GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s goodwill and purchased intangible assets as of December 31, 2019 and December 31, 2018 are as follows:



	December 31, 2019							December 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
	(In thousands)
Goodwill	$	24,783	$	—		$	24,783	$	24,783	$	—		$	24,783

Intangible assets:
Other indefinite-lived intangibles	$	286	$	—		$	286	$	286	$	—		$	286
Intangible assets with finite lives:
Patents and licensed technology	—		—			—		1,665		(1,665		)	—
Developed technology	13,100		(3,093		)	10,007		13,100		(909		)	12,191
Customer relationships	23,100		(2,814		)	20,286		23,100		(271		)	22,829
Total purchased intangible assets	$	36,486	$	(5,907	)	$	30,579	$	38,151	$	(2,845	)	$	35,306

In August 2018, the Company acquired certain finite-lived intangible assets in its acquisition of SunPower Corporation’s (“SunPower”) microinverter business, primarily developed technology and customer relationships pursuant to an Asset Purchase Agreement (“APA”). See Note 20. “Acquisition,” of the notes to consolidated financial statements included in Item 8 of the Company’s 2019 Annual Report on Form 10-K for additional information related to this acquisition.

Amortization expense related to finite-lived intangible assets are as follows:



	Years Ended December 31,
	2019		2018
	(In thousands)
Developed technology, and patents and licensed technology	$	2,184	$	1,409
Customer relationships	2,543		271
Total amortization expense	$	4,727	$	1,680

Amortization of developed technology, patents and licensed technology is recorded to sales and marketing expense. The developed technology acquired from the Company’s acquisition of SunPower’s microinverter business was embedded in the microinverters that SunPower sold to its customers. The Company does not actively use the developed technology acquired from SunPower and holds the developed technology to prevent others from using it. Accordingly, the Company accounts for the developed technology as a defensive intangible asset and amortizes the associated value over a period of six years from the date of acquisition.

The master supply agreement (“MSA”) entered into with SunPower in August 2018 provides the Company with the exclusive right to supply SunPower with module level power electronics for a period of five years, with options for renewals. The exclusivity arrangement extends throughout the term of the MSA, which comprises all of the expected cash flows from the customer relationship intangible asset, and was a condition to, and was an essential part of the acquisition of SunPower’s microinverter business by the Company. As the fair value ascribed to the customer relationship intangible asset represents payments to a customer, the Company amortizes the value of the customer relationship intangible asset as a reduction to revenue using a pattern of economic benefit method over a useful life of nine years.