Note 8 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

8. COMMITMENTS AND CONTINGENCIES

Product Warranties

The Company generally provides one to two-year warranties against defects in materials and workmanship and will repair the products, provide replacements at no charge to customers or issue a refund. As they are considered assurance-type warranties, the Company does not account for them as separate performance obligations. Warranty reserve requirements are generally based on a specific assessment of the products sold with warranties when a customer asserts a claim for warranty or a product defect.

The changes in warranty reserves are as follows (in thousands):

	Three Months Ended March 31,
	2022			2021
Balance at beginning of period	$	20,989		$	6,895
Warranty provision for product sales		4,740			3,609
Settlements made		(1,380	)		(313	)
Unused warranty provision		(516	)		(250	)
Balance at end of period	$	23,833		$	9,941

For the three months ended March 31, 2022, the warranty provision for product sales included net adjustments to pre-existing claims of $4.2 million. For the three months ended March 31, 2021, net adjustments to pre-existing claims were not material.

Purchase Commitments

The Company has outstanding purchase obligations with its suppliers and other parties that require the future purchases of goods or services, which primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and research and development facilities, purchases of production and other equipment, and license arrangements. As of March 31, 2022, the Company’s outstanding purchase obligations totaled approximately $204.1 million. 

Litigation

The Company is a party to actions and proceedings in the ordinary course of business, including potential litigation initiated by its stockholders, challenges to the enforceability or validity of its intellectual property, claims that the Company’s products infringe on the intellectual property rights of others, and employment matters. These proceedings often involve complex questions of fact and law and  may require the expenditure of significant funds and the diversion of other resources to prosecute and defend. The Company intends to defend itself vigorously against any such claims. As of March 31, 2022, there were no material pending legal proceedings to which the Company was a party.