Ichor
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C. 20549 FORM 10‑K (Mark One)☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 28, 2018or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001‑37961 ICHOR HOLDINGS, LTD.(Exact name of registrant as specified in its charter) Cayman Islands 001-37961 Not Applicable(State or other jurisdiction ofincorporation) (Commission File Number) (IRS Employer Identification No.)3185 Laurelview Ct.Fremont, California 94538(Address of principal executive offices, including Zip Code)(510) 897-5200(Registrant's telephone number, including area code)Not Applicable(Former name or former address, if changed since last report) Title of each class Name of exchange on which registeredOrdinary Shares, $0.0001 par value The NASDAQ Stock Market, LLCSecurities registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 ofthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. Large accelerated filer☐ Accelerated filer☒Non-accelerated filer☐ Smaller reporting company☐Emerging Growth Company☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒There were 22,369,135 ordinary shares, $0.0001 par value, outstanding as of March 1, 2019. The aggregate market value of voting ordinary shares held by non-affiliates was$534,635,184 as of June 29, 2018, the last business day of our most recently completed second fiscal quarter.DOCUMENTS INCORPORATED BY REFERENCEThe information required by Part III of Form 10‑K is incorporated herein by reference to the registrant’s definitive Proxy Statement relating to its 2019 General Meeting, which will befiled with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year.  TABLE OF CONTENTS PagePART I ITEM 1.BUSINESS1ITEM 1A.RISK FACTORS9ITEM 1B.UNRESOLVED STAFF COMMENTS24ITEM 2.PROPERTIES24ITEM 3.LEGAL PROCEEDINGS24ITEM 4.MINE SAFETY DISCLOSURES24 PART II ITEM 5.MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES25ITEM 6.SELECTED FINANCIAL DATA27ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS28ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK44ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA44ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE45ITEM 9A.CONTROLS AND PROCEDURES45ITEM 9B.OTHER INFORMATION45 PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE47ITEM 11.EXECUTIVE COMPENSATION47ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDERMATTERS47ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE47ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES47 PART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES47ITEM 16.FORM 10-K SUMMARY47 EXHIBIT INDEX SIGNATURES  CAUTIONARY STATEMENT CONCERNING FORWARD‑LOOKING STATEMENTSThis report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical factincluded in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of futureresults and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. Theseforward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,”“plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. However, these words are not the exclusive means ofidentifying such statements. These statements are contained in many sections of this report, including those entitled “Business” and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations.” Although we believe that our plans, intentions and expectations reflected in orsuggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected.Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in thisreport under the heading “Risk Factors,” as well as other cautionary statements that are made from time to time in our other filings with the Securities andExchange Commission and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks anduncertainties.We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you thatwe will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us orour operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligationto publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.  PART IITEM 1. BUSINESSUnless expressly indicated or the context requires otherwise, the terms “Ichor,” “Company,” “we,” “us,” “our,” and similar terms in this report refer to IchorHoldings, Ltd. and its consolidated subsidiaries.We use a 52 or 53 week fiscal year ending on the last Friday in December. The following table details our fiscal periods included elsewhere in this report. Allreferences to fiscal years or quarters relate to our fiscal period as so detailed. Fiscal Period Period Ending Weeks in PeriodFiscal Year 2018: December 28, 2018 52First Quarter March 30, 2018 13Second Quarter June 29, 2018 13Third Quarter September 28, 2018 13Fourth Quarter December 28, 2018 13 Fiscal Year 2017: December 29, 2017 52First Quarter March 31, 2017 13Second Quarter June 30, 2017 13Third Quarter September 29, 2017 13Fourth Quarter December 29, 2017 13 Fiscal Year 2016: December 30, 2016 53First Quarter March 25, 2016 13Second Quarter June 24, 2016 13Third Quarter September 23, 2016 13Fourth Quarter December 30, 2016 14 Fiscal Year 2015 December 25, 2015 52 Company OverviewWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment. Ourproduct offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process toolsused in the manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gasesused in semiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactiveliquid chemistries used in semiconductor manufacturing processes such as chemical-mechanical planarization, electroplating, and cleaning. We alsomanufacture precision machined components, weldments, and proprietary products for use in fluid delivery systems for direct sales to our customers. Thisvertically integrated portion of our business is primarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductormanufacturing processes. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects inthese processes. Most OEMs outsource all or a portion of the design, engineering and manufacturing of their gas delivery subsystems to a few specializedsuppliers, including us. Additionally, many OEMs are also increasingly outsourcing the design, engineering and manufacturing of their chemical deliverysubsystems due to the increased fluid expertise required to manufacture these subsystems. Outsourcing these subsystems has allowed OEMs to leverage thesuppliers’ highly specialized engineering, design and production skills while focusing their internal resources on their own value-added processes. Webelieve that this outsourcing trend has enabled OEMs to reduce their costs and development time, as well as provide growth opportunities for specializedsubsystems suppliers like us.1 Our goal is to be a leading supplier of outsourced fluid delivery subsystems and components to OEMs engaged in manufacturing capital equipment toproduce semiconductors and to leverage our technology and products to expand our addressable markets. To achieve this goal, we engage with our customersearly in their design and development processes and utilize our deep engineering resources and operating expertise to jointly create innovative and advancedsolutions that meet the current and future needs of our customers. These collaborations frequently involve our engineers working at our customers’ sites andserving as an extension of our customers’ product design teams. We employ this approach with three of the largest manufacturers of semiconductor capitalequipment in the world. We believe this approach enables us to design subsystems that meet the precise specifications our customers demand, allows us tooften be the sole supplier of these subsystems during the initial production ramp and positions us to be the preferred supplier for the full five to ten-yearlifespan of the process tool.The broad technical expertise of our engineering team, coupled with our early customer engagement approach, enables us to offer innovative and reliablesolutions to complex fluid delivery challenges. With two decades of experience developing complex fluid delivery subsystems and meeting the constantlychanging production requirements of leading semiconductor OEMs, we have developed expertise in fluid delivery that we offer to our OEM customers. Inaddition, our capital efficient model and the integration of our business systems with those of our customers provides us the flexibility to fulfill increaseddemand and meet changing customer requirements with relatively low levels of capital expenditures. With an aim to superior customer service, we have aglobal footprint with many facilities strategically located in close proximity to our customers. We have long standing relationships with top tier OEMcustomers, including Lam Research, Applied Materials, and ASML, which were our three largest customers by sales in 2018.We grew our revenue from continuing operations by 26% to $823.6 million in 2018 from $655.9 million in 2017 (hereinafter, all references to “sales” or“revenue” relates to net sales from continuing operations, unless explicitly stated otherwise). We generated net income from continuing operations of$57.9 million, $56.9 million, and $20.8 million in 2018, 2017, and 2016, respectively. We generated adjusted net income from continuing operations of$75.1 million, $65.1 million, and $31.6 million in 2018, 2017, and 2016, respectively. See Item 7 – Management's Discussion and Analysis of FinancialCondition and Results of Operations, Non-GAAP Results for a discussion of adjusted net income from continuing operations, an accompanying presentationof the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States, net incomefrom continuing operations, and a reconciliation of the differences between adjusted net income from continuing operations and net income from continuingoperations.Our Competitive StrengthsAs a leader in the fluid delivery industry, we believe that our key competitive strengths include the following:Deep Fluids Engineering ExpertiseWe believe that our engineering team, comprised of chemical engineers, mechanical engineers and software and systems engineers, has positioned us toexpand the scope of our solutions, provide innovative subsystems and strengthen our incumbent position at our OEM customers. Many of our engineers areindustry veterans and have spent a significant portion of their careers at our customers, bringing first-hand expertise and a heightened understanding of ourcustomers’ needs. Our engineering team acts as an extension of our customers’ product development teams, providing our customers with technical expertisethat is outside of their core competencies.Early Engagement with Customers on Product DevelopmentWe seek to engage with our customers and potential customers very early in their process for new product development. We believe this approach enables usto collaborate on product design, qualification, manufacturing and testing in order to provide a comprehensive, customized solution. Through earlyengagement during the complex design stages, our engineering team gains early insight into our customers’ technology roadmaps which enables us topioneer innovative and advanced solutions. In many cases our early engagement with our customers enables us to be the sole source supplier when theproduct is initially introduced.Long History and Strong Relationships with Top Tier CustomersWe have established deep relationships with top tier OEMs such as Lam Research, Applied Materials, and ASML, which were our three largest customers bysales in 2018. Our customers are global leaders by sales in the semiconductor capital equipment industry. Our existing relationships with our customers haveenabled us to effectively compete for new fluid delivery subsystems for our customers’ next generation products in development. We leverage our deeprooted existing customer relationships with these market leaders to penetrate new business opportunities created through industry consolidation. Our closecollaboration with them has contributed to our established market position and several key supplier awards.2 Operational Excellence with Scale to Support the Largest CustomersOver our 19 year history of designing and building gas delivery systems, we have developed deep capabilities in operations. We have strategically locatedour manufacturing facilities near our customers’ locations in order to provide fast and efficient responses to new product introductions, and accommodateconfiguration or design changes late in the manufacturing process. We also added significant capacity in our Singapore facility to support high volumeproducts and will continue to add capacity as needed to support future growth. In addition to providing high quality and reliable fluid delivery subsystems,one of our principal strategies is delivering the lead-times that provide our customers the required flexibility needed in their production processes. We haveaccomplished this by investing in manufacturing systems and processes and an efficient supply chain. Our focus on operational efficiency and flexibilityallows us to reduce manufacturing cycle times in order to respond quickly to customer requests and lead-times that are often less than four weeks.Capital Efficient and Scalable Business ModelIn general, our business is not capital intensive and we are able to grow sales with a low investment in property, plant and equipment. In 2018, 2017, and2016, our total capital expenditures were $13.9 million, $8.2 million, and $4.3 million, respectively, representing only 1.7%, 1.3%, and 1.1% of sales,respectively. The semiconductor capital equipment market has historically been cyclical. We have structured our business to minimize fixed manufacturingoverhead and operating expenses to enable us to grow net income at a higher rate than sales during periods of growth. Conversely, our low fixed costapproach allows us to minimize the impact of cyclical downturns on our net income, but results in a lower level of gross margin leverage or improvement as apercentage of sales in times of increased demand. For example, from 2014 to 2018, sales grew at a compound annual growth rate, or CAGR, of 35% whileadjusted net income from continuing operations grew at a CAGR of 64%. Conversely, our low fixed cost approach allows us to minimize the impact ofcyclical downturns on our net income, but results in a smaller increase in gross margin as a percentage of sales in times of increased demand.Our Growth StrategyOur objective is to enhance our position as a leader in providing fluid delivery solutions, including subsystems, components, and tool refurbishment, to ourcustomers by leveraging our core strengths. The key elements of our growth strategy are:Grow Our Market Share within Existing Customer BaseWe intend to grow our position within our existing customers by continuing to leverage our specialized engineering talent, early collaboration approachwith OEMs to foster long-term relationships and expanded product offerings. Each of our customers produces many different process tools for various processsteps. At each customer, we are an outsourced supplier of fluid delivery subsystems and components for a subset of their entire process tool offerings. We areconstantly looking to expand our market share at our existing customers. We believe that our early collaborative approach with customers positions us todeliver innovative and dynamic solutions, offer timely deployment and meet competitive cost targets, further increasing our market share. Through ouracquisitions of a weldment company and a precision machining company in July and December 2017, respectively, a plastic machining & fabricationcompany in April 2016, and a Korean gas panel supplier in April 2018, we expanded our served market and also entered the market for chemical deliverysubsystems for wet process tools where we had only limited engagement in the past. Using this and our existing engineering capability, we developed aliquid delivery module and was qualified on a wet process equipment system at one of our largest customers who is a market leader in this space.Grow Our Total Available Market at Existing Customers with Expanded Product OfferingsWe continue to work with our existing core customers on additional opportunities, including chemical delivery, one of our important potential growth areas.We believe that wet processes, clean and electro chemical deposition, or ECD, that require precise chemical delivery are currently an underpenetrated marketopportunity for us. By leveraging our existing customer relationships and strong reputation in fluid mechanics, we intend to increase our chemical deliverymodule market share and introduce additional related products. Through our acquisitions of a weldment company and a precision machining company inJuly and December 2017, respectively, a plastic machining & fabrication company in April 2016, and a Korean gas panel supplier in April 2018, weexpanded our served market and entered the market for chemical delivery subsystems. The acquisitions allow us to manufacture and assemble the complexplastic and metal products and precision machined components for the semiconductor equipment, aerospace, and general-industrial industries, as well asprovide us exposure to and growth opportunities in the Korean semiconductor capital equipment market.3 Expand Our Total Customer Base within Fluid Delivery MarketWe have expanded our customer base and are currently a supplier of gas delivery systems for a leading lithography system manufacturer, a leading ALDsystem manufacturer, and a Korean process tool OEM. We continue to actively engage with new customers that are considering outsourcing their gas andchemical delivery needs as well as expanding our components business.Continue to Improve Our Manufacturing Process EfficiencyWe continually strive to improve our processes to reduce our manufacturing process cycle time, improve our ability to respond to short lead-time and lastminute configuration changes, reduce our manufacturing costs, and improve our inventory efficiency requirements in order to improve profitability and makeour product offerings more attractive to new and existing customers.Our Products and ServicesWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems. Our product and service offerings are classified in thefollowing categories:Gas Delivery SubsystemsGas delivery is among the most technologically complex functions in semiconductor capital equipment and is used to deliver, monitor and control precisequantities of the vapors and gases critical to the manufacturing process. Our gas delivery systems consist of a number of gas lines, each controlled by a seriesof mass flow controllers, regulators, pressure transducers and valves, and an integrated electronic control system. Our gas delivery subsystems are primarilyused in equipment for “dry” manufacturing processes, such as etch, chemical vapor deposition, physical vapor deposition, epitaxy and strip. 4 Chemical Delivery SubsystemsOur chemical delivery subsystems are used to precisely blend and dispense reactive chemistries and colloidal slurries critical to the specific “wet” front-endprocess, such as wet clean, electro chemical deposition (“ECD”), and chemical-mechanical planarization (“CMP”). In addition to the chemical deliverysubsystem, we also develop the process modules that apply the various chemicals directly to the wafer in a process and application-unique manner to createthe desired chemical reaction.The image below shows a typical wet-process front end semiconductor tool, with a chemical delivery subsystem and corresponding application processmodule highlighted: WeldmentsOur complete offering of weldments support the delivery of fluids through the process tool. We have developed both automated and manual welding processto support world class workmanship on all types of metals needed to support fluid delivery within the semiconductor market. The welded assemblies are usedin both wet and dry processes.Precision MachiningPrecision machining provides the ability to supply our customers with components used in our gas delivery systems and weldments, while also providingcustom machined solutions throughout customers’ equipment. Many of these items are used downstream of the gas system and in process criticalapplications. Our precision machined products can be used in both wet and dry applications.5 HistoryWe were originally incorporated as Celerity, Inc. (“Celerity”) in 1999. Our business of designing and manufacturing critical systems for semiconductorcapital equipment manufacturers operated as a stand-alone business until 2009 when Celerity sold the business to a private equity fund. Francisco Partners(“FP”) acquired the business in December 2011 and formed Ichor Holdings, Ltd., an exempt company incorporated in the Cayman Islands, in March 2012 toserve as the parent company as part of a restructuring to accommodate the expansion of our business in Singapore and Malaysia. In April 2012, we acquiredSemi Scenic UK Limited to provide refurbishment services for legacy tools. In April 2016, we purchased Ajax for $17.6 million to add chemical deliverysubsystem capabilities with existing customers. We completed the initial public offering of our ordinary shares in December 2016. In July 2017 we acquiredCal‑Weld, Inc. (“Cal‑Weld”) for $56.2 million to add to our gas delivery subsystem and weldment capabilities. In December 2017 we acquired TalonInnovations Corporation (“Talon”) for $137.8 million to add to our gas delivery subsystem, precision machining, and component manufacturing capabilities.In April 2018, we acquired IAN Engineering Co., Ltd. (“IAN”) for $6.5 million to provide us exposure to and growth opportunities in the Koreansemiconductor capital equipment market. We intend to continue to evaluate opportunistic acquisitions to supplement our organic growth.Customers, Sales and MarketingWe market and sell our products directly to equipment OEMs in the semiconductor equipment market. We are dependent upon a small number of customers,as the semiconductor equipment manufacturer market is highly concentrated with four companies accounting for over 80% of all process tool revenues. For2018, our two largest customers were Lam Research and Applied Materials, which accounted for 56% and 32% of sales, respectively. We do not have long-term contracts that require customers to place orders with us in fixed or minimum volumes, and we generally operate on a purchase order basis withcustomers.Our sales and marketing efforts focus on fostering close business relationships with our customers. As a result, we locate many of our account managers nearthe customer they support. Our sales process involves close collaboration between our account managers and engineering and operations teams. Accountmanagers and engineers work together with customers and in certain cases provide on-site support, including attending customers’ internal meetings relatedto production and engineering design. Each customer project is supported by our account managers and customer support team, who ensure we are alignedwith all of the customer’s quality, cost and delivery expectations.Operations, Manufacturing and Supply Chain ManagementWe have developed a highly flexible manufacturing model with cost-effective locations situated nearby the manufacturing facilities of our largest customers.We have facilities in the United States, Singapore, Malaysia, the United Kingdom, and Korea.OperationsOur product cycle engagements begin by working closely with our customers to outline the solution specifications before design and prototyping evenbegin. Our design and manufacturing process is highly flexible, enabling our customers to make alterations to their final requirements throughout the design,engineering and manufacturing process. This flexibility results in significantly decreased order-to-delivery cycle times for our customers. For instance, it cantake as little as 20 to 30 days for us to manufacture a gas delivery system with fully evaluated performance metrics after receiving an order.ManufacturingWe are ISO 9001 certified or compliant at each of our manufacturing locations, and our manufactured subsystems and modules adhere to strict designtolerances and specifications. We operate Class 100 and Class 10,000 clean room facilities for customer-specified testing, assembly, and integration of high-purity gas and chemical delivery systems at our locations in Singapore, Oregon, Texas, and Korea. We operate additional facilities in Malaysia, Oregon, andCalifornia for weldments and related components used in our gas delivery subsystems, and we operate a separate facility in California for critical componentsused in our chemical delivery subsystems. We operate facilities in Minnesota and Florida for precision machining of components for sale to our customersand internal use. Our facilities are located in close proximity to our largest customers to allow us to collaborate with them on a regular basis and to enable usto deliver our products on a just-in-time basis, regardless of order size or the degree of changes in the applicable configuration or specifications.We qualify and test key components that are integrated into our subsystems, and test our fluid delivery subsystems during the design process and again priorto shipping. Our quality management system allows us to access real-time corrective action reports, non-conformance reports, customer complaints andcontrolled documentation. In addition, our senior management conducts quarterly reviews of our quality control system to evaluate effectiveness. Ourcustomers also complete quarterly surveys which allow us to measure satisfaction.6 Supply Chain ManagementWe use a wide range of components and materials in the production of our gas and chemical delivery systems, including filters, mass flow controllers,regulators, pressure transducers and valves. We obtain components and materials from a large number or sources, including single source and sole sourcesuppliers. We use consignment material and just-in-time stocking programs to better manage our component inventories and better respond to changingcustomer requirements. These approaches enable us to significantly reduce our inventory levels and maintain flexibility in responding to changes in productdemand.In addition, a key part of our strategy is to identify multiple suppliers with a strong global reach that are located within close proximity to our manufacturinglocations.Technology Development and EngineeringWe have a long history of engineering innovation and development. Over time, we have transitioned from being simply an integration engineering andcomponents company into a gas and chemical delivery subsystem leader with complete system engineering and integration expertise. Our industry continuesto experience rapid technological change, requiring us to continuously invest in technology and product development and to regularly introduce newproducts and features that meet our customers’ evolving requirements.We have built a team of fluid delivery experts. As of December 28, 2018, our engineering team consisted of approximately 75 engineers and designers withmechanical, electrical, chemical, systems and software expertise. Our engineers are closely connected with our customers and typically work at our customers’sites and operate as an extension of our customers’ design team. We engineer within our customers’ processes, design vaults, drawing standards and partnumbering systems. These development efforts are designed to meet specific customer requirements in the areas of subsystem design, materials, componentselection and functionality. The majority of our sales are generated from projects during which our engineers cooperated with our customer early in thedesign cycle. Through this early collaborative process, we become an integral part of our customers’ design and development processes, and we are able toquickly anticipate and respond to our customers’ changing requirements.Our engineering team also works directly with our suppliers to help them identify new component technologies and make necessary changes in, andenhancements to, the components that we integrate into our products. Our analytical and testing capabilities enable us to evaluate multiple suppliercomponent technologies and provide customers with a wide range of appropriate component and design choices for their gas and chemical delivery systemsand other critical subsystems. Our analytical and testing capabilities also help us anticipate technological changes and the requirements in componentfeatures for next-generation gas delivery systems and other critical subsystems.CompetitionThe markets for our products are very competitive. When we compete for new business, we face competition from other suppliers of gas or chemical deliverysubsystems, and in some cases with the internal manufacturing groups of OEMs. While many OEMs have outsourced the design and manufacture of their gasand chemical delivery systems, we would face additional competition if in the future these OEMs elected to develop these systems internally.The fluid delivery subsystem market is concentrated and we face competition primarily from Ultra Clean Technology, with some competition from regionalsuppliers. The chemical delivery subsystem, weldment and precision machining industries are fragmented and we face competition from numerous smallersuppliers. In addition, the market for tool refurbishment is fragmented and we compete with many regional competitors. The primary competitive factors weemphasize include: •early engagement with customers; •size and experience of engineering staff; •design-to-delivery cycle times; •flexible manufacturing capabilities; and •customer relationships.We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that couldadversely affect sales of our current and future products. In addition, the limited number of potential customers in our industry further intensifies competition.We anticipate that increased competitive pressures may cause intensified price-based competition and we may have to reduce the prices of our products. Inaddition, we expect to face new competitors as we enter new markets.7 Intellectual PropertyOur success depends, in part, upon our ability to maintain and protect our technology and products and to conduct our business without infringing theproprietary rights of others. We continue to invest in securing intellectual property protection for our technology and products and protect our technologyby, among other things, filing patent applications. We also rely on a combination of trade secrets and confidentiality provisions, and to a much lesser extent,copyrights and trademarks, to protect our proprietary rights. We have historically focused our patent protection efforts in the United States. As ofDecember 28, 2018, we held 47 patents, 19 of which were U.S. patents. While we consider our patents to be valuable assets, we do not believe the success ofour business or our overall operations are dependent upon any single patent or group of related patents. In addition, we do not believe that the loss orexpiration of any single patent or group of related patents would materially affect our business.Intellectual property that we develop on behalf of our customers is generally owned exclusively by those customers. In addition, we have agreed toindemnify certain of our customers against claims of infringement of the intellectual property rights of others with respect to our products. Historically, wehave not paid any claims under these indemnification obligations, and we do not have any pending indemnification claims against us.Employees and Labor RelationsAs of December 28, 2018, we had approximately 1,305 full‑time employees and 185 contract or temporary workers, which allow flexibility as businessconditions and geographic demand change. Of our total employees, approximately 75 are engineers, 60 are engaged in sales and marketing, 1,255 areengaged in manufacturing, and 100 perform executive and administrative functions. None of our employees are unionized, but in various countries, local lawrequires our participation in works councils. We have not experienced any material work stoppages at any of our facilities. We consider our relationship withour employees to be good.Environmental, Health, and Safety RegulationsOur operations and facilities are subject to federal, state and local regulatory requirements and foreign laws and regulations, relating to environmental, wastemanagement and health and safety matters, including those relating to the release, use, storage, treatment, transportation, discharge, disposal and remediationof contaminants, hazardous substances and wastes, as well as practices and procedures applicable to the construction and operation of our facilities. Webelieve that our business is operated in substantial compliance with applicable regulations. However, in the future we could incur substantial costs, includingcleanup costs, fines or civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under theselaws and regulations, or non-compliance with the environmental permits required at our facilities. Potentially significant expenditures could be required inorder to comply with environmental laws that may be adopted or imposed in the future. We are not aware of any threatened or pending environmentalinvestigations, lawsuits or claims involving us, our operations or our current or former facilities.Available InformationOur internet address is www.ichorsystems.com. We make a variety of information available, free of charge, at our Investor Relations website,ir.ichorsystems.com. This information includes our Annual Reports on Form 10‑K, our Quarterly Reports on Form 10‑Q, our Current Reports on Form 8‑K,and any amendments to those reports as soon as reasonably practicable after we electronically file those reports with or furnish them to the Securities andExchange Commission (“SEC”), as well as our Code of Business Ethics and Conduct and other governance documents.The public may read and copy materials filed by us with the Securities and Exchange Commission, or the SEC, at the SEC’s Public Reference Room at100 F Street, NE Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at1‑800‑SEC‑0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that filedocuments electronically with the SEC at www.sec.gov.The contents of these websites, or the information connected to those websites, are not incorporated into this report. References to websites in this report areprovided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or availablethrough, the website.8 ITEM 1A. RISK FACTORSThere are many factors that affect our business and the results of operations, some of which are beyond our control. The following is a description of someimportant factors that may cause the actual results of operations in future periods to differ materially from those currently expected or desired.Risks Related to Our BusinessOur business depends significantly on expenditures by manufacturers in the semiconductor capital equipment industry, which, in turn, is dependentupon the semiconductor device industry. When that industry experiences cyclical downturns, demand for our products and services is likely to decrease,which would likely result in decreased sales. We may also be forced to reduce our prices during cyclical downturns without being able to proportionallyreduce costs.Our business, financial condition and results of operations depend significantly on expenditures by manufacturers in the semiconductor capital equipmentindustry. In turn, the semiconductor capital equipment industry depends upon the current and anticipated market demand for semiconductor devices. Thesemiconductor device industry is subject to cyclical and volatile fluctuations in supply and demand and in the past has periodically experienced significantdownturns, which often occur in connection with declines in general economic conditions, and which have resulted in significant volatility in thesemiconductor capital equipment industry. The semiconductor device industry has also experienced recurring periods of over-supply of products that havehad a severe negative effect on the demand for capital equipment used to manufacture such products. We have experienced, and anticipate that we willcontinue to experience, significant fluctuations in customer orders for our products and services as a result of such fluctuations and cycles. Any downturns inthe semiconductor device industry could have a material adverse effect on our business, financial condition and results of operations.In addition, we must be able to appropriately align our cost structure with prevailing market conditions, effectively manage our supply chain and motivateand retain employees, particularly during periods of decreasing demand for our products. We may be forced to reduce our prices during periods of decreasingdemand. While we operate under a low fixed cost model, we may not be able to proportionally reduce all of our costs if we are required to reduce our prices. Ifwe are not able to timely and appropriately adapt to the changes in our business environment, our business, financial condition and results of operations willbe materially adversely affected. The cyclical and volatile nature of the semiconductor device industry and the absence of long-term fixed or minimumvolume contracts make any effort to project a material reduction in future sales volume difficult.We rely on a very small number of OEM customers for a significant portion of our sales. Any adverse change in our relationships with these customerscould materially adversely affect our business, financial condition and results of operations.The semiconductor capital equipment industry is highly concentrated and has experienced significant consolidation in recent years. As a result, a relativelysmall number of OEM customers have historically accounted for a significant portion of our sales, and we expect this trend to continue for the foreseeablefuture. For 2018, our top two customers accounted for approximately 56% and 32%, respectively, of sales, and we expect that our sales will continue to beconcentrated among a very small number of customers. We do not have any long-term contracts that require customers to place orders with us in fixed orminimum volumes. Accordingly, the success of our business depends on the success of our customers and those customers and other OEMs continuing tooutsource the manufacturing of critical subsystems and process solutions to us. Because of the small number of OEMs in the markets we serve, a number ofwhich are already our customers, it would be difficult to replace lost sales resulting from the loss of, or the reduction, cancellation or delay in purchase ordersby, any one of these customers, whether due to a reduction in the amount of outsourcing they do, their giving orders to our competitors, their acquisition byan OEM who is not a customer or with whom we do less business, or otherwise. We have in the past lost business from customers for a number of thesereasons. If we are unable to replace sales from customers who reduce the volume of products and services they purchase from us or terminate their relationshipwith us entirely, such events could have a material adverse impact on our business, financial condition and results of operations.Additionally, if one or more of the largest OEMs were to decide to single- or sole-source all or a significant portion of manufacturing and assembly work to asingle equipment manufacturer, such a development would heighten the risks discussed above.9 Our customers exert a significant amount of negotiating leverage over us, which may require us to accept lower prices and gross margins or increasedliability risk in order to retain or expand our market share with them.By virtue of our largest customers’ size and the significant portion of our sales that is derived from them, as well as the competitive landscape, our customersare able to exert significant influence and pricing pressure in the negotiation of our commercial arrangements and the conduct of our business with them. Ourcustomers often require reduced prices or other pricing, quality or delivery commitments as a condition to their purchasing from us in any given period orincreasing their purchase volume, which can, among other things, result in reduced gross margins in order to maintain or expand our market share. Ourcustomers’ negotiating leverage also can result in customer arrangements that may contain significant liability risk to us. For example, some of our customersrequire that we provide them indemnification against certain liabilities in our arrangements with them, including claims of losses by their customers causedby our products. Any increase in our customers’ negotiating leverage may expose us to increased liability risk in our arrangements with them, which, ifrealized, may have a material adverse effect on our business, financial condition and results of operations. In addition, new products often carry lower grossmargins than existing products for several quarters following their introduction. If we are unable to retain and expand our business with our customers onfavorable terms, or if we are unable to achieve gross margins on new products that are similar to or more favorable than the gross margins we have historicallyachieved, our business, financial condition and results of operations may be materially adversely affected.The industries in which we participate are highly competitive and rapidly evolving, and if we are unable to compete effectively, our business, financialcondition and results of operations could be materially adversely affected.We face intense competition from other suppliers of gas or chemical delivery subsystems, as well as the internal manufacturing groups of OEMs. Increasedcompetition has in the past resulted, and could in the future result, in price reductions, reduced gross margins or loss of market share, any of which wouldmaterially adversely affect our business, financial condition and results of operations. We are subject to significant pricing pressure as we attempt to maintainand increase market share with our existing customers. Our competitors may offer reduced prices or introduce new products or services for the marketscurrently served by our products and services. These products may have better performance, lower prices and achieve broader market acceptance than ourproducts. OEMs also typically own the design rights to their products. Further, if our competitors obtain proprietary rights to these designs such that we areunable to obtain the designs necessary to manufacture products for our OEM customers, our business, financial condition and results of operations could bematerially adversely affected.Certain of our competitors may have or may develop greater financial, technical, manufacturing and marketing resources than we do. As a result, they may beable to respond more quickly to new or emerging technologies and changes in customer requirements, devote greater resources to the development,promotion, sale and support of their products and services, and reduce prices to increase market share. In addition to organic growth by our competitors, theremay be merger and acquisition activity among our competitors and potential competitors that may provide our competitors and potential competitors with anadvantage over us by enabling them to expand their product offerings and service capabilities to meet a broader range of customer needs. The introduction ofnew technologies and new market entrants may also increase competitive pressures.We are exposed to risks associated with weakness in the global economy and geopolitical instability.Our business is dependent upon manufacturers of semiconductor capital equipment, whose businesses in turn ultimately depend largely on consumerspending on semiconductor devices. Continuing uncertainty regarding the global economy continues to pose challenges to our business. Economicuncertainty and related factors, including current unemployment levels, uncertainty in European debt markets, geopolitical instability in various parts of theworld, fiscal uncertainty in the U.S. economy, market volatility and the slow rate of recovery of many countries from recent recessions, exacerbate negativetrends in business and consumer spending and may cause certain of our customers to push out, cancel or refrain from placing orders for products or services,which may reduce sales and materially adversely affect our business, financial condition and results of operations. Difficulties in obtaining capital, uncertainmarket conditions or reduced profitability may also cause some customers to scale back operations, exit businesses, merge with other manufacturers, or filefor bankruptcy protection and potentially cease operations, leading to customers’ reduced research and development funding and/or capital expendituresand, in turn, lower orders from our customers and/or additional slow moving or obsolete inventory or bad debt expense for us. These conditions may alsosimilarly affect our key suppliers, which could impair their ability to deliver parts and result in delays for our products or require us to either procure productsfrom higher-cost suppliers, or if no additional suppliers exist, to reconfigure the design and manufacture of our products, and we may be unable to fulfill somecustomer orders. Any of these conditions or events could have a material adverse effect on our business, financial condition and results of operations.10 If we do not keep pace with developments in the industries we serve and with technological innovation generally, our products and services may not becompetitive.Rapid technological innovation in the markets we serve requires us to anticipate and respond quickly to evolving customer requirements and could renderour current product offerings, services and technologies obsolete. In particular, the design and manufacturing of semiconductors is constantly evolving andbecoming more complex in order to achieve greater power, performance and efficiency with smaller devices. Capital equipment manufacturers need to keeppace with these changes by refining their existing products and developing new products.We believe that our future success will depend upon our ability to design, engineer and manufacture products that meet the changing needs of our customers.This requires that we successfully anticipate and respond to technological changes in design, engineering and manufacturing processes in a cost-effectiveand timely manner. If we are unable to integrate new technical specifications into competitive product designs, develop the technical capabilities necessaryto manufacture new products or make necessary modifications or enhancements to existing products, our business, financial condition and results ofoperations could be materially adversely affected.The timely development of new or enhanced products is a complex and uncertain process which requires that we: •design innovative and performance-enhancing features that differentiate our products from those of our competitors; •identify emerging technological trends in the industries we serve, including new standards for our products; •accurately identify and design new products to meet market needs; •collaborate with OEMs to design and develop products on a timely and cost-effective basis; •ramp-up production of new products, especially new subsystems, in a timely manner and with acceptable yields; •manage our costs of product development and the costs of producing the products that we sell; •successfully manage development production cycles; and •respond quickly and effectively to technological changes or product announcements by others.If we are unsuccessful in keeping pace with technological developments for the reasons above or other reasons, our business, financial condition and resultsof operations could be materially adversely affected.We must design, develop and introduce new products that are accepted by OEMs in order to retain our existing customers and obtain new customers.The introduction of new products is inherently risky because it is difficult to foresee the adoption of new standards, coordinate our technical personnel andstrategic relationships and win acceptance of new products by OEMs. We attempt to mitigate this risk by collaborating with our customers during theirdesign and development processes. We cannot, however, assure you that we will be able to successfully introduce, market and cost-effectively manufacturenew products, or that we will be able to develop new or enhanced products and processes that satisfy customer needs. In addition, new capital equipmenttypically has a lifespan of five to ten years, and OEMs frequently specify which systems, subsystems, components and instruments are to be used in theirequipment. Once a specific system, subsystem, component or instrument is incorporated into a piece of capital equipment, it will often continue to bepurchased for that piece of equipment on an exclusive basis for 18 to 24 months before the OEM generates enough sales volume to consider addingalternative suppliers. Accordingly, it is important that our products are designed into the new systems introduced by the OEMs. If any of the new products wedevelop are not launched or successful in the market, our business, financial condition and results of operations could be materially adversely affected.11 The manufacturing of our products is highly complex, and if we are not able to manage our manufacturing and procurement process effectively, ourbusiness, financial condition and results of operations may be materially adversely affected.The manufacturing of our products is a highly complex process that involves the integration of multiple components and requires effective management ofour supply chain while meeting our customers’ design-to-delivery cycle time requirements. Through the course of the manufacturing process, our customersmay modify design and system configurations in response to changes in their own customers’ requirements. In order to rapidly respond to these modificationsand deliver our products to our customers in a timely manner, we must effectively manage our manufacturing and procurement process. If we fail to managethis process effectively, we risk losing customers and damaging our reputation. We may also be subject to liability under our agreements with our customersif we or our suppliers fail to re- configure manufacturing processes or components in response to these modifications. In addition, if we acquire inventory inexcess of demand or that does not meet customer specifications, we could incur excess or obsolete inventory charges. We have from time to time experiencedbottlenecks and production difficulties that have caused delivery delays and quality control problems. These risks are even greater as we seek to expand ourbusiness into new subsystems. In addition, certain of our suppliers have been, and may in the future be, forced out of business as a result of the economicenvironment. In such cases, we may be required to procure products from higher-cost suppliers or, if no additional suppliers exist, reconfigure the design andmanufacture of our products. This could materially limit our growth, adversely impact our ability to win future business and have a material adverse effect onour business, financial condition and results of operations.Defects in our products could damage our reputation, decrease market acceptance of our products and result in potentially costly litigation.A number of factors, including design flaws, material and component failures, contamination in the manufacturing environment, impurities in the materialsused and unknown sensitivities to process conditions, such as temperature and humidity, as well as equipment failures, may cause our products to containundetected errors or defects. Errors, defects or other problems with our products may: •cause delays in product introductions and shipments; •result in increased costs and diversion of development resources; •cause us to incur increased charges due to unusable inventory; •require design modifications; •result in liability for the unintended release of hazardous materials; •create claims for rework, replacement and/or damages under our contracts with customers, as well as indemnification claims from customers; •decrease market acceptance of, or customer satisfaction with, our products, which could result in decreased sales and increased product returns;or •result in lower yields for semiconductor manufacturers.If any of our products contain defects or have reliability, quality or compatibility problems, our reputation may be damaged and customers may be reluctantto buy our products. We may also face a higher rate of product defects as we increase our production levels in periods of significant growth. Product defectscould result in warranty and indemnification liability or the loss of existing customers or impair our ability to attract new customers. In addition, we may notfind defects or failures in our products until after they are installed in a manufacturer’s fabrication facility. We may have to invest significant capital andother resources to correct these problems. Our current or potential customers also might seek to recover from us any losses resulting from defects or failures inour products. In addition, hazardous materials flow through and are controlled by certain of our products and an unintended release of these materials couldresult in serious injury or death. Liability claims could require us to spend significant time and money in litigation or pay significant damages.We may incur unexpected warranty and performance guarantee claims that could materially adversely affect our business, financial condition andresults of operations.In connection with our products and services, we provide various product warranties, performance guarantees and indemnification rights. Warranty or otherperformance guarantee or indemnification claims against us could cause us to incur significant expense to repair or replace defective products or indemnifythe affected customer for losses. In addition, quality issues can have various other ramifications, including delays in the recognition of sales, loss of sales, lossof future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, all of which couldmaterially adversely affect our business, financial condition and results of operations.12 Our dependence on a limited number of suppliers may harm our production output and increase our costs, and may prevent us from deliveringacceptable products on a timely basis.Our ability to meet our customers’ demand for our products depends upon obtaining adequate supplies of quality components and other raw materials on atimely basis. In addition, our customers often specify components from particular suppliers that we must incorporate into our products. We also useconsignment and just-in-time stocking programs, which means we carry very little inventory of components or other raw materials, and we rely on oursuppliers to deliver necessary components and raw materials in a timely manner. However, our suppliers are under no obligation to provide us withcomponents or other raw materials. As a result, the loss of or failure to perform by any of our key suppliers could materially adversely affect our ability todeliver products on a timely basis. In addition, if a supplier was unable to provide the volume of components we require on a timely basis and at acceptableprices and quality, we would have to identify and qualify replacements from alternative sources of supply. However, the process of qualifying new suppliersfor complex components is also lengthy and could delay our production. We may also experience difficulty in obtaining sufficient supplies of componentsand raw materials in times of significant growth in our business. If we are unable to procure sufficient quantities of components or raw materials fromsuppliers, our customers may elect to delay or cancel existing orders or not place future orders, which could have a material adverse effect on our business,financial condition and results of operations.We are subject to order and shipment uncertainties, and any significant reductions, cancellations or delays in customer orders could have a materialadverse effect on our business, financial condition and results of operations.Our sales are difficult to forecast because we generally do not have a material backlog of unfilled orders and because of the short time frame within which weare often required to manufacture and deliver products to our customers. Most of our sales for a particular quarter depend on customer orders placed duringthat quarter or shortly before it commences. Our contracts generally do not require our customers to commit to minimum purchase volumes. While most of ourcustomers provide periodic rolling forecasts for product orders, those forecasts do not become binding until a formal purchase order is submitted, whichgenerally occurs only a short time prior to shipment. As a result of the foregoing and the cyclicality and volatility of the industries we serve, it is difficult topredict future orders with precision. Occasionally, we order component inventory and build products in advance of the receipt of actual customer orders.Customers may cancel order forecasts, change production quantities from forecasted volumes or delay production for reasons beyond our control.Furthermore, reductions, cancellations or delays in customer order forecasts usually occur without penalty to, or compensation from, the customer.Reductions, cancellations or delays in forecasted orders could cause us to hold inventory longer than anticipated, which could reduce our gross profit, restrictour ability to fund our operations and result in unanticipated reductions or delays in sales. If we do not obtain orders as we anticipate, we could have excesscomponents for a specific product and/or finished goods inventory that we would not be able to sell to another customer, likely resulting in inventory write-offs, which could have a material adverse effect on our business, financial condition and results of operations.Because our customers generally require that they qualify our engineering, documentation, manufacturing and quality control procedures, our abilityto add new customers quickly is limited.We are generally required to qualify and maintain our status as a supplier for each of our customers. This is a time-consuming process that involves theinspection and approval by a customer of our engineering, documentation, manufacturing and quality control procedures before that customer will placeorders with us. Our ability to lessen the adverse effect of any loss of, or reduction in sales to, an existing customer through the rapid addition of one or morenew customers is limited in part because of these qualification requirements. Consequently, the risk that our business, financial condition and results ofoperations would be materially adversely affected by the loss of, or any reduction in orders by, any of our significant customers is increased. Moreover, if welost our existing status as a qualified supplier to any of our customers, such customer could cancel its orders from us or otherwise terminate its relationshipwith us, which could have a material adverse effect on our business, financial condition and results of operations.We may be subject to interruptions or failures in our information technology systems.We rely on our information technology systems to process transactions, summarize our operating results and manage our business. Our informationtechnology systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attack orother security breaches, catastrophic events, such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by ouremployees. If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replacethem, and we may suffer loss of critical data and interruptions or delays in our operations.13 We may be the target of attempted cyber-attacks, computer viruses, malicious code, phishing attacks, denial of service attacks and other information securitythreats. To date, cyber-attacks have not had a material impact on our financial condition, results or business; however, we could suffer material financial orother losses in the future and we are not able to predict the severity of these attacks. Our risk and exposure to these matters remains heightened because of,among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale and our role inthe financial services industry, the outsourcing of some of our business operations, the ongoing shortage of qualified cyber-security professionals, and theinterconnectivity and interdependence of third parties to our systems. The occurrence of a cyber-attack, breach, unauthorized access, misuse, computer virusor other malicious code or other cyber-security event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption,loss or destruction of confidential and other information that belongs to us, our customers, our counterparties, third-party service providers or borrowers thatis processed and stored in, and transmitted through, our computer systems and networks. The occurrence of such an event could also result in damage to oursoftware, computers or systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations. Thiscould result in significant losses, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention,reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations.The reliability and capacity of our information technology systems is critical to our operations and the implementation of our growth initiatives. Anymaterial disruption in our information technology systems, or delays or difficulties in implementing or integrating new systems or enhancing current systems,could have an adverse effect on our business, and results of operations.Restrictive covenants under our Credit Facilities may limit our current and future operations. If we fail to comply with those covenants, the lenderscould cause outstanding amounts, which are currently substantial, to become immediately due and payable, and we might not have sufficient funds andassets to pay such loans.As of December 28, 2018, we had $170.6 million of indebtedness outstanding under our term loan facility and $34.2 million of indebtedness outstandingunder our revolving credit facility (our “Credit Facilities”). The outstanding amount of our Credit Facilities reflected in our consolidated financial statementsincluded elsewhere in this report is net of $3.9 million of debt issuance costs. We may incur additional indebtedness in the future. Our Credit Facilitiescontain certain restrictive covenants and conditions, including limitations on our ability to, among other things: •incur additional indebtedness or contingent obligations; •create or incur liens, negative pledges or guarantees; •make investments; •make loans; •sell or otherwise dispose of assets; •merge, consolidate or sell substantially all of our assets; •make certain payments on indebtedness; •pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; •enter into certain agreements that restrict distributions from restricted subsidiaries; •enter into transactions with affiliates; •change the nature of our business; and •amend the terms of our organizational documents.As a result of these covenants, we may be restricted in our ability to pursue new business opportunities or strategies or to respond quickly to changes in theindustries that we serve. A violation of any of these covenants would be deemed an event of default under our Credit Facilities. In such event, upon theelection of the lenders, the loan commitments under our Credit Facilities would terminate and the principal amount of the loans and accrued interest thenoutstanding would be due and payable immediately. A default may also result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event our lenders accelerate the repayment of our borrowings, we cannot assure you that we and our subsidiaries would havesufficient funds to repay such indebtedness or be able to obtain replacement financing on a timely basis or at all. These events could force us into bankruptcyor liquidation, which could have a material adverse effect on our business, financial condition and results of operations.14 We also may need to negotiate changes to the covenants in the agreements governing our Credit Facilities in the future if there are material changes in ourbusiness, financial condition or results of operations, but we cannot assure you that we will be able to do so on terms favorable to us or at all.Certain of our customers require that we consult with them in connection with specified fundamental changes in our business, and address any concernsor requests such customer may have in connection with a fundamental change. While those customers do not have contractual approval or veto rightswith respect to fundamental changes, our failure to consult with such customers or to satisfactorily respond to their requests in connection with any suchfundamental change could constitute a breach of contract or otherwise be detrimental to our relationships with such customers.Certain of our key customers require that we consult with them in connection with specified fundamental changes in our business, including, among otherthings: •entering into any new line of business; •amending or modifying our organizational documents; •selling all or substantially all of our assets, or merging or amalgamating with a third party; •incur borrowings in excess of a specific amount; •making senior management changes; •entering into any joint venture arrangement; and •effecting an initial public offering.These customers do not have contractual approval or veto rights with respect to any fundamental changes in our business. However, our failure to consultwith such customers or to satisfactorily respond to their requests in connection with any such fundamental change could constitute a breach of contract orotherwise be detrimental to our relationships with such customers, which could have a material adverse effect on our business, financial condition and resultsof operations.We may not be able to generate sufficient cash to service all of our indebtedness, including under our Credit Facilities, and may be forced to take otheractions to satisfy our obligations under our indebtedness, which may not be successful.Our ability to make scheduled payments on or to refinance our indebtedness, including under our Credit Facilities, depends on our financial condition andresults of operations, which are subject to prevailing economic and competitive conditions and other factors beyond our control. We may be unable tomaintain a level of cash flows from operating activities sufficient to permit us to fund our day-to-day operations or to pay the principal, premium, if any, andinterest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidityproblems and could be forced to reduce or delay investments and capital expenditures or to sell assets or operations, seek additional capital or restructure orrefinance our indebtedness. If we cannot make scheduled payments on our debt, we will be in default and, as a result, the lenders under our Credit Facilitiescould terminate their commitments to loan money, or foreclose against the assets securing such borrowings, and we could be forced into bankruptcy orliquidation, in each case, which would have a material adverse effect on our business, financial condition and results of operations.Our business is largely dependent on the know-how of our employees, and we generally do not have an intellectual property position that is protected bypatents.We believe that the success of our business depends in part on our proprietary technology, information, processes and know-how and on our ability tooperate without infringing on the proprietary rights of third parties. We rely on a combination of trade secrets and contractual confidentiality provisions and,to a much lesser extent, patents, copyrights and trademarks to protect our proprietary rights. Accordingly, our intellectual property position is morevulnerable than it would be if it were protected primarily by patents. We cannot assure you that we have adequately protected or will be able to adequatelyprotect our technology, that our competitors will not be able to utilize our existing technology or develop similar technology independently, that the claimsallowed with respect to any patents held by us will be broad enough to protect our technology or that foreign intellectual property laws will adequatelyprotect our intellectual property rights. If we fail to protect our proprietary rights successfully, our competitive position could suffer. Any future litigation toenforce patents issued to us, to protect trade secrets or know-how possessed by us or to defend ourselves or to indemnify others against claimed infringementof the rights of others could have a material adverse effect on our business, financial condition and results of operations.15 Third parties have claimed and may in the future claim we are infringing their intellectual property, which could subject us to litigation or licensingexpenses, and we may be prevented from selling our products if any such claims prove successful.We may in the future receive claims that our products, processes or technologies infringe the patents or other proprietary rights of third parties. In addition,we may be unaware of intellectual property rights of others that may be applicable to our products. Any litigation regarding our patents or other intellectualproperty could be costly and time-consuming and divert our management and key personnel from our business operations, any of which could have amaterial adverse effect on our business, financial condition and results of operations. The complexity of the technology involved in our products and theuncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement may also require us to enter into costly licenseagreements. However, we may not be able to obtain licenses on terms acceptable to us, or at all. We also may be subject to significant damages or injunctionsagainst the development, manufacture and sale of certain of our products if any such claims prove successful. We also rely on design specifications and otherintellectual property of our customers in the manufacture of products for such customers. While our customer agreements generally provide forindemnification of us by a customer if we are subjected to litigation for third-party claims of infringement of such customer’s intellectual property, suchindemnification provisions may not be sufficient to fully protect us from such claims, or our customers may breach such indemnification obligations to us,which could result in costly litigation to defend against such claims or enforce our contractual rights to such indemnification.From time to time, we may become involved in other litigation and regulatory proceedings, which could require significant attention from ourmanagement and result in significant expense to us and disruptions in our business.In addition to any litigation related to our intellectual property rights, we may in the future be named as a defendant from time to time in other lawsuits andregulatory actions relating to our business, such as commercial contract claims, employment claims and tax examinations, some of which may claimsignificant damages or cause us reputational harm. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot predict the ultimateoutcome of any such proceeding. An unfavorable outcome could have a material adverse effect on our business, financial condition and results of operationsor limit our ability to engage in certain of our business activities. In addition, regardless of the outcome of any litigation or regulatory proceeding, suchproceedings are often expensive, time-consuming and disruptive to normal business operations and require significant attention from our management. As aresult, any such lawsuits or proceedings could materially adversely affect our business, financial condition and results of operations.The technology labor market is very competitive, and our business will suffer if we are unable to hire and retain key personnel.Our future success depends in part on the continued service of our key executive officers, as well as our research, engineering, sales and manufacturingpersonnel, most of whom are not subject to employment or non-competition agreements. Competition for qualified personnel in the technology industry isparticularly intense, and we operate in geographic locations in which labor markets are competitive. Our management team has significant industryexperience and deep customer relationships, and therefore would be difficult to replace. In addition, our business is dependent to a significant degree on theexpertise and relationships which only a limited number of engineers possess. Many of these engineers often work at our customers’ sites and serve as anextension of our customers’ product design teams. The loss of any of our key executive officers or key engineers and other personnel, including our engineersworking at our customers’ sites, or the failure to attract additional personnel as needed, could have a material adverse effect on our business, financialcondition and results of operations and could lead to higher labor costs, the use of less-qualified personnel and the loss of customers. In addition, if any of ourkey executive officers or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how andkey personnel.We do not maintain key-man life insurance with respect to any of our employees. Our business will suffer if we are unable to attract, employ and retain highlyskilled personnel.16 Future acquisitions may present integration challenges, and if the goodwill, indefinite-lived intangible assets and other long-term assets recorded inconnection with such acquisitions become impaired, we would be required to record impairment charges, which may be significant.We have acquired strategic businesses in the past and if we find appropriate opportunities in the future, we may acquire businesses, products or technologiesthat we believe are strategic. The process of integrating an acquired business, product or technology may produce unforeseen operating difficulties andexpenditures, fail to result in expected synergies or other benefits and absorb significant attention of our management that would otherwise be available forthe ongoing development of our business. In addition, we may record a portion of the assets we acquire as goodwill, other indefinite-lived intangible assets orfinite-lived intangible assets. We do not amortize goodwill and indefinite-lived intangible assets, but rather review them for impairment on an annual basis orwhenever events or changes in circumstances indicate that their carrying value may not be recoverable. The recoverability of goodwill and indefinite-livedintangible assets is dependent on our ability to generate sufficient future earnings and cash flows. Changes in estimates, circumstances or conditions,resulting from both internal and external factors, could have a significant impact on our fair valuation determination, which could then have a materialadverse effect on our business, financial condition and results of operations.Our quarterly sales and operating results fluctuate significantly from period to period, and this may cause volatility in our share price.Our quarterly sales and operating results have fluctuated significantly in the past, and we expect them to continue to fluctuate in the future for a variety ofreasons, including the following: •demand for and market acceptance of our products as a result of the cyclical nature of the industries we serve or otherwise, often resulting inreduced sales during industry downturns and increased sales during periods of industry recovery or growth; •overall economic conditions; •changes in the timing and size of orders by our customers; •strategic decisions by our customers to terminate their outsourcing relationship with us or give market share to our competitors; •consolidation by our customers; •cancellations and postponements of previously placed orders; •pricing pressure from either our competitors or our customers, resulting in the reduction of our product prices or loss of market share; •disruptions or delays in the manufacturing of our products or in the supply of components or raw materials that are incorporated into or used tomanufacture our products, thereby causing us to delay the shipment of products; •decreased margins for several or more quarters following the introduction of new products, especially as we introduce new subsystems or otherproducts or services; •changes in design-to-delivery cycle times; •inability to reduce our costs quickly in step with reductions in our prices or in response to decreased demand for our products; •changes in our mix of products sold; •write-offs of excess or obsolete inventory; •one-time expenses or charges; and •announcements by our competitors of new products, services or technological innovations, which may, among other things, render ourproducts less competitive.As a result of the foregoing, we believe that quarter-to-quarter comparisons of our sales and results of operations may not be meaningful and that thesecomparisons may not be an accurate indicator of our future performance. Changes in the timing or terms of a small number of transactions coulddisproportionately affect our results of operations in any particular quarter. Moreover, our results of operations in one or more future quarters may fail to meetour guidance or the expectations of securities analysts or investors. If this occurs, we would expect to experience an immediate and significant decline in thetrading price of our ordinary shares.17 Labor disruptions could materially adversely affect our business, financial condition and results of operations.As of December 28, 2018, we had approximately 1,305 full time employees and 185 contract or temporary workers worldwide. None of our employees areunionized, but in various countries, local law requires our participation in works councils. While we have not experienced any material work stoppages atany of our facilities, any stoppage or slowdown could cause material interruptions in manufacturing, and we cannot assure you that alternate qualifiedcapacity would be available on a timely basis, or at all. As a result, labor disruptions at any of our facilities could materially adversely affect our business,financial condition and results of operations.As a global company, we are subject to the risks of doing business internationally, including periodic foreign economic downturns and politicalinstability, which may adversely affect our sales and cost of doing business in those regions of the world.Foreign economic downturns have adversely affected our business and results of operations in the past and could adversely affect our business and results ofoperations in the future. In addition, other factors relating to the operation of our business outside of the United States may have a material adverse effect onour business, financial condition and results of operations in the future, including: •the imposition of governmental controls or changes in government regulations, including tax regulations; •difficulties in enforcing our intellectual property rights; •difficulties in developing relationships with local suppliers; •difficulties in attracting new international customers; •difficulties in complying with foreign and international laws and treaties; •restrictions on the export of technology; •compliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act, export controllaws and export license requirements; •difficulties in achieving headcount reductions due to unionized labor and works councils; •restrictions on transfers of funds and assets between jurisdictions; •geo-political instability; and •trade restrictions and changes in taxes and tariffs.In the future, we may seek to expand our presence in certain foreign markets or enter emerging markets. Evaluating or entering into an emerging market mayrequire considerable management time, as well as start-up expenses for market development before any significant sales and earnings are generated.Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local political,economic and market conditions. As we continue to operate our business globally, our success will depend, in part, on our ability to anticipate andeffectively manage these and the other risks noted above. The impact of any one or more of these factors could materially adversely affect our business,financial condition and results of operations.We are subject to fluctuations in foreign currency exchange rates which could cause operating results and reported financial results to varysignificantly from period to period.The vast majority of our sales are denominated in U.S. Dollars. Many of the costs and expenses associated with our Singapore, Malaysian and U.K. operationsare paid in Singapore Dollars, Malaysian Ringgit or British Pounds (or Euros), respectively, and we expect our exposure to these currencies to increase as weincrease our operations in those countries. As a result, our risk exposure from transactions denominated in non-U.S. currencies is primarily related to theSingapore Dollar, Malaysian Ringgit, British Pound and Euro. In addition, because the majority of our sales are denominated in the U.S. Dollar, if one ormore of our competitors sells to our customers in a different currency than the U.S. Dollar, we are subject to the risk that the competitors’ products will berelatively less expensive than our products due to exchange rate effects. We have not historically established transaction-based hedging programs. Foreigncurrency exchange risks inherent in doing business in foreign countries could have a material adverse effect on our business, financial condition and resultsof operations.18 We are subject to numerous environmental laws and regulations, which could require us to incur environmental liabilities, increase our manufacturingand related compliance costs or otherwise adversely affect our business.We are subject to a variety of federal, state, local and foreign laws and regulations governing the protection of the environment. These environmental lawsand regulations include those relating to the use, storage, handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardousmaterials used in our manufacturing processes. These materials may have been or could be released into the environment at properties currently or previouslyowned or operated by us, at other locations during the transport of materials or at properties to which we send substances for treatment or disposal. Inaddition, we may not be aware of all environmental laws or regulations that could subject us to liability in the United States or internationally. If we were toviolate or become liable under environmental laws and regulations or become non-compliant with permits required at some of our facilities, we could be heldfinancially responsible and incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, third-party property damage or personalinjury claims.Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on ourbusiness and stock price.As a publicly traded company, we are required to comply with the SEC’s rules implementing Section 302 and 404 of the Sarbanes-Oxley Act, which requiremanagement to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness ofcontrols over financial reporting. Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to theeffectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC or thedate we are no longer an emerging growth company, which may be up to five full fiscal years following our initial public offering in December 2016.If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or toassert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion asto the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reportsand the market price of our common stock could be negatively affected, and we could become subject to investigations by NASDAQ, the SEC or otherregulatory authorities, which could require additional financial and management resources.In the second quarter of 2017, we identified material weaknesses in our internal control over financial reporting and may identify additional materialweaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. Ifour internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report ourfinancial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financialinformation and may lead to a decline in our share price.During the second quarter of 2017, we identified a material weakness in our internal control over financial reporting related to ineffective periodic riskassessment over control activities that ensure the ending inventory balances of our Malaysia and Singapore subsidiaries were recorded at the appropriate U.S.Dollar functional currency rate. During our previous consolidation process, we had a manual process that translated these inventory balances into the U.S.Dollar functional currency at incorrect rates for these subsidiaries due to system limitations, and we did not implement a control to reconcile the endinginventory balance at our Malaysia and Singapore subsidiaries to the final inventory balance reported in our consolidated financial statements. This materialweakness resulted in an accumulated overstatement of inventory as of March 31, 2017 of approximately $1.8 million. We corrected this overstatement in thesecond quarter of 2017 with a charge to cost of sales of $1.8 million. Additionally, we re‑implemented our Oracle system, which allows for a systems‑basedcalculation of inventory purchases and ending inventory at the proper U.S. Dollar functional currency rates, and implemented a control to reconcile the finalMalaysia and Singapore inventory sub‑ledger balances to the final balances recorded in consolidation. These improvements to our internal controls,implemented during 2017, were in place and demonstrated a sustained period of effective operation during 2017 to enable management of the Company toconclude the material weakness has been remediated as of December 29, 2017.If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report ourfinancial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financialinformation and may lead to a decline in our stock price.19 There are limitations on the effectiveness of controls, and the failure of our control systems may materially and adversely impact us.We do not expect that disclosure controls or internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter howwell designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of acontrol system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of theinherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, havebeen detected. Failure of our control systems to prevent error or fraud could have a material adverse effect on our business, financial condition and results ofoperations.Compliance with recently adopted rules of the SEC relating to “conflict minerals” may require us and our suppliers to incur substantial expense andmay result in disclosure by us that certain minerals used in products we manufacture are not “DRC conflict free.”Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, required the SEC to promulgate rules requiringdisclosure by a public company of any “conflict minerals” (tin, tungsten, tantalum and gold) necessary to the functionality or production of a productmanufactured or contracted to be manufactured by such company. The SEC adopted final rules in 2012 which took effect at the end of January 2013. Becausewe manufacture products which may contain tin, tungsten, tantalum or gold, we will be required under these rules to determine whether those minerals arenecessary to the functionality or production of our products and, if so, conduct a country of origin inquiry with respect to all such minerals. If any suchminerals may have originated in the Democratic Republic of the Congo, or the DRC, or any of its adjoining countries, or the “covered countries,” then weand our suppliers must conduct diligence on the source and chain of custody of the conflict minerals to determine if they did originate in one of the coveredcountries and, if so, whether they financed or benefited armed groups in the covered countries. Disclosures relating to the products which may containconflict minerals, the country of origin of those minerals and whether they are “DRC conflict free” must be provided in a Form SD (and accompanyingconflict minerals report if one is required to disclose the diligence undertaken by us in sourcing the minerals and our conclusions relating to such diligence).If we are required to submit a conflict minerals report, that report must be audited by an independent auditor pursuant to existing government auditingstandards, unless (for the first two years) we are unable to determine whether the minerals are “DRC conflict free.” Compliance with this new disclosure rulemay be very time consuming for management and our supply chain personnel (as well as time consuming for our suppliers) and could involve theexpenditure of significant amounts of money and resources by us and them. Disclosures by us mandated by the new rules which are perceived by the marketto be “negative” may cause customers to refuse to purchase our products. We are currently unable to assess the cost of compliance with this rule, and wecannot assure you that such cost will not have a material adverse effect on our business, financial condition and results of operations.Our business is subject to the risks of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by man-madedisruptions, such as terrorism.Our facilities could be subject to a catastrophic loss caused by natural disasters, including fires and earthquakes. If any of our facilities were to experience acatastrophic loss, it could disrupt our operations, delay production and shipments, reduce sales and result in large expenses to repair or replace the facility. Inaddition, we may experience extended power outages at our facilities. Disruption in supply resulting from natural disasters or other causalities or catastrophicevents may result in certain of our suppliers being unable to deliver sufficient quantities of components or raw materials at all or in a timely manner,disruptions in our operations or disruptions in our customers’ operations. To the extent that natural disasters or other calamities or causalities should result indelays or cancellations of customer orders, or the delay in the manufacture or shipment of our products, our business, financial condition and results ofoperations would be adversely affected.Changes in tax laws, tax rates or tax assets and liabilities could materially adversely affect our financial condition and results of operations.As a global company, we are subject to taxation in the United States and various other countries. Significant judgment is required to determine and estimateworldwide tax liabilities. Our future annual and quarterly tax rates could be affected by numerous factors, including changes in applicable tax laws, theamount and composition of pre-tax income in countries with differing tax rates or valuation of our deferred tax assets and liabilities. We have significantoperations in the United States and our holding company structure includes entities organized in the Cayman Islands, Netherlands, Singapore and Scotland.As a result, changes in applicable tax laws in these jurisdictions could have a material adverse effect on our financial condition and results of operations.On December 22, 2017, Congress passed the Tax Cuts and Jobs Act (the “Tax Act”). Among a number of significant changes to the U.S. federal income taxrules, the Tax Act reduces the marginal U.S. corporate income tax rate from 35% to 21%, limits the deduction for net interest expense, limits the deduction fornet operating losses and eliminates net operating loss carrybacks, modifies or repeals many business deductions and credits, shifts the United States toward amore territorial tax system, and imposes new taxes to combat erosion of the U.S. federal income tax base. Our net deferred tax assets and liabilities will berevalued at the newly enacted U.S. corporate rate, and the impact will be recognized in our tax expense in the year of enactment.20 We are also subject to regular examination by the Internal Revenue Service and other tax authorities, and from time to time we initiate amendments topreviously filed tax returns. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations and amendments todetermine the adequacy of our provision for income taxes, which requires estimates and judgments. Although we believe our tax estimates are reasonable, wecannot assure you that the tax authorities will agree with such estimates. We may have to engage in litigation to achieve the results reflected in the estimates,which may be time- consuming and expensive. We cannot assure you that we will be successful or that any final determination will not be materially differentfrom the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our financial condition andresults of operations.Risks Related to Ownership of Our Ordinary SharesThe price of our ordinary shares may fluctuate substantially.You should consider an investment in our ordinary shares to be risky, and you should invest in our ordinary shares only if you can withstand a significantloss and wide fluctuations in the market value of your investment. Some factors that may cause the market price of our ordinary shares to fluctuate, inaddition to the other risks mentioned in this report, are: •our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitionsor strategic investments; •changes in earnings estimates or recommendations by securities analysts, if any, who cover our ordinary shares; •speculation about our business in the press or investment community; •failures to meet external expectations or management guidance; •fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; •changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of ordinary shares by our shareholders,our incurrence of additional debt or our failure to comply with the agreements governing our Credit Facilities; •our decision to enter new markets; •reputational issues; •changes in general economic and market conditions in any of the regions in which we conduct our business; •material litigation or government investigations; •changes in industry conditions or perceptions; and •changes in applicable laws, rules or regulations.In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investorconfidence, the trading price of our ordinary shares could decline for reasons unrelated to our business, financial condition and results of operations. If any ofthe foregoing occurs, it could cause our share price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distractionto management.Future sales of our ordinary shares, or the perception in the public markets that these sales may occur, may depress our share price.We may seek to raise additional capital from time to time in the future, which may involve the issuance of additional ordinary shares, or securities convertibleinto ordinary shares. Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales could occur, could adverselyaffect the price of our ordinary shares and could impair our ability to raise capital through the sale of additional shares.21 We are an “emerging growth company” and have elected to comply with reduced public company reporting requirements, which could make ourordinary shares less attractive to investors.We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to takeadvantage of exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required tocomply with the auditor attestation requirements of Section 404 of the Sarbanes‑Oxley Act, (ii) reduced disclosure obligations regarding executivecompensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbindingadvisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerginggrowth company for up to five years after the first sale of our ordinary shares pursuant to an effective registration statement under the Securities Act, whichfifth anniversary will occur in December 2021. However, if certain events occur prior to the end of such five‑year period, including if we become a “largeaccelerated filer,” our annual gross revenue exceeds $1.0 billion or we issue more than $1.0 billion of non‑convertible debt in any three‑year period, wewould cease to be an emerging growth company prior to the end of such five‑year period. We have taken advantage of certain of the reduced disclosureobligations regarding executive compensation and may elect to take advantage of other reduced disclosure obligations in our SEC filings. As a result, theinformation that we provide to holders of our ordinary shares may be different than you might receive from other public reporting companies in which youhold equity interests. We cannot predict if investors will find our ordinary shares less attractive as a result of our reliance on these exemptions. If someinvestors find our ordinary shares less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for ourordinary shares and the price for our ordinary shares may be more volatile.Under the JOBS Act, emerging growth companies may also elect to delay adoption of new or revised accounting standards until such time as those standardsapply to private companies. We have elected not to avail ourselves of this extended transition period for complying with new or revised accounting standardsand, therefore, we will be subject to the same new or revised accounting standards as other public companies.We do not expect to pay any cash dividends for the foreseeable future.We do not anticipate that we will pay any cash dividends on our ordinary shares for the foreseeable future. Any determination to pay dividends in the futurewill be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, contractual restrictions (including thoseunder our Credit Facilities and any potential indebtedness we may incur in the future), restrictions imposed by applicable law, tax considerations and otherfactors our Board of Directors deems relevant. There can be no assurance that we will pay a dividend in the future or continue to pay any dividend if we docommence paying dividends. Accordingly, realization of a gain on an investment in our ordinary shares will depend on the appreciation of the price of ourordinary shares, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our ordinary shares.Our articles of association contain anti-takeover provisions that could adversely affect the rights of our shareholders.Our articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of controltransactions, including, among other things: •provisions that authorize our Board of Directors, without action by our shareholders, to issue additional ordinary shares and preferred shareswith preferential rights determined by our Board of Directors; •provisions that permit only a majority of our Board of Directors or the chairman of our Board of Directors to call shareholder meetings andtherefore do not permit shareholders to call shareholder meetings; •provisions that impose advance notice requirements, minimum shareholding periods and ownership thresholds, and other requirements andlimitations on the ability of shareholders to propose matters for consideration at shareholder meetings; and •a staggered board whereby our directors are divided into three classes, with each class subject to re-election once every three years on a rotatingbasis.These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices bydiscouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. With our staggered Board of Directors, atleast two annual meetings of shareholders are generally required in order to effect a change in a majority of our directors. Our staggered Board of Directorscan discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potentialacquirer to gain control of our Board of Directors in a relatively short period of time.22 The issuance of preferred shares could adversely affect holders of ordinary shares.Our Board of Directors is authorized to issue preferred shares without any action on the part of holders of our ordinary shares. Our Board of Directors also hasthe power, without shareholder approval, to set the terms of any such preferred shares that may be issued, including voting rights, dividend rights, andpreferences over our ordinary shares with respect to dividends or if we liquidate, dissolve or wind up our business and other terms. If we issue preferred sharesin the future that have preference over our ordinary shares with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or ifwe issue preferred shares with voting rights that dilute the voting power of our ordinary shares, the rights of holders of our ordinary shares or the price of ourordinary shares could be adversely affected.You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared tothe laws of the United States.Our corporate affairs are governed by our amended and restated memorandum and articles of association and by the Companies Law (2013 Revision) andcommon law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and thefiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. Thecommon law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English commonlaw, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of ourdirectors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, theCayman Islands have a less exhaustive body of securities laws as compared to the United States. In addition, Cayman Islands companies may not havestanding to initiate a shareholder derivative action before the United States federal courts.As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors ormajor shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.Certain judgments obtained against us by our shareholders may not be enforceable.We are a Cayman Islands company and a portion our assets are located outside of the United States. As a result, it may be difficult or impossible for you tobring an action against us in the United States in the event that you believe that your rights have been infringed under U.S. federal securities laws orotherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment againstour assets. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands willgenerally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.There can be no assurance that we will not be a passive foreign investment company for any taxable year, which could result in adverse U.S. federalincome tax consequences to U.S. Holders of our ordinary shares.A non-U.S. corporation will be a passive foreign investment company, or PFIC, for any taxable year if either (i) at least 75% of its gross income for such yearis passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable toassets that produce or are held for the production of passive income. Our PFIC status for any taxable year can be determined only after the close of that year.Based on the value of our assets and the composition of our income and assets, we do not believe we were treated as a PFIC for U.S. federal income purposesfor our taxable year ending December 28, 2018. However, the determination of PFIC status is based on an annual determination that cannot be made until theclose of a taxable year, involves extensive factual investigation, including ascertaining the fair market value of all of our assets on a quarterly basis and thecharacter of each item of income that we earn, and is subject to uncertainty in several respects. Accordingly, we cannot assure you that we were not treated asa PFIC for our taxable year ending December 28, 2018, or will not be treated as a PFIC for any future taxable year or that the IRS will not take a contraryposition.If we are a PFIC for any taxable year during which a U.S. person holds ordinary shares, certain adverse U.S. federal income tax consequences could apply tosuch U.S. person. You are strongly urged to consult your tax advisors as to whether or not we will be a PFIC.23 If a U.S. person is treated as owning at least 10% of our shares, such person may be subject to adverse U.S. federal income tax consequences.If a U.S. person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treatedas a “United States shareholder” with respect to each “controlled foreign corporation” in the Company's group (if any). Because our group includes one ormore U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations (regardless of whether we are or are not treatedas a controlled foreign corporation).A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of“Subpart F income,” “global intangible low-taxed income” and investments in United States property by controlled foreign corporations, whether or not theCompany makes any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not beallowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. A failure to comply withthese reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent starting of the statute of limitationswith respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due. We cannot provide any assurances that we willassist investors in determining whether we or any of our current or future non-U.S. subsidiaries are treated as a controlled foreign corporation or whether suchinvestor is treated as a United States shareholder with respect to any of such controlled foreign corporations. In addition, we cannot provide assurances wewill furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.A U.S. investor should consult its own advisors regarding the potential application of these rules to its investment in the shares.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur principal executive office is located at 3185 Laurelview Ct., Fremont, California 94538. As of December 28, 2018, our principal manufacturing andadministrative facilities, including our executive offices, comprises approximately 580,700 square feet. All of our facilities are leased, which allows forflexibility as business conditions and geographic demand change. The table below sets forth the approximate square footage of each of our facilities. Location ApproximateSquareFootage Austin, Texas 25,700 East Blantyre, Scotland 37,700 Fremont, California 62,800 Seoul, Korea 15,200 Osakis, Minnesota 22,300 Sauk Rapids, Minnesota 58,600 Selangor, Malaysia 31,900 Singapore 97,700 Tampa, Florida 32,600 Tualatin, Oregon 143,400 Union City, California 52,800 We believe that our existing facilities and equipment are well maintained, in good operating condition and are adequate to meet our currently anticipatedrequirements.ITEM 3. LEGAL PROCEEDINGSWe are currently not a party to any material legal proceedings. However, in the future we may be subject to various legal claims and proceedings which arisein the ordinary course of our business involving claims incidental to our business, including employment-related claims.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.24 PART IIITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket Information for Ordinary SharesThe following table sets forth the high and low closing prices per share of our ordinary shares as reported by the NASDAQ for the period indicated. High Low 2018 Fourth Quarter $20.89 $14.51 Third Quarter $25.93 $18.99 Second Quarter $26.98 $20.53 First Quarter $34.35 $21.34 2017 Fourth Quarter $34.28 $23.61 Third Quarter $26.80 $18.03 Second Quarter $27.88 $17.14 First Quarter $19.83 $11.55Holders of RecordOn March 1, 2019, there were 3 holders of record of our ordinary shares. This number does not include shareholders for whom shares are held in “nominee” or“street” name.DividendsWe do not anticipate that we will pay any cash dividends on our ordinary shares for the foreseeable future. Any determination to pay dividends in the futurewill be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, contractual restrictions (including thoseunder our Credit Facilities and any potential indebtedness we may incur in the future), restrictions imposed by applicable law, tax considerations and otherfactors our Board of Directors deems relevant.Share Repurchase ProgramInformation related to repurchases of our ordinary shares during 2018 is as follows: Total Numberof SharesRepurchased Average PricePaid per Share Total NumberofSharesPurchasedas Part ofPubliclyAnnouncedProgram AmountAvailable UnderRepurchaseProgram (1) (dollars in thousands, except share and per share amounts) Amount available at February 15, 2018 $50,000 Quarter ended March 30, 2018 195,750 $25.54 195,750 $45,000 Quarter ended June 29, 2018 1,061,855 $23.52 1,061,855 $20,030 Board authorization, $50 million increase, August 18, 2018 $70,030 Quarter ended September 28, 2018 1,424,359 $21.31 1,424,359 $39,683 October 2018 1,030,934 $19.06 1,030,934 $20,030 November 2018 315,007 $15.90 315,007 $15,021 December 2018 311,624 $16.04 311,624 $10,021 Year ended December 28, 2018 4,339,529 $20.73 4,339,529 $10,02125 (1)The amounts presented in this column are the remaining total authorized value to be spent after each month’s repurchases. On February 15, 2018, weannounced that our Board of Directors authorized a $50.0 million share repurchase program under which we may repurchase our ordinary shares inthe open market or through privately negotiated transactions, depending on market conditions and other factors. Repurchases were funded with cashon-hand and cash flows from operations. On August 18, 2018, our Board of Directors increased the amount authorized under the share repurchaseprogram by $50.0 million.Stock Performance GraphThe information included under the heading “Stock Performance Graph” is “furnished” and not “filed” for purposes of Section 18 of the Securities ExchangeAct of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subjectto Regulation 14A or incorporated by reference in any filing under the Securities Act or the Exchange Act.Our ordinary shares are listed for trading on the NASDAQ under the symbol “ICHR.” The Stock Price Performance Graph set forth below plots the cumulativetotal shareholder return on a monthly basis of our ordinary shares from December 9, 2016, the date on which our shares began trading, throughDecember 28, 2018, with the cumulative total return of the Nasdaq Composite Index and the PHLX Semiconductor Sector Index over the same period. Thecomparison assumes $100 was invested on December 9, 2016 in the ordinary shares of Ichor Holdings, Ltd., in the Nasdaq Composite Index, and in the PHLXSemiconductor Sector Index and assumes reinvestment of dividends, if any. The stock price performance shown on the graph above is not necessarily indicative of future price performance. Information used in the graph was obtainedfrom the Nasdaq Stock Market, a source believed to be reliable, but we are not responsible for any errors or omissions in such information.26 ITEM 6. SELECTED FINANCIAL DATAThe following tables present our historical selected consolidated financial data. The selected consolidated statement of operations data for 2018, 2017, and2016, and the selected balance sheet data as of December 28, 2018 and December 29, 2017, are derived from our audited consolidated financial statementsthat are included elsewhere in this report. The selected statement of operations data for 2015 and balance sheet data as of December 30, 2016 andDecember 25, 2015 are derived from our audited consolidated financial statements not included in this report.Our historical results are not necessarily indicative of the results that may be expected in the future. You should read the selected historical financial databelow in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financialstatements and related notes included elsewhere in this report. Year Ended December 28,2018 December 29,2017 December 30,2016 December 25,2015 (in thousands, except share and per share amounts) Consolidated Statement of Operations Data: Net sales $823,611 $655,892 $405,747 $290,641 Cost of sales (1) 687,474 555,131 340,352 242,087 Gross profit 136,137 100,761 65,395 48,554 Operating expenses: Research and development (1) 9,355 7,899 6,383 4,813 Selling, general and administrative (1) 47,448 37,802 28,126 24,729 Amortization of intangible assets 15,369 8,880 7,015 6,411 Total operating expenses 72,172 54,581 41,524 35,953 Operating income 63,965 46,180 23,871 12,601 Interest expense 9,987 3,277 4,370 3,831 Other income, net (241) (126) (629) (46)Income from continuing operations before income taxes 54,219 43,029 20,130 8,816 Income tax benefit from continuing operations (2) (3,664) (13,886) (649) (3,991)Net income from continuing operations 57,883 56,915 20,779 12,807 Discontinued operations: Loss from discontinued operations before taxes — (722) (4,077) (7,406)Income tax expense (benefit) from discontinued operations — (261) 40 (225)Net loss from discontinued operations — (461) (4,117) (7,181)Net income 57,883 56,454 16,662 5,626 Less: Preferred share dividend — — — (22,127)Less: Undistributed earnings attributable to preferred shareholders — — (15,284) — Net income (loss) attributable to ordinary shareholders $57,883 $56,454 $1,378 $(16,501)Net income (loss) per share from continuing operations attributable toordinary shareholders: (3) Basic $2.34 $2.27 $1.14 $(292.39)Diluted $2.30 $2.17 $0.87 $(292.39)Net income (loss) per share attributable to ordinary shareholders: (3) Basic $2.34 $2.25 $0.92 $(517.68)Diluted $2.30 $2.15 $0.70 $(517.68)Shares used to compute net income (loss) from continuing operationsper share attributable to ordinary shareholders: (3) Basic 24,706,542 25,118,031 1,503,296 31,875 Diluted 25,128,055 26,218,424 1,967,926 31,875 Shares used to compute net income (loss) per share attributable toordinary shareholders: (3) Basic 24,706,542 25,118,031 1,503,296 31,875 Diluted 25,128,055 26,218,424 1,967,926 31,875 27 Year Ended December 28,2018 December 29,2017 December 30,2016 December 25,2015 (in thousands) Consolidated Balance Sheet Data: Cash and restricted cash $43,834 $69,304 $52,648 $24,188 Working capital $123,821 $131,233 $56,020 $24,860 Total assets $485,489 $557,684 $282,491 $198,023 Total long-term debt (4) $204,787 $189,535 $39,830 $65,000 Preferred shares $— $— $— $142,728 Total shareholders’ equity $198,326 $216,762 $141,659 $74,678 (1)Share-based compensation included in the consolidated statement of operations data above was as follows: Year Ended December 28,2018 December 29,2017 December 30,2016 December 25,2015 (in thousands) Share-Based Compensation Expense: Cost of sales $608 $118 $20 $105 Research and development 530 — — — Selling general and administrative 6,439 2,112 3,196 1,013 Total share-based compensation expense $7,577 $2,230 $3,216 $1,118 (2)During 2018, income tax benefit from continuing operations consists primarily of the impact of U.S. operations, offset by discrete tax benefits, including therelease of a valuation allowance against our foreign tax credit carryforwards we now expect to realize as a result of additional analysis of the Tax Cuts and JobsAct and stock option exercises. During 2017, it consisted primarily of the impact of foreign operations, including withholding taxes, offset by a $7.6 million taxbenefit as a result of our acquisitions (see Note 2 – Acquisitions of our consolidated financial statements included elsewhere in this report), a $5.9 million taxbenefit from revaluing our deferred taxes from 35% to 21% due to the Tax Cuts and Jobs Act, and a $1.6 million benefit from re-characterizing intercompany debtto equity between our U.S. and Singapore entities related to the reversal of previously accrued withholding taxes. During 2016 and 2015, it consisted primarily ofthe impact of foreign operations, including withholding taxes, offset by a tax benefit in 2016 as a result of our acquisition (see Note 2 – Acquisitions of ourconsolidated financial statements included elsewhere in this report). (3)Please see Note 14 – Earnings per Share of our consolidated financial statements included elsewhere in this report for an explanation of the calculations of ouractual basic and diluted net income per share and our pro forma unaudited basic and diluted net income per share. (4)Does not include debt issuance costs of $3.9 million, $2.8 million, $1.9 million, and $2.4 million as of December 28, 2018, December 29, 2017,December 30, 2016, and December 25, 2015, respectively.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSYou should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financialstatements and related notes included elsewhere in this report. The following discussion contains forward-looking statements based upon our current plans,expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-lookingstatements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in “RiskFactors”.OverviewWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment. Our primaryofferings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used inthe manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gases used insemiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactive liquidchemistries used in semiconductor manufacturing processes such as electroplating and cleaning. We also manufacture certain components such as weldmentsand precision machined components for use in fluid delivery systems for direct sales to our customers. This vertically integrated portion of our business isprimarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.28 Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductormanufacturing process. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects inthese processes. Historically, semiconductor OEMs internally designed and manufactured the fluid delivery subsystems used in their process tools. Currently,most OEMs outsource the design, engineering and manufacturing of their gas delivery subsystems to a few specialized suppliers, including us. Additionally,many OEMs are also increasingly outsourcing the design, engineering and manufacturing of their chemical delivery subsystems due to the increased fluidexpertise required to manufacture these subsystems. Outsourcing these subsystems has allowed OEMs to leverage the suppliers’ highly specializedengineering, design and production skills while focusing their internal resources on their own value-added processes. We believe that this outsourcing trendhas enabled OEMs to reduce their fixed costs and development time, as well as provided significant growth opportunities for specialized subsystemssuppliers like us.We have a global footprint with production facilities in Malaysia, Singapore, Korea, California, Florida, Minnesota, Oregon, and Texas. In 2018, 2017, and2016, our two largest customers by revenue were Lam Research and Applied Materials.The following summarizes key financial information for the periods indicated: Year Ended December 28,2018 December 29,2017 December 30,2016 Net sales $823,611 $655,892 $405,747 Gross profit $136,137 $100,761 $65,395 Gross margin 16.5% 15.4% 16.1%Operating expenses $72,172 $54,581 $41,524 Operating income $63,965 $46,180 $23,871 Net income from continuing operations, GAAP $57,883 $56,915 $20,779 Net income from continuing operations, Non-GAAP $75,052 $65,060 $31,596 We increased operating income by $17.8 million, or 38.5%, in 2018, contemporaneous with a 25.6% increase in revenue, as we maintained leverage over ouroperating expenses and exercised strong cost control. Operating income was also impacted beneficially by our acquisitions of Talon and Cal‑Weld in thesecond half of 2017, partially offset by amortization expense resulting from intangible assets recorded when we acquired Talon and Cal‑Weld.Net income from continuing operations, on a GAAP basis, increased $1.0 million. Included in net income from continuing operations are (1) discrete taxbenefits recognized in 2017 related to acquisitions, re-characterizing intercompany debt to equity, and the impact of the 2017 Tax Cuts and Jobs Act that didnot repeat in 2018; and (2) $6.7 million in increased interest expense in 2018 as a result of increased borrowings relating to our acquisitions in the secondhalf of 2017.Net income from continuing operations on a Non-GAAP basis, which excludes the impact of the aforementioned discrete tax benefits as well as share-basedcompensation expense, amortization expense, and other non-recurring items, rose by $10.0 million, or 15.4%, in 2018. See “Non-GAAP Results” for adiscussion of adjusted net income from continuing operations, an accompanying presentation of the most directly comparable financial measure calculatedin accordance with generally accepted accounting principles in the United States, net income from continuing operations, and a reconciliation of thedifferences between adjusted net income from continuing operations and net income from continuing operations.Key Factors Affecting Our BusinessInvestment in Semiconductor Manufacturing EquipmentThe design and manufacturing of semiconductor devices is constantly evolving and becoming more complex in order to achieve greater performance andefficiency. To keep pace with these changes, OEMs need to refine their existing products and invest in developing new products. In addition, semiconductordevice manufacturers will continue to invest in new wafer fabrication equipment to expand their production capacity and to support new manufacturingprocesses.Outsourcing of Subsystems by Semiconductor OEMsFaced with increasing manufacturing complexities, more complex subsystems, shorter product lead times, shorter industry spend cycles, and significantcapital requirements, outsourcing of subsystems and components by OEMs has continued to grow. In the past two decades, OEMs have outsourced most oftheir gas delivery systems to suppliers such as us. OEMs have also started to outsource their chemical delivery systems in recent years. Our results will beaffected by the degree to which outsourcing of these fluid delivery systems by OEMs continues to grow.29 Cyclicality of Semiconductor Device IndustryOur business is indirectly subject to the cyclicality of the semiconductor device industry. In 2018, we derived approximately 98% of our sales from thesemiconductor device industry. Demand for semiconductor devices can fluctuate significantly based on changes in general economic conditions, includingconsumer spending, demand for the products that include these devices and other factors. These fluctuations have in the past resulted in significant variationsin our results of operations. The cyclicality of the semiconductor device industries will continue to impact our results of operations in the future.Customer ConcentrationThe number of capital equipment manufacturers for the semiconductor device industry is significantly consolidated, resulting in a small number of largemanufacturers. Our customers are a significant component of this consolidation, resulting in our sales being concentrated in a few customers. In 2018, our topthree customers were Lam Research, Applied Material, and ASML, with Lam Research and Applied Materials accounting for approximately 56% and 32% ofsales, respectively. The sales we generated from these customers in 2018 were spread across 35 different product lines utilized in 13 unique manufacturingprocess steps. We believe the diversity of products that we provide to these customers, combined with the fact that our customers use our products onnumerous types of process equipment, lessens the impact of the inherent concentration in the industry. Our customers often require reduced prices or otherpricing, quality or delivery commitments as a condition to their purchasing from us in any given period or increasing their purchase volume, which can,among other things, result in reduced gross margins in order to maintain or expand our market share. Although we do not have any long-term contracts thatrequire customers to place orders with us, Lam Research and Applied Materials have been our customers for over 10 years.AcquisitionsWe acquired Cal‑Weld, a California-based leader in the design and fabrication of precision, high purity industrial components, subsystems, and systems, inJuly 2017 for $56.2 million. We also acquired Talon, a Minnesota-based leader in the design and manufacturing of high precision machined parts used inleading edge semiconductor tools, in December 2017 for $137.8 million. On a combined basis, these acquisitions contributed approximately $57.5 million tosales in 2017. We acquired IAN, a Seoul-based leader in providing locally-sourced design and manufacturing of gas delivery systems to customers in SouthKorea, for $6.5 million, which contributed $7.7 million to sales in 2018. These acquisitions continue to have a significant impact on our financial positionand results of operations. We intend to continue to evaluate opportunistic acquisitions to supplement our organic growth, and any such acquisitions couldhave a material impact on our business and results of operations.Components of Our Results of OperationsThe following discussion sets forth certain components of our statements of operations as well as significant factors that impact those items.SalesWe generate sales primarily from the design, manufacture, and sale of subsystems and components for semiconductor capital equipment. Sales are recognizedwhen control of promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to inexchange for those goods or services. Our shipping terms are generally “shipping point.” Accordingly, control transfers, and sales are recognized, at thispoint-in-time.Cost of Sales and Gross ProfitCost of sales consists primarily of purchased materials, direct labor, indirect labor, factory overhead cost and depreciation expense for our manufacturingfacilities and equipment, as well as certain engineering costs that are related to non-recurring engineering services that we provide to, and for which weinvoice, our customers in connection with their product development activities. Our business has a highly variable cost structure with a low fixed overheadstructure as a percentage of cost of sales. In addition, our existing global manufacturing plant capacity is scalable and we are able to adjust to increasedcustomer demand for our products without significant additional capital investment. We operate our business in this manner in order to avoid havingexcessive fixed costs during a cyclical downturn while retaining flexibility to expand our production volumes during periods of growth. However, thisapproach results in a smaller increase in gross margin as a percentage of sales in times of increased demand.Since the gross margin on each of our products differs, our overall gross margin as a percentage of our sales changes based on the mix of products we sell inany period.30 Operating ExpensesOur operating expenses primarily include research and development and sales, general and administrative expenses. Personnel costs are the most significantcomponent of operating expenses and consist of salaries, benefits, bonuses, share-based compensation and, with regard to sales and marketing expense, salescommissions. Operating expenses also include overhead costs for facilities, IT and depreciation. In addition, our operating expenses include costs related toamortization of intangible assets and restructuring costs.Research and development – Research and development expense consists primarily of activities related to product design and other developmentactivities, new component testing and evaluation, and test equipment and fixture development. Research and development expense does notinclude engineering costs that are related to non-recurring engineering services that we provide to and for which we invoice our customers as partof sales, which are reflected as cost of sales. We expect research and development expense will increase in absolute dollars as our customerscontinue to increase their demand for new product designs and as we invest in our research and product development efforts to enhance ourproduct capabilities and access new customer markets.Selling, general and administrative – Selling expense consists primarily of salaries and commissions paid to our sales and sales support employeesand other costs related to the sales of our products. General and administrative expense consists primarily of salaries and overhead associated withour administrative staff, professional fees and depreciation and other allocated facility related costs. We expect selling expenses to increase inabsolute dollars as we continue to invest in expanding our markets and as we expand our international operations. We expect general andadministrative expenses to also increase in absolute dollars due to an increase in costs related to being a public company, including higher legal,corporate insurance and accounting expenses.Amortization of intangibles – Amortization of intangible assets is related to our finite-lived intangible assets and is computed using the straight-line method over the estimated economic life of the asset.Interest Expense, netInterest expense, net consists of interest on our outstanding debt under our Credit Facilities and any other indebtedness we may incur in the future.Other Income, NetThe functional currency of our international subsidiaries located in the United Kingdom, Singapore and Malaysia is the U.S. dollar. Transactionsdenominated in currencies other than the functional currency generate foreign exchange gains and losses that are included in other expense, net on theaccompanying consolidated statements of operations. Substantially all of our sales and agreements with third party suppliers provide for pricing andpayments in U.S. dollars and, therefore, are not subject to material exchange rate fluctuations.Income Tax BenefitDuring 2018, income tax benefit from continuing operations consists primarily of the impact of U.S. operations, offset by discrete tax benefits, including therelease of a valuation allowance against our foreign tax credit carryforwards we now expect to realize as a result of additional analysis of the Tax Cuts andJobs Act and stock option exercises. During 2017, income tax benefit from continuing operations consists primarily of the impact of foreign operations,including withholding taxes, offset by a $7.6 million tax benefit as a result of our acquisitions (see Note 2 – Acquisitions of our consolidated financialstatements included elsewhere in this report), a $5.9 million tax benefit from revaluing our deferred taxes from 35% to 21% due to the Tax Cuts and Jobs Act,and a $1.6 million benefit from re-characterizing intercompany debt to equity between our U.S. and Singapore entities related to the reversal of previouslyaccrued withholding taxes. During 2016 and 2015, income tax benefit from continuing operations consisted primarily of the impact of foreign operations,including withholding taxes, offset by a tax benefit in 2016 as a result of our acquisition.31 Results of OperationsThe following table sets forth our results of operations for the periods presented. The period-to-period comparison of results is not necessarily indicative ofresults for future periods. Year Ended December 28,2018 December 29,2017 December 30,2016 (in thousands) Consolidated Statements of Operations Data: Sales $823,611 $655,892 $405,747 Cost of sales 687,474 555,131 340,352 Gross profit 136,137 100,761 65,395 Operating expenses: Research and development 9,355 7,899 6,383 Selling, general, and administrative 47,448 37,802 28,126 Amortization of intangible assets 15,369 8,880 7,015 Total operating expenses 72,172 54,581 41,524 Operating income 63,965 46,180 23,871 Interest expense 9,987 3,277 4,370 Other income, net (241) (126) (629)Income from continuing operations before income taxes 54,219 43,029 20,130 Income tax benefit from continuing operations (3,664) (13,886) (649)Net income from continuing operations 57,883 56,915 20,779 Discontinued operations: Loss from discontinued operations before taxes — (722) (4,077)Income tax expense from discontinued operations — (261) 40 Net loss from discontinued operations — (461) (4,117)Net income $57,883 $56,454 $16,662 The following table sets forth our results of operations as a percentage of our total sales for the periods presented. Year Ended December 28,2018 December 29,2017 December 30,2016 Consolidated Statements of Operations Data: Sales 100.0 100.0 100.0 Cost of sales 83.5 84.6 83.9 Gross profit 16.5 15.4 16.1 Operating expenses: Research and development 1.1 1.2 1.6 Selling, general, and administrative 5.8 5.8 6.9 Amortization of intangible assets 1.9 1.4 1.7 Total operating expenses 8.8 8.3 10.2 Operating income 7.8 7.0 5.9 Interest expense 1.2 0.5 1.1 Other income, net 0.0 0.0 (0.2)Income from continuing operations before income taxes 6.6 6.6 5.0 Income tax benefit from continuing operations (0.4) (2.1) (0.2)Net income from continuing operations 7.0 8.7 5.1 Discontinued operations: Loss from discontinued operations before taxes 0.0 (0.1) (1.0)Income tax expense from discontinued operations 0.0 0.0 0.0 Net loss from discontinued operations 0.0 (0.1) (1.0)Net income 7.0 8.6 4.132 Comparison of Fiscal Years 2018 and 2017Sales Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Net sales $823,611 $655,892 $167,719 25.6% The increase in net sales from 2017 to 2018 was primarily related to an increase in volume resulting from industry growth, our acquisitions of Cal‑Weld,Talon, and IAN, and market share gains. We refer to the volume of purchases from us by a customer of ours relative to its other suppliers as our market share ofthat customer. On a geographic basis, sales in the U.S. increased by $116.1 million to $502.8 million, and foreign sales increased by $51.6 million to$320.9 million.Cost of Sales and Gross Margin Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Cost of sales $687,474 $555,131 $132,343 23.8%Gross profit $136,137 $100,761 $35,376 35.1%Gross margin 16.5% 15.4% + 110 bps The increase in cost of sales and gross profit from 2017 to 2018 was primarily due to increased sales volume and our acquisitions of Cal‑Weld and Talon inthe third and fourth quarters of 2017, respectively.The 110 basis point increase in our gross margin was primarily due to the accretive impact of our acquisitions of Cal‑Weld and Talon. The increase was dueto the following: (1) 70 basis points from sales accretive to gross margin, primarily from our acquisitions of Cal‑Weld and Talon; (2) 20 basis points from acharge to cost of sales of $4.8 million (0.6% of revenue) and $5.2 million (0.8% of revenue) in 2018 and 2017, respectively, due to recording acquiredinventory at fair value; and (3) 20 basis points from a $1.8 million charge to cost of sales in the second quarter of 2017 from an error correction relating totranslated inventory balances at our Malaysia and Singapore subsidiaries using an incorrect foreign currency rate.Research and Development Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Research and development $9,355 $7,899 $1,456 18.4% The increase in research and development expenses from 2017 to 2018 was primarily due to incremental expenses from our acquisition of Talon, increasedshare-based compensation expense, and an increase in headcount and other program expenses to support additional new product developments.Selling, General and Administrative Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Selling, general, and administrative $47,448 $37,802 $9,646 25.5% 33 The increase in selling, general, and administrative expense from 2017 to 2018 was primarily due to $8.6 million in incremental operating expenses from ouracquisitions of Cal‑Weld, Talon, and IAN, a $4.5 million increase in share-based compensation expense (inclusive of $2.9 million associated with modifyingour former CFO’s equity awards), $1.1 million in non-equity separation benefits for former CFO, and $1.1 million in various costs to support growth, partiallyoffset by a $2.2 million decrease in acquisition-related expenses, a $1.3 million credit from derecognizing our IAN earn-out liability, a $1.0 million charge inthe third quarter of 2017 from a final arbitration ruling on our working capital claim with the sellers of Ajax, and $1.0 million in expense incurred in 2017associated with the secondary offerings of our shares by affiliates of our former principal shareholder, FP.Amortization of Intangible Assets Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Amortization of intangibles assets $15,369 $8,880 $6,489 73.1% The increase in amortization expense from 2017 to 2018 was due to incremental amortization expense from intangible assets acquired in connection with ouracquisitions of Cal‑Weld and Talon in the second half of 2017 and IAN in the second quarter of 2018. The fair value assigned to intangible assets acquired inconnection with our acquisition IAN is still preliminary.Interest Expense, Net Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Interest expense $9,987 $3,277 $6,710 204.8% The increase in interest expense from 2017 to 2018 was primarily due to an increase in the average amount borrowed, which was primarily due to ouracquisition of Talon in December 2017, resulting in an additional $120.0 million borrowed. Our average amount borrowed in 2018 was $196.6 millioncompared to $58.9 million in 2017. Our weighted average interest rate was 4.36% in 2018 compared to 4.30% in 2017.Other Income, Net Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Other income, net $(241) $(126) $(115) 91.3% The change in other income, net for 2018 was primarily due to exchange rate fluctuations on transactions denominated in the local currencies of our foreignoperations, principally the Singapore Dollar, Malaysian Ringgit, and British Pound, and a gain of $0.2 million on the sale of our cost method investment,CHawk Technology International, Inc. (“CHawk”) in the first quarter of 2017 that did not repeat in the first quarter of 2018.Income Tax Benefit from Continuing Operations Year Ended Change December 28,2018 December 29,2017 Amount % (dollars in thousands) Income tax benefit from continuing operations $(3,664) $(13,886) $10,222 -73.6% 34 The decrease in income tax benefit from 2017 to 2018 was primarily due to $12.7 million in discrete tax benefits recognized in 2017 relating to the reversalof previously accrued withholding taxes from our re-characterization of intercompany debt to equity, our acquisitions of Talon and Cal‑Weld, and the impactof the Tax Cuts and Jobs Act that did not repeat in 2018, a $4.2 million decrease in excess tax benefits from share-based compensation from 2017 to 2018,and a $2.4 million decrease in permanently disallowed expenses in 2018, partially offset by a $4.1 million tax benefit recognized due to the release of avaluation allowance against foreign tax credit carryforwards in the second quarter of 2018.Comparison of Fiscal Years 2017 and 2016Sales Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Net sales $655,892 $405,747 $250,145 61.7% The increase in sales from 2016 to 2017 was primarily related to an increase in volume resulting from industry growth, our acquisitions of Cal‑Weld andTalon, and market share gains. The volume increase was due to an approximate 6.1%, or approximately $77.8 million, increase in our market share at our twolargest customers, which includes the acquisitions of Cal‑Weld and Talon, and an approximately $172.3 million increase in the volume of purchasesprimarily by our two largest customers driven by overall industry growth. We refer to the volume of purchases from us by a customer of ours relative to itsother suppliers as our market share of that customer. On a geographic basis, sales in the U.S. increased by $143.4 million in 2017 to $386.6 million. Foreignsales increased by $80.2 million in 2017 to $269.3 million.Cost of Sales and Gross Margin Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Cost of sales $555,131 $340,352 $214,779 63.1%Gross profit $100,761 $65,395 $35,366 54.1%Gross margin 15.4% 16.1% - 70 bps The increase in cost of sales from 2016 to 2017 was primarily due to the increase in sales volume. The increase in absolute dollars of gross profit was drivenprimarily by an increase in sales volume.As part of our purchase of Talon and Cal‑Weld, we recorded opening inventory at fair value which included a fair value adjustment to inventory of$6.2 million and $3.6 million, respectively. We released a combined $5.2 million of the fair value adjustment to cost of sales based on the sale of inventoryduring 2017. The impact of this charge accounts for a decrease to reported gross margin of 80 basis points for 2017.As discussed in Note 1 – Basis of Presentation to the consolidated financial statements, we recorded a charge to cost of sales of $1.8 million in the secondquarter of 2017 due to the correction of an error related to translating inventory balances at our Singapore and Malaysia subsidiaries. The impact of thischarge accounts for a decrease to reported gross margin of 30 basis points in 2017.Additionally, our gross margins for 2017 were favorably impacted by our acquisitions of Cal‑Weld and Talon, with margins that were accretive to ourhistorical business.Research and Development Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Research and development $7,899 $6,383 $1,516 23.8% 35 The increase in research and development expenses from 2016 to 2017 was due to an increase in headcount and consulting expense to support additionalprojects and development programs.Selling, General and Administrative Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Selling, general and administrative $37,802 $28,126 $9,676 34.4% The increase in selling, general, and administrative expense from 2016 to 2017 was primarily due to increased acquisition‑related expenses from ouracquisitions of Cal‑Weld and Talon, incremental Cal‑Weld and Talon operating expenses incurred subsequent to the acquisition, increased expensesresulting from the secondary offerings of our ordinary shares by FP, increased public company costs, increased incentive compensation on improvedperformance to operating targets, and increased headcount expense to support increased sales volume.Selling, general, and administrative expense also increased during 2017 due to a charge of approximately $1.0 million as a result of the final arbitrationruling on our working capital claim with the sellers of Ajax. The ruling was outside of the one year measurement period and not considered to be anadjustment to goodwill, resulting in a charge to selling, general, and administrative expense.Amortization of Intangible Assets Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Amortization of intangibles assets $8,880 $7,015 $1,865 26.6% The increase in amortization expense from 2016 to 2017 was due to incremental amortization expense from intangible assets acquired in connection with ouracquisition of Ajax in the second quarter of 2016, and our acquisitions of Talon and Cal‑Weld in the second half of 2017.Interest Expense, Net Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Interest expense $3,277 $4,370 $(1,093) -25.0% The decrease in interest expense, net from 2016 to 2017 was due to a decrease in the average amount borrowed during 2017 as a result of the pay down ofdebt in December 2016 using proceeds from our IPO and a 70 basis point decrease in our average interest rate during 2017 primarily from an amendment toour Credit Facilities in connection with our acquisition of Cal‑Weld, partially offset by an additional $30.0 million in borrowings to fund our acquisition ofCal‑Weld. The additional $120.0 million in borrowings to fund our acquisition of Talon and the related impact on our average interest rate was notsignificant to 2017 results due to the short period of time the additional borrowing were outstanding during 2017.Total borrowings outstanding at December 29, 2017, net of debt issuance costs, was $186.7 million, compared to $37.9 million at December 30, 2016.36 Other Income, Net Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Other income, net $(126) $(629) $503 -80.0% The decrease in other income, net from 2016 to 2017 was primarily due to exchange rate fluctuations on transactions denominated in the local currencies ofour foreign operations, principally the Singapore Dollar, Malaysian Ringgit, and British Pound, partially offset by a gain on the sale of our cost methodinvestment, CHawk Technology International, Inc. (“CHawk”) of $0.2 million that occurred in the first quarter of 2017.Income Tax Benefit from Continuing Operations Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands)Income tax benefit from continuing operations $(13,886) $(649) $(13,237) n/m During 2017, income tax benefit from continuing operations consists primarily of the impact of foreign operations, including withholding taxes, offset by a$7.6 million tax benefit as a result of our acquisitions of Talon and Cal‑Weld, a $5.9 million tax benefit from revaluing our deferred taxes from 35% to 21%due to the Tax Cuts and Jobs Act, and a $1.6 million benefit from re-characterizing intercompany debt to equity between our U.S. and Singapore entitiesrelated to the reversal of previously accrued withholding taxes. This compares to a discrete tax benefit of only $2.3 million in 2016 in connection with ouracquisition of Ajax.Non-GAAP ResultsManagement uses non-GAAP adjusted net income from continuing operations to evaluate our operating and financial results. We believe the presentation ofnon-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability toview our results from management’s perspective. Non-GAAP adjusted net income from continuing operations is defined as: net income from continuingoperations excluding (1) amortization of intangible assets, share-based compensation expense, non-recurring expenses including adjustments to the cost ofgoods sold, and the tax adjustments related to those non-GAAP adjustments; and (2) non-recurring discrete tax items including tax impacts from releasing avaluation allowance related to foreign tax credits to the extent they are present in gross profit, operating income, and net income from continuing operations.Non-GAAP adjusted diluted EPS is defined as non-GAAP adjusted net income from continuing operations divided by weighted average diluted ordinaryshares outstanding during the period.37 The following table presents our unaudited non‑GAAP adjusted net income from continuing operations and a reconciliation from net income fromcontinuing operations, the most comparable GAAP measure, for the periods indicated: Year Ended December 28,2018 December 29,2017 December 30,2016 (dollars in thousands, except per share amounts) Non-GAAP Data: Net income from continuing operations $57,883 $56,915 $20,779 Non-GAAP adjustments: Amortization of intangible assets 15,369 8,880 7,015 Share-based compensation (1) 7,577 2,230 3,216 Other non-recurring expense, net (2) 1,727 4,767 2,988 Tax adjustments related to non-GAAP adjustments (8,203) (626) (131)Tax benefit from acquisitions (3) — (7,582) (2,271)Tax benefit from re-characterizing intercompany debt to equity (4) — (1,627) — Tax impact from tax law change (5) — (5,911) — Tax benefit from release of valuation allowance (6) (4,140) — — Adjustments to cost of goods sold (7) — 1,752 — Fair value adjustment to inventory from acquisitions (8) 4,839 5,230 — Loss on Ajax acquisition arbitration settlement (9) — 1,032 — Non-GAAP adjusted net income from continuing operations $75,052 $65,060 $31,596 Non-GAAP adjusted diluted EPS $2.99 $2.48 $1.31 Shares used to compute diluted EPS 25,128,055 26,218,424 24,188,881 (1)Included in share-based compensation for 2018 is $2.9 million from accelerating the vesting of our former CFO’s equity awards pursuant toseparation benefits that became effective in January 2018. (2)Included in this amount for fiscal year 2018 are (i) expenses associated with separation benefits for our former CFO that became effective in January2018, (ii) a gain on the extinguishment of an earn-out liability recorded in connection with our acquisition of IAN in April 2018 which will not bepaid, and (iii) acquisition-related expenses, comprised primarily of expense associated with a two year retention agreement between key managementpersonnel of IAN.Included in this amount for 2017 are (i) acquisition-related expenses, (ii) expenses incurred in connection with sales or other dispositions of ourordinary shares by affiliates of FP, (iii) executive search expenses incurred in connection with replacing the Company’s Chief Financial Officer, (iv) arefund of previously paid consulting fees from FP Consulting (“FPC”), and (v) a gain on sale of our investment in CHawk.Included in this amount for 2016 are (i) acquisition-related expenses, (ii) bonuses paid to members of our management in connection with the cashdividend paid by us in August 2015, (iii) consulting fees paid to FPC, and (iv) IPO preparation expenses. (3)We recorded $2.3 million in tax benefit in the fourth quarter of 2017 and $5.3 million in the third quarter of 2017 in connection with ouracquisitions of Talon and Cal‑Weld, respectively. We recorded $2.3 million in tax benefits in the second quarter of 2016 in connection with itsacquisition of Ajax. (4)In the third quarter of 2017, we re-characterized intercompany debt to equity between our U.S. and Singapore entities resulting in a tax benefit of$1.6 million related to the reversal of previously accrued withholding taxes. (5)This adjustment represents the impact of U.S. corporate tax reform. (6)Represents the release of a valuation allowance against our foreign tax credit carryforwards we now expect to realize as a result of additional analysisof the Tax Cuts and Jobs Act. (7)During the second quarter of 2017, we corrected an error relating to translated inventory balances at our Malaysia and Singapore subsidiaries usingan incorrect foreign currency rate. The error arose in prior period financial statements beginning in periods prior to 2014 and through 2016. Thecorrection resulted in a $1.8 million increase in cost of sales and a corresponding decrease in gross profit in our consolidated statement of operationsand a decrease to inventories in our consolidated balance sheet during the second quarter of 2017.38 (8)As part of our purchase price allocations for our acquisitions of Cal‑Weld in July 2017 and Talon in December 2017 and our preliminary purchaseprice allocation for our acquisition of IAN in April 2018, we recorded acquired-inventory at fair value, resulting in a fair value step-up of$3.6 million, $6.2 million, and $0.3 million, respectively. These amounts were subsequently released to cost of sales as acquired-inventory was sold. (9)During the third quarter of 2017, we received a final arbitration ruling on our working capital claim with the sellers of Ajax. The ruling was outsidethe one year measurement period and therefore could not be considered an adjustment to goodwill, resulting in a charge to selling, general, andadministrative expense.Non-GAAP adjusted net income from continuing operations has limitations as an analytical tool, and you should not consider it in isolation or as a substitutefor net income or any of our other operating results reported under GAAP. Other companies may calculate adjusted net income differently or may use othermeasures to evaluate their performance, both of which could reduce the usefulness of our adjusted net income as a tool for comparison.Because of these limitations, you should consider non-GAAP adjusted net income from continuing operations alongside other financial performancemeasures, including net income from continuing operations and other financial results presented in accordance with GAAP. In addition, in evaluating non-GAAP adjusted net income, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in derivingadjusted net income and you should not infer from our presentation of adjusted net income that our future results will not be affected by these expenses orany unusual or non-recurring items.39 Unaudited Quarterly Financial ResultsThe following table set forth statement of operations data for the periods indicated. The information for each of these periods is unaudited and has beenprepared on the same basis as our audited consolidated financial statements included herein and includes all adjustments, consisting only of normal recurringadjustments that we consider necessary for a fair presentation of our unaudited operations data for the periods presented. Historical results are not necessarilyindicative of the results to be expected in the future. Three Months Ended December28,2018 September28,2018 June 29,2018 March 30,2018 December29,2017 September29,2017 June 30,2017 March 31,2017 (in thousands, except share and per share amounts) Sales $141,402 $175,207 $248,973 $258,029 $182,936 $164,519 $159,733 $148,704 Cost of sales 119,953 146,993 205,098 215,430 153,892 140,323 136,227 124,689 Gross profit 21,449 28,214 43,875 42,599 29,044 24,196 23,506 24,015 Operating expenses: Research and development 2,203 2,123 2,577 2,452 2,213 1,992 1,950 1,744 Selling, general and administrative 9,432 10,658 11,647 15,711 11,530 11,430 7,984 6,858 Amortization of intangible assets 3,833 3,885 3,772 3,879 3,062 2,220 1,803 1,795 Total operating expenses 15,468 16,666 17,996 22,042 16,805 15,642 11,737 10,397 Operating income 5,981 11,548 25,879 20,557 12,239 8,554 11,769 13,618 Interest expense 2,627 2,553 2,303 2,504 1,173 739 675 690 Other expense (income), net (181) (84) (217) 241 199 73 151 (549)Income from continuing operations beforeincome taxes 3,535 9,079 23,793 17,812 10,867 7,742 10,943 13,477 Income tax expense (benefit) from continuingoperations 50 (558) (4,247) 1,091 (8,328) (6,556) 473 525 Net income from continuing operations 3,485 9,637 28,040 16,721 19,195 14,298 10,470 12,952 Discontinued operations: Loss from discontinued operations beforetaxes — — — — (1) — (610) (111)Income tax expense (benefit) fromdiscontinued operations — — — — (270) 8 — 1 Net income (loss) from discontinuedoperations — — — — 269 (8) (610) (112)Net income 3,485 9,637 28,040 16,721 19,464 14,290 9,860 12,840 Diluted net income per share from continuingoperations: $0.15 $0.39 $1.07 $0.63 $0.72 $0.54 $0.40 $0.51 Diluted net income per share: $0.15 $0.39 $1.07 $0.63 $0.73 $0.54 $0.38 $0.50 Shares used to compute diluted net income pershare: 23,014,317 24,674,912 26,120,717 26,734,710 26,656,065 26,278,147 26,063,527 25,640,089 40 The following table sets forth our unaudited quarterly consolidated statement of operations data as a percentage of sales for the periods indicated. Three Months Ended December28,2018 September28,2018 June 29,2018 March 30,2018 December29,2017 September29,2017 June 30,2017 March 31,2017 Sales 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Cost of sales 84.8 83.9 82.4 83.5 84.1 85.3 85.3 83.9 Gross profit 15.2 16.1 17.6 16.5 15.9 14.7 14.7 16.1 Operating expenses: Research and development 1.6 1.2 1.0 1.0 1.2 1.2 1.2 1.2 Selling, general and administrative 6.7 6.1 4.7 6.1 6.3 6.9 5.0 4.6 Amortization of intangible assets 2.7 2.2 1.5 1.5 1.7 1.3 1.1 1.2 Total operating expenses 10.9 9.5 7.2 8.5 9.2 9.5 7.3 7.0 Operating income 4.2 6.6 10.4 8.0 6.7 5.2 7.4 9.2 Interest expense 1.9 1.5 0.9 1.0 0.6 0.4 0.4 0.5 Other expense (income), net (0.1) 0.0 (0.1) 0.1 0.1 0.0 0.1 (0.4)Income from continuing operations before incometaxes 2.5 5.2 9.6 6.9 5.9 4.7 6.9 9.1 Income tax expense (benefit) from continuingoperations 0.0 (0.3) (1.7) 0.4 (4.6) (4.0) 0.3 0.4 Net income from continuing operations 2.5 5.5 11.3 6.5 10.5 8.7 6.6 8.7 Discontinued operations: Loss from discontinued operations beforetaxes 0.0 0.0 0.0 0.0 0.0 0.0 (0.4) (0.1)Income tax expense (benefit) fromdiscontinued operations 0.0 0.0 0.0 0.0 (0.1) 0.0 0.0 0.0 Net income (loss) from discontinued operations 0.0 0.0 0.0 0.0 0.1 0.0 (0.4) (0.1)Net income 2.5 5.5 11.3 6.5 10.6 8.7 6.2 8.6SeasonalityWe have not historically experienced meaningful seasonality with respect to our business or results of operations.Liquidity and Capital ResourcesWe had cash of $43.8 million as of December 28, 2018, compared to $69.3 million as of December 29, 2017. Our principal uses of liquidity are to fund ourworking capital needs, purchase new capital equipment, and our share repurchase program. The decrease was primarily due to cash flow from operations of$60.5 million, net borrowings on long-term debt of $15.3 million, and proceeds from the issuance of ordinary shares under our share-based compensationplans of $6.2 million, offset by share repurchases of $90.0 million, capital expenditures of $13.9 million, debt modification costs from the refinancing of ourcredit facilities in February 2018 of $2.1 million, and net cash paid in connection with acquisitions of $1.4 million.We believe that our cash, the amounts available under our revolving credit facility, and our cash flows from operations will be sufficient to meet ouranticipated cash needs for at least the next 12 months.Cash Flow AnalysisThe following table sets forth a summary of operating, investing, and financing activities for the periods presented: Year Ended December 28,2018 December 29,2017 December 30,2016 (in thousands) Cash provided by operating activities $60,475 $38,803 $27,730 Cash used in investing activities (15,363) (186,751) (21,202)Cash provided by (used in) financing activities (70,582) 164,604 21,932 Net increase (decrease) in cash $(25,470) $16,656 $28,46041 Operating ActivitiesWe generated $60.5 million from operating activities during 2018 due to net income of $57.9 million and net non-cash charges of $24.9 million, partiallyoffset by an increase in our net operating assets and liabilities of $22.3 million, net of acquired assets and liabilities. Non-cash charges primarily consist ofdepreciation and amortization of $23.1 million and share-based compensation of $7.6 million, partially offset by deferred income taxes of $6.7 million. Theincrease in our net operating assets and liabilities was primarily due to a decrease in accounts payable and accrued and other liabilities of $62.2 million and$5.0 million, respectively, partially offset by a decrease in inventories and accounts receivable of $35.1 million and $10.4 million, respectively.We generated $38.8 million of cash from operating activities during 2017 due to net income of $56.5 million, partially offset by net non‑cash charges of$(0.2) million and an increase in our net operating assets and liabilities of $17.4 million. Non‑cash charges primarily related to $12.5 million in depreciationand amortization, $2.2 million in share-based compensation, and $0.6 million in amortization of debt issuance cost, offset by $15.3 million in deferred taxbenefit and a gain on the sale of our investment in CHawk of $0.2 million. The increase in net operating assets and liabilities was primarily due to an increasein inventories of $43.4 million in order to meet sales demand in the first quarter of 2018, partially offset by an increase in accounts payable of $22.6 millionand prepaid expenses and other assets of $3.4 million.We generated $27.7 million of cash from operating activities during 2016 due to net income of $16.7 million, non-cash charges of $10.8 million, and a netdecrease of $0.2 million in our net operating assets and liabilities. Non-cash charges primarily related to $9.5 million in depreciation and amortization,$3.2 million in share-based compensation, and $0.5 million in amortization of debt issuance cost, offset in part by $2.4 million in deferred tax benefit. Thedecrease in net operating assets and liabilities was primarily due to an increase in accounts payable of $36.8 million resulting from increased materialspurchased to support higher sales volumes. The decrease in our net operating assets and liabilities was partially offset by an increase of $9.0 million inaccounts receivable due to increased sales and timing of customer payments, an increase in inventory of $23.7 million due to anticipated sales in the firstquarter of 2017, and a decrease in customer deposits of $4.2 million arising from a reduction in customer orders associated with discontinued operations.Investing ActivitiesCash used in investing activities during 2018 was $15.4 million due to capital expenditures of $13.9 million and net cash paid in connection withacquisitions of $1.4 million.Cash used in investing activities during 2017 was $186.8 million. We used approximately $131.4 million and $49.5 million, net of acquired cash, to acquireTalon and Cal‑Weld, respectively, and $8.2 million to fund capital expenditures to purchase test fixtures and leasehold improvements primarily related to ourplant expansions in the United States and Malaysia. These outflows were partially offset by proceeds from the sale of our investments in Ajax ForesightGlobal Manufacturing Sdn. Bhd. (“AFGM”) and CHawk and the settlement of a note receivable from AFGM of $2.4 million.Cash used in investing activities during 2016 was $21.2 million. We used $17.4 million, net of cash acquired, to acquire Ajax and $4.3 million from capitalexpenditures to purchase test fixtures and leasehold improvements primarily related to our plant expansions in the United States and Malaysia, partiallyoffset by proceeds from sales of certain intangible and fixed assets totaling $0.5 million.Financing ActivitiesCash used in financing activities during 2018 was $70.6 due to share repurchases of $90.0 million and debt modification costs in connection with therefinancing of our credit facilities in February 2018 of $2.1 million, partially offset by net borrowing on long-term debt of $15.3 million and proceeds relatedto issuances of ordinary shares under our share-based compensation plans of $6.2 million.We generated $164.6 million of cash from financing activities during 2017, which primarily consisted of $150.0 million in proceeds from the issuance oflong-term debt to fund our acquisitions of Talon and Cal‑Weld, $9.1 million in proceeds from employees’ and directors’ exercise of stock options, and$7.3 million of proceeds from the exercise of the underwriters’ over‑allotment option in January 2017 in connection with our December 2016 IPO, partiallyoffset by $1.5 million in financing costs associated with the issuance of long-term debt.We generated $21.9 million of cash from financing during 2016, which consisted of net proceeds from our IPO of $47.1 million and $27.0 million ofproceeds from borrowings under our Credit Facilities, partially offset by $52.2 million used to partially repay amounts owed under our Credit Facilities.42 Subsequent EventsSubsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. For a description of subsequentevents, please review the information provided in Note 16 – Subsequent Events of our consolidated financial statements in Part IV, Item 15 of this report onForm 10‑K.Credit FacilitiesFor a description of our Credit Facilities, please review the information provided in Note 9 – Credit Facilities of our consolidated financial statementsincluded in Part IV, Item 15 of this report.Contractual Obligations and CommitmentsThe following summarizes our contractual obligations and commitments as of December 28, 2018: Payments Due by Period Total Less Than1 Year 1-3 Years 3-5 Years More Than5 Years (in thousands) Operating leases $19,182 $4,910 $9,229 $4,923 $120 Long-term debt obligations, principal (1) 204,787 8,750 17,500 178,537 — Long-term debt obligations, interest (2) 34,657 9,000 16,860 8,797 — Total $258,626 $22,660 $43,589 $192,257 $120 (1)Represents the contractually required principal payments under our Credit Facilities in accordance with the required principal payment schedule.(2)Represents the contractually required interest payments under our Credit Facilities in accordance with the required interest payment schedule. Interestcosts have been estimated based on interest rates in effect for such indebtedness as of December 28, 2018.Critical Accounting Policies and EstimatesOur consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of theseconsolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, andrelated disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances.We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are materialdifferences between these estimates and our actual results, our future financial statements will be affected.The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidatedfinancial statements are described below.Revenue RecognitionTo understand our revenue recognition accounting policy, please review the information provided in Note 1 – Organization and Summary of SignificantAccounting.Inventory ValuationTo understand our inventory valuation accounting policy, please review the information provided in Note 1 – Organization and Summary of SignificantAccounting. During 2018, 2017, and 2016, we wrote down $1.9 million, $0.9 million, and $3.9 million, respectively, in inventory determined to be excessiveor obsolete.43 Recent Accounting PronouncementsFrom time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates tothe FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed,we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on ourConsolidated Financial Statements upon adoption.To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 1 – Organizationand Summary of Significant Accounting Policies of our consolidated financial statements in Part IV, Item 15 of this report.Off-Balance Sheet ArrangementsAs of December 28, 2018, we did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or specialpurpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other purposes.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to financial market risks, including changes in currency exchange rates and interest rates.Foreign Currency Exchange RiskCurrently, substantially all of our sales and arrangements with third-party suppliers provide for pricing and payment in U.S. dollars and, therefore, are notsubject to material exchange rate fluctuations. As a result, we do not expect foreign currency exchange rate fluctuations to have a material effect on ourresults of operations. However, increases in the value of the U.S. dollar relative to other currencies would make our products more expensive relative tocompeting products priced in such other currencies, which could negatively impact our ability to compete. Conversely, decreases in the value of the U.S.dollar relative to other currencies could result in our foreign suppliers raising their prices in order to continue doing business with us.While not currently significant, we do have certain operating expenses that are denominated in currencies of the countries in which our operations arelocated, and may be subject to fluctuations due to foreign currency exchange rates, particularly the Singapore dollar, Malaysian Ringgit, British Pound andEuro. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our statement of operations. To date, foreigncurrency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedgingtransactions.Interest Rate RiskWe had total indebtedness of $204.8 million as of December 28, 2018, exclusive of $3.9 million in debt issuance costs, of which $8.8 million was due within12 months. The outstanding amount of debt included elsewhere in this report is net of debt issuance costs.We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate riskexposure. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. The interest rate on ouroutstanding debt is variable based on LIBOR, the Prime Rate, or the Federal Funds Rate. A hypothetical 1% change in the interest rate on our outstandingdebt would have resulted in a $2.0 million change to interest expense during 2018.ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAThe financial statements and supplementary financial information required to be filed under this Item 8 are presented beginning on page F‑1 in Part IV,Item 15 of this annual report on Form 10‑K and are incorporated herein by reference.44 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresAs required by Rule 13a‑15(b) under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management,including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures(as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act) as of the end of the period covered by this report. There are inherent limitations to theeffectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of thecontrols and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their controlobjectives. We evaluated the effectiveness of our disclosure controls and procedures as of December 28, 2018, with the participation of our CEO and CFO.Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 28, 2018.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a‑15(f) and15d‑15(f) under the Exchange Act). With the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated theeffectiveness of our internal control over financial reporting based on the framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (“COSO”) in Internal Control—Integrated Framework (2013). Because of its inherent limitations, internal control over financial reporting is notintended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Based on that assessment,management has concluded that our internal control over financial reporting was effective as of December 28, 2018 to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.We have not engaged an independent registered accounting firm to perform an audit of our internal control over financial reporting as of any balance sheetdate or for any period reported in our financial statements. Our independent public registered accounting firm will first be required to attest to theeffectiveness of our internal control over financial reporting for our Annual Report on Form 10-K for the first year we are no longer an “emerging growthcompany” as defined by the JOBS Act.Changes in Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principalfinancial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparationof financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. If we cannot provide reliable financialinformation, our business, operating results and share price could be negatively impacted.In connection with the adoption of new revenue recognition accounting standards, as codified in ASC Topic 606, we implemented certain internal controls toensure we adequately evaluated our contracts with our customers and properly assessed the impact of the new revenue recognition accounting standards onour financial statements to facilitate its adoption at the beginning of our first fiscal 2018 quarter. There were no significant changes to our internal controlover financial reporting due to the adoption of the new accounting standards.ITEM 9B. OTHER INFORMATIONThe Compensation, Nominating, and Corporate Governance Committee (the “Committee”) of our Board of Directors evaluates and reviews our executivecompensation, programs, objectives and philosophy on an annual basis. The Committee engaged Radford to advise on our executive compensation programsin connection with the Committee’s annual compensation review. Radford assisted in refining our executive compensation strategies and practices incomparison to similarly situated peer companies, including with respect to severance and change in control programs.45 In connection with this review and based on market data provided by Radford, the Committee approved a new Select Severance Plan (the “Select SeverancePlan”) pursuant to which we will provide severance pay and other benefits to eligible participants (the “Participants” and each, a “Participant”) in the eventof such employee’s termination under certain circumstances described therein. The effective date of the Select Severance Plan was March 6, 2019 (the“Effective Date”).The following summary of the Select Severance Plan does not purport to be complete and is subject to and qualified in its entirety by reference to the text ofthe Select Severance Plan filed as Exhibit 10.9 to this Annual Report on Form 10-K and incorporated herein by reference.The Select Severance Plan provides eligible officers (each an “Officer Participant” and collectively, “Officer Participants”) with the following benefits in theevent of a termination of employment or service by us without “cause” (as defined in the Select Severance Plan) (and solely with respect to our CEO, uponresignation for “good reason” (as defined in the Select Severance Plan)): •nine‑month salary continuation (or 12 months in the case of the CEO); •a pro rata portion (based on the number of days employed during the applicable performance period from when the separation from serviceoccurs) of the Officer Participant’s annual target cash performance bonus based on actual results; •continued health insurance coverage at the active employee rate for a period up to nine months (or 12 months in the case of the CEO).In lieu of the benefits described above, if a Participant is terminated without cause or terminates employment for “good reason” during (1) the 90 day periodprior to our entry into a definitive agreement that results in a “change in control” (as defined in the Select Severance Plan) (such termination, a “Pre‑CICTermination”) or (2) the period commencing on a change in control and ending 12 months later (such termination, a “Post‑CIC Termination”), the SelectSeverance Plan provides Participants with the following benefits. •in the case of Officer Participants, a lump sum amount in cash equal to the employee’s base salary plus the employee’s annual target cashperformance bonus (or 2X such amount in the case of the CEO); •in the case of Officer Participants, a pro rata portion (based on the number of days employed during the applicable performance period fromwhen the separation from service occurs) of the employee’s annual target cash performance bonus based on actual results; •in the case of Officer Participants, continued health insurance coverage at the active employee rate for a period of up to twelve months (or24 months in the case of the CEO); •full vesting of any unvested stock-based awards and removal of restrictions with respected to restricted stock awards; and •any stock option, stock appreciation right or similar award shall become fully exercisable.The severance benefits payable under the Select Severance Plan are subject to: (1) the six month delay to the extent required under Section 409A of theInternal Revenue Code of 1986, as amended; (2) the execution and non-revocation of a general release of claims in favor of us within a specified time period;(3) the Participant’s compliance with certain non-disparagement and confidentiality covenants following a termination; and (4) reduction to avoid any excisetax on “parachute payments,” but only if the executive would benefit from such reduction as compared to paying the excise tax.Any benefits payable under the Select Severance Plan supersede and are in lieu of any severance benefits and/or payments provided under any otheragreements, arrangements or severance plans by and between the executive and us unless a Participant’s employment or similar agreement provides forseverance benefits that, in the aggregate, are more favorable to the Participant (in which case, such greater benefits will be paid under this Plan).46 PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 General Meeting to be filed with the SEC within120 days after the close of the year ended December 28, 2018.Code of ConductThe Company has adopted a code of business ethics and conduct (the “Code of Conduct”) that applies to all employees, officers and directors, including theprincipal executive officer, principal financial officer and principal accounting officer. The Code of Conduct is available on the Company’s website atwww.ichorsystems.com under the Investor Relations tab. The Company intends to post on its website all disclosures that are required by law or NASDAQlisting rules regarding any amendment to, or a waiver of, any provision of the Code of Conduct for the principal executive officer, principal financial officer,principal accounting officer or controller, or persons performing similar functions.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 General Meeting to be filed with the SEC within120 days after the close of the year ended December 28, 2018.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERSThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 General Meeting to be filed with the SEC within120 days after the close of the year ended December 28, 2018.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 General Meeting to be filed with the SEC within120 days after the close of the year ended December 28, 2018.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 General Meeting to be filed with the SEC within120 days after the close of the year ended December 28, 2018.PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)The following documents are filed as a part of this report: (1)Financial Statements.The following Consolidated Financial Statements are filed as part of this report under Item 8 “Financial Statements andSupplementary Data.” Report of Independent Registered Public Accounting FirmF‑1Consolidated Balance SheetsF‑2Consolidated Statements of OperationsF‑3Consolidated Statements of Shareholders’ EquityF‑4Consolidated Statements of Cash FlowsF‑5Notes to Consolidated Financial StatementsF‑6 (2)Exhibits. Exhibits are listed on the Exhibit Index at the end of this report.ITEM 16. FORM 10-K SUMMARYNot applicable. 47 Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsIchor Holdings, Ltd.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Ichor Holdings, Ltd. and subsidiaries (the Company) as of December 28, 2018 andDecember 29, 2017, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three‑year periodended December 28, 2018, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statementspresent fairly, in all material respects, the financial position of the Company as of December 28, 2018 and December 29, 2017, and the results of itsoperations and its cash flows for each of the years in the three‑year period ended December 28, 2018, in conformity with U.S. generally accepted accountingprinciples.Change in Accounting PrincipleAs discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue recognition beginning in 2018due to the adoption of Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (Topic 606).Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required tohave, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain anunderstanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ KPMG LLPWe have served as the Company’s auditor since 2011.Portland, OregonMarch 8, 2019F-1 ICHOR HOLDINGS, LTD.Consolidated Balance Sheets(in thousands, except share and per share data) December 28,2018 December 29,2017 Assets Current assets: Cash $43,834 $68,794 Restricted cash — 510 Accounts receivable, net 40,287 49,249 Inventories, net 121,106 154,541 Prepaid expenses and other current assets 6,348 5,357 Current assets from discontinued operations — 3 Total current assets 211,575 278,454 Property and equipment, net 41,740 34,380 Other noncurrent assets 906 1,052 Deferred tax assets, net 1,363 994 Intangible assets, net 56,895 73,405 Goodwill 173,010 169,399 Total assets $485,489 $557,684 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $64,300 $121,405 Accrued liabilities 9,556 12,211 Other current liabilities 5,148 6,715 Current portion of long-term debt 8,750 6,490 Current liabilities from discontinued operations — 400 Total current liabilities 87,754 147,221 Long-term debt, less current portion, net 192,117 180,247 Deferred tax liabilities 3,966 10,558 Other non-current liabilities 3,326 2,896 Total liabilities 287,163 340,922 Shareholders’ equity: Preferred shares ($0.0001 par value; 20,000,000 shares authorized; zero shares issued andoutstanding) — — Ordinary shares ($0.0001 par value; 200,000,000 shares authorized; 22,234,508 and25,892,162 shares outstanding, respectively; 26,574,037 and 25,892,162 shares issued,respectively) 2 3 Additional paid in capital 228,358 214,697 Treasury shares at cost (4,339,529 and zero shares, respectively) (89,979) — Retained earnings 59,945 2,062 Total shareholders’ equity 198,326 216,762 Total liabilities and shareholders’ equity $485,489 $557,684 F-2 ICHOR HOLDINGS, LTD.Consolidated Statements of Operations(in thousands, except share and per share data) Year Ended December 28,2018 December 29,2017 December 30,2016 Net sales $823,611 $655,892 $405,747 Cost of sales 687,474 555,131 340,352 Gross profit 136,137 100,761 65,395 Operating expenses: Research and development 9,355 7,899 6,383 Selling, general, and administrative 47,448 37,802 28,126 Amortization of intangible assets 15,369 8,880 7,015 Total operating expenses 72,172 54,581 41,524 Operating income 63,965 46,180 23,871 Interest expense 9,987 3,277 4,370 Other income, net (241) (126) (629)Income from continuing operations before income taxes 54,219 43,029 20,130 Income tax benefit from continuing operations (3,664) (13,886) (649)Net income from continuing operations 57,883 56,915 20,779 Discontinued operations: Loss from discontinued operations before taxes — (722) (4,077)Income tax expense (benefit) from discontinued operations — (261) 40 Net loss from discontinued operations — (461) (4,117)Net income 57,883 56,454 16,662 Less: Undistributed earnings attributable to preferred shareholders — — (15,284)Net income attributable to ordinary shareholders $57,883 $56,454 $1,378 Net income per share from continuing operations attributable to ordinaryshareholders: Basic $2.34 $2.27 $1.14 Diluted $2.30 $2.17 $0.87 Net income per share attributable to ordinary shareholders: Basic $2.34 $2.25 $0.92 Diluted $2.30 $2.15 $0.70 Shares used to compute net income from continuing operations per shareattributable to ordinary shareholders: Basic 24,706,542 25,118,031 1,503,296 Diluted 25,128,055 26,218,424 1,967,926 Shares used to compute net income per share attributable to ordinaryshareholders: Basic 24,706,542 25,118,031 1,503,296 Diluted 25,128,055 26,218,424 1,967,926 F-3 ICHOR HOLDINGS, LTD.Consolidated Statements of Shareholders’ Equity(in thousands, except share data) Retained Additional Treasury Earnings Total Preferred Shares Ordinary Shares Paid-In Shares (Accumulated Shareholders' Shares Amount Shares Amount Capital Shares Amount Deficit) Equity Balance at December25, 2015 17,722,808 $142,728 65,409 $— $3,004 — $— $(71,054) $74,678 Ordinary sharesissued, net oftransaction costs — — 5,877,778 — 47,103 — — — 47,103 Conversion ofpreferred shares toordinary shares (17,722,808) (142,728) 17,722,808 2 142,726 — — — — Share-basedcompensationexpense — — — — 3,216 — — — 3,216 Vesting ofrestricted shares — — 191,386 — — — — — — Net income — — — — — — — 16,662 16,662 Balance at December30, 2016 — — 23,857,381 2 196,049 — — (54,392) 141,659 Ordinary sharesissued from initialpublic offering, netof transaction costs — — 881,667 1 7,277 — — — 7,278 Ordinary sharesissued fromexercise of stockoptions 1,078,182 — 9,141 — 9,141 Ordinary sharesissued from vestingof restricted shareunits — — 74,932 — — — — — — Share-basedcompensationexpense — — — — 2,230 — — — 2,230 Net income — — — — — — — 56,454 56,454 Balance at December29, 2017 — — 25,892,162 3 214,697 — — 2,062 216,762 Ordinary sharesissued fromexercise of stockoptions — — 573,162 — 5,661 — — — 5,661 Ordinary sharesissued from vestingof restricted shareunits — — 79,336 — (91) — — — (91)Ordinary sharesissued fromemployee sharepurchase plan — — 29,377 — 514 — — — 514 Repurchase ofordinary shares — — (4,339,529) (1) — 4,339,529 (89,979) — (89,980)Share-basedcompensationexpense — — — — 7,577 — — — 7,577 Net income — — — — — — — 57,883 57,883 Balance at December28, 2018 — $— 22,234,508 $2 $228,358 4,339,529 $(89,979) $59,945 $198,326 F-4 ICHOR HOLDINGS, LTD.Consolidated Statements of Cash Flows(in thousands) Year Ended December 28,2018 December 29,2017 December 30,2016 Cash flows from operating activities: Net income $57,883 $56,454 $16,662 Adjustments to reconcile net income to net cash provided by operatingactivities: Depreciation and amortization 23,064 12,509 9,497 Gain on sale of investments and settlement of note receivable — (241) — Share-based compensation 7,577 2,230 3,216 Deferred income taxes (6,687) (15,347) (2,429)Amortization of debt issuance costs 970 608 527 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable, net 10,425 (1,059) (9,007)Inventories 35,126 (43,425) (23,719)Prepaid expenses and other assets (685) 3,386 (3,381)Accounts payable (62,173) 22,612 36,761 Accrued liabilities (3,518) 848 1,612 Other liabilities (1,507) 228 (2,009)Net cash provided by operating activities 60,475 38,803 27,730 Cash flows from investing activities: Capital expenditures (13,920) (8,226) (4,268)Cash paid for acquisitions, net of cash acquired (1,443) (180,955) (17,407)Proceeds from sale of intangible assets — — 230 Proceeds from sale of property, plant, and equipment — — 243 Proceeds from sale of investments and settlement note receivable — 2,430 — Net cash used in investing activities (15,363) (186,751) (21,202)Cash flows from financing activities: Issuance of ordinary shares, net of fees — 7,278 47,103 Issuance of ordinary shares under share-based compensation plans 6,329 9,141 — Employees' taxes paid upon vesting of restricted share units (91) — — Repurchase of ordinary shares (89,980) — — Debt issuance and modification costs (2,092) (1,520) — Borrowings on revolving credit facility 44,162 10,000 12,000 Repayments on revolving credit facility (20,000) — (22,000)Proceeds from term loan — 140,000 15,000 Repayments on term loan (8,910) (295) (30,171)Net cash provided by (used in) financing activities (70,582) 164,604 21,932 Net increase (decrease) in cash (25,470) 16,656 28,460 Cash at beginning of year 69,304 52,648 24,188 Cash at end of year $43,834 $69,304 $52,648 Supplemental disclosures of cash flow information: Cash paid during the period for interest $8,273 $3,436 $3,686 Cash paid during the period for taxes $2,278 $1,068 $103 Supplemental disclosures of non-cash activities: Capital expenditures included in accounts payable $1,462 $723 $1,174 F-5 ICHOR HOLDINGS, LTD.Notes to Financial Statements(dollar figures in tables in thousands, except share and per share amounts and percentages)Note 1 – Organization and Summary of Significant Accounting PoliciesOrganization and Operations of the CompanyIchor Holdings, Ltd. and Subsidiaries (the “we”, “us”, “our”, “Company”) designs, develops, manufactures and distributes gas and liquid delivery subsystemsand components purchased by capital equipment manufacturers for use in the semiconductor markets. We are headquartered in Fremont, California and haveoperations in the United States, United Kingdom, Singapore, Malaysia, and Korea.On December 30, 2011, Ichor Systems Holdings, LLC consummated a sales transaction with Icicle Acquisition Holdings, LLC, a Delaware limited liabilitycompany. Shortly after consummation of the sale transaction, Icicle Acquisition Holdings, LLC changed its name to Ichor Holdings, LLC.In March 2012, Ichor Holdings, LLC completed a reorganization of its legal structure, forming Ichor Holdings, Ltd., a Cayman Islands entity. IchorHoldings, Ltd. is now the reporting entity and the ultimate parent company of the operating entities.In January 2016, we decided to close our Kingston, New York facility which was the primary facility for the Precision Flow Technologies, Inc. (“PFT”)subsidiary. In May 2016, we ceased operations in this facility and ended the relationship with the customer it served in this location. Our consolidatedfinancial statements and accompanying notes for current and prior periods have been retroactively adjusted to present the results of operations of thePrecision Flow Technologies, Inc. subsidiary as a discontinued operation. In addition, the assets and liabilities to be disposed of have been treated andclassified as a discontinued operation. For more information on the discontinued operation see Note 15 – Discontinued Operations.Basis of PresentationThese consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Allintercompany balances and transactions have been eliminated upon consolidation. All financial figures presented in the notes to consolidated financialstatements are in thousands, except share, per share, and percentage figures.These consolidated financial statements include the following wholly owned subsidiaries of Ichor Holdings, Ltd.: Name of Subsidiary Jurisdiction of Incorporation,Organization, or FormationIchor Intermediate Holdings, Ltd. Cayman IslandsIcicle Acquisition Holding Co-op NetherlandsIcicle Acquisition Holding B.V. NetherlandsIchor Holdings Ltd. ScotlandIchor Systems Ltd. ScotlandIchor Holdings, LLC DelawareIchor Systems, Inc. DelawareIchor Systems Korea Ltd. KoreaIchor Systems Malaysia Sdn Bhd MalaysiaIchor Systems Singapore, PTE Ltd. SingaporePrecision Flow Technologies, Inc. New YorkAjax-United Patterns & Molds, Inc. CaliforniaCal-Weld, Inc. CaliforniaTalon Innovations Corporations MinnesotaTalon Innovations (FL) Corporation FloridaTalon Innovations Korea KoreaIAN Engineering Co., Ltd. Korea Public OfferingOn December 14, 2016, we completed an initial public offering (“IPO”) of 5,877,778 ordinary shares at a price to the public of $9.00 per share. We receivednet proceeds from the offering of $47.1 million after offering fees and expenses. The net proceeds were used to repay $40.0 million of loans outstandingunder our Credit Facilities. In January 2017, we received $7.3 million, net of fees and expenses, from the exercise of the underwriters’ over‑allotment optionto sell an additional 881,667 ordinary shares.F-6 Year EndWe use a 52 or 53 week fiscal year ending on the last Friday in December. The years ended December 28, 2018 and December 29, 2017 were both 52 weeks.The year ended December 30, 2016 was 53 weeks. All references to 2018, 2017, and 2016 are references to the fiscal years then ended.Use of EstimatesThe preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenue and expenses during the reporting periods presented. We base our estimates and judgments onhistorical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ from the estimatesmade by management. Significant estimates include the fair value of assets and liabilities acquired in acquisitions, estimated useful lives for long-livedassets, allowance for doubtful accounts, inventory valuation, uncertain tax positions, fair value assigned to stock options granted, and impairment analysisfor both definite-lived intangible assets and goodwill.Revenue RecognitionWe recognize revenue when control of promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to beentitled to in exchange for those goods or services. This amount is recorded as net sales in our consolidated statements of operations.Transaction price – In most of our contracts, prices are generally determined by a customer-issued purchase order and generally remain fixed over theduration of the contract. Certain contracts contain variable consideration, including early-payment discounts and rebates. When a contract includes variableconsideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include thevariable consideration in the transaction price only to the extent that it is probable that a significant reversal will not occur. Variable consideration estimatesare updated at each reporting date. Historically, we have not incurred significant costs to obtain a contract. All amounts billed to a customer relating toshipping and handling are classified as net sales, while all costs incurred by us for shipping and handling are classified as cost of goods sold.Performance obligations – Substantially all of our performance obligations pertain to promised goods (“products”), which are primarily comprised of fluiddelivery subsystems, weldments, and other components. Most of our contracts contain a single performance obligation and are generally completed withintwelve months. Product sales are recognized at a point-in-time, generally upon delivery, as such term is defined within the contract, as that is when control ofthe promised good has transferred. Products are covered by a standard assurance warranty, generally extended for a period of one to two years depending onthe customer, which promises that delivered products conform to contract specifications. As such, we account for such warranties under ASC 460,Guarantees, and not as a separate performance obligation.Contract balances – Accounts receivable represents our unconditional right to receive consideration from our customers. Accounts receivable are carried atinvoice price less an estimate for doubtful accounts and estimated payment discounts. Payment terms vary by customer but are generally due within 15‑60days. Historically, we have not incurred significant payment issues with our customers. We had no significant contract assets or liabilities on ourconsolidated balance sheets in any of the periods presented.Concentration of Credit RiskFinancial instruments that subject us to credit risk consist of accounts receivable, accounts payable and long-term debt. At December 28, 2018 andDecember 29, 2017, two customers represented, in the aggregate, approximately 40% and 61%, respectively, of the balance of accounts receivable.F-7 We establish an allowance for doubtful accounts based upon the credit risk of specific customers, historical trends, and other information. Activity andbalances related to the allowance for doubtful accounts is as follows: Allowance fordoubtful accounts Balance at December 25, 2015 $123 Charges to costs and expenses 71 Write-offs — Balance at December 30, 2016 194 Charges to costs and expenses 62 Write-offs — Balance at December 29, 2017 256 Charges to costs and expenses 195 Write-offs and recoveries (111)Balance at December 28, 2018 $340 We require collateral, typically cash, in the normal course of business if customers do not meet the criteria established for offering credit. If the financialcondition of our customers were to deteriorate and result in an impaired ability to make payments, additions to the allowance may be required. Accountsreceivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded to income when received.We use qualified manufacturers to supply many components and subassemblies of our products. We obtain the majority of our components from a limitedgroup of suppliers. A majority of the purchased components used in our products are customer specified. An interruption in the supply of a particularcomponent would have a temporary adverse impact on our operating results.We maintain cash balances at both United States-based and foreign-based commercial banks. Cash balances in the United States exceed amounts that areinsured by the Federal Deposit Insurance Corporation (FDIC). The majority of the cash maintained in foreign-based commercial banks is insured by thegovernment where the foreign banking institutions are based. Cash held in foreign-based commercial banks totaled $25.5 million and $36.4 million atDecember 28, 2018 and December 29, 2017, respectively, and at times exceeds insured amounts. No losses have been incurred at December 28, 2018 andDecember 29, 2017 for amounts exceeding the insured limits.Fair Value MeasurementsWe estimate the fair value of financial assets and liabilities based upon comparison of such assets and liabilities to the current market values for instrumentsof a similar nature and degree of risk. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservableinputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principalor most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishesbetween observable and unobservable inputs, which are categorized in one of the following levels: ▪Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at themeasurement date ▪Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, forsubstantially the full term of the asset or liability ▪Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available,thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement dateThere were no changes to our valuation techniques during 2018. We estimate that the recorded value of our financial assets and liabilities approximate fairvalue at December 28, 2018 and December 29, 2017.We estimate the value of intangible assets on a nonrecurring basis based on an income approach utilizing discounted cash flows. Under this approach, weestimate the future cash flows from our asset groups and discount the income stream to its present value to arrive at fair value. Future cash flows are based onrecently prepared operating forecasts. Operating forecasts and cash flows include, among other things, revenue growth rates that are calculated based onmanagement’s forecasted sales projections. A discount rate is utilized to convert the forecasted cash flows to their present value equivalent. The discount rateapplied to the future cash flows includes a subject-company risk premium, an equity market risk premium, a beta, and a risk-free rate. As this approachcontains unobservable inputs, the measurement of fair value for intangible assets is classified as Level 3.F-8 InventoriesInventories are stated at the lower of cost or net realizable value. The majority of inventory values are based upon average costs. We analyze inventory levelsand record write-downs for inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory inexcess of expected customer demand. We assess the valuation of all inventories, including raw materials, work-in-process, finished goods and spare parts on aperiodic basis. Obsolete inventory or inventory in excess of our estimated usage is written down to its estimated market value less costs to sell, if less than itscost. Inherent in our estimates of demand and market value in determining inventory valuation are estimates related to economic trends, future demand forour products and technological obsolescence of our products. If actual demand and market conditions are less favorable than our projections, additionalinventory write-downs may be required. If the inventory value is written down to its net realizable value, and subsequently there is an increased demand forthe inventory at a higher value, the increased value of the inventory is not realized until the inventory is sold either as a component of a subsystem or asseparate inventory.Property and EquipmentProperty, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the followingestimated useful lives: Estimated usefullives of PP&EMachinery 5-10 yearsLeasehold improvements Lesser of 10 yearsor lease termComputer software, hardware, and equipment 3-5 yearsOffice furniture, fixtures, and equipment 5-7 yearsVehicles 5 yearsMaintenance and repairs that neither add materially to the value of the asset nor appreciably prolong its useful life are charged to expense as incurred. Gainsor losses on the disposal of property and equipment are included in selling, general and administrative expenses on the consolidated statements ofoperations.Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying amount ofan asset (or asset group) may not be recoverable. In analyzing potential impairments, projections of future cash flows from the asset group are used to estimatefair value. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset group, a loss is recognized for the differencebetween the estimated fair value and the carrying value of the asset group. The projections are based on assumptions, judgments and estimates of revenuegrowth rates for the related business, anticipated future economic, regulatory and political conditions, the assignment of discount rates relative to risk, andestimates of terminal values. At December 28, 2018 and December 29, 2017, intangible assets passed the recoverability test resulting in no impairment. Intangible AssetsWe account for intangible assets that have a definite life and are amortized on a basis consistent with their expected cash flows over the following estimateduseful lives: Estimated usefullives of intangiblesTrademarks 10 yearsCustomer relationships 6-10 yearsDeveloped technology 7-10 years F-9 GoodwillGoodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified andseparately recognized. We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value ofgoodwill may not be recoverable. We first make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than itscarrying amount before applying a quantitative goodwill impairment test. Under the quantitative test, the fair value of the reporting unit is compared to itscarrying value and an impairment loss is recognized for any excess of carrying amount over the reporting unit’s fair value. Fair value of the reporting unit isdetermined using a discounted cash flow analysis. For purposes of testing goodwill for impairment, we have concluded that we operate as one reporting unit.We performed a qualitative goodwill assessment at December 28 2018 and December 29, 2017. This assessment indicated that it was more likely than not ourreporting unit’s fair value exceeded its carrying value.Research and Development CostsResearch and development costs are expensed as incurred.Special BonusOn August 11, 2015, our Board of Directors instituted a special bonus to certain members of management totaling $3.1 million. In December 2016 our Boardof Directors approved that all remaining special bonus not yet earned had been earned, resulting in a $0.6 million expense in 2016. There were no suchbonuses instituted in 2018 or 2017.Share-Based PaymentsWe use the Black-Scholes option-pricing model to value the awards on the date of grant. We use the simplified method to estimate the expected term ofshare-based awards for all periods as we do not have sufficient history to estimate the weighted average expected term. The risk-free interest rate is based onthe U.S. Treasury rates in effect on the corresponding date of grant. Estimated volatility is based on the historical volatility of ours and similar entities’publicly traded shares.Income TaxesWe recognize deferred income taxes using the asset and liability method of accounting for income taxes. Under the asset and liability method, deferredincome taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for theyears in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includesthe enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income taxbenefit for the current year differs from the statutory rate primarily as a result of the impact of foreign operations and discrete tax benefits recorded inconnection with our historical acquisitions, stock option exercises, and the release of the valuation allowance against certain foreign tax credits that are nowexpected to be utilized as a result of the analysis performed related to the Tax Cuts and Jobs Act passed in 2017.When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may besubject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position isrecognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely thannot that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offsetor aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefitthat is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positionstaken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in our consolidated balance sheets alongwith any associated interest and penalties that would be payable to the taxing authorities upon examination. We recognize interest and penalties as acomponent of income tax expense.F-10 Foreign OperationsThe functional currency of our international subsidiaries located in the United Kingdom, Singapore, and Malaysia, is the U.S. dollar. Transactionsdenominated in currencies other than the functional currency generate foreign exchange gains and losses that are included in other income, net on ourconsolidated statements of operations. Substantially, all of our sales and agreements with third-party suppliers provide for pricing and payments in U.S.dollars and, therefore, are not subject to material exchange rate fluctuations. Foreign operations consist of revenue of $379.1 million, $346.0 million, and$241.7 million during 2018, 2017, and 2016, respectively. Assets of foreign operations totaled $157.0 million and $127.2 million at December 29, 2017 andDecember 30, 2016, respectively.Accounting Pronouncements Recently AdoptedIn May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) 2014‑09, Revenue from Contracts withCustomers (Topic 606), which supersedes nearly all existing revenue recognition guidance. Subsequent to the issuance of ASU 2014‑09, the FASB clarifiedthe guidance through several ASUs. We adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, onDecember 30, 2017, the first day of fiscal year 2018, using the modified retrospective method. After assessing our contracts with our customers, wedetermined that there was not a significant change to the nature, timing, and extent of our revenues under the new standard. Accordingly, we did not make acumulative-effect adjustment to retained earnings on December 30, 2017, as there was no adjustment to be made.In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. The amendmentprovides and clarifies guidance on the classification of certain cash receipts and cash payments in the statement of cash flows to eliminate diversity inpractice. We adopted ASU 2016-15 on December 30, 2017, the first day of fiscal year 2018, which did not have a significant impact on our consolidatedfinancial statements.In January 2017, the FASB issued ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this updateclarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for asacquisitions (or disposals) of assets or businesses. We adopted ASU 2017‑01 on December 30, 2017, the first day of fiscal year 2018, which did not have asignificant impact on our consolidated financial statements.In May 2017, the FASB issued ASU 2017‑09, Compensation-Stock Compensation (Topic 718) – Scope of Modification Accounting, which providesguidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.We adopted ASU 2017‑09 on December 30, 2017, the first day of fiscal year 2018, which did not have a significant impact on our consolidated financialstatements.Accounting Pronouncements Recently IssuedIn February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), which consists of a comprehensive lease accounting standard. Under the new standard,assets and liabilities arising from most leases will be recognized on the balance sheet. Leases will be classified as either operating or financing, and the leaseclassification will determine whether expense is recognized on a straight-line basis (operating leases) or based on an effective interest method (financingleases). The standard also contains expanded disclosure requirements regarding the amounts, timing, and uncertainties of cash flows related to leasingactivities.The new standard is effective for interim and annual periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018‑11, Leases(Topic 842): Targeted Improvements, which provides an optional transition method allowing entities to initially apply the new lease standard at the adoptiondate and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We plan to use the optionaltransition method and apply the lease standard as of December 29, 2018, the first day of fiscal year 2019.The new standard provides a number of practical expedients in transition. We will elect the package of practical expedients, which permits us not to reassessunder the new standard our prior conclusions about lease identification, lease classification, and initial direct costs. We will elect to not recognize short-termleases, those with an initial term of 12 months or less, on our consolidated balance sheets.We expect the new standard to have a material effect on our consolidated financial statements. While we continue to assess all of the effects of adoption, wecurrently believe the most significant effects relate to the recognition of new right-of-use (“ROU”) assets and lease liabilities on our balance sheet for ourfacilities operating leases and the new disclosure requirements about our leasing activities. Upon adoption of the standard, we anticipate recording leaseliabilities and ROU assets to our consolidated balance sheet of approximately $17‑22 million. We do not anticipate a significant cumulative-effectadjustment to the opening balance of retained earnings, and we don’t anticipate the standard to have a material impact on our consolidated statements ofincome or cash flows. We are evaluating the disclosure requirements and collecting the relevant data in preparation for disclosure in our first quarter 2019consolidated financial statements, and we are continuing to review our existing contracts for potential embedded leases.F-11 In June 2018, the FASB issued ASU 2018‑07, Compensation-Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based PaymentAccounting. This standard is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees.ASU 2018‑07 expands the scope of ASC Topic 718, which currently only includes share-based payments issued to employees, to also include share-basedpayments issued to nonemployees for goods and services. The provisions are effective for annual periods beginning after December 15, 2018. We do notexpect this ASU to have a material impact on our consolidated financial statements.Note 2 – AcquisitionsIAN Engineering Co., Ltd.On April 19, 2018, we completed the acquisition, via stock purchase, of IAN Engineering Co., Ltd. (“IAN”), a Seoul-based leader in providing locally-sourced design and manufacturing of gas delivery systems to customers in South Korea, for an aggregate purchase price of $6.5 million, inclusive of$5.3 million paid at closing and contingent consideration with a fair value of $1.3 million. Contingent consideration consisted of an earn-out liability thatbecame payable in 2019 and 2020 if certain financial targets were achieved. During 2018, we determined those financial targets would not be met and,therefore, derecognized the earn-out liability, resulting in a gain of $1.3 million recognized in operating income on our consolidated statements of income.As this determination was made because of facts and circumstances that arose after the acquisition date, there was no change to total acquisitionconsideration. IAN provides us exposure to and growth opportunities in the South Korean semiconductor capital equipment market.The following table presents the preliminary purchase price allocation as of April 19, 2018 and December 28, 2018. Measurement period adjustmentsrecognized in 2018 relate to the fair value of IAN’s opening balance of deferred taxes. PreliminaryAllocationApril 19, 2018 2018MeasurementPeriodAdjustment PreliminaryAllocationDecember 28,2018 Cash acquired $3,952 $— $3,952 Accounts receivable 863 — 863 Inventories 1,870 — 1,870 Prepaid expenses and other current assets 56 — 56 Property and equipment 396 — 396 Other noncurrent assets 101 — 101 Intangible assets 1,559 — 1,559 Goodwill 2,856 6 2,862 Accounts payable (4,193) — (4,193)Accrued and other current liabilities (452) — (452)Deferred tax liabilities (383) (6) (389)Other non-current liabilities (82) — (82)Total acquisition consideration $6,543 $— $6,543 We preliminarily allocated $1.6 million to customer relationships with an amortization period of 6 years. Goodwill recognized from the acquisition wasprimarily attributed to an assembled workforce and expected synergies and is not tax deductible. The allocation of acquisition consideration for IAN ispreliminary as we have not obtained all of the information to finalize our procedures on the opening balance sheet or the allocation between goodwill andintangible assets. We have recorded allocations based on information currently available.Our consolidated statements of operations for 2018 include approximately eight months of IAN operating activity, including revenue of $7.7 million.Pro forma financial information has not been provided for the acquisition of IAN as it was not material to our operations and overall financial position.Talon Innovations CorporationOn December 11, 2017 we completed the acquisition, via stock purchase, of Talon Innovations Corporation (“Talon”), a Minnesota-based leader in thedesign and manufacturing of high precision machined parts used in leading edge semiconductor tools, for $137.8 million. Talon expanded our capacity andcapabilities in the area of component manufacturing for gas and chemical delivery tools used in semiconductor manufacturing and other industrialapplications.F-12 The following table presents the preliminary purchase price allocation as of December 11, 2017 and the final allocation as of December 28, 2018.Measurement period adjustments recognized in 2018 primarily relate to the fair value of Talon’s opening balance of accounts receivable, inventory, incometaxes payable, deferred taxes, developed technology, and other working capital amounts. PreliminaryAllocationDecember 11,2017 2018MeasurementPeriodAdjustment FinalAllocationDecember 11,2018 Cash acquired $5,586 $— $5,586 Accounts receivable 11,471 600 12,071 Inventories 19,399 209 19,608 Prepaid expenses and other current assets 182 — 182 Property and equipment 16,655 — 16,655 Other noncurrent assets 76 — 76 Intangible assets 38,000 (2,700) 35,300 Goodwill 74,594 892 75,486 Accounts payable (4,706) — (4,706)Accrued liabilities (2,767) 170 (2,597)Other current liabilities (1,838) 972 (866)Deferred tax liabilities (19,652) 652 (19,000)Total acquisition consideration $137,000 $795 $137,795 We allocated $32.4 million to customer relationships and $2.9 million to intellectual property with weighted average amortization periods of 6 years and10 years, respectively. Goodwill recognized from the acquisition was primarily attributed to an assembled workforce and expected synergies and is not taxdeductible. We incurred transaction costs of $1.5 million in connection with the acquisition during 2017. The fair value adjustment to inventory as part ofour purchase price allocation resulted in a $4.5 million and $1.6 million charge to cost of sales during 2018 and 2017, respectively.Our consolidated statement of operations for 2017 includes approximately 3 weeks of Talon operating activity, which is not material to our 2017 results ofoperations.Cal‑Weld, Inc.On July 27, 2017, we completed the acquisition, via stock purchase, of Cal‑Weld, Inc. (“Cal‑Weld”), a California-based leader in the design and fabrication ofprecision, high purity industrial components, subsystems, and systems, for $56.2 million. Cal‑Weld expanded our capacity and capabilities in the area ofcomponent manufacturing for gas delivery tools used in semiconductor manufacturing.The following table presents the preliminary purchase price allocation as of July 27, 2017 and the final allocation on June 29, 2018. Measurement periodadjustments recognized in 2017 and 2018 primarily relate to the fair value of Cal‑Weld’s opening balance of inventory, income taxes payable, and otherworking capital amounts. PreliminaryAllocationJuly 27, 2017 2017MeasurementPeriodAdjustment 2018MeasurementPeriodAdjustment FinalAllocationJune 29, 2018 Cash acquired $7,337 $— $— $7,337 Accounts receivable 10,318 — — 10,318 Inventories 20,836 — (388) 20,448 Prepaid expenses and other current assets 287 113 — 400 Property and equipment 1,639 — — 1,639 Other noncurrent assets 587 — — 587 Intangible assets 12,140 — — 12,140 Goodwill 17,957 (223) (143) 17,591 Accounts payable (5,991) — (5,991)Accrued liabilities (2,016) 79 (173) (2,110)Other non-current liabilities (908) — — (908)Deferred tax liabilities (5,307) 31 11 (5,265)Total acquisition consideration $56,879 $— $(693) $56,186F-13 We allocated $11.5 million to customer relationships and $0.7 million to order backlog with weighted average amortization periods of 6 years and 6 months,respectively. Goodwill recognized from the acquisition was primarily attributed to an assembled workforce and expected synergies and is not tax deductible.We incurred transaction costs of $1.9 million in connection with the acquisition during 2017. The fair value adjustment to inventory as part of our purchaseprice allocation resulted in a $3.6 million charge to cost of sales during 2017.Our consolidated statement of operations for 2017 includes approximately 5 months of Cal‑Weld operating activity, including revenue of $53.0 million andnet income from continuing operations of $6.7 million.Ajax-United Patterns & Molds, Inc.On April 12, 2016, we completed the acquisition, via stock purchase, of Ajax-United Patterns & Molds, Inc. (“Ajax”), a California-based manufacturer ofcomplex plastic and metal products used in the medical, biomedical, semiconductor, data communication and food processing equipment industries, for$17.6 million. The acquisition allows us to manufacture and assemble the complex plastic and metal products required by the medical, biomedical,semiconductor and data communication equipment industries.The following table presents the preliminary purchase price allocation as of April 12, 2016 and the final allocation on April 12, 2017. Measurement periodadjustments recognized in 2016 and 2017 are primarily related to finalization of the valuation of deferred tax liabilities and net identifiable assets andliabilities. PreliminaryAllocationApril 12, 2016 2016MeasurementPeriodAdjustment 2017MeasurementPeriodAdjustment FinalAllocationApril 12, 2017 Cash acquired $187 $— $— $187 Accounts receivable 1,245 5 — 1,250 Inventories 3,236 — — 3,236 Prepaid expenses and other current assets 77 — 8 85 Property and equipment 1,545 — (78) 1,467 Other noncurrent assets 2,948 — — 2,948 Intangible assets 8,130 (100) — 8,030 Goodwill 4,629 2,449 (22) 7,056 Accounts payable and accrued liabilities (4,403) (83) 9 (4,477)Deferred tax liabilities — (2,271) 83 (2,188)Total acquisition consideration $17,594 $— $— $17,594 We allocated $8.0 million to customer relationships with a weighted average amortization periods of 10 years. Goodwill recognized from the acquisition wasprimarily attributed to an assembled workforce and expected synergies and is not tax deductible. We incurred transaction costs of $1.5 million in 2016 inconnection with the acquisition.Our consolidated statement of operations for 2016 includes approximately 8 months of Ajax operating activity, including revenue of $20.0 million andoperating income of $0.6 million.Pro forma financial information has not been provided for the acquisition of Ajax as it was not material to our operations and overall financial position.Note 3 – InventoriesInventory consists of the following: December 28,2018 December 29,2017 Raw materials $90,713 $91,109 Work in process 20,852 42,186 Finished goods 17,233 27,268 Excess and obsolete adjustment (7,692) (6,022)Total inventories, net $121,106 $154,541 F-14 The following table presents changes to our excess and obsolete adjustment: Excess andobsoleteadjustment Balance at December 25, 2015 $(6,132)Charge to cost of sales (3,921)Disposition of inventory 1,973 Balance at December 30, 2016 (8,080)Charge to cost of sales (909)Disposition of inventory 2,967 Balance at December 29, 2017 (6,022)Charge to cost of sales (1,871)Disposition of inventory 201 Balance at December 28, 2018 $(7,692) Note 4 – Property and EquipmentProperty and equipment consist of the following: December 28,2018 December 29,2017 Machinery $29,885 $23,464 Leasehold improvements 15,333 15,329 Computer software, hardware and equipment 4,884 4,551 Office furniture, fixtures and equipment 1,058 868 Vehicles 26 51 Construction-in-process 9,514 2,771 60,700 47,034 Less accumulated depreciation (18,960) (12,654)Total property and equipment, net $41,740 $34,380 Depreciation expense for 2018, 2017, and 2016 was $7.7 million, $3.6 million, and $2.5 million, respectively.Note 5 – Intangible Assets and GoodwillDefinite-lived intangible assets consist of the following: December 28, 2018 Gross value Accumulatedamortization Accumulatedimpairmentcharges Carryingamount Weightedaverageuseful lifeTrademarks $9,690 $(6,781) $— $2,909 10.0 yearsCustomer relationships 82,986 (31,308) — 51,678 7.8 yearsDeveloped technology 2,900 (592) — 2,308 10.0 yearsTotal intangible assets $95,576 $(38,681) $— $56,895 December 29, 2017 Gross value Accumulatedamortization Accumulatedimpairmentcharges Carryingamount Weightedaverageuseful lifeTrademarks $9,690 $(5,814) $— $3,876 10.0 yearsCustomer relationships 81,427 (20,060) — 61,367 7.8 yearsDeveloped technology 22,990 (14,938) — 8,052 7.7 yearsBacklog 660 (550) — 110 0.5 yearsTotal intangible assets $114,767 $(41,362) $— $73,405 F-15 Future projected annual amortization expense consists of the following: Futureamortizationexpense 2019 $12,579 2020 12,579 2021 12,579 2022 8,765 2023 7,541 Thereafter 2,852 $56,895 The following tables present the changes to goodwill: Goodwill Balance at December 25, 2015 $70,015 Acquisitions 7,078 Balance at December 30, 2016 77,093 Acquisitions 92,306 Balance at December 29, 2017 169,399 Acquisitions 3,611 Balance at September 28, 2018 $173,010 Note 6 – Commitments and ContingenciesOperating LeasesWe lease facilities under various non-cancellable operating leases expiring through 2024. In addition to base rental payments, we are responsible for utilitiesand our proportionate share of operating expenses. Escalating rental payments are recognized on a straight‑line basis over the lease term. Rent expense for2018, 2017, and 2016, was $5.5 million, $3.6 million, and $2.9 million, respectively. Future minimum lease payments for non-cancelable operating leases areas follows: Futureminimum leasepayments 2019 $4,910 2020 4,873 2021 4,356 2022 3,820 2023 1,103 Thereafter 120 $19,182 LitigationWe are periodically involved in legal actions and claims that arise as a result of events that occur in the normal course of operations. The ultimate resolutionof these actions is not expected to have a material adverse effect on our financial position or results of operations.Note 7 – Income TaxesIn December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act included a number of changes to existing U.S. tax lawsthat impact us, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. The 2017Tax Act also provided for a one‑time transition tax on certain foreign earnings and the acceleration of depreciation for certain assets placed into service afterSeptember 27, 2017, and prospective changes beginning in 2018, including the repeal of the domestic manufacturing deduction, acceleration of tax revenuerecognition, capitalization of research and development expenditures, additional limitations on executive compensation, and limitations on the deductibilityof interest.F-16 We recognized the income tax effects of the 2017 Tax Act in our 2017 financial statements in accordance with Staff Accounting Bulletin (“SAB”) No. 118,which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the 2017 Tax Act was signed intolaw. As of December 28, 2018, the impact of the 2017 Tax Act is complete and is included in our provision for income taxes.The changes to existing U.S. tax laws as a result of the 2017 Tax Act, which we believe have the most significant impact on the federal income taxes, are asfollows:Reduction of the U.S. Corporate Income Tax RateWe measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to berecovered or paid. Accordingly, our deferred tax assets and liabilities were re‑measured in 2017 to reflect the reduction in the U.S. corporate income tax ratefrom 35% to 21%, resulting in a $5.9 million increase in income tax benefit for 2017 and a corresponding $5.9 million decrease in net deferred tax liabilitiesat December 29, 2017.Transition Tax on Foreign EarningsIn 2017, we recognized a provisional income tax expense of $0.7 million related to the one-time transition tax on certain foreign earnings. This resulted in acorresponding decrease in deferred tax assets due to the utilization of net operating loss carryforwards. This amount was adjusted in 2018 to $0.6 million,resulting in a tax benefit of $0.1 million recorded in 2018.Global Intangible Low-Taxed Income (“GILTI”)Beginning in 2018, a portion of foreign subsidiaries’ earnings, net of a return on investment in tangible assets, are subject to tax in the United States. During2018, we recognized income tax expense of $0.1 million, net of foreign tax credits, related to GILTI.Foreign Derived Intangible Income (“FDII”) DeductionBeginning in 2018, a deduction is allowed in the United States for a portion of foreign-derived income, net of a return on investment in tangible assets.During 2018, we recognized income tax benefit of $0.2 million related to the FDII deduction.Foreign Tax CreditsBeginning in 2018, rules surrounding the utilization and carryforward of foreign tax credits in the United States were changed as a result of the 2017 Tax Act.Due to these changes, we released a valuation allowance on our accrued foreign tax credits which were previously limited under the tax code in effect beforethe 2017 Tax Act was enacted, resulting in a $4.1 million discrete benefit.Income from continuing operations before tax was as follows: Year Ended December 28,2018 December 29,2017 December 30,2016 United States $7,519 $370 $(12,553)Foreign 46,700 42,659 32,683 Income from continuing operations before tax $54,219 $43,029 $20,130 F-17 Significant components of income tax benefit from continuing operations consist of the following: Year Ended December 28,2018 December 29,2017 December 30,2016 Current: Federal $861 $809 $— State 316 249 (73)Foreign 1,751 397 1,858 Total current tax expense 2,928 1,455 1,785 Deferred: Federal (5,379) (13,251) (2,213)State (667) (1,553) — Foreign (546) (537) (221)Total deferred tax benefit (6,592) (15,341) (2,434)Income tax benefit from continuing operations $(3,664) $(13,886) $(649) The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax benefit from continuing operations consist of the following: Year Ended December 28,2018 December 29,2017 December 30,2016 Effective rate reconciliation: U.S. federal tax expense $11,386 $15,060 $7,046 State income taxes, net (329) (373) (324)Permanent items 30 2,141 303 Foreign rate differential (1,679) (7,498) (5,907)Tax holiday (7,583) (7,437) (5,714)Credits (1,158) (1,818) (794)Tax contingencies 168 335 86 Share-based compensation (1,270) (5,438) 185 Withholding tax 727 840 1,435 Impact of re-characterizing intercompany debt to equity — 1,409 — Impact of Tax Cuts and Jobs Act 199 (6,188) — Other, net (15) (248) 168 Valuation allowance (4,140) (4,671) 2,867 Income tax benefit from continuing operations $(3,664) $(13,886) $(649) F-18 Deferred income tax assets and liabilities from continuing operations consist of the following as of: December 28,2018 December 29,2017 Deferred tax assets: Inventory $3,500 $2,825 Share-based compensation 1,295 866 Accrued payroll 896 1,202 Net operating loss carryforwards 534 4,020 Transaction costs 99 63 Tax credits 7,258 5,851 Other assets 1,747 1,956 Deferred tax assets 15,329 16,783 Valuation allowance (112) (4,252) Total deferred tax assets 15,217 12,531 Deferred tax liabilities: Intangible assets (13,789) (18,283) Property, plant and equipment (3,687) (3,069) Other liabilities (344) (743) Total deferred tax liabilities (17,820) (22,095) Net deferred tax liability $(2,603) $(9,564) At December 28, 2018, we had federal and state net operating loss carryforwards of $1.0 million and $5.8 million, respectively. The federal and state netoperating loss carryforwards, if not utilized, will begin to expire in 2035 and 2032, respectively. At December 28, 2018, we had federal and state research anddevelopment credits of $1.7 million and $0.4 million, respectively. The federal and state research and development credits, if not utilized, will begin toexpire in 2032 and 2022, respectively. Additionally, we had foreign tax credits of $1.5 million, which if not utilized, will begin to expire in 2022.We have determined the amount of our valuation allowance based on our estimates of taxable income by jurisdiction in which we operate over the periods inwhich the related deferred tax assets will be recoverable. During 2017, the Company completed the acquisitions of Cal‑Weld and Talon, resulting in a releaseof valuation allowance against the Company’s net deferred tax assets. During the second quarter of 2018, as part of our evaluation of the 2017 Tax Act, wedetermined we would be able to utilize our foreign tax credit carryforwards, including our currently generated credits and accrued credits related tointercompany payables. As such, we recognized an addition $4.1 million benefit from releasing the associated valuation allowance. As of December 28,2018, we believe it is more-likely-than-not that we will realize our U.S. deferred tax assets, with the exception of certain state and foreign net operating losscarryforwards we believe are not likely to be realized within the carryforward period.The Company was granted a tax holiday for its Singapore operations effective 2011 through 2021. The net impact of the tax holiday in Singapore ascompared to the Singapore statutory rate was a benefit of $7.6 million, $7.4 million, and $5.7 million during 2018, 2017, and 2016, respectively. Our incometax fluctuates based on the geographic mix of earnings and is calculated quarterly based on actual results pursuant to ASC Topic 740‑270As of December 28, 2018, we have recognized $2.3 million of unrecognized tax benefits in long-term liabilities and zero unrecognized tax benefits innoncurrent deferred tax liabilities on the accompanying consolidated balance sheet. If recognized, $1.6 million of this amount would impact our effective taxrate. We do not expect a significant decrease to the total amount of unrecognized tax benefits within the next twelve months.Our ongoing practice is to recognize potential accrued interest and penalties related to unrecognized tax benefits within its global operations in income taxbenefit. During 2018, we recognized a net increase of approximately $0.1 million in potential interest and penalties associated with uncertain tax positions inthe consolidated statements of operations. At December 28, 2018, we had approximately $0.1 million and $0.4 million of interest and penalties, respectively,associated with uncertain tax positions, which are excluded from the unrecognized tax benefits table below. We recognize interest and penalties relating tounrecognized tax benefits as part of its income tax expense.F-19 The following table summarizes the activity related to the Company’s unrecognized tax benefits: Unrecognizedtax benefits Balance at December 25, 2015 $558 Increase in tax positions for current year 118 Decrease in tax positions for prior period (100)Balance at December 30, 2016 576 Increase in tax positions for current year 458 Increase in tax positions for prior period 214 Increase in tax positions due to acquisitions 710 Decrease in tax positions for prior period — Impact of Tax Cuts and Jobs Act (48)Balance at December 29, 2017 1,910 Increase in tax positions for current year 407 Decreases in tax positions for prior period (61)Balance at December 28, 2018 $2,256 Our three major filing jurisdictions are the United States, Singapore and Malaysia. We are no longer subject to U.S. Federal examination for tax years endingbefore 2015, to state examinations before 2014, or to foreign examinations before 2013. However, to the extent allowed by law, the tax authorities may havethe right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of thenet operating losses or credit carryforward.Note 8 – Employee Benefit Programs401(k) PlanWe sponsor a 401(k) plan available to employees of our U.S.‑based subsidiaries. Participants may make salary deferral contributions not to exceed 50% of aparticipant’s annual compensation or the maximum amount otherwise allowed by law. Eligible employees receive a discretionary matching contributionequal to 50% of a participant’s deferral, up to an annual maximum of 4% of a participant’s annual compensation. For 2018, 2017, and 2016, matchingcontributions were $1.5 million, $0.7 million, and $0.3 million, respectively.Note 9 – Credit FacilitiesLong-term debt consists of the following: December 28,2018 December 29,2017 Term loan $170,625 $179,535 Revolving credit facility 34,162 10,000 Total principal amount of long-term debt 204,787 189,535 Less unamortized debt issuance costs (3,920) (2,798)Total long-term debt, net 200,867 186,737 Less current portion (8,750) (6,490)Total long-term debt, less current portion, net $192,117 $180,247 Maturities of long-term debt consist of the following: Futurematurities oflong-term debt 2019 $8,750 2020 8,750 2021 8,750 2022 8,750 2023 169,787 $204,787 F-20 The weighted average interest rate across all credit facilities was 4.36%, 4.30%, and 5.04% during 2018, 2017, and 2016, respectively.On August 11, 2015, we entered into a new credit agreement with a syndicate of lenders and repaid all outstanding indebtedness under our previous creditagreement. The credit agreement included a $55.0 million term loan facility and $20.0 million revolving credit facility. We recorded $2.6 million in debtissuance costs associated with the new credit agreement.In April 2016, we acquired Ajax. To fund the acquisition, we amended our credit agreement, increasing the term loan facility by $15.0 million. Theamendment did not meet the definition of an extinguishment and was accounted for as a modification.In July 2017, we acquired Cal‑Weld. To fund the acquisition, we amended our credit agreement, increasing the term loan facility by $20.0 million, increasingthe revolving credit facility capacity by $20.0 million, and reducing our interest rate. The amendment did not meet the definition of an extinguishment andwas accounted for as a modification.In December 2017, we acquired Talon. To fund the acquisition, we amended our credit agreement, increasing the term loan facility by $120.0 million. Theamendment did not meet the definition of an extinguishment and was accounted for as a modification.On February 15, 2018, we amended and restated our credit agreement, which replaced our existing credit facilities with a $175.0 million term loan facilityand a $125.0 million revolving credit facility. The amendment reduced our interest rate, depending on our leverage ratio, and extended the maturity date. Weincurred debt issuance costs of $2.1 million in connection with the amendment. The amendment did not meet the definition of an extinguishment and wasaccounted for as a modification.Our credit agreement is secured by our tangible and intangible assets and includes customary representations, warranties, and covenants. We are required tomaintain a minimum fixed charge coverage ratio of 1.25 : 1 and a maximum leverage ratio 3.00 : 1.Interest is charged at either the Base Rate or the Eurodollar rate (as such terms are defined in the credit agreement) at our option, plus an applicable margin.The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds Rate plus 0.5%, or iii) the Eurodollar Rate plus 1.00%. The Eurodollar rate isequal to LIBOR. The applicable margin on Base Rate and Eurodollar Rate loans is 0.75‑1.50% and 1.75‑2.50% per annum, respectively, depending on ourleverage ratio. We are also charged a commitment fee of 0.20%-0.35% on the unused portion of our revolver. Base Rate interest payments and commitmentfees are due quarterly. Eurodollar interest payments are due on the last day of the applicable interest period. At December 28, 2018, the term loan andrevolver bore interest at the Eurodollar rate option of 4.34% and 4.54%, respectively.Principal payments of $2.2 million are due on a quarterly basis. The credit agreement matures on February 15, 2023.Note 10 – Shareholders’ EquityPreferred SharesPrior to the December 2016 IPO, our preferred shares had the following characteristics:Conversion—The holders of preferred shares had the ability to convert to common stock at any time at the option of the holder, and the preferred shareswould automatically convert to common stock upon a majority vote of the holders of preferred stock. The conversion price was equal to the ratio of theoriginal issuance price divided by the conversion price.Liquidation preference—In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, preferred shareholders wereentitled to receive an amount per share equal to the greater of (i) the original issuance price plus any dividends declared but unpaid or (ii) an amount pershare that would have been payable assuming conversion to common stock immediately prior to a liquidation event. Any remaining assets after the initialliquidation preference were to be distributed to common stock holders on a pro rata basis. If our assets were not sufficient for the full liquidation preference,the holders would share in any distribution on a pro rata basis.Voting—Preferred shareholders had voting rights based on the number of shares of common stock into which the preferred shares could convert.Dividends—Preferred shareholders were entitled to receive dividends when and if declared by our Board of Directors.At the IPO, all outstanding preferred shares were converted into 17,722,808 ordinary shares.Share Repurchase ProgramIn February 2018, our Board of Directors authorized a share repurchase program up to $50.0 million under which we may repurchase our ordinary shares inthe open market or through privately negotiated transactions, depending on market conditions and other factors. Ordinary shares repurchased are recorded astreasury shares using the cost method on a first-in, first-out basis. In August 2018, our Board of Directors authorized a $50 million increase to the sharerepurchase program.F-21 The following tables details our share repurchases for the periods indicated : Total Numberof SharesRepurchased Total Cost ofRepurchase Average PricePaid per Share AmountAvailable UnderRepurchaseProgram (dollars in thousands, except share and per share amounts) Amount available at February 15, 2018 $50,000 Quarter ended March 30, 2018 195,750 $5,000 $25.54 $45,000 Quarter ended June 29, 2018 1,061,855 24,970 $23.52 $20,030 Board authorization, $50 million increase, August 18, 2018 $70,030 Quarter ended September 28, 2018 1,424,359 30,348 $21.31 $39,683 Quarter ended December 28, 2018 1,657,565 29,662 $17.89 $10,021 Year ended December 28, 2018 4,339,529 $89,980 $20.73 $10,021 Note 11 – Related Party TransactionsWe purchased certain parts from Ajax Foresight Global Manufacturing Sdn. Bhd. (“AFGM”), an investment acquired in conjunction with our acquisition ofAjax. Total purchases from AFGM were $0.2 million and $0.7 million in 2017 and 2016, respectively. In February 2017, we sold our investment in AFGM,and therefore no related party relationship exists on a go‑forward basis.We received advisory services from Francisco Partners Management, L.P. (“FPM”), an entity affiliated with certain of our former principal shareholdersthrough our December 2016 IPO, at which time our advisory agreement with FPM was terminated. Under the advisory agreement, we were obligated to payFPM an annual advisory fee equal to $1.5 million per year. Such advisory fee was waived for all periods presented in which the advisory agreement waseffective.We also received consulting services from Francisco Partners Consulting, LLC (“FPC”), an entity that provides consulting services to the private equity fundsmanaged by FPM and their portfolio companies on a dedicated basis, through our December 2016 IPO, at which time our agreement with FPC was terminatedand such services ceased. FPC is not an affiliate of us, FPM, or any of our former principal shareholders, and none of our former principal shareholders hold anin interest in FPC. During 2017, we received a refund from FPC for previously paid consulting fees of $0.3 million. During 2016 we paid $0.5 million to FPCfor consulting services.On January 10, 2011, PFT entered into a sublease agreement with Precision Flow Inc., which was majority owned by a member of our Board of Directors.During 2016, PFT paid $1.0 million in sublease rent to Precision Flow Inc. This board member resigned in 2016, and therefore no related party relationshipexists on a go-forward basis.We had purchases totaling $0.1 million from Ceres, an entity owned by a member of our Board of Directors during 2016. We had sales totaling $0.2 millionto Ceres during 2016. This board member resigned in 2016, and therefore no related party relationship exists on a go-forward basis.Note 12 – Share-Based Compensation2016 PlanIn December 2016, we adopted the 2016 Omnibus Incentive Plan (“the 2016 Plan”). Under the 2016 Plan, 1,888,000 ordinary shares are reserved for issuance.The number of shares reserved for issuance under the 2016 Plan increases annually beginning in fiscal year 2018 by the lesser of (i) 2% of the ordinary sharesoutstanding on the last day of the immediately preceding fiscal year or (ii) such amount determined by our Board of Directors. Awards may be in the form ofoptions, tandem and non-tandem stock appreciation rights, restricted shares, performance awards, and other share based awards and can be issued toemployees, directors, and consultants. Canceled or expired awards under the 2016 Plan are returned to the incentive plan pool for future grants.Awards granted under the 2016 Plan generally have a term of 7 years. Vesting generally occurs 25% on the first anniversary of the date of grant, and quarterlythereafter over the remaining 3 years. Upon vesting of restricted shares, employees may elect to have shares withheld to cover statutory minimumwithholding taxes. Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shareswere never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.F-22 2012 PlanIn March 2012, we adopted the Ichor Holdings Ltd. 2012 Equity Incentive Plan (the “2012 Plan”). Under the 2012 Plan, we may grant either restricted sharesor stock options to employees, directors and consultants. Our Board of Directors initially authorized the issuance of 21,000,000 stock options or restrictedshares under the 2012 Plan. On October 25, 2013, our Board of Directors authorized the issuance of an additional 4,000,000 stock options or restricted sharesunder the 2012 Plan. Canceled or expired stock options or restricted shares are returned to the incentive plan pool for future grants.Stock options granted under the 2012 Plan generally have a term of 7 years. Vesting generally occurs 25% on the first anniversary of the date of grant, andquarterly thereafter over the remaining 3 years.There have been no issuances of equity-based awards under the 2012 Plan since the adoption of the 2016 Plan.On January 18, 2018, in connection with the resignation of our former Chief Financial Officer, certain separation benefits became effective, which included avesting acceleration of all outstanding and unvested stock options and restricted shares. Consequently, 88,445 stock options and 39,175 restricted sharesvested on January 18, 2018. This was accounted for as an equity award modification under ASC Topic 718, resulting in $2.9 million in share-basedcompensation expense.Stock OptionsThe table below sets forth the weighted average assumptions used to measure the fair value of options granted: Year Ended December 28,2018 December 29,2017 December 30,2016 Weighted average expected term 5 years 5 years 5 years Risk-free interest rate 2.6% 1.9% 1.3%Dividend yield 0.0% 0.0% 0.0%Volatility 52.6% 47.7% 50.0% The following table summarizes our stock option activity: Number of Stock Options Timevesting Performancevesting Weightedaverageexercise priceper share Weightedaverageremainingcontractual term Aggregateintrinsic value(in thousands) Outstanding, December 29, 2017 1,452,825 215,908 $12.87 Granted 773,100 — $24.64 Exercised (423,162) (150,000) $9.88 Forfeited (96,322) — $20.13 Expired — — $— Outstanding, December 28, 2018 1,706,441 65,908 $18.57 4.7 years $3,572 Exercisable, December 28, 2018 594,335 65,908 $12.05 2.7 years $3,186 Fair value information for options granted and the intrinsic value of options exercised are as follows: Year Ended December 28,2018 December 29,2017 December 30,2016 Weighted average grant-date fair value of options granted $11.81 $8.52 $4.18 Total intrinsic value of options exercised $8,744 $16,423 N/A At December 28, 2018, total unrecognized share-based compensation expense relating to stock options was $9.7 million, with a weighted average remainingservice period of 2.9 years.F-23 Restricted SharesThe following table summarizes our restricted share activity: Number ofRestrictedShares Time vesting Weighted averagegrant date fairvalue Unvested, December 29, 2017 153,281 $17.53 Granted 122,698 $23.89 Vested (83,679) $15.12 Forfeited — $— Unvested, December 28, 2018 192,300 $22.64 Fair value information for restricted shares granted and vested during is as follows: Year Ended December 28,2018 December 29,2017 December 30,2016 Weighted average grant-date fair value of shares granted $23.89 $19.63 $9.42 Total fair value of shares vested $2,041 $634 $1,484 At December 28, 2018, total unrecognized share-based compensation expense relating to restricted shares was $3.6 million, with a weighted averageremaining service period of 2.8 years.During 2018, 2017, and 2016, share-based compensation expense for stock options and restricted shares across all plans totaled $7.3 million, $2.2 million,and $3.2 million, respectively.2017 ESPPIn May 2017, we adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”). The 2017 ESPP grants employees the ability to designate a portion oftheir base-pay to purchase ordinary shares at a price equal to 85% of the fair market value of our ordinary shares on the first or last day of each 6 monthpurchase period. Purchase periods begin on January 1 or July 1 and end on June 30 or December 31, or the next business day if such date is not a businessday. Shares are purchased on the last day of the purchase period.The table below sets forth the weighted average assumptions used to measure the fair value of 2017 ESPP rights: Year Ended December 28,2018 December 29,2017 December 30,2016Weighted average expected term 0.5 years 0.4 years N/ARisk-free interest rate 1.9% 1.1% N/ADividend yield 0.0% 0.0% N/AVolatility 52.7% 47.8% N/A We recognize share-based compensation expense associated with the 2017 ESPP over the duration of the purchase period. We recognized $0.3 million and$0.1 million of share-based compensation expense associated with the 2017 ESPP during 2018 and 2017, respectively. At December 28, 2018, there was nounrecognized share-based compensation expense.Note 13 – Segment InformationOur Chief Operating Decision Maker, the Chief Executive Officer, reviews our results of operations on a consolidated level and executive staff is structuredby function rather than by product category. Therefore, we operate in one operating segment. Key resources, decisions, and assessment of performance arealso analyzed on a company‑wide level.Foreign operations are conducted primarily through our wholly owned subsidiaries in Singapore and Malaysia. Our principal markets include North America,Asia and, to a lesser degree, Europe. Sales by geographic area represent sales to unaffiliated customers.F-24 All information on sales by geographic area is based upon the location to which the products were shipped. The following table sets forth sales by geographicarea (including sales from discontinued operations): Year Ended December 28,2018 December 29,2017 December 30,2016 United States of America $502,750 $386,645 $243,237 Singapore 224,230 223,277 163,515 Europe 60,688 27,555 16,353 Other 35,943 18,415 9,218 Total net sales $823,611 $655,892 $432,323 The following table sets forth our two major customers, which comprised 88%, 93%, and 97% of net sales from continuing operations in 2018, 2017, and2016, respectively: Year Ended December 28,2018 December 29,2017 December 30,2016 Lam Research $458,705 $350,372 $207,230 Applied Materials $262,146 $259,234 $185,465 Note 14 – Earnings per ShareBasic and diluted net income per share attributable to ordinary shareholders was presented in conformity with the two-class method during 2016, as we hadtwo classes of stock until our December 2016 IPO. We considered our convertible preferred shares to be a participating security as the convertible preferredshares participated in dividends with ordinary shareholders, when and if declared by our Board of Directors. In the event a dividend was paid on ordinaryshares, the holders of preferred shares were entitled to a proportionate share of any such dividend as if they were holders of ordinary shares (on an as-ifconverted basis). The convertible preferred shares did not participate in incurred losses. In accordance with the two-class method, earnings allocated to theseparticipating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights inundistributed earnings, have been excluded from the computation of basic and diluted net income per share attributable to ordinary shareholders.Under the two-class method, net income attributable to ordinary shareholders after deduction of preferred share dividends, if any, is determined by allocatingundistributed earnings between the ordinary shares and the participating securities based on their respective rights to receive dividends. Basic net income pershare attributable to ordinary shareholders is computed by dividing net income attributable to ordinary shareholders by the weighted-average number ofordinary shares outstanding during the period. All participating securities are excluded from basic weighted-average ordinary shares outstanding. Diluted netincome per share attributable to ordinary shareholders is computed by dividing net income attributable to ordinary shareholders by the weighted averagenumber of ordinary shares outstanding, including all potentially dilutive ordinary shares, if the effect of each class of potential shares of ordinary shares isdilutive.For purposes of calculating EPS under the two-class method, an accounting policy election has been made to treat each income statement line item (netincome from continuing operations, net income from discontinued operations, and net income) as an independent calculation and only allocate earnings toparticipating securities for those line items for which income is reported, as the participating securities do not have a contractual obligation to participate inlosses. There is therefore no allocation of losses to participating securities for those line items for which a loss is reported. Under this method, the sum of theindividual EPS income statement line items will not reconcile to the total net income per share.Net income per share was not presented in conformity with the two‑class method during 2018 and 2017, as we had only one class of stock outstandingduring those years.F-25 The following table sets forth the computation of our basic and diluted net income (loss) per share attributable to ordinary shareholders and a reconciliationof the numerator and denominator used in the calculation: Year Ended December 28,2018 December 29,2017 December 30,2016 Numerator: Net income from continuing operations $57,883 $56,915 $20,779 Undistributed earnings attributed to preferred shareholders — — (19,060)Net income from continuing operations, attributable to ordinaryshareholders $57,883 $56,915 $1,719 Net loss from discontinued operations $— $(461) $(4,117)Undistributed earnings attributed to preferred shareholders — — — Net loss from discontinued operations, attributable to ordinaryshareholders $— $(461) $(4,117)Net income $57,883 $56,454 $16,662 Undistributed earnings attributed to preferred shareholders — — (15,284)Net income, attributable to ordinary shareholders $57,883 $56,454 $1,378 Denominator: Weighted average ordinary shares outstanding 24,706,542 25,118,031 1,503,296 Dilutive effect of stock options 398,590 1,030,793 306,871 Dilutive effect of restricted shares 20,530 68,184 157,759 Dilutive effect of employee share purchase plan 2,393 1,416 — Weighted average number of shares used in diluted per share calculation fornet income and net income from continuing operations 25,128,055 26,218,424 1,967,926 Weighted average ordinary shares outstanding 24,706,542 25,118,031 1,503,296 Dilutive effect of stock options — — — Dilutive effect of restricted shares — — — Dilutive effect of employee share purchase plan — — — Weighted average number of shares used in diluted per share calculation fornet loss from discontinued operations 24,706,542 25,118,031 1,503,296 Earnings per share attributable to ordinary shareholders: Net income from continuing operations: Basic $2.34 $2.27 $1.14 Diluted $2.30 $2.17 $0.87 Net loss from discontinued operations: Basic $— $(0.02) $(2.74)Diluted $— $(0.02) $(2.74)Net income: Basic $2.34 $2.25 $0.92 Diluted $2.30 $2.15 $0.70 An aggregated total of 516,070, 72,321, and 165,275 potential ordinary shares have been excluded from the computation of diluted net income per shareattributable to ordinary shareholders for 2018, 2017, and 2016, respectively, because including them would have been antidilutive.Note 15 – Discontinued OperationsIn January 2016, we made the decision to shut down our Kingston, New York facility as this location consumed a significant amount of resources whilecontributing very little income. We completed the shutdown of the operations of the New York facility in May 2016 through abandonment as a buyer for thefacility and operation was not found. We recorded lease abandonment and inventory charges of approximately $0.6 million and $2.0 million, respectively, in2016. In 2017, we accrued for remaining costs of $0.3 million to occupy the facility through its lease expiration in February 2018. The discontinuedoperation was deemed to be fully disposed of at December 29, 2017. Accordingly, there was no activity associated with the discontinued operation during2018.F-26 The carrying amounts of the major classes of assets and liabilities of our Kingston, New York facility are reflected in the following table: December 29,2017 Assets Current assets: Prepaid expenses and other current assets $3 Total current assets 3 Total assets $3 Liabilities Current liabilities: Accounts payable $136 Accrued liabilities 255 Other current liabilities 9 Total current liabilities 400 Total liabilities $400 The results of the discontinued operation were as follows: Year Ended December 29,2017 December 30,2016 Net sales $— $26,576 Cost of sales — 28,077 Operating expenses: Research and development — 262 Selling, general, and administrative 722 2,315 Total operating expenses 722 2,577 Operating loss (722) (4,078)Other income, net — (1)Loss from discontinued operations before income taxes (722) (4,077)Income tax expense (benefit) (261) 40 Loss from discontinued operations $(461) $(4,117) Note 16 – Subsequent Events (unaudited)Ordinary Share RepurchasesIn January 2019, we repurchased 97,910 ordinary shares for a total cost of $1.6 million at an average price of $16.34 per share pursuant to our previouslyannounced share repurchase program. F-27 EXHIBIT INDEXThe following exhibits are filed with this Form 10‑K or are incorporated herein by reference: ExhibitNumber Description of Exhibit 3.1 Amended and Restated Memorandum and Articles of Association of Ichor Holdings, Ltd., effective as of December 9, 2016 (Incorporatedby reference to Exhibit 3.1 to the current report on Form 8‑K filed with the Securities and Exchange Commission on December 14, 2016). 10.1 Amended and Restated Credit Agreement, dated as of February 14, 2018, by and among Ichor Holdings, LLC, Ichor Systems, Inc., PrecisionFlow Technologies, Inc., Ajax United Patterns & Molds, Inc., Cal Weld, Inc., Talon Innovations Corporation, and Talon Innovations (FL)Corporation as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions party thereto, as lenders(Incorporated by reference to Exhibit 10.1 to the current report on Form 8 K filed with the Securities and Exchange Commission onFebruary 15, 2018). 10.2+ Employment Agreement, dated as of September 19, 2014, by and among Ichor Systems, Inc., Thomas Rohrs and, with respect toSections 1.2 and 3.4 therein only, Ichor Holdings, Ltd (Incorporated by reference to Exhibit 10.7 to Ichor Holdings, Ltd’s RegistrationStatement on Form S‑1, filed with the Securities and Exchange Commission on November 14, 2016). 10.3+ Ichor Holdings, Ltd. 2016 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.11 to Ichor Holdings, Ltd’s Amendment No. 2to Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.4+ Form of Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.12 to Ichor Holdings, Ltd’s Amendment No. 2 toRegistration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.5+ Form of Restricted Stock Agreement (Incorporated by reference to Exhibit 10.13 to Ichor Holdings, Ltd’s Amendment No. 2 to RegistrationStatement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.6+ Form of Nonqualifed Stock Option Agreement (Incorporated by reference to Exhibit 10.14 to Ichor Holdings, Ltd’s Amendment No. 2Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.7+ Offer Letter, dated as of January 8, 2013, by and between Ichor Systems, Inc. and Philip Barros (Incorporated by reference to Exhibit 10.16to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 14, 2016). 10.8+ Offer Letter, dated as of September 30, 2015, by and between Ichor Systems, Inc. and Philip Barros (Incorporated by reference toExhibit 10.17 to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities and Exchange Commission onNovember 14, 2016). 10.9*+ Select Severance Plan, dated as of March 6, 2019, by and among Ichor Holdings, Ltd. and certain officers and directors party thereto. 21.1* List of subsidiaries 23.1* Consent of KPMG LLP 31.1* Certifications of Chief Executive Officer of the Company under Rule 13a‑14(a) of the Securities Exchange Act of 1934, as amended, asadopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 31.2* Certifications of Chief Financial Officer of the Company under Rule 13a‑14(a) of the Securities Exchange Act of 1934, as amended, asadopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 32.1* Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑OxleyAct of 2002. This certification accompanies this report and shall not, except to the extent required by the Sarbanes‑Oxley Act of 2002, bedeemed filed for purposes of §18 of the Securities Exchange Act of 1934, as amended. 32.2* Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Actof 2002. This certification accompanies this report and shall not, except to the extent required by the Sarbanes‑Oxley Act of 2002, bedeemed filed for purposes of §18 of the Securities Exchange Act of 1934, as amended. *Filed herewith+A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S‑K  SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. Dated: March 8, 2019ICHOR HOLDINGS, LTD. By: /s/ Thomas M. Rohrs Thomas M. RohrsExecutive Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. Signature Name and Title Date /s/ Thomas M. RohrsThomas M. Rohrs Executive Chairman, Director and Chief ExecutiveOfficer (Principal Executive Officer) March 8, 2019 /s/ Jeffrey AndresonJeffrey Andreson Chief Financial Officer (Principal Accounting andFinancial Officer) March 8, 2019 /s/ Laura BlackLaura Black Director March 8, 2019 /s/ John ChenaultJohn Chenault Director March 8, 2019 /s/ John Kispert Director March 8, 2019John Kispert /s/ Marc HaugenMarc Haugen Director March 8, 2019 /s/ Andrew KowalAndrew Kowal Director March 8, 2019 /s/ Iain MacKenzie Director March 8, 2019Iain MacKenzie  Exhibit 10.9 ICHOR HOLDINGS, LTD SELECT SEVERANCE PLANINTRODUCTIONThe purpose of the Plan is to enable the Company to offer certain protections to Participants if their employment or service with the Employer isterminated under the circumstances described herein.The Plan shall apply to Participants employed by or providing service to an Employer on or after the Effective Date and shall not apply toParticipants who terminated employment or service with an Employer prior to the Effective Date.Unless otherwise expressly provided in the Plan or unless otherwise agreed to in writing between the Company or an Affiliate and a Participanton or after the date hereof, Participants covered by the Plan shall not be eligible to participate in any other severance or termination plan, policy or practice ofthe Employer that would otherwise apply under the circumstances described herein. The Company intends that this Plan, with respect applicable Participants,qualify as and come within the various exceptions and exemptions under ERISA for an unfunded plan maintained primarily for a select group of managementor highly compensated employees, and any ambiguities in this Plan shall be construed to effect that intent. This document shall constitute both the plandocument and summary plan description and shall be distributed to Participants in this form. Capitalized terms and phrases used herein shall have themeanings ascribed thereto in Article I.ARTICLE IDEFINITIONSFor purposes of the Plan, capitalized terms and phrases used herein shall have the meanings ascribed in this Article.1.1“Affiliate” shall mean (a) any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code, (b) anycorporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% ormore (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company, or (c) any other entity which isdesignated as an Affiliate by the Board or the Committee.1.2“Base Salary” shall mean a Participant’s annual base compensation rate for services paid by the Employer to the Participant at thetime immediately prior to the Participant’s termination of employment, as reflected in the Employer’s payroll records, without regard to any reduction givingrise to Good Reason. Base Salary shall not include commissions, bonuses, overtime pay, incentive compensation, benefits paid under any qualified plan, anygroup medical, dental or other welfare benefit plan, non-cash compensation or any other additional compensation, but shall include amounts reducedpursuant to a Participant’s salary reduction agreement under Section 125, 132(f)(4) or 401(k) of the Code, if any, or a nonqualified elective deferredcompensation arrangement, if any, to the extent that in each such case the reduction is to base salary.1.3“Board” shall mean the Board of Directors of the Company.1.4“Bonus” shall mean the Participant’s annual target cash performance bonus opportunity relating to the fiscal year in which a Changein Control shall occur, as determined under an agreement between the Participant and the Employer, or under any written bonus plan, program or arrangementapproved by the Board or the Committee, without regard to any reduction giving rise to Good Reason. Bonus shall not include any other bonus to be paidupon completion of any specified project or upon the occurrence of a specified event, including, without limitation, a Change in Control.11.5“Cause” means the following: (a) in the case where there is no employment agreement or similar agreement in effect between theCompany or an Affiliate and the Participant at the time of the Participant’s Separation from Service, (or where there is such an agreement but it does notdefine “cause” (or words of like import)), termination due to a Participant’s insubordination, dishonesty, fraud, incompetence, moral turpitude, willfulmisconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity or materially unsatisfactoryperformance of the Participant’s duties for the Company or an Affiliate, as determined by the Board in its good faith discretion; or (b) in the case where thereis an employment agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the Participant’s Separationfrom Service that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreementunder which the definition of “cause” only applies on occurrence of a Change in Control, such definition of “cause” shall not apply until a Change inControl actually takes place and then only with regard to a termination thereafter. Termination of the Participant for Cause shall be made by delivery to theParticipant of a copy of a resolution duly adopted by the affirmative vote of not less than a two-thirds super majority of the Board at a meeting of the Boardcalled and held for that purpose (after 10 days prior written notice to the Participant and a reasonable opportunity for the Participant to cure such conditionsconstituting Cause in all material respects, if curable, and to be heard before the Board prior to such vote) finding that in the good faith judgment of theBoard, the Participant was guilty of conduct set forth in any of clauses (a) and (b) above and specifying the particulars thereof.1.6“Change in Control” shall mean the consummation of any of the following events: (a) any “person,” as such term is used in Sections13(d) and 14(d) of the Exchange Act, or group of “persons” (acting in concert), (other than the Company, any trustee or other fiduciary holding securitiesunder any employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially thesame proportions as their ownership of equity interests of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;(b) a merger or consolidation of the Company with any other operating corporation (or other operating entity) or its Affiliate, other than a merger orconsolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remainingoutstanding or by being converted into voting securities of the surviving entity) 60% or more of the combined voting power of the voting securities of theCompany or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected toimplement a recapitalization of the Company (or similar transaction) in which no Person (other than those covered by the exceptions in Section 1.6(a))acquires more than 40% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of theCompany; or (d) a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantiallyall of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficiallyown, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale.Notwithstanding anything herein to the contrary and except with respect to a Change in Control event described in Section 1.6(b), a Change in Control shallbe deemed to have occurred under this Section 1.6 solely upon the occurrence of the closing of the transaction giving rise to the Change in Control event.Notwithstanding anything herein to the contrary, none of the foregoing events shall be deemed to be a “Change in Control” unless such event constitutes a“change in control event” within the meaning of Code Section 409A.1.7“Change in Control Related Termination” means a Pre-Change in Control Termination or a Post-Change in Control Termination,as applicable.1.8“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.1.9“Code” shall mean the Internal Revenue Code of 1986, as amended.1.10“Code Section 409A” shall mean Section 409A of the Code together with the treasury regulations and other official guidancepromulgated thereunder.1.11“Committee” shall mean the Compensation, Nominating and Corporate Governance Committee of the Board or such othercommittee appointed by the Board from time to time to administer the Plan.21.12“Company” shall mean Ichor Holdings, Ltd. and any successor as provided in Article VI hereof.1.13“Continuation Period” shall mean a period commencing on the date of a Participant’s Separation from Service (or the date of theChange in Control in the event of a Pre-Change in Control Termination as a result of a Participant’s resignation for Good Reason) until the earliest of:(a)solely in the event of a Non-Change in Control Termination, the expiration of the period during which the Participant isreceiving Severance Payments;(b)solely in the Event of a Change in Control Related Termination, twelve (12) months (or, twenty-four (24) months withrespect to a Participant with the title “Chief Executive Officer” who experiences a Change in Control Related Termination) from such date;(c)the date the Participant becomes eligible for coverage under the health insurance plan of a subsequent employer; and(d)the date the Participant or the Participant’s eligible dependents, as the case may be, cease to be eligible under COBRA.1.14“Continued Health Coverage” shall mean the benefit set forth in Section 2.2(b) of the Plan.1.15“Delay Period” shall mean the period commencing on the date the Participant incurs a Separation from Service from the Employeruntil the earlier of (a) the six (6)-month anniversary of the date of such Separation from Service and (b) the date of the Participant’s death.1.16“Director” shall mean a non-employee member of the Board.1.17“Director Event” shall mean, with respect to a Director, the consummation of a Change in Control.1.18“Disability” shall mean a Participant’s disability that qualifies under the Employer’s long-term disability plan without regard toany waiting periods set forth in such plan.1.19“Effective Date” shall mean March 6, 2019.1.20“Eligible Employee” shall mean any executive-level employee of the Employer subject to Section 16 of the Exchange Act, orotherwise designated in writing by the Committee to participate in the Plan.1.21“Employer” shall mean the Company and any Affiliate.1.22“Equity Vesting” shall mean the benefit set forth in Section 2.2(b) of the Plan.1.23“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.1.24“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.1.25“Good Reason” shall mean the occurrence of any of the following events, without the Participant’s express written consent,provided the Participant gives notice to the Employer of the Good Reason event within thirty (30) days after the Participant has knowledge of the GoodReason event and such events are not fully corrected in all material respects by the Employer within thirty (30) days following receipt of the Participant’swritten notification: (a) a material diminution in the nature or scope of the Participant’s responsibilities, duties or authority (except in connection with thetermination of the Participant’s employment for Cause or due to Disability, or temporarily as a result of the Participant’s illness or other absence); (b) theCompany’s material breach of any employment agreement or similar agreement to which the Company and Participant are parties; (c) the Company’srelocation of its principal offices more than fifty (50) miles from the prior location; (d) a reduction in the Participant’s Base Salary or target Bonus other than,for both Base Salary and target Bonus individually, a temporary reduction lasting not more than twelve (12) continuous months of not more than twentypercent (20%) that also is applied to substantially all other executive officers of the Company; or (e) the failure of any successor to the Company to assumethe Plan.31.26“Non-Change in Control Termination” shall mean a termination event described in Section 2.1(a)(i) of the Plan.1.27“Participant” shall mean any Eligible Employee or Director who is eligible to receive Severance Benefits under the Plan.1.28“Plan” shall mean the Ichor Holdings, Ltd. Select Severance Plan.1.29“Post-Change in Control Termination” shall mean a termination event described in Section 2.1(a)(ii) of the Plan.1.30“Pre-Change in Control Termination” shall mean a termination event described in Section 2.l(a)(ii) of the Plan.1.31“Pro-Rata Bonus” shall mean the payment set forth in Section 2.2(d) of the Plan.1.32 “Separation from Service” shall mean a Participant’s termination or significant reduction of services with the Employer, providedthat such termination or reduction constitutes a separation from service within the meaning of Code Section 409A and the guidance issued thereunder. Allreferences in the Plan to a “termination,” “termination of employment” or like terms shall mean Separation from Service.1.33“Severance Benefits” shall mean, as applicable, the Severance Payment, the Continued Health Coverage, the Equity Vesting andthe Pro-Rata Bonus.1.34“Severance Payment” shall mean the payments set forth in Section 2.2(a) of the Plan.1.35“Specified Employee” shall mean a Participant who, as of the date of his or her Separation from Service, is deemed to be a“specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by theEmployer from time to time in accordance therewith, or if none, the default methodology set forth therein.ARTICLE IISEVERANCE BENEFITSEligibility for Severance Benefits.(a)Qualifying Event for an Eligible Employee or Director.(i)Non-Change in Control Termination. If, at any time prior to a Change in Control, the employment of aParticipant is terminated by the Employer without Cause (and solely with respect to the Chief Executive Officer, upon resignationfor Good Reason) (a “Non-Change in Control Termination”), then the Employer shall pay or provide the Participant with theSeverance Payment, the Continued Health Coverage, and the Pro-Rata Bonus pursuant to the terms set forth herein.(ii)Change in Control Related Termination. If, during the ninety (90) day period prior to the date of theCompany’s consummation of a Change in Control (a “Pre-Change in Control Termination”) or the period commencing on the dateof a Change in Control and ending twelve (12) months thereafter (a “Post-Change in Control Termination”), the employment of aParticipant is terminated by the Employer without Cause or by the Participant for Good Reason, then the Employer shall pay orprovide the Participant with the Severance Payment, the Continued Health Coverage, the Equity Vesting, and the Pro-Rata Bonuspursuant to the terms set forth herein, and in the event of a Pre-Change in Control Termination, the foregoing Severance Benefitsshall be in lieu of any Severance Benefits the Participant is entitled to under Section 2.1(a)(i).(iii)Director Event. Upon the occurrence of a Director Event, Directors shall be entitled to severance pursuantto the terms set forth herein.4(b)Non-Qualifying Events for an Eligible Employee. A Participant shall not be entitled to Severance Benefits under thePlan if the Participant’s employment is terminated (i) by the Employer for Cause, (ii) by a Participant for any reason, except with respect to aresignation for Good Reason during the periods set forth in this Section 2.1, or (iii) on account of the Participant’s death or Disability.2.2Severance Benefits. In the event that a Participant becomes entitled to benefits pursuant to Section 2.1(a) hereof, the Employer shallpay or provide the Participant, in addition to any accrued but unpaid compensation (whether in the form of Participant’s earned Base Salary, Bonus orotherwise), with the applicable Severance Benefits as follows:(a)Severance Payment for an Eligible Employee. Subject to the provisions of Sections 2.3 through 2.8, the Employer shallpay to the Participant the following:(i)Non-Change in Control Termination. In the event of a Non-Change in Control Termination, the Employershall pay the Participant an amount in cash equal to one-twelfth (1/12) of the Participant’s Base Salary, payable monthly inaccordance with the Company’s normal payroll practices for a period of nine (9) months (but for the Chief Executive Officer, twelve(12) months) following the Participant’s Separation from Service, with the first payment thereof paid on the sixtieth (60th) dayfollowing the date of the Participant’s Separation from Service (or, if earlier and to the extent permitted by Code Section 409A, assoon as practicable following the effective date of the release described in Section 2.5), which first payment shall include anyamounts that would have been otherwise payable to the Participant during such period. Notwithstanding the foregoing or anythingin the Plan to the contrary, to the extent required by Code Section 409A, the payment of the Severance Payments under this Section2.2(a)(i) shall be subject to the Delay Period as provided in Section 7.8(b) hereof.(ii)Change in Control Related Termination. In the event of a Change in Control Related Termination, theEmployer shall pay the Participant a lump sum amount in cash equal to the sum of Participant’s Base Salary plus Bonus (but for theChief Executive Officer, such sum multiplied by two (2)). Notwithstanding the foregoing or anything in the Plan to the contrary, (A)to the extent required by Code Section 409A, the payment of the Severance Payments under this Section 2.2(a)(ii) shall be subject tothe Delay Period as provided in Section 7.8(b) hereof, and (B) to the extent Code Section 409A would not permit a lump sumpayment pursuant to this Section 2.2(a)(ii) with respect to amounts set forth in Section 2.2(a)(i), such amounts shall be paid pursuantto the schedule set forth in Section 2.2(a)(i).(b)Continued Health Coverage for an Eligible Employee. Subject to the provisions of Sections 2.3 through 2.8 and aParticipant’s timely election pursuant to COBRA, during the Continuation Period the Employer shall pay the employer-portion of continuedcoverage pursuant to COBRA, for the Participant and the Participant’s eligible dependents, under the Employer’s group health plans in whichthe Participant participated immediately prior to the date of termination of the Participant’s employment or materially equivalent plansmaintained by the Company in replacement thereof. Following the Continuation Period, the Participant (or, if applicable, the Participant’squalified beneficiaries under COBRA) shall be entitled to such continued coverage for the remainder of the COBRA period, if any, on a fullyself-paid basis to the extent eligible under COBRA. In the event Continued Health Coverage cannot be provided to the Participant during theContinuation Period without subjecting the Company or the Participant to penalties under applicable law, the Company may alter the manner inwhich Continued Health Coverage is provided; provided, the after-tax cost to the Participant of such benefits shall not be greater than the costapplicable to similarly situated executives who remain actively employed by the Company.5(c)Accelerated Vesting of Equity Awards. The Equity Vesting under this Section 2.2(c) shall apply only in the event of aChange in Control Related Termination or a Director Event. Subject to the provisions of Sections 2.3 and 2.4 and Sections 2.6 through 2.8, to theextent not vested immediately prior to a Change in Control, all stock based awards granted to the Participant prior to the Change in Controlunder the Company’s equity plans, each as amended, including, but not limited to, the Company’s 2016 Omnibus Incentive Plan and 2012Equity Incentive Plan, or any predecessor or successor plan(s) thereto, that are outstanding as of the date of the Change in Control (including, butnot limited to, stock options and shares of restricted stock), or, in the event such stock based awards are not assumed or substituted by thesuccessor in connection with such Change in Control, outstanding immediately prior to the date of the Change in Control, shall become fullyvested as of the date of the Change in Control Related Termination. Any stock option, stock appreciation right or similar award that provides fora Participant-elected exercise shall become fully exercisable and will remain exercisable for the applicable period following termination asspecified in the applicable equity plan and/or the applicable award agreement. In the case of restricted stock or similar awards that are not subjectto a Participant-elected exercise, the Company shall remove any restrictions (other than restrictions required by Federal securities law) orconditions in respect of such award as of the date of the Participant’s Change in Control Related Termination. For the avoidance of doubt, thisSection 2.2(b) shall apply to any equity awards that, in connection with a Change in Control, (1) are granted as replacement of the equity awardsheld by the Participant immediately prior to the Change in Control, and (2) are outstanding immediately prior to the Change in Control, but arenot assumed or substituted by the successor in connection with such Change in Control. Subject to the provisions of Sections 2.3 and 2.4 andSections 2.6 through 2.8, to the extent not vested immediately prior to a Change in Control, all stock based awards granted to a Director shallbecome fully vested as of the date of a Director Event.(d)Pro-Rata Bonus for an Eligible Employee. The Pro-Rata Bonus under this Section 2.2(d) shall apply in the event of eithera Non-Change in Control Termination or a Change in Control Related Termination. Subject to the provisions of Sections 2.3 through 2.8, theParticipant shall be entitled to receive a pro rata portion (based on the completed number of months of employment during the applicableperformance period) of the Participant’s Bonus for the performance period in which the Participant’s Separation from Service occurs, calculatedbased on actual results for such performance period, payable at the time that the performance bonus would otherwise be paid. For the avoidanceof doubt, a Pro-Rata Bonus shall not be based on any bonus to be paid upon completion of any specified project or upon occurrence of aspecified event, including, without limitation, a Change in Control.2.3Prior Agreements. The Severance Benefits under this Plan shall supersede and be in lieu of any severance benefits and/or paymentsprovided under the Plan as in effect prior to the Effective Date or under any other agreements, arrangements or severance plans by and between the Participantand the Employer, except to the extent any other such agreements, arrangements or severance plans entered into after the Effective Date specifically state thatthey supersede this Plan, or to the extent a Participant’s employment or similar agreement provides for severance benefits that, in the aggregate, are morefavorable to the Participant (in which case, such greater benefits will be paid under this Plan).2.4No Duty to Mitigate/Set-off. No Participant entitled to receive Severance Benefits hereunder shall be required to seek otheremployment or to attempt in any way to reduce any amounts payable to the Participant by the Company or Employer pursuant to the Plan, and there shall beno offset against any amounts due to the Participant under the Plan on account of any remuneration attributable to any subsequent employment that theParticipant may obtain or otherwise. The amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense or other right which theEmployer may have against the Participant. In the event of the Participant’s breach of any provision hereunder, including without limitation, Sections 2.5(other than as it applies to a release of claims under the Age Discrimination in Employment Act, as amended), 2.7 and 2.8 hereof, the Company shall beentitled to recover any payments previously made to the Participant hereunder. Severance Benefits shall be reduced (offset) by any amounts payable underany statutory entitlement (including notice of termination, termination pay and/or severance pay) of the Participant upon a termination of employment,including, without limitation, any payments related to an actual or potential liability under the Worker Adjustment and Retraining Notification Act (WARN)or similar state or local law.2.5Release Required. Any Severance Benefits (other than the Equity Vesting) payable or to be provided pursuant to the Plan shall beconditioned upon the Participant’s execution and non-revocation of a release substantially in the form attached as Appendix A hereto (with such changesthereon as are legally necessary at the time of execution to make it enforceable, including, but not limited to the addition of any federal, state or local laws)(the “Release”). The Company shall provide the release to the Participant within seven (7) days following the date of the Participant’s Separation fromService. Any release must be executed and become non-revocable during the period set forth in the release, but in any event no later than sixty (60) daysfollowing Participant’s6Separation from Service.2.6Code Section 280G.(a)In the event it is determined pursuant to clause (b) below, that part or all of the consideration, compensation or benefitsto be paid to the Participant under the Plan in connection with the Participant’s termination of employment following a Change in Control orunder any other plan, arrangement or agreement in connection therewith (each a “Payment”), constitutes a “parachute payment” (or payments)under Section 280G(b)(2) of the Code, then, if the aggregate present value of such parachute payments (the “Parachute Amount”) exceeds 2.99times the Participant’s “base amount,” as defined in Section 280G(b)(3) of the Code (the “Participant Base Amount”) and would be subject tothe excise tax imposed by Section 4999 of the Code (the “Excise Tax”), the amounts constituting “parachute payments” which would otherwisebe payable to or for the benefit of the Participant shall be reduced to the extent necessary so that the Parachute Amount is equal to 2.99 times theParticipant Base Amount; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction wouldresult in an increase in the aggregate Payment to be provided, determined on a net after-tax basis (taking into account the Excise Tax imposed,any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes).(b)Any determination that a Payment constitutes a parachute payment and any calculation described in this Section 2.6(“determination”) shall be made by the independent public accountants for the Company, and may, at the Company’s election, be made prior totermination of the Participant’s employment where the Company determines that a Change in Control is imminent. Such determination shall befurnished in writing no later than thirty (30) days following the date of the Change in Control by the accountants to the Participant. If theParticipant does not agree with such determination, he may give notice to the Company within ten (10) days of receipt of the determination fromthe accountants and, within fifteen (15) days thereafter, accountants of the Participant’s choice must deliver to the Company their determinationthat in their judgment complies with the Code. If the two accountants cannot agree upon the amount to be paid to the Participant pursuant to thisSection 2.6 within ten days of the delivery of the statement of the Participant’s accountants to the Company, the two accountants shall choose athird accountant who shall deliver their determination of the appropriate amount to be paid to the Participant pursuant to this Section 2.6, whichdetermination shall be final. If the final determination provides for the payment of a greater amount than that proposed by the accountants of theCompany, then the Company shall pay all of the Participant’s costs incurred in contesting such determination and all other costs incurred by theCompany with respect to such determination. However, if the determination of the accountants of the Company is supported by the thirdaccountant, the Participant shall pay all reasonable costs incurred by both the Company and the Participant with respect to the determination.(c)If the final determination made pursuant to clause (b) above results in a reduction of the Payments that would otherwisebe paid to the Participant except for the application of Section 2.6(a), the Equity Vesting shall be eliminated or reduced to the extent necessaryin order to not exceed the limitation under Section 2.6(a), then, to the extent necessary pursuant to Section 2.6(a), the Severance Payment shallbe reduced, and, finally, to the extent necessary pursuant to Section 2.6(a), the Continued Health Coverage shall be reduced. Within ten daysfollowing such determination, the Company shall pay to or distribute to or for the benefit of the Participant such amounts as are then due to theParticipant under the Plan and shall promptly pay to or distribute to or for the benefit of the Participant in the future such amounts as become dueto the Participant under the Plan.7(d)As a result of the uncertainty in the application of Section 280G of the Code at the time of a determination hereunder, itis possible that payments will be made by the Company which should not have been made under Section 2.6(a) (an “Overpayment”) or thatadditional payments which are not made by the Company pursuant to Section 2.6(a) above should have been made (an “Underpayment”). In theevent that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that anOverpayment has been made, any such Overpayment shall be treated for all purposes as a loan to the Participant to the extent permitted by law,which the Participant shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of theCode. Nothing in this Section 2.6 is intended to violate the Sarbanes-Oxley Act of 2002 and to the extent that any advance or repaymentobligation hereunder would do so, such obligation shall be modified so as to make the advance a nonrefundable payment to the Participant andthe repayment obligation null and void to the extent required by such Act. In the event that there is a final determination by the InternalRevenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant towhich an Underpayment arises under the Plan, any such Underpayment shall be promptly paid by the Company to or for the benefit of theParticipant, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.2.7Restrictive Covenants. As a condition to receiving Severance Benefits (other than the Equity Vesting), the Participant shall besubject to the restrictive covenants described in the Release. Upon the Participant’s timely execution and non-revocation of the Release, the restrictivecovenants contained therein shall supersede any restrictive covenants contained in any agreement or arrangement between the Employer and the Participant,including any employment agreement.2.8Cooperation. By accepting the Severance Benefits under the Plan, subject to the Participant’s other commitments, the Participantagrees to be reasonably available to cooperate (but only truthfully) with the Employer and the Company and provide information as to matters which theParticipant was personally involved, or has information on, during the Participant’s employment with the Employer and which are or become the subject oflitigation or other dispute.ARTICLE IIIUNFUNDED PLAN3.1Unfunded Status. The Plan shall be “unfunded” for the purposes of ERISA and the Code, and Severance Payments shall be paid outof the general assets of the Employer as and when Severance Payments are payable under the Plan. All Participants shall be solely unsecured general creditorsof the Company and the Employer. If the Company decides in its sole discretion to establish any advance accrued reserve on its books against the futureexpense of the Severance Payments payable hereunder, or if the Company decides in its sole discretion to fund a trust under the Plan, such reserve or trustshall not under any circumstances be deemed to be an asset of the Plan.ARTICLE IVADMINISTRATION OF THE PLAN84.1Plan Administrator. The general administration of the Plan on behalf of the Company (as plan administrator under Section 3(16)(A)of ERISA) shall be placed with the Committee.4.2Reimbursement of Expenses of Plan Committee. The Company may, in its sole discretion, pay or reimburse the members of theCommittee for all reasonable expenses incurred in connection with their duties hereunder, including, without limitation, expenses of outside legal counsel.4.3Action by the Plan Committee. Decisions of the Committee shall be made by a majority of its members attending a meeting at whicha quorum is present (which meeting may be held telephonically), or by written action in accordance with applicable law. Subject to the terms of the Plan andprovided that the Committee acts in good faith, the Committee shall have complete authority to determine a Participant’s participation and SeveranceBenefits under the Plan, to interpret and construe the provisions of the Plan, and to make decisions in all disputes involving the rights of any personinterested in the Plan.4.4Delegation of Authority. Subject to the limitations of applicable law, the Committee may delegate any and all of its powers andresponsibilities hereunder to other persons by formal resolution filed with and accepted by the Board. Any such delegation shall not be effective until it isaccepted by the Board and the persons designated, and may be rescinded at any time by written notice from the Committee to the person to whom thedelegation is made.4.5Retention of Professional Assistance. The Committee may employ such legal counsel, accountants and other persons as may berequired in carrying out its work in connection with the Plan.4.6Accounts and Records. The Committee shall maintain such accounts and records regarding the fiscal and other transactions of thePlan and such other data as may be required to carry out its functions under the Plan and to comply with all applicable laws.4.7Indemnification. The Committee, its members and any person designated pursuant to Section 4.4 above shall not be liable for anyaction or determination made in good faith with respect to the Plan. The Employer shall, to the fullest extent permitted by law, indemnify and hold harmlesseach member of the Committee and each director, officer and employee of the Employer, and any person designated above, for liabilities or expenses theyand each of them incur in carrying out their respective duties under the Plan, other than for any liabilities or expenses arising out of such individual’s willfulmisconduct or fraud.ARTICLE VAMENDMENT AND TERMINATION5.1Amendment and Termination. The Company reserves the right to amend or terminate, in whole or in part, any or all of theprovisions of the Plan by action of the Board (or a duly authorized committee thereof) at any time, provided that in no event shall any amendment, except foramendments pursuant to Section 7.8(a), reducing the Severance Benefits provided hereunder or any Plan termination be effective prior to the later of (A) thethird (3rd) anniversary of the Effective Date and (B) one year after the Company provides written notice to the Participant that it wishes to amend or terminatethis Plan and the nature of the amendments, if applicable, and further provided, that the Company shall not amend or terminate the Plan at any time after (i)the occurrence of a Change in Control or (ii) the date the Company enters into a definitive agreement which, if consummated, would result in a Change inControl, unless the potential Change in Control is abandoned (as publicly announced by the Company), in either case until two (2) years after the occurrenceof a Change in Control, provided that all Severance Benefits under the Plan have been paid.ARTICLE VISUCCESSORSFor purposes of the Plan, the Company shall include any and all successors or assignees, whether direct or indirect, by purchase, merger,consolidation or otherwise, to all or substantially all the business or assets of the Company, and such successors and assignees shall perform the Company’sobligations under the Plan, in the same manner and to the same extent that the Company, would be required to perform if no such succession or assignmenthad taken place. In the event the surviving corporation in any transaction to which the Company is a party is a subsidiary of another corporation, then theultimate parent corporation of such surviving corporation shall cause the surviving corporation to perform the Plan in the same manner and to the sameextent that the Company would be required to perform if no such succession or assignment had taken place. In such event, the term “Company” as used in thePlan, shall mean the Company, as hereinbefore defined and any successor or assignee (including the ultimate parent corporation) to the business or assets ofthe Company, which by reason hereof becomes bound by the terms and provisions of the Plan.9ARTICLE VIIMISCELLANEOUS7.1Minors and Incompetents. If the Committee shall find that any person to whom Severance Benefits are payable under the Plan isunable to care for his or her affairs because of illness or accident, or is a minor, any Severance Benefits due (unless a prior claim therefore shall have beenmade by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, parent, or brother or sister, or to any persondeemed by the Committee to have incurred expense for such person otherwise entitled to the Severance Benefits, in such manner and proportions as theCommittee may determine in its sole discretion. Any such Severance Benefits shall be a complete discharge of the liabilities of the Company, the Employer,the Committee, and the Board under the Plan.7.2Limitation of Rights. Nothing contained herein shall be construed as conferring upon a Participant the right to continue in theemploy of the Employer as an employee in any other capacity or to interfere with the Employer’s right to discharge him or her at any time for any reasonwhatsoever.7.3Payment Not Salary. Any Severance Benefits payable under the Plan shall not be deemed salary or other compensation to theParticipant for the purposes of computing benefits to which he or she may be entitled under any pension plan or other arrangement of the Employermaintained for the benefit of its employees, unless such plan or arrangement provides otherwise.7.4Severability. In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affectthe remaining parts hereof, but the Plan shall be construed and enforced as if such illegal and invalid provision never existed.7.5Withholding. The Company and/or the Employer shall have the right to make such provisions as it deems necessary or appropriateto satisfy any obligations it may have to withhold federal, state or local income or other taxes incurred by reason of payments pursuant to the Plan. In lieuthereof, the Company and/or the Employer shall have the right to withhold the amounts of such taxes from any other sums due or to become due from theCompany and/or the Employer to the Participant upon such terms and conditions as the Committee may prescribe.7.6Non-Alienation of Benefits. The Severance Benefits payable under the Plan shall not be subject to alienation, transfer, assignment,garnishment, execution or levy of any kind, and any attempt to cause any Severance Benefits to be so subjected shall not be recognized.7.7Governing Law. To the extent legally required, the Code and ERISA shall govern the Plan and, if any provision hereof is inviolation of any applicable requirement thereof, the Company reserves the right to retroactively amend the Plan to comply therewith. To the extent notgoverned by the Code and ERISA, the Plan shall be governed by the laws of the State of California, without reference to rules relating to conflicts of law.7.8Code Section 409A.(a)General. Although the Employer makes no guarantee with respect to the tax treatment of payments hereunder and shallnot be responsible in any event with regard to non-compliance with Code Section 409A, the Plan is intended to either comply with, or be exemptfrom, the requirements of Code Section 409A. To the extent that the Plan is not exempt from the requirements of Code Section 409A, the Plan isintended to comply with the requirements of Code Section 409A and shall be limited, construed and interpreted in accordance with such intent.Accordingly, the Company reserves the right to amend the provisions of the Plan at any time and in any manner without the consent ofParticipants solely to comply with the requirements of Code Section 409A and to avoid the imposition of an excise tax under Code Section409A on any payment to be made hereunder, provided that there is no reduction in the Severance Benefits hereunder. Notwithstanding theforegoing, in no event whatsoever shall the Employer be liable for any additional tax, interest or penalty that may be imposed on a Participant byCode Section 409A or any damages for failing to comply with Code Section 409A.(b)Separation from Service; Delay Period for Specified Employees. A termination of employment shall not be deemed tohave occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits upon or following a termination ofemployment unless such termination is also a Separation from Service. If a Participant is deemed on the date of termination to be a SpecifiedEmployee, then with regard to any payment that is specified as subject to this Section, such payment shall not be made prior to the expiration ofthe Delay Period. All payments delayed pursuant to this Section 7.8(b) (whether they would have otherwise been payable in a single lump sum orin installments in the absence of such delay) shall be paid to the Participant in a single lump sum on the first Company payroll date on orfollowing the first day following the expiration of the Delay Period, and any remaining payments and benefits due under the Plan shall be paid orprovided in accordance with the normal payment dates specified for them herein.10(c)Separate Payments and No Participant Discretion. For purposes of Code Section 409A, the Participant’s right to receiveany installment payments pursuant to this Plan shall be treated as a right to receive a series of separate and distinct payments. Whenever apayment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30)days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of theEmployer.7.9Non-Exclusivity. The adoption of the Plan by the Company shall not be construed as creating any limitations on the power of theCompany to adopt such other supplemental retirement income arrangements as it deems desirable, and such arrangements may be either generally applicableor limited in application.7.10Non-Employment. The Plan is not an agreement of employment and it shall not grant the Participant any rights of employment.7.11Headings and Captions. The headings and captions herein are provided for reference and convenience only. They shall not beconsidered part of the Plan and shall not be employed in the construction of the Plan.7.12Gender and Number. Whenever used in the Plan, the masculine shall be deemed to include the feminine and the singular shall bedeemed to include the plural, unless the context clearly indicates otherwise.7.13Communications. All announcements, notices and other communications regarding the Plan will be made by the Company and/orthe Employer in writing.7.14Legal Fees. This Section 7.14 shall apply only in the event of a Change in Control Related Termination. In the event that aParticipant substantially prevails in a litigation between the Participant and the Company arising in connection with such Participant’s attempt to obtain orenforce any right or benefit provided by the Plan, the Company agrees to pay the reasonable attorney’s fees and other legal expenses incurred by suchParticipant in pursuing such litigation, including a reasonable rate of interest for delayed payment.ARTICLE VIIIWHAT ELSE A PARTICIPANT NEEDSTO KNOW ABOUT THE PLAN8.1Claims Procedure. Any claim by a Participant with respect to eligibility, participation, contributions, benefits or other aspects of theoperation of the Plan shall be made in writing to a person designated by the Committee from time to time for such purpose. If the designated person receivinga claim believes, following consultation with the Chairman of the Committee, that the claim should be denied, he or she shall notify the Participant in writingof the denial of the claim within ninety (90) days after his or her receipt thereof. This period may be extended an additional ninety (90) days in specialcircumstances and, in such event, the Participant shall be notified in writing of the extension, the special circumstances requiring the extension of time andthe date by which the Committee expects to make a determination with respect to the claim. If the extension is required due to the Participant’s failure tosubmit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sentuntil the date on which the Participant responds to the Plan’s request for information.If a claim is denied in whole or in part, or any adverse benefit determination is made with respect to the claim, the Participant will be providedwith a written notice setting forth (a) the specific reason or reasons for the denial making reference to the pertinent provisions of the Plan or of Plandocuments on which the denial is based, (b) a description of any additional material or information necessary to perfect or evaluate the claim, and explainwhy such material or information, if any, is necessary, and (c) inform the Participant of his or her right to request review of the decision.The notice shall also provide an explanation of the Plan’s claims review procedure and the time limits applicable to such procedure, as well as astatement of the Participant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review. If aParticipant is not notified (of the denial or an extension) within ninety (90) days from the date the Participant notifies the Plan Administrator, the Participantmay request a review of the application as if the claim had been denied.A Participant may appeal the denial of a claim by submitting a written request for review to the Committee, within sixty (60) days after writtennotification of denial is received. Receipt of such denial shall be deemed to have occurred if the notice of denial is sent via first class mail to the Participant’slast shown address on the books of the Employer. Such period may be extended by the Committee for good cause shown. The claim will then be reviewed bythe Committee. In connection with this appeal, the Participant (or his or her duly authorized representative) may (a) be provided, upon written request andfree of charge, with reasonable access to (and copies of) all documents, records, and other information relevant to the claim, and (b) submit to the Committeewritten comments, documents, records, and other information related to the claim. If the Committee deems it appropriate, it may hold a hearing as to a claim.If a hearing is held, the Participant shall be entitled to be represented by counsel.11The review by the Committee will take into account all comments, documents, records, and other information the Participant submits relating tothe claim. The Committee will make a final written decision on a claim review, in most cases within sixty (60) days after receipt of a request for a review. Insome cases, the claim may take more time to review, and an additional processing period of up to sixty (60) days may be required. If that happens, theParticipant will receive a written notice of that fact, which will also indicate the special circumstances requiring the extension of time and the date by whichthe Committee expects to make a determination with respect to the claim. If the extension is required due to the Participant’s failure to submit informationnecessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent to the Participantuntil the date on which the Participant responds to the Plan’s request for information.The Committee’s decision on the claim for review will be communicated to the Participant in writing. If an adverse benefit determination is madewith respect to the claim, the notice will include: (a) the specific reason(s) for any adverse benefit determination, with references to the specific Planprovisions on which the determination is based; (b) a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to(and copies of) all documents, records and other information relevant to the claim; and (c) a statement of the Participant’s right to bring a civil action underSection 502(a) of ERISA. A Participant may not start a lawsuit to obtain benefits until after he or she has requested a review and a final decision has beenreached on review, or until the appropriate timeframe described above has elapsed since the Participant filed a request for review and the Participant has notreceived a final decision or notice that an extension will be necessary to reach a final decision. These procedures must be exhausted before a Participant (orany beneficiary) may bring a legal action seeking payment of benefits. In addition, no lawsuit may be started more than two years after the date on which theapplicable appeal was denied. If there is no decision on appeal, no lawsuit may be started more than two years after the time when the Committee should havedecided the appeal. The law also permits the Participant to pursue his or her remedies under Section 502(a) of ERISA without exhausting these appealprocedures if the Plan has failed to follow them. 12 APPENDIX AAGREEMENT AND RELEASEIchor Holdings, LTD (the “Company”) and [name] (the “Employee”) agree to the terms and conditions set forth below:1.Termination. Employee’s employment with the Employer (as defined under the Ichor Holdings, LTD Executive Severance Plan (the“Severance Plan”)) [is] [was] terminated as of [ ], 20[ ] (the “Termination Date”). Employee acknowledges that the Termination Date [is] [was] thetermination date of [his/her] employment for purposes of participation in and coverage under all benefit plans and programs sponsored by or through theEmployer. Employee acknowledges and agrees that the Employer shall not have any obligation to rehire Employee, nor shall the Employer have anyobligation to consider [him/her] for employment, after the Termination Date. All capitalized terms used herein, unless defined otherwise herein, shall havethe meaning set forth in the Severance Plan.2.Severance Benefits. In exchange for the general release in paragraph 4 below and other promises contained herein, and in accordancewith the terms of the Severance Plan, which Employee hereby acknowledges receiving, Employee will receive the applicable Severance Benefits underSection 2.2 of the Plan, paid or provided in accordance therewith.3.Acknowledgment. Employee hereby agrees and acknowledges that the Severance Benefits exceed any payment, benefit or otherthing of value to which Employee might otherwise be entitled under any policy, plan or procedure of the Employer, the Company or Affiliates or pursuant toany prior agreement or contract with the Employer, the Company or Affiliates.4.Release. (a) In exchange for the Severance Benefits and other valuable consideration, Employee, for [himself/herself] and for[his/her] heirs, executors, administrators and assigns (referred to collectively as “Releasors”), forever releases and discharges the Employer and any and all ofthe Employer’s parent companies, partners, subsidiaries, affiliates, successors and assigns and any and all of its and their past and/or present officers, directors,partners, agents, employees, representatives, counsel, employee benefit plans and their fiduciaries and administrators, successors and assigns (referred tocollectively as the “Releasees”), from any and all claims, demands, causes of action, fees and liabilities of any kind whatsoever, whether known or unknown,which Releasors ever had, now have or may have against Releasees by reason of any actual or alleged act, omission, transaction, practice, conduct,occurrence or other matter up to and including the date Employee signs this Agreement and Release.A-1 (b)Without limiting the generality of the foregoing, this Agreement and Release is intended to and shall release Releasees from anyand all claims, whether known or unknown, that Releasors ever had, now have or may have against Releasees arising out of Employee’semployment with the Employer or any of the Releasees, the terms and conditions of such employment and/or the termination of suchemployment, including but not limited to: (i) any claim under the Age Discrimination in Employment Act, as amended (“ADEA”), and/or theOlder Workers Benefit Protection Act which laws prohibit discrimination on account of age; (ii) any claim under Title VII of the Civil Rights Actof 1964, as amended, which, among other things, prohibits discrimination/retaliation on account of race, color, religion, sex, and national origin;(iii) any claim under the Americans with Disabilities Act (“ADA”) or Sections 503 and 504 of the Rehabilitation Act of 1973, each as amended;(iv) any claim under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”): (v) any claim under the Family and MedicalLeave Act; (vi) any claim or other action under the National Labor Relations Act, as amended; (vii) any claim under the Workers’ Adjustmentand Retraining Notification Act; (viii) any claim under [State laws applicable to employee] (ix) the Sarbanes-Oxley Act of 2002; (x) any otherclaim of discrimination, harassment or retaliation in employment (whether based on federal, state or local law, regulation, or decision; (xi) anyother claim (whether based on federal, state or local law, statutory or decisional) arising out of the terms and conditions of Employee’semployment with and termination from the Employer and/or the Released Parties; (xii) any claims for wrongful discharge, whistleblowing,constructive discharge, promissory estoppel, detrimental reliance, negligence, defamation, emotional distress, compensatory or punitivedamages, and/or equitable relief; (xiii) any claims under federal, state, or local occupational safety and health laws or regulations, all asamended; and (xiv) any claim for attorneys’ fees [ADD ONLY FOR A CHANGE IN CONTROL RELATED TERMINATION:, (other thanclaims for legal fees pursuant to Section 7.14 of the Severance Plan)], costs, disbursements and/or the like. By virtue of the foregoing, Employeeagrees that [he/she] has waived any damages and other relief available to [him/her] (including, without limitation, money damages, equitablerelief and reinstatement) under the claims waived in this paragraph 4; provided that nothing herein shall be a waiver of Employee’s right toreport violations of federal law or regulation or provide truthful information about this Agreement and Release or Releasees or, to cooperate withany investigation being conducted by any governmental agency, or making other disclosures that are protected under the whistleblowerprovisions of federal law or regulation. Notwithstanding anything herein to the contrary, the sole matters to which this Agreement of Releasedoes not apply are: (A) claims to the Severance Benefits; (B) claims under the Consolidated Omnibus Budget Reconciliation Act of 1985, asamended; (C) claims arising after the date Employee signs this Agreement and Release; (D) claims relating to any rights of indemnification underthe Employer’s organizational documents or otherwise, (E) claims relating to any outstanding stock options or other equity-based award on theTermination Date [ADD ONLY FOR A CHANGE IN CONTROL RELATED TERMINATION:, including, without limitation, the EquityVesting]; (F) claims to vested accrued benefits under the Employer’s tax qualified retirement plans or non-qualified retirement plans inaccordance with, and subject to, the terms and conditions of such plans and applicable law; or (G) Employee’s right to seek enforcement of theterms of the Severance Plan [ADD ONLY FOR A CHANGE IN CONTROL RELATED TERMINATION:, including, but not limited to, claimsfor legal fees pursuant to Section 7.14 of the Severance Plan], Employee acknowledges that Employee has been informed that Employee mighthave specific rights and/or claims under the ADEA. Employee specifically waives such rights and/or claims under the ADEA to the extent suchrights and/or claims arose on or prior to the date this Agreement of Release is executed by Employee.A-2  (d)Non-Disparagement: Cooperation in Certain Other Legal Proceedings. Employee agrees that at no time will [he/she], inpublic or private, engage in any form of conduct or make any statements or representations that deprecate, impugn, disparage or otherwise impairthe reputation, goodwill or commercial interests of, or make any remarks that would tend to or be construed to tend to defame, the Releasees, norshall the Employee assist any other person, firm or company in so doing. Nothing in this Agreement and Release shall prohibit or restrictEmployee from (i) making any disclosure of information, as required by law, in a proceeding or lawsuit in which the Employer is a party, oradditionally in any other civil proceeding or lawsuit upon ten (10) business days prior written notice to the Employer; (ii) providing informationto, or testifying or otherwise assisting in an investigation or proceeding brought by any federal regulatory or law enforcement agency orlegislative body or the Employer’s designated legal, compliance, or human resources officers; (iii) filing, testifying, participating or otherwiseassisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud or any rule or regulation of theSecurities and Exchange Commission; (iv) challenging the validity of this Agreement and Release as it applies to a release of claims underADEA; or (v) accepting any U.S. Securities and Exchange Commission awards. In addition, nothing in this Agreement and Release prohibits orrestricts Employer or Employee from initiating communications with, or responding to any inquiry from, any regulatory or supervisory authorityregarding any good faith concerns about possible violations of law or regulation. Pursuant to 18 U.S.C. § 1833(b), Employee will not be heldcriminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Employer or its subsidiaries oraffiliates that (A) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to Employee’sattorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other documentthat is filed under seal in a lawsuit or other proceeding. If Employee files a lawsuit for retaliation by Employer for reporting a suspectedviolation of law, Employee may disclose the trade secret to Employee’s attorney and use the trade secret information in the court proceeding, ifEmployee files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement and Release is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that areexpressly allowed by such section.5.Cooperation. Employee agrees to make [himself/herself] reasonably available at times and for durations reasonably acceptable toboth parties to assist the Employer with respect to any issues wherein the Employer considers Employee’s knowledge or expertise reasonably beneficial. TheEmployer will reimburse Employee for all reasonable out of pocket expenses that incurred while [he/she] is engaged in such activity. Employee will alsocooperate fully with the Employer in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or onbehalf of the Employer that relate to events or occurrences that transpired while the Employee was employed by the Employer. Employee’s full cooperationin connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to actas a witness on behalf of the Employer at mutually convenient times. Employee shall also cooperate fully with the Employer in connection with any suchinvestigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpiredwhile Employee was employed by the Employer. The Employer shall pay for any reasonable out-of-pocket expenses incurred by Employee in connectionwith [his/her] performance of the obligations pursuant to this paragraph 5. Employee’s performance under this paragraph 5 following the Termination Dateshall be subject to [his/her] then current employment obligations.6.Nonsolicitation. To the extent permitted by applicable law as applied to Employee, during Employee’s employment with theEmployer and for a period of [ENTER EQUIVALENT MONTHS OF SEVERANCE BENEFIT] months following [his/her] last day of employment withthe Employer, Employee shall not, directly or indirectly, either on [his/her] own behalf or on behalf of any other person or entity, solicit, induce orencourage, or attempt to solicit, induce or encourage, (i) the resignation of any director, officer, employee or independent contractor of the Employer (each a“Restricted Firm Person”), or (ii) in the case of an independent contractor, any reduction in the services such independent contractor provides to theEmployer. 7.Return of Property. Employee represents that [he/she] has returned (or will return) to Employer all property belonging to theEmployer, including but not limited to electronic devices (e.g., Blackberry and/or laptop computer), keys, card access to buildings and office floors, andbusiness information and documents.A-3  8.Severability. If any provision of this Agreement and Release is held to be illegal, void, or unenforceable, such provision shall be ofno force or effect. However, the illegality or unenforceability of such provision shall have no effect upon, and shall not impair the enforceability of, any otherprovision of this Agreement and Release. Further, to the extent any provision of this Agreement and Release is deemed to be overbroad or unenforceable aswritten, such provision shall be given the maximum effect permissible under law.9.Entire Agreement. This Agreement and Release represents the entire understanding between the parties hereto with respect to thesubject matter hereof, and may not be changed or modified except by a written agreement signed by both of the parties hereto after the Effective Date of thisAgreement and Release. In the event of any conflict between any of the provisions of this Agreement and Release and the provisions of the Severance Plan,the terms of the Severance Plan shall govern.10.Governing Law. Except as may be preempted by federal law or as set forth in paragraph 6, this Agreement and Release shall begoverned by the laws of the State of California, without regard to conflict of laws principles, and the parties in any action arising out of this Agreement andRelease shall be subject to the personal jurisdiction and venue of the federal and state courts, as applicable, in the County of San Francisco, California.11.Non-Disclosure. The parties agree that this Agreement and Release and its terms are confidential and shall be accorded the utmostconfidentiality. Employee hereby agrees to keep confidential and not disclose the terms and conditions of this Agreement to any person or entity without theprior written consent of the Employer, except to Employee’s accountants, attorneys and/or spouse, provided that they also agree to maintain theconfidentiality of this Agreement. Employee shall be responsible for any disclosure by them. Employee further represent that Employee has not disclosed theterms and conditions of this Agreement to anyone other than Employee’s attorneys, accountants and/or spouse. This Section 11 does not prohibit disclosureof this Agreement by any party if required by law, provided that if Employee is required to make such disclosure the Employee has given the Employerprompt written notice of any legal process and cooperated with the Employer’s efforts to seek a protective order.12.Confidential Information. Employee acknowledges that during the course of Employee’s employment with the Employer,Employee has had access to information relating to the Employer and its business that is not generally known by persons not employed by the Employer andthat could not easily be determined or learned by someone outside of the Employer (“Confidential Information”) Such information is confidential orproprietary and may include but not be limited to customer or client contact lists, trade secrets, patents, copyrighted materials, proprietary computer softwareand programs, products, systems analyses, lists of suppliers and supplier contracts, internal policies and marketing strategies, financial information relating tothe Employer and its employees, and other documents and information that provide the Employer with a competitive advantage and that could not be easilydetermined or learned or obtained by someone outside the Employer. Employee further acknowledges that: (i) such confidential and proprietary informationis the exclusive, unique, and valuable property of the Employer; (ii) the businesses of the Employer depend on such confidential and proprietary information;and (iii) the Employer wishes to protect such confidential and proprietary information by keeping it confidential for the use and benefit of the Employer.Employee agrees not to disclose or use such Confidential Information at any time in the future, except if authorized by the Employer in writing or if requiredin connection with a subpoena or other legal process or investigation by any governmental, regulatory or self-regulatory agency or in connection with anylegal proceeding brought against Employee, or in connection with a proceeding to enforce this Agreement.13.Remedies. Employee acknowledges and agrees that the Employer will suffer irreparable damage if any of the provisions ofparagraphs 5, 6 or 12 of this Agreement and Release are breached and that the Employer’s remedies at law for a breach of such provisions would beinadequate and, in recognition of this fact, Employee agrees that, in the event of such a breach, in addition to any remedies at law, the Employer will beentitled to obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitableremedy which may then be available.14.Binding Agreement. This Agreement and Release is binding upon, and shall inure to the benefit of, the parties and their respectiveheirs, executors, administrators, successors and assigns.A-4  15.ADEA Provisions. Employee acknowledges that [he/she]: (a) has carefully read this Agreement and Release in its entirety; (b) hashad an opportunity to consider the terms of this Agreement and Release [insert only if employees are over 40: and the disclosure information attachedhereto as Exhibit I (which is provided pursuant to the Older Workers Benefit Protection Act)] for at least [twenty- one (21)] [forty-five (45)] days; (c) is herebyadvised by the Company in writing to consult with an attorney of [his/her] choice in connection with this Agreement and Release; (d) fully understands thesignificance of all of the terms and conditions of this Agreement and Release and has discussed them with an attorney of [his/her] choice, or has had areasonable opportunity to do so; and (e) is signing this Agreement and Release voluntarily and of [his/her] own free will and agrees to abide by all the termsand conditions contained herein.16.Revocation/Effective Date. Employee may accept this Agreement and Release by signing it before a notary public and delivering itto [INSERT NAME AND ADDRESS OF CONTACT] on or before the [twenty-first (21st)] [forty-fifth (45th)] day after [he/she] receives this Agreement andRelease. Notwithstanding the foregoing, Employee may not sign this Agreement and Release before [his/her] last day of employment and this Agreement andRelease will not be accepted or effective if signed before the Termination Date. After signing this Agreement and Release, Employee shall have [seven (7)]days (the “Revocation Period”) to revoke [his/her] decision by indicating [his/her] desire to do so in writing delivered to [INSERT NAME] at the aboveaddress by no later than the last day of the Revocation Period. If the last day of the Revocation Period falls on a Saturday, Sunday or holiday, the last day ofthe Revocation Period will be deemed to be the next business day. Provided Employee does not revoke this Agreement and Release during the RevocationPeriod, the Effective Date of this Agreement and Release shall be the later of the [eighth (8th)] day after Employee signs this Agreement and Release or theday after the last day of the Revocation Period (the “Effective Date”). Dated: (signature) [Employee]ICHOR HOLDINGS, LTD Dated: Accepted by: Name: A-5 Exhibit 21.1 Name of Subsidiary Jurisdiction of Incorporation,Organization, or FormationIchor Holdings, Ltd. Cayman IslandsIchor Intermediate Holdings, Ltd. Cayman IslandsIcicle Acquisition Holding Co-op NetherlandsIcicle Acquisition Holding B.V. NetherlandsIchor Holdings Ltd. ScotlandIchor Systems Ltd. ScotlandIchor Holdings, LLC DelawareIchor Systems, Inc. DelawareIchor Systems Korea Ltd. KoreaIchor Systems Malaysia Sdn Bhd MalaysiaIchor Systems Singapore, PTE Ltd. SingaporePrecision Flow Technologies, Inc. New YorkAjax-United Patterns & Molds, Inc. CaliforniaCal-Weld, Inc. CaliforniaTalon Innovations Corporations MinnesotaTalon Innovations (FL) Corporation FloridaTalon Innovations Korea KoreaIAN Engineering Co., Ltd. Korea Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsIchor Holdings, Ltd.:We consent to the incorporation by reference in the registration statements (No. 333‑215984 and No. 333‑219846) on Form S‑8 of Ichor Holdings, Ltd. andsubsidiaries (the Company) of our report dated March 8, 2019, with respect to the consolidated balance sheets of Ichor Holdings, Ltd. and subsidiaries as ofDecember 28, 2018 and December 29, 2017, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the yearsin the three-year period ended December 28, 2018, and the related notes (collectively, the consolidated financial statements), which report appears in theDecember 28, 2018 annual report on Form 10‑K of the Company.Our report on the consolidated financial statements refers to a change in the method of accounting for revenue recognition in 2018 due to the adoption ofAccounting Standards Codification 606, Revenue from Contracts with Customers./s/ KPMG LLPPortland, OregonMarch 8, 2019 Exhibit 31.1CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Thomas M. Rohrs, certify that:1.I have reviewed this annual report on Form 10-K of Ichor Holdings, Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. Date: March 8, 2019 By:/s/ Thomas M. Rohrs Thomas M. Rohrs Chief Executive Officer  Exhibit 31.2CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Jeffrey S. Andreson, certify that:1.I have reviewed this annual report on Form 10-K of Ichor Holdings, Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. Date: March 8, 2019 By:/s/ Jeffrey S. Andreson Jeffrey S. Andreson Chief Financial Officer  Exhibit 32.1CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Ichor Holdings, Ltd. (the “Company”) on Form 10-K for the period ending December 28, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to§ 906 of the Sarbanes‑Oxley Act of 2002, that: (1)The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 8, 2019 By:/s/ Thomas M. Rohrs Thomas M. Rohrs Chief Executive Officer  Exhibit 32.2CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Ichor Holdings, Ltd. (the “Company”) on Form 10-K for the period ending December 28, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to§ 906 of the Sarbanes‑Oxley Act of 2002, that: (1)The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 8, 2019 By:/s/ Jeffrey S. Andreson Jeffrey S. Andreson Chief Financial Officer 

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