Inventories and Deferred Cost of Sales

Inventories consisted of the following (in thousands):



	December 31, 2015			December 31, 2014
Raw materials	$	14,546		$	9,219
Work-in-process	98			1,195
Finished goods	7,485			10,762
	22,129			21,176
Less: inventory valuation allowance	(5,317		)	(2,701		)
Inventories, net	$	16,812		$	18,475

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 $11.5 million and $2.6 million at December 31, 2015 and 2014.

The Company’s consignment inventory with its contract manufacturer consists of inventory transferred from the Company’s prior contract manufacturer as well as inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand. The Company is contractually obligated to purchase inventory transferred from the Company's prior contract manufacturer after the inventory ages for 365 days. The Company is also contractually obligated to purchase inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand when the inventory ages beyond 180 days and has no forecasted demand. The Company’s consignment inventory at its contract manufacturing partner was $8.7 million and $0.1 million as of December 30, 2015 and December 31, 2014. The Company records a liability for adverse purchase commitments of inventory owned by its contract manufacturing partner. See Note 13 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability.

The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability for the years ended December 31 (in thousands):



	2015			2014		2013
Inventory, net	$	1,476		$	2,412	$	3,302
Inventory deposit, net	(29		)	126		945
Adverse purchase commitments	1,831			323		327

The following is a summary of the change in the Company’s inventory valuation allowance for the years ended December 31 (in thousands):



	2015			2014
Inventory valuation allowance, beginning of the year	$	2,701		$	7,037
Usage:
Inventory scrapped	(151		)	(5,768		)
Inventory utilized	(856		)	(1,005		)
Subtotal—usage	(1,007		)	(6,773		)
Write-downs of inventory valuation	2,332			3,417
Transfer from other liabilities ^(A)	1,291			(1,013		)
Transfer from inventory deposit valuation allowance	—			33
Inventory valuation allowance, end of the year	$	5,317		$	2,701


(A)	Transfer from other liabilities is related to obsolete inventory purchased from contract manufacturers during the year which was previously reserved for as an adverse purchase commitment. (Note 9—Other Accrued and Other Long-Term Liabilities and Note 13—Commitments and Contingencies.)

Deferred cost of sales are related to deferred revenue on shipments to customers and was $14.1 million and $0.2 million at December 31, 2015 and 2014.