10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013. 

OR

[   ] 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 000-25699

PLX Technology, Inc.

(Exact name of Registrant as Specified in its Charter)

Delaware	94-3008334
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

870 W. Maude Avenue

Sunnyvale, California  94085

(408) 774-9060

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

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[  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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[  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See definition of “large accelerated filer”, "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check One):

Large accelerated filer [  ]Accelerated filer [X]Non-accelerated filer [  ] Smaller Reporting Company [  ]

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

As of September 30, 2013 there were 45,696,349 shares of common stock, par value $0.001 per share, outstanding.

PLX TECHNOLOGY, INC.

INDEX TO

REPORT ON FORM 10-Q

FOR QUARTER ENDED SEPTEMBER 30, 2013

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2013 and 2012	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 6.	Exhibits	38
Signature		39

2

PART I.   FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

PLX TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

	September 30,				December 31,
	2013				2012
ASSETS
Current Assets:
Cash and cash equivalents		$	12,441			$	14,673
Short-term marketable securities			5,011				1,787
Accounts receivable, net			12,014				10,635
Inventories			10,070				10,560
Other current assets			3,602				2,894
Total current assets			43,138				40,549
Property and equipment, net			10,390				11,267
Goodwill			20,461				20,461
Long-term marketable securities			533				251
Other assets			204				451
Total assets		$	74,726			$	72,979
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	5,697			$	10,738
Accrued compensation and benefits			3,744				4,493
Accrued commissions			500				817
Short term borrowing against line of credit			-				8,000
Other accrued expenses			3,060				2,259
Total current liabilities			13,001				26,307
Long term borrowing against line of credit			6,000				-
Total liabilities			19,001				26,307
Stockholders' Equity:
Common stock, par value			46				45
Additional paid-in capital			192,237				189,444
Accumulated other comprehensive loss			(267	)			(226	)
Accumulated deficit			(136,291	)			(142,591	)
Total stockholders' equity			55,725				46,672
Total liabilities and stockholders' equity		$	74,726			$	72,979

See accompanying notes to condensed consolidated financial statements.

3

PLX TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net revenues	$	25,725		$	26,866		$	78,793		$	76,834
Cost of revenues		11,265			10,808			33,735			31,732
Gross margin		14,460			16,058			45,058			45,102
Operating expenses:
Research and development		6,107			8,823			18,548			21,362
Selling, general and administrative		6,309			6,654			19,532			22,764
Acquisition and restructuring related costs		-			2,830			291			5,179
Amortization of acquired intangible assets		-			64			-			223
Total operating expenses		12,416			18,371			38,371			49,528
Income (loss) from operations		2,044			(2,313	)		6,687			(4,426	)
Interest income (expense) and other, net		(2	)		(60	)		(128	)		(119	)
Income (loss) from continuing operations before provision for income taxes		2,042			(2,373	)		6,559			(4,545	)
Provision for income taxes		57			931			202			466
Income (loss) from continuing operations, net of tax		1,985		$	(3,304	)	$	6,357		$	(5,011	)
Loss from discontinued operations, net of tax (1)		-			(3,013	)		(57	)		(26,965	)
Net income (loss)	$	1,985		$	(6,317	)	$	6,300		$	(31,976	)
Basic net income (loss) per share:
Income (loss) from continuing operations	$	0.04		$	(0.07	)	$	0.14		$	(0.11	)
Loss from discontinued operations	$	-		$	(0.07	)	$	-		$	(0.60	)
Net income (loss)	$	0.04		$	(0.14	)	$	0.14		$	(0.71	)
Diluted net income (loss) per share:
Income (loss) from continuing operations	$	0.04		$	(0.07	)	$	0.14		$	(0.11	)
Loss from discontinued operations	$	-		$	(0.07	)	$	-		$	(0.60	)
Net income (loss)	$	0.04		$	(0.14	)	$	0.14		$	(0.71	)
Shares used to compute per share amounts
Basic		45,682			44,946			45,553			44,824
Diluted		46,692			44,946			46,332			44,824

(1)   Loss from discontinued operations includes gain on disposal of $2,097 for the three and nine months ended September 30, 2012

See accompanying notes to condensed consolidated financial statements.

4

PLX TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income (loss)	$	1,985		$	(6,317	)	$	6,300		$	(31,976	)
Unrealized gain (loss) on marketable securities, net		1			1			-			(7	)
Foreign currency translation adjustments		(13	)		(26	)		(41	)		(92	)
Comprehensive net income (loss)	$	1,973		$	(6,342	)	$	6,259		$	(32,075	)

See accompanying notes to condensed consolidated financial statements.

5

PLX TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	6,300		$	(31,976	)
Adjustments to reconcile net income (loss) to net cash flows from operating activities,
net of assets acquired and liabilities assumed:
Depreciation and amortization		1,588			2,305
Share-based compensation expense		1,558			2,342
Amortization of acquired intangible assets		-			5,262
Impairment of assets		-			10,343
Gain on sale of business		-			(2,097	)
Write-downs of inventories		453			771
Other non-cash items		28			71
Changes in operating assets and liabilities:
Accounts receivable		(1,379	)		(3,059	)
Inventories		37			(3,368	)
Other current assets		(708	)		(440	)
Other assets		153			271
Accounts payable		(5,041	)		8,414
Accrued compensation and benefits		(749	)		2,189
Other accrued expenses		484			1,624
Net cash provided by (used) in operating activities		2,724			(7,348	)
Cash flows from investing activities:
Proceeds from sale of business		-			9,000
Purchases of marketable securities		(8,194	)		(4,112	)
Maturities of marketable securities		4,666			5,172
Sales of marketable securities		-			3,019
Purchase of property and equipment		(624	)		(1,989	)
Net cash provided by (used in) investing activities		(4,152	)		11,090
Cash flows from financing activities:
Borrowings against line of credit		-			9,500
Principal payments on line of credit		(2,000	)		(6,500	)
Proceeds from exercise of common stock options		1,556			1,006
Taxes paid related to net share settlement of equity awards		(321	)		(47	)
Principal payment on acquisition note		-			(4,848	)
Principal payments on capital lease obligations		-			(478	)
Net cash used in financing activities		(765	)		(1,367	)
Effect of exchange rate fluctuations on cash and cash equivalents		(39	)		(98	)
Net increase (decrease) in cash and cash equivalents		(2,232	)		2,277
Cash and cash equivalents at beginning of period		14,673			12,097
Cash and cash equivalents at end of period	$	12,441		$	14,374
Supplemental disclosure of cash flow  information:
Cash paid for income taxes	$	143		$	14
Cash from income tax refunds	$	1		$	15
Cash paid for interest	$	190		$	282

See accompanying notes to condensed consolidated financial statements.

6

PLX TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PLX Technology, Inc. and its wholly-owned subsidiaries (collectively, “PLX” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals) that management considers necessary for a fair presentation of the Company’s financial position, operating results and cash flows for the interim periods presented. Operating results and cash flows for interim periods are not necessarily indicative of results for the entire year.

On September 20, 2012, the Company completed the sale of its physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement between the Company and Aquantia Corporation dated September 14, 2012.  On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of its digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line.  The operations of the PHY related business have been segregated from continuing operations and are presented as discontinued operations in the Company’s consolidated statement of operations for all periods presented.

The unaudited condensed consolidated financial statements include all of the accounts of the Company and those of its wholly-owned subsidiaries.  All intercompany accounts and transactions have been eliminated.

This financial data should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and such differences may be material to the financial statements.

Accumulated Other Comprehensive Loss

The changes in the components of accumulated comprehensive loss were as follows (in thousands):

	Unrealized gain		Foreign currency
	on marketable securities		translation adjustments			Total
Balance at January 1, 2013	$	1	$	(227	)	$	(226	)
Current period net change		-		(41	)		(41	)
Balance at September 30, 2013	$	1	$	(268	)	$	(267	)

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery or customer acceptance, where applicable, has occurred, the fee is fixed or determinable, and collection is reasonably assured.

Revenue from product sales to direct customers and distributors is recognized upon shipment and transfer of risk of loss, if the Company believes collection is reasonably assured and all other revenue recognition criteria are met. The Company assesses the probability of collection based on a number of factors, including past transaction history and the customer’s creditworthiness.  At the end of each reporting period, the sufficiency of allowances for doubtful accounts is assessed based on the age of the receivable and the individual customer’s creditworthiness.

7

The Company offers pricing protection to two distributors whereby the Company supports the distributor’s resale product margin on certain products held in the distributor’s inventory. The Company analyzes current requests for credit in process, also known as ship and debits, and inventory at the distributor to determine the ending sales reserve required for this program.  The Company also offers stock rotation rights to two distributors such that they can return up to a total of 5% of products purchased every six months in exchange for other PLX products of equal value. The Company analyzes inventory at distributors, current stock rotation requests and past experience to determine the ending sales reserve required for this program. Provisions for reserves are charged directly against revenue and the related reserves are recorded as a reduction to accounts receivable.

2.  Share-Based Compensation

Equity Incentive Plans

In May 2008, the Company’s stockholders approved the 2008 Equity Incentive Plan (“2008 Plan”).  The 2008 Plan was amended by the Company’s stockholders in May 2010 to increase the number of shares reserved for issuance under the Plan by 1,500,000 shares. In May 2011, the 2008 Plan was amended again by the Company’s stockholders to increase the number of shares reserved for issuance under the Plan by 2,300,000 shares. Under the 2008 Plan, there is currently authorized for issuance and available for awards an aggregate of 5,000,000 shares of the Company’s common stock, plus up to an additional 2,407,369 shares that otherwise would have reverted to the share reserve of the Company’s prior incentive plan, the Company’s 1999 Stock Incentive Plan, subject to an overall, aggregate share reserve limit of 7,407,369 shares. Awards under the 2008 Plan may include stock options, restricted stock, stock appreciation rights, performance awards, restricted stock units and other awards, provided that with respect to full value awards, such as restricted stock or restricted stock units, no more than 300,000 shares may be issued in the form of full value awards during the term of the 2008 Plan.  Awards under the 2008 Plan may be made to the Company’s officers and other employees, its board members and consultants that it hires.  Generally, options vest over a four-year period and expire no more than seven years after the date of grant.  The 2008 Plan has a term of ten years.

Employee Stock Ownership Plan

In January 2009, the Company established the PLX Technology, Inc. Employee Stock Ownership Plan (the “ESOP”). The ESOP is a tax-qualified defined contribution retirement plan that is non-contributory.  PLX regular employees (other than nonresident aliens with no U.S.-source income, employees covered by a collective bargaining agreement, leased employees and employees of a non-participating subsidiary of PLX) who are at least 18 years old and have worked for PLX for at least 12 consecutive months are eligible to participate in the ESOP.  The Company makes cash contributions equal to a percentage of eligible compensation that is determined annually by the Board of Directors. Eligible compensation is limited to $150,000.  The contributions are used to purchase common stock of the Company. Since the adoption of the ESOP, the Company has made annual contributions of 2% of each employee's eligible compensation up to a maximum of $3,000 for any single employee (2% of $150,000 of eligible compensation).  In accordance with the IDT merger agreement, which was subsequently terminated, the Company ceased contributing to the plan after the April 2012 contribution. The reinstatement of contributions was approved by the Company’s Board of Directors effective as of the first quarter of 2013. Eligible participants receive a share allocation at the end of the plan year based on the contributions plus an additional allocation for forfeitures that occurred during the plan year.  The shares and forfeitures are allocated to each ESOP participant who is employed on the last day of the ESOP Plan Year (December 31) in the same proportion that the compensation (up to the $150,000 limit) of each ESOP participant bears to the eligible compensation of all ESOP participants. 

Share-Based Compensation Expense

The fair value of share-based awards is calculated using the Black-Scholes option pricing model, which requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values.

The weighted-average fair value of share-based compensation to employees is based on the multiple option valuation approach. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of share-based compensation awards to employees is amortized using the straight-line method over the vesting period of the awards. The weighted-average fair value calculations are based on the following weighted average assumptions:

8

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Risk-free interest rate		1.18	%		0.55	%		0.96	%		0.68	%
Expected volatility		57.10	%		64.10	%		59.40	%		62.90	%
Expected life (years)		4.34			4.35			4.34			4.35

Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option.

Expected Life: The Company’s expected life represents the weighted-average period that the Company’s stock options are expected to be outstanding. The expected life is based on the observed and expected time to post-vesting exercise of options by employees. The Company uses historical exercise patterns of previously granted options in relation to stock price movements to derive an employee behavioral pattern used to forecast expected exercise patterns.

Expected Volatility: The Company believes that historical volatility best represents expected volatility due to the lack of market data consistently available to calculate implied volatility. The historical volatility is based on the weekly closing prices of its common stock over a period equal to the expected term of the option and is a strong indicator of the expected future volatility.

These factors could change in the future, which would affect the share-based compensation expense in future periods.

As share-based compensation expense recognized in the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table shows total share-based compensation and employee stock ownership plan expenses recorded for the three and nine months ended September 30, 2013 and 2012, included in the respective line items of the Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013			2012
Cost of revenues	$	9	$	49	$	-		$	98
Research and development		193		349		609			719
Selling, general and administrative		343		516		1,268			1,189
Discontinued operations (1)		-		126		(54	)		517
Total share-based compensation expense	$	545	$	1,040	$	1,823		$	2,523

(1)   Recorded in loss from discontinued operations in the Condensed Consolidated Statements of Operations.

Share-based compensation expense from employee stock options and restricted stock units (“RSUs”) for the three months ended September 30, 2013 and 2012 were $0.5 million and $1.0 million, respectively. For the three months ended September 30, 2013, ESOP expenses were $0.1 million. As a result of the April 2012 cessation of ESOP contributions noted above, there were no ESOP expenses recorded in the three months ended September 30, 2012.

Share-based compensation expense from employee stock options and RSUs for the nine months ended September 30, 2013 and 2012 were $1.6 million and $2.3 million, respectively. For the same periods, ESOP expenses were $0.3 million and $0.2 million, respectively.

9

A summary of option activity under the Company’s stock equity plans during the nine months ended September 30, 2013 is as follows:

				Weighted Average
				Remaining	Aggregate
	Number of	Weighted Average		Contractual Term	Intrinsic
Options	Shares	Exercise Price		(in years)	Value
Outstanding at December 31, 2012	4,212,552	$	4.11	3.76	$	1,751,614
Granted	1,160,000		4.59
Exercised	(440,101)		3.53
Cancelled	(309,193)		5.55
Outstanding at September 30, 2013	4,623,258	$	4.19	4.25	$	9,332,201
Exercisable at September 30, 2013	2,717,241	$	4.04	3.15	$	6,199,818

The Black-Scholes weighted average fair values of options granted during the three months ended September 30, 2013 and 2012 were $2.23 and $2.90, respectively.

The Black-Scholes weighted average fair values of options granted during the nine months ended September 30, 2013 and 2012 were $2.17 and $2.16, respectively.

The following table summarizes ranges of outstanding and exercisable options as of September 30, 2013:

	Options Outstanding				Options Exercisable
		Weighted Average
		Remaining	Weighted			Weighted
		Contractual Term	Average			Average
Range of Exercise Prices	Number	(in years)	Exercise Price		Number	Exercise Price
$1.80-$2.69	986,382	2.65	$	2.12	912,678	$	2.07
$2.70-$4.10	1,394,904	4.67		3.82	781,570		3.75
$4.11-$4.55	966,000	6.40		4.54	114,000		4.53
$4.56-$6.66	1,003,548	4.10		5.11	636,569		5.03
$6.67-$15.58	272,424	0.88		8.91	272,424		8.91
Total	4,623,258	4.25	$	4.19	2,717,241	$	4.04

The total intrinsic value of options exercised during the three and nine months ended September 30, 2013 was $0.1 million and $0.5 million, respectively. For the same periods in 2012, the total intrinsic value of options exercised was $0.3 million and $0.7 million, respectively. The fair value of options vested during the three and nine months ended September 30, 2013 was approximately $0.5 million and $2.1 million, respectively. As of September 30, 2013, total unrecognized compensation costs related to nonvested stock options including estimated forfeitures was $1.8 million which is expected to be recognized as expense over a weighted average period of approximately 1.38 years.

10

The following table summarizes the activity for our nonvested restricted stock units (“RSUs”) during the nine months ended September 30, 2013:

	Nonvested Restricted Stock Units
	Number of			Weighted Average
	Shares			Grant-Date Fair Value
December 31, 2012		240,100		$	6.20
Vested		(240,100	)	$	6.20
September 30, 2013		-		$	-

As of September 30, 2013, there are no unvested RSUs.

3.  Inventories

Inventories are valued at the lower of cost (first-in, first-out method) or market (net realizable value).  Inventories were as follows (in thousands):

	September 30,		December 31,
	2013		2012
Work-in-process	$	6,059	$	4,986
Finished goods		4,011		5,574
Total	$	10,070	$	10,560

The Company evaluates the need for potential inventory write downs by considering a combination of factors including the life of the product, sales history, obsolescence, sales forecasts and expected sales prices.

4.  Net Income (Loss) Per Share

The Company uses the treasury stock method to calculate the weighted average shares used in the diluted earnings per share. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Net income (loss) from continuing operations	$	1,985	$	(3,304	)	$	6,357	$	(5,011	)
Weighted average shares outstanding - basic		45,682		44,946			45,553		44,824
Dilutive effect of stock options		1,010		-			779		-
Weighted average shares outstanding - diluted		46,692		44,946			46,332		44,824
Basic net income (loss) per share from continuing operations	$	0.04	$	(0.07	)	$	0.14	$	(0.11	)
Diluted net income (loss) per share from continuing operations	$	0.04	$	(0.07	)	$	0.14	$	(0.11	)

Weighted average employee stock options to purchase approximately 1.5 million and 2.4 million shares for the three and nine month periods ended September 30, 2013, respectively, were outstanding, but were not included in the computation of diluted earnings per share as the exercise price of the options was greater than the average share price of the Company’s stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices was greater than the weighted average number of shares underlying outstanding option and, therefore, the effect would have been anti-dilutive.

11

As the Company incurred a net loss for the three and nine month periods ended September 30, 2012, the effect of dilutive securities, totaling 5.0 million shares has been excluded from the computation of diluted loss per share, as its impact would be anti-dilutive. Dilutive securities are comprised of options to purchase common stock.

5.  Fair Value Measurements

The accounting guidance for fair value measurements provides a framework for measuring fair value and expands related disclosures. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The guidance also establishes a hierarchy which requires an entity to maximize the use of observable inputs, when available.  The guidance requires fair value measurement be classified and disclosed in one of the following three categories:

Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities.  The fair value of available-for-sale securities included in the level 1 category is based on quoted prices that are readily and regularly available in an active market.

Level 2: Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. The fair value of available-for-sale securities included in the Level 2 category is based upon quoted prices in markets that are not active and incorporate available trade, bid and other market information.

Level 3: Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing.

The fair value of financial assets and liabilities measured on a recurring basis is as follows (in thousands):

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	September 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Certificate of deposit	$	3,645	$	-	$	3,645	$	-
Marketable securities		2,132		-		2,132		-
Escrow receivable		1,657		-		-		1,657
Total	$	7,434	$	-	$	5,777	$	1,657

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	1,809	$	1,809	$	-	$	-
Certificate of deposit		2,707		-		2,707		-
Marketable securities		1,259		-		1,259		-
Escrow receivable		1,600		-		-		1,600
Total	$	7,375	$	1,809	$	3,966	$	1,600

The fair value of the Company’s money-market funds classified as Level 1 is valued using prices in active markets. The fair values of the Company’s investments classified as Level 2 are valued using inputs that include actual trade data, benchmark yields, broker/dealer quotes and other similar data. These inputs are obtained from quoted market prices, independent pricing vendors or other sources.

12

The estimated fair value of the escrow payment is based on assumptions made regarding potential claims against the escrow using historical and market data and a 3.25% discount rate to consider present value. The Company estimated a claims rate of 17%. These assumptions and fair value estimate are subject to change. Changes in these inputs would change the assessed fair value of the escrow receivable. See Note 13 of the condensed consolidated financial statements for more information on the escrow receivable.

6.  Investments

As of September 30, 2013, the Company’s securities consisted of certificate of deposits and debt securities and were designated as available-for-sale. Available-for-sale securities are carried at fair value, based on quoted market prices or prices quoted in markets that are not active, with unrealized gains and losses reported in a separate component of stockholders’ equity.  The amortized cost of debt securities is adjusted for the amortization of premiums and the accretion of discounts to maturity, both of which are included in interest income.  Realized gains and losses are recorded on the specific identification method.

The fair value of available-for-sale investments is as follows (in thousands):

	September 30, 2013
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	3,645	$	-	$	-	$	3,645
Marketable securities:
Municipal bonds		1,541		1		-		1,542
US treasury and government agencies securities		590		-		-		590
Total	$	5,776	$	1	$	-	$	5,777
Less amounts classified as cash equivalents								(233	)
Total short and long-term available-for-sale investments							$	5,544
Contractual maturity dates for investments:
Less than one year:								5,011
One to two years:								533
							$	5,544

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	December 31, 2012
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	2,707	$	-	$	-	$	2,707
Marketable securities:
Corporate bonds and notes		278		-		-		278
Municipal bonds		981		-		-		981
Total	$	3,966	$	-	$	-	$	3,966
Less amounts classified as cash equivalents								(1,928	)
Total short and long-term available-for-sale investments							$	2,038
Contractual maturity dates for investments:
Less than one year:								1,787
One to two years:								251
							$	2,038

As of September 30, 2013 and December 31, 2012, the Company had an aggregate unrealized loss of less than $1,000.

The Company reviews its available for sale investments for impairment at the end of each period.  Investments in debt securities are considered impaired when the fair value of the debt security is below its amortized cost. If an impairment exists and the Company determines it has intent to sell the debt security or if it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis, an other-than-temporary impairment loss is recognized in earnings to write the debt security down to its fair value. However, even if the Company does not expect to sell the debt security, it must evaluate expected cash flows to be received and determine if a credit loss exists. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized in earnings. Amounts relating to factors other than credit losses are recognized in other comprehensive income (loss). The Company did not record any other-than-temporary write-downs in the accompanying financial statements.

7.  Acquisition and Restructuring Costs

In the nine months ended September 30, 2013, the Company recorded approximately $0.3 million of severance and benefit related costs, included in acquisition and restructuring related costs in the Condensed Consolidated Statement of Operations, related to the termination of 4 employees worldwide as part of the restructuring of SG&A activities as a result of the divestiture of the PHY business. As of September 30, 2013 all of the severance and benefit accruals were paid.

Liability at December 31, 2012	$	315
Expense		279
Cash payments		(594	)
Liability at September 30, 2013	$	-

In the nine months ended September 30, 2013, the Company recorded $12,000 of outside legal and accounting costs associated with the wrap up of the IDT acquisition activities, which were terminated in December 2012. For the three and nine months ended September 30, 2012, the Company recorded $2.8 million and $5.2 million, respectively, of acquisition costs, primarily for outside legal and investment banking fees associated with the IDT acquisition activities. These expenses were also included in operating expenses under acquisition and restructuring related costs in the Company’s Condensed Consolidated Statement of Operations.

8.  Segments of an Enterprise and Related Information

The Company has one operating segment, the sale of semiconductor devices. The Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”) because he has final authority over resource allocation decisions and performance assessment. The CODM does not receive discrete financial information about individual components of the Company’s business. The majority of the Company’s assets are located in the United States.

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Revenues from continuing operations by geographic region based on customer location were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues:
China	$	7,389	$	6,640	$	22,177	$	20,052
United States		4,998		4,671		15,775		12,195
Singapore		4,409		4,326		13,509		10,494
Taiwan		4,052		6,403		12,978		17,955
Germany		1,895		2,398		6,701		8,485
Other Asia Pacific		2,531		2,070		6,335		6,193
Europe, Middle East and Africa		330		266		978		1,175
The Americas - excluding United States		121		92		340		285
Total	$	25,725	$	26,866	$	78,793	$	76,834

There were no direct end customers that accounted for more than 10% of net revenues. Sales to the following distributors accounted for 10% or more of net revenues from continuing operations:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Excelpoint Systems Pte Ltd		34	%		30	%		33	%		27	%
Avnet, Inc.		22	%		24	%		23	%		24	%
Answer Technology, Inc.		11	%		18	%		12	%		20	%

There were no direct end customers that accounted for more than 10% or more of the total accounts receivable balance.  The following distributors accounted for 10% or more of the total accounts receivable balance:

	September 30,
	2013			2012
Excelpoint Systems Pte Ltd		46	%		38	%
Answer Technology, Inc.		14	%		22	%
Avnet, Inc.		*			11	%

*           Less than 10%

9. Line of Credit

On September 30, 2011, the Company entered into an agreement with Silicon Valley Bank to establish a two-year $10.0 million revolving loan facility. On April 22, 2013, the agreement was amended to increase the facility to $15.0 million and extend the maturity date to September 30, 2015. The facility provides for revolving advances based on a borrowing-base formula tied to the Company’s receivables and also provides for month-end and fiscal quarter-end advances beyond the borrowing-base formula subject to certain limitations and requirements. Borrowings under the credit facility bear interest at rates equal to the prime rate announced from time to time in The Wall Street Journal. As of September 30, 2013 the prime rate was 3.25%.  The facility also provides for commitment, unused facility and letter-of-credit fees. The facility is secured by liens on the Company’s personal property assets except for intellectual property, which is subject to a negative pledge against encumbrance. As of September 30, 2013 there is $6.0 million outstanding against the facility. In addition, the Company issued an irrevocable letter of credit of $0.8 million against the facility for the bond issued as a result of the judgment in the Internet Machines litigation. Borrowing availability as of September 30, 2013 was $8.1 million. Interest payments are paid monthly with principal due at maturity.

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The facility is subject to certain financial covenants for EBITDA, as defined in the agreement, and a monthly quick ratio computation (PLX’s cash, investments and accounts receivable divided by current liabilities). The Company was in compliance with all financial covenants associated with this facility as of September 30, 2013.

10. Contingencies

To date, Internet Machines LLC ("Internet Machines") has filed three separate lawsuits against PLX.  The first suit was filed on February 2, 2010, which has been served on PLX, entitled Internet Machines LLC v. Alienware Corporation, et al., in the United States District Court for the Eastern District of Texas, Tyler Division (the “First Suit”).  This First Suit alleges infringement by PLX and the other defendants in the lawsuit of two patents held by Internet Machines.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On May 14, 2010, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On December 6, 2010, the Court held a case-management conference and subsequently entered a scheduling order in this matter, and set the trial for February 2012.

On February 21, 2012, through February 29, 2012, the claims and defenses asserted in the First Suit were tried to a seven-member jury in the United States District Court for the Eastern District of Texas, Tyler Division.  On February 29, 2012, the jury returned its verdict, finding the patents-in-suit valid and infringed and awarded money damages against PLX in the amount of $1.0 million.  On June 19, 2013, the Court issued its ruling on the post-verdict motions filed by the parties and entered an appealable judgment, affirming the jury’s findings of validity and infringement.  The judgment entered by the Court further affirmed the monetary award found by the jury.  On July 17, 2013, the Company filed a notice of appeal with the Court and on October 7, 2013 it filed the appeal brief, appealing the judgment to the United States Court of Appeals for the Federal Circuit.  The Company intends to continue to vigorously seek reversal of the jury’s verdict and the Court’s judgment on appeal.

Internet Machines' second lawsuit, which has also been served on PLX, was filed on October 17, 2010, again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Second Suit”).  This Second Suit, entitled Internet Machines LLC v. ASUS Computer International, et al., alleges infringement by PLX of another patent held by Internet Machines.  The complaint also asserts infringement claims against a separate group of defendants not named in the first Internet Machines lawsuit, and accuses those defendants of infringing the two patents asserted against PLX in the First Suit, as well as the additional patent listed in this Second Suit.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On December 28, 2010, the Company filed its answer to the live complaint in the second lawsuit and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.

On May 17, 2011, Internet Machines filed a third lawsuit entitled Internet Machines LLC v. Avnet, Inc., et al., again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Third Suit”).  The third lawsuit has been served on PLX and alleges that PLX infringes a fourth patent held by Internet Machines.  This lawsuit also accuses a new group of defendants of infringing each of Internet Machines' patents at issue in the First and Second Suits, as well as the fourth patent asserted against PLX in this Third Suit.  The complaint in the Third Suit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On September 27, 2011, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.

On January 20, 2012, the Court entered an order consolidating the Second and Third Suits into one action.  The Court further ordered that the schedule entered in the Third Suit would govern the consolidated action.  As a result, the consolidated action was originally set for trial in February 2013.

On March 25, 2011, a related entity, Internet Machines MC LLC, filed a lawsuit against PLX, entitled Internet Machines MC LLC v. PLX Technology, Inc., et al., in the United States District Court for the Eastern District of Texas, Marshall Division.  Internet Machines MC LLC, however, did not serve the initial complaint on PLX.  Instead, on August 26, 2011, Internet Machines MC LLC filed a first amended complaint, which has now been served on PLX, alleging infringement by PLX and the other defendants in the lawsuit of one patent held by Internet Machines MC LLC.  The complaint in this lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines MC LLC's patents.  On November 11, 2011, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On March 5, 2012, the Court held an initial case-management conference in this matter.  The Court entered a scheduling order in this matter, and trial was originally set for July 2013.

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On September 4, 2012, the Court entered an order staying the Second and Third Suits and the lawsuit brought by Internet Machines MC LLC discussed in the preceding paragraph.  Pursuant to the Court’s order, those lawsuits are stayed until a final non-appealable judgment is entered in the First Suit, again styled Internet Machines LLC v. Alienware Corp., et al., Cause No. 6:10-CV-023, in the United States District Court for the Eastern District of Texas. While it is not possible to determine the ultimate outcome of these suits, the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, but it is unable to estimate a range of possible loss, if any.

As a result of the jury’s February 29, 2012 verdict on the First Suit, the Company accrued $1.0 million as of December 31, 2011. Based on the June 19, 2013 Court’s ruling, the Company accrued an additional $0.9 million. As noted above, the Company has filed an appeal of the jury’s verdict and the Court’s judgment issued in the First Suit.  The Company will continue to accrue royalties, under the Court’s direction, until the appeal is finalized. A change in the ruling as a result of that appeal could change the estimated liability in the period in which the outcome of the appeal is known.

From time to time, the Company is involved in claims and legal proceedings that arise in the ordinary course of business. Any claims or proceedings against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require the Company to enter into royalty or licensing agreements which, if required, may not be available on terms favorable to the Company or at all. If management believes that a loss arising from these matters is probable and can be reasonably estimated, the Company will record a reserve for the loss.

11.  Income Taxes

A provision for income tax from continuing operations of $0.2 million has been recorded for the nine month period ended September 30, 2013, compared to a provision of $0.5 million for the same period in 2012.  Income tax expense for the nine months ended September 30, 2013 is a result of applying the estimated annual effective tax rate to cumulative profit before taxes. Income tax provision for the nine months ended September 30, 2012 is a result of applying the estimated annual effective tax rate to cumulative profit before taxes adjusted for certain discrete items which are fully recognized in the period they occur and miscellaneous state income taxes.

The Company has determined that negative evidence supports the need for a full valuation allowance against its net deferred tax assets at this time. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of a deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income during the periods in which those temporary differences become deductible. The Company continues to review its conclusions about the appropriate amount of its deferred income tax asset valuation allowance in light of circumstances existing in current periods and considering the expected future period results and will maintain a full valuation until sufficient positive evidence exists to support a reversal of the valuation allowance. If in the future the Company determines based on its current and expected future profitability that these deferred tax assets are more likely than not to be realized, a release of all, or part, of the related valuation allowance could result in an immediate material income tax benefit in the period of adjustment and material income tax provisions in periods beyond this adjustment. Such release of the valuation allowance could occur in the foreseeable future provided the Company results continue to remain positive.

On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012, or ATRA. Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts incurred through December 31, 2011. The ATRA extends the research credit for two years for qualified research expenditures incurred through the end of 2013. The extension of the research credit is retroactive and includes amounts incurred after 2011. There was no benefit to the Company of the restated credit in the three quarters of 2013 due to the full valuation allowance.

As of September 30, 2013, the Company had unrecognized tax benefits of approximately $5.4 million of which none, if recognized, would result in a reduction of the Company’s effective tax rate.  There were no material changes in the amount of unrecognized tax benefits during the nine months ended September 30, 2013. Future changes in the balance of unrecognized tax benefits will have no impact on the effective tax rate as they are subject to a full valuation allowance. The Company does not believe the amount of its unrecognized tax benefits will significantly change within the next twelve months.

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The Company is subject to taxation in the United States and various state and foreign jurisdictions.  The tax years 2008 through 2012 remain open to examination by the federal and most state tax authorities. Net operating loss and tax credit carryforwards generated in prior periods remain open to examination.

12. Asset Impairment

In June 2012 the Company recorded impairment charges of $10.3 million related to its 10 Gigabit Ethernet business, including core technology of $9.6 million, trade name and customer relationships of $0.2 million and certain tangible assets of $0.5 million.  The primary factors contributing to this impairment charge was the uncertainty of and reduction in forecasted cash flows, resulting in an increase in the probability that the product line will be sold or disposed of based on the reduction and timing of future cash flows.  In determining the amount of impairment charges the Company calculated the fair value of the asset group as of the impairment date.  The valuation of the assets was classified as a level 3 measurement under the fair value measurement guidance. The fair value was determined using the weighted average of a discounted cash flow analysis and a market approach along with proceeds received from Entropic in July 2012 in connection with the IP license agreement.  The discounted cash flow approach calculates the value based on the risk-adjusted present value of the cash flows related to 10 Gigabit Ethernet while the market approach calculates the value based on  indications of what a market participant would pay for the asset group.  The key unobservable inputs utilized in the discounted cash flow model include a 40% discount rate, a tax rate of 40% and future cash flows based on current product and market data.  The impairment was recorded in discontinued operations in the Company’s Consolidated Statement of Operations.

13. Discontinued Operations

On September 20, 2012, the Company completed the sale of its physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement (the “Aquantia APA”) between the Company and Aquantia Corporation for $2.0 million in cash.

On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of its digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line. Under the terms of the Entropic APA, the Company continued to have an obligation to complete the development in process.  The agreement provided for $3.0 million upon closing and up to $5.0 million in future payments.  Future payments consisted of a milestone payment of $2.0 million in connection with product acceptance, a $2.0 million escrow payment relating to certain representations, warranties and indemnities made by PLX and is due to be released to PLX twelve months after product acceptance and a $1.0 million milestone payment in the event a third party royalty arrangement is secured.  In conjunction with the Entropic APA, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with Entropic which provided a fully paid, non-exclusive, royalty free license to certain of the physical layer 10GBase-T integrated circuit technology which provided for a $4.0 million payment from Entropic to the Company upon signing.  In connection with the Transaction with Aquantia, on November 21, 2012, the Company negotiated a modification to the Agreement with Entropic that amended and restated the product acceptance milestone such that the milestone was deemed to have occurred upon execution of the amendment and changed the associated consideration from $2.0 million to $1.4 million. In exchange, the obligation of PLX to complete the development of the product was assumed by Entropic.

The consideration for the combined sale of the PHY business totaled $12.0 million and consisted of cash received at closing in connection with the Aquantia APA of $2.0 million, the Entropic APA of $3.0 million and the License Agreement of $4.0 million, the accelerated product acceptance milestone payment of $1.4 million and the rights to the estimated fair value of the escrow payment under the Entropic APA of $1.6 million.  The estimated fair value of the escrow payment is included in the Company’s balance sheet as other current assets and is based on assumptions made regarding potential claims against the escrow using historical and market data and is subject to change.  Future payments of up to $1.0 million which are contingent on future milestone achievements were not included in the initial consideration and will be accounted for when they are received. The Company recorded a gain of $3.5 million in 2012 related to this divestiture, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012. The following table summarizes the components of the gain (in thousands):

18

Cash proceeds from sale (including fair value amount held escrow)	$	12,000
Less carrying value of assets transferred and asset write-offs:
Inventory transferred		(1,254	)
Fixed assets transferred		(631	)
Intangible assets write-off		(5,783	)
Goodwill write-off		(877	)
Other adjustments		(5	)
Gain on disposal	$	3,450

The following is selected financial information included in net loss from discontinued operations:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013		2012			2013			2012
	in thousands
Revenues	$	-	$	1,435		$	-		$	2,947
Gain on disposal (1)		-		2,097			-			2,097
Loss before income taxes		-		(3,935	)		(57	)		(27,363	)
Provision for income taxes		-		(922	)		-			(398	)
Loss from discontinued operations	$	-	$	(3,013	)	$	(57	)	$	(26,965	)

(1)   The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012.

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

This Report on Form 10-Q contains forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations, hopes, intentions, beliefs or strategies regarding the future. Forward-looking statements include statements regarding our PCI Express revenue growth in the fourth quarter of 2013, our future research and development expenses, our future unrecognized tax benefits, our ability to meet our capital requirements for the next twelve months, our future capital requirements, that current high turns fill requirements will continue indefinitely and our anticipation that sales to a small number of customers will account for a significant portion of our sales.  Actual results could differ materially from those projected in such forward-looking statements.  Factors that could cause actual results to differ include unexpected changes in the mix of our product sales, unexpected pricing pressures, unexpected capital requirements that may arise due to other possible acquisitions or other events, unanticipated changes in the businesses of our suppliers, and unanticipated cash shortfalls.  Actual results could also differ for the reasons noted under the sub-heading “Factors That May Affect Future Operating Results” in Item 1A, Risk Factors in Part II of this report on Form 10-Q and in other sections of this report on Form 10-Q.  All forward-looking statements included in this Form 10-Q are based on information available to us on the date of this report on Form 10-Q, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements.

The following discussion should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

OVERVIEW

PLX Technology, Inc. ("PLX" or the "Company"), a Delaware corporation established in 1986, designs, develops, manufactures, and sells integrated circuits that perform critical system connectivity functions.  These interconnect products are fundamental building blocks for standards-based electronic equipment.  We market our products to major customers that sell electronic systems in the enterprise, consumer, server, storage, communications, PC peripheral and embedded markets.

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The explosive growth of cloud-based computing has provided a significant opportunity for PLX, since the data centers that house these systems are limited by their ability to offer high performance, low cost, low power, scalable interconnections.  The level of integration is increasing, and the need for rapid expansion forces these customers to build their systems using standard-based, off-the-shelf devices.

PLX is a market share leader in stand-alone PCI Express switches and bridges.  We recognized the trend towards this serial, switched interconnect technology early, launched products for this market long before our competitors, and have deployed multiple generations of products to serve a general-purpose market.  In addition to enabling customer differentiation through our product features, the breadth of our product offering is in itself a significant benefit to our customers, since we can serve the complete needs of our customers with cost-effective solutions tailored to specific system requirements.  PLX supplies an extensive portfolio of PCI Express switches; PCI Express bridges that allow backward compatibility to the previous PCI standard; and our newest bridges enable seamless interoperability between two of the most popular mainstream interconnects: PCI Express and USB. Our long experience with PCI Express connectivity products enables PLX to deliver reliable devices that operate in non-ideal, real-world system environments.

PLX offers a complete solution consisting of semiconductor devices, software development kits, hardware design kits, software drivers, and firmware solutions that enable added-value features in our products.  We differentiate our products by offering higher performance at lower power, by enabling a richer customer experience based on proprietary features that enable system-level customer advantages, and by providing capabilities that enable a customer to get to market more quickly.

We utilize a “fabless” semiconductor business model whereby we purchase wafers and packaged and tested semiconductor devices from independent manufacturing foundries. This approach allows us to focus on defining, developing, and marketing our products and eliminates the need for us to invest large amounts of capital in manufacturing facilities and work-in-process inventory.

We rely on a combination of direct sales personnel, distributors and manufacturers’ representatives throughout the world to sell a significant portion of our products.  We pay manufacturers’ representatives a commission on sales while we sell products to distributors at a discount from the selling price.

The time period between initial customer evaluation and design completion is generally between six and twelve months, though it can be longer in some circumstances. Furthermore, there is typically an additional six to twelve month or greater period after design completion before a customer requests volume production of our products.  Due to the variability and length of these design cycles and variable demand from customers, we may experience significant fluctuations in new orders from month to month. In addition, we typically make inventory purchases prior to receiving customer orders.  Consequently, if anticipated sales and shipments in any quarter do not occur when expected, expenses and inventory levels could be disproportionately high, and our results for that quarter and potentially future quarters would be materially and adversely affected.

Our long-term success will depend on our ability to introduce new products.  While new products typically generate little or no revenues during the first twelve months following their introduction, our revenues in subsequent periods depend upon these new products. Due to the lengthy sales cycle and additional time before our customers request volume production, significant revenues from our new products typically occur twelve to twenty-four months after product introduction.  As a result, revenues from newly introduced products have, in the past, produced a small percentage of our total revenues in the year the product was introduced.  See –“Our Lengthy Sales Cycle Can Result in Uncertainty and Delays with Regard to Our Expected Revenues” in Item 1A, Risk Factors, in Part II of this report on Form 10-Q.

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Discontinued operations

On September 20, 2012, the Company completed the sale of a portion of its physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement between the Company and Aquantia Corporation dated September 14, 2012.  The Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., on July 6, 2012, as amended on November 21, 2012, pursuant to which the Company completed the sale of its digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line.  Together, these divestitures completed the sale of the PHY business.  The 10G Ethernet market developed more slowly than had previously been anticipated and the divestitures were intended to reduce future spending and operating losses associated with this business.  The operations of the PHY related business have been segregated from continuing operations and are presented as discontinued operations in the Company’s consolidated statement of operations.  Unless otherwise indicated, the following discussions in Results of Operations pertain only to our continuing operations.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND SEPTEMBER 30, 2012

Net Revenues

The following table shows the revenue by type (in thousands) and as a percentage of net revenues:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2013				2012				2013				2012
PCI Express Revenue	$	18,226	70.8	%	$	17,484	65.1	%	$	56,973	72.3	%	$	50,523	65.8	%
Connectivity Revenue		7,499	29.2	%		9,382	34.9	%		21,820	27.7	%		26,311	34.2	%
	$	25,725			$	26,866			$	78,793			$	76,834

Net revenues consist primarily of product revenues generated principally by sales of our semiconductor devices. Net revenues for the three months ended September 30, 2013 decreased 4.3%, or $1.1 million, compared to the same period in 2012. Net revenues for the nine months ended September 30, 2013 increased 2.6%, or $2.0 million, compared to the same period in 2012. The decreases in the three month period was due to lower sales of our Connectivity products as a result of the decline in demand for products used in systems nearing end of life and the customer transition from our legacy products to our PCI Express products, partially offset by higher sales of our PCI Express products. The increase in the nine month period were due to higher sales of our PCI Express products because of the ramp of our Gen 2 and Gen 3 products, partially offset by lower sales of our Connectivity products.

There were no direct end customers that accounted for more than 10% of net revenues. Sales to the following distributors accounted for 10% or more of net revenues:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Excelpoint Systems Pte Ltd		34	%		30	%		33	%		27	%
Avnet, Inc.		22	%		24	%		23	%		24	%
Answer Technology, Inc.		11	%		18	%		12	%		20	%

We currently expect to see revenue growth in the fourth quarter of 2013 for our PCI Express products and continued declines in the revenues of our Connectivity products. Future demand for our products is uncertain and is highly dependent on general economic conditions and the demand for products that contain our chips. Customer demand for semiconductors can change quickly and unexpectedly.  Our revenue levels have been highly dependent on the amount of new orders that are received for products to be delivered to the customer within the same quarter, also called “turns fill” orders.  Because of the long cycle time to build our products and our lack of visibility into demand when turns fill orders are high, it is difficult to predict which products to build to match future demand.  We believe the current high turns fill requirements will continue indefinitely.  The high turns fill orders pattern, together with the uncertainty of product mix and pricing, makes it difficult to predict future levels of sales and profitability and may require us to carry higher levels of inventory.

Gross Margin

Gross margin represents net revenues less the cost of revenues.  Cost of revenues includes the cost of (1) purchasing semiconductor devices or wafers from our independent foundries, (2) packaging, assembly and test services from our independent foundries, assembly contractors and test contractors and (3) our operating costs associated with the procurement, storage, and shipment of products as allocated to production.

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	in thousands
Gross profit	$	14,460		$	16,058		$	45,058		$	45,102
Gross margin		56.2	%		59.8	%		57.2	%		58.7	%

Gross profit for the three months ended September 30, 2013 decreased by 10.0%, or $1.6 million compared to the same period in 2012 while gross margin decreased 3.6 percentage points or 6.0%. The decrease in absolute dollars and product gross margin percentage was due primarily to product and customer mix of our PCI Express products and the royalty accrual associated with the Internet Machines litigation, which had approximately a 1.0 percentage point impact on gross margin. See Note 10 of the condensed consolidated financial statements for more information on the Internet Machines litigation.

Gross profit for the nine months ended September 30, 2013 was flat at $45.1 million compared to the same period in 2012 while gross margin decreased 1.5 percentage point or 2.6%. The decrease in product gross margin percentage was due primarily to product and customer mix of our PCI Express products, partially offset by reduced costs on our PCI Express Gen 3 builds as we move from our early revision products to our production revision products and into production volume builds.

Future gross profit and gross margin are highly dependent on the product and customer mix, our ability to secure cost reductions from our suppliers, provisions and sales of previously written down inventory, the position of our products in their respective life cycles and specific manufacturing costs.  Accordingly, we are not able to predict future gross profit levels or gross margins with certainty.

Research and Development Expenses

Research and development (“R&D”) expenses consist primarily of tape-out costs at our independent foundries, salaries and related costs, including share-based compensation and expenses for outside engineering consultants.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	in thousands
R&D expenses	$	6,107		$	8,823		$	18,548		$	21,362
As a percentage of revenues		23.7	%		32.8	%		23.5	%		27.8	%

R&D expenses decreased by $2.7 million or 30.8% in the three months ended September 30, 2013 compared to the same period in 2012. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to a decrease in spending on tape-out related activities of $3.4 million due to timing of projects taped-out, partially offset by an increase in compensation and benefit related expenses of $0.3 million due to the increase in headcount.

R&D expenses decreased by $2.8 million or 13.2% in the nine months ended September 30, 2013 compared to the same period in 2012. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to a decrease in spending on tape-out related activities of $3.3 million due to timing of projects taped-out, partially offset by an increase in compensation and benefit related expenses of $0.6 million due to the increase in headcount.

We believe continued spending on research and development to develop new products is critical to our success. R&D spending will continue to fluctuate due to timing of projects and tape-out related activities.

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Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and related costs, including share-based compensation, commissions to manufactures’ representatives and professional fees, as well as trade show and other promotional expenses.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	in thousands
SG&A expenses	$	6,309		$	6,654		$	19,532		$	22,764
As a percentage of revenues		24.5	%		24.8	%		24.8	%		29.6	%

SG&A expenses decreased by $0.3 million or 5.2% in the three months ended September 30, 2013 compared to the same period in 2012. The decrease in SG&A in absolute dollars was due primarily to the 2012 retention measures that were put in place as a result of the IDT acquisition activities, particularly RSU grants and a one-time increase in employee related commissions.

SG&A expenses decreased by $3.2 million or 14.2% in the nine months ended September 30, 2013 compared to the same period in 2012. The decrease in SG&A in absolute dollars and a percentage of revenue was due primarily to decreases in legal fees of $3.0 million due to the charges incurred in the first half of 2012 in connection with the Internet Machines patent infringement lawsuit, which included the February 2012 trial of the First Suit, compensation and benefit related expenses due to the decrease in headcount of $0.6 million, and employee related commissions of $0.3 million, partially offset by an accrual of $1.0 million in 2013 as a result of the Court’s post-verdict ruling in the Internet Machine’s lawsuit.

On June 19, 2013, the Court in the Internet Machines infringement lawsuit issued its ruling on the post-verdict motions filed by the parties and entered an appealable judgment. Based on the Court’s ruling, we accrued an additional $1.0 million in the nine months ended September 30, 2013. On October 7, 2013, we filed our appeal with the Court, appealing the judgment to the United States Court of Appeals for the Federal Circuit. We plan to vigorously seek reversal of the ruling. See Note 10 of the condensed consolidated financial statements for more information on the Internet Machines litigation.

Acquisition and Restructuring Related Costs

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	in thousands
Severance costs	$	-	$	-	$	279	$	-
Deal costs		-		2,830		12		5,179
	$	-	$	2,830	$	291	$	5,179

In the nine months ended September 30, 2013, we recorded approximately $0.3 million of severance and benefit related costs, included in acquisition and restructuring related costs in the Condensed Consolidated Statement of Operations, related to the termination of 4 employees worldwide as part of the restructuring of SG&A activities as a result of the divestiture of the PHY business.

In the nine months ended September 30, 2013, we recorded $12,000 of outside legal and accounting costs associated with the wrap up of the IDT acquisition activities, which were terminated in December 2012. For the three and nine months ended September 30, 2012 we recorded $2.8 million and $5.2 million, respectively, primarily for outside legal and banking expenses associated with the IDT acquisition activities. These expenses were also included in operating expenses under acquisition and restructuring related costs in the Condensed Consolidated Statement of Operations.

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Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets consists of amortization expense related to developed core technology, trade name and customer base acquired as a result of the Oxford acquisition in January 2009.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	in thousands
Amortization of acquired intangible assets	$	-		$	64		$	-		$	223
As a percentage of revenues		0.0	%		0.2	%		0.0	%		0.3	%

Amortization of acquired intangible assets in the three and nine months ended September 30, 2012 was related to the Oxford NAS developed core technology which became fully amortized in December 2012. There was no amortization expense in the three and nine months ended September 30, 2013.

Interest Income (Expense) and Other, Net

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	in thousands
Interest income	$	62		$	8		$	70		$	27
Interest expense		(67	)		(72	)		(197	)		(162	)
Other income (expense)		3			4			(1	)		16
	$	(2	)	$	(60	)	$	(128	)	$	(119	)

Interest income reflects interest earned on cash, cash equivalents and short-term and long-term investment balances.

Interest expense for the three and nine months ended September 30, 2013 was due to interest recorded on the line of credit borrowings. For the same periods in 2012, interest expense consisted of interest recorded on the line of credit borrowings and our capital lease obligations.

Other income includes foreign currency transaction gains and losses and other miscellaneous transactions. Other income may fluctuate significantly due to currency fluctuations.

Provision for Income Taxes

A provision for income tax of $0.2 million has been recorded for the nine month period ended September 30, 2013, compared to a provision of $0.5 million for the same period in 2012.  Income tax expense for the nine months ended September 30, 2013 is a result of applying the estimated annual effective tax rate to cumulative profit before taxes. Income tax provision for the nine months ended September 30, 2012 is a result of applying the estimated annual effective tax rate to cumulative profit before taxes adjusted for certain discrete items which are fully recognized in the period they occur and miscellaneous state income taxes.

We have determined that negative evidence supports the need for a full valuation allowance against our net deferred tax assets at this time. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of a deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income during the periods in which those temporary differences become deductible. We continue to review our conclusions about the appropriate amount of our deferred income tax asset valuation allowance in light of circumstances existing in current periods and considering the expected future period results and will maintain a full valuation until sufficient positive evidence exists to support a reversal of the valuation allowance. If in the future we determine based on our current and expected future profitability that these deferred tax assets are more likely than not to be realized, a release of all, or part, of the related valuation allowance could result in an immediate material income tax benefit in the period of adjustment and material income tax provisions in periods beyond this adjustment. Such release of the valuation allowance could occur in the foreseeable future provided our results continue to remain positive.

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On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012, or ATRA. Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts incurred through December 31, 2011. The ATRA extends the research credit for two years for qualified research expenditures incurred through the end of 2013. The extension of the research credit is retroactive and includes amounts incurred after 2011. There was no benefit to us of the restated credit in the three quarters of 2013 due to the full valuation allowance.

As of September 30, 2013, we had unrecognized tax benefits of approximately $5.4 million of which none, if recognized, would result in a reduction of our effective tax rate.  There were no material changes in the amount of unrecognized tax benefits during the nine months ended September 30, 2013. Future changes in the balance of unrecognized tax benefits will have no impact on the effective tax rate as they are subject to a full valuation allowance. We do not believe the amount of our unrecognized tax benefits will significantly change within the next twelve months.

The Company is subject to taxation in the United States and various state and foreign jurisdictions.  The tax years 2008 through 2012 remain open to examination by the federal and most state tax authorities. Net operating loss and tax credit carryforwards generated in prior periods remain open to examination.

Liquidity and Capital Resources

Cash and Investments

We invest excess cash predominantly in certificate of deposits and debt instruments that are highly liquid, of high-quality investment grade, and predominantly have maturities of less than one year with the intent to make such funds readily available for operating purposes. As of September 30, 2013 cash, cash equivalents, short and long-term marketable securities were $18.0 million, an increase of $1.3 million from $16.7 million at December 31, 2012.

Operating Activities

	Nine Months Ended
	September 30,
	2013			2012
	in thousands
Income (loss) from continuing operations, net of non-cash items	$	10,038		$	(51	)
Loss from discontinued operations, net of non-cash items		(111	)		(12,928	)
Changes in working capital		(7,203	)		5,631
Net cash provided by (used in) operating activities	$	2,724		$	(7,348	)

Cash used in operating activities primarily consists of net income (loss) adjusted for certain non-cash items including depreciation, amortization, share-based compensation expense, provisions for excess and obsolete inventories, impairments, other non-cash items, and the effect of changes in working capital and other activities. Cash provided by operating activities for the nine months ended September 30, 2013 was $2.7 million compared to cash used in operating activities of $7.3 million in the same period in 2012. 2012 included loss from discontinued operations, adjusted for non-cash items, of $12.9 million. Excluding the impact from discontinued operations, cash provided by operating activities was $2.8 million and $5.6 million, respectively. The decrease in cash flow provided by continuing operations was primarily due to changes in our working capital as a result of larger vendor payments related to the IDT acquisition activities and employee variable compensation payments in the first quarter of 2013 compared to 2012, partially offset by an increase in income from continuing operations, net of non-cash items. Our days sales outstanding decreased due to stronger shipments late in September 2012 compared to September 2013. Our days payable outstanding decreased as we paid off the payables related to the IDT acquisition activities. Inventory was relatively flat.

Investing Activities

Our investing activities are primarily driven by investment of our excess cash, sales of investments, business acquisitions and divestitures and capital expenditures. Capital expenditures have generally been comprised of purchases of engineering equipment, computer hardware, software, server equipment and furniture and fixtures. The cash used in investing activities for the nine months ended September 30, 2013 of $4.2 million was due to purchases of investments (net of sales and maturities) of $3.5 million and capital expenditures of $0.6 million. Cash provided by investing activities for the nine months ended September 30, 2012 of $11.1 million was due to proceeds received from the sale of the PHY business of $9.0 million and the sales and maturities of investments (net of purchases) of $4.1 million, partially offset by capital expenditures of $2.0 million.

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Financing Activities

Cash used in financing activities for the nine months ended September 30, 2013 of $0.8 million was due to principal payments against the line of credit of $2.0 million and taxes paid related to net share settlements of restricted stock units of $0.3 million, partially offset by proceeds from the exercise of stock options of $1.6 million. Cash used in financing activities for the nine months ended September 30, 2012 of $1.4 million was primarily due to the payment of the note associated with the 2010 acquisition of Teranetics of $4.8 million and payments made on capital lease obligations of $0.5 million, partially offset by borrowings against the line of credit (net of principal payments) of $3.0 million and proceeds from the exercise of stock options of $1.0 million.

Obligations

As of September 30, 2013, we had the following significant contractual obligations and commercial commitments (in thousands):

	Payments due in
			Less than		1-3		More than
	Total		1 Year		Years		3 Years
Operating leases - facilities and equipment	$	377	$	195	$	182	$	-
Software licenses		4,473		3,306		1,167		-
Inventory purchase commitments		8,091		8,091		-		-
Borrowing against line of credit		6,000		-		6,000		-
Total cash obligations	$	18,941	$	11,592	$	7,349	$	-

On September 30, 2011, we entered into an agreement with Silicon Valley Bank to establish a two-year $10.0 million revolving loan facility. On April 22, 2013, the agreement was amended to increase the facility to $15.0 million and extend the maturity date to September 30, 2015. Borrowings under the credit facility bear interest at rates equal to the prime rate announced from time to time in The Wall Street Journal. As of September 30, 2013 the prime rate was 3.25%.  The facility also provides for commitment, unused facility and letter-of-credit fees. As of September 30, 2013 there is $6.0 million outstanding against the facility. In addition, the company issued an irrevocable letter of credit of $0.8 million against the facility for the bond issued as a result of the judgment in the Internet Machines litigation. The facility is subject to certain financial covenants for EBITDA, as defined in the agreement, and a monthly quick ratio computation (PLX’s cash, investments and accounts receivable divided by current liabilities). We were in compliance with all financial covenants associated with this facility as of September 30, 2013. See Note 9 of the condensed consolidated financial statements for additional information.

Based on the June 19, 2013 Court’s ruling in the Internet Machines litigation, we were required to issue a bond of $2.7 million for pre-judgment damages awarded and future royalties. As of September 30, 2013, we accrued $2.1 million of the $2.7 million judgment under other accrued expenses in our Condensed Consolidated Balance Sheet. Future royalties will be accrued as incurred. See Note 10 of the condensed consolidated financial statements for more information on the Internet Machines litigation.

We believe that our existing resources, together with cash generated from our operations will be sufficient to meet our capital requirements for at least the next twelve months.  Our future capital requirements will depend on many factors, including the level of investment we make in new technologies and improvements to existing technologies and the levels of monthly expenses required to launch new products.  To the extent that existing resources and future earnings are insufficient to fund our future activities, we may need to raise additional funds through public or private financings.  Additional funds may be difficult to obtain and may not be available or, if available, we may not be able to obtain them on terms favorable to us and our stockholders.

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Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the condensed consolidated financial statements and accompanying notes. The U.S. Securities and Exchange Commission (“SEC”) has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, we have identified the critical accounting policies and judgments addressed below.  We also have other key accounting policies which involve the use of estimates, judgments and assumptions that are significant to understanding our results. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available.  Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery or customer acceptance, where applicable, has occurred, the fee is fixed or determinable, and collection is reasonably assured.

Revenue from product sales to direct customers and distributors is recognized upon shipment and transfer of risk of loss, if we believe collection is reasonably assured and all other revenue recognition criteria are met. We assess the probability of collection based on a number of factors, including past transaction history and the customer’s creditworthiness.  At the end of each reporting period, the sufficiency of allowances for doubtful accounts is assessed based on the age of the receivable and the individual customer’s creditworthiness.

As of September 30, 2013, we offer pricing protection to two distributors whereby the Company supports the distributor’s resale product margin on certain products held in the distributor’s inventory. We analyze current requests for credit in process, also known as ship and debits, and inventory at the distributor to determine the ending sales reserve required for this program.  We also offer stock rotation rights to two distributors such that they can return up to a total of 5% of products purchased every six months in exchange for other PLX products of equal value. We analyze inventory at distributors, current stock rotation requests and past experience, which has historically been insignificant, to determine the ending sales reserve required for this program.  Provisions for reserves are charged directly against revenue and related reserves are recorded as a reduction to accounts receivable.

Inventory Valuation

We evaluate the need for potential inventory provisions by considering a combination of factors, including the life of the product, sales history, obsolescence, sales forecasts and expected sales prices. Any adverse changes to our future product demand may result in increased provisions, resulting in decreased gross margin.  In addition, future sales on any of our previously written down inventory may result in increased gross margin in the period of sale.

Allowance for Doubtful Accounts

We evaluate the collectability of our accounts receivable based on length of time the receivables are past due. Generally, our customers have between thirty and forty five days to remit payment of invoices. We record reserves for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected.  Once we have exhausted collection efforts, we will reduce the related accounts receivable against the allowance established for that receivable. We have certain customers with individually large amounts due at any given balance sheet date.  Any unanticipated change in one of those customers’ creditworthiness or other matters affecting the collectability of amounts due from such customers could have a material adverse effect on our results of operations in the period in which such changes or events occur. Historically, our write-offs have been insignificant.

Goodwill

Our methodology for allocating the purchase price related to business acquisitions is determined through established valuation techniques. Goodwill is measured as the excess of the cost of the acquisition over the amounts assigned to identifiable tangible and intangible assets acquired less assumed liabilities. We have one operating segment and business reporting unit, the sales of semiconductor devices, and we perform goodwill impairment tests annually during the fourth quarter and between annual tests if indicators of potential impairment exist.

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Long-lived Assets

We review long-lived assets, principally property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We evaluate recoverability of assets to be held and used by comparing the carrying amount of an asset to estimated future net undiscounted cash flows generated by the asset.  If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. In addition, if we determine the useful life of an asset is shorter than we had originally estimated, we accelerate the rate of depreciation over the assets’ new, shorter useful life.

Share-Based Compensation

We estimate the value of employee stock options on the date of grant using the Black-Scholes model. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables.  These variables include, but are not limited to the expected stock price volatility over the term of the awards and the actual and projected employee stock option exercise behaviors. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. We calculate expected volatility using the historical volatility of stock. We estimate the amount of forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of employee restricted stock units is equal to the market value of our common stock on the date the award is granted.

Taxes

We account for income taxes using the asset and liability method.  Deferred taxes are determined based on the differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse.  Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. As of September 30, 2013, we carried a valuation allowance for the entire deferred tax asset as a result of uncertainties regarding the realization of the asset balance. We will maintain a full valuation allowance against our deferred tax assets until sufficient positive evidence exists to support a reversal of the valuation allowance.

Future taxable income and/or tax planning strategies may eliminate all or a portion of the need for the valuation allowance. In the event we determine we are able to realize our deferred tax asset, an adjustment to the valuation allowance may increase income in the period such determination is made.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have an investment portfolio of fixed income securities, including amounts classified as cash equivalents, short-term investments and long-term investments of $5.8 million at September 30, 2013.  These securities are subject to interest rate fluctuations and will decrease in market value if interest rates increase.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk.  We invest primarily in high quality, short-term and long-term debt instruments. A hypothetical 100 basis point increase in interest rates would result in less than a $30,000 decrease (less than 1%) in the fair value of our available-for-sale securities.

ITEM 4.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Based on their evaluation as of September 30, 2013, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and instructions for Form 10-Q and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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(b) Changes in internal controls.

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

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

To date, Internet Machines LLC ("Internet Machines") has filed three separate lawsuits against PLX.  The first suit was filed on February 2, 2010, which has been served on PLX, entitled Internet Machines LLC v. Alienware Corporation, et al., in the United States District Court for the Eastern District of Texas, Tyler Division (the “First Suit”).  This First Suit alleges infringement by PLX and the other defendants in the lawsuit of two patents held by Internet Machines.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On May 14, 2010, we filed our answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On December 6, 2010, the Court held a case-management conference and subsequently entered a scheduling order in this matter, and set the trial for February 2012.

On February 21, 2012, through February 29, 2012, the claims and defenses asserted in the First Suit were tried to a seven-member jury in the United States District Court for the Eastern District of Texas, Tyler Division.  On February 29, 2012, the jury returned its verdict, finding the patents-in-suit valid and infringed and awarded money damages against PLX in the amount of $1.0 million.  On June 19, 2013, the Court issued its ruling on the post-verdict motions filed by the parties and entered an appealable judgment, affirming the jury’s findings of validity and infringement.  The judgment entered by the Court further affirmed the monetary award found by the jury.  On July 17, 2013, we filed a notice of appeal with the Court and on October 7, 2013 we filed the appeal brief, appealing the judgment to the United States Court of Appeals for the Federal Circuit.  We intend to continue to vigorously seek reversal of the jury’s verdict and the Court’s judgment on appeal.

Internet Machines' second lawsuit, which has also been served on PLX, was filed on October 17, 2010, again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Second Suit”).  This Second Suit, entitled Internet Machines LLC v. ASUS Computer International, et al., alleges infringement by PLX of another patent held by Internet Machines.  The complaint also asserts infringement claims against a separate group of defendants not named in the first Internet Machines lawsuit, and accuses those defendants of infringing the two patents asserted against PLX in the First Suit, as well as the additional patent listed in this Second Suit.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On December 28, 2010, we filed our answer to the live complaint in the second lawsuit and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.

On May 17, 2011, Internet Machines filed a third lawsuit entitled Internet Machines LLC v. Avnet, Inc., et al., again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Third Suit”).  The third lawsuit has been served on PLX and alleges that PLX infringes a fourth patent held by Internet Machines.  This lawsuit also accuses a new group of defendants of infringing each of Internet Machines' patents at issue in the First and Second Suits, as well as the fourth patent asserted against PLX in this Third Suit.  The complaint in the Third Suit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On September 27, 2011, we filed our answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.

On January 20, 2012, the Court entered an order consolidating the Second and Third Suits into one action.  The Court further ordered that the schedule entered in the Third Suit would govern the consolidated action.  As a result, the consolidated action was originally set for trial in February 2013.

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On March 25, 2011, a related entity, Internet Machines MC LLC, filed a lawsuit against PLX, entitled Internet Machines MC LLC v. PLX Technology, Inc., et al., in the United States District Court for the Eastern District of Texas, Marshall Division.  Internet Machines MC LLC, however, did not serve the initial complaint on PLX.  Instead, on August 26, 2011, Internet Machines MC LLC filed a first amended complaint, which has now been served on PLX, alleging infringement by PLX and the other defendants in the lawsuit of one patent held by Internet Machines MC LLC.  The complaint in this lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines MC LLC's patents.  On November 11, 2011, we filed our answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On March 5, 2012, the Court held an initial case-management conference in this matter. The Court entered a scheduling order in this matter, and trial was originally set for July 2013.

On September 4, 2012, the Court entered an order staying the Second and Third Suits and the lawsuit brought by Internet Machines MC LLC discussed in the preceding paragraph.  Pursuant to the Court’s order, those lawsuits are stayed until a final non-appealable judgment is entered in the First Suit, again styled Internet Machines LLC v. Alienware Corp., et al., Cause No. 6:10-CV-023, in the United States District Court for the Eastern District of Texas. While it is not possible to determine the ultimate outcome of these suits, we believe that we have meritorious defenses with respect to the claims asserted against us and intend to vigorously defend our position, but we are unable to estimate a range of possible loss, if any.

As a result of the jury’s February 29, 2012 verdict on the First Suit, we accrued $1.0 million as of December 31, 2011.  Based on the June 19, 2013 Court’s ruling, we accrued an additional $0.9 million. As noted above, we filed an appeal of the jury’s verdict and the Court’s judgment issued in the First Suit.  We will continue to accrue royalties, under the Court’s direction, until the appeal is finalized. A change in the ruling as a result of that appeal could change the estimated liability in the period in which the outcome of the appeal is known.

ITEM 1A.  RISK FACTORS

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

This quarterly report on Form 10-Q contains forward-looking statements which involve risks and uncertainties.  Our actual results could differ materially from those anticipated by such forward-looking statements as a result of certain factors, including those set forth below.  The following risk factors have been updated from those set forth in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2012, and are included herein in their entirety.

Our Operating Results May Fluctuate Significantly Due To Factors Which Are Not Within Our Control

Our quarterly operating results have fluctuated significantly in the past and are expected to fluctuate significantly in the future based on a number of factors, many of which are not under our control.  Our operating expenses, which include product development costs and selling, general and administrative expenses, are relatively fixed in the short-term.  If our revenues are lower than we expect because we sell fewer semiconductor devices, delay the release of new products or the announcement of new features, or for other reasons, we may not be able to quickly reduce our spending in response.

Other circumstances that can affect our operating results include:

·   the timing of significant orders, order cancellations and reschedulings;

·   the loss of one or more significant customers;

·   introduction of products and technologies by our competitors or partners;

·   the availability of production capacity at the fabrication facilities that manufacture our products;

·   our significant customers could lose market share that may affect our business;

·   integration of our product functionality into our customers’ products;

·   our ability to develop, introduce and market new products and technologies on a timely basis;

·   unexpected issues that may arise with devices in production;

·   shifts in our product mix toward lower margin products;

·   changes in our pricing policies or those of our competitors or suppliers, including decreases in unit average selling prices of our products;

·   contractual terms of supply agreements with our customers;

·   the availability and cost of materials to our suppliers;

·   costs associated with third party legal actions;

·   general macroeconomic conditions;

·   environmental related conditions, such as natural disasters; and

·   political climate.

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These factors are difficult to forecast, and these or other factors could adversely affect our business.  Any shortfall in our revenues would have a direct impact on our business.  In addition, fluctuations in our quarterly results could adversely affect the market price of our common stock in a manner unrelated to our long-term operating performance.

The Cyclical Nature Of The Semiconductor Industry May Lead To Significant Variances In The Demand For Our Products

In the past, the semiconductor industry has been characterized by significant downturns and wide fluctuations in supply and demand.  Also, the industry has experienced significant fluctuations in anticipation of changes in general economic conditions.  This cyclicality has led to significant variances in product demand and production capacity.  It has also accelerated erosion of average selling prices per unit.  We may experience periodic fluctuations in our future financial results because of industry-wide conditions.

Global Economic Conditions May Continue to Have an Adverse Effect on Our Businesses and Results of Operations

In late 2008 and 2009, the severe tightening of the credit markets, turmoil in the financial markets, and weakening global economy contributed to slowdowns in the industries in which we operate.  Economic uncertainty exacerbated negative trends in spending and caused certain customers to push out, cancel, or refrain from placing orders, which reduced revenue. We have seen market conditions improve; however, a slowdown in the economic recovery or worsening global economic conditions may result in difficulties in obtaining capital and uncertain market conditions may lead to the inability of some customers to obtain affordable financing, resulting in lower sales. Customers with liquidity issues may lead to additional bad debt expense. These conditions may also similarly affect key suppliers, which could affect their ability to deliver parts and result in delays in the availability of product.  Further, these conditions and uncertainty about future economic conditions make it challenging for us to forecast our operating results, make business decisions, and identify the risks that may affect our business, financial condition and results of operations. If the current improving economic conditions are not sustained or begin to deteriorate again, or if we are not able to timely and appropriately adapt to changes resulting from the difficult macroeconomic environment, our business, financial condition or results of operations may be materially and adversely affected.

In addition, our results of operations, including revenue, gross margin, expenses and interest and other, would likely be adversely affected in the event of widespread financial and business disruption on account of a default by the U.S. on U.S. government obligations and/or a prolonged failure to maintain significant U.S. government operations.

Because A Substantial Portion Of Our Net Revenues Are Generated By A Small Number Of Large Customers, If Any Of These Customers Delays Or Reduces Its Orders, Our Net Revenues And Earnings Will Be Harmed

Historically, a relatively small number of customers have accounted for a significant portion of our net revenues in any particular period. See Note 8 of the consolidated financial statements for customer concentrations.

We have no long-term volume purchase commitments from any of our significant customers. We cannot be certain that our current customers will continue to place orders with us, that orders by existing customers will continue at the levels of previous periods or that we will be able to obtain orders from new customers. In addition, some of our customers supply products to end-market purchasers and any of these end-market purchasers could choose to reduce or eliminate orders for our customers' products. This would in turn lower our customers' orders for our products.

We anticipate that sales of our products to a relatively small number of customers will continue to account for a significant portion of our net revenues.  Due to these factors, the following have in the past and may in the future reduce our net revenues or earnings:

·   the reduction, delay or cancellation of orders from one or more of our significant customers;

·   the selection of competing products or in-house design by one or more of our current customers;

·   the loss of one or more of our current customers; or

·   a failure of one or more of our current customers to pay our invoices.

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Intense Competition In The Markets In Which We Operate May Reduce The Demand For Or Prices Of Our Products

Competition in the semiconductor industry is intense.  If our main target market, the microprocessor-based systems market, continues to grow, the number of competitors may increase significantly. In addition, new semiconductor technology may lead to new products that can perform similar functions as our products.  Some of our competitors and other semiconductor companies may develop and introduce products that integrate into a single semiconductor device the functions performed by our semiconductor devices.  This would eliminate the need for our products in some applications.

In addition, competition in our markets comes from companies of various sizes, many of which are significantly larger and have greater financial and other resources than we do and thus can better withstand adverse economic or market conditions.  Therefore, we cannot assure you that we will be able to compete successfully in the future against existing or new competitors, and increased competition may adversely affect our business.  See “Business – Products,” and “—Competition” in Part I of Item 1 of our Form 10-K for the year ended December 31, 2012.

Our Independent Manufacturers May Not Be Able To Meet Our Manufacturing Requirements

We do not manufacture any of our semiconductor devices.  Therefore, we are referred to in the semiconductor industry as a “fabless” producer of semiconductors. Consequently, we depend upon third party manufacturers to produce semiconductors that meet our specifications.  We currently have third party manufacturers located in China, Japan, Korea, Malaysia, Singapore and Taiwan that can produce semiconductors which meet our needs.  However, as the semiconductor industry continues to progress towards smaller manufacturing and design geometries, the complexities of producing semiconductors will increase.  Decreasing geometries may introduce new problems and delays that may affect product development and deliveries.  Due to the nature of the semiconductor industry and our status as a fabless semiconductor company, we could encounter fabrication-related problems that may affect the availability of our semiconductor devices, delay our shipments or increase our costs.

Only a small number of our semiconductor devices are currently manufactured by more than one supplier.  We place our orders on a purchase order basis and do not have a long term purchase agreement with any of our existing suppliers.  In the event that the supplier of a semiconductor device was unable or unwilling to continue to manufacture our products in the required volume, we would have to identify and qualify a substitute supplier.  Introducing new products or transferring existing products to a new third party manufacturer or process may result in unforeseen device specification and operating problems.  These problems may affect product shipments and may be costly to correct.  Silicon fabrication capacity may also change, or the costs per silicon wafer may increase.  Manufacturing-related problems may have a material adverse effect on our business.

Lower Demand For Our Customers’ Products Will Result In Lower Demand For Our Products

Demand for our products depends largely on the development and expansion of the high-performance microprocessor-based systems markets including networking and telecommunications, enterprise and consumer storage, imaging and industrial applications.  The size and rate of growth of these microprocessor-based systems markets may in the future fluctuate significantly based on numerous factors. These factors include the adoption of alternative technologies, capital spending levels and general economic conditions.  Demand for products that incorporate high-performance microprocessor-based systems may not grow.

Our Lengthy Sales Cycle Can Result In Uncertainty And Delays With Regard To Our Expected Revenues

Our customers typically perform numerous tests and extensively evaluate our products before incorporating them into their systems.  The time required for test, evaluation and design of our products into a customer’s equipment can range from six to twelve months or more.  It can take an additional six to twelve months or more before a customer commences volume shipments of equipment that incorporates our products.  Because of this lengthy sales cycle, we may experience a delay between the time when we increase expenses for research and development and sales and marketing efforts and the time when we generate higher revenues, if any, from these expenditures.

In addition, the delays inherent in our lengthy sales cycle raise additional risks of customer decisions to cancel or change product plans.  When we achieve a design win, there can be no assurance that the customer will ultimately ship products incorporating our products.  Our business could be materially adversely affected if a significant customer curtails, reduces or delays orders during our sales cycle or chooses not to release products incorporating our products.

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Failure To Have Our Products Designed Into The Products Of Electronic Equipment Manufacturers Will Result In Reduced Sales

Our future success depends on electronic equipment manufacturers that design our semiconductor devices into their systems.  We must anticipate market trends and the price, performance and functionality requirements of current and potential future electronic equipment manufacturers and must successfully develop and manufacture products that meet these requirements.  In addition, we must meet the timing requirements of these electronic equipment manufacturers and must make products available to them in sufficient quantities.  These electronic equipment manufacturers could develop products that provide the same or similar functionality as one or more of our products and render these products obsolete in their applications.

We do not have purchase agreements with our customers that contain minimum purchase requirements.  Instead, electronic equipment manufacturers purchase our products pursuant to short-term purchase orders that may be canceled without charge. We believe that in order to obtain broad penetration in the markets for our products, we must maintain and cultivate relationships, directly or through our distributors, with electronic equipment manufacturers that are leaders in the embedded systems markets.  Accordingly, we will incur significant expenditures in order to build relationships with electronic equipment manufacturers prior to volume sales of new products. If we fail to develop relationships with additional electronic equipment manufacturers to have our products designed into new microprocessor-based systems or to develop sufficient new products to replace products that have become obsolete, our business would be materially adversely affected.

Defects In Our Products Could Increase Our Costs And Delay Our Product Shipments

Our products are complex and we use third party developed intellectual property, including serdes, in the design of our products. While we test our products, these products may still have errors, defects or bugs that we find only after commercial production has begun. We have experienced errors, defects and bugs in the past in connection with new products.

Our customers may not purchase our products if the products have reliability, quality or compatibility problems. This delay in acceptance could make it more difficult to retain our existing customers and to attract new customers.  Moreover, product errors, defects or bugs could result in additional development costs, diversion of technical and other resources from our other development efforts, claims by our customers or others against us, or the loss of credibility with our current and prospective customers. In the past, the additional time required to correct defects has caused delays in product shipments and resulted in lower revenues. We may have to spend significant amounts of capital and resources to address and fix problems in new products.

We must continuously develop our products using new process technology with smaller geometries to remain competitive on a cost and performance basis.  Migrating to new technologies is a challenging task requiring new design skills, methods and tools and is difficult to achieve.

Failure Of Our Products To Gain Market Acceptance Would Adversely Affect Our Financial Condition

We believe that our growth prospects depend upon our ability to gain customer acceptance of our products and technology.  Market acceptance of products depends upon numerous factors, including compatibility with other products, adoption of relevant interconnect standards, perceived advantages over competing products and the level of customer service available to support such products.  There can be no assurance that growth in sales of new products will continue or that we will be successful in obtaining broad market acceptance of our products and technology.

We expect to spend a significant amount of time and resources to develop new products and refine existing products. In light of the long product development cycles inherent in our industry, these expenditures will be made well in advance of the prospect of deriving revenues from the sale of any new products. Our ability to commercially introduce and successfully market any new products is subject to a wide variety of challenges during this development cycle, including start-up bugs, design defects and other matters that could delay introduction of these products to the marketplace. In addition, since our customers are not obligated by long-term contracts to purchase our products, our anticipated product orders may not materialize, or orders that do materialize may be cancelled. As a result, if we do not achieve market acceptance of new products, we may not be able to realize sufficient sales of our products in order to recoup research and development expenditures. The failure of any of our new products to achieve market acceptance would harm our business, financial condition, results of operation and cash flows.

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A Large Portion Of Our Revenues Is Derived From Sales To Third-Party Distributors Who May Terminate Their Relationships With Us At Any Time

We depend on distributors to sell a significant portion of our products. Sales through distributors for the nine months ended September 30, 2013 and 2012 accounted for approximately 86% and 89%, respectively, of our net revenues.  Some of our distributors also market and sell competing products.  Distributors may terminate their relationships with us at any time.  Our future performance will depend in part on our ability to attract additional distributors that will be able to market and support our products effectively, especially in markets in which we have not previously distributed our products. We may lose one or more of our current distributors or may not be able to recruit additional or replacement distributors. The loss of one or more of our major distributors could have a material adverse effect on our business, as we may not be successful in servicing our customers directly or through manufacturers’ representatives.

The Demand For Our Products Depends Upon Our Ability To Support Evolving Industry Standards

A majority of our revenues are derived from sales of products, which rely on the PCI Express, PCI and USB standards.  If markets move away from these standards and begin using new standards, we may not be able to successfully design and manufacture new products that use these new standards.  There is also the risk that new products we develop in response to new standards may not be accepted in the market.  In addition, these standards are continuously evolving, and we may not be able to modify our products to address new specifications.  Any of these events would have a material adverse effect on our business.

We Must Make Significant Research And Development Expenditures Prior To Generating Revenues From Products

To establish market acceptance of a new semiconductor device, we must dedicate significant resources to research and development, production and sales and marketing.  We incur substantial costs in developing, manufacturing and selling a new product, which often significantly precede meaningful revenues from the sale of this product.  Consequently, new products can require significant time and investment to achieve profitability.  Investors should understand that our efforts to introduce new semiconductor devices or other products or services may not be successful or profitable.  In addition, products or technologies developed by others may render our products or technologies obsolete or noncompetitive.

We record as expenses the costs related to the development of new semiconductor devices and other products as these expenses are incurred.  As a result, our profitability from quarter to quarter and from year to year may be adversely affected by the number and timing of our new product launches in any period and the level of acceptance gained by these products.

We Could Lose Key Personnel Due To Competitive Market Conditions And Attrition

Our success depends to a significant extent upon our senior management and key technical and sales personnel.  The loss of one or more of these employees could have a material adverse effect on our business.  We do not have employment contracts with any of our executive officers.

Our success also depends on our ability to attract and retain qualified technical, sales and marketing, customer support, financial and accounting, and managerial personnel.  Competition for such personnel in the semiconductor industry is intense, and we may not be able to retain our key personnel or to attract, assimilate or retain other highly qualified personnel in the future.  In addition, we may lose key personnel due to attrition, including health, family and other reasons.  We have experienced, and may continue to experience, difficulty in hiring and retaining candidates with appropriate qualifications.  If we do not succeed in hiring and retaining candidates with appropriate qualifications, our business could be materially adversely affected.

The Successful Marketing And Sales Of Our Products Depend Upon Our Third Party Relationships, Which Are Not Supported By Written Agreements

When marketing and selling our semiconductor devices, we believe we enjoy a competitive advantage based on the availability of development tools offered by third parties.  These development tools are used principally for the design of other parts of the microprocessor-based system but also work with our products.  We will lose this advantage if these third party tool vendors cease to provide these tools for existing products or do not offer them for our future products.  This event could have a material adverse effect on our business.  We have no written agreements with these third parties, and these parties could choose to stop providing these tools at any time.

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Our Limited Ability To Protect Our Intellectual Property And Proprietary Rights Could Adversely Affect Our Competitive Position

Our future success and competitive position depend upon our ability to obtain and maintain proprietary technology used in our principal products.  Currently, we have limited protection of our intellectual property in the form of patents and rely instead on trade secret protection.  Our existing or future patents may be invalidated, circumvented, challenged or licensed to others.  The rights granted there under may not provide competitive advantages to us.  In addition, our future patent applications may not be issued with the scope of the claims sought by us, if at all.  Furthermore, others may develop technologies that are similar or superior to our technology, duplicate our technology or design around the patents owned or licensed by us.  In addition, effective patent, trademark, copyright and trade secret protection may be unavailable or limited in foreign countries where we may need protection.  We cannot be sure that steps taken by us to protect our technology will prevent misappropriation of the technology.

We may from time to time receive notifications of claims that we may be infringing patents or other intellectual property rights owned by third parties.

See Note 10 of the condensed consolidated financial statements for a description of the four lawsuits filed against us by a company alleging patent infringement.

During the course of the litigations as well as any other future intellectual property litigations, we will incur costs associated with defending or prosecuting these matters. These litigations could also divert the efforts of our technical and management personnel, whether or not they are determined in our favor.  In addition, if it is determined in such a litigation that we have infringed the intellectual property rights of others, we may not be able to develop or acquire non-infringing technology or procure licenses to the infringing technology under reasonable terms.  This could require expenditures by us of substantial time and other resources.  Any of these developments would have a material adverse effect on our business.

Acquisitions Could Adversely Affect Our Financial Condition And Could Expose Us To Unanticipated Liabilities

As part of our business strategy, we expect to continue to review acquisition prospects that would complement our existing product offerings, improve market coverage or enhance our technological capabilities.  Potential future acquisitions could result in any or all of the following:

·   potentially dilutive issuances of equity securities;

·   large acquisition-related write-offs;

·   potential patent and trademark infringement claims against the acquired company;

·   the incurrence of debt and contingent liabilities or amortization expenses related to other intangible assets;

·   difficulties in the assimilation of operations, personnel, technologies, products and the information systems of the acquired companies;

·   the incurrence of additional operating losses and expenses of companies we may acquire;

·   possible delay or failure to achieve expected synergies;

·   diversion of management’s attention from other business concerns;

·   risks of entering geographic and business markets in which we have no or limited prior experience;

·   potential loss of key employees; and

·   potential lawsuits from shareholders.

Because We Sell Our Products To Customers Outside Of The United States And Because Our Products Are Incorporated With Products Of Others That Are Sold Outside Of The United States We Face Foreign Business, Political And Economic Risks

Sales outside of the United States accounted for 80% and 84% of our net revenues in the nine months ended September 30, 2013 and 2012, respectively.  Sales outside of the United States may fluctuate in future periods and may continue to account for a large portion of our revenues. In addition, equipment manufacturers who incorporate our products into their products sell their products outside of the Unites States, thereby exposing us indirectly to foreign risks. Further, most of our semiconductor products are manufactured outside of the United States. Accordingly, we are subject to international risks, including:

·   difficulties in managing distributors;

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·   difficulties in staffing and managing foreign subsidiary and branch operations;

·   political and economic instability;

·   foreign currency exchange fluctuations;

·   difficulties in accounts receivable collections;

·   potentially adverse tax consequences;

·   timing and availability of export licenses;

·   changes in regulatory requirements, tariffs and other barriers;

·   difficulties in obtaining governmental approvals for telecommunications and other products; and

·   the burden of complying with complex foreign laws and treaties.

Because sales of our products have been denominated to date exclusively in United States dollars, increases in the value of the United States dollar will increase the price of our products so that they become relatively more expensive to customers in the local currency of a particular country, which could lead to a reduction in sales and profitability in that country.

We May Be Required To Record A Significant Charge To Earnings If Our Goodwill Or Other Long Lived Asset Become Impaired

Under generally accepted accounting principles, we review our amortizable intangible and long lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested for impairment annually during the fourth quarter and between annual tests in certain circumstances. Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill or other long lived assets may not be recoverable, include a persistent decline in stock price and market capitalization, reduced future cash flow estimates, and slower growth rates in our industry. We have recorded goodwill related to prior acquisitions, and may do so in connection with any potential future acquisitions. We may be required to record a significant charge in our financial statements during the period in which any additional impairment of our goodwill  or other long lived assets is determined, which would adversely impact our results of operations.

Customer Demands And New Regulations Related To Conflict-Free Minerals May Force Us To Incur Additional Expenses

In August 2012, under 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,” regardless of their actual country of origin) in their products. These new requirements will require companies to investigate, disclose and report whether or not such metals originated from the Democratic Republic of Congo or adjoining countries. In January 2013, the SEC’s conflicts minerals disclosure rules became effective, requiring companies to make their first conflict minerals disclosures on or before May 31, 2014 for the 2013 calendar year. We are currently evaluating the disclosure requirements in order to comply with these disclosures, if any, within the prescribed time frame.

In the semiconductor industry, these minerals are most commonly found in metals. As there may be only a limited number of suppliers offering “conflict free” metals, we cannot be sure that we will be able to obtain necessary 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 that the metals used in our products are “conflict free.” 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.

Our Business Could Be Materially Adversely Affected As A Result Of Natural Disasters, Acts Of War Or Terrorism

Our operations and those of our suppliers and customers are vulnerable to interruption by fire, earthquake, flood and other natural disasters, as well as act of terrorism, war and other events beyond our control. If such events were to occur, it could result in a significant reduction of end-customer demand and/or availability of materials, a disruption of the global supply chain and an increase in the cost of products that we purchase. Any of these events would have a material adverse effect on our business.

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The Anti-Takeover Provisions In Our Certificate of Incorporation And Bylaws Could Adversely Affect The Rights Of The Holders Of Our Common Stock

Anti-takeover provisions of Delaware law, our Certificate of Incorporation and our Bylaws may make a change in control of PLX more difficult, even if a change in control would be beneficial to the stockholders.  These provisions may allow the Board of Directors to prevent changes in the management and control of PLX.

As part of our anti-takeover devices, our Board of Directors has the ability to determine the terms of preferred stock and issue preferred stock without the approval of the holders of the common stock.  Our Certificate of Incorporation allows the issuance of up to 5,000,000 shares of preferred stock.  There are no shares of preferred stock outstanding.  However, because the rights and preferences of any series of preferred stock may be set by the Board of Directors in its sole discretion without approval of the holders of the common stock, the rights and preferences of this preferred stock may be superior to those of the common stock.  Accordingly, the rights of the holders of common stock may be adversely affected.  Consistent with Delaware law, our Board of Directors may adopt additional anti-takeover measures in the future.

Proxy Contests Threatened Or Commenced Against Us Could Be Disruptive And Costly And The Possibility That Activist Shareholders May Wage Proxy Contests Or Gain Representation On Or Control Of Our Board Of Directors Could Cause Uncertainty About The Strategic Direction Of Our Business

On March 6, 2013, Potomac Capital Partners II, L.P., a stockholder in PLX (“Potomac”), delivered a letter to PLX indicating that it intended to nominate up to five individuals for election to the PLX Board of Directors at the 2013 annual meeting.  On October 28, 2013, Potomac filed with the SEC a preliminary proxy statement indicating that it intended to solicit proxies for the election of these five individuals to the PLX Board at the 2013 annual meeting.  If Potomac is successful in its proxy contest against PLX, it would obtain control of PLX without paying any PLX stockholders a premium for such control.  Potomac has indicated in its most recent filings with the SEC that it owns approximately 9.8% of PLX’s issued and outstanding common stock.

If Potomac continues to pursue a proxy contest or other actions at the 2013 annual meeting of stockholders to elect directors other than those recommended by our board of directors, or other actions that contest or conflict with our company’s strategic direction, any such actions could have an adverse effect on our company because:

·   responding to proxy contests and other actions by activist stockholders such as Potomac can be costly and time-consuming, disrupt our operations, and divert the attention of our management and employees away from their regular duties;

·   perceived uncertainties as to our future direction as a result of changes to composition of our board may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, may result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners;

·   these types of actions could cause significant fluctuations in our company’s stock based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business; and

·   if individuals are elected to our Board with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our stockholders.

For additional information concerning the above matters, please refer to the information under the caption “Background of Proxy Solicitation” in the most recently filed PLX proxy statement and other relevant SEC filings by PLX and Potomac.

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ITEM 6.  EXHIBITS

Exhibit
Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, Chapter 63 of Title 18, United States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, Chapter 63 of Title 18, United States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURE

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.

PLX TECHNOLOGY, INC.

Date: November 7, 2013

By     /s/ Arthur O. Whipple

         Arthur O. Whipple

         Chief Financial Officer

         (Principal Financial Officer and duly authorized signatory)

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EXHIBIT INDEX

Exhibit
Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, Chapter 63 of Title 18, United States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, Chapter 63 of Title 18, United States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David K. Raun, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PLX Technology, Inc.;

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(s) 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.

Dated:  November 7, 2013

             /s/ David K. Raun                                                                                                           

             David K. Raun

             Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Arthur O. Whipple, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PLX Technology, Inc.;

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(s) 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.

Dated:  November 7, 2013

            /s/ Arthur O. Whipple                                                                                                                      

           Arthur O. Whipple

           Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PLX Technology, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission (the "Report"), I, David K. Raun, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

1.   the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

2.   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, "filed" with the Securities and Exchange Commission.

Date: November 7, 2013

By:/s/ David K. Raun

 David K. Raun

 Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PLX Technology, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission (the "Report"), I, Arthur O. Whipple, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

1.   the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

2.   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, "filed" with the Securities and Exchange Commission.

Date: November 7, 2013

By:/s/ Arthur O. Whipple

 Arthur O. Whipple

 Chief Financial Officer

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Taxes [Abstract]

Income Taxes

11.  Income Taxes

A provision for income tax from continuing operations of $0.2 millionhas been recorded for the nine month period ended September 30, 2013, compared to a provision of $0.5 million for the same period in 2012.  Income tax expense for the nine months ended September 30, 2013 is a result of applying the estimated annual effective tax rate to cumulative profit before taxes. Income tax provision for the nine months ended September 30, 2012 is a result of applying the estimated annual effective tax rate to cumulative profit before taxesadjusted for certain discrete items which are fully recognized in the period they occur and miscellaneous state income taxes.

The Company has determined that negative evidence supports the need for a full valuation allowance against its net deferred tax assets at this time. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of a deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income during the periods in which those temporary differences become deductible. The Company continues to review its conclusions about the appropriate amount of its deferred income tax asset valuation allowance in light of circumstances existing in current periods and considering the expected future period results and will maintain a full valuation until sufficient positive evidence exists to support a reversal of the valuation allowance. If in the future the Company determines based on its current and expected future profitability that these deferred tax assets are more likely than not to be realized, a release of all, or part, of the related valuation allowance could result in an immediate material income tax benefit in the period of adjustment and material income tax provisions in periods beyond this adjustment. Such release of the valuation allowance could occur in the foreseeable future provided the Company results continue to remain positive.

On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012, or ATRA. Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts incurred through December 31, 2011. The ATRA extends the research credit for two years for qualified research expenditures incurred through the end of 2013. The extension of the research credit is retroactive and includes amounts incurred after 2011. There was no benefit to the Company of the restated credit in the three quarters of 2013 due to the full valuation allowance.

As of September 30, 2013,  the Company had unrecognized tax benefits of approximately $5.4 million of which none, if recognized, would result in a reduction of the Company’s effective tax rate.  There were no material changes in the amount of unrecognized tax benefits during the nine months ended September 30, 2013. Future changes in the balance of unrecognized tax benefits will have no impact on the effective tax rate as they are subject to a full valuation allowance. The Company does not believe the amount of its unrecognized tax benefits will significantly change within the next twelve months.

The Company is subject to taxation in the United States and various state and foreign jurisdictions.  The tax years 2008 through 2012 remain open to examination by the federal and most state tax authorities. Net operating loss and tax credit carryforwards generated in prior periods remain open to examination.

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Discontinued Operations (Summary Of Financial Information Included In Net Loss From Discontinued Operations) (Details) (USD $)	1 Months Ended	3 Months Ended			9 Months Ended			12 Months Ended
	Jul. 31, 2012	Dec. 31, 2012	Sep. 30, 2012		Sep. 30, 2013	Sep. 30, 2012		Dec. 31, 2012
Discontinued Operations [Abstract]
Disposal Group, Including Discontinued Operation, Revenue			$ 1,435,000			$ 2,947,000
Revenues			1,435,000			2,947,000
Gain on disposal		1,400,000	2,097,000	[1]		2,097,000	[1]	3,450,000
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax			(3,935,000)		(57,000)	(27,363,000)
Loss before income taxes			(3,935,000)		(57,000)	(27,363,000)
Benefit from income taxes			(922,000)			(398,000)
Discontinued Operation, Tax Effect of Discontinued Operation			(922,000)			(398,000)
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest			(3,013,000)		(57,000)	(26,965,000)
Loss from discontinued operations			(3,013,000)		(57,000)	(26,965,000)
Proceeds From Divestiture Of Businesses Including Fair Value Amount Held In Escrow								12,000,000
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax		1,400,000	2,097,000	[1]		2,097,000	[1]	3,450,000
Procceds from Entropic for nonexclusive licensing fee for intellectual property	$ 4,000,000

[1] The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Condensed Consolidated Statements Of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended		12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012		Sep. 30, 2012		Dec. 31, 2012
Condensed Consolidated Statements Of Operations [Abstract]
Gain on sale of business	$ 1,400	$ 2,097	[1]	$ 2,097	[1]	$ 3,450

[1] The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2013

Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

4.  Net Income (Loss) Per Share

The Company uses the treasury stock method to calculate the weighted average shares used in the diluted earnings per share.The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Net income (loss) from continuing operations	$	1,985	$	(3,304)	$	6,357	$	(5,011)
Weighted average shares outstanding - basic		45,682		44,946		45,553		44,824
Dilutive effect of stock options		1,010		-		779		-
Weighted average shares outstanding - diluted		46,692		44,946		46,332		44,824
Basic net income (loss) per share from continuing operations	$	0.04	$	(0.07)	$	0.14	$	(0.11)
Diluted net income (loss) per share from continuing operations	$	0.04	$	(0.07)	$	0.14	$	(0.11)

Weighted average employee stock options to purchase approximately 1.5 millionand2.4million shares for the three and nine month periods ended September 30, 2013, respectively, were outstanding, but were not included in the computation of diluted earnings per share as the exercise price of the options was greater than the average share price of the Company’s stock or the number of shares assumed to be repurchased using the proceeds of unrecognized compensation expense and exercise prices was greater than the weighted average number of shares underlying outstanding option and, therefore, the effect would have been anti-dilutive.

As the Company incurred a net loss for the three and nine month periods ended September 30, 2012, the effect of dilutive securities, totaling  5.0million shares has been excluded from the computation of diluted loss per share, as its impact would be anti-dilutive. Dilutive securities are comprised of options to purchase common stock.

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Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Net Income (Loss) Per Share [Abstract]

Computation Of Basic And Diluted Net Income (Loss) Per Share

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Net income (loss) from continuing operations	$	1,985	$	(3,304)	$	6,357	$	(5,011)
Weighted average shares outstanding - basic		45,682		44,946		45,553		44,824
Dilutive effect of stock options		1,010		-		779		-
Weighted average shares outstanding - diluted		46,692		44,946		46,332		44,824
Basic net income (loss) per share from continuing operations	$	0.04	$	(0.07)	$	0.14	$	(0.11)
Diluted net income (loss) per share from continuing operations	$	0.04	$	(0.07)	$	0.14	$	(0.11)

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Asset Impairment

9 Months Ended

Sep. 30, 2013

Asset Impairment [Abstract]

Asset Impairment

12. Asset Impairment

In June 2012 the Company recorded impairment charges of $10.3 million related to its 10 Gigabit Ethernet business, including core technology of $9.6 million, trade name and customer relationships of $0.2 million and certain tangible assets of $0.5 million.  The primary factors contributing to this impairment charge was the uncertainty of and reduction in forecasted cash flows, resulting in an increase in the probability that the product line will be sold or disposed of based on the reduction and timing of future cash flows.  In determining the amount of impairment charges the Company calculated the fair value of the asset group as of the impairment date.  The valuation of the assets was classified as a level 3 measurement under the fair value measurement guidance. The fair value was determined using the weighted average of a discounted cash flow analysis and a market approach along with proceeds received from Entropic in July 2012 in connection with the IP license agreement.  The discounted cash flow approach calculates the value based on the risk-adjusted present value of the cash flows related to 10 Gigabit Ethernet while the market approach calculates the value based on  indications of what a market participant would pay for the asset group.  The key unobservable inputs utilized in the discounted cash flow model include a 40% discount rate, a tax rate of 40% and future cash flows based on current product and market data.  The impairment was recorded in discontinued operations in the Company’s Consolidated Statement of Operations.

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Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2013	Dec. 31, 2011
Contingencies [Abstract]
Contingency accrual	$ 0.9	$ 1.0

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Net Income (Loss) Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net Income (Loss) Per Share [Abstract]
Net income (loss) from continuing operations	$ 1,985	$ (3,304)	$ 6,357	$ (5,011)
Weighted average shares outstanding - basic	45,682,000	44,946,000	45,553,000	44,824,000
Dillutive effect of stock options	1,010,000		779,000
Weighted average shares outstanding - diluted	46,692,000	44,946,000	46,332,000	44,824,000
Basic net income (loss) per share from continuing operations	$ 0.04	$ (0.07)	$ 0.14	$ (0.11)
Diluted net income (loss) per share from continuing operations	$ 0.04	$ (0.07)	$ 0.14	$ (0.11)
Shares excluded from computation of diluted loss per share	1,500,000	5,000,000	2,400,000	5,000,000

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Acquisition And Restructuring Costs (Tables)

9 Months Ended

Sep. 30, 2013

Acquisition And Restructuring Costs [Abstract]

Severance and benefit liability

Liability at December 31, 2012	$	315
Expense		279
Cash payments		(594)
Liability at September 30, 2013	$	-

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Investments (Tables)

9 Months Ended

Sep. 30, 2013

Investments [Abstract]

Schedule Of Fair Value Of Available-For-Sale Investments

	September 30, 2013
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	3,645	$	-	$	-	$	3,645
Marketable securities:
Municipal bonds		1,541		1		-		1,542
US treasury and government agencies securities		590		-		-		590
Total	$	5,776	$	1	$	-	$	5,777
Less amounts classified as cash equivalents								(233)
Total short and long-term available-for-sale investments							$	5,544
Contractual maturity dates for investments:
Less than one year:								5,011
One to two years:								533
							$	5,544

	December 31, 2012
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	2,707	$	-	$	-	$	2,707
Marketable securities:
Corporate bonds and notes		278		-		-		278
Municipal bonds		981		-		-		981
Total	$	3,966	$	-	$	-	$	3,966
Less amounts classified as cash equivalents								(1,928)
Total short and long-term available-for-sale investments							$	2,038
Contractual maturity dates for investments:
Less than one year:								1,787
One to two years:								251
							$	2,038

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Segments Of An Enterprise And Related Information (Schedule Of Percentage Of Total Accounts Receivable Balance Accounted To Distributors) (Details) (Accounts Receivable [Member])	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Excelpoint Systems Pte Ltd [Member]
Revenue, Major Customer [Line Items]
Percentage of total accounts receivable	46.00%	38.00%
Answer Technology, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of total accounts receivable	14.00%	22.00%
Avnet, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of total accounts receivable		11.00%

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Share-Based Compensation (Summary Of Stock Option Activity) (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Share-Based Compensation [Abstract]
Number of Shares, Outstanding, Beginning Balance	4,212,552
Number of Shares, Granted	1,160,000
Number of Shares, Exercised	(440,101)
Number of Shares, Cancelled	(309,193)
Number of Shares, Outstanding, Ending Balance	4,623,258	4,212,552
Number of Shares, Exercisable at September 30, 2013	2,717,241
Weighted Average Exercise Price, Outstanding, Beginning Balance	$ 4.11
Weighted Average Exercise Price, Granted	$ 4.59
Weighted Average Exercise Price, Exercised	$ 3.53
Weighted Average Exercise Price, Cancelled	$ 5.55
Weighted Average Exercise Price, Outstanding, Ending Balance	$ 4.19	$ 4.11
Weighted Average Exercise Price, Exercisable at September 30, 2013	$ 4.04
Weighted Average Remaining Contractual Term (in years), Outstanding	4 years 3 months	3 years 9 months 4 days
Weighted Average Remaining Contractual Term (in years), Exercisable at September 30, 2013	3 years 1 month 24 days
Aggregate Intrinsic Value, Outstanding	$ 9,332,201	$ 1,751,614
Aggregate Intrinsic Value, Exercisable at September 30, 2013	$ 6,199,818

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Investments (Narrative) (Details) (USD $)	Sep. 30, 2013
Investments [Abstract]
Aggregate unrealized loss	$ 1,000

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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Taxes [Abstract]
Provision for income taxes	$ 57,000	$ 931,000	$ 202,000	$ 466,000
Unrecognized tax benefits	$ 5,400,000		$ 5,400,000

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Share-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of options exercised	$ 100,000	$ 300,000	$ 500,000	$ 700,000
Fair value of options vested	500,000		2,100,000
Total unrecognized compensation costs related to nonvested stock options including estimated forfeitures	1,800,000		1,800,000
Weighted average period, years			1 year 4 months 17 days
Share-based compensation expense	545,000	1,040,000	1,823,000	2,523,000
Weighted average fair value of options granted	$ 2.23	$ 2.90	$ 2.17	$ 2.16
2008 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares of common stock authorized and available for awards, prior to 1999 Equity Plan eligible shares	5,000,000		5,000,000
Additional shares potentially available which would revert back to the 1999 Equity Plan	2,407,369
Aggregate share reserve limit under 2008 Equity Plan	7,407,369
Number of shares that may be issued in the form of full value	300,000		300,000
Award vesting period, years	4 years
Award expiration period, years	7 years
Term of plan, years	10 years
May 2010 Amendment [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in number of shares reserved for issuance	1,500,000
May 2011 Amendment [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in number of shares reserved for issuance	2,300,000
ESOP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESOP eligible annual compensation limit	150,000
ESOP annual salary contribution, percentage	2.00%
ESOP maximum annual contribution per employee	3,000
Share-based compensation expense	100,000		300,000	200,000
Stock Options And Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 500,000	$ 1,000,000	$ 1,600,000	$ 2,300,000

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Acquisition And Restructuring Costs (Summary Of Activity Within Lease Termination Liability) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Acquisition And Restructuring Costs [Abstract]
Liability at December 31, 2012	$ 315
Expense	279
Cash payments	$ (594)

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Schedule Of Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	September 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Certificate of deposit	$	3,645	$	-	$	3,645	$	-
Marketable securities		2,132		-		2,132		-
Escrow receivable		1,657		-		-		1,657
Total	$	7,434	$	-	$	5,777	$	1,657

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	1,809	$	1,809	$	-	$	-
Certificate of deposit		2,707		-		2,707		-
Marketable securities		1,259		-		1,259		-
Escrow receivable		1,600		-		-		1,600
Total	$	7,375	$	1,809	$	3,966	$	1,600

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows used in operating activities:
Net income (loss)	$ 6,300	$ (31,976)
Adjustments to reconcile net loss to net cash flows used in operating activities, net of assets acquired and liabilities assumed:
Depreciation and amortization	1,588	2,305
Share-based compensation expense	1,558	2,342
Amortization of acquired intangible assets		5,262
Impairment of assets		10,343
Gain on sale of business		(2,097)	[1]
Write-downs of inventories	453	771
Other non-cash items	28	71
Changes in operating assets and liabilities:
Accounts receivable	(1,379)	(3,059)
Inventories	37	(3,368)
Other current assets	(708)	(440)
Other assets	153	271
Accounts payable	(5,041)	8,414
Accrued compensation and benefits	(749)	2,189
Other accrued expenses	484	1,624
Net cash provided by (used) in operating activities	2,724	(7,348)
Cash flows from investing activities:
Proceeds from sale of business		9,000
Purchases of marketable securities	(8,194)	(4,112)
Maturities of marketable securities	4,666	5,172
Sales of marketable securities		3,019
Purchase of property and equipment	(624)	(1,989)
Net cash provided by (used in) investing activities	(4,152)	11,090
Cash flows from financing activities:
Borrowings against line of credit		9,500
Principal payments on line of credit	(2,000)	(6,500)
Proceeds from exercise of common stock options	1,556	1,006
Taxes paid related to net share settlement of equity awards	(321)	(47)
Principal payment on acquisition note		(4,848)
Principal payments on capital lease obligations		(478)
Net cash provided by financing activities	(765)	(1,367)
Effect of exchange rate fluctuations on cash and cash equivalents	(39)	(98)
Net increase (decrease) in cash and cash equivalents	(2,232)	2,277
Cash and cash equivalents at beginning of period	14,673	12,097
Cash and cash equivalents at end of period	12,441	14,374
Supplemental disclosure of cash flow information:
Cash paid for income taxes	143	14
Cash from income tax refunds	1	15
Cash paid for interest	$ 190	$ 282

[1] The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Share-Based Compensation

9 Months Ended

Sep. 30, 2013

Share-Based Compensation [Abstract]

Share-Based Compensation

2.Share-Based Compensation

Equity Incentive Plans

In May 2008, the Company’s stockholders approved the 2008 Equity Incentive Plan (“2008 Plan”).  The 2008 Plan was amended by the Company’s stockholders in May 2010 to increase the number of shares reserved for issuance under the Plan by 1,500,000 shares. In May 2011, the 2008 Plan was amended again by the Company’s stockholders to increase the number of shares reserved for issuance under the Plan by 2,300,000 shares. Under the 2008 Plan, there is currently authorized for issuance and available for awards an aggregate of 5,000,000 shares of the Company’s common stock, plus up to an additional 2,407,369 shares that otherwise would have reverted to the share reserve of the Company’s prior incentive plan, the Company’s 1999 Stock Incentive Plan, subject to an overall, aggregate share reserve limit of 7,407,369 shares. Awards under the 2008 Plan may include stock options, restricted stock, stock appreciation rights, performance awards, restricted stock units and other awards, provided that with respect to full value awards, such as restricted stock or restricted stock units, no more than 300,000 shares may be issued in the form of full value awards during the term of the 2008 Plan.  Awards under the 2008 Plan may be made to the Company’s officers and other employees, its board members and consultants that it hires.  Generally, options vest over a four-year period and expire no more than seven years after the date of grant.  The 2008 Plan has a term of ten years.

Employee Stock Ownership Plan

In January 2009, the Company established the PLX Technology, Inc. Employee Stock Ownership Plan (the “ESOP”). The ESOP is a tax-qualified defined contribution retirement plan that is non-contributory.  PLX regular employees (other than nonresident aliens with no U.S.-source income, employees covered by a collective bargaining agreement, leased employees and employees of a non-participating subsidiary of PLX) who are at least 18 years old and have worked for PLX for at least 12 consecutive months are eligible to participate in the ESOP.  The Company makes cash contributions equal to a percentage of eligible compensation that is determined annually by the Board of Directors. Eligible compensation is limited to $150,000.  The contributions are used to purchase common stock of the Company. Since the adoption of the ESOP, the Company has made annual contributions of 2% of each employee's eligible compensation up to a maximum of $3,000 for any single employee (2% of $150,000 of eligible compensation).  In accordance with the IDT merger agreement, which was subsequently terminated, the Company ceased contributing to the plan after the April 2012 contribution. The reinstatement of contributions was approved by the Company’s Board of Directors effective as of the first quarter of 2013. Eligible participants receive a share allocation at the end of the plan year based on the contributions plus an additional allocation for forfeitures that occurred during the plan year.  The shares and forfeitures are allocated to each ESOP participant who is employed on the last day of the ESOP Plan Year (December 31) in the same proportion that the compensation (up to the $150,000 limit) of each ESOP participant bears to the eligible compensation of all ESOP participants. 

Share-Based Compensation Expense

The fair value of share-based awards is calculated using the Black-Scholes option pricing model, which requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values.

The weighted-average fair value of share-based compensation to employees is based on the multiple option valuation approach. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of share-based compensation awards to employees is amortized using the straight-line method over the vesting period of the awards. The weighted-average fair value calculations are based on the following weighted average assumptions:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Risk-free interest rate		1.18%		0.55%		0.96%		0.68%
Expected volatility		57.10%		64.10%		59.40%		62.90%
Expected life (years)		4.34		4.35		4.34		4.35

Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option.

Expected Life: The Company’s expected life represents the weighted-average period that the Company’s stock options are expected to be outstanding. The expected life is based on the observed and expected time to post-vesting exercise of options by employees. The Company uses historical exercise patterns of previously granted options in relation to stock price movements to derive an employee behavioral pattern used to forecast expected exercise patterns.

Expected Volatility: The Company believes that historical volatility best represents expected volatility due to the lack of market data consistently available to calculate implied volatility. The historical volatility is based on the weekly closing prices of its common stock over a period equal to the expected term of the option and is a strong indicator of the expected future volatility.

These factors could change in the future, which would affect the share-based compensation expense in future periods.

As share-based compensation expense recognized in the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table shows total share-based compensation and employee stock ownership plan expenses recorded for the three and nine months ended September 30, 2013 and 2012, included in the respective line items of the Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Cost of revenues	$	9	$	49	$	-	$	98
Research and development		193		349		609		719
Selling, general and administrative		343		516		1,268		1,189
Discontinued operations (1)		-		126		(54)		517
Total share-based compensation expense	$	545	$	1,040	$	1,823	$	2,523

(1) Recorded in loss from discontinued operations in the Condensed Consolidated Statements of Operations.

Share-based compensation expense from employee stock options and restricted stock units (“RSUs”) for the three months ended September 30, 2013 and 2012 were $0.5 million and $1.0 million, respectively. For the three months ended September 30, 2013, ESOP expenses were  $0.1 million. As a result of the April 2012 cessation of ESOP contributions noted above, there were no ESOP expenses recorded in the three months ended September 30, 2012.

Share-based compensation expense from employee stock options and RSUs for the nine months ended September 30, 2013 and 2012 were $1.6 millionand $2.3 million, respectively. For the same periods, ESOP expenses were$0.3 million and $0.2 million, respectively.

A summary of option activity under the Company’s stock equity plans during the nine months ended September 30, 2013 is as follows:

				Weighted Average
				Remaining	Aggregate
	Number of	Weighted Average		Contractual Term	Intrinsic
Options	Shares	Exercise Price		(in years)	Value
Outstanding at December 31, 2012	4,212,552	$	4.11	3.76	$	1,751,614
Granted	1,160,000		4.59
Exercised	(440,101)		3.53
Cancelled	(309,193)		5.55
Outstanding at September 30, 2013	4,623,258	$	4.19	4.25	$	9,332,201
Exercisable at September 30, 2013	2,717,241	$	4.04	3.15	$	6,199,818

The Black-Scholes weighted average fair values of options granted during the three months ended September 30, 2013 and 2012 were$2.23and $2.90, respectively.

The Black-Scholes weighted average fair values of options granted during the nine months ended September 30, 2013 and 2012 were $2.17 and $2.16, respectively.

The following table summarizes ranges of outstanding and exercisable options as of September 30, 2013:

	Options Outstanding				Options Exercisable
		Weighted Average
		Remaining	Weighted			Weighted
		Contractual Term	Average			Average
Range of Exercise Prices	Number	(in years)	Exercise Price		Number	Exercise Price
$1.80-$2.69	986,382	2.65	$	2.12	912,678	$	2.07
$2.70-$4.10	1,394,904	4.67		3.82	781,570		3.75
$4.11-$4.55	966,000	6.40		4.54	114,000		4.53
$4.56-$6.66	1,003,548	4.10		5.11	636,569		5.03
$6.67-$15.58	272,424	0.88		8.91	272,424		8.91
Total	4,623,258	4.25	$	4.19	2,717,241	$	4.04

The total intrinsic value of options exercised during the three and nine months ended September 30, 2013 was $0.1 million and$0.5million, respectively. For the same periods in 2012, the total intrinsic value of options exercised was $0.3 million and $0.7 million, respectively.The fair value of options vested during the three and nine months ended September 30, 2013 was approximately $0.5 million and $2.1 million, respectively. As of September 30, 2013, total unrecognized compensation costs related to nonvested stock options including estimated forfeitures was $1.8 million which is expected to be recognized as expense over a weighted average period of approximately 1.38 years.

The following table summarizes the activity for our nonvested restricted stock units (“RSUs”) during the nine months ended September 30, 2013:

	Nonvested Restricted Stock Units
	Number of	Weighted Average
	Shares	Grant-Date Fair Value
December 31, 2012	240,100	$	6.20
Vested	(240,100)	$	6.20
September 30, 2013	-	$	-

As of September 30, 2013, there are no unvested RSUs.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

5.  Fair Value Measurements

The accounting guidance for fair value measurements provides a framework for measuring fair value and expands related disclosures. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The guidance also establishes a hierarchy which requires an entity to maximize the use of observable inputs, when available.  The guidance requires fair value measurement be classified and disclosed in one of the following three categories:

Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities.  The fair value of available-for-sale securities included in the level 1 category is based on quoted prices that are readily and regularly available in an active market. 

Level 2: Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. The fair value of available-for-sale securities included in the Level 2 category is based upon quoted prices in markets that are not active and incorporate available trade, bid and other market information.

Level 3: Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing.

The fair value of financial assets and liabilities measured on a recurring basis is as follows (in thousands):

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	September 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Certificate of deposit	$	3,645	$	-	$	3,645	$	-
Marketable securities		2,132		-		2,132		-
Escrow receivable		1,657		-		-		1,657
Total	$	7,434	$	-	$	5,777	$	1,657

			Fair Value Measurement as of Reporting Date Using
			Quoted Prices in Active Markets		Significant Other		Significant
			for Identical Assets or Liabilities		Observable Inputs		Unobservable Inputs
	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	1,809	$	1,809	$	-	$	-
Certificate of deposit		2,707		-		2,707		-
Marketable securities		1,259		-		1,259		-
Escrow receivable		1,600		-		-		1,600
Total	$	7,375	$	1,809	$	3,966	$	1,600

The fair value of the Company’s money-market funds classified as Level 1 is valued using prices in active markets. The fair values of the Company’s investments classified as Level 2 are valued using inputs that include actual trade data, benchmark yields, broker/dealer quotes and other similar data. These inputs are obtained from quoted market prices, independent pricing vendors or other sources.

The estimated fair value of the escrow payment is based on assumptions made regarding potential claims against the escrow using historical and market data and a 3.25% discount rate to consider present value. The Company estimated a claims rate of 17%. These assumptions and fair value estimate are subject to change. Changes in these inputs would change the assessed fair value of the escrow receivable. See Note 13 of the condensed consolidated financial statements for more information on the escrow receivable.

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Inventories

9 Months Ended

Sep. 30, 2013

Inventories [Abstract]

Inventories

3.Inventories

Inventories are valued at the lower of cost (first-in, first-out method) or market (net realizable value).  Inventories were as follows (in thousands):

	September 30,		December 31,
	2013		2012
Work-in-process	$	6,059	$	4,986
Finished goods		4,011		5,574
Total	$	10,070	$	10,560

The Company evaluates the need for potential inventory write downs by considering a combination of factors including the life of the product, sales history, obsolescence, sales forecasts and expected sales prices.

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Investments (Schedule Of Fair Value Of Available-For-Sale Investments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Less amounts classified as cash equivalents	$ (233)	$ (1,928)
Total short and long-term available-for-sale investments	5,544	2,038
Contractual maturity dates for investments, Less than one year, Estimated Fair Value	5,011	1,787
Contractual maturity dates for investments, One to two years, Estimated Fair Value	533	251
Certificate Of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,645	2,707
Estimated Fair Value	3,645	2,707
Corporate Bonds And Notes [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		278
Estimated Fair Value		278
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,541	981
Unrealized Gain	1
Estimated Fair Value	1,542	981
US Treasury And Government Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	590
Estimated Fair Value	590
Total Bonds, Notes And Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,776	3,966
Unrealized Gain	1
Estimated Fair Value	$ 5,777	$ 3,966

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Segments Of An Enterprise And Related Information (Tables)

9 Months Ended

Sep. 30, 2013

Segments Of An Enterprise And Related Information [Abstract]

Schedule Of Revenues By Geographic Region Based On Customer Location

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues:
China	$	7,389	$	6,640	$	22,177	$	20,052
United States		4,998		4,671		15,775		12,195
Singapore		4,409		4,326		13,509		10,494
Taiwan		4,052		6,403		12,978		17,955
Germany		1,895		2,398		6,701		8,485
Other Asia Pacific		2,531		2,070		6,335		6,193
Europe, Middle East and Africa		330		266		978		1,175
The Americas - excluding United States		121		92		340		285
Total	$	25,725	$	26,866	$	78,793	$	76,834

Schedule Of Percentage Of Net Revenues Accounted As Sales To Distributors

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Excelpoint Systems Pte Ltd	34%	30%	33%	27%
Avnet, Inc.	22%	24%	23%	24%
Answer Technology, Inc.	11%	18%	12%	20%

Schedule Of Percentage Of Total Accounts Receivable Balance Accounted To Distributors

	September 30,
	2013	2012
Excelpoint Systems Pte Ltd	46%	38%
Answer Technology, Inc.	14%	22%
Avnet, Inc.	*	11%

*           Less than 10%

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Share-Based Compensation (Schedule Of Weighted-Average Fair Value Calculations Based On Weighted Average Assumptions) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-Based Compensation [Abstract]
Risk-free interest rate	1.18%	0.55%	0.96%	0.68%
Expected volatility	57.10%	64.10%	59.40%	62.90%
Expected life (years)	4 years 4 months 2 days	4 years 4 months 6 days	4 years 4 months 2 days	4 years 4 months 6 days

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Inventories [Abstract]
Work-in-process	$ 6,059	$ 4,986
Finished goods	4,011	5,574
Total	$ 10,070	$ 10,560

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Asset Impairment (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 30, 2012
Impairment of assets	$ 10,300	$ 10,343
Fair value inputs income tax rate	40.00%
Fair value inputs, discount rate	40.00%
Existing And Core Technology [Member]
Impairment of assets	9,600
Trade Names and Customer Relationships [Member]
Impairment of assets	200
Tangible Assets [Member]
Impairment of assets	$ 500

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Segments Of An Enterprise And Related Information (Schedule Of Percentage Of Net Revenues Accounted As Sales To Distributors) (Details) (Revenue [Member])	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Excelpoint Systems Pte Ltd [Member]
Revenue, Major Customer [Line Items]
Percentage of net revenues	34.00%	30.00%	33.00%	27.00%
Avnet, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of net revenues	22.00%	24.00%	23.00%	24.00%
Answer Technology, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of net revenues	11.00%	18.00%	12.00%	20.00%

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Condensed Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012		Sep. 30, 2013	Sep. 30, 2012
Net revenues	$ 25,725	$ 26,866		$ 78,793	$ 76,834
Cost of revenues	11,265	10,808		33,735	31,732
Gross margin	14,460	16,058		45,058	45,102
Operating expenses:
Research and development	6,107	8,823		18,548	21,362
Selling, general and administrative	6,309	6,654		19,532	22,764
Acquisition and restructuring related costs		2,830		291	5,179
Amortization of acquired intangible assets					5,262
Total operating expenses	12,416	18,371		38,371	49,528
Income (loss) from operations	2,044	(2,313)		6,687	(4,426)
Interest income (expense) and other, net	(2)	(60)		(128)	(119)
Income (loss) from continuing operations before provision for income taxes	2,042	(2,373)		6,559	(4,545)
Provision for income taxes	57	931		202	466
Income (loss) from continuing operations, net of tax	1,985	(3,304)		6,357	(5,011)
Loss from discontinued operations, net of tax		(3,013)	[1]	(57)	(26,965)	[1]
Net income (loss)	1,985	(6,317)		6,300	(31,976)
Basic net income (loss) per share:
Income (loss) from continuing operations	$ 0.04	$ (0.07)		$ 0.14	$ (0.11)
Loss from discontinued operations		$ (0.07)			$ (0.60)
Net income (loss)	$ 0.04	$ (0.14)		$ 0.14	$ (0.71)
Diluted net income (loss) per share:
Income (loss) from continuing operations	$ 0.04	$ (0.07)		$ 0.14	$ (0.11)
Loss from discontinued operations		$ (0.07)			$ (0.60)
Net income (loss)	$ 0.04	$ (0.14)		$ 0.14	$ (0.71)
Shares used to compute basic per share amounts	45,682	44,946		45,553	44,824
Shares used to compute diluted per share amounts	46,692	44,946		46,332	44,824
Continuing Operations [Member]
Operating expenses:
Amortization of acquired intangible assets		$ 64			$ 223

[1] Loss from discontinued operations includes gain on disposal of $2,097 for the three and nine months ended September 30, 2012

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Segments Of An Enterprise And Related Information

9 Months Ended

Sep. 30, 2013

Segments Of An Enterprise And Related Information [Abstract]

Segments Of An Enterprise And Related Information

8.  Segments of an Enterprise and Related Information

The Company has one operating segment, the sale of semiconductor devices. The Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”) because he has final authority over resource allocation decisions and performance assessment. The CODM does not receive discrete financial information about individual components of the Company’s business. The majority of the Company’s assets are located in the United States.

Revenues from continuing operations by geographic region based on customer location were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues:
China	$	7,389	$	6,640	$	22,177	$	20,052
United States		4,998		4,671		15,775		12,195
Singapore		4,409		4,326		13,509		10,494
Taiwan		4,052		6,403		12,978		17,955
Germany		1,895		2,398		6,701		8,485
Other Asia Pacific		2,531		2,070		6,335		6,193
Europe, Middle East and Africa		330		266		978		1,175
The Americas - excluding United States		121		92		340		285
Total	$	25,725	$	26,866	$	78,793	$	76,834

There were no direct end customers that accounted for more than 10% of net revenues. Sales to the following distributors accounted for 10% or more of net revenues from continuing operations:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Excelpoint Systems Pte Ltd	34%	30%	33%	27%
Avnet, Inc.	22%	24%	23%	24%
Answer Technology, Inc.	11%	18%	12%	20%

There were no direct end customers that accounted for more than 10% or more of the total accounts receivable balance.  The following distributors accounted for 10% or more of the total accounts receivable balance:

	September 30,
	2013	2012
Excelpoint Systems Pte Ltd	46%	38%
Answer Technology, Inc.	14%	22%
Avnet, Inc.	*	11%

*           Less than 10%

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Condensed Consolidated Statements of Comprehensive Loss [Abstract]
Net income (loss)	$ 1,985	$ (6,317)	$ 6,300	$ (31,976)
Unrealized gain (loss) on marketable securities, net	1	1		(7)
Foreign currency translation adjustments	(13)	(26)	(41)	(92)
Comprehensive net income (loss)	$ 1,973	$ (6,342)	$ 6,259	$ (32,075)

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 12,441	$ 14,673
Short-term marketable securities	5,011	1,787
Accounts receivable, net	12,014	10,635
Inventories	10,070	10,560
Other current assets	3,602	2,894
Total current assets	43,138	40,549
Property and equipment, net	10,390	11,267
Goodwill	20,461	20,461
Long-term marketable securities	533	251
Other assets	204	451
Total assets	74,726	72,979
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	5,697	10,738
Accrued compensation and benefits	3,744	4,493
Accrued commissions	500	817
Short term borrowing against line of credit		8,000
Other accrued expenses	3,060	2,259
Total current liabilities	13,001	26,307
Long term borrowing against line of credit	6,000
Total liabilities	19,001	26,307
Stockholders' Equity:
Common stock, par value	46	45
Additional paid-in capital	192,237	189,444
Accumulated other comprehensive loss	(267)	(226)
Accumulated deficit	(136,291)	(142,591)
Total stockholders' equity	55,725	46,672
Total liabilities and stockholders' equity	$ 74,726	$ 72,979

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Discontinued Operations (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended
	Jul. 31, 2012	Dec. 31, 2012	Sep. 30, 2012		Sep. 30, 2012		Dec. 31, 2012	Nov. 30, 2012 Amendment [Member]	Sep. 20, 2012 Aquantia APA [Member]	Jul. 31, 2012 Entropic APA [Member]	Sep. 30, 2013 Entropic APA [Member]	Jul. 31, 2012 Entropic APA [Member] Product Acceptance [Member]	Jul. 31, 2012 Entropic APA [Member] Potential Third Party Royalty Arrangement [Member]
Proceeds from sale of product line									$ 2,000,000	$ 3,000,000
Possible future proceeds for post closing milestones and amount held in escrow										5,000,000
Possible future proceeds for post-closing milestones								1,400,000			1,000,000	2,000,000	1,000,000
Possible escrow agreement proceeds from Entropic for post-closing indemnification	2,000,000
Possible Future Proceeds for Post-Closing Milestones								1,400,000			1,000,000	2,000,000	1,000,000
Proceeds From Divestiture Of Businesses Including Fair Value Amount Held In Escrow							12,000,000
Procceds from Entropic for nonexclusive licensing fee for intellectual property	4,000,000
Fair value of escrow payment											1,600,000
Gain on disposal		$ 1,400,000	$ 2,097,000	[1]	$ 2,097,000	[1]	$ 3,450,000

[1] The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2013

Discontinued Operations [Abstract]

Components Of Gain On Sale Of A Business

Cash proceeds from sale (including fair value amount held escrow)	$	12,000
Less carrying value of assets transferred and asset write-offs:
Inventory transferred		(1,254)
Fixed assets transferred		(631)
Intangible assets write-off		(5,783)
Goodwill write-off		(877)
Other adjustments		(5)
Gain on disposal	$	3,450

Summary Of Financial Information Included In Net Loss From Discontinued Operations

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	in thousands
Revenues	$	-	$	1,435	$	-	$	2,947
Gain on disposal (1)		-		2,097		-		2,097
Loss before income taxes		-		(3,935)		(57)		(27,363)
Provision for income taxes		-		(922)		-		(398)
Loss from discontinued operations	$	-	$	(3,013)	$	(57)	$	(26,965)

The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventories [Abstract]

Schedule Of Inventories

	September 30,		December 31,
	2013		2012
Work-in-process	$	6,059	$	4,986
Finished goods		4,011		5,574
Total	$	10,070	$	10,560

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Segments Of An Enterprise And Related Information (Schedule Of Revenues By Geographic Region Based On Customer Location) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 25,725	$ 26,866	$ 78,793	$ 76,834
China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	7,389	6,640	22,177	20,052
Taiwan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	4,052	6,403	12,978	17,955
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	4,998	4,671	15,775	12,195
Singapore [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	4,409	4,326	13,509	10,494
Other Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	2,531	2,070	6,335	6,193
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	1,895	2,398	6,701	8,485
Europe, Middle East And Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	330	266	978	1,175
The Americas - Excluding United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 121	$ 92	$ 340	$ 285

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Fair Value Measurements (Schedule Of Fair Value Of Assets And Liabilities On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 7,434	$ 7,375
Discount rate used for fair value consideration	3.25%
Estimated claims rate on escrow	17.00%
Quoted Prices In Active Markets For Identical Assets Or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets		1,809
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	5,777	3,966
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	1,657	1,600
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets		1,809
Money Market Funds [Member] | Quoted Prices In Active Markets For Identical Assets Or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets		1,809
Certificate Of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	3,645	2,707
Certificate Of Deposit [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	3,645	2,707
Marketable Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	2,132	1,259
Marketable Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	2,132	1,259
Escrow Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	1,657	1,600
Escrow Receivable [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 1,657	$ 1,600

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Share-Based Compensation (Summary Of Ranges Of Outstanding And Exercisable Options) (Details) (USD $)	3 Months Ended
	Sep. 30, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number	4,623,258
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	4 years 3 months
Options Outstanding, Weighted Average Exercise Price	$ 4.19
Options Exercisable, Number	2,717,241
Options Exercisable, Weighted Average Exercise Price	$ 4.04
$1.80-$2.69 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 1.80
Range of Exercise Prices, upper limit	$ 2.69
Options Outstanding, Number	986,382
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	2 years 7 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 2.12
Options Exercisable, Number	912,678
Options Exercisable, Weighted Average Exercise Price	$ 2.07
$2.70-$4.10 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 2.70
Range of Exercise Prices, upper limit	$ 4.10
Options Outstanding, Number	1,394,904
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	4 years 8 months 1 day
Options Outstanding, Weighted Average Exercise Price	$ 3.82
Options Exercisable, Number	781,570
Options Exercisable, Weighted Average Exercise Price	$ 3.75
$4.11-$4.55 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 4.11
Range of Exercise Prices, upper limit	$ 4.55
Options Outstanding, Number	966,000
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	6 years 4 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 4.54
Options Exercisable, Number	114,000
Options Exercisable, Weighted Average Exercise Price	$ 4.53
$4.56-$6.66 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 4.56
Range of Exercise Prices, upper limit	$ 6.66
Options Outstanding, Number	1,003,548
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	4 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price	$ 5.11
Options Exercisable, Number	636,569
Options Exercisable, Weighted Average Exercise Price	$ 5.03
$6.67-$15.58 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 6.67
Range of Exercise Prices, upper limit	$ 15.58
Options Outstanding, Number	272,424
Options Outstanding, Weighted Average Remaining Contractual Term (in years)	10 months 17 days
Options Outstanding, Weighted Average Exercise Price	$ 8.91
Options Exercisable, Number	272,424
Options Exercisable, Weighted Average Exercise Price	$ 8.91

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Share-Based Compensation (Summary Of Activity For Unvested Restricted Stock Units) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Share-Based Compensation [Abstract]
Number of Shares, Beginning Balance	240,100
Number of Shares, Vested	(240,100)
Weighted Average Grant-Date Fair Value, Beginning Balance	$ 6.20
Weighted Average Grant-Date Fair Value, Vested	$ 6.20

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Acquisition And Restructuring Costs

9 Months Ended

Sep. 30, 2013

Acquisition And Restructuring Costs [Abstract]

Acquisition And Restructuring Costs

7.  Acquisition and Restructuring Costs

In the ninemonths ended September 30, 2013, the Company recorded approximately $0.3 million of severance and benefit related costs, included in acquisition and restructuring related costs in the Condensed Consolidated Statement of Operations, related to the termination of 4 employees worldwide as part of the restructuring of SG&A activities as a result of the divestiture of the PHY business. As of September 30, 2013 all of the severance and benefit accruals were paid.

Liability at December 31, 2012	$	315
Expense		279
Cash payments		(594)
Liability at September 30, 2013	$	-

In the nine months ended September 30, 2013, the Company recorded $12,000 of outside legal and accounting costs associated with the wrap up of the IDT acquisition activities, which were terminated in December 2012. For the three and nine months ended September 30, 2012, the Company recorded$2.8 million and $5.2 million, respectively, of acquisition costs, primarily for outside legal and investment banking fees associated with the IDT acquisition activities. These expenses were also included in operating expenses under acquisition and restructuring related costs in the Company’s Condensed Consolidated Statement of Operations.

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Basis Of Presentation (Schedule Of Accumulated Comprehensive Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Basis Of Presentation [Abstract]
Unrealized gain (loss) on marketable securtities, Balance at January 1, 2013			$ 1
Unrealized gain (loss) on marketable securtities, Balance at September 30, 2013	1		1
Foreign currency translation adjustments, Balance at January 1, 2013			(227)
Foreign currency translation adjustments, Current period net change	(13)	(26)	(41)	(92)
Foreign currency translation adjustments, Balance at September 30, 2013	(268)		(268)
Accumulated Other Comprehensive Income (Loss), Beginning Balance			(226)
Other Comprehensive Income (Loss)			(41)
Accumulated Other Comprehensive Income (Loss), Ending Balance	$ (267)		$ (267)

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Acquisition And Restructuring Costs (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2013 employee	Sep. 30, 2012
Acquisition And Restructuring Costs [Line Items]
Severance and benefit related costs		$ 279,000
Number of employees terminated		4
Acquisition and Restructuring Related Costs	2,830,000	291,000	5,179,000
Integrated Device Technology, Inc [Member]
Acquisition And Restructuring Costs [Line Items]
Third party acquisition related costs		$ 12,000

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Contingencies

9 Months Ended

Sep. 30, 2013

Contingencies [Abstract]

Contingencies

10. Contingencies

To date, Internet Machines LLC ("Internet Machines") has filed three separate lawsuits against PLX.  The first suit was filed on February 2, 2010, which has been served on PLX, entitled Internet Machines LLC v. Alienware Corporation, et al., in the United States District Court for the Eastern District of Texas, Tyler Division (the “First Suit”).  This First Suit alleges infringement by PLX and the other defendants in the lawsuit of two patents held by Internet Machines.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On May 14, 2010, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On December 6, 2010, the Court held a case-management conference and subsequently entered a scheduling order in this matter, and set the trial for February 2012.

On February 21, 2012, through February 29, 2012, the claims and defenses asserted in the First Suit were tried to a seven-member jury in the United States District Court for the Eastern District of Texas, Tyler Division.  On February 29, 2012, the jury returned its verdict, finding the patents-in-suit valid and infringed and awarded money damages against PLX in the amount of $1.0 million.  On June 19, 2013, the Court issued its ruling on the post-verdict motions filed by the parties and entered an appealable judgment, affirming the jury’s findings of validity and infringement.  The judgment entered by the Court further affirmed the monetary award found by the jury.  On July 17, 2013, the Company filed a notice of appeal with the Court and on October 7, 2013 it filed the appeal brief, appealing the judgment to the United States Court of Appeals for the Federal Circuit.  The Company intends to continue to vigorously seek reversal of the jury’s verdict and the Court’s judgment on appeal.

Internet Machines' second lawsuit, which has also been served on PLX, was filed on October 17, 2010, again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Second Suit”).  This Second Suit, entitled Internet Machines LLC v. ASUS Computer International, et al., alleges infringement by PLX of another patent held by Internet Machines.  The complaint also asserts infringement claims against a separate group of defendants not named in the first Internet Machines lawsuit, and accuses those defendants of infringing the two patents asserted against PLX in the First Suit, as well as the additional patent listed in this Second Suit.  The complaint in the lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On December 28, 2010, the Company filed its answer to the live complaint in the second lawsuit and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.

On May 17, 2011, Internet Machines filed a third lawsuit entitled Internet Machines LLC v. Avnet, Inc., et al., again in the United States District Court for the Eastern District of Texas, Tyler Division (the “Third Suit”).  The third lawsuit has been served on PLX and alleges that PLX infringes a fourth patent held by Internet Machines.  This lawsuit also accuses a new group of defendants of infringing each of Internet Machines' patents at issue in the First and Second Suits, as well as the fourth patent asserted against PLX in this Third Suit.  The complaint in the Third Suit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines' patents.  On September 27, 2011, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit. 

On January 20, 2012, the Court entered an order consolidating the Second and Third Suits into one action.  The Court further ordered that the schedule entered in the Third Suit would govern the consolidated action.  As a result, the consolidated action was originally set for trial in February 2013. 

On March 25, 2011, a related entity, Internet Machines MC LLC, filed a lawsuit against PLX, entitled Internet Machines MC LLC v. PLX Technology, Inc., et al., in the United States District Court for the Eastern District of Texas, Marshall Division.  Internet Machines MC LLC, however, did not serve the initial complaint on PLX.  Instead, on August 26, 2011, Internet Machines MC LLC filed a first amended complaint, which has now been served on PLX, alleging infringement by PLX and the other defendants in the lawsuit of one patent held by Internet Machines MC LLC.  The complaint in this lawsuit seeks unspecified compensatory damages, treble damages and attorneys' fees, as well as injunctive relief against further infringement of Internet Machines MC LLC's patents.  On November 11, 2011, the Company filed its answer to the live complaint and asserted counterclaims, seeking declaratory judgments of non-infringement and invalidity of the patents-in-suit.  On March 5, 2012, the Court held an initial case-management conference in this matter.  The Court entered a scheduling order in this matter, and trial was originally set for July 2013.

On September 4, 2012, the Court entered an order staying the Second and Third Suits and the lawsuit brought by Internet Machines MC LLC discussed in the preceding paragraph.  Pursuant to the Court’s order, those lawsuits are stayed until a final non-appealable judgment is entered in the First Suit, again styled Internet Machines LLC v. Alienware Corp., et al., Cause No. 6:10-CV-023, in the United States District Court for the Eastern District of Texas.While it is not possible to determine the ultimate outcome of these suits, the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, but it is unable to estimate a range of possible loss, if any.

As a result of the jury’s February 29, 2012 verdict on the First Suit, the Company accrued $1.0 million as of December 31, 2011. Based on the June 19, 2013 Court’s ruling, the Company accrued an additional $0.9 million. As noted above, the Company has filed an appeal of the jury’s verdict and the Court’s judgment issued in the First Suit.  The Company will continue to accrue royalties, under the Court’s direction, until the appeal is finalized. A change in the ruling as a result of that appeal could change the estimated liability in the period in which the outcome of the appeal is known.

From time to time, the Company is involved in claims and legal proceedings that arise in the ordinary course of business. Any claims or proceedings against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require the Company to enter into royalty or licensing agreements which, if required, may not be available on terms favorable to the Company or at all. If management believes that a loss arising from these matters is probable and can be reasonably estimated, the Company will record a reserve for the loss.

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Investments

9 Months Ended

Sep. 30, 2013

Investments [Abstract]

Investments

6.  Investments

As of September 30, 2013, the Company’s securities consisted of certificate of deposits and debt securities and were designated as available-for-sale. Available-for-sale securities are carried at fair value, based on quoted market prices or prices quoted in markets that are not active, with unrealized gains and losses reported in a separate component of stockholders’ equity.  The amortized cost of debt securities is adjusted for the amortization of premiums and the accretion of discounts to maturity, both of which are included in interest income.  Realized gains and losses are recorded on the specific identification method.

The fair value of available-for-sale investments is as follows (in thousands):

	September 30, 2013
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	3,645	$	-	$	-	$	3,645
Marketable securities:
Municipal bonds		1,541		1		-		1,542
US treasury and government agencies securities		590		-		-		590
Total	$	5,776	$	1	$	-	$	5,777
Less amounts classified as cash equivalents								(233)
Total short and long-term available-for-sale investments							$	5,544
Contractual maturity dates for investments:
Less than one year:								5,011
One to two years:								533
							$	5,544

	December 31, 2012
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gain		Loss		Fair Value
Certificate of deposit	$	2,707	$	-	$	-	$	2,707
Marketable securities:
Corporate bonds and notes		278		-		-		278
Municipal bonds		981		-		-		981
Total	$	3,966	$	-	$	-	$	3,966
Less amounts classified as cash equivalents								(1,928)
Total short and long-term available-for-sale investments							$	2,038
Contractual maturity dates for investments:
Less than one year:								1,787
One to two years:								251
							$	2,038

As of September 30, 2013 and December 31, 2012, the Company had an aggregate unrealized loss of less than $1,000.

The Company reviews its available for sale investments for impairment at the end of each period.  Investments in debt securities are considered impaired when the fair value of the debt security is below its amortized cost. If an impairment exists and the Company determines it has intent to sell the debt security or if it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis, an other-than-temporary impairment loss is recognized in earnings to write the debt security down to its fair value. However, even if the Company does not expect to sell the debt security, it must evaluate expected cash flows to be received and determine if a credit loss exists. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized in earnings. Amounts relating to factors other than credit losses are recognized in other comprehensive income (loss). The Company did not record any other-than-temporary write-downs in the accompanying financial statements.

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Basis Of Presentation

9 Months Ended

Sep. 30, 2013

Basis Of Presentation [Abstract]

Basis Of Presentation

1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PLX Technology, Inc. and its wholly-owned subsidiaries (collectively, “PLX” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals) that management considers necessary for a fair presentation of the Company’s financial position, operating results and cash flows for the interim periods presented. Operating results and cash flows for interim periods are not necessarily indicative of results for the entire year.

On September 20, 2012, the Company completed the sale of its physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement between the Company and Aquantia Corporation dated September 14, 2012.  On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of its digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line.  The operations of the PHY related business have been segregated from continuing operations and are presented as discontinued operations in the Company’s consolidated statement of operations for all periods presented.

The unaudited condensed consolidated financial statements include all of the accounts of the Company and those of its wholly-owned subsidiaries.  All intercompany accounts and transactions have been eliminated.

This financial data should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and such differences may be material to the financial statements.

Accumulated Other Comprehensive Loss

The changes in the components of accumulated comprehensive loss were as follows (in thousands):

	Unrealized gain		Foreign currency
	on marketable securities		translation adjustments		Total
Balance at January 1, 2013	$	1	$	(227)	$	(226)
Current period net change		-		(41)		(41)
Balance at September 30, 2013	$	1	$	(268)	$	(267)

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery or customer acceptance, where applicable, has occurred, the fee is fixed or determinable, and collection is reasonably assured.

Revenue from product sales to direct customers and distributors is recognized upon shipment and transfer of risk of loss, if the Company believes collection is reasonably assured and all other revenue recognition criteria are met. The Company assesses the probability of collection based on a number of factors, including past transaction history and the customer’s creditworthiness.  At the end of each reporting period, the sufficiency of allowances for doubtful accounts is assessed based on the age of the receivable and the individual customer’s creditworthiness.

The Company offers pricing protection to two distributors whereby the Company supports the distributor’s resale product margin on certain products held in the distributor’s inventory. The Company analyzes current requests for credit in process, also known as ship and debits, and inventory at the distributor to determine the ending sales reserve required for this program.  The Company also offers stock rotation rights to twodistributors such that they can return up to a total of 5% of products purchased every six months in exchange for other PLX products of equal value. The Company analyzes inventory at distributors, current stock rotation requests and past experienceto determine the ending sales reserve required for this program. Provisions for reserves are charged directly against revenue and the related reserves are recorded as a reduction to accounts receivable.

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Discontinued Operations (Components Of Gain On Divestiture) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended		12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012		Sep. 30, 2012		Dec. 31, 2012
Discontinued Operations [Abstract]
Cash proceeds from sale (including fair value amount held escrow)						$ 12,000
Inventory transferred	(1,254)					(1,254)
Fixed assets transferred	(631)					(631)
Intangible assets write-off						(5,783)
Goodwill write-off						(877)
Disposal group including discontinued operation other adjustments	(5)					(5)
Gain on disposal	$ 1,400	$ 2,097	[1]	$ 2,097	[1]	$ 3,450

[1] The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012

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Line Of Credit (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2013	Apr. 22, 2013	Sep. 30, 2011
Line of credit facility borrowing capacity		$ 15.0	$ 10.0
Prime rate on line of credit facility	3.25%
Line of credit facility amount outstanding	6.0
Line of credit facility remaining availability	8.1
Line of credit, expiration date	Sep. 30, 2015
Letter of Credit [Member]
Irrevocable letter of credit issued	$ 0.8

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Share-Based Compensation (Schedule Of Share-Based Compensation And Employee Stock Ownership Plan Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 545	$ 1,040		$ 1,823		$ 2,523
Cost Of Revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	9	49				98
Research And Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	193	349		609		719
Selling, General And Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	343	516		1,268		1,189
Discontinued Operations [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense		$ 126	[1]	$ (54)	[1]	$ 517	[1]

[1] Recorded in loss from discontinued operations in the Condensed Consolidated Statements of Operations.

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Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations [Abstract]

Discontinued Operations

13. Discontinued Operations

On September 20, 2012, the Company completed the sale of its physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement (the “Aquantia APA”) between the Company and Aquantia Corporation for $2.0 million in cash.

On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of its digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line. Under the terms of the Entropic APA, the Company continued to have an obligation to complete the development in process.  The agreement provided for $3.0 million upon closing and up to $5.0 million in future payments.  Future payments consisted of a milestone payment of $2.0 million in connection with product acceptance, a $2.0 million escrow payment relating to certain representations, warranties and indemnities made by PLX and is due to be released to PLX twelve months after product acceptance and a $1.0 million milestone payment in the event a third party royalty arrangement is secured.  In conjunction with the Entropic APA, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with Entropic which provided a fully paid, non-exclusive, royalty free license to certain of the physical layer 10GBase-T integrated circuit technology which provided for a $4.0 million payment from Entropic to the Company upon signing.  In connection with the Transaction with Aquantia, on November 21, 2012, the Company negotiated a modification to the Agreement with Entropic that amended and restated the product acceptance milestone such that the milestone was deemed to have occurred upon execution of the amendment and changed the associated consideration from $2.0 million to $1.4 million.In exchange, the obligation of PLX to complete the development of the product was assumed by Entropic.

The consideration for the combined sale of the PHY business totaled $12.0 million and consisted of cash received at closing in connection with the Aquantia APA of $2.0 million, the Entropic APA of $3.0 million and the License Agreement of $4.0 million, the accelerated product acceptance milestone payment of $1.4 million and the rights to the estimated fair value of the escrow payment under the Entropic APA of $1.6 million.  The estimated fair value of the escrow payment is included in the Company’s balance sheet as other current assets and is based on assumptions made regarding potential claims against the escrow using historical and market data and is subject to change.  Future payments of up to $1.0 million which are contingent on future milestone achievements were not included in the initial consideration and will be accounted for when they are received. The Company recorded a gain of $3.5 million in 2012 related to this divestiture, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012. The following table summarizes the components of the gain (in thousands):

Cash proceeds from sale (including fair value amount held escrow)	$	12,000
Less carrying value of assets transferred and asset write-offs:
Inventory transferred		(1,254)
Fixed assets transferred		(631)
Intangible assets write-off		(5,783)
Goodwill write-off		(877)
Other adjustments		(5)
Gain on disposal	$	3,450

The following is selected financial information included in net loss from discontinued operations:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	in thousands
Revenues	$	-	$	1,435	$	-	$	2,947
Gain on disposal (1)		-		2,097		-		2,097
Loss before income taxes		-		(3,935)		(57)		(27,363)
Provision for income taxes		-		(922)		-		(398)
Loss from discontinued operations	$	-	$	(3,013)	$	(57)	$	(26,965)

(1) The Company recorded a gain on disposal of $3.5 million in 2012, of which $2.1 million was recorded in the third quarter of 2012. As a result of the November 2012 Entropic amendment, $1.4 million recoded as a gain in the fourth quarter of 2012.

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Line Of Credit

9 Months Ended

Sep. 30, 2013

Line Of Credit [Abstract]

Line Of Credit

9. Line of Credit

On September 30, 2011, the Company entered into an agreement with Silicon Valley Bank to establish a two-year $10.0 million revolving loan facility. On April 22, 2013, the agreement was amended to increase the facility to $15.0 million and extend the maturity date to September 30, 2015. The facility provides for revolving advances based on a borrowing-base formula tied to the Company’s receivables and also provides for month-end and fiscal quarter-end advances beyond the borrowing-base formula subject to certain limitations and requirements.  Borrowings under the credit facility bear interest at rates equal to the prime rate announced from time to time in The Wall Street Journal. As of September 30, 2013 the prime rate was 3.25%. The facility also provides for commitment, unused facility and letter-of-credit fees.  The facility is secured by liens on the Company’s personal property assets except for intellectual property, which is subject to a negative pledge against encumbrance. As of September 30, 2013 there is $6.0 million outstanding against the facility. In addition, the Company issued an irrevocable letter of credit of $0.8 million against the facility for the bond issued as a result of the judgment in the Internet Machines litigation. Borrowing availability as of September 30, 2013 was $8.1 million. Interest payments are paid monthly with principal due at maturity.

The facility is subject to certain financial covenants for EBITDA, as defined in the agreement, and a monthly quick ratio computation (PLX’s cash, investments and accounts receivable divided by current liabilities). The Company was in compliance with all financial covenants associated with this facility as of September 30, 2013.

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Share-Based Compensation [Abstract]

Schedule Of Weighted-Average Fair Value Calculations Based On Weighted Average Assumptions

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Risk-free interest rate		1.18%		0.55%		0.96%		0.68%
Expected volatility		57.10%		64.10%		59.40%		62.90%
Expected life (years)		4.34		4.35		4.34		4.35

Schedule Of Share-Based Compensation And Employee Stock Ownership Plan Expenses

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Cost of revenues	$	9	$	49	$	-	$	98
Research and development		193		349		609		719
Selling, general and administrative		343		516		1,268		1,189
Discontinued operations (1)		-		126		(54)		517
Total share-based compensation expense	$	545	$	1,040	$	1,823	$	2,523

(1) Recorded in loss from discontinued operations in the Condensed Consolidated Statements of Operations.

Summary Of Stock Option Activity

				Weighted Average
				Remaining	Aggregate
	Number of	Weighted Average		Contractual Term	Intrinsic
Options	Shares	Exercise Price		(in years)	Value
Outstanding at December 31, 2012	4,212,552	$	4.11	3.76	$	1,751,614
Granted	1,160,000		4.59
Exercised	(440,101)		3.53
Cancelled	(309,193)		5.55
Outstanding at September 30, 2013	4,623,258	$	4.19	4.25	$	9,332,201
Exercisable at September 30, 2013	2,717,241	$	4.04	3.15	$	6,199,818

Summary Of Ranges Of Outstanding And Exercisable Options

	Options Outstanding				Options Exercisable
		Weighted Average
		Remaining	Weighted			Weighted
		Contractual Term	Average			Average
Range of Exercise Prices	Number	(in years)	Exercise Price		Number	Exercise Price
$1.80-$2.69	986,382	2.65	$	2.12	912,678	$	2.07
$2.70-$4.10	1,394,904	4.67		3.82	781,570		3.75
$4.11-$4.55	966,000	6.40		4.54	114,000		4.53
$4.56-$6.66	1,003,548	4.10		5.11	636,569		5.03
$6.67-$15.58	272,424	0.88		8.91	272,424		8.91
Total	4,623,258	4.25	$	4.19	2,717,241	$	4.04

Summary Of Activity For Nonvested Restricted Stock Units

	Nonvested Restricted Stock Units
	Number of	Weighted Average
	Shares	Grant-Date Fair Value
December 31, 2012	240,100	$	6.20
Vested	(240,100)	$	6.20
September 30, 2013	-	$	-

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Basis Of Presentation (Policy)

9 Months Ended

Sep. 30, 2012

Basis Of Presentation [Abstract]

Use Of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and such differences may be material to the financial statements.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery or customer acceptance, where applicable, has occurred, the fee is fixed or determinable, and collection is reasonably assured.

Revenue from product sales to direct customers and distributors is recognized upon shipment and transfer of risk of loss, if the Company believes collection is reasonably assured and all other revenue recognition criteria are met. The Company assesses the probability of collection based on a number of factors, including past transaction history and the customer’s creditworthiness.  At the end of each reporting period, the sufficiency of allowances for doubtful accounts is assessed based on the age of the receivable and the individual customer’s creditworthiness.

The Company offers pricing protection to two distributors whereby the Company supports the distributor’s resale product margin on certain products held in the distributor’s inventory. The Company analyzes current requests for credit in process, also known as ship and debits, and inventory at the distributor to determine the ending sales reserve required for this program.  The Company also offers stock rotation rights to twodistributors such that they can return up to a total of 5% of products purchased every six months in exchange for other PLX products of equal value. The Company analyzes inventory at distributors, current stock rotation requests and past experienceto determine the ending sales reserve required for this program. Provisions for reserves are charged directly against revenue and the related reserves are recorded as a reduction to accounts receivable.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013
Entity Registrant Name	PLX TECHNOLOGY INC
Entity Central Index Key	0000850579
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	45,696,349

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Basis Of Presentation (Tables)

9 Months Ended

Sep. 30, 2013

Basis Of Presentation [Abstract]

Schedule Of Accumulated Comprehensive Loss

	Unrealized gain		Foreign currency
	on marketable securities		translation adjustments		Total
Balance at January 1, 2013	$	1	$	(227)	$	(226)
Current period net change		-		(41)		(41)
Balance at September 30, 2013	$	1	$	(268)	$	(267)