We value inventory at the lower of cost or market using the first-in, first-out (FIFO) method. Management
assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and
changes in technology. These assessments require management judgments and estimates, and valuation
adjustments for excess and obsolete inventory may be recorded based on these assessments. We estimate excess
and obsolescence exposures based upon assumptions about future demand, product transitions, and market
conditions and record adjustments to reduce inventories to their estimated net realizable value. The failure to
accurately forecast demand may lead to additional excess and obsolete inventory and future charges.