10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

___________________________________________

FORM 10-Q

___________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number 001-33383

___________________________________________

Super Micro Computer, Inc.

(Exact name of Registrant as specified in its charter)

___________________________________________

Delaware	77-0353939
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

980 Rock Avenue

San Jose, CA 95131

(Address of principal executive offices)

(408) 503-8000

(Registrant’s telephone number, including area code)

___________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of January 28, 2014, there were 43,720,499 shares of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common or voting stock of the registrant issued.

SUPER MICRO COMPUTER, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2013

TABLE OF CONTENTS

		Page Number
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of December 31, 2013 and June 30, 2013	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2013 and 2012	2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended December 31, 2013 and 2012	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2013 and 2012	4
	Notes to Condensed Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risks	32
ITEM 4.	Controls and Procedures	33
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
ITEM 3.	Defaults upon Senior Securities	47
ITEM 4.	Mine Safety Disclosures	47
ITEM 5.	Other Information	47
ITEM 6.	Exhibits	48
	Signatures	49

PART I: FINANCIAL INFORMATION

Item 1.    

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

	December 31,			June 30,
	2013			2013
ASSETS
Current assets:
Cash and cash equivalents	$	89,883		$	93,038
Accounts receivable, net of allowances of $1,662 and $1,966 at December 31, 2013 and June 30, 2013, respectively (including amounts receivable from a related party of $417 and $974 at December 31, 2013 and June 30, 2013, respectively)	161,174			149,340
Inventory	290,927			254,170
Deferred income taxes-current	15,503			15,786
Prepaid income taxes	4,592			4,039
Prepaid expenses and other current assets	5,504			6,819
Total current assets	567,583			523,192
Long-term investments	2,637			2,637
Property, plant and equipment, net	128,072			95,912
Deferred income taxes-noncurrent	7,316			7,275
Other assets	3,123			3,241
Total assets	$	708,731		$	632,257
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable (including amounts due to a related party of $48,150 and $50,448 at December 31, 2013 and June 30, 2013, respectively)	$	205,758		$	172,855
Accrued liabilities	35,929			34,122
Income taxes payable	7,747			6,049
Short-term debt and current portion of long-term debt	37,208			28,638
Total current liabilities	286,642			241,664
Long-term debt-net of current portion	5,133			6,533
Other long-term liabilities	11,169			10,336
Total liabilities	302,944			258,533
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock and additional paid-in capital, $0.001 par value:
Authorized shares: 100,000,000
Issued shares: 43,588,516 and 42,744,500 at December 31, 2013 and June 30, 2013, respectively	168,755			157,712
Treasury stock (at cost), 445,028 shares at December 31, 2013 and June 30, 2013	(2,030		)	(2,030		)
Accumulated other comprehensive loss	(70		)	(69		)
Retained earnings	238,964			217,930
Total Super Micro Computer, Inc. stockholders' equity	405,619			373,543
Noncontrolling interest	168			181
Total stockholders' equity	405,787			373,724
Total liabilities and stockholders' equity	$	708,731		$	632,257

See accompanying notes to condensed consolidated financial statements.

1

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Net sales (including related party sales of $3,859 and $2,898 in the three months ended December 31, 2013 and 2012, respectively, and $7,387 and $5,791 in the six months ended December 31, 2013 and 2012, respectively)	$	356,362		$	291,487		$	665,378		$	562,194
Cost of sales (including related party purchases of $54,424 and $38,683 in the three months ended December 31, 2013 and 2012, respectively, and $99,741 and $87,940 in the six months ended December 31, 2013 and 2012, respectively)	301,270			251,365			563,494			487,057
Gross profit	55,092			40,122			101,884			75,137
Operating expenses:
Research and development	20,428			18,824			40,664			37,045
Sales and marketing	8,976			7,945			17,841			16,711
General and administrative	5,484			5,745			11,132			12,091
Total operating expenses	34,888			32,514			69,637			65,847
Income from operations	20,204			7,608			32,247			9,290
Interest and other income, net	46			7			63			22
Interest expense	(184		)	(152		)	(379		)	(307		)
Income before income tax provision	20,066			7,463			31,931			9,005
Income tax provision	6,731			2,549			10,897			3,192
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Net income per common share:
Basic	$	0.31		$	0.12		$	0.49		$	0.14
Diluted	$	0.30		$	0.11		$	0.47		$	0.13
Weighted-average shares used in calculation of net income per common share:
Basic	42,915			41,893			42,706			41,780
Diluted	45,039			43,431			45,052			43,819

See accompanying notes to condensed consolidated financial statements.

2

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended December 31,					Six Months Ended December 31,
	2013			2012		2013			2012
Net income	$	13,335		$	4,914	$	21,034		$	5,813
Other comprehensive income, net of tax:
Foreign currency translation gain (loss)	(5		)	4		(1		)	8
Unrealized gains on investments	—			16		—			16
Total other comprehensive income (loss)	(5		)	20		(1		)	24
Comprehensive income	$	13,330		$	4,934	$	21,033		$	5,837

See accompanying notes to condensed consolidated financial statements.

3

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended December 31,
	2013			2012
OPERATING ACTIVITIES:
Net income	$	21,034		$	5,813
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	2,920			3,974
Stock-based compensation expense	5,377			5,812
Excess tax benefits from stock-based compensation	(1,084		)	(785		)
Allowance for doubtful accounts	1,076			75
Provision for inventory	1,538			6,313
Deferred income taxes	242			(3,982		)
Exchange loss (gain)	(115		)	278
Changes in operating assets and liabilities:
Accounts receivable, net (including changes in related party balances of $557 and $418 during the six months ended December 31, 2013 and 2012, respectively)	(12,910		)	(16,973		)
Inventory	(38,295		)	26,689
Prepaid expenses and other assets	1,428			699
Accounts payable (including changes in related party balances of $(2,298) and $(14,267) during the six months ended December 31, 2013 and 2012, respectively)	31,950			(25,094		)
Income taxes payable, net	2,677			679
Accrued liabilities	1,760			2,203
Other long-term liabilities	797			(98		)
Net cash provided by operating activities	18,395			5,603
INVESTING ACTIVITIES:
Restricted cash	(8		)	(12		)
Proceeds from investments	—			300
Purchases of property, plant and equipment	(33,956		)	(2,790		)
Net cash used in investing activities	(33,964		)	(2,502		)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	4,785			780
Minimum tax withholding paid on behalf of an officer for restricted stock awards	(651		)	(1,022		)
Excess tax benefits from stock-based compensation	1,084			785
Proceeds from debt	8,576			20,641
Repayment of debt	(1,400		)	(16,673		)
Payment of obligations under capital leases	(15		)	(18		)
Advances (payments) under receivable financing arrangements	41			(584		)
Contributions from noncontrolling interests	—			168
Net cash provided by financing activities	12,420			4,077
Effect of exchange rate fluctuations on cash	(6		)	394
Net increase (decrease) in cash and cash equivalents	(3,155		)	7,572
Cash and cash equivalents at beginning of period	93,038			80,826
Cash and cash equivalents at end of period	$	89,883		$	88,398
Supplemental disclosure of cash flow information:
Cash paid for interest	$	378		$	409
Cash paid for taxes, net of refunds	$	6,840		$	6,448
Non-cash investing and financing activities:
Accrued costs for property, plant and equipment purchases	$	2,891		$	1,080

See accompanying notes to condensed consolidated financial statements.

4

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.        Summary of Significant Accounting Policies

Organization

Super Micro Computer, Inc. (“Super Micro Computer”) was incorporated in 1993. Super Micro Computer is a global leader in server technology and green computing innovation. Super Micro Computer develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. Super Micro Computer has operations primarily in San Jose, California, the Netherlands, Taiwan and China.

Basis of Presentation

The condensed consolidated financial statements reflect the condensed consolidated balance sheets, results of operations, comprehensive income and cash flows of Super Micro Computer, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly-owned subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2013 included in its Annual Report on Form 10-K, as filed with the SEC (the “Annual Report”).

The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The condensed consolidated results of operations for the three and six months ended December 31, 2013 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2014.

As of December 31, 2013, the Company contributed $168,000 and owned a 50% interest in Super Micro Business Park, Inc. ("Management Company") in Taiwan. The Management Company was established to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. The Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. Therefore, the accounts of the Management Company have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations. In the three and six months ended December 31, 2012, $2,000 and $0, respectively, of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations.

Fair Value of Financial Instruments

The Company accounts for certain assets and liabilities at fair value. Accounts receivable and accounts payable are carried at cost, which approximates fair value due to the short maturity of these instruments. Cash equivalents and long-term investments are carried at fair value. Short-term and long-term debt is carried at amortized cost, which approximates its fair value based on borrowing rates currently available to the Company for loans with similar terms. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

5

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

• Level 2 - Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

• Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Net Income Per Common Share

The Company’s restricted share awards subject to repurchase and settled in shares of common stock upon vesting have the nonforfeitable right to receive dividends on an equal basis with common stock and therefore are considered participating securities that must be included in the calculation of net income per share using the two-class method. Under the two-class method, basic and diluted net income per common share is determined by calculating net income per share for common stock and participating securities based on participation rights in undistributed earnings. Diluted net income per common share also considers the dilutive effect of in-the-money stock options, calculated using the treasury stock method. Under the treasury stock method, the amount of assumed proceeds from unexercised stock options includes the amount of compensation cost attributable to future services not yet recognized, assumed proceeds from the exercise of the options, and the incremental income tax benefit or liability as if the options were exercised during the period.

Adoption of New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued authoritative guidance associated with reporting of amounts reclassified out of accumulated other comprehensive income, which requires companies to present significant reclassifications out of accumulated other comprehensive income in their entirety in the statement of operations or in a separate footnote to the financial statements. For amounts that are not required to be reclassified in their entirety to net income, the standard requires companies to cross-reference to related footnoted disclosures. The new disclosure requirements are effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2012 and early adoption is permitted. The adoption of this guidance did not have a material impact on the Company's financial statement disclosures, results of operations or financial position.

In July 2013, the FASB issued authoritative guidance associated with the presentation of unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. It requires a liability related to unrecognized tax benefit to offset a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if a settlement is required or expected in the event the uncertain tax position is disallowed. The Company currently plans to adopt the new disclosure requirement on July 1, 2014. The Company does not believe the adoption of this guidance will have a material impact on its financial statement disclosures, results of operations or financial position.

Note 2.        Stock-based Compensation and Stockholders’ Equity

Equity Incentive Plan

In January 2011, the Board of Directors approved an amendment to the 2006 Equity Incentive Plan (the “2006 Plan”) that increased by 2,000,000 the aggregate maximum number of shares that may be issued under the 2006 Plan. The amendment to the 2006 Plan was approved by the Company’s stockholders in February 2011. The authorized number of shares that may be issued under the 2006 Plan automatically increases on July 1 each year through 2016, by an amount equal to (a) 3.0% of shares of stock issued and outstanding on the immediately preceding June 30, or (b) a lesser amount determined by the Board of Directors. The exercise price per share for incentive stock options granted to employees owning shares representing more than 10% of the Company at the time of grant cannot be less than 110% of the fair value. Nonqualified stock options and incentive stock options granted to all other persons shall be granted at a price not less than 100% of the fair value. Options generally expire ten years after the date of grant and options vest over four years; 25% at the end of one year and one sixteenth per quarter thereafter. As of December 31, 2013, the Company had 1,115,296 authorized shares available for future issuance under all of its equity incentive plans.

6

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Restricted Stock Awards

Restricted stock awards are share awards that provide the rights to a set number of shares of the Company’s stock on the grant date. In August 2008, the Compensation Committee of the Board of Directors of the Company (the “Committee”) approved the terms of an agreement (the “Option Exercise Agreement”) with Charles Liang, a director and President and Chief Executive Officer of the Company, pursuant to which Mr. Liang exercised a fully vested option previously granted to him for the purchase of 925,000 shares. The option was exercised using a “net-exercise” procedure in which he was issued a number of shares representing the spread between the option exercise price and the then current market value of the shares subject to the option (898,205 shares based upon the market value as of the date of exercise). The shares issued upon exercise of the option are subject to vesting over five years. Vesting of the shares subject to the award may accelerate in certain circumstances pursuant to the terms of the Option Exercise Agreement. The Company determined that there was no incremental fair value of the option exchanged for the award. 898,205 and 718,564 shares were vested as of December 31, 2013 and June 30, 2013, respectively.

Determining Fair Value

Valuation and amortization method—The Company estimates the fair value of stock options granted using the Black-Scholes-option-pricing formula and a single option award approach. This fair value is then amortized ratably over the requisite service periods of the awards, which is generally the vesting period.

Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on an analysis of the relevant peer companies’ post-vest termination rates and the exercise factors for the stock options granted prior to June 30, 2011. For stock options granted after June 30, 2011, the expected term is based on a combination of the Company's peer group and the Company's historical experience.

Expected Volatility—Expected volatility is based on a combination of the the Company's implied and historical volatility.

Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input and the Company has no plans to pay dividends.

Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes valuation method is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

Estimated Forfeitures—The estimated forfeiture rate is based on the Company’s historical forfeiture rates and the estimate is revised in subsequent periods if actual forfeitures differ from the estimate.

The fair value of stock option grants for the three and six months ended December 31, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Risk-free interest rate	1.53		%	0.81		%	1.53% - 1.54%			0.65% - 0.81%
Expected life	5.50 years			5.11 years			5.49 - 5.50 years			5.03 - 5.11 years
Dividend yield	—		%	—		%	—		%	—		%
Volatility	50.07		%	51.57		%	50.05% - 50.07%			51.29% - 51.57%
Weighted-average fair value	$	6.63		$	4.17		$	6.24		$	4.91

7

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Cost of sales	$	245		$	224		$	480		$	464
Research and development	1,709			1,632			3,270			3,262
Sales and marketing	305			389			619			793
General and administrative	529			664			1,008			1,293
Stock-based compensation expense before taxes	2,788			2,909			5,377			5,812
Income tax impact	(381		)	(181		)	(669		)	(409		)
Stock-based compensation expense, net	$	2,407		$	2,728		$	4,708		$	5,403

The cash flows resulting from the tax benefits for tax deductions resulting from the exercise of stock options in excess of the compensation expense recorded for those options (excess tax benefits) issued or modified since July 1, 2006 are classified as cash from financing activities. Excess tax benefits for stock options issued prior to July 1, 2006 are classified as cash from operating activities. The Company had $1,532,000 and $1,494,000 of excess tax benefits accounted in the Company’s additional paid-in capital in the six months ended December 31, 2013 and 2012, respectively. The Company had excess tax benefits that are classified as cash from financing activities of $1,084,000 and $785,000 in the six months ended December 31, 2013 and 2012, respectively, for options issued since July 1, 2006. Excess tax benefits for stock options issued prior to July 1, 2006 continue to be classified as cash from operating activities.

Stock Option Activity

The following table summarizes stock option activity during the six months ended December 31, 2013 under all stock option plans:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at July 1, 2013	12,206,178		$	10.83	6.23	$	22,631
Granted	945,620		13.40
Exercised	(714,375	)	6.70
Forfeited or cancelled	(155,947	)	13.94
Outstanding at December 31, 2013	12,281,476		11.23		6.12	74,943
Options vested and expected to vest at December 31, 2013	12,009,051		11.19		6.05	73,834
Options vested and exercisable at December 31, 2013	8,880,986		$	10.28	5.14	$	62,395

The total pretax intrinsic value of options exercised was $3,234,000 and $5,215,000 for the three and six months ended December 31, 2013, respectively, and $2,190,000 and $3,068,000 for the three and six months ended December 31, 2012, respectively. As of December 31, 2013, the Company’s total unrecognized compensation cost related to non-vested stock-based awards granted since July 1, 2006 to employees and non-employee directors was $18,757,000, which will be recognized over a weighted-average vesting period of approximately 2.39 years.

8

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Restricted Stock Award Activity

The following table summarizes the Company’s restricted stock award activity for the six months ended December 31, 2013:

	Restricted Stock Awards
	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested stock at July 1, 2013	179,641		$	10.66
Granted	3,500		14.23
Vested	(179,641	)	10.66
Forfeited	—		—
Nonvested stock at December 31, 2013	3,500		$	14.23

The total pretax intrinsic value of restricted stock awards vested was $0 and $2,337,000 for the three and six months ended December 31, 2013, respectively, and $0 and $2,190,000 for the three and six months ended December 31, 2012, respectively. In the six months ended December 31, 2013 and 2012, upon vesting, 179,641 shares of restricted stock awards were partially net share-settled such that the Company withheld 50,000 and 83,857 shares, respectively, with value equivalent to an officer's minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were based on the value of the restricted stock awards on the vesting date as determined by the Company’s closing stock price. Total payments for an officer's tax obligations to the taxing authorities were $651,000 and $1,022,000 in the six months ended December 31, 2013 and 2012, respectively, and are reflected as a financing activity within the condensed consolidated statements of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company. The total intrinsic value of the outstanding restricted stock awards was $60,000 as of December 31, 2013.

9

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Note 3.        Net Income Per Common Share

The computation of basic and diluted net income per common share using the two-class method is as follows (in thousands, except per share amounts):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Basic net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(28		)	(33		)
Net income attributable to common shares—basic	$	13,334		$	4,893		$	21,006		$	5,780
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Basic net income per common share	$	0.31		$	0.12		$	0.49		$	0.14
Diluted net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(26		)	(31		)
Net income attributable to common shares—diluted	$	13,334		$	4,893		$	21,008		$	5,782
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Dilutive effect of options to purchase common stock	2,124			1,538			2,346			2,039
Weighted-average number of common shares used to compute diluted net income per common share	45,039			43,431			45,052			43,819
Diluted net income per common share	$	0.30		$	0.11		$	0.47		$	0.13

For the three and six months ended December 31, 2013 and 2012, the Company had stock options outstanding that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net income per share in the periods presented, as their effect would have been anti-dilutive. The shares of common stock issuable upon exercise of such anti-dilutive outstanding stock options were 6,288,000 and 5,461,000 for the three and six months ended December 31, 2013, respectively, and 7,293,000 and 5,842,000 for the three and six months ended December 31, 2012, respectively.

Note 4.         Balance Sheet Components (in thousands)        

The following tables provide details of the selected balance sheet items (in thousands):

Inventory:

	December 31,		June 30,
	2013		2013
Finished goods	$	215,857	$	185,459
Work in process	22,856		10,440
Purchased parts and raw materials	52,214		58,271
Total inventory	$	290,927	$	254,170

The Company recorded a provision for lower of costs or market and excess and obsolete inventory totaling $1,534,000 and $1,538,000 in the three and six months ended December 31, 2013, respectively, and $3,403,000 and $6,313,000 in the three and six months ended December 31, 2012, respectively.

10

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Property, Plant, and Equipment:

	December 31,			June 30,
	2013			2013
Land	$	63,952		$	41,774
Buildings	51,959			43,979
Building and leasehold improvements	7,547			7,483
Machinery and equipment	31,315			26,941
Furniture and fixtures	4,852			4,731
Purchased software	5,507			5,380
	165,132			130,288
Accumulated depreciation and amortization	(37,060		)	(34,376		)
Property, plant and equipment, net	$	128,072		$	95,912

On October 31, 2013, the Company completed the purchase of real property for $30,158,000. The property consists of approximately 324,000 square feet of building space on 36 acres of land. The purchase values allocated to the land and building were $22,178,000 and $7,980,000, respectively.

Other Assets:

	December 31,		June 30,
	2013		2013
Prepaid royalty license	$	1,371	$	1,496
Restricted cash	855		847
Investment in a privately held company	750		750
Others	147		148
Total other assets	$	3,123	$	3,241

Restricted cash consists primarily of certificates of deposits pledged as security for one irrevocable letter of credit required in connection with a warehouse lease in Fremont, California, certificates of deposits pledged as security for value added tax examination required by tax authority of Taiwan and bank guarantees in connection with office leases in the Netherlands.

Accrued Liabilities:

	December 31,		June 30,
	2013		2013
Accrued payroll and related expenses	$	12,834	$	12,084
Customer prepayments	4,614		4,134
Accrued warranty costs	6,822		6,472
Accrued cooperative marketing expenses	3,952		4,016
Others	7,707		7,416
Total accrued liabilities	$	35,929	$	34,122

11

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Product Warranties:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Balance, beginning of period	$	6,600		$	5,964		$	6,472		$	5,522
Provision for warranty	3,507			3,384			6,941			6,492
Costs charged to accrual	(3,313		)	(3,153		)	(6,664		)	(6,057		)
Change in estimated liability for pre-existing warranties	28			32			73			270
Balance, end of period	$	6,822		$	6,227		$	6,822		$	6,227

Note 5.        Long-term Investments

As of December 31, 2013 and June 30, 2013, the Company held $2,637,000 of auction-rate securities (“auction rate securities”), net of unrealized losses, representing its interest in auction rate preferred shares in a closed end mutual fund invested in municipal securities; such auction rate securities were rated AAA or AA2 at December 31, 2013 and June 30, 2013. These auction rate preferred shares have no stated maturity date.

During February 2008, the auctions for these auction rate securities began to fail to obtain sufficient bids to establish a clearing rate and the securities were not saleable in the auction, thereby losing the short-term liquidity previously provided by the auction process. As a result, as of December 31, 2013 and June 30, 2013, $2,637,000 of these auction rate securities have been classified as long-term available-for-sale investments.

The Company has used a discounted cash flow model to estimate the fair value of the auction rate securities as of December 31, 2013 and June 30, 2013. The material factors used in preparing the discounted cash flow model are i) the discount rate utilized to present value the cash flows, ii) the time period until redemption and iii) the estimated rate of return. As of December 31, 2013, the discount rate, the time period until redemption and the estimated rate of return were 1.51%, 3 years and 0.26%, respectively. Management derives the estimates by obtaining input from market data on the applicable discount rate, estimated time to redemption and estimated rate of return. The changes in fair value have been primarily due to changes in the estimated rate of return and a change in the estimated redemption period. The fair value of the Company's investment portfolio may change between 1% to 3% by increasing or decreasing the rate of return used by 1% or by increasing or decreasing the term used by 1 year. Changes in these estimates or in the market conditions for these investments are likely in the future based upon the then current market conditions for these investments and may affect the fair value of these investments. On a quarterly basis, the Company reviews the inputs to assess their continued appropriateness and consistency. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the auction rate securities. Movement of these inputs would not significantly impact the fair value of the auction rate securities.

Based on this assessment of fair value, the Company determined there were no changes in fair value of its auction rate securities during the three and six months ended December 31, 2013. There was a recovery in fair value of $27,000 during the three and six months ended December 31, 2012. There was a cumulative total decline in fair value of $113,000 as of December 31, 2013 and June 30, 2013. That amount has been recorded as a component of other comprehensive income. As of December 31, 2013 and June 30, 2013, the Company has recorded an accumulated unrealized loss of $68,000, net of deferred income taxes, on long-term auction rate securities. The Company deems this loss to be temporary as it will not likely be required to sell the securities before their anticipated recovery and the Company has the intent and financial ability to hold these investments until recovery of cost.

Although the investment impairment is considered to be temporary, these investments are not currently liquid and in the event the Company needs to access these funds, the Company will not be able to do so without a loss of principal. The Company plans to continue to monitor the liquidity situation in the marketplace and the creditworthiness of its holdings and will perform periodic impairment analysis. During the three and six months ended December 31, 2013, there were no auction rate securities redeemed or sold. During the three and six months ended December 31, 2012, $300,000 of the auction rate securities were redeemed at par.

12

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Note 6.        Fair Value Disclosure

The financial assets of the Company measured at fair value on a recurring basis are included in cash equivalents and long-term investments. The Company’s money market funds are classified within Level 1 of the fair value hierarchy which is based on quoted market prices for the identical underlying securities in active markets. The Company’s long-term auction rate securities investments are classified within Level 3 of the fair value hierarchy which did not have observable inputs for its auction rate securities as of December 31, 2013 and June 30, 2013. Refer to Note 1 of Notes to Condensed Consolidated Financial Statements for a discussion of the Company’s policies regarding the fair value hierarchy. The Company’s methodology for valuing these investments is the discounted cash flow model and is described in Note 5 of Notes to Condensed Consolidated Financial Statements.

The following table sets forth the Company’s cash equivalents and long-term investments as of December 31, 2013 and June 30, 2013 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement, (in thousands):

December 31, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947
June 30, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947

The above table excludes $89,337,000 and $92,495,000 of cash and $1,150,000 and $1,139,000 of certificates of deposit held by the Company as of December 31, 2013 and June 30, 2013, respectively. There were no transfers between Level 1, Level 2 or Level 3 securities in the three and six months ended December 31, 2013 and 2012.

The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of long-term auction rate securities, using significant unobservable inputs (Level 3) for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,					Six Months Ended December 31,
	2013		2012			2013		2012
Balance as of beginning of period	$	2,637	$	2,923		$	2,637	$	2,923
Total realized gains or (losses) included in net income	—		—			—		—
Total unrealized gains or (losses) included in other comprehensive income	—		27			—		27
Sales and settlements at par	—		(300		)	—		(300		)
Transfers in and/or out of Level 3	—		—			—		—
Balance as of end of period	$	2,637	$	2,650		$	2,637	$	2,650

13

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following is a summary of the Company’s long-term investments as of December 31, 2013 and June 30, 2013 (in thousands):

	December 31, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637
	June 30, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637

The Company measures the fair value of outstanding debt for disclosure purposes on a recurring basis. As of December 31, 2013 and June 30, 2013, short-term and long-term debt of $42,341,000 and $35,171,000, respectively, are reported at amortized cost. This outstanding debt is classified at Level 2 as they are not actively traded and are valued using a discounted cash flow model that uses observable market inputs. Based on the discounted cash flow model, the fair value of the outstanding debt approximates amortized cost. 

Note 7.        Short-term and Long-term Obligations

Short-term and long-term obligations as of December 31, 2013 and June 30, 2013 consisted of the following (in thousands):

	December 31,			June 30,
	2013			2013
Lines of credit:
Bank of America	$	10,899		$	10,899
CTBC Bank	3,520			—
Total line of credit	14,419			10,899
Building term loans:
Bank of America	7,933			9,333
CTBC Bank	19,989			14,939
Total building term loans	27,922			24,272
Total debt	42,341			35,171
Current portion	(37,208		)	(28,638		)
Long-term portion	$	5,133		$	6,533

Activities under Revolving Lines of Credit and Term Loans

Bank of America

In October 2011, the Company entered into an amendment to the existing credit agreement with Bank of America, N.A. ("Bank of America") which provided for (i) a $40,000,000 revolving line of credit facility that matured on June 15, 2013 and (ii) a five-year $14,000,000 term loan facility. The term loan is secured by three buildings located in San Jose, California and the principal and interest are payable monthly through September 30, 2016 with an interest rate at the LIBOR rate plus 1.50% per annum. The credit agreement was subsequently amended to extend the maturity date of the revolving line of credit facility to August 15, 2014.

14

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The line of credit facility provides for borrowings denominated both in U.S. dollars and in Taiwanese dollars. For borrowings denominated in U.S. dollars, the interest rate for the revolving line of credit is at the LIBOR rate plus 1.25% per annum. The LIBOR rate was 0.17% at December 31, 2013. For borrowings denominated in Taiwanese dollars, the interest rate is equal to the lender's established interest rate which is adjusted monthly.

As of December 31, 2013 and June 30, 2013, the total outstanding borrowings under the Bank of America term loan was $7,933,000 and $9,333,000, respectively. The total outstanding borrowings under the Bank of America line of credit was $10,899,000 as of December 31, 2013 and June 30, 2013, respectively. The interest rates for these loans ranged from 1.20% to 1.67% per annum at December 31, 2013 and 1.23% to 1.69% per annum at June 30, 2013, respectively. As of December 31, 2013, the unused revolving line of credit with Bank of America was $29,101,000.

CTBC Bank

In October 2011, the Company obtained an unsecured revolving line of credit from CTBC Bank Co., Ltd ("CTBC Bank", formerly, China Trust Bank) totaling NT$300,000,000 Taiwanese dollars, or $9,898,000 U.S. dollar equivalents. In July 2012, the Company increased the credit facility to NT$450,000,000 Taiwanese dollars or $14,912,000 U.S. dollar equivalents. The term loan was secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender’s established interest rate plus 0.30% which was adjusted monthly.

In November 2013, the Company entered into an amendment to the existing credit agreement with CTBC Bank to increase the credit facility amount and extend the maturity date to November 30, 2014. The amendment provides for (i) a 13-month NT$700,000,000 Taiwanese dollars or $23,787,000 U.S. dollar equivalents term loan secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established New Taiwan Dollar ("NTD") interest rate plus 0.25% per annum which is adjusted monthly and (ii) a 13-month unsecured term loan up to NT$100,000,000 Taiwanese dollars or $3,398,000 U.S. dollar equivalents and a 13-month revolving line of credit up to 80% of eligible accounts receivable in an aggregate amount of up to NT$500,000,000 Taiwanese dollars or $16,991,000 U.S. dollar equivalents with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum or lender's established USD interest rate plus 0.30% per annum which is adjusted monthly. The total borrowings allowed under the credit agreement is capped at NT$1,000,000,000 Taiwanese dollars or $33,981,000 U.S. dollar equivalents.

The total outstanding borrowings under the CTBC Bank term loan was denominated in Taiwanese dollars and was translated into U.S. dollars of $19,989,000 and $14,939,000 at December 31, 2013 and June 30, 2013, respectively. The total outstanding borrowings under the CTBC Bank revolving line of credit was $3,520,000 and $0 at December 31, 2013 and June 30, 2013, respectively. The interest rates for these loans ranged from 1.11% to 1.74% per annum at December 31, 2013 and was at 1.20% per annum at June 30, 2013. At December 31, 2013, NT$294,340,000 Taiwanese dollars or $9,806,000 U.S. dollar equivalents were available for future borrowing under this credit agreement.

Covenant Compliance

The credit agreement with Bank of America contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The credit agreement contains certain financial covenants, including the following:

• Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods;

• The Company’s funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA) shall not be greater than 2.00;

• The Company’s unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value of not less than $30,000,000, measured as of the last day of each fiscal quarter and the last day of each fiscal year.

As of December 31, 2013 and June 30, 2013, total assets of $663,476,000 and $586,742,000, respectively collateralized the line of credit with Bank of America and were all of the assets of the Company except for the three buildings located in San Jose, California and the land and building located in Bade, Taiwan. As of December 31, 2013 and June 30,

15

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

2013, total assets collateralizing the term loan with Bank of America were $17,699,000 and $17,813,000, respectively. As of December 31, 2013, the Company was in compliance with all financial covenants associated with the credit agreement with Bank of America.

As of December 31, 2013 and June 30, 2013, the net book value of land and building located in Bade, Taiwan collateralizing the term loan with CTBC Bank was $27,556,000 and $27,702,000, respectively. There are no financial covenants associated with the term loan with CTBC Bank at December 31, 2013.

Note 8.        Related-party and Other Transactions

Ablecom Technology Inc.—Ablecom, a Taiwan corporation, together with one of its subsidiaries, Compuware (collectively “Ablecom”), is one of the Company’s major contract manufacturers. Ablecom’s ownership of Compuware is below 50% but Compuware remains a related party as Ablecom still has significant influence over the operations. Ablecom’s chief executive officer, Steve Liang, is the brother of Charles Liang, the Company’s President, Chief Executive Officer and Chairman of the Board of Directors. Ablecom owns approximately 1.1% of the Company’s common stock. Charles Liang and his wife, also an officer of the Company, collectively own approximately 10.5% of Ablecom, while Steve Liang and other family members own approximately 35.9% of Ablecom at December 31, 2013.

The Company has product design and manufacturing services agreements (“product design and manufacturing agreements”) and a distribution agreement (“distribution agreement”) with Ablecom.

Under the product design and manufacturing agreements, the Company outsources a portion of its design activities and a significant part of its manufacturing of components such as server chassis to Ablecom. Ablecom agrees to design products according to the Company’s specifications. Additionally, Ablecom agrees to build the tools needed to manufacture the products. The Company has agreed to pay for Ablecom's cost of chassis and related product tooling and engineering services and will pay for those items when the work has been completed.

Under the distribution agreement, Ablecom purchases server products from the Company for distribution in Taiwan. The Company believes that the pricing and terms under the distribution agreement are similar to the pricing and terms of distribution arrangements the Company has with similar, third party distributors.

Ablecom’s net sales to the Company and its net sales of the Company’s products to others comprise a substantial majority of Ablecom’s net sales. The Company purchased products from Ablecom totaling $54,424,000 and $99,741,000 and sold products to Ablecom totaling $3,859,000 and $7,387,000 for the three and six months ended December 31, 2013, respectively. The Company purchased products from Ablecom totaling $38,683,000 and $87,940,000 and sold products to Ablecom totaling $2,898,000 and $5,791,000 for the three and six months ended December 31, 2012, respectively.

Amounts owed to the Company by Ablecom as of December 31, 2013 and June 30, 2013, were $417,000 and $974,000, respectively. Amounts owed to Ablecom by the Company as of December 31, 2013 and June 30, 2013, were $48,150,000 and $50,448,000, respectively. For the three and six months ended December 31, 2013, the Company paid Ablecom the majority of invoiced dollars between 55 and 93 days of invoice. For the three and six months ended December 31, 2013, the Company paid $1,460,000 and $3,736,000, respectively, for tooling assets and miscellaneous costs to Ablecom. For the three and six months ended December 31, 2012, the Company paid $1,483,000 and $2,867,000, respectively, for tooling assets and miscellaneous costs to Ablecom.

The Company’s exposure to loss as a result of its involvement with Ablecom is limited to (a) potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products and (b) potential losses on outstanding accounts receivable from Ablecom in the event of an unforeseen deterioration in the financial condition of Ablecom such that Ablecom defaults on its payable to the Company. Outstanding purchase orders with Ablecom were $63,352,000 and $53,684,000 at December 31, 2013 and June 30, 2013, respectively, representing the maximum exposure to loss relating to (a) above. The Company does not have any direct or indirect guarantees of losses of Ablecom.

In May 2012, the Company and Ablecom jointly established Super Micro Business Park, Inc. ("Management Company") in Taiwan to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. Each company contributed $168,000 and own 50% of the Management Company. Although the

16

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

operations of the Management Company are independent of the Company, through governance rights, the Company has the ability to direct the Management Company's business strategies. Therefore, the Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. The accounts of the Management Company are consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for the Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations. In the three and six months ended December 31, 2012, $2,000 and $0, respectively, of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations.

Note 9.        Income Taxes

The Company recorded provisions for income taxes of $6,731,000 and $10,897,000 for the three and six months ended December 31, 2013, respectively, and $2,549,000 and $3,192,000 for the three and six months ended December 31, 2012. The effective tax rate was 33.5% and 34.1% for the three and six months ended December 31, 2013, respectively, and 34.2% and 35.4% for the three and six months ended December 31, 2012, respectively. The effective tax rates for the three and six months ended December 31, 2013 are estimated to be lower than the federal statutory rate primarily due to the Company's release of unrecognized tax benefit as a result of audit settlements in the U.S. and foreign jurisdictions and the benefit from U.S. federal and state research and development tax credits in part offset by an increase in stock option expenses.

As of December 31, 2013, the Company had a liability for gross unrecognized tax benefits of $9,194,000, substantially all of which, if recognized, would affect the Company's effective tax rate. During the three and six months ended December 31, 2013, there were no material changes in the total amount of the liability for gross unrecognized tax benefits.   

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes on the condensed consolidated statements of operations. As of December 31, 2013, the Company had accrued $851,000 of interest and penalties relating to unrecognized tax benefits.

The Company is subject to U.S. federal income tax as well as income taxes in many state and foreign jurisdictions. The statutes of limitation in federal jurisdiction remain open in general for tax years 2010 through 2013. The state jurisdictions remain open in general for tax years 2008 through 2013. The Company's tax returns for its most significant foreign jurisdictions remain open for examination in general for tax years 2006 through 2013. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months.      

Note 10.        Commitments and Contingencies

Litigation and Claims — The Company is involved in various legal proceedings arising from the normal course of business activities. The Company defends itself vigorously against any such claims. In management’s opinion, the resolution of any matters will not have a material adverse effect on the Company’s condensed consolidated financial condition, results of operations or liquidity.

Purchase Commitments — The Company has agreements to purchase certain units of inventory and non-inventory items through fiscal year 2016. As of December 31, 2013, these remaining non-cancellable commitments were $257,728,000.

Included in the above non-cancellable commitments are hard disk drive purchase commitments totaling approximately $89,819,000, which will be paid through December 2014. The Company entered into purchase agreements with selected suppliers of hard disk drives in order to ensure continuity of supply for these components. The agreements provide for some variation in the amount of units the Company is required to purchase and the suppliers may modify the purchase price for these components due to significant changes in market or component supply conditions. Product mix for these components may be negotiated quarterly and the purchase price for these components will be reviewed quarterly with the suppliers. The Company has been negotiating the purchase price with the suppliers on an ongoing basis based upon market rates.

17

SUPER MICRO COMPUTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Note 11.        Segment Reporting

The Company operates in one operating segment that develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. The Company’s chief operating decision maker is the Chief Executive Officer.

International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and six months ended December 31, 2013 and 2012, of net sales by geographic region (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2013		2012		2013		2012
Net sales:
United States	$	179,571	$	156,533	$	354,785	$	291,359
Europe	84,977		66,874		156,162		130,323
Asia	82,211		60,413		137,183		125,097
Other	9,603		7,667		17,248		15,415
	$	356,362	$	291,487	$	665,378	$	562,194

The following is a summary of long-lived assets, excluding financial instruments, deferred tax assets and other assets (in thousands):

	December 31,		June 30,
	2013		2013
Long-lived assets:
United States	$	91,497	$	61,976
Asia	36,193		33,500
Europe	382		436
	$	128,072	$	95,912

The following is a summary of net sales by product type (in thousands):

	Three Months Ended December 31,								Six Months Ended December 31,
	2013				2012				2013				2012
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales
Server systems	$	174,072	48.8	%	$	126,117	43.3	%	$	317,355	47.7	%	$	232,966	41.4	%
Subsystems and accessories	182,290		51.2	%	165,370		56.7	%	348,023		52.3	%	329,228		58.6	%
Total	$	356,362	100.0	%	$	291,487	100.0	%	$	665,378	100.0	%	$	562,194	100.0	%

Subsystems and accessories are comprised of serverboards, chassis and accessories. Server systems constitute an assembly of subsystems and accessories done by the Company. No customer represented greater than 10% of the Company’s total net sales nor did net sales in any country other than the United States represent greater than 10% of the Company’s total net sales in the three and six months ended December 31, 2013 and 2012. No customer accounted for 10% or more of accounts receivable as of December 31, 2013. One customer accounted for 14.4% of the Company's accounts receivable as of June 30, 2013.

18

Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations

This section and other parts of this Form 10-Q contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including “would,” “could,” “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of these terms or other comparable terminology. In evaluating these statements, you should specifically consider various factors, including the risks described under “Risk Factors” below and in other parts of this Form 10-Q as well as in our other filings with the SEC. These factors may cause our actual results to differ materially from those anticipated or implied in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We cannot guarantee future results, levels of activity, performance or achievements.

Overview

We are a global leader in high-performance, high-efficiency server technology and green computing innovation. We develop and provide advanced server Building Block Solutions to Data Center, Cloud Computing, Enterprise, Hadoop/Big Data, High Performance Computing, or HPC, and Embedded markets. Our solutions range from complete server, storage, blade, workstation and full rack solutions to networking devices and server management software, which can be used by distributors, original equipment manufacturers, or OEMs, and end customers. Net sales of optimized servers were $174.1 million and $317.4 million for the three and six months ended December 31, 2013, respectively, and $126.1 million and $233.0 million for the three and six months ended December 31, 2012, respectively, reflecting our traditionally seasonally strong fiscal second quarter. Net sales of subsystems and accessories were $182.3 million and $348.0 million for the three and six months ended December 31, 2013, respectively, and $165.4 million and $329.2 million for the three and six months endedDecember 31, 2012, respectively. The increase in our net sales in the three and six months ended December 31, 2013 compared with the three and six months ended December 31, 2012 was primarily due to increased sales in server systems including our innovative products such as the Twin family of servers, especially the FatTwin, storage, GPU/Xeon Phi servers and Rack solutions. Our continued focus on offering complete server systems has shown strong progress. More partners, from both channel and direct, are moving toward purchasing complete systems from us because of our higher product quality, better time to market, optimized product performance and power efficiency and available global logistics support. In addition, our new products including servers based on Intel's Ivy Bridge processor, which was launched in September 2013, continue to ramp in the three months ended December 31, 2013. On a geographical basis, we had strong growth around the world with Asia leading the way on a percentage basis.

We commenced operations in 1993 and have been profitable every year since inception. Our net sales were $356.4 million and $665.4 million for the three and six months ended December 31, 2013, respectively, and $291.5 million and $562.2 million for the three and six months ended December 31, 2012, respectively. Our net income was $13.3 million and $21.0 million for the three and six months endedDecember 31, 2013, respectively, and $4.9 million and $5.8 million for the three and six months ended December 31, 2012, respectively. Our increase in net income in the three and six months ended December 31, 2013 compared to the three and six months ended December 31, 2012 was primarily attributable to an increase in our gross profit resulting primarily from higher sales of server systems which have higher margins than our subsystems and accessories partially offset by higher research and development expenses.

We sell our server systems and subsystems and accessories primarily through distributors and to a lesser extent to OEMs as well as through our direct sales force. We derived 53.4% and 56.9% of our net sales from products sold to distributors and derived 46.6% and 43.1% from sales to OEMs and to end customers for the three and six months ended December 31, 2013, respectively, and 55.0% and 54.8% of our net sales from products sold to distributors, and 45.0% and 45.2% from sales to OEMs and to end customers for the three and six months ended December 31, 2012, respectively. None of our customers accounted for 10% or more of our net sales in the three and six months ended December 31, 2013 and 2012. We derived 50.4% and 53.3% of our net sales from customers in the United States for the three and six months ended December 31, 2013, respectively, and 53.7% and 51.8% for the three and six months ended December 31, 2012, respectively. We derived 49.6% and 46.7% of our net sales from customers outside the United States for the three and six months ended December 31, 2013, respectively, and 46.3% and 48.2% for the three and six months ended December 31, 2012, respectively.

We perform the majority of our research and development efforts in-house. Research and development expenses represented 5.8% and 6.1% of our net sales for the three and six months ended December 31, 2013, respectively, and 6.5% for the three and six months ended December 31, 2012.

19

We use several suppliers and contract manufacturers to design and manufacture components in accordance with our specifications, with most final assembly and testing performed at our manufacturing facility in San Jose, California. During fiscal year 2014, we have continued to invest in expanding our operations both in San Jose, California and our subsidiaries in Taiwan and the Netherlands in order to support our growth. We have increased manufacturing and service operations in Taiwan and the Netherlands to support our Asian and European customers and we have increased our utilization of our overseas manufacturing capacity. One of our key suppliers is Ablecom, a related party, which supplies us with contract design and manufacturing support. For the three and six months ended December 31, 2013, our purchases from Ablecom represented 18.1% and 17.7%, respectively, compared to 15.4% and 18.1% of our cost of sales for the three and six months ended December 31, 2012, respectively. Ablecom’s sales to us constitute a substantial majority of Ablecom’s net sales. We continue to maintain our manufacturing relationship with Ablecom in Asia in an effort to reduce our product costs. In addition to providing a larger volume of contract manufacturing services for us, Ablecom continues to warehouse for us a number of components and subassemblies manufactured by multiple suppliers prior to shipment to our facilities in the United States and Europe. We typically negotiate the price of products that we purchase from Ablecom on a quarterly basis; however, either party may re-negotiate the price of products with each order. As a result of our relationship with Ablecom, it is possible that Ablecom may in the future sell products to us at a price higher or lower than we could obtain from an unrelated third party supplier. This may result in our future reporting of gross profit as a percentage of net sales that is less than or in excess of what we might have obtained absent our relationship with Ablecom.

In order to continue to increase our net sales and profits, we believe that we must continue to develop flexible and customizable server solutions and be among the first to market with new features and products. We measure our financial success based on various indicators, including growth in net sales, gross profit as a percentage of net sales, operating income as a percentage of net sales, levels of inventory, and days sales outstanding, or DSOs. In connection with these efforts, we monitor daily and weekly sales and shipment reports. Among the key non-financial indicators of our success is our ability to rapidly introduce new products and deliver the latest application optimized server solutions. In this regard, we work closely with microprocessor and other component vendors to take advantage of new technologies as they are introduced. Historically, our ability to introduce new products rapidly has allowed us to benefit from the introduction of new microprocessors and as a result we monitor the introduction cycles of Intel, AMD and Nvidia carefully. This also impacts our research and development expenditures. For example, in fiscal year 2012 and in prior years, our results have been adversely impacted by customer order delays in anticipation of the introduction of the new lines of microprocessors and research and development expenditures necessary for us to prepare for the introduction.

Other Financial Highlights

The following is a summary of other financial highlights of the second quarter of fiscal year 2014:

• Net cash provided by operating activities was $0.1 million and $18.4 million during the three and six months ended December 31, 2013, respectively, and $32.2 million and $5.6 million during the three and six months ended December 31, 2012, respectively. Our cash and cash equivalents, together with our investments, were $92.6 million at the end of the second quarter of fiscal year 2014, compared with $95.7 million at the end of fiscal year 2013. The decrease in our cash, cash equivalents and investments at the end of the second quarter of fiscal year 2014 was primarily due to $34.0 million of purchases of property and equipments partially offset by $18.4 million of cash generated from our operating activities, $7.2 million of proceeds from debt, net of repayment and $4.8 million of proceeds from exercise of stock options by our employees.

• Days sales outstanding in accounts receivables (“DSO”) at the end of the second quarter of fiscal year 2014 and at the end of the fourth quarter of fiscal year 2013 was both 38 days.

• Our inventory balance was $290.9 million at the end of the second quarter of fiscal year 2014, compared with $254.2 million at the end of fiscal year 2013. Days sales of inventory (“DSI”) at the end of the second quarter of fiscal year 2014 was 83 days, compared with 84 days at the end of the fourth quarter of fiscal year 2013. The increase in our inventory was to support the lunar new year holiday shutdown in Asia at the end of January 2014. The decrease in our DSI at the end of the second quarter of fiscal year 2014 was due to a higher of cost of goods sold in the second quarter of fiscal year 2014.

• Our purchase commitments with contract manufacturers and suppliers were $257.7 million at the end of the second quarter of fiscal year 2014 and $249.0 million at the end of fiscal year 2013. Included in the above non-cancellable commitments are hard disk drive purchase commitments totaling approximately $89.8 million, which have terms expiring through December 2014. See Note 10 of Notes to our Condensed Consolidated Financial Statements for a discussion of purchase commitments.

20

• On October 31, 2013, we completed the purchase of real property in San Jose, California for $30.2 million. The property consists of approximately 324,000 square feet of building space on 36 acres of land.

• In November 2013, we amended our existing credit agreement with CTBC Bank and drew an additional $8.6 million to fund our working capital in Taiwan as we grow our sales and increase manufacturing activities in Asia.

Fiscal Year

Our fiscal year ends on June 30. References to fiscal year 2014, for example, refer to the fiscal year ending June 30, 2014.

Revenues and Expenses

Net sales. Net sales consist of sales of our server solutions, including server systems, subsystems and accessories. The main factors which impact our net sales are unit volumes shipped and average selling prices. The prices for server systems range widely depending upon the configuration, and the prices for our subsystems and accessories vary based on the type. As with most electronics-based products, average selling prices typically are highest at the time of introduction of new products which utilize the latest technology and tend to decrease over time as such products mature in the market and are replaced by next generation products.

Cost of sales. Cost of sales primarily consists of the costs to manufacture our products, including the costs of materials, contract manufacturing, shipping, personnel and related expenses, equipment and facility expenses, warranty costs and inventory excess and obsolete provisions. The primary factors that impact our cost of sales are the mix of products sold and cost of materials, which include raw material costs, shipping costs and salary and benefits related to production. Cost of sales as a percentage of net sales may increase over time if decreases in average selling prices are not offset by corresponding decreases in our costs. Our cost of sales, as a percentage of net sales, is generally lower on server systems than on subsystems and accessories. Because we generally do not have long-term fixed supply agreements, our cost of sales is subject to change based on market conditions.

Research and development expenses. Research and development expenses consist of the personnel and related expenses of our research and development teams, and materials and supplies, consulting services, third party testing services and equipment and facility expenses related to our research and development activities. All research and development costs are expensed as incurred. We occasionally receive non-recurring engineering, or NRE funding from certain suppliers and customers. Under these programs, we are reimbursed for certain research and development costs that we incur as part of the joint development of our products and those of our suppliers and customers. These amounts offset a portion of the related research and development expenses and have the effect of reducing our reported research and development expenses.

Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries and incentive bonuses for our sales and marketing personnel, costs for tradeshows, independent sales representative fees and marketing programs. From time to time, we receive cooperative marketing funding from certain suppliers. Under these programs, we are reimbursed for certain marketing costs that we incur as part of the joint promotion of our products and those of our suppliers. These amounts offset a portion of the related expenses and have the effect of reducing our reported sales and marketing expenses. Similarly, we from time to time offer our distributors cooperative marketing funding which has the effect of increasing our expenses. The timing, magnitude and estimated usage of our programs and those of our suppliers can result in significant variations in reported sales and marketing expenses from period to period. Spending on cooperative marketing, either by us or our suppliers, typically increases in connection with significant product releases by us or our suppliers.

General and administrative expenses. General and administrative expenses consist primarily of general corporate costs, including personnel expenses, financial reporting, corporate governance and compliance and outside legal, audit and tax fees.

Interest and other expense, net. Interest and other expense, net represents interest expense on our term loans and line of credit, offset by interest earned on our investment and cash balances.

Income tax provision. Our income tax provision is based on our taxable income generated in the jurisdictions in which we operate, currently primarily the United States, Taiwan, the Netherlands, and to a lesser extent, China. Our effective tax rate differs from the statutory rate primarily due to research and development tax credits, the domestic production activities

21

deduction and lower taxes in foreign jurisdictions which were partially offset by the impact of state taxes and stock option expenses.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses. We evaluate our estimates on an on-going basis, including those related to allowances for doubtful accounts and sales returns, cooperative marketing accruals, investment valuations, inventory valuations, income taxes, warranty obligations and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making the judgments we make about the carrying values of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from the estimates.

We believe the following are our most critical accounting policies as they require our more significant judgments in the preparation of our financial statements.

Revenue recognition. We recognize revenue from sales of products, when persuasive evidence of an arrangement exists, shipment has occurred and title has transferred, the sales price is fixed or determinable, collection of the resulting receivable is reasonably assured, and all significant obligations have been met. Generally this occurs at the time of shipment when risk of loss and title has passed to the customer. Our standard arrangement with our customers includes a signed purchase order or contract, 30 to 60 days payment terms, Ex-works terms, except for a few customers who have free-on-board destination terms or customer acceptance provisions, for which revenue is recognized when the products arrive or are accepted at the destination. We generally do not provide for non-warranty rights of return except for products which have “Out-of-box” failure, where customers could return these products for credit within 30 days of receiving the items. Certain distributors and OEMs are also permitted to return products in unopened boxes, limited to purchases over a specified period of time, generally within 60 to 90 days of the purchase, or to products in the distributor’s or OEM’s inventory at certain times (such as the termination of the agreement or product obsolescence). To estimate reserves for future sales returns, we regularly review our history of actual returns for each major product line. We also communicate regularly with our distributors to gather information about end customer satisfaction, and to determine the volume of inventory in the channel. Reserves for future returns are adjusted as necessary, based on returns experience, returns expectations and communication with our distributors.

In addition, certain customers have acceptance provisions and revenue is deferred until the customers provide the necessary acceptance. At December 31, 2013 and June 30, 2013, we had deferred revenue of $1.8 million and $1.0 million and related deferred product costs of $1.6 million and $0.7 million, respectively, related to shipments to customers pending acceptances.

Probability of collection is assessed on a customer-by-customer basis. Customers are subjected to a credit review process that evaluates the customers’ financial position and ability to pay. If it is determined from the outset of an arrangement that collection is not probable based upon the review process, the customers are required to pay cash in advance of shipment. We also make estimates of the uncollectibility of accounts receivables, analyzing accounts receivable and historical bad debts, customer concentrations, customer-credit-worthiness, current economic trends and changes in customer payment terms to evaluate the adequacy of the allowance for doubtful accounts. On a quarterly basis, we evaluate aged items in the accounts receivable aging report and provide an allowance in an amount we deem adequate for doubtful accounts. Our provision for bad debt was $0.2 million and $1.1 million in the three and six months ended December 31, 2013, respectively, and $(0.1) million and $0.1 million in the three and six months ended December 31, 2012, respectively. If a major customer's creditworthiness deteriorates, if actual defaults are higher than our historical experience, or if other circumstances arise, our estimates of the recoverability of amounts due to us could be overstated, and additional allowances could be required, which could have an adverse impact on our reported operating expenses. We provide for price protection to certain distributors. We assess the market competition and product technology obsolescence, and make price adjustments based on our judgment. Upon each announcement of price reductions, the accrual for price protection is calculated based on our distributors’ inventory on hand. Such reserves are recorded as a reduction to revenue at the time we reduce the product prices.

We have an immaterial amount of service revenue relating to on-site service and non-warranty repairs. Revenue for on-site service is recognized over the contracted service period, and revenue for non-warranty repair service is recognized upon shipment of the repaired units to customers. Service revenue has been less than 10% of net sales for all periods presented and is not separately disclosed.

22

Product warranties. We offer product warranties ranging from 15 to 39 months against any defective product. We accrue for estimated returns of defective products at the time revenue is recognized, based on historical warranty experience and recent trends. We monitor warranty obligations and may make revisions to our warranty reserve if actual costs of product repair and replacement are significantly higher or lower than estimated. Accruals for anticipated future warranty costs are charged to cost of sales and included in accrued liabilities. The liability for product warranties was $6.8 million as of December 31, 2013, compared with $6.5 million as of June 30, 2013. The provision for warranty reserve was $3.5 million and $6.9 million in the three and six months ended December 31, 2013, respectively, and $3.4 million and $6.5 million in the three and six months ended December 31, 2012, respectively. Our estimates and assumptions used have been historically close to actual. The change in estimated liability for pre-existing warranties was $28,000 and $73,000 in the three and six months ended December 31, 2013, respectively, and $32,000 and $0.3 million in the three and six months ended December 31, 2012, respectively. As a result of our increase in cost of servicing warranty claims from our increase in net sales in the three and six months ended December 31, 2013, the provision for warranty reserve increased $0.1 million and $0.4 million compared to the three and six months ended December 31, 2012, respectively. If in future periods, we experience or anticipate an increase or decrease in warranty claims as a result of new product introductions or change in unit volumes compared with our historical experience, or if the cost of servicing warranty claims is greater or lesser than expected, we intend to adjust our estimates appropriately.

Inventory valuation. Inventory is valued at the lower of cost or market. We evaluate inventory on a quarterly basis for lower of cost or market and excess and obsolescence and, as necessary, write down the valuation of units to lower of cost or market or for excess and obsolescence based upon the number of units that are unlikely to be sold based upon estimated demand for the following twelve months. This evaluation takes into account matters including expected demand, anticipated sales price, product obsolescence and other factors. If actual future demand for our products is less than currently forecasted, additional inventory adjustments may be required. Once a reserve is established, it is maintained until the product to which it relates is sold or scrapped. If a unit that has been written down is subsequently sold, the cost associated with the revenue from this unit is reduced to the extent of the write down, resulting in an increase in gross profit. We monitor the extent to which previously written down inventory is sold at amounts greater or less than carrying value, and based on this analysis, adjust our estimate for determining future write downs. If in future periods, we experience or anticipate a change in recovery rate compared with our historical experience, our gross margin would be affected. Our provision for inventory was $1.5 million in both three and six months ended December 31, 2013 and $3.4 million and $6.3 million in the three and six months ended December 31, 2012, respectively.

Accounting for income taxes. We account for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax reporting purposes, net operating loss carry-forwards and other tax credits measured by applying currently enacted tax laws. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.

We recognize the tax liability for uncertain income tax positions on the income tax return based on the two-step process. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires us to determine the probability of various possible outcomes. We evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors, including changes in facts or circumstances, changes in applicable tax law, settlement of issues under audit and new exposures. If we later determine that our exposure is lower or that the liability is not sufficient to cover our revised expectations, we adjust the liability and effect a related change in our tax provision during the period in which we make such determination. See Note 9 of Notes to Condensed Consolidated Financial Statements for the impact on our condensed consolidated financial statements.

Stock-based compensation. We measure and recognize the compensation expense for all share-based awards made to employees and non-employee members of the Board of Directors including employee stock options and restricted stock awards based on estimated fair values. We are required to estimate the fair value of share-based awards on the date of grant. The value of awards that are ultimately expected to vest is recognized as an expense over the requisite service periods. Compensation expense for options and restricted stock awards granted to employees was $2.8 million and $5.4 million for the three and six months ended December 31, 2013, respectively, and $2.9 million and $5.8 million for the three and six months ended December 31, 2012, respectively.

As of December 31, 2013, the total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options granted since July 1, 2006 to employees and non-employee members of the Board of Directors, was

23

$18.8 million, which is expected to be recognized as an expense over a weighted-average period of approximately 2.39 years. See Note 2 of Notes to our Condensed Consolidated Financial Statements for additional information.

We estimated the fair value of stock options granted using a Black-Scholes option-pricing model and a single option award approach. This model requires us to make estimates and assumptions with respect to the expected term of the option, the expected volatility of the price of our common stock and the expected forfeiture rate. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

The expected term represents the period that our stock-based awards are expected to be outstanding and was determined based on an analysis of the relevant peer companies’ post-vest termination rates and exercise behavior for the stock options granted prior to June 30, 2011. For stock options and restricted stock awards granted after June 30, 2011, expected term is based on a combination of our peer group and our historical experience. The expected volatility is based on a combination of our implied and historical volatility. In addition, forfeitures of share-based awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

Variable interest entities. We have concluded that Ablecom and its subsidiaries ("Ablecom") is a variable interest entity in accordance with applicable accounting standards and guidance; however, we are not the primary beneficiary of Ablecom and therefore, we do not consolidate Ablecom. In performing our analysis, we considered our explicit arrangements with Ablecom including the supplier and distributor arrangements. Also, as a result of the substantial related party relationship between the two companies, we considered whether any implicit arrangements exist that would cause us to protect those related parties’ interests in Ablecom from suffering losses. We determined that no implicit arrangements exist with Ablecom or its shareholders. Such an arrangement would be inconsistent with the fiduciary duty that we have towards our stockholders who do not own shares in Ablecom.

In May 2012, we and Ablecom jointly established Super Micro Business Park, Inc. ("Management Company") in Taiwan to manage the common areas shared by us and Ablecom for our separately constructed manufacturing facilities. Each company contributed $168,000 and own 50% of the Management Company. Although the operations of the Management Company are independent of us, through governance rights, we have the ability to direct the Management Company's business strategies. Therefore, we have concluded that the Management Company is a variable interest entity of us as we are the primary beneficiary of the Management Company. As of December 31, 2013, the accounts of the Management Company have been consolidated with our accounts, and a noncontrolling interest has been recorded for Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations. In the three and six months ended December 31, 2012, $2,000 and $0, respectively, of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations.

24

Results of Operations

The following table sets forth our financial results, as a percentage of net sales for the periods indicated:

	Three Months Ended December 31,				Six Months Ended December 31,
	2013		2012		2013		2012
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	84.5		86.2		84.7		86.6
Gross profit	15.5		13.8		15.3		13.4
Operating expenses:
Research and development	5.8		6.5		6.1		6.5
Sales and marketing	2.5		2.7		2.7		3.0
General and administrative	1.5		2.0		1.7		2.2
Total operating expenses	9.8		11.2		10.5		11.7
Income from operations	5.7		2.6		4.8		1.7
Interest and other income, net	—		—		—		—
Interest expense	(0.1	)	—		—		(0.1	)
Income before income tax provision	5.6		2.6		4.8		1.6
Income tax provision	1.9		0.9		1.6		0.6
Net income	3.7	%	1.7	%	3.2	%	1.0	%

Comparison of Three Months Ended December 31, 2013 and 2012

Net sales. Net sales increased by $64.9 million, or 22.3%, to $356.4 million from $291.5 million, for the three months ended December 31, 2013 and 2012, respectively. This increase was due primarily to an increase in the average selling price of our server systems and to a lesser extent an increase in unit volumes of subsystems and accessories and server systems.

For the three months ended December 31, 2013, the number of server system units sold increased 5.0% to 63,000 compared to 60,000 for the three months ended December 31, 2012. The average selling price of server system units increased 28.6% to $2,700 in the three months ended December 31, 2013 compared to $2,100 in the three months ended December 31, 2012. The average selling prices of our server systems increased primarily due to an increase in average selling prices of our innovative servers such as the Twin family of servers, especially the FatTwin, storage, GPU/Xeon Phi servers and Rack solutions which offered higher density computing and more CPU, memory and hard disk drive capacity. Sales of server systems increased by $48.0 million or 38.0% from the three months ended December 31, 2012 to the three months ended December 31, 2013, primarily due to the increased sales of the products described above. In addition, our new server products based on Intel's Ivy Bridge processor which was launched in September 2013 has also contributed to our growth in server systems sales in the three months ended December 31, 2013. Sales of server systems represented 48.8% of our net sales for the three months ended December 31, 2013 compared to 43.3% of our net sales for the three months ended December 31, 2012.

For the three months ended December 31, 2013, the number of subsystems and accessories units sold increased 8.0% to 1,173,000 compared to 1,086,000 for the three months ended December 31, 2012. Sales of subsystems and accessories increased by $16.9 million or 10.2% from the three months ended December 31, 2012 to the three months ended December 31, 2013, primarily related to higher sales of hard disk drives and memory bundled with our server solutions to our distributors and system integrators who purchased additional accessories from us prior to completing the final assembly themselves. Sales of subsystems and accessories represented 51.2% of our net sales for the three months ended December 31, 2013 as compared to 56.7% of our net sales for the three months ended December 31, 2012.

For the three months ended December 31, 2013 and 2012, we derived 53.4% and 55.0%, respectively, of our net sales from products sold to distributors and we derived 46.6% and 45.0%, respectively, from sales to OEMs and to end customers. For the three months ended December 31, 2013, customers in the United States, Europe and Asia accounted for 50.4%, 23.9% and 23.0% of our net sales, respectively, as compared to 53.7%, 23.0% and 20.7%, respectively, for the three months ended December 31, 2012.

Cost of sales. Cost of sales increased by $49.9 million, or 19.9%, to $301.3 million from $251.4 million, for the three months ended December 31, 2013 and 2012, respectively. Cost of sales as a percentage of net sales was 84.5% and 86.2% for

25

the three months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars of cost of sales was primarily attributable to the increase in net sales partially offset by a decrease of $1.9 million in provision for inventory reserve. The lower cost of sales as a percentage of net sales was primarily due to an increase in purchasing power, a lower provision for inventory reserve, an increase in the mix of server system sales and higher utilization of our manufacturing facilities in Taiwan. In general, we have higher margins in server systems than in subsystems and accessories. In the three months ended December 31, 2013, we recorded a $1.5 million expense related to the inventory provision as compared to $3.4 million, or 1.2% of net sales, in the three months ended December 31, 2012. The decrease in the inventory provision was primarily due to lower inventory reserves for special items as we have improved our processes and reduced our excess and slow moving inventory. In the three months ended December 31, 2013, we recorded a $3.5 million expense, or 1.0% of net sales, related to the provision for warranty reserve as compared to $3.4 million, or 1.2% of net sales, in the three months ended December 31, 2012. The increase in the provision for warranty reserve was primarily due to higher cost of servicing warranty claims from higher net sales in the three months ended December 31, 2013. If in future periods we experience or anticipate an increase or decrease in warranty claims as a result of new product introductions or change in unit volumes compared with our historical experience, or if the cost of servicing warranty claims is greater or lesser than expected, our gross margin would be affected.

Research and development expenses. Research and development expenses increased by $1.6 million, or 8.5%, to $20.4 million from $18.8 million, for the three months ended December 31, 2013 and 2012, respectively. Research and development expenses were 5.8% and 6.5% of net sales for the three months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars was primarily due to an increase of $1.6 million in compensation and benefits resulting from an annual salary increase and growth in research and development personnel related to expanded product development initiatives in the United States and in Taiwan. The decrease as a percentage of net sales was primarily due to the significant increase in net sales during the period.

Research and development expenses include stock-based compensation expense of $1.7 million and $1.6 million for the three months ended December 31, 2013 and 2012, respectively.

Sales and marketing expenses. Sales and marketing expenses increased by $1.0 million, or 13.0%, to $9.0 million from $7.9 million, for the three months ended December 31, 2013 and 2012, respectively. Sales and marketing expenses were 2.5% and 2.7% of net sales for the three months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars was primarily due to an increase of $0.5 million in compensation and benefits resulting from growth in sales and marketing personnel.

Sales and marketing expenses include stock-based compensation expense of $0.3 million and $0.4 million for the three months ended December 31, 2013 and 2012, respectively.

General and administrative expenses. General and administrative expenses decreased by $0.3 million, or 4.5%, to $5.5 million from $5.7 million, for the three months ended December 31, 2013 and 2012, respectively. General and administrative expenses were 1.5% and 2.0% of net sales for the three months ended December 31, 2013 and 2012, respectively. The decrease in absolute dollars was primarily due to a decrease of $0.6 million resulting from payroll tax audit assessment.

General and administrative expenses include stock-based compensation expense of $0.5 million and $0.7 million for three months ended December 31, 2013 and 2012, respectively.

Interest and other expense, net. Interest and other expense, net was $0.1 million for both three months ended December 31, 2013 and 2012, which included $0.2 million of interest expense for both three months ended December 31, 2013 and 2012.

Provision for income taxes. Provision for income taxes increased by $4.2 million, or 164.1%, to $6.7 million from $2.5 million, for the three months ended December 31, 2013 and 2012, respectively. The higher provision for income taxes was primarily attributable to our higher operating income for the three months ended December 31, 2013. The effective tax rate was 33.5% and 34.2% for the three months ended December 31, 2013 and 2012, respectively. The lower effective tax rate for the three months ended December 31, 2013 was primarily attributable to higher income taxed at foreign jurisdictions with lower tax rates.

26

Comparison of Six Months Ended December 31, 2013 and 2012

Net sales. Net sales increased by $103.2 million, or 18.4%, to $665.4 million from $562.2 million, for the six months ended December 31, 2013 and 2012, respectively. This increase was due primarily to an increase in the average selling price of our server systems and to a lesser extent an increase in unit volumes of subsystems and accessories as we sold more higher density server systems on a processing compute basis.

For the six months ended December 31, 2013, the number of server system units sold increased 2.6% to 118,000 compared to 115,000 for the six months ended December 31, 2012. The average selling price of server system units increased 35.0% to $2,700 in the six months ended December 31, 2013 compared to $2,000 in the six months ended December 31, 2012. The average selling prices of our server systems increased primarily due to an increase in average selling prices of our innovative servers such as the Twin family of servers, especially the FatTwin, storage and GPU/Xeon Phi servers and Rack solutions which offered higher density computing and more memory and hard disk drive capacity. Sales of server systems increased by $84.4 million or 36.2% from the six months ended December 31, 2012 to the six months ended December 31, 2013, primarily due to the increased sales of the products described above. In addition, our new server products based on Intel's Ivy Bridge processor which was launched in September 2013 has also contributed to our growth in server system sales in the six months ended December 31, 2013. Sales of server systems represented 47.7% of our net sales for the six months ended December 31, 2013, compared to 41.4% of our net sales for the six months ended December 31, 2012.

For the six months ended December 31, 2013, the number of subsystems and accessories units sold increased 5.0% to 2,229,000 compared to 2,122,000 for the six months ended December 31, 2012. Sales of subsystems and accessories increased by $18.8 million or 5.7% from the six months ended December 31, 2012 to the six months ended December 31, 2013, primarily related to higher sales of hard disk drives and memory to our distributors and system integrators who purchased additional accessories from us prior to completing the final assembly themselves. Sales of subsystems and accessories represented 52.3% of our net sales for the six months ended December 31, 2013 as compared to 58.6% of our net sales for the six months ended December 31, 2012.

For the six months ended December 31, 2013 and 2012, we derived 56.9% and 54.8% of our net sales from products sold to distributors, respectively, and we derived 43.1% and 45.2%, respectively, from sales to OEMs and to end customers. For the six months ended December 31, 2013, customers in the United States, Europe and Asia accounted for 53.3%, 23.5% and 20.6% of our net sales, respectively, as compared to 51.8%, 23.2% and 22.3%, respectively, for the six months ended December 31, 2012.

Cost of sales. Cost of sales increased by $76.4 million, or 15.7%, to $563.5 million from $487.1 million, for the six months ended December 31, 2013 and 2012, respectively. Cost of sales as a percentage of net sales was 84.7% and 86.6% for the six months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars of cost of sales was primarily attributable to the increase in net sales partially offset by a decrease of $4.8 million in provision for inventory reserve. The lower cost of sales as a percentage of net sales was primarily due to a lower provision for inventory reserve, an increase in purchasing power, an increase in the mix of server system sales and higher utilization of our manufacturing facilities in Taiwan. In general, we have higher margins in server systems than in subsystems and accessories. In the six months ended December 31, 2013, we recorded a $1.5 million expense related to the inventory provision as compared to $6.3 million, or 1.1% of net sales, in the six months ended December 31, 2012. The decrease in the inventory provision was primarily due to lower inventory reserves for special items and higher sales of previously reserved inventory as we have improved our processes and reduced our excess and slow moving inventory. In the six months ended December 31, 2013, we recorded a $6.9 million expense, or 1.0% of net sales, related to the provision for warranty reserve as compared to $6.5 million, or 1.2% of net sales, in the six months ended December 31, 2012. The increase in the provision for warranty reserve was primarily due to higher cost of servicing warranty claims from higher net sales in the six months ended December 31, 2013. If in future periods we experience or anticipate an increase or decrease in warranty claims as a result of new product introductions or change in unit volumes compared with our historical experience, or if the cost of servicing warranty claims is greater or lesser than expected, our gross margin would be affected.

Research and development expenses. Research and development expenses increased by $3.6 million, or 9.8%, to $40.7 million from $37.0 million, for the six months ended December 31, 2013 and 2012, respectively. Research and development expenses were 6.1% and 6.5% of net sales for the six months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars was primarily due to an increase of $2.8 million in compensation and benefits resulting from growth in research and development personnel related to expanded product development initiatives in the United States and in Taiwan and an increase of $1.3 million in development expenses for prototype materials and testing associated with new product

27

introductions, particularly related to the introduction of new products including servers based on Intel's Ivy Bridge processor, TwinPro and MicroBlade series of servers.

Research and development expenses include stock-based compensation expense of $3.3 million for both six months ended December 31, 2013 and 2012.

Sales and marketing expenses. Sales and marketing expenses increased by $1.1 million, or 6.8%, to $17.8 million from $16.7 million, for the six months ended December 31, 2013 and 2012, respectively. Sales and marketing expenses were 2.7% and 3.0% of net sales for the six months ended December 31, 2013 and 2012, respectively. The increase in absolute dollars was primarily due to an increase of $1.0 million in compensation and benefits resulting from growth in sales and marketing personnel.

Sales and marketing expenses include stock-based compensation expense of $0.6 million and $0.8 million for the six months ended December 31, 2013 and 2012, respectively.

General and administrative expenses. General and administrative expenses decreased by $1.0 million, or 7.9%, to $11.1 million from $12.1 million, for the six months ended December 31, 2013 and 2012, respectively. General and administrative expenses were 1.7% and 2.2% of net sales for the six months ended December 31, 2013 and 2012, respectively. The decrease in absolute dollars was primarily due to an increase of $0.7 million in miscellaneous income relating to the settlement of our outstanding accounts payable with one vendor and a decrease of $0.6 million resulting from payroll tax audit assessment and a decrease of $0.3 million in compensation and benefits offset in part by an increase of $1.0 million in bad debt expenses.

General and administrative expenses include stock-based compensation expense of $1.0 million and $1.3 million for the six months ended December 31, 2013 and 2012, respectively.

Interest and other expense, net. Interest and other expense, net was $0.3 million of expense for both six months ended December 31, 2013 and 2012, which included $0.4 million and $0.3 million of interest expense for the six months ended December 31, 2013 and 2012, respectively.

Provision for income taxes. Provision for income taxes increased by $7.7 million, to $10.9 million from $3.2 million, for the six months ended December 31, 2013 and 2012, respectively. The higher provision for income taxes was primarily attributable to our higher operating income for the six months ended December 31, 2013. The effective tax rate was 34.1% and 35.4% for the six months ended December 31, 2013 and 2012, respectively. The lower effective tax rate for the six months ended December 31, 2013 was primarily attributable to the benefit from U.S. federal R&D tax credits and higher income taxed at foreign jurisdictions with lower tax rate.

Liquidity and Capital Resources

Since our inception, we have financed our growth primarily with funds generated from operations and from the proceeds of our initial public offering. In addition, we have, from time to time, utilized borrowing facilities, particularly in relation to the financing of real property acquisitions. Our cash and cash equivalents and short-term investments were $89.9 million and $93.1 million as of December 31, 2013 and June 30, 2013, respectively. Our cash in foreign locations was $17.7 million and $16.6 million at December 31, 2013 and June 30, 2013, respectively. It is management's intention to reinvest the undistributed foreign earnings indefinitely in foreign operations.

Operating Activities. Net cash provided by operating activities was $18.4 million and $5.6 million for the six months ended December 31, 2013 and 2012, respectively.

Net cash provided by our operating activities for the six months ended December 31, 2013 was primarily due to our net income of $21.0 million, an increase in accounts payable of $32.0 million, stock-based compensation expense of $5.4 million, depreciation expense of $2.9 million, an increase in income tax payable of $2.7 million and an increase in accrued liability of $1.8 million which were partially offset by an increase in inventory of $38.3 million and an increase in accounts receivable of $12.9 million.

Net cash provided by our operating activities for the six months ended December 31, 2012 was primarily due to our net income of $5.8 million, a decrease in inventory of $26.7 million, provision for inventory of $6.3 million, stock-based compensation expense of $5.8 million, depreciation expense of $4.0 million, an increase in accrued liabilities of $2.2 million

28

and an increase in net income taxes payable of $0.7 million which were partially offset by a decrease in accounts payable of $25.1 million, an increase in accounts receivable of $17.0 million, an increase in deferred income taxes of $4.0 million and excess tax benefits from stock-based compensation of $0.8 million.

The increase for the six months ended December 31, 2013 in accounts receivable was primarily due to an increase in our sales in the second quarter. The increase for the six months ended December 31, 2013 in accounts payable was due to higher purchases and timing of payments to our vendors. The increase for the six months ended December 31, 2013 in inventory was due to support the lunar new year holiday shutdown in Asia at the end of January 2014. We anticipate that accounts receivable, inventory and accounts payable will increase to the extent we continue to grow our product lines and our business.

The increase for the six months ended December 31, 2012 in accounts receivable was primarily due to an increase in net sales to customers with longer net payment terms. The decrease for the six months ended December 31, 2012 in accounts payable was due to timing of payments to our vendors. The decrease for the six months ended December 31, 2012 in inventory was in part due to increased sales in hard disk drives as we have aggressively promoted hard disk drives bundling with server systems resulting from the purchase commitment agreements with certain suppliers.

Investing activities. Net cash used in our investing activities was $34.0 million and $2.5 million for the six months ended December 31, 2013 and 2012, respectively. In the six months ended December 31, 2013, $34.0 million was related to the purchase of property, plant and equipment including $30.2 million related to the real property purchased in San Jose, California in October 2013. In the six months ended December 31, 2012, $2.8 million was related to the purchase of property, plant and equipment offset in part by the redemption at par of investments in auction rate securities of $0.3 million.

Financing activities. Net cash provided by our financing activities was $12.4 million and $4.1 million for the six months ended December 31, 2013 and 2012, respectively. In the six months ended December 31, 2013, we received $4.8 million related to proceeds from the exercise of stock options. We withheld shares and paid the minimum tax withholding mainly on behalf of one executive officer for his restricted stock awards of $0.7 million for the six months ended December 31, 2013. Further, we borrowed additional $5.1 million under the secured term loan from CTBC Bank, borrowed $3.5 million of our revolving line of credit from CTBC Bank and repaid $1.4 million in loans in the six months ended December 31, 2013. In the six months ended December 31, 2013, excess tax benefits from stock-based compensation were $1.1 million.

In the six months ended December 31, 2012, we received $0.8 million related to the proceeds from the exercise of stock options. We withheld shares and paid the minimum tax withholding on behalf of one executive officer for his restricted stock awards of $1.0 million for the six months ended December 31, 2012. Further, we borrowed $15.0 million under a new term loan from CTBC Bank, borrowed $5.6 million of our revolving line of credit from Bank of America and repaid $16.7 million in loans in the six months ended December 31, 2012.

We expect to experience continued growth in our working capital requirements and capital expenditures as we continue to expand our business. Our long-term future capital requirements will depend on many factors, including our level of revenues, the timing and extent of spending to support our product development efforts, the expansion of sales and marketing activities, the timing of our introductions of new products, the costs to ensure access to adequate manufacturing capacity and the continuing market acceptance of our products. We intend to fund this continued expansion through cash generated by operations and by drawing on the revolving credit facility or through other debt financing. However we cannot be certain whether such financing will be available on commercially reasonable or otherwise favorable terms or that such financing will be available at all. We anticipate that working capital and capital expenditures will constitute a material use of our cash resources. We have sufficient cash on hand to continue to operate for at least the next 12 months.

Other factors affecting liquidity and capital resources

Activities under Revolving Lines of Credit and Term Loans

Bank of America

In October 2011, we entered into an amendment to the existing credit agreement with Bank of America, which provided for (i) a $40.0 million revolving line of credit facility through June 15, 2013 and (ii) a five-year $14.0 million term loan facility. The term loan is secured by three buildings located in San Jose, California and the principal and interest are payable monthly through September 30, 2016 with an interest rate at the LIBOR rate plus 1.50% per annum. The credit agreement was subsequently amended to extend the maturity date of the revolving line of credit to August 15, 2014.

29

The line of credit facility provided for borrowings denominated both in U.S. dollars and in Taiwanese dollars. For borrowings denominated in U.S. dollars, the interest rate for the revolving line of credit is at the LIBOR rate plus 1.25% per annum. The LIBOR rate was 0.17% at December 31, 2013. For borrowings denominated in Taiwanese dollars, the interest rate for the revolving line of credit is equal to the lender's established interest rate which is adjusted monthly.

As of December 31, 2013 and June 30, 2013, the total outstanding borrowings under the Bank of America term loan was $7.9 million and $9.3 million, respectively. The total outstanding borrowings under the Bank of America line of credit was $10.9 million as of December 31, 2013 and June 30, 2013. The interest rates for these loans ranged from 1.20% to 1.67% per annum at December 31, 2013 and ranged from 1.23% to 1.69% per annum at June 30, 2013, respectively. As of December 31, 2013, the unused revolving line of credit under Bank of America was $29.1 million.

CTBC Bank

In October 2011, we obtained an unsecured revolving line of credit from CTBC Bank totaling NT$300.0 million Taiwanese dollars, or $9.9 million U.S. dollar equivalents. In July 2012, we increased the credit line to a NT$450.0 million Taiwanese dollars, or $14.9 million U.S. dollar equivalents. The term loan was secured by the land and building located in Bade, Taiwan with an interest rate at the lender's established interest rate plus 0.3% which is adjusted monthly.

In November 2013, we entered into an amendment to the existing credit agreement with CTBC Bank to increase the credit facility amount and extend the maturity date to November 30, 2014. The amendment provides for (i) a 13-month NT$700.0 million Taiwanese dollars or $23.8 million U.S. dollar equivalents term loan secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum which is adjusted monthly and (ii) a 13-month unsecured term loan up to NT$100.0 million Taiwanese dollars or $3.4 million U.S. dollar equivalents, and a 13-month revolving line of credit up to 80% of eligible accounts receivable in an aggregate amount of up to NT$500.0 million Taiwanese dollars or $17.0 million U.S. dollar equivalents with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum or lender's established USD interest rate plus 0.30% per annum which is adjusted monthly. The total borrowings allowed under the credit agreement is capped at NT$1.0 billion Taiwanese dollars or $34.0 million U.S. dollar equivalents.

The total outstanding borrowings under the CTBC Bank term loan was denominated in Taiwanese dollars and was translated into U.S. dollars of $20.0 million and $14.9 million at December 31, 2013 and June 30, 2013, respectively. The total outstanding borrowings under the CTBC Bank revolving line of credit was $3.5 million and $0 at December 31, 2013 and June 30, 2013, respectively. The interest rates for these loans ranged from 1.11% to 1.74% per annum at December 31, 2013 and was at 1.20% per annum at June 30, 2013. At December 31, 2013, NT$294.3 million Taiwanese dollars or $9.8 million U.S. dollar equivalents were available for future borrowing under this credit agreement.

Covenant Compliance

The credit agreement with Bank of America contains customary representations and warranties and customary affirmative and negative covenants applicable to us and our subsidiaries. The credit agreement contains certain financial covenants, including the following:

• Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods;

• Our funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA) shall not be greater than 2.00;

• Our unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value of not less than $30.0 million, measured as of the last day of each fiscal quarter and the last day of each fiscal year.

As of December 31, 2013 and June 30, 2013, our total assets of $663.5 million and $586.7 million, respectively, collateralized the line of credit with Bank of America and were all of the assets of the Company except for the three buildings located in San Jose, California and the land and building located in Bade, Taiwan. As of December 31, 2013 and June 30, 2013, total assets collateralizing the term loan with Bank of America were $17.7 million and $17.8 million, respectively. As of December 31, 2013, the Company was in compliance with all financial covenants associated with the term loan and line of credit with Bank of America.

30

As of December 31, 2013 and June 30, 2013, the net book value of land and building located in Bade, Taiwan collateralizing the term loan with CTBC Bank was $27.6 million and $27.7 million, respectively. There are no financial covenants associated with the term loan with CTBC Bank at December 31, 2013.

Contract Manufacturers

For the three and six months ended December 31, 2013, we paid our contract manufacturers within 60 to 74 days of invoice and Ablecom between 55 to 93 days of invoice. Ablecom, a Taiwan corporation, is one of our major contract manufacturers and a related party. As of December 31, 2013 and June 30, 2013 amounts owed to Ablecom by us were approximately $48.2 million and $50.4 million, respectively.

Auction Rate Securities Valuation

As of December 31, 2013, we held $2.6 million of auction rate securities, net of unrealized losses, representing our interest in auction rate preferred shares in a closed end mutual fund invested in municipal securities; the auction rate security was rated AAA or AA2 at December 31, 2013. These auction rate preferred shares have no stated maturity date.

During February 2008, the auctions for these auction rate securities began to fail to obtain sufficient bids to establish a clearing rate and were not saleable in the auction, thereby losing the short-term liquidity previously provided by the auction process. As a result, as of December 31, 2013, $2.6 million of these auction rate securities have been classified as long-term available-for-sale investments. Based on our assessment of fair value at December 31, 2013, we have recorded an accumulated unrealized loss of $0.1 million, net of deferred income taxes, on long-term auction rate securities. The unrealized loss was deemed to be temporary and has been recorded as a component of accumulated other comprehensive loss. During the three and six months ended December 31, 2013, there were no auction rate securities redeemed or sold. During the three and six months ended December 31, 2012, $0.3 million of the auction rate securities were redeemed at par.

Contractual Obligations

The following table describes our contractual obligations as of December 31, 2013:

	Payments Due by Period
	Less Than  1 Year		1 to 3 Years		3 to 5  Years		More Than 5 Years		Total
	(in thousands)
Operating leases	$	3,517	$	2,435	$	—	$	—	$	5,952
Capital leases, including interest	43		75		51		—		169
Long-term debt, including interest (1)	37,327		5,221		—		—		42,548
License arrangements	600		—		—		—		600
Purchase commitments (2)	257,599		129		—		—		257,728
Total	$	299,086	$	7,860	$	51	$	—	$	306,997

__________________________

(1) Amount reflects total anticipated cash payments, including anticipated interest payments based on the interest rate at December 31, 2013.

(2) Amount reflects total gross purchase commitments under our manufacturing arrangements with third-party contract manufacturers or vendors. Our purchase obligations included $89.8 million of hard disk drive purchase commitments at December 31, 2013, which will be paid through December 2014. See Note 10 of Notes to our Condensed Consolidated Financial Statements for a discussion of purchase commitments.

The table above excludes liabilities for deferred revenue for warranty and on-site services of $3.5 million and unrecognized tax benefits and related interest and penalties accrual of $9.2 million as of December 31, 2013. We have not provided a detailed estimate of the payment timing of unrecognized tax benefits due to the uncertainty of when the related tax settlements will become due.

We expect to fund our remaining contractual obligations from our ongoing operations and existing cash and cash equivalents on hand.

31

Adoption of New Accounting Pronouncements

In February 2013, FASB issued authoritative guidance associated with reporting of amounts reclassified out of accumulated other comprehensive income, which requires companies to present significant reclassifications out of accumulated other comprehensive income in their entirety in the statement of operations or in a separate footnote to the financial statements. For amounts that are not required to be reclassified in their entirety to net income, the standard requires companies to cross-reference to related footnoted disclosures. The new disclosure requirements are effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2012 and early adoption is permitted. The adoption of this guidance did not have a material impact on our financial statement disclosure, results of operations or financial position.

In July 2013, the FASB issued authoritative guidance associated with the presentation of unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. It requires a liability related to unrecognized tax benefit to offset a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if a settlement is required or expected in the event the uncertain tax position is disallowed. We currently plan to adopt the new disclosure requirement on July 1, 2014. We do not believe the adoption of this guidance will have a material impact on our financial statement disclosure, results of operations or financial position.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3.        Quantitative and Qualitative Disclosure About Market Risks

Interest Rate Risk

The primary objectives of our investment activities are to preserve principal, provide liquidity and maximize income without significantly increasing the risk. Some of the securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the fair value of the investment to fluctuate. To minimize this risk, we maintain our portfolio of cash equivalents and short-term investments in money market funds and certificates of deposit. Our long-term investments include auction rate securities, which have been classified as long-term due to the lack of a liquid market for these securities. Since our results of operations are not dependent on investments, the risk associated with fluctuating interest rates is limited to our investment portfolio, and we believe that a 10% change in interest rates would not have a significant impact on our results of operations. As of December 31, 2013, our investments were in money market funds, certificates of deposits and auction rate securities (see Liquidity Risk below).

We are exposed to changes in interest rates as a result of our borrowings under our term loan and revolving lines of credit. The interest rates for the term loans and the revolving lines of credit ranged from 1.11% to 1.74% at December 31, 2013 and 1.20% to 1.69% at June 30, 2013, respectively. Based on the outstanding principal indebtedness of $42.3 million under our credit facilities as of December 31, 2013, we believe that a 10% change in interest rates would not have a significant impact on our results of operations.

32

Liquidity Risk

As of December 31, 2013, we held $2.6 million of auction rate securities, net of unrealized losses, representing our interest in auction rate preferred shares in a closed end mutual fund invested in municipal securities; the auction rate security was rated AAA or AA2 at December 31, 2013. These auction rate preferred shares have no stated maturity date. During February 2008, the auctions for these auction rate securities began to fail to obtain sufficient bids to establish a clearing rate and were not saleable in the auction, thereby losing the short-term liquidity previously provided by the auction process. As a result, as of December 31, 2013, $2.6 million of these auction rate securities have been classified as long-term available-for-sale investments. Based on our assessment of fair value at December 31, 2013, we have recorded an accumulated unrealized loss of $0.1 million, net of deferred income taxes, on long-term auction rate securities. The unrealized loss was deemed to be temporary and has been recorded as a component of accumulated other comprehensive loss. During the three and six months ended December 31, 2013, there were no auction rate securities redeemed or sold. During the three and six months ended December 31, 2012, $0.3 million of auction rate securities were redeemed at par.

Although we have determined that we will not likely be required to sell the securities before the anticipated recovery and we have the intent and ability to hold our investments until successful auctions occur, these investments are not currently liquid and in the event we need to access these funds, we will not be able to do so without a loss of principal. There can be no assurances that these investments will be settled in the short term or that they will not become other-than-temporarily impaired subsequent to December 31, 2013, as the market for these investments is presently uncertain. In any event, we do not have a present need to access these funds for operational purposes. We will continue to monitor and evaluate these investments as there is no assurance as to when the market for these investments will allow us to liquidate them. We may be required to record impairment charges in periods subsequent to December 31, 2013 with respect to these securities and, if a liquid market does not develop for these investments, we could be required to hold them to market recovery.

Foreign Currency Risk

To date, our international customer and supplier agreements have been denominated primarily in U.S. dollars, and accordingly, we have limited exposure to foreign currency exchange rate fluctuations from customer agreements, and do not currently engage in foreign currency hedging transactions. However, the functional currency of our operations in the Netherlands and Taiwan is the U.S. dollar and our local accounts including financing arrangements are denominated in the local currency in the Netherlands and Taiwan, respectively, and thus we are subject to foreign currency exchange rate fluctuations associated with re-measurement to U.S. dollars. Such fluctuations have not been significant historically. Foreign exchange gain (loss) for three and six months ended December 31, 2013 was $0.2 million and $12,000, and approximately $0.1 million and $(46,000) for the three and six months ended December 31, 2012, respectively.

Item 4.        Controls and Procedures

Evaluation of Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The evaluation considered the procedures designed to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2013.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

33

PART II: OTHER INFORMATION

Item 1.        Legal Proceedings

From time to time, we have been involved in various legal proceedings arising from the normal course of business activities. We defend ourselves vigorously against any such claims. In management’s opinion, the resolution of any pending matters will not have a material adverse effect on our condensed consolidated financial condition, results of operations, or liquidity.

Item 1A.    Risk Factors

The Risk Factors included in our Annual Report on Form 10-K for the year ended June 30, 2013 have not materially changed. You should carefully consider the following risk factors, as well as the other information in this Form 10-Q. If any of the following risks actually occurs, our business, financial condition and results of operations would suffer. In this case, the trading price of our common stock would likely decline and you might lose all or part of your investment in our common stock. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business operations.

Risks Related to Our Business and Industry

Our quarterly operating results will likely fluctuate in the future, which could cause rapid declines in our stock price.

As our business continues to grow, we believe that our quarterly operating results will be subject to greater fluctuation due to various factors, many of which are beyond our control. Factors that may affect quarterly operating results in the future include:

• fluctuations based upon seasonality, with the quarters ending March 31 and September 30 typically being weaker;

• unpredictability of the timing and size of customer orders, since most of our customers purchase our products on a purchase order basis rather than pursuant to a long term contract;

• fluctuations in availability and costs associated with key components and other materials needed to satisfy customer requirements;

• variability of our margins based on the mix of server systems, subsystems and accessories we sell;

• the timing of the introduction of new products by leading microprocessor vendors and other suppliers;

• our ability to introduce new and innovative server solutions that appeal to our customers;

• our ability to address technology issues as they arise, improve our products’ functionality and expand our product offerings;

• changes in our product pricing policies, including those made in response to new product announcements and pricing changes of our competitors;

• mix of whether customer purchases are of full systems or subsystems and accessories and whether made directly or through indirect sales channels;

• the effect of mergers and acquisitions among our competitors, suppliers or partners;

• general economic conditions in our geographic markets; and

• impact of regulatory changes on our cost of doing business.

Accordingly, it is difficult to accurately forecast our growth and results of operations on a quarterly basis. If we fail to meet expectations of investors or analysts, our stock price may fall rapidly and without notice. Furthermore, the fluctuation of quarterly operating results may render less meaningful period-to-period comparisons of our operating results, and you should not rely upon them as an indication of future performance.

34

We may fail to meet publicly announced financial guidance or other expectations about our business, which would cause our stock to decline in value.

We typically provide forward looking financial guidance when we announce our financial results from the prior quarter. We undertake no obligation to update such guidance at any time. Frequently in the past and in particularly during the last two fiscal years, our financial results have failed to meet the guidance we provided. There are a number of reasons why we might fail, including, but not limited to, the factors described in the preceding Risk Factor.

Our cost structure and ability to deliver server solutions to customers in a timely manner may be adversely affected by volatility of the market for core components and materials for our products.

Prices of materials and core components utilized in the manufacture of our server solutions, such as serverboards, chassis, central processing units, or CPUs, memory and hard drives represent a significant portion of our cost of sales. We generally do not enter into long-term supply contracts for these materials and core components, but instead purchase these materials and components on a purchase order basis. Prices of these core components and materials are volatile, and, as a result, it is difficult to predict expense levels and operating results. In addition, if our business growth renders it necessary or appropriate to transition to longer term contracts with materials and core component suppliers, our costs may increase and our gross margins could correspondingly decrease.

Because we often acquire materials and core components on an as needed basis, we may be limited in our ability to effectively and efficiently respond to customer orders because of the then-current availability or the terms and pricing of materials and core components. Our industry has experienced materials shortages and delivery delays in the past, and we may experience shortages or delays of critical materials in the future. From time to time, we have been forced to delay the introduction of certain of our products or the fulfillment of customer orders as a result of shortages of materials and core components. For example, we were unable to fulfill certain orders at the end of the quarter ended June 30, 2010 due to component shortages, and our net sales were adversely impacted in fiscal year 2013 and 2012 by disk drive shortages resulting from the flooding in Thailand. If shortages or delays arise, the prices of these materials and core components may increase or the materials and core components may not be available at all. In addition, in the event of shortages, some of our larger competitors may have greater abilities to obtain materials and core components due to their larger purchasing power. We may not be able to secure enough core components or materials at reasonable prices or of acceptable quality to build new products to meet customer demand, which could adversely affect our business and financial results.

We may incur additional expenses and suffer lower margins if our expectations regarding long term hard disk drive commitments prove incorrect.

Notwithstanding our general practice of not entering into long term supply contracts, as a result of severe flooding in Thailand during the first quarter of fiscal year 2012, we have entered into purchase agreements with selected suppliers of hard disk drives in order to ensure continuity of supply for these components. The hard disk drive purchase commitments totaled approximately $89.8 million as of December 31, 2013 and will be paid through December 2014. Higher costs compared to the lower selling prices for these components incurred under these agreements contributed to our lower gross profit in fiscal year 2013 and will likely impact our gross profit in the future. This and any other similar future supply commitments that we may enter into expose us to risk for lower margins or loss on disposal of such inventory if our expectations of customer demand are incorrect and the market price of the material or component inventory decline.

We may lose sales or incur unexpected expenses relating to insufficient, excess or obsolete inventory.

As a result of our strategy to provide greater choice and customization of our products to our customers, we are required to maintain a high level of inventory. If we fail to maintain sufficient inventory, we may not be able to meet demand for our products on a timely basis, and our sales may suffer. If we overestimate customer demand for our products, we could experience excess inventory of our products and be unable to sell those products at a reasonable price, or at all. As a result, we may need to record higher inventory reserves. In addition, from time to time we assume greater inventory risk in connection with the purchase or manufacture of more specialized components in connection with higher volume sales opportunities. We have from time to time experienced inventory write downs associated with higher volume sales that were not completed as anticipated. For example, we recorded a reserve in the quarters ended March 31, 2013 and June 30, 2013 relating to specialized inventory purchased for one customer. We expect that we will experience such write downs from time to time in the future related to existing and future commitments. If we are later able to sell inventory with respect to which we have taken a reserve at a profit, it may increase the quarterly variances in our operating results. Additionally, the rapid pace of innovation in our industry could render significant portions of our existing inventory obsolete. Certain of our distributors and OEMs have rights

35

to return products, limited to purchases over a specified period of time, generally within 60 to 90 days of the purchase, or to products in the distributor's or OEM's inventory at certain times, such as termination of the agreement or product obsolescence. Any returns under these arrangements could result in additional obsolete inventory. In addition, server systems, subsystems and accessories that have been customized and later returned by those of our customers and partners who have return rights or stock rotation rights may be unusable for other purposes or may require reformation at additional cost to be made ready for sale to other customers. Excess or obsolete inventory levels for these or other reasons could result in unexpected expenses or increases in our reserves against potential future charges which would adversely affect our business and financial results. For example, during both three and six months ended December 31, 2013, we recorded inventory write-downs charged to cost of sales of $1.5 million for lower of cost or market and excess and obsolete inventory and $3.4 million and $6.3 million during the three and six months ended December 31, 2012, respectively. For additional information regarding customer return rights, see “Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies-Revenue Recognition.”

If we do not successfully manage the expansion of our international manufacturing operations, our business could be harmed.

Since inception we have conducted substantially all of our manufacturing operations near our corporate headquarters in California. We have recently begun significant manufacturing operations in Taiwan and more limited manufacturing operations in the Netherlands. The commencement of new manufacturing operations in new locations, particularly in other jurisdictions, entails additional risks and challenges. If we are unable to successfully ramp up these operations we may incur unanticipated costs, difficulties in making timely delivery of products or suffer other business disruptions which could adversely impact our results of operations.

We may not be able to successfully manage our planned growth and expansion.

Over time we expect to continue to make investments to pursue new customers and expand our product offerings to grow our business rapidly. We expect that our annual operating expenses will continue to increase as we invest in sales and marketing, research and development, manufacturing and production infrastructure, and strengthen customer service and support resources for our customers. Our failure to expand operational and financial systems timely or efficiently could result in additional operating inefficiencies, which could increase our costs and expenses more than we had planned and prevent us from successfully executing our business plan. We may not be able to offset the costs of operation expansion by leveraging the economies of scale from our growth in negotiations with our suppliers and contract manufacturers. Additionally, if we increase our operating expenses in anticipation of the growth of our business and this growth does not meet our expectations, our financial results will be negatively impacted.

If our business grows, we will have to manage additional product design projects, materials procurement processes, and sales efforts and marketing for an increasing number of SKUs, as well as expand the number and scope of our relationships with suppliers, distributors and end customers. If we fail to manage these additional responsibilities and relationships successfully, we may incur significant costs, which may negatively impact our operating results. Additionally, in our efforts to be first to market with new products with innovative functionality and features, we may devote significant research and development resources to products and product features for which a market does not develop quickly, or at all. If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer.

We may encounter difficulties with our ERP Systems.

We have been in the process of planning for the implementation of a new enterprise resource planning, or ERP, System. We have incurred and expect to continue to incur additional expenses to prepare for the implementation and when we commence the implementation. Many companies have experienced delays and difficulties with the implementation of new or changed ERP systems that have had a negative effect on their business. Any disruptions, delays or deficiencies in the design and implementation of a revised or new ERP system could result in potentially much higher costs than we had anticipated and could adversely affect our ability to develop new products, provide services, fulfill contractual obligations, file reports with the SEC in a timely manner and/or otherwise operate our business, or otherwise impact our controls environment. Any of these consequences could have an adverse effect on our results of operations and financial condition.

36

The market in which we participate is highly competitive, and if we do not compete effectively, we may not be able to increase our market penetration, grow our net sales or improve our gross margins.

The market for server solutions is intensely competitive and rapidly changing. Barriers to entry in our market are relatively low and we expect increased challenges from existing as well as new competitors. Some of our principal competitors offer server solutions at a lower price, which has resulted in pricing pressures on sales of our server solutions. We expect further downward pricing pressure from our competitors and expect that we will have to price some of our server solutions aggressively to increase our market share with respect to those products, particularly for datacenter customers. If we are unable to maintain the margins on our server solutions, our operating results could be negatively impacted. In addition, if we do not develop new innovative server solutions, or enhance the reliability, performance, efficiency and other features of our existing server solutions, our customers may turn to our competitors for alternatives. In addition, pricing pressures and increased competition generally may also result in reduced sales, lower margins or the failure of our products to achieve or maintain widespread market acceptance, any of which could have a material adverse effect on our business, results of operations and financial condition.

Our principal competitors include global technology companies such as Dell, Inc., Hewlett-Packard Company, IBM, Cisco and Intel. In addition, we also compete with a number of other vendors who also sell application optimized servers, contract manufacturers and original design manufacturers, or ODMs, such as Quanta Computer Incorporated. ODMs sell server solutions marketed or sold under a third party brand.

Many of our competitors enjoy substantial competitive advantages, such as:

• greater name recognition and deeper market penetration;

• longer operating histories;

• larger sales and marketing organizations and research and development teams and budgets;

• more established relationships with customers, contract manufacturers and suppliers and better channels to reach larger customer bases and larger sales volume allowing for better costs;

• larger customer service and support organizations with greater geographic scope;

• a broader and more diversified array of products and services; and

• substantially greater financial, technical and other resources.

As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. Competitors may seek to copy our innovations and use cost advantages from greater size to compete aggressively with us on price. Certain customers are also current or prospective competitors and as a result, assistance that we provide to them as customers may ultimately result in increased competitive pressure against us. Furthermore, because of these advantages, even if our application optimized server solutions are more effective than the products that our competitors offer, potential customers might accept competitive products in lieu of purchasing our products. The challenges we face from larger competitors will become even greater if consolidation or collaboration between or among our competitors occurs in our industry. In addition, in recent periods there has been substantial speculation regarding the future plans of Hewlett-Packard, Dell and IBM. A substantial change by either with respect to their strategy in the server market could have a significant impact on the market and impact our results of operations. For all of these reasons, we may not be able to compete successfully against our current or future competitors, and if we do not compete effectively, our ability to increase our net sales may be impaired.

As we increasingly target larger customers, our customer base may become less diversified, our cost of sales may increase, and our sales may be less predictable.

We expect that as our business continues to grow, we will be increasingly dependent upon larger sales to maintain our rate of growth and that selling our server solutions to larger customers will create new challenges. However, if certain customers buy our products in greater volumes, and their business becomes a larger percentage of our net sales, we may grow increasingly dependent on those customers to maintain our growth. If our largest customers do not purchase our products at the levels or in the timeframes that we expect, our ability to maintain or grow our net sales will be adversely affected.

Additionally, as we and our distribution partners focus increasingly on selling to larger customers and attracting larger orders, we expect greater costs of sales. Our sales cycle may become longer and more expensive, as larger customers typically spend more time negotiating contracts than smaller customers. Larger customers often seek to gain greater pricing concessions, as well as greater levels of support in the implementation and use of our server solutions. These factors can result in lower margins for our products.

37

Increased sales to larger companies may also cause fluctuations in results of operations. A larger customer may seek to fulfill all or substantially all of its requirements in a single order, and not make another purchase for a significant period of time. Accordingly, a significant increase in revenue during the period in which we recognize the revenue from the sale may be followed by a period of time during which the customer purchases none or few of our products. A significant decline in net sales in periods following a significant order could adversely affect our stock price.

We must work closely with our suppliers to make timely new product introductions.

We rely on our close working relationships with our suppliers, including Intel, AMD and Nvidia, to anticipate and deliver new products on a timely basis when new generation materials and core components are made available. Intel, AMD and Nvidia are the only suppliers of the microprocessors we use in our server systems. If we are not able to maintain our relationships with our suppliers or continue to leverage their research and development capabilities to develop new technologies desired by our customers, our ability to quickly offer advanced technology and product innovations to our customers would be impaired. We have no long term agreements that obligate our suppliers to continue to work with us or to supply us with products.

Our suppliers’ failure to improve the functionality and performance of materials and core components for our products may impair or delay our ability to deliver innovative products to our customers.

We need our material and core component suppliers, such as Intel, AMD and Nvidia, to provide us with core components that are innovative, reliable and attractive to our customers. Due to the pace of innovation in our industry, many of our customers may delay or reduce purchase decisions until they believe that they are receiving best of breed products that will not be rendered obsolete by an impending technological development. Accordingly, demand for new server systems that incorporate new products and features is significantly impacted by our suppliers’ new product introduction schedules and the functionality, performance and reliability of those new products. If our materials and core component suppliers fail to deliver new and improved materials and core components for our products, we may not be able to satisfy customer demand for our products in a timely manner, or at all. If our suppliers’ components do not function properly, we may incur additional costs and our relationships with our customers may be adversely affected.

As our business grows and if the economy does not improve, we expect that we may be exposed to greater customer credit risks.

Historically, we have offered limited credit terms to our customers. As our customer base expands, as our orders increase in size, and as we obtain more direct customers, we expect to offer increased credit terms and flexible payment programs to our customers. Doing so may subject us to increased credit risk, higher accounts receivable with longer days outstanding, and increases in charges or reserves, which could have a material adverse effect on our business, results of operations and financial condition. Likewise, if there is no sustained economic recovery, we could be exposed to greater credit risk.

Economic conditions could materially adversely affect us.

Our operations and performance depend significantly on worldwide economic conditions. Uncertainty about current global economic conditions poses a risk as consumers and businesses may continue to postpone spending in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values, which could have a material negative effect on demand for our products and services.

In addition, economic uncertainty concerns over the sovereign debt situation in certain countries in the European Union, as well as continued turmoil in the geopolitical environment in many parts of the world, have, and may continue to, put pressure on global economic conditions, which has led, and could continue to lead, to reduced demand for our products, to delays or reductions in IT expansions or infrastructure projects, and/or higher costs of production. Economic weakness may also lead to longer collection cycles for payments due from our customers, an increase in customer bad debt, restructuring initiatives and associated expenses, and impairment of investments. Furthermore, continued weakness and the sovereign debt situation in certain countries in the European Union, may adversely impact the ability of our customers to adequately fund their expected capital expenditures, which could lead to delays or cancellations of planned purchases of our products or services. In addition, our operating expenses are largely based on anticipated revenue trends and a high percentage of our expenses is, and will continue to be, fixed in the short and medium term.

38

Uncertainty about future economic conditions also makes it difficult to forecast operating results and to make decisions about future investments. Future or continued economic weakness, failure of our customers and markets to recover from such weakness, customer financial difficulties, increases in costs of production, and reductions in spending on IT maintenance and expansion could have a material adverse effect on demand for our products and consequently on our business, financial condition, and results of operations. Uncertainty about current global economic conditions could also continue to increase the volatility of our stock price.

Our ability to develop our brand is critical to our ability to grow.

We believe that acceptance of our server solutions by an expanding customer base depends in large part on increasing awareness of the Supermicro brand and that brand recognition will be even more important as competition in our market develops. In particular, we expect an increasing proportion of our sales to come from sales of server systems, the sales of which we believe may be particularly impacted by brand strength. Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to develop reliable and useful products at competitive prices. To date, we have not devoted significant resources to building our brand, and have limited experience in increasing customer awareness of our brand. Our future brand promotion activities, including any expansion of our cooperative marketing programs with strategic partners, may involve significant expense and may not generate desired levels of increased revenue, and even if such activities generate some increased revenue, such increased revenue may not offset the expenses we incurred in endeavoring to build our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses in our attempts to promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient return on our brand-building efforts, and as a result our operating results and financial condition could suffer.

We principally rely on indirect sales channels for the sale and distribution of our products and any disruption in these channels could adversely affect our sales.

Historically, a majority of our revenues have resulted from sales of our products through third party distributors and resellers, which sales accounted for 53.4% and 56.9% of our net sales in the three and six months ended December 31, 2013, respectively, and 55.0% and 54.8% in the three and six months ended December 31, 2012, respectively. We depend on our distributors to assist us in promoting market acceptance of our products and anticipate that a majority of our revenues will continue to result from sales through indirect channels. To maintain and potentially increase our revenue and profitability, we will have to successfully preserve and expand our existing distribution relationships as well as develop new distribution relationships. Our distributors also sell products offered by our competitors and may elect to focus their efforts on these sales. If our competitors offer our distributors more favorable terms or have more products available to meet the needs of their customers, or utilize the leverage of broader product lines sold through the distributors, those distributors may de-emphasize or decline to carry our products. In addition, our distributors’ order decision-making process is complex and involves several factors, including end customer demand, warehouse allocation and marketing resources, which can make it difficult to accurately predict total sales for the quarter until late in the quarter. We also do not control the pricing or discounts offered by distributors to end customers. To maintain our participation in distributors’ marketing programs, in the past we have provided cooperative marketing arrangements or made short-term pricing concessions.

The discontinuation of cooperative marketing arrangements or pricing concessions could have a negative effect on our business. Our distributors could also modify their business practices, such as payment terms, inventory levels or order patterns. If we are unable to maintain successful relationships with distributors or expand our distribution channels or we experience unexpected changes in payment terms, inventory levels or other practices by our distributors, our business will suffer.

We may be unable to accurately predict future sales through our distributors, which could harm our ability to efficiently manage our resources to match market demand.

Since a significant portion of our sales are made through domestic and international distributors, our financial results, quarterly product sales, trends and comparisons are affected by fluctuations in the buying patterns of end customers and our distributors, and by the changes in inventory levels of our products held by these distributors. We generally record revenue based upon a “sell-in” model which means that we generally record revenue upon shipment to our distributors. For more information regarding our revenue recognition policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.” While we attempt to assist our distributors in maintaining targeted stocking level of our products, we may not consistently be accurate or successful. This process involves the exercise of judgment and use of assumptions as to future uncertainties including end customer demand. Our distributors also have various rights to return products which could, among other things, result in our having to repurchase inventory which has declined in value or is obsolete. Consequently, actual results could differ from our estimates. Inventory levels of our products held by our

39

distributors may exceed or fall below the levels we consider desirable on a going-forward basis. This could adversely affect our distributors or our ability to efficiently manage or invest in internal resources, such as manufacturing and shipping capacity, to meet the demand for our products.

Any failure to adequately expand or retain our sales force will impede our growth.

We expect that our direct sales force will grow as larger customers increasingly require a direct sales approach. Competition for direct sales personnel with the advanced sales skills and technical knowledge we need is intense. Our ability to grow our revenue in the future will depend, in large part, on our success in recruiting, training, retaining and successfully managing sufficient qualified direct sales personnel. We have traditionally experienced greater turnover in our sales and marketing personnel as compared to other departments and other companies. New hires require significant training and may take six months or longer before they reach full productivity. Our recent hires and planned hires may not become as productive as we would like, and we may be unable to hire sufficient numbers of qualified individuals in the future in the markets where we do business. If we are unable to hire, develop and retain sufficient numbers of productive sales personnel, sales of our server solutions will suffer.

Our direct sales efforts may create confusion for our end customers and harm our relationships with our distributors and OEMs.

Though our direct sales efforts have historically been limited and focused on customers who typically do not buy from distributors or OEMs, we expect our direct sales force to grow as our business grows. As our direct sales force becomes larger, our direct sales efforts may lead to conflicts with our distributors and OEMs, who may view our direct sales efforts as undermining their efforts to sell our products. If a distributor or OEM deems our direct sales efforts to be inappropriate, the distributor or OEM may not effectively market our products, may emphasize alternative products from competitors, or may seek to terminate our business relationship. Disruptions in our distribution channels could cause our revenues to decrease or fail to grow as expected. Our failure to implement an effective direct sales strategy that maintains and expands our relationships with our distributors and OEMs could lead to a decline in sales and adversely affect our results of operations.

If we are required to change the timing of our revenue recognition, our net sales and net income could decrease.

We currently record revenue based upon a “sell-in” model with revenues generally recorded upon shipment of products to our distributors. This is in contrast to a “sell-through” model pursuant to which revenues are generally recognized upon sale of products by distributors to their customers. This requires that we maintain a reserve to cover the estimated costs of any returns or exercises of stock rotation rights, which we estimate primarily based on our historical experience. If facts and circumstances change such that the rate of returns of our products exceeds our historical experience, we may have to increase our reserve, which, in turn, would cause our revenue to decline. Similarly, if facts and circumstances change such that we are no longer able to determine reasonable estimates of our sales returns, we would be required to defer our revenue recognition until the point of sale from the distributors to their customers. Any such change may negatively impact our net sales or net income for particular periods and cause a decline in our stock price. For additional information regarding our revenue recognition policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.”

The average selling prices for our existing server solutions are subject to decline if customers do not continue to purchase our latest generation products, which could harm our results of operations.

As with most electronics based products, average selling prices of servers typically are highest at the time of introduction of new products, which utilize the latest technology, and tend to decrease over time as such products become commoditized and are ultimately replaced by even newer generation products. As our business continues to grow, we may increasingly be subject to this industry risk. We cannot predict the timing or amount of any decline in the average selling prices of our server solutions that we may experience in the future. In some instances, our agreements with our distributors limit our ability to reduce prices unless we make such price reductions available to them, or price protect their inventory. If we are unable to decrease per unit manufacturing costs faster than the rate at which average selling prices continue to decline, our business, financial condition and results of operations will be harmed.

40

If our limited number of contract manufacturers or suppliers of materials and core components fail to meet our requirements, we may be unable to meet customer demand for our products, which could decrease our revenues and earnings.

We purchase many sophisticated materials and core components from one or a limited number of qualified suppliers and rely on a limited number of contract manufacturers to provide value added design, manufacturing, assembly and test services. We generally do not have long-term agreements with these vendors, and instead obtain key materials and services through purchase order arrangements. We have no contractual assurances from any contract manufacturer that adequate capacity will be available to us to meet future demand for our products.

Consequently, we are vulnerable to any disruptions in supply with respect to the materials and core components provided by limited-source suppliers, and we are at risk of being harmed by discontinuations of design, manufacturing, assembly or testing services from our contract manufacturers. We have occasionally experienced delivery delays from our suppliers and contract manufacturers because of high industry demand or because of inability to meet our quality or delivery requirements. For example, in the past we experienced delays in the delivery of printed circuit board material as a result of the loss of two of our five printed circuit board vendors which resulted in a reduction of net sales for the quarter in which it occurred. In addition, the 2011 floods in Thailand disrupted the global supply chain for hard disk drives manufactured in Thailand. Furthermore, if our relationships with our suppliers and contract manufactures are negatively impacted by late payments or other issues, we may not receive timely delivery of materials and core components.

If we were to lose any of our current supply or contract manufacturing relationships, the process of identifying and qualifying a new supplier or contract manufacturer who will meet our quality and delivery requirements, and who will appropriately safeguard our intellectual property, may require a significant investment of time and resources, adversely affecting our ability to satisfy customer purchase orders and delaying our ability to rapidly introduce new products to market. Similarly, if any of our suppliers were to cancel, materially change contracts or commitments to us or fail to meet the quality or delivery requirements needed to satisfy customer demand for our products, whether due to shortages or other reasons, our reputation and relationships with customers could be damaged. We could lose orders, be unable to develop or sell some products cost-effectively or on a timely basis, if at all, and have significantly decreased revenues, margins and earnings, which would have a material adverse effect on our business.

Our focus on internal development and customizable server solutions could delay our introduction of new products and result in increased costs.

Our strategy is to rely to a significant degree on internally developed components, even when third party components may be available. We believe this allows us to develop products with a greater range of features and functionality and allows us to develop solutions that are more customized to customer needs. However, if not properly managed, this reliance on internally developed components may be more costly than use of third party components, thereby making our products less price competitive or reducing our margins. In addition, our reliance on internal development may lead to delays in the introduction of new products and impair our ability to introduce products rapidly to market. We may also experience increases in our inventory costs and obsolete inventory, thereby reducing our margins.

Our research and development expenditures, as a percentage of our net sales, are considerably higher than many of our competitors and our earnings will depend upon maintaining revenues and margins that offset these expenditures.

Our strategy is to focus on being consistently rapid-to-market with flexible and customizable server systems that take advantage of our own internal development and the latest technologies offered by microprocessor manufacturers and other component vendors. Consistent with this strategy, we spend higher amounts, as a percentage of revenues, on research and development costs than many of our competitors. If we can not sell our products in sufficient volume and with adequate gross margins to compensate for such investment in research and development, our earnings may be materially and adversely affected.

Our failure to deliver high quality server solutions could damage our reputation and diminish demand for our products.

Our server solutions are critical to our customers’ business operations. Our customers require our server solutions to perform at a high level, contain valuable features and be extremely reliable. The design of our server solutions is sophisticated and complex, and the process for manufacturing, assembling and testing our server solutions is challenging. Occasionally, our design or manufacturing processes may fail to deliver products of the quality that our customers require. For example, in the past a vendor provided us with a defective capacitor that failed under certain heavy use applications. As a result, our product

41

needed to be repaired. Though the vendor agreed to pay for a large percentage of the costs of the repairs, we incurred costs in connection with the recall and diverted resources from other projects.

New flaws or limitations in our server solutions may be detected in the future. Part of our strategy is to bring new products to market quickly, and first-generation products may have a higher likelihood of containing undetected flaws. If our customers discover defects or other performance problems with our products, our customers’ businesses, and our reputation, may be damaged. Customers may elect to delay or withhold payment for defective or underperforming server solutions, request remedial action, terminate contracts for untimely delivery, or elect not to order additional server solutions, which could result in an increase in our provision for doubtful accounts, an increase in collection cycles for accounts receivable or subject us to the expense and risk of litigation. We may incur expense in recalling, refurbishing or repairing defective server solutions. If we do not properly address customer concerns about our products, our reputation and relationships with our customers may be harmed. For all of these reasons, customer dissatisfaction with the quality of our products could substantially impair our ability to grow our business.

Conflicts of interest may arise between us and Ablecom Technology Inc., one of our major contract manufacturers, and those conflicts may adversely affect our operations.

We use Ablecom, a related party, for contract design and manufacturing coordination support. We work with Ablecom to optimize modular designs for our chassis and certain of other components. Our purchases from Ablecom represented 18.1% and 17.7% of our cost of sales for the three and six months ended December 31, 2013, respectively, and 15.4% and 18.1% for the three and six months ended December 31, 2012, respectively. Ablecom’s sales to us constitute a substantial majority of Ablecom’s net sales. Ablecom is a privately-held Taiwan-based company.

Steve Liang, Ablecom’s Chief Executive Officer and largest shareholder, is the brother of Charles Liang, our President, Chief Executive Officer and Chairman of the Board. Charles Liang, and his spouse, Chiu-Chu (Sara) Liu Liang, our Vice President of Operations, Treasurer and director, jointly own 10.5% of Ablecom’s outstanding common stock, while Mr. Steve Liang and other family members own 35.9% of Ablecom’s outstanding common stock. Mr. and Mrs. Charles Liang, as directors, officers and significant stockholders of the Company, have considerable influence over the management of our business relationships. Accordingly, we may be disadvantaged by their economic interests as stockholders of Ablecom and their personal relationship with Ablecom’s Chief Executive Officer. We may not negotiate or enforce contractual terms as aggressively with Ablecom as we might with an unrelated party, and the commercial terms of our agreements may be less favorable than we might obtain in negotiations with third parties. If our business dealings with Ablecom are not as favorable to us as arms-length transactions, our results of operations may be harmed.

If Steve Liang ceases to have significant influence over Ablecom, or if those of our stockholders who hold shares of Ablecom cease to have a significant amount of the outstanding shares of Ablecom, the terms and conditions of our agreements with Ablecom may not be as favorable as those in our existing contracts. As a result, our costs could increase and adversely affect our margins and results of operations.

Our relationship with Ablecom may allow us to benefit from favorable pricing which may result in reported results more favorable than we might report in the absence of our relationship.

Although we generally re-negotiate the price of products that we purchase from Ablecom on a quarterly basis, pursuant to our agreements with Ablecom either party may re-negotiate the price of products for each order. As a result of our relationship with Ablecom, it is possible that Ablecom may in the future sell products to us at a price lower than we could obtain from an unrelated third party supplier. This may result in future reporting of gross profit as a percentage of net sales that is in excess of what we might have obtained absent our relationship with Ablecom.

Our reliance on Ablecom could be subject to risks associated with our reliance on a limited source of contract manufacturing services and inventory warehousing.

We continue to maintain our manufacturing relationship with Ablecom in Asia. In order to provide a larger volume of contract manufacturing services for us, Ablecom will continue to warehouse for us an increasing number of components and subassemblies manufactured by multiple suppliers prior to shipment to our facilities in the U.S. and Europe. We also anticipate that we will continue to lease office space from Ablecom in Taiwan to support the research and development efforts we are undertaking and continue to operate a joint management company with Ablecom to manage the common areas shared by us and Ablecom for our separately constructed manufacturing facilities in Taiwan.

42

If we or Ablecom fail to manage the contract manufacturing services and warehouse operations in Asia, we may experience delays in our ability to fulfill customer orders. Similarly, if Ablecom’s facility in Asia is subject to damage, destruction or other disruptions, our inventory may be damaged or destroyed, and we may be unable to find adequate alternative providers of contract manufacturing services in the time that we or our customers require. We could lose orders and be unable to develop or sell some products cost-effectively or on a timely basis, if at all.

Currently, we purchase contract manufacturing services primarily for our chassis and power supply products from Ablecom. If our commercial relationship with Ablecom were to deteriorate or terminate, establishing direct relationships with those entities supplying Ablecom with key materials for our products or identifying and negotiating agreements with alternative providers of warehouse and contract manufacturing services might take a considerable amount of time and require a significant investment of resources. Pursuant to our agreements with Ablecom and subject to certain exceptions, Ablecom has the exclusive right to be our supplier of the specific products developed under such agreements. As a result, if we are unable to obtain such products from Ablecom on terms acceptable to us, we may need to identify a new supplier, change our design and acquire new tooling, all of which could result in delays in our product availability and increased costs. If we need to use other suppliers, we may not be able to establish business arrangements that are, individually or in the aggregate, as favorable as the terms and conditions we have established with Ablecom. If any of these things should occur, our net sales, margins and earnings could significantly decrease, which would have a material adverse effect on our business.

Our growth into markets outside the United States exposes us to risks inherent in international business operations.

We market and sell our systems and components both domestically and outside the United States. We intend to expand our international sales efforts, especially into Asia and are expanding our business operations in Europe and Asia, particularly in Taiwan, the Netherlands and China. In particular, we have and continue to make substantial investments for the purchase of land and the development of new facilities in Taiwan to accommodate our expected growth. Our international expansion efforts may not be successful. Our international operations expose us to risks and challenges that we would otherwise not face if we conducted our business only in the United States, such as:

• heightened price sensitivity from customers in emerging markets;

• our ability to establish local manufacturing, support and service functions, and to form channel relationships with resellers in non-U.S. markets;

• localization of our systems and components, including translation into foreign languages and the associated expenses;

• compliance with multiple, conflicting and changing governmental laws and regulations;

• foreign currency fluctuations;

• limited visibility into sales of our products by our distributors;

• laws favoring local competitors;

• weaker legal protections of intellectual property rights and mechanisms for enforcing those rights;

• market disruptions created by public health crises in regions outside the U.S., such as Avian flu, SARS and other diseases;

• difficulties in staffing and managing foreign operations, including challenges presented by relationships with workers’ councils and labor unions; and

• changing regional economic and political conditions.

These factors could limit our future international sales or otherwise adversely impact our operations or our results of operations.

We have in the past entered into plea and settlement agreements with the government relating to violations of export control and related laws; if we fail to comply with laws and regulations restricting dealings with sanctioned countries, we may be subject to future civil or criminal penalties, which may have a material adverse effect on our business or ability to do business outside the United States.

In 2006, we entered into certain plea and settlement agreement with government agencies relating to export control and related law violations for activities that occurred in the 2001 to 2003 time frame. We believe we are currently in compliance in all material respects with applicable export related laws and regulations. However, if our export compliance program is not effective, or if we are subject to any future claims regarding violation of export control and economic sanctions laws, we could be subject to civil or criminal penalties, which could lead to a material fine or other sanctions, including loss of export privileges, that may have a material adverse effect on our business, financial condition, results of operation and future prospects. In addition, these plea and settlement agreements and any future violations could have an adverse impact on our ability to sell our products to United States federal, state and local government and related entities.

43

Any failure to protect our intellectual property rights, trade secrets and technical know-how could impair our brand and our competitiveness.

Our ability to prevent competitors from gaining access to our technology is essential to our success. If we fail to protect our intellectual property rights adequately, we may lose an important advantage in the markets in which we compete. Trademark, patent, copyright and trade secret laws in the United States and other jurisdictions as well as our internal confidentiality procedures and contractual provisions are the core of our efforts to protect our proprietary technology and our brand. Our patents and other intellectual property rights may be challenged by others or invalidated through administrative process or litigation, and we may initiate claims or litigation against third parties for infringement of our proprietary rights. Such administrative proceedings and litigation are inherently uncertain and divert resources that could be put towards other business priorities. We may not be able to obtain a favorable outcome and may spend considerable resources in our efforts to defend and protect our intellectual property.

Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our products are available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate.

Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property and using our technology for their competitive advantage. Any such infringement or misappropriation could have a material adverse effect on our business, results of operations and financial condition.

Resolution of claims that we have violated or may violate the intellectual property rights of others could require us to indemnify our customers, resellers or vendors, redesign our products, or pay significant royalties to third parties, and materially harm our business.

Our industry is marked by a large number of patents, copyrights, trade secrets and trademarks and by frequent litigation based on allegations of infringement or other violation of intellectual property rights. Third-parties have in the past sent us correspondence regarding their intellectual property or filed claims that our products infringe or violate third parties’ intellectual property rights. In addition, increasingly non-operating companies are purchasing patents and bringing claims against technology companies. We have been subject to several such claims and may be subject to such claims in the future.

Successful intellectual property claims against us from others could result in significant financial liability or prevent us from operating our business or portions of our business as we currently conduct it or as we may later conduct it. In addition, resolution of claims may require us to redesign our technology, to obtain licenses to use intellectual property belonging to third parties, which we may not be able to obtain on reasonable terms, to cease using the technology covered by those rights, and to indemnify our customers, resellers or vendors. Any claim, regardless of its merits, could be expensive and time consuming to defend against, and divert the attention of our technical and management resources.

If we lose Charles Liang, our President, Chief Executive Officer and Chairman, or any other key employee or are unable to attract additional key employees, we may not be able to implement our business strategy in a timely manner.

Our future success depends in large part upon the continued service of our executive management team and other key employees. In particular, Charles Liang, our President, Chief Executive Officer and Chairman of the Board, is critical to the overall management of our company as well as to the development of our culture and our strategic direction. Mr. Liang co-founded our company and has been our Chief Executive Officer since our inception. His experience in running our business and his personal involvement in key relationships with suppliers, customers and strategic partners are extremely valuable to our company. We currently do not have a succession plan for the replacement of Mr. Liang if it were to become necessary. Additionally, we are particularly dependent on the continued service of our existing research and development personnel because of the complexity of our products and technologies. Our employment arrangements with our executives and employees do not require them to provide services to us for any specific length of time, and they can terminate their employment with us at any time, with or without notice, without penalty. The loss of services of any of these executives or of one or more other key members of our team could seriously harm our business.

To execute our growth plan, we must attract additional highly qualified personnel, including additional engineers and executive staff. Competition for qualified personnel is intense, especially in San Jose, where we are headquartered. We have experienced in the past and may continue to experience difficulty in hiring and retaining highly skilled employees with appropriate qualifications. In particular, we are currently working to add personnel in our finance, accounting and general

44

administration departments, which have historically had limited budgets and staffing. If we are unable to attract and integrate additional key employees in a manner that enables us to scale our business and operations effectively, or if we do not maintain competitive compensation policies to retain our employees, our ability to operate effectively and efficiently could be limited.

Backlog does not provide a substantial portion of our net sales in any quarter.

Our net sales are difficult to forecast because we do not have sufficient backlog of unfilled orders to meet our quarterly net sales targets at the beginning of a quarter. Rather, a majority of our net sales in any quarter depend upon customer orders that we receive and fulfill in that quarter. Because our expense levels are based in part on our expectations as to future net sales and to a large extent are fixed in the short term, we might be unable to adjust spending in time to compensate for any shortfall in net sales. Accordingly, any significant shortfall of revenues in relation to our expectations would harm our operating results.

Our business and operations are especially subject to the risks of earthquakes and other natural catastrophic events.

Our corporate headquarters, including our most significant research and development and manufacturing operations, are located in the Silicon Valley area of Northern California, a region known for seismic activity. We have also established significant manufacturing and research and development operations in Taiwan which is also subject to seismic activity risks. We do not currently have a comprehensive disaster recovery program and as a result, a significant natural disaster, such as an earthquake, could have a material adverse impact on our business, operating results, and financial condition. Although we are in the process of preparing such a program, there is no assurance that it will be effective in the event of such a disaster.

If we are unable to favorably assess the effectiveness of our internal control over financial reporting, or if our independent auditors are unable to provide an unqualified attestation report on our internal control over financial reporting, our stock price could be adversely affected.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, our management is required to report on the effectiveness of our internal control over financial reporting in our annual reports. In addition, our independent auditors must attest to and report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex, and require significant documentation, testing and possible remediation. As a result, our efforts to comply with Section 404 have required the commitment of significant managerial and financial resources. As we are committed to maintaining high standards of public disclosure, our efforts to comply with Section 404 are ongoing, and we are continuously in the process of reviewing, documenting and testing our internal control over financial reporting, which will result in continued commitment of significant financial and managerial resources. Although we strive to maintain effective internal controls over financial reporting in order to prevent and detect material misstatements in our annual and quarterly financial statements and prevent fraud, we cannot assure that such efforts will be effective. If we fail to maintain effective internal controls in future periods, our operating results, financial position and stock price could be adversely affected.

Our operations involve the use of hazardous and toxic materials, and we must comply with environmental laws and regulations, which can be expensive, and may affect our business and operating results.

We are subject to federal, state and local regulations relating to the use, handling, storage, disposal and human exposure to hazardous and toxic materials. If we were to violate or become liable under environmental laws in the future as a result of our inability to obtain permits, human error, accident, equipment failure or other causes, we could be subject to fines, costs, or civil or criminal sanctions, face third party property damage or personal injury claims or be required to incur substantial investigation or remediation costs, which could be material, or experience disruptions in our operations, any of which could have a material adverse effect on our business. In addition, environmental laws could become more stringent over time imposing greater compliance costs and increasing risks and penalties associated with violations, which could harm our business.

We also face increasing complexity in our product design as we adjust to new and future requirements relating to the materials composition of our products, including the restrictions on lead and other hazardous substances applicable to specified electronic products placed on the market in the European Union (Restriction on the Use of Hazardous Substances Directive 2002/95/EC, also known as the RoHS Directive). We are also subject to laws and regulations such as California’s “Proposition 65” which requires that clear and reasonable warnings be given to consumers who are exposed to certain chemicals deemed by the State of California to be dangerous, such as lead. We expect that our operations will be affected by other new environmental laws and regulations on an ongoing basis. Although we cannot predict the ultimate impact of any such new laws and

45

regulations, they will likely result in additional costs, and could require that we change the design and/or manufacturing of our products, any of which could have a material adverse effect on our business.

Risks Related to Owning Our Stock

The trading price of our common stock is likely to be volatile, and you might not be able to sell your shares at or above the price at which you purchased the shares.

The trading prices of technology company securities historically have been highly volatile and the trading price of our common stock has been and is likely to continue to be subject to wide fluctuations. Factors, in addition to those outlined elsewhere in this filing, that may affect the trading price of our common stock include:

• actual or anticipated variations in our operating results;

• announcements of technological innovations, new products or product enhancements, strategic alliances or significant agreements by us or by our competitors;

• changes in recommendations by any securities analysts that elect to follow our common stock;

• the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

• the loss of a key customer;

• the loss of key personnel;

• technological advancements rendering our products less valuable;

• lawsuits filed against us;

• changes in operating performance and stock market valuations of other companies that sell similar products;

• price and volume fluctuations in the overall stock market;

• market conditions in our industry, the industries of our customers and the economy as a whole; and

• other events or factors, including those resulting from war, incidents of terrorism or responses to these events.

Future sales of shares by existing stockholders could cause our stock price to decline.

Attempts by existing stockholders to sell substantial amounts of our common stock in the public market could cause the trading price of our common stock to decline significantly. All of our shares are eligible for sale in the public market, including shares held by directors, executive officers and other affiliates, sales of which are subject to volume limitations under Rule 144 under the Securities Act. In addition, shares subject to outstanding options and reserved for future issuance under our stock option plans are eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements. If these additional shares are sold, or if it is perceived that they will be sold in the public market, the trading price of our common stock could decline.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The research and reports that industry or financial analysts publish about us or our business likely have an effect on the trading price of our common stock. If an industry analyst decides not to cover our company, or if an industry analyst decides to cease covering our company at some point in the future, we could lose visibility in the market, which in turn could cause our stock price to decline. If an industry analyst downgrades our stock, our stock price would likely decline rapidly in response.

The concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters.

As of January 28, 2014, our executive officers, directors, current five percent or greater stockholders and affiliated entities together beneficially owned 40.2% of our common stock, net of treasury stock. As a result, these stockholders, acting together, will have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.

46

Provisions of our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, as a result, depress the trading price of our common stock.

Our certificate of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions:

• establish a classified board of directors so that not all members of our board are elected at one time;

• require super-majority voting to amend some provisions in our certificate of incorporation and bylaws;

• authorize the issuance of “blank check” preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt;

• limit the ability of our stockholders to call special meetings of stockholders;

• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

• provide that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and

• establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which, subject to some exceptions, prohibits “business combinations” between a Delaware corporation and an “interested stockholder,” which is generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation’s voting stock for a three-year period following the date that the stockholder became an interested stockholder. Section 203 could have the effect of delaying, deferring or preventing a change in control that our stockholders might consider to be in their best interests.

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and cause us to take corporate actions other than those stockholders desire.

We do not expect to pay any cash dividends for the foreseeable future.

We do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.        Defaults Upon Senior Securities

Not applicable.

Item 4.        Mine Safety Disclosures

Not applicable.

Item 5.        Other Information

Not applicable.

47

Item 6.        Exhibits

(a) Exhibits.

31.1	Certification of Charles Liang, President and Chief Executive Officer of the Registrant pursuant to Section 302, as adopted pursuant to the Sarbanes-Oxley Act of 2002
31.2	Certification of Howard Hideshima, Chief Financial Officer of the Registrant pursuant to Section 302, as adopted pursuant to the Sarbanes-Oxley Act of 2002
32.1	Certification of Charles Liang, President and Chief Executive Officer of the Registrant pursuant to Section 906, as adopted pursuant to the Sarbanes-Oxley Act of 2002
32.2	Certification of Howard Hideshima, Chief Financial Officer of the Registrant pursuant to Section 906, as adopted pursuant to the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

_________________________________

 * Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

48

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SUPER MICRO COMPUTER, INC.
Date:	February 7, 2014	/S/ CHARLES LIANG
		Charles Liang
		President, Chief Executive Officer and Chairman of the Board
		(Principal Executive Officer)
Date:	February 7, 2014	/S/ HOWARD HIDESHIMA
		Howard Hideshima
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

49

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles Liang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Super Micro Computer, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 7, 2014	/s/    CHARLES LIANG
		Charles Liang President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Howard Hideshima, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Super Micro Computer, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	February 7, 2014	/s/    HOWARD HIDESHIMA
		Howard Hideshima Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles Liang, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Super Micro Computer, Inc. on Form 10-Q for the period ended December 31, 2013, as filed with the Securities and Exchange Commission on the date thereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Super Micro Computer, Inc.

Date:	February 7, 2014	/s/    CHARLES LIANG
		Charles Liang President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Howard Hideshima, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Super Micro Computer, Inc. on Form 10-Q for the period ended December 31, 2013, as filed with the Securities and Exchange Commission on the date thereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Super Micro Computer, Inc.

Date:	February 7, 2014	/s/    HOWARD HIDESHIMA
		Howard Hideshima Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Balance Sheet Components - Warranty (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance, beginning of period	$ 6,600	$ 5,964	$ 6,472	$ 5,522
Provision for warranty	3,507	3,384	6,941	6,492
Costs charged to accrual	(3,313)	(3,153)	(6,664)	(6,057)
Change in estimated liability for pre-existing warranties	28	32	73	270
Balance, end of period	$ 6,822	$ 6,227	$ 6,822	$ 6,227

XML

Commitment and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Loss Contingencies [Line Items]
Purchase commitment	$ 257,728
Hard Disk Drive [Member]
Loss Contingencies [Line Items]
Purchase commitment	$ 89,819

XML

Related-Party and Other Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended				3 Months Ended		6 Months Ended					6 Months Ended		3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013	Dec. 31, 2013 Super Micro [Member] Immediate Family Member of Management or Principal Owner [Member]	Dec. 31, 2013 Ablecom [Member]	Dec. 31, 2012 Ablecom [Member]	Dec. 31, 2013 Ablecom [Member]	Dec. 31, 2012 Ablecom [Member]	Jun. 30, 2013 Ablecom [Member]	Dec. 31, 2013 Ablecom [Member] Immediate Family Member of Management or Principal Owner [Member]	Dec. 31, 2013 Ablecom [Member] CEO's Other Family Members [Member]	Dec. 31, 2013 Minimum [Member] Ablecom [Member]	Dec. 31, 2013 Maximum [Member] Ablecom [Member]	Dec. 31, 2013 Variable Interest Entity, Primary Beneficiary [Member] Super Micro Business Park, Inc. [Member]	Dec. 31, 2012 Variable Interest Entity, Primary Beneficiary [Member] Super Micro Business Park, Inc. [Member]	Dec. 31, 2013 Variable Interest Entity, Primary Beneficiary [Member] Super Micro Business Park, Inc. [Member]	Dec. 31, 2012 Variable Interest Entity, Primary Beneficiary [Member] Super Micro Business Park, Inc. [Member]	May 31, 2012 Variable Interest Entity, Primary Beneficiary [Member] Super Micro Business Park, Inc. [Member]
Related Party Transaction [Line Items]
Ablecom ownership percentage in Compuware is lower than															50.00%
Ownership percentage of Company own by Steve Liang						1.10%
Ownership percentage of Ablecom own by Charles Liang and his wife												10.50%
Ownership percentage of Ablecom own by Steve Liang and other family members													35.90%
Purchases from Ablecom							$ 54,424	$ 38,683	$ 99,741	$ 87,940
Net sales from Ablecom	3,859	2,898	7,387	5,791			3,859	2,898	7,387	5,791
Amounts owed to the Company by Ablecom	417		417		974		417		417		974
Amounts owed to Ablecom by the Company	48,150		48,150		50,448		48,150		48,150		50,448
Majority of invoiced paid to Ablecom, minimum days														55 days
Majority of invoiced paid to Ablecom, maximum days															93 days
Tooling assets and miscellaneous costs paid to Ablecom							1,460	1,483	3,736	2,867
Outstanding purchase order with Ablecom							63,352		63,352		53,684
Contributions in Supermicro Business Park, Inc.																168		168		168
Noncontrolling interest, ownership percentage by the Company																50.00%		50.00%		50.00%
Net income (loss) attributable to Ablecom's interest																$ (7)	$ 2	$ (13)	$ 0

XML

Restricted Stock Award Activity (Details Table) (Restricted Stock [Member], USD $)	6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Nonvested stock, beginning of period	179,641
Vested	(179,641)	(179,641)
Granted	3,500
Forfeited	0
Nonvested stock, end of period	3,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Nonvested stock, beginning of period	$ 10.66
Granted	$ 14.23
Vested	$ 10.66
Forfeited	$ 0.00
Nonvested stock, end of period	$ 14.23

XML

Short-Term and Long-Term Obligations (Tables)

6 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Schedule of Short-term and Long-term Obligations

Short-term and long-term obligations as of December 31, 2013 and June 30, 2013 consisted of the following (in thousands):

	December 31,			June 30,
	2013			2013
Lines of credit:
Bank of America	$	10,899		$	10,899
CTBC Bank	3,520			—
Total line of credit	14,419			10,899
Building term loans:
Bank of America	7,933			9,333
CTBC Bank	19,989			14,939
Total building term loans	27,922			24,272
Total debt	42,341			35,171
Current portion	(37,208		)	(28,638		)
Long-term portion	$	5,133		$	6,533

XML

Segment Reporting of Long-Lived Assets (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Segment Reporting Information [Line Items]
Long-lived assets:	$ 128,072	$ 95,912
United States [Member]
Segment Reporting Information [Line Items]
Long-lived assets:	91,497	61,976
Asia [Member]
Segment Reporting Information [Line Items]
Long-lived assets:	36,193	33,500
Europe [Member]
Segment Reporting Information [Line Items]
Long-lived assets:	$ 382	$ 436

XML

Fair Value Disclosure - Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (Fair Value, Inputs, Level 3 [Member], Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of the period	$ 2,637	$ 2,923	$ 2,637	$ 2,923
Total realized gains or (losses) included in net income	0	0	0	0
Total unrealized gains or (losses) included in other comprehensive income	0	27	0	27
Sales and settlements at par	0	(300)	0	(300)
Transfer in and/or out of Level 3	0	0	0	0
Balance, ending of the period	$ 2,637	$ 2,650	$ 2,637	$ 2,650

XML

Balance Sheet Components - Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Balance Sheet Related Disclosures [Abstract]
Long-term prepaid royalty license	$ 1,371	$ 1,496
Restricted cash	855	847
Investment in a privately held company	750	750
Other	147	148
Total other assets	$ 3,123	$ 3,241

XML

Income Tax (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Provisions for income taxes	$ 6,731	$ 2,549	$ 10,897	$ 3,192
Effective tax rate	33.50%	34.20%	34.10%	35.40%
Unrecognized tax benefits	9,194		9,194
Unrecognized tax benefits, income tax penalties and interest accrued	$ 851		$ 851

XML

Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Organization

Super Micro Computer, Inc. (“Super Micro Computer”) was incorporated in 1993. Super Micro Computer is a global leader in server technology and green computing innovation. Super Micro Computer develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. Super Micro Computer has operations primarily in San Jose, California, the Netherlands, Taiwan and China.

Basis of Presentation

The condensed consolidated financial statements reflect the condensed consolidated balance sheets, results of operations, comprehensive income and cash flows of Super Micro Computer, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly-owned subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2013 included in its Annual Report on Form 10-K, as filed with the SEC (the “Annual Report”).

The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The condensed consolidated results of operations for the three and six months ended December 31, 2013 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2014.

As of December 31, 2013, the Company contributed $168,000 and owned a 50% interest in Super Micro Business Park, Inc. ("Management Company") in Taiwan. The Management Company was established to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. The Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. Therefore, the accounts of the Management Company have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations. In the three and six months ended December 31, 2012, $2,000 and $0, respectively, of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations.

Fair Value of Financial Instruments

The Company accounts for certain assets and liabilities at fair value. Accounts receivable and accounts payable are carried at cost, which approximates fair value due to the short maturity of these instruments. Cash equivalents and long-term investments are carried at fair value. Short-term and long-term debt is carried at amortized cost, which approximates its fair value based on borrowing rates currently available to the Company for loans with similar terms. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2 - Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

• Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Net Income Per Common Share

The Company’s restricted share awards subject to repurchase and settled in shares of common stock upon vesting have the nonforfeitable right to receive dividends on an equal basis with common stock and therefore are considered participating securities that must be included in the calculation of net income per share using the two-class method. Under the two-class method, basic and diluted net income per common share is determined by calculating net income per share for common stock and participating securities based on participation rights in undistributed earnings. Diluted net income per common share also considers the dilutive effect of in-the-money stock options, calculated using the treasury stock method. Under the treasury stock method, the amount of assumed proceeds from unexercised stock options includes the amount of compensation cost attributable to future services not yet recognized, assumed proceeds from the exercise of the options, and the incremental income tax benefit or liability as if the options were exercised during the period.

Adoption of New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued authoritative guidance associated with reporting of amounts reclassified out of accumulated other comprehensive income, which requires companies to present significant reclassifications out of accumulated other comprehensive income in their entirety in the statement of operations or in a separate footnote to the financial statements. For amounts that are not required to be reclassified in their entirety to net income, the standard requires companies to cross-reference to related footnoted disclosures. The new disclosure requirements are effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2012 and early adoption is permitted. The adoption of this guidance did not have a material impact on the Company's financial statement disclosures, results of operations or financial position.

In July 2013, the FASB issued authoritative guidance associated with the presentation of unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. It requires a liability related to unrecognized tax benefit to offset a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if a settlement is required or expected in the event the uncertain tax position is disallowed. The Company currently plans to adopt the new disclosure requirement on July 1, 2014. The Company does not believe the adoption of this guidance will have a material impact on its financial statement disclosures, results of operations or financial position.

XML

Fair Value Disclosure - Long-term Investment (Details) (Auction Rate Securities [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Auction Rate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Auction rate securities, amortized cost	$ 2,750	$ 2,750
Auction rate securities, gross unrealized holding gain	0	0
Auction rate security, gross unrealized holding loss	(113)	(113)
Auction rate securities, fair value	$ 2,637	$ 2,637

XML

Restricted Stock Awards (Details)	6 Months Ended		1 Months Ended
	Dec. 31, 2013	Dec. 31, 2013 Restricted Stock [Member]	Aug. 31, 2008 Chief Executive Officer [Member] Restricted Stock [Member]	Dec. 31, 2013 Chief Executive Officer [Member] Restricted Stock [Member]	Jun. 30, 2013 Chief Executive Officer [Member] Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise of stock options, shares	714,375		925,000
Restricted stock awards granted, shares		3,500	898,205
Restricted stock awards, vesting period			5 years
Restricted stock awards vested, shares				898,205	718,564

XML

Equity Incentive Plans (Details)	1 Months Ended	6 Months Ended
	Jan. 31, 2011	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares available for future issuance under all equity incentive plans		1,115,296
2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increased additional shares authorized for future issuance	2,000,000
Increase in number of shares of common stock reserved for issuance under the 2006 Plan		3.00%
Minimum percentage of shares owned by employee for ISO		10.00%
Stock options granted term		10 years
Stock options, vesting period		4 years
Stock options vesting rights		25% at the end of one year and one sixteenth per quarter thereafter
Percentage of options vested at the end of one year		25.00%
Percentage of options vested at the end of each quarter		6.25%
Maximum [Member] | 2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value		110.00%
Minimum [Member] | 2006 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value		100.00%

XML

Short-Term and Long-term Debt (Details Table) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Debt Instrument [Line Items]
Total debt	$ 42,341	$ 35,171
Debt, Current	(37,208)	(28,638)
Long-term portion	5,133	6,533
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total debt	14,419	10,899
Revolving Credit Facility [Member] | Bank of America [Member]
Debt Instrument [Line Items]
Total debt	10,899	10,899
Revolving Credit Facility [Member] | CTBC Bank [Member]
Debt Instrument [Line Items]
Total debt	3,520	0
Secured Debt [Member]
Debt Instrument [Line Items]
Total debt	27,922	24,272
Secured Debt [Member] | Bank of America [Member]
Debt Instrument [Line Items]
Total debt	7,933	9,333
Secured Debt [Member] | CTBC Bank [Member]
Debt Instrument [Line Items]
Total debt	$ 19,989	$ 14,939

XML

Determining Fair Value (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate, minimum			1.53%	0.65%
Risk free interest rate, maximum			1.54%	0.81%
Risk free interest rate	1.53%	0.81%
Expected life	5 years 6 months	5 years 1 month 9 days
Dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility, minimum			50.05%	51.29%
Volatility, maximum			50.07%	51.57%
Volatility	50.07%	51.57%
Weighted average fair value	$ 6.63	$ 4.17	$ 6.24	$ 4.91
Stock-based compensation expense before taxes	$ 2,788	$ 2,909	$ 5,377	$ 5,812
Income tax impact	(381)	(181)	(669)	(409)
Stock-based compensation expense, net	2,407	2,728	4,708	5,403
Excess tax benefits accounted in additional paid-in capital			1,532	1,494
Excess tax benefit from financing activities			1,084	785
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life			5 years 6 months	5 years 1 month 9 days
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life			5 years 5 months 28 days	5 years 0 months 11 days
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense before taxes	245	224	480	464
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense before taxes	1,709	1,632	3,270	3,262
Sales and Marketing Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense before taxes	305	389	619	793
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense before taxes	$ 529	$ 664	$ 1,008	$ 1,293

XML

Stock Option Activity (Details Table) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 31, 2013	Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of shares, beginning	12,206,178
Number of shares, stock options granted	945,620
Number of shares, options exercised	(714,375)
Number of shares, options forfeited or cancelled	(155,947)
Number of shares, ending	12,281,476	12,206,178
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Beginning balance, weighted average exercise price per share, options outstanding	$ 10.83
Weighted average exercise price per share, options granted	$ 13.40
Weighted average exercise price per share, options exercised	$ 6.70
Weighted average exercise price per share, options forfeited or cancelled	$ 13.94
Ending balance, weighted average exercise price per share, options outstanding	$ 11.23	$ 10.83
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Balance, weighted average remaining contractual term of options outstanding	6 years 1 month 12 days	6 years 2 months 23 days
Balance, aggregate intrinsic value of options outstanding	$ 74,943	$ 22,631
Number of shares options vested and expected to vest	12,009,051
Weighted average exercise price per share, options vested and expected to vest	$ 11.19
Weighted average remaining contractual term, options vested and expected to vest	6 years 0 months 18 days
Aggregate intrinsic value of options vested and expected to vest	73,834
Number of shares options vested and exercisable	8,880,986
Weighted average exercise price per share, options vested and exercisable	$ 10.28
Weighted average remaining contractual term, options vested and exercisable	5 years 1 month 20 days
Aggregate intrinsic value of options vested and exercisable	$ 62,395

XML

Condensed Consolidated Statements Of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Net cash provided by (used in) operating activities
Accounts receivable, changes in related party balances	$ 557	$ 418
Accounts payable, changes in related party balances	$ (2,298)	$ (14,267)

XML

Stock Option and Restricted Stock Award Activity (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total pretax intrinsic value of options exercised	$ 3,234	$ 2,190	$ 5,215	$ 3,068
Unrecognized compensation cost related to non-vested stock-based awards	18,757		18,757
Unrecognized compensation cost related to non-vested stock based awards, period for recognition			2 years 4 months 21 days
Payments related to tax withholding for share-based compensation			651	1,022
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pretax intrinsic value of restricted stock awards vested	0	0	2,337	2,190
Restricted stock awards vested, shares			179,641	179,641
Shares withheld for taxes			50,000	83,857
Total intrinsic value of the outstanding restricted stock awards	60		60
Officer [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payments related to tax withholding for share-based compensation			$ 651	$ 1,022

XML

Long-Term Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013
Schedule of Investments [Line Items]
Fair value inputs, discount rate			1.51%
Fair value inputs, time period until redemption			3 years
Fair value inputs, estimated rate of return			0.26%
Fair value investment, increase or decrease in rate of return			1.00%
Fair value investment, increase or decrease in term			1 year
Auction Rate Securities [Member]
Schedule of Investments [Line Items]
Auction-rate securities, net of unrealized losses	$ 2,637		$ 2,637		$ 2,637
Change in fair value	0	27	0	27
Auction rate security, gross unrealized holding loss	113		113		113
Accumulated unrealized income (loss), net of tax	(68)		(68)		(68)
Auction rate securities, redeemed at par	$ 0	$ 300	$ 0	$ 300
Minimum [Member]
Schedule of Investments [Line Items]
Fair value, change in investment portfolio			1.00%
Maximum [Member]
Schedule of Investments [Line Items]
Fair value, change in investment portfolio			3.00%

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
ASSETS
Cash and cash equivalents	$ 89,883	$ 93,038
Accounts receivable, net of allowances of $1,662 and $1,966 at December 31, 2013 and June 30, 2013, respectively (including amounts receivable from a related party of $417 and $974 at December 31, 2013 and June 30, 2013, respectively)	161,174	149,340
Inventory	290,927	254,170
Deferred income taxes-current	15,503	15,786
Prepaid income taxes	4,592	4,039
Prepaid expenses and other current assets	5,504	6,819
Total current assets	567,583	523,192
Long-term investments	2,637	2,637
Property, plant and equipment, net	128,072	95,912
Deferred income taxes-noncurrent	7,316	7,275
Other assets	3,123	3,241
Total assets	708,731	632,257
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable (including amounts due to a related party of $48,150 and $50,448 at December 31, 2013 and June 30, 2013, respectively)	205,758	172,855
Accrued liabilities	35,929	34,122
Income taxes payable	7,747	6,049
Short-term debt and current portion of long-term debt	37,208	28,638
Total current liabilities	286,642	241,664
Long-term debt-net of current portion	5,133	6,533
Other long-term liabilities	11,169	10,336
Total liabilities	302,944	258,533
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock and additional paid-in capital, $0.001 par value, Authorized shares: 100,000,000, Issued shares: 43,588,516 and 42,744,500 at December 31, 2013 and June 30, 2013, respectively	168,755	157,712
Treasury stock (at cost), 445,028 shares at December 31, 2013 and June 30, 2013	(2,030)	(2,030)
Accumulated other comprehensive loss	(70)	(69)
Retained earnings	238,964	217,930
Total Super Micro Computer, Inc. stockholders' equity	405,619	373,543
Noncontrolling interest	168	181
Total stockholders' equity	405,787	373,724
Total liabilities and stockholders' equity	$ 708,731	$ 632,257

XML

Short-Term and Long-Term Obligations (Details Textual)																					1 Months Ended			1 Months Ended						1 Months Ended								6 Months Ended		1 Months Ended				1 Months Ended		6 Months Ended
	Dec. 31, 2013 USD ($)	Jun. 30, 2013 USD ($)	Dec. 31, 2013 Bank of America [Member] USD ($)	Oct. 31, 2011 Bank of America [Member] USD ($)	Dec. 31, 2013 CTBC Bank [Member] USD ($)	Dec. 31, 2013 CTBC Bank [Member] TWD	Nov. 30, 2013 CTBC Bank [Member] USD ($)	Nov. 30, 2013 CTBC Bank [Member] TWD	Jun. 30, 2013 CTBC Bank [Member]	Oct. 30, 2011 CTBC Bank [Member] USD ($)	Oct. 30, 2011 CTBC Bank [Member] TWD	Dec. 31, 2013 London Interbank Offered Rate (LIBOR) [Member] Bank of America [Member]	Dec. 31, 2013 Minimum [Member] Bank of America [Member]	Jun. 30, 2013 Minimum [Member] Bank of America [Member]	Dec. 31, 2013 Minimum [Member] CTBC Bank [Member]	Dec. 31, 2013 Maximum [Member] Bank of America [Member]	Jun. 30, 2013 Maximum [Member] Bank of America [Member]	Dec. 31, 2013 Maximum [Member] CTBC Bank [Member]	Dec. 31, 2013 Secured Debt [Member] USD ($)	Jun. 30, 2013 Secured Debt [Member] USD ($)	Oct. 31, 2011 Secured Debt [Member] Bank of America [Member] USD ($) Building	Dec. 31, 2013 Secured Debt [Member] Bank of America [Member] USD ($) Building	Jun. 30, 2013 Secured Debt [Member] Bank of America [Member] USD ($)	Nov. 30, 2013 Secured Debt [Member] CTBC Bank [Member] USD ($)	Nov. 30, 2013 Secured Debt [Member] CTBC Bank [Member] TWD	Dec. 31, 2013 Secured Debt [Member] CTBC Bank [Member] USD ($)	Jun. 30, 2013 Secured Debt [Member] CTBC Bank [Member] USD ($)	Jul. 31, 2012 Secured Debt [Member] CTBC Bank [Member] USD ($)	Jul. 31, 2012 Secured Debt [Member] CTBC Bank [Member] TWD	Oct. 31, 2011 Secured Debt [Member] London Interbank Offered Rate (LIBOR) [Member] Bank of America [Member]	Nov. 30, 2013 Secured Debt [Member] CTBC's Established NTD Interest Rate [Member] CTBC Bank [Member]	Jul. 31, 2012 Secured Debt [Member] CTBC's Established NTD Interest Rate [Member] CTBC Bank [Member]	Nov. 30, 2013 Unsecured Debt [Member] CTBC Bank [Member] USD ($)	Nov. 30, 2013 Unsecured Debt [Member] CTBC Bank [Member] TWD	Nov. 30, 2013 Unsecured Debt [Member] CTBC's Established NTD Interest Rate [Member] CTBC Bank [Member]	Dec. 31, 2013 Revolving Credit Facility [Member] USD ($)	Jun. 30, 2013 Revolving Credit Facility [Member] USD ($)	Dec. 31, 2013 Revolving Credit Facility [Member] Bank of America [Member] USD ($) Consecutive_Quarters	Jun. 30, 2013 Revolving Credit Facility [Member] Bank of America [Member] USD ($)	Nov. 30, 2013 Revolving Credit Facility [Member] CTBC Bank [Member] USD ($)	Nov. 30, 2013 Revolving Credit Facility [Member] CTBC Bank [Member] TWD	Dec. 31, 2013 Revolving Credit Facility [Member] CTBC Bank [Member] USD ($)	Jun. 30, 2013 Revolving Credit Facility [Member] CTBC Bank [Member] USD ($)	Oct. 31, 2011 Revolving Credit Facility [Member] London Interbank Offered Rate (LIBOR) [Member] Bank of America [Member]	Nov. 30, 2013 Revolving Credit Facility [Member] CTBC's Established USD Interest Rate [Member] CTBC Bank [Member]	Dec. 31, 2013 Revolving Credit Facility [Member] Minimum [Member] Bank of America [Member] USD ($)
Short-term and long-term obligations
Credit facility, maximum borrowing capacity				$ 40,000,000			$ 33,981,000	1,000,000,000		$ 9,898,000	300,000,000													$ 23,787,000	700,000,000								$ 3,398,000	100,000,000						$ 16,991,000	500,000,000
Term loan, face amount																					14,000,000							14,912,000	450,000,000
Number of buildings as collateral																					3	3
Credit facility, basis spread on variable rate																														1.50%	0.25%	0.30%			0.25%									1.25%	0.30%
Interest rate, period end									1.20%			0.17%	1.20%	1.23%	1.11%	1.67%	1.69%	1.74%
Credit facility, total outstanding balance	42,341,000	35,171,000																	27,922,000	24,272,000		7,933,000	9,333,000			19,989,000	14,939,000									14,419,000	10,899,000	10,899,000	10,899,000			3,520,000	0
Line of credit facility, unused amount			29,101,000		9,806,000	294,340,000
Debt, term																					5 years			13 months	13 months								13 months	13 months						13 months	13 months
Percent of eligible accounts receivable																																								80.00%	80.00%
Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods																																						2
The Company's funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA), shall not be greater than																																														2.00
The Company's unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value, of not less than																																														30,000,000
Total assets collateralizing line of credit																																						663,476,000	586,742,000
Total assets collateralizing term loan																						$ 17,699,000	$ 17,813,000			$ 27,556,000	$ 27,702,000

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net income	$ 13,335	$ 4,914	$ 21,034	$ 5,813
Other comprehensive income, net of tax:
Foreign currency translation gain (loss)	(5)	4	(1)	8
Unrealized gains on investments	0	16	0	16
Total other comprehensive income (loss)	(5)	20	(1)	24
Comprehensive income	$ 13,330	$ 4,934	$ 21,033	$ 5,837

XML

Balance Sheet Components - Inventory(Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013
Balance Sheet Related Disclosures [Abstract]
Finished goods	$ 215,857		$ 215,857		$ 185,459
Work in process	22,856		22,856		10,440
Purchased parts and raw materials	52,214		52,214		58,271
Total inventory	290,927		290,927		254,170
Provision for inventory	$ 1,534	$ 3,403	$ 1,538	$ 6,313

XML

Net Income per Common Share (Tables)

6 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Common Share Using Two-class Method

The computation of basic and diluted net income per common share using the two-class method is as follows (in thousands, except per share amounts):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Basic net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(28		)	(33		)
Net income attributable to common shares—basic	$	13,334		$	4,893		$	21,006		$	5,780
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Basic net income per common share	$	0.31		$	0.12		$	0.49		$	0.14
Diluted net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(26		)	(31		)
Net income attributable to common shares—diluted	$	13,334		$	4,893		$	21,008		$	5,782
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Dilutive effect of options to purchase common stock	2,124			1,538			2,346			2,039
Weighted-average number of common shares used to compute diluted net income per common share	45,039			43,431			45,052			43,819
Diluted net income per common share	$	0.30		$	0.11		$	0.47		$	0.13

XML

Balance Sheet Components - Property, Plant, and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Oct. 31, 2013 acre sqft	Jun. 30, 2013
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 165,132		$ 130,288
Accumulated depreciation and amortization	(37,060)		(34,376)
Property, plant and equipment, net	128,072		95,912
Significant acquisition of real property		30,158
Square footage of building		324,000
Acre of land		36
Land [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	63,952		41,774
Significant acquisition of real property		22,178
Building [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	51,959		43,979
Significant acquisition of real property		7,980
Building and Leasehold Impovements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	7,547		7,483
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	31,315		26,941
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	4,852		4,731
Purchased Software [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 5,507		$ 5,380

XML

Fair Value Disclosure (Tables)

6 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Cash Equivalents and Long-term Investments Measured on Recurring Basis

The following table sets forth the Company’s cash equivalents and long-term investments as of December 31, 2013 and June 30, 2013 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement, (in thousands):

December 31, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947
June 30, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of long-term auction rate securities, using significant unobservable inputs (Level 3) for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,					Six Months Ended December 31,
	2013		2012			2013		2012
Balance as of beginning of period	$	2,637	$	2,923		$	2,637	$	2,923
Total realized gains or (losses) included in net income	—		—			—		—
Total unrealized gains or (losses) included in other comprehensive income	—		27			—		27
Sales and settlements at par	—		(300		)	—		(300		)
Transfers in and/or out of Level 3	—		—			—		—
Balance as of end of period	$	2,637	$	2,650		$	2,637	$	2,650

Schedule of Long-term Investments Reconciliation

The following is a summary of the Company’s long-term investments as of December 31, 2013 and June 30, 2013 (in thousands):

	December 31, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637
	June 30, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637

XML

Condensed Consolidated Statements Of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
OPERATING ACTIVITIES:
Net income	$ 21,034	$ 5,813
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	2,920	3,974
Stock-based compensation expense	5,377	5,812
Excess tax benefits from stock-based compensation	(1,084)	(785)
Allowance for doubtful accounts	1,076	75
Provision for inventory	1,538	6,313
Deferred income taxes	242	(3,982)
Exchange loss (gain)	(115)	278
Changes in operating assets and liabilities:
Accounts receivable, net (including changes in related party balances of $557 and $418 during the six months ended December 31, 2013 and 2012, respectively)	(12,910)	(16,973)
Inventory	(38,295)	26,689
Prepaid expenses and other assets	1,428	699
Accounts payable (including changes in related party balances of $(2,298) and $(14,267) during the six months ended December 31, 2013 and 2012, respectively)	31,950	(25,094)
Income taxes payable, net	2,677	679
Accrued liabilities	1,760	2,203
Other long-term liabilities	797	(98)
Net cash provided by operating activities	18,395	5,603
INVESTING ACTIVITIES:
Restricted cash	(8)	(12)
Proceeds from investments	0	300
Purchases of property, plant and equipment	(33,956)	(2,790)
Net cash used in investing activities	(33,964)	(2,502)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	4,785	780
Minimum tax withholding paid on behalf of an officer for restricted stock awards	(651)	(1,022)
Excess tax benefits from stock-based compensation	1,084	785
Proceeds from debt	8,576	20,641
Repayment of debt	(1,400)	(16,673)
Payment of obligations under capital leases	(15)	(18)
Advances (payments) under receivable financing arrangements	41	(584)
Contributions from noncontrolling interests	0	168
Net cash provided by financing activities	12,420	4,077
Effect of exchange rate fluctuations on cash	(6)	394
Net increase (decrease) in cash and cash equivalents	(3,155)	7,572
Cash and cash equivalents at beginning of period	93,038	80,826
Cash and cash equivalents at end of period	89,883	88,398
Supplemental disclosure of cash flow information:
Cash paid for interest	378	409
Cash paid for taxes, net of refunds	6,840	6,448
Non-cash investing and financing activities:
Accrued costs for property, plant and equipment purchases	$ 2,891	$ 1,080

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Current Assets
Accounts receivable, allowances	$ 1,662	$ 1,966
Accounts receivable, related party	417	974
Current Liabilities
Accounts payable, related party	$ 48,150	$ 50,448
Stockholders' Equity
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	43,588,516	42,744,500
Treasury stock, shares	445,028	445,028

XML

Income Taxes

6 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded provisions for income taxes of $6,731,000 and $10,897,000 for the three and six months ended December 31, 2013, respectively, and $2,549,000 and $3,192,000 for the three and six months ended December 31, 2012. The effective tax rate was 33.5% and 34.1% for the three and six months ended December 31, 2013, respectively, and 34.2% and 35.4% for the three and six months ended December 31, 2012, respectively. The effective tax rates for the three and six months ended December 31, 2013 are estimated to be lower than the federal statutory rate primarily due to the Company's release of unrecognized tax benefit as a result of audit settlements in the U.S. and foreign jurisdictions and the benefit from U.S. federal and state research and development tax credits in part offset by an increase in stock option expenses.

As of December 31, 2013, the Company had a liability for gross unrecognized tax benefits of $9,194,000, substantially all of which, if recognized, would affect the Company's effective tax rate. During the three and six months ended December 31, 2013, there were no material changes in the total amount of the liability for gross unrecognized tax benefits.   

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes on the condensed consolidated statements of operations. As of December 31, 2013, the Company had accrued $851,000 of interest and penalties relating to unrecognized tax benefits.

The Company is subject to U.S. federal income tax as well as income taxes in many state and foreign jurisdictions. The statutes of limitation in federal jurisdiction remain open in general for tax years 2010 through 2013. The state jurisdictions remain open in general for tax years 2008 through 2013. The Company's tax returns for its most significant foreign jurisdictions remain open for examination in general for tax years 2006 through 2013. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months.

XML

Document And Entity Information	6 Months Ended
	Dec. 31, 2013	Jan. 28, 2014
Document And Entity Information [Abstract]
Entity Registrant Name	Super Micro Computer, Inc.
Entity Central Index Key	0001375365
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		43,720,499

XML

Commitments and Contingencies

6 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

        Commitments and Contingencies

Litigation and Claims — The Company is involved in various legal proceedings arising from the normal course of business activities. The Company defends itself vigorously against any such claims. In management’s opinion, the resolution of any matters will not have a material adverse effect on the Company’s condensed consolidated financial condition, results of operations or liquidity.

Purchase Commitments — The Company has agreements to purchase certain units of inventory and non-inventory items through fiscal year 2016. As of December 31, 2013, these remaining non-cancellable commitments were $257,728,000.

Included in the above non-cancellable commitments are hard disk drive purchase commitments totaling approximately $89,819,000, which will be paid through December 2014. The Company entered into purchase agreements with selected suppliers of hard disk drives in order to ensure continuity of supply for these components. The agreements provide for some variation in the amount of units the Company is required to purchase and the suppliers may modify the purchase price for these components due to significant changes in market or component supply conditions. Product mix for these components may be negotiated quarterly and the purchase price for these components will be reviewed quarterly with the suppliers. The Company has been negotiating the purchase price with the suppliers on an ongoing basis based upon market rates.

XML

Condensed Consolidated Statements Of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Net sales (including related party sales of $3,859 and $2,898 in the three months ended December 31, 2013 and 2012, respectively, and $7,387 and $5,791 in the six months ended December 31, 2013 and 2012, respectively)	$ 356,362	$ 291,487	$ 665,378	$ 562,194
Cost of sales (including related party purchases of $54,424 and $38,683 in the three months ended December 31, 2013 and 2012, respectively, and $99,741 and $87,940 in the six months ended December 31, 2013 and 2012, respectively)	301,270	251,365	563,494	487,057
Gross profit	55,092	40,122	101,884	75,137
Operating expenses:
Research and development	20,428	18,824	40,664	37,045
Sales and marketing	8,976	7,945	17,841	16,711
General and administrative	5,484	5,745	11,132	12,091
Total operating expenses	34,888	32,514	69,637	65,847
Income from operations	20,204	7,608	32,247	9,290
Interest and other income, net	46	7	63	22
Interest expense	(184)	(152)	(379)	(307)
Income before income tax provision	20,066	7,463	31,931	9,005
Income tax provision	6,731	2,549	10,897	3,192
Net income	$ 13,335	$ 4,914	$ 21,034	$ 5,813
Net income per common share:
Basic (Per Share)	$ 0.31	$ 0.12	$ 0.49	$ 0.14
Diluted (Per Share)	$ 0.30	$ 0.11	$ 0.47	$ 0.13
Weighted-average shares used in calculation of net income per common share:
Basic (Shares)	42,915	41,893	42,706	41,780
Diluted (Shares)	45,039	43,431	45,052	43,819

XML

Balance Sheet Components

6 Months Ended

Dec. 31, 2013

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Balance Sheet Components (in thousands)        

The following tables provide details of the selected balance sheet items (in thousands):

Inventory:

	December 31,		June 30,
	2013		2013
Finished goods	$	215,857	$	185,459
Work in process	22,856		10,440
Purchased parts and raw materials	52,214		58,271
Total inventory	$	290,927	$	254,170

The Company recorded a provision for lower of costs or market and excess and obsolete inventory totaling $1,534,000 and $1,538,000 in the three and six months ended December 31, 2013, respectively, and $3,403,000 and $6,313,000 in the three and six months ended December 31, 2012, respectively.

Property, Plant, and Equipment:

	December 31,			June 30,
	2013			2013
Land	$	63,952		$	41,774
Buildings	51,959			43,979
Building and leasehold improvements	7,547			7,483
Machinery and equipment	31,315			26,941
Furniture and fixtures	4,852			4,731
Purchased software	5,507			5,380
	165,132			130,288
Accumulated depreciation and amortization	(37,060		)	(34,376		)
Property, plant and equipment, net	$	128,072		$	95,912

On October 31, 2013, the Company completed the purchase of real property for $30,158,000. The property consists of approximately 324,000 square feet of building space on 36 acres of land. The purchase values allocated to the land and building were $22,178,000 and $7,980,000, respectively.

Other Assets:

	December 31,		June 30,
	2013		2013
Prepaid royalty license	$	1,371	$	1,496
Restricted cash	855		847
Investment in a privately held company	750		750
Others	147		148
Total other assets	$	3,123	$	3,241

Restricted cash consists primarily of certificates of deposits pledged as security for one irrevocable letter of credit required in connection with a warehouse lease in Fremont, California, certificates of deposits pledged as security for value added tax examination required by tax authority of Taiwan and bank guarantees in connection with office leases in the Netherlands.

Accrued Liabilities:

	December 31,		June 30,
	2013		2013
Accrued payroll and related expenses	$	12,834	$	12,084
Customer prepayments	4,614		4,134
Accrued warranty costs	6,822		6,472
Accrued cooperative marketing expenses	3,952		4,016
Others	7,707		7,416
Total accrued liabilities	$	35,929	$	34,122

Product Warranties:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Balance, beginning of period	$	6,600		$	5,964		$	6,472		$	5,522
Provision for warranty	3,507			3,384			6,941			6,492
Costs charged to accrual	(3,313		)	(3,153		)	(6,664		)	(6,057		)
Change in estimated liability for pre-existing warranties	28			32			73			270
Balance, end of period	$	6,822		$	6,227		$	6,822		$	6,227

XML

Net Income Per Common Share

6 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Net Income Per Common Share

Net Income Per Common Share

The computation of basic and diluted net income per common share using the two-class method is as follows (in thousands, except per share amounts):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Basic net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(28		)	(33		)
Net income attributable to common shares—basic	$	13,334		$	4,893		$	21,006		$	5,780
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Basic net income per common share	$	0.31		$	0.12		$	0.49		$	0.14
Diluted net income per common share calculation
Net income	$	13,335		$	4,914		$	21,034		$	5,813
Less: Undistributed earnings allocated to participating securities	(1		)	(21		)	(26		)	(31		)
Net income attributable to common shares—diluted	$	13,334		$	4,893		$	21,008		$	5,782
Weighted-average number of common shares used to compute basic net income per common share	42,915			41,893			42,706			41,780
Dilutive effect of options to purchase common stock	2,124			1,538			2,346			2,039
Weighted-average number of common shares used to compute diluted net income per common share	45,039			43,431			45,052			43,819
Diluted net income per common share	$	0.30		$	0.11		$	0.47		$	0.13

For the three and six months ended December 31, 2013 and 2012, the Company had stock options outstanding that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net income per share in the periods presented, as their effect would have been anti-dilutive. The shares of common stock issuable upon exercise of such anti-dilutive outstanding stock options were 6,288,000 and 5,461,000 for the three and six months ended December 31, 2013, respectively, and 7,293,000 and 5,842,000 for the three and six months ended December 31, 2012, respectively.

XML

Balance Sheet Components (Tables)

6 Months Ended

Dec. 31, 2013

Balance Sheet Related Disclosures [Abstract]

Inventory

Inventory:

	December 31,		June 30,
	2013		2013
Finished goods	$	215,857	$	185,459
Work in process	22,856		10,440
Purchased parts and raw materials	52,214		58,271
Total inventory	$	290,927	$	254,170

Property, Plant and Equipment

Property, Plant, and Equipment:

	December 31,			June 30,
	2013			2013
Land	$	63,952		$	41,774
Buildings	51,959			43,979
Building and leasehold improvements	7,547			7,483
Machinery and equipment	31,315			26,941
Furniture and fixtures	4,852			4,731
Purchased software	5,507			5,380
	165,132			130,288
Accumulated depreciation and amortization	(37,060		)	(34,376		)
Property, plant and equipment, net	$	128,072		$	95,912

Other Assets

Other Assets:

	December 31,		June 30,
	2013		2013
Prepaid royalty license	$	1,371	$	1,496
Restricted cash	855		847
Investment in a privately held company	750		750
Others	147		148
Total other assets	$	3,123	$	3,241

Accrued Liabilities

Accrued Liabilities:

	December 31,		June 30,
	2013		2013
Accrued payroll and related expenses	$	12,834	$	12,084
Customer prepayments	4,614		4,134
Accrued warranty costs	6,822		6,472
Accrued cooperative marketing expenses	3,952		4,016
Others	7,707		7,416
Total accrued liabilities	$	35,929	$	34,122

Reconciliation of the Changes in Accrued Warranty Costs

Product Warranties:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Balance, beginning of period	$	6,600		$	5,964		$	6,472		$	5,522
Provision for warranty	3,507			3,384			6,941			6,492
Costs charged to accrual	(3,313		)	(3,153		)	(6,664		)	(6,057		)
Change in estimated liability for pre-existing warranties	28			32			73			270
Balance, end of period	$	6,822		$	6,227		$	6,822		$	6,227

XML

Segment Reporting

6 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company operates in one operating segment that develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. The Company’s chief operating decision maker is the Chief Executive Officer.

International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and six months ended December 31, 2013 and 2012, of net sales by geographic region (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2013		2012		2013		2012
Net sales:
United States	$	179,571	$	156,533	$	354,785	$	291,359
Europe	84,977		66,874		156,162		130,323
Asia	82,211		60,413		137,183		125,097
Other	9,603		7,667		17,248		15,415
	$	356,362	$	291,487	$	665,378	$	562,194

The following is a summary of long-lived assets, excluding financial instruments, deferred tax assets and other assets (in thousands):

	December 31,		June 30,
	2013		2013
Long-lived assets:
United States	$	91,497	$	61,976
Asia	36,193		33,500
Europe	382		436
	$	128,072	$	95,912

The following is a summary of net sales by product type (in thousands):

	Three Months Ended December 31,								Six Months Ended December 31,
	2013				2012				2013				2012
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales
Server systems	$	174,072	48.8	%	$	126,117	43.3	%	$	317,355	47.7	%	$	232,966	41.4	%
Subsystems and accessories	182,290		51.2	%	165,370		56.7	%	348,023		52.3	%	329,228		58.6	%
Total	$	356,362	100.0	%	$	291,487	100.0	%	$	665,378	100.0	%	$	562,194	100.0	%

Subsystems and accessories are comprised of serverboards, chassis and accessories. Server systems constitute an assembly of subsystems and accessories done by the Company. No customer represented greater than 10% of the Company’s total net sales nor did net sales in any country other than the United States represent greater than 10% of the Company’s total net sales in the three and six months ended December 31, 2013 and 2012. No customer accounted for 10% or more of accounts receivable as of December 31, 2013. One customer accounted for 14.4% of the Company's accounts receivable as of June 30, 2013.

XML

Short-Term and Long-Term Obligations

6 Months Ended

Dec. 31, 2013

Debt Instruments [Abstract]

Short-term and Long-term Obligations

Short-term and Long-term Obligations

Short-term and long-term obligations as of December 31, 2013 and June 30, 2013 consisted of the following (in thousands):

	December 31,			June 30,
	2013			2013
Lines of credit:
Bank of America	$	10,899		$	10,899
CTBC Bank	3,520			—
Total line of credit	14,419			10,899
Building term loans:
Bank of America	7,933			9,333
CTBC Bank	19,989			14,939
Total building term loans	27,922			24,272
Total debt	42,341			35,171
Current portion	(37,208		)	(28,638		)
Long-term portion	$	5,133		$	6,533

Activities under Revolving Lines of Credit and Term Loans

Bank of America

In October 2011, the Company entered into an amendment to the existing credit agreement with Bank of America, N.A. ("Bank of America") which provided for (i) a $40,000,000 revolving line of credit facility that matured on June 15, 2013 and (ii) a five-year $14,000,000 term loan facility. The term loan is secured by three buildings located in San Jose, California and the principal and interest are payable monthly through September 30, 2016 with an interest rate at the LIBOR rate plus 1.50% per annum. The credit agreement was subsequently amended to extend the maturity date of the revolving line of credit facility to August 15, 2014.

The line of credit facility provides for borrowings denominated both in U.S. dollars and in Taiwanese dollars. For borrowings denominated in U.S. dollars, the interest rate for the revolving line of credit is at the LIBOR rate plus 1.25% per annum. The LIBOR rate was 0.17% at December 31, 2013. For borrowings denominated in Taiwanese dollars, the interest rate is equal to the lender's established interest rate which is adjusted monthly.

As of December 31, 2013 and June 30, 2013, the total outstanding borrowings under the Bank of America term loan was $7,933,000 and $9,333,000, respectively. The total outstanding borrowings under the Bank of America line of credit was $10,899,000 as of December 31, 2013 and June 30, 2013, respectively. The interest rates for these loans ranged from 1.20% to 1.67% per annum at December 31, 2013 and 1.23% to 1.69% per annum at June 30, 2013, respectively. As of December 31, 2013, the unused revolving line of credit with Bank of America was $29,101,000.

CTBC Bank

In October 2011, the Company obtained an unsecured revolving line of credit from CTBC Bank Co., Ltd ("CTBC Bank", formerly, China Trust Bank) totaling NT$300,000,000 Taiwanese dollars, or $9,898,000 U.S. dollar equivalents. In July 2012, the Company increased the credit facility to NT$450,000,000 Taiwanese dollars or $14,912,000 U.S. dollar equivalents. The term loan was secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender’s established interest rate plus 0.30% which was adjusted monthly.

In November 2013, the Company entered into an amendment to the existing credit agreement with CTBC Bank to increase the credit facility amount and extend the maturity date to November 30, 2014. The amendment provides for (i) a 13-month NT$700,000,000 Taiwanese dollars or $23,787,000 U.S. dollar equivalents term loan secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established New Taiwan Dollar ("NTD") interest rate plus 0.25% per annum which is adjusted monthly and (ii) a 13-month unsecured term loan up to NT$100,000,000 Taiwanese dollars or $3,398,000 U.S. dollar equivalents and a 13-month revolving line of credit up to 80% of eligible accounts receivable in an aggregate amount of up to NT$500,000,000 Taiwanese dollars or $16,991,000 U.S. dollar equivalents with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum or lender's established USD interest rate plus 0.30% per annum which is adjusted monthly. The total borrowings allowed under the credit agreement is capped at NT$1,000,000,000 Taiwanese dollars or $33,981,000 U.S. dollar equivalents.

The total outstanding borrowings under the CTBC Bank term loan was denominated in Taiwanese dollars and was translated into U.S. dollars of $19,989,000 and $14,939,000 at December 31, 2013 and June 30, 2013, respectively. The total outstanding borrowings under the CTBC Bank revolving line of credit was $3,520,000 and $0 at December 31, 2013 and June 30, 2013, respectively. The interest rates for these loans ranged from 1.11% to 1.74% per annum at December 31, 2013 and was at 1.20% per annum at June 30, 2013. At December 31, 2013, NT$294,340,000 Taiwanese dollars or $9,806,000 U.S. dollar equivalents were available for future borrowing under this credit agreement.

Covenant Compliance

The credit agreement with Bank of America contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The credit agreement contains certain financial covenants, including the following:

• Not to incur on a consolidated basis, a net loss before taxes and extraordinary items in any two consecutive quarterly accounting periods;

• The Company’s funded debt to EBITDA ratio (ratio of all outstanding liabilities for borrowed money and other interest-bearing liabilities, including current and long-term debt, less the non-current portion of subordinated liabilities to EBITDA) shall not be greater than 2.00;

• The Company’s unencumbered liquid assets, as defined in the agreement, held in the United States shall have an aggregate market value of not less than $30,000,000, measured as of the last day of each fiscal quarter and the last day of each fiscal year.

As of December 31, 2013 and June 30, 2013, total assets of $663,476,000 and $586,742,000, respectively collateralized the line of credit with Bank of America and were all of the assets of the Company except for the three buildings located in San Jose, California and the land and building located in Bade, Taiwan. As of December 31, 2013 and June 30, 2013, total assets collateralizing the term loan with Bank of America were $17,699,000 and $17,813,000, respectively. As of December 31, 2013, the Company was in compliance with all financial covenants associated with the credit agreement with Bank of America.

As of December 31, 2013 and June 30, 2013, the net book value of land and building located in Bade, Taiwan collateralizing the term loan with CTBC Bank was $27,556,000 and $27,702,000, respectively. There are no financial covenants associated with the term loan with CTBC Bank at December 31, 2013.

XML

Long-Term Investments

6 Months Ended

Dec. 31, 2013

Long-term Investments [Abstract]

Long-term Investments

Long-term Investments

As of December 31, 2013 and June 30, 2013, the Company held $2,637,000 of auction-rate securities (“auction rate securities”), net of unrealized losses, representing its interest in auction rate preferred shares in a closed end mutual fund invested in municipal securities; such auction rate securities were rated AAA or AA2 at December 31, 2013 and June 30, 2013. These auction rate preferred shares have no stated maturity date.

During February 2008, the auctions for these auction rate securities began to fail to obtain sufficient bids to establish a clearing rate and the securities were not saleable in the auction, thereby losing the short-term liquidity previously provided by the auction process. As a result, as of December 31, 2013 and June 30, 2013, $2,637,000 of these auction rate securities have been classified as long-term available-for-sale investments.

The Company has used a discounted cash flow model to estimate the fair value of the auction rate securities as of December 31, 2013 and June 30, 2013. The material factors used in preparing the discounted cash flow model are i) the discount rate utilized to present value the cash flows, ii) the time period until redemption and iii) the estimated rate of return. As of December 31, 2013, the discount rate, the time period until redemption and the estimated rate of return were 1.51%, 3 years and 0.26%, respectively. Management derives the estimates by obtaining input from market data on the applicable discount rate, estimated time to redemption and estimated rate of return. The changes in fair value have been primarily due to changes in the estimated rate of return and a change in the estimated redemption period. The fair value of the Company's investment portfolio may change between 1% to 3% by increasing or decreasing the rate of return used by 1% or by increasing or decreasing the term used by 1 year. Changes in these estimates or in the market conditions for these investments are likely in the future based upon the then current market conditions for these investments and may affect the fair value of these investments. On a quarterly basis, the Company reviews the inputs to assess their continued appropriateness and consistency. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the auction rate securities. Movement of these inputs would not significantly impact the fair value of the auction rate securities.

Based on this assessment of fair value, the Company determined there were no changes in fair value of its auction rate securities during the three and six months ended December 31, 2013. There was a recovery in fair value of $27,000 during the three and six months ended December 31, 2012. There was a cumulative total decline in fair value of $113,000 as of December 31, 2013 and June 30, 2013. That amount has been recorded as a component of other comprehensive income. As of December 31, 2013 and June 30, 2013, the Company has recorded an accumulated unrealized loss of $68,000, net of deferred income taxes, on long-term auction rate securities. The Company deems this loss to be temporary as it will not likely be required to sell the securities before their anticipated recovery and the Company has the intent and financial ability to hold these investments until recovery of cost.

Although the investment impairment is considered to be temporary, these investments are not currently liquid and in the event the Company needs to access these funds, the Company will not be able to do so without a loss of principal. The Company plans to continue to monitor the liquidity situation in the marketplace and the creditworthiness of its holdings and will perform periodic impairment analysis. During the three and six months ended December 31, 2013, there were no auction rate securities redeemed or sold. During the three and six months ended December 31, 2012, $300,000 of the auction rate securities were redeemed at par.

XML

Fair Value Disclosure

6 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosure

Fair Value Disclosure

The financial assets of the Company measured at fair value on a recurring basis are included in cash equivalents and long-term investments. The Company’s money market funds are classified within Level 1 of the fair value hierarchy which is based on quoted market prices for the identical underlying securities in active markets. The Company’s long-term auction rate securities investments are classified within Level 3 of the fair value hierarchy which did not have observable inputs for its auction rate securities as of December 31, 2013 and June 30, 2013. Refer to Note 1 of Notes to Condensed Consolidated Financial Statements for a discussion of the Company’s policies regarding the fair value hierarchy. The Company’s methodology for valuing these investments is the discounted cash flow model and is described in Note 5 of Notes to Condensed Consolidated Financial Statements.

The following table sets forth the Company’s cash equivalents and long-term investments as of December 31, 2013 and June 30, 2013 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement, (in thousands):

December 31, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947
June 30, 2013	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,637		2,637
Total	$	310	$	—	$	2,637	$	2,947

The above table excludes $89,337,000 and $92,495,000 of cash and $1,150,000 and $1,139,000 of certificates of deposit held by the Company as of December 31, 2013 and June 30, 2013, respectively. There were no transfers between Level 1, Level 2 or Level 3 securities in the three and six months ended December 31, 2013 and 2012.

The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of long-term auction rate securities, using significant unobservable inputs (Level 3) for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,					Six Months Ended December 31,
	2013		2012			2013		2012
Balance as of beginning of period	$	2,637	$	2,923		$	2,637	$	2,923
Total realized gains or (losses) included in net income	—		—			—		—
Total unrealized gains or (losses) included in other comprehensive income	—		27			—		27
Sales and settlements at par	—		(300		)	—		(300		)
Transfers in and/or out of Level 3	—		—			—		—
Balance as of end of period	$	2,637	$	2,650		$	2,637	$	2,650

The following is a summary of the Company’s long-term investments as of December 31, 2013 and June 30, 2013 (in thousands):

	December 31, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637
	June 30, 2013
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(113	)	$	2,637

The Company measures the fair value of outstanding debt for disclosure purposes on a recurring basis. As of December 31, 2013 and June 30, 2013, short-term and long-term debt of $42,341,000 and $35,171,000, respectively, are reported at amortized cost. This outstanding debt is classified at Level 2 as they are not actively traded and are valued using a discounted cash flow model that uses observable market inputs. Based on the discounted cash flow model, the fair value of the outstanding debt approximates amortized cost.

XML

Related-Party and Other Transactions

6 Months Ended

Dec. 31, 2013

Related Party Transaction, Due from (to) Related Party [Abstract]

Related-party and Other Transactions

Related-party and Other Transactions

Ablecom Technology Inc.—Ablecom, a Taiwan corporation, together with one of its subsidiaries, Compuware (collectively “Ablecom”), is one of the Company’s major contract manufacturers. Ablecom’s ownership of Compuware is below 50% but Compuware remains a related party as Ablecom still has significant influence over the operations. Ablecom’s chief executive officer, Steve Liang, is the brother of Charles Liang, the Company’s President, Chief Executive Officer and Chairman of the Board of Directors. Ablecom owns approximately 1.1% of the Company’s common stock. Charles Liang and his wife, also an officer of the Company, collectively own approximately 10.5% of Ablecom, while Steve Liang and other family members own approximately 35.9% of Ablecom at December 31, 2013.

The Company has product design and manufacturing services agreements (“product design and manufacturing agreements”) and a distribution agreement (“distribution agreement”) with Ablecom.

Under the product design and manufacturing agreements, the Company outsources a portion of its design activities and a significant part of its manufacturing of components such as server chassis to Ablecom. Ablecom agrees to design products according to the Company’s specifications. Additionally, Ablecom agrees to build the tools needed to manufacture the products. The Company has agreed to pay for Ablecom's cost of chassis and related product tooling and engineering services and will pay for those items when the work has been completed.

Under the distribution agreement, Ablecom purchases server products from the Company for distribution in Taiwan. The Company believes that the pricing and terms under the distribution agreement are similar to the pricing and terms of distribution arrangements the Company has with similar, third party distributors.

Ablecom’s net sales to the Company and its net sales of the Company’s products to others comprise a substantial majority of Ablecom’s net sales. The Company purchased products from Ablecom totaling $54,424,000 and $99,741,000 and sold products to Ablecom totaling $3,859,000 and $7,387,000 for the three and six months ended December 31, 2013, respectively. The Company purchased products from Ablecom totaling $38,683,000 and $87,940,000 and sold products to Ablecom totaling $2,898,000 and $5,791,000 for the three and six months ended December 31, 2012, respectively.

Amounts owed to the Company by Ablecom as of December 31, 2013 and June 30, 2013, were $417,000 and $974,000, respectively. Amounts owed to Ablecom by the Company as of December 31, 2013 and June 30, 2013, were $48,150,000 and $50,448,000, respectively. For the three and six months ended December 31, 2013, the Company paid Ablecom the majority of invoiced dollars between 55 and 93 days of invoice. For the three and six months ended December 31, 2013, the Company paid $1,460,000 and $3,736,000, respectively, for tooling assets and miscellaneous costs to Ablecom. For the three and six months ended December 31, 2012, the Company paid $1,483,000 and $2,867,000, respectively, for tooling assets and miscellaneous costs to Ablecom.

The Company’s exposure to loss as a result of its involvement with Ablecom is limited to (a) potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products and (b) potential losses on outstanding accounts receivable from Ablecom in the event of an unforeseen deterioration in the financial condition of Ablecom such that Ablecom defaults on its payable to the Company. Outstanding purchase orders with Ablecom were $63,352,000 and $53,684,000 at December 31, 2013 and June 30, 2013, respectively, representing the maximum exposure to loss relating to (a) above. The Company does not have any direct or indirect guarantees of losses of Ablecom.

In May 2012, the Company and Ablecom jointly established Super Micro Business Park, Inc. ("Management Company") in Taiwan to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. Each company contributed $168,000 and own 50% of the Management Company. Although the operations of the Management Company are independent of the Company, through governance rights, the Company has the ability to direct the Management Company's business strategies. Therefore, the Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. The accounts of the Management Company are consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for the Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations. In the three and six months ended December 31, 2012, $2,000 and $0, respectively, of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations.

XML

Net Income per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Net income	$ 13,335	$ 4,914	$ 21,034	$ 5,813
Less: undistributed earnings allocated to participating securities	(1)	(21)	(28)	(33)
Net income attributable to common shares - basic	13,334	4,893	21,006	5,780
Weighted-average number of common shares used to compute basic net income per common share	42,915	41,893	42,706	41,780
Basic net income per common share	$ 0.31	$ 0.12	$ 0.49	$ 0.14
Earnings Per Share, Diluted [Abstract]
Less: Undistributed earnings allocated to participating securities	(1)	(21)	(26)	(31)
Net income attributable to common shares - diluted	$ 13,334	$ 4,893	$ 21,008	$ 5,782
Dilutive effect of options to purchase common stock	2,124	1,538	2,346	2,039
Weighted-average number of common shares used to compute diluted net income per common share	45,039	43,431	45,052	43,819
Diluted net income per common share	$ 0.30	$ 0.11	$ 0.47	$ 0.13
Anti-dilutive outstanding stock options, shares	6,288	7,293	5,461	5,842

XML

Revenue by Product Type (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2013 Customer	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013 Customer
Segment Reporting Information [Line Items]
Customers accounted for 10% or more of accounts receivable	0				1
Net sales	$ 356,362	$ 291,487	$ 665,378	$ 562,194
Server systems [Member]
Segment Reporting Information [Line Items]
Net sales	174,072	126,117	317,355	232,966
Subsystems and accessories [Member]
Segment Reporting Information [Line Items]
Net sales	$ 182,290	$ 165,370	$ 348,023	$ 329,228
Sales [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	100.00%	100.00%	100.00%	100.00%
Sales [Member] | Server systems [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	48.80%	43.30%	47.70%	41.40%
Sales [Member] | Subsystems and accessories [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	51.20%	56.70%	52.30%	58.60%
Customer Concentration Risk [Member] | One Customer [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage					14.40%

XML

Stock-Based Compensation and Stockholders' Equity (Tables)

6 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The fair value of stock option grants for the three and six months ended December 31, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Risk-free interest rate	1.53		%	0.81		%	1.53% - 1.54%			0.65% - 0.81%
Expected life	5.50 years			5.11 years			5.49 - 5.50 years			5.03 - 5.11 years
Dividend yield	—		%	—		%	—		%	—		%
Volatility	50.07		%	51.57		%	50.05% - 50.07%			51.29% - 51.57%
Weighted-average fair value	$	6.63		$	4.17		$	6.24		$	4.91

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Cost of sales	$	245		$	224		$	480		$	464
Research and development	1,709			1,632			3,270			3,262
Sales and marketing	305			389			619			793
General and administrative	529			664			1,008			1,293
Stock-based compensation expense before taxes	2,788			2,909			5,377			5,812
Income tax impact	(381		)	(181		)	(669		)	(409		)
Stock-based compensation expense, net	$	2,407		$	2,728		$	4,708		$	5,403

Schedule of Share-based Compensation, Stock Options Activity

The following table summarizes stock option activity during the six months ended December 31, 2013 under all stock option plans:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at July 1, 2013	12,206,178		$	10.83	6.23	$	22,631
Granted	945,620		13.40
Exercised	(714,375	)	6.70
Forfeited or cancelled	(155,947	)	13.94
Outstanding at December 31, 2013	12,281,476		11.23		6.12	74,943
Options vested and expected to vest at December 31, 2013	12,009,051		11.19		6.05	73,834
Options vested and exercisable at December 31, 2013	8,880,986		$	10.28	5.14	$	62,395

Schedule of Share-based Compensation, Restricted Stock Award Activity

The following table summarizes the Company’s restricted stock award activity for the six months ended December 31, 2013:

	Restricted Stock Awards
	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested stock at July 1, 2013	179,641		$	10.66
Granted	3,500		14.23
Vested	(179,641	)	10.66
Forfeited	—		—
Nonvested stock at December 31, 2013	3,500		$	14.23

XML

Segment Reporting (Tables)

6 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Summary of Net Sales by Geographic Region

International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and six months ended December 31, 2013 and 2012, of net sales by geographic region (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2013		2012		2013		2012
Net sales:
United States	$	179,571	$	156,533	$	354,785	$	291,359
Europe	84,977		66,874		156,162		130,323
Asia	82,211		60,413		137,183		125,097
Other	9,603		7,667		17,248		15,415
	$	356,362	$	291,487	$	665,378	$	562,194

Summary of Long-Lived Assets

The following is a summary of long-lived assets, excluding financial instruments, deferred tax assets and other assets (in thousands):

	December 31,		June 30,
	2013		2013
Long-lived assets:
United States	$	91,497	$	61,976
Asia	36,193		33,500
Europe	382		436
	$	128,072	$	95,912

Summary of Net Sales by Product Type

The following is a summary of net sales by product type (in thousands):

	Three Months Ended December 31,								Six Months Ended December 31,
	2013				2012				2013				2012
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales
Server systems	$	174,072	48.8	%	$	126,117	43.3	%	$	317,355	47.7	%	$	232,966	41.4	%
Subsystems and accessories	182,290		51.2	%	165,370		56.7	%	348,023		52.3	%	329,228		58.6	%
Total	$	356,362	100.0	%	$	291,487	100.0	%	$	665,378	100.0	%	$	562,194	100.0	%

XML

Revenue from Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Net sales	$ 356,362	$ 291,487	$ 665,378	$ 562,194
United States [Member]
Segment Reporting Information [Line Items]
Net sales	179,571	156,533	354,785	291,359
Europe [Member]
Segment Reporting Information [Line Items]
Net sales	84,977	66,874	156,162	130,323
Asia [Member]
Segment Reporting Information [Line Items]
Net sales	82,211	60,413	137,183	125,097
Other region [Member]
Segment Reporting Information [Line Items]
Net sales	$ 9,603	$ 7,667	$ 17,248	$ 15,415

XML

Fair Value Disclosure - Assets and Liabilities Measured at Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets, fair value	$ 310	$ 310
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets, fair value	0	0
Debt, fair value	42,341	35,171
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets, fair value	2,637	2,637
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets, fair value	2,947	2,947
Cash [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	89,337	92,495
Certificates of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certificates of deposit, fair value	1,150	1,139
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	310	310
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0	0
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	0	0
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value	310	310
Auction Rate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Auction rate securities, fair value	2,637	2,637
Auction Rate Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Auction rate securities, fair value	0	0
Auction Rate Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Auction rate securities, fair value	0	0
Auction Rate Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Auction rate securities, fair value	2,637	2,637
Auction Rate Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Auction rate securities, fair value	$ 2,637	$ 2,637

XML

Condensed Consolidated Statements Of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Net sales, related party sales	$ 3,859	$ 2,898	$ 7,387	$ 5,791
Cost of sales, related party purchases	$ 54,424	$ 38,683	$ 99,741	$ 87,940

XML

Stock-Based Compensation and Stockholders' Equity

6 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation and Stockholders' Equity

Stock-based Compensation and Stockholders’ Equity

Equity Incentive Plan

In January 2011, the Board of Directors approved an amendment to the 2006 Equity Incentive Plan (the “2006 Plan”) that increased by 2,000,000 the aggregate maximum number of shares that may be issued under the 2006 Plan. The amendment to the 2006 Plan was approved by the Company’s stockholders in February 2011. The authorized number of shares that may be issued under the 2006 Plan automatically increases on July 1 each year through 2016, by an amount equal to (a) 3.0% of shares of stock issued and outstanding on the immediately preceding June 30, or (b) a lesser amount determined by the Board of Directors. The exercise price per share for incentive stock options granted to employees owning shares representing more than 10% of the Company at the time of grant cannot be less than 110% of the fair value. Nonqualified stock options and incentive stock options granted to all other persons shall be granted at a price not less than 100% of the fair value. Options generally expire ten years after the date of grant and options vest over four years; 25% at the end of one year and one sixteenth per quarter thereafter. As of December 31, 2013, the Company had 1,115,296 authorized shares available for future issuance under all of its equity incentive plans.

Restricted Stock Awards

Restricted stock awards are share awards that provide the rights to a set number of shares of the Company’s stock on the grant date. In August 2008, the Compensation Committee of the Board of Directors of the Company (the “Committee”) approved the terms of an agreement (the “Option Exercise Agreement”) with Charles Liang, a director and President and Chief Executive Officer of the Company, pursuant to which Mr. Liang exercised a fully vested option previously granted to him for the purchase of 925,000 shares. The option was exercised using a “net-exercise” procedure in which he was issued a number of shares representing the spread between the option exercise price and the then current market value of the shares subject to the option (898,205 shares based upon the market value as of the date of exercise). The shares issued upon exercise of the option are subject to vesting over five years. Vesting of the shares subject to the award may accelerate in certain circumstances pursuant to the terms of the Option Exercise Agreement. The Company determined that there was no incremental fair value of the option exchanged for the award. 898,205 and 718,564 shares were vested as of December 31, 2013 and June 30, 2013, respectively.

Determining Fair Value

Valuation and amortization method—The Company estimates the fair value of stock options granted using the Black-Scholes-option-pricing formula and a single option award approach. This fair value is then amortized ratably over the requisite service periods of the awards, which is generally the vesting period.

Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on an analysis of the relevant peer companies’ post-vest termination rates and the exercise factors for the stock options granted prior to June 30, 2011. For stock options granted after June 30, 2011, the expected term is based on a combination of the Company's peer group and the Company's historical experience.

Expected Volatility—Expected volatility is based on a combination of the the Company's implied and historical volatility.

Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input and the Company has no plans to pay dividends.

Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes valuation method is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

Estimated Forfeitures—The estimated forfeiture rate is based on the Company’s historical forfeiture rates and the estimate is revised in subsequent periods if actual forfeitures differ from the estimate.

The fair value of stock option grants for the three and six months ended December 31, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Risk-free interest rate	1.53		%	0.81		%	1.53% - 1.54%			0.65% - 0.81%
Expected life	5.50 years			5.11 years			5.49 - 5.50 years			5.03 - 5.11 years
Dividend yield	—		%	—		%	—		%	—		%
Volatility	50.07		%	51.57		%	50.05% - 50.07%			51.29% - 51.57%
Weighted-average fair value	$	6.63		$	4.17		$	6.24		$	4.91

The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and six months ended December 31, 2013 and 2012 (in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2013			2012			2013			2012
Cost of sales	$	245		$	224		$	480		$	464
Research and development	1,709			1,632			3,270			3,262
Sales and marketing	305			389			619			793
General and administrative	529			664			1,008			1,293
Stock-based compensation expense before taxes	2,788			2,909			5,377			5,812
Income tax impact	(381		)	(181		)	(669		)	(409		)
Stock-based compensation expense, net	$	2,407		$	2,728		$	4,708		$	5,403

The cash flows resulting from the tax benefits for tax deductions resulting from the exercise of stock options in excess of the compensation expense recorded for those options (excess tax benefits) issued or modified since July 1, 2006 are classified as cash from financing activities. Excess tax benefits for stock options issued prior to July 1, 2006 are classified as cash from operating activities. The Company had $1,532,000 and $1,494,000 of excess tax benefits accounted in the Company’s additional paid-in capital in the six months ended December 31, 2013 and 2012, respectively. The Company had excess tax benefits that are classified as cash from financing activities of $1,084,000 and $785,000 in the six months ended December 31, 2013 and 2012, respectively, for options issued since July 1, 2006. Excess tax benefits for stock options issued prior to July 1, 2006 continue to be classified as cash from operating activities.

Stock Option Activity

The following table summarizes stock option activity during the six months ended December 31, 2013 under all stock option plans:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at July 1, 2013	12,206,178		$	10.83	6.23	$	22,631
Granted	945,620		13.40
Exercised	(714,375	)	6.70
Forfeited or cancelled	(155,947	)	13.94
Outstanding at December 31, 2013	12,281,476		11.23		6.12	74,943
Options vested and expected to vest at December 31, 2013	12,009,051		11.19		6.05	73,834
Options vested and exercisable at December 31, 2013	8,880,986		$	10.28	5.14	$	62,395

The total pretax intrinsic value of options exercised was $3,234,000 and $5,215,000 for the three and six months ended December 31, 2013, respectively, and $2,190,000 and $3,068,000 for the three and six months ended December 31, 2012, respectively. As of December 31, 2013, the Company’s total unrecognized compensation cost related to non-vested stock-based awards granted since July 1, 2006 to employees and non-employee directors was $18,757,000, which will be recognized over a weighted-average vesting period of approximately 2.39 years.

Restricted Stock Award Activity

The following table summarizes the Company’s restricted stock award activity for the six months ended December 31, 2013:

	Restricted Stock Awards
	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested stock at July 1, 2013	179,641		$	10.66
Granted	3,500		14.23
Vested	(179,641	)	10.66
Forfeited	—		—
Nonvested stock at December 31, 2013	3,500		$	14.23

The total pretax intrinsic value of restricted stock awards vested was $0 and $2,337,000 for the three and six months ended December 31, 2013, respectively, and $0 and $2,190,000 for the three and six months ended December 31, 2012, respectively. In the six months ended December 31, 2013 and 2012, upon vesting, 179,641 shares of restricted stock awards were partially net share-settled such that the Company withheld 50,000 and 83,857 shares, respectively, with value equivalent to an officer's minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were based on the value of the restricted stock awards on the vesting date as determined by the Company’s closing stock price. Total payments for an officer's tax obligations to the taxing authorities were $651,000 and $1,022,000 in the six months ended December 31, 2013 and 2012, respectively, and are reflected as a financing activity within the condensed consolidated statements of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company. The total intrinsic value of the outstanding restricted stock awards was $60,000 as of December 31, 2013.

XML

Summary of Significant Accounting Policies - Consolidation (Details) (Variable Interest Entity, Primary Beneficiary [Member], Super Micro Business Park, Inc. [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	May 31, 2012
Variable Interest Entity, Primary Beneficiary [Member] | Super Micro Business Park, Inc. [Member]
Summary of Significant Accounting Policies [Abstract]
Contributions in variable interest entity	$ 168		$ 168		$ 168
Noncontrolling interest, ownership percentage by the Company	50.00%		50.00%		50.00%
Net income (loss) attributable to noncontrolling interest	$ (7)	$ 2	$ (13)	$ 0

XML

Balance Sheet Components - Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2013
Accrued Liabilities [Abstract]
Accrued payroll and related expenses	$ 12,834	$ 12,084
Customer prepayments	4,614	4,134
Accrued warranty costs	6,822	6,472
Accrued cooperative marketing expenses	3,952	4,016
Others	7,707	7,416
Total accrued liabilities	$ 35,929	$ 34,122

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Organization

Organization

Super Micro Computer, Inc. (“Super Micro Computer”) was incorporated in 1993. Super Micro Computer is a global leader in server technology and green computing innovation. Super Micro Computer develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. Super Micro Computer has operations primarily in San Jose, California, the Netherlands, Taiwan and China.

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements reflect the condensed consolidated balance sheets, results of operations, comprehensive income and cash flows of Super Micro Computer, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly-owned subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2013 included in its Annual Report on Form 10-K, as filed with the SEC (the “Annual Report”).

The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The condensed consolidated results of operations for the three and six months ended December 31, 2013 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2014.

As of December 31, 2013, the Company contributed $168,000 and owned a 50% interest in Super Micro Business Park, Inc. ("Management Company") in Taiwan. The Management Company was established to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. The Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. Therefore, the accounts of the Management Company have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for Ablecom's interests in the net assets and operations of the Management Company. In the three and six months ended December 31, 2013, $7,000 and $13,000, respectively, of net loss attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company accounts for certain assets and liabilities at fair value. Accounts receivable and accounts payable are carried at cost, which approximates fair value due to the short maturity of these instruments. Cash equivalents and long-term investments are carried at fair value. Short-term and long-term debt is carried at amortized cost, which approximates its fair value based on borrowing rates currently available to the Company for loans with similar terms. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2 - Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

• Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Net Income Per Common Share

Net Income Per Common Share

The Company’s restricted share awards subject to repurchase and settled in shares of common stock upon vesting have the nonforfeitable right to receive dividends on an equal basis with common stock and therefore are considered participating securities that must be included in the calculation of net income per share using the two-class method. Under the two-class method, basic and diluted net income per common share is determined by calculating net income per share for common stock and participating securities based on participation rights in undistributed earnings. Diluted net income per common share also considers the dilutive effect of in-the-money stock options, calculated using the treasury stock method. Under the treasury stock method, the amount of assumed proceeds from unexercised stock options includes the amount of compensation cost attributable to future services not yet recognized, assumed proceeds from the exercise of the options, and the incremental income tax benefit or liability as if the options were exercised during the period.

Adoption of New Accounting Pronouncements

Adoption of New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued authoritative guidance associated with reporting of amounts reclassified out of accumulated other comprehensive income, which requires companies to present significant reclassifications out of accumulated other comprehensive income in their entirety in the statement of operations or in a separate footnote to the financial statements. For amounts that are not required to be reclassified in their entirety to net income, the standard requires companies to cross-reference to related footnoted disclosures. The new disclosure requirements are effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2012 and early adoption is permitted. The adoption of this guidance did not have a material impact on the Company's financial statement disclosures, results of operations or financial position.

In July 2013, the FASB issued authoritative guidance associated with the presentation of unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. It requires a liability related to unrecognized tax benefit to offset a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if a settlement is required or expected in the event the uncertain tax position is disallowed. The Company currently plans to adopt the new disclosure requirement on July 1, 2014. The Company does not believe the adoption of this guidance will have a material impact on its financial statement disclosures, results of operations or financial position.