Inventories

Inventories consisted of the following (in thousands):



	September 30, 2012			December 31, 2011
Raw materials	$	11,171		$	10,925
Work-in-process	1,066			599
Finished goods	10,891			20,127
	23,128			31,651
Less: inventory valuation allowance	(2,635		)	(4,640		)
Inventories, net	$	20,493		$	27,011



	September 30, 2012			December 31, 2011
Inventory deposit ^(A)	$	11,929		$	11,578
Less: inventory deposit valuation allowance	(2,455		)	(3,135		)
Inventory deposit, net	$	9,474		$	8,443

(A)

The Company is contractually obligated to reimburse its contract manufacturer for the cost of excess inventory that has been purchased as a result of the Company's forecasted demand when there is no alternative use. The Company's inventory deposit represents a cash deposit paid to its contract manufacturer for inventory in excess of near term demand. The deposit is recorded net of adverse purchase commitment liabilities, and therefore the net balance of the deposit represents inventory the Company believes will be utilized. The deposit will be applied against future adverse purchase commitments owed to the Company's contract manufacturers or reduced based on the usage of inventory. See Note 10 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability.

Consigned inventory is held at third-party locations, including the Company's contract manufacturing partner and customers. The Company retains title to the inventory until purchased by the third-party. Consigned inventory, consisting of raw materials and finished goods, was $0.5 million and $3.8 million at September 30, 2012 and December 31, 2011.

The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Inventory, net	$	384	$	815	$	1,415	$	1,637
Inventory deposit, net	158		394		521		802
Adverse purchase commitments	(84)		28		(112)		825