Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Investments and Fair Value Measurements [Abstract]

Investments and Fair Value Measurements

Note 2. Investments and Fair Value Measurements

Our cash, cash equivalents and investments are classified as follows (in thousands):

	March 31, 2013									December 31, 2012
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gain		(Loss)			Value		Cost		Gain		(Loss)			Value
Classified as:
Cash	$	25,789	$	—	$	—		$	25,789	$	26,250	$	—	$	—		$	26,250
Cash equivalents:
Money market fund		3		—		—			3		4,384		—		—			4,384
Total cash equivalents		3		—		—			3		4,384		—		—			4,384
Total cash and cash equivalents		25,792		—		—			25,792		30,634		—		—			30,634
Investments (available for sale):
Certificates of deposit		6,998		8		(7	)		6,999		6,638		9		(2	)		6,645
Corporate bonds		16,646		4		(71	)		16,579		12,872		7		(63	)		12,816
Total investments		23,644		12		(78	)		23,578		19,510		16		(65	)		19,461
Total cash, cash equivalents and investments	$	49,436	$	12	$	(78	)	$	49,370	$	50,144	$	16	$	(65	)	$	50,095
Contractual maturities on investments:
Due within 1 year	$	6,536						$	6,540	$	10,288						$	10,270
Due after 1 through 5 years		17,108							17,038		9,222							9,191
	$	23,644						$	23,578	$	19,510						$	19,461

We manage our investments as a single portfolio of highly marketable securities that is intended to be available to meet our current cash requirements. We have no investments in auction rate securities. There were no sales of available-for-sales securities and no realized gains and losses for the three months ended March 31, 2013 and 2012. The proceeds from maturities of available-for-sale securities were$8.1 million and $2.7 million for the three months ended March 31, 2013 and 2012, respectively.

The gross unrealized losses related to our portfolio of available-for-sale securities were primarily due to changes in interest rates and market and credit conditions of the underlying securities. We have determined that the gross unrealized losses on some of our available-for-sale securities as of March 31, 2013 are temporary in nature. We periodically review our investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary include the magnitude of the decline in market value, the length of time the market value has been below cost (or adjusted cost), credit quality, and our ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in market value.

The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2013 (in thousands):

	In Loss Position < 12 Months					In Loss Position > 12 Months				Total In Loss Position
	Fair Value		Gross Unrealized (Loss)			Fair Value		Gross Unrealized (Loss)		Fair Value		Gross Unrealized (Loss)
Investments:
Certificates of deposit	$	2,953	$	(7	)	$	—	$	—	$	2,953	$	(7	)
Corporate bonds		12,788		(71	)		—		—		12,788		(71	)
Total in loss position	$	15,741	$	(78	)	$	—	$	—	$	15,741	$	(78	)

The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2012 (in thousands):

	In Loss Position < 12 Months					In Loss Position > 12 Months					Total In Loss Position
	Fair Value		Gross Unrealized (Loss)			Fair Value		Gross Unrealized (Loss)			Fair Value		Gross Unrealized (Loss)
Investments:
Certificates of deposit	$	1,877	$	(1	)	$	199	$	(1	)	$	2,076	$	(2	)
Corporate bonds		6,446		(40	)		1,502		(23	)		7,948		(63	)
Total in loss position	$	8,323	$	(41	)	$	1,701	$	(24	)	$	10,024	$	(65	)

Investments in Privately-held Companies

We have made strategic investments in private companies located in China in order to gain access at a competitive cost to raw materials that are critical to our substrate business (see Note 6). The investment balances for all these companies, including minority investments in privately-held companies made indirectly through our consolidated joint ventures are accounted for under the equity method and are included in "other assets" in the condensed consolidated balance sheets and totaled $9.5 million and $9.4 million as of March 31, 2013 and December 31, 2012, respectively. We also maintain minority investments in other unconsolidated privately-held companies which are accounted for under the cost method as we do not have the ability to exercise significant influence over their operations. Our investments in these privately-held companies are reviewed for other than temporary declines in value on a quarterly basis. We monitor our investments for impairment and record reductions in carrying value when events or changes in circumstances indicate that the carrying value may not be recoverable. As of both March 31, 2013 and December 31, 2012, our investments in these unconsolidated privately-held companies had a carrying value of $392,000 and are also included in "other assets" in the condensed consolidated balance sheets.

Fair Value Measurements

ASC topic 820, Fair value measurement ("ASC 820") establishes three levels of inputs that may be used to measure fair value. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily-available pricing sources for comparable instruments. Level 3 instrument valuations are obtained from unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. As of March 31, 2013, we did not have any Level 3 assets or liabilities. On a recurring basis, we measure certain financial assets and liabilities at fair value, primarily consisting of our short-term and long-term investments.

The type of instrument valued based on quoted market prices in active markets include our money market funds, which are generally classified within Level 1 of the fair value hierarchy. We classify all of our available-for-sale securities including certificates of deposit and corporate bonds as having Level 2 inputs. The valuation techniques used to measure the fair value of these financial instruments having Level 2 inputs were derived from quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. There were no changes in valuation techniques or related inputs in the three months ended March 31, 2013. There have been no transfers between fair value measurement levels during the three months ended March 31, 2013.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 (in thousands):

	Balance as ofMarch 31, 2013		Quoted Prices inActive Markets ofIdentical Assets(Level 1)		Significant OtherObservableInputs(Level 2)
Assets:
Cash equivalents and investments:
Money market fund	$	3	$	3	$	—
Certificates of deposit		6,999		—		6,999
Corporate bonds		16,579		—		16,579
Total	$	23,581	$	3	$	23,578
Liabilities	$	—	$	—	$	—

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 (in thousands):

	Balance as ofDecember 31, 2012		Quoted Prices inActive Markets ofIdentical Assets(Level 1)		Significant OtherObservableInputs(Level 2)
Assets:
Cash equivalents and investments:
Money market fund	$	4,384	$	4,384	$	—
Certificates of deposit		6,645		—		6,645
Corporate bonds		12,816		—		12,816
Total	$	23,845	$	4,384	$	19,461
Liabilities	$	—	$	—	$	—

Items Measured at Fair Value on a Nonrecurring Basis

Certain assets that are subject to nonrecurring fair value measurements are not included in the table above. These assets include investments in privately-held companies accounted for by equity and cost method (See Note 6). We did not record other-than-temporary impairment charges for either of these investments during the three months ended March 31, 2013 or 2012.