Concentration of Risk

9 Months Ended

Oct. 30, 2016

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



	Three Months Ended				Nine Months Ended
(percentage of net sales)	October 30, 2016		October 25, 2015		October 30, 2016		October 25, 2015
Arrow (and affiliates)	11	%	10	%	9	%	9	%

The Company did not have any customer that accounted for at least 10% of total net receivables as of October 30, 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, including 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 third quarter of fiscal years 2017 and 2016, respectively, approximately 24% and 29%, 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 third quarter of fiscal year 2017, authorized distributors accounted for approximately 64% of the Company’s net sales compared to approximately 56% in the third 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 third quarter of fiscal year 2017, our two largest distributors were based in Asia.