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Derivative Financial Instruments | 6 Months Ended
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Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 7. Derivative Financial Instruments The Company’s Korean subsidiary from time to time has entered into zero cost collar contracts to hedge the risk of changes in the functional-currency-equivalent cash flows attributable to currency rate changes on U.S. dollar denominated revenues. Details of the zero cost collar contracts as of June 30, 2022 are as follows (in thousands):
Date of transaction |  | Total notional amount |  |  | Month of settlement
May 13, 2021 |  | $ | 9,000 |  |  | July 2022 to September 2022
August 13, 2021 |  | $ | 30,000 |  |  | July 2022 to December 2022
January 04, 2022 |  | $ | 39,000 |  |  | October 2022 to June 2023
March 07, 2022 |  | $ | 24,000 |  |  | July 2023 to December 2023
April 27, 2022 |  | $ | 51,000 |  |  | October 2022 to December 2023
Details of the zero cost collar contracts as of December 31, 2021 are as follows (in thousands):
Date of transaction |  | Total notional amount |  |  | Month of settlement
May 13, 2021 |  | $ | 39,000 |  |  | January 2022 to September 2022
August 13, 2021 |  | $ | 48,000 |  |  | January 2022 to December 2022
The zero cost collar contracts qualify as cash flow hedges under ASC 815, “Derivatives and Hedging,” since at both the inception of the contracts and on an ongoing basis, the hedging relationship was and is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the contracts. The fair values of the Company’s outstanding zero cost collar contracts recorded as liabilities as of June 30, 2022 and December 31, 2021 are as follows (in thousands):
Derivatives designated as hedging instruments: |  |  |  |  | June 30, 2022 |  |  | December 31, 2021 |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  |  | Other current liabilities |  |  | $ | 5,677 |  |  | $ | 2,020 |
Zero cost collars |  |  | Other non-current liabilities |  |  | $ | 1,348 |  |  | $ | — |
Offsetting of derivative liabilities as of June 30, 2022 is as follows (in thousands):
As of June 30, 2022 |  | Gross amounts of recognized liabilities |  |  | Gross amounts offset in the balance sheets |  |  | Net amounts of liabilities presented in the balance sheets |  |  | Gross amounts not offset in the balance sheets |  |  | Net amount |
| Financial instruments |  |  | Cash collateral pledged |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  | $ | 7,025 |  |  | $ | — |  |  | $ | 7,025 |  |  | $ | — |  |  | $ | (5,990 | ) |  | $ | 1,035 |
Offsetting of derivative liabilities as of December 31, 2021 is as follows (in thousands):
As of December 31, 2021 |  | Gross amounts of recognized liabilities |  |  | Gross amounts offset in the balance sheets |  |  | Net amounts of liabilities presented in the balance sheets |  |  | Gross amounts not offset in the balance sheets |  |  | Net amount |
| Financial instruments |  |  | Cash collateral pledged |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  | $ | 2,020 |  |  | $ | — |  |  | $ | 2,020 |  |  | $ | — |  |  | $ | (2,060 | ) |  | $ | (40 | )
For derivative instruments that are designated and qualify as cash flow hedges, gains or losses on the derivative aside from components excluded from the assessment of effectiveness are reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative, representing hedge components excluded from the assessment of effectiveness, are recognized in current earnings. The following table summarizes the impact of derivative instruments on the consolidated statements of operations for the three months ended June 30, 2022 and 2021 (in thousands):
Derivatives in ASC 815 Cash Flow Hedging Relationships |  | Amount of Income (Loss) Recognized in AOCI on Derivatives |  |  | Location/Amount of Gain (Loss) Reclassified from AOCI Into Statement of Operations |  |  | Location/Amount of Gain (Loss) Recognized in Statement of Operations on Derivatives |
|  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |
|  | 2022 |  |  | 2021 |  |  |  |  |  | 2022 |  |  | 2021 |  |  |  |  |  | 2022 |  |  | 2021 |
Zero cost collars |  | $ | (6,477 | ) |  | $ | 432 |  |  |  | Net sales |  |  | $ | (1,796 | ) |  | $ | 475 |  |  |  | Other income, net |  |  | $ | 184 |  |  | $ | (58 | )
The following table summarizes the impact of derivative instruments on the consolidated statements of operations for the six months ended June 30, 2022 and 2021 (in thousands).
Derivatives in ASC 815 Cash Flow Hedging Relationships |  | Amount of Loss Recognized in AOCI on Derivatives |  |  | Location/Amount of Gain (Loss) Reclassified from AOCI Into Statement of Operations |  |  | Location/Amount of Gain (Loss) Recognized in Statement of Operations on Derivatives |
|  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |
|  | 2022 |  |  | 2021 |  |  |  |  |  | 2022 |  |  | 2021 |  |  |  |  |  | 2022 |  |  | 2021 |
Zero cost collars |  | $ | (7,741 | ) |  | $ | (1,693 | ) |  |  | Net sales |  |  | $ | (2,558 | ) |  | $ | 986 |  |  |  | Other income, net |  |  | $ | 55 |  |  | $ | (144 | )
As of June 30, 2022, the amount expected to be reclassified from accumulated other comprehensive loss into loss within the next 12 months is $5,294 thousand. The Company set aside cash deposits to the counterparties, Nomura Financial Investment (Korea) Co., Ltd. (“NFIK”) and Standard Chartered Bank Korea Limited (“SC”), as required for the zero cost collar contracts. These cash deposits are recorded as hedge collateral on the consolidated balance sheets. Cash deposits as of June 30, 2022 and December 31, 2021 are as follows (in thousands):​​​​​​​
Counterparties |  | June 30, 2022 |  |  | December 31, 2021 |
SC |  | $ | 1,000 |  |  | $ | 1,000 |
The Company is required to deposit additional cash collateral with NFIK and SC for any exposure in excess of $500 thousand. As of June 30, 2022, $5,290 thousand and $700 thousand of additional cash collateral was required by NFIK and SC, respectively, and recorded as hedge collateral on the consolidated balance sheet. As of December 31, 2021, $760 thousand and $1,300 thousand of additional cash collateral was required by NFIK and SC , respectively, and recorded as hedge collateral on the consolidated balance sheet. These zero cost collar contracts may be terminated by the counterparties if the Company’s total cash and cash equivalents is less than $30,000 thousand at the end of a fiscal quarter, unless a waiver is obtained.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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