SIGNIFICANT CUSTOMERS AND EXPORT SALES

12 Months Ended

Dec. 31, 2015

SIGNIFICANT CUSTOMERS AND EXPORT SALES [Text Block]

SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of analog and mixed-signal ICs and other electronic components and circuitry used in high-voltage power conversion. 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.

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 major end markets served: communications, computer, consumer and industrial. The table below provides the percentage of net sales activity by end markets served on a comparative basis for all periods:



	Year Ended December 31,
End Market	2015		2014		2013
Communications	24	%	18	%	21	%
Computer	7	%	10	%	10	%
Consumer	36	%	37	%	35	%
Industrial	33	%	35	%	34	%

Customer Concentration

The Company's top ten customers accounted for approximately 60% of net revenues in 2015 and 59% in each of 2014 and 2013. 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 each accounted for 10% or more of total net revenues:



	Year Ended December 31,
Customer	2015		2014		2013
Avnet	21	%	19	%	19	%
Powertech Distribution Ltd.	10	%	*		*

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* Total customer revenue was less than 10% of net revenues

Avnet and Powertech Distribution Ltd. 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 consisted 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. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables. As of December 31, 2015, and December 31, 2014, 66% of accounts receivable were concentrated with the Company’s top 10 customers.

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



Customer	December 31, 2015		December 31, 2014
Avnet	20	%	22	%
ATM Electronic Corporation	10	%	*
Burnon International Ltd.	*		11	%

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* Total customer accounts receivable was less than 10%

Avnet, ATM Electronic Corporation and Burnon International Ltd. 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 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:



	Year Ended December 31,
	2015		2014		2013
Hong Kong/China	50	%	47	%	47	%
Taiwan	14	%	15	%	15	%
Korea	10	%	11	%	11	%
Western Europe (excluding Germany)	11	%	11	%	11	%
Japan	5	%	5	%	5	%
Singapore	1	%	1	%	2	%
Germany	2	%	2	%	2	%
Other	2	%	3	%	2	%
Total foreign revenue	95	%	95	%	95	%

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