Concentration of Risk and Segment Information

Geographic Information and Major Customers. The Company markets and sells flash memory products in the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers and subsidiaries. The Company’s Chief Operating Decision Maker, its President and Chief Executive Officer, evaluates performance of the Company and makes decisions regarding allocation of resources based on total Company results. Since the Company operates in one segment, all financial segment information can be found in the accompanying Consolidated Financial Statements.

Other than sales in the U.S., China and Taiwan, no individual country represented more than 10% of the Company’s revenue. Intercompany sales between geographic areas have been eliminated.

Revenue by geographic areas for fiscal years 2014, 2013 and 2012 were as follows (in thousands):



	Fiscal years ended
	December 28, 2014		December 29, 2013		December 30, 2012
United States	$	1,136,284	$	877,759	$	714,293
China	2,026,122		1,887,207		1,195,617
Taiwan	864,461		958,705		981,801
Other Asia-Pacific	1,464,720		1,363,927		1,290,291
Europe, Middle East and Africa	814,817		780,079		642,494
Other foreign countries	321,297		302,326		228,013
Total	$	6,627,701	$	6,170,003	$	5,052,509

Product revenue from customers is designated based on the geographic location to which the product is delivered. License and royalty revenue is attributed to countries based upon the location of the headquarters of the licensee.

Long-lived assets by geographic area were as follows (in thousands):



	December 28, 2014		December 29, 2013
United States	$	314,578	$	313,959
Japan	503,234		553,318
China	283,533		299,704
Other foreign countries	150,918		47,070
Total	$	1,252,263	$	1,214,051

Long-lived assets are attributed to the geographic location in which they are located. The Company includes in long-lived assets property and equipment, long-term equity investments in Flash Ventures and other equity investments, and attributes those investments to the location of the investee’s primary operations.

Customer and Supplier Concentrations. A limited number of customers or licensees have accounted for a substantial portion of the Company’s revenue. Revenue from the Company’s top 10 customers or licensees accounted for approximately 48%, 49% and 43% of the Company’s revenue for fiscal years 2014, 2013 and 2012, respectively. In fiscal years 2014, 2013 and 2012, Apple Inc. (“Apple”) accounted for 19%, 20% and 13% of the Company’s revenue, respectively.

All of the Company’s flash memory system products require silicon wafers for the memory and controller components. The Company’s memory wafers are currently supplied almost entirely from Flash Ventures and the controller wafers are all manufactured by third‑party subcontractors. The failure of any of these sources to deliver silicon wafers could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the employees of Toshiba Corporation (“Toshiba”) that produce Flash Ventures’ products are covered by collective bargaining agreements and any strike or other job action by those employees could interrupt the Company’s wafer supply from Toshiba’s Yokkaichi, Japan operations.

In addition, some key components are purchased from single source vendors for which alternative sources are currently not available. Shortages could occur in these essential materials due to an interruption of supply or increased demand in the industry. If the Company were unable to procure certain of such materials, it could reduce sales, which could have a material adverse effect upon its results of operations. The Company also relies on third‑party subcontractors to assemble and test a portion of its products. The Company does not have long-term contracts with some of these subcontractors and cannot directly control product delivery schedules or manufacturing processes. This could lead to product shortages or quality assurance problems that could increase the manufacturing costs of the Company’s products and have material adverse effects on the Company’s operating results.

Concentration of Credit Risk. The Company’s concentration of credit risk consists principally of cash, cash equivalents, short and long-term marketable securities and trade receivables. The Company’s investment policy restricts investments to high-credit quality investments and limits the amounts invested with any one issuer. The Company sells to Commercial and Retail customers in the Americas; Europe, Middle East and Africa (“EMEA”); and Asia-Pacific. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral. As of December 28, 2014 and December 29, 2013, the Company’s top 10 customers or licensees accounted for approximately 68% and 64% of the Company’s net accounts receivable, respectively. As of December 28, 2014, Apple and Best Buy Co., Inc. (“Best Buy”) accounted for 34% and 10% of the Company’s net accounts receivable, respectively. As of December 29, 2013, Apple and Best Buy accounted for 32% and 11% of the Company’s net accounts receivable, respectively.

Off-Balance Sheet Risk. The Company has off-balance sheet financial obligations. See Note 14, “Commitments, Contingencies and Guarantees.”