Intevac, Inc. (IVAC): PESTLE Analysis [Nov-2025 Updated]

Intevac, Inc. (IVAC) is a fascinating dual-engine company right now: high-stakes defense technology versus a mature, cyclical equipment business. You need to know that the projected 2025 revenue growth of 5% to 10% is defintely riding on the Photonics segment's success with the US Department of Defense. But honestly, the volatility in Hard Disk Drive capital expenditure and tight export controls are real counter-pressures. To make a smart move, you have to map these political, economic, and technological forces-here is the clear PESTLE breakdown you need.

Intevac, Inc. (IVAC) - PESTLE Analysis: Political factors

The political landscape for Intevac, Inc., now operating primarily as a Thin-Film Equipment (TFE) supplier and recently acquired by a Seagate Technology subsidiary, is defined by US-China trade tensions and the US Department of Defense (DoD) budget. The key takeaway is that while the company's direct defense exposure is lower following the 2021 Photonics sale, its core TFE business faces significant, immediate risk from evolving global export control policies, especially those impacting the high-tech supply chain.

Increased US Department of Defense (DoD) spending for advanced systems

While Intevac sold its high-profile Photonics defense business (night vision sensors) in 2021, the company's remaining TFE division still services defense and aerospace markets with specialized thin-film deposition tools for advanced coatings. The overall US Department of Defense (DoD) investment for Fiscal Year (FY) 2025 is substantial, totaling $310.7 billion for Procurement and Research, Development, Test, and Evaluation (RDT&E). This massive budget is a clear opportunity for Intevac's parent company, Seagate, to secure TFE-related contracts for high-reliability components, which require advanced coatings for durability and performance.

This spending trend provides a stable, high-margin revenue floor, even if the TFE defense component is a smaller part of the overall $52 million to $55 million total revenue guidance for 2025. The political commitment to modernizing the joint force, paced to the challenge posed by China, directly benefits suppliers of dual-use technologies like Intevac's TFE systems for advanced materials.

Geopolitical tensions driving demand/risk for Intevac's Thin-Film Equipment (TFE)

Geopolitical tensions, particularly the US-China technology competition, are a double-edged sword for the TFE business. The demand for advanced data storage, driven by data center growth and Artificial Intelligence (AI), is strong, which is a tailwind for Intevac's core Hard Disk Drive (HDD) equipment business. But, the political friction creates immense supply chain risk. China's Ministry of Commerce (MOFCOM) has been aggressive in asserting control over critical materials, which impacts the global manufacturing ecosystem that uses Intevac's equipment.

The most immediate political risk is the potential for a sudden reinstatement of China's recently suspended export controls. These controls, announced in October 2025, targeted a wide range of materials and production equipment related to rare earths and lithium batteries, which are key components in many advanced thin-film applications.

• Temporary Relief: China announced a one-year suspension of these new export controls on November 7, 2025, until November 10, 2026, following trade negotiations, but the legal framework remains intact.
• Persistent Risk: The suspension is a temporary reprieve, not a resolution. The risk of sudden reinstatement or new US Export Administration Regulations (EAR) remains high, complicating long-term sales and support for TFE systems in Asia.

Export control regulations (e.g., EAR) impacting thin-film equipment sales to China

Intevac's TFE business is highly exposed to US and Chinese export control regimes because its vacuum process equipment is used in the manufacture of high-tech products, including HDD and advanced coatings. The US EAR regulations restrict the export of certain technologies to China, and China has retaliated with its own extraterritorial controls.

The political environment forces a high compliance burden on the TFE business, especially concerning dual-use items (products with both commercial and military applications). The complexity is compounded by China's October 2025 measures, which included controls on production equipment for rare earth and artificial graphite anode materials, effective November 8, 2025, before their temporary suspension. You defintely have to track every component's origin now.

Government contract renewal risk for Thin-Film Equipment (TFE) programs

The risk of government contract renewal, while less acute than when the company was solely reliant on a few large Photonics programs, still exists within the TFE division. Intevac's total 2025 revenue guidance is projected to be between $52 million and $55 million. Even a small portion of this revenue coming from TFE-related defense contracts represents a critical, high-margin stream that is subject to the annual appropriations process and program-specific renewal cycles.

The company's integration into Seagate Technology, a much larger entity, mitigates this risk somewhat, as a single contract loss is less impactful to the parent company's overall financial health. Still, the TFE team must focus on delivering on its current contracts to secure future funding, especially for specialized advanced coating systems that serve niche defense applications. Losing a key program could easily cut revenue by a few million, which is a significant hit against the $52 million low-end guidance.

Intevac, Inc. (IVAC) - PESTLE Analysis: Economic factors

You are looking at an economic landscape that is both challenging and highly opportunistic for Intevac, Inc. The near-term risks from interest rate pressure and currency volatility are largely offset by the massive, structural upswing in capital expenditure from the company's core customers. Simply put, the AI-driven data center boom is creating a demand cycle that is overriding macroeconomic headwinds.

Volatility in the Hard Disk Drive (HDD) capital expenditure cycle affecting thin-film sales

The historical cyclicality of the Hard Disk Drive (HDD) capital expenditure (CapEx) market has long been a primary risk for Intevac's thin-film equipment sales. However, the 2025 economic environment shows this cycle shifting from volatile to structurally strong, driven by the massive demand for cloud and Artificial Intelligence (AI) storage. This is a 'Stronger For Longer' cycle, with the upward trend expected to extend through 2028.

The key economic driver is the explosion in cloud vendor CapEx. The world's top 11 cloud vendors are projected to spend approximately $459 billion on CapEx in 2025, which represents a massive 61% year-on-year increase. Intevac's thin-film systems are critical to the manufacturing of next-generation high-capacity HDDs, particularly those utilizing Heat-Assisted Magnetic Recording (HAMR) technology. The high correlation (between 0.8 and 0.9) between the revenue of Intevac's key customers (like Seagate Technology) and this cloud CapEx means the demand for Intevac's equipment is directly tied to this historic spending surge.

High interest rates increasing the cost of capital for R&D and expansion

While high interest rates generally increase the cost of capital (Weighted Average Cost of Capital, or WACC) for manufacturers, Intevac is uniquely insulated from the direct effects. The company maintains a strong balance sheet, projecting a cash and investments balance in the range of $70 million to $72 million at the end of 2024. This robust liquidity means the company is not reliant on expensive new debt for its own R&D or expansion. In fact, the high-rate environment has been a source of income, with the company projecting approximately $700,000 in interest income for Q4 2024 alone.

The indirect risk-that high rates would slow down customer CapEx-is also being minimized. The US government's full expensing of capital expenditures, effective from 2025 through 2028, is expected to lessen corporate tax burdens for public companies, freeing up cash for investment. This tax incentive, combined with the non-negotiable, AI-driven need for more storage, is overriding the general pressure from interest rates on the capital spending of Intevac's customers.

Strong US dollar potentially reducing the competitiveness of overseas equipment sales

The US dollar's performance in 2025 has been defined by extreme volatility, creating a significant currency risk for a US-based exporter like Intevac. The dollar's strength or weakness directly impacts the competitiveness of Intevac's thin-film equipment, which is sold to global HDD manufacturers in US Dollars.

Here's the quick math on the volatility:

• In the first half of 2025 (1H25), the US Dollar Index (DXY) fell by 10.7%, marking its worst performance for that period in over 50 years. This depreciation would have made Intevac's equipment cheaper and more competitive for foreign buyers.
• However, the dollar staged a sharp rebound in Q3 2025, driven by strong US GDP growth (3.8% annualized in Q2 2025) and a paring back of Federal Reserve rate cut expectations.

This 'whiplash' in the currency market means that while a weaker dollar helped sales volume in the first half, the renewed strength in the second half of 2025 makes US exports more expensive, potentially pressuring foreign customers to defer non-essential equipment purchases or negotiate harder on price. The DXY has been trading in a wide range between the 96 and 108 marks throughout the year, making financial forecasting for overseas sales defintely challenging.

Projected 2025 revenue growth driven by the core business

Intevac's strategic pivot to focus entirely on its core Thin-Film Equipment (TFE) business, specifically the HDD sector, is the sole driver of its 2025 revenue forecast, as the Photonics segment was sold in 2021 [cite: 5 in previous step]. The company's own 2025 revenue projection is in the range of $52 million to $55 million [cite: 1, 7 in previous step].

This revenue is underpinned by the industry's adoption of HAMR technology, which is expected to drive substantial growth in the coming years. The company projects its HDD business will generate approximately $200 million in revenue over the three-year period from 2025 to 2027 [cite: 2, 4 in previous step]. This represents a significant increase in the core business's forward visibility and profitability outlook. The projected revenue baseline of $50 million for 2025 from the HDD upgrade market is expected to support a return to cash flow neutrality or positivity for the fiscal year [cite: 3 in previous step, 7 in previous step].

Intevac, Inc. (IVAC) - PESTLE Analysis: Social factors

Growing demand for smaller, lighter, and more power-efficient military equipment.

The core of the Intevac business, particularly its photonics solutions for defense, is directly influenced by the military's pervasive demand for Size, Weight, and Power (SWaP) reduction. This isn't a new trend, but the push has intensified in 2025 as the US Department of Defense (DoD) prioritizes highly mobile, dismounted, and unmanned systems. For the Intevac business, this means the night-vision and digital sensor technology must continuously shrink while improving performance.

This social factor is a major opportunity, but it creates a relentless engineering challenge. The shift requires constant innovation in the advanced coatings and digital sensor technology that the Intevac business is known for. The focus is on delivering lighter, more robust components for next-generation platforms, which defintely requires a specialized and expensive R&D team.

Global shortage of highly specialized engineering and physics talent, defintely impacting hiring.

The global talent gap in specialized engineering and physics is a critical headwind for the Intevac business, which relies on niche expertise in thin-film deposition and photonics. As of October 2025, the semiconductor industry-a close parallel to Intevac's technology-is facing an intensifying shortage, with projections indicating a need for over one million additional skilled professionals globally by 2030. In the US alone, the deficit could range from 59,000 to 146,000 workers by 2029, including an estimated 88,000 engineers.

This shortage makes hiring and retention extremely difficult, especially for a highly specialized unit. Here's the quick math on the talent crunch:

The small size of the workforce, which was 106 employees in the last 12 months reported, means the loss of a single key scientist or process engineer has a disproportionate impact on project timelines and innovation capacity. It's a high-stakes labor market.

Corporate social responsibility (CSR) demands from investors regarding defense-related products.

While the defense sector is a key revenue stream, the Intevac business faces growing scrutiny from the Environmental, Social, and Governance (ESG) investment community. This is a complex social factor because many large institutional investors, including those managing ESG-focused funds, have policies that restrict or prohibit investment in companies with significant revenue from controversial weapons or military-related products.

The Intevac business's photonics division, which provides digital night-vision sensors for military applications, falls into a category that some ESG screens flag. This can limit the pool of potential investors and put pressure on the parent company, Seagate Technology Holdings, to articulate a clear and ethical use policy for the technology. Honestly, this ESG pressure can influence capital cost and valuation, even for a non-public subsidiary.

• Defense-Related Revenue Scrutiny: The defense component of the business is subject to ethical investment screens, potentially limiting access to a growing pool of ESG capital.
• Talent Attraction: Younger, highly-skilled professionals increasingly prioritize working for companies with strong social missions, which can make recruiting for defense-related roles harder.
• Mitigation Strategy: The company must emphasize the dual-use nature of its technology, such as its thin-film deposition systems used for commercial hard disk drives, to balance the defense-related perception.

Focus on retaining key personnel in the highly competitive Silicon Valley labor market.

The Intevac business is headquartered in Santa Clara, California, placing it directly in the most competitive and expensive labor market in the world: Silicon Valley. Retaining the specialized talent needed for thin-film processing and advanced photonics is a continuous battle against the giants. The top 20 technology employers in the Bay Area, which include companies like Apple, Meta, and Nvidia, have added at least 40,000 jobs in the region since early 2019, creating immense wage inflation and competition for niche skills. One clean one-liner: You can't compete with Apple's stock options on a shoestring budget.

The company's Revenue Per Employee was approximately $603,566 in the last reported 12 months, which is a key productivity metric, but retaining the staff that drives this efficiency is the real challenge. The high cost of living in the Bay Area, coupled with the desire for flexible work arrangements (which are harder to offer for hands-on equipment engineering roles) means compensation and benefits packages must be top-tier, or the business risks a high churn rate among its most valuable employees.

The strategic action here is clear: The Intevac business must offer non-monetary incentives like advanced research opportunities and clear career paths within the larger Seagate organization to retain its 106 highly specialized employees, who are constantly targeted by competitors.

Intevac, Inc. (IVAC) - PESTLE Analysis: Technological factors

The technological landscape for Intevac, Inc. as of 2025 is defined by two major, irreversible shifts: the divestiture of its Photonics business and the full integration of its Thin-Film Equipment (TFE) segment into Seagate Technology Holdings following the acquisition in March 2025. This means the company's technology risk and opportunity are now entirely concentrated on the Hard Disk Drive (HDD) media market's evolution.

Rapid advancements in competing display and thin-film deposition technologies.

Intevac's attempt to diversify into adjacent thin-film deposition markets through its TRIO platform failed to gain traction, forcing a strategic retreat to its core HDD business. The TRIO system, which targeted an estimated $1 billion served market in consumer electronics and automotive displays, did not meet performance and market penetration expectations, leading to its closure and a $33 million restructuring charge in late 2024. This exit highlights the intense, rapid competition in non-HDD thin-film deposition, where players like Applied Materials or specialized display equipment makers dominate. Honestly, they couldn't compete with the scale and speed of innovation outside their core competency.

The core TFE business, centered on the 200 Lean platform, remains dominant in its niche, but it is now fully dependent on the technological success of its parent company, Seagate, and other major HDD manufacturers like Western Digital Corporation and Showa Denko. The key technological risk is that a competitor could develop a fundamentally different, lower-cost method for high-density magnetic media deposition that bypasses the 200 Lean's sputtering technology.

Continuous R&D investment in next-generation digital night vision and sensor fusion.

This R&D area is no longer a factor for Intevac, Inc. The former Photonics business, which developed the patented Electron Bombarded Active Pixel Sensor (EBAPS®) technology for advanced digital night vision and sensor fusion systems like the U.S. Army's Integrated Visual Augmentation System (IVAS), was sold to EOTECH LLC in late 2021. This sale shifted Intevac's R&D focus entirely to the TFE segment.

The current R&D investment is therefore concentrated on enabling next-generation HDD technology. This primarily involves developing and installing upgrades to the existing global installed base of 200 Lean systems to support the shift to higher-density recording methods. The main R&D priority is the enhancement of the 200 Lean platform to support Heat-Assisted Magnetic Recording (HAMR) media production, which requires extremely precise thin-film deposition capabilities like the Radio Frequency Source technology for insulating or high-resistivity metal targets. This R&D is crucial for securing the projected fiscal 2025 revenue of $52 million to $55 million from the HDD upgrade market.

Patent portfolio strength in high-performance photocathodes protecting core defense revenue.

Similar to the R&D, the patent strength related to high-performance photocathodes is now held by EOTECH following the 2021 divestiture. The core defense revenue stream has been eliminated from Intevac's standalone operations.

The current, post-acquisition patent portfolio strength lies in the thin-film sputtering technology that underpins the 200 Lean platform. This intellectual property provides a significant moat in the HDD media manufacturing space. Intevac claims its machinery is responsible for processing over 65 percent of the world's HDD production capacity, a market-leading position that is directly protected by its patents on high-productivity vacuum handling and precise thin-film deposition for magnetic media. Seagate's acquisition was, in part, a move to internalize this critical technology and ensure a stable supply of HAMR-capable sputtering capacity.

Transition from traditional HDD to Solid State Drives (SSD) limiting the long-term equipment market.

The ongoing technological transition from Hard Disk Drives (HDD) to Solid State Drives (SSD) remains the primary long-term threat. SSDs continue to see price declines due to advancements like 3D NAND and QLC NAND, making them the preferred choice for performance and consumer devices. However, the sheer volume of global data, projected to rise to 181 zettabytes by the end of 2025, favors HDDs for massive, cost-effective archival and cloud storage.

The global HDD market is forecast to grow from $66.6 billion in 2025 to $111.2 billion by 2035, a 5.3% CAGR, driven by hyperscale data centers. This growth is capacity-driven, not unit-driven, which means Intevac's TFE equipment is essential for enabling the higher areal density technologies like HAMR that sustain this market. The table below maps the trade-off that defines Intevac's market:

The key action for the new parent company, Seagate, is to continue aggressive R&D investment in HAMR and future HDD technologies to maintain the cost-per-gigabyte advantage over SSDs for the cloud market.

Intevac, Inc. (IVAC) - PESTLE Analysis: Legal factors

Strict compliance requirements for handling classified information in defense contracts.

The legal landscape for Intevac's defense business, now operating as a subsidiary of Seagate Technology Holdings plc, is dominated by stringent U.S. government contracting regulations, particularly those concerning national security and data protection. The most immediate concern is the scrutiny under Foreign Ownership, Control, or Influence (FOCI) rules, which are triggered by the change in ownership.

Any Intevac defense contract or subcontract with the Department of Defense (DoD) valued over $5 million is subject to a mandatory FOCI review by the Defense Counterintelligence and Security Agency (DCSA). This review assesses the risk to national security and the potential for compromise of sensitive data, which is a significant administrative and legal burden for the newly structured entity. The DCSA provides a risk indicator report and may mandate mitigation measures, such as exclusion resolutions or the appointment of outside directors, generally requiring implementation within 90 days. Failure to comply makes a company ineligible to do business with the government.

Furthermore, the Cybersecurity Maturity Model Certification (CMMC) program, with its final rule being implemented in 2025, is creating a new layer of compliance complexity. CMMC requires third-party verification of a contractor's security controls for protecting Controlled Unclassified Information (CUI). This means the Intevac business must not only meet the NIST SP 800-171 security requirements but also undergo an audit to maintain eligibility for future DoD contracts.

• FOCI Review: Mandatory for DoD contracts > $5 million post-acquisition.
• CMMC Compliance: Requires third-party audit for CUI protection.
• Cyber Incident Reporting: Requires rapid reporting of cyber incidents within 72 hours of discovery.

Intellectual property (IP) litigation risk in the competitive thin-film deposition space.

Intevac's core thin-film deposition technology is a critical asset, and in this highly competitive sector, intellectual property (IP) litigation is a persistent and costly risk. While the company's IP is now integrated into Seagate's much larger portfolio, the legal exposure remains, but the defense resources have significantly increased. Seagate is a major player in the Hard Disk Drive (HDD) industry, and IP disputes are common in the storage and materials science fields.

The legal environment for patents is also shifting in 2025. The Federal Circuit's decision in LKQ v. GM Global Technologies, which overturned the long-standing 'basically the same' test for design patent obviousness, could potentially lower the bar for examiners to reject new design patents. This change makes it harder to secure broad protection for new equipment designs, increasing the risk of competitors successfully challenging or designing around patents in the thin-film deposition equipment space.

Here's the quick math: A single patent infringement case in the U.S. can easily cost a company between $3 million and $5 million to litigate through trial, a risk that is now managed under Seagate's legal budget.

New SEC rules on climate-related disclosures increasing reporting complexity.

The near-term federal reporting complexity for Intevac has actually been mitigated in 2025, but the global and state-level burden is still rising. The U.S. Securities and Exchange Commission (SEC) voted on March 27, 2025, to end its defense of the final climate-related disclosure rules, and the rules remain subject to a voluntary stay pending judicial review. This action effectively pauses the immediate, extensive federal requirement to report Scope 1, 2, and potentially Scope 3 greenhouse gas (GHG) emissions in 2025 financial filings.

However, this pause does not eliminate the legal requirement to report to other jurisdictions. The Intevac business, now part of a global entity, must still monitor and comply with state laws like California's SB 253 and SB 261, and international requirements like the European Union's Corporate Sustainability Reporting Directive (CSRD), which are still proliferating. These non-federal mandates require detailed disclosure on climate-related risks and governance, creating a complex, multi-jurisdictional compliance patchwork.

International trade agreements and tariffs influencing component sourcing and sales.

The legal and regulatory environment for international trade in 2025 is characterized by escalating tariffs, which directly impact the cost structure for Intevac's thin-film processing systems that rely on a global supply chain. The U.S. trade policy has introduced new, broad tariffs that complicate component sourcing, especially from Asia.

Key tariff impacts for the thin-film deposition equipment sector:

This tariff environment forces a costly legal and operational pivot. Many companies are shifting their supply chains away from China (a 'China Plus One' strategy) to mitigate the 39% tariff risk, which requires new contract negotiations and legal due diligence in alternative sourcing regions. The universal 10% tariff, effective in April 2025, means every component's landed cost has increased, regardless of origin, unless a specific exemption applies. This defintely pressures the gross margin of the thin-film systems business.

Intevac, Inc. (IVAC) - PESTLE Analysis: Environmental factors

You're looking at Intevac, Inc. (IVAC) through a 2025 lens, and the environmental factors are a mix of intense industry pressure and specific regulatory compliance risks, all amplified by the pending acquisition by Seagate Technology Holdings plc. The core challenge is translating the high-tech nature of their products-thin-film equipment and specialized sensors-into concrete, measurable environmental stewardship.

Need for energy-efficient thin-film equipment to meet customer sustainability goals

The thin-film equipment (TFE) market is now inextricably linked to energy efficiency, not just throughput. Intevac's primary product, the 200 Lean sputtering tool, operates within a global sputtering equipment market projected to be worth approximately $7.93 billion in 2025, with a Compound Annual Growth Rate (CAGR) of 4.3% through 2032.

The push for energy-efficient coatings is a major driver, especially in the European and North American markets. For Intevac's Hard Disk Drive (HDD) customers like Seagate Technology Holdings plc, energy consumption is a direct operational cost. The industry is moving toward new technologies like Heat Assisted Magnetic Recording (HAMR) and Energy Assisted Magnetic Recording (EAMR), which require updated equipment. The acquisition by Seagate Technology Holdings plc, valued at approximately $119 million, is partly motivated by the need to integrate and update this sputtering capacity to reduce capital costs, implying a direct need for more energy- and cost-efficient deposition processes.

New thin-film equipment must offer a significant reduction in energy per wafer to stay competitive. It's a simple cost-of-ownership calculation for customers.

Management of hazardous materials used in the manufacturing of specialized sensors

Intevac's Photonics business, which produces specialized sensors, primarily focuses on the Electron Bombarded Active Pixel Sensor (EBAPS) technology. This sensor relies on a photocathode, which is often composed of Gallium Arsenide (GaAs). Gallium Arsenide is a Group 3 toxic substance that requires extremely rigorous handling, disposal, and environmental monitoring under the Resource Conservation and Recovery Act (RCRA) in the US, plus international equivalents.

The manufacturing process itself is complex, requiring high-voltage bias (up to 2 kilovolts) and automated, ultra-high vacuum production packaging, which minimizes material exposure but concentrates the waste stream. The key risk here is the disposal of manufacturing byproducts and end-of-life sensors containing GaAs. Failure to manage this could result in substantial civil penalties or criminal fines, as the SEC has noted for the industry generally.

Increasing pressure for supply chain transparency regarding conflict minerals

Pressure for supply chain transparency, particularly concerning conflict minerals (3TG: tin, tantalum, tungsten, and gold), is a baseline requirement for any US-listed equipment manufacturer. Intevac is required to file a Form SD (Specialized Disclosure Report) annually.

The latest available public data from Intevac's 2023 Conflict Minerals Report, filed in 2024, provides a clear picture of their diligence efforts on their Thin-film Equipment (TFE) products, including the 200 Lean.

Here's the quick math on their 3TG sourcing effort for the 2023 reporting period:

The ongoing challenge for 2025 is closing the gap on those 66 'unknown' sources of origin to maintain a 'DRC Conflict-Free' goal, especially since the SEC rules still require a good faith effort to determine country of origin.

Compliance with global Waste Electrical and Electronic Equipment (WEEE) directives

Compliance with the European Union's Waste Electrical and Electronic Equipment (WEEE) Directive (2012/19/EU) is mandatory for Intevac, as they are a 'Producer' placing electrical and electronic equipment (EEE), like their TFE systems and sensors, onto the EU market.

The WEEE Directive requires manufacturers to finance the collection, treatment, recovery, and environmentally sound disposal of end-of-life products. While Intevac does not publicly disclose a specific WEEE provision, the cost is a non-trivial line item. For a company in the semiconductor equipment market, which is projected to reach a revenue of $94.27 billion in 2025 globally, compliance costs are typically factored into the product's European selling price. The risk is not just the cost, but the administrative burden of country-by-country registration and reporting, which is time-consuming and complex. You defintely need a robust system to track the weight and category of EEE placed on the market in each EU member state.

• Register to national WEEE registries in all relevant EU countries.
• Declare quantities and weights of EEE placed on the market regularly.
• Organize and finance the take-back and recycling of end-of-life equipment.