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Income Taxes
 3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes The Company recorded a provision for income taxes of $0.2 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively. The provision for income taxes for the three months ended March 31, 2023 was driven by a combination of the valuation allowance recorded on U.S. deferred tax assets, foreign withholding taxes, the statutory tax expense for the foreign jurisdictions for 2023 and indefinite-lived intangible tax amortization expense. The provision for income taxes for the three months ended March 31, 2022 was driven by a combination of the valuation allowance recorded on U.S. deferred tax assets, foreign withholding taxes, the statutory tax expense for the foreign jurisdictions for 2022 and indefinite-lived intangible tax amortization expense.
During the three months ended March 31, 2023 and 2022, the Company paid withholding taxes of $5.4 million and $5.0 million, respectively.
The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. As of March 31, 2023, the Company continues to maintain a full valuation allowance on its U.S. federal and California deferred tax assets as it does not yet believe that there is sufficient evidence to determine that it is more likely than not that they will be realized. The Company weighed both positive and negative evidence and determined that there is a continued need for a valuation allowance as the Company is in a cumulative loss position over the previous three years, which is considered significant negative evidence. Although the weight of negative evidence related to cumulative losses has decreased as the Company’s profitability has improved, the Company believes that the cumulative losses and other negative evidence outweigh the positive evidence of projections of future profitability and, as such, the Company has maintained a full valuation allowance against its U.S. federal and California deferred tax assets. However, if the Company sustains recent improvements in the Company's operating results, conditioned on its continued growth within its memory interface chips and Silicon IP product offerings, signing new or renewing existing license agreements and managing costs, management believes a reasonable possibility exists that sufficient positive evidence may become available to reach a conclusion that could lead to the reversal of almost all of the Company's valuation allowance during 2023. Should the Company determine that it is more likely than not that it would be able to realize its deferred tax assets, it would result in the reversal of the valuation allowance, a corresponding material non-cash income tax benefit and the recording of additional deferred tax assets on the balance sheet in the period such determination is made.
The Company has U.S. federal deferred tax assets related to research and development credits, foreign tax credits and other tax attributes that can be used to offset U.S. federal taxable income in future periods. These credit carryforwards will expire if they are not used within certain time periods. It is possible that some or all of these attributes could ultimately expire unused.
The Company maintains liabilities for uncertain tax positions within its long-term income taxes payable accounts and as a reduction to existing deferred tax assets to the extent tax attributes are available to offset such liabilities. These liabilities involve judgment and estimation and are monitored by management based on the best information available including changes in tax regulations, the outcome of relevant court cases and other information.
As of March 31, 2023, the Company had approximately $169.9 million of unrecognized tax benefits, including $19.8 million recorded as a reduction of long-term deferred tax assets, $148.8 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea and $1.3 million recorded in long-term income taxes payable. If the Company would have recovered such benefit, which is currently estimated at $150.1 million, this benefit would have likely been reduced due to amending the Company’s U.S. Federal tax returns as a result of such recovery, offsetting most or all of the potential recovery. As a result of recent court rulings in South Korea, the Company has determined that it may be entitled to refund claims for foreign taxes previously withheld by licensees in South Korea. The Company recognizes that there are numerous risks and uncertainties associated with the ultimate collection of this refund and has therefore maintained an offsetting reserve for the entire amount of refundable withholding taxes previously withheld in South Korea. As of December 31, 2022, the Company had $164.5 million of unrecognized tax benefits, including $19.6 million recorded as a reduction of long-term deferred tax assets, $143.6 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld by licensees in South Korea and $1.3 million recorded in long-term income taxes payable.
Although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time.
Additionally, the Company’s future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of its deferred tax assets and liabilities or by changes in tax laws or interpretations of those laws.