Concentration of Risk

9 Months Ended

Oct. 29, 2017

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



	Three Months Ended				Nine Months Ended
(percentage of net sales)	October 29, 2017		October 30, 2016		October 29, 2017		October 30, 2016
Arrow Electronics (and affiliates)	13	%	11	%	10	%	9	%
Trend-tek Technology Ltd (and affiliates)	10	%	8	%	10	%	10	%
Samsung Electronics (and affiliates)	9	%	9	%	8	%	8	%
Premier Technical Sales Korea, Inc. (and affiliates) ⁽¹⁾	5	%	6	%	6	%	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 Company did not have any customer that accounted for at least 10% of total net receivables as of October 29, 2017 or January 29, 2017.

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, Taiwan and Israel. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in China, Malaysia, Taiwan, Thailand, Korea and the Philippines. For the third quarter of fiscal years 2018 and 2017, respectively, approximately 21% and 24%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in China, and these percentages could be higher in future periods.

In the third quarter of fiscal year 2018, authorized distributors accounted for approximately 66% of the Company’s net sales compared to approximately 64% in the third quarter of fiscal year 2017. 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 third quarter of fiscal year 2018, the Company's two largest distributors were based in Asia.