SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES

3 Months Ended

Mar. 31, 2020

Concentration Risk Disclosure [Text Block]

SIGNIFICANT CUSTOMERS AND GEOGRAPHIC NET REVENUES:

Segment Reporting

The Company is organized and operates as one reportable segment, the design, development, manufacture and marketing of integrated circuits and related components for use primarily in the high-voltage power-conversion market. 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 55% of net revenues for the three months ended March 31, 2020, and approximately 52% of net revenues in the corresponding period of the previous year. 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 original equipment manufacturers, or OEMs, and merchant power supply manufacturers. Sales to distributors were $83.5 million and $69.8 million in the three months ended March 31, 2020 and 2019, respectively. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.

In the three months ended March 31, 2020, two customers, distributors of the Company's products, accounted for more than 10% of the Company’s net revenues. In the three months ended March 31, 2019, one of the two customers accounted for more than 10% of the Company’s net revenues.

The following table discloses the customers’ percentage of revenues for the respective periods:



	Three Months Ended
Customer	March 31, 2020		March 31, 2019
Avnet	11	%	13	%
Powertech Distribution Ltd.	11	%	*

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

No other customers accounted for 10% or more of the Company’s net revenues in the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2020, and December 31, 2019, 69% and 63%, respectively, of accounts receivable were concentrated with the Company’s top ten customers.

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



Customer	March 31, 2020		December 31, 2019
Powertech Distribution Ltd.	16	%	10	%
Avnet	13	%	*
Burnon International Ltd.	10	%	*

*Total customer accounts receivable was less than 10% of accounts receivable.

No other customers accounted for 10% or more of the Company’s accounts receivable in the periods presented.

Geographic Net Revenues

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors. Geographic net revenues, based on “bill to” customer locations, for the three months ended March 31, 2020, and March 31, 2019, were as follows:



	Three Months Ended
(In thousands)	March 31, 2020		March 31, 2019
United States of America	$	2,713	$	2,672
Hong Kong/China	60,413		47,229
Taiwan	6,479		6,672
Korea	10,357		8,542
Western Europe (excluding Germany)	10,035		10,901
Japan	3,905		3,650
Germany	5,567		4,927
Other	10,195		4,595
Total net revenues	$	109,664	$	89,188