SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

12 Months Ended

Dec. 31, 2024

SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS

Customer Concentration

A majority 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 (in thousands):


	Year Ended December 31,
Customer	2024		2023
Distributor A	56	%	45	%

At the end of 2024, the Company terminated its distribution agreement with Distributor A. As a result of this termination, the Company incurred a bad debt expense of $7.5 million included in Selling, general and administrative expenses for the year ended December 31, 2024.

The Company had acquired inventory, which was intended to be primarily sold through this distributor. Given the termination, the Company re-evaluated the recoverability of its inventory and recorded a write-down of $5.0 million to Cost of Revenues for the year ended December 31, 2024. Additionally, the Company also had a research and development project related to creating future products for distribution to this customer, which was abandoned resulting in a $1.7 million charged to Research and development for the year ended December 31, 2024.

Revenues by Geographic Area

Revenues for the twelve months ended December 31, 2024 and 2023, were attributable to the following regions:


	Year Ended December 31,
Region	2024		2023
Hong Kong	64	%	53	%
Rest of Asia	18	%	13	%
US	9	%	9	%
China	4	%	15	%
Europe	4	%	10	%
All Other	1	%	—	%
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 the Company’s accounts receivable:


	As of December 31,
Customer	2024		2023
Distributor A	44	%	77	%

Concentration of Supplier Risk

The Company currently relies on a single foundry to produce wafers for GaN ICs and a separate single foundry to produce SiC MOSFETs. Loss of the relationship with either of these suppliers 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 the third-party foundry that supplies 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.

The Company entered into an agreement to purchase raw materials from a supplier from September 29, 2022 through December 31, 2025, and accordingly made a $2.0 million deposit to be received as invoice credits toward future purchases. The Company is not obligated to purchase from this supplier, however, if the Company does not meet the minimum purchase requirements during the term, the Company may forfeit all or a portion of its $2.0 million deposit. As of December 31, 2024, the Company has determined it will not meet the minimum purchase requirements, therefore, the Company wrote-off this $2.0 million deposit, and is included in the Company’s research and development expenses for the year ended December 31, 2024.