Note 13 - Segment and Geographical Information

9 Months Ended

Oct. 31, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13.           Segment and geographical information

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance.  We are organized as, and operate in, one reportable segment.  Our operating segment consists of our geographically based entities in the United States, Israel and Singapore.  Our chief operating decision-maker reviews consolidated financial information, accompanied by information about revenue by product group, target market and geographic region.  We do not assess the performance of our geographic regions on other measures of income, expense or net income.

Our net revenue is derived principally from the sales of integrated semiconductor solutions, which we sell across all of our target markets. Smart TV products consist of a range of platforms that are based on highly integrated chips, embedded software, and hardware reference designs. Media Connectivity products consist of wired home networking controller chipsets that are designed to provide connectivity solutions between various home entertainment products and incoming video streams. Set-top Box products consist of connected media processors and players delivering IP streaming video, including hybrid versions of these products. IoT Devices consist of our wireless Z-Wave chipsets and modules.

Our License and other markets include revenue derived from the licensing of our technology to third parties and other sources. Revenue derived from other sources includes software development kits, engineering support services for hardware and software, and engineering development for customization of chipsets and other accessories. No revenue was derived from the licensing of our technology during the three and nine months ended October 31, 2015, and zero and 3.7% of our total net revenue for the three and nine months ended November 1, 2014, respectively, was derived from licensing arrangements.

Historically, we disclosed information encompassing product groupings by target markets with certain naming conventions, consisting of Digital Television (“DTV”), Set-top Box, Home Networking, Home Control, and License and other. Effective in the fourth quarter of fiscal 2015, we changed the naming conventions of some of our target markets, commensurate with changes taking effect in our industry as a whole. We renamed our “DTV” target market to “Smart TV,” “Home Networking” to “Media Connectivity,” and “Home Control” to “IoT Devices.” These changes did not affect the products or related services categorization, or previously reported amounts related to the aforementioned historical target markets.

The following table sets forth net revenue attributable to each target market (in thousands):

	Three Months Ended				Nine Months Ended
	October 31 , 201 5		November 1 , 201 4		October 31 , 201 5		November 1 , 201 4
Smart TV	$	32,244	$	16,570	$	78,378	$	32,667
Media Connectivity		14,003		23,022		43,149		56,968
IoT Devices		10,209		7,182		35,637		19,898
Set-top Box		4,744		6,759		17,582		17,976
License and other		381		251		1,054		5,958
Net revenue	$	61,581	$	53,784	$	175,800	$	133,467

The following table sets forth net revenue for each geographic region based on the ship-to location of customers (in thousands):

	Three Months Ended				Nine Months Ended
	October 31 , 201 5		November 1 , 201 4		October 31 , 201 5		November 1 , 201 4
Asia	$	47,691	$	46,567	$	132,045	$	109,885
North America		11,464		3,986		33,698		13,532
Europe		2,426		3,023		8,207		7,385
Other Regions		-		208		1,850		2,665
Net revenue	$	61,581	$	53,784	$	175,800	$	133,467

The following table sets forth net revenue for each significant country based on the ship-to location of customers (in thousands):

	Three Months Ended				Nine Months Ended
	October 31 , 201 5		November 1 , 201 4		October 31 , 201 5		November 1 , 201 4
China, including Hong Kong	$	26,556	$	20,341	$	69,861	$	51,159
Taiwan		15,355		7,615		39,520		18,605
United States		11,300		4,007		33,395		13,416
Thailand		1,428		14,191		11,021		28,472
Rest of the world		6,942		7,630		22,003		21,815
Net revenue	$	61,581	$	53,784	$	175,800	$	133,467

During the three and nine months ended October 31, 2015, Sunjet Components Corporation accounted for 18% and 16% of our net revenue, respectively. During the three months ended November 1, 2014, Cal-Comp Electronics, Benchmark Electronics and Nanning Fugui Precision accounted for 13%, 13% and 10% of our net revenue, respectively; during the nine months ended November 1, 2014, Benchmark Electronics accounted for 13% of our net revenue.

As of October 31, 2015, Sunjet Components Corporation and Nanning Fugui Precision accounted for approximately 17% and 10% of net accounts receivable, respectively. As of January 31, 2015, Benchmark Electronics, Nanning Fugui Precision and Arrow Electronics accounted for approximately 16%, 12%, and 10% of net accounts receivable.