SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES

12 Months Ended

Dec. 31, 2016

SIGNIFICANT CUSTOMERS AND EXPORT SALES [Text Block]

SIGNIFICANT CUSTOMERS AND INTERNATIONAL SALES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of analog and mixed-signal ICs and other electronic components and circuitry used in high-voltage power conversion. The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Customer Concentration

The Company's top ten customers accounted for approximately 60% of net revenues in each of 2016 and 2015, and 59% in 2014. A significant portion of these revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a broad, diverse range of end users, including OEMs and merchant power supply manufacturers.

The following customers each accounted for 10% or more of total net revenues:



	Year Ended December 31,
Customer	2016		2015		2014
Avnet	18	%	21	%	19	%
Powertech Distribution Ltd.	11	%	10	%	*

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* Total customer revenue was less than 10% of net revenues

Avnet and Powertech Distribution Ltd. are distributors of the Company's products. No other customers accounted for 10% or more of the Company’s net revenues in those periods.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consisted principally of cash investments and trade receivables. The Company has cash investment policies that limit cash investments to low-risk investments. With respect to trade receivables, the Company performs ongoing evaluations of its customers' financial conditions and requires letters of credit whenever deemed necessary. Additionally, the Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends related to past write-offs and other relevant information. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables. As of December 31, 2016 and December 31, 2015, 70% and 66% of accounts receivable were concentrated with the Company’s top 10 customers.

The following customers each represented 10% or more of accounts receivable:



Customer	December 31, 2016		December 31, 2015
Avnet	24	%	20	%
ATM Electronic Corporation	*		10	%

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* Total customer accounts receivable was less than 10%

Avnet and ATM Electronic Corporation are distributors of the Company’s products. No other customers accounted for 10% or more of the Company’s accounts receivable in these periods.

International Sales

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors. As a percentage of total net revenues, international sales, which consist of sales to distributors and direct customers outside of the United States of America, based on "bill to" customer locations, comprise the following:



	Year Ended December 31,
	2016		2015		2014
Hong Kong/China	51	%	50	%	47	%
Taiwan	13	%	14	%	15	%
Korea	11	%	10	%	11	%
Western Europe (excluding Germany)	11	%	11	%	11	%
Japan	5	%	5	%	5	%
Germany	2	%	2	%	2	%
Other	3	%	3	%	4	%
Total foreign revenue	96	%	95	%	95	%

The remainder of the Company’s sales is to customers within the United States of America.