SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of integrated circuits and related components for use primarily in the high-voltage power-conversion market. 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

The Company's top ten customers accounted for approximately 62% and 60% of net revenues for the three and six months ended June 30, 2015, respectively, and approximately 61% and 60% of net revenues, respectively, in the corresponding periods of the previous year. 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.

One customer, a distributor of the Company's products, accounted for more than 10% of the Company's net revenues in the three and six months ended June 30, 2015, and in the corresponding periods of 2014. The following table discloses that customer's percentage of revenues for the respective periods:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
Customer	2015		2014		2015		2014
Avnet	22	%	20	%	22	%	20	%

No other customers accounted for 10% or more of the Company's net revenues in the periods presented.

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 June 30, 2015, and December 31, 2014, 65% and 66%, respectively, of accounts receivable were concentrated with the Company's top 10 customers.

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



Customer	June 30, 2015		December 31, 2014
Avnet	25	%	22	%
Burnon International LTD.	*		11	%

_______________________________


*	Total customer accounts receivable was less than 10%.

The above-mentioned customers are distributors of the Company’s products. No other customers accounted for 10% or more of the Company’s accounts receivable on these dates.

International Sales

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors. As a percentage of total net revenues, international sales, which consist of sales to distributors and direct customers outside of the United States of America, comprise the following:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Hong Kong/China	51	%	48	%	49	%	46	%
Taiwan	14	%	16	%	13	%	16	%
Korea	8	%	10	%	10	%	10	%
Western Europe (excluding Germany)	11	%	10	%	11	%	11	%
Japan	6	%	5	%	6	%	6	%
Germany	2	%	2	%	2	%	2	%
Other	3	%	4	%	4	%	4	%
Total foreign revenue	95	%	95	%	95	%	95	%

The remainder of the Company’s sales is to customers within the United States of America.

Product Sales

Net revenues consist primarily of sales of the Company's high-voltage integrated-circuit products, IGBT drivers and high-voltage silicon diodes. When evaluating the Company's net revenues, the Company categorizes its sales into the following four end-market groupings: communications, computer, consumer and industrial. The table below provides the percentage of net sales activity by end market for the three and six months ended June 30, 2015 and 2014:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
End Market	2015		2014		2015		2014
Communications	21	%	15	%	21	%	17	%
Computer	7	%	12	%	7	%	11	%
Consumer	36	%	38	%	37	%	37	%
Industrial	36	%	35	%	35	%	35	%