Segment Information

12 Months Ended

Jun. 26, 2011

Segment Information [Abstract]

Segment Information

9. Segment Information

The Company reports in six segments which correspond to the way the Company manages its business and interacts with customers. These reportable segments, which correspond to operating segments include:

Power Management Devices (“PMD”) - The PMD segment targets power supply, data processing, and industrial and commercial battery-powered system applications with the Company’s Trench HEXFET®MOSFETs, Discrete HEXFET®MOSFETs, Dual HEXFET®MOSFETs, FETKY®s, and DirectFET®s products.

Energy Saving Products (“ESP”) -The ESP segment targets solutions in motor control appliances, industrial automation, lighting and display, audio and video with the Company’s HVICs and IGBT platforms, digital control ICs and IRAM integrated power modules.  These products provide multiple technologies to deliver completely integrated design platforms specific to these customers.

Automotive Products (“AP”) - The AP segment products are focused solely on automotive customers and applications that require a high level of reliability, quality and performance and consist of the Company’s automotive qualified HVICs, intelligent power switch ICs, power MOSFETs including DirectFET® and IGBTs .  The Company’s automotive product portfolio provides high performance and energy saving solutions for a broad variety of automotive systems, ranging from typical 12V power net applications up to 1200V hybrid electric vehicle power management solutions.

Enterprise Power (“EP”) – The EP segment’s primary applications include servers, storage, routers, switches, infrastructure equipment, notebooks, graphic cards, and gaming counsels.  The Company offers a broad portfolio of power management system products that deliver benchmark power density, efficiency and performance. These products include DirectFET® discrete products, digital controllers, power monitoring products, XPhase®, SupIRBuckTM and iPOWIR® voltage regulators, Low voltage ICs, and PowIRstagesTM.

HiRel - The HiRel segment includes the Company’s RAD-Hard discretes, RAD-Hard ICs, power management modules and DC-DC converters as well as other high-reliability power components that address power management requirements in mission critical applications including satellites and space exploration vehicles, military hardware and other high- reliability applications such as commercial aircraft, undersea telecommunications, and oil drilling in heavy industry and products used in biomedical applications.  HiRel’s strategy is to apply multiple technologies to deliver highly efficient power delivery in applications that operate in naturally harsh environments like space and undersea as well as applications that require a high level of reliability to address issues of safety, cost of failure or difficulty in replacement, like medical applications.

Intellectual Property (“IP”) - The IP segment includes revenues from the sale of the Company’s technologies and manufacturing process know-how, in addition to the operating results of the Company’s patent licensing and settlements of claims brought against third parties.  With the expiration of the Company’s broadest MOSFET patents, most of its IP segment revenues ceased during the fourth quarter of fiscal year 2008; however, the Company continues, from time to time, to enter into opportunistic licensing arrangements that it believes are consistent with its business strategy.

Transition Services (“TS”) - The TS segment consists of the operating results of the transition services, including wafer fabrication, assembly, product supply, test and other manufacturing-related support services being supplied to Vishay as part of the Divestiture.  After ongoing ramp-down in many of such services, Vishay terminated most wafer processing services under the TPSA effective April 30, 2009.  The revenues from such terminating services represents all but an immaterial amount of the remaining revenues reported under the TS segment.  The immaterial amounts of remaining sales to Vishay have been included in the Company’s PMD segment results as of the beginning of fiscal year 2010.

The Company does not allocate assets, sales and marketing, information systems, finance and administrative costs and asset impairment, restructuring and other charges (recoveries) to the operating segments, as these are not meaningful statistics to the CEO in making resource allocation decisions or in evaluating performance of the operating segments.

Because operating segments are generally defined by the products they design and sell, they do not make sales to each other.  The Company does not directly allocate assets to its operating segments, nor does the CEO evaluate operating segments using discrete asset information.  However, depreciation and amortization related to the manufacturing of goods is included in gross profit for the segments as part of manufacturing overhead.  Due to the Company’s methodology for cost build up at the product level, it is impractical to determine the amount of depreciation and amortization included in each segment’s gross profit.

The Company’s “ongoing customer segments” include PMD, ESP, AP, EP and HiRel reporting segments and its “ongoing segments” include the ongoing customer segments as well as the IP reporting segment.

For the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, revenues and gross margin by reportable segments were as follows (in thousands, except percentages):

	June 26, 2011								June 27, 2010								June 28, 2009
Business Segment	Revenues		Percentage of Total			Gross Margin			Revenues		Percentage of Total			Gross Margin			Revenues		Percentage of Total			Gross Margin
PMD	$	456,764		38.8	%		31.6	%	$	345,610		38.6	%		16.5	%	$	233,737		31.6	%		10.9	%
ESP		275,044		23.4			44.7			185,404		20.7			40.3			151,090		20.4			36.7
AP		112,174		9.5			29.9			72,932		8.1			24.2			54,061		7.3			21.5
EP		134,627		11.5			44.1			128,691		14.4			42.3			87,473		11.8			37.1
HiRel		190,547		16.2			51.2			153,213		17.1			51.7			148,266		20.0			51.7
Ongoing customer segments total		1,169,156		99.4			39.1			885,850		98.9			32.0			674,627		91.1			29.9
IP		7,421		0.6			100.0			9,447		1.1			100.0			27,673		3.7			100.0
Ongoing segments total		1,176,577		100.0			39.5			895,297		100.0			32.7			702,300		94.9			32.6
TS		―		―			―			―		―			―			38,119		5.1			(11.3	)
Consolidated total	$	1,176,577		100.0	%		39.5	%	$	895,297		100.0	%		32.7	%	$	740,419		100.0	%		30.4	%

Revenues from unaffiliated customers are based on the location in which the sale originated. The Company includes in long-lived assets, all long-term assets excluding long-term investments, restricted cash, long-term deferred income taxes, goodwill and acquisition-related intangibles. Geographic information for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is presented below (in thousands):

	2011		2010		2009
Revenues from Unaffiliated Customers
The United States	$	254,593	$	204,474	$	218,781
Asia		674,654		516,993		364,795
Europe		239,909		164,383		129,169
Subtotal		1,169,156		885,850		712,745
Royalties (unallocated)		7,421		9,447		27,674
Total	$	1,176,577	$	895,297	$	740,419
Long-lived Assets
The United States	$	306,741	$	235,021	$	247,546
Asia		44,695		28,139		30,388
Europe		155,742		131,203		145,690
Total	$	507,178	$	394,363	$	423,624

During the fiscal year ended June 26, 2011, sales to two of the Company’s distribution customers were approximately 12.7 and 11.8 percent, respectively, of consolidated revenues.  During the fiscal year ended June 27, 2010, sales to two of the Company’s distribution customers were approximately 13.2 and 11.2 percent, respectively, of consolidated revenues.  No single customer accounted for more than ten percent of the Company’s consolidated revenues for the fiscal year ended June 28, 2009.