Fair Value Measurements

6 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements [Text Block]

Fair Value Measurements

Under FASB guidance, fair value is defined as the price expected to be received from the sale of an asset or paid to transfer a liability in a transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The FASB guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that the market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available at that time. The fair value hierarchy is broken down into the following three levels based on the reliability of inputs:

• Level 1 – Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices which are readily and regularly available in an active market, valuation of these products can be done without a significant degree of judgment.

• Level 2 – Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments and model-derived valuations in which all significant inputs and significant value drives are observable in active markets.

• Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

As of March 31, 2012, the Company’s financial assets utilizing Level 1 inputs included a short-term investment security traded on an active securities exchange. The Company did not have any financial assets utilizing Level 2 or Level 3 inputs at March 31, 2012 and September 30, 2011.

The following table represents the Company’s fair value hierarchy for financial assets measured at fair value on a recurring basis:

	March 31, 2012		September 30, 2011
	(Level 1)		(Level 1)
	(In thousands)
Money market instruments (1)	$	34,299	$	34,281
Semiconductor Manufacturing International Corp.
(SMIC) common stock (2)	1,482		1,497
	$	35,781	$	35,778

(1) Included in cash and cash equivalents

(2) Included in short-term investments

There were no transfers in or out of our Level 1 assets during the three months ended March 31, 2012.

As of March 31, 2012, the Company did not have any liabilities or non-financial assets that are measured on a fair value basis on a recurring basis.

Available-for-sale marketable securities consisted of the following:

March 31, 2012	Amortized Cost			Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
				(In thousands)
Money market instruments	$	34,299		$	—	$	—		$	34,299
Certificates of deposit	11,869			—		—			11,869
SMIC common stock	3,426			—		(1,944		)	1,482
Total	49,594			—		(1,944		)	47,650
Less: Amounts included in cash, cash equivalents
and restricted cash	(43,169		)	—		—			(43,169		)
	$	6,425		$	—	$	(1,944	)	$	4,481
September 30, 2011	Amortized Cost			Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
				(In thousands)
Money market instruments	$	34,281		$	—	$	—		$	34,281
Certificates of deposit	12,051			—		—			12,051
SMIC common stock	3,426			—		(1,929		)	1,497
Total	49,758			—		(1,929		)	47,829
Less: Amounts included in cash, cash equivalents
and restricted cash	(43,068		)	—		—			(43,068		)
	$	6,690		$	—	$	(1,929	)	$	4,761

As of March 31, 2012 and September 30, 2011, the gross unrealized holding losses were related to our SMIC common stock that had been in a continuous loss position for less than twelve months.

The Company determined that the decline in the fair value of SMIC was not other than temporary based on the Company's assessment that the decline was primarily a result of historically volatile semiconductor stock prices. The Company also considered the severity and the duration of the impairment of its SMIC investment which had risen above the Company's cost basis during fiscal 2011. The Company uses the weighted-average cost method to determine the cost basis of shares of SMIC.            

The Company had no debt securities at March 31, 2012 and September 30, 2011. As of March 31, 2012 and September 30, 2011, the Company had cash, cash equivalents and short-term investments of $30.1 million ($3.1 million of which is in China and subject to exchange control regulations) and $41.6 million, respectively, in foreign financial institutions.