation

Our worldwide business activities subject us to various federal, state, local, and foreign laws in the countries in which we operate, and our Total IT Solutions are subject to laws and regulations affecting their sale.

To date, costs and accruals incurred to comply with these governmental regulations, including environmental regulations, have not been material to our capital expenditures, results of operations, and competitive position.

Although there is no assurance that existing or future governmental laws and regulations, including environmental regulations, applicable to our operations or Total IT Solutions will not have a material adverse effect on our capital expenditures, results of operations, and competitive position, we do not currently anticipate material increases in expenditures for compliance with government regulations.

Mission, Culture, and Engagement

We aim to attract, develop, and retain a high performing and engaged global workforce.

SMCI | 2022 Form 10-K | 6

We are committed to protecting the environment through our “We Keep IT Green” initiative as a first to market innovator in high-performance, high-efficiency server, storage, networking and management total solutions.

We recognize the critical importance of talent and culture to our success and ability to fulfill this vision.

We encourage opportunities for growth and conduct regular performance reviews that set clear expectations to motivate employees and align their performance with company objectives.

Supermicro Portal, our internal intranet, was created to keep employees informed about key changes to our business and company-wide resources.

Diversity, Equity, Inclusion, and Belonging

We strive to create a culture that promotes diversity, equity, inclusion, and belonging to boost team dynamics, productivity, and innovation within the organization.

Employees should be treated fairly and respectfully despite differences and should feel accepted in the workplace to contribute their perspective and be valued.

We are committed to increasing diversity in our workforce at all levels and regularly monitor our recruitment process with an aim to improve the diversity of our workforce and candidate pool.

Talent Development, Acquisition, Retention and Rewards

Throughout our history, we have maintained our commitment to providing a safe workplace that protects against and limits personal injury and environmental harm.

We follow international standards and regulations for product safety and security.

Our health and safety programs emphasize personal accountability, professional conduct, and regulatory compliance, while our culture fosters a sense of proactivity, caution, and communication.

In the development of our products, we define and perform various tests to ensure Product Safety and Security.

We evaluate risks using both government-required procedures and best practices to ensure we understand residual risk and appropriately protect our employees.

We engage in proactive efforts to prevent occupational illnesses and injuries which allows us to maintain a safe, healthy, and secure workplace.

We have a Safety Committee, which is designed to promote communications regarding health, safety, and emergency response procedures and to help implement improvements to our work areas and practices.

SMCI | 2022 Form 10-K | 7

We are committed to complying with applicable laws, including those associated with labor and employment, across all areas of our operations.

In addition, we abide by global standards, irrespective of legal requirements, regarding the treatment of workers such as those detailed by the Responsible Business Alliance (“RBA”).

These include prevention of excessive working hours and unfair wages, controls to prohibit child labor and human trafficking and bolstering workplace health and safety measures.

To respond to the COVID-19 pandemic, we implemented the following precautions:

sales channel partners.

For example, in early April 2021, we introduced over 100 new application optimized systems in support of Intel’s introduction of its 3rd Gen Intel Xeon Scalable processors.

In March 2021, Supermicro announced one of the most versatile portfolio of AMD EPYC™ 7003-based systems delivering world record performance – 36% improvement -- for today’s most critical workloads.

We have recently completed the construction of a new 749,000 square feet building in Taiwan to increase our manufacturing capacity and diversify our operating base and optimize relatively low labor costs as compared to the United States.

In addition, we have added a new building devoted to manufacturing at our San Jose, California headquarters.

We believe that our relations with our employees are good.

We are motivated to attract, develop and retain a high performing team engaged in work that they love, motivated by growth opportunities.

We are

We continuously assess our efforts to respond to the COVID-19 pandemic, which include the following:

- We have enhanced our contact tracing, significantly decreased non-priority business travel, and provided personal air purifier for each of the employees; and

The information required by this item is incorporated herein by reference to the information set forth under the caption “Litigation and Claims” in [added: Part II, Item 8,] Note [removed: 16] [added: 15] “Commitments and Contingencies” of our notes to the consolidated financial statements included in this Annual Report.

| [removed: ☒ | | | ANNUAL] [added: ☒ ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

[removed: For] [added: For] the fiscal year ended June 30, [removed: 2021][added: 2022]

| [removed: ☐ | | | TRANSITION] [added: ☐ TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

[removed: For] [added: For] the transition period [removed: from to][added: from___________to___________]

[removed: Commission] [added: Commission] File Number [removed: 001-33383][added: 001-33383]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: (State] [added: (State] or other jurisdiction of incorporation or [removed: organization)] [added: organization)] | | | | | | [removed: (I.R.S.] [added: (I.R.S.] Employer Identification [removed: No.)] [added: No.)] | | |

[removed: (Address] [added: (Address] of principal executive offices, including zip [removed: code)][added: code)]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | | [removed: Trading Symbol] [added: Trading Symbol] | | | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] | | |

[removed: Securities] [added: Securities] registered pursuant to section 12(g) of the Act: [removed: None][added: None]

The aggregate market value of the registrant’s common stock held by non-affiliates, based upon the closing price of the common stock on December 31, [removed: 2020,] [added: 2021,] as reported by the NASDAQ Global Select Market, was [removed: $1,374,947,450.][added: $1,962,046,138.]

Shares of common stock held by each executive officer and director and by each person who owns 5% or more of the outstanding common stock, based on filings with the Securities Exchange [added: Commission, have been excluded since such persons may be deemed affiliates.]

As of July 31, [removed: 2021,] [added: 2022,] there were [removed: 50,590,466] [added: 52,347,039] shares of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common stock of the registrant issued.

| Item 1. | | | [removed: [Business](#if356ebe46cb3493a845a822775a88c91_16)] [added: [Business](#i3228858d90d940fabb3f087f4a45e56d_16)] | | | [removed: [2](#if356ebe46cb3493a845a822775a88c91_16)] [added: [1](#i3228858d90d940fabb3f087f4a45e56d_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#if356ebe46cb3493a845a822775a88c91_19)] [added: Factors](#i3228858d90d940fabb3f087f4a45e56d_19)] | | | [removed: [9](#if356ebe46cb3493a845a822775a88c91_19)] [added: [10](#i3228858d90d940fabb3f087f4a45e56d_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#if356ebe46cb3493a845a822775a88c91_22)] [added: Comments](#i3228858d90d940fabb3f087f4a45e56d_22)] | | | [removed: [29](#if356ebe46cb3493a845a822775a88c91_22)] [added: [33](#i3228858d90d940fabb3f087f4a45e56d_22)] | | |

| Item 2. | | | [removed: [Properties](#if356ebe46cb3493a845a822775a88c91_25)] [added: [Properties](#i3228858d90d940fabb3f087f4a45e56d_25)] | | | [removed: [29](#if356ebe46cb3493a845a822775a88c91_25)] [added: [33](#i3228858d90d940fabb3f087f4a45e56d_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#if356ebe46cb3493a845a822775a88c91_28)] [added: Proceedings](#i3228858d90d940fabb3f087f4a45e56d_28)] | | | [removed: [30](#if356ebe46cb3493a845a822775a88c91_28)] [added: [33](#i3228858d90d940fabb3f087f4a45e56d_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#if356ebe46cb3493a845a822775a88c91_31)] [added: Disclosures](#i3228858d90d940fabb3f087f4a45e56d_31)] | | | [removed: [30](#if356ebe46cb3493a845a822775a88c91_31)] [added: [33](#i3228858d90d940fabb3f087f4a45e56d_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#if356ebe46cb3493a845a822775a88c91_37)] [added: Securities](#i3228858d90d940fabb3f087f4a45e56d_37)] | | | [removed: [31](#if356ebe46cb3493a845a822775a88c91_37)] [added: [34](#i3228858d90d940fabb3f087f4a45e56d_37)] | | |

| Item 6. | | | [Selected Financial [removed: Data](#if356ebe46cb3493a845a822775a88c91_40)] [added: Data](#i3228858d90d940fabb3f087f4a45e56d_40)] | | | [removed: [33](#if356ebe46cb3493a845a822775a88c91_40)] [added: [36](#i3228858d90d940fabb3f087f4a45e56d_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#if356ebe46cb3493a845a822775a88c91_43)] [added: Operations](#i3228858d90d940fabb3f087f4a45e56d_43)] | | | [removed: [34](#if356ebe46cb3493a845a822775a88c91_43)] [added: [37](#i3228858d90d940fabb3f087f4a45e56d_43)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#if356ebe46cb3493a845a822775a88c91_58)] [added: Risk](#i3228858d90d940fabb3f087f4a45e56d_58)] | | | [removed: [48](#if356ebe46cb3493a845a822775a88c91_58)] [added: [50](#i3228858d90d940fabb3f087f4a45e56d_58)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#if356ebe46cb3493a845a822775a88c91_61)] [added: Data](#i3228858d90d940fabb3f087f4a45e56d_61)] | | | [removed: [49](#if356ebe46cb3493a845a822775a88c91_61)] [added: [51](#i3228858d90d940fabb3f087f4a45e56d_61)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#if356ebe46cb3493a845a822775a88c91_187)] [added: Disclosure](#i3228858d90d940fabb3f087f4a45e56d_145)] | | | [removed: [91](#if356ebe46cb3493a845a822775a88c91_187)] [added: [100](#i3228858d90d940fabb3f087f4a45e56d_145)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#if356ebe46cb3493a845a822775a88c91_190)] [added: Procedures](#i3228858d90d940fabb3f087f4a45e56d_148)] | | | [removed: [91](#if356ebe46cb3493a845a822775a88c91_190)] [added: [100](#i3228858d90d940fabb3f087f4a45e56d_148)] | | |

| Item 9B. | | | [Other [removed: Information](#if356ebe46cb3493a845a822775a88c91_196)] [added: Information](#i3228858d90d940fabb3f087f4a45e56d_154)] | | | [removed: [93](#if356ebe46cb3493a845a822775a88c91_196)] [added: [101](#i3228858d90d940fabb3f087f4a45e56d_154)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#if356ebe46cb3493a845a822775a88c91_202)] [added: Governance](#i3228858d90d940fabb3f087f4a45e56d_160)] | | | [removed: [94](#if356ebe46cb3493a845a822775a88c91_202)] [added: [102](#i3228858d90d940fabb3f087f4a45e56d_160)] | | |

| Item 11. | | | [Executive [removed: Compensation](#if356ebe46cb3493a845a822775a88c91_205)] [added: Compensation](#i3228858d90d940fabb3f087f4a45e56d_163)] | | | [removed: [102](#if356ebe46cb3493a845a822775a88c91_205)] [added: [111](#i3228858d90d940fabb3f087f4a45e56d_163)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#if356ebe46cb3493a845a822775a88c91_208)] [added: Matters](#i3228858d90d940fabb3f087f4a45e56d_166)] | | | [removed: [124](#if356ebe46cb3493a845a822775a88c91_208)] [added: [134](#i3228858d90d940fabb3f087f4a45e56d_166)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#if356ebe46cb3493a845a822775a88c91_211)] [added: Independence](#i3228858d90d940fabb3f087f4a45e56d_169)] | | | [removed: [125](#if356ebe46cb3493a845a822775a88c91_211)] [added: [135](#i3228858d90d940fabb3f087f4a45e56d_169)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#if356ebe46cb3493a845a822775a88c91_214)] [added: Services](#i3228858d90d940fabb3f087f4a45e56d_172)] | | | [removed: [129](#if356ebe46cb3493a845a822775a88c91_214)] [added: [139](#i3228858d90d940fabb3f087f4a45e56d_172)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#if356ebe46cb3493a845a822775a88c91_220)] [added: Schedules](#i3228858d90d940fabb3f087f4a45e56d_178)] | | | [removed: [129](#if356ebe46cb3493a845a822775a88c91_220)] [added: [139](#i3228858d90d940fabb3f087f4a45e56d_178)] | | |

______________________________________________________________________

______________________________________________________________________

| | | |

| --- | --- | --- |

or

| | | |

| --- | --- | --- |

______________________________________________________________________


______________________________________________________________________

FOR THE FISCAL YEAR ENDED JUNE 30, 2022

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i3228858d90d940fabb3f087f4a45e56d_1751) | | | [102](#i3228858d90d940fabb3f087f4a45e56d_1751) | | |

| | | | [Signatures](#i3228858d90d940fabb3f087f4a45e56d_187) | | | [145](#i3228858d90d940fabb3f087f4a45e56d_187) | | |

__________________________________________________________________________

| | | | | | |

| --- | --- | --- | --- | --- | --- |

or

Commission, have been excluded since such persons may be deemed affiliates.

| | | | [Signatures](#if356ebe46cb3493a845a822775a88c91_229) | | | [133](#if356ebe46cb3493a845a822775a88c91_229) | | |

As of June 30, [removed: 2021,] [added: 2022,] we owned approximately 2,273,000 square feet and leased approximately [removed: 753,000] [added: 690,000] square feet of office and manufacturing space.

Our long-lived assets located outside of the United States represented [removed: 34.4%, 23.5%] [added: 36.8%, 34.4%] and [removed: 21.5%] [added: 23.5%] of total value of long-lived assets in fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively.

See Part II, Item 8, Note [removed: 18,] [added: 17,] “Segment Reporting” to the consolidated financial statements in this Annual Report for a summary of long-lived assets by geographic region.

We lease approximately 5,000 square feet of office space in Jersey City, New Jersey under a lease that expires in [removed: January 2022,] [added: May 2027,] lease approximately 46,000 square feet of office space in San Jose, California under a lease that expires in January [removed: 2022, and] [added: 2028,] lease approximately 246,000 square feet of warehouse space in Fremont, California under a lease that expires in July [removed: 2025.][added: 2025, and lease approximately 28,000 square feet of warehouse space in Milpitas, California under a lease that expires in March 2027.]

In Asia, our manufacturing facilities are located in Taoyuan County, Taiwan where we own approximately 954,000 square feet of office and manufacturing space on [removed: 6.96] [added: 6.77] acres of land.

These manufacturing facilities are pledged as security under the existing term loans with [removed: $59.8] [added: $45.8] million remaining outstanding as of June 30, [removed: 2021.][added: 2022.]

Our research and development center, service operations, and warehouse space in Asia are located in an approximately [removed: 106,000] [added: 110,000] square feet facility in Taipei, Taiwan under [removed: twelve] [added: thirteen] leases that expire at various dates ranging from [removed: January] [added: November] 2022 through [removed: May 2024] [added: July 2025] and an approximately [removed: 134,000] [added: 38,000] square feet facility in Taoyuan, Taiwan under [removed: six] [added: two] leases that expire [removed: from December 2021 through] [added: in] December [removed: 2023.][added: 2022.]

We [removed: remodeled one warehouse with approximately 310,000 square feet of storage space and] completed the construction of [removed: a] [added: our third] new manufacturing and warehouse building with approximately [removed: 182,000] [added: 209,000] square feet of [removed: manufacturing] space in [removed: August 2015.][added: June 2021.]

In fiscal [removed: years 2019 and 2020,] [added: year 2022,] we continued to engage several contractors for the development and construction of improvements on the property.

See Part II, Item 8, Note [removed: 10,] [added: 9,] “Short-term and Long-term Debt” to the consolidated financial statements in this Annual Report for a discussion of our company's debt.

We completed the construction of a second new manufacturing and warehouse building in the first quarter of fiscal year 2018.

SMCI | 2022 Form 10-K | 33

As of July 31, [removed: 2021,] [added: 2022,] there were [removed: 23] [added: 20] registered stockholders of record of our common stock.

Please see Part III, Item 12, [removed: *“*Security] [added: “Security] Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters*”*] [added: Matters”] of this Annual Report for disclosure relating to our equity compensation plans.

The graph reflects an investment of $100 (with reinvestment of all dividends, if any) in our common stock, the Nasdaq Computer Index and the Nasdaq Composite Index on June 30, [removed: 2016] [added: 2017,] and our relative performance tracked through June 30, [removed: 2021.][added: 2022.]

[removed: ][added: ]

| | | | | | | [removed: 6/30/2016] [added: 6/30/2017] | | | | | | [removed: 6/30/2017] [added: 6/30/2018] | | | | | | [removed: 6/30/2018] [added: 6/30/2019] | | | | | | [removed: 6/30/2019] [added: 6/30/2020] | | | | | | [removed: 6/30/2020] [added: 6/30/2021] | | | | | | [removed: 6/30/2021] [added: 6/30/2022] | | |

During the three months ended June 30, [removed: 2021,] [added: 2022,] we [removed: repurchased the following] [added: did not repurchase] shares of our common [removed: stock:][added: stock.]

[removed: (2)On] [added: On] January 29, 2021, a duly authorized subcommittee of [removed: our] [added: the] Board approved a share repurchase program [added: (the "Prior Repurchase Program")] to repurchase up to $200 million of our common stock at prevailing prices in the open market.

The share repurchase program is effective until [removed: July] [added: January] 31, [removed: 2022] [added: 2024] or until the maximum amount of common stock is repurchased, whichever occurs first.

SMCI | 2022 Form 10-K | 34

| Super Micro Computer, Inc. | | | | | | 100.00 | | | | | | 95.94 | | | | | | 78.50 | | | | | | 115.17 | | | | | | 142.72 | | | | | | 163.69 | | |

| Nasdaq Composite Index | | | | | | 100.00 | | | | | | 122.31 | | | | | | 130.39 | | | | | | 163.81 | | | | | | 236.20 | | | | | | 179.61 | | |

| Nasdaq Computer Index | | | | | | 100.00 | | | | | | 129.47 | | | | | | 140.11 | | | | | | 200.72 | | | | | | 301.78 | | | | | | 246.13 | | |

Prior to the expiration of such repurchase program on July 31, 2022, an aggregate of $50 million had been purchased thereunder.

Subsequently, on August 3, 2022, after the expiration of the Prior Repurchase Program, a duly authorized subcommittee of the Board approved a new share repurchase program to repurchase shares of common stock for up to $200 million at prevailing prices in the open market.

SMCI | 2022 Form 10-K | 35

| Super Micro Computer, Inc. | | | | | | 100.00 | | | | | | 99.20 | | | | | | 95.17 | | | | | | 77.87 | | | | | | 114.25 | | | | | | 141.57 | | |

| Nasdaq Composite Index | | | | | | 100.00 | | | | | | 126.80 | | | | | | 155.09 | | | | | | 165.33 | | | | | | 207.71 | | | | | | 299.50 | | |

| Nasdaq Computer Index | | | | | | 100.00 | | | | | | 136.30 | | | | | | 176.47 | | | | | | 190.98 | | | | | | 273.59 | | | | | | 411.33 | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | | Total Number of Shares Purchased(1) | | | | | | Average Price Paid per Share(1) | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs(2) | | |

| Month 1 (April 1, 2021 to April 30, 2021) | | | 236,171 | | | | | | $ | 39.56 | | | | | 236,171 | | | | | | $150.0 million | | |

| Month 2 (May 1, 2021 to May 31, 2021) | | | 83,341 | | | | | | $ | 35.28 | | | | | — | | | | | | $150.0 million | | |

| Month 3 (June 1, 2021 to June 30, 2021) | | | — | | | | | | $ | — | | | | | — | | | | | | $150.0 million | | |

| Total | | | 319,512 | | | | | | $ | 38.45 | | | | | 236,171 | | | | | | | | |

__________________________

(1)Includes shares withheld from delivery to satisfy tax withholding obligations of recipients that occur upon the vesting of restricted stock units granted under our equity incentive plans.

SMCI | 2022 Form 10-K | 36

Removed and reserved.

[removed: INDEX TO CONSOLIDATED FINANCIAL STATEMENTS][added: | Index to Consolidated Financial Statements | | | | | | Page | | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#if356ebe46cb3493a845a822775a88c91_64)] [added: Firm (PCAOB ID:](#i3228858d90d940fabb3f087f4a45e56d_64) 34)] | | | [removed: [50](#if356ebe46cb3493a845a822775a88c91_64)] | | | [added: [52](#i3228858d90d940fabb3f087f4a45e56d_64) | | |]

| [Consolidated Balance [removed: Sheets](#if356ebe46cb3493a845a822775a88c91_67)] [added: Sheets](#i3228858d90d940fabb3f087f4a45e56d_67)] | | | [removed: [52](#if356ebe46cb3493a845a822775a88c91_67)] | | | [added: [54](#i3228858d90d940fabb3f087f4a45e56d_67) | | |]

| [Consolidated Statements of [removed: Operations](#if356ebe46cb3493a845a822775a88c91_73)] [added: Operations](#i3228858d90d940fabb3f087f4a45e56d_70)] | | | [removed: [53](#if356ebe46cb3493a845a822775a88c91_73)] | | | [added: [55](#i3228858d90d940fabb3f087f4a45e56d_70) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#if356ebe46cb3493a845a822775a88c91_79)] [added: Income](#i3228858d90d940fabb3f087f4a45e56d_73)] | | | [removed: [54](#if356ebe46cb3493a845a822775a88c91_79)] | | | [added: [56](#i3228858d90d940fabb3f087f4a45e56d_73) | | |]

| [Consolidated Statements of Stockholders’ [removed: Equity](#if356ebe46cb3493a845a822775a88c91_82)] [added: Equity](#i3228858d90d940fabb3f087f4a45e56d_76)] | | | [removed: [55](#if356ebe46cb3493a845a822775a88c91_82)] | | | [added: [57](#i3228858d90d940fabb3f087f4a45e56d_76) | | |]

| [Consolidated Statements of Cash [removed: Flows](#if356ebe46cb3493a845a822775a88c91_85)] [added: Flows](#i3228858d90d940fabb3f087f4a45e56d_79)] | | | [removed: [56](#if356ebe46cb3493a845a822775a88c91_85)] | | | [added: [58](#i3228858d90d940fabb3f087f4a45e56d_79) | | |]

| [Notes to Consolidated Financial [removed: Statements](#if356ebe46cb3493a845a822775a88c91_91)] [added: Statements](#i3228858d90d940fabb3f087f4a45e56d_82)] | | | [removed: [57](#if356ebe46cb3493a845a822775a88c91_91)] | | | [added: [60](#i3228858d90d940fabb3f087f4a45e56d_82) | | |]

We have audited the accompanying consolidated balance sheets of Super Micro Computer, Inc. and subsidiaries (the "Company") as of June [removed: 30,2021] [added: 30, 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended June 30, [removed: 2021,] [added: 2022,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended June 30, [removed: 2021,] [added: 2022,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated August [removed: 27, 2021,] [added: 29, 2022,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

[removed: a.We] [added: - We] tested the effectiveness of controls over the review of the calculation of excess and obsolescence reserve based on the Company’s reserve methodology, including management’s evaluation of the reserve rates by inventory aging category using historical data.

[removed: b.To] [added: - To] understand and evaluate the Company’s methodology for determining inventory that is excess or obsolete and the key assumptions and judgments made as part of the process, including the reserve rates, we made inquiries of various personnel in the Company including but not limited to finance and operations personnel about the expected product lifecycles and product development plans.

[removed: c.We] [added: - We] involved data specialists to assess management’s estimate on reserve rates by recalculating historical reserve rates across multiple fiscal periods.

We compared our independently developed historical reserve rates with the reserve rates used by [removed: management.][added: management to evaluate management’s ability to accurately estimate excess and obsolete inventory.]

[removed: d.We] [added: - We] tested the accuracy and completeness of the underlying data utilized in management’s excess and obsolescence reserve, including the classification of inventory by aging category.

[removed: e.We] [added: - We] considered the existence of contradictory evidence based on reading of internal communications to management, Company press releases, and industry reports, as well as our observations and inquires as to changes within the business.

(in thousands, except [removed: share and] per share amounts)

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 232,266] [added: 267,397] | | | | | $ | [removed: 210,533] [added: 232,266] | |

| Accounts receivable, net of allowances of [removed: $2,591] [added: $1,753] and [removed: $4,586] [added: $2,591] at June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively (including amounts receivable from related parties of [removed: $8,678] [added: $8,398] and [removed: $8,712] [added: $8,678] at June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively) | | | [removed: 463,834] [added: 834,513] | | | | | | [removed: 403,745] [added: 463,834] | | |

| Inventories | | | [removed: 1,040,964] [added: 1,545,606] | | | | | | [removed: 851,498] [added: 1,040,964] | | |

| Prepaid expenses and other current assets (including receivables from related parties of [removed: $23,748] [added: $24,412] and [removed: $19,791] [added: $23,837] at June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively) | | | [removed: 130,195] [added: 158,799] | | | | | | [removed: 126,985] [added: 130,195] | | |

| Total current assets | | | [removed: 1,867,259] [added: 2,806,315] | | | | | | [removed: 1,592,761] [added: 1,867,259] | | |

| Investment in equity investee | | | [removed: 4,578] [added: 5,329] | | | | | | [removed: 2,703] [added: 4,578] | | |

| Property, plant and equipment, net | | | [removed: 274,713] [added: 285,972] | | | | | | [removed: 233,785] [added: 274,713] | | |

| Deferred income taxes, net | | | [removed: 63,288] [added: 69,929] | | | | | | [removed: 54,898] [added: 63,288] | | |

| Other assets | | | [removed: 32,126] [added: 37,532] | | | | | | [removed: 34,499] [added: 32,126] | | |

| Total assets | | | $ | [removed: 2,241,964] [added: 3,205,077] | | | | | $ | [removed: 1,918,646] [added: 2,241,964] | |

| Accounts payable (including amounts due to related parties of [removed: $70,096] [added: $87,355] and [removed: $72,368] [added: $70,096] at June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively) | | | $ | [removed: 612,336] [added: 655,403] | | | | | $ | [removed: 417,673] [added: 612,336] | |

| Accrued liabilities (including amounts due to related parties of [removed: $18,528] [added: $18,676] and [removed: $16,206] [added: $18,528] at June 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively) | | | [removed: 178,850] [added: 212,419] | | | | | | [removed: 155,401] [added: 178,850] | | |

| Income taxes payable | | | [removed: 12,741] [added: 41,743] | | | | | | [removed: 4,700] [added: 12,741] | | |

| Short-term debt | | | [removed: 63,490] [added: 449,146] | | | | | | [removed: 23,704] [added: 63,490] | | |

| Deferred revenue | | | [removed: 101,479] [added: 111,313] | | | | | | [removed: 106,157] [added: 101,479] | | |

| Total current liabilities | | | [removed: 968,896] [added: 1,470,024] | | | | | | [removed: 707,635] [added: 968,896] | | |

| Deferred revenue, non-current | | | [removed: 100,838] [added: 122,548] | | | | | | [removed: 97,612] [added: 100,838] | | |

| Long-term debt | | | [removed: 34,700] [added: 147,618] | | | | | | [removed: 5,697] [added: 34,700] | | |

| Other long-term liabilities (including [added: changes in] related party [removed: balance] [added: balances] of [removed: $0] [added: $499, $(1,699)] and [removed: $1,699 at June 30,] [added: $(1,301) in fiscal years 2022,] 2021 and 2020, respectively) | | | [removed: 41,132] [added: (10,557)] | | | | | | [removed: 41,995] [added: (4,220)] | | | [added: | | | (8,001) | | |]

| Total liabilities | | | [removed: 1,145,566] [added: 1,779,330] | | | | | | [removed: 852,939] [added: 1,145,566] | | |

| Commitments and contingencies (Note [removed: 16)] [added: 15)] | | | | | | | | | | | |

| | | | | | | | | |

SMCI | 2022 Form 10-K | 51

SMCI | 2022 Form 10-K | 52

August 29, 2022

SMCI | 2022 Form 10-K | 53

| | | | 2022 | | | | | | 2021 | | |

SMCI | 2022 Form 10-K | 54

SMCI | 2022 Form 10-K | 55

| Net income | | | $ | 285,163 | | | | | $ | 111,865 | | | | | $ | 84,308 | |

| Net change in defined benefit obligations | | | 705 | | | | | | — | | | | | | — | | |

SMCI | 2022 Form 10-K | 56

| Other comprehensive loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (72) | | | | | | — | | | | | | — | | | | | | (72) | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 605 | | | | | | — | | | | | | — | | | | | | 605 | | |

| Exercise of stock options, net of taxes | | | 1,197,756 | | | | | | 20,994 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,994 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 458 | | | | | | — | | | | | | — | | | | | | 458 | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 285,163 | | | | | | (1) | | | | | | 285,162 | | |

| Balance at June 30, 2022 | | | 52,311,014 | | | | | | $ | 481,741 | | | | | — | | | | | | $ | — | | | | | $ | 911 | | | | | $ | 942,923 | | | | | $ | 172 | | | | | $ | 1,425,747 | |

SMCI | 2022 Form 10-K | 57

| Net income | | | $ | 285,163 | | | | | $ | 111,865 | | | | | $ | 84,308 | |

| Investment in a privately-held company | | | (1,100) | | | | | | — | | | | | | — | | |

SMCI | 2022 Form 10-K | 58

| Right of use ("ROU") assets obtained in exchange for operating lease commitments | | | $ | 11,151 | | | | | $ | 3,258 | | | | | $ | — | |

SMCI | 2022 Form 10-K | 59

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The Company recognizes the amount of transaction price allocated to each performance obligation within a customer contract as revenue at the time the related performance obligation is satisfied by transferring control of the promised good or service to a customer.

Determining the relative SSP for contracts that contain multiple performance obligations requires significant judgement.

If the SSP is not observable through past transactions, the Company applies judgment to estimate the SSP.

For substantially all performance obligations, the Company is able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers.

The Company typically establishes an SSP range for its products and services, which is reassessed on a periodic basis or when facts and circumstances change.

SSP for the Company’s products and services can evolve over time due to changes in its pricing practices, internally approved pricing guidelines with respect to geographies, customer type, internal costs, and gross margin objectives for the related performance obligations which can also be influenced by intense competition, changes in demand for the Company’s products and services, economic and other factors.

These estimates and judgements have not fluctuated significantly for the fiscal year ended June 30, 2022, compared to prior fiscal years.

SMCI | 2022 Form 10-K | 63

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| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| --- | --- | --- | --- | --- | --- |

| | | | Page | | |

Then, selected a sample of inventory products and verified the items were properly included in the correct aging category for determination of the reserve rate.

August 27, 2021

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Treasury stock (at cost), 0 and 1,333,125 shares at June 30, 2021 and 2020, respectively | | | — | | | | | | (20,491) | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at June 30, 2018 | | | 50,914,571 | | | | | | $ | 331,550 | | | | | (1,333,125) | | | | | | $ | (20,491) | | | | | $ | 165 | | | | | $ | 532,271 | | | | | $ | 157 | | | | | $ | 843,652 | |

| Cumulative effect of adjustment from adoption of new accounting standard, net of taxes | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,714 | | | | | | — | | | | | | 7,714 | | |

| Foreign currency translation loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (245) | | | | | | — | | | | | | — | | | | | | (245) | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 71,918 | | | | | | 4 | | | | | | 71,922 | | |

| Foreign currency translation loss | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (72) | | | | | | — | | | | | | — | | | | | | (72) | | |

| Foreign currency translation gain | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 605 | | | | | | — | | | | | | — | | | | | | 605 | | |

| Impairment of investments | | | — | | | | | | — | | | | | | 2,661 | | |

| Other long-term liabilities (including changes in related party balances of $(1,699), $(1,301) and $(500) in fiscal years 2021, 2020 and 2019, respectively) | | | (4,220) | | | | | | (8,001) | | | | | | 116 | | |

| Equipment purchased under capital leases | | | $ | 3,258 | | | | | $ | — | | | | | $ | — | |

| Contribution of certain technology rights to equity investee | | | $ | — | | | | | $ | — | | | | | $ | 3,000 | |

If the standalone selling price is not observable through past transactions, the Company applies judgment to estimate the standalone selling price taking into account available information, such as internally approved pricing guidelines with respect to geographies, customer type, internal costs, and gross margin objectives, for the related performance obligations.

interests from suffering losses.

In June 2016, the FASB issued authoritative guidance, *Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments*.

Under this new guidance, a company is required to estimate credit losses on certain types of financial instruments using an expected-loss model, replacing the current incurred-loss model, and record the estimate through an allowance for credit losses, which results in more timely recognition of credit losses.

The Company adopted this guidance on July 1, 2020 using the modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated.

The Company maintains an allowance for credit losses for accounts receivable and the investment in an auction rate security.

The allowance for credit losses is estimated using a loss rate method, considering factors such as customers’ credit risk, historical loss experience, current conditions, and forecasts.

The allowance for credit losses is measured on a collective (pool) basis by aggregating customer balances with similar risk characteristics.

The Company also records a specific allowance based on an analysis of individual past due balances or customer-specific information, such as a decline in creditworthiness or bankruptcy.

The new guidance has no material impact on the Company's consolidated financial statements for the year ended June 30, 2021.

In August 2018, the FASB issued amended guidance, *Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measuremen*t, to modify the disclosure requirements on fair value measurements based on the concepts in the FASB Concepts Statements, including the consideration of costs and benefits.

The Company adopted this guidance on July 1, 2020.

Changes to the disclosures in the consolidated financial statements were immaterial.

See Note 2, "Fair Value Disclosure".

In August 2018, the FASB issued authoritative guidance, *Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract*, to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract as well as hosting arrangements that include an internal use software license with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new guidance.

The Company adopted this guidance on July 1, 2020, prospectively.

The Company determined that the adoption of the guidance will not have a material impact on the Company's consolidated financial statements and disclosures.

In March 2020, the FASB issued authoritative guidance, *Facilitation of the Effects of Reference Rate Reform on Financial Reporting*.

E.SUN Credit Facility will terminate on September 18, 2021 before the phase out of LIBOR.

Therefore, the Company does not expect the adoption of the guidance to have an impact on its consolidated financial statements and disclosures.

| Total assets measured at fair value | | | $ | 1,163 | | | | | $ | 836 | | | | | $ | 1,571 | | | | | $ | 3,570 | |

Under the supervision, and with the participation, of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, [removed: 2021.][added: 2022.]

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, [removed: 2021.][added: 2022.]

Management, including our CEO and CFO, assessed our internal control over financial reporting as of June 30, [removed: 2021.][added: 2022.]

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of June 30, [removed: 2021] [added: 2022,] to provide reasonable assurance regarding the reliability of financial reporting and preparation of consolidated financial statements in accordance with U.S. GAAP.

The effectiveness of our internal control over financial reporting as of June 30, [removed: 2021] [added: 2022,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and their opinion is stated in their report which is included in this Annual Report on Form 10-K.

[removed: Other than the remediation efforts described above, there] [added: There] were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, [removed: 2021] [added: 2022,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have audited the internal control over financial reporting of Super Micro Computer, Inc. and subsidiaries (the “Company”) as of June 30, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, [removed: 2021,] [added: 2022,] of the Company and our report dated August [removed: 27, 2021,] [added: 29, 2022,] expressed an unqualified opinion on those financial statements.

SMCI | 2022 Form 10-K | 100

August 29, 2022

Remediation of Prior Year Material Weakness

We have remediated the IT general controls that aggregated to a material weakness as previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2020.

Since that time, with the oversight of our management and audit committee, we have implemented measures to remediate the material weakness.

The following actions have been implemented and performed:

- Re-designed the logical access roles associated with our primary ERP application and re-provisioned those roles to enforce segregation of duties and align user access commensurate with their business process role and job responsibilities;

- Implemented a third-party application to facilitate improved processes and controls related to provisioning privileged access roles and the monitoring of those roles;

- For our boundary applications relevant to financial reporting, implemented new program change management control;

- Strengthened access and monitoring controls related to boundary systems;

- For our primary ERP application, strengthened provisioning of privileged access roles; and

- Monitored instances in which individuals were granted broad access.

We believe the foregoing efforts have effectively remediated the material weakness as these procedures

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have been implemented for a sufficient period of time during the fiscal year and we have completed our testing of the design and operating effectiveness of these above procedures as of June 30, 2021.

As we continue to evaluate and work to improve our internal control over financial reporting, we may execute additional measures to enhance the overall design of our internal controls.

August 27, 2021

SMCI | 2022 Form 10-K | 101

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PART III

None.

PART III

The following table sets forth information regarding our current directors and executive officers and their ages as of July 31, [removed: 2021:][added: 2022:]

| Charles Liang | | | | | | [removed: 63] [added: 64] | | | | | | President, Chief Executive Officer and Chairman of the Board | | |

| David Weigand | | | | | | [removed: 63] [added: 64] | | | | | | Senior Vice President, Chief Financial Officer and Chief Compliance Officer | | |

| Don Clegg | | | | | | [removed: 62] [added: 63] | | | | | | Senior Vice President of Worldwide Sales | | |

| George Kao | | | | | | [removed: 60] [added: 61] | | | | | | Senior Vice President of Operations | | |

| Sara Liu | | | | | | [removed: 59] [added: 60] | | | | | | Co-Founder, Senior Vice President and Director | | |

| Daniel [removed: W.] Fairfax (1)(4) | | | | | | [removed: 65] [added: 66] | | | | | | Director | | |

| Sherman Tuan (2)(3)(4) | | | | | | [removed: 67] [added: 68] | | | | | | Director | | |

| Shiu Leung (Fred) Chan [removed: (1)(4)] [added: (1)(2)(4)] | | | | | | [removed: 73] [added: 74] | | | | | | Director | | |

| Tally Liu [removed: (1)(4)] [added: (1)(3)(4)] | | | | | | [removed: 71] [added: 72] | | | | | | Director | | |

[removed: (2)Member] [added: (3)Member] of the Compensation Committee

[removed: (3)Member] [added: (2)Member] of the Nominating and Corporate Governance Committee (the “Governance Committee”)

*Sara Liu* co-founded Super Micro in September 1993, has been a member of our Board [removed: of Directors] since March 2007 and currently serves as our Co-Founder, Senior Vice President, and a director.

[added: *Daniel] Fairfax* has been a member of our Board [removed: of Directors] since July 2019.

[removed: *Saria Tseng*] [added: *Judy Lin*] has been a member of our Board [removed: of Directors] since [removed: November 2016.][added: April 2022.]

*Sherman Tuan* has been a member of our Board [removed: of Directors] since February 2007.

*Shiu Leung (Fred) Chan* has been a member of our Board [removed: of Directors] since October 2020.

Mr. Chan is the founder and [added: currently the] president of KCR Development, Inc. which has developed real estate projects in excess of $1 billion in California and Hawaii specializing in high-density residential and retail projects.

He most recently served as chairman of ESS Technology, Inc., a privately held semiconductor company which he [added: had] founded, from 2015 to 2019.

ESS Technology was previously a public company listed on Nasdaq from 1995 until 2008, where he had held a variety of senior executive roles, including as chairman, president and [added: chief executive officer, and served as a director.]

*Tally Liu* was appointed to our Board [removed: of Directors] and our Audit Committee [removed: on] [added: in] January [removed: 30, 2019,] [added: 2019] and was appointed as the chair of the Audit Committee [removed: on] [added: in] June [removed: 30,] 2019.

A Certified Public Accountant from 1982-2007, Mr. Liu is a member of the American Institute of Certified Public Accountants (AICPA) with retired [removed: status,] [added: status] and was previously a member of the Florida Institute of Certified Public Accountants (FICPA).

Mr. Liu is not related to any member of our Board [removed: of Directors] or any of our officers.

Except for Mr. Charles Liang and Ms. Sara Liu who are [removed: married,] [added: married to each other,] there are no other family relationships among any of our directors or executive officers.

| Class II [removed: Director] [added: Directors] (2) | | | Sara Liu [added: Judy Lin] | | |

| Class III Directors (3) | | | Daniel W. Fairfax [removed: Saria Tseng] Shiu Leung (Fred) Chan | | |

(3)The term of Class III directors expires at the annual meeting of stockholders following fiscal year [removed: 2021.][added: 2024.]

We have adopted “Corporate Governance Guidelines” to help ensure that the Board [removed: of Directors] is independent from management, appropriately performs its function as the overseer of management, and that the interests of the Board of Directors [added: and management align with the interests of our stockholders.]

The “Corporate Governance Guidelines” are available at [removed: https://ir.supermicro.com/governance/governance-documents/default.aspx.][added: https://ir.supermicro.com/governance/governance-documents/default.aspx]

[removed: The] [added: Each year, the] Board affirmatively [removed: determines] [added: assesses] the independence of each director and nominee for election as a director in accordance with the listing requirements of The Nasdaq Stock Market.

[added: Based on these standards, our Board has determined that five of its current seven members, Daniel] Fairfax, [removed: Saria Tseng,] [added: Judy Lin,] Sherman Tuan Shiu Leung (Fred) Chan and Tally Liu, are [removed: "independent directors"] [added: “independent directors”] under the applicable rules and regulations of the SEC and the listing requirements and rules of The Nasdaq Stock Market.

The Board [removed: of Directors] welcomes the submission of any comments or concerns from stockholders or other interested parties.

If you wish to send any communications to the [removed: Board of Directors,] [added: Board,] you may use one of the following methods:

Communications that are intended specifically for the independent directors or non-management directors should be sent to the e-mail address or street address noted above, to the attention of the [removed: "Independent Directors."][added: “Independent Directors”.]

We held an annual meeting of stockholders on May [removed: 28, 2021] [added: 18, 2022,] for our fiscal year [removed: 2020.][added: 2021.]

[added: The] Board held [removed: nine] [added: eleven] meetings during fiscal year [removed: 2021,] [added: 2022,] four of which were regularly scheduled meetings and [removed: five] [added: seven] of which were special meetings.

All directors attended at least 75% of the meetings of the Board and the committees on which they served during the time they were members of the Board or such committees during fiscal year [removed: 2021.][added: 2022.]

[removed: Our] [added: The] Board has delegated primary responsibility for oversight of risks relating to financial controls and reporting to our Audit [removed: Committee, which in turn reports to the full Board on such matters as appropriate.][added: Committee.]

The Audit Committee also assists the Board in oversight of certain [added: other] risks, [removed: particularly in the areas of] [added: including] internal controls [removed: over financial reporting, financial reporting] and review of related party transactions.

Our management, with oversight from our Compensation Committee, has reviewed our compensation policies and practices with respect to risk-taking incentives and risk management and does not believe that potential risks arising from our compensation polices or practices are reasonably likely to have a material adverse effect on our [removed: company][added: company.]

| Judy Lin (2)(4) | | | | | | 69 | | | | | | Director | | |

SMCI | 2022 Form 10-K | 102

The following Board Diversity Matrix is provided pursuant to Nasdaq Rule 5606.

Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).

| Board Diversity Matrix (As of July 31, 2022) | | | | | | | | | | | | | | |

| Total Number of Directors | | | 7 | | | | | | | | | | | |

| | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | | |

| Part I: Gender Identity | | | | | | | | | | | | | | |

| Directors | | | 2 | | | 5 | | | 0 | | | 0 | | |

| Part II: Demographic Background | | | | | | | | | | | | | | |

| African American or Black | | | 0 | | | 0 | | | 0 | | | 0 | | |

| Alaskan Native or Native American | | | 0 | | | 0 | | | 0 | | | 0 | | |

| Asian | | | 2 | | | 4 | | | 0 | | | 0 | | |

| Hispanic or Latinx | | | 0 | | | 0 | | | 0 | | | 0 | | |

| Native Hawaiian or Pacific Islander | | | 0 | | | 0 | | | 0 | | | 0 | | |

| White | | | 0 | | | 1 | | | 0 | | | 0 | | |

| Two or More Races or Ethnicities | | | 0 | | | 0 | | | 0 | | | 0 | | |

| LGBTQ+ | | | 0 | | | | | | | | | | | |

| Did Not Disclose Demographic Background | | | 0 | | | | | | | | | | | |

SMCI | 2022 Form 10-K | 103

Ms. Lin is a retired executive who has 30 years of experience in the disk drive industry.

She served as an Independent Board Director of MORESCO Corporation, a leading manufacturer of specialty chemicals based in Japan, from June 2014 to May 2022.

Ms. Lin served as Vice President of Western Digital Media Operations, a leader in data infrastructure, from September 2007 until her retirement in September 2012.

Prior to Western Digital, Ms. Lin served as Vice President at Komag Inc., a leading supplier of thin-film disks to the hard disk drive industry and held various management positions from April 1994 until Western Digital acquired Komag in September 2007.

Before joining Komag, Ms. Lin was with IBM Almaden Research Center Storage Systems Division for 11 years as a Senior Scientist from January 1983 to April 1994.

Ms. Lin holds a MSc degree in Materials Science and Mineral Engineering from University of California, Berkeley where she was also a PhD candidate, and a BS in Chemical Engineering from National Cheng Kung University in Taiwan.

Our Governance Committee concluded that Ms. Lin should serve on the Board based on her substantial leadership and management experience and, considering she is well versed in technology innovation, product development, engineering and global operations, she will add valuable perspective to the Board.

SMCI | 2022 Form 10-K | 104

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The Audit Committee reports to the full Board on such matters as appropriate.

In October 2021, the each of the three standing committees conducted their periodic review of their charters, and a description of such charters is set forth below.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Tally Liu (1) | | | | | | Sherman Tuan (1) | | | | | | Shiu Leung (Fred) Chan (1) | | |

SMCI | 2022 Form 10-K | 107

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| Saria Tseng (2)(3)(4) | | | | | | 51 | | | | | | Director | | |

__________________________

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*Daniel W.

Mr. Fairfax currently serves on the board of directors of Energous Corporation, where he is both the chair of the board and chair of the audit committee.

Ms. Tseng has served as Vice President of Strategic Corporate Development, General Counsel and Secretary of Monolithic Power Systems, Inc. (“MPS”), a fabless manufacturer of high-performance analog and mixed-signal semiconductors since 2004.

From 2001 to 2004, Ms. Tseng served as Vice President, General Counsel and Corporate Secretary of MaXXan Systems, an enterprise class storage network system.

Previously, Ms. Tseng was an attorney at Gray Cary (now DLA Piper) and Jones Day.

Ms. Tseng is a member of the state bar in both California and New York and is a member of the bar association of the Republic of China, Taiwan.

She holds Master of Law degrees from the University of California at Berkeley and the Chinese Culture University in Taipei.

Our Governance Committee concluded that Ms. Tseng should serve on the Board based on her skills, experience and qualifications in business and corporate law, her legal expertise and her familiarity with technology business.

chief executive officer, and served as a director.

and management align with the interests of our stockholders.

Based on these standards, our Board of Directors has determined that five of its current seven members, Daniel W.

The

In October 2020, the Board of Directors approved amendments to the charters for each of the Audit Committee and the Compensation Committee, and, in January 2021, the Board of Directors approved amendments to the Governance Committee charter, which amendments are all reflected in the descriptions contained herein.

| Daniel W. Fairfax | | | | | | Saria Tseng | | | | | | Sherman Tuan | | |

(2)The Governance Committee does not currently have a designated chairperson.

The Governance Committee charter provides that the Governance Committee shall be comprised of no fewer than two members.

In this section we provide an explanation and analysis of the material elements of the compensation provided to our Chief Executive Officer, [removed: persons who served as] Chief Financial [removed: Officer during fiscal year 2021,] [added: Officer,] and [added: both of] our other [removed: three most highly compensated] [added: two] executive officers who were serving [removed: as executive officers at] [added: on June 30, 2022, which was] the end of our fiscal year [removed: 2021] [added: 2022] (collectively referred to as our “named executive officers”).

Our named executive officers and their positions at the end of fiscal year [removed: 2021] [added: 2022] were:

| David [removed: Weigand(1)] [added: Weigand] | | | Senior Vice President, Chief Financial Officer and Chief Compliance Officer | | |

| [removed: Kevin Bauer(1)] [added: David Weigand] | | | [removed: Former] [added: | | |] Senior Vice President, Chief Financial Officer [added: and Chief Compliance Officer] | | | [added: | | | $94,050(2) | | |]

[removed: ][added: ]

[removed: (1) The] [added: (1)The] chart presents the percentage compensation by compensation component received by the [removed: five presented] [added: three] non-CEO named executive officers together (aggregate compensation) as a group, as well as the split between cash and equity compensation for all such persons received in [added: the] aggregate as a group.

Compensation Philosophy and Objectives—Our [added: Continued] Move Toward Performance-Based Compensation Arrangements

Our executive compensation philosophy is to link compensation to corporate [removed: performance, particularly the compensation of Mr. Liang, our CEO.][added: performance.]

[removed: This movement culminated in] [added: In] March 2021, [removed: when] we [added: had] changed Mr. Liang’s compensation to be almost completely performance-based.

As discussed in more detail below, in March 2021, we converted nearly 100% of Mr. Liang’s compensation to performance-based compensation through the issuance of [added: performance-based] options (the “2021 CEO Performance Award”) to purchase 1,000,000 shares of our common stock at an exercise price of $45.00 per share, which [added: price] was 32% higher than the market price of our common stock on the date [removed: of] the award [added: was provided] ($34.08).

The [removed: option] [added: 2021 CEO Performance Award] is comprised of five [removed: tranches, which] [added: tranches that] vest only if the market price of our common stock reaches various prices (ranging from $45.00 to $120.00 per share) and we achieve certain specified revenue goals, all as described in greater detail below.

In connection with the 2021 CEO Performance Award, Mr. Liang’s base salary was reduced to $1.00 per year [removed: (or, if required by law, the statutory minimum wage applicable in San Jose, California)] and Mr. Liang agreed that he would not be eligible for any increase in base salary, or any other cash compensation, until June 30, 2026.

In summary, [removed: as of] [added: since] the [removed: end] [added: latter part] of fiscal year 2021, [added: through all of fiscal year 2022, and continuing for about the next four years,] almost all of Mr. Liang’s compensation [removed: for the next five years] [added: has been, and] is [added: expected to be,] based [added: only] upon us achieving the revenue goals described below and the [removed: market price of our] common stock [removed: meeting the] price targets described below.

To fully achieve those goals and targets, our revenue must increase [removed: from] [added: to $8 billion over a rolling four-quarter period (from] $3.6 billion for [added: the last full] fiscal year [removed: 2021 to $8 billion,] [added: before the award)] and the market price of our common stock must reach [removed: $120, an increase of 252% from the market price] [added: $120.00 per share (from $34.08] on the day the [removed: stock options were awarded.][added: award was provided).]

[removed: See below for] [added: For] more [removed: details] [added: information] about the [added: operation of this award, see “Discussion and Analysis of] 2021 CEO Performance [removed: Award.][added: Award” above.]

During [added: the early part of] fiscal year 2022, the Compensation Committee [removed: intends] [added: reviewed the results of a new compensation study it had requested from its independent compensation consultant, and continued] to [removed: continue exploring] [added: explore] (with Mr. Liang) the appropriate balance [added: for other named executive officers] between [added: fixed and regular compensation components (like base salary and regularly refreshed equity grants with time-based vesting) and] performance-based equity awards [removed: like PRSUs and our traditional use of stock options and] [added: (like performance-based] restricted stock units [removed: (“RSUs”) with time-based vesting for future long-term equity programs for other named executive officers.][added: (“PRSUs”)).]

During fiscal year [removed: 2021,] [added: 2022,] the Compensation Committee was [added: principally] comprised of [removed: three non-employee directors through May 28, 2021 and] two non-employee [removed: directors] [added: directors, although] for [removed: the remainder of the fiscal year] [added: a brief period from April 27, 2022] through [removed: June 30, 2021 following the expiration of] [added: May 18, 2022,] the [removed: term of office] [added: Compensation Committee was comprised] of [removed: Mr. Hwei-Ming (Fred) Chan as a director.][added: three non-employee directors.]

All of the non-employee directors who served on the Compensation Committee during fiscal year [removed: 2021] [added: 2022] were independent pursuant to the applicable listing rules of NASDAQ and Rule 16b-3 under the Exchange Act.

However, [added: during the meetings,] neither our Chief Financial Officer nor our General Counsel [removed: attends] [added: participates in] the [removed: portion] [added: consideration] of [removed: meetings during which] his own performance or [removed: compensation is being discussed.][added: compensation, although he may provide an introduction of the topic to be considered to the Compensation Committee.]

As part of making an overall assessment of each named executive officer’s role and performance, and structuring our compensation programs for fiscal year [removed: 2021,] [added: 2022,] the Compensation Committee reviewed recommendations of our Chief Executive Officer, as well as publicly available peer group compensation data and data compiled by our independent compensation consultant.

During fiscal year [removed: 2021,] [added: 2022,] the Compensation Committee considered various sources of information and comparative data when structuring the compensation awards issued and determining executive compensation levels, including information and compensation data assembled for the Compensation Committee by Radford, an Aon Hewitt company ("Radford"), from a sample of public companies selected by [removed: us.][added: us, with input on the selection of this sample from Radford.]

| Ciena Corporation | | | [removed: Infinera Corporation] [added: NETGEAR, Inc.] | | |

| [removed: Cray Inc.(2)] [added: Juniper Networks, Inc.] | | | [removed: Juniper Networks,] [added: Viasat,] Inc. | | |

| Diebold Nixdorf, [removed: Incorporated] [added: Inc.] | | | [removed: NetApp, Inc.] [added: Plexus Corp.] | | |

| Extreme Networks, Inc. | | | [removed: NETGEAR,] [added: Pure Storage,] Inc. | | |

Recognizing that over-reliance on external comparisons can be of concern, the Compensation Committee used external comparisons as only one point of reference and [removed: is] [added: was] mindful of the value and limitations of comparative data.

Key Fiscal Year [removed: 2021] [added: 2022] Executive Compensation Decisions and Actions

In connection with the grant of the 2021 CEO Performance Award, [removed: it was also determined that] Mr. Liang [removed: would receive] [added: receives] a de minimis salary of $1 per [removed: annum (or such other non-waivable minimum wage requirement, if deemed advisable)] [added: year] and no cash bonuses through June 30, 2026.

[removed: In fiscal year 2019, before] [added: Before] receiving Radford’s information and [removed: assistance,] [added: assistance in fiscal year 2022,] the Compensation Committee assessed the independence of Radford in the light of all relevant factors, including [removed: the] additional services and other factors required by the SEC, that could give rise to a potential conflict of interest with respect to Radford.

The Compensation Committee, [removed: with] the entire Board, and our management value the opinions of our stockholders.

[removed: As discussed in the Prior Year CD&A, feedback] [added: Feedback] received from stockholders has included a desire that a more significant portion of executive compensation [removed: (including future equity awards made following the adoption of the 2020 Equity and Incentive Compensation Plan)] be tied to performance based upon the achievement of pre-established goals.

For fiscal year [removed: 2021,] [added: 2022,] the Compensation Committee took such prior feedback into consideration when it developed, designed, and [removed: granted] [added: implemented] the [removed: 2021 CEO] [added: FY2022] Performance [removed: Award.][added: Program for Other Named Executive Officers.]

Our last annual meeting of stockholders was held on May [removed: 28, 2021] [added: 18, 2022] (the [removed: "Fiscal] [added: “Fiscal] Year [removed: 2020] [added: 2021] Annual [removed: Meeting"),] [added: Meeting”),] and we provided our stockholders the annual opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement for such meeting.