SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

3 Months Ended

Mar. 31, 2017

Concentration Risk Disclosure [Text Block]

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES:

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 59% of net revenues for the three months ended March 31, 2017, and approximately 64% 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. Sales to distributors were $80.6 million and $67.3 million in the three months ended March 31, 2017 and 2016, respectively. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

In the three months ended March 31, 2017, one customer, a distributor of the Company's products, accounted for more than 10% of the Company’s net revenues. In the three months ended March 31, 2016, two customers, both distributors, accounted for more than 10% of the Company’s net revenues.

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



	Three Months Ended
	March 31,
Customer	2017		2016
Avnet	17	%	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, 2017, and December 31, 2016, 67% and 70%, 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, 2017		December 31, 2016
Avnet	17	%	24	%
Burnon International Ltd.	12	%	*

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*	Total customer percentage of accounts receivable was less than 10%.

Geographic Net Revenues

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors. Geographic net revenues, based on “bill to” customer locations, for the three months ended March 31, 2017, and March 31, 2016, were as follows:



	Three Months Ended
	March 31,
(In thousands)	2017		2016
United States of America	$	3,829	$	3,608
Hong Kong/China	54,845		43,342
Taiwan	13,034		10,399
Korea	9,506		9,673
Western Europe (excluding Germany)	11,971		10,711
Japan	4,648		4,808
Germany	2,796		2,099
Other	4,059		3,396
Total net revenues	$	104,688	$	88,036