10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 June 30, 2016

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: 000-23193

 ________________________________________________________

APPLIED MICRO CIRCUITS CORPORATION

(Exact name of registrant as specified in its charter)

 ________________________________________________________ 

Delaware	94-2586591
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4555 Great America Parkway, 6th Floor, Santa Clara, CA	95054
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (408) 542-8600

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  o

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  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 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. (Check one):

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

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

As of July 29, 2016, 85,366,236 shares of the registrant’s common stock, $0.01 par value per share, were issued and outstanding.

APPLIED MICRO CIRCUITS CORPORATION

INDEX

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Balance Sheets at June 30, 2016 and March 31, 2016	3
	Condensed Consolidated Statements of Operations for the three months ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended June 30, 2016 and 2015	5
	Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2016 and 2015	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46
Signatures		47

2

APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

	June 30, 2016			March 31, 2016
	(unaudited)			*
ASSETS
Current assets:
Cash and cash equivalents	$	24,225		$	25,065
Short-term investments	58,086			58,780
Accounts receivable, net	9,163			9,265
Inventories	12,604			16,148
Other current assets	10,906			10,775
Total current assets	114,984			120,033
Property and equipment, net	13,905			13,293
Goodwill	11,425			11,425
Other assets	1,323			1,541
Total assets	$	141,637		$	146,292
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,184		$	8,599
Accrued payroll and other accrued liabilities	4,711			4,115
Veloce accrued liability	6,600			6,608
Other accrued liabilities	11,316			9,793
Deferred revenue	347			346
Total current liabilities	29,158			29,461
Non-current liabilities	1,548			1,793
Total liabilities	30,706			31,254
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares - 2,000, none issued and outstanding	—			—
Common stock, $0.01 par value:
Authorized shares - 375,000 at June 30, 2016 and March 31, 2016
Issued and outstanding shares - 85,359at June 30, 2016 and 84,590 at March 31, 2016	854			846
Additional paid-in capital	6,065,559			6,059,137
Accumulated other comprehensive loss	(9,551		)	(9,553		)
Accumulated deficit	(5,945,931		)	(5,935,392		)
Total stockholders’ equity	110,931			115,038
Total liabilities and stockholders’ equity	$	141,637		$	146,292

* The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

See Accompanying Notes to Condensed Consolidated Financial Statements

3

APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,
	2016			2015
Net revenues	$	41,498		$	37,813
Cost of revenues	16,029			16,806
Gross profit	25,469			21,007
Operating expenses:
Research and development	27,485			21,617
Selling, general and administrative	8,699			8,764
Restructuring	—			96
Total operating expenses	36,184			30,477
Operating loss	(10,715		)	(9,470		)
Realized gain on short-term investments and interest income, net	230			1,619
Otherincome, net	17			25
Loss before income taxes	(10,468		)	(7,826		)
Income tax provision (benefit)	71			(422		)
Net loss	$	(10,539	)	$	(7,404	)
Basic and diluted net loss per share	$	(0.12	)	$	(0.09	)
Shares used in calculating basic and diluted net loss per share	84,980			81,179

See Accompanying Notes to Condensed Consolidated Financial Statements

4

APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	Three Months Ended June 30,
	2016			2015
Net loss	$	(10,539	)	$	(7,404	)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on investments*	147			(1,653		)
Loss on foreign currency translation	(145		)	(137		)
Other comprehensive loss, net of tax	2			(1,790		)
Total comprehensive loss	$	(10,537	)	$	(9,194	)

* The amounts reclassified from accumulated other comprehensive loss and recorded in realized gain on short-term investments and interest income, net in the Condensed Consolidated Statement of Operations related to the sale of short-term investments were $27,000 and $1.4 million for the three months ended June 30, 2016 and 2015, respectively. Refer to Note 2, Certain Financial Statement Information, to the Condensed Consolidated Financial Statements for additional details.

See Accompanying Notes to Condensed Consolidated Financial Statements

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APPLIED MICRO CIRCUITS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended June 30,
	2016			2015
Operating activities:
Net loss	$	(10,539	)	$	(7,404	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	1,570			1,838
Amortization of bond premium	226			—
Stock-based compensation expense	8,165			6,092
Gain on short-term investments and other, net	(26		)	(1,455		)
Tax effect on other comprehensive loss	(94		)	—
Changes in operating assets and liabilities:
Accounts receivable	102			882
Inventories	3,552			3,723
Other assets	(70		)	2,464
Accounts payable	(2,382		)	(3,453		)
Accrued payroll and other accrued liabilities	1,077			220
Veloce accrued liability	(8		)	(65		)
Deferred revenue	1			7
Net cash provided by operating activities	1,574			2,849
Investing activities:
Proceeds from sales and maturities of short-term investments	18,461			7,444
Purchases of short-term investments	(17,739		)	(1,129		)
Proceeds from sale of property and equipment	2			25
Purchases of property and equipment	(2,547		)	(315		)
Net cash provided by (used for) investing activities	(1,823		)	6,025
Financing activities:
Proceeds from issuance of common stock	32			133
Funding of restricted stock units withheld for taxes and other	(623		)	(1,212		)
Net cash used for financing activities	(591		)	(1,079		)
Net increase (decrease) in cash and cash equivalents	(840		)	7,795
Cash and cash equivalents at beginning of period	25,065			36,495
Cash and cash equivalents at end of period	$	24,225		$	44,290
Supplementary cash flow disclosures:
Cash paid for income taxes	$	167		$	145
Common stock issued for Veloce merger consideration	$	—		$	921

See Accompanying Notes to Condensed Consolidated Financial Statements

6

APPLIED MICRO CIRCUITS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview

Applied Micro Circuits Corporation (the "Company") is a global leader in silicon solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long-haul communications equipment.

Basis of Presentation

The Condensed Consolidated Financial Statements include all the accounts of the Company's and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepared the accompanying unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

In management’s opinion, the unaudited Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the Company's financial position, results of operations and cash flows. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the Consolidated Financial Statements and notes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016.

Use of Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to its:

• capitalized mask sets including their useful lives, which affect cost of goods sold and property and equipment or Research and Development ("R&D") expenses, if not capitalized;

• inventory valuation, warranty liabilities and revenue reserves, which affect cost of sales, gross margin, and revenues;

• allowance for doubtful accounts, which affects operating expenses;

• unrealized losses or other-than-temporary impairments of short-term investments available for sale, which affect interest income (expense), net;

• valuation of other long-lived assets and goodwill, which affects depreciation and impairment of long-lived assets, impairment of goodwill and apportionment of goodwill related to divestitures;

• potential costs of litigation, which affect operating expenses;

• valuation of deferred income taxes, which affects income tax expense (benefit); and

• stock-based compensation, which affects gross margin and operating expenses.

The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from management’s estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

Risks and Uncertainties

The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's business or future results and cause actual results to vary materially from historical results include, but are not limited to, the highly cyclical nature of the semiconductor industry; high fixed costs; declines in average selling prices; ability to fund liquidity needs; failure to maintain an effective system of internal controls; product return and liability risks; absence of significant backlog; dependence on international operations and sales; proposed changes to United States tax laws which result in adverse tax consequences; inadequate management information systems; ability to attract and retain qualified employees; difficulties consolidating and evolving the operational capabilities; dependence on materials and equipment suppliers; loss of

7

customers; development of new proprietary technology and the enforcement of intellectual property ("IP") rights by or against the Company; the complexity of packaging and test processes; competition; existing and future environmental regulations; and fire, flood or other calamities affecting the Company or others with whom it does business.

The Company's cash, cash equivalents, short-term investments and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents may be redeemable upon demand and are maintained with several financial institutions that management believes are of high credit quality and therefore bear minimal credit risk. The Company's accounts receivables are derived from revenue earned from customers located around the world. Two customers accounted for 80% and 69% of accounts receivable at June 30, 2016 and March 31, 2016, respectively. This concentration and the concentration of credit risk resulting from trade receivables is substantially mitigated by the credit evaluation process and collateral.

The Company sells its products primarily through direct sales force and distributors. Based on direct shipments, 2 and 4 customers individually accounted for at least 10% of total net revenues during the three months ended June 30, 2016 and 2015, respectively. The Company expects that its largest customers collectively will continue to account for a substantial portion of its net revenue for the foreseeable future. See Note 7, Significant Customer and Geographic Information, to the Condensed Consolidated Financial Statements for details.

The Company currently purchases wafers from a limited number of vendors. Additionally, since the Company does not maintain manufacturing facilities, it depends upon close relationships with contract manufacturers to assemble its products. The Company anticipates the continued use of a limited number of vendors and contract manufacturers in the near future. Under the Company's fabless business model, long-term revenue growth is dependent on its ability to obtain sufficient external manufacturing capacity, including wafer production. The Company believes there are other vendors that can provide the same quality wafers at competitive prices and other contract manufacturers that can provide comparable services at competitive prices.

New Accounting Pronouncements

In March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718); Improvements to Employee Share-Based Payment Accounting". The new guidance simplifies several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, policy election to account for forfeitures as they occur rather than on an estimated basis, and classification on the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company has adopted this ASU as of June 30, 2016. The adoption of this accounting standard was not material to the Company’s Condensed Consolidated Financial Statements and related disclosures.

2. CERTAIN FINANCIAL STATEMENT INFORMATION

Accounts receivable, net:

	June 30, 2016			March 31, 2016
	(In thousands)
Accounts receivable	$	9,426		$	9,527
Less: allowance for bad debts	(263		)	(262		)
	$	9,163		$	9,265

Inventories:

	June 30, 2016		March 31, 2016
	(In thousands)
Finished goods	$	4,782	$	8,206
Work in process	4,836		5,854
Raw materials	2,986		2,088
	$	12,604	$	16,148

Other current assets:

8

	June 30, 2016		March 31, 2016
	(In thousands)
Prepaid expenses	$	8,988	$	8,887
Executive deferred compensation assets	837		817
Other	1,081		1,071
	$	10,906	$	10,775

Property and equipment:

	Useful Life	June 30, 2016			March 31, 2016
	(In years)	(In thousands)
Machinery and equipment	3-5	$	39,632		$	36,723
Leasehold improvements	1-5	7,528			7,529
Computers, office furniture and equipment	3-5	33,294			34,016
		80,454			78,268
Less: accumulated depreciation		(66,549		)	(64,975		)
		$	13,905		$	13,293

Other accrued liabilities:

	June 30, 2016		March 31, 2016
	(In thousands)
Employee related liabilities	$	1,563	$	1,362
Executive deferred compensation	871		848
Accrued bonus	3,921		3,269
Other	4,961		4,314
	$	11,316	$	9,793

Short-term investments:

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument (in thousands):

	June 30, 2016									March 31, 2016
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses							Gains		Losses
Cash	$	21,219	$	—	$	—		$	21,219	$	23,510	$	—	$	—		$	23,510
Cash equivalents	3,006		—		—			3,006		1,555		—		—			1,555
U.S. Treasury and agency securities	14,173		74		—			14,247		14,863		38		(3		)	14,898
Corporate bonds	24,861		338		—			25,199		28,047		221		(5		)	28,263
Asset-backed and mortgage-backed securities	16,701		65		(18		)	16,748		13,565		13		(27		)	13,551
Municipal bonds	1,877		15		—			1,892		2,052		16		—			2,068
	$	81,837	$	492	$	(18	)	$	82,311	$	83,592	$	288	$	(35	)	$	83,845
Reported as:
Cash and cash equivalents								$	24,225								$	25,065
Short-term investments available-for-sale								58,086									58,780
								$	82,311								$	83,845

9

The established guidelines for measuring fair value and expanded disclosures regarding fair value measurements are defined as a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities.

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument measured at fair value on a recurring basis (in thousands):

	June 30, 2016								March 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash	$	21,219	$	—	$	—	$	21,219	$	23,510	$	—	$	—	$	23,510
Cash equivalents	3,006		—		—		3,006		1,555		—		—		1,555
U.S. Treasury and agency securities	14,247		—		—		14,247		14,898		—		—		14,898
Corporate bonds	—		25,199		—		25,199		—		28,263		—		28,263
Asset-backed and mortgage-backed securities	—		16,748		—		16,748		—		13,551		—		13,551
Municipal bonds	—		1,892		—		1,892		—		2,068		—		2,068
	$	38,472	$	43,839	$	—	$	82,311	$	39,963	$	43,882	$	—	$	83,845

There were no significant transfers in and out of Level 1 and Level 2 fair value measurement categories during the three months ended June 30, 2016 and 2015.

The following is a summary of the cost and estimated fair values of available-for-sale securities with stated maturities, which include U.S. Treasury and agency securities, corporate bonds, asset-backed and mortgage-backed securities and municipal bonds, by contractual maturity:

	June 30, 2016
	Cost		Estimated Fair Value
	(In thousands)
Less than 1 year	$	13,471	$	13,471
Mature in 1 – 2 years	34,118		34,386
Mature in 3 – 5 years	8,823		9,023
Mature after 5 years	1,200		1,206
	$	57,612	$	58,086

The following is a summary of gross unrealized losses (in thousands):

As of June 30, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Asset-backed and mortgage-backed securities	$	4,681	$	(18	)	$	—	$	—	$	4,681	$	(18	)

10

As of March 31, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
U.S. Treasury and agency securities	$	9,396	$	(3	)	$	—	$	—	$	9,396	$	(3	)
Corporate bonds	4,601		(5		)	—		—		4,601		(5		)
Asset-backed and mortgage-backed securities	8,394		(27		)	—		—		8,394		(27		)
	$	22,391	$	(35	)	$	—	$	—	$	22,391	$	(35	)

Accumulated other comprehensive loss:

	Foreign currency translation adjustments			Unrealized gain (loss) on short-term investments			Total
	(In thousands)
Balance as of March 31, 2016	$	(2,486	)	$	(7,067	)	$	(9,553	)
Other comprehensive gain (loss), net of tax	(145		)	147			2
Balance as of June 30, 2016	$	(2,631	)	$	(6,920	)	$	(9,551	)

Realized gain on short-term investments and interest income, net:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Net realized gain on short-term investments	$	32	$	1,430
Interest income, net	198		189
	$	230	$	1,619

Net loss per share:

Shares used in basic net loss per share are computed using the weighted average number of common shares outstanding during each period. Shares used in diluted net loss per share include the dilutive effect of common shares potentially issuable upon the exercise of stock options, purchase of Employee Stock Purchase Plan ("ESPP") rights and vesting of restricted stock units ("RSUs"). For the three months ended June 30, 2016 and 2015, the Company recorded a net loss. As such, all outstanding potential common shares were excluded from the diluted earnings per share computation.

The following potentially dilutive common shares are excluded from the computation of net loss per share:

	June 30, 2016	June 30, 2015
	(In thousands)
Outstanding stock options	1,384	1,713
Outstanding RSUs	5,420	3,997
ESPP shares	383	249
	7,187	5,959

3. VELOCE

In June 2012, the Company completed the acquisition of Veloce Technologies, Inc. ("Veloce") which developed specific ARM-based technology for the Company. The total purchase consideration for Veloce was $178.5 million, the payment of which has been subject to the completion of certain development milestones and vesting requirements. For accounting purposes, the costs incurred in connection with the development milestones relating to Veloce were considered compensatory and recognized as R&D expense in the Condensed Consolidated Statement of Operations. Veloce completed the milestones as of March 31, 2014 and the total consideration of $178.5 million has been recognized as R&D expense as of March 31, 2015.

11

The following table summarizes the cash payment and stock issuance activities as part of the above arrangement:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Cash payments	$	8	$	65
Value of common stock issued	—		921
Total payments	$	8	$	986
Shares of common stock issued	—		163

As of June 30, 2016, $171.9 million of the total Veloce consideration has been paid in cash and stock and the Company expects the remaining $6.6 million will be paid in cash and stock by September 30, 2016. The $171.9 million paid to date includes $89.4 million in cash and the issuance of 11.2 million shares of common stock valued at $82.5 million.

4. STOCKHOLDERS’ EQUITY

Stock Options

The Company has granted stock options to employees and non-employee directors under several plans. These option plans include two stockholder-approved plans (1992 Equity Incentive Plan and 2011 Equity Incentive Plan) and one plan not approved by stockholders (2000 Equity Incentive Plan). Options are fully vested generally in four years and expire eight to ten years from the effective date of grant.

A summary of the Company's stock option activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (millions)
Outstanding as of March 31, 2016	1,571		$	8.92
Granted	—		—
Exercised	(6	)	$	5.23		—		(1	)
Cancelled	(181	)	$	11.56
Outstanding, vested and exercisable as of June 30, 2016	1,384		$	8.59	0.9	$	—	(2	)

(1) The aggregate pre-tax intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

(2) The aggregate pre-tax intrinsic value is calculated as the difference between the market value as of June 30, 2016 and the exercise price of the shares. The closing price of the Company’s common stock was $6.42 per share on June 30, 2016.

Restricted Stock Units

The Company has granted RSUs to employees and non-employee directors pursuant to its 2011 Equity Incentive Plan. RSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock. RSUs vest over varying terms, to a maximum of four years from the date of the grant. 

In November 2013, May and October 2014, November 2015, and January and May 2016, the Compensation Committee (the "Committee") authorized market-performance based RSUs ("MSUs"). The MSUs will be earned, if at all, based on the Company's Total Shareholder Return (“TSR”) compared to that of the Standard & Poor's Depositary Receipts S&P Semiconductor Index ("Index”) over a two-year performance period for half of the MSU award and a three-year performance period for the remaining half of the MSU award. The MSUs will vest between ranges of 0% and 150% or 0% and 175% based on the Company's relative TSR compared to the Index. Total grant-date fair value of these MSUs was $4.7 million, of which $2.9 million expired unvested as of June 30, 2016.

12

The Company has compensation programs with respect to fiscal 2016 and 2017. The programs include time-based RSUs and financial or operational performance-based awards with payouts that ranges from 0% to 150% of pre-established target levels. Awards under these programs vest in fiscal 2016 through 2018 and can be paid out in common stock or cash.

A summary of the Company's RSU activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Grant Date Fair Value
Unvested as of March 31, 2016	4,704		$	6.59
Awarded	1,758		$	6.06
Vested	(863	)	$	7.05
Cancelled	(179	)	$	5.41
Unvested as of June 30, 2016	5,420		$	6.38

The weighted average remaining contractual term for the RSUs outstanding as of June 30, 2016 was 1.3 years.

As of June 30, 2016, the aggregate pre-tax intrinsic value of RSUs outstanding including performance-based awards which are subject to certain milestone attainments was $34.8 million. The aggregate pretax intrinsic value was calculated based on the closing price of the Company’s common stock of $6.42 on June 30, 2016.

The aggregate pre-tax intrinsic value of RSUs released during the three months ended June 30, 2016 was $5.4 million. This intrinsic value represents the fair market value of the Company’s common stock on the date of release.

Employee Stock Purchase Plan

Under the Company's 2012 ESPP, the Company reserved 3.8 million shares for issuance. The ESPP provides that eligible employees may contribute up to 20% of their base salary, subject to certain limits, towards the purchase of the Company’s common stock. Under the terms of the ESPP, eligible employees are entitled to purchase common stock, on a semi-annual basis, at a purchase price equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. At June 30, 2016, 1.2 million shares were available for future issuance under the ESPP. There were no stock purchases under the ESPP during the three months ended June 30, 2016 and 2015. 

5. STOCK-BASED COMPENSATION

The following tables summarize the allocation of the stock-based compensation expense:

Stock-based compensation expense by type of grant:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Employee stock purchase rights	$	327		$	207
RSUs	7,847			5,897
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

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Stock-based compensation expense by cost centers:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Cost of revenues	$	167		$	105
Research and development	5,993			4,060
Selling, general and administrative	2,014			1,939
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

As of June 30, 2016, the amount of unrecognized stock-based compensation cost related to unvested stock-based awards was $32.4 million which will be recognized over a weighted average period of 1.3 years.

6. COMMITMENTS AND CONTINGENCIES

Commitments

The following table summarizes the Company's contractual operating leases and other purchase commitments as of June 30, 2016 (in thousands):

Fiscal Years Ending March 31,	Operating Leases		Purchase Commitments *		Total
2017 (remainder of year)	$	1,849	$	21,465	$	23,314
2018	871		11,194		12,065
2019	503		378		881
Total	$	3,223	$	33,037	$	36,260

* Includes open purchase orders with terms that generally allow us the option to cancel or reschedule the order, subject to various restrictions and limitations. Also includes the licensing fees relating to the Company's R&D efforts, including IP, technology, product design, test and verification tools of $18.3 million.

Warranty

The Company's products typically carry a one-year warranty. The Company establishes reserves for estimated product warranty costs at the time revenue is recognized. Although the Company engages in extensive product quality programs and processes, its warranty obligation is affected by product failure rates, use of materials, and service delivery costs incurred in correcting any product failure. Historically, the Company’s warranty returns have not been material.

Intellectual Property Indemnities

The Company indemnifies certain customers and contract manufacturers against liability arising from third-party claims of IP rights infringement related to its products. These indemnities appear in development and supply agreements with customers as well as manufacturing service agreements with contract manufacturers and generally survive the expiration of the contract. Given that the amount of any potential liabilities related to such indemnities cannot be determined until an infringement claim has been made, the Company is unable to determine the maximum amount of losses that could be incurred related to such indemnifications.

Guarantees and Indemnities

In the normal course of business, the Company is occasionally required to provide other guarantees and indemnities for which it may be required to make future payments under specific circumstances. The amount of any potential liabilities related to such obligations cannot be accurately determined until a formal claim is filed. The Company maintains general and product liability insurance which may provide a source of recovery in the event of an indemnification claim.

Legal Proceedings

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The Company is currently a party to certain legal proceedings, including those noted in this section. The Company believes the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm the Company's financial position, results of operations or cash flows. Notwithstanding the foregoing, legal proceedings are subject to inherent uncertainties, unfavorable rulings or other events that could occur. In addition, legal proceedings are expensive to prosecute and defend against and can divert management attention and Company resources away from the Company's business objectives. Unfavorable resolutions could include monetary damages against the Company or injunctions or other restrictions on the conduct of the Company’s business, or preclude the Company from recovering the damages it seeks in legal proceedings it has commenced. It is also possible that the Company could conclude it is in the best interests of its stockholders, employees, and customers to settle one or more such matters, and any such settlement could include substantial payments or the surrender of rights to collect payments from third parties. However, the Company has not reached this conclusion with respect to any material matter at this time.

In 1993, the Company was named as a Potentially Responsible Party (“PRP”) along with more than 100 other companies that used an Omega Chemical Corporation waste treatment facility in Whittier, California (the “Omega Site”). The U.S. Environmental Protection Agency (“EPA”) has alleged that Omega failed to properly treat and dispose of certain hazardous waste materials at the Omega Site. The Company is a member of a large group of PRPs, known as the Omega Chemical Site PRP Organized Group (“OPOG”), which has agreed to fund certain on-going remediation efforts relating to the Omega Site. Pursuant to a consent decree entered into between EPA and OPOG and approved by the U.S. District Court for the Central District of California (the “Court”) in 2001, as amended in 2010, removal of waste materials stored at the Omega Site has been completed. Efforts to remediate the soil, groundwater and air quality at and around the Omega Site are expected to be ongoing for several more years. In addition, in April 2016 OPOG and EPA filed with the Court a consent decree (the “Consent Decree”) outlining the proposed remediation plan and related litigation settlement terms for a regional groundwater contamination plume allegedly originating at the Omega Site (the Operable Unit 2 or “OU2”). It is anticipated the Court will approve the Consent Decree in fiscal year 2017, following which remediation of OU2 will commence. It is also anticipated that the Court’s approval of the Consent Decree will cause it to lift the stay it had previously placed on litigation originally filed in 2007 by Angeles Chemical Company, located downstream from the Omega Site, against OPOG and the PRPs for cost recovery and indemnification for future costs allegedly resulting from OU2.

In 2012, as a result of challenges made by certain PRPs to the criteria previously used to allocate liability among OPOG members, and of the departure of certain PRPs from OPOG, OPOG approved changes to the cost allocation structure that resulted in an increase to the Company's proportional allocation of liability. In 2013 and 2014, OPOG retained legal counsel to pursue groundwater remediation-related claims against other PRPs and to protect its interests in connection with bankruptcy proceedings filed by an OPOG member. In connection with those cost recovery efforts, in May 2014, OPOG entered into a cost sharing and settlement agreement (as amended in April 2016 in connection with the Consent Decree) with one PRP for future remediation costs and settlement of EPA’s past costs for OU2. To fund the shared costs, OPOG and the other PRP will create a Joint Environmental Remediation Trust, for which OPOG’s contribution amount will be funded from member assessments made in 2016. Any additional changes made to OPOG’s cost allocation structure, as well as the subsequent departure or bankruptcy of one or more other PRPs from OPOG, could have the effect of increasing the proportional liability of the remaining PRPs, including the Company.

To date, the Company has remitted payments to OPOG covering its proportional allocation of liability for OPOG’s legal expenses and remediation costs; the Company's assessments received during fiscal year 2016 totaled approximately $62,000. The Company anticipates that its payment obligations relating to the Omega Site will increase once the Consent Decree receives final Court approval, although the timing of any such increases currently is uncertain. Notwithstanding such anticipated increases or their timing, the Company does not currently believe its total share of remediation-related expenses will be material to its financial statements, based on its approximately 0.5% contribution to the total waste tonnage sent to the site and current estimates of the potential aggregate remediation costs. Based on currently available information, the Company has a loss accrual that is not material and believe that the actual amount of our costs will not be materially different from the amount accrued. However, proceedings are ongoing and the eventual outcome of the clean-up efforts and the pending litigation matters is uncertain at this time. Based on currently available information, the Company does not believes that any eventual outcome will have a material adverse effect on its business or operations.

7. SIGNIFICANT CUSTOMER AND GEOGRAPHIC INFORMATION

Based on direct shipments, net revenues to customers that were equal to or greater than 10% of total net revenues were as follows:

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	Three Months Ended June 30,
	2016		2015
Wintec (global logistics provider)**	26	%	29	%
Avnet (distributor)	32	%	25	%
Arrow (distributor)	*		11	%
Flextronics (contract manufacturer)	*		11	%

*	Less than 10% of total net revenues for period indicated.
**	Wintec provides vendor managed inventory support primarily for Cisco Systems, Inc.

Based on ship to location, net revenues by geographic region were as follows:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
United States of America	$	18,239	$	18,044
Taiwan	2,649		1,314
Hong Kong	9,343		5,971
Europe	5,891		7,392
Japan	3,846		3,813
Other	1,530		1,279
	$	41,498	$	37,813

As of June 30, 2016 and 2015, long-lived assets, which represent property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization, located outside the Americas were not material.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the accompanying Condensed Consolidated Financial Statements and notes to help provide an understanding of our financial condition, changes in our financial condition and results of our operations. The MD&A is organized as follows:

• Caution concerning forward-looking statements. This section discusses how forward-looking statements made by us in the MD&A and elsewhere in this quarterly report are based on management’s present expectations about future events and are inherently susceptible to uncertainty and changes in circumstances.

• Overview. This section provides an introductory overview and context for the discussion and analysis that follows in the MD&A.

• Critical accounting policies. This section discusses those accounting policies that are both considered important to our financial condition and operating results and require significant judgment and estimates on the part of management in their application.

• Results of operations. This section provides an analysis of our results of operations for the three months ended June 30, 2016 and 2015. A brief description is provided of transactions and events that impact the comparability of the results being analyzed.

• Liquidity and capital resources. This section provides an analysis of our cash position and cash flows, as well as a discussion of our financing arrangements and financial commitments.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

The MD&A should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended March 31, 2016 filed with the U.S. Securities and Exchange Commission and the Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report. All statements included or incorporated by reference in this Quarterly Report, other than statements or characterizations of historical fact, are forward-looking statements. Any statement that refers to an expectation, projection or other characterization of future events or circumstances, including the underlying assumptions, is a forward-looking statement. We use certain words and their derivatives such as “anticipate”, “believe”, “plan”, “expect”, “estimate”, “predict”, “intend”, “may”, “will”, “should”, “could”, “future”, “potential” and similar expressions in many of the forward-looking statements.

These forward-looking statements include, but are not limited to, statements regarding: anticipated trends and challenges in our business and the markets in which we operate; expectations regarding the growth of next-generation cloud infrastructure and global data center traffic, energy consumption and total cost of ownership; anticipated market penetration by ARM®-based data center servers and other market and technological trends; our plans and predictions regarding the development, production, performance, sales volumes and general market acceptance of our X-Gene® Server on a Chip® product family and development platform, our X-Weave® Connectivity product family, our HeliX® family of embedded processor products, and other new products; the timing and scope of customer testing and adoption of such products and their total addressable market and total cost of ownership; product development cycles and schedules; design-win pipeline; our strategy, including our focus on the development roadmap of our X-Gene, X-Weave and HeliX product families and our current Connectivity investments in high-growth 100 and 400Gbps (gigabit per second) data center solutions; the timing and extent of customers’ transition away from older connectivity solutions and toward higher performance solutions; our assumptions and forecasts regarding competitors’ product offerings, pricing and strategies, and our products’ ability to compete; our expectations regarding the adequacy of leased facilities and in-licensed technologies; the impact of seasonal fluctuations and economic conditions on our business; our intellectual property ("IP"); our expectations as to expenses, expense reductions, liquidity and capital resources, including without limitation our expected sources and uses of cash and adequacy of cash reserves; our gross margin and efforts to offset reductions in gross margin; our estimates regarding eventual actual costs compared to amounts accrued in our financial statements; our ability to attract and retain qualified personnel; our restructuring activities and related expense and anticipated expense savings; and the impact of accounting pronouncements and our critical accounting policies, judgments, estimates and assumptions on our financial results.

The forward-looking statements are based on our current expectations, estimates and projections about our industry and our business, management's beliefs, and other assumptions made by us. In addition, some of the forward-looking statements included below are based upon statements made by industry experts, analysts, and other third party sources. All forward-looking statements and the expectations, estimates, projections, beliefs and other assumptions on which they are based are subject to many risks and uncertainties and are inherently subject to change. We describe many of the risks and uncertainties

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that we face in Part II, Item 1A, “Risk Factors”, and elsewhere in this report. Our actual results and actual events could differ materially from those anticipated in any forward-looking statement. Readers should not place undue reliance on any forward-looking statement. All forward-looking statements in this report speak only as of the filing date of this report, and except as required by law, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after such date.

OVERVIEW

The Company

Applied Micro Circuits Corporation (“we” or “our”) is a global leader in solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long haul communications equipment.

Our corporate headquarters are located in Santa Clara, California. Sales and engineering offices are located throughout the world. We serve two target markets: Computing and Connectivity. Our Computing products include the X-Gene family of ARM 64-bit server processors which target mainstream cloud and data center infrastructure including hyperscale, telco, enterprise and high performance computing. X-Gene is the world's first ARM 64-bit Server on a Chip platform in production.

As part of our current Computing business, we offer a line of embedded computing products based on Power Architecture, sometimes referred to as PowerPC products. The market for PowerPC products generally continues to be in secular decline with customers migrating toward ARM-based processor technology. Our HeliX family of ARM 64-bit processors represents the future of our embedded processor solutions and directly leverages the research and development ("R&D") investments made in our X-Gene server processor architecture. Our embedded processor products are currently being designed and deployed in a variety of applications including networking and telecom, enterprise storage, data center, embedded and industrial applications.

The Connectivity portion of our business includes a broad array of physical layer (“PHY”), framer and mapper solutions that target high-speed, high-reliability networking and communications solutions for the service provider and data center markets. Our highly-integrated system-on-chip solutions are used in high-speed optical and network infrastructure equipment as well as data center switches and routers. Our X-Weave family of Connectivity products is being deployed by leading system original equipment manufacturers ("OEMs") to meet the needs of public cloud, private cloud, and enterprise data centers.

Our products and our customers’ products are highly complex. Due to this complexity, it often takes several years to complete the development and qualification of a product before it enters into volume production. Accordingly, some major products in development during the last few years have not yet started to generate significant revenues. In addition, demand for our products can be impacted by economic downturns, competitive pressures, cyclicality in the telecommunications market, technological developments, and other factors described elsewhere in this report.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. See Note 1, Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements for details. The methods, estimates and judgments we use in applying these critical accounting policies have a significant impact on the results we report in our financial statements. We base our estimates and assumptions on historical experience and on various other factors that we believe to be reasonable under the circumstances. Our actual results may differ materially and adversely from management’s estimates. To the extent there are material differences between our estimates and actual results, our future results of operations will be affected.

There have been no significant changes in our critical accounting policies as compared to the critical accounting policies disclosed in MD&A included in our Annual Report on Form 10-K for the year ended March 31, 2016.

RESULTS OF OPERATIONS

Summary Financials (dollars in thousands):

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	Three Months Ended June 30,
	2016					2015
	Amount			% of Net Revenue		Amount			% of Net Revenue		Increase (Decrease)			% Change
Net revenues	$	41,498		100.0	%	$	37,813		100.0	%	$	3,685		9.7	%
Cost of revenues	16,029			38.6		16,806			44.4		(777		)	(4.6	)%
Gross profit	25,469			61.4		21,007			55.6		4,462			21.2	%
Total operating expenses	36,184			87.2		30,477			80.6		5,707			18.7	%
Operating loss	(10,715		)	(25.8	)	(9,470		)	(25.0	)	1,245			13.1	%
Realized gain on short-term investments and interest and other income, net	247			0.6		1,644			4.3		(1,397		)	(85.0	)%
Loss before income taxes	(10,468		)	(25.2	)	(7,826		)	(20.7	)	2,642			33.8	%
Income tax provision	71			0.2		(422		)	(1.1	)	493			(116.8	)%
Net loss	$	(10,539	)	(25.4	)%	$	(7,404	)	(19.6	)%	$	3,135		42.3	%

Net Revenues. We generate revenues primarily through sales of our integrated circuit products and printed circuit board assemblies to OEMs who in turn supply their equipment principally to communications service providers and data centers. In the normal course of business, we regularly assess our product portfolio. At such time, we may determine to phase-out products and put them through end of life ("EOL"). The EOL announcement can result in near-term increases in our revenues as customers typically respond to these announcements by making last-time-buys to ensure that they have adequate stock on hand to support their production forecast. The demand for our products is affected by various factors, including our development and introduction of new products, availability and pricing of competing products, capacity constraints at our suppliers, EOL product decisions, and general economic conditions.

We classify our revenues into two categories, Connectivity and Computing, based on the markets that the underlying products serve. We use information from each category to analyze our performance and success in the related markets, including our strategy to focus on the transition to the high-growth data center market. As an ongoing part of our business, from time to time we seek to monetize our IP investments through IP licensing, sales or development arrangements with customers, suppliers and other business partners that have operations beyond IP licensing.

Based on direct shipments, net revenues to customers that individually accounted for at least 10% of total net revenues are as follows:

	Three Months Ended June 30,
	2016		2015
Wintec (global logistics provider)**	26	%	29	%
Avnet (distributor)	32	%	25	%
Arrow (distributor)	*		11	%
Flextronics (contract manufacturer)	*		11	%

*	Less than 10% of total net revenues for period indicated.
**	Wintec provides vendor managed inventory support primarily for Cisco Systems, Inc.

We expect that our largest customers collectively will continue to account for a substantial portion of our net revenues for the foreseeable future.

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Based on ship to location, net revenues by geographic region are as follows (dollars in thousands):

	Three Months Ended June 30,
	2016				2015
	Amount		% of Net Revenue		Amount		% of Net Revenue
United States of America	$	18,239	44.0	%	$	18,044	47.7	%
Taiwan	2,649		6.4		1,314		3.5
Hong Kong	9,343		22.5		5,971		15.8
Europe	5,891		14.2		7,392		19.5
Japan	3,846		9.3		3,813		10.1
Other	1,530		3.6		1,279		3.4
	$	41,498	100.0	%	$	37,813	100.0	%

Cost of Revenues. Cost of revenues consists primarily of the cost of semiconductor wafers and other materials, depreciation, royalties and the cost of assembly and test. Cost of revenue also includes personnel related costs (including stock-based compensation) and overhead associated with product procurement, planning and quality assurance. Our cost of product revenues is affected by various factors, including product mix, volume, provisions for excess and obsolete inventories and lower of cost or market inventory reserve, material costs, manufacturing efficiencies, and the position of our products within their life-cycles. Our cost of product revenues as a percentage of net product revenues is affected by these factors as well as pricing and competitive pricing programs.

Research and Development. R&D expenses consist primarily of personnel related costs (including stock-based compensation) of employees engaged in research, design and development activities including amounts relating to Veloce, costs related to engineering licenses and design tools, mask costs, subcontracting costs and facilities expenses. We believe that a continued commitment to R&D is vital to our goal of maintaining a leadership position with innovative products. In addition to our internal R&D programs, our business strategy includes acquiring products, technologies or businesses from third parties.

Selling, General and Administrative. Selling, general and administrative (“SG&A”) expenses consist primarily of personnel related costs (including stock-based compensation), professional and legal fees, corporate branding and facilities expenses.

Comparison of the Three Months Ended June 30, 2016 to the Three Months Ended June 30, 2015

Net Revenues by market (dollars in thousands):

	Three Months Ended June 30,
	2016				2015
	Amount		% of Net Revenue		Amount		% of Net Revenue		Increase		% Change
Computing	$	16,453	39.6	%	$	14,517	38.4	%	$	1,936	13.3	%
Connectivity	25,045		60.4		23,296		61.6		1,749		7.5	%
Total	$	41,498	100.0	%	$	37,813	100.0	%	$	3,685	9.7	%

Our Computing revenues increased primarily due to the higher demand for our legacy Computing products and active management of the life cycle of PowerPC products. We expect the sales of our PowerPC products will decline as the networking industry migrates away from the PowerPC architecture. We continue to focus our resources on ARM-based products which are in the adoption phase and have not yet generated significant revenue.

Our Connectivity revenues increased primarily due to higher demand for our OTN products and higher revenue from development agreements, partially offset by lower demand for our PHY products.

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Gross Profit (dollars in thousands):

	Three Months Ended June 30,
	2016				2015
	Amount		% of Net Revenue		Amount		% of Net Revenue		Increase (Decrease)			% Change
Net revenues	$	41,498	100.0	%	$	37,813	100.0	%	$	3,685		9.7	%
Cost of revenues	16,029		38.6		16,806		44.4		(777		)	(4.6	)%
Gross profit	$	25,469	61.4	%	$	21,007	55.6	%	$	4,462		21.2	%

The increase in our gross profit percentage is primarily due to improved yield and lower material costs as well as higher revenues from development agreements.

Research and Development and Selling, General and Administrative Expenses (dollars in thousands):

	Three Months Ended June 30,
	2016				2015
	Amount		% of Net Revenue		Amount		% of Net Revenue		Increase (Decrease)			% Change
Research and development	$	27,485	66.2	%	$	21,617	57.2	%	$	5,868		27.1	%
Selling, general and administrative	$	8,699	21.0	%	$	8,764	23.2	%	$	(65	)	(0.7	)%

Research and Development. The increase in R&D expenses is mainly due to $1.9 million higher stock-based compensation expense, $1.8 million higher mask set tape-out and new product introduction expense and $1.3 million higher personnel expense.

Selling, General and Administrative. The SG&A expenses are comparable to the prior period.

Realized Gain on Short-Term Investments and Interest and Other Income, net (dollars in thousands):

	Three Months Ended June 30,
	2016				2015
	Amount		% of Net Revenue		Amount		% of Net Revenue		Increase (Decrease)			% Change
Realized gain on short-term investments and interest income, net	$	230	0.6	%	$	1,619	4.3	%	$	(1,389	)	(85.8	)%

Realized Gain on Short-Term Investments and Interest Income, net. The decrease in realized gain on short-term investments and interest income, net, is primarily due to a decrease in realized gains from the sale of short-term investments and marketable securities.

LIQUIDITY AND CAPITAL RESOURCES

A summary of our cash flows is as follows:

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	Three Months Ended June 30,
	2016			2015
	(In thousands)
Net cash provided by operating activities	$	1,574		$	2,849
Net cash provided by (used for) investing activities	(1,823		)	6,025
Net cash used for financing activities	(591		)	(1,079		)
Net increase (decrease) in cash and cash equivalents	$	(840	)	$	7,795

Operating Activities

Net cash provided by operating activities totaled $1.6 million for the three months ended June 30, 2016. Our net loss of $10.5 million includes $9.8 million of non-cash items primarily consisting of $8.2 million of stock-based compensation, $1.6 million of depreciation and $0.2 million of premium amortization of our investments in bonds. The remaining change in operating cash flows primarily reflects an inflow from the change in inventories of $3.6 million, accrued payroll and other liabilities of $1.1 million and accounts receivable of $0.1 million, and an outflow from change in accounts payable of $2.4 million.

Investing Activities

Net cash used for investing activities of $1.8 million for the three months ended June 30, 2016 is due to purchases of property and equipment of $2.5 million, partially offset by net proceeds from short-term investment activities of $0.7 million.

Financing Activities

Net cash used for financing activities of $0.6 million for the three months ended June 30, 2016 was due to tax withholding payments related to the vesting of restricted stock units.

Liquidity

We currently believe that our available cash, cash equivalents and short-term investments will be sufficient to meet our capital requirements and fund our operations for at least the next 12 months. Notwithstanding the foregoing, from time to time we have explored one or more potential options to further enhance our balance sheet and liquidity, including without limitation the possibility of issuing equity to strategic investors or pursuing other financing transactions, and we have implemented certain business restructuring activities intended to reduce our ongoing net operating expenses.

Our available liquidity could be adversely affected, however, if our normal operations or unforeseen events require us to expend more cash than currently anticipated or if the revenue ramps relating to our recent and new product introductions fail to occur within the currently anticipated timeframes. As a result of any of the above, we could elect or be required to pursue various options to raise additional capital or generate cash. Such options could include, without limitation, issuing equity to one or more strategic or other investors, obtaining debt financing, selling assets or business units or acquiring cash-generating assets or business units from third parties. Liquidity concerns could also cause us to pursue various options to reduce our operating expenses, such as delaying or canceling new product introductions, reducing or deferring R&D investments, or engaging in additional restructuring activities. If additional equity is issued or our stock price declines as a result of any of the foregoing, it could result in greater dilution to our stockholders. Our liquidity could also be adversely affected if we were to be forced to liquidate our investments or other assets on short notice and on unfavorable terms. There can be no assurance that any of the options that we might pursue to raise additional capital or to generate or preserve cash will be available on commercially reasonable terms or at all.

Off-Balance Sheet Arrangements and Contractual Obligations

We lease facilities under noncancelable operating lease arrangements. See Note 6, Commitments and Contingencies, to the Condensed Consolidated Financial Statements for more detailed information regarding our contractual commitments.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates and a decline in the stock market. We are exposed to market risks related to changes in interest rates and foreign currency exchange rates.

We maintain an investment portfolio of various holdings, types of instruments and maturities. These securities are classified as available-for-sale and, consequently, are recorded on our Condensed Consolidated Balance Sheets at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income or loss. We have established policies to ensure diversification of credit and counterparty risks as well as limiting maturities and exposure to interest rate risks, all in order to maintain the principal value and liquidity of its short-term investment portfolio. The company reviews these policies on a periodic basis. We invest our excess cash in the U.S. Treasury and agency securities, corporate bonds, asset backed and mortgage-backed securities, and municipal bonds with credit ratings as specified in our investment policy. We generally do not utilize derivatives to hedge against increases in interest rates which decrease market values.

We are exposed to market risk as it relates to changes in the market value of our investments. At June 30, 2016, our investment portfolio included short-term securities classified as available-for-sale investments with an aggregate fair market value of $58.1 million and a cost basis of $57.6 million. Substantially all of these securities are subject to interest rate risk, as well as credit risk and liquidity risk, and will decline in value if interest rates increase or an issuer’s credit rating or financial condition is weakened.

The following table presents the hypothetical changes in fair value of our short-term investments held at June 30, 2016 (in thousands):

	Valuation of Securities Given an Interest Rate Decrease of X Basis Points (“BPS”)						Fair Value as of		Valuation of Securities Given an Interest Rate Increase of X Basis Points (“BPS”)
	(150 BPS)		(100 BPS)		(50 BPS)		June 30, 2016		50 BPS		100 BPS		150 BPS
Available-for-sale investments	$	59,532	$	59,158	$	58,657	$	58,086	$	57,523	$	56,969	$	56,422

The modeling technique used measures the change in fair market value arising from selected potential changes in interest rates. Market changes reflect immediate hypothetical parallel shifts in the yield curve of plus or minus 50 basis points, 100 basis points and 150 basis points. While this modeling technique provides a measure of our exposure to market risk, the current economic turbulence could cause interest rates to shift by more than 150 basis points.

We generally conduct business, including sales to foreign customers, in U.S. dollars, and as a result, we have limited foreign currency exchange rate risk. We did not enter into any forward currency exchange contracts during the three months ended June 30, 2016.

ITEM 4. CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit 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 that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

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As required by Exchange Act Rule 13a-15(b), we conducted an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2016. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our CEO and CFO concluded that as of such date our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under Note 6, Commitments and Contingencies, to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this Quarterly Report and in our other filings with the SEC. We update our descriptions of the risks and uncertainties facing us in our periodic reports filed with the SEC. The risks and uncertainties described below and in our other filings are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any of these known or unknown risks or uncertainties actually occurs, our business, financial condition and results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment. The risks and

uncertainties set forth below with an asterisk (“*”) next to the title contain changes to the description of the risks and

uncertainties associated with our business as previously disclosed in Item 1A to our Annual Report on Form 10-K for the fiscal

year ended March 31, 2016 filed with the SEC on May 20, 2016.

*Our liquidity may deteriorate based on our future uses of cash.

Our cash, cash equivalents and short-term investments balance as of June 30, 2016 was $82.3 million compared to $83.8 million as of March 31, 2016. Of the $178.5 million we previously committed to pay in Veloce acquisition consideration, $6.6 million currently remains to be paid, and our cash balance will be affected depending upon how much of this remaining balance we decide to pay in cash instead of our common stock. Our cash balances could further decrease depending upon the extent and timing of research and development ("R&D") and manufacturing expenses associated with our new product development and roll-out activities. Although we currently believe we have adequate liquidity to meet our capital requirements and fund our operations for at least the next twelve months, our cash balances could decrease significantly if our normal operations or unforeseen events require us to expend more cash than anticipated or if the revenue ramps relating to our recent and new product introductions fail to occur within the currently anticipated timeframes. If this were to occur, we may be faced with liquidity issues requiring us to pursue various options to raise additional capital, generate cash, delay or cancel new-product introductions, reduce or defer R&D investments, engage in additional restructuring activities, or divest or liquidate business assets. In addition, we may elect to raise additional capital, including without limitation by issuing equity or debt securities, or otherwise attempt to generate additional cash in order to augment our cash reserves for purposes of enabling future business expansion and providing additional liquidity assurances to our current and prospective customers, suppliers and partners. There can be no assurance that any of the options that we might pursue to raise additional capital or to generate or preserve cash will be available on commercially reasonable terms or at all.

*The markets in which we compete are highly competitive, and we expect competition to increase in these markets in the future.

The markets in which we compete are highly competitive, and we expect that domestic and international competition will increase in these markets, due in part to industry consolidation, rapid technological advances, price erosion, changing customer preferences, deregulation, and evolving industry standards.

Increased competition, coupled with the significantly larger size and economic and business resources of several of our competitors, could result in significant price competition, delayed or reduced customer adoption of our new products, reduced revenues, lower profit margins or loss of market share. Our ability to compete successfully in our markets depends on a number of factors, including:

• the scale and depth of our R&D, sales and marketing budgets and related resources, as compared to our competitors, and our ability to increase our scale sufficient to more effectively compete with them;

• our ability to partner with original equipment manufacturer ("OEM"), ecosystem and channel partners who are successful in the market;

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• success in designing and subcontracting the manufacture of new products that implement new technologies;

• product quality, interoperability, reliability, performance and certification;

• procurement expenses, supply chain economies of scale, and production efficiency, as compared to our larger competitors:

• our ability to attract and retain key engineering, operations, sales and marketing employees and management;

• pricing decisions or other actions taken by competitors;

• customer support;

• time-to-market;

• price;

• production efficiency;

• design wins;

• expansion of production of our products for particular systems manufacturers;

• end-user acceptance of the systems manufacturers' products;

• market acceptance of competitors' products; and

• general economic conditions.

We designed X-Gene for existing and emerging cloud and enterprise data centers. Existing data centers currently rely primarily on Xeon server processors and related chipsets developed and marketed by Intel, which has dominant market share and significantly greater R&D, manufacturing, sales and market development resources than we do. Intel also offers lower-performance products for lower-intensity data center applications. As a result, Intel is a significant competitor in the cloud and enterprise server infrastructure market. In addition to Intel, in the cloud and enterprise server market, we currently or will in the future compete with a number of ARM-based server silicon vendors, including AMD, Broadcom, Cavium and Qualcomm. In the embedded computing silicon solutions market, we compete with technology companies such as NXP, Cavium and Intel. In addition, some of our customers and potential customers have internal integrated circuit design or manufacturing capabilities with which we compete. In the connectivity silicon solutions market, we compete primarily with companies such as Broadcom, Inphi and Microsemi. Many of these companies have substantially greater financial, R&D, marketing and distribution resources than we have. We may also face competition from new entrants to our target markets, including both private and public technology companies that may develop or acquire differentiating technology and then apply their resources to our detriment.

Many of our competitors have longer operating histories and presences in key markets, greater name recognition, and larger customer bases, workforces and intellectual property ("IP") portfolios, and in some cases operate their own fabrication facilities. Our competitors may offer enhancements to existing products, or offer new products based on new technologies, industry standards or customer requirements more quickly than comparable products from us or that could replace or provide lower cost alternatives to our products. Competitors’ introduction of enhancements, new products or new pricing structures could render our existing and future products obsolete or unmarketable. In addition, large competitors could use their existing market share and influence, including without limitation financial incentives, to discourage potential ecosystem partners and customers from supporting or purchasing our products. We and our customers also face intense price pressure and competition from companies in lower cost countries such as China. In response to these price pressures, our customers could require us to reduce prices which could adversely affect our financial results. Furthermore, our discrete legacy products are being and could continue to be integrated into ASICs or combined into single chip solutions that could cause our revenues from such products to decline at a faster rate.

As a result of each of these factors, we cannot assure you that we will be able to continue to compete successfully against current or new competitors. If we do not compete successfully, we may lose or fail to obtain market share in our existing and target markets and our revenues may fail to increase or may decline, which could have a material adverse effect on our business, financial condition and results of operations.

*Our industry and markets are subject to consolidation, which may result in stronger competitors, fewer customers and reduced demand.

There has been and will likely continue to be significant industry consolidation among communications IC companies, network equipment companies and telecommunications companies, such as the acquisition of Broadcom Corporation by Avago Technologies in February 2016, of Altera Corporation by Intel Corporation and of Freescale Semiconductor by NXP Semiconductors in December 2015, of Cambridge Silicon Radio by Qualcomm in August 2015, of IBM’s Microelectronics business (including its 300nm and 200nm wafer foundries) by GlobalFoundries in July 2015, and of Spansion by Cypress Semiconductor in March 2015. Also in 2016 and 2015, there were announcements of numerous additional proposed consolidations in the semiconductor market, involving both larger and smaller target companies. We expect this consolidation to continue as companies attempt to benefit from economies of scale, gain improved or more comprehensive product or technology portfolios, increase the size of their serviceable markets, and otherwise strengthen or hold their positions in an

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evolving technology landscape. Chinese companies and investment groups have also launched a number of acquisitions, joint venture partnerships, and significant equity investment stakes in IC companies, in furtherance of China’s stated goal of becoming self-sufficient in semiconductors and reducing imports from foreign suppliers. Such industry and market consolidation may result in stronger competitors, fewer customers and reduced demand for our products, which in turn could have a material adverse effect on our business, operating results, and financial condition. In addition, our Company or one or more of our product families or technologies may become a target for a company looking to improve its competitive position through acquisition, and one or more of our product families or technologies that no longer hold the prospect of providing sufficient investment return may become the target of divestiture activities. There can be no guarantee that any such divestiture activities would be successful. The Board of Directors on an ongoing basis evaluates the potential risks and benefits to our Company and its stockholders with respect to various potential consolidation scenarios involving our business, product lines and technologies and those of third party business enterprises.

If we are unable to timely develop, market or sell new products or new versions of products to replace our current products, our operating results and competitive position will be materially harmed.

Our industry is characterized by intense competition, rapidly evolving technology and continually changing customer requirements. These factors will over time render our existing products less competitive or obsolete. Some of our existing products have experienced weakening overall demand, and revenues from these products can be expected to continue to decline further in subsequent quarters. Accordingly, our future operating results and ability to compete will depend in large part on our ability to develop new products and new generations and versions of our existing products that achieve market acceptance on a timely and cost-effective basis, and to respond to changing requirements. If we are unable to do so, our business, operating results and financial condition will be negatively affected. In particular, our inability to productize and generate demand for our X-Gene Server on a Chip solutions, our X-Weave connectivity products and our HeliX embedded products, and related products, in a timely manner would have a material adverse effect on our operating results and financial condition.

The successful development and market acceptance of our products depend on a number of factors, including, but not limited to:

• our customers’ willingness to incorporate products based on the ARM architecture, on which most of our new products are based, into their own products and systems;

• our successful collaboration with our ecosystem and technology partners;

• availability, quality, price, performance, power consumption, size and total cost of ownership of our products relative to competing products and technologies;

• our accurate prediction of changing customer requirements;

• the sufficiency and scale of our R&D budget and our timely development of new designs;

• retention of key technical and design expertise, both internally and within third-party technology development partners;

• timely qualification and certification of our products for use in electronic systems;

• continued availability on commercially reasonable terms of the manufacturing services, technology components and tools that we purchase or license from third party suppliers;

• commercial acceptance and production of the electronic systems into which our products are incorporated;

• our customer service and support capabilities and responsiveness;

• successful development of relationships with existing and potential new customers;

• maintaining compliance and compatibility with new and changing industry standards and requirements;

• maintaining close working relationships with key customers so that they will design our products into their future products; and

• our ability to develop, gain access to and use leading technologies in a cost-effective and timely manner.

We have in recent years devoted substantial engineering and financial resources to designing, developing and rolling out new products and technologies and introducing several new products. However, there can be no assurance that our product development efforts will be successful or that the products and technologies we have recently developed and which we are currently developing will achieve widespread market acceptance. If these products and technologies fail to achieve market acceptance, in a timely manner or at all, or if we are unable to continue developing new products and technologies that achieve market acceptance, our business, financial condition and operating results will be materially and adversely affected. In addition, for our X-Gene, X-Weave and HeliXproduct families, we are a licensee of the ARM 64-bit instruction set architecture ("ISA"), and will depend upon our ability to successfully renew or otherwise maintain our license rights to that ISA, as well as the timely delivery by ARM of various updates and other support under the license agreement.There can be no guaranty that our existing ARM license rights, some of which expired in the fourth quarter of fiscal 2016, will be sufficient to enable us to fully develop and implement our ARM-based product roadmap, or that we will be able to expand or renew those license rights on commercially reasonable terms or at all. The success of our ARM-based products will also depend, among other things, on

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customers’ willingness to incorporate products based on the ARM architecture into their products and systems, and the anticipated time frame within which such incorporation occurs. For many customers, this would represent a change from their existing technology and their existing key suppliers, and therefore the time frame and magnitude of adoption of ARM-based products such as ours is inherently uncertain. Furthermore, the development and commercialization of new products incorporating ARM architecture could be delayed if the ecosystem partners that rely on this architecture are unable to successfully establish their own operations on a timely basis or if they are unable to work successfully with ARM in developing their products.

*Our success depends in part on the continued service of our key senior management, design engineering, sales, marketing, and manufacturing personnel, our ability to identify, hire and retain additional qualified personnel, and successful succession planning.

Our success depends to a significant extent upon the continued service of our senior management and engineering personnel and successful succession planning. Some management and engineering personnel have departed in recent quarters. Among other things, our ability to continue our commercialization and next-generation product development efforts for X-Gene and other new products will depend upon the retention of key engineering personnel, including former Veloce personnel and others. We acquired Veloce in June 2012 pursuant to a merger agreement that provided for payments based on post-closing product development milestones. Our ability to retain key former Veloce personnel has been, and may continue to be, adversely impacted by factors such as the substantial completion of our payment obligations to them under the Veloce merger agreement, the effects of past or future restructuring activities in increasing or changing their workloads, and the impact of declines in our stock price on the value of their equity compensation packages.

As our core business and technologies continue to evolve, including without limitation with respect to our growth and expansion into next-generation cloud infrastructure and data center markets, our success will depend on effectively transitioning to certain new management and engineering personnel who are most capable of supporting that evolution. There is intense competition for qualified personnel in the semiconductor industry, and in particular for design, product and test engineers. We may not be able to continue to identify, attract and retain engineers or other qualified personnel necessary for the development of our business, or to replace engineers or other qualified personnel who have left or may leave our employment.

We also face the risks associated with our former employees assisting their new employers to recruit our key talent, in violation of their contractual non-solicitation and confidentiality covenants and other legal obligations to us. Our efforts to enforce these contractual covenants and legal obligations has required, and may in the future require, us to incur significant litigation expenses and devote significant management attention. Furthermore, while we encourage our employees to abide by all contractual and legal obligations owed to their former employers, there can be no assurance that we will not be the target of allegations made by other companies that we have, directly or indirectly, unlawfully solicited their employees to join us. There are significant costs associated with recruiting, hiring and retaining personnel, as well as significant actual and potential losses to our business arising from the delays in or cancellation of technology development, product completion and roll-out, customer design wins and product orders, and sales revenues caused by the departure of key engineering resources.

Periods of contraction in our business may also inhibit our ability to attract and retain our personnel. As we respond to declining revenues and/or implement additional cost improvement measures such as reductions in force, our remaining key employees may lose confidence in our future performance and decide to leave. Loss of the services of, or failure to recruit, key design engineers or other technical and management personnel could be significantly detrimental to our product development or other aspects of our business. To manage our operations effectively, we will be required to continue to improve our operational, financial and management systems and to successfully hire, train, motivate, manage and retain our employees.

*If we issue additional shares of stock in the future, it may have a dilutive effect on our stockholders.

We have a significant number of authorized and unissued shares of our common stock available. These shares will provide us with the flexibility to issue our common stock for proper corporate purposes, which may include raising equity capital from strategic, institutional or other investors, discharging our remaining purchase price obligations in the Veloce acquisition, making new acquisitions through the use of stock, and adopting additional equity incentive plans or increasing the share reserve under our existing plan. For example, to enable us to make future equity grants to attract and retain key employees and service providers, in August 2015, we requested and received stockholder approval of a 3.3 million share increase in the shares reserved for issuance under our 2011 Equity Incentive Plan and, in August 2016, we will request stockholder approval of a 3.0 million share increase in the shares reserved for purchase under our 2012 Employee Stock Purchase Plan. Any issuance of our common stock will result in immediate dilution of our stockholders. In addition, the issuance of a significant amount of our common stock may result in additional regulatory requirements, such as stockholder approval. The actual amount and timing of additional share issuances to be made in connection with Veloce acquisition

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payments will be based upon numerous factors including, without limitation, the total amount of acquisition consideration to be paid, the market price of our common stock as of each payment date, the tax impact of the issuances and the recipients’ ability to sell shares in order to cover related tax liabilities, and our available cash balances and liquidity requirements as of such dates, some of which are not determinable at this time.

*Our dependence on third-party manufacturing and supply relationships increases the risk that we will not have an adequate supply of products to meet demand or that our cost of materials will be higher than expected.

We depend upon third parties to manufacture, assemble, package and test certain of our products. As a result, we are subject to risks associated with our dependence on third-party manufacturing and supply relationships, including:

• pricing of foundry services and of other supply chain services such as assembly, packaging and testing, from vendors such as Taiwan Semiconductor Manufacturing Company Ltd., GlobalFoundries, Inc. (which recently took over foundry services previously provided to us by International Business Machines Corporation), Advanced Semiconductor Engineering, Inc. and Siliconware Precision Industries Co., Ltd.;

• reduced control over the supply chain process, delivery schedules and quality;

• potentially inadequate manufacturing yields and excessive costs;

• the risks associated with transitioning our manufacturing supply from one foundry or other supplier to another, which may be extremely difficult to accomplish, particularly on short notice and when cutting-edge process technologies are involved;

• our ability to retain key personnel with specialized knowledge of our products and processes;

• difficulties selecting and integrating new subcontractors;

• the potential lack of adequate capacity at the foundry during periods of high demand, resulting in significant increases in lead time requirements and production delays, which can be expected to cause difficulties with our customers, including reduced revenues and higher expenses;

• increased risk of excess and obsolete inventory charges due to the higher level of inventories in response to the increased lead times;

• limited warranties on products supplied to us, which may not match the warranties that our customers require from us;

• potential instability and business disruption in countries where third-party manufacturers or distributors are located;

• potential misappropriation of our IP;

• the speed, efficiency and success with which our outside foundries and suppliers are able to transition to the next generation of manufacturing technologies and to smaller geometries; and

• potential foundry shortages when we commence volume manufacturing of new products, especially those with 28nm, 16nm and anticipated smaller geometry technologies or using more complicated manufacturing process technologies such as FinFET, which could delay the supply of products to our customers.

Our outside foundries and manufacturing, assembly, packaging and test service providers generally operate on a purchase order basis, and we have few long-term supply arrangements with these suppliers. We have less control over delivery schedules, manufacturing yields and costs than our competitors that use their own fabrication facilities or provide larger volumes of business to their outside foundries. A manufacturing disruption or capacity constraint experienced by one or more of our outside foundries or service providers or a disruption of our relationship with an outside foundry or service provider, including discontinuance of our products by that foundry or service provider, would negatively impact the production and cost structure of certain of our products for a substantial period of time.

As our third-party manufacturing suppliers extend their lead time requirements, we will likely need to also extend our lead time requirements to our customers. This could cause our customers to lower their competitive assessment of us as a supplier and, as a result, we may not be considered for future design awards.

Each of our integrated circuit, or IC, products is generally only qualified for production at a single foundry. These suppliers can allocate, and in the past have allocated, capacity to the production of other companies' products while reducing deliveries to us on short notice. There is also the potential that they may discontinue manufacturing our products, be acquired by competitors, or go out of business. Because establishing relationships, designing or redesigning silicon solutions, and ramping production with new outside foundries may take over a year, there is no readily available alternative source of supply for these products.

Difficulties associated with adapting our technology and product design to the proprietary process technology and design rules of outside foundries can lead to reduced yields of our IC products. This risk is substantially higher with respect to the manufacture of our X-Gene, X-Weave and HeliX products at 28 nanometers, and will be even higher when using anticipated smaller geometries such as 16 nanometers and more complicated processes such as FinFET. FinFET generally refers to a multi-

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gate architecture that includes a silicon “fin” that wraps around the conducting portion of the device. The process technology of an outside foundry is typically proprietary to the manufacturer. Since low yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual product exists that can be analyzed and tested to identify process sensitivities relating to the design rules that are used. As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between us and our manufacturer. This risk could be compounded by the offshore location of certain of our manufacturers, increasing the effort and time required to identify, communicate and resolve manufacturing yield problems. Manufacturing defects that we do not discover during the manufacturing or testing process may lead to costly product recalls. These risks may lead to increased costs or delayed product delivery, which would harm our profitability and customer relationships.

Our requirements typically represent a very small portion of the total production of the third-party foundries and related service providers. As a result, we are subject to the risk that a producer or service provider will cease production of an older or lower-volume process that it uses to produce our parts, cease performing the supply services currently provided, or raise the prices it charges us. We cannot assure you that our external foundries and related service providers will continue to devote resources to the production of parts for our products or continue to advance the process design technologies on which the manufacturing of our products are based. Each of these events could increase our costs, lower our gross margin, cause us to hold more inventory or reduce our ability to deliver our products on time. As our volumes decrease with any third-party foundry, the likelihood of unfavorable pricing or service levels increases.

Our customers’ products incorporate components from other suppliers. If these other suppliers cannot access sufficient production capacity or have other production or delivery issues, our customers may reduce orders for our products.

*Our restructuring activities could result in management distractions, operational disruptions and other difficulties.

Over the past several years, we have implemented several restructuring activities in an effort to reduce operating costs and similar activities may continue in the future. For example, our Board of Directors approved reductions in force of between 5% and 10% of our workforce on four occasions from December 2012 to January 2015, the most recent of which was substantially completed by March 31, 2015. Additional reductions in force and senior level employee replacements may be required as we continue to realign our business organization, operations and product lines. Employees whose positions were or will be eliminated in connection with these restructuring activities may seek employment with our competitors, customers or suppliers. Although each of our employees is required to sign a confidentiality agreement with us at the time of employment, which agreement contains covenants prohibiting among other things the disclosure or use of our confidential information and the solicitation of our employees, we cannot guarantee that the confidential nature of our proprietary information will be maintained in the course of such future employment, or that our key continuing employees will not be solicited to terminate their employment with us. Any restructuring effort could also cause disruptions with customers and other business partners, divert the attention of our management away from our operations, weaken our administrative, financial reporting and compliance capabilities, harm our reputation, expose us to increased risk of legal claims by terminated employees, increase our expenses, increase the workload placed upon remaining employees and cause our remaining employees to lose confidence in our future performance and decide to leave. We cannot guarantee that any restructuring activities undertaken in the future will be successful, or that we will be able to realize the cost savings and other anticipated benefits from our previous, current or future restructuring plans. In addition, our reduced workforce may adversely impact our ability to respond rapidly to new growth opportunities or to remain competitive.

*We may experience difficulties in transitioning to smaller geometry processes or in achieving higher levels of design integration and, as a result, may experience reduced manufacturing yields, delays in product deliveries and increased expenses.

We may not be able to achieve higher levels of design integration or deliver new integrated circuit products on a timely basis. We periodically evaluate the benefits, on a product-by-product basis, of migrating to smaller geometry process technologies to reduce our costs and increase performance. As smaller line-width geometries, such as 16, 14 or 7 nanometer, and more complicated processes, such as FinFET, are introduced to and become more prevalent in the industry, we expect to integrate greater levels of functionality into our IC products and to transition our IC products to smaller geometries.

Shifting to smaller geometry process technologies and new manufacturing processes often results in reduced manufacturing yields, delays in product deliveries and increased expenses. The transition to smaller geometries is inherently more expensive and, as we manufacture more products using smaller geometries, the incremental costs could have an adverse impact on our earnings. We may face these difficulties, delays and expenses with respect to the 28 nanometer and smaller versions of X-Gene, X-Weave and Helix and as we continue to transition our other products to smaller geometry processes. Transitions to more sophisticated designs and processes, such as FinFET, could result in similar difficulties. We are dependent

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on our relationships with our foundries to transition to smaller geometry and new design processes successfully and at competitive pricing. We cannot assure you that our foundries will be able to effectively manage these transitions or that we will be able to maintain our relationships with our foundries. If we or our foundries experience significant delays or difficulties in these transitions or fail to implement them at competitive pricing, our business, financial condition and results of operations could be materially and adversely affected.

The gross margins for our products could decrease rapidly or not increase as forecasted, which would negatively impact our business, financial conditions and results of operations.

The gross margins for our solutions have declined in the past and may do so again in the future. Factors that we expect to cause downward pressure on the gross margins for our products include competitive pricing pressures, the cost sensitivity of our customers, particularly in higher-volume markets, new product introductions by us or our competitors, the overall mix of our products sold during a particular quarter, and other factors. From time to time, for strategic reasons, we have accepted and may in the future accept orders at less than optimal gross margins in order to facilitate the introduction of new products or the market penetration of existing products. We may also accept orders at less than optimal gross margins to encourage customers to order sooner or in larger quantities than previously anticipated. To maintain acceptable operating results, we will need to offset any reduction in gross margins of our products by reducing costs, increasing sales volume, developing and introducing new products and developing new generations and versions of existing products on a timely basis. If the gross margins for our products decline or do not increase as anticipated and we are unable to offset those reductions, our business, financial condition and results of operations will be materially and adversely affected. In addition, our margins may fluctuate from

period to period based on the timing and amount of any IP licensing or sales arrangements or development agreements that we may undertake. Although historically these arrangements and agreements have provided us with higher-margin revenues, we cannot predict the frequency or extent to which we will engage in them in the future.

*Adverse economic and financial market conditions could harm our revenues, operating results and financial condition.

Our business has been negatively affected by occasional downturns in the economies of the United States ("U.S.") and other countries, including one in recent years that continues to cause unstable economic and political conditions in certain countries in Europe and Asia. Economic downturns or political instability in various geographic regions, such as Europe, Asia and the Middle East, could also negatively affect our business. Our current operating plans are based on assumptions concerning levels of consumer and corporate spending. If weak global economic and market conditions persist or worsen, the recent rebound in the U.S. economy deteriorates, or there is a downturn in global credit markets, our business, operating results and financial condition could suffer materially, which in turn could result in a decline in the price of our common stock. If economic conditions worsen, we may have to implement additional cost reduction measures or delay certain R&D spending, which may adversely impact our ability to introduce new products and technologies. Because we expect to depend on new products for a substantial portion of our future revenues, this could have a material adverse effect on us.

Adverse economic conditions affecting our larger customers could have a particularly significant effect on our business and operating results, given our customer concentration. See "Sales of our Connectivity and Computing products are concentrated among a few large customers" below. Among other things, these conditions could impair the ability of our customers to pay for our products, causing our allowances for doubtful accounts and write-offs of accounts receivable to increase. In addition, adverse economic conditions could cause our contract manufacturers and other suppliers to experience financial difficulties that negatively affect their operations and their ability to supply us with necessary products and services.

Generally to enhance our IP portfolio and to augment our R&D resources, we have invested, and may continue to invest, in privately-held companies, most of which can still be considered to be in startup or developmental stages. These investments are inherently risky as the markets for the technologies or products they have under development are typically in the early stages and may never materialize. In fiscal 2015, we determined to write off all of the value of our private company investments.

*Our operating results may fluctuate because of a number of factors, many of which are beyond our control.

If our operating results are below the expectations of research analysts or investors, then the market price of our common stock could decline. Some of the factors that affect our quarterly and annual results, but which are often difficult to control or predict, include those discussed elsewhere in this “Risk Factors” section, as well as the following:

• market acceptance of our products and our customers' products, including without limitation any failure of our X-Gene, X-Weave or HeliX product families to be commercially accepted within the time frames and at the levels we anticipate;

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• the reduction, rescheduling or cancellation of orders by customers, including without limitation as a result of slowing demand for our products or our customers' products, over-ordering or double booking of our products or our customers' products, or agreements with customers to accelerate, delay, increase or decrease previously anticipated orders;

• changes to U.S. or other applicable export laws or the imposition of trade embargoes or other restrictions, which may delay, limit or prohibit our sale or resale of products and technologies to certain countries or customers;

• changes in the timing and amounts of shipments due to our decision to phase out a particular product, which often results in near-term “last-time-buy” orders for the “end-of-life” product that would otherwise have been placed and shipped in later periods;

• changes in the mix of product orders;

• the gain or loss of one or more key customers or their key customers, or significant changes in the financial condition of one or more of our key customers or their key customers;

• our ability to introduce, certify and deliver new products and technologies, including without limitation the next generation of our X-Gene, X-Weave and HeliX products, on a timely basis;

• the announcement or introduction of new products and technologies by our competitors;

• competitive pressures on selling prices;

• the ability of our customers to obtain components from their other suppliers;

• risks associated with our or our customers' dependence on third-party manufacturing and supply relationships;

• increases in the costs of facilities leases, in particular for our headquarters facilities lease which expires in 2017, and other material contracts with our service providers:

• increases in the costs of our ARM instruction set architecture or other technology licenses or our failure to renew such licenses;

• increases in the costs of mask sets and other manufacturing materials and services, including without limitation with respect to smaller or more sophisticated process technologies such as FinFET, or the discontinuance of products, services or components by our suppliers;

• the amounts and timing of meeting the specifications and expense recovery on non-recurring engineering projects;

• the amounts and timing of costs associated with warranties, product returns and customer indemnification claims;

• the impact of potential claims asserting infringement of third party patent or misappropriation of third party IP rights;

• the amounts and timing of investments in R&D;

• the product lifecycle and recoverability of architectural licenses, technology access fees and mask set costs;

• revenue and margin fluctuations depending on the timing and amount of any IP licensing or sale transactions that we may undertake;

• the amounts and timing of the costs associated with payroll taxes related to stock option exercises or settlement of restricted stock units;

• the impact of potential one-time charges related to goodwill;

• our ability to use net operating losses (“NOLs”) to offset taxable income and the potential restrictions placed on our use of such NOLs that could result from changes to existing tax laws or to our shareholder ownership profile:

• the impact on interest income of a significant use of our cash for an acquisition, stock repurchase or other purpose;

• the effects of changes in interest rates or credit worthiness on the value and yield of our short-term investment portfolio;

• the effects of changes in accounting standards; and

• the availability of ecosystem partners.

*Our business, financial condition and operating results would be harmed if we do not achieve anticipated revenues.

We can have revenue shortfalls for a variety of reasons, including:

• shortages of raw materials or production capacity constraints that lead our suppliers to allocate available supplies or capacity to their other customers, which may disrupt our ability to meet our production obligations;

• our customers experiencing shortages from their suppliers, which may cause them to delay orders or deliveries of our products;

• delays in the availability of the software elements from third party vendors and ecosystem partners that may cause delays in customers' use of our hardware products, resulting in further delays in bringing our products to market;

• the reduction, rescheduling or cancellation of customer orders, including without limitation agreements with customers to delay the timing or decrease the size of orders, resulting in decreased near-term revenues from the affected products, or to accelerate the timing or increase the size of orders, resulting in reduced revenues from those products in later periods;

• declines in the average selling prices of our products;

• delays in the introduction of new products, or lower than expected demand for new products;

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• delays when our customers are transitioning from old architectures, technologies and products to new architectures, technologies and products;

• a decrease in demand for our products or our customers' products due to technological changes, industry consolidation, competitive developments, trends in our customers’ businesses or other factors;

• a decline in the financial condition or liquidity of our customers or their customers;

• the failure of our products to be qualified in our customers' systems or certified by our customers;

• excess inventory of our products held by our customers, resulting in a reduction in their order patterns as they work through such excess inventory;

• decisions to phase out or “end-of-life” particular products, which may result in higher near-term revenues due to customers’ final, “last-time-buy” orders, but a cessation of revenues from those products in later periods;

• fabrication, test, product yield, or assembly constraints for our products that adversely affect our ability to meet our production obligations;

• the failure of one or more of our subcontract manufacturers to perform its obligations to us;

• our failure to successfully integrate or maintain acquired companies, products and technologies; and

• global political, economic and industry conditions.

Our business is characterized by short-term orders and shipment schedules. Customer orders typically can be cancelled or rescheduled without significant penalty to the customer. Because we do not have substantial non-cancellable backlog, we typically plan our production and inventory levels based on internal forecasts of customer demand, which is highly unpredictable and can fluctuate substantially. We generally recognize revenue upon shipment of products to a customer. If a customer refuses to accept shipped products or does not pay for these products, we could miss future revenue projections or incur significant charges against our income, which could materially and adversely affect our operating results.

Our expense levels are relatively fixed in the short-term and are based on our expectations of future revenues. We have limited ability to reduce expenses quickly in response to any revenue shortfalls. Changes to production volumes and the impact of overhead absorption may result in a decline in our financial condition or liquidity.

We are dependent on orders that are received and shipped in the same quarter and are therefore limited in our visibility of future product shipments.

Our net sales in any given quarter depend upon a combination of shipments from backlog and orders received in that quarter for shipment in that quarter, which we refer to as turns business. We estimate turns business at the beginning of a quarter based on the orders needed to meet the shipment forecasts that we set entering the quarter. Historically, we have relied on our ability to respond quickly to customer orders as part of our competitive strategy, resulting in customers placing orders with relatively short delivery schedules. Shorter lead times generally mean that turns orders as a percentage of our business are relatively high in any particular quarter and reduce our backlog visibility on future product shipments. Turns business correlates to overall semiconductor industry conditions and product lead times. Because turns business is difficult to predict, varying levels of turns business make our net sales more difficult to forecast. If we do not achieve a sufficient level of turns business in a particular quarter relative to our revenue forecasts, our revenue and operating results may suffer.

*Our business faces challenges due to declining sales of our older products and the evolving dynamics of the networking and communications industries.

Each of our Connectivity and Computing product families faces industry-specific challenges, in addition to the risks applicable to our business as a whole. For our Connectivity products, order patterns historically have been uneven from period to period. The unpredictable nature of demand in this sector makes it more difficult to forecast our revenues, and may cause us to incur additional expenses for inventory that may need to be written off. Our Connectivity product lines are also subject to technology transitions within the communications industry. For example, as the communications industry has continued to shift away from the synchronous optical network (“SONET”)/synchronous data hierarchy standard to the higher speed, lower power optical transport network ("OTN") standard, substantially all of our new Connectivity product designs utilize the OTN standard. However, as a result of this transition, many of our older, SONET-based Connectivity products are experiencing declining sales, while our newer Connectivity products, such as the X-Weave product family, have not yet generated significant revenue. Moreover, the transition to OTN, resulting in higher sales volumes and increased competition from integrated solutions providers, is in turn leading to price and margin erosion challenges. The introduction of other technological standards may also affect demand for our products. For our Computing business, as well, the migration of the networking industry away from products utilizing the PowerPC architecture and towards products utilizing other architectures such as ARM, has presented challenges. In line with this migration, we are no longer introducing new PowerPC product designs and are reducing our resources equipped to support our older PowerPC product lines. Moreover, as many of our older, PowerPC-based Computing products are experiencing declining sales, we will increasingly depend on revenues from our new ARM-based

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products, such as the X-Gene product family and our HeliX embedded products. If we are unable to develop and deliver new Connectivity and Computing products that meet changing customer and industry needs and generate sufficient revenue to offset the decline in sales of our older product lines, our business, results of operations and financial condition would be materially and adversely affected. See also "Sales of our Connectivity and Computing products are concentrated among a few large customers" below.

Our business may suffer due to downturns in the technology industry, which is cyclical.

The technology equipment industry is cyclical and has in the past experienced significant and extended downturns. The most recent downturn caused a reduction in capital spending on information technology ("IT") generally, which affected demand for our products. Future downturns may materially and adversely affect our business, operating results and financial condition. We sell our communications IC products primarily to communications equipment manufacturers that in turn sell their equipment to customers that depend on the growth of the Internet and other communications services. We are also developing and introducing new Cloud Server® products for the internet and data center markets. If those end markets fail to grow as expected, or experience downturns, demand for our products would be reduced.

*Interruptions, delays, cyber attacks, security breaches or other unauthorized activities at third-party data centers or other cloud computing infrastructure providers, or similar failures within our internal IT systems, could materially harm our business.

Our business depends upon the reliable operation of internal and third-party IT systems, but we have limited control over the integrity and reliability of those systems. We conduct significant business functions and computer operations, including without limitation data storage and email, using the infrastructure systems of third-party vendors, such as remote data centers, virtual servers and other “cloud computing” resources. “Cloud computing” is an IT hosting and delivery system in which data is stored outside of the user's physical infrastructure and is delivered to and used by the user as an internet-based application service. These third-party systems may experience cyber-attacks and other security breaches, along with the possible risk of loss, theft or unauthorized publication of our confidential information or that of our employees, customers, suppliers and other business partners. Any interruptions or problems at such data centers or other cloud computing facilities could result in significant disruptions to our business operations and potential liabilities to our employees and business partners. We do not control the operation of these third-party providers, and each is vulnerable to damage or interruption from earthquakes, floods, fires, terrorist attack, vandalism, power loss, telecommunications failures and similar events. These third-party vendor relationships present further risk and management challenges for us, including, among others: confirming and monitoring the third party's security measures; the potential for improper handling of or access to our data; and data location uncertainty, including the possibility of data storage in inappropriate jurisdictions, where laws or security measures may be inadequate, or the unauthorized movement of technical data between locations in violation of applicable export laws. In addition, third-party data center and other providers have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, we may experience costs or down-time in connection with the transfer to new third-party providers.

Our internal IT systems have also in the past experienced and will likely continue to experience cyber attacks of varying degrees. Such attacks, if successful, could result in the misappropriation of our IP, proprietary business information or financial resources or the interruption of our business. The reliability and security of our internal IT infrastructure, and our ability to continually update our technical and procedural safeguards in response to increased risks, is critical to our business. There can be no assurance that we will be successful in preventing cyber attacks, security breaches or other unauthorized activities involving our IT systems, or detecting and stopping them once they have begun. Any failure of our outsourced service providers or our internal IT systems to properly protect our data or the confidential information of our employees and business partners may adversely affect our business, reputation, financial condition and results of operations, as well as result in significant expenses including governmental penalties.

In addition to the risk of cyber attacks or other unauthorized activities, our internally maintained IT infrastructure may experience interruptions of service or errors in connection with operational oversights, malfeasance, systemic failures (which may be caused by third-party actions including viruses or other externally introduced problems, hardware or software failures, telecommunications or Internet connectivity issues, natural disasters or other causes), systems integration or migration work. In such an event, we may be unable to implement new systems or transition data and processes promptly, which could be expensive, time consuming and disruptive. These disruptions could impair our ability to fulfill orders and interrupt other business functions, resulting in delayed or lost sales, lower margins or lost customers, which could adversely affect our reputation and financial results.

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*Our business is dependent on selling to distributors and any disruption in their operations could materially harm our business.

Sales to distributors accounted for 47% of our revenues for the quarter ended June 30, 2016, and 49% and 54% of our revenues for the fiscal years ended March 31, 2016 and 2015, respectively. Our largest distributor accounted for 32% of our revenues for the quarter ended June 30, 2016, and 26% of our revenues each for the fiscal years ended March 31, 2016 and 2015. We do not have long-term agreements with our distributors, and either party can terminate the relationship with little advance notice.

Any future adverse conditions in the U.S. and global economies or in the U.S. and global credit markets could materially impact the operations of our distributors. Any deterioration in the financial condition of our distributors or any disruption in their operations could adversely impact the flow of our products to our end customers and adversely impact our results of operations. In addition, during an industry or economic downturn, it is possible there will be an oversupply of products and a decrease in sell-through of our products by our distributors, which could cause them to hold excess inventories and reduce our net sales in a given period and result in an increase in stock rotations.

*Sales of our Connectivity and Computing products are concentrated among a few large customers.

A relatively small number of customers have accounted for a significant portion of our net revenues in any particular period. Based on direct shipments, net revenues to customers that accounted for at least 10% of total net revenues were as follows:

	Three Months Ended June 30,
	2016		2015
Wintec (global logistics provider)**	26	%	29	%
Avnet (distributor)	32	%	25	%
Arrow (distributor)	*		11	%
Flextronics (contract manufacturer)	*		11	%

*     Less than 10% of total net revenues for period indicated.

**     Wintec provides vendor managed inventory support primarily for Cisco Systems, Inc.

We have no long-term volume purchase commitments from our key customers. One or more of our key customers may discontinue operations as a result of consolidation, bankruptcy or otherwise. Reductions, delays and cancellation of orders from our key customers, the loss of one or more key customers, or the failure to obtain certifications from a key customer or its distribution channel could significantly reduce our revenues and profits. Our agreements with customers typically are non-exclusive and do not require them to purchase a minimum quantity of our products. We cannot assure you that our current customers will continue to place orders with us, that orders by existing customers will continue at current or historical levels or that we will be able to obtain orders from new customers. Changes in a large customer’s financial condition, budgeting or technology strategy may materially affect our sales and could result in our holding higher than expected unsold inventory, which could result in higher expenses.

Our ability to maintain or increase sales to key customers and attract significant new customers is subject to a variety of factors, including:

• customers may stop incorporating our products into their own products with limited notice to us;

• customers or prospective customers may not incorporate our products into their future product designs;

• the timing and success of new product introductions by customers;

• some of our customers may reduce or eliminate future purchase orders or design wins placed with us as an adverse reaction to our having sold patents to third parties who thereafter asserted the acquired patents in infringement actions brought against such customers, or due to other adverse IP developments;

• sales of customer product lines incorporating our products may rapidly decline or such product lines may be phased out;

• our agreements with customers typically are non-exclusive and do not require them to purchase a minimum quantity of our products;

• many of our customers have pre-existing relationships or may establish relationships with our current or potential competitors that may delay or deter such customers from adopting our products or may cause them to switch from using our products to using competing products;

• some of our OEM customers may develop products internally that would replace our products;

• we may not be able to successfully develop relationships with additional network equipment vendors;

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• our relationships with some of our larger customers may deter other potential customers (who compete with these customers) from buying our products; and

• the impact of terminating certain sales or support personnel as a result of our workforce reduction or otherwise.

The occurrence of any one of the factors above could have a material adverse effect on our business, financial condition and results of operations.

Any significant order cancellations or order deferrals could cause unplanned inventory growth resulting in excess inventory, which may adversely affect our operating results.

Our customers may increase orders during periods of product shortages or cancel orders if their inventories are too high. Major inventory corrections by our customers are not uncommon and can last for significant periods of time and affect demand for our products. Customers may also cancel or delay orders in anticipation of new products or for other reasons. Cancellations or deferrals could cause us to hold excess inventory, which could reduce our profit margins by reducing sales prices, incurring inventory write-downs or writing off additional obsolete products.

Increasing lead times from our suppliers cause us to make commitments for inventory purchases earlier in our production cycle which in turn increases our risk of having excess inventory. In addition, from time to time some of our suppliers deliver to us based on allocations which in turn causes us to increase our inventory levels. We must balance our inventory levels between the risk of losing a significant customer to a competitor because we cannot meet our customer's requirements and the risk of having excess inventory if a significant order is cancelled.

In addition, from time to time, in response to anticipated long lead times to obtain inventory and materials from our outside contract manufacturers, suppliers and foundries, we may order materials in advance of anticipated customer demand. This advance ordering has in the past resulted and may in the future result in excess inventory levels or unanticipated inventory write-downs if expected orders fail to materialize, or other factors render our products less marketable. If we are forced to hold excess inventory or we incur unanticipated inventory write-downs, our financial condition and operating results could be materially and adversely affected.

Inventory fluctuations could affect our results of operations and restrict our ability to fund our operations. Inventory management remains an area of focus as we balance the need to maintain strategic inventory levels to ensure competitive lead times and meet customer expectations against the risk of inventory obsolescence because of changing technology and customer requirements. Customer orders for our products typically have non-standard lead times, which make it difficult for us to predict revenues and plan inventory levels and production schedules. If we are unable to plan inventory levels and production schedules effectively, our business, financial condition and operating results could be materially and adversely affected.

From time to time, we may discuss our “book-to-bill” ratio with analysts and investors, or include it in other public disclosures. The book-to-bill ratio, which is commonly used by investors to compare and evaluate technology and semiconductor companies, is a demand-to-supply ratio that compares the total amount of orders received to the total amount of orders filled. This ratio tells whether we have more orders than we delivered (if greater than 1), have the same amount of orders than we delivered (equals 1), or have fewer orders than we delivered (under 1). Though the ratio provides a general indicator of whether orders (bookings) are rising or falling at a particular point in time, it does not consider the timing of, or if the order will result in, future revenues or the effect of changing lead times and product phase-out decisions on bookings. As lead times increase, customers will place orders sooner, and when we declare a product to be “end-of-life,” customers may place final, non-recurring orders for such product, thereby increasing our bookings and book-to-bill ratio in the near term. Due to the limitations of this ratio, we recommend that investors do not place undue emphasis on it when evaluating a potential investment in our common stock.

There is no guarantee that design wins will become actual orders and sales.

A “design win” occurs when a customer or prospective customer notifies us that our product has been selected to be integrated with the customer's product. There can be delays of several months or more between the design win and when a customer initiates actual orders of our product. Following a design win, we will commit significant resources to the integration of our product into the customer's product before receiving the initial order. Receipt of an initial order from a customer following a design win, however, is dependent on a number of factors, including the success of the customer's product, which cannot be guaranteed. The design win may never result in an actual order or sale of our products. If we fail to generate revenues after incurring substantial expenses to develop a product or to achieve a design win, our business and operating results would suffer.

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*Our customers' products typically have lengthy design cycles. A customer may decide to cancel or change its product plans, which could cause us to lose anticipated sales.

After we have developed and delivered a product to a customer, the customer will usually test and evaluate our product prior to designing its own equipment to incorporate our product. Our customers may need more than six months to test, evaluate and adopt our product and an additional nine months or more to begin volume production of the equipment or devices that incorporate our product. Due to this generally lengthy design cycle, we may experience significant delays from the time we increase our operating expenses and make investments in inventory until the time that we generate revenue from these products. It is possible that we may never generate any revenue from a product or product line after incurring such expenditures. Even if a customer selects our product to incorporate into its equipment, we cannot guarantee that the customer will ultimately market and sell its equipment or devices, or that such efforts by our customer will be successful. The delays inherent in this lengthy design cycle increase the risk that a customer will decide to cancel or change its product plans. Such a cancellation or change in plans by a customer could cause us to lose sales that we had anticipated. While our customers' design cycles are typically long, some of our product life cycles tend to be short as a result of the rapidly changing technology environment in which we operate. As a result, the resources devoted to R&D, product sales and marketing may not generate material revenue for us with respect to a particular product or business, and from time to time, we may need to write off excess and obsolete inventory, cease making new R&D investments, and divest or otherwise discontinue the affected products or business. If we incur significant R&D and marketing expenses and investments in inventory in the future that we are not able to recover, and we are not able to mitigate those expenses, our operating results could be adversely affected. In addition, if we sell our products at reduced prices in anticipation of cost reductions but still hold higher cost products in inventory, our operating results would be harmed.

An important part of our strategy is to focus on data center markets. If we are unable to further penetrate into and expand our share of these markets or accurately anticipate or react timely or properly to emerging trends, our revenues may not grow and could decline.

Our target markets, including the data center market, undergo transitions from time to time in which products incorporate new features, interoperability and performance standards on an industry-wide basis. If our products are unable to support the new features or standards required by OEMs or end customers in these markets, or if our products fail to be certified or adopted by OEMs, we will lose business from an existing or potential customer and may not have the opportunity to compete for new design wins or certification until the next product transition occurs. If we fail to develop products with required features or standards, or if we experience a delay in certifying or bringing a new product to market, or if our customers fail to achieve market acceptance of their products, our revenues could be significantly reduced for a substantial period.

We face competition from customers developing products internally.

Data center customers for our products, and other customers, generally have substantial technological capabilities and financial resources. Some customers have traditionally used these resources to develop their own products internally. The future prospects for our products in these markets are dependent upon our customers' acceptance of our products as an alternative to their internally developed products. Future sales prospects also are dependent upon acceptance of third-party sourcing for products as an alternative to in-house development. Customers may in the future continue to use internally developed components. They also may decide to develop or acquire components, technologies or products that are similar to, or that may be substituted for, our products. If our customers fail to accept our products as an alternative, if they develop or acquire the technology to develop such components internally rather than purchase our products, or if we are otherwise unable to develop or maintain strong relationships with them, our business, financial condition and results of operations would be materially and adversely affected.

*Our business strategy contemplates the potential acquisition of other companies, products and technologies, as well as the divestitures of subsidiaries, operations and product families that no longer are material to our core business, are unable to achieve or maintain requisite scale in today’s rapidly consolidating marketplace, or otherwise no longer hold the potential for meaningful contributions to our earnings. Merger and acquisition activities involve numerous risks and we may not be able to conduct these activities successfully without substantial expense, delay or other operational or financial problems that could disrupt our business and harm our results of operations and financial condition.

Acquiring products, technologies or businesses from third parties, making and increasing equity investments in companies developing such products, technologies or businesses, and divesting business units or subsidiaries and selling product lines and technologies that are no longer material to our core business or no longer provide, or hold the prospect of providing, sufficient investment return, all have been and may continue to be part of our long-term business strategy. The risks involved with merger and acquisition, equity investment and divestiture activities include:

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• diversion of management's attention from our core businesses;

• both expected and unanticipated adverse effects from the loss of technologies, patents and other IP and personnel relating to divested subsidiaries, product lines and businesses;

• adverse effects on existing business relationships with suppliers and customers and on employee morale;

• costs associated with acquisitions, investments and divestitures;

• difficulties associated with combining, integrating or separating acquired or divested operations, products or technologies;

• failure to integrate or potential loss of key employees, particularly those of the acquired companies;

• potential difficulties resulting from the divestiture of business operations, with respect to protecting the confidentiality of proprietary information and trade secrets not subject to the divestiture;

• difficulties and risks associated with the methods, estimates and judgments we use in applying critical accounting policies, such as the methods and judgments we used in valuing the Veloce merger consideration, which affected our R&D expense in certain periods in fiscal 2014 and 2015;

• difficulty in completing an acquired company's in-process research or development projects;

• difficulties and risks associated with entering and competing in markets that are unfamiliar to us;

• the ability of the acquired companies to meet their financial projections; and

• the effect of divesting subsidiaries, product families or businesses on our revenues and margins.

In addition, as a result of our acquisition and investment activities, we could:

• issue stock that would dilute, in some cases significantly, our current stockholders' percentage ownership;

• use a significant portion of our cash reserves or incur debt;

• assume liabilities, including unanticipated third-party litigation and other unknown liabilities and unanticipated costs, events or circumstances;

• incur adverse tax consequences;

• incur amortization or impairment expenses related to goodwill and other intangible assets, depreciation and deferred compensation; and

• incur large one-time charges and immediate write-offs.

Any of these risks could materially harm our business, financial condition and results of operations.

Our past acquisitions required us to capitalize significant amounts of goodwill and purchased intangible assets, and we recorded significant impairment charges against these assets in our previous financial statements. At June 30, 2016, we had $11.4 millionof goodwill. Although we had no purchased intangible assets at June 30, 2016, we may be required to take significant charges as a result of impairment to the carrying value of any goodwill or purchased intangible assets that we may record in the future.

We have expended significant effort and expense on divestitures, and may do so in the future. For example, in April 2013, we completed the sale of 100% of the issued and outstanding shares of TPack A/S, a wholly-owned subsidiary, and certain IP assets owned by us related to TPack's business for an aggregate consideration of $33.5 million, payable in cash. In January 2013, we sold certain assets relating to our active optical technology platform to Volex Plc for a purchase price of $2.0 million. We may be unable to accomplish future strategic divestitures on favorable terms or at all.

Our operating results are subject to fluctuations because we rely heavily on international sales.

International sales account for a significant part of our revenues and may account for an increasing portion of our future revenues. The revenues we derive from international sales are subject to certain risks, including:

• foreign currency exchange fluctuations to the extent that this impacts our customers' purchasing power;

• changes in regulatory requirements;

• tariffs, rising protectionism and other trade barriers;

• timing and availability of export licenses, as well as barriers to direct sales or resales to specified customers or jurisdictions outside the U.S.;

• political and economic instability;

• natural disasters;

• increased exposure to liability under U.S and foreign anti-corruption laws and regulations;

• difficulties in staffing and managing foreign operations;

• difficulties in managing distributors;

• reduced or uncertain protection for IP rights in some countries;

• longer payment cycles and difficulties in collecting accounts receivable in some countries;

• burdens of complying with a wide variety of complex foreign laws and treaties;

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• potentially adverse tax consequences; and

• uncertain economic conditions that may worsen or sustain improvements which trail those in the U.S.

Because sales of our products have been denominated to date primarily in U.S. dollars, increases in the value of the U.S. dollar could increase the price of our products so that they become relatively more expensive to customers in the local currency of a particular country, leading to a reduction in sales in that country. Future international activity may result in increased foreign currency denominated sales. Gains and losses on the conversion to U.S. dollars of accounts payable and other monetary assets and liabilities arising from international operations may contribute to fluctuations in our results of operations.

Some of our customer purchase orders and agreements are governed by foreign laws, which may differ significantly from laws in the U.S., or may require that dispute resolution occur in a foreign country. As a result, our ability to enforce our rights under such agreements may be limited compared with our ability to enforce our rights under agreements governed by laws in the U.S. and adjudicated in the U.S..

*Our foreign operations may subject us to risks relating to the U.S. Foreign Corrupt Practices Act, other U.S. and foreign anti-bribery statutes and similar foreign regulations that may have a material adverse impact on our business, financial condition or results of operations.

Our international operations are subject to laws regarding the conduct of business overseas, such as the U.S. Foreign Corrupt Practices Act, or FCPA, and other anti-bribery regulations in foreign jurisdictions where we do business, such as China, India, Vietnam, and Europe. The FCPA prohibits the provision of illegal or improper inducements to foreign government officials in connection with obtaining or retaining business overseas or to secure an improper commercial advantage. The FCPA also requires us to keep accurate books and records of business transactions and maintain an adequate system of internal accounting controls. Violations of the FCPA, anti-bribery statutes or other similar laws by us, any of our foreign subsidiaries or distributors, or any of our or their employees, executive officers, or other agents or intermediaries, could subject us and the individuals involved to significant criminal and civil liability. In recent years, the Department of Justice and SEC have significantly stepped up their investigation and prosecution of alleged FCPA violations, bringing increased prosecutorial actions against companies and their individual officers and employees. Any such allegations of non-compliance with the FCPA, anti-bribery statutes or other similar laws could harm our reputation, divert management attention and result in significant expenses, and could therefore materially harm our business, financial condition or results of operations.

*Our portfolio of short-term investments is exposed to certain market risks.

We maintain an investment portfolio of various holdings, types of instruments and maturities. Our portfolio primarily includes fixed income securities, the values of which are subject to market price volatility. These securities are classified as available-for-sale and, consequently, are recorded on our condensed consolidated balance sheets at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive loss, net of tax. Our investment portfolio is exposed to market risks related to changes in interest rates and credit ratings of the issuers, as well as to the risks of default by the issuers and lack of overall market liquidity. Substantially all of these securities are subject to interest rate and credit rating risk and will decline in value if interest rates increase or one or more of the issuers' credit ratings is reduced. Increases in interest rates or decreases in the credit worthiness of one or more of the issuers in our investment portfolio could have a material adverse impact on our financial condition or results of operations. During the quarter ended June 30, 2016, and the fiscal years ended March 31, 2016 and 2015, we did not record any other-than-temporary impairment charges on our available-for-sale investments and, as of June 30, 2016, the unrealized losses on our balance sheet on these securities that were not previously written down as an other-than-temporary impairment charge were $18,000. While not currently a material amount, there can be no guarantee that such losses will not increase in future periods due to the factors described above. If the fair value of any of these securities does not recover to at least the amortized cost of such security or we are unable to hold these securities until they recover, we may be required to record a decline in the carrying value of these securities.

Our operating results depend on manufacturing output and yields of our ICs and printed circuit board assemblies, which may not meet expectations.

The yields on wafers we have manufactured decline whenever a substantial percentage of wafers must be rejected or a significant number of die on each wafer are nonfunctional. Such declines can be caused by many factors, including minute levels of contaminants in the manufacturing environment, design issues, defects in masks used to print circuits on a wafer and difficulties in the fabrication process. Design iterations and process changes by our suppliers can cause a risk of defects. Many of these problems are difficult to diagnose, are time consuming and expensive to remedy and can result in shipment delays.

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We estimate yields per wafer and final packaged parts in order to estimate the value of inventory. If yields are materially different than projected, work-in-process inventory may need to be re-valued. We may have to take inventory write-downs as a result of decreases in manufacturing yields. We may suffer periodic yield problems in connection with new or existing products or in connection with the commencement of production using a new design geometry or at a new manufacturing facility.

The complexity of our products may lead to errors, defects and bugs, which could negatively impact our reputation with customers and result in liability.

Products as complex as ours may contain errors, defects and bugs when first introduced or as new versions are released. Our products have in the past experienced such errors, defects and bugs. Delivery of products with production defects or reliability, quality or compatibility problems could significantly delay or hinder market acceptance of the products or result in a costly recall and could damage our reputation and adversely affect our ability to retain existing customers and attract new customers. Errors, defects or bugs could cause problems with device functionality, resulting in interruptions, delays or cessation of sales to our customers. We may also be required to make significant expenditures of capital and resources to resolve such problems. We cannot assure you that problems will not be found in new products, both before and after commencement of commercial production, despite testing by us, our suppliers or our customers. Any such problems could result in:

• delays in development, manufacture and roll-out of new products;

• additional development costs;

• loss of, or delays in, market acceptance;

• diversion of technical and other resources from our other development efforts;

• claims by our customers or others against us; and

• loss of credibility with our current and prospective customers.

• Any such event could have a material adverse effect on our business, financial condition and results of operations.

Regulatory authorities in jurisdictions into or from which we ship our products could levy fines or restrict our ability to import and export products.

A significant majority of our sales are made outside of the U.S. through the exporting and re-exporting of products, and may also include revenue arising from exporting our technology as part of our design and development of products for our customers outside of the U.S. In addition to local jurisdictions' export regulations, our U.S.-manufactured products and products based on U.S. technology are subject to U.S. laws and regulations governing international trade and exports. These laws and regulations include, but are not limited to, the Export Administration Regulations, and trade sanctions against embargoed countries and destinations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control. Licenses or proper license exceptions are required for the shipment of our products to certain countries as well as for the transfer of certain information and technology to certain foreign countries, foreign nationals or other prohibited persons within the U.S. or abroad. A determination by the U.S. or local government that we have failed to comply with these or other import or export regulations can result in penalties which may include denial of import or export privileges, fines, civil and criminal penalties and seizure of products. Such penalties could have a material adverse effect on our business, including our ability to meet our sales and earnings forecasts. Further, a change in these laws and regulations including without limitation the imposition by U.S. export authorities of export embargoes and other trade restrictions on one or more of our customers, could restrict our ability (or the ability of our customers) to export to previously permitted countries, customers, distributors or other third parties. Any one or more of these sanctions or a change in laws or regulations could have a material adverse effect on our business, financial condition and results of operations. We cannot predict whether quotas, duties, taxes or other charges or restrictions upon the importation or exportation of our products (by us or our customers) will be implemented by the U.S. or other countries.

*If our internal control over financial reporting is not considered effective, our business and stock price could be adversely affected.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each fiscal year, and to include a management report assessing the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K for that fiscal year. Section 404 also requires our independent registered public accounting firm to attest to and report on the effectiveness of our internal control over financial reporting.

Our management, including our chief executive officer and chief financial officer, does not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of control must be

40

considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of internal control can provide absolute assurance that all control issues and instances of fraud involving a company have been, or will be, detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions. Over time, our internal control over financial reporting may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. In addition, as a result of the reduction in the number of employees assigned to financial reporting and regulatory compliance functions in connection with recently completed and anticipated future restructuring activities, we may be at increased risk of failures in our internal control systems. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our management has concluded, and our independent registered public accounting firm has attested, that our internal control over financial reporting was effective as of March 31, 2016. We cannot be certain in future periods that any control deficiencies that may constitute one or more “significant deficiencies” (as defined by the relevant auditing standards) or material weaknesses in our internal control over financial reporting will not be identified by us or our independent registered public accounting firm. If we fail to maintain the adequacy of our internal controls, including any failure to implement or difficulty in implementing required new or improved controls, our business and results of operations could be harmed, the results of operations we report could be subject to adjustments, and we could fail to be able to provide reasonable assurance as to our financial results or the effectiveness of our internal controls or meet our reporting obligations. A material weakness in our internal control over financial reporting would require management and our independent registered public accounting firm to report our internal control over financial reporting as ineffective. If our internal control over financial reporting is not considered effective, we may experience a restatement as we have in the past of our financial statements. Any restatement or actual or perceived weakness or adverse conditions in our internal control over financial reporting, or in management's assessment thereof, could result in a loss of public confidence in our reported financial information, and have a material adverse effect on our business, the market price of our common stock, and our ability to access capital markets, and may result in litigation claims, regulatory actions and diversion of management attention and resources.

*Our ability to supply a sufficient number of products to meet customer demand, and customer demand itself, could be severely hampered by natural disasters or other catastrophes, the effects of war, acts of terrorism, global threats or shortages of water, electricity or other supplies.

A significant portion of our R&D and supply chain operations are located in Asia. These locations are subject to natural disasters such as earthquakes, floods and tsunamis, like those that in recent years have struck Taiwan, Japan and Thailand. In addition, our headquarters facilities in California are located in an area containing known earthquake fault lines and potential susceptibility to tsunamis in the event of significant offshore earthquakes. We do not have earthquake or flood insurance for these facilities, because adequate coverage is not offered at economically justifiable rates. A significant natural disaster, shortage of water, electricity or other supplies, or other catastrophic event affecting us, our suppliers or our customers could have a material adverse impact on our business, financial condition and operating results.

The effects of war, armed conflict, acts of terrorism or other regional or global threats, including, but not limited to, the outbreak of epidemic disease, could have a material adverse effect on our business, operating results and financial condition. The continued threat of terrorism and heightened security and military action in response to this threat, or any future acts of terrorism, may cause further disruptions to local and global economies and create further uncertainties. To the extent that such disruptions or uncertainties result in delays or cancellations of customer orders, or the manufacture or shipment of our products, our business, operating results and financial condition could be materially and adversely affected.

We could incur substantial fines, litigation costs and remediation expenses associated with our storage, use and disposal of hazardous materials.

We and the third-party contract manufacturers we utilize are subject to a variety of U.S. federal, state and local and foreign governmental regulations related to the use, storage, discharge and disposal of toxic, volatile or otherwise hazardous chemicals used in our manufacturing process. Any failure to comply with present or future regulations could result in the imposition of fines, the suspension of production or a cessation of operations. These regulations could require us or our contract manufacturers to acquire costly equipment or incur other significant expenses to comply with environmental regulations or clean up prior discharges.

Since 1993, we have been named as a potentially responsible party (“PRP”) along with more than 100 other companies that used Omega Chemical Corporation waste treatment facility in Whittier, California (the “Omega Site”). The U.S. Environmental Protection Agency (“EPA”) has alleged that the Omega Site failed to properly treat and dispose of certain hazardous waste material. We are a member of a large group of PRPs, known as the Omega Chemical Site PRP

41

Organized Group (“OPOG”), that has agreed to fund certain ongoing remediation efforts at and nearby the Omega Site and with respect to the regional groundwater allegedly contaminated thereby. In April 2016, OPOG and EPA filed with the court a consent decree outlining the proposed groundwater remediation plan; it is anticipated the court will approve it in fiscal year 2017, following which the groundwater remediation will commence. It is also anticipated the court will thereafter lift the stay previously placed on litigation originally filed in 2007 against OPOG and the PRPs by a different chemical company located nearby the Omega Site, seeking a judicial determination that the Omega PRPs are responsible for some or all of the plaintiff's potential liability to clean up groundwater contamination beneath the plaintiff's site. For more information, see our disclosures set forth in footnote 11, “Legal Proceedings,” to the financial statements contained in this report.

Based on currently available information, we have a loss accrual for the Omega Site that is not material and we believe that the actual amount of our costs and liabilities will not be materially different from the amount accrued. However, the proceedings are ongoing and the eventual outcome of the clean-up efforts and the pending litigation matters is uncertain at this time. Based on currently available information, we do not believe that any eventual outcome will have a material adverse effect on our operations but we cannot guarantee this result. In addition, in 2012, as a result of the PRP group's modification of its liability allocation formulae and the withdrawal of PRP group members from OPOG, our proportional allocation of responsibility among the PRPs increased. Subsequently, certain other PRPs withdrew from OPOG or initiated bankruptcy proceedings, and legal proceedings and settlement negotiations with these parties are continuing. Any future increases to our allocation of responsibility among the PRPs or the future reduction of parties participating in the PRP group could materially increase our potential liability relating to the Omega Site.

Although we believe that we have been and currently are in material compliance with applicable environmental laws and regulations, we cannot guarantee that we are or will be in material compliance with these laws or regulations or that our future obligations to fund any remediation efforts, including those relating to the Omega Site, or expenses and potential liabilities relating to the pending litigation matter, will not have a material adverse effect on our business and financial condition.

*Customer requirements and new regulations related to conflict-free minerals may force us to incur additional expenses or cause us to lose business.

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC adopted new requirements for companies that use certain minerals and derivative metals (referred to as “conflict minerals”) in their products, including products that are manufactured by third parties. These new regulations require companies to investigate, disclose and report whether or not such minerals or metals originated from the Democratic Republic of Congo or adjoining countries, and mandate independent audits under certain circumstances, to confirm that trade in such minerals or metals does not fund armed conflict in those countries. We have timely filed reports under these regulations in May 2014, 2015 and 2016, and we will be required to file similar reports on an annual basis thereafter.

The implementation of these requirements, and any similar requirements that other jurisdictions may impose in the future, will require us to incur additional compliance-related expenses. They could also adversely affect the availability and cost of metals used in the manufacture of many semiconductor devices, including ours. As there may be only a limited number of suppliers offering metals from sources outside of the relevant countries or that have been independently verified as not funding armed conflict in those countries, we cannot be sure that our contract manufacturers and other suppliers will be able to obtain those metals in sufficient quantities or at competitive prices. Also, since our supply chain is complex and some suppliers will not share their confidential supplier information, we may face challenges with our customers and suppliers if we are unable to sufficiently verify the origin of the metals used in our products. Some customers may choose to disqualify us as a supplier, and we may have to write off inventory in the event that it becomes unsalable as a result of these regulations. We may face similar risks in connection with any other regulations focusing on social responsibility or ethical sourcing that may be adopted in the future.

Environmental laws and regulations could cause a disruption in our business and operations.

We are subject to various state, federal and international laws and regulations governing the environment, including those restricting the presence of certain substances in electronic products and making manufacturers of those products financially responsible for the collection, treatment, recycling and disposal of certain products. Such laws and regulations have been passed in several jurisdictions in which we operate, including various European Union (“EU”) member countries and countries in Asia. For example, the EU has enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) and the Waste Electrical and Electronic Equipment (“WEEE”) directives. RoHS prohibits the use of lead and other substances in semiconductors and other products put on the market after July 1, 2006. The WEEE directive obligates parties that place electrical and electronic equipment on the market in the EU to put a clearly identifiable mark on the equipment, register with and report to EU member countries regarding distribution of the equipment, and provide a

42

mechanism to take back and properly dispose of the equipment. There can be no assurance that similar programs will not be implemented in other jurisdictions resulting in additional costs, possible delays in delivering products, and even the discontinuance of existing and planned future product replacements if the cost were to become prohibitive.

We may not be able to protect our IP adequately.

We rely in part on patents to protect our IP. We cannot assure you that any of our issued patents will adequately protect the IP in our products and processes, will provide us with competitive advantages, will not be challenged by third parties or that, if challenged, any such patents will be found to be valid or enforceable. In our industry, the assertion of IP rights often results in the other party seeking to assert claims based on its own IP, which can be costly and disruptive. In addition, there can be no assurance our pending patent applications or any future applications will be approved or that we will successfully prepare and file patent applications with respect to new inventions potentially subject to patent protection. Others may independently develop similar products or processes, duplicate our products or processes or design around any patents we currently hold or that may be issued to us.

To protect our IP, we also rely on the combination of mask work protection under the Federal Semiconductor Chip Protection Act of 1984, trademarks, copyrights, trade secret laws, employee and third-party nondisclosure agreements, and licensing arrangements. Despite these efforts, we cannot assure you that others will not independently develop substantially equivalent IP or otherwise gain access to our trade secrets or IP, or disclose such IP or trade secrets, or that we can meaningfully protect our IP. A failure by us to meaningfully protect our IP could have a material adverse effect on our business, financial condition and operating results.

We generally enter into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with other third parties including consultants, suppliers, customers, licensees and strategic partners. We also try to control access to and distribution of our technologies, pre-release products, documentation and other proprietary information, through the use of license agreements and other contracts and the implementation and enforcement of physical security measures. Despite these efforts, employees, contractors and third parties may attempt to copy, disclose, obtain or use our confidential information, products, services or technology without our authorization. In such event, any contracts we have in place with such parties might not provide us with adequate remedies to protect our IP rights or to recover adequate damages for this loss. Also, former employees may seek employment with our business partners, customers or competitors and we cannot assure you that the confidential nature of our proprietary information will be maintained in the course of such future employment. Additionally, former employees or third parties could attempt to penetrate our network to misappropriate our proprietary information or interrupt our business. Because the techniques used by computer hackers to access or sabotage networks change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques. As a result, our technologies and processes may be misappropriated, particularly in foreign countries where laws may not protect our proprietary rights as fully as in the U.S..

We could be harmed by litigation involving patents, proprietary rights or other claims.

In the past we have sold to third parties, including non-practicing entities (also known as "NPEs" or "patent trolls"), groups of patents previously issued to or acquired by us that we deemed to be no longer essential to our core product lines and technologies. Certain NPE acquirers have brought and may in the future bring legal actions asserting infringement of the acquired patents against various defendants, including customers or potential customers of ours. Although we are expressly licensed and our customers are similarly protected under such acquired patents with respect to all products sold by us, nevertheless certain customers, against whom the NPEs have asserted infringement of the acquired patents by products other than ours (e.g., products internally developed by the customer or purchased from third-party suppliers other than us), have reacted adversely to us based on our initial sale of the acquired patents to the NPEs. Such adverse reactions have included, among other things, demands that we reimburse the customer for expenses incurred in defending against or settling the legal action, as well as threats to reduce or discontinue the customer's current or future business with us. There can be no assurance that any such expense reimbursement payments or other financial consideration extended to such affected customers or any actual reduction or discontinuance of product sales to such affected customers would not adversely affect our business, financial condition or operating results.

In addition, litigation may be necessary to enforce our IP rights, to determine the validity and scope of the proprietary rights of others or to defend against claims that our products are infringing or misappropriating the IP rights of third parties. The semiconductor industry is characterized by substantial litigation regarding patent and other IP rights. Currently we are not a named defendant in any IP infringement lawsuits. Nevertheless, as our products and IP become instantiated in more and more customer products and applications, and as patent infringement litigation brought by our competitors, NPEs and patent-

43

licensing companies is on the rise, we are at an increased risk of being named as a defendant in such litigation. Due in part to the factors described above, we have been or currently are subject to the following:

• having information about our products and technologies subpoenaed, and our employees deposed, in patent litigation between other third parties;

• demands that we enter into expensive licenses of third party patent portfolios in order to avoid being named as a defendant in future IP infringement suits;

• claims, contractual or otherwise, demanding that we indemnify or reimburse customers or end users of our products

with respect to their actual or potential liability, including without limitation defense costs, arising from third party IP infringement claims brought against them; and

• demands from customers that we enter into “springing licenses” that prospectively grant such customers and related parties automatic license rights to any patents we sell or otherwise divest control over in specified transactions.

•

Such claims and demands have caused and could in the future result in substantial costs and diversion of resources and could have a material adverse effect on our business, financial condition and results of operations.

Any current or future litigation relating to the IP rights of third parties would at a minimum be costly and could divert the efforts and attention of our management and technical personnel. In the event of any adverse ruling in any such litigation, we could be required to pay substantial damages, cease the manufacturing, use and sale of infringing products, discontinue the use of certain processes, expend substantial resources attempting to develop non-infringing products or technologies, or obtain a license under the IP rights of the third party claiming infringement. A license might not be available on reasonable economic and other terms or at all. From time to time, we may be involved in litigation relating to other claims arising out of our operations in the normal course of business. The ultimate outcome of any such litigation matters could have a material, adverse effect on our business, financial condition and operating results.

*Our stock price is volatile.

The market price of our common stock has fluctuated significantly. For example, during the fiscal quarter ended June 30, 2016 our stock's closing price ranged from $5.88 and $6.86 per share and during the fiscal year ended March 31, 2016 our stock's closing price ranged from $4.94 and $8.03 per share. In the future, the market price of our common stock could be subject to significant fluctuations due to general economic and market conditions and in response to:

• fluctuations in our anticipated or actual operating results;

• our announcement of actual results or financial outlook that are higher or lower than market or analyst expectations;

• changes in the economic performance or market valuations of other semiconductor companies or companies perceived by investors to be comparable to us;

• announcements or introductions of new products by us or our competitors;

• fluctuations in the anticipated or actual operating results or growth rates of our customers, peers or competitors;

• technological innovations or setbacks by us or our competitors;

• conditions in the semiconductor, communications or IT markets;

• the commencement or outcome of litigation or governmental investigations;

• changes in ratings and estimates of our performance, or loss of coverage, by securities analysts;

• positive or negative commentary about our business or prospects by industry bloggers and journalists;

• volume fluctuations due to inconsistent trading volume levels of our shares;

• announcements, by us or third parties, of merger, acquisition or financing transactions;

• management changes;

• our inclusion in certain stock indices; and

• general economic and market conditions.

In recent years, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many high technology companies, particularly semiconductor companies. In some instances, these fluctuations appear to have been unrelated or disproportionate to the operating performance of the affected companies. Whether or not our stock is part of one or more Index funds could also have a significant impact on our stock. We cannot assure you that our stock will be part of any Index fund. In addition, broader conditions in the financial markets, such as the credit and mortgage crisis in 2008 and beyond, may cause our stock price to decline rapidly and unexpectedly.

Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

44

Provisions in our certificate of incorporation, as amended, and our bylaws, as amended and restated, may have the effect of delaying or preventing a change of control or changes in our directors and management. These provisions include the following:

• the ability of the board of directors to issue up to 2.0 million shares of “blank check” preferred stock with terms designed to prevent or delay a takeover attempt, as described further below;

• the prohibition of cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;

• the requirement for advance notice for nominations of directors for election to the board or for proposing matters that can be acted upon at a stockholders' meeting;

• the ability of the board of directors to alter our bylaws without obtaining stockholder approval;

• the requirement that any stockholder derivative actions and certain other intra-corporate disputes be litigated solely and exclusively in Delaware state court;

• the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors; and

• the prohibition of the right of stockholders to call a special meeting of stockholders.

Our board of directors has the authority to issue up to 2.0 million shares of preferred stock and to determine the price, rights, preferences and privileges and restrictions, including voting rights, of those shares without any further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be harmed by, the rights of the holders of any shares of preferred stock that may be issued in the future. The issuance of preferred stock may delay, defer or prevent a change in control, as the terms of the preferred stock that might be issued could potentially prohibit our consummation of any merger, reorganization, sale of substantially all of our assets, liquidation or other extraordinary corporate transaction without the approval of the holders of the outstanding shares of preferred stock. The issuance of preferred stock could have a dilutive effect on our stockholders.

Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law. These provisions may prohibit, restrict or significantly delay large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us.

Although we believe these provisions in our charter and bylaws and under Delaware law collectively provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders. In any event, these provisions may delay or prevent a third party from acquiring us. Any such delay or prevention could cause the market price of our common stock to decline.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In April 2016, the Company repurchased its common stock from a non-officer employee in a privately negotiated transaction that was not part of a repurchase plan or program. The repurchased shares were retired upon delivery to the Company.

Below is a summary of stock repurchases for the three months ended June 30, 2016. 

Period	Total Number of Shares Repurchased	Average Price Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2016 - April 30, 2016	10,084	$	6.42	N/A	N/A
May 1, 2016 - May 31, 2016	—	—		N/A	N/A
June 1, 2016 - June 30, 2016	—	—		N/A	N/A
Total	10,084	$	6.42	N/A	N/A

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

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None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed in the accompanying “Exhibit Index” are filed or incorporated by reference as part of this Form 10-Q.

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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.

Date: August 3, 2016

APPLIED MICRO CIRCUITS CORPORATION
By:	/S/ Martin S. McDermut
	Martin S. McDermut
	Vice President and Chief Financial Officer
	(Duly Authorized Signatory and Principal Financial and Accounting Officer)

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Exhibit Index

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Filing Date	Exhibit Number	Filed Herewith
3.1	Amended and Restated Certificate of Incorporation of the Company.	S-1	10/10/1997	3.2
3.2	Certificate of Amendment of Certificate of Incorporation of the Company.	S-4	9/12/2000	3.3
3.3	Certificate of Amendment of Certificate of Incorporation of the Company.	8-K	12/11/2007	3.1
3.4	Amended and Restated Bylaws of the Company.	10-Q	11/3/2010	3.2
4.1	Specimen Stock Certificate.	S-1/A	11/12/1997	4.1
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.				x
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.				x
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				x
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				x
101.INS	XBRL Instance Document				x
101.SCH	XBRL Taxonomy Extension Schema Document				x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				x
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				x
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				x
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				x

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Dr. Paramesh Gopi, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Applied Micro Circuits Corporation;

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 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.

/s/ Paramesh Gopi

Dr. Paramesh Gopi

President and Chief Executive Officer

Date: August 3, 2016

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Martin S. McDermut, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Applied Micro Circuits Corporation;

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 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.

/S/ Martin S. McDermut

Martin S. McDermut

Vice President and Chief Financial Officer

Dated: August 3, 2016

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350, as adopted), Dr. Paramesh Gopi, Chief Executive Officer of Applied Micro Circuits Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1. This Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission (“SEC”) or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

/s/ Paramesh Gopi

Dr. Paramesh Gopi

President and Chief Executive Officer

Dated: August 3, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350, as adopted), Martin S. McDermut, Chief Financial Officer of Applied Micro Circuits Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1.  This Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission (“SEC”) or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

/S/ Martin S. McDermut

Martin S. McDermut

Vice President and Chief Financial Officer

Dated: August 3, 2016

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Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	APPLIED MICRO CIRCUITS CORP
Entity Central Index Key	0000711065
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		85,366,236

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	[1]
Current assets:
Cash and cash equivalents	$ 24,225	$ 25,065
Short-term investments	58,086	58,780
Accounts receivable, net	9,163	9,265
Inventories	12,604	16,148
Other current assets	10,906	10,775
Total current assets	114,984	120,033
Property and equipment, net	13,905	13,293
Goodwill	11,425	11,425
Other assets	1,323	1,541
Total assets	141,637	146,292
Current liabilities:
Accounts payable	6,184	8,599
Accrued payroll and other accrued liabilities	4,711	4,115
Veloce accrued liability	6,600	6,608
Other accrued liabilities	11,316	9,793
Deferred revenue	347	346
Total current liabilities	29,158	29,461
Non-current liabilities	1,548	1,793
Total liabilities	30,706	31,254
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.01 par value: Authorized shares - 2,000, none issued and outstanding	0	0
Common stock, $0.01 par value: Authorized shares - 375,000 at June 30, 2016 and March 31, 2016; Issued and outstanding shares - 83,359 at June 30, 2016 and 84,590 at March 31, 2016	854	846
Additional paid-in capital	6,065,559	6,059,137
Accumulated other comprehensive loss	(9,551)	(9,553)
Accumulated deficit	(5,945,931)	(5,935,392)
Total stockholders’ equity	110,931	115,038
Total liabilities and stockholders’ equity	$ 141,637	$ 146,292

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Mar. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	2,000,000	2,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	375,000,000	375,000,000
Common stock, shares issued (shares)	85,359,000	84,590,000
Common stock, shares outstanding (shares)	85,359,000	84,590,000

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Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Net revenues	$ 41,498	$ 37,813
Cost of revenues	16,029	16,806
Gross profit	25,469	21,007
Operating expenses:
Research and development	27,485	21,617
Selling, general and administrative	8,699	8,764
Restructuring	0	96
Total operating expenses	36,184	30,477
Operating loss	(10,715)	(9,470)
Realized gain on short-term investments and interest income, net	230	1,619
Other income, net	17	25
Loss before income taxes	(10,468)	(7,826)
Income tax provision (benefit)	71	(422)
Net loss	$ (10,539)	$ (7,404)
Basic and diluted net loss per share (in dollars per share)	$ (0.12)	$ (0.09)
Shares used in calculating basic and diluted net loss per share (in shares)	84,980	81,179

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Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss		$ (10,539)	$ (7,404)
Other comprehensive loss, net of tax:
Unrealized gain (loss) on investments	[1]	147	(1,653)
Loss on foreign currency translation		(145)	(137)
Other comprehensive loss, net of tax		2	(1,790)
Total comprehensive loss		$ (10,537)	$ (9,194)

[1] The amounts reclassified from accumulated other comprehensive loss and recorded in realized gain on short-term investments and interest income, net in the Condensed Consolidated Statement of Operations related to the sale of short-term investments were $27,000 and $1.4 million for the three months ended June 30, 2016 and 2015, respectively. Refer to Note 2, Certain Financial Statement Information, to the Condensed Consolidated Financial Statements for additional details.

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Condensed Consolidated Statements of Comprehensive Loss (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Reclassification adjustment from AOCI to earnings, short term investments	$ 27	$ 1,400

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016		Jun. 30, 2015
Adjustments to reconcile net loss to net cash provided by operating activities:
Net loss	$ (10,539)		$ (7,404)
Depreciation	1,570		1,838
Amortization of bond premium	226		0
Stock-based compensation expense	8,165		6,092
Gain on short-term investments and other, net	(26)		(1,455)
Tax effect on other comprehensive loss	(94)		0
Changes in operating assets and liabilities:
Accounts receivable	102		882
Inventories	3,552		3,723
Other assets	(70)		2,464
Accounts payable	(2,382)		(3,453)
Accrued payroll and other accrued liabilities	1,077		220
Veloce accrued liability	(8)		(65)
Deferred revenue	1		7
Net cash provided by operating activities	1,574		2,849
Investing activities:
Proceeds from sales and maturities of short-term investments	18,461		7,444
Purchases of short-term investments	(17,739)		(1,129)
Proceeds from sale of property and equipment	2		25
Purchases of property and equipment	(2,547)		(315)
Net cash provided by (used for) investing activities	(1,823)		6,025
Financing activities:
Proceeds from issuance of common stock	32		133
Funding of restricted stock units withheld for taxes and other	(623)		(1,212)
Net cash used for financing activities	(591)		(1,079)
Net increase (decrease) in cash and cash equivalents	(840)		7,795
Cash and cash equivalents at beginning of period	25,065	[1]	36,495
Cash and cash equivalents at end of period	24,225		44,290
Supplementary cash flow disclosures:
Cash paid for income taxes	167		145
Common stock issued for Veloce merger consideration	$ 0		$ 921

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview

Applied Micro Circuits Corporation (the "Company") is a global leader in silicon solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long-haul communications equipment.

Basis of Presentation

The Condensed Consolidated Financial Statements include all the accounts of the Company's and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepared the accompanying unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

In management’s opinion, the unaudited Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the Company's financial position, results of operations and cash flows. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the Consolidated Financial Statements and notes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016.

Use of Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to its:

• capitalized mask sets including their useful lives, which affect cost of goods sold and property and equipment or Research and Development ("R&D") expenses, if not capitalized;

• inventory valuation, warranty liabilities and revenue reserves, which affect cost of sales, gross margin, and revenues;

• allowance for doubtful accounts, which affects operating expenses;

• unrealized losses or other-than-temporary impairments of short-term investments available for sale, which affect interest income (expense), net;

• valuation of other long-lived assets and goodwill, which affects depreciation and impairment of long-lived assets, impairment of goodwill and apportionment of goodwill related to divestitures;

• potential costs of litigation, which affect operating expenses;

• valuation of deferred income taxes, which affects income tax expense (benefit); and

• stock-based compensation, which affects gross margin and operating expenses.

The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from management’s estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

Risks and Uncertainties

The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's business or future results and cause actual results to vary materially from historical results include, but are not limited to, the highly cyclical nature of the semiconductor industry; high fixed costs; declines in average selling prices; ability to fund liquidity needs; failure to maintain an effective system of internal controls; product return and liability risks; absence of significant backlog; dependence on international operations and sales; proposed changes to United States tax laws which result in adverse tax consequences; inadequate management information systems; ability to attract and retain qualified employees; difficulties consolidating and evolving the operational capabilities; dependence on materials and equipment suppliers; loss of customers; development of new proprietary technology and the enforcement of intellectual property ("IP") rights by or against the Company; the complexity of packaging and test processes; competition; existing and future environmental regulations; and fire, flood or other calamities affecting the Company or others with whom it does business.

The Company's cash, cash equivalents, short-term investments and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents may be redeemable upon demand and are maintained with several financial institutions that management believes are of high credit quality and therefore bear minimal credit risk. The Company's accounts receivables are derived from revenue earned from customers located around the world. Two customers accounted for 80% and 69% of accounts receivable at June 30, 2016 and March 31, 2016, respectively. This concentration and the concentration of credit risk resulting from trade receivables is substantially mitigated by the credit evaluation process and collateral.

The Company sells its products primarily through direct sales force and distributors. Based on direct shipments, 2 and 4 customers individually accounted for at least 10% of total net revenues during the three months ended June 30, 2016 and 2015, respectively. The Company expects that its largest customers collectively will continue to account for a substantial portion of its net revenue for the foreseeable future. See Note 7, Significant Customer and Geographic Information, to the Condensed Consolidated Financial Statements for details.

The Company currently purchases wafers from a limited number of vendors. Additionally, since the Company does not maintain manufacturing facilities, it depends upon close relationships with contract manufacturers to assemble its products. The Company anticipates the continued use of a limited number of vendors and contract manufacturers in the near future. Under the Company's fabless business model, long-term revenue growth is dependent on its ability to obtain sufficient external manufacturing capacity, including wafer production. The Company believes there are other vendors that can provide the same quality wafers at competitive prices and other contract manufacturers that can provide comparable services at competitive prices.

New Accounting Pronouncements

In March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718); Improvements to Employee Share-Based Payment Accounting". The new guidance simplifies several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, policy election to account for forfeitures as they occur rather than on an estimated basis, and classification on the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company has adopted this ASU as of June 30, 2016. The adoption of this accounting standard was not material to the Company’s Condensed Consolidated Financial Statements and related disclosures.

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Certain Financial Statement Information

3 Months Ended

Jun. 30, 2016

Certain Financial Statement Information [Abstract]

CERTAIN FINANCIAL STATEMENT INFORMATION

CERTAIN FINANCIAL STATEMENT INFORMATION

Accounts receivable, net:

	June 30, 2016			March 31, 2016
	(In thousands)
Accounts receivable	$	9,426		$	9,527
Less: allowance for bad debts	(263		)	(262		)
	$	9,163		$	9,265

Inventories:

	June 30, 2016		March 31, 2016
	(In thousands)
Finished goods	$	4,782	$	8,206
Work in process	4,836		5,854
Raw materials	2,986		2,088
	$	12,604	$	16,148

Other current assets:

	June 30, 2016		March 31, 2016
	(In thousands)
Prepaid expenses	$	8,988	$	8,887
Executive deferred compensation assets	837		817
Other	1,081		1,071
	$	10,906	$	10,775

Property and equipment:

	Useful Life	June 30, 2016			March 31, 2016
	(In years)	(In thousands)
Machinery and equipment	3-5	$	39,632		$	36,723
Leasehold improvements	1-5	7,528			7,529
Computers, office furniture and equipment	3-5	33,294			34,016
		80,454			78,268
Less: accumulated depreciation		(66,549		)	(64,975		)
		$	13,905		$	13,293

Other accrued liabilities:

	June 30, 2016		March 31, 2016
	(In thousands)
Employee related liabilities	$	1,563	$	1,362
Executive deferred compensation	871		848
Accrued bonus	3,921		3,269
Other	4,961		4,314
	$	11,316	$	9,793

Short-term investments:

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument (in thousands):

	June 30, 2016									March 31, 2016
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses							Gains		Losses
Cash	$	21,219	$	—	$	—		$	21,219	$	23,510	$	—	$	—		$	23,510
Cash equivalents	3,006		—		—			3,006		1,555		—		—			1,555
U.S. Treasury and agency securities	14,173		74		—			14,247		14,863		38		(3		)	14,898
Corporate bonds	24,861		338		—			25,199		28,047		221		(5		)	28,263
Asset-backed and mortgage-backed securities	16,701		65		(18		)	16,748		13,565		13		(27		)	13,551
Municipal bonds	1,877		15		—			1,892		2,052		16		—			2,068
	$	81,837	$	492	$	(18	)	$	82,311	$	83,592	$	288	$	(35	)	$	83,845
Reported as:
Cash and cash equivalents								$	24,225								$	25,065
Short-term investments available-for-sale								58,086									58,780
								$	82,311								$	83,845

The established guidelines for measuring fair value and expanded disclosures regarding fair value measurements are defined as a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities.

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument measured at fair value on a recurring basis (in thousands):

	June 30, 2016								March 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash	$	21,219	$	—	$	—	$	21,219	$	23,510	$	—	$	—	$	23,510
Cash equivalents	3,006		—		—		3,006		1,555		—		—		1,555
U.S. Treasury and agency securities	14,247		—		—		14,247		14,898		—		—		14,898
Corporate bonds	—		25,199		—		25,199		—		28,263		—		28,263
Asset-backed and mortgage-backed securities	—		16,748		—		16,748		—		13,551		—		13,551
Municipal bonds	—		1,892		—		1,892		—		2,068		—		2,068
	$	38,472	$	43,839	$	—	$	82,311	$	39,963	$	43,882	$	—	$	83,845

There were no significant transfers in and out of Level 1 and Level 2 fair value measurement categories during the three months ended June 30, 2016 and 2015.

The following is a summary of the cost and estimated fair values of available-for-sale securities with stated maturities, which include U.S. Treasury and agency securities, corporate bonds, asset-backed and mortgage-backed securities and municipal bonds, by contractual maturity:

	June 30, 2016
	Cost		Estimated Fair Value
	(In thousands)
Less than 1 year	$	13,471	$	13,471
Mature in 1 – 2 years	34,118		34,386
Mature in 3 – 5 years	8,823		9,023
Mature after 5 years	1,200		1,206
	$	57,612	$	58,086

The following is a summary of gross unrealized losses (in thousands):

As of June 30, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Asset-backed and mortgage-backed securities	$	4,681	$	(18	)	$	—	$	—	$	4,681	$	(18	)

As of March 31, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
U.S. Treasury and agency securities	$	9,396	$	(3	)	$	—	$	—	$	9,396	$	(3	)
Corporate bonds	4,601		(5		)	—		—		4,601		(5		)
Asset-backed and mortgage-backed securities	8,394		(27		)	—		—		8,394		(27		)
	$	22,391	$	(35	)	$	—	$	—	$	22,391	$	(35	)

Accumulated other comprehensive loss:

	Foreign currency translation adjustments			Unrealized gain (loss) on short-term investments			Total
	(In thousands)
Balance as of March 31, 2016	$	(2,486	)	$	(7,067	)	$	(9,553	)
Other comprehensive gain (loss), net of tax	(145		)	147			2
Balance as of June 30, 2016	$	(2,631	)	$	(6,920	)	$	(9,551	)

Realized gain on short-term investments and interest income, net:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Net realized gain on short-term investments	$	32	$	1,430
Interest income, net	198		189
	$	230	$	1,619

Net loss per share:

Shares used in basic net loss per share are computed using the weighted average number of common shares outstanding during each period. Shares used in diluted net loss per share include the dilutive effect of common shares potentially issuable upon the exercise of stock options, purchase of Employee Stock Purchase Plan ("ESPP") rights and vesting of restricted stock units ("RSUs"). For the three months ended June 30, 2016 and 2015, the Company recorded a net loss. As such, all outstanding potential common shares were excluded from the diluted earnings per share computation.

The following potentially dilutive common shares are excluded from the computation of net loss per share:

	June 30, 2016	June 30, 2015
	(In thousands)
Outstanding stock options	1,384	1,713
Outstanding RSUs	5,420	3,997
ESPP shares	383	249
	7,187	5,959

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Veloce

3 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

VELOCE

VELOCE

In June 2012, the Company completed the acquisition of Veloce Technologies, Inc. ("Veloce") which developed specific ARM-based technology for the Company. The total purchase consideration for Veloce was $178.5 million, the payment of which has been subject to the completion of certain development milestones and vesting requirements. For accounting purposes, the costs incurred in connection with the development milestones relating to Veloce were considered compensatory and recognized as R&D expense in the Condensed Consolidated Statement of Operations. Veloce completed the milestones as of March 31, 2014 and the total consideration of $178.5 million has been recognized as R&D expense as of March 31, 2015.

The following table summarizes the cash payment and stock issuance activities as part of the above arrangement:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Cash payments	$	8	$	65
Value of common stock issued	—		921
Total payments	$	8	$	986
Shares of common stock issued	—		163

As of June 30, 2016, $171.9 million of the total Veloce consideration has been paid in cash and stock and the Company expects the remaining $6.6 million will be paid in cash and stock by September 30, 2016. The $171.9 million paid to date includes $89.4 million in cash and the issuance of 11.2 million shares of common stock valued at $82.5 million.

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Stockholders' Equity

3 Months Ended

Jun. 30, 2016

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock Options

The Company has granted stock options to employees and non-employee directors under several plans. These option plans include two stockholder-approved plans (1992 Equity Incentive Plan and 2011 Equity Incentive Plan) and one plan not approved by stockholders (2000 Equity Incentive Plan). Options are fully vested generally in four years and expire eight to ten years from the effective date of grant.

A summary of the Company's stock option activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (millions)
Outstanding as of March 31, 2016	1,571		$	8.92
Granted	—		—
Exercised	(6	)	$	5.23		—		(1	)
Cancelled	(181	)	$	11.56
Outstanding, vested and exercisable as of June 30, 2016	1,384		$	8.59	0.9	$	—	(2	)

(1) The aggregate pre-tax intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

(2) The aggregate pre-tax intrinsic value is calculated as the difference between the market value as of June 30, 2016 and the exercise price of the shares. The closing price of the Company’s common stock was $6.42 per share on June 30, 2016.

Restricted Stock Units

The Company has granted RSUs to employees and non-employee directors pursuant to its 2011 Equity Incentive Plan. RSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock. RSUs vest over varying terms, to a maximum of four years from the date of the grant. 

In November 2013, May and October 2014, November 2015, and January and May 2016, the Compensation Committee (the "Committee") authorized market-performance based RSUs ("MSUs"). The MSUs will be earned, if at all, based on the Company's Total Shareholder Return (“TSR”) compared to that of the Standard & Poor's Depositary Receipts S&P Semiconductor Index ("Index”) over a two-year performance period for half of the MSU award and a three-year performance period for the remaining half of the MSU award. The MSUs will vest between ranges of 0% and 150% or 0% and 175% based on the Company's relative TSR compared to the Index. Total grant-date fair value of these MSUs was $4.7 million, of which $2.9 million expired unvested as of June 30, 2016.

The Company has compensation programs with respect to fiscal 2016 and 2017. The programs include time-based RSUs and financial or operational performance-based awards with payouts that ranges from 0% to 150% of pre-established target levels. Awards under these programs vest in fiscal 2016 through 2018 and can be paid out in common stock or cash.

A summary of the Company's RSU activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Grant Date Fair Value
Unvested as of March 31, 2016	4,704		$	6.59
Awarded	1,758		$	6.06
Vested	(863	)	$	7.05
Cancelled	(179	)	$	5.41
Unvested as of June 30, 2016	5,420		$	6.38

The weighted average remaining contractual term for the RSUs outstanding as of June 30, 2016 was 1.3 years.

As of June 30, 2016, the aggregate pre-tax intrinsic value of RSUs outstanding including performance-based awards which are subject to certain milestone attainments was $34.8 million. The aggregate pretax intrinsic value was calculated based on the closing price of the Company’s common stock of $6.42 on June 30, 2016.

The aggregate pre-tax intrinsic value of RSUs released during the three months ended June 30, 2016 was $5.4 million. This intrinsic value represents the fair market value of the Company’s common stock on the date of release.

Employee Stock Purchase Plan

Under the Company's 2012 ESPP, the Company reserved 3.8 million shares for issuance. The ESPP provides that eligible employees may contribute up to 20% of their base salary, subject to certain limits, towards the purchase of the Company’s common stock. Under the terms of the ESPP, eligible employees are entitled to purchase common stock, on a semi-annual basis, at a purchase price equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. At June 30, 2016, 1.2 million shares were available for future issuance under the ESPP. There were no stock purchases under the ESPP during the three months ended June 30, 2016 and 2015.

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Stock-Based Compensation

3 Months Ended

Jun. 30, 2016

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

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following tables summarize the allocation of the stock-based compensation expense:

Stock-based compensation expense by type of grant:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Employee stock purchase rights	$	327		$	207
RSUs	7,847			5,897
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

Stock-based compensation expense by cost centers:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Cost of revenues	$	167		$	105
Research and development	5,993			4,060
Selling, general and administrative	2,014			1,939
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

As of June 30, 2016, the amount of unrecognized stock-based compensation cost related to unvested stock-based awards was $32.4 million which will be recognized over a weighted average period of 1.3 years.

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Commitments and Contingencies

3 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Commitments

The following table summarizes the Company's contractual operating leases and other purchase commitments as of June 30, 2016 (in thousands):

Fiscal Years Ending March 31,	Operating Leases		Purchase Commitments *		Total
2017 (remainder of year)	$	1,849	$	21,465	$	23,314
2018	871		11,194		12,065
2019	503		378		881
Total	$	3,223	$	33,037	$	36,260

* Includes open purchase orders with terms that generally allow us the option to cancel or reschedule the order, subject to various restrictions and limitations. Also includes the licensing fees relating to the Company's R&D efforts, including IP, technology, product design, test and verification tools of $18.3 million.

Warranty

The Company's products typically carry a one-year warranty. The Company establishes reserves for estimated product warranty costs at the time revenue is recognized. Although the Company engages in extensive product quality programs and processes, its warranty obligation is affected by product failure rates, use of materials, and service delivery costs incurred in correcting any product failure. Historically, the Company’s warranty returns have not been material.

Intellectual Property Indemnities

The Company indemnifies certain customers and contract manufacturers against liability arising from third-party claims of IP rights infringement related to its products. These indemnities appear in development and supply agreements with customers as well as manufacturing service agreements with contract manufacturers and generally survive the expiration of the contract. Given that the amount of any potential liabilities related to such indemnities cannot be determined until an infringement claim has been made, the Company is unable to determine the maximum amount of losses that could be incurred related to such indemnifications.

Guarantees and Indemnities

In the normal course of business, the Company is occasionally required to provide other guarantees and indemnities for which it may be required to make future payments under specific circumstances. The amount of any potential liabilities related to such obligations cannot be accurately determined until a formal claim is filed. The Company maintains general and product liability insurance which may provide a source of recovery in the event of an indemnification claim.

Legal Proceedings

The Company is currently a party to certain legal proceedings, including those noted in this section. The Company believes the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm the Company's financial position, results of operations or cash flows. Notwithstanding the foregoing, legal proceedings are subject to inherent uncertainties, unfavorable rulings or other events that could occur. In addition, legal proceedings are expensive to prosecute and defend against and can divert management attention and Company resources away from the Company's business objectives. Unfavorable resolutions could include monetary damages against the Company or injunctions or other restrictions on the conduct of the Company’s business, or preclude the Company from recovering the damages it seeks in legal proceedings it has commenced. It is also possible that the Company could conclude it is in the best interests of its stockholders, employees, and customers to settle one or more such matters, and any such settlement could include substantial payments or the surrender of rights to collect payments from third parties. However, the Company has not reached this conclusion with respect to any material matter at this time.

In 1993, the Company was named as a Potentially Responsible Party (“PRP”) along with more than 100 other companies that used an Omega Chemical Corporation waste treatment facility in Whittier, California (the “Omega Site”). The U.S. Environmental Protection Agency (“EPA”) has alleged that Omega failed to properly treat and dispose of certain hazardous waste materials at the Omega Site. The Company is a member of a large group of PRPs, known as the Omega Chemical Site PRP Organized Group (“OPOG”), which has agreed to fund certain on-going remediation efforts relating to the Omega Site. Pursuant to a consent decree entered into between EPA and OPOG and approved by the U.S. District Court for the Central District of California (the “Court”) in 2001, as amended in 2010, removal of waste materials stored at the Omega Site has been completed. Efforts to remediate the soil, groundwater and air quality at and around the Omega Site are expected to be ongoing for several more years. In addition, in April 2016 OPOG and EPA filed with the Court a consent decree (the “Consent Decree”) outlining the proposed remediation plan and related litigation settlement terms for a regional groundwater contamination plume allegedly originating at the Omega Site (the Operable Unit 2 or “OU2”). It is anticipated the Court will approve the Consent Decree in fiscal year 2017, following which remediation of OU2 will commence. It is also anticipated that the Court’s approval of the Consent Decree will cause it to lift the stay it had previously placed on litigation originally filed in 2007 by Angeles Chemical Company, located downstream from the Omega Site, against OPOG and the PRPs for cost recovery and indemnification for future costs allegedly resulting from OU2.

In 2012, as a result of challenges made by certain PRPs to the criteria previously used to allocate liability among OPOG members, and of the departure of certain PRPs from OPOG, OPOG approved changes to the cost allocation structure that resulted in an increase to the Company's proportional allocation of liability. In 2013 and 2014, OPOG retained legal counsel to pursue groundwater remediation-related claims against other PRPs and to protect its interests in connection with bankruptcy proceedings filed by an OPOG member. In connection with those cost recovery efforts, in May 2014, OPOG entered into a cost sharing and settlement agreement (as amended in April 2016 in connection with the Consent Decree) with one PRP for future remediation costs and settlement of EPA’s past costs for OU2. To fund the shared costs, OPOG and the other PRP will create a Joint Environmental Remediation Trust, for which OPOG’s contribution amount will be funded from member assessments made in 2016. Any additional changes made to OPOG’s cost allocation structure, as well as the subsequent departure or bankruptcy of one or more other PRPs from OPOG, could have the effect of increasing the proportional liability of the remaining PRPs, including the Company.

To date, the Company has remitted payments to OPOG covering its proportional allocation of liability for OPOG’s legal expenses and remediation costs; the Company's assessments received during fiscal year 2016 totaled approximately $62,000. The Company anticipates that its payment obligations relating to the Omega Site will increase once the Consent Decree receives final Court approval, although the timing of any such increases currently is uncertain. Notwithstanding such anticipated increases or their timing, the Company does not currently believe its total share of remediation-related expenses will be material to its financial statements, based on its approximately 0.5% contribution to the total waste tonnage sent to the site and current estimates of the potential aggregate remediation costs. Based on currently available information, the Company has a loss accrual that is not material and believe that the actual amount of our costs will not be materially different from the amount accrued. However, proceedings are ongoing and the eventual outcome of the clean-up efforts and the pending litigation matters is uncertain at this time. Based on currently available information, the Company does not believes that any eventual outcome will have a material adverse effect on its business or operations.

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Significant Customer and Geographic Information

3 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Significant Customer and Geographic Information

SIGNIFICANT CUSTOMER AND GEOGRAPHIC INFORMATION

Based on direct shipments, net revenues to customers that were equal to or greater than 10% of total net revenues were as follows:

	Three Months Ended June 30,
	2016		2015
Wintec (global logistics provider)**	26	%	29	%
Avnet (distributor)	32	%	25	%
Arrow (distributor)	*		11	%
Flextronics (contract manufacturer)	*		11	%

*	Less than 10% of total net revenues for period indicated.
**	Wintec provides vendor managed inventory support primarily for Cisco Systems, Inc.

Based on ship to location, net revenues by geographic region were as follows:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
United States of America	$	18,239	$	18,044
Taiwan	2,649		1,314
Hong Kong	9,343		5,971
Europe	5,891		7,392
Japan	3,846		3,813
Other	1,530		1,279
	$	41,498	$	37,813

As of June 30, 2016 and 2015, long-lived assets, which represent property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization, located outside the Americas were not material.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Condensed Consolidated Financial Statements include all the accounts of the Company's and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepared the accompanying unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

In management’s opinion, the unaudited Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly present the Company's financial position, results of operations and cash flows. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the Consolidated Financial Statements and notes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016.

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to its:

• capitalized mask sets including their useful lives, which affect cost of goods sold and property and equipment or Research and Development ("R&D") expenses, if not capitalized;

• inventory valuation, warranty liabilities and revenue reserves, which affect cost of sales, gross margin, and revenues;

• allowance for doubtful accounts, which affects operating expenses;

• unrealized losses or other-than-temporary impairments of short-term investments available for sale, which affect interest income (expense), net;

• valuation of other long-lived assets and goodwill, which affects depreciation and impairment of long-lived assets, impairment of goodwill and apportionment of goodwill related to divestitures;

• potential costs of litigation, which affect operating expenses;

• valuation of deferred income taxes, which affects income tax expense (benefit); and

• stock-based compensation, which affects gross margin and operating expenses.

The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from management’s estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

Risk and Uncertainties

Risks and Uncertainties

The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's business or future results and cause actual results to vary materially from historical results include, but are not limited to, the highly cyclical nature of the semiconductor industry; high fixed costs; declines in average selling prices; ability to fund liquidity needs; failure to maintain an effective system of internal controls; product return and liability risks; absence of significant backlog; dependence on international operations and sales; proposed changes to United States tax laws which result in adverse tax consequences; inadequate management information systems; ability to attract and retain qualified employees; difficulties consolidating and evolving the operational capabilities; dependence on materials and equipment suppliers; loss of customers; development of new proprietary technology and the enforcement of intellectual property ("IP") rights by or against the Company; the complexity of packaging and test processes; competition; existing and future environmental regulations; and fire, flood or other calamities affecting the Company or others with whom it does business.

The Company's cash, cash equivalents, short-term investments and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents may be redeemable upon demand and are maintained with several financial institutions that management believes are of high credit quality and therefore bear minimal credit risk. The Company's accounts receivables are derived from revenue earned from customers located around the world. Two customers accounted for 80% and 69% of accounts receivable at June 30, 2016 and March 31, 2016, respectively. This concentration and the concentration of credit risk resulting from trade receivables is substantially mitigated by the credit evaluation process and collateral.

The Company sells its products primarily through direct sales force and distributors. Based on direct shipments, 2 and 4 customers individually accounted for at least 10% of total net revenues during the three months ended June 30, 2016 and 2015, respectively. The Company expects that its largest customers collectively will continue to account for a substantial portion of its net revenue for the foreseeable future. See Note 7, Significant Customer and Geographic Information, to the Condensed Consolidated Financial Statements for details.

The Company currently purchases wafers from a limited number of vendors. Additionally, since the Company does not maintain manufacturing facilities, it depends upon close relationships with contract manufacturers to assemble its products. The Company anticipates the continued use of a limited number of vendors and contract manufacturers in the near future. Under the Company's fabless business model, long-term revenue growth is dependent on its ability to obtain sufficient external manufacturing capacity, including wafer production. The Company believes there are other vendors that can provide the same quality wafers at competitive prices and other contract manufacturers that can provide comparable services at competitive prices.

N

New Accounting Pronouncements

New Accounting Pronouncements

In March 2016, the FASB issued ASU No. 2016-09, "Stock Compensation (Topic 718); Improvements to Employee Share-Based Payment Accounting". The new guidance simplifies several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, policy election to account for forfeitures as they occur rather than on an estimated basis, and classification on the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company has adopted this ASU as of June 30, 2016. The adoption of this accounting standard was not material to the Company’s Condensed Consolidated Financial Statements and related disclosures.

Warrant, Intellectual Property Indemnities, Guarantees and Indemnities

Warranty

The Company's products typically carry a one-year warranty. The Company establishes reserves for estimated product warranty costs at the time revenue is recognized. Although the Company engages in extensive product quality programs and processes, its warranty obligation is affected by product failure rates, use of materials, and service delivery costs incurred in correcting any product failure. Historically, the Company’s warranty returns have not been material.

Intellectual Property Indemnities

The Company indemnifies certain customers and contract manufacturers against liability arising from third-party claims of IP rights infringement related to its products. These indemnities appear in development and supply agreements with customers as well as manufacturing service agreements with contract manufacturers and generally survive the expiration of the contract. Given that the amount of any potential liabilities related to such indemnities cannot be determined until an infringement claim has been made, the Company is unable to determine the maximum amount of losses that could be incurred related to such indemnifications.

Guarantees and Indemnities

In the normal course of business, the Company is occasionally required to provide other guarantees and indemnities for which it may be required to make future payments under specific circumstances. The amount of any potential liabilities related to such obligations cannot be accurately determined until a formal claim is filed. The Company maintains general and product liability insurance which may provide a source of recovery in the event of an indemnification claim.

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Certain Financial Statement Information (Tables)

3 Months Ended

Jun. 30, 2016

Certain Financial Statement Information [Abstract]

Schedule of Accounts receivable

Accounts receivable, net:

	June 30, 2016			March 31, 2016
	(In thousands)
Accounts receivable	$	9,426		$	9,527
Less: allowance for bad debts	(263		)	(262		)
	$	9,163		$	9,265

Schedule of Inventories

Inventories:

	June 30, 2016		March 31, 2016
	(In thousands)
Finished goods	$	4,782	$	8,206
Work in process	4,836		5,854
Raw materials	2,986		2,088
	$	12,604	$	16,148

Schedule of Other current assets

Other current assets:

	June 30, 2016		March 31, 2016
	(In thousands)
Prepaid expenses	$	8,988	$	8,887
Executive deferred compensation assets	837		817
Other	1,081		1,071
	$	10,906	$	10,775

Schedule of Property and equipment

Property and equipment:

	Useful Life	June 30, 2016			March 31, 2016
	(In years)	(In thousands)
Machinery and equipment	3-5	$	39,632		$	36,723
Leasehold improvements	1-5	7,528			7,529
Computers, office furniture and equipment	3-5	33,294			34,016
		80,454			78,268
Less: accumulated depreciation		(66,549		)	(64,975		)
		$	13,905		$	13,293

Schedule of Other accrued liabilities

Other accrued liabilities:

	June 30, 2016		March 31, 2016
	(In thousands)
Employee related liabilities	$	1,563	$	1,362
Executive deferred compensation	871		848
Accrued bonus	3,921		3,269
Other	4,961		4,314
	$	11,316	$	9,793

Schedule of Cash, cash equivalents and available-for-sale investments by type of instruments

Short-term investments:

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument (in thousands):

	June 30, 2016									March 31, 2016
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses							Gains		Losses
Cash	$	21,219	$	—	$	—		$	21,219	$	23,510	$	—	$	—		$	23,510
Cash equivalents	3,006		—		—			3,006		1,555		—		—			1,555
U.S. Treasury and agency securities	14,173		74		—			14,247		14,863		38		(3		)	14,898
Corporate bonds	24,861		338		—			25,199		28,047		221		(5		)	28,263
Asset-backed and mortgage-backed securities	16,701		65		(18		)	16,748		13,565		13		(27		)	13,551
Municipal bonds	1,877		15		—			1,892		2,052		16		—			2,068
	$	81,837	$	492	$	(18	)	$	82,311	$	83,592	$	288	$	(35	)	$	83,845
Reported as:
Cash and cash equivalents								$	24,225								$	25,065
Short-term investments available-for-sale								58,086									58,780
								$	82,311								$	83,845

Schedule of Cash, cash equivalents and available-for-sale investments by type of instruments measured at fair value on recurring basis

The following is a summary of cash, cash equivalents and available-for-sale investments by type of instrument measured at fair value on a recurring basis (in thousands):

	June 30, 2016								March 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash	$	21,219	$	—	$	—	$	21,219	$	23,510	$	—	$	—	$	23,510
Cash equivalents	3,006		—		—		3,006		1,555		—		—		1,555
U.S. Treasury and agency securities	14,247		—		—		14,247		14,898		—		—		14,898
Corporate bonds	—		25,199		—		25,199		—		28,263		—		28,263
Asset-backed and mortgage-backed securities	—		16,748		—		16,748		—		13,551		—		13,551
Municipal bonds	—		1,892		—		1,892		—		2,068		—		2,068
	$	38,472	$	43,839	$	—	$	82,311	$	39,963	$	43,882	$	—	$	83,845

Schedule of Cost and estimated fair values of available-for-sale securities with stated maturities by contractual maturity

The following is a summary of the cost and estimated fair values of available-for-sale securities with stated maturities, which include U.S. Treasury and agency securities, corporate bonds, asset-backed and mortgage-backed securities and municipal bonds, by contractual maturity:

	June 30, 2016
	Cost		Estimated Fair Value
	(In thousands)
Less than 1 year	$	13,471	$	13,471
Mature in 1 – 2 years	34,118		34,386
Mature in 3 – 5 years	8,823		9,023
Mature after 5 years	1,200		1,206
	$	57,612	$	58,086

Schedule of Gross unrealized losses

The following is a summary of gross unrealized losses (in thousands):

As of June 30, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Asset-backed and mortgage-backed securities	$	4,681	$	(18	)	$	—	$	—	$	4,681	$	(18	)

As of March 31, 2016	Less Than 12 Months of Unrealized Losses					12 Months or More of Unrealized Losses				Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
U.S. Treasury and agency securities	$	9,396	$	(3	)	$	—	$	—	$	9,396	$	(3	)
Corporate bonds	4,601		(5		)	—		—		4,601		(5		)
Asset-backed and mortgage-backed securities	8,394		(27		)	—		—		8,394		(27		)
	$	22,391	$	(35	)	$	—	$	—	$	22,391	$	(35	)

Schedule of Accumulated other comprehensive loss

Accumulated other comprehensive loss:

	Foreign currency translation adjustments			Unrealized gain (loss) on short-term investments			Total
	(In thousands)
Balance as of March 31, 2016	$	(2,486	)	$	(7,067	)	$	(9,553	)
Other comprehensive gain (loss), net of tax	(145		)	147			2
Balance as of June 30, 2016	$	(2,631	)	$	(6,920	)	$	(9,551	)

Schedule of Interest income, net

Realized gain on short-term investments and interest income, net:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Net realized gain on short-term investments	$	32	$	1,430
Interest income, net	198		189
	$	230	$	1,619

Schedule of potentially dilutive common shares excluded from EPS computation

The following potentially dilutive common shares are excluded from the computation of net loss per share:

	June 30, 2016	June 30, 2015
	(In thousands)
Outstanding stock options	1,384	1,713
Outstanding RSUs	5,420	3,997
ESPP shares	383	249
	7,187	5,959

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Veloce (Tables)

3 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Schedule of cash payments and stock issuance activities

The following table summarizes the cash payment and stock issuance activities as part of the above arrangement:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
Cash payments	$	8	$	65
Value of common stock issued	—		921
Total payments	$	8	$	986
Shares of common stock issued	—		163

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Stockholders' Equity (Tables)

3 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of Option Activity Under Stock Incentive Plans

A summary of the Company's stock option activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (millions)
Outstanding as of March 31, 2016	1,571		$	8.92
Granted	—		—
Exercised	(6	)	$	5.23		—		(1	)
Cancelled	(181	)	$	11.56
Outstanding, vested and exercisable as of June 30, 2016	1,384		$	8.59	0.9	$	—	(2	)

(1) The aggregate pre-tax intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

(2) The aggregate pre-tax intrinsic value is calculated as the difference between the market value as of June 30, 2016 and the exercise price of the shares. The closing price of the Company’s common stock was $6.42 per share on June 30, 2016.

Schedule of Restricted Stock Unit Activity

A summary of the Company's RSU activities and related information is as follows:

	Number of Shares (thousands)		Weighted Average Grant Date Fair Value
Unvested as of March 31, 2016	4,704		$	6.59
Awarded	1,758		$	6.06
Vested	(863	)	$	7.05
Cancelled	(179	)	$	5.41
Unvested as of June 30, 2016	5,420		$	6.38

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Stock-Based Compensation (Tables)

3 Months Ended

Jun. 30, 2016

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

Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units

The following tables summarize the allocation of the stock-based compensation expense:

Stock-based compensation expense by type of grant:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Employee stock purchase rights	$	327		$	207
RSUs	7,847			5,897
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

Summary of Stock-Based Compensation Expense

Stock-based compensation expense by cost centers:	Three Months Ended June 30,
	2016			2015
	(In thousands)
Cost of revenues	$	167		$	105
Research and development	5,993			4,060
Selling, general and administrative	2,014			1,939
	8,174			6,104
Stock-based compensation capitalized to inventory	(9		)	(12		)
Total	$	8,165		$	6,092

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Commitments and Contingencies (Tables)

3 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Obligation by Fiscal Year Maturity

The following table summarizes the Company's contractual operating leases and other purchase commitments as of June 30, 2016 (in thousands):

Fiscal Years Ending March 31,	Operating Leases		Purchase Commitments *		Total
2017 (remainder of year)	$	1,849	$	21,465	$	23,314
2018	871		11,194		12,065
2019	503		378		881
Total	$	3,223	$	33,037	$	36,260

* Includes open purchase orders with terms that generally allow us the option to cancel or reschedule the order, subject to various restrictions and limitations. Also includes the licensing fees relating to the Company's R&D efforts, including IP, technology, product design, test and verification tools of $18.3 million.

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Significant Customer and Geographic Information (Tables)

3 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of net revenue by major customer

Based on direct shipments, net revenues to customers that were equal to or greater than 10% of total net revenues were as follows:

	Three Months Ended June 30,
	2016		2015
Wintec (global logistics provider)**	26	%	29	%
Avnet (distributor)	32	%	25	%
Arrow (distributor)	*		11	%
Flextronics (contract manufacturer)	*		11	%

*	Less than 10% of total net revenues for period indicated.
**	Wintec provides vendor managed inventory support primarily for Cisco Systems, Inc.

Schedule of net revenue by geographic region

Based on ship to location, net revenues by geographic region were as follows:

	Three Months Ended June 30,
	2016		2015
	(In thousands)
United States of America	$	18,239	$	18,044
Taiwan	2,649		1,314
Hong Kong	9,343		5,971
Europe	5,891		7,392
Japan	3,846		3,813
Other	1,530		1,279
	$	41,498	$	37,813

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended	12 Months Ended
	Jun. 30, 2016	Mar. 31, 2016
Customer Concentration Risk | Accounts Receivable
Concentration Risk [Line Items]
Concentration risk percentage	80.00%	69.00%

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Certain Financial Statement Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of Accounts receivable
Accounts receivable	$ 9,426	$ 9,527
Less: allowance for bad debts	(263)	(262)
Accounts receivable, net	$ 9,163	$ 9,265	[1]

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of Inventories
Finished goods	$ 4,782	$ 8,206
Work in process	4,836	5,854
Raw materials	2,986	2,088
Inventories, total	$ 12,604	$ 16,148	[1]

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of Other current assets
Prepaid expenses	$ 8,988	$ 8,887
Executive deferred compensation assets	837	817
Other	1,081	1,071
Other current assets, total	$ 10,906	$ 10,775	[1]

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Mar. 31, 2016
Schedule of Property and equipment
Machinery and equipment	$ 39,632	$ 36,723
Leasehold improvements	7,528	7,529
Computers, office furniture and equipment	33,294	34,016
Property and equipment, gross	80,454	78,268
Less: accumulated depreciation	(66,549)	(64,975)
Property and equipment, net	$ 13,905	$ 13,293	[1]
Machinery and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Machinery and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	5 years
Leasehold Improvements | Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	1 year
Leasehold Improvements | Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	5 years
Computers, Office Furniture and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Computers, Office Furniture and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful life (in years)	5 years

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Other Accrued Liabiliteis (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of other accrued liabilities
Employee related liabilities	$ 1,563	$ 1,362
Executive deferred compensation	871	848
Accrued bonus	3,921	3,269
Other	4,961	4,314
Total other accrued liabilities	$ 11,316	$ 9,793	[1]

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Short-Term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016		Jun. 30, 2015	Mar. 31, 2015
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Available-for-sale Securities, Amortized Cost	$ 81,837	$ 83,592
Available-for-sale Securities, Gross Unrealized Gains	492	288
Available-for-sale Securities, Gross Unrealized Losses	(18)	(35)
Available-for-sale Securities, Estimated Fair Value	82,311	83,845
Cash and cash equivalents	24,225	25,065	[1]	$ 44,290	$ 36,495
Short-term investments available-for-sale	58,086	58,780	[1]
Cash, Cash equivalents and Short-term investments, Estimated Fair Value	82,311	83,845
Cash
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Cash and Cash equivalents, Estimated Fair Value	21,219	23,510
Cash equivalents
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Cash and Cash equivalents, Estimated Fair Value	3,006	1,555
U.S. Treasury and agency securities
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Available-for-sale Securities, Amortized Cost	14,173	14,863
Available-for-sale Securities, Gross Unrealized Gains	74	38
Available-for-sale Securities, Gross Unrealized Losses	0	(3)
Available-for-sale Securities, Estimated Fair Value	14,247	14,898
Corporate bonds
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Available-for-sale Securities, Amortized Cost	24,861	28,047
Available-for-sale Securities, Gross Unrealized Gains	338	221
Available-for-sale Securities, Gross Unrealized Losses	0	(5)
Available-for-sale Securities, Estimated Fair Value	25,199	28,263
Asset-backed and mortgage-backed securities
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Available-for-sale Securities, Amortized Cost	16,701	13,565
Available-for-sale Securities, Gross Unrealized Gains	65	13
Available-for-sale Securities, Gross Unrealized Losses	(18)	(27)
Available-for-sale Securities, Estimated Fair Value	16,748	13,551
Municipal bonds
Schedule of cash, cash equivalents and available-for-sale investments by type of instruments
Available-for-sale Securities, Amortized Cost	1,877	2,052
Available-for-sale Securities, Gross Unrealized Gains	15	16
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Estimated Fair Value	$ 1,892	$ 2,068

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Short Term Investments Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	$ 82,311	$ 83,845
Cash
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	21,219	23,510
Cash equivalents
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	3,006	1,555
U.S. Treasury and agency securities
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	14,247	14,898
Corporate bonds
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	25,199	28,263
Asset-backed and mortgage-backed securities
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	16,748	13,551
Municipal bonds
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	1,892	2,068
Recurring
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash, cash equivalents and available-for-sale investments	82,311	83,845
Recurring | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash, cash equivalents and available-for-sale investments	38,472	39,963
Recurring | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash, cash equivalents and available-for-sale investments	43,839	43,882
Recurring | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash, cash equivalents and available-for-sale investments	0	0
Recurring | Cash
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	21,219	23,510
Recurring | Cash | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	21,219	23,510
Recurring | Cash | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	0	0
Recurring | Cash | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	0	0
Recurring | Cash equivalents
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	3,006	1,555
Recurring | Cash equivalents | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	3,006	1,555
Recurring | Cash equivalents | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	0	0
Recurring | Cash equivalents | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Cash and cash equivalents	0	0
Recurring | U.S. Treasury and agency securities
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	14,247	14,898
Recurring | U.S. Treasury and agency securities | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	14,247	14,898
Recurring | U.S. Treasury and agency securities | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | U.S. Treasury and agency securities | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Corporate bonds
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	25,199	28,263
Recurring | Corporate bonds | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Corporate bonds | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	25,199	28,263
Recurring | Corporate bonds | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Asset-backed and mortgage-backed securities
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	16,748	13,551
Recurring | Asset-backed and mortgage-backed securities | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Asset-backed and mortgage-backed securities | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	16,748	13,551
Recurring | Asset-backed and mortgage-backed securities | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Municipal bonds
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	1,892	2,068
Recurring | Municipal bonds | Level 1
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	0	0
Recurring | Municipal bonds | Level 2
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	1,892	2,068
Recurring | Municipal bonds | Level 3
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments by Type of Instruments Measured at Fair Value on Recurring Basis
Available-for-sale securities	$ 0	$ 0

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Certain Financial Statement Information - Short-Term Investments Schedule of Maturities (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Schedule of cost and estimated fair values of available-for-sale securities with stated maturities by contractual maturity
Less than 1 year, Cost	$ 13,471
Mature in 1 - 2 years, Cost	34,118
Mature in 3 - 5 years, Cost	8,823
Mature after 5 years, Cost	1,200
Cost, Total	57,612
Less than 1 year, Fair Value	13,471
Mature in 1 - 2 years, Fair Value	34,386
Mature in 3 - 5 years, Fair Value	9,023
Mature after 5 years, Fair Value	1,206
Fair Value, Total	$ 58,086

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Certain Financial Statement Information - Short-Term Investments Gross Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Schedule of Gross Unrealized Losses
Less Than 12 Months of Unrealized Losses, Estimated Fair Value		$ 22,391
Less than 12 Months of Unrealized Losses, Gross Unrealized Losses		(35)
12 Months or More of Unrealized Losses, Estimated Fair Value		0
12 Months or More of Unrealized Losses, Gross Unrealized Losses		0
Total, Estimated Fair Value		22,391
Total Gross Unrealized Losses		(35)
U.S. Treasury and agency securities
Schedule of Gross Unrealized Losses
Less Than 12 Months of Unrealized Losses, Estimated Fair Value		9,396
Less than 12 Months of Unrealized Losses, Gross Unrealized Losses		(3)
12 Months or More of Unrealized Losses, Estimated Fair Value		0
12 Months or More of Unrealized Losses, Gross Unrealized Losses		0
Total, Estimated Fair Value		9,396
Total Gross Unrealized Losses		(3)
Corporate bonds
Schedule of Gross Unrealized Losses
Less Than 12 Months of Unrealized Losses, Estimated Fair Value		4,601
Less than 12 Months of Unrealized Losses, Gross Unrealized Losses		(5)
12 Months or More of Unrealized Losses, Estimated Fair Value		0
12 Months or More of Unrealized Losses, Gross Unrealized Losses		0
Total, Estimated Fair Value		4,601
Total Gross Unrealized Losses		(5)
Asset-backed and mortgage-backed securities
Schedule of Gross Unrealized Losses
Less Than 12 Months of Unrealized Losses, Estimated Fair Value	$ 4,681	8,394
Less than 12 Months of Unrealized Losses, Gross Unrealized Losses	(18)	(27)
12 Months or More of Unrealized Losses, Estimated Fair Value	0	0
12 Months or More of Unrealized Losses, Gross Unrealized Losses	0	0
Total, Estimated Fair Value	4,681	8,394
Total Gross Unrealized Losses	$ (18)	$ (27)

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Certain Financial Statement Information - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	[1]	$ 115,038
Other comprehensive loss, net of tax		2	$ (1,790)
Ending Balance		110,931
Foreign currency translation adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance		(2,486)
Other comprehensive loss, net of tax		(145)
Ending Balance		(2,631)
Unrealized loss on short-term investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance		(7,067)
Other comprehensive loss, net of tax		147
Ending Balance		(6,920)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance		(9,553)
Other comprehensive loss, net of tax		2
Ending Balance		$ (9,551)

[1] The Condensed Consolidated Balance Sheet as of March 31, 2016 has been derived from the audited Consolidated Financial Statements at that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements.

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Certain Financial Statement Information - Realized Gain on Short-Term Investments and Interest Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Schedule of Interest Income, Net
Net realized gain on short-term investments	$ 32	$ 1,430
Interest income, net	198	189
Realized gain on short-term investments and interest income, net	$ 230	$ 1,619

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Certain Financial Statement Information - Potentially Dilutive Common Shares (Details) - shares shares in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Certain Financial Statement Information [Line Items]
Dilutive securities excluded from the net loss per share computation	7,187	5,959
Outstanding stock options
Certain Financial Statement Information [Line Items]
Dilutive securities excluded from the net loss per share computation	1,384	1,713
Outstanding RSUs
Certain Financial Statement Information [Line Items]
Dilutive securities excluded from the net loss per share computation	5,420	3,997
ESPP shares
Certain Financial Statement Information [Line Items]
Dilutive securities excluded from the net loss per share computation	383	249

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Veloce - Additional Information (Details) - Veloce Technologies Inc - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		49 Months Ended
	Jun. 30, 2012	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016
Business Acquisition [Line Items]
Total purchase consideration	$ 178,500	$ 8	$ 986	$ 171,900
Consideration payable in cash or equity		6,600		6,600
Cash payments		$ 8	$ 65	$ 89,400
Stock issued (in shares)		0	163	11,200
Total equity value transferred				$ 82,500

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Veloce - Cash Payments and Stock Issuances (Details) - Veloce Technologies Inc - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		49 Months Ended
	Jun. 30, 2012	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016
Business Acquisition [Line Items]
Cash payments		$ 8	$ 65	$ 89,400
Value of common stock issued		0	921
Total payments	$ 178,500	$ 8	$ 986	$ 171,900
Shares of common stock issued (in shares)		0	163	11,200

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Stockholders' Equity - Stock Options (Details) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Jun. 30, 2016 USD ($) Approved_Plan $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stockholder-approved plans | Approved_Plan	2
Number of plans unapproved by stockholders | Approved_Plan	1
Schedule of Option Activity Under Stock Incentive Plans
Number of Shares, Outstanding at the beginning of the year (in shares) | shares	1,571
Number of Shares, Granted (in shares) | shares	0
Number of Shares, Exercised (in shares) | shares	(6)
Number of Shares, Forfeited (in shares) | shares	(181)
Number of Shares, Outstanding at the end of the period (in shares) | shares	1,384
Number of Shares vested and exercisable at end of period (in shares) | shares	1,384
Schedule of Weighted Average Exercise Price Per Share Under Stock Incentive Plans
Weighted Average Exercise Price Per Share, Outstanding at the beginning of the year (USD per share)	$ 8.92
Weighted Average Exercise Price Per Share, Granted (USD per share)	0.00
Weighted Average Exercise Price Per Share, Exercised (USD per share)	5.23
Weighted Average Exercise Price Per Share, Forfeited (USD per share)	11.56
Weighted Average Exercise Price Per Share, Outstanding at the end of the period (USD per share)	8.59
Weighted Average Exercise Price Per Share, vested and exercisable at the end of the period (USD per share)	$ 8.59
Weighted average remaining contractual term for options outstanding at end of period (in years)	10 months 24 days
Weighted Average Remaining Contractual Life, vested and exercisable at end of period (in years)	10 months 24 days
Aggregate pretax intrinsic value of options exercised | $	$ 0.0	[1]
Aggregate intrinsic value of options outstanding at end of period | $	0.0	[2]
Aggregate intrinsic value of options, vested and exercisable at end of period | $	$ 0.0	[2]
Common stock, closing price per share (USD per share)	$ 6.42
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, in years	4 years
Stock options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period, in years	8 years
Stock options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period, in years	10 years

[1] The aggregate pre-tax intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

[2] The aggregate pre-tax intrinsic value is calculated as the difference between the market value as of June 30, 2016 and the exercise price of the shares. The closing price of the Company’s common stock was $6.42 per share on June 30, 2016.

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Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended	31 Months Ended
	Jun. 30, 2016	May 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Common stock, closing price per share (USD per share)	$ 6.42
Outstanding RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Shares, Beginning balance (in shares)	4,704
Number of Shares, Awarded (in shares)	1,758
Number of Shares, Vested (in shares)	(863)
Number of Shares, Cancelled (in shares)	(179)
Number of Shares, Ending balance (in shares)	5,420
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted Average Grant Date Fair Value, Beginning Balance (in Dollars per share)	$ 6,590
Weighted Average Grant Date Fair Value, Awarded (in Dollars per share)	6,060
Weighted Average Grant Date Fair Value, Vested (in Dollars per share)	7,050
Weighted Average Grant Date Fair Value, Cancelled (in Dollars per share)	5,410
Weighted Average Grant Date Fair Value, Ending Balance (in Dollars per share)	$ 6,380
Weighted average remaining contractual term for the restricted stock units outstanding (in years)	1 year 3 months 10 days
Aggregate pre-tax intrinsic value of restricted stock units outstanding which includes performance based awards which are subject to milestone attainments	$ 34.8
Aggregate pretax intrinsic value	5.4
Performance-Based MSU
Class of Stock [Line Items]
Grants in period, fair value		$ 4.7
Value of shares expired unvested in period	$ 2.9
Performance-Based MSU | First Vesting period
Class of Stock [Line Items]
Award performance period	2 years
Performance-Based MSU | First Vesting period | Minimum
Class of Stock [Line Items]
Vesting percentage	0.00%
Performance-Based MSU | First Vesting period | Maximum
Class of Stock [Line Items]
Vesting percentage	150.00%
Performance-Based MSU | Second Vesting Period
Class of Stock [Line Items]
Award performance period	3 years
Performance-Based MSU | Second Vesting Period | Minimum
Class of Stock [Line Items]
Vesting percentage	0.00%
Performance-Based MSU | Second Vesting Period | Maximum
Class of Stock [Line Items]
Vesting percentage	175.00%
2011 Equity Incentive Plan | Outstanding RSUs | Maximum
Class of Stock [Line Items]
Vesting period, in years	4 years
Compensation Programs | Minimum
Class of Stock [Line Items]
Award pay out percentage	0.00%
Compensation Programs | Maximum
Class of Stock [Line Items]
Award pay out percentage	150.00%

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Stockholders' Equity - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - 2012 Employee Stock Purchase Plan shares in Millions	3 Months Ended
	Jun. 30, 2016 shares
Class of Stock [Line Items]
Common stock reserved for issuance (in shares)	3.8
Maximum percentage of base salary that can be contributed to purchase common stock	20.00%
Percentage of purchase price of common stock equal to fair market value	85.00%
Shares available for future issuance (in shares)	1.2

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Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	$ 8,174	$ 6,104
Stock-based compensation capitalized to inventory	(9)	(12)
Total	8,165	6,092
Cost of Revenues
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	167	105
Research and Development Expense
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	5,993	4,060
Selling, General and Administrative
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	2,014	1,939
Outstanding stock options
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	327	207
Outstanding RSUs
Summary of Stock-Based Compensation Expense of Stock Options and Restricted Stock Units
Stock-based compensation expense	$ 7,847	$ 5,897

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Stock-Based Compensation - Additional Information (Details) $ in Millions	3 Months Ended
	Jun. 30, 2016 USD ($)
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Unearned stock-based compensation	$ 32.4
Weighted-average period over which the unearned stock-based compensation is expected to be recognized, years	1 year 3 months

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Commitments and Contingencies - Commitments (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($)
Operating Leases
2017 (remainder of year)	$ 1,849
2018	871
2019	503
Total	3,223
Purchase Commitments
2017 (remainder of year)	21,465	[1]
2018	11,194	[1]
2019	378	[1]
Total	33,037	[1]
Total
2017 (remainder of year)	23,314
2018	12,065
2019	881
Total	36,260
Licensing Costs Due	$ 18,300
Length of warranty (in years)	1 year

[1] Includes open purchase orders with terms that generally allow us the option to cancel or reschedule the order, subject to various restrictions and limitations. Also includes the licensing fees relating to the Company's R&D efforts, including IP, technology, product design, test and verification tools of $18.3 million.

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Commitments and Contingencies - Contingencies (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2012	Jun. 30, 2016 USD ($) Company
Commitments and Contingencies Disclosure [Abstract]
Companies named as Potentially Responsible Parties (more than) | Company		100
Payments for OPOG's legal expenses and remediation costs | $		$ 62
Percent of contribution to the total waste	0.50%

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Significant Customer and Geographic Information - Revenue by Customer (Details) - Net Revenue - Customer Concentration Risk		3 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Wintec (global logistics provider)
Revenue, Major Customer [Line Items]
Concentration risk percentage	[1]	26.00%	29.00%
Avnet (distributor)
Revenue, Major Customer [Line Items]
Concentration risk percentage		32.00%	25.00%
Arrow (distributor)
Revenue, Major Customer [Line Items]
Concentration risk percentage			11.00%
Flextronics (contract manufacturer)
Revenue, Major Customer [Line Items]
Concentration risk percentage			11.00%

[1] {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjhmNTBmMTIxMWI3MTQ2OWE5YzExMjAyNmM0NzM3YTcxfFRleHRTZWxlY3Rpb246NjAyN0U4MzAxODg0REI1OTEyQUIyMzNEQ0MxMDhCODIM}

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Significant Customer and Geographic Information - Revenue by Geographical Location (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 41,498	$ 37,813
United States of America
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	18,239	18,044
Taiwan
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	2,649	1,314
Hong Kong
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	9,343	5,971
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	5,891	7,392
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	3,846	3,813
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 1,530	$ 1,279