SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES

3 Months Ended

Mar. 31, 2016

SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES

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% of net revenues for the three months ended March 31, 2016, and approximately 60% of net revenues in the corresponding period 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.

In the three months ended March 31, 2016, two customers, both distributors of the Company's products, accounted for more than 10% of the Company’s net revenues. In the three months ended March 31, 2015, one customer, also a distributor, accounted for more than 10% of net revenues.

The following table discloses these customers’ percentage of revenues for the respective periods:



	Three Months Ended
	March 31,
Customer	2016		2015
Avnet	21	%	22	%
Powertech Distribution Ltd.	12	%	*

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*	Total customer percentage of revenues was less than 10%.

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 does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2016, and December 31, 2015, 72% 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	March 31, 2016		December 31, 2015
Avnet	27	%	20	%
ATM Electronic Corporation	*		10	%

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*	Total customer accounts receivable was less than 10%.

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
	March 31,
	2016		2015
Hong Kong/China	49	%	47	%
Taiwan	12	%	13	%
Korea	11	%	12	%
Western Europe (excluding Germany)	12	%	12	%
Japan	6	%	5	%
Germany	2	%	2	%
Other	4	%	5	%
Total foreign revenue	96	%	96	%

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