SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

6 Months Ended

Jun. 30, 2019

Concentration Risk Disclosure [Text Block]

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of integrated circuits and related components for use primarily in the high-voltage power-conversion market. The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Customer Concentration

The Company's top ten customers accounted for approximately 56% and 54% of net revenues for the three and six months ended June 30, 2019, respectively, and approximately 59% and 58%, respectively, of net revenues in the corresponding periods of the previous year. A significant portion of these revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a broad, diverse range of end users, including original equipment manufacturers, or OEMs, and merchant power supply manufacturers. Sales to distributors were $74.8 million and $144.7 million in the three and six months ended June 30, 2019, respectively, and $83.0 million and $162.1 million, respectively, for the corresponding periods of 2018. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

In each of three and six months ended June 30, 2019 and 2018, one customer, a distributor of the Company's products, accounted for more than 10% of the Company’s net revenues.

The following table discloses this customer’s percentage of revenues for the respective periods:



	Three Months Ended				Six Months Ended
Customer	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Avnet	10	%	14	%	12	%	15	%

No other customers accounted for 10% or more of the Company’s net revenues in the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables. The Company does not have any off-balance-sheet credit exposure related to its customers. As of June 30, 2019, and December 31, 2018, 66% and 64%, respectively, of accounts receivable were concentrated with the Company’s top ten customers.

The following customers represented 10% or more of accounts receivable:



Customer	June 30, 2019	December 31, 2018
Avnet	*	17	%
Powertech Distribution Ltd.	*	11	%

*Total customer accounts receivable was less than 10% of net accounts receivables.

No other customers accounted for 10% or more of the Company’s accounts receivable in the periods presented.

Geographic Net Revenues

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors. Geographic net revenues, based on “bill to” customer locations, for the three and six months ended June 30, 2019, and June 30, 2018, were as follows:



	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
United States of America	$	2,612	$	3,729	$	5,284	$	7,596
Hong Kong/China	59,355		58,614		106,584		109,971
Taiwan	10,164		12,914		16,836		24,800
Korea	6,902		8,229		15,444		17,878
Western Europe (excluding Germany)	8,625		11,476		19,526		25,068
Japan	2,909		5,647		6,559		10,198
Germany	3,813		3,705		8,740		7,009
Other	8,485		5,168		13,080		10,043
Total net revenues	$	102,865	$	109,482	$	192,053	$	212,563