Concentration of Risk

6 Months Ended

Jul. 28, 2019

The following significant customers accounted for at least 10% of net sales in one or more of the periods indicated:



	Three Months Ended				Six Months Ended
(percentage of net sales)	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
Trend-tek Technology Ltd (and affiliates)	14	%	13	%	13	%	13	%
Frontek Technology Corporation (and affiliates)	10	%	13	%	10	%	10	%
Arrow Electronics (and affiliates)	9	%	10	%	9	%	11	%
Huawei Technologies Co., Ltd. (and affiliates)	5	%	9	%	10	%	7	%
Samsung Electronics (and affiliates)	3	%	7	%	6	%	7	%
Premier Technical Sales Korea, Inc. (and affiliates) ⁽¹⁾	8	%	4	%	7	%	5	%

⁽¹⁾ Premier is a distributor with a concentration of sales to Samsung. The above percentages represent the Company's estimate of the sales activity related to Samsung that is passing through this distributor.

The following table shows the customers that have an outstanding receivable balance that represents at least 10% of total net receivables as of the dates indicated:



	Balance as of
(percentage of net sales)	July 28, 2019		January 27, 2019
Frontek Technology Corporation (and affiliates)	12	%	10	%
Trend-tek Technology Ltd (and affiliates)	12	%	11	%

Outside Subcontractors and Suppliers

The Company relies on a limited number of third-party subcontractors and suppliers for the production of silicon wafers, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors, including due to natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. Several of the Company’s third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Israel and Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in China, Malaysia, Taiwan, Thailand, South Korea and the Philippines. During the three and six months ended July 28, 2019, approximately 23% and 20%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in China, and approximately 14% and 13%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in Israel. During the three and six months ended July 29, 2018, approximately 15% and 15%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in China, and approximately 16% and 12%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in Israel. These percentages could be higher in future periods.

For the three and six months ended July 28, 2019, authorized distributors accounted for approximately 72% and 67%, respectively, of the Company’s net sales, compared to approximately 67% for both the three and six months ended July 29, 2018. Generally, the Company does not have long-term contracts with its distributors and most can terminate their agreement with little or no notice. For the second quarter of fiscal year 2020, the Company's two largest distributors were based in Asia