Concentration of Risk

3 Months Ended

May. 01, 2016

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



	Three Months Ended
(percentage of net sales)	May 1, 2016		April 26, 2015
Trend-tek Technology Ltd (and affiliates)	12	%	7	%

The Company did not have any customer that accounted for at least 10% of total net receivables as of May 1, 2016 or January 31, 2016.

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 2017 and 2016, respectively, approximately 25% and 30%, respectively, of the Company’s silicon in terms of cost of wafers was supplied by a third-party foundry in China, and these percentages could be higher in future periods.

In the first quarter of fiscal year 2017, authorized distributors accounted for approximately 65% of the Company’s net sales compared to approximately 64% in the first quarter of fiscal year 2016. 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 2017, our two largest distributors were based in Asia.