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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of Income Tax Expense

The components of income tax expense are as follows:

		Year Ended December 31
		2014				2015				2016
		US$				US$				US$
Current			15,630				17,338				31,063
Deferred			471				911				(3,373	)
Income tax expense			16,101				18,249				27,690

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
		2014				2015				2016
		US$				US$				US$
Domestic			(12,761	)			(12,037	)			(20,663	)
Foreign			73,329				90,537				159,293
			60,568				78,500				138,630

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
		2014				2015				2016
		US$				US$				US$
Tax expense at statutory rate of Cayman			—				—				—
Differences between Cayman and foreign statutory tax rates			15,727				18,765				34,415
Tax-exempt income			(2,573	)			(906	)			(4,648	)
Permanent differences			(396	)			(1,065	)			(7,792	)
Temporary differences			(344	)			(330	)			(1,533	)
Alternative minimum tax			1,170				4				594
Income tax (10%) on undistributed earnings			2,491				2,460				5,677
Net changes in income tax credit			(899	)			(897	)			(495	)
Net changes in valuation allowance of deferred income tax assets			733				1,621				1,724
Net operating loss carryforwards			(1,298	)			(2,052	)			(1,689	)
Liabilities related to unrealized tax benefits			91				672				2,385
Adjustment of prior years’ taxes and others			1,399				(23	)			(948	)
Income tax expense			16,101				18,249				27,690

Deferred Income Tax Assets (Liabilities)

Deferred income tax assets (liabilities) are as follows:

		December 31
		2015				2016
		US$				US$
Notes and accounts receivable			82				44
Stock-based compensation			544				1,146
Allowance for sales return			173				205
Inventory reserve			1,478				1,646
Foreign currency translation			(1,949	)			2
Property and equipment			360				383
Investment tax credits			8,295				8,647
Net operating loss carryforwards			10,651				12,335
Others			20				411
Valuation allowance			(19,044	)			(20,836	)
			610				3,983

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
		2014				2015				2016
		US$				US$				US$
Balance, beginning of year			5,815				4,655				5,639
Increases in tax positions taken in current year			446				2,337				4,675
Decrease in tax position taken in prior year primarily related to the resolution of tax audit			(1,606	)			(1,353	)			(28	)
Balance, end of year			4,655				5,639				10,286

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, 2016:

Tax Jurisdiction		Tax Years
China		2013 and onward
Hong Kong		2013 and onward
Taiwan		2011 and onward
Korea		2011 and onward
United States		2007 onward

X

- 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

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-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 9
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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

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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

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure of the change in unrecognized tax benefits.

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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

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