SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

6 Months Ended

Jun. 30, 2023

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

7. 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 82% and 79% of net revenues for the three and six months ended June 30, 2023, respectively, and 77% for both the three and six months ended June 30, 2022. 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 (“OEMs”) and merchant power-supply manufacturers. Similarly, merchant power-supply manufacturers sell power supplies incorporating the Company’s products to a broad range of OEMs. Sales to distributors were $78.8 million and $145.5 million in the three and six months ended June 30, 2023, respectively, and $133.9 million and $269.7 million, respectively, in the corresponding periods of 2022. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

The following customers represented 10% or more of the Company’s net revenues for the respective periods:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Customer	2023		2022		2023		2022
Avnet	25	%	30	%	25	%	31	%
Honestar Technologies Co., Ltd.	15	%	11	%	14	%	13	%
Salcomp Group	14	%	*		13	%	*
Flextronics Group	12	%	*		11	%	*

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

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 both June 30, 2023 and December 31, 2022, 87% of accounts receivable were concentrated with the Company’s top ten customers.

The following customers represented 10% or more of accounts receivable at June 30, 2023 and December 31, 2022:

	June 30,		December 31,
Customer	2023		2022
Avnet	33	%	42	%
Salcomp Group	18	%	13	%
Flextronics Group	15	%	11	%

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 six months ended June 30, 2023 and 2022, were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2023		2022		2023		2022
United States of America	$	2,148	$	7,569	$	4,695	$	14,476
Hong Kong/China		76,496		96,760		136,094		202,001
India		11,312		7,256		18,041		13,105
Taiwan		4,495		5,848		6,504		11,106
Korea		6,316		18,563		13,117		37,226
Western Europe (excluding Germany)		5,498		8,129		12,414		16,374
Japan		3,740		10,160		9,079		18,209
Germany		6,075		14,460		13,549		25,943
Other		7,143		15,241		16,027		27,695
Total net revenues	$	123,223	$	183,986	$	229,520	$	366,135