SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

9 Months Ended

Sep. 30, 2023

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

7. 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 83% and 81% of net revenues for the three and nine months ended September 30, 2023, respectively, and 72% and 75%, respectively, in the corresponding periods of 2022. 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 (“OEMs”) and merchant power-supply manufacturers. Similarly, merchant power-supply manufacturers sell power supplies incorporating the Company’s products to a broad range of OEMs. Sales to distributors were $93.2 million and $238.7 million in the three and nine months ended September 30, 2023, respectively, and $103.6 million and $373.3 million, respectively, in the corresponding periods of 2022. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

The following customers represented 10% or more of the Company’s net revenues for the respective periods:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Customer	2023		2022		2023		2022
Avnet	28	%	28	%	26	%	30	%
Honestar Technologies Co., Ltd.	23	%	*		17	%	12	%
Salcomp Group	*		12	%	11	%	*

* Total customer revenue was less than 10% of net revenues.

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 September 30, 2023, and December 31, 2022, 89% and 87% of accounts receivable were concentrated with the Company’s top ten customers.

The following customers represented 10% or more of accounts receivable at September 30, 2023 and December 31, 2022:

	September 30,		December 31,
Customer	2023		2022
Avnet	41	%	42	%
Honestar Technologies Co., Ltd.	12	%	*
Salcomp Group	10	%	13	%
Flextronics Group	*		11	%

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

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 nine months ended September 30, 2023 and 2022, were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2023		2022		2023		2022
United States of America	$	2,208	$	8,387	$	6,903	$	22,862
Hong Kong/China		79,735		80,508		215,829		282,508
India		9,697		9,660		27,738		22,765
Taiwan		4,949		4,895		11,453		16,000
Korea		4,308		10,071		17,425		47,298
Western Europe (excluding Germany)		8,498		10,790		20,912		27,164
Japan		4,311		9,777		13,390		27,986
Germany		5,741		16,601		19,290		42,545
Other		6,064		9,544		22,091		37,240
Total net revenues	$	125,511	$	160,233	$	355,031	$	526,368