Geographic Information and Concentration of Risk

3 Months Ended

Apr. 27, 2014

Risks and Uncertainties [Abstract]

Geographic Information and Concentration of Risk

Geographic Information and Concentration of Risk

The Company operates exclusively in the semiconductor industry and primarily within the analog and mixed-signal sector.

Net sales activity by geographic region is as follows:

	Three Months Ended
	April 27, 2014		April 28, 2013
Asia-Pacific	74	%	73	%
North America	14	%	16	%
Europe	12	%	11	%
	100	%	100	%

The Company generally attributes sales to a country based on the ship-to address. The table below summarizes sales activity to countries that represented greater than 10% of total net sales:

	Three Months Ended
(percentage of total sales)	April 27, 2014		April 28, 2013
China (including Hong Kong)	34	%	34	%
United States	13	%	15	%
South Korea	11	%	13	%
Japan	10	%	10	%

Income (loss) from continuing operations before income taxes is as follows:

	Three Months Ended
(in thousands)	April 27, 2014			April 28, 2013
Domestic	$	(5,137	)	$	(6,414	)
Foreign	14,621			21,625
Total	$	9,484		$	15,211

Sales to the Company’s customers are generally made on open account, subject to credit limits the Company may impose, and the receivables are subject to the risk of being uncollectible.

Each of the following significant customers accounted for at least 10% of net sales for at least one of the periods indicated:

	Three Months Ended
(percentage of net sales)	April 27, 2014		April 28, 2013
Samsung Electronics (and affiliates)	14	%	14	%
Huawei Technologies (and affiliates)	4	%	10	%

The following table shows the list of customers that have an outstanding receivable balance that represents at least 10% of total net receivables for at least one of the periods indicated:

	Balance as of
(percentage of net accounts receivable)	April 27, 2014		January 26, 2014
Samsung Electronics (and affiliates)	16	%	13	%

Outside Subcontractors and Suppliers

The Company relies on a limited number of outside subcontractors and suppliers for the production of silicon wafers, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors, due to natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. Several of the Company’s outside subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Taiwan, Europe and Israel. The Company’s largest source of silicon wafers is an outside foundry located in China and a significant amount of the Company’s assembly and test operations are conducted by third-party contractors in China, Malaysia, Taiwan, Thailand, Korea and the Philippines. For the first quarter of fiscal years 2015 and 2014, respectively, approximately 54% and 40% of the Company's silicon in terms of cost of wafers was supplied by a third-party foundry in China, and this percentage could be higher in future periods.

In the first quarter of fiscal year 2015, authorized distributors accounted for approximately 53% of the Company's net sales compared to 43% in the fourth quarter of fiscal year 2014. Generally, the Company does not have long-term contracts with its distributors and most can terminate their agreement with little or no notice. For the first quarter of fiscal year 2015, the Company's two largest distributors were based in Asia.