10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

COMMISSION FILE NUMBER 000-26124

IXYS CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	77-0140882
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1590 BUCKEYE DRIVE

MILPITAS, CALIFORNIA 95035-7418

(Address of principal executive offices and Zip Code)

(408) 457-9000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of October 28, 2015 was 31,460,311.

IXYS CORPORATION

FORM 10-Q

September 30, 2015

INDEX

		Page
PART I - FINANCIAL INFORMATION			3
ITEM 1.	FINANCIAL STATEMENTS		3
	UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS		3
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS		4
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		5
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS		6
	NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		30
ITEM 4.	CONTROLS AND PROCEDURES		30
PART II – OTHER INFORMATION			31
ITEM 1.	LEGAL PROCEEDINGS		31
ITEM 1A.	RISK FACTORS		31
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		46
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		46
ITEM 4.	MINE SAFETY DISCLOSURES		46
ITEM 5.	OTHER INFORMATION		46
ITEM 6.	EXHIBITS		46

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	September 30, 2015			March 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	116,851		$	121,164
Restricted cash		1,244			266
Accounts receivable, net of allowances of $2,186 at September 30, 2015 and $2,768 at March 31, 2015		38,865			41,042
Inventories		86,362			82,005
Prepaid expenses and other current assets		3,643			3,413
Deferred income taxes		7,085			7,077
Total current assets		254,050			254,967
Property, plant and equipment, net		43,534			42,545
Intangible assets, net		9,676			10,384
Goodwill		42,616			27,375
Deferred income taxes		24,983			24,880
Other assets		13,134			13,704
Total assets	$	387,993		$	373,855
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capitalized lease obligations	$	55		$	464
Current portion of loans payable		47,812			45,790
Accounts payable		12,753			12,675
Accrued expenses and other current liabilities		23,439			19,865
Total current liabilities		84,059			78,794
Long term loans, net of current portion		6,114			3,433
Pension liabilities		17,179			17,232
Other long term liabilities		7,244			7,095
Total liabilities		114,596			106,554
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized: 5,000,000 shares; none issued and outstanding		—			—
Common stock, $0.01 par value:
Authorized: 80,000,000 shares; 38,168,708 issued and 31,455,311 outstanding at September 30, 2015 and 38,116,884 issued and 31,674,782 outstanding at March 31, 2015		382			381
Additional paid-in capital		211,978			209,707
Treasury stock, at cost: 6,713,397 common shares at September 30, 2015 and 6,442,102 common shares at March 31, 2015		(60,424	)		(56,833	)
Retained earnings		141,018			137,134
Accumulated other comprehensive loss		(19,557	)		(23,088	)
Total stockholders’ equity		273,397			267,301
Total liabilities and stockholders’ equity	$	387,993		$	373,855

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
Net revenues	$	80,257		$	86,435		$	162,304		$	174,515
Cost of goods sold		54,245			60,265			110,690			123,345
Gross profit		26,012			26,170			51,614			51,170
Operating expenses:
Research, development and engineering		7,804			6,948			15,487			14,198
Selling, general and administrative		9,801			10,713			20,437			21,477
Amortization of acquired intangible assets		1,374			1,419			2,953			3,126
Total operating expenses		18,979			19,080			38,877			38,801
Operating income		7,033			7,090			12,737			12,369
Other income (expense):
Interest income		39			49			86			96
Interest expense		(284	)		(322	)		(598	)		(732	)
Other income (expense), net		(1,010	)		2,165			(1,800	)		2,373
Income before income tax provision		5,778			8,982			10,425			14,106
Provision for income tax		(2,505	)		(3,235	)		(4,167	)		(4,784	)
Net income	$	3,273		$	5,747		$	6,258		$	9,322
Net income per share:
Basic	$	0.10		$	0.18		$	0.20		$	0.30
Diluted	$	0.10		$	0.18		$	0.19		$	0.29
Cash dividends per common share	$	0.040		$	0.035		$	0.075		$	0.065
Weighted average shares used in per share calculation:
Basic		31,651			31,499			31,769			31,439
Diluted		32,380			32,235			32,627			32,142

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
Net income	$	3,273		$	5,747		$	6,258		$	9,322
Foreign currency translation adjustments		869			(7,820	)		3,561			(8,100	)
Changes in market value of investments:
Changes in unrealized loss, net of tax benefits of $(124) and $(202) for the three and six months ended September 30, 2015, respectively, and net of tax benefits of $(188) and $(342) for the three and six months ended September 30, 2014, respectively		(185	)		(350	)		(302	)		(638	)
Reclassification adjustment for net losses (gains) realized in net income, net of tax expenses of $182 for the three and six months ended September 30, 2015, respectively and net of tax expense (benefit) of $0 and $(11) for the three and six months ended September 30, 2014, respectively		272			—			272			(19	)
Net change in market value of investments		87			(350	)		(30	)		(657	)
Total comprehensive income (loss)	$	4,229		$	(2,423	)	$	9,789		$	565

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income	$	6,258		$	9,322
Adjustments to reconcile net income to net cash provided by operating activities, net of assets acquired and liabilities assumed:
Depreciation and amortization		7,145			9,148
Provision for receivable allowances		2,903			5,516
Net change in inventory provision		703			1,653
Stock-based compensation		1,691			1,378
Loss (gain) on investments		650			(34	)
Foreign currency adjustments on intercompany amounts and other non-cash items		719			(2,054	)
Changes in operating assets and liabilities, net of business acquired:
Accounts receivable		1,239			(3,249	)
Inventories		(3,218	)		(5,310	)
Prepaid expenses and other current assets		(634	)		5,016
Other assets		(68	)		790
Accounts payable		(583	)		(1,067	)
Accrued expenses and other liabilities		1,772			2,232
Pension liabilities		(617	)		(657	)
Net cash provided by operating activities		17,960			22,684
Cash flows from investing activities:
Change in restricted cash		(879	)		(356	)
Purchase of business, net of cash and cash equivalents acquired		(14,571	)		(2,297	)
Purchases of property and equipment		(4,445	)		(4,609	)
Changes in investments		21			54
Net cash used in investing activities		(19,874	)		(7,208	)
Cash flows from financing activities:
Principal payments on capital lease obligations		(419	)		(1,336	)
Repayments of loans and notes payable		(937	)		(629	)
Installment payment for business acquisition		—			(15,000	)
Proceeds from loans		3,317			30,000
Proceeds from employee equity plans		3,431			1,430
Purchases of treasury stock		(6,440	)		—
Payment of cash dividends to stockholders		(2,374	)		(2,047	)
Net cash provided by (used in) financing activities		(3,422	)		12,418
Effect of exchange rate fluctuations on cash and cash equivalents		1,023			(1,388	)
Net increase (decrease) in cash and cash equivalents		(4,313	)		26,506
Cash and cash equivalents at beginning of period		121,164			98,438
Cash and cash equivalents at end of period	$	116,851		$	124,944

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31, 2015 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2015, or fiscal 2015, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

2. Recent Accounting Pronouncements and Accounting Changes

In May 2014, the Financial Accounting Standards Board, or FASB, issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In April 2015, FASB issued the authoritative guidance that requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The guidance will be effective for fiscal years beginning after December 15, 2015, and interim periods during the annual period, with early adoption permitted for financial statements that have not been previously issued. The new standard is required to be applied retrospectively to all prior periods presented in the financial statements. An entity is also required in the year of adoption (and in interim periods within that year) to provide certain disclosures about the change in accounting principle, including the nature of and reason for the change, the transition method, a description of the prior period information that has been retrospectively adjusted and the effect of the change on the financial statements line items (that is, debt issuance cost asset and the debt liability). We do not expect this guidance to have a significant impact on our consolidated financial statements. In August 2015, FASB issued the authoritative guidance that added Securities and Exchange Commission, or SEC, content. The guidance issued in April 2015 did not directly address the manner in which debt issuance costs relating to a line of credit arrangement are treated. The SEC staff clarified that they would not object to the balance sheet presentation of such costs as an asset (i.e., a deferred charge) to be subsequently amortized ratably over the term of the line of credit arrangement, even if there are no borrowings outstanding on the underlying line of credit arrangement.

In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330, Inventory, for inventory that is measured using the methods other than last-in, first-out (LIFO) and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for us from the fiscal years beginning after December 15, 2016 and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

In September 2015, FASB issued an amendment to modify the guidance related to measurement-period adjustments in Topic 805, Business Combinations. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. It also requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the

7

acquisition date. It eliminates the requirement to retrospectively account for those adjustments. The guidance will be effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods during the annual period. The new standard is required to be applied prospectively to adjustments to provisional amounts that occur after the aforementioned effective date with earlier application permitted for financial statements that have not yet been issued. We do not expect this guidance to have a significant impact on our consolidated financial statements. The impact on earnings due to measurement period adjustments will be disclosed in the relevant notes to the financial statements.

In October 2015, FASB ratified a proposed Accounting Standards Update, or ASU, which requires presentation of deferred tax assets and liabilities as noncurrent in a classified balance sheet. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods during the annual period. Early application is permitted as of the beginning of any interim or annual reporting period. We do not expect this guidance to have a significant impact on our consolidated financial statements.

3. Business Combinations

RadioPulse, Inc.

On May 1, 2015, we acquired RadioPulse, Inc., or RadioPulse. Based in South Korea, RadioPulse is a fabless semiconductor company that develops, manufactures and sells wireless network technology solutions based on the ZigBee® protocol, which combines microcontrollers and radio frequency devices. RadioPulse’s solutions are designed to enable a broad range of power-sensitive applications in the industrial, medical, consumer, smart grid and Internet of Things, or IoT, markets. RadioPulse offers a complementary product portfolio to IXYS’s product lines. At closing, we paid cash consideration of $14.7 million. The consideration may also include earnout payments aggregating up to $6.0 million payable over three years. The earnout payments are subject to certain financial thresholds related to net revenues, gross profit and net income. Based on our preliminary valuation the fair value of the liability for the earnout payment is estimated to be nil. In connection with the acquisition, we incurred and expensed $248,000 in legal and consulting costs and $249,000 in acquisition related compensation costs.

The following table summarizes the preliminary values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Preliminary Purchase Consideration Allocation
	(unaudited)
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		616
Identifiable intangible assets		2,523
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(2,916	)
Total identifiable net liabilities		(494	)
Goodwill		15,162
Total purchase consideration	$	14,668

During the quarter ended September 30, 2015, we recorded adjustments that reduced the value of goodwill by $190,000. The adjustments were primarily related to increases in the fair value of accounts receivable and accrued and other liabilities of $471,000 and $283,000, respectively.

Identifiable intangible assets consisted of developed intellectual property, in-process research and development expenses, customer relationships and contract backlog. The value reflected in the table represents the preliminary purchase price allocation. We are in the process of completing the valuation of acquired intangible assets, acquired liabilities and tax attributes. The preliminary valuation of the acquired intangibles was classified as a level 3 measurement under the fair value measurement guidance because the preliminary valuation was based on significant unobservable inputs and involved management judgment and assumptions about market participants and pricing. We did not recognize any liability with respect to the contingent consideration based upon our preliminary analysis. We expect to complete the purchase price allocation by December 31, 2015.

8

Identified intangible assets resulting from the RadioPulse acquisition based on our preliminary valuation consisted of the following (in thousands):

	Fair Value (In thousands)		Amortization Method	Estimated Useful Life (In months)
	(unaudited)
Developed intellectual property	$	643	Straight-line		60
In-process research and development expenses (1)		598	Straight-line		60
Customer relationships		1,153	Accelerated		36
Contract backlog		129	Straight-line		6
Total	$	2,523

(1) Amortization will start after the completion of the research and development activities of the related projects.

In determining the preliminary fair value of the acquired intangible assets, we determined the appropriate unit of measure, the exit market and the highest and best use for the assets. The income approach and cost approach were used to estimate the fair value. The income approach indicates the fair value of an asset based on the value of the cash flows that the asset can be expected to generate in the future through a discounted cash flow method. The income approach was used to determine the fair values of developed intellectual property, in-process research and development expenses, contract backlog and customer relationships. The goodwill arising from the acquisition was largely attributable to the synergies expected to be realized after our acquisition and integration of RadioPulse. The goodwill is not deductible for tax purposes.

RadioPulse contributed net revenues of $930,000 and $2.2 million to our unaudited condensed consolidated statements of operations for the three and six month periods ended September 30, 2015, respectively. The net losses of RadioPulse during the same periods ended September 30, 2015 were $1.2 million and $2.4 million, respectively, based on the preliminary purchase consideration valuation. The financial statements of RadioPulse were immaterial compared to our financial statements and therefore pro-forma financial statements have not been separately presented.

Other Acquisition

In the quarter ended June 30, 2014 we completed a business acquisition for a cash consideration of $2.3 million, net of cash acquired of approximately $204,000. The acquisition resulted in a goodwill of $2.8 million and we assumed debt of $723,000. The goodwill balance as of September 30, 2015 reflected a cumulative reduction of $490,000 caused by changes in the foreign exchange translation rate. This acquisition was not significant to our unaudited condensed consolidated financial statements.

4. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of non-performance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1	—	Quoted prices for identical instruments in active markets.
Level 2	—	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
Level 3	—	Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

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Fair Value Measurements on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of September 30, 2015 and March 31, 2015 (in thousands):

	September 30, 2015 (1)						March 31, 2015 (1)
			Fair Value Measured at Reporting Date Using						Fair Value Measured at Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	72,444	$	72,444	$	—	$	76,317	$	76,317	$	—
Marketable equity securities (3)		1,263		1,263		—		1,737		1,737		—
Auction rate preferred securities (3)		350		—		350		350		—		350
Total Assets Measured at Fair Value	$	74,057	$	73,707	$	350	$	78,404	$	78,054	$	350
Liabilities
Derivative liabilities (4)		—		—		—		19		—		19
Total Liabilities Measured at Fair Value	$	—	$	—	$	—	$	19	$	—	$	19

(1) We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.

(2) Included in “Cash and cash equivalents” on our unaudited condensed consolidated balance sheets.

(3) Included in “Other assets” on our unaudited condensed consolidated balance sheets.

(4) Included in “Accrued expenses and other current liabilities” on our unaudited condensed consolidated balance sheets.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates. We review any impairment to determine whether it is other than temporarily impaired. This review is based on factors such as length of time of impairment, extent to which the fair value is below the cost basis, financial conditions of the issuer of the security, our expectations of future recoveries and our ability and intent to hold or sell the securities. Based on our review, we recognized an other than temporary impairment loss of $454,000 in marketable equity securities during the quarter and six months ended September 30, 2015.

From time to time, we use derivative instruments to manage exposure to changes in interest rates and currency exchange rates. The fair values of these instruments are recorded on the balance sheets. The changes in the fair value of these instruments are recorded in the current period’s statement of operations and are included in other income (expense), net. We have elected not to designate these instruments as accounting hedges. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. All of our ARPS have credit ratings of at least AA, are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 300 percent. Accordingly, the remaining ARPS balance was categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of September 30, 2015 and March 31, 2015. We currently believe that the ARPS values are not impaired and, as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at amounts that approximate fair value in our unaudited condensed consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

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Our debt, which primarily consists of loans from banks, approximated fair value as the interest rates either adjusted according to the market rates or the interest rates approximated the market rates. The estimated fair value of our debt was approximately $53.9 million and $49.2 million as of September 30, 2015 and March 31, 2015, respectively. Our debt is categorized as Level 2 for fair value measurement. Our pension liabilities, net of plan assets, approximated fair value. See Note 9, “Pension Plans” for a discussion of pension liabilities.

The fair value of contingent consideration for a business acquisition is classified as a Level 3 estimate. See Note 3, “Business Combinations” for a discussion of fair value of contingent consideration.

5. Other Assets

Other assets consist of the following (in thousands):

	September 30, 2015		March 31, 2015
	(unaudited)
Marketable equity securities	$	1,263	$	1,737
Auction rate preferred securities		350		350
Long-term equity investments		10,895		11,041
Other items		626		576
Total	$	13,134	$	13,704

6. Inventories

Inventories consist of the following (in thousands):

	September 30, 2015		March 31, 2015
	(unaudited)
Raw materials	$	16,294	$	17,169
Work in process		40,160		37,491
Finished goods		29,908		27,345
Total	$	86,362	$	82,005

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	September 30, 2015		March 31, 2015
	(unaudited)
Uninvoiced goods and services	$	9,437	$	8,473
Compensation and benefits		7,500		6,230
Income taxes		3,356		2,459
Commissions, royalties and other		3,146		2,703
Total	$	23,439	$	19,865

8. Borrowing Arrangements

Bank of the West

On December 6, 2013, we entered into an Amended and Restated Credit Agreement with Bank of the West, or BOTW, for a revolving line of credit of $50.0 million. All amounts owed under the credit agreement are due and payable on November 30, 2015. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At September 30, 2015, the outstanding principal under the credit agreement was $45.0 million.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin, an alternative base rate plus a margin or a floating rate plus a margin. The margin can range from 0.75% to 2.5%, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The effective interest rate as of September 30, 2015 was 2.01%. An unused commitment fee is also payable. It ranges from 0.25% to 0.625%, depending on leverage.

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The credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At September 30, 2015, we complied with all of these financial covenants.

The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 15, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

On June 10, 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB Deutsche Industriebank, or IKB. At March 31, 2015, the outstanding principal balance was €3.5 million, or about $3.8 million.

In April 2015, we replaced the loan with a new loan from IKB. Under the new agreement, we borrowed €6.5 million, or about $7.0 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $261,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part with a modest penalty. The loan is collateralized by a security interest in the facility in Lampertheim, Germany. At September 30, 2015, the outstanding principal balance was €6.0 million, or about $6.8 million, and we complied with all of these financial covenants.

Loans Assumed from Business Acquisitions

We assumed loans of approximately $2.4 million related to the acquisition of RadioPulse. These loans are primarily short-term facilities from financial institutions and carry a weighted average interest rate of 4.9%. The loans are repayable on or before April 1, 2016. The facilities have been partially secured by bank deposits, which are classified as restricted cash on our unaudited condensed consolidated balance sheets. The outstanding principal on these loans was $1.7 million as of September 30, 2015.

We assumed loans of approximately $723,000 related to an acquisition completed during the quarter ended June 30, 2014. The assumed borrowings were non-interest bearing loans from government agencies to support the research and development activities with maturity dates varying from fiscal 2017 to fiscal 2021, other than a loan of $99,000 that we paid off during the quarter ended September 30, 2014.

9. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees and one for Philippine employees. We deposit funds for the United Kingdom and Philippine plans with financial institutions and make payments to former German employees directly. We accrue for the unfunded portion of obligations. As of September 30, 2015, the German defined benefit plan was completely unfunded and we accrue for its obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. We expect to contribute approximately $994,000 to the United Kingdom and Philippines plans in the fiscal year ending March 31, 2016. The measurement date for the projected benefit obligations and the plan assets is March 31.

The net periodic pension expense includes the following components (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014
	(unaudited)						(unaudited)
Service cost	$	25		$	26		$	51		$	52
Interest cost on projected benefit obligation		371			467			739			940
Expected return on plan assets		(442	)		(494	)		(880	)		(991	)
Recognized actuarial loss		45			18			90			36
Net periodic pension expense	$	(1	)	$	17		$	—		$	37

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Information on Plan Assets

We report and measure the plan assets of our defined benefit pension plans at fair value. The table below sets forth the fair value of our plan assets as of September 30, 2015 and March 31, 2015, using the same three-level hierarchy of fair-value inputs described in Note 4, “Fair Value” (in thousands):

	September 30, 2015										March 31, 2015
Description	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
	(unaudited)										(unaudited)
Cash and cash funds	$	1,157	$	—		$	—	$	1,157		$	2,588	$	—		$	—	$	2,588
Currency contracts		—		(125	)		—		(125	)		—		(30	)		—		(30	)
Equity		3,876		—			—		3,876			19,997		652			7		20,656
Fixed interest		1,101		13,055			1		14,157			861		5,887			1		6,749
Mutual funds		—		9,484			—		9,484			—		—			—		—
Mortgage-backed securities		—		34			—		34			—		16			—		16
Swaps and other		—		249			—		249			2		133			—		135
Total	$	6,134	$	22,697		$	1	$	28,832		$	23,448	$	6,658		$	8	$	30,114

10. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2009 Equity Incentive Plan, the 2011 Equity Incentive Plan and the 2013 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On August 30, 2013, our stockholders approved the 2013 Equity Incentive Plan, or the 2013 Plan, under which 2,000,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan, the 2011 Plan and the 2013 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Stock Awards

Stock awards, denominated restricted stock under the 2009 Plan and the 2011 Plan, may be granted to any employee, director or consultant under the Plans. Pursuant to a stock award, we will issue shares of common stock. Shares that are subject to the restriction will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and non-employee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

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Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and non-employee directors under the Plans. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

Employee Stock Purchase Plan

The Board of Directors has approved the Amended and Restated 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved a total of 1,550,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee’s eligible compensation. During the six months ended September 30, 2015, there were 51,824 shares purchased under the Purchase Plan, leaving approximately 285,691 shares available for purchase under the Purchase Plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
Statement of Operations Classifications	2015		2014		2015		2014
	(unaudited)				(unaudited)
Cost of goods sold	$	124	$	102	$	246	$	210
Research, development and engineering expenses (1)		330		189		791		378
Selling, general and administrative expenses		497		406		903		790
Stock-based compensation effect in income before taxes		951		697		1,940		1,378
Provision for income taxes (2)		333		244		679		482
Net stock-based compensation effects in net income	$	618	$	453	$	1,261	$	896

(1) Includes acquisition-related compensation expenses of $249,000 during the six months ended September 30, 2015.

(2) Calculated at the U.S. statutory federal income tax rate of 35% in fiscal 2016 and 2015.

During the six months ended September 30, 2015, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of September 30, 2015, approximately $8.2 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 3.2 years.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three and six months ended September 30, 2015 and 2014, were based on estimates at the date of grant as follows:

	Stock Options												Purchase Plan (1)
	Three Months Ended September 30,						Six Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014			2015			2014
	(unaudited)						(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	4.31		$	5.54		$	4.83		$	5.54		$	3.15		$	2.90
Risk-free interest rate		1.7	%		1.8	%		1.8	%		1.8	%		0.1	%		0.1	%
Expected term in years		6.35			6.25			6.45			6.25			1.00			0.50
Volatility		42.8	%		52.2	%		44.9	%		52.2	%		33.7	%		34.5	%
Dividend yield		1.3	%		1.0	%		1.2	%		1.0	%		1.1	%		1.1	%

(1) Under the stock purchase plan, rights to purchase shares are only granted during the first and third quarters of each fiscal year.

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Activity with respect to outstanding stock options for the six months ended September 30, 2015 was as follows:

	Number of Shares			Weighted Average Exercise Price Per Share		Intrinsic Value (1)
				(unaudited)		(000)
Balance at March 31, 2015		4,942,511		$	10.37
Options granted		1,124,000		$	11.72
Options exercised		(320,826	)	$	9.15	$	1,291
Options cancelled		(2,500	)	$	12.13
Options expired		(434,788	)	$	14.68
Balance at September 30, 2015		5,308,397		$	10.38
Exercisable at September 30, 2015		3,504,063		$	9.84
Exercisable at March 31, 2015		3,942,261		$	10.20

(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

11. Accumulated Other Comprehensive Income (Loss)

The components and the changes in accumulated other comprehensive loss, net of tax, for the six months ended September 30, 2015 and 2014 were as follows (in thousands):

	Six Months Ended September 30, 2015
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		3,561			(302	)		—			3,259
Net loss reclassified from accumulated other comprehensive income (loss)		—			272			—			272
Net current period other comprehensive income (loss)		3,561			(30	)		—			3,531
Balance as of September 30, 2015	$	(10,016	)	$	(23	)	$	(9,518	)	$	(19,557	)

	Six Months Ended September 30, 2014
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2014	$	10,535		$	325		$	(5,831	)	$	5,029
Other comprehensive income (loss) before reclassifications		(8,100	)		(638	)		—			(8,738	)
Net gain reclassified from accumulated other comprehensive income (loss)		—			(19	)		—			(19	)
Net current period other comprehensive income (loss)		(8,100	)		(657	)		—			(8,757	)
Balance as of September 30, 2014	$	2,435		$	(332	)	$	(5,831	)	$	(3,728	)

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The amounts reclassified out of accumulated other comprehensive income (loss) for the three and six months ended September 30, 2015 and 2014 are as follows (in thousands):

Accumulated Other Comprehensive Income Components	Amounts Reclassified from Accumulated Other Comprehensive Income											Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended September 30,					Six Months Ended September 30,
	2015			2014		2015			2014
	(unaudited)					(unaudited)
Net gain on investments	$	—		$	—	$	—		$	30		Other income (expense), net
Impairment of marketable securities		(454	)		—		(454	)		—		Other income (expense), net
Tax impact		182			—		182			(11	)	Provision for income tax
Total reclassifications for the period	$	(272	)	$	—	$	(272	)	$	19		Income after income tax provision

12. Computation of Earnings per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Net income	$	3,273	$	5,747	$	6,258	$	9,322
Weighted average shares - basic		31,651		31,499		31,769		31,439
Weighted average shares - diluted		32,380		32,235		32,627		32,142
Net income per share - basic	$	0.10	$	0.18	$	0.20	$	0.30
Net income per share - diluted	$	0.10	$	0.18	$	0.19	$	0.29

Diluted weighted average shares included approximately 729,000 and 736,000 common equivalent shares from stock options for the three months ended September 30, 2015 and 2014, respectively, and approximately 858,000 and 703,000 common equivalent shares from stock options for the six months ended September 30, 2015 and 2014, respectively.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the three and six months ended September 30, 2015, there were outstanding weighted average options to purchase 2,067,109 and 1,436,546 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. During the three and six months ended September 30, 2014, there were outstanding weighted average options to purchase 2,318,679 and 2,507,755 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. These options could dilute earnings per share in future periods if the market price of the common stock increases.

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13. Segment and Geographic Information

We have a single operating segment and reportable segment. We design develop, manufacture and market high performance semiconductor products. Our Chief Executive Officer and our President, together, have been identified as the chief operating decision makers. Our chief operating decision makers review financial information presented as one operating segment for the purpose of making decisions, allocating resources and assessing financial performance. Our net revenues by major geographic area (based on destination) were as follows (in thousands):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
United States	$	19,317	$	21,502	$	39,450	$	44,006
Europe and the Middle East
France		2,302		1,897		4,342		3,749
Germany		8,845		8,026		16,922		16,475
Italy		969		909		2,233		2,382
Russia		465		2,157		718		2,860
Sweden		574		1,309		1,279		2,594
United Kingdom		3,494		5,822		6,714		11,201
Other		6,657		6,810		13,091		13,894
Asia Pacific
China		20,053		20,480		41,288		40,882
Japan		2,402		2,161		5,724		3,962
Korea		6,089		5,689		12,225		12,128
Malaysia		1,322		1,490		2,564		3,122
Singapore		3,020		2,913		6,137		6,070
Thailand		992		983		2,035		2,027
Other		1,607		1,702		3,091		3,816
Rest of the World
India		909		1,380		2,041		2,629
Other		1,240		1,205		2,450		2,718
Total	$	80,257	$	86,435	$	162,304	$	174,515

The following table sets forth net revenues for each of our product groups for the three and six months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Power semiconductors	$	53,433	$	55,780	$	108,411	$	113,748
Integrated circuits		22,024		23,438		44,508		47,320
Systems and RF power semiconductors		4,800		7,217		9,385		13,447
Total	$	80,257	$	86,435	$	162,304	$	174,515

For the three and six months ended September 30, 2015, one distributor accounted for 11.5% and 11.1% of our net revenues, respectively. For the three and six months ended September 30, 2014, another distributor accounted for 11.4% and 10.9% of our net revenues, respectively.

14. Income Taxes

For the three and six months ended September 30, 2015, we recorded income tax provisions of $2.5 million and $4.2 million, reflecting effective tax rates of 43.4% and 40.0%, respectively. For the three and six months ended September 30, 2014, we recorded income tax provisions of $3.2 million and $4.8 million, reflecting effective tax rates of 36.0% and 33.9%, respectively. For the three and six months ended September 30, 2015, the effective tax rates were affected by tax losses that could not be offset against other profits in certain jurisdictions with lower tax rates. The effective tax rates were also affected by estimates of annual income in domestic and foreign jurisdictions, as adjusted by changes in estimates of annual income in domestic and foreign jurisdictions. For the three and six months ended September 30, 2014, the effective tax rates were affected by changes in estimates of annual income in domestic and foreign jurisdictions and certain discrete items.

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15. Commitments and Contingencies

Bank of the West

On December 6, 2013, we entered into an Amended and Restated Credit Agreement with BOTW for a revolving line of credit of $50.0 million. All amounts owed under the credit agreement are due and payable on November 30, 2015. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. The credit agreement includes a letter of credit subfacility, under which BOTW agrees to issue letters of credit of up to $3.0 million.

However, borrowing under this subfacility is limited to the extent of availability under the $50.0 million revolving line of credit. At September 30, 2015, the outstanding principal under the credit agreement was $45.0 million. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of September 30, 2015 and March 31, 2015.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion contains forward-looking statements, which are subject to certain risks and uncertainties, including, without limitation, those described elsewhere in this Form 10-Q and, in particular, in Item 1A of Part II hereof. Actual results may differ materially from the results discussed in the forward-looking statements. For a discussion of risks that could affect future results, see “Item 1A. Risk Factors.” All forward-looking statements included in this document are made as of the date hereof, based on the information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement, except as may be required by law.

Overview

We are a multi-market integrated semiconductor company. Our three principal product groups are: power semiconductors; integrated circuits, or ICs; and systems and radio frequency, or RF, power semiconductors.

Our power semiconductors improve system efficiency and reliability by converting electricity at relatively high voltage and current levels into the finely regulated power required by electronic products. We focus on the market for power semiconductors that are capable of processing greater than 200 watts of power.

We also design, manufacture and sell integrated circuits for a variety of applications. Our microcontrollers provide application-specific, embedded system-on-chip, or SoC, solutions for the industrial and consumer markets. Our analog and mixed-signal ICs are principally used in telecommunications applications. Our mixed-signal application-specific ICs, or ASICs, address the requirements of the medical imaging equipment and display markets. Our power management and control ICs are used in conjunction with our power semiconductors.

Our systems include laser diode drivers, high voltage pulse generators and modulators, and high power subsystems, sometimes known as stacks, that are principally based on our high power semiconductor devices. Our RF power semiconductors enable circuitry that amplifies or receives radio frequencies in wireless and other microwave communication applications, medical imaging applications and defense and space applications.

Over the past two quarters ended September 30, 2015, our net revenues decreased sequentially. Our net revenues from sales of power semiconductors and systems and RF power semiconductors have remained relatively flat over the past three quarters, while our net revenues from sales of ICs have decreased over the six months ended September 30, 2015. Over the three and six months ended September 30, 2015, sales to the industrial and commercial market and consumer products market have declined during the past quarter, while sales to the medical products market have increased during the three and six months. Gross profit margin increased slightly over the last two quarters due to a shift in product mix and improved utilization at our manufacturing facilities. Our efforts to implement price increases for some low-margin products sold to OEM customers are expected to lead to reduced revenues for these products in future periods, which may adversely affect our total revenues and increase underutilization charges. Over the past two quarters ended September 30, 2015, our selling, general and administrative, or SG&A, expenses have remained relatively flat while our research, development and engineering expenses, or R&D expenses, increased due to the recent acquisition of RadioPulse. In future periods, we expect our SG&A expenses and R&D expenses to remain fairly consistent.

Critical Accounting Policies and Significant Management Estimates

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the reasonableness of its estimates. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies require that we make significant judgments and estimates in preparing our consolidated financial statements.

Revenue recognition. Revenue is recognized when there is persuasive evidence that an arrangement exists, when delivery has occurred, when the price to the buyer is fixed or determinable and when collectability of the receivable is reasonably assured. These elements are met when title to the products is passed to the buyer, which is generally when product is shipped to the customer with sale terms ex-works, or EXW, or when product is delivered to the customer with sales terms delivered duty paid, or DDP.

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We sell to distributors and original equipment manufacturers, or OEMs. Approximately 57.1% of our net revenues in the six months ended September 30, 2015 and 54.9% of our net revenues in the six months ended September 30, 2014 were from distributors. We provide some of our distributors with the following programs: stock rotation and ship and debit.

Reserves for sales returns and allowances, including allowances for so called “ship and debit” transactions, are recorded at the time of shipment, and are based on historical levels of returns and current economic trends and changes in customer demand.

Accounts receivable from distributors are recognized and inventory is relieved when title to inventories transfer, typically upon shipment from us, at which point we have a legally enforceable right to collection under normal payment terms. Under certain circumstances, where we are not able to reasonably and reliably estimate the actual returns, revenues and costs relating to distributor sales are deferred until products are sold by the distributors to the distributors’ end customers. Deferred amounts are presented net and included under “Accrued expenses and other liabilities.”

We state our revenues net of any taxes collected from customers that are required to be remitted to various government agencies. The amount of taxes collected from customers and payable to governmental entities is included under “Accrued expenses and other liabilities.” Shipping and handling costs are included in cost of sales.

Allowance for sales returns. We maintain an allowance for sales returns based on estimated product returns by our customers. We estimate our allowance for sales returns based on our historical return experience, current economic trends, changes in customer demand, known returns we have not received and other assumptions. If we were to make different judgments or utilize different estimates, the amount and timing of our revenue could be materially different. Given that our revenues consist of a high volume of relatively similar products, to date our actual returns and allowances have not fluctuated significantly from period to period, and our returns provisions have historically been reasonably accurate. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations.

Allowance for stock rotation. We also provide “stock rotation” to select distributors. The rotation allows distributors to return a percentage of the previous six months’ sales in exchange for orders of an equal or greater amount. In the six months ended September 30, 2015 and 2014, approximately $733,000 and $1.1 million, respectively, of products were returned to us under the program. We establish the allowance for sales to distributors except in cases where the revenue recognition is deferred and recognized upon sale by the distributor of products to the end-customer. The allowance, which is management’s best estimate of future returns, is based upon the historical experience of returns and inventory levels at the distributors. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations. Should distributors increase stock rotations beyond our estimates, these statements would be adversely affected.

Allowance for ship and debit. Ship and debit is a program designed to assist distributors in meeting competitive prices in the marketplace on sales to their end-customers. Ship and debit requires a request from the distributor for a pricing adjustment for a specific part for a customer sale to be shipped from the distributor’s stock. We have no obligation to accept this request. However, it is our historical practice to allow some companies to obtain pricing adjustments for inventory held. We receive periodic statements regarding our products held by our distributors. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to distributor’s customer. At the time we record sales to distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. The sales allowance requirement is based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing and other key management. We believe that the analysis of these inputs enables us to make reliable estimates of future credits under the ship and debit program. This analysis requires the exercise of significant judgments. Our actual results to date have approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment. This allowance is included as part of the accounts receivable allowance on the balance sheet and as a reduction of revenues in the statement of operations. If competitive pricing were to decrease sharply and unexpectedly, our estimates might be insufficient, which could significantly adversely affect our operating results.

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Additions to the ship and debit allowance are estimates of the amount of expected future ship and debit activity related to sales during the period. Additions to the allowance reduce revenues and gross profit in the period. The following table sets forth the beginning and ending balances of, additions to, and deductions from, our allowance for ship and debit during the six months ended September 30, 2015 (in thousands):

	(unaudited)
Balance at March 31, 2015	$	1,059
Additions		1,031
Deductions		(1,193	)
Balance at June 30, 2015		897
Additions		1,048
Deductions		(1,179	)
Balance at September 30, 2015	$	766

Allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses from the inability of our customers to make required payments. We evaluate our allowance for doubtful accounts based on the aging of our accounts receivable, the financial condition of our customers and their payment history, our historical write-off experience and other assumptions. If we were to make different judgments of the financial condition of our customers or the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. This allowance is reported on the balance sheet as part of the accounts receivable allowance and is included on the statement of operations as part of selling, general and administrative expenses. This allowance is based on historical losses and management’s estimates of future losses.

Inventories. Inventories are recorded at the lower of standard cost, which approximates actual cost on a first-in-first-out basis, or market value. Our accounting for inventory costing is based on the applicable expenditure incurred, directly or indirectly, in bringing the inventory to its existing condition. Such expenditures include acquisition costs, production costs and other costs incurred to bring the inventory to its use. As it is impractical to track inventory from the time of purchase to the time of sale for the purpose of specifically identifying inventory cost, our inventory is, therefore, valued based on a standard cost, given that the materials purchased are identical and interchangeable at various production processes. We review our standard costs on an as-needed basis but in any event at least once a year, and update them as appropriate to approximate actual costs. The authoritative guidance provided by FASB requires certain abnormal expenditures to be recognized as expenses in the current period instead of capitalized in inventory. It also requires that the amount of fixed production overhead allocated to inventory be based on the normal capacity of the production facilities.

We typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The value of our inventories is dependent on our estimate of future demand as it relates to historical sales. If our projected demand is overestimated, we may be required to reduce the valuation of our inventories below cost. We regularly review inventory quantities on hand and record an estimated provision for excess inventory based primarily on our historical sales and expectations for future use. We also recognize a reserve based on known technological obsolescence, when appropriate. Actual demand and market conditions may be different from those projected by our management. This could have a material effect on our operating results and financial position. If we were to make different judgments or utilize different estimates, the amount and timing of our write-down of inventories could be materially different. For example, during the fourth quarter of fiscal 2009, we examined our inventory and as a consequence of the dramatic retrenchment in some of our markets, certain of our inventory that normally would not be considered excess was considered as such. Therefore, we booked additional charges of about $14.9 million to recognize this exposure.

Excess inventory frequently remains saleable. When excess inventory is sold, it yields a gross profit margin of up to 100%. Sales of excess inventory have the effect of increasing the gross profit margin beyond that which would otherwise occur, because of previous write-downs. Once we have written down inventory below cost, we do not write it up when it is subsequently utilized, sold or scrapped. We do not physically segregate excess inventory nor do we assign unique tracking numbers to it in our accounting systems. Consequently, we cannot isolate the sales prices of excess inventory from the sales prices of non-excess inventory. Therefore, we are unable to report the amount of gross profit resulting from the sale of excess inventory or quantify the favorable impact of such gross profit on our gross profit margin.

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The following table provides information on our excess and obsolete inventory reserve charged against inventory at cost (in thousands):

	(unaudited)
Balance at March 31, 2015	$	22,753
Utilization or sale		(309	)
Scrap		(431	)
Additional accrual		589
Foreign currency translation adjustments		177
Balance at June 30, 2015		22,779
Utilization or sale		(975	)
Scrap		(613	)
Additional accrual		1,425
Foreign currency translation adjustments		35
Balance at September 30, 2015	$	22,651

The practical efficiencies of wafer fabrication require the manufacture of semiconductor wafers in minimum lot sizes. Often, when manufactured, we do not know whether or when all the semiconductors resulting from a lot of wafers will sell. With more than 10,000 different part numbers for semiconductors, excess inventory resulting from the manufacture of some of those semiconductors will be continual and ordinary. Because the cost of storage is minimal when compared to the potential value and because our products do not quickly become obsolete, we expect to hold excess inventory for potential future sale for years. Consequently, we have no set time line for the utilization, sale or scrapping of excess inventory.

In addition, our inventory is also being written down to the lower of cost or market or net realizable value. We review our inventory listing on a quarterly basis for an indication of losses being sustained for costs that exceed selling prices less direct costs to sell. When it is evident that our selling price is lower than current cost, inventory is marked down accordingly. At September 30, 2015, our lower of cost or market reserve was $455,000.

Furthermore, we perform an annual inventory count and at certain locations periodic cycle counts for specific parts that have a high turnover. We also periodically identify any inventory that is no longer usable and write it off.

Valuation of Goodwill and Intangible Assets. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired. The costs of acquired intangible assets are recorded at fair value at acquisition. Intangible assets with finite lives are amortized using the straight-line method or accelerated method over their estimated useful lives and evaluated for impairment in accordance with the authoritative guidance provided by FASB.

Goodwill and intangible assets with indefinite lives are reviewed at least annually for impairment charges during the quarter ending March 31, or more frequently if events and circumstances indicate that the asset might be impaired, in accordance with the authoritative guidance provided by FASB. We first assess qualitative factors to determine whether it is necessary to perform the two-step fair value-based impairment test described below. If we believe that, as a result of its qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required.

Under the quantitative approach, there are two steps in the determination of the impairment of goodwill. The first step compares the carrying amount of the net assets to the fair value of the reporting unit. The second step, if necessary, recognizes an impairment loss to the extent the carrying value of the reporting unit’s net assets exceed the implied fair value of goodwill. An impairment loss would be recognized to the extent that the carrying amount exceeds the fair value of the reporting unit. We operate our business as one reporting unit.

We assess the recoverability of the finite-lived intangible assets by examining the occurrences of certain events or changes of circumstances that indicate that the carrying amounts may not be recoverable. After our initial assessment, if it is necessary, we perform the impairment test by determining whether the estimated undiscounted cash flows attributable to the assets in question are less than their carrying values. Impairment losses, if any, are measured as the amount by which the carrying values of the assets exceed their fair value and are recognized in operating results. If a useful life is determined to be shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

Income tax. In preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our unaudited condensed consolidated balance sheets. We then assess the likelihood that our

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deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. A valuation allowance reduces our deferred tax assets to the amount that management estimates is more likely than not to be realized. In determining the amount of the valuation allowance, we consider income over recent years, estimated future taxable income, feasible tax planning strategies and other factors in each taxing jurisdiction in which we operate. If we determine that it is more likely than not that we will not realize all or a portion of our remaining deferred tax assets, then we will increase our valuation allowance with a charge to income tax expense. Conversely, if we determine that it is likely that we will ultimately be able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been provided, then the related portion of the valuation allowance will reduce income tax expense. Significant management judgment is required in determining our provision for income taxes and potential tax exposures, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to establish a valuation allowance, which could materially impact our financial position and results of operations. Our ability to utilize our deferred tax assets and the need for a related valuation allowance are monitored on an ongoing basis.

Furthermore, computation of our tax liabilities involves examining uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain tax positions based on the two-step process as prescribed by the authoritative guidance provided by FASB. The first step is to evaluate the tax position to determine whether there is sufficient available evidence to indicate if it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure and determine the approximate amount of the tax benefit at the largest amount that is more than 50% likely of being realized upon ultimate settlement with the tax authorities. It is inherently difficult and requires significant judgment to estimate such amounts, as this requires us to determine the probability of various possible outcomes. We reexamine these uncertain tax positions on a quarterly basis. This reassessment is based on various factors during the period including, but not limited to, changes in worldwide tax laws and treaties, changes in facts or circumstances, effectively settled issues under audit and any new audit activity. A change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our unaudited condensed consolidated financial statements, see Note 2, “Recent Accounting Pronouncements and Accounting Changes” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

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Results of Operations — Three and Six Months Ended September 30, 2015 and 2014

The following table sets forth selected consolidated statements of operations data for the fiscal periods indicated and the percentage changes in such data from period to period. These historical operating results may not be indicative of the results for any future period.

	Three Months Ended September 30,							Six Months Ended September 30,
	2015		% change			2014		2015		% change			2014
	(unaudited)							(unaudited)
	(000)					(000)		(000)					(000)
Net revenues	$	80,257		(7.1	)	$	86,435	$	162,304		(7.0	)	$	174,515
Cost of goods sold		54,245		(10.0	)		60,265		110,690		(10.3	)		123,345
Gross profit	$	26,012		(0.6	)	$	26,170	$	51,614		0.9		$	51,170
Operating expenses:
Research, development and engineering	$	7,804		12.3		$	6,948	$	15,487		9.1		$	14,198
Selling, general and administrative		9,801		(8.5	)		10,713		20,437		(4.8	)		21,477
Amortization of acquired intangible assets		1,374		(3.2	)		1,419		2,953		(5.5	)		3,126
Total operating expenses	$	18,979		(0.5	)	$	19,080	$	38,877		0.2		$	38,801

The following table sets forth selected statements of operations data as a percentage of net revenues for the fiscal periods indicated. These historical operating results may not be indicative of the results for any future periods.

	% of Net Revenues Three Months Ended September 30,						% of Net Revenues Six Months Ended September 30,
	2015			2014			2015			2014
	(unaudited)						(unaudited)
Net revenues		100.0			100.0			100.0			100.0
Cost of goods sold		67.6			69.7			68.2			70.7
Gross profit		32.4			30.3			31.8			29.3
Operating expenses:
Research, development and engineering		9.7			8.0			9.5			8.1
Selling, general and administrative		12.2			12.5			12.7			12.3
Amortization of acquired intangible assets		1.7			1.6			1.8			1.8
Total operating expenses		23.6			22.1			24.0			22.2
Operating income		8.8			8.2			7.8			7.1
Other income (expense), net		(1.6	)		2.2			(1.3	)		0.9
Income before income tax		7.2			10.4			6.5			8.0
Provision for income tax		(3.1	)		(3.7	)		(2.6	)		(2.7	)
Net income		4.1			6.7			3.9			5.3

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Net Revenues

The following table sets forth the net revenues for each of our product groups for the fiscal periods indicated:

Net Revenues (1)

	Three Months Ended September 30,							Six Months Ended September 30,
	2015		% change			2014		2015		% change			2014
	(unaudited)							(unaudited)
	(000)					(000)		(000)					(000)
Power semiconductors	$	53,433		(4.2	)	$	55,780	$	108,411		(4.7	)	$	113,748
Integrated circuits		22,024		(6.0	)		23,438		44,508		(5.9	)		47,320
Systems and RF power semiconductors		4,800		(33.5	)		7,217		9,385		(30.2	)		13,447
Total	$	80,257		(7.1	)	$	86,435	$	162,304		(7.0	)	$	174,515

(1) Includes $269,000 and $527,000 of intellectual property revenues in integrated circuits during the three and six months ended September 30, 2015, respectively, as compared to $306,000 and $674,000 for the three and six months ended September 30, 2014, respectively.

The following tables set forth the average selling prices, or the ASPs, and units for the fiscal periods indicated:

Average Selling Prices

	Three Months Ended September 30,							Six Months Ended September 30,
	2015		% change			2014		2015		% change			2014
	(unaudited)							(unaudited)
Power semiconductors	$	1.76		(18.1	)	$	2.15	$	1.86		(13.5	)	$	2.15
Integrated circuits	$	0.42		(10.6	)	$	0.47	$	0.43		(8.5	)	$	0.47
Systems and RF power semiconductors	$	33.33		(11.3	)	$	37.59	$	33.28		5.7		$	31.49

Units

	Three Months Ended September 30,							Six Months Ended September 30,
	2015		% change			2014		2015		% change			2014
	(unaudited)							(unaudited)
	(000)					(000)		(000)					(000)
Power semiconductors		30,297		16.8			25,930		58,431		10.6			52,835
Integrated circuits		51,418		4.6			49,157		102,653		4.2			98,534
Systems and RF power semiconductors		144		(25.0	)		192		282		(34.0	)		427
Total		81,859		8.7			75,279		161,366		6.3			151,796

The following table sets forth the net revenue by geographic region for the fiscal periods indicated:

	Three Months Ended September 30,								Six Months Ended September 30,
	2015				2014				2015				2014
	Net Revenue		% of Net Revenue		Net Revenue		% of Net Revenue		Net Revenue		% of Net Revenue		Net Revenue		% of Net Revenue
	(unaudited)								(unaudited)
	(000)				(000)				(000)				(000)
Europe and Middle East	$	23,306		29.0	$	26,930		31.1	$	45,299		27.9	$	53,155		30.5
Asia Pacific		35,485		44.2		35,418		41.0		73,064		45.0		72,007		41.3
Rest of world		2,149		2.7		2,585		3.0		4,491		2.8		5,347		3.0
International revenues	$	60,940		75.9	$	64,933		75.1	$	122,854		75.7	$	130,509		74.8
USA		19,317		24.1		21,502		24.9		39,450		24.3		44,006		25.2
Total	$	80,257		100.0	$	86,435		100.0	$	162,304		100.0	$	174,515		100.0

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The 7.1% decrease in net revenues in the three months ended September 30, 2015 as compared to the three months ended September 30, 2014 reflected a decrease in all product groups. Our net revenues from the sale of power semiconductors decreased by $2.3 million, or 4.2%; our net revenues from the sale of ICs decreased by $1.4 million, or 6.0%; and net revenues from the sale of systems and RF power semiconductor devices decreased by $2.4 million, or 33.5%. The decline in the net revenues from power semiconductors was largely the result of reduced shipments of bipolar devices. The decrease in the net revenues from ICs was mainly due to reduced sales of microcontrollers. The decrease in revenues from the sale of systems and RF power semiconductor devices was primarily due to a decrease in the sale of subassemblies. All of the decreases were primarily attributed to lower shipments to the industrial and commercial market.

Our net revenues, which declined by 7.0% in the six months ended September 30, 2015 as compared to the six months ended September 30, 2014, reflected a decrease in all product groups. Net revenues from the sale of power semiconductors decreased by $5.3 million, or 4.7%; our net revenues from the sale of ICs decreased by $2.8 million, or 5.9%; and our net revenues from the sale of systems and RF power semiconductor devices decreased by $4.1 million, or 30.2%. The decrease in the net revenues from power semiconductors was primarily due to reduced sales of bipolar devices partially offset by an increase in sales of MOS products to the industrial and commercial market. The decrease in the net revenues from ICs was mainly due to reduced sales of our microcontrollers to the industrial and commercial market partially offset by increased sales of ICs. The decrease in revenues from the sale of systems and RF power semiconductor devices was mainly due to a decrease of $3.0 million in the sale of subassemblies to the industrial and commercial market and a decrease of $1.3 million in the sale of RF power semiconductor products.

For the three and six months ended September 30, 2015 as compared to the same periods of the previous fiscal year, the decreases in the ASPs in power semiconductors were due to shifts in product mix toward lower-priced products. The reductions in the ASPs of ICs in these periods ended September 30, 2015 were mainly due to shifts in our product mix. The decreases in the ASPs for systems and RF power semiconductors in the three months ended September 30, 2015 was primarily due to a decrease in the revenues of higher priced subassemblies. The increase in the ASPs of systems and RF power semiconductors in the six months ended September 30, 2015 as compared to the same period of the prior year was due to a decrease in the number of low priced RF power semiconductor units shipped in the period.

For the three and six months ended September 30, 2015 as compared to the three and six months ended September 30, 2014, the increases in unit shipments of our power semiconductors and ICs were broad-based across product lines. The decreases in systems and RF power semiconductors units were principally caused by lower shipments of RF power semiconductors.

For the three and six months ended September 30, 2015 as compared to the three and six months ended September 30, 2014, our sales to the United States and Europe and the Middle East decreased while our sales to the Asia Pacific region increased.

For the three and six months ended September 30, 2015, one distributor accounted for 11.5% and 11.1% of our net revenues, respectively. For the three and six months ended September 30, 2014, another distributor accounted for 11.4% and 10.9% of our net revenues, respectively.

Our net revenues were reduced by allowances for sales returns, stock rotations and ship and debit. See “Critical Accounting Policies and Significant Management Estimates” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Gross Profit

Gross profit margin was 32.4% in the three months ended September 30, 2015, as compared to 30.3% in the three months ended September 30, 2014. Gross profit margin was 31.8% in the six months ended September 30, 2015 as compared to 29.3% in the six months ended September 30, 2014. For both the three and six months ended September 30, 2015 as compared to the three and six months ended September 30, 2014, the gross profit margins improved due to lower manufacturing costs and improved utilization of our manufacturing facilities.

Our gross profit and gross profit margin were positively affected by the sale of excess inventory, which had previously been written down. See “Critical Accounting Policies and Significant Management Estimates - Inventories” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Research, Development and Engineering

R&D expenses typically consist of internal engineering efforts for product design, process improvement and development. As a percentage of net revenues, our R&D expenses for the three and six months ended September 30, 2015 were 9.7% and 9.5%, respectively, as compared to 8.0% and 8.1% for the three and six months ended September 30, 2014. The increase in the percentage from one year to the next primarily resulted from lower net revenues and higher R&D expenses following the acquisition of RadioPulse in May 2015. Expressed in dollars, for the three and six months ended September 30, 2015 as compared to the same periods of the prior year, our R&D expenses increased by approximately $856,000, or 12.3%, and $1.3 million, or 9.1%, respectively.

Selling, General and Administrative

As a percentage of net revenues, our SG&A expenses for the three and six months ended September 30, 2015 were 12.2% and 12.7% as compared to 12.5% and 12.3% for the three and six months ended September 30, 2014, respectively. Expressed in dollars, for the three and six months ended September 30, 2015 as compared to the same periods of the prior year, our SG&A expenses decreased by approximately $912,000, or 8.5%, and $1.0 million, or 4.8%, respectively. These reductions were due to lower selling expenses corresponding to the lower revenues and lower bad debt expenses. For both the three and six months, the changes in the percentages were largely due to changes in revenues.

Amortization of Acquired Intangible Assets

For the three and six months ended September 30, 2015, we recorded amortization expenses on acquired intangible assets of $1.4 million and $3.0 million as compared to the amortization expenses of $1.4 million and $3.1 million, respectively, for the same periods in fiscal 2015. The fiscal 2016 periods include amortization for the RadioPulse acquisition completed in May 2015.

Interest Expense

During the three and six months ended September 30, 2015, our interest expenses were $284,000 and $598,000, respectively, as compared to $322,000 and $732,000, respectively, for the three and six months ended September 30, 2014. The interest expenses during fiscal 2015 included the accrual of interest on the installment payments for an acquisition.

Other Income (Expense), net

In the three and six months ended September 30, 2015, other expense, net was $1.0 million and $1.8 million, respectively, as compared to other income, net, of $2.2 million and $2.4 million in the three and six months ended September 30, 2014, respectively. The shift from other income, net, in the three and six month periods ended September 30, 2015 to other expense, net, in the comparable periods of fiscal 2016 was primarily caused by losses associated with changes in exchange rates for foreign currency transactions.

Provision for Income Tax

For the three and six months ended September 30, 2015, we recorded income tax provisions of $2.5 million and $4.2 million, reflecting effective tax rates of 43.4% and 40.0%, respectively. For the three and six months ended September 30, 2014, we recorded income tax provisions of $3.2 million and $4.8 million, reflecting effective tax rates of 36.0% and 33.9%, respectively. For the three and six months ended September 30, 2015, the effective tax rates were affected by losses that could not be offset against other profits in certain jurisdictions with lower tax rates. The effective tax rates were also affected by estimates of annual income in domestic and foreign jurisdictions, as adjusted by changes in estimates of annual income in domestic and foreign jurisdictions. For the three and six months ended September 30, 2014, the effective tax rates were affected by changes in estimates of annual income in domestic and foreign jurisdictions and certain discrete items.

Liquidity and Capital Resources

At September 30, 2015, cash and cash equivalents were $116.9 million as compared to $121.2 million at March 31, 2015.

Our cash provided by operating activities for the six months ended September 30, 2015 was $18.0 million, a reduction of approximately $4.7 million as compared to the $22.7 million of cash provided by operating activities in the comparable period of the prior year. The change in our operating cash flow was primarily due to a decrease of $4.9 million in net income and adjustments to reconcile net income, offset by a small net change in our operating assets and liabilities.

The decrease in net income and adjustments to reconcile net income was principally caused by the decline in net revenues, depreciation and amortization expenses, and reserves for accounts receivable and inventory. These decreases were offset by an increase to changes in foreign exchange. The changes in operating assets and liabilities for the six months ended September 30, 2015

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compared to the six months ended September 30, 2014 included a decrease in accounts receivable and inventory purchases in large part because of reduced revenues in the six months ended September 30, 2015 period and an increase in prepaid expenses and other current assets, which was, in large part, the result of a refund of value-added tax during the earlier period.

Our net cash used in investing activities for the six months ended September 30, 2015 was $19.9 million, as compared to net cash used in investing activities of $7.2 million during the six months ended September 30, 2014. During the six months ended September 30, 2015, we spent $14.6 million, net of cash and cash equivalents acquired, on the acquisition of RadioPulse and $4.4 million on the purchase of property and equipment. During the six months ended September 30, 2014, our uses of cash for investing activities principally reflected capital expenditures of $4.6 million and a payment for the acquisition of a business of $2.3 million.

For the six months ended September 30, 2015, net cash used in financing activities was $3.4 million as compared to net cash provided by financing activities of $12.4 million in the six months ended September 30, 2014. During the six months ended September 30, 2015, we repurchased $6.4 million of our common stock, paid $2.4 million in dividends and used $1.4 million for principal repayments on capital lease and loan obligations, offset by $3.3 million in proceeds from a loan and $3.4 million from employee equity plans. During the six months ended September 30, 2014, we received proceeds of $30 million from a loan and $1.4 million from employee equity plans, offset by the first $15.0 million deferred payment related to the acquisition of a business in June 2013, $2.0 million in payments of cash dividends to stockholders and $2.0 million of principal repayments on capital lease and loan obligations.

At September 30, 2015, capital lease obligations and loans payable totalled $54.0 million. This represented 46.2% of our cash and cash equivalents and 19.7% of our stockholders’ equity.

In June 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB Deutsche Industriebank, or IKB. At March 31, 2015, the outstanding principal balance was €3.5 million, or about $3.8 million. In April 2015, we replaced the loan with a new loan from IKB. Under the new agreement, we borrowed €6.5 million, or about $7.0 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $261,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part with a modest penalty. The loan is also collateralized by a security interest in the facility in Lampertheim, Germany. At September 30, 2015, we complied with all of these financial covenants. See Note 8, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the new agreement.

On December 6, 2013, we entered into an Amended and Restated Credit Agreement with BOTW for a revolving line of credit of $50.0 million. All amounts owed under the credit agreement are due and payable on November 30, 2015. Borrowings may be repaid and re-borrowed during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At September 30, 2015, the outstanding principal balance under the credit agreement was $45.0 million. The credit agreement is subject to a set of financial covenants, including minimum total net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At September 30, 2015, we complied with all of these financial covenants. See Note 8, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the credit agreement. The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 15, “Commitments and Contingencies” and Note 8, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the terms of our credit arrangements.

On May 1, 2015, we acquired RadioPulse. At closing, we paid a cash consideration of $14.7 million. The total consideration may also include earnout payments aggregating up to $6.0 million and payable over three years.

We assumed loans of approximately $2.4 million related to the acquisition of RadioPulse. These loans are primarily short-term facilities from financial institutions and carry a weighted average interest rate of 4.9%. The loans are repayable on or before April 1, 2016. The facilities have been partially secured by bank deposits which are classified as restricted cash on our unaudited condensed consolidated balance sheets.

We assumed loans of approximately $723,000, related to an acquisition completed during the quarter ended June 30, 2014. The assumed borrowings were non-interest loans from government agencies to support the research and development activities with maturity dates varying from fiscal 2017 to fiscal 2021, other than a loan of $99,000 that we paid in full during the quarter ended September 30, 2014.

During the six months ended September 30, 2015, we declared and paid $2.4 million in cash dividends, consisting of a dividend of $0.035 per share for the quarter ended June 30, 2015 and a dividend of $0.040 per share for the quarter ended September 30, 2015. The quarterly dividend is at the discretion of the Board of Directors.

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Additionally, we maintain three defined benefit pension plans: one in the United Kingdom, one in Germany and one in the Philippines. Benefits are based on years of service and the employees’ compensation. We deposit funds for the United Kingdom and Philippine plans with financial institutions and make payments to former German employees directly. We accrue for the unfunded portion of the obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The total pension liability accrued for the three plans at September 30, 2015 was $17.2 million.

We believe that our cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our anticipated cash requirements for the next 12 months. Our liquidity could be negatively affected by a decline in demand for our products, increases in the cost of materials or labor, investments in new product development, one or more acquisitions, or the inability to renew or replace our revolving line of credit in whole or in part. From time to time, we use derivative contracts in the normal course of business to manage our foreign currency exchange and interest rate risks. We did not have any open derivative contracts at September 30, 2015. There can be no assurance that additional debt or equity financing will be available when required or, if available, can be secured on terms satisfactory to us.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk has not changed materially from the market risk disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2015.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Based on their evaluation as of September 30, 2015, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations. Furthermore, these controls and procedures were also effective to ensure that information required to be disclosed by us in this Quarterly Report on Form 10-Q was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our procedures or our internal controls will prevent or detect all errors and all fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of our controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, have been detected.

Changes in Internal Controls over Financial Reporting

During the quarter ended September 30, 2015, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We currently are involved in a variety of legal matters that arise in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, results of operations and cash flows. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs.

ITEM 1A. RISK FACTORS

In addition to the other information in this Quarterly Report on Form 10-Q, the following risk factors should be considered carefully in evaluating our business and us. Additional risks not presently known to us or that we currently believe are not serious may also impair our business and its financial condition.

Our operating results fluctuate significantly because of a number of factors, many of which are beyond our control.

Given the nature of the markets in which we participate, as well as macroeconomic uncertainties, we cannot reliably predict future revenues and profitability and unexpected changes may cause us to adjust our operations. Large portions of our costs are fixed, due in part to our significant sales, research and development and manufacturing costs. Thus, small declines in revenues could seriously negatively affect our operating results in any given quarter. Our operating results may fluctuate significantly from quarter-to-quarter and year-to-year. For example, from fiscal 2008 to fiscal 2009, net income in one year shifted to net loss in the next year. Some of the factors that may affect our quarterly and annual results are:

• changes in business and economic conditions, including a downturn in demand or decrease in the rate of growth in demand, whether in the global economy, a regional economy or the semiconductor industry;

• changes in market conditions, potentially including changes in the credit markets, currency exchange rates, expectations for inflation or energy prices;

• the reduction, rescheduling or cancellation of orders by customers;

• fluctuations in timing and amount of customer requests for product shipments;

• changes in the mix of products that our customers purchase;

• changes in the level of customers’ component inventories;

• loss of key customers;

• the availability of production capacity, whether internally or from external suppliers;

• the cyclical nature of the semiconductor industry;

• competitive pressures on selling prices;

• strategic actions taken by our competitors;

• market acceptance of our products and the products of our customers;

• fluctuations in our manufacturing yields and significant yield losses;

• difficulties in forecasting demand for our products and the planning and managing of inventory levels;

• the availability of raw materials, supplies and manufacturing services from third parties;

• the amount and timing of investments in research and development;

• damage awards or injunctions as the result of litigation;

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• changes in our product distribution channels and the timeliness of receipt of distributor resale information;

• the impact of vacation schedules and holidays, largely during the second and third quarters of our fiscal year; and

• the amount and timing of costs associated with product returns.

As a result of these factors, many of which are difficult to control or predict, as well as the other risk factors discussed in this Quarterly Report on Form 10-Q, we may experience materially adverse fluctuations in our future operating results on a quarterly or annual basis. Changes in demand for our products and in our customers’ product needs could have a variety of negative effects on our competitive position and our financial results, and, in certain cases, may reduce our revenues, increase our costs, lower our gross margin percentage or require us to recognize impairments of our assets. If product demand declines, our manufacturing or assembly and test capacity could be underutilized and we may be required to record an impairment on our long-lived assets, including facilities and equipment as well as intangible assets and goodwill, which would increase our expenses. Factory planning decisions may also shorten the useful lives of long-lived assets, including facilities and equipment, and cause us to accelerate depreciation. In addition, if product demand declines or we fail to forecast demand accurately, we could be required to write off inventory or record underutilization charges, which would have a negative impact on our gross margin.

We may not be successful in our acquisitions.

We have in the past made, and may in the future make, acquisitions of other technologies and companies. These acquisitions involve numerous risks, including:

• failure to retain key personnel of the acquired business;

• diversion of management’s attention during the acquisition process;

• disruption of our ongoing business;

• the potential strain on our financial and managerial controls and reporting systems and procedures;

• unanticipated expenses and potential delays related to integration of an acquired business;

• the risk that we will be unable to develop or exploit acquired technologies;

• the engineering risks inherent in transferring products from one wafer fabrication facility to another;

• failure to successfully integrate the operations of an acquired business with our own;

• the challenges in achieving strategic objectives, cost savings and other benefits from acquisitions;

• the risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets;

• the risks of entering new markets in which we have limited experience;

• difficulties in expanding our information technology systems or integrating disparate information technology systems to accommodate the acquired businesses;

• the challenges inherent in managing an increased number of employees and facilities and the need to implement appropriate policies, benefits and compliance programs;

• customer dissatisfaction or performance problems with an acquired company’s products or personnel or with altered sales terms or a changed distribution channel;

• adverse effects on our relationships with suppliers;

• the reduction in financial stability associated with the incurrence of debt or the use of a substantial portion of our available cash;

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• the costs associated with acquisitions, including amortization expenses related to intangible assets, and the integration of acquired operations; and

• assumption of known or unknown liabilities or other unanticipated events or circumstances.

We cannot assure that we will be able to successfully acquire other businesses or product lines or integrate them into our operations without substantial expense, delay in implementation or other operational or financial problems.

As a result of an acquisition, our financial results may differ from the investment community’s expectations in a given quarter. Further, if one or more of the foregoing risks materialize or market conditions or other factors lead us to change our strategic direction, we may not realize the expected value from such transactions. If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows or stock price could be negatively impacted.

Our backlog may not result in future revenues.

Customer orders typically can be cancelled or rescheduled by the customer without penalty to the customer. Cancellations or reschedulings are common in periods of decreasing demand. Further, in periods of increasing demand, particularly when production is allocated or delivery delayed, customers of semiconductor companies have on occasion placed orders without expectation of accepting delivery to increase their share of allocated product or in an effort to improve the timeliness of delivery. While we are attuned to the potential for such behavior and attempt to identify such orders, we could accept orders of this nature and subsequently experience order cancellation unexpectedly.

Our backlog at any particular date is not necessarily indicative of actual revenues for any succeeding period. A reduction of backlog during any particular period, or the failure of our backlog to result in future revenues, could harm our results of operations.

Fluctuations in the mix of products sold may adversely affect our financial results.

Changes in the mix and types of products sold may have a substantial impact on our revenues and gross profit margins. In addition, more recently introduced products tend to have higher associated costs because of initial overall development costs and higher start-up costs. Fluctuations in the mix and types of our products may also affect the extent to which we are able to recover our fixed costs and investments that are associated with a particular product or wafer foundry, and, as a result, can negatively impact our financial results.

Our international operations expose us to material risks.

For the fiscal year ended March 31, 2015, our net revenues by region were approximately 25.2% in the United States, approximately 29.6% in Europe and the Middle East, approximately 42.2% in the Asia Pacific region and approximately 3.0% in India and the rest of the world. We expect net revenues from foreign markets to continue to represent a majority of total net revenues. We maintain significant business operations in Germany, the United Kingdom, the Philippines and South Korea and work with subcontractors, suppliers and manufacturers in South Korea, Japan, the Philippines and elsewhere in Europe and the Asia Pacific region. Some of the risks inherent in doing business internationally are:

• foreign currency fluctuations, particularly in the Euro and the British pound;

• longer payment cycles;

• challenges in collecting accounts receivable;

• changes in the laws, regulations or policies of the countries in which we manufacture or sell our products;

• trade restrictions;

• cultural and language differences;

• employment regulations;

• limited infrastructure in emerging markets;

• transportation delays;

• seasonal reduction in business activities;

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• work stoppages;

• labor and union disputes;

• electrical outages;

• terrorist attack or war; and

• economic or political instability.

Our sales of products manufactured in our Lampertheim, Germany facility and our costs at that facility are primarily denominated in Euros, and sales of products manufactured in our Chippenham, U.K. facility and our costs at that facility are primarily denominated in British pounds. Fluctuations in the value of the Euro and the British pound against the U.S. dollar could have a significant adverse impact on our balance sheet and results of operations. We generally do not enter into foreign currency hedging transactions to control or minimize these risks. Reductions in the value of the Euro or British pound would reduce our revenues recognized in U.S. dollars, all other things being equal. Increases in the value of the Euro or the British pound could cause or increase losses associated with changes in exchange rates for foreign currency transactions. Fluctuations in currency exchange rates could cause our products to become more expensive to customers in a particular country, leading to a reduction in sales or profitability in that country. Alternatively, fluctuations in currency exchange rates in the face of competitive pricing pressures could lead to lower gross profit margins, as customer prices in one currency fall relative to costs of production experienced in a different currency. If we expand our international operations or change our pricing practices to denominate prices in other foreign currencies, we could be exposed to even greater risks of currency fluctuations.

Our financial performance is dependent on economic stability and credit availability in international markets. Actions by governments to address deficits or sovereign or bank debt issues, particularly in Europe, could adversely affect gross domestic product or currency exchange rates in countries where we operate, which in turn could adversely affect our financial results. If our customers or suppliers are unable to obtain the credit necessary to fund their operations, we could experience increased bad debts, reduced product orders and interruptions in supplier deliveries leading to delays or stoppages in our production. Alternatively, actions in emerging markets, such as China, to limit inflation or to address asset or other “bubbles” could also adversely affect gross domestic product or the growth thereof, and result in reduced product orders or increased bad debt expense for us.

In addition, the laws of certain foreign countries may not protect our products or intellectual property rights to the same extent as do U.S. laws. Therefore, the risk of piracy of our technology and products may be greater when we manufacture or sell our products in certain foreign countries.

Our efforts to increase our prices for some products will result in reduced revenues from some customers and may result in lower gross profits and in restructuring charges.

We have informed a number of our OEM customers that we are increasing prices to levels that will provide us with more acceptable gross margins. Increased pricing has led to the cancellation or reduction of existing orders and will lead to a reduction in new orders and, therefore, to reduced revenues from these customers. If the business remaining with these customers after the price increases results in lower gross profits, our results of operations could be materially adversely affected. If the reduced or cancelled orders from these customers cannot be substantially replaced, we may undertake a reduction in force, close a production line or take other operational steps, any of which could result in restructuring charges that would materially adversely affect our results of operations.

The semiconductor industry is cyclical, and an industry downturn could adversely affect our operating results.

Business conditions in the semiconductor industry may rapidly change from periods of strong demand and insufficient production to periods of weakened demand and overcapacity. The industry in general is characterized by:

• changes in product mix in response to changes in demand;

• alternating periods of overcapacity and production shortages, including shortages of raw materials supplies and manufacturing services;

• cyclical demand for semiconductors;

• significant price erosion;

• variations in manufacturing costs and yields;

• rapid technological change and the introduction of new products; and

• significant expenditures for capital equipment and product development.

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These factors could harm our business and cause our operating results to suffer.

Our dependence on subcontractors to assemble and test our products subjects us to a number of risks, including an inadequate supply of products and higher materials costs.

We depend on subcontractors for the assembly and testing of our products. The substantial majority of our products are assembled by subcontractors located outside of the United States. Assembly subcontractors generally work on narrow margins and have limited capital. We have encountered assembly subcontractors who have ceased or reduced production because of financial problems. We engage assembly subcontractors who operate while in insolvency proceedings or whose financial stability is uncertain. The unexpected cessation of production or reduction in production by one or more of our assembly subcontractors could adversely affect our production, our customer relations, our revenues and our financial condition. Our reliance on these subcontractors also involves the following significant risks:

• reduced control over delivery schedules and quality;

• the potential lack of adequate capacity during periods of excess demand;

• difficulties selecting and integrating new subcontractors;

• limited or no warranties by subcontractors or other vendors on products supplied to us;

• potential increases in prices due to capacity shortages and other factors;

• potential misappropriation of our intellectual property; and

• economic or political instability in foreign countries.

These risks may lead to delayed product delivery or increased costs, which would harm our profitability and customer relationships.

Further, we use only a limited number of subcontractors to assemble most of our products. If one or more of these key subcontractors experience financial, operational, production or quality assurance difficulties, we could experience a significant reduction or interruption in supply. Although we believe alternative subcontractors are available, our operating results could temporarily suffer until we engage one or more of those alternative subcontractors. Moreover, in engaging alternative subcontractors in exigent circumstances, our production costs could increase markedly.

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We depend on external foundries to manufacture many of our products.

Of our net revenues for our fiscal year ended March 31, 2015, 46.0% came from wafers manufactured for us by a number of external foundries. In particular, the wafers for all of our microcontrollers are fabricated at external foundries. Our dependence on external foundries may grow.

Our relationships with our external foundries do not guarantee prices, delivery or lead times or wafer or product quantities sufficient to satisfy current or expected demand. Generally, these foundries manufacture our products on a purchase order basis. We provide these foundries with rolling forecasts of our production requirements. However, the ability of each foundry to provide wafers to us is limited by the foundry’s available capacity. At any given time, these foundries could choose to prioritize capacity for their own use or other customers or reduce or eliminate deliveries to us. If growth in demand for our products occurs, our external foundries may be unable or unwilling to allocate additional capacity to our needs, thereby limiting our revenue growth. Accordingly, we cannot be certain that these foundries will allocate sufficient capacity to satisfy our requirements. In addition, we cannot be certain that we will continue to do business with these or other foundries on terms as favorable as our current terms. If we are not able to obtain foundry capacity as required, our relationships with our customers could be harmed, we could be unable to fulfill contractual requirements and our revenues could be reduced or our growth limited. Moreover, even if we are able to secure foundry capacity, we may be required, either contractually or as a practical business matter, to utilize all of that capacity or incur penalties or an adverse effect to the business relationship. The costs related to maintaining foundry capacity could be expensive and could harm our operating results. Other risks associated with our reliance on external foundries include:

• the lack of control over delivery schedules;

• the unavailability of, or delays in obtaining access to, key process technologies;

• limited control over quality assurance, manufacturing yields and production costs; and

• potential misappropriation of our intellectual property.

Our requirements typically represent a small portion of the total production of the external foundries that manufacture our wafers and products. One or more of these external foundries may not continue to produce wafers for us or continue to advance the process design technologies on which the manufacturing of our products is based. If we are required to transition production from one foundry to another, we may make large last-time buys of product at the foundry that we are exiting, which could eventually result in substantial inventory write-offs if semiconductors are not sold or utilized. These circumstances could harm our ability to deliver our products or increase our costs.

Our gross margin is dependent on a number of factors, including our level of capacity utilization.

Semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. We are limited in our ability to reduce fixed costs quickly in response to any shortfall in revenues. If we are unable to utilize our manufacturing, assembly and testing facilities at a high level, the fixed costs associated with these facilities will not be fully absorbed, resulting in lower gross margins. Increased competition and other factors may lead to price erosion, lower revenues and lower gross margins for us in the future.

Our success depends on our ability to manufacture our products efficiently.

We manufacture our products in facilities that are owned and operated by us, as well as in external wafer foundries and subcontract assembly facilities. The fabrication of semiconductors is a highly complex and precise process, and a substantial percentage of wafers could be rejected or numerous dies on each wafer could be nonfunctional as a result of, among other factors:

• contaminants in the manufacturing environment;

• defects in the masks used to print circuits on a wafer;

• manufacturing equipment failure; or

• wafer breakage.

For these and other reasons, we could experience a decrease in manufacturing yields. Additionally, if we increase our manufacturing output, the additional demands placed on existing equipment and personnel or the addition of new equipment or personnel may lead to a decrease in manufacturing yields. As a result, we may not be able to cost-effectively expand our production capacity in a timely manner.

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We order materials and commence production in advance of anticipated customer demand. Therefore, revenue shortfalls may also result in inventory write-downs.

We typically plan our production and inventory levels based on our own expectations for customer demand. Actual customer demand, however, can be highly unpredictable and can fluctuate significantly. In response to anticipated long lead times to obtain inventory and materials, we order materials and production in advance of customer demand. This advance ordering and production may result in excess inventory levels or unanticipated inventory write-downs if expected orders fail to materialize. For example, additional inventory write-downs occurred in the quarter ended March 31, 2009.

Semiconductors for inclusion in consumer products have shorter product life cycles.

We believe that consumer products are subject to shorter product life cycles, because of technological change, consumer preferences, trendiness and other factors, than other types of products sold by our customers. Shorter product life cycles result in more frequent design competitions for the inclusion of semiconductors in next generation consumer products, which may not result in design wins for us. Shorter product life cycles may lead to more frequent circumstances where sales of existing products are reduced or ended.

Uncertain global macroeconomic conditions could adversely affect our results of operations and financial condition.

Uncertain global macroeconomic conditions that affect the economy and the economic outlook of the United States, Europe, China and other parts of the world could adversely affect our customers and vendors, which could adversely affect our results of operations and financial condition. These uncertainties, including, among other things, sovereign and foreign bank debt levels, the inability of national or international political institutions to effectively resolve economic or budgetary crises or issues, consumer confidence, unemployment levels, interest rates, availability of capital, fuel and energy costs, tax rates, and the threat or outbreak of terrorism or public unrest, could adversely impact our customers and vendors, which could adversely affect us. Recessionary conditions and depressed levels of consumer and commercial spending may cause customers to reduce, modify, delay or cancel plans to purchase our products and may cause vendors to reduce their output or change their terms of sales. We generally sell products to customers with credit payment terms. If customers’ cash flow or operating or financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, they may not be able to pay, or may delay payment to us. Likewise, for similar reasons vendors may restrict credit or impose different payment terms. Any inability of current or potential customers to pay us for our products or any demands by vendors for different payment terms may adversely affect our results of operations and financial condition.

Approximately 29.0% of our total consolidated net sales for the fiscal year ended March 31, 2015 were derived from Europe. There have been continuing concerns and uncertainties about the state of the European economies and Europe’s political institutions. Continued difficult or declining economic conditions in Europe may adversely affect our operations in Europe by adversely affecting our European customers and vendors in the ways described above. Additionally, the inability of Europe’s political institutions to deal effectively with actual or perceived debt, currency or budget crises could increase economic uncertainty in Europe, and globally, and may have an adverse effect on our customers’ cash flow or operating performance. Further, debt or budget crises in European countries may lead to reductions in government spending in certain countries or higher income or corporate taxes, which could depress spending overall. Our results of operations and financial condition could be adversely affected by any of these events.

Our debt agreements contain certain restrictions that may limit our ability to operate our business.

The agreements governing our debt contain, and any other future debt agreement we enter into may contain, restrictive covenants that limit our ability to operate our business, including, in each case subject to certain exceptions, restrictions on our ability to:

• incur additional indebtedness;

• grant liens;

• consolidate, merge or sell our assets, unless specified conditions are met;

• acquire other business organizations;

• make investments;

• redeem or repurchase our stock; and

• change the nature of our business.

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In addition, our debt agreements contain financial covenants and additional affirmative and negative covenants. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions. If we are not able to comply with all of these covenants for any reason, some or all of our outstanding debt could become immediately due and payable and the incurrence of additional debt under the credit facilities provided by the debt agreements would not be allowed. If our cash is utilized to repay any outstanding debt, depending on the amount of debt outstanding, we could experience an immediate and significant reduction in working capital available to operate our business.

As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be beneficial to us, such as strategic acquisitions or joint ventures.

Our revolving line of credit with Bank of the West, or BOTW, expires November 30, 2015. We may not be able to renew the line of credit for a similar principal amount, on terms that are as favorable as the current terms or on any terms at all.

We estimate tax liabilities, the final determination of which is subject to review by domestic and international taxation authorities.

We are subject to income taxes and other taxes in both the United States and foreign jurisdictions in which we currently operate or have historically operated. We are also subject to review and audit by both domestic and foreign taxation authorities. The determination of our worldwide provision for income taxes and current and deferred tax assets and liabilities requires significant judgment and estimation. The provision for income taxes can be adversely affected by a variety of factors, including but not limited to changes in tax laws, regulations and accounting principles, including accounting for uncertain tax positions, or interpretation of those changes. Significant judgment is required to determine the recognition and measurement attributes prescribed in the authoritative guidance issued by Financial Accounting Standards Board, or FASB, in connection with accounting for income taxes. Although we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our consolidated financial statements and may materially affect our income tax provision, net income, goodwill or cash flows in the period or periods for which such determination is made.

Our intellectual property revenues are uncertain and unpredictable in timing and amount.

We are unable to discern a pattern in or otherwise predict the amount of any payments for the sale or licensing of intellectual property that we may receive. Consequently, we are unable to plan on the timing of intellectual property revenues and our results of operations may be adversely affected by a reduction in the amount of intellectual property revenues.

Our markets are subject to technological change and our success depends on our ability to develop and introduce new products.

The markets for our products are characterized by:

• changing technologies;

• changing customer needs;

• frequent new product introductions and enhancements;

• increased integration with other functions; and

• product obsolescence.

To develop new products for our target markets, we must develop, gain access to and use leading technologies in a cost-effective and timely manner and continue to expand our technical and design expertise. Failure to do so could cause us to lose our competitive position and seriously impact our future revenues.

Products or technologies developed by others may render our products or technologies obsolete or non-competitive. A fundamental shift in technologies in our product markets would have a material adverse effect on our competitive position within the industry.

Our revenues are dependent upon our products being designed into our customers’ products.

Many of our products are incorporated into customers’ products or systems at the design stage. The value of any design win largely depends upon the customer’s decision to manufacture the designed product in production quantities, the commercial success of the customer’s product and the extent to which the design of the customer’s electronic system also accommodates incorporation of

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components manufactured by our competitors. In addition, our customers could subsequently redesign their products or systems so that they no longer require our products. The development of the next generation of products by our customers generally results in new design competitions for semiconductors, which may not result in design wins for us, potentially leading to reduced revenues and profitability. We may not achieve design wins or our design wins may not result in future revenues.

We could be harmed by intellectual property litigation.

As a general matter, the semiconductor industry is characterized by substantial litigation regarding patent and other intellectual property rights. We have been sued for purported patent infringement and have been accused of infringing the intellectual property rights of third parties. We also have certain indemnification obligations to customers and suppliers with respect to the infringement of third party intellectual property rights by our products. We could incur substantial costs defending ourselves and our customers and suppliers from any such claim. Infringement claims or claims for indemnification, whether or not proven to be true, may divert the efforts and attention of our management and technical personnel from our core business operations and could otherwise harm our business. For example, in June 2000, we were sued for patent infringement by International Rectifier Corporation. The case was ultimately resolved in our favor, but not until October 2008. In the interim, the U.S. District Court entered multimillion dollar judgments against us on two different occasions, each of which was subsequently vacated.

In the event of an adverse outcome in any intellectual property litigation, we could be required to pay substantial damages, cease the development, manufacturing, use and sale of infringing products, discontinue the use of certain processes or obtain a license from the third party claiming infringement with royalty payment obligations upon us. An adverse outcome in an infringement action could materially and adversely affect our financial condition, results of operations and cash flows.

We may not be able to protect our intellectual property rights adequately.

Our ability to compete is affected by our ability to protect our intellectual property rights. We rely on a combination of patents, trademarks, copyrights, trade secrets, confidentiality procedures and non-disclosure and licensing arrangements to protect our intellectual property rights. Despite these efforts, we cannot be certain that the steps we take to protect our proprietary information will be adequate to prevent misappropriation of our technology, or that our competitors will not independently develop technology that is substantially similar or superior to our technology. More specifically, we cannot assure that our pending patent applications or any future applications will be approved, or that any issued patents will provide us with competitive advantages or will not be challenged by third parties. Nor can we assure that, if challenged, our patents will be found to be valid or enforceable, or that the patents of others will not have an adverse effect on our ability to do business. We may also become subject to or initiate interference proceedings in the U.S. Patent and Trademark Office, which can demand significant financial and management resources and could harm our financial results. Also, others may independently develop similar products or processes, duplicate our products or processes or design their products around any patents that may be issued to us.

Because our products typically have lengthy sales cycles, we may experience substantial delays between incurring expenses related to research and development and the generation of revenues.

The time from initiation of design to volume production of new semiconductors often takes 18 months or longer. We first work with customers to achieve a design win, which may take nine months or longer. Our customers then complete the design, testing and evaluation process and begin to ramp up production, a period that may last an additional nine months or longer. As a result, a significant period of time may elapse between our research and development efforts and our realization of revenues, if any, from volume purchasing of our products by our customers.

The markets in which we participate are intensely competitive.

Many of our target markets are intensely competitive. Our ability to compete successfully in our target markets depends on the following factors:

• proper new product definition;

• product quality, reliability and performance;

• product features;

• price;

• timely delivery of products;

• technical support and service;

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• design and introduction of new products;

• market acceptance of our products and those of our customers; and

• breadth of product line.

In addition, our competitors or customers may offer new products based on new technologies, industry standards or end-user or customer requirements, including products that have the potential to replace our products or provide lower cost or higher performance alternatives to our products. The introduction of new products by our competitors or customers could render our existing and future products obsolete or unmarketable.

Our primary power semiconductor competitors include Fairchild Semiconductor, Fuji, Hitachi, Infineon, Microsemi, Mitsubishi, On Semiconductor, Powerex, Renesas Electronics, Semikron International, STMicroelectronics, Toshiba and Vishay Intertechnology. Our IC products compete principally with those of Atmel, Cypress Semiconductor, Freescale Semiconductor, Microchip, NEC, Renesas Electronics and Silicon Labs. Our RF power semiconductor competitors include Microsemi and Qorvo. Many of our competitors have greater financial, technical, marketing and management resources than we have. Some of these competitors may be able to sell their products at prices at which it would be unprofitable for us to sell our products or benefit from established customer relationships that provide them with a competitive advantage. We cannot assure that we will be able to compete successfully in the future against existing or new competitors or that our operating results will not be adversely affected by increased price competition.

We rely on our distributors and sales representatives to sell many of our products.

Most of our products are sold to distributors or through sales representatives. Our distributors and sales representatives could reduce or discontinue sales of our products. They may not devote the resources necessary to sell our products in the volumes and within the time frames that we expect. In addition, we depend upon the continued viability and financial resources of these distributors and sales representatives, some of which are small organizations with limited working capital. These distributors and sales representatives, in turn, depend substantially on general economic conditions and conditions within the semiconductor industry. We believe that our success will continue to depend upon these distributors and sales representatives. Foreign distributors are typically granted longer payment terms, resulting in higher accounts receivable balances for a given level of sales than domestic distributors. Our risk of loss from the financial insolvency of distributors is, therefore, disproportionally weighted to foreign distributors. If any significant distributor or sales representative experiences financial difficulties, or otherwise becomes unable or unwilling to promote and sell our products, our business could be harmed. For example, All American Semiconductor, Inc., one of our former distributors, filed for bankruptcy in April 2007.

Our future success depends on the continued service of management and key engineering personnel and our ability to identify, hire and retain additional personnel.

Our success depends upon our ability to attract and retain highly skilled technical, managerial, marketing and finance personnel, and, to a significant extent, upon the efforts and abilities of Nathan Zommer, Ph.D., our Chief Executive Officer, and other members of senior management. The loss of the services of one or more of our senior management or other key employees could adversely affect our business. We do not maintain key person life insurance on any of our officers, employees or consultants. There is intense competition for qualified employees in the semiconductor industry, particularly for highly skilled design, application and test engineers. We may not be able to continue to attract and retain engineers or other qualified personnel necessary for the development of our business or to replace engineers or other qualified individuals who could leave us at any time in the future. If we grow, we expect increased demands on our resources, and growth would likely require the addition of new management and engineering staff as well as the development of additional expertise by existing management. If we lose the services of or fail to recruit key engineers or other technical and management personnel, our business could be harmed.

Acquisitions, expansion, technological and administrative changes and software conversions and updates place a significant strain on our information systems.

Presently, because of our acquisitions, we are operating a number of different information systems that are not integrated. As a consequence, we use spreadsheets, which are prepared by individuals rather than automated systems, in our accounting. In our accounting, we perform many manual reconciliations and other manual steps, which result in a high risk of errors. Manual steps also increase the possibility of control deficiencies and material weaknesses.

If we do not adequately manage and evolve our financial reporting and managerial systems and processes, our ability to manage or grow our business may be harmed. Our ability to successfully implement our goals and comply with regulations, requires an effective planning and management system and process. We will need to continue to improve existing, and implement new, operational and financial systems, procedures and controls to manage our business effectively in the future.

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In improving, consolidating, changing or updating our operational and financial systems, procedures and controls, we would expect to periodically implement new or different software and other systems that will affect our internal operations regionally or globally. The conversion process from one system to another is complex and could require, among other things, that data from the existing system be made compatible with the upgraded or different system.

In connection with any of the foregoing, we could experience errors, interruptions, delays, cessations of service and other inefficiencies, which could adversely affect our business. Any error, delay, disruption, interruption or cessation, including with respect to any new or different systems, software programs, procedures or controls, could harm our ability to forecast sales demand, manage our supply chain, achieve accuracy in the conversion of electronic data and record and report financial and management information on a timely and accurate basis. In addition, as we add or change functionality, transition or convert to different systems or programs or integrate additional data in connection with an acquisition, problems could arise that we have not foreseen. Such problems could adversely impact our ability to do the following in a timely manner: provide quotes; take customer orders; ship products; provide services and support to our customers; bill and track our customers; fulfill contractual obligations; and otherwise run our business. Failure to properly or adequately address these issues could result in the diversion of management’s attention and resources, adversely affect our ability to manage our business, increase expenses, or adversely affect our results of operations, cash flows, stock price or reputation.

System security risks, data protection breaches and cyber-attacks could disrupt our operations and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation or adversely affect our stock price.

Computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We manage and store proprietary information and sensitive or confidential data relating to our business and the businesses of third parties. Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us or our partners or customers, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, could expose us, our partners and customers to a risk of loss or misuse of this information, result in regulatory investigations and fines, litigation and potential liability for us or damage to our brand and reputation, or otherwise harm our business. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Delayed sales, lower margins or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.

New regulations related to conflict minerals will force us to incur additional expenses.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo, or DRC, and adjoining countries. As a result, the SEC established annual disclosure and reporting requirements for those companies who use “conflict” minerals mined from the DRC and adjoining countries in their products. These requirements could affect the sourcing and availability of minerals used in the manufacture of our products. As a result, we cannot ensure that we will be able to obtain minerals at competitive prices. Moreover, there will be additional costs associated with complying with the extensive due diligence and audit procedures required by the SEC. In addition, we may face reputational challenges with our customers and other stakeholders as we have in the past and may in the future be unable to sufficiently verify the origins of all minerals used in our products. Finally, these rules bring implementation challenges. We may not successfully implement effective procedures to timely or adequately comply with these rules.

We depend on a limited number of suppliers for our substrates, most of whom we do not have long term agreements with.

We purchase the bulk of our silicon substrates from a limited number of vendors, most of whom we do not have long term supply agreements with. Any of these suppliers could reduce or terminate our supply of silicon substrates at any time. Our reliance on a limited number of suppliers involves several risks, including potential inability to obtain an adequate supply of silicon substrates and reduced control over the price, timely delivery, reliability and quality of the silicon substrates. We cannot assure that problems will not occur in the future with suppliers.

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Increasing raw material prices could impact our profitability.

Our products use large amounts of silicon, metals and other materials. From time to time, we have experienced price increases for many of these items. If we are unable to pass price increases for raw materials onto our customers, our gross margins and profitability could be adversely affected.

We may not be able to increase production capacity to meet the present and future demand for our products.

The semiconductor industry has been characterized by periodic limitations on production capacity. These limitations may result in longer lead times for product delivery than desired by many of our customers. If we are unable to increase our production capacity to meet future demand, some of our customers may seek other sources of supply, our future growth may be limited or our results of operations may be adversely affected.

Costs related to product defects and errata may harm our results of operations and business.

Costs associated with unexpected product defects and errata (deviations from published specifications) due to, for example, unanticipated problems in our manufacturing processes, include the costs of:

• writing off the value of inventory of defective products;

• disposing of defective products;

• recalling defective products that have been shipped to customers;

• providing product replacements for, or modifications to, defective products; and/or

• defending against litigation related to defective products.

These costs could be substantial and may, therefore, increase our expenses and lower our gross margin. In addition, our reputation with our customers or users of our products could be damaged as a result of such product defects and errata, and the demand for our products could be reduced. These factors could harm our financial results and the prospects for our business.

We face the risk of financial exposure to product liability claims alleging that the use of products that incorporate our semiconductors resulted in adverse effects.

Approximately 8.8% of our net revenues for the fiscal year ended March 31, 2015 were derived from sales of products used in medical devices, such as defibrillators. Product liability risks may exist even for those medical devices that have received regulatory approval for commercial sale. We cannot be sure that the insurance that we maintain against product liability will be adequate to cover our losses. Any defects in our semiconductors used in these devices, or in any other product, could result in significant product liability costs to us.

If our goodwill, acquired intangible assets or long-lived assets become impaired, we may be required to record a significant charge to earnings.

Under generally accepted accounting principles, goodwill is required to be tested for impairment at least annually and we review our acquired intangible assets and long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, acquired intangible assets or long-lived assets may not be recoverable include a decline in stock price and market capitalization, future cash flows and slower growth rates in our industry. From time to time, we have recorded impairment charges and written down the value of goodwill.

Our results of operations could vary as a result of the methods, estimates, and judgments that we use in applying our accounting policies.

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on our results of operations (see “Critical Accounting Policies and Significant Management Estimates” in Part I, Item 2 of this Form 10-Q). Such methods, estimates, and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that lead us to change our methods, estimates, and judgments. Changes in those methods, estimates and judgments could significantly affect our results of operations.

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We are exposed to various risks related to the regulatory environment.

We are subject to various risks related to new, different, inconsistent or even conflicting laws, rules and regulations that may be enacted by legislative bodies and/or regulatory agencies in the countries in which we operate; disagreements or disputes between national or regional regulatory agencies; and the interpretation and application of laws, rules and regulations. If we are found by a court or regulatory agency not to be in compliance with applicable laws, rules or regulations, our business, financial condition and results of operations could be materially and adversely affected.

In addition, approximately 8.8% of our net revenues for the fiscal year ended March 31, 2015 were derived from the sale of products included in medical devices that are subject to extensive regulation by numerous governmental authorities in the United States and internationally, including the U.S. Food and Drug Administration, or FDA. The FDA and certain foreign regulatory authorities impose numerous requirements for medical device manufacturers to meet, including adherence to Good Manufacturing Practices, or GMP, regulations and similar regulations in other countries, which include testing, control and documentation requirements. Ongoing compliance with GMP and other applicable regulatory requirements is monitored through periodic inspections by federal and state agencies, including the FDA, and by comparable agencies in other countries. Our failure to comply with applicable regulatory requirements could prevent our products from being included in approved medical devices or result in damages or other compensation payable to medical device manufacturers.

Our business could also be harmed by delays in receiving or the failure to receive required approvals or clearances, the loss of obtained approvals or clearances or the failure to comply with existing or future regulatory requirements.

We invest in companies for strategic reasons and may not realize a return on our investments.

We make investments in companies to further our strategic objectives and support our key business initiatives. Such investments include investments in equity securities of public companies and investments in non-marketable equity securities of private companies, which range from early-stage companies that are often still defining their strategic direction to more mature companies whose products or technologies may directly support a product or initiative. The success of these companies is dependent on product development, market acceptance, operational efficiency, and other key business success factors. The private companies in which we invest may fail for operational reasons or because they may not be able to secure additional funding, obtain favorable investment terms for future financings or take advantage of liquidity events such as initial public offerings, mergers, and private sales. If any of these private companies fail, we could lose all or part of our investment in that company. If we determine that an other-than-temporary decline in the fair value exists for the equity securities of the public and private companies in which we invest, we write down the investment to its fair value and recognize the related write-down as an investment loss. Furthermore, when the strategic objectives of an investment have been achieved, or if the investment or business diverges from our strategic objectives, we may decide to dispose of the investment, even at a loss. Our investments in non-marketable equity securities of private companies are not liquid, and we may not be able to dispose of these investments on favorable terms or at all. The occurrence of any of these events could negatively affect our results of operations.

Our ability to access capital markets could be limited.

From time to time, we may need to access the capital markets to obtain long term financing. Although we believe that we can continue to access the capital markets on acceptable terms and conditions, our flexibility with regard to long term financing activity could be limited by our existing capital structure, our credit ratings and the health of the semiconductor industry. In addition, many of the factors that affect our ability to access the capital markets, such as the liquidity of the overall capital markets and the current state of the economy, are outside of our control. There can be no assurance that we will continue to have access to the capital markets on favorable terms.

Geopolitical instability, war, terrorist attacks and terrorist threats, and government responses thereto, may negatively affect all aspects of our operations, revenues, costs and stock price.

Any such event may disrupt our operations or those of our customers or suppliers. Our markets currently include South Korea, Taiwan, Russia and Israel, which are currently experiencing political instability. Additionally, we have accounting and administrative operations in the Philippines, an external foundry and some of our design and sales operations are located in South Korea and assembly subcontractors are located in Indonesia, the Philippines and South Korea.

Business interruptions may damage our facilities or those of our suppliers.

Our operations and those of our suppliers are vulnerable to interruption by fire, earthquake, flood and other natural disasters, as well as power loss, telecommunications failure and other events beyond our control. We do not have a detailed disaster recovery plan and do not have backup generators. Our facilities in California are located near major earthquake faults and have experienced earthquakes in the past. For example, the March 2011 earthquake in Japan adversely affected the operations of some of our Japanese suppliers, which limited the availability of certain production inputs to us for a period of time. If a natural disaster occurs, our ability

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to conduct our operations could be seriously impaired, which could harm our business, financial condition and results of operations and cash flows. We cannot be sure that the insurance we maintain against general business interruptions will be adequate to cover all our losses.

We may be affected by environmental laws and regulations.

We are subject to a variety of laws, rules and regulations related to the use, storage, handling, discharge and disposal of certain chemicals and gases used in our manufacturing process. Any of those regulations could require us to acquire expensive equipment or to incur substantial other expenses to comply with them. If we incur substantial additional expenses, product costs could significantly increase. Failure to comply with present or future environmental laws, rules and regulations could result in fines, suspension of production or cessation of operations.

Nathan Zommer, Ph.D. owns a significant interest in our common stock.

Nathan Zommer, Ph.D., our Chief Executive Officer, beneficially owned, as of October 28, 2015, approximately 21.3% of the outstanding shares of our common stock. As a result, Dr. Zommer can exercise significant control over all matters requiring stockholder approval, including the election of the Board of Directors. His holdings could result in a delay of, or serve as a deterrent to, any change in control of our company, which may reduce the market price of our common stock.

Our stock price is volatile.

The market price of our common stock has fluctuated significantly to date. The future market price of our common stock may also fluctuate significantly in the event of:

• variations in our actual or expected quarterly operating results;

• announcements or introductions of new products;

• technological innovations by our competitors or development setbacks by us;

• conditions in semiconductor markets;

• the commencement or adverse outcome of litigation;

• changes in analysts’ estimates of our performance or changes in analysts’ forecasts regarding our industry, competitors or customers;

• announcements of merger or acquisition transactions or a failure to achieve the expected benefits of an acquisition as rapidly or to the extent anticipated by participants in the stock market;

• terrorist attack or war;

• sales of our common stock by one or more members of management, including Nathan Zommer, Ph.D., our Chief Executive Officer; or

• general economic and market conditions.

In addition, the stock market in recent years has experienced extreme price and volume fluctuations that have affected the market prices of many high technology companies, including semiconductor companies. These fluctuations have often been unrelated or disproportionate to the operating performance of companies in our industry, and could harm the market price of our common stock.

The anti-takeover provisions of our certificate of incorporation and of the Delaware General Corporation Law may delay, defer or prevent a change of control.

Our Board of Directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be harmed by, the rights of the holders of any shares of preferred stock that may be issued in the future. The issuance of preferred stock may delay, defer or prevent a change in control because the terms of any issued preferred stock could potentially prohibit our consummation of any merger, reorganization, sale of substantially all of our assets, liquidation or other extraordinary corporate transaction, without the approval of the holders of the outstanding shares of preferred stock. In addition, the issuance of preferred stock could have a dilutive effect on our stockholders.

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Our stockholders must give substantial advance notice prior to the relevant meeting to nominate a candidate for director or present a proposal to our stockholders at a meeting. These notice requirements could inhibit a takeover by delaying stockholder action. The Delaware anti-takeover law restricts business combinations with some stockholders once the stockholder acquires 15% or more of our common stock. The Delaware statute makes it more difficult for us to be acquired without the consent of our Board of Directors and management.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1, 2015 – July 31, 2015		—		—		—		604,390
August 1, 2015 –August 31, 2015		592,121	$	10.88		592,121		1,012,269
September 1, 2015 – September 30, 2015		—		—		—		1,012,269
Total		592,121	$	10.88		592,121

(1) On August 24, 2012, our Board of Directors authorized a new program to repurchase up to 1,000,000 shares of our common stock. On August 28, 2015, our Board of Directors authorized another program to repurchase up to 1,000,000 shares of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM  5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

See the Index to Exhibits, which is incorporated by reference herein.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

IXYS CORPORATION
By:	/s/ Uzi Sasson
Uzi Sasson, President and
Chief Financial Officer
(Principal Financial Officer)

Date: November 4, 2015

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Sixth Amended Executive Employment Agreement by and between IXYS Corporation and Nathan Zommer, effective as of August 1, 2015.
10.2	Third Amended Executive Employment Agreement by and between IXYS Corporation and Uzi Sasson, effective as of August 1, 2015.
31.1	Certificate of Chief Executive Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification required under Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

(1) This exhibit is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1933, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities and Exchange Act of 1993, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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EX-10.1

Exhibit 10.1

SIXTH AMENDED EXECUTIVE EMPLOYMENT AGREEMENT

This Sixth Amended Executive Employment Agreement (the “Agreement”) is entered into by and between IXYS Corporation (the “Company”), a Delaware corporation, and Nathan Zommer (“Executive”), effective as of August 1, 2015 (the “Effective Date”).

W I T N E S S E T H

WHEREAS, the Company and the Executive are parties to that certain Fifth Amended Executive Employment Agreement effective as of July 16, 2012, which is modified and superseded by this Sixth Amended Executive Employment Agreement; and

WHEREAS, the Company desires to continue and extend the employment of Executive under mutually satisfactory terms and conditions, and the Executive desires to be employed by the Company, under the terms and conditions herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. EMPLOYMENT BY THE COMPANY. The Company hereby employs Executive to render full-time services to the Company as its Chief Executive Officer. Executive shall have responsibilities, duties and authorities that are customarily associated with such position, and such duties that are assigned by the Company’s Board of Directors (the “Board”). The Executive acknowledges that the Board may delegate to a committee of the Board any matter referred to in this Agreement as being for the Board’s determination.

2. COMPENSATION, VACATION AND BENEFITS.

2.1 The Company agrees to pay Executive an annual base salary in the amount of $525,000.00, payable every two weeks. Notwithstanding the foregoing, with the Executive’s consent, such salary may be temporarily reduced as part of a salary reduction program affecting multiple employees. The Executive shall be considered for an annual performance bonus on such terms and conditions as the Board shall determine in its sole discretion. The Executive’s performance, and his base salary and bonus arrangement will be reviewed by the Board from time to time, as the Board determines in its sole discretion. Executive shall be eligible for stock options and/or restricted stock grants, as determined by the Board in its sole discretion.

2.2 Executive’s paychecks will be distributed pursuant to ordinary business practice, and shall be subject to ordinary payroll deductions and tax withholdings. The Company also agrees to provide Executive with benefits consistent with Company policy for senior executives. Details about these benefits are set forth in the employee handbook and summary plan descriptions, copies of which have been provided to Executive. Unless the context otherwise requires, as used in this Agreement, “benefits” does not include any rights to the Company’s equity securities (whether stock options, restricted stock units, stock awards or other).

2.3 In addition to the benefits provided to Executive pursuant to subsections 2.1 and 2.2 hereof, the Company shall:

(a) pay, or reimburse Executive, for all reasonable costs of a yearly medical exam of Executive by a physician of his choice prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(b) maintain term life insurance (without a buildup of equity) in the amount of $2,000,000 on the life of the Executive payable to such beneficiary or beneficiaries as Executive may designate from time to time;

(c) pay, or reimburse Executive, for the services of a personal tax and/or investment advisor, not to exceed $2,000 per year, prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(d) at the Board’s discretion, either (i) provide Executive with a car of such make and model as Executive and Board shall agree is commensurate with Executive’s position with the Company, including gas, insurance for such car and reasonable maintenance thereof or (ii) pay Executive a monthly allowance for a car on an economic basis comparable to (i); provided, however, that Executive shall at all times (x) comply with all policies of the Company from time to time in effect with respect to the maintenance and operation of motor vehicles, and (y) maintain a valid driver’s license;

(e) provide Executive with up to 10 hours per month of bill paying and bookkeeping services in connection with the payment of the personal bills of Executive (but in no event shall the funds of the Company be used to pay the personal bills of Executive): and

(f) provide Executive with annual vacation during each year in an amount equal to the sum of (i) 15 working days and (ii)  ¹⁄₂ working day for each full year of service by the Executive at the Company after June 1, 2003.

3. EMPLOYEE HANDBOOK. By signing this Agreement, Executive acknowledges that he has received and read the Company’s employee handbook. Executive agrees to abide by all company policies and procedures. Notwithstanding the foregoing, if there shall be any conflict between this Agreement and such employee handbook, the terms of this Agreement shall govern.

4. TERMINATION OF EMPLOYMENT.

4.1 AT WILL. This Agreement does not provide for a minimum term of employment and Executive may be terminated by the Company at will.

4.2 COMPANY INITIATED TERMINATION.

(a) In the event the Company terminates Executive’s employment without cause, but not for reasons of Disability or death, Executive shall receive as severance a one-time payment equal to eighteen months of his then annual salary, payable within fifteen (15) days of such termination or such longer period of time that Executive has to make effective the release required by this

Section 4.2 (a). In addition, the Company shall pay in one lump sum the amounts payable pursuant to COBRA for Executive’s health insurance for the eighteen calendar months following such termination. No other benefits or payments shall be provided. The Company’s obligation to make any payment or provide any benefit under this Section 4.2 (a) is conditioned upon the execution and delivery by the Executive of a release in favor of the Company in the form attached hereto as Exhibit A specifically referencing this Section 4.2(a) within 60 days of the date of termination (the “Release Period”). In the event the Release Period begins and ends in different taxable years, the amounts payable to Executive under this Section 4.2(a) shall be paid in the later of the two calendar years. For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(b) In the event Executive’s employment is terminated at any time with cause, all of Executive’s compensation and benefits will cease immediately, and Executive shall not be entitled to any severance benefits and all other benefits provided hereunder shall cease as of such termination. For purposes of this Agreement, “cause” shall mean (i) unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company, (ii) commission of an act of material dishonesty in connection with responsibilities as an employee; (iii) repeated failure, in the reasonable judgment of the Board, to substantially perform assigned duties or responsibilities as an employee as directed or assigned by the Board (other than a failure resulting from Disability) after written notice thereof to Executive from the Company describing in reasonable detail the factual basis of Executive’s failure to perform such duties or responsibilities and Executive having had the opportunity to address the Board regarding such alleged failures and Executive’s failure to remedy said non-performance to the Company’s satisfaction within 60 days of receiving written notice; (iv) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State; (v) engagement in gross misconduct and such misconduct is materially harmful to the Company; (vi) failure to comply with the terms of any written Company policy or rule as they may be in effect from time to time during employment and such failure is materially harmful to the Company; (vii) failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested cooperation; or (viii) breach of this Agreement, the Proprietary Information Agreement, or any other agreements with the Company including, but not limited to agreements regarding confidentiality or proprietary information, and such failure is materially harmful to the Company. Physical or mental disability shall not constitute “cause”. Failure to accomplish corporate financial and management goals shall not constitute “cause”.

(c) In the event Executive suffers and continues to suffer a disability that renders him unable to perform the essential functions of his position, for three months within any six-month period (“Disability”), the Company shall, for eighteen months commencing at the conclusion of such three-month period of disability, (i) continue to pay Executive his annual base salary, (ii) continue to provide Executive’s health insurance and (ii) maintain life insurance in the manner and in the amount set forth in Section 2.3(b) hereof. If upon the conclusion of the eighteen-month period, Executive remains unable to perform the essential functions of the job, or the Company has no suitable vacant position for him, Executive’s employment shall be terminated.

4.3 EXECUTIVE INITIATED TERMINATION. Executive may voluntarily terminate his employment with the Company at any time by giving the Board 60 days written notice. In the event Executive voluntarily terminates his employment with the Company, all of Executive’s compensation and benefits will cease as of such termination date. Executive acknowledges that he will not receive any severance pay or benefits, except as defined in the Employee Handbook, and except as specified in this Agreement at Section 5.2 if applicable, upon such voluntary termination.

4.4 LIMITATION ON COMPENSATION. Except as expressly provided in Section 4.2 or Section 5.2, Executive will not be entitled to any other compensation, severance, pay-in-lieu of notice or any such compensation.

5. CHANGE OF CONTROL.

5.1 DEFINITIONS.

For purposes of this Agreement, a “Change of Control” shall mean:

(a) any merger or consolidation of the Company in which its voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity or its ultimate parent immediately after the merger or consolidation;

(b) any person or entity becoming the beneficial owner, directly or indirectly, of securities of the Company representing at least a majority of the total voting power of all of the then outstanding voting securities of the Company, other than a third party affiliated with the Company as of the date of this Agreement; or

(c) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.

For purposes of this Agreement, “good reason” for voluntary termination shall mean: (i) reduction of Executive’s rate of salary compensation as in effect immediately prior to the Change of Control by more than five percent; (ii) failure by the Company to pay or provide the Executive when due any compensation, benefits or perquisites to which the Executive is entitled pursuant to this Agreement or any other plan, contract or arrangement in which the Executive participates or is entitled to participate, after written notice thereof to Company from Executive describing in reasonable detail the factual basis of the Company’s failure to perform such obligation and the Company’s failure to remedy such non-performance within 60 days of receiving written notice; (iii) change in Executive’s responsibilities, authority, titles or offices resulting in diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith which is remedied by the Company promptly after notice thereof is given by Executive (it being understood that the fact that the Company is no longer a public company or an ultimate parent entity shall not be a basis for diminution); (iv) request that Executive relocate to a worksite that is more than 35 miles from his prior worksite, unless Executive accepts such relocation opportunity; (vi) failure or refusal of the successor company to assume the Company’s obligations under this Agreement; or (vii) material breach by the Company or any successor company of any of the material provisions of this Agreement.

5.2 OPERATIVE PROVISIONS

(a) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, he shall be entitled to receive a cash payment in one lump sum, payable within 15 days of such termination or such longer period of time that Executive has to make effective the release required by Section 5.2 (e) of this Agreement (the “Section 5.2 Payment Date”), equal to three times his average total annual cash compensation, including base salary and bonus, of the prior three years. The average of the prior three years (“Average”) shall be computed by dividing by three the sum of all cash compensation he received from the Company during the three years prior to the termination. Section 4.2 (a) shall not have any application in the event of a termination covered by this Section 5.2(a).

(b) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, Executive shall continue to receive all employment benefits as defined in Sections 2.2 and 2.3 above (excluding 2.3 (e) and 2.3(f)), or their equivalent where benefit plan participation by Executive is not available, for eighteen (18) months following the termination.

(c) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, the vesting of all shares of Company stock covered by options, restricted stock, stock appreciation rights or other stock rights, in each case granted to Executive by the Company, shall be accelerated on the Section 5.2 Payment Date such that all such unvested shares or rights shall become vested as of such date.

(d) For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Code and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(e) The Company’s obligation to make any payment or provide any benefit or vest any options or other stock rights under this Section 5.2 is conditioned upon the execution and delivery by the Executive of a release in favor of the

Company in the form attached hereto as Exhibit A specifically referencing Section 5.2 within the Release Period. In the event the Release Period begins and ends in different taxable years, the amounts payable to Executive under Section 5.2 shall be paid in the later of the two calendar years.

6. NOTICES. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or delivered by registered or certified mail (return receipt requested), or private overnight mail (delivery confirmed by such service, to the address listed below, or to such other address as either party shall designate by notice in writing to the other in accordance herein):

If to the Company:

IXYS Corporation

1590 Buckeye Drive

Milpitas, CA 95035

Attention: Chairman of the Compensation

Committee of the Board of Directors

If to Executive:

Nathan Zommer

c/o 1590 Buckeye Drive

Milpitas, CA 95035

7. ARBITRATION. To ensure rapid and economical resolution of any and all disputes which may arise under this Agreement, the Company and Executive each agree that any and all disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and discrimination claims), arising from or regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by final and binding arbitration under the procedures set forth in Exhibit B to this Agreement, which exhibit is incorporated herein by reference, and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit B).

8. CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS. Executive and the Company hereby agree as follows:

8.1 Anything in this Agreement to the contrary notwithstanding, in the event that any payment, distribution or other benefit provided by the Company to or for the benefit of Executive (whether paid or payable or provided or to be provided pursuant to the terms of this Agreement or otherwise) (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 8, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, in accordance with this Section 8, such Payments shall be reduced to the maximum amount that would result in no portion of the payments being subject to the Excise Tax, but only if and to the extent that such a reduction would result in Executive’s receipt of Payments that are greater than the net amount Executive would receive (after application of the Excise Tax) if no reduction is made. The amount of required reduction, if any, shall be the smallest amount so that Executive’s net proceeds with respect to the Payments (after taking into account payment of any Excise Tax and all federal, state and local income, employment or other taxes) shall be maximized. If, notwithstanding any reduction described in this Section 8 (or in the absence of any such reduction), the IRS determines that a Payment is subject to the Excise Tax (or subject to

a different amount of the Excise Tax than determined by the Company or Executive), then Section 8.3 shall apply. If the Excise Tax is not eliminated pursuant to this Section 8, Executive shall pay the Excise Tax.

8.2 All determinations required to be made under this Section 8 shall be made by the Company’s independent auditors. Such auditors shall provide detailed supporting calculations both to the Company and Executive. Any such determination by the Company’s independent auditors shall be binding upon the Company and Executive. The Payments, including without limitation any option acceleration benefits provided under this Agreement or otherwise (“Option Benefits”), shall be eliminated or reduced consistent with the requirements of this Section 8, first by eliminating or reducing cash payments and then by eliminating or reducing the number of Company shares or options that vest. Within five business days following a determination pursuant to this Section 8.2, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement.

8.3 As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Company’s independent auditors hereunder, it is possible that Option Benefits or other Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Option Benefits or other Payments, as the case may be, which will not have been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In the event that the Company’s independent auditors, based upon the assertion of a deficiency by the IRS against Executive or the Company which the Company’s independent auditors believe has a high probability of success, determine that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be repaid to the Company; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Company’s independent auditors, based upon controlling precedent or other substantial authority, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

9. OTHER TAX MATTERS. Notwithstanding the other provisions of this Agreement, to the extent that any amounts payable to Executive pursuant to this Agreement would not be deductible by the Company for federal income tax purposes on account of the limitations of Section 162(m) of the Code, the Company may defer payment of such amounts to the earliest subsequent calendar year in which the Company reasonably anticipates that payment of such amounts would be deductible by the Company in accordance with Section 409A of the Code and Section 1.409A-2(b)(7)(i) of the regulations thereunder. This Agreement is intended to comply with the short-term deferral rule under Treasury Regulation Section 1.409A-1(b)(4) and be exempt from Section 409A of the Code, and shall be construed and interpreted in accordance with such intent.

10. TERM. The term of this Agreement is from the date hereof until July 31, 2018.

11. GENERAL.

11.1 ENTIRE AGREEMENT. This Agreement sets forth the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with respect to the subject matter hereof. This Agreement is entered into without

reliance upon any promise, warranty or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties, representations or agreements.

11.2 SEVERABILITY. If any provision of this Agreement shall be held by a court of competent jurisdiction to be excessively broad as to duration, activity or subject, it shall be deemed to extend only over the maximum duration, activity and/or subject as to which such provision shall be valid and enforceable under applicable law. If any provisions shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this agreement, but this agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs, personal representatives, assigns, executors and administrators of each party, and inure to the benefit of each party, its heirs, successors and assigns. However, because of the unique and personal nature of Executive’s duties under this Agreement, Executive agrees not to delegate the performance of his duties under this Agreement without the prior consent of the Board.

11.4 APPLICABLE LAW; CLAWBACKS. This Agreement shall be deemed to have been entered into and shall be construed in accordance with the laws of the state of California as applied to contracts made and to be performed entirely within California. Executive agrees and acknowledges that any compensation paid to Executive by the Company, whether heretofore or hereafter, is subject to clawback by the Company under any rule adopted, from time to time, by the U.S. Securities and Exchange Commission or any stock exchange on which the Company’s stock is traded.

11.5 HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

11.6 COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Executive Employment Agreement to be executed as follows:

Nathan Zommer,		IXYS Corporation,
An individual		a Delaware Corporation
/s/ Nathan Zommer		By:	/s/ James Thorburn
			James M. Thorburn, Chairman of the Compensation Committee of the Board of Directors
Date:	8/28/2015	Date:	8-28-15

EXHIBIT A

RELEASE AGREEMENT

This Release Agreement (the “Agreement”) is entered into by and between Nathan Zommer (hereinafter “Executive”) and IXYS Corporation, a Delaware corporation (hereinafter the “Company”), in accordance with the severance provisions set forth in Section [    ] of the Sixth Amended Executive Employment Agreement, effective as of August 1, 2015, entered into by and between Executive and the Company (the “Employment Agreement”).

1. Separation of Employment. Effective                     , Executive shall no longer be employed by the Company in any capacity.

2. Separation Pay. In accordance with the Employment Agreement, the Company shall pay to Executive the severance benefits as provided in Section [    ] of the Employment Agreement.

3. No Admission of Liability. This Agreement does not constitute an admission of any kind by the Company.

4. Release of Known Claims By Executive. In exchange for the payments and agreements contained in this Agreement, Executive agrees unconditionally and forever to release and discharge the Company and the Company’s affiliated, related, parent and subsidiary corporations, as well as the Company’s and any affiliated, related, parent and subsidiary corporation’s respective attorneys, agents, representatives, partners, joint venturers, successors, assigns, insurers, owners, employees, officers, and directors (hereinafter the “Releasees”) from any and all claims, actions, causes of action, demands, rights, or damages of any kind or nature which he may now have, or ever have, whether known or unknown, of any nature arising out of or in any way relating to his employment with, or separation from the Company on or before the date of the execution of this Agreement.

5. Release of Unknown Claims By Executive. Executive further agrees knowingly to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

This release of claims shall be construed as broadly as possible under applicable law but shall not include any claim for indemnification under California Labor Code Section 2802 or California Corporations Code Section 317 or any other claim the release of which would violate California or federal statutory law or the public policy of the State of California.

6. Knowing and Voluntary. Executive represents and agrees that he is entering into this Agreement knowingly and voluntarily. Executive affirms that no promise or inducement was made to cause him to enter into this Agreement, other than the severance benefits promised to Executive herein. Executive further confirms that he has not relied upon any other statement or representation by anyone other than what is in this Agreement as a basis for his agreement.

7. Execution of Agreement. Executive expressly acknowledges that he has been provided twenty-one (21) days to consider this Agreement form the Company and that he was informed that he had the right to consult with counsel regarding this Agreement, and that he has had the opportunity to consult with counsel. To the extent that Executive has taken fewer than twenty-one (21) days to consider this Agreement, Executive acknowledges that he had sufficient time to consider the Agreement and to consult with counsel and that he does not desire additional time.

8. Revocation. This Agreement is revocable by Executive for a period of seven calendar days following his execution of this Agreement. The revocation must be in writing, must specifically revoke this Agreement, and must be received by the Company prior to the eighth calendar day following the execution of this Agreement. This Agreement becomes effective, enforceable and irrevocable on the eighth calendar day following Executive’s execution of this Agreement.

9. Release of Known Claims by the Company. In exchange for the agreements contained in this Agreement, the Company agrees unconditionally and forever to release and discharge Executive, as well as his attorneys, agents, assigns and representatives from any and all claims, actions, causes of action, demands, rights, or damages of any kind or nature which it may now have, or ever have, whether known or unknown, of any nature arising out of or in any way relating to Executive’s employment with, or separation from the Company on or before the date of the execution of this Agreement.

10. Release of Unknown Claims by the Company. The Company further agrees knowingly to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN, MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

11. Governing Law. This Agreement shall be construed under the laws of the State of California, both procedural and substantive.

12. Arbitration. Any dispute or controversy arising out of or relating to any interpretation, construction, performance, termination or breach of this Agreement, will be settled by final and binding arbitration under the procedures set forth in Exhibit B to the Employment Agreement, which exhibit is incorporated herein by reference, and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit B).

13. Confidentiality. Executive agrees not to disclose the existence of this Agreement or any of its terms to anyone other than his attorneys, accountants and immediate family members, or where compelled by an order of a court of competent jurisdiction or a subpoena issued under the authority thereof. Executive further agrees to keep this Agreement and all of its terms strictly confidential and agrees that he will inform any such attorneys, accountants and immediate family members about this confidentiality provision.

14. Waiver. The failure to enforce any provision of this Agreement shall not be construed to be a waiver of such provision or to affect the validity of this Agreement or the right of any party to enforce this Agreement.

15. Modification. No amendments to this Agreement will be valid unless written and signed by Executive and an authorized representative of the Company.

16. Severability. If any sentence, phrase, paragraph, subparagraph or portion of this Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of this Agreement.

17. Ambiguities. Both parties have participated in the negotiation of this Agreement and, thus, it is understood and agreed that the general rule that ambiguities are to be construed against the drafter shall not apply to this Agreement. In the event that any language of this Agreement is found to be ambiguous, each party shall have an opportunity to present evidence as to the actual intent of the parties with respect to any such ambiguous language.

18. Entire Agreement/Integration. This Agreement and any confidentiality, proprietary information, or inventions agreements signed by Executive during his employment with the Company (all of which survive the termination of the employment relationship) constitute the entire agreement between Executive and the Company concerning the terms of Executive’s employment with and separation from the Company and the compensation related thereto. All prior discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.

[Signature page follows]

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTER INTO IT WITH THE INTENT TO BE BOUND THEREBY.

		EXECUTIVE
Dated:
		Nathan Zommer
		Address:
		IXYS CORPORATION
Dated:	By:
		OFFICER OF THE COMPANY

Exhibit B

ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this Agreement or the termination of this Agreement shall be resolved by binding arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of arbitration, unless compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President and vice president of JAMS shall designate the arbitrator.

5. The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within 15 days of the date of that party’s written demand for arbitration or on the first available date thereafter on the arbitrator’s calendar. The arbitration hearing shall be held within 30 available date thereafter on the arbitrator’s calendar. Nothing in this paragraph shall prevent a party from seeking temporary equitable relief at any time, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

6. Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demands for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within 15 days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedure set forth in the California Code of Civil Procedure) with a maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

7. It is the intent of the parties that the Federal Arbitration Act (“FAA”) shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act (“CAA”) shall apply.

8. The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

9. Each party shall pay its pro rata share of the arbitrator’s fees and expenses, in addition to other expenses of the arbitration approved by the arbitrator, pending the resolution of the arbitration. The arbitrator shall have authority to award the payment of such fees and expenses to the prevailing party, as appropriate in the discretion of the arbitrator. Notwithstanding the foregoing, in no event shall the cost to Executive exceed the cost in a court of law or equity. Each party shall pay its own attorneys’ fees, witness fees and other expenses incurred for its own benefit.

10. The arbitrator shall render a written award setting forth the reasons for his or her decision. The decree or judgment of an award by the arbitrator may be entered and enforced in any court having jurisdiction over the parties. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the FAA, or if the FAA is not applicable, as permitted by the CAA.

EX-10.2

Exhibit 10.2

THIRD AMENDED EXECUTIVE EMPLOYMENT AGREEMENT

This Third Amended Executive Employment Agreement (the “Agreement”) is entered into by and between IXYS Corporation (the “Company”), a Delaware corporation, and Uzi Sasson (“Executive”), effective as of August 1, 2015 (the “Effective Date”).

W I T N E S S E T H

WHEREAS, the Company and the Executive are parties to that certain Second Amended Executive Employment Agreement effective as of July 16, 2012, which is modified and superseded by this Third Amended Executive Employment Agreement; and

WHEREAS, the Company desires to continue and extend the employment of Executive under mutually satisfactory terms and conditions, and the Executive desires to be employed by the Company, under the terms and conditions herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. EMPLOYMENT BY THE COMPANY. The Company hereby employs Executive to render full-time services to the Company as its President. Executive shall have responsibilities, duties and authorities that are customarily associated with such position, and such duties that are assigned by the Company’s Board of Directors (the “Board”). The Executive acknowledges that the Board may delegate to a committee of the Board any matter referred to in this Agreement as being for the Board’s determination.

2. COMPENSATION, VACATION AND BENEFITS.

2.1 The Company agrees to pay Executive an annual base salary in the amount of $395,000.00, payable every two weeks. Notwithstanding the foregoing, with the Executive’s consent, such salary may be temporarily reduced as part of a salary reduction program affecting multiple employees. The Executive shall be considered for an annual performance bonus on such terms and conditions as the Board shall determine in its sole discretion. The Executive’s performance, and his base salary and bonus arrangement will be reviewed by the Board from time to time, as the Board determines in its sole discretion. Executive shall be eligible for stock options and/or restricted stock grants, as determined by the Board in its sole discretion.

2.2 Executive’s paychecks will be distributed pursuant to ordinary business practice, and shall be subject to ordinary payroll deductions and tax withholdings. The Company also agrees to provide Executive with benefits consistent with Company policy for senior executives. Details about these benefits are set forth in the employee handbook and summary plan descriptions, copies of which have been provided to Executive. Unless the context otherwise requires, as used in this Agreement, “benefits” does not include any rights to the Company’s equity securities (whether stock options, restricted stock units, stock awards or other).

2.3 In addition to the benefits provided to Executive pursuant to subsections 2.1 and 2.2 hereof, the Company shall:

(a) pay, or reimburse Executive, for all reasonable costs of a yearly medical exam of Executive by a physician of his choice prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(b) maintain term life insurance (without a buildup of equity) in the amount of $2,000,000 on the life of the Executive payable to such beneficiary or beneficiaries as Executive may designate from time to time;

(c) pay, or reimburse Executive, for the services of a personal tax and/or investment advisor, not to exceed $2,000 per year, prior to the 15^th day of the third month following the end of the applicable fiscal year with respect to which such amount is payable;

(d) at the Board’s discretion, either (i) provide Executive with a car of such make and model as Executive and Board shall agree is commensurate with Executive’s position with the Company, including gas, insurance for such car and reasonable maintenance thereof or (ii) pay Executive a monthly allowance for a car on an economic basis comparable to (i); provided, however, that Executive shall at all times (x) comply with all policies of the Company from time to time in effect with respect to the maintenance and operation of motor vehicles, and (y) maintain a valid driver’s license; and

(e) provide Executive with 15 working days of annual vacation during each year.

3. EMPLOYEE HANDBOOK. By signing this Agreement, Executive acknowledges that he has received and read the Company’s employee handbook. Executive agrees to abide by all company policies and procedures. Notwithstanding the foregoing, if there shall be any conflict between this Agreement and such employee handbook, the terms of this Agreement shall govern.

4. TERMINATION OF EMPLOYMENT.

4.1 AT WILL. This Agreement does not provide for a minimum term of employment and Executive may be terminated by the Company at will.

4.2 COMPANY INITIATED TERMINATION.

(a) In the event the Company terminates Executive’s employment without cause, but not for reasons of Disability or death, Executive shall receive as severance a one-time payment equal to one month of his then annual salary multiplied by the number of calendar years (a fraction of a year shall be paid on a prorated basis) of Executive’s service with the Company, but not less than twelve months and not to exceed a total of eighteen months, payable within fifteen (15) days of such termination or such longer period of time that Executive has to make effective the release required by this Section 4.2 (a). In addition, the Company shall pay in one lump sum the amounts payable pursuant to COBRA for Executive’s health insurance for the eighteen calendar months following such termination. No other benefits or payments shall be provided. The Company’s obligation to make any payment or provide any benefit under this Section 4.2 (a) is conditioned upon the execution and delivery by the Executive of a release in favor of the Company in the form

attached hereto as Exhibit A specifically referencing this Section 4.2 (a) within 60 days of the date of termination (the “Release Period”). In the event the Release Period begins and ends in different taxable years, the amounts payable to Executive under this Section 4.2(a) shall be paid in the later of the two calendar years. For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(b) In the event Executive’s employment is terminated at any time with cause, all of Executive’s compensation and benefits will cease immediately, and Executive shall not be entitled to any severance benefits and all other benefits provided hereunder shall cease as of such termination. For purposes of this Agreement, “cause” shall mean (i) unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company, (ii) commission of an act of material dishonesty in connection with responsibilities as an employee; (iii) repeated failure, in the reasonable judgment of the Board, to substantially perform assigned duties or responsibilities as an employee as directed or assigned by the Chief Executive Officer or the Board (other than a failure resulting from Disability) after written notice thereof to Executive from the Company describing in reasonable detail the factual basis of Executive’s failure to perform such duties or responsibilities and Executive having had the opportunity to address the Board or the Chief Executive Officer, as determined by the Board, regarding such alleged failures and Executive’s failure to remedy said non-performance to the Company’s satisfaction within 60 days of receiving written notice; (iv) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State; (v) engagement in gross misconduct and such misconduct is materially harmful to the Company; (vi) failure to comply with the terms of any written Company policy or rule as they may be in effect from time to time during employment and such failure is materially harmful to the Company; (vii) failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested cooperation; or (viii) breach of this Agreement, the Proprietary Information Agreement, or any other agreements with the Company including, but not limited to agreements regarding confidentiality or proprietary information, and such failure is materially harmful to the Company. Physical or mental disability shall not constitute “cause”. Failure to accomplish corporate financial and management goals shall not constitute “cause”.

(c) In the event Executive suffers and continues to suffer a disability that renders him unable to perform the essential functions of his position, for three months within any six-month period (“Disability”), the Company shall, for eighteen months commencing at the conclusion of such three-month period of disability, (i) continue to pay Executive his annual base salary, (ii) continue to provide Executive’s health insurance and (ii) maintain life insurance in the manner and in the amount set forth in Section 2.3(b) hereof. If upon the conclusion of the eighteen-month period, Executive remains unable to perform the essential functions of the job, or the Company has no suitable vacant position for him, Executive’s employment shall be terminated.

4.3 EXECUTIVE INITIATED TERMINATION. Executive may voluntarily terminate his employment with the Company at any time by giving the Board 60 days written notice. In the event Executive voluntarily terminates his employment with the Company, all of Executive’s compensation and benefits will cease as of such termination date. Executive acknowledges that he will not receive any severance pay or benefits, except as defined in the Employee Handbook, and except as specified in this Agreement at Section 5.2 if applicable, upon such voluntary termination.

4.4 LIMITATION ON COMPENSATION. Except as expressly provided in Section 4.2 or Section 5.2, Executive will not be entitled to any other compensation, severance, pay-in-lieu of notice or any such compensation.

5. CHANGE OF CONTROL.

5.1 DEFINITIONS.

For purposes of this Agreement, a “Change of Control” shall mean:

(a) any merger or consolidation of the Company in which its voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity or its ultimate parent immediately after the merger or consolidation;

(b) any person or entity becoming the beneficial owner, directly or indirectly, of securities of the Company representing at least a majority of the total voting power of all of the then outstanding voting securities of the Company, other than a third party affiliated with the Company as of the date of this Agreement; or

(c) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.

For purposes of this Agreement, “good reason” for voluntary termination shall mean: (i) reduction of Executive’s rate of salary compensation as in effect immediately prior to the Change of Control by more than five percent; (ii) failure by the Company to pay or provide the Executive when due any compensation, benefits or perquisites to which the Executive is entitled pursuant to this Agreement or any other plan, contract or arrangement in which the Executive participates or is entitled to participate, after written notice thereof to Company from Executive describing in reasonable detail the factual basis of the Company’s failure to perform such obligation and the Company’s failure to remedy such non-performance within 60 days of receiving written notice; (iii) change in Executive’s responsibilities, authority, titles or offices resulting in diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith which is remedied by the Company promptly after notice thereof is given by Executive (it being understood that the fact that the Company is no longer a public company or an ultimate parent entity shall not be a basis for diminution) and excluding for this purpose those duties that Executive may be performing that are in the nature of duties performed by a chief financial officer; (iv) request that Executive relocate to a worksite that is more than 35 miles from his prior worksite, unless Executive accepts such relocation opportunity; (vi) failure or refusal of the successor company to assume the Company’s obligations under this Agreement; or (vii) material breach by the Company or any successor company of any of the material provisions of this Agreement.

5.2 OPERATIVE PROVISIONS

(a) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, he shall be entitled to receive a cash payment in one lump sum, payable within 15 days of such termination or such longer period of time that Executive has to make effective the release required by Section 5.2 (e) of this Agreement (the “Section 5.2 Payment Date”), equal to two times his average total annual cash compensation, including base salary and bonus, of the prior three years. The average of the prior three years (“Average”) shall be computed by dividing by three the sum of all cash compensation he received from the Company during the three years prior to the termination. Section 4.2 (a) shall not have any application in the event of a termination covered by this Section 5.2(a).

(b) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, Executive shall continue to receive all employment benefits as defined in Sections 2.2 and 2.3 above (excluding 2.3 (e)), or their equivalent where benefit plan participation by Executive is not available, for eighteen (18) months following the termination.

(c) In the event of Executive’s termination of employment hereunder either by the Company without cause, or by Executive for good reason, but not for reasons of Disability or death, within one year following a Change of Control and Executive has provided notice to the Company of such good reason within ninety (90) days of its initial occurrence and the Company has had at least thirty (30) days thereafter to cure the good reason event and has failed to do so, the vesting of all shares of Company stock covered by options, restricted stock, stock appreciation rights or other stock rights, in each case granted to Executive by the Company, shall be accelerated on the Section 5.2 Payment Date such that all such unvested shares or rights shall become vested as of such date.

(d) For purposes of this Agreement, termination of Executive’s employment shall mean “separation from service” within the meaning of Section 409A of the Code and Section 1.409A-1(h) of the regulations promulgated under the Code or any successor regulations.

(e) The Company’s obligation to make any payment or provide any benefit or vest any options or other stock rights under this Section 5.2 is conditioned upon the execution and delivery by the Executive of a release in favor of the

Company in the form attached hereto as Exhibit A specifically referencing Section 5.2 within the Release Period. In the event the Release Period begins and ends in different taxable years, the amounts payable to Executive under Section 5.2 shall be paid in the later of the two calendar years.

6. NOTICES. All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or delivered by registered or certified mail (return receipt requested), or private overnight mail (delivery confirmed by such service, to the address listed below, or to such other address as either party shall designate by notice in writing to the other in accordance herein):

If to the Company:

IXYS Corporation

1590 Buckeye Drive

Milpitas, CA 95035

Attention:  Chairman of the Compensation

 Committee of the Board of Directors

If to Executive:

Uzi Sasson

c/o 1590 Buckeye Drive

Milpitas, CA 95035

7. ARBITRATION. To ensure rapid and economical resolution of any and all disputes which may arise under this Agreement, the Company and Executive each agree that any and all disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and discrimination claims), arising from or regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by final and binding arbitration under the procedures set forth in Exhibit B to this Agreement, which exhibit is incorporated herein by reference, and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit B).

8. CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS. Executive and the Company hereby agree as follows:

8.1 Anything in this Agreement to the contrary notwithstanding, in the event that any payment, distribution or other benefit provided by the Company to or for the benefit of Executive (whether paid or payable or provided or to be provided pursuant to the terms of this Agreement or otherwise) (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 8, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, in accordance with this Section 8, such Payments shall be reduced to the maximum amount that would result in no portion of the payments being subject to the Excise Tax, but only if and to the extent that such a reduction would result in Executive’s receipt of Payments that are greater than the net amount Executive would receive (after application of the Excise Tax) if no reduction is made. The amount of required reduction, if any, shall be the smallest amount so that Executive’s net proceeds with respect to the Payments (after taking into account payment of any Excise Tax and all federal, state and local income, employment or other taxes) shall be maximized. If, notwithstanding any reduction described in this Section 8 (or in the absence of any such reduction), the IRS determines that a Payment is subject to the Excise Tax (or subject to

a different amount of the Excise Tax than determined by the Company or Executive), then Section 8.3 shall apply. If the Excise Tax is not eliminated pursuant to this Section 8, Executive shall pay the Excise Tax.

8.2 All determinations required to be made under this Section 8 shall be made by the Company’s independent auditors. Such auditors shall provide detailed supporting calculations both to the Company and Executive. Any such determination by the Company’s independent auditors shall be binding upon the Company and Executive. The Payments, including without limitation any option acceleration benefits provided under this Agreement or otherwise (“Option Benefits”), shall be eliminated or reduced consistent with the requirements of this Section 8, first by eliminating or reducing cash payments and then by eliminating or reducing the number of Company shares or options that vest. Within five business days following a determination pursuant to this Section 8.2, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement.

8.3 As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Company’s independent auditors hereunder, it is possible that Option Benefits or other Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Option Benefits or other Payments, as the case may be, which will not have been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In the event that the Company’s independent auditors, based upon the assertion of a deficiency by the IRS against Executive or the Company which the Company’s independent auditors believe has a high probability of success, determine that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be repaid to the Company; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Company’s independent auditors, based upon controlling precedent or other substantial authority, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

9. OTHER TAX MATTERS. Notwithstanding the other provisions of this Agreement, to the extent that any amounts payable to Executive pursuant to this Agreement would not be deductible by the Company for federal income tax purposes on account of the limitations of Section 162(m) of the Code, the Company may defer payment of such amounts to the earliest subsequent calendar year in which the Company reasonably anticipates that payment of such amounts would be deductible by the Company in accordance with Section 409A of the Code and Section 1.409A-2(b)(7)(i) of the regulations thereunder. This Agreement is intended to comply with the short-term deferral rule under Treasury Regulation Section 1.409A-1(b)(4) and be exempt from Section 409A of the Code, and shall be construed and interpreted in accordance with such intent.

10. TERM. The term of this Agreement is from the date hereof until July 31, 2018.

11. GENERAL.

11.1 ENTIRE AGREEMENT. This Agreement sets forth the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with respect to the subject matter hereof. This Agreement is entered into without

reliance upon any promise, warranty or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties, representations or agreements.

11.2 SEVERABILITY. If any provision of this Agreement shall be held by a court of competent jurisdiction to be excessively broad as to duration, activity or subject, it shall be deemed to extend only over the maximum duration, activity and/or subject as to which such provision shall be valid and enforceable under applicable law. If any provisions shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this agreement, but this agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs, personal representatives, assigns, executors and administrators of each party, and inure to the benefit of each party, its heirs, successors and assigns. However, because of the unique and personal nature of Executive’s duties under this Agreement, Executive agrees not to delegate the performance of his duties under this Agreement without the prior consent of the Board.

11.4 APPLICABLE LAW; CLAWBACKS. This Agreement shall be deemed to have been entered into and shall be construed in accordance with the laws of the state of California as applied to contracts made and to be performed entirely within California. Executive agrees and acknowledges that any compensation paid to Executive by the Company, whether heretofore or hereafter, is subject to clawback by the Company under any rule adopted, from time to time, by the U.S. Securities and Exchange Commission or any stock exchange on which the Company’s stock is traded.

11.5 HEADINGS. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

11.6 COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Executive Employment Agreement to be executed as follows:

Uzi Sasson,		IXYS Corporation,
An individual		a Delaware Corporation
/s/ Uzi Sasson		By:	/s/ James Thorburn
			James M. Thorburn, Chairman of the Compensation Committee of the Board of Directors
Date:	August 28, 2015	Date:	8-28-15

EXHIBIT A

RELEASE AGREEMENT

This Release Agreement (the “Agreement”) is entered into by and between Uzi Sasson (hereinafter “Executive”) and IXYS Corporation, a Delaware corporation (hereinafter the “Company”), in accordance with the severance provisions set forth in Section [    ] of the Third Amended Executive Employment Agreement, effective as of August 1, 2015, entered into by and between Executive and the Company (the “Employment Agreement”).

1. Separation of Employment. Effective                     , Executive shall no longer be employed by the Company in any capacity.

2. Separation Pay. In accordance with the Employment Agreement, the Company shall pay to Executive the severance benefits as provided in Section [    ] of the Employment Agreement.

3. No Admission of Liability. This Agreement does not constitute an admission of any kind by the Company.

4. Release of Known Claims By Executive. In exchange for the payments and agreements contained in this Agreement, Executive agrees unconditionally and forever to release and discharge the Company and the Company’s affiliated, related, parent and subsidiary corporations, as well as the Company’s and any affiliated, related, parent and subsidiary corporation’s respective attorneys, agents, representatives, partners, joint venturers, successors, assigns, insurers, owners, employees, officers, and directors (hereinafter the “Releasees”) from any and all claims, actions, causes of action, demands, rights, or damages of any kind or nature which he may now have, or ever have, whether known or unknown, of any nature arising out of or in any way relating to his employment with, or separation from the Company on or before the date of the execution of this Agreement.

5. Release of Unknown Claims By Executive. Executive further agrees knowingly to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

This release of claims shall be construed as broadly as possible under applicable law but shall not include any claim for indemnification under California Labor Code Section 2802 or California Corporations Code Section 317 or any other claim the release of which would violate California or federal statutory law or the public policy of the State of California.

6. Knowing and Voluntary. Executive represents and agrees that he is entering into this Agreement knowingly and voluntarily. Executive affirms that no promise or inducement was made to cause him to enter into this Agreement, other than the severance benefits promised to Executive herein. Executive further confirms that he has not relied upon any other statement or representation by anyone other than what is in this Agreement as a basis for his agreement.

7. Execution of Agreement. Executive expressly acknowledges that he has been provided twenty-one (21) days to consider this Agreement form the Company and that he was informed that he had the right to consult with counsel regarding this Agreement, and that he has had the opportunity to consult with counsel. To the extent that Executive has taken fewer than twenty-one (21) days to consider this Agreement, Executive acknowledges that he had sufficient time to consider the Agreement and to consult with counsel and that he does not desire additional time.

8. Revocation. This Agreement is revocable by Executive for a period of seven calendar days following his execution of this Agreement. The revocation must be in writing, must specifically revoke this Agreement, and must be received by the Company prior to the eighth calendar day following the execution of this Agreement. This Agreement becomes effective, enforceable and irrevocable on the eighth calendar day following Executive’s execution of this Agreement.

9. Release of Known Claims by the Company. In exchange for the agreements contained in this Agreement, the Company agrees unconditionally and forever to release and discharge Executive, as well as his attorneys, agents, assigns and representatives from any and all claims, actions, causes of action, demands, rights, or damages of any kind or nature which it may now have, or ever have, whether known or unknown, of any nature arising out of or in any way relating to Executive’s employment with, or separation from the Company on or before the date of the execution of this Agreement.

10. Release of Unknown Claims by the Company. The Company further agrees knowingly to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN, MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

11. Governing Law. This Agreement shall be construed under the laws of the State of California, both procedural and substantive.

12. Arbitration. Any dispute or controversy arising out of or relating to any interpretation, construction, performance, termination or breach of this Agreement, will be settled by final and binding arbitration under the procedures set forth in Exhibit B to the Employment Agreement, which exhibit is incorporated herein by reference, and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit B).

13. Confidentiality. Executive agrees not to disclose the existence of this Agreement or any of its terms to anyone other than his attorneys, accountants and immediate family members, or where compelled by an order of a court of competent jurisdiction or a subpoena issued under the authority thereof. Executive further agrees to keep this Agreement and all of its terms strictly confidential and agrees that he will inform any such attorneys, accountants and immediate family members about this confidentiality provision.

14. Waiver. The failure to enforce any provision of this Agreement shall not be construed to be a waiver of such provision or to affect the validity of this Agreement or the right of any party to enforce this Agreement.

15. Modification. No amendments to this Agreement will be valid unless written and signed by Executive and an authorized representative of the Company.

16. Severability. If any sentence, phrase, paragraph, subparagraph or portion of this Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of this Agreement.

17. Ambiguities. Both parties have participated in the negotiation of this Agreement and, thus, it is understood and agreed that the general rule that ambiguities are to be construed against the drafter shall not apply to this Agreement. In the event that any language of this Agreement is found to be ambiguous, each party shall have an opportunity to present evidence as to the actual intent of the parties with respect to any such ambiguous language.

18. Entire Agreement/Integration. This Agreement and any confidentiality, proprietary information, or inventions agreements signed by Executive during his employment with the Company (all of which survive the termination of the employment relationship) constitute the entire agreement between Executive and the Company concerning the terms of Executive’s employment with and separation from the Company and the compensation related thereto. All prior discussions and negotiations have been and are merged and integrated into, and are superseded by, this Agreement.

[Signature page follows]

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTER INTO IT WITH THE INTENT TO BE BOUND THEREBY.

		EXECUTIVE
Dated:
		Uzi Sasson
		Address:
		IXYS CORPORATION
Dated:	By:
		OFFICER OF THE COMPANY

Exhibit B

ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this Agreement or the termination of this Agreement shall be resolved by binding arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. (“JAMS”). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of arbitration, unless compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President and vice president of JAMS shall designate the arbitrator.

5. The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within 15 days of the date of that party’s written demand for arbitration or on the first available date thereafter on the arbitrator’s calendar. The arbitration hearing shall be held within 30 available date thereafter on the arbitrator’s calendar. Nothing in this paragraph shall prevent a party from seeking temporary equitable relief at any time, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

6. Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demands for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within 15 days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedure set forth in the California Code of Civil Procedure) with a maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

7. It is the intent of the parties that the Federal Arbitration Act (“FAA”) shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act (“CAA”) shall apply.

8. The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

9. Each party shall pay its pro rata share of the arbitrator’s fees and expenses, in addition to other expenses of the arbitration approved by the arbitrator, pending the resolution of the arbitration. The arbitrator shall have authority to award the payment of such fees and expenses to the prevailing party, as appropriate in the discretion of the arbitrator. Notwithstanding the foregoing, in no event shall the cost to Executive exceed the cost in a court of law or equity. Each party shall pay its own attorneys’ fees, witness fees and other expenses incurred for its own benefit.

10. The arbitrator shall render a written award setting forth the reasons for his or her decision. The decree or judgment of an award by the arbitrator may be entered and enforced in any court having jurisdiction over the parties. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the FAA, or if the FAA is not applicable, as permitted by the CAA.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Nathan Zommer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IXYS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2015

/s/ Nathan Zommer

Nathan Zommer

Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Uzi Sasson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IXYS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2015

/s/ Uzi Sasson

Uzi Sasson

President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. 1350, Nathan Zommer, the Chief Executive Officer of IXYS Corporation (the “Company”), and Uzi Sasson, the Chief Financial Officer of the Company, each hereby certifies that, to his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the periods covered by the Periodic Report and the results of operations of the Company for the periods covered by the Periodic Report.

Dated: November 4, 2015

/s/ Nathan Zommer

Nathan Zommer

Chief Executive Officer

/s/ Uzi Sasson

Uzi Sasson

Chief Financial Officer

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Note 5 - Other Assets - Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Marketable equity securities	$ 1,263	$ 1,737
Auction rate preferred securities	350	350
Long-term equity investments	10,895	11,041
Other items	626	576
Total	$ 13,134	$ 13,704

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Note 13 - Segment and Geographic Information (Details Textual)	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Distributor 1 [Member]
Number of Entity Wide Revenue Major Customers	1		1
Concentration Risk, Percentage	11.50%		11.10%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Distributor 2 [Member]
Number of Entity Wide Revenue Major Customers		1		1
Concentration Risk, Percentage		11.40%		10.90%
Number of Operating Segments	1	1	1	1
Number of Reportable Segments	1	1	1	1

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Note 10 - Employee Equity Incentive Plans - Fair Value and Assumptions (Details) - $ / shares		3 Months Ended		6 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Stock Option [Member]
Weighted average estimated fair value of grant per share (in dollars per share)		$ 4.31	$ 5.54	$ 4.83	$ 5.54
Risk-free interest rate		1.70%	1.80%	1.80%	1.80%
Expected term in years		6 years 127 days	6 years 91 days	6 years 164 days	6 years 91 days
Volatility		42.80%	52.20%	44.90%	52.20%
Dividend yield		1.30%	1.00%	1.20%	1.00%
Employee Stock Purchase Plan 1999 [Member]
Weighted average estimated fair value of grant per share (in dollars per share)	[1]			$ 3.15	$ 2.90
Risk-free interest rate	[1]			0.10%	0.10%
Expected term in years	[1]			1 year	182 days
Volatility	[1]			33.70%	34.50%
Dividend yield	[1]			1.10%	1.10%

[1] Under the stock purchase plan, rights to purchase shares are only granted during the first and third quarters of each fiscal year.

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Note 10 - Employee Equity Incentive Plans (Details Textual) - USD ($)		6 Months Ended
	May. 01, 2015	Sep. 30, 2015	Sep. 30, 2014	Aug. 30, 2013	Sep. 16, 2011	Sep. 10, 2009
Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized						900,000
Plan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					600,000
Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				2,000,000
Stock Options of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		100.00%
Stock Options of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Stock Appreciation Rights of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		100.00%
Stock Appreciation Rights of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Employee Stock Purchase Plan 1999 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		1,550,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		85.00%
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate		15.00%
Stock Issued During Period, Shares, Employee Stock Purchase Plans		51,824
Common Stock, Capital Shares Reserved for Future Issuance		285,691
Equity Incentive Plans Total [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 8,200,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		3 years 73 days
RadioPulse [Member]
Employee Service Share-based Compensation, Cash Flow Effect, Cash Used to Settle Awards	$ 249,000	$ 249,000
Estimated Statutory Income Tax Rate		35.00%	35.00%

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Note 13 - Segment and Geographic Information (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Revenue from External Customers by Geographic Areas [Table Text Block]

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
United States	$	19,317	$	21,502	$	39,450	$	44,006
Europe and the Middle East
France		2,302		1,897		4,342		3,749
Germany		8,845		8,026		16,922		16,475
Italy		969		909		2,233		2,382
Russia		465		2,157		718		2,860
Sweden		574		1,309		1,279		2,594
United Kingdom		3,494		5,822		6,714		11,201
Other		6,657		6,810		13,091		13,894
Asia Pacific
China		20,053		20,480		41,288		40,882
Japan		2,402		2,161		5,724		3,962
Korea		6,089		5,689		12,225		12,128
Malaysia		1,322		1,490		2,564		3,122
Singapore		3,020		2,913		6,137		6,070
Thailand		992		983		2,035		2,027
Other		1,607		1,702		3,091		3,816
Rest of the World
India		909		1,380		2,041		2,629
Other		1,240		1,205		2,450		2,718
Total	$	80,257	$	86,435	$	162,304	$	174,515

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Power semiconductors	$	53,433	$	55,780	$	108,411	$	113,748
Integrated circuits		22,024		23,438		44,508		47,320
Systems and RF power semiconductors		4,800		7,217		9,385		13,447
Total	$	80,257	$	86,435	$	162,304	$	174,515

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Note 14 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Tax Expense (Benefit)	$ 2,505	$ 3,235	$ 4,167	$ 4,784
Effective Income Tax Rate Reconciliation, Percent	43.40%	36.00%	40.00%	33.90%

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Note 4 - Fair Value (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	September 30, 2015 (1)						March 31, 2015 (1)
			Fair Value Measured at Reporting Date Using						Fair Value Measured at Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	72,444	$	72,444	$	-	$	76,317	$	76,317	$	-
Marketable equity securities (3)		1,263		1,263		-		1,737		1,737		-
Auction rate preferred securities (3)		350		-		350		350		-		350
Total Assets Measured at Fair Value	$	74,057	$	73,707	$	350	$	78,404	$	78,054	$	350
Liabilities
Derivative liabilities (4)		-		-		-		19		-		19
Total Liabilities Measured at Fair Value	$	-	$	-	$	-	$	19	$	-	$	19

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Note 11 - Accumulated Other Comprehensive (Loss) - AOCI Change (Details) - USD ($)	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	$ (13,577,000)	$ 10,535,000
Other comprehensive income (loss) before reclassifications	$ 3,561,000	$ (8,100,000)
Net (gain) loss reclassified from accumulated other comprehensive income (loss)
Net current period other comprehensive income (loss)	$ 3,561,000	$ (8,100,000)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(10,016,000)	2,435,000
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	7,000	325,000
Other comprehensive income (loss) before reclassifications	(302,000)	(638,000)
Net (gain) loss reclassified from accumulated other comprehensive income (loss)	272,000	(19,000)
Net current period other comprehensive income (loss)	(30,000)	(657,000)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(23,000)	(332,000)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(9,518,000)	$ (5,831,000)
Other comprehensive income (loss) before reclassifications	$ 0
Net (gain) loss reclassified from accumulated other comprehensive income (loss)
Net current period other comprehensive income (loss)	$ 0
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(9,518,000)	$ (5,831,000)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(23,088,000)	5,029,000
Other comprehensive income (loss) before reclassifications	3,259,000	(8,738,000)
Net (gain) loss reclassified from accumulated other comprehensive income (loss)	272,000	(19,000)
Net current period other comprehensive income (loss)	3,531,000	(8,757,000)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(19,557,000)	$ (3,728,000)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(23,088,000)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	$ (19,557,000)

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Note 8 - Borrowing Arrangements (Details Textual)		3 Months Ended	6 Months Ended
	Dec. 06, 2013 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 EUR (€)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	May. 01, 2015 USD ($)	Apr. 01, 2015 EUR (€)	Apr. 01, 2015 USD ($)	Mar. 31, 2015 EUR (€)	Mar. 31, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 10, 2005 EUR (€)	Jun. 10, 2005 USD ($)
Bank of West Amended and Restated Credit Agreement December Six Two Thousand and Thirteen [Member] | Minimum [Member]
Line of Credit Facility Basis Spread on Variable Rate			0.75%			0.75%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.25%	0.25%
Bank of West Amended and Restated Credit Agreement December Six Two Thousand and Thirteen [Member] | Maximum [Member]
Line of Credit Facility Basis Spread on Variable Rate			2.50%			2.50%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.625%	0.625%
Bank of West Amended and Restated Credit Agreement December Six Two Thousand and Thirteen [Member]
Line of Credit Facility, Initiation Date	Dec. 06, 2013		Dec. 06, 2013	Dec. 06, 2013
Line of Credit Facility, Expiration Date	Nov. 30, 2015		Nov. 30, 2015	Nov. 30, 2015
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000,000					$ 50,000,000
Long-term Line of Credit						$ 45,000,000
Line of Credit Facility, Interest Rate at Period End			2.01%			2.01%
Available Credit Line for Letter of Credit	$ 3,000,000					$ 3,000,000
IKB Deutsche Industrial Bank Loan Payable [Member]
Debt Instrument, Issuance Date			Jun. 10, 2005	Jun. 10, 2005
Debt Instrument, Face Amount													€ 10,000,000	$ 12,200,000
Long-term Debt, Gross										€ 3,500,000	$ 3,800,000
April 2015 IKB Deutsche Industriebank Loan Payable [Member]
Debt Instrument, Maturity Date			Mar. 31, 2022	Mar. 31, 2022
Debt Instrument, Face Amount								€ 6,500,000	$ 7,000,000
Long-term Debt, Gross			€ 6,000,000			6,800,000
Debt Instrument, Interest Rate, Stated Percentage								1.75%	1.75%
Debt Instrument, Periodic Payment, Principal			€ 232,000	$ 261,000
Notes Payable, Other Payables [Member] | RadioPulse [Member]
Long-term Debt, Gross						$ 1,700,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt							$ 2,400,000
Debt Instrument, Interest Rate, Effective Percentage							4.90%
Notes Payable, Other Payables [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt												$ 723,000
Repayments of Debt		$ 99,000
Repayments of Debt				$ 937,000	$ 629,000

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Note 4 - Fair Value (Details Textual) - USD ($)	3 Months Ended	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Mar. 31, 2015
Other than Temporary Impairment Losses, Investments	$ 454,000	$ 454,000
Auction Rate Preferred Securities Percentage Collateralized	100.00%	100.00%
Collateralized Asset Value Exceeding Value of ARPS Percentage	300.00%	300.00%
Debt, Long-term and Short-term, Combined Amount	$ 53,900,000	$ 53,900,000	$ 49,200,000

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Note 12 - Computation of Earnings per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Weighted Average Number Diluted Shares Outstanding Adjustment	729,000	736,000	858,000	703,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,067,109	2,318,679	1,436,546	2,507,755

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Note 10 - Employee Equity Incentive Plans - Allocated Share-based Compensation Expense (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Cost of Sales [Member]
Stock-based Compensation Effect in Income before Taxes		$ 124	$ 102	$ 246	$ 210
Research and Development Expense [Member]
Stock-based Compensation Effect in Income before Taxes	[1]	330	189	791	378
Selling, General and Administrative Expenses [Member]
Stock-based Compensation Effect in Income before Taxes		497	406	903	790
Stock-based Compensation Effect in Income before Taxes		951	697	1,940	1,378
Provision for income taxes	[2]	333	244	679	482
Net stock-based compensation effects in net income		$ 618	$ 453	$ 1,261	$ 896

[1] Includes acquisition-related compensation expenses of $249,000 during the six months ended September 30, 2015.

[2] Calculated at the U.S. statutory federal income tax rate of 35% in fiscal 2016 and 2015.

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Note 2 - Recent Accounting Pronouncements and Accounting Changes

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2. Recent Accounting Pronouncements and Accounting Changes

In May 2014, the Financial Accounting Standards Board, or FASB issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In April 2015, FASB issued the authoritative guidance that requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The guidance will be effective for fiscal years beginning after December 15, 2015, and interim periods during the annual period, with early adoption permitted for financial statements that have not been previously issued. The new standard is required to be applied retrospectively to all prior periods presented in the financial statements. An entity is also required in the year of adoption (and in interim periods within that year) to provide certain disclosures about the change in accounting principle, including the nature of and reason for the change, the transition method, a description of the prior period information that has been retrospectively adjusted and the effect of the change on the financial statements line items (that is, debt issuance cost asset and the debt liability). We do not expect this guidance to have a significant impact on our consolidated financial statements. In August 2015, FASB issued the authoritative guidance that added Securities and Exchange Commission, or SEC, content. The guidance issued in April 2015 did not directly address the manner in which debt issuance costs relating to a line of credit arrangement are treated. The SEC staff clarified that they would not object to the balance sheet presentation of such costs as an asset (i.e., a deferred charge) to be subsequently amortized ratably over the term of the line of credit arrangement, even if there are no borrowings outstanding on the underlying line of credit arrangement.

In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330,

Inventory

, for inventory that is measured using the methods other than last-in, first-out (LIFO) and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for us from the fiscal years beginning after December 15, 2016 and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

In September 2015, FASB issued an amendment to modify the guidance related to measurement-period adjustments in Topic 805,

Business Combinations

. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. It also requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. It eliminates the requirement to retrospectively account for those adjustments.

The guidance will be effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods during the annual period. The new standard is required to be applied prospectively to adjustments to provisional amounts that occur after the aforementioned effective date with earlier application permitted for financial statements that have not yet been issued. We do not expect this guidance to have a significant impact on our consolidated financial statements. The impact on earnings due to measurement period adjustments will be disclosed in the relevant notes to the financial statements

.

In October 2015, FASB ratified a proposed Accounting Standards Update, or ASU, which requires presentation of deferred tax assets and liabilities as noncurrent in a classified balance sheet. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods during the annual period. Early application is permitted as of the beginning of any interim or annual reporting period. We do not expect this guidance to have a significant impact on our consolidated financial statements.

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Note 9 - Pension Plans (Details Textual)	12 Months Ended
	Mar. 31, 2016 USD ($)	Sep. 30, 2015
United Kingdom and the Philippines Plans [Member] | Scenario, Forecast [Member]
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	$ 994,000
Number of Defined Benefit Plans		3

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Note 9 - Pension Plans (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(unaudited)						(unaudited)
Service cost	$	25		$	26		$	51		$	52
Interest cost on projected benefit obligation		371			467			739			940
Expected return on plan assets		(442	)		(494	)		(880	)		(991	)
Recognized actuarial loss		45			18			90			36
Net periodic pension expense	$	(1	)	$	17		$	-		$	37

Defined Benefit Plan Plan Assets Fair Value [Table Text Block]

	September 30, 2015										March 31, 2015
Description	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
	(unaudited)										(unaudited)
Cash and cash funds	$	1,157	$	-		$	-	$	1,157		$	2,588	$	-		$	-	$	2,588
Currency contracts		-		(125	)		-		(125	)		-		(30	)		-		(30	)
Equity		3,876		-			-		3,876			19,997		652			7		20,656
Fixed interest		1,101		13,055			1		14,157			861		5,887			1		6,749
Mutual funds		-		9,484			-		9,484			-		-			-		-
Mortgage-backed securities		-		34			-		34			-		16			-		16
Swaps and other		-		249			-		249			2		133			-		135
Total	$	6,134	$	22,697		$	1	$	28,832		$	23,448	$	6,658		$	8	$	30,114

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Note 7 - Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Accrued Expenses and Other Current Liabilities [Table Text Block]

	September 30,		March 31,
	2015		2015
	(unaudited)
Uninvoiced goods and services	$	9,437	$	8,473
Compensation and benefits		7,500		6,230
Income taxes		3,356		2,459
Commissions, royalties and other		3,146		2,703
Total	$	23,439	$	19,865

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Note 13 - Segment and Geographic Information - Revenue by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Power Semiconductors [Member]
Net Revenues	$ 53,433	$ 55,780	$ 108,411	$ 113,748
Integrated Circuits [Member]
Net Revenues	22,024	23,438	44,508	47,320
Systems and RF Power Semiconductors [Member]
Net Revenues	4,800	7,217	9,385	13,447
Net Revenues	$ 80,257	$ 86,435	$ 162,304	$ 174,515

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Note 9 - Pension Plans - Net Periodic Pension Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Service cost	$ 25	$ 26	$ 51	$ 52
Interest cost on projected benefit obligation	371	467	739	940
Expected return on plan assets	(442)	(494)	(880)	(991)
Recognized actuarial loss	45	18	$ 90	36
Net periodic pension expense	$ (1)	$ 17		$ 37

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Note 10 - Employee Equity Incentive Plans (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended September 30,				Six Months Ended S eptember 30,
Statement of Operations Classifications	2015		2014		2015		2014
	(unaudited)				(unaudited)
Cost of goods sold	$	124	$	102	$	246	$	210
Research, development and engineering expenses (1)		330		189		791		378
Selling, general and administrative expenses		497		406		903		790
Stock-based compensation effect in income before taxes		951		697		1,940		1,378
Provision for income taxes (2)		333		244		679		482
Net stock-based compensation effects in net income	$	618	$	453	$	1,261	$	896

Schedule of Employee Service Share Based Compensation Fair Value Assumptions and Methodology [Table Text Block]

	Stock Options												Purchase Plan (1)
	Three Months Ended September 30,						Six Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014			2015			2014
	(unaudited)						(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	4.31		$	5.54		$	4.83		$	5.54		$	3.15		$	2.90
Risk-free interest rate		1.7	%		1.8	%		1.8	%		1.8	%		0.1	%		0.1	%
Expected term in years		6.35			6.25			6.45			6.25			1.00			0.50
Volatility		42.8	%		52.2	%		44.9	%		52.2	%		33.7	%		34.5	%
Dividend yield		1.3	%		1.0	%		1.2	%		1.0	%		1.1	%		1.1	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares			Weighted Average Exercise Price Per Share		Intrinsic  Value (1)
				(unaudited)			(000)
Balance at March 31, 2015		4,942,511		$	10.37
Options granted		1,124,000		$	11.72
Options exercised		(320,826	)	$	9.15	$	1,291
Options cancelled		(2,500	)	$	12.13
Options expired		(434,788	)	$	14.68
Balance at September 30, 2015		5,308,397		$	10.38
Exercisable at September 30, 2015		3,504,063		$	9.84
Exercisable at March 31, 2015		3,942,261		$	10.20

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Note 11 - Accumulated Other Comprehensive (Loss) (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Six Months Ended September 30, 2015
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		3,561			(302	)		-			3,259
Net loss reclassified from accumulated other comprehensive income   (loss)		-			272			-			272
Net current period other comprehensive income (loss)		3,561			(30	)		-			3,531
Balance as of September 30, 2015	$	(10,016	)	$	(23	)	$	(9,518	)	$	(19,557	)

	Six Months Ended September 30, 2014
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2014	$	10,535		$	325		$	(5,831	)	$	5,029
Other comprehensive income (loss) before reclassifications		(8,100	)		(638	)		-			(8,738	)
Net gain reclassified from accumulated other comprehensive income (loss)		-			(19	)		-			(19	)
Net current period other comprehensive income   (loss)		(8,100	)		(657	)		-			(8,757	)
Balance as of September 30, 2014	$	2,435		$	(332	)	$	(5,831	)	$	(3,728	)

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Accumulated Other C omprehensive Income Components	Amounts Reclassified from Accumulated Other Comprehensive Income											Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended September 30,					Six Months Ended September 30,
	2015			2014		2015			2014
	(unaudited)					(unaudited)
Net gain on investments	$	-		$	-	$	-		$	30		Other income (expense), net
Impairment of marketable securities		(454	)		-		(454	)		-		Other income (expense), net
Tax impact		182			-		182			(11	)	Provision for income tax
Total reclassifications for the period	$	(272	)	$	-	$	(272	)	$	19		Income after income tax provision

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Note 1 - Unaudited Condensed Consolidated Financial Statements

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Basis of Accounting [Text Block]

1

. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31, 2015 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2015, or fiscal 2015, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

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Note 12 - Computation of Earnings per Share (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Net income	$	3,273	$	5,747	$	6,258	$	9,322
Weighted average shares - basic		31,651		31,499		31,769		31,439
Weighted average shares - diluted		32,380		32,235		32,627		32,142
Net income per share - basic	$	0.10	$	0.18	$	0.20	$	0.30
Net income per share - diluted	$	0.10	$	0.18	$	0.19	$	0.29

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Note 6 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Raw materials	$ 16,294	$ 17,169
Work in process	40,160	37,491
Finished goods	29,908	27,345
Total	$ 86,362	$ 82,005

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Note 12 - Computation of Earnings per Share - Computation of Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 3,273	$ 5,747	$ 6,258	$ 9,322
Weighted average shares - basic (in shares)	31,651	31,499	31,769	31,439
Weighted average shares - diluted (in shares)	32,380	32,235	32,627	32,142
Net income per share - basic (in dollars per share)	$ 0.10	$ 0.18	$ 0.20	$ 0.30
Net income per share - diluted (in dollars per share)	$ 0.10	$ 0.18	$ 0.19	$ 0.29

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Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Current assets:
Cash and cash equivalents	$ 116,851	$ 121,164
Restricted cash	1,244	266
Accounts receivable, net of allowances of $2,186 at September 30, 2015 and $2,768 at March 31, 2015	38,865	41,042
Inventories	86,362	82,005
Prepaid expenses and other current assets	3,643	3,413
Deferred income taxes	7,085	7,077
Total current assets	254,050	254,967
Property, plant and equipment, net	43,534	42,545
Intangible assets, net	9,676	10,384
Goodwill	42,616	27,375
Deferred income taxes	24,983	24,880
Other assets	13,134	13,704
Total assets	387,993	373,855
Current liabilities:
Current portion of capitalized lease obligations	55	464
Current portion of loans payable	47,812	45,790
Accounts payable	12,753	12,675
Accrued expenses and other current liabilities	23,439	19,865
Total current liabilities	84,059	78,794
Long term loans, net of current portion	6,114	3,433
Pension liabilities	17,179	17,232
Other long term liabilities	7,244	7,095
Total liabilities	$ 114,596	$ 106,554
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.01 par value: Authorized: 5,000,000 shares; none issued and outstanding
Common stock, $0.01 par value: Authorized: 80,000,000 shares; 38,168,708 issued and 31,455,311 outstanding at September 30, 2015 and 38,116,884 issued and 31,674,782 outstanding at March 31, 2015	$ 382	$ 381
Additional paid-in capital	211,978	209,707
Treasury stock, at cost: 6,713,397 common shares at September 30, 2015 and 6,442,102 common shares at March 31, 2015	(60,424)	(56,833)
Retained earnings	141,018	137,134
Accumulated other comprehensive loss	(19,557)	(23,088)
Total stockholders’ equity	273,397	267,301
Total liabilities and stockholders' equity	$ 387,993	$ 373,855

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Note 9 - Pension Plans - Information on Plan Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 1,157	$ 2,588
Fair Value, Inputs, Level 1 [Member] | Foreign Exchange Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 3,876	$ 19,997
Fair Value, Inputs, Level 1 [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 1,101	$ 861
Fair Value, Inputs, Level 1 [Member] | Mutual Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Backed Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 1 [Member] | Other Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets		$ 2
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 6,134	$ 23,448
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 2 [Member] | Foreign Exchange Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ (125)	$ (30)
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets		652
Fair Value, Inputs, Level 2 [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 13,055	$ 5,887
Fair Value, Inputs, Level 2 [Member] | Mutual Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	9,484
Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Backed Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	34	$ 16
Fair Value, Inputs, Level 2 [Member] | Other Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets	249	133
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 22,697	$ 6,658
Fair Value, Inputs, Level 3 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 3 [Member] | Foreign Exchange Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets		$ 7
Fair Value, Inputs, Level 3 [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 1	$ 1
Fair Value, Inputs, Level 3 [Member] | Mutual Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Backed Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 3 [Member] | Other Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 1	$ 8
Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,157	2,588
Foreign Exchange Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets	(125)	(30)
Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	3,876	20,656
Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	14,157	$ 6,749
Mutual Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	9,484
Collateralized Mortgage Backed Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	34	$ 16
Other Contract [Member]
Defined Benefit Plan, Fair Value of Plan Assets	249	135
Defined Benefit Plan, Fair Value of Plan Assets	$ 28,832	$ 30,114

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Taxes on reclassification adjustment for sales of securities included in net income	$ 182		$ 182	$ (11)

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Note 3 - Business Combinations - Purchase Price Allocation (Details) $ in Thousands	May. 01, 2015 USD ($)
RadioPulse [Member]
Cash, restricted cash and cash equivalents	$ 196
Accounts receivable	1,497
Inventories	534
Property, plant and equipment	24
Prepaid expenses and other current assets	616
Identifiable intangible assets	2,523
Short-term borrowings	(2,354)
Accounts payable	(614)
Accruals and other liabilities	(2,916)
Total identifiable net liabilities	(494)
Goodwill	15,162
Total purchase consideration	$ 14,668

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Note 15 - Commitments and Contingencies

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

15. Commitments and Contingencies

Bank of the West

On December 6, 2013, we entered into an Amended and Restated Credit Agreement with BOTW for a revolving line of credit of $50.0 million. All amounts owed under the credit agreement are due and payable on November 30, 2015. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. The credit agreement includes a letter of credit subfacility, under which BOTW agrees to issue letters of credit of up to $3.0 million.

However, borrowing under this subfacility is limited to the extent of availability under the $50.0 million revolving line of credit. At September 30, 2015

, the outstanding principal under the credit agreement was $45.0 million. See Note 8, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of September 30, 2015 and March 31, 2015.

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Note 3 - Business Combinations - Acquired Finite-Lived Intangible Assets (Details) $ in Thousands	May. 01, 2015 USD ($)
Developed Technology Rights [Member]
Fair Value	$ 643
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	5 years
In Process Research and Development [Member]
Fair Value	$ 598	[1]
Finite-Lived Intangible Assets, Amortization Method	Straight-line	[1]
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	5 years	[1]
Customer Relationships [Member]
Fair Value	$ 1,153
Finite-Lived Intangible Assets, Amortization Method	Accelerated
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	3 years
Order or Production Backlog [Member]
Fair Value	$ 129
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	180 days
Fair Value	$ 2,523

[1] Amortization will start after the completion of the research and development activities of the related projects.

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Note 3 - Business Combinations (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	Preliminary Purchase Consideration Allocation
	(unaudited)
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		616
Identifiable intangible assets		2,523
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(2,916	)
Total identifiable net liabilities		(494	)
Goodwill		15,162
Total purchase consideration	$	14,668

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

	Fair Value (In thousands)		Amortization Method	Estimated Useful Life ( In months)
			(unaudited)
Developed intellectual property	$	643	Straight-line		60
In-process research and development expenses (1)		598	Straight-line		60
Customer relationships		1,153	Accelerated		36
Contract backlog		129	Straight-line		6
Total	$	2,523

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 6,258	$ 9,322
Adjustments to reconcile net income to net cash provided by operating activities, net of assets acquired and liabilities assumed:
Depreciation and amortization	7,145	9,148
Provision for receivable allowances	2,903	5,516
Net change in inventory provision	703	1,653
Stock-based compensation	1,691	1,378
Loss (gain) on investments	650	(34)
Foreign currency adjustments on intercompany amounts and other non-cash items	719	(2,054)
Changes in operating assets and liabilities, net of business acquired:
Accounts receivable	1,239	(3,249)
Inventories	(3,218)	(5,310)
Prepaid expenses and other current assets	(634)	5,016
Other assets	(68)	790
Accounts payable	(583)	(1,067)
Accrued expenses and other liabilities	1,772	2,232
Pension liabilities	(617)	(657)
Net cash provided by operating activities	17,960	22,684
Cash flows from investing activities:
Change in restricted cash	(879)	(356)
Purchase of business, net of cash and cash equivalents acquired	(14,571)	(2,297)
Purchases of property and equipment	(4,445)	(4,609)
Changes in investments	21	54
Net cash used in investing activities	(19,874)	(7,208)
Cash flows from financing activities:
Principal payments on capital lease obligations	(419)	(1,336)
Repayments of loans and notes payable	$ (937)	(629)
Installment payment for business acquisition		(15,000)
Proceeds from loans	$ 3,317	30,000
Proceeds from employee equity plans	3,431	$ 1,430
Purchases of treasury stock	(6,440)
Payment of cash dividends to stockholders	(2,374)	$ (2,047)
Net cash provided by (used in) financing activities	(3,422)	12,418
Effect of exchange rate fluctuations on cash and cash equivalents	1,023	(1,388)
Net increase (decrease) in cash and cash equivalents	(4,313)	26,506
Cash and cash equivalents at beginning of period	121,164	98,438
Cash and cash equivalents at end of period	$ 116,851	$ 124,944

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Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Accounts receivable, allowance for doubtful accounts	$ 2,186	$ 2,768
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	80,000,000	80,000,000
Common stock, issued (in shares)	38,168,708	38,116,884
Common stock, outstanding (in shares)	31,455,311	31,674,782
Treasury stock, shares (in shares)	6,713,397	6,442,102

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Note 10 - Employee Equity Incentive Plans

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

10. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2009 Equity Incentive Plan, the 2011 Equity Incentive Plan and the 2013 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On August 30, 2013, our stockholders approved the 2013 Equity Incentive Plan, or the 2013 Plan, under which 2,000,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan, the 2011 Plan and the 2013 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Stock Awards

Stock awards, denominated restricted stock under the 2009 Plan and the 2011 Plan, may be granted to any employee, director or consultant under the Plans. Pursuant to a stock award, we will issue shares of common stock. Shares that are subject to the restriction will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and non-employee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and non-employee directors under the Plans. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

Employee Stock Purchase Plan

The Board of Directors has approved the Amended and Restated 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved a total of 1,550,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee’s eligible compensation. During the six months ended September 30, 2015

, there were 51,824 shares purchased under the Purchase Plan, leaving approximately 285,691 shares available for purchase under the Purchase Plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended September 30,				Six Months Ended S eptember 30,
Statement of Operations Classifications	2015		2014		2015		2014
	(unaudited)				(unaudited)
Cost of goods sold	$	124	$	102	$	246	$	210
Research, development and engineering expenses (1)		330		189		791		378
Selling, general and administrative expenses		497		406		903		790
Stock-based compensation effect in income before taxes		951		697		1,940		1,378
Provision for income taxes (2)		333		244		679		482
Net stock-based compensation effects in net income	$	618	$	453	$	1,261	$	896

(1)	Includes acquisition-related compensation expenses of $249,000 during the six months ended September 30, 2015.
(2)	Calculated at the U.S. statutory federal income tax rate of 35% in fiscal 2016 and 2015.

During the six months ended September 30, 2015, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of September 30, 2015, approximately $8.2 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 3.2 years.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three and six months ended September 30, 2015 and 2014, were based on estimates at the date of grant as follows:

	Stock Options												Purchase Plan (1)
	Three Months Ended September 30,						Six Months Ended September 30,						Six Months Ended September 30,
	2015			2014			2015			2014			2015			2014
	(unaudited)						(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	4.31		$	5.54		$	4.83		$	5.54		$	3.15		$	2.90
Risk-free interest rate		1.7	%		1.8	%		1.8	%		1.8	%		0.1	%		0.1	%
Expected term in years		6.35			6.25			6.45			6.25			1.00			0.50
Volatility		42.8	%		52.2	%		44.9	%		52.2	%		33.7	%		34.5	%
Dividend yield		1.3	%		1.0	%		1.2	%		1.0	%		1.1	%		1.1	%

(1) Under the stock purchase plan, rights to purchase shares are only granted during the first and third quarters of each fiscal year.

Activity with respect to outstanding stock options for the six months ended September 30, 2015 was as follows:

	Number of Shares			Weighted Average Exercise Price Per Share		Intrinsic  Value (1)
				(unaudited)			(000)
Balance at March 31, 2015		4,942,511		$	10.37
Options granted		1,124,000		$	11.72
Options exercised		(320,826	)	$	9.15	$	1,291
Options cancelled		(2,500	)	$	12.13
Options expired		(434,788	)	$	14.68
Balance at September 30, 2015		5,308,397		$	10.38
Exercisable at September 30, 2015		3,504,063		$	9.84
Exercisable at March 31, 2015		3,942,261		$	10.20

(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

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Document And Entity Information - shares	6 Months Ended
	Sep. 30, 2015	Oct. 28, 2015
Entity Registrant Name	IXYS CORP /DE/
Entity Central Index Key	0000945699
Trading Symbol	IXYS
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		31,460,311
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Note 11 - Accumulated Other Comprehensive (Loss)

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Accumulated Other Comprehensive Income Loss [Text Block]

11. Accumulated Other

Comprehensive Income (Loss)

The components and the changes in accumulated other comprehensive loss, net of tax, for the six months ended September 30, 2015 and 2014 were as follows (in thousands):

	Six Months Ended September 30, 2015
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		3,561			(302	)		-			3,259
Net loss reclassified from accumulated other comprehensive income   (loss)		-			272			-			272
Net current period other comprehensive income (loss)		3,561			(30	)		-			3,531
Balance as of September 30, 2015	$	(10,016	)	$	(23	)	$	(9,518	)	$	(19,557	)

	Six Months Ended September 30, 2014
	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2014	$	10,535		$	325		$	(5,831	)	$	5,029
Other comprehensive income (loss) before reclassifications		(8,100	)		(638	)		-			(8,738	)
Net gain reclassified from accumulated other comprehensive income (loss)		-			(19	)		-			(19	)
Net current period other comprehensive income   (loss)		(8,100	)		(657	)		-			(8,757	)
Balance as of September 30, 2014	$	2,435		$	(332	)	$	(5,831	)	$	(3,728	)

The amounts reclassified out of accumulated other comprehensive income (loss) for the three and six months ended September 30, 2015 and 2014 are as follows (in thousands):

Accumulated Other C omprehensive Income Components	Amounts Reclassified from Accumulated Other Comprehensive Income											Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended September 30,					Six Months Ended September 30,
	2015			2014		2015			2014
	(unaudited)					(unaudited)
Net gain on investments	$	-		$	-	$	-		$	30		Other income (expense), net
Impairment of marketable securities		(454	)		-		(454	)		-		Other income (expense), net
Tax impact		182			-		182			(11	)	Provision for income tax
Total reclassifications for the period	$	(272	)	$	-	$	(272	)	$	19		Income after income tax provision

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Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net revenues	$ 80,257	$ 86,435	$ 162,304	$ 174,515
Cost of goods sold	54,245	60,265	110,690	123,345
Gross profit	26,012	26,170	51,614	51,170
Operating expenses:
Research, development and engineering	7,804	6,948	15,487	14,198
Selling, general and administrative	9,801	10,713	20,437	21,477
Amortization of acquired intangible assets	1,374	1,419	2,953	3,126
Total operating expenses	18,979	19,080	38,877	38,801
Operating income	7,033	7,090	12,737	12,369
Other income (expense):
Interest income	39	49	86	96
Interest expense	(284)	(322)	(598)	(732)
Other income (expense), net	(1,010)	2,165	(1,800)	2,373
Income before income tax provision	5,778	8,982	10,425	14,106
Provision for income tax	(2,505)	(3,235)	(4,167)	(4,784)
Net income	$ 3,273	$ 5,747	$ 6,258	$ 9,322
Net income per share:
Basic (in dollars per share)	$ 0.10	$ 0.18	$ 0.20	$ 0.30
Diluted (in dollars per share)	0.10	0.18	0.19	0.29
Cash dividends per common share (in dollars per share)	$ 0.04	$ 0.035	$ 0.075	$ 0.065
Weighted average shares used in per share calculation:
Basic (in shares)	31,651	31,499	31,769	31,439
Diluted (in shares)	32,380	32,235	32,627	32,142

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Note 5 - Other Assets

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Other Assets Disclosure [Text Block]

5. Other Assets

Other assets consist of the following (in thousands):

	September 30,		March 31,
	2015		2015
	(unaudited)
Marketable equity securities	$	1,263	$	1,737
Auction rate preferred securities		350		350
Long-term equity investments		10,895		11,041
Other items		626		576
Total	$	13,134	$	13,704

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Note 4 - Fair Value

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Fair Value Disclosures [Text Block]

4

. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of non-performance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 — Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

Fair Value Measurements on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of September 30, 2015 and March 31, 2015 (in thousands):

	September 30, 2015 (1)						March 31, 2015 (1)
			Fair Value Measured at Reporting Date Using						Fair Value Measured at Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	72,444	$	72,444	$	-	$	76,317	$	76,317	$	-
Marketable equity securities (3)		1,263		1,263		-		1,737		1,737		-
Auction rate preferred securities (3)		350		-		350		350		-		350
Total Assets Measured at Fair Value	$	74,057	$	73,707	$	350	$	78,404	$	78,054	$	350
Liabilities
Derivative liabilities (4)		-		-		-		19		-		19
Total Liabilities Measured at Fair Value	$	-	$	-	$	-	$	19	$	-	$	19

(1)	We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.
(2)	Included in "Cash and cash equivalents" on our unaudited condensed consolidated balance sheets.
(3)	Included in "Other assets" on our unaudited condensed consolidated balance sheets.
(4)	Included in "Accrued expenses and other current liabilities" on our unaudited condensed consolidated balance sheets.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates. We review any impairment to determine whether it is other than temporarily impaired. This review is based on factors such as length of time of impairment, extent to which the fair value is below the cost basis, financial conditions of the issuer of the security, our expectations of future recoveries and our ability and intent to hold or sell the securities. Based on our review, we recognized an other than temporary impairment loss of $454,000 in marketable equity securities during the quarter and six months ended September 30, 2015.

From time to time, we use derivative instruments to manage exposure to changes in interest rates and currency exchange rates. The fair values of these instruments are recorded on the balance sheets. The changes in the fair value of these instruments are recorded in the current period’s statement of operations and are included in other income (expense), net. We have elected not to designate these instruments as accounting hedges. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. All of our ARPS have credit ratings of at least AA, are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 300 percent. Accordingly, the remaining ARPS balance was categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of September 30, 2015 and March 31, 2015. We currently believe that the ARPS values are not impaired and

, as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at amounts that approximate fair value in our unaudited condensed consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

Our debt, which primarily consists of loans from banks, approximated fair value as the interest rates either adjusted according to the market rates or the interest rates approximated the market rates. The estimated fair value of our debt was approximately $53.9 million and $49.2 million as of September 30, 2015 and March 31, 2015, respectively. Our debt is categorized as Level 2 for fair value measurement. Our pension liabilities, net of plan assets, approximated fair value. See Note 9, “Pension Plans” for a discussion of pension liabilities.

The fair value of contingent consideration for a business acquisition is classified as a Level 3 estimate. See Note 3, “Business Combinations” for a discussion of fair value of contingent consideration.

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Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed balance sheet as of March 31, 2015 has been derived from our audited balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2015, or fiscal 2015, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year.

New Accounting Pronouncements, Policy [Policy Text Block]

In May 2014, the Financial Accounting Standards Board, or FASB issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In April 2015, FASB issued the authoritative guidance that requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The guidance will be effective for fiscal years beginning after December 15, 2015, and interim periods during the annual period, with early adoption permitted for financial statements that have not been previously issued. The new standard is required to be applied retrospectively to all prior periods presented in the financial statements. An entity is also required in the year of adoption (and in interim periods within that year) to provide certain disclosures about the change in accounting principle, including the nature of and reason for the change, the transition method, a description of the prior period information that has been retrospectively adjusted and the effect of the change on the financial statements line items (that is, debt issuance cost asset and the debt liability). We do not expect this guidance to have a significant impact on our consolidated financial statements. In August 2015, FASB issued the authoritative guidance that added Securities and Exchange Commission, or SEC, content. The guidance issued in April 2015 did not directly address the manner in which debt issuance costs relating to a line of credit arrangement are treated. The SEC staff clarified that they would not object to the balance sheet presentation of such costs as an asset (i.e., a deferred charge) to be subsequently amortized ratably over the term of the line of credit arrangement, even if there are no borrowings outstanding on the underlying line of credit arrangement.

In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330,

Inventory

, for inventory that is measured using the methods other than last-in, first-out (LIFO) and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for us from the fiscal years beginning after December 15, 2016 and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

In September 2015, FASB issued an amendment to modify the guidance related to measurement-period adjustments in Topic 805,

Business Combinations

. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. It also requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. It eliminates the requirement to retrospectively account for those adjustments.

The guidance will be effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods during the annual period. The new standard is required to be applied prospectively to adjustments to provisional amounts that occur after the aforementioned effective date with earlier application permitted for financial statements that have not yet been issued. We do not expect this guidance to have a significant impact on our consolidated financial statements. The impact on earnings due to measurement period adjustments will be disclosed in the relevant notes to the financial statements

.

In October 2015, FASB ratified a proposed Accounting Standards Update, or ASU, which requires presentation of deferred tax assets and liabilities as noncurrent in a classified balance sheet. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods during the annual period. Early application is permitted as of the beginning of any interim or annual reporting period. We do not expect this guidance to have a significant impact on our consolidated financial statements.

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Note 12 - Computation of Earnings per Share

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Earnings Per Share [Text Block]

12

. Computation of Earnings per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Net income	$	3,273	$	5,747	$	6,258	$	9,322
Weighted average shares - basic		31,651		31,499		31,769		31,439
Weighted average shares - diluted		32,380		32,235		32,627		32,142
Net income per share - basic	$	0.10	$	0.18	$	0.20	$	0.30
Net income per share - diluted	$	0.10	$	0.18	$	0.19	$	0.29

Diluted weighted average shares included approximately 729,000 and 736,000 common equivalent shares from stock options for the three months ended September 30, 2015 and 2014, respectively, and approximately 858,000 and 703,000 common equivalent shares from stock options for the six months ended September 30, 2015 and 2014, respectively.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding

during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the three and six months ended September 30, 2015

, there were outstanding weighted average options to purchase 2,067,109 and 1,436,546 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. During the three and six months ended September 30, 2014, there were outstanding weighted average options to purchase 2,318,679 and 2,507,755 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. These options could dilute earnings per share in future periods if the market price of the common stock increases

.

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Note 8 - Borrowing Arrangements

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Debt Disclosure [Text Block]

8.

Borrowing Arrangements

Bank of the West

On December 6, 2013, we entered into an Amended and Restated Credit Agreement with Bank of the West, or BOTW, for a revolving line of credit of $50.0 million. All amounts owed under the credit agreement are due and payable on November 30, 2015. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by two of our subsidiaries. At September 30, 2015, the outstanding principal under the credit agreement was $45.0 million.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin, an alternative base rate plus a margin or a floating rate plus a margin. The margin can range from 0.75% to 2.5%, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The effective interest rate as of September 30, 2015 was 2.01%. An unused commitment fee is also payable. It ranges from 0.25% to 0.625%, depending on leverage.

The credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At September 30, 2015, we complied with all of these financial covenants

.

The credit agreement also includes a $3.0 million letter of credit subfacility. See Note 15, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

On June 10, 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB Deutsche Industriebank, or IKB. At March 31, 2015, the outstanding principal balance was €3.5 million, or about $3.8 million

.

In April 2015, we replaced the loan with a new loan from IKB. Under the new agreement, we borrowed €6.5 million, or about $7.0 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $261,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part with a modest penalty. The loan is collateralized by a security interest in the facility in Lampertheim, Germany. At September 30, 2015, the outstanding principal balance was €6.0 million, or about $6.8 million

, and we complied with all of these financial covenants.

Loans Assumed from Business Acquisitions

We assumed loans of approximately $2.4 million related to the acquisition of RadioPulse. These loans are primarily short-term facilities from financial institutions and carry a weighted average interest rate of 4.9%. The loans are repayable on or before April 1, 2016. The facilities have been partially secured by bank deposits

, which are classified as restricted cash on our unaudited condensed consolidated balance sheets. The outstanding principal on these loans was $1.7 million as of September 30, 2015.

We assumed loans of approximately $723,000 related to an acquisition completed during the quarter ended June 30, 2014. The assumed borrowings were non-interest bearing loans from government agencies to support the research and development activities with maturity dates varying from fiscal 2017 to fiscal 2021, other than a loan of $99,000 that we paid off during the quarter ended September 30, 2014.

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Note 6 - Inventories

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Inventory Disclosure [Text Block]

6. Inventories

Inventories consist of the following (in thousands):

	September 30,		March 31,
	2015		2015
	(unaudited)
Raw materials	$	16,294	$	17,169
Work in process		40,160		37,491
Finished goods		29,908		27,345
Total	$	86,362	$	82,005

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Note 7 - Accrued Expenses and Other Current Liabilities

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Accrued Expenses and Other Current Liabilities Disclosure [Text Block]

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	September 30,		March 31,
	2015		2015
	(unaudited)
Uninvoiced goods and services	$	9,437	$	8,473
Compensation and benefits		7,500		6,230
Income taxes		3,356		2,459
Commissions, royalties and other		3,146		2,703
Total	$	23,439	$	19,865

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Note 9 - Pension Plans

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

9. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees and one for Philippine employees. We deposit funds for the United Kingdom and Philippine plans with financial institutions and make payments to former German employees directly. We accrue for the unfunded portion of obligations. As of September 30, 2015, the German defined benefit plan was completely unfunded and we accrue for its obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. We expect to contribute approximately $994,000 to the United Kingdom and Philippines plans in the fiscal year ending March 31, 2016. The measurement date for the projected benefit obligations and the plan assets is March 31.

The net periodic pension expense includes the following components (in thousands): 

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(unaudited)						(unaudited)
Service cost	$	25		$	26		$	51		$	52
Interest cost on projected benefit obligation		371			467			739			940
Expected return on plan assets		(442	)		(494	)		(880	)		(991	)
Recognized actuarial loss		45			18			90			36
Net periodic pension expense	$	(1	)	$	17		$	-		$	37

Information on Plan Assets

We report and measure the plan assets of our defined benefit pension plans at fair value. The table below sets forth the fair value of our plan assets as of September 30, 2015 and March 31, 2015, using the same three-level hierarchy of fair-value inputs described in Note 4, “Fair Value” (in thousands):

	September 30, 2015										March 31, 2015
Description	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
	(unaudited)										(unaudited)
Cash and cash funds	$	1,157	$	-		$	-	$	1,157		$	2,588	$	-		$	-	$	2,588
Currency contracts		-		(125	)		-		(125	)		-		(30	)		-		(30	)
Equity		3,876		-			-		3,876			19,997		652			7		20,656
Fixed interest		1,101		13,055			1		14,157			861		5,887			1		6,749
Mutual funds		-		9,484			-		9,484			-		-			-		-
Mortgage-backed securities		-		34			-		34			-		16			-		16
Swaps and other		-		249			-		249			2		133			-		135
Total	$	6,134	$	22,697		$	1	$	28,832		$	23,448	$	6,658		$	8	$	30,114

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Note 3 - Business Combinations (Details Textual) - USD ($)		3 Months Ended		6 Months Ended		15 Months Ended
	May. 01, 2015	Sep. 30, 2015	Jun. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015
RadioPulse [Member]
Payments to Acquire Businesses, Gross	$ 14,700,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	6,000,000
Business Acquisition, Transaction Costs	248,000
Employee Service Share-based Compensation, Cash Flow Effect, Cash Used to Settle Awards	$ 249,000			$ 249,000
Goodwill, Purchase Accounting Adjustments		$ (190,000)
Increase (Decrease) in Fair Value of Accounts Receivable Acquired		471,000
Increase (Decrease) in Fair Value of Accrued and Other Liabilities Acquired		283,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		930,000		2,200,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual		$ (1,200,000)		(2,400,000)
Other Acquisition [Member]
Payments to Acquire Businesses, Net of Cash Acquired			$ 2,300,000
Cash Acquired from Acquisition			204,000
Goodwill, Acquired During Period			2,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt			$ 723,000
Goodwill, Translation Adjustments						$ (490,000)
Payments to Acquire Businesses, Net of Cash Acquired				$ 14,571,000	$ 2,297,000

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Note 11 - Accumulated Other Comprehensive (Loss) - AOCI Reclass (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Other income (expense), net				$ 30
Accumulated Other-than-Temporary Impairment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Other income (expense), net	$ (454)		$ (454)
Tax impact	182		182	$ (11)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Total reclassifications for the period	(272)		(272)	19
Other income (expense), net	(1,010)	$ 2,165	(1,800)	2,373
Tax impact	(2,505)	(3,235)	(4,167)	(4,784)
Total reclassifications for the period	$ 3,273	$ 5,747	$ 6,258	$ 9,322

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Note 14 - Income Taxes

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14

. Income Taxes

For the three and six months ended September 30, 2015, we recorded income tax provisions of $2.5 million and $4.2 million, reflecting effective tax rates of 43.4% and 40.0%, respectively. For the three and six months ended September 30, 2014

, we recorded income tax provisions of $3.2 million and $4.8 million

, reflecting effective tax rates of 36.0% and 33.9%, respectively. For the three and six months ended September 30, 2015, the effective tax rates were affected by tax losses that could not be offset against other profits in certain jurisdictions with lower tax rates

. The effective tax rates were also affected by estimates of annual income in domestic and foreign jurisdictions, as adjusted by changes in estimates of annual income in domestic and foreign jurisdictions. For the three and six months ended September 30, 2014, the effective tax rates were affected by changes in estimates of annual income in domestic and foreign jurisdictions and certain discrete items.

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Note 5 - Other Assets (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Other Assets, Noncurrent [Table Text Block]

	September 30,		March 31,
	2015		2015
	(unaudited)
Marketable equity securities	$	1,263	$	1,737
Auction rate preferred securities		350		350
Long-term equity investments		10,895		11,041
Other items		626		576
Total	$	13,134	$	13,704

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Note 10 - Employee Equity Incentive Plans - Option Activity (Details) - USD ($) $ in Thousands		6 Months Ended
		Sep. 30, 2015	Mar. 31, 2015
Options outstanding (in shares)		5,308,397
Options outstanding (in dollars per share)		$ 10.38
Options granted (in shares)		1,124,000
Options granted (in dollars per share)		$ 11.72
Options exercised (in shares)		(320,826)
Options exercised (in dollars per share)		$ 9.15
Options exercised, Intrinsic Value	[1]	$ 1,291
Options cancelled (in shares)		(2,500)
Options cancelled (in dollars per share)		$ 12.13
Options expired (in shares)		(434,788)
Options expired (in dollars per share)		$ 14.68
Options exercisable (in shares)		3,504,063	3,942,261
Options exercisable (in dollars per share)		$ 9.84	$ 10.20

[1] Represents the difference between the exercise price and the value of our common stock at the time of exercise.

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Note 7 - Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015
Uninvoiced goods and services	$ 9,437	$ 8,473
Compensation and benefits	7,500	6,230
Income taxes	3,356	2,459
Commissions, royalties and other	3,146	2,703
Total	$ 23,439	$ 19,865

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Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 3,273	$ 5,747	$ 6,258	$ 9,322
Foreign currency translation adjustments	869	(7,820)	3,561	(8,100)
Changes in market value of investments:
Changes in unrealized loss, net of tax benefits of $(124) and $(202) for the three and six months ended September 30, 2015, respectively and net of tax benefits of $(188) and $(342) for the three and six months ended September 30, 2014, respectively	(185)	$ (350)	(302)	(638)
Reclassification adjustment for net losses (gains) realized in net income, net of tax expenses of $182 for the three and six months ended September 30, 2015, respectively and net of tax expense (benefit) of $0 and $(11) for the three and six months ended September 30, 2014, respectively	272		272	(19)
Net change in market value of investments	87	$ (350)	(30)	(657)
Total comprehensive income (loss)	$ 4,229	$ (2,423)	$ 9,789	$ 565

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Note 3 - Business Combinations

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Business Combination Disclosure [Text Block]

3. Business Combinations

 

RadioPulse, Inc.

On May 1, 2015, we acquired RadioPulse, Inc., or RadioPulse.

Based in South Korea, RadioPulse is a fabless semiconductor company that develops, manufactures and sells wireless network technology solutions based on the ZigBee® protocol, which combines microcontrollers and radio frequency devices. RadioPulse’s solutions are designed to enable a broad range of power-sensitive applications in the industrial, medical, consumer, smart grid and Internet of Things, or IoT, markets. RadioPulse offers a complementary product portfolio to IXYS’s product lines. At closing, we paid cash consideration of $14.7 million. The consideration may also include earnout payments aggregating up to $6.0 million payable over three years. The earnout payments are subject to certain financial thresholds related to net revenues, gross profit and net income. Based on our preliminary valuation the fair value of the liability for the earnout payment is estimated to be nil. In connection with the acquisition, we incurred and expensed $248

,000 in legal and consulting costs and $249,000 in acquisition related compensation costs.

The following table summarizes the preliminary values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Preliminary Purchase Consideration Allocation
	(unaudited)
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		616
Identifiable intangible assets		2,523
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(2,916	)
Total identifiable net liabilities		(494	)
Goodwill		15,162
Total purchase consideration	$	14,668

During the quarter ended September 30, 2015, we recorded adjustments that reduced the value of goodwill by $190,000. The adjustments were primarily related to increases in the fair value of accounts receivable and accrued and other liabilities of $471,000 and $283,000, respectively.

Identifiable intangible assets consisted of developed intellectual property, in-process research and development expenses, customer relationships and contract backlog. The value reflected in the table represents the preliminary purchase price allocation. We are in the process of completing the valuation of acquired intangible assets, acquired liabilities and tax attributes. The preliminary valuation of the acquired intangibles was classified as a level 3 measurement under the fair value measurement guidance because the preliminary valuation was based on significant unobservable inputs and involved management judgment and assumptions about market participants and pricing. We did not recognize any liability with respect to the contingent consideration based upon our preliminary analysis. We expect to complete the purchase price allocation by December 31, 2015.

Identified intangible assets resulting from the RadioPulse acquisition based on our preliminary valuation consisted of the following (in thousands):

	Fair Value (In thousands)		Amortization Method	Estimated Useful Life ( In months)
			(unaudited)
Developed intellectual property	$	643	Straight-line		60
In-process research and development expenses (1)		598	Straight-line		60
Customer relationships		1,153	Accelerated		36
Contract backlog		129	Straight-line		6
Total	$	2,523

(1)   Amortization will start after the completion of the research and development activities of the related projects.

In determining the preliminary fair value of the acquired intangible assets, we determined the appropriate unit of measure, the exit market and the highest and best use for the assets. The income approach and cost approach were used to estimate the fair value. The income approach indicates the fair value of an asset based on the value of the cash flows that the asset can be expected to generate in the future through a discounted cash flow method. The income approach was used to determine the fair values of developed intellectual property, in-process research and development expenses, contract backlog and customer relationships.

The goodwill arising from the acquisition was largely attributable to the synergies expected to be realized after our acquisition and integration of RadioPulse. The goodwill is not deductible for tax purposes.

RadioPulse contributed net revenues of $930,000 and $2.2 million to our unaudited condensed consolidated statements of operations for the three and six month periods ended September 30, 2015, respectively. The net losses of RadioPulse during the same periods ended September 30, 2015 were $1.2 million and $2.4 million, respectively, based on the preliminary purchase consideration valuation. The financial statements of RadioPulse were immaterial compared to our financial statements and therefore pro-forma financial statements have not been separately presented.

Other Acquisition

In the quarter ended June 30, 2014 we completed a business acquisition for a cash consideration of $2.3 million, net of cash acquired of approximately $204,000. The acquisition resulted in a goodwill of $2.8 million and we assumed debt of $723,000. The goodwill balance as of

September 30, 2015 reflected a cumulative reduction of $490,000 caused by changes in the foreign exchange translation rate. This acquisition was not significant to our unaudited condensed consolidated financial statements.

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Note 15 - Commitments and Contingencies (Details Textual) - Bank of West Amended and Restated Credit Agreement December Six Two Thousand and Thirteen [Member] - USD ($)		6 Months Ended
	Dec. 06, 2013	Sep. 30, 2015
Line of Credit Facility, Initiation Date	Dec. 06, 2013	Dec. 06, 2013
Line of Credit Facility, Expiration Date	Nov. 30, 2015	Nov. 30, 2015
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000,000	$ 50,000,000
Available Credit Line for Letter of Credit	$ 3,000,000	3,000,000
Long-term Line of Credit		$ 45,000,000

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Note 6 - Inventories (Tables)

6 Months Ended

Sep. 30, 2015

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30,		March 31,
	2015		2015
	(unaudited)
Raw materials	$	16,294	$	17,169
Work in process		40,160		37,491
Finished goods		29,908		27,345
Total	$	86,362	$	82,005

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Label	Element	Value
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice	$ 10.37
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber	4,942,511

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Note 4 - Fair Value - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands		Sep. 30, 2015	Mar. 31, 2015
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Money market funds	[1],[2]	$ 72,444	$ 76,317
Marketable equity securities	[2],[3]	$ 1,263	$ 1,737
Auction rate preferred securities	[2],[3]
Total Assets Measured at Fair Value	[2]	$ 73,707	$ 78,054
Liabilities
Derivative liabilities	[2],[4]
Total Liabilities Measured at Fair Value	[2]
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Money market funds	[1],[2]
Marketable equity securities	[2],[3]
Auction rate preferred securities	[2],[3]	$ 350	$ 350
Total Assets Measured at Fair Value	[2]	$ 350	350
Liabilities
Derivative liabilities	[2],[4]		19
Total Liabilities Measured at Fair Value	[2]		19
Fair Value, Measurements, Recurring [Member]
Assets
Money market funds	[1],[2]	$ 72,444	76,317
Marketable equity securities	[2],[3]	1,263	1,737
Auction rate preferred securities	[2],[3]	350	350
Total Assets Measured at Fair Value	[2]	$ 74,057	78,404
Liabilities
Derivative liabilities	[2],[4]		19
Total Liabilities Measured at Fair Value	[2]		19
Marketable equity securities		$ 1,263	1,737
Auction rate preferred securities		$ 350	$ 350

[1] Included in "Cash and cash equivalents" on our unaudited condensed consolidated balance sheets.

[2] We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.

[3] Included in "Other assets" on our unaudited condensed consolidated balance sheets.

[4] Included in "Accrued expenses and other current liabilities" on our unaudited condensed consolidated balance sheets.

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Note 13 - Segment and Geographic Information

6 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13. Segment and Geographic Information

We have a single operating segment and reportable segment. We design develop, manufacture and market high performance semiconductor products. Our Chief Executive Officer and our President, together, have been identified as the chief operating decision makers. Our chief operating decision makers review financial information presented as one operating segment for the purpose of making decisions, allocating resources and assessing financial performance. Our net revenues by major geographic area (based on destination) were as follows (in thousands):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
United States	$	19,317	$	21,502	$	39,450	$	44,006
Europe and the Middle East
France		2,302		1,897		4,342		3,749
Germany		8,845		8,026		16,922		16,475
Italy		969		909		2,233		2,382
Russia		465		2,157		718		2,860
Sweden		574		1,309		1,279		2,594
United Kingdom		3,494		5,822		6,714		11,201
Other		6,657		6,810		13,091		13,894
Asia Pacific
China		20,053		20,480		41,288		40,882
Japan		2,402		2,161		5,724		3,962
Korea		6,089		5,689		12,225		12,128
Malaysia		1,322		1,490		2,564		3,122
Singapore		3,020		2,913		6,137		6,070
Thailand		992		983		2,035		2,027
Other		1,607		1,702		3,091		3,816
Rest of the World
India		909		1,380		2,041		2,629
Other		1,240		1,205		2,450		2,718
Total	$	80,257	$	86,435	$	162,304	$	174,515

The following table sets forth net revenues for each of our product groups for the three and six months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Power semiconductors	$	53,433	$	55,780	$	108,411	$	113,748
Integrated circuits		22,024		23,438		44,508		47,320
Systems and RF power semiconductors		4,800		7,217		9,385		13,447
Total	$	80,257	$	86,435	$	162,304	$	174,515

For the three and six months ended September 30, 2015, one distributor accounted for 11.5% and 11.1% of our net revenues, respectively. For the three and six months ended September 30, 2014, another distributor accounted for 11.4% and 10.9% of our net revenues, respectively.