SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

9 Months Ended

Sep. 30, 2019

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 55% and 54% of net revenues for the three and nine months ended September 30, 2019, respectively, and approximately 56% and 57%, respectively, of net revenues 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 original equipment manufacturers, or OEMs, and merchant power supply manufacturers. Sales to distributors were $78.0 million and $222.7 million in the three and nine months ended September 30, 2019, respectively, and $83.3 million and $245.4 million, respectively, for the corresponding periods of 2018. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

In each of three and nine months ended September 30, 2019 and 2018, one customer, a distributor of the Company's products, accounted for more than 10% of the Company’s net revenues.

The following table discloses this customer’s percentage of revenues for the respective periods:



	Three Months Ended				Nine Months Ended
Customer	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Avnet	11	%	14	%	11	%	14	%

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 September 30, 2019, and December 31, 2018, 65% and 64%, respectively, of accounts receivable were concentrated with the Company’s top ten customers.

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



Customer	September 30, 2019		December 31, 2018
Avnet	14	%	17	%
Powertech Distribution Ltd.	*		11	%

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

No other customers accounted for 10% or more of the Company’s accounts receivable in the periods presented.

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 and nine months ended September 30, 2019, and September 30, 2018, were as follows:



	Three Months Ended				Nine Months Ended
(In thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
United States of America	$	2,878	$	4,460	$	8,162	$	12,056
Hong Kong/China	64,526		59,178		171,110		169,149
Taiwan	10,410		11,210		27,246		36,010
Korea	7,177		8,087		22,621		25,965
Western Europe (excluding Germany)	9,220		12,842		28,746		37,910
Japan	4,753		5,040		11,312		15,238
Germany	4,921		3,873		13,661		10,882
Other	10,274		5,395		23,354		15,438
Total net revenues	$	114,159	$	110,085	$	306,212	$	322,648