ALPHA & OMEGA SEMICONDUCTOR LTD, 10-Q filed on 2/6/2013
Quarterly Report
Document and Entity Information
6 Months Ended
Dec. 31, 2012
Jan. 31, 2013
Entity Information [Line Items]
 
 
Entity Registrant Name
ALPHA & OMEGA SEMICONDUCTOR Ltd 
 
Entity Central Index Key
0001387467 
 
Current Fiscal Year End Date
--06-30 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Dec. 31, 2012 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
25,429,722 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Current assets:
 
 
Cash and cash equivalents
$ 91,864 
$ 82,166 
Restricted cash
361 
236 
Accounts receivable, net
42,967 
38,850 
Inventories
71,488 
65,778 
Deferred income tax assets
2,835 
2,789 
Other current assets
3,752 
3,962 
Total current assets
213,267 
193,781 
Property, plant and equipment, net
151,160 
158,543 
Intangible assets, net
742 
1,028 
Goodwill
269 
269 
Deferred income tax assets
10,427 
10,061 
Other long-term assets
835 
2,475 
Total assets
376,700 
366,157 
Current liabilities:
 
 
Short term debt
2,857 
3,571 
Accounts payable
32,988 
35,646 
Accrued liabilities
19,184 
21,026 
Income taxes payable
2,450 
2,349 
Deferred margin
468 
366 
Capital leases
960 
961 
Total current liabilities
58,907 
63,919 
Long term debt
15,250 
16,429 
Income taxes payable - long term
3,626 
3,509 
Deferred income tax liabilities
1,622 
587 
Capital leases - long term
606 
1,085 
Deferred rent
1,338 
1,235 
Total liabilities
81,349 
86,764 
Commitments and contingencies (Note 10)
   
   
Preferred shares, par value $0.002 per share:
 
 
Authorized: 10,000 shares; Issued and outstanding: none at December 31, 2012 and June 30, 2012
0 
0 
Common shares, par value $0.002 per share:
 
 
Authorized: 50,000 shares; Issued and outstanding: 25,625 shares and 25,396 shares at December 31, 2012 and 25,167 shares and 24,938 shares at June 30, 2012
51 
50 
Treasury shares at cost; 229 shares at December 31, 2012 and June 30, 2012
(2,106)
(2,104)
Additional paid-in capital
164,947 
160,602 
Accumulated other comprehensive income
1,027 
972 
Retained earnings
131,432 
119,873 
Total shareholders’ equity
295,351 
279,393 
Total liabilities and shareholders’ equity
$ 376,700 
$ 366,157 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Dec. 31, 2012
Jun. 30, 2012
Common shares, par value (in dollars per share)
$ 0.002 
$ 0.002 
Common shares, authorized (in shares)
50,000,000 
50,000,000 
Common stock, shares issued (in shares)
25,625,000 
25,167,000 
Common stock, shares outstanding (in shares)
25,396,000 
24,938,000 
Preferred stock, par value (in dollars per share)
$ 0.002 
$ 0.002 
Preferred stock, shares authorized (in shares)
10,000,000 
10,000,000 
Preferred stock, shares issued (in shares)
0 
0 
Preferred stock, shares outstanding (in shares)
0 
0 
Treasury shares (in shares)
229,000 
229,000 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Revenue
$ 89,448 
$ 80,713 
$ 185,209 
$ 164,161 
Cost of goods sold
68,854 
62,440 
139,082 
125,311 
Gross profit
20,594 
18,273 
46,127 
38,850 
Operating expenses
 
 
 
 
Research and development
6,866 
8,108 
13,799 
16,502 
Selling, general and administrative
8,838 
7,833 
17,619 
17,116 
Total operating expenses
15,704 
15,941 
31,418 
33,618 
Operating income
4,890 
2,332 
14,709 
5,232 
Interest income
20 
25 
37 
64 
Interest expense
(107)
(44)
(189)
(71)
Income before income taxes
4,803 
2,313 
14,557 
5,225 
Income tax expense
1,085 
839 
2,897 
1,612 
Net income
$ 3,718 
$ 1,474 
$ 11,660 
$ 3,613 
Net income per share attributable to common shareholders
 
 
 
 
Basic (in dollars per share)
$ 0.15 
$ 0.06 
$ 0.46 
$ 0.15 
Diluted (in dollars per share)
$ 0.14 
$ 0.06 
$ 0.45 
$ 0.14 
Weighted average number of common shares used to compute net income per share
 
 
 
 
Basic (in shares)
25,292 
24,538 
25,165 
24,529 
Diluted (in shares)
26,101 
25,423 
25,992 
25,517 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Net income
$ 3,718 
$ 1,474 
$ 11,660 
$ 3,613 
Other comprehensive income, net of tax
 
 
 
 
Foreign currency translation adjustment
25 
36 
55 
25 
Total comprehensive income
$ 3,743 
$ 1,510 
$ 11,715 
$ 3,638 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Cash flows from operating activities
 
 
Net income
$ 11,660 
$ 3,613 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation
14,498 
11,504 
Amortization
286 
286 
Allowance for doubtful accounts
0 
185 
Share-based compensation expense
2,354 
2,675 
Deferred income taxes, net
624 
129 
Loss on disposal of property and equipment
51 
2 
Changes in working capital:
 
 
Accounts receivable
(4,117)
7,513 
Inventories
(5,710)
19,116 
Other current and long term assets
1,850 
2,027 
Accounts payable
2,496 
(21,795)
Income taxes payable
218 
(762)
Accrued and other liabilities
(1,542)
(1,724)
Net cash provided by operating activities
22,668 
22,769 
Cash flows from investing activities
 
 
Purchases of property and equipment
(12,531)
(21,884)
Restricted cash placed
(125)
(25)
Investment in a privately held company
0 
(100)
Net cash used in investing activities
(12,656)
(22,009)
Cash flows from financing activities
 
 
Proceeds from exercise of stock options and ESPP
2,051 
930 
Payment for repurchase of common shares
(5)
(1,574)
Proceeds from borrowings
250 
14,700 
Repayments of borrowings
(2,143)
(4,000)
Principal payments on capital leases
(479)
(291)
Net cash provided by (used in) financing activities
(326)
9,765 
Effect of exchange rate changes on cash and cash equivalents
12 
27 
Net increase in cash and cash equivalents
9,698 
10,552 
Cash and cash equivalents at beginning of period
82,166 
86,708 
Cash and cash equivalents at end of period
91,864 
97,260 
Supplemental disclosures of non-cash investing and financing information:
 
 
Property and equipment purchased but not yet paid
$ 3,144 
$ 8,267 
The Company and Significant Accounting Policies
The Company and Significant Accounting Policies
The Company and Significant Accounting Policies
The Company
Alpha and Omega Semiconductor Limited and its subsidiaries (the “Company”, "AOS", "we" or "us") design, develop and supply a broad range of power semiconductors. The Company's portfolio of products targets high-volume applications, including portable computers, flat panel TVs, LED lighting, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment. The Company conducts its operations primarily in the United States of America (“USA”), Hong Kong, Macau, China, Taiwan, Korea and Japan.
Basis of Preparation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Article 10 of Securities and Exchange Commission Regulation S-X, as amended. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. Operating results for the three and six months ended December 31, 2012 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending June 30, 2013. The condensed consolidated balance sheet at June 30, 2012 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. To the extent there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected. On an ongoing basis, the Company evaluates the estimates, judgments and assumptions, including those related to stock rotation returns, price adjustments, inventory reserves, warranty accrual, income taxes, share-based compensation, and useful lives for property, plant and equipment and intangible assets.
Fair Value of Financial Instruments
The fair value of cash equivalents are based on observable market prices and have been categorized in Level 1 in the fair value hierarchy. Cash equivalents consist primarily of short term bank deposits. The carrying values of financial instruments such as cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to their short-term maturities. The carrying value of the company's debt is considered a reasonable estimate of fair value which is estimated by considering the current rates available to the Company for debt of the same remaining maturities, structure and terms of the debts.
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company's accumulated other comprehensive income consists of cumulative foreign currency translation adjustments. Total comprehensive income (loss) is presented in the condensed consolidated statements of comprehensive income.
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued the Accounting Standards Update ("ASU") 2011-05, Comprehensive Income: Presentation of Comprehensive Income. The new guidance requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. In December 2011, the FASB issued an amendment to this guidance to defer the requirement to present such reclassification adjustments. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2011.
Effective July 1, 2012, the Company retrospectively adopted this new guidance by presenting total comprehensive income and the components of net income and other comprehensive income in two separate but consecutive statements. The adoption of this guidance resulted only in a change in how the Company presents other comprehensive income in the condensed consolidated financial statements and did not have any impact on its results of operations, financial position, or cash flows.
Net Income Per Share
Net Income Per Share
Net Income Per Share
The following table presents the calculation of basic and diluted net income per share attributable to common shareholders:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands, except per share data)
Numerator:
 
 
 
 
 
 
 
Net income
$
3,718

 
$
1,474

 
$
11,660

 
$
3,613

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Weighted average number of common shares used to compute basic net income per share
25,292

 
24,538

 
25,165

 
24,529

Diluted:
 
 
 
 
 
 
 
Weighted average number of common shares used to compute basic net income per share
25,292

 
24,538

 
25,165

 
24,529

Effect of potentially dilutive securities:
 
 
 
 
 
 
 
Stock options, RSUs and ESPP shares
809

 
885

 
827

 
988

Weighted average number of common shares used to compute diluted net income per share
26,101

 
25,423

 
25,992

 
25,517

Net income per share attributable to common shareholders:
 
 
 
 
 
 
 
Basic
$
0.15

 
$
0.06

 
$
0.46

 
$
0.15

Diluted
$
0.14

 
$
0.06

 
$
0.45

 
$
0.14


The following potential dilutive securities were excluded from the computation of diluted net income per share as their effect would have been anti-dilutive:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
Employee stock options and RSUs
2,841

 
3,026

 
2,768

 
2,797

ESPP to purchase common shares
187

 
886

 
251

 
443

Total potential dilutive securities
3,028

 
3,912

 
3,019

 
3,240

Concentration of Credit Risk and Significant Customers
Concentration of Credit Risk and Significant Customers
Concentration of Credit Risk and Significant Customers
The Company manages its credit risk associated with exposure to distributors and direct customers on outstanding accounts receivable through the application of credit approvals, credit ratings and other monitoring procedures. In some instances, the Company also obtains letters of credit from certain customers.
Credit sales, which are mainly on credit terms of 30 to 60 days, are only made to customers who meet the Company's credit standards, while sales to new customers or customers with low credit ratings are usually made on an advance payment basis. The Company considers its financial assets to be of good credit quality because its key distributors and direct customers have long-standing business relationships with the Company and the Company has not experienced any significant bad debt write-offs of accounts receivable in the past. The Company closely monitors the aging of accounts receivable from its distributors and direct customers, and regularly reviews their financial positions, when available.
Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
Percentage of revenue
2012
 
2011
 
2012
 
2011
Customer A
24.2
%
 
23.1
%
 
23.9
%
 
20.2
%
Customer B
43.8
%
 
40.5
%
 
42.6
%
 
42.7
%
Customer C
11.2
%
 
14.8
%
 
12.5
%
 
14.6
%
 
 
December 31,
2012
 
June 30,
2012
Percentage of accounts receivable
 
Customer A
26.9
%
 
34.1
%
Customer B
37.0
%
 
23.6
%
Customer C
15.0
%
 
20.4
%
Balance Sheet Components
Balance Sheet Components
Balance Sheet Components
Accounts receivable:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Accounts receivable
$
62,912

 
$
55,858

Less: Allowance for price adjustments
(19,193
)
 
(16,256
)
Less: Allowance for doubtful accounts
(752
)
 
(752
)
Accounts receivable, net
$
42,967

 
$
38,850



Inventories:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Raw materials
$
23,817

 
$
27,856

Work in-process
36,932

 
28,188

Finished goods
10,739

 
9,734

 
$
71,488

 
$
65,778



Property, plant and equipment:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Land
$
4,950

 
$
4,950

Building
4,106

 
4,077

Manufacturing machinery and equipment
158,685

 
152,307

Equipment and tooling
9,854

 
9,910

Computer equipment and software
15,705

 
14,912

Office furniture and equipment
1,561

 
1,630

Leasehold improvements
22,941

 
22,463

 
217,802

 
210,249

Less accumulated depreciation
(76,841
)
 
(63,114
)
 
140,961

 
147,135

Equipment and construction in progress
10,199

 
11,408

Property, plant and equipment, net
$
151,160

 
$
158,543


Other long term assets:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Prepayments for property and equipment
$
64

 
$
1,632

Investment in a privately held company
100

 
100

Deferred debt issuance cost
145

 
204

Office leases deposits
526

 
539

 
$
835

 
$
2,475


Accrued liabilities:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Accrued salaries and wages
$
3,911

 
$
3,418

Accrued vacation
1,840

 
2,232

Accrued bonuses
2,744

 
4,258

Warranty accrual
1,673

 
1,556

Stock rotation accrual
1,767

 
2,032

Accrued professional fees
606

 
687

ESPP payable
332

 
313

Customer deposits
291

 
179

Other accrued expenses
6,020

 
6,351

 
$
19,184

 
$
21,026


    
Warranty accrual, included in accrued liabilities is as follows:
 
Six Months Ended December 31,
 
2012
 
2011
 
(in thousands)
Beginning balance
$
1,556

 
$
664

Additions
733

 
439

Utilization
(616
)
 
(323
)
Ending balance
$
1,673

 
$
780


Stock rotation accrual, included in accrued liabilities is as follows:
 
Six Months Ended December 31,
 
2012
 
2011
 
(in thousands)
Beginning balance
$
2,032

 
$
1,880

Additions
3,254

 
2,906

Utilization
(3,519
)
 
(3,095
)
Ending balance
$
1,767

 
$
1,691

Acquisition of Wafer Fabrication Facility
Acquisition of Wafer Fabrication Facility
Acquisition of Wafer Fabrication Facility

On January 31, 2012, the Company completed the acquisition of certain assets, including land, building, machinery and equipment and inventories, associated with a wafer fabrication facility located in Hillsboro, Oregon (the "Oregon fab") from Integrated Device Technology, Inc, ("IDT"), for a purchase price of $26.3 million in cash plus certain assumed liabilities of $0.5 million. The Company applied the related cash deposit of $5.0 million made during fiscal 2011 to the purchase price.

The acquisition was accounted for as a business combination and the financial results of operations of the acquired facility were included in the Company's consolidated statements of income from the date of acquisition. In connection with the acquisition, the Company incurred certain acquisition related expenses of approximately $0.2 million, which were recorded in general and administrative expenses in the Company's condensed consolidated statements of income for fiscal 2012.

The allocation of the total purchase consideration of $26.3 million based on the estimated fair values as of the acquisition date, is summarized in the following table (in thousands):
Land
$
4,950

Building
3,900

Machinery and equipment
15,564

Inventories
2,159

Accrued liabilities
(512
)
Goodwill
269

Total purchase consideration
$
26,330



Of the total purchase price paid at the time of acquisition, approximately $0.3 million has been allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible assets and is deductible for tax purposes. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible assets were the synergies in improved product research and development as well as product to market lead time and production operations that can be leveraged to enable the Company to build an enterprise value greater than the sum of its parts. The Company is depreciating on a straight-line basis the building over an estimated useful life of 20 years and the machinery and equipment over an estimated useful life of 3 to 7 years.

The Company considered the additional proforma revenue and earnings disclosure as not practical given the assets acquired had been and will continue to be used primarily as a captive fabrication facility. Due to the lack of independently substantiated standalone historical financial statements of the acquired assets, retrospective application requires significant estimates of their related revenues, costs and expenses for the proforma financial information disclosure. It is impossible to distinguish objectively information about those estimates that would provide evidence of circumstances that existed on the dates at which those amounts would be recognized, measured, or disclosed under retrospective application, or such information would have been available when the financial statements for that prior period were issued. Furthermore, the wafers produced by the Oregon fab for the Company are different from those of IDT and the Company does not intend to continue to produce such wafers. Therefore, the retroactive proforma financial information would not provide meaningful information for investors.
Debt
Debt
Debt
On May 11, 2012, the Company entered into a loan agreement with a financial institution that provides a term loan of $20.0 million for general purposes and a $10.0 million non-revolving credit line for the purchase of equipment. Both the term loan and equipment line will mature in May 2015. The borrowings may be made in the form of either Eurodollar loans or Base Rate loans. Eurodollar loans accrue interest based on an adjusted London Interbank Offered Rate ("LIBOR") as defined in the agreement, plus a margin of 1.00% to 1.75%. Base Rate loans accrue interest at the highest of (a) the lender's Prime Rate, (b) the Federal Funds Rate plus 0.5% and (c) the Eurodollar Rate (for a one-month interest period) plus 1%; plus a margin of -0.5% to 0.25%. The applicable margins for both Eurodollar loans and Base Rate loans will vary from time to time in the foregoing ranges based on the cash and cash equivalent balances maintained by the Company and its subsidiaries with the lender. As of December 31, 2012, the outstanding balance of the term loan and the equipment line was $17.9 million and $0, respectively.

The obligations under the loan agreement are secured by substantially all assets of two subsidiaries of the Company, including, but not limited to, certain real property and related assets located at the Oregon fab. In addition, the Company and certain subsidiaries of the Company have agreed to guarantee full repayment and performance of the obligations under the loan agreement. The loan agreement contains customary restrictive covenants and includes certain financial covenants that require the Company to maintain on a consolidated basis specified financial ratios including total liabilities to tangible net worth, fixed charge coverage and current assets to current liabilities. As of December 31, 2012, the Company was in compliance with these covenants.
Two of the Company's subsidiaries in China had revolving lines of credit that allow each of the subsidiaries to draw down, from time to time, up to 80% of the accounts receivable balance of such subsidiary, with an aggregated maximum amount of RMB 95 million (equivalent of $15.2 million based on the currency exchange rate as of December 31, 2012) to finance the subsidiary's working capital with a maximum of 120-day repayment term. The interest rate on each draw down varied and was indexed to the published LIBOR per annum. These lines expired in August 2012 and were renewed in November 2012 with substantially the same terms except the aggregated maximum available amount of these two lines of credit increased from RMB80 million to RMB95 million. As of December 31, 2012, there was no outstanding balance for these lines of credit.
During July 2012, the Company entered into a loan agreement with the State of Oregon for an amount of $250,000. The loan is required to be used for training new and re-training existing employees of the Oregon Fab. The loan bears a compound annual interest rate of 5.0% and is to be repaid in April 2014. The State may forgive the loan and unpaid interest if certain conditions primarily relating to hiring targets are met. As of December 31, 2012, the outstanding balance of the loan was $250,000.
Shareholders' Equity and Share-based Compensation
Shareholders' Equity and Share-based Compensation
Shareholders' Equity and Share-based Compensation
Shares Repurchase
On October 22, 2010, the Company's board of directors authorized a $25.0 million share repurchase program. Under this repurchase program the Company may, from time to time, repurchase shares from the open market or in privately negotiated transactions, subject to supervision and oversight by the board. The Company accounts for treasury stock under the cost method. Shares repurchased are accounted for as treasury shares and the total cost of shares repurchased is recorded as a reduction of shareholders' equity. From time to time, treasury shares may be reissued as part of the Company's stock-based compensation programs. Gains on re-issuance of treasury stock are credited to additional paid-in capital; losses are charged to additional paid-in capital to offset the net gains, if any, from previous sales or re-issuance of treasury stock. Any remaining balance of the losses are charged to retained earnings.
During the three and six months ended December 31, 2012, the Company repurchased 600 shares with weighted average repurchase price of $7.48 per share under the program. During the three and six months ended December 31, 2012, the Company issued 1,200 and 1,400 shares, respectively, with weighted average repurchase cost of $13.80 per share, upon vesting of certain restricted stock units ("RSU").
As of December 31, 2012, the Company repurchased an aggregate of 241,770 shares for a total cost of $2.3 million, at an average repurchase price of $9.40 per share since inception of the program. Of the 241,770 repurchased shares, 13,200 shares with a weighted average repurchase price of $13.80 per share were issued at an average price of $4.92 per share for option exercises and vested RSUs.
Stock Options
The following table summarizes the Company's stock option activities for the six months ended December 31, 2012:
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
Number of
 
Exercise Price
 
Aggregate
 
Shares
 
Per Share
 
Intrinsic Value
Outstanding at June 30, 2012
4,214,652

 
$
10.00

 
$
6,758,645

Granted
30,000

 
7.97

 
 
Exercised
(287,873
)
 
4.24

 
1,264,884

Canceled or forfeited
(391,795
)
 
12.72

 
 
Outstanding at December 31, 2012
3,564,984

 
$
10.15

 
$
4,464,243


Information with respect to stock options outstanding and exercisable at December 31, 2012 is as follows:
 
Options Outstanding  
 
Options Vested and Exercisable  
 
Number Outstanding
 
Weighted-Average
Remaining Contractual Life (years) 
 
Weighted-Average
Exercise Price
 
Number Exercisable
 
Weighted-Average
Exercise Price
Total options outstanding
3,564,984

 
5.54
 
$
10.15

 
2,704,191

 
$
9.41

 
 
 
 
 
 
 
 
 
 
Options vested and expected to vest
3,497,164

 
5.49
 
$
10.10

 
 
 
 

Options expected to vest are the result of applying the pre-vesting forfeiture rate assumption to total outstanding options.
The fair value of stock options granted were estimated at the date of grant using the Black-Scholes option valuation for the six months ended December 31, 2012 with the following weighted average assumptions:
 
Six Months Ended December 31,
 
2012
Volatility rate
49%
Risk-free interest rate
0.7%
Expected term
5.5 years
Dividend yield
0%

Restricted Stock Units ("RSU")
The following table summarizes the Company's RSU activities for the six months ended December 31, 2012:
 
 
Number of Restricted Stock
Units
 
Weighted Average
Grant Date Fair
Value Per Share
 
Weighted Average
Remaining
Recognition
Period (Years)
 
Aggregate Intrinsic Value
Nonvested at June 30, 2012
449,378

 
$
10.33

  
2.26
  
$
4,111,809

Granted
99,000

 
8.70

  
 
  
 
Vested
(69,380
)
 
10.00

 
 
 
 
Forfeited
(18,250
)
 
10.64

  
 
  
 
Nonvested at December 31, 2012
460,748

 
$
10.40

  
2.08
 
$
3,870,283

RSUs vested and expected to vest
404,595

 
 
 
1.99
 
$
3,398,601


The fair value of RSU is estimated based on the market price of the Company's share on the date of grant.
Employee Share Purchase Plan
The Employee Share Purchase Plan (the "ESPP") was established in May 2010 upon the completion of the Company's initial public offering. The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:
 
Six Months Ended December 31,
 
2012
Volatility rate
50%
Risk-free interest rate
0.1% - 0.3%
Expected term
1.3 years
Dividend yield
0%

The total share-based compensation expense related to stock options, ESPP and RSUs described above, recognized in the condensed consolidated statements of income for the periods presented was as follows:

 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Cost of goods sold
$
141

 
$
133

 
$
339

 
$
214

Research and development
278

 
372

 
671

 
631

Selling, general and administrative
494

 
948

 
1,344

 
1,830

 
$
913

 
$
1,453

 
$
2,354

 
$
2,675


Total unrecognized stock-based compensation expense as of December 31, 2012 was $5.7 million, which includes estimated forfeitures and is expected to be recognized over a weighted-average period of 1.5 years.
Income Taxes
Income Taxes
Income Taxes

The Company recognized income tax expense of approximately $1.1 million and $0.8 million for the three months ended December 31, 2012 and 2011, respectively. The Company recognized income tax expense of approximately $2.9 million and $1.6 million for the six months ended December 31, 2012 and 2011, respectively. The estimated effective tax rate was 22.6% and 36.3% for the three months ended December 31, 2012 and 2011, respectively. The estimated effective tax rate was 19.9% and 30.9% for the six months ended December 31, 2012 and 2011, respectively. The effective tax rate for the three and six months ended December 31, 2012 was lower than that for same period of last year primarily due to the changes in the mix of earnings in various geographic jurisdictions between the two periods.
    
The Company files its income tax returns in the United States and in various foreign jurisdictions. The tax years 2001 to 2012 remain open to examination by U.S. federal and state tax authorities. The tax years 2005 to 2012 remain open to examination by foreign tax authorities.
The Company's income tax returns are subject to examinations by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of December 31, 2012, the gross amount of unrecognized tax benefits was approximately $7.2 million. If the Company's estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.
Segment and Geographic Information
Segment and Geographic Information
Segment and Geographic Information
The Company is organized as, and operates in, one operating segment: the design, development and supply of power semiconductor products for computing, consumer electronics, communication and industrial applications. The chief operating decision-maker is the Chief Executive Officer. The financial information presented to the Company's Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources. The Company has one business segment, and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level. Accordingly, the Company reports as a single operating segment.
The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. Because the Company's distributors sell their products to end customers which may have global presence, revenue by geographical location is not necessarily representative of the geographical distribution of sales to end user markets.
The revenue by geographical location in the following tables is based on the country or region to which the products were shipped to:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Hong Kong
$
71,251

 
$
63,207

 
$
145,878

 
$
128,059

China
15,336

 
14,592

 
32,965

 
29,214

South Korea
1,392

 
1,706

 
3,660

 
4,164

United States
313

 
366

 
656

 
767

Other countries
1,156

 
842

 
2,050

 
1,957

 
$
89,448

 
$
80,713

 
$
185,209

 
$
164,161


        
The following is a summary of revenue by product type:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Power discrete
$
70,801

 
$
62,491

 
$
146,305

 
$
126,205

Power IC
12,936

 
12,967

 
27,467

 
26,280

Packaging and testing services
5,711

 
5,255

 
11,437

 
11,676

 
$
89,448

 
$
80,713

 
$
185,209

 
$
164,161

 
Long-lived assets, consisting of property, plant and equipment by geographical area are as follows:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
China
$
104,597

 
$
111,432

United States
45,990

 
46,730

Other countries
573

 
381

 
$
151,160

 
$
158,543

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Purchase Commitments
As of December 31, 2012 and June 30, 2012, the Company had approximately $30.9 million and $43.3 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts and packaging and testing services; and approximately $0.5 million and $2.6 million of capital commitments for the purchase of property and equipment, respectively.
Contingencies and Indemnities
The Company is currently not a party to any material legal proceedings. The Company has in the past, and may from time to time in the future, becomes involved in legal proceedings arising from the normal course of business activities. The semiconductor industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. Irrespective of the validity of such claims, the Company could incur significant costs in the defense thereof or could suffer adverse effects on its operations.
The Company is a party to a variety of agreements that it contracted with various third parties. Pursuant to these agreements, the Company may be obligated to indemnify another party to such an agreement with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the Company, under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants related to such matters as title to assets sold, certain intellectual property rights, specified environmental matters and certain income taxes. In these circumstances, payment by the Company is customarily conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party's claim. Further, the Company's obligations under these agreements may be limited in time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements. The Company has not historically paid or recorded any material indemnifications and no accrual has been made at December 31, 2012 and June 30, 2012.
The Company has agreed to indemnify its directors and certain employees as permitted by law and pursuant to its bye-laws, and has entered into indemnification agreements with its directors and executive officers. The Company has not recorded a liability associated with these indemnification arrangements, as it historically has not incurred any material costs associated with such indemnification obligations. Costs associated with such indemnification obligations may be mitigated by insurance coverage that it maintains, however, such insurance may not cover any, or may cover only a portion of, the amounts the Company may be required to pay. In addition, the Company may not be able to maintain such insurance coverage in the future.
The Company and Significant Accounting Policies (Policies)
Basis of Preparation 
Basis of Preparation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Article 10 of Securities and Exchange Commission Regulation S-X, as amended. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. Operating results for the three and six months ended December 31, 2012 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending June 30, 2013. The condensed consolidated balance sheet at June 30, 2012 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.
Use of Estimates 
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. To the extent there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected. On an ongoing basis, the Company evaluates the estimates, judgments and assumptions, including those related to stock rotation returns, price adjustments, inventory reserves, warranty accrual, income taxes, share-based compensation, and useful lives for property, plant and equipment and intangible assets.
Fair Value of Financial Instruments 
Fair Value of Financial Instruments
The fair value of cash equivalents are based on observable market prices and have been categorized in Level 1 in the fair value hierarchy. Cash equivalents consist primarily of short term bank deposits. The carrying values of financial instruments such as cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to their short-term maturities. The carrying value of the company's debt is considered a reasonable estimate of fair value which is estimated by considering the current rates available to the Company for debt of the same remaining maturities, structure and terms of the debts.
Comprehensive Income (Loss) 
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company's accumulated other comprehensive income consists of cumulative foreign currency translation adjustments. Total comprehensive income (loss) is presented in the condensed consolidated statements of comprehensive income.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued the Accounting Standards Update ("ASU") 2011-05, Comprehensive Income: Presentation of Comprehensive Income. The new guidance requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. In December 2011, the FASB issued an amendment to this guidance to defer the requirement to present such reclassification adjustments. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2011.
Effective July 1, 2012, the Company retrospectively adopted this new guidance by presenting total comprehensive income and the components of net income and other comprehensive income in two separate but consecutive statements. The adoption of this guidance resulted only in a change in how the Company presents other comprehensive income in the condensed consolidated financial statements and did not have any impact on its results of operations, financial position, or cash flows.

Net Income Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
The following table presents the calculation of basic and diluted net income per share attributable to common shareholders:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands, except per share data)
Numerator:
 
 
 
 
 
 
 
Net income
$
3,718

 
$
1,474

 
$
11,660

 
$
3,613

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Weighted average number of common shares used to compute basic net income per share
25,292

 
24,538

 
25,165

 
24,529

Diluted:
 
 
 
 
 
 
 
Weighted average number of common shares used to compute basic net income per share
25,292

 
24,538

 
25,165

 
24,529

Effect of potentially dilutive securities:
 
 
 
 
 
 
 
Stock options, RSUs and ESPP shares
809

 
885

 
827

 
988

Weighted average number of common shares used to compute diluted net income per share
26,101

 
25,423

 
25,992

 
25,517

Net income per share attributable to common shareholders:
 
 
 
 
 
 
 
Basic
$
0.15

 
$
0.06

 
$
0.46

 
$
0.15

Diluted
$
0.14

 
$
0.06

 
$
0.45

 
$
0.14

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
The following potential dilutive securities were excluded from the computation of diluted net income per share as their effect would have been anti-dilutive:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
Employee stock options and RSUs
2,841

 
3,026

 
2,768

 
2,797

ESPP to purchase common shares
187

 
886

 
251

 
443

Total potential dilutive securities
3,028

 
3,912

 
3,019

 
3,240

Concentration of Credit Risk and Significant Customers (Tables)
Schedules of Concentration of Risk, by Risk Factor
Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
Percentage of revenue
2012
 
2011
 
2012
 
2011
Customer A
24.2
%
 
23.1
%
 
23.9
%
 
20.2
%
Customer B
43.8
%
 
40.5
%
 
42.6
%
 
42.7
%
Customer C
11.2
%
 
14.8
%
 
12.5
%
 
14.6
%
 
 
December 31,
2012
 
June 30,
2012
Percentage of accounts receivable
 
Customer A
26.9
%
 
34.1
%
Customer B
37.0
%
 
23.6
%
Customer C
15.0
%
 
20.4
%
Balance Sheet Components (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable 
Accounts receivable:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Accounts receivable
$
62,912

 
$
55,858

Less: Allowance for price adjustments
(19,193
)
 
(16,256
)
Less: Allowance for doubtful accounts
(752
)
 
(752
)
Accounts receivable, net
$
42,967

 
$
38,850

Schedule of Inventory, Current 
Inventories:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Raw materials
$
23,817

 
$
27,856

Work in-process
36,932

 
28,188

Finished goods
10,739

 
9,734

 
$
71,488

 
$
65,778

Property, Plant and Equipment 
Property, plant and equipment:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Land
$
4,950

 
$
4,950

Building
4,106

 
4,077

Manufacturing machinery and equipment
158,685

 
152,307

Equipment and tooling
9,854

 
9,910

Computer equipment and software
15,705

 
14,912

Office furniture and equipment
1,561

 
1,630

Leasehold improvements
22,941

 
22,463

 
217,802

 
210,249

Less accumulated depreciation
(76,841
)
 
(63,114
)
 
140,961

 
147,135

Equipment and construction in progress
10,199

 
11,408

Property, plant and equipment, net
$
151,160

 
$
158,543

Schedule of Other Assets, Noncurrent 
Other long term assets:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Prepayments for property and equipment
$
64

 
$
1,632

Investment in a privately held company
100

 
100

Deferred debt issuance cost
145

 
204

Office leases deposits
526

 
539

 
$
835

 
$
2,475

Schedule of Accrued Liabilities 
Accrued liabilities:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
Accrued salaries and wages
$
3,911

 
$
3,418

Accrued vacation
1,840

 
2,232

Accrued bonuses
2,744

 
4,258

Warranty accrual
1,673

 
1,556

Stock rotation accrual
1,767

 
2,032

Accrued professional fees
606

 
687

ESPP payable
332

 
313

Customer deposits
291

 
179

Other accrued expenses
6,020

 
6,351

 
$
19,184

 
$
21,026

Schedule of Product Warranty Liability 
Warranty accrual, included in accrued liabilities is as follows:
 
Six Months Ended December 31,
 
2012
 
2011
 
(in thousands)
Beginning balance
$
1,556

 
$
664

Additions
733

 
439

Utilization
(616
)
 
(323
)
Ending balance
$
1,673

 
$
780

Stock Rotation Accrual 
Stock rotation accrual, included in accrued liabilities is as follows:
 
Six Months Ended December 31,
 
2012
 
2011
 
(in thousands)
Beginning balance
$
2,032

 
$
1,880

Additions
3,254

 
2,906

Utilization
(3,519
)
 
(3,095
)
Ending balance
$
1,767

 
$
1,691

Acquisition of Wafer Fabrication Facility (Tables)
Schedule of Purchase Price Allocation
The allocation of the total purchase consideration of $26.3 million based on the estimated fair values as of the acquisition date, is summarized in the following table (in thousands):
Land
$
4,950

Building
3,900

Machinery and equipment
15,564

Inventories
2,159

Accrued liabilities
(512
)
Goodwill
269

Total purchase consideration
$
26,330

Shareholders' Equity and Share-based Compensation (Tables)
Summary of Stock Option Activites 
The following table summarizes the Company's stock option activities for the six months ended December 31, 2012:
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
Number of
 
Exercise Price
 
Aggregate
 
Shares
 
Per Share
 
Intrinsic Value
Outstanding at June 30, 2012
4,214,652

 
$
10.00

 
$
6,758,645

Granted
30,000

 
7.97

 
 
Exercised
(287,873
)
 
4.24

 
1,264,884

Canceled or forfeited
(391,795
)
 
12.72

 
 
Outstanding at December 31, 2012
3,564,984

 
$
10.15

 
$
4,464,243


Information with respect to stock options outstanding and exercisable at December 31, 2012 is as follows:
 
Options Outstanding  
 
Options Vested and Exercisable  
 
Number Outstanding
 
Weighted-Average
Remaining Contractual Life (years) 
 
Weighted-Average
Exercise Price
 
Number Exercisable
 
Weighted-Average
Exercise Price
Total options outstanding
3,564,984

 
5.54
 
$
10.15

 
2,704,191

 
$
9.41

 
 
 
 
 
 
 
 
 
 
Options vested and expected to vest
3,497,164

 
5.49
 
$
10.10

 
 
 
 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
or the six months ended December 31, 2012 with the following weighted average assumptions:
 
Six Months Ended December 31,
 
2012
Volatility rate
49%
Risk-free interest rate
0.7%
Expected term
5.5 years
Dividend yield
0%
Restricted Stock Units Activity 
The following table summarizes the Company's RSU activities for the six months ended December 31, 2012:
 
 
Number of Restricted Stock
Units
 
Weighted Average
Grant Date Fair
Value Per Share
 
Weighted Average
Remaining
Recognition
Period (Years)
 
Aggregate Intrinsic Value
Nonvested at June 30, 2012
449,378

 
$
10.33

  
2.26
  
$
4,111,809

Granted
99,000

 
8.70

  
 
  
 
Vested
(69,380
)
 
10.00

 
 
 
 
Forfeited
(18,250
)
 
10.64

  
 
  
 
Nonvested at December 31, 2012
460,748

 
$
10.40

  
2.08
 
$
3,870,283

RSUs vested and expected to vest
404,595

 
 
 
1.99
 
$
3,398,601

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions 
The Employee Share Purchase Plan (the "ESPP") was established in May 2010 upon the completion of the Company's initial public offering. The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:
 
Six Months Ended December 31,
 
2012
Volatility rate
50%
Risk-free interest rate
0.1% - 0.3%
Expected term
1.3 years
Dividend yield
0%
Share-based Compensation, Allocation of Recognized Period Costs 
The total share-based compensation expense related to stock options, ESPP and RSUs described above, recognized in the condensed consolidated statements of income for the periods presented was as follows:

 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Cost of goods sold
$
141

 
$
133

 
$
339

 
$
214

Research and development
278

 
372

 
671

 
631

Selling, general and administrative
494

 
948

 
1,344

 
1,830

 
$
913

 
$
1,453

 
$
2,354

 
$
2,675

Segment and Geographic Information (Tables)
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas 
The revenue by geographical location in the following tables is based on the country or region to which the products were shipped to:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Hong Kong
$
71,251

 
$
63,207

 
$
145,878

 
$
128,059

China
15,336

 
14,592

 
32,965

 
29,214

South Korea
1,392

 
1,706

 
3,660

 
4,164

United States
313

 
366

 
656

 
767

Other countries
1,156

 
842

 
2,050

 
1,957

 
$
89,448

 
$
80,713

 
$
185,209

 
$
164,161

Long-lived assets, consisting of property, plant and equipment by geographical area are as follows:
 
December 31,
2012
 
June 30,
2012
 
(in thousands)
China
$
104,597

 
$
111,432

United States
45,990

 
46,730

Other countries
573

 
381

 
$
151,160

 
$
158,543

Revenue from External Customers by Products and Services 
The following is a summary of revenue by product type:
 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
 
(in thousands)
 
(in thousands)
Power discrete
$
70,801

 
$
62,491

 
$
146,305

 
$
126,205

Power IC
12,936

 
12,967

 
27,467

 
26,280

Packaging and testing services
5,711

 
5,255

 
11,437

 
11,676

 
$
89,448

 
$
80,713

 
$
185,209

 
$
164,161

Net Income Per Share - Basic and Diluted Income Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Numerator:
 
 
 
 
Net income
$ 3,718 
$ 1,474 
$ 11,660 
$ 3,613 
Basic:
 
 
 
 
Weighted average number of common shares used to compute basic net income per share
25,292 
24,538 
25,165 
24,529 
Effect of potentially dilutive securities:
 
 
 
 
Stock options, RSUs and ESPP shares (in shares)
809 
885 
827 
988 
Weighted average number of common shares used to compute diluted net income per share
26,101 
25,423 
25,992 
25,517 
Net income per share attributable to common shareholders:
 
 
 
 
Basic (in dollars per share)
$ 0.15 
$ 0.06 
$ 0.46 
$ 0.15 
Diluted (in dollars per share)
$ 0.14 
$ 0.06 
$ 0.45 
$ 0.14 
Net Income Per Share - Potential Dilutive Shares (Details)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Potential dilutive securities (in shares)
3,028 
3,912 
3,019 
3,240 
Employee stock options and RSUs
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Potential dilutive securities (in shares)
2,841 
3,026 
2,768 
2,797 
ESPP to purchase common shares
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Potential dilutive securities (in shares)
187 
886 
251 
443 
Concentration of Credit Risk and Significant Customers - (Details)
6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended
Dec. 31, 2012
Minimum
Dec. 31, 2012
Maximum
Dec. 31, 2012
Customer A
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer A
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer A
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer A
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer A
Accounts Receivable
Customer Concentration Risk
Jun. 30, 2012
Customer A
Accounts Receivable
Customer Concentration Risk
Dec. 31, 2012
Customer B
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer B
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer B
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer B
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer B
Accounts Receivable
Customer Concentration Risk
Jun. 30, 2012
Customer B
Accounts Receivable
Customer Concentration Risk
Dec. 31, 2012
Customer C
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer C
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer C
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2011
Customer C
Sales Revenue, Goods, Net
Customer Concentration Risk
Dec. 31, 2012
Customer C
Accounts Receivable
Customer Concentration Risk
Jun. 30, 2012
Customer C
Accounts Receivable
Customer Concentration Risk
Concentration Risk
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Terms of credit sales, (in days)
30 days 
60 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customers greater than 10% of total
 
 
24.20% 
23.10% 
23.90% 
20.20% 
26.90% 
34.10% 
43.80% 
40.50% 
42.60% 
42.70% 
37.00% 
23.60% 
11.20% 
14.80% 
12.50% 
14.60% 
15.00% 
20.40% 
Balance Sheet Components - Accounts receivable (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Balance Sheet Related Disclosures [Abstract]
 
 
Accounts receivable
$ 62,912 
$ 55,858 
Less: allowance for price adjustments
(19,193)
(16,256)
Less: allowance for doubtful accounts
(752)
(752)
Accounts receivable, net
$ 42,967 
$ 38,850 
Balance Sheet Components - Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Balance Sheet Related Disclosures [Abstract]
 
 
Raw materials
$ 23,817 
$ 27,856 
Work in-process
36,932 
28,188 
Finished goods
10,739 
9,734 
Inventory, net
$ 71,488 
$ 65,778 
Balance Sheet Components - Property, plant, and equipment (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
$ 217,802 
$ 210,249 
Less accumulated depreciation
(76,841)
(63,114)
Property, plant and equipment excluding equipment and construction in progress, net
140,961 
147,135 
Equipment and construction in progress
10,199 
11,408 
Property, plant and equipment, net
151,160 
158,543 
Land
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
4,950 
4,950 
Building
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
4,106 
4,077 
Manufacturing machinery and equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
158,685 
152,307 
Equipment and tooling
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
9,854 
9,910 
Computer equipment and software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
15,705 
14,912 
Office furniture and equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
1,561 
1,630 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant, and equipment excluding equipment and construction In progress, gross
$ 22,941 
$ 22,463 
Balance Sheet Components - Other long term assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Balance Sheet Related Disclosures [Abstract]
 
 
Prepayments for property and equipment
$ 64 
$ 1,632 
Investment in a privately held company
100 
100 
Deferred debt issuance cost
145 
204 
Office leases deposits
526 
539 
Other long-term assets
$ 835 
$ 2,475 
Balance Sheet Components - Accrued liabilites (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2011
Balance Sheet Related Disclosures [Abstract]
 
 
 
 
Accrued salaries and wages
$ 3,911 
$ 3,418 
 
 
Accrued vacation
1,840 
2,232 
 
 
Accrued bonuses
2,744 
4,258 
 
 
Warranty accrual
1,673 
1,556 
780 
664 
Stock rotation accrual
1,767 
2,032 
1,691 
1,880 
Accrued professional fees
606 
687 
 
 
ESPP payable
332 
313 
 
 
Customer deposits
291 
179 
 
 
Other accrued expenses
6,020 
6,351 
 
 
Accrued liabilities
$ 19,184 
$ 21,026 
 
 
Balance Sheet Components - Product Warranty Accrual (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
 
 
Beginning balance
$ 1,556 
$ 664 
Additions
733 
439 
Utilization
(616)
(323)
Ending balance
$ 1,673 
$ 780 
Balance Sheet Components - Stock Rotation Accrual (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Stock Rotation Accrual Increae (Decrease) [Roll Forward]
 
 
Beginning balance
$ 2,032 
$ 1,880 
Additions
3,254 
2,906 
Utilzation
(3,519)
(3,095)
Ending balance
$ 1,767 
$ 1,691 
Acquisition of Wafer Fabrication Facility - (Details) (Intergrated Device Technology (IDT), USD $)
6 Months Ended 12 Months Ended
Jan. 31, 2012
Dec. 31, 2012
Building
Dec. 31, 2012
Minimum
Manufacturing machinery and equipment
Dec. 31, 2012
Maximum
Manufacturing machinery and equipment
Jun. 30, 2012
General and Administrative Expense
Business Acquisition, Contingent Consideration [Line Items]
 
 
 
 
 
Cash deposit applied to purchase price
$ 5,000,000 
 
 
 
 
Related acquistion costs
 
 
 
 
200,000 
Business Acquisition, Purchase Price Allocation [Abstract]
 
 
 
 
 
Land
4,950,000 
 
 
 
 
Building
3,900,000 
 
 
 
 
Machinery and equipment
15,564,000 
 
 
 
 
Inventories
2,159,000 
 
 
 
 
Accrued liabilities
(512,000)
 
 
 
 
Goodwill
269,000 
 
 
 
 
Total purchase consideration
$ 26,330,000 
 
 
 
 
Property, plant and equipment, useful life
 
20 years 
3 years 
7 years 
 
Debt - (Details)
6 Months Ended 6 Months Ended 6 Months Ended
Dec. 31, 2012
Subsidiaries
Dec. 31, 2012
Federal funds rate
Dec. 31, 2012
Eurodollar rate
Dec. 31, 2012
Minimum
LIBOR rate
Dec. 31, 2012
Minimum
Margin Rate
Dec. 31, 2012
Maximum
LIBOR rate
Dec. 31, 2012
Maximum
Margin Rate
Dec. 31, 2012
Subsidiaries
Maximum
Dec. 31, 2012
Company's China Subsidiary One
USD ($)
Dec. 31, 2012
Company's China Subsidiary One
CNY
Aug. 31, 2012
Company's China Subsidiary One
CNY
Dec. 31, 2012
Company's China Subsidiary Two
USD ($)
Dec. 31, 2012
Company's China Subsidiary Two
CNY
Aug. 31, 2012
Company's China Subsidiary Two
CNY
Dec. 31, 2012
CHINA
Subsidiaries
Dec. 31, 2012
Variable Interest Rate Term Loan Maturing May 2015
Notes Payable to Banks
USD ($)
May 11, 2012
Variable Interest Rate Term Loan Maturing May 2015
Notes Payable to Banks
USD ($)
Dec. 31, 2012
State of Oregon Loan
Loans Payable
USD ($)
Jul. 17, 2012
State of Oregon Loan
Loans Payable
USD ($)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan, principal amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20,000,000 
 
$ 250,000 
Line of credit facility, maximum limit
 
 
 
 
 
 
 
 
15,200,000 
95,000,000 
80,000,000 
15,200,000 
95,000,000 
80,000,000 
 
 
10,000,000 
 
 
Debt instrument, basis spread on variable rate
 
0.50% 
1.00% 
1.00% 
(0.50%)
1.75% 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding balance of loan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17,900,000 
 
250,000 
 
Line of credit facility, amount outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0 
 
 
 
Number of subsidiaries securing obligations under loan agreement
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of subsidiaries with revolving lines of credit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
Line of credit facility, subsidiaries, borrowing capacity, maximum percent of accounts receivable
 
 
 
 
 
 
 
80.00% 
 
 
 
 
 
 
 
 
 
 
 
Repayment term of line of credit (in days)
 
 
 
 
 
 
 
120 days 
 
 
 
 
 
 
 
 
 
 
 
Interest rate on loan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
Shareholders' Equity and Share-based Compensation - Shares Repurchase (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 6 Months Ended 26 Months Ended
Oct. 22, 2010
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2012
Class of Stock [Line Items]
 
 
 
 
 
Share repurchase program, authorized amount
$ 25.0 
 
 
 
 
Treasury stock acquired, shares repurchased (in shares)
 
600 
 
600 
241,770 
Treasury stock acquired, average price per share (in dollars per share)
 
$ 7.48 
$ 13.80 
$ 7.48 
$ 9.40 
Treasury stock reissued (in shares)
 
 
 
 
13,200 
Treasury stock acquired
 
 
 
 
$ 2.3 
Treasury stock reissued, average price per share (in dollars per share)
 
 
 
 
$ 4.92 
Treasury Stock Reissued
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Treasury stock acquired, average price per share (in dollars per share)
 
 
 
 
$ 13.80 
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures
 
1,200 
 
1,400 
 
Shareholders' Equity and Share-based Compensation - Share-based Compensation (Details) (USD $)
6 Months Ended
Dec. 31, 2012
Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Outstanding at June 30, 2012 (in shares)
4,214,652 
 
Granted (in shares)
30,000 
 
Exercised (in shares)
(287,873)
 
Canceled or forfeited (in shares)
(391,795)
 
Outstanding at December 31, 2012 (in shares)
3,564,984 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Outstanding at June 30, 2012 (in dollars per share)
$ 10.00 
 
Granted (in dollars per share)
$ 7.97 
 
Exercised (in dollars per share)
$ 4.24 
 
Canceled or forfeited (in dollars per share)
$ 12.72 
 
Outstanding at December 31, 2012 (in dollars per share)
$ 10.15 
 
Options Outstanding Aggregate Intrinsic Value
$ 4,464,243 
$ 6,758,645 
Options Exercised Aggegate Intrinsic Value
$ 1,264,884 
 
Shareholders' Equity and Share-based Compensation - Stock Options Outstanding and Exercisable (Details) (USD $)
6 Months Ended
Dec. 31, 2012
Jun. 30, 2012
Share-based Compensation [Abstract]
 
 
Options, Number Outstanding (in shares)
3,564,984 
4,214,652 
Options, Weighted-Average Remaining Contractual Life (in years)
5 years 6 months 15 days 
 
Options, Weighted-Average Exercise Price (in dollars per share)
$ 10.15 
$ 10.00 
Options, Number Exercisable (in shares)
2,704,191 
 
Options, Weighted-Average Exercise Price (in dollars per share)
$ 9.41 
 
Options vested and expected to vest, Number Outstanding (in shares)
3,497,164 
 
Options vested and expected to vest, Weighted Average Remaining Contractual Life (in years)
5 years 5 months 27 days 
 
Options vested and expected to vest, Weighted Average Exercise Price (in dollars per share)
$ 10.10 
 
Shareholders' Equity and Share-based Compensation - Fair Value of Stock Options Weighted Average Assumptions (Details) (Stock Options)
6 Months Ended
Dec. 31, 2012
Stock Options
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Volatility rate
49.00% 
Risk-free interest rate
0.70% 
Expected term
5 years 6 months 
Dividend yield
0.00% 
Shareholders' Equity and Share-based Compensation - Restricted Stock Activity (Details) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2012
Restricted Stock
Jun. 30, 2012
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Nonvested
 
449,378 
 
Granted
 
99,000 
 
Vested
 
(69,380)
 
Forfeited
 
(18,250)
 
Nonvested
 
460,748 
449,378 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Nonvested
 
$ 10.33 
 
Granted
 
$ 8.70 
 
Vested
 
$ 10.00 
 
Forfeited
 
$ 10.64 
 
Nonvested
 
$ 10.40 
$ 10.33 
Weighted Average Remaining Recognition Period (Years)
1 year 6 months 
2 years 0 months 29 days 
2 years 3 months 4 days 
Aggregate Intrinsic Value
 
$ 3,870,283 
$ 4,111,809 
RSUs vested and expected to vest, Outstanding (in shares)
 
404,595 
 
RSUs vested and expected to vest, Weighted Average Remaining Recognition Period (in years)
 
1 year 11 months 27 days 
 
RSUs vested and expected to vest, Aggregate Intrinsic Value
 
$ 3,398,601 
 
Shareholders' Equity and Share-based Compensation - Employee Stock Purchase Plan (Details) (Employee Stock)
6 Months Ended
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Volatility rate
50.00% 
Expected term
1 year 3 months 18 days 
Dividend yield
0.00% 
Minimum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Risk-free interest rate
0.10% 
Maximum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Risk-free interest rate
0.30% 
Shareholders' Equity and Share-based Compensation - Share-based Compensation Expenses (Details) (USD $)
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated share-based compensation expense
$ 913,000 
$ 1,453,000 
$ 2,354,000 
$ 2,675,000 
Unrecognized compensation expense
5,700,000 
 
5,700,000 
 
Recognition period of share-based compensation expense (in years)
1 year 6 months 
 
 
 
Cost of goods sold
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated share-based compensation expense
141,000 
133,000 
339,000 
214,000 
Research and development
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated share-based compensation expense
278,000 
372,000 
671,000 
631,000 
Selling, general and administrative
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated share-based compensation expense
$ 494,000 
$ 948,000 
$ 1,344,000 
$ 1,830,000 
Income Taxes - Narrative (Details) (USD $)
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
 
Income tax expense
$ 1,085,000 
$ 839,000 
$ 2,897,000 
$ 1,612,000 
Estimated effective income tax rate
22.60% 
36.30% 
19.90% 
30.90% 
Unrecognized tax benefits
$ 7,200,000 
 
$ 7,200,000 
 
Segment and Geographic Information - Revenue by Location and Product Type (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
$ 89,448 
$ 80,713 
$ 185,209 
$ 164,161 
Revenues from external customers
89,448 
80,713 
185,209 
164,161 
Power discrete
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues from external customers
70,801 
62,491 
146,305 
126,205 
Power IC
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues from external customers
12,936 
12,967 
27,467 
26,280 
Packaging and testing services
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues from external customers
5,711 
5,255 
11,437 
11,676 
Hong Kong
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
71,251 
63,207 
145,878 
128,059 
China
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
15,336 
14,592 
32,965 
29,214 
South Korea
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
1,392 
1,706 
3,660 
4,164 
United States
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
313 
366 
656 
767 
Other countries
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenues
$ 1,156 
$ 842 
$ 2,050 
$ 1,957 
Segment and Geographic Information - Long-lived Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
$ 151,160 
$ 158,543 
China
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
104,597 
111,432 
United States
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
45,990 
46,730 
Other countries
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Long-lived assets
$ 573 
$ 381 
Commitments and Contingencies - Purchase Commitments (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Jun. 30, 2012
Raw materials, wafers, and packaging and testing services puchase commitments
 
 
Purchase Commitment, Excluding Long-term Committment [Line Items]
 
 
Purchase commitment, amount
$ 30.9 
$ 43.3 
Property and equipment purchase commitments
 
 
Purchase Commitment, Excluding Long-term Committment [Line Items]
 
 
Purchase commitment, amount
$ 0.5 
$ 2.6 
Commitments and Contingencies - Guarantees (Details) (Indemnification Agreement, USD $)
Dec. 31, 2012
Jun. 30, 2012
Indemnification Agreement
 
 
Loss Contingencies [Line Items]
 
 
Indemnifications accrual
$ 0 
$ 0