SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

3 Months Ended

Mar. 31, 2022

SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

Customer Concentration

Nearly all of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a range of end users, including OEMs and merchant power supply manufacturers.

The following customers represented 10% or more of the Company’s net revenues for the respective three months ended March 31, 2022 and 2021, respectively:



Customer	March 31, 2022		March 31, 2021
Distributor A	39	%	40	%
Distributor B	13		14	%
Distributor C	31	%	32	%

Revenues by Geographic Area

The Company considers the domicile of its end customers, rather than the distributors it sells to directly, to be the basis for attributing revenues from external customers to individual countries. Revenues for the three months ending March 31, 2022 and 2021, were attributable to end customers in the following countries:



Country	March 31, 2022		March 31, 2021
China	58	%	86	%
United States	33		4
Taiwan	5		—
Korea	4		8
All others	—		2
Total	100	%	100	%

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consisted principally of cash, cash equivalents and trade receivables. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. The Company has not experienced any losses on cash or cash equivalents held at financial institutions. The Company does not have any off-balance-sheet credit exposure related to its customers.

The following customers represented 10% or more of accounts receivable:


Customer	March 31, 2022		December 31, 2021
Distributor A	26	%	44	%
Distributor B	*		14	%
Distributor C	12	%	14	%
Distributor D	12	%	*
Distributor E	10	%	*
Distributor F	21	%	*

*Total customer accounts receivable was less than 10% of net accounts receivables.

Concentration of Supplier Risk

The Company currently relies on a single foundry to produce wafers for GaN ICs. Loss of the relationship with this supplier could have a substantial negative effect on the Company. Additionally, the Company relies on a limited number of third-party subcontractors and suppliers for testing, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors, including due to the COVID-19 pandemic or natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. A significant amount of the Company’s third-party subcontractors and suppliers, including third-party foundries that supply wafers for GaN ICs, are located in Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Taiwan and the Philippines.