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



	Fiscal Year Ended
(percentage of net sales)	January 28, 2018		January 29, 2017		January 31, 2016
Arrow Electronics (and affiliates)	11	%	10	%	9	%
Trend-tek Technology Ltd (and affiliates)	10	%	10	%	7	%
Samsung Electronics (and affiliates)	8	%	7	%	7	%
Premier Technical Sales Korea, Inc. (and affiliates) ⁽¹⁾	6	%	4	%	3	%

⁽¹⁾ Premier is a distributor with a concentration of sales to Samsung. The above percentages represent the Company's estimate of the sales activity related to Samsung that is passing through this distributor.

The Company did not have any customer that accounted for at least 10% of total net receivables as of January 28, 2018 or January 29, 2017.

Outside Subcontractors and Suppliers

The Company relies on a limited number of third-party 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 third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Israel and Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in China, Malaysia, Taiwan, Thailand, South Korea and the Philippines. For fiscal year 2018, approximately 20% 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 2017 and 2016, approximately 25% and 28% of the Company’s silicon in terms of cost of wafers was supplied by this third-party foundry in China, respectively.

In fiscal year 2018, authorized distributors accounted for approximately 66% 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 2018, our two largest distributors were based in Asia.