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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2014
Components of Income Tax Expense | The components of income tax expense are as follows:
|  | Year Ended December 31 |
|  | 2012 |  |  | 2013 |  |  | 2014 |
|  | US$ |  |  | US$ |  |  | US$ |
Current |  |  | 5,534 |  |  |  | 8,591 |  |  |  | 15,630 |
Deferred |  |  | 1,582 |  |  |  | 1,181 |  |  |  | 471 |
Income tax expense |  |  | 7,116 |  |  |  | 9,772 |  |  |  | 16,101 |
Income (Loss) Before Income Taxes for Domestic and Foreign Entities | The income (loss) before income taxes for domestic and foreign entities is as follows:
|  | Year Ended December 31 |
|  | 2012 |  |  | 2013 |  |  | 2014 |
|  | US$ |  |  | US$ |  |  | US$ |
Domestic |  |  | (11,039 | ) |  |  | (8,080 | ) |  |  | (12,761 | )
Foreign |  |  | 65,373 |  |  |  | 45,228 |  |  |  | 73,329 |
|  |  | 54,334 |  |  |  | 37,148 |  |  |  | 60,568 |
Reconciliation of Income Tax Expense on Pretax Income at Statutory Rate and Income Tax Expense | The Company and its subsidiaries file separate income tax returns. A reconciliation of income tax expense on pretax income at statutory rate and income tax expense is shown below:
|  | Year Ended December 31 |
|  | 2012 |  |  | 2013 |  |  | 2014 |
|  | US$ |  |  | US$ |  |  | US$ |
Cayman statutory rate |  |  | — |  |  |  | — |  |  |  | — |
Tax on pretax income at statutory rate |  |  | 8,142 |  |  |  | 6,788 |  |  |  | 15,727 |
Tax-exempt income |  |  | (5,149 | ) |  |  | (4,325 | ) |  |  | (2,573 | )
Permanent differences |  |  | 861 |  |  |  | 1,730 |  |  |  | (396 | )
Temporary differences |  |  | (2,290 | ) |  |  | 1,732 |  |  |  | (344 | )
Alternative minimum tax |  |  | 4,340 |  |  |  | 2,203 |  |  |  | 1,170 |
Income tax (10%) on undistributed earnings |  |  | 2,631 |  |  |  | 3,396 |  |  |  | 2,491 |
Net changes in income tax credit |  |  | 5,518 |  |  |  | 708 |  |  |  | (899 | )
Net changes in valuation allowance of deferred income tax assets |  |  | (3,879 | ) |  |  | (2,364 | ) |  |  | 733 |
Net operating loss carryforwards |  |  | 604 |  |  |  | (189 | ) |  |  | (1,298 | )
Liabilities related to unrealized tax benefits |  |  | 832 |  |  |  | (39 | ) |  |  | 91 |
Adjustment of prior years’ taxes and others |  |  | (4,494 | ) |  |  | 132 |  |  |  | 1,399 |
Income tax expense |  |  | 7,116 |  |  |  | 9,772 |  |  |  | 16,101 |
Deferred Income Tax Assets (Liabilities) | Deferred income tax assets (liabilities) are as follows:
|  | December 31 |
|  | 2013 |  |  | 2014 |
|  | US$ |  |  | US$ |
Current: |  |  |  |  |  |  |  |
Notes and accounts receivable |  |  | 142 |  |  |  | 141 |
Stock-based compensation |  |  | 679 |  |  |  | 615 |
Allowance for sales return |  |  | 123 |  |  |  | 105 |
Inventory reserve |  |  | 544 |  |  |  | 48 |
Foreign currency translation |  |  | 312 |  |  |  | (1,273 | )
Others |  |  | 561 |  |  |  | 504 |
Valuation allowance |  |  | (1,083 | ) |  |  | (528 | )
|  |  | 1,278 |  |  |  | (388 | )
Non-current: |  |  |  |  |  |  |  |
Inventory reserve |  |  | 590 |  |  |  | 766 |
Property and equipment |  |  | 651 |  |  |  | 452 |
Investment tax credits |  |  | 7,011 |  |  |  | 7,823 |
Net operating loss carryforwards |  |  | 8,540 |  |  |  | 9,621 |
Others |  |  | (885 | ) |  |  | (490 | )
Valuation allowance |  |  | (15,193 | ) |  |  | (16,263 | )
|  |  | 714 |  |  |  | 1,909 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|  | Year Ended December 31 |
|  | 2012 |  |  | 2013 |  |  | 2014 |
|  | US $ |  |  | US $ |  |  | US$ |
Balance, beginning of year |  |  | 2,657 |  |  |  | 3,520 |  |  |  | 5,815 |
Increases in tax positions taken in current year |  |  | 917 |  |  |  | 2,947 |  |  |  | 446 |
Decrease in tax position taken in prior year primarily related to the resolution of tax audit |  |  | (54 | ) |  |  | (652 | ) |  |  | (1,606 | )
Balance, end of year |  |  | 3,520 |  |  |  | 5,815 |  |  |  | 4,655 |
Summary of Major Jurisdictions and Tax Year Subject to Examination by Tax Authorities | The following table summarizes the Company’s major jurisdictions and tax year that remain subject to examination by tax authorities as of December 31, 2014:
Tax Jurisdiction |  | Tax Years
SMI Taiwan |  | 2009 and onward
FCI |  | 2009 and onward
SMI USA |  | 2007 onward

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=32707879&loc=d3e36027-109320 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (c),(d)(2)-(3) -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 + Details
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