SIGNIFICANT CUSTOMERS AND EXPORT SALES

9 Months Ended

Sep. 30, 2011

Risks and Uncertainties [Abstract]

SIGNIFICANT CUSTOMERS AND EXPORT SALES [Text Block]

SIGNIFICANT CUSTOMERS AND EXPORT SALES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of proprietary, high-voltage, analog integrated circuits for use primarily in the AC-DC power conversion markets. The Company's chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Customer Concentration

Ten customers accounted for approximately 65% and 64% of net revenues for the three months ended September 30, 2011 and September 30, 2010, respectively, and 65% and 64% of revenues for the nine months ended September 30, 2011 and September 30, 2010, respectively. A significant portion of these revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a broad, diverse range of end users, including OEMs and merchant power supply manufacturers.

The following customers accounted for 10% or more of total net revenues:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Customer	2011		2010		2011		2010
A	19	%	18	%	19	%	16	%
B	12	%	11	%	12	%	11	%

Customers A and B are distributors of the Company's products. No other customers accounted for 10% or more of the Company's net revenues in those periods.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables. The Company has cash investment policies that limit cash investments to low-risk investments. With respect to trade receivables, the Company performs ongoing evaluations of its customers' financial conditions and requires letters of credit whenever deemed necessary. Additionally, the Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends related to past write-offs and other relevant information. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2011 and December 31, 2010, 71% and 76%, respectively, of accounts receivable were concentrated with the Company's top 10 customers.

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

Customer	September 30, 2011		December 31, 2010
A	21	%	21	%
B	15	%	*

 _______________

*less than 10%

Customers A and B are distributors of the Company’s products. No other customers accounted for 10% or more of the Company’s accounts receivable in these periods.

International Sales

The Company markets its products through its sales personnel and a worldwide network of distributors. As a percentage of total net revenues, international sales, which consist of domestic and foreign sales to distributors and direct customers outside of the Americas, are comprised of the following:

	Three Months  Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Hong Kong/China	40	%	35	%	38	%	32	%
Taiwan	18	%	23	%	21	%	24	%
Korea	16	%	18	%	16	%	19	%
Western Europe (excluding Germany)	10	%	9	%	10	%	8	%
Japan	7	%	5	%	6	%	6	%
Singapore	2	%	2	%	2	%	2	%
Germany	1	%	1	%	1	%	2	%
Other	2	%	1	%	2	%	2	%
Total foreign revenue	96	%	94	%	96	%	95	%

The remainder of the Company’s sales are to customers within the Americas, primarily located in the United States.

Product Sales

Approximately 97% to 99% of the Company's sales in the three and nine months ended September 30, 2011 and 2010, respectively, were from its three primary groupings of low-power AC-DC power-conversion products - TOPSwitch, TinySwitch and LinkSwitch. Approximately 1% to 3% of the Company's sales came from other product families, principally the Company's DPA-Switch family of high-voltage DC-DC products, and in the first three quarters of 2011, the Company's Hiper family of products which includes both power-conversion and power-factor-correction products for high-power applications.

Revenue mix by product family for the three and nine months ended September 30, 2011 and 2010 was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Product Family	2011		2010		2011		2010
LinkSwitch	43	%	39	%	42	%	37	%
TinySwitch	33	%	37	%	33	%	38	%
TOPSwitch	21	%	23	%	23	%	24	%
Other	3	%	1	%	2	%	1	%