SILICON LABORATORIES INC.SLAB
SILICON LABORATORIES INC. Fair Value Disclosure
Fair Value of Financial Instruments
The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.
| Fair Value Measurements at January 3, 2026 Using | Total | |||||||||||||||||||
| Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||||||||
| Cash equivalents: | ||||||||||||||||||||
| Money market funds | $ | 206,051 | $ | — | $ | 206,051 | ||||||||||||||
| Time deposit | — | 5,595 | 5,595 | |||||||||||||||||
| Total cash equivalents | $ | 206,051 | $ | 5,595 | $ | 211,646 | ||||||||||||||
| Short-term investments: | ||||||||||||||||||||
| Government debt securities | $ | — | $ | 79,400 | $ | 79,400 | ||||||||||||||
| Total short-term investments | $ | — | $ | 79,400 | $ | 79,400 | ||||||||||||||
| Total | $ | 206,051 | $ | 84,995 | $ | 291,046 | ||||||||||||||
| Fair Value Measurements at December 28, 2024 Using | Total | |||||||||||||||||||
| Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||||||||
| Cash equivalents: | ||||||||||||||||||||
| Money market funds | $ | 188,057 | $ | — | $ | 188,057 | ||||||||||||||
| Total cash equivalents | $ | 188,057 | $ | — | $ | 188,057 | ||||||||||||||
| Short-term investments: | ||||||||||||||||||||
| Corporate debt securities | $ | — | $ | 13,514 | $ | 13,514 | ||||||||||||||
| Government debt securities | — | 87,040 | 87,040 | |||||||||||||||||
| Total short-term investments | $ | — | $ | 100,554 | $ | 100,554 | ||||||||||||||
| Total | $ | 188,057 | $ | 100,554 | $ | 288,611 | ||||||||||||||
Valuation methodology
The Company’s cash equivalents and short-term investments that are classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar
instruments in active markets; quoted prices in less active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data.
The following summarizes the components of available-for-sale investments:
| Reported As | ||||||||||||||||||||||||||||||||||||||
| As of January 3, 2026 | Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash Equivalent | Marketable Securities | ||||||||||||||||||||||||||||||||
| Time deposits | $ | 5,595 | $ | — | $ | — | $ | 5,595 | $ | 5,595 | $ | — | ||||||||||||||||||||||||||
| Government debt securities | 79,148 | 252 | — | 79,400 | — | 79,400 | ||||||||||||||||||||||||||||||||
| Money market funds | 206,051 | — | — | 206,051 | 206,051 | — | ||||||||||||||||||||||||||||||||
| Total | $ | 290,794 | $ | 252 | $ | — | $ | 291,046 | $ | 211,646 | $ | 79,400 | ||||||||||||||||||||||||||
| Reported As | ||||||||||||||||||||||||||||||||||||||
| As of December 28, 2024 | Amortized Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash Equivalent | Marketable Securities | ||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | 13,517 | $ | 12 | $ | (15) | $ | 13,514 | $ | — | $ | 13,514 | ||||||||||||||||||||||||||
| Government debt securities | 86,949 | 141 | (49) | 87,040 | — | 87,040 | ||||||||||||||||||||||||||||||||
| Money market funds | 188,057 | — | — | 188,057 | 188,057 | — | ||||||||||||||||||||||||||||||||
| Total | $ | 288,523 | $ | 153 | $ | (64) | $ | 288,611 | $ | 188,057 | $ | 100,554 | ||||||||||||||||||||||||||
Contractual maturities of investments
The Company’s available-for-sale investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income in the Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at January 3, 2026 (in thousands):
| Cost | Fair Value | ||||||||||
| Due in one year or less | $ | 69,647 | $ | 69,822 | |||||||
| Due after one year through five years | 9,501 | 9,578 | |||||||||
| $ | 79,148 | $ | 79,400 | ||||||||
Unrealized Gains and Losses
The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):
| Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
| As of December 28, 2024 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | — | $ | — | $ | 4,187 | $ | (15) | $ | 4,187 | $ | (15) | ||||||||||||||||||||||||||
| Government debt securities | 26,318 | (49) | — | — | 26,318 | (49) | ||||||||||||||||||||||||||||||||
| $ | 26,318 | $ | (49) | $ | 4,187 | $ | (15) | $ | 30,505 | $ | (64) | |||||||||||||||||||||||||||
There were no gross unrealized losses as of January 3, 2026. The gross unrealized losses as of December 28, 2024 were due primarily to changes in market interest rates.
The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of January 3, 2026, there were no material declines in the market value of available-for-sale investments due to credit-related factors.
Fair values of other financial instruments
The fair value of the Company’s 2025 Notes was determined using observable market prices. The notes were traded in less active markets and were therefore classified as a Level 2 fair value measurement. No notes were outstanding as of January 3, 2026.
The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities. The Company’s foreign currency derivative instruments are valued using discounted cash flow models. The assumptions used in preparing the valuation models include foreign exchange rates, forward and spot prices for currencies and market observable data of similar instruments.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.