Concentration of Risk

12 Months Ended

Jan. 31, 2016

Geographic Information and Concentration of Risk

Concentration of Risk

Significant Customers

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.

The following significant customer accounted for at least 10% of net sales in one or more of the periods indicated:



	Fiscal Year Ended
(percentage of net sales)	January 31, 2016		January 25, 2015		January 26, 2014
Samsung Electronics (and affiliates)	7	%	11	%	12	%

The following table shows the customer that has an outstanding receivable balance that represents at least 10% of total net receivables as of one or more of the dates indicated:



	Balance as of
(percentage of net accounts receivable)	January 31, 2016		January 25, 2015
Samsung Electronics (and affiliates)	5	%	12	%

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 fiscal year 2016, approximately 28% 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. For fiscal years 2015 and 2014, approximately 37% and 38% of the Company’s silicon in terms of cost of wafers was supplied by this third-party foundry in China, respectively.

In fiscal year 2016, authorized distributors accounted for approximately 58% of the Company’s net sales. Generally, the Company does not have long-term contracts with its distributors and most can terminate their agreement with little or no notice. For fiscal year 2016, our two largest distributors were based in Asia.