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Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Feb. 28, 2015
Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name INPHI CORP
Document Type 10-K
Current Fiscal Year End Date --12-31
Entity Common Stock, Shares Outstanding 37,864,922
Entity Public Float $ 458,000,000
Amendment Flag false
Entity Central Index Key 0001160958
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Filer Category Accelerated Filer
Entity Well-known Seasoned Issuer No
Document Period End Date Dec 31, 2014
Document Fiscal Year Focus 2014
Document Fiscal Period Focus FY
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Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current assets:
Cash and cash equivalents $ 30,366 $ 31,667
Investments in marketable securities 38,908 90,890
Accounts receivable, net 36,914 13,073
Inventories 26,650 6,767
Deferred tax assets 678 1,099
Income tax receivable 204 240
Prepaid expenses and other current assets 6,779 2,361
Total current assets 140,499 146,097
Property and equipment, net 35,498 22,460
Goodwill 9,405 5,875
Identifiable intangible assets, net 80,773
Deferred tax charge 3,261 4,200
Other assets, net 9,274 3,710
Total assets 278,710 182,342
Current liabilities:
Accounts payable 7,884 7,280
Deferred revenue 7,110 1,686
Accrued employee expenses 9,492 4,626
Other accrued expenses 4,952 1,611
Other current liabilities 2,689 1,881
Total current liabilities 32,127 17,084
Other long-term liabilities 7,409 5,865
Total liabilities 39,536 22,949
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued 0 0
Common stock, $0.001 par value; 500,000,000 shares authorized; 37,310,963 and 30,244,439 issued and outstanding at December 31, 2014 and 2013, respectively 37 30
Additional paid-in capital 327,475 225,007
Accumulated deficit (89,190) (66,582)
Accumulated other comprehensive income 852 938
Total stockholders’ equity 239,174 159,393
Total liabilities and stockholders’ equity $ 278,710 $ 182,342
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Consolidated Balance Sheets (Parentheticals) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 37,310,963 30,244,439
Common stock, outstanding 37,310,963 30,244,439
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Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Revenue $ 156,142 $ 102,664 $ 91,206
Cost of revenue 70,488 37,095 32,684
Gross profit 85,654 65,569 58,522
Research and development 70,863 50,516 40,102
Sales and marketing 20,003 15,741 14,052
General and administrative 16,153 11,614 12,300
Total operating expenses 107,019 77,871 66,454
Loss from operations (21,365) (12,302) (7,932)
Interest and other income 495 876 914
Loss before income taxes (20,870) (11,426) (7,018)
Provision for income taxes 1,738 1,752 13,673
Net loss $ (22,608) $ (13,178) $ (20,691)
Earnings per share:
Basic (in Dollars per share) $ (0.69) $ (0.45) $ (0.73)
Diluted (in Dollars per share) $ (0.69) $ (0.45) $ (0.73)
Weighted-average shares used in computing earnings per share:
Basic (in Shares) 32,707,868 29,493,005 28,378,680
Diluted (in Shares) 32,707,868 29,493,005 28,378,680
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Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Net loss $ (22,608) $ (13,178) $ (20,691)
Other comprehensive income (loss):
Change in unrealized gain, net of $45, $(80) and $176 tax expense (benefit) in 2014, 2013 and 2012, respectively 11 (88) 364
Realized loss (gain) reclassified into earnings, net of tax (97) (45) (68)
Comprehensive loss $ (22,694) $ (13,311) $ (20,395)
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Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Change in unrealized gain, tax $ 45 $ (80) $ 176
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Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, except Share data
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
Balance at Dec. 31, 2011 $ 28 $ 190,314 $ (32,713) $ 775 $ 158,404
Balance (in Shares) at Dec. 31, 2011 27,882,223
Issuance of common stock from exercise of stock options 1 1,827 1,828
Issuance of common stock from exercise of stock options (in Shares) 670,734
Issuance of common stock from restricted stock unit grant (325) (325)
Issuance of common stock from restricted stock unit grant (in Shares) 76,001
Issuance of common stock from employee stock purchase plan 943 943
Issuance of common stock from employee stock purchase plan (in Shares) 101,088 101,088
Income tax benefit from stock option exercises 51 51
Stock-based compensation expense 12,459 12,459
Net income (loss) (20,691) (20,691)
Other comprehensive income (loss), net 296 296
Balance at Dec. 31, 2012 29 205,269 (53,404) 1,071 152,965
Balance (in Shares) at Dec. 31, 2012 28,730,046
Issuance of common stock from exercise of stock options and warrant 1 2,904 2,905
Issuance of common stock from exercise of stock options and warrant (in Shares) 854,379
Issuance of common stock from restricted stock unit grant (2,180) (2,180)
Issuance of common stock from restricted stock unit grant (in Shares) 380,940
Issuance of common stock from employee stock purchase plan 2,221 2,221
Issuance of common stock from employee stock purchase plan (in Shares) 279,074 279,074
Income tax benefit adjustment from stock option exercises (185) (185)
Stock-based compensation expense 16,978 16,978
Net income (loss) (13,178) (13,178)
Other comprehensive income (loss), net (133) (133)
Balance at Dec. 31, 2013 30 225,007 (66,582) 938 159,393
Balance (in Shares) at Dec. 31, 2013 30,244,439
Issuance of common stock from exercise of stock options 1 4,297 4,298
Issuance of common stock from exercise of stock options (in Shares) 788,196 788,196
Issuance of common stock from restricted stock unit grant 1 (4,965) (4,964)
Issuance of common stock from restricted stock unit grant (in Shares) 738,862
Issuance of common stock from employee stock purchase plan 2,668 2,668
Issuance of common stock from employee stock purchase plan (in Shares) 264,886 264,886
Income tax benefit from stock option exercises 55 55
Stock-based compensation expense 22,460 22,460
Issuance of stock from Cortina acquisition 5 77,953 77,958
Issuance of stock from Cortina acquisition (in Shares) 5,274,580
Net income (loss) (22,608) (22,608)
Other comprehensive income (loss), net (86) (86)
Balance at Dec. 31, 2014 $ 37 $ 327,475 $ (89,190) $ 852 $ 239,174
Balance (in Shares) at Dec. 31, 2014 37,310,963
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Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities
Net loss $ (22,608) $ (13,178) $ (20,691)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 14,114 7,508 4,908
Stock-based compensation 22,460 16,978 12,459
Abandonment of asset 1,195 516
Deferred income taxes 487 (163) 9,954
Amortization of deferred tax charge 938 938 963
Excess tax benefit related to stock-based compensation (55) (2,060)
Amortization of premiums on marketable securities 800 983 1,161
Other noncash items 2 (46) 112
Changes in assets and liabilities:
Accounts receivable (8,686) 644 (4,442)
Inventories 10,119 (1,873) 822
Prepaid expenses and other assets (3,255) (578) (164)
Income tax payable/receivable (576) 3,045 2,657
Accounts payable (1,302) 379 682
Accrued expenses (9,006) 1,645 847
Deferred revenue 5,424 603 (846)
Other liabilities (1,665) 1,257 106
Net cash provided by operating activities 8,386 18,658 6,468
Cash flows from investing activities
Purchases of property and equipment (21,171) (16,578) (8,383)
Proceeds from sale of property and equipment 237
Purchases of marketable securities (38,557) (43,125) (47,030)
Sales and maturities of marketable securities 89,872 42,226 44,667
Purchase of patents (1,580)
Acquisition of Cortina, net of cash acquired (35,308)
Purchase of cost-method investment in private company (5,000) (2,621)
Net cash used in investing activities (11,744) (20,098) (10,509)
Proceeds from exercise of stock options and warrants 4,298 2,905 1,828
Excess tax benefit related to stock-based compensation 55 2,060
Proceeds from employee stock purchase plan 2,668 2,221 943
Minimum tax withholding paid on behalf of employees for restricted stock units (4,964) (2,180) (325)
Net cash provided by financing activities 2,057 2,946 4,506
Net increase (decrease) in cash and cash equivalents (1,301) 1,506 465
Cash and cash equivalents at beginning of year 31,667 30,161 29,696
Cash and cash equivalents at end of year 30,366 31,667 30,161
Acquisition of Cortina Systems, Inc. in exchange for common stock 77,958
Income taxes paid $ 715 $ 59 $ 99
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Note 1 - Organization and Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

1. Organization and Summary of Significant Accounting Policies


Inphi Corporation (the “Company”), a Delaware corporation, was incorporated in November 2000. The Company is a fabless provider of high-speed analog and mixed signal semiconductor solutions for the communications, datacenter and computing markets. The Company’s semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments and enable the rollout of next generation communications, datacenter and computing infrastructures. In addition, the semiconductor solutions provide a vital high-speed interface between analog signals and digital information in high-performance systems such as telecommunications transport systems, enterprise networking equipment, datacenter and enterprise servers, storage platforms, test and measurement equipment and military systems.


On October 3, 2014, the Company completed the acquisition of Cortina Systems, Inc. including its high-speed interconnect and optical transport product lines (Cortina) for approximately $52,509 in cash and approximately 5.3 million shares of the Company’s common stock in accordance with the Agreement and Plan of Merger dated July 30, 2014 as amended by Amendment No. 1 to the Agreement and Plan of Merger dated September 25, 2014.


The Company is subject to certain risks and uncertainties and believes changes in any of the following areas could have a material adverse effect on the Company’s future financial position or results of operations or cash flows: ability to sustain profitable operations due to history of losses and accumulated deficit, dependence on limited number of customers for a substantial portion of revenue, product defects, risks related to intellectual property matters, lengthy sales cycle and competitive selection process, lengthy and expensive qualification process, ability to develop new or enhance products in a timely manner, market development of and demand for the Company’s products, reliance on third parties to manufacture, assemble and test products and ability to compete.


Basis of Presentation


The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of Inphi, Cortina and subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.


 Business Combinations


The Company accounts for acquisitions of business using the purchase method of accounting, which requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.


Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies where applicable. Although, the Company believes the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, expected costs to develop in-process research and development (IPR&D) into commercially viable products and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.


Use of Estimates


The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


On an ongoing basis, management evaluates its estimates, including those related to (i) the collectibility of accounts receivable and allowance for distributors’ price discounts; (ii) write down for excess and obsolete inventories; (iii) warranty obligations; (iv) the value assigned to and estimated useful lives of long-lived assets; (v) the realization of tax assets and estimates of tax liabilities and tax reserves; (vi) the valuation of equity securities; (vii) amounts recorded in connection with acquisitions; (viii) recoverability of intangible assets and goodwill and (ix) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company engages third party valuation specialists to assist with estimates related to the valuation of financial instruments and assets associated with various contractual arrangements, and valuation of assets acquired in connection with acquisitions. Such estimates often require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions or circumstances.


Foreign Currency Translation


The Company and its subsidiaries use the U.S. dollar as its functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the exchange rate in effect during the period the transaction occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency transactions are included in the Consolidated Statements of Operations as part of “Other income (expense)”. Foreign currency gain or loss in 2014, 2013 and 2012 were not material.


Cash and Cash Equivalents


The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents with major financial institutions and, at times, such balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. Cash equivalents primarily consist of money market funds.


Fair Market Value of Financial Instruments


The carrying amount reflected in the balance sheet for cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these financial instruments.


Investments in Marketable Securities


Investments in marketable securities consist of available-for-sale securities. These investments are recorded at fair value with changes in fair value, net of applicable taxes, recorded as unrealized gains (losses) as a component of accumulated other comprehensive income in stockholders' equity. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in Other (expense) income, net. The cost basis for realized gains and losses on available-for-sale securities is determined on a specific identification basis. Investments are made based on our investment policy which restricts the types of investments that can be made. The Company classified available-for-sale securities as short-term as the investments are available to be used in current operations.


 Inventories


Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Inventories are reduced for write downs based on periodic reviews for evidence of slow-moving or obsolete parts. The write-down is based on comparison between inventory on hand and estimated future sales for each specific product. Once written down, inventory write downs are not reversed until the inventory is sold or scrapped. Inventory write downs are also established when conditions indicate that the net realizable value is less than cost due to physical deterioration, obsolescence, changes in price level or other causes. Inventory valuation reserves were $1,949 and $1,479, as of December 31, 2014 and 2013, respectively.


Property and Equipment


Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is provided on property and equipment over the estimated useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. Repairs and maintenance are charged to expense as incurred. Useful lives by asset category are as follows:


Asset Category

Years 

Office equipment

3 years

Software

3 years

Leasehold improvements

Shorter of lease term or estimated useful life

Production equipment

2 years

Computer equipment

5 years

Lab equipment

5 years

Furniture and fixtures

7 years


 Equipment Under Capital Leases


The Company leases certain of its equipment under capital lease agreements. The assets and liabilities under capital leases are initially recorded at the fair value of the assets under lease. The capital lease obligation outstanding at December 31, 2014 was $142, payable in 2015.


Intangible Assets


Intangible assets represent rights acquired for developed technology, customer relationships, trade mark, patents and IPR&D in connection with the acquisition of Cortina. Intangible assets with finite useful lives are amortized over periods ranging from five to ten years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed, or if that pattern cannot be reliably determined, using a straight-line amortization method. Acquired IPR&D is capitalized and amortization commences upon completion of the underlying projects. If any of the projects are abandoned, the Company would be required to impair the related IPR&D asset.


Impairment of Long-lived Assets and Goodwill


Long-lived Assets


The Company assesses the impairment of long-lived assets, which consist primarily of property and equipment and intangible assets, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Events or changes in circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is utilized, significant declines in the estimated fair value of the overall Company for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces.


If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the assets.


Goodwill


Goodwill is recorded when the consideration paid for a business acquisition exceeds the fair value of net tangible and intangible assets acquired. Goodwill is measured and tested for impairment on an annual basis during the fourth fiscal quarter or more frequently if the Company believes indicators of impairment exist.  


The performance of the test involves a two-step process. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. As the Company has only one reporting unit, the fair value of the reporting unit is determined by taking the market capitalization of the Company as determined through quoted market prices and adjusted for control premiums and other relevant factors. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process is only performed if a potential impairment exists, and it involves determining the difference between the fair value of the reporting unit's net assets other than goodwill and the fair value of the reporting unit. If the difference is less than the net book value of goodwill, impairment exists and is recorded. In the event that the Company determines that the value of goodwill has become impaired, the Company will record an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company has not been required to perform this second step of the process because the fair value of the reporting unit has significantly exceeded its book value at every measurement date. The guidance also provides the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. There was no impairment of goodwill in 2014, 2013 and 2012.


Internal Use Software Costs


Certain external computer software costs acquired for internal use are capitalized. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized costs are included within property and equipment.


Revenue Recognition


The Company’s products are fully functional at the time of shipment and do not require additional production, modification, or customization. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred, the fee is fixed or determinable, and collection is reasonably assured. The Company’s sales arrangements do not include multiple elements.


Product revenue is recognized upon shipment of product to customers, net of accruals for estimated sales returns and allowances, which to date, have not been significant. However, some of the Company’s sales are made through distributors under arrangements that allow for price protection or rights of return on product unsold by the distributors. Product revenue on sales made through distributors with rights of return or price protection is deferred until the distributors sell the product to end customers. Sales to distributors are included in deferred revenue and the Company includes the related costs in inventory until sale to the end customers occurs. Price protection rights allow distributors the right to a credit in the event of declines in the price of the Company’s product that they hold prior to the sale to an end customer. In the event that the Company reduces the selling price of products held by distributors, deferred revenue related to distributors with price protection rights is reduced upon notification to the customer of the price change. Additionally, certain distributors may receive a credit for the price discounts associated with the distributors' customers that purchased those products. The Company estimates the extent of these distributor price discounts at each reporting period to reduce accounts receivable and deferred revenue, but does not issue these discounts to the distributor until the inventory is sold to the distributors' customers. The Company’s sales to direct customers are made primarily pursuant to standard purchase orders for delivery of products. The Company generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment.


Cost of Revenue


Cost of revenue includes cost of materials, such as wafers processed by third-party foundries, cost associated with packaging and assembly, test and shipping, cost of personnel, including stock-based compensation, and equipment associated with manufacturing support, logistics and quality assurance, warranty cost, write down of inventories, amortization of production mask costs, amortization of developed technology, amortization of step-up values of inventory, overhead and an allocated portion of occupancy costs.


Warranty


The Company’s products are under warranty against defects in material and workmanship generally for a period of one or two years. The Company accrues for estimated warranty cost at the time of sale based on anticipated warranty claims and actual historical warranty claims experience including knowledge of specific product failures that are outside of the Company’s typical experience. The warranty obligation is determined based on product failure rates, cost of replacement and failure analysis cost. If actual warranty costs differ significantly from these estimates, adjustments may be required in the future. As of both December 31, 2014 and 2013, the warranty liability was $110 and $40, respectively.


The following table sets forth changes in warranty accrual included in other accrued expenses in the Company’s consolidated balance sheets:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Beginning balance

  $ 40     $ 40     $ 40  

Warranty liabilities assumed in acquisition

    79              

Settlements

    (9 )            
    $ 110     $ 40     $ 40  

On November 3, 2014, the Company received a claim notification from an insurance company asserting a claim of approximately $4,000 for field installation repair and replacement costs incurred by a customer in 2011. The Company believes that it had fulfilled its contractual obligation to provide warranty repair and replacement, but has referred the matter to its insurance carrier at the request of the insurance company. As of December 31, 2014, the Company believes that the liability under this claim is not probable. Nevertheless, resolutions of third-party claims are inherently uncertain and as such, an unfavorable outcome could ultimately impact the Company’s business, cash flow and results of operations.


In 2010, the Company was informed of a claim related to repair and replacement costs in connection with shipments of over 4,000 integrated circuits made by the Company during the summer and fall of 2009. The Company assessed, provided and accumulated additional warranty reserves based on estimated, probable costs to replace units. In 2012, based on additional investigation and discussions with the customer, the Company booked an additional warranty cost of $750. This amount was recorded as a reduction to revenue. In June 2012, the Company entered into a settlement agreement with the customer in which the Company paid $1,750 in July 2012.


Research and Development Expense


Research and development expense consists of costs incurred in performing research and development activities including salaries, stock-based compensation, employee benefits, occupancy costs, pre-production engineering mask costs, overhead costs and prototype wafer, packaging and test costs. Research and development costs are expensed as incurred. The Company enters into development agreements with some of our customers. Recoveries from nonrecurring engineering services are recorded as an offset to product development expense incurred in support of this effort since these activities do not represent an earning process core to our business and serve as a mechanism to partially recover development expenditures. These reimbursements are recognized upon completion and acceptance by the customer of contract deliverables or milestones. The Company recorded approximately $10,250, $1,000 and $2,484 as offset to research and development expense for the years ended December 31, 2014, 2013 and 2012, respectively.


Sales and Marketing Expense


Sales and marketing expense consists of salaries, stock-based compensation, employee benefits, travel and trade show costs. The Company expenses sales and marketing costs as incurred. Advertising expenses for the years ended December 31, 2014, 2013 and 2012 were not material.


General and Administrative Expense


General and administrative expense consists of salaries, stock-based compensation, employee benefits and expenses for executive management, legal and finance. In addition, general and administrative expense includes fees for professional services and occupancy costs. These costs are expensed as incurred.


Income Taxes


Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must also make judgments in evaluating whether deferred tax assets will be recovered from future taxable income. To the extent that it believes that recovery is not likely, the Company must establish a valuation allowance. The carrying value of the Company’s net deferred tax asset is based on whether it is more likely than not that the Company will generate sufficient future taxable income to realize these deferred tax assets. A valuation allowance is established for deferred tax assets which the Company does not believe meet the “more likely than not” criteria. The Company’s judgments regarding future taxable income may change over time due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company’s assumptions and consequently its estimates change in the future, the valuation allowance the Company has established may be increased or decreased, resulting in a material respective increase or decrease in income tax expense (benefit) and related impact on the Company’s reported net income (loss).


In accordance with FASBs guidance on Accounting for Uncertainty in Income Taxes, the Company performs a comprehensive review of uncertain tax positions regularly. In this regard, an uncertain tax position represents an expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or claim, which has not been reflected in measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company does not recognize the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in our consolidated financial statements. The Company recognizes potential interest and penalties on uncertain tax positions within provision (benefit) for income taxes on the consolidated statement of operations.


Stock-Based Compensation


Stock-based compensation for stock option and restricted stock units issued to the Company’s employees is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis. The fair value of restricted stock units is based on the fair market value of the Company’s common stock on the date of grant. The Company uses the Black-Scholes option-pricing model for valuing stock option awards granted to employees and directors at the grant date. Determining the fair value of stock option awards at the grant date requires the input of various assumptions, including fair value of the underlying common stock, expected future share price volatility, expected term, risk-free interest rate and dividend rate. Changes in these assumptions can materially affect the fair value of the options. The Company based its estimate of expected volatility on the estimated volatility of similar entities whose share prices are publicly available. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding to the expected life of the options. The weighted average expected life of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited experience. The expected dividend yield is zero because the Company has not historically paid dividends and has no present intention to pay dividends. The Company establishes the estimated forfeiture rates based on historical experience. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period which is equal to the vesting period.


The Company has elected to treat share-based payment awards with graded vesting schedules and time-based service conditions as single awards and recognizes stock-based compensation expense on a straight-line basis (net of estimated forfeitures) over the requisite service period.


The Company recognizes non-employee stock-based compensation expenses based on the estimated fair value of the equity instrument determined using the Black-Scholes option-pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The fair value of each non-employee variable stock award is re-measured each period until a commitment date is reached, which is generally the vesting date.


Earnings per Share


Basic earnings per share is calculated by dividing income allocable to common stockholders (after the reduction for any preferred stock dividends assuming current income for the period had been distributed) by the weighted average number of shares of common stock outstanding, net of shares subject to repurchase by the Company, during the period. Diluted earnings per share is calculated by dividing the net income allocable to common stockholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common stock, which are comprised of stock options, restricted stock units and employee share purchase plan.


Segment Information


The Company operates in one segment related to the design, development and sale of high speed analog connectivity components that operate to maintain, amplify and improve signal integrity at high speeds in a wide variety of applications. The Company’s chief operating decision-maker is its Chief Executive Officer, who reviews operating results on an aggregate basis and manages the Company’s operations as a single operating segment.


Recent Accounting Pronouncements


In January 2014, the Company adopted the guidance on the Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The guidance provides that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments in this update do not require new recurring disclosures. The adoption of this guidance had no impact on the Company’s financial statements.


In May 2014, the Financial Accounting Standards Board issued guidance on “Revenue from Contracts with Customers.” The new revenue recognition guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance is effective for the Company on January 1, 2017. Early application is not permitted. The new guidance permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that the new revenue recognition guidance will have on the consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor determined the effect of the standard on the ongoing financial reporting.


In November 2014, the Financial Accounting Standards Board, issued authoritative guidance that provides guidance on whether and at what threshold an acquired business or not-for-profit organization can apply pushdown accounting. This guidance provides an option to apply pushdown accounting in the separate financial statements of an acquired entity upon the occurrence of an event in which an acquirer obtains control of the acquired entity. The guidance is effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of this guidance is not expected to have any significant impact in the consolidated financial statements.


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Note 2 - Acquisition
12 Months Ended
Dec. 31, 2014
Business Combinations [Abstract]
Business Combination Disclosure [Text Block]

2. Acquisition


On October 3, 2014, the Company completed the acquisition of Cortina Systems, Inc. including its high-speed interconnect and optical transport product lines for approximately $52,509 in cash and approximately 5.3 million shares. The Company did not acquire as part of the merger, Cortina Systems, Inc.’s access and digital Home business, which Cortina Systems, Inc. divested prior to the closing of the acquisition. The Company acquired Cortina to expand the Company’s market share of the high-speed optical and networking interconnects. Cash of $16,500 was placed in an escrow fund for up to 12 months following the closing for the satisfaction of certain potential indemnification claims. The consolidated financial statements include the results of operations of Cortina as of the acquisition date.


 The fair value of consideration transferred is shown in the table below:


Cash

  $ 52,509  

Common stock

    77,958  
    $ 130,467  

The acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. As additional information becomes available, the Company may revise its preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.


The following table summarizes the preliminary purchase price allocation as of the acquisition date:


Cash

  $ 17,201  

Receivables

    15,155  

Inventories

    30,002  

Other current assets

    1,685  

Property and equipment

    4,751  

Identifiable intangible assets

    80,660  

In-process research and development

    1,750  

Other noncurrent assets

    366  

Accounts payable, accrued expenses and other current liabilities

    (22,796 )

Deferred tax liabilities, noncurrent

    (725 )

Other liabilities

    (1,112 )

Total identifiable net assets

    126,937  

Goodwill

    3,530  

Net assets acquired

  $ 130,467  

As of the acquisition date, the fair value of receivables, other assets, accounts payable and accrued expenses approximated the book value acquired.


The following table summarizes the estimated fair value of intangible assets and their estimated useful lives as of the date of acquisition:


   

Estimated

Fair Value

   

Estimated

Useful Life (Years)

 
                 

Developed technology

  $ 71,570       5-8  

Customer relationships

    8,170       10  

Trade name

    920       5  

In-process research and development

    1,750        
    $ 82,410          

Developed technology was valued using the multi-period excess earnings method under the income approach. This method involves discounting the direct cash flow expected to be generated by the technologies over their remaining lives, net of returns on contributory assets. The estimated useful life was determined based on the technology cycle related to each product family and its expected contribution to forecast revenue. Customer relationships were valued using the incremental cash flow approach which involved discounting management’s estimate of the incremental revenues afforded by having the existing customer relationships in place as of the acquisition date, net of operating expense, taxes and returns on contributory assets. The estimated useful life was determined based on the estimated customer product or program ramp-up period required to develop the similar existing customer revenue base. Trade name was valued based on application of relief-from-royalty approach under the income approach. This method is based on the application of a royalty rate to forecasted revenue. The estimated useful life was determined based on the expected life of the trade names, the history of the trade names and the cash flows anticipated over the forecasted periods. In-process research and development was valued using the multi-period excess earnings method under the income approach, with the additional inclusion of estimated costs required to complete the projects.


The Company capitalized $1,750 of IPR&D costs related to the Cortina acquisition. Upon completion of the project, the related IPR&D assets will be amortized over their estimated useful lives. If the project are abandoned, the Company will be required to impair the related IPR&D asset. The significant assumptions underlying the valuation of IPR&D are:


Estimated percent complete

    5 %

Estimated time to complete

 

18 months

 

Estimated cost to complete

  $ 12,548  

Discount rate

    26.5 %

As of December 31, 2014, the projects are expected to be completed in March 2016 and will commence commercial production in 2016.


Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and is attributable to the workforce of Cortina. Goodwill is not amortized and is not deductible for tax purposes.


The Company incurred acquisition costs of $1,091 which are included in general and administrative expense in the consolidated statement of income for the year ended December 31, 2014.


Cortina contributed revenue of $21,018 and pre-tax loss of $10,018 to the Company for the period from October 3, 2014 to December 31, 2014.


Pro Forma Information


The following unaudited pro forma financial information presents a summary of the Company’s consolidated results of operations for the year ended December 31, 2014 and the year ended December 31, 2013, assuming the Cortina acquisition had been completed as of January 1, 2013. The pro forma information includes adjustments to amortization and depreciation for intangible assets and property and equipment acquired, amortization of the purchase accounting effect on inventory acquired from Cortina, and interest income for reduction in short-term investments to fund the acquisition.


   

Pro Forma
Year Ended
December 31,
2014

   

Pro Forma
Year Ended
December 31,
2013

 
   

(unaudited)

   

(unaudited)

 

Revenue

  $ 224,116     $ 191,966  

Net loss

  $ (8,500 )   $ (28,427 )

Earnings per share – basic

  $ (0.23 )   $ (0.82 )

Earnings per share – diluted

  $ (0.23 )   $ (0.82 )

The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on the historical financial information of the Company and Cortina, reflecting the results of operations for the year ended December 31, 2014 and 2013. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition as of the beginning of the period presented. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition.


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Note 3 - Investments
12 Months Ended
Dec. 31, 2014
Investments Schedule [Abstract]
Investment [Text Block]

3. Investments


The following table summarizes the investments by investment category:


   

December 31, 2014

 
   

Cost

   

Gross

Unrealized

Gain

   

Gross

Unrealized

Loss

   

Fair Value

 

Available-for-sale securities:

                               

US treasury securities

  $ 2,056     $ 1     $     $ 2,057  

Municipal bonds

    19,686       43       (17 )     19,712  

Corporate notes/bonds

    16,381       32       (21 )     16,392  

Asset backed securities

    750             (3 )     747  

Total investments

  $ 38,873     $ 76     $ (41 )   $ 38,908  

   

December 31, 2013

 
   

Cost

   

Gross

Unrealized

Gain

   

Gross

Unrealized

Loss

   

Fair Value

 

Available-for-sale securities:

                               

US treasury securities

  $ 25,061     $ 11     $     $ 25,072  

Municipal bonds

    34,912       105       (34 )     34,983  

Corporate notes/bonds

    28,565       105       (22 )     28,648  

Certificate of deposit

    1,500       1             1,501  

Asset backed securities

    685       1             686  

Total investments

  $ 90,723     $ 223     $ (56 )   $ 90,890  

As of December 31, 2014, we had 22 investments that were in an unrealized loss position. The gross unrealized losses on these investments at December 31, 2014 were primarily due to changes in interest rates and determined to be temporary in nature. The Company reviews the investments to identify and evaluate investments that have an indication of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.


The realized gain related to the Company’s available-for-sale investment, which was reclassified from other comprehensive income, was included in other income in the consolidated statements of income.


The contractual maturities of available-for-sale securities at December 31, 2014 are presented in the following table:


   

Cost

   

Fair Value

 

Due in one year or less

  $ 13,613     $ 13,656  

Due between one and five years

    25,260       25,252  
    $ 38,873     $ 38,908  

In 2014 and 2013, the Company used cash to purchase a minority interest in an early stage private company for $5,000 and $2,621, respectively. The Company’s ownership in the entity is less than 10% and the Company does not have significant influence, therefore, the investment is accounted for under the cost method and included in other assets in the Company’s consolidated balance sheets.


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Note 4 - Concentrations
12 Months Ended
Dec. 31, 2014
Risks and Uncertainties [Abstract]
Concentration Risk Disclosure [Text Block]

4. Concentrations


Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and trade accounts receivable. The Company extends differing levels of credit to customers and does not require collateral deposits. As of December 31, 2014 and 2013, the Company has allowance for doubtful accounts of $165 and $152, respectively. As of December 31, 2014, the Company has allowance for distributors’ price discount of $2,206.


The following table summarizes the significant customers’ and distributors’ accounts receivable and revenue as a percentage of total accounts receivable and total revenue, respectively:


   

December 31,

 

Accounts Receivable

 

2014

   

2013

 

Customer A

    *       11%  

Customer B

    *       *  

Customer C

    18%       *  

   

Year Ended December 31,

 

Revenue

 

2014

   

2013

   

2012

 

Customer A

    13%       12%       19%  

Customer B

    *       15       15  

Customer C

    *       *       *  

*

Less than 10% of total accounts receivable or total revenue


Certain other customers are distributors that sell the Company’s products exclusively to what would be a “Customer D” above if we were able to include the sales made to those distributors. In the aggregate, revenue to such end customer, including revenue made through distributors as a percentage of total revenue was 11% and 14% for the years ended December 31, 2013 and 2012, respectively. In addition, certain other customers are subcontractors of customers A and B above. In the aggregate, revenue to Customer A, including its subcontractors as a percentage of total revenue was 18%, 20% and 23% for the years ended December 31, 2014, 2013 and 2012, respectively. In the aggregate, revenue to Customer B, including its subcontractor as a percentage of total revenue was 16% and 15% for the years ended December 31, 2013 and 2012, respectively.


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Note 5 - Inventories
12 Months Ended
Dec. 31, 2014
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]

5. Inventories


Inventories consist of the following:


   

December 31,

 
   

2014

   

2013

 
                 

Raw materials

  $ 5,803     $ 670  

Work in process

    2,409       2,001  

Finished goods

    18,438       4,096  
    $ 26,650     $ 6,767  

Finished goods include amounts held by distributors of $2,798 and $543 as of December 31, 2014 and 2013, respectively.


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Note 6 - Property and Equipment, Net
12 Months Ended
Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment Disclosure [Text Block]

6. Property and Equipment, net


Property and equipment consist of the following:


   

December 31,

 
   

2014

   

2013

 
                 

Laboratory and production equipment

  $ 48,522     $ 34,443  

Office, software and computer equipment

    15,855       8,649  

Furniture and fixtures

    1,762       834  

Leasehold improvements

    5,212       3,952  
      71,351       47,878  

Less accumulated depreciation

    (35,853 )     (25,418 )
    $ 35,498     $ 22,460  

Depreciation and amortization expense for the years ended December 31, 2014, 2013 and 2012 was $10,897, $7,508 and $4,908, respectively.


As of December 31, 2014 and 2013, computer software costs included in property and equipment were $4,582 and $2,815, respectively. Amortization expense of capitalized computer software costs was $614, $283 and $280 for the years ended December 31, 2014, 2013 and 2012, respectively.


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Note 7 - Goodwill and Identifiable Intangible Assets
12 Months Ended
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets Disclosure [Text Block]

7. Goodwill and Identifiable Intangible Assets


The following table presents details of identifiable intangible assets:


   

December 31, 2014

 
   

Gross

   

Accumulated

Amortization

   

Net

 

Developed technology

  $ 71,570     $ 2,857     $ 68,713  

Customer relationships

    8,170       201       7,969  

Trade name

    920       46       874  

Patents

    1,579       112       1,467  

In-process research and development

    1,750             1,750  
    $ 83,989     $ 3,216     $ 80,773  

The following table presents amortization of intangible assets for the year ended December 31, 2014:


Cost of goods sold

  $ 2,857  

Sales and marketing

    201  

General and administrative

    158  
    $ 3,216  

Based on the amount of intangible assets subject to amortization at December 31, 2014, the expected amortization expense for each of the next five fiscal years and thereafter is as follows:


2015

  $ 12,730  

2016

    12,704  

2017

    12,678  

2018

    12,645  

2019

    11,075  

Thereafter

    17,191  
    $ 79,023  

The weighted-average amortization periods remaining by intangible asset category were as follows (in years):


Developed technology

    6.27  

Customer relationship

    9.75  

Others

    10.71  

During the year ended December 31, 2014, goodwill increased by $3,530 as a result of Cortina acquisition.


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Note 8 - Other Long-term Liabilities
12 Months Ended
Dec. 31, 2014
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]
Other Liabilities Disclosure [Text Block]

8. Other Long-term Liabilities


Other long-term liabilities consist of the following:


   

December 31,

 
   

2014

   

2013

 
                 

Deferred rent

  $ 1,930     $ 1,471  

Income tax payable

    4,687       3,295  

Deferred tax liabilities

    792       1,099  
    $ 7,409     $ 5,865  

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Note 9 - Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]

9. Income Taxes


Loss before income taxes consists of the following:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

United States

  $ (2,684 )   $ (2,507 )   $ (2,852 )

Foreign

    (18,186 )     (8,919 )     (4,166 )

Total

  $ (20,870 )   $ (11,426 )   $ (7,018 )

Income tax provision (benefit) consisted of the following:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Current:

                       

U.S. Federal

  $ 350     $ 1,816     $ 3,760  

U.S. State

    55       1       (132 )

Foreign

    846       98       91  
      1,251       1,915       3,719  
                         

Deferred:

                       

U.S. Federal

    895       (135 )     4,842  

U.S. State

                5,088  

Foreign

    (408 )     (28 )     24  
      487       (163 )     9,954  

Total

  $ 1,738     $ 1,752     $ 13,673  

Income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 34% in 2014 and 2013 and 35% in 2012 to loss before income taxes as a result of the following:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Provision (benefit) at statutory rate

  $ (7,096 )   $ (3,886 )   $ (2,456 )

State income taxes

    1,651       303       200  

Research and development credits

    (7,384 )     (5,850 )     (1,345 )

Change in valuation allowance

    5,271       6,781       15,247  

Foreign earnings, taxed at different rates

    6,381       2,888       1,649  

Unrecognized tax benefits

    1,713       1,708       1,487  

Stock-based compensation

    166       142       336  

Tax exempt income

    (83 )     (157 )     (197 )

Prior year return to provision adjustment

    292       (257 )     (1,264 )

Cortina acquisition transaction cost

    444              

Other

    383       80       16  
    $ 1,738     $ 1,752     $ 13,673  

Significant components of the Company’s net deferred taxes consist of the following:


   

December 31,

 
   

2014

   

2013

 

Deferred tax assets

               

Net operating loss carry forwards

  $ 8,314     $ 8,532  

Research and development credits

    30,637       15,460  

Stock-based compensation

    6,966       5,192  

Accrued expenses and allowances

    2,117       1,592  

Amortization and depreciation

    1,052        

Other temporary differences

    3,461       111  

Valuation allowance

    (39,682 )     (22,448 )

Total deferred tax assets

    12,865       8,439  
                 

Deferred tax liabilities

               

Subpart F income on foreign subsidiaries earnings

    (5,981 )     (5,621 )

Acquired intangible assets

    (6,157 )      

Amortization and depreciation

          (2,790 )

Other deferred tax liabilities

    (820 )      

Total deferred tax liabilities

    (12,958 )     (8,411 )

Deferred tax assets (liabilities), net

  $ (93 )   $ 28  

At December 31, 2014 and 2013, the Company has recorded a deferred tax charge of $3,261 and $4,200, respectively, which represents the tax on the intercompany transfer of intangible assets in connection with the Company’s international reorganization during 2010. The deferred tax charge is being amortized over the estimated useful life of 8 years to income tax expense.


Valuation Allowance


The Company records a valuation allowance to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The determination of recording or releasing tax valuation allowances is made, in part, pursuant to an assessment performed by management regarding the likelihood that the Company will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized. This assessment requires management to exercise significant judgment and make estimates with respect to the Company’s ability to generate revenue, gross profits, operating income and taxable income in future periods. Amongst other factors, management must make assumptions regarding overall current and projected business and semiconductor industry conditions, operating efficiencies, the Company’s ability to timely develop, introduce and consistently manufacture new products to customers’ specifications, acceptance of new products, customer concentrations, technological change and the competitive environment which may impact the Company’s ability to generate taxable income and, in turn, realize the value of the deferred tax assets. The Company uses the tax law ordering approach of intraperiod allocation to allocate the benefit of windfall tax benefits based on provisions in the tax law that identify the sequence in which those amounts are utilized for tax purposes. Additionally, when determining whether uncertain tax positions are a source of income for valuation allowance purposes, the Company applies the tax law ordering approach to determine how these liabilities will ultimately be satisfied.


At December 31, 2012, the Company established full valuation allowances of approximately $14,827 against certain U.S. deferred tax assets, and valuation allowances of approximately $853 against deferred tax assets of the Company’s subsidiaries in Singapore and Taiwan, to reflect the deferred tax asset at the net amount that is more likely than not to be realized. The decision to establish the valuation allowance in 2012 was due to negative evidence which includes the Company’s cumulative losses in U.S., Singapore and Taiwan after considering permanent tax differences, the passage of a California tax law requiring use of single sales factor, which reduces the amount of California taxable income starting 2013. At December 31, 2013, full valuation allowance was recorded on the U.S., Singapore, and Taiwan deferred tax assets. At December 31, 2014, the Company has full valuation allowance recorded against the U.S., Singapore and Canada deferred tax assets, and partial valuation allowance on Taiwan deferred tax assets.


The valuation allowance increased $17,234, $6,768 and $15,247 in the years ended December 31, 2014, 2013 and 2012, respectively.


 General Income Tax Disclosures


The Company has net operating loss (“NOL”) carryforwards for federal and state income tax purposes of approximately $67,951 and $34,904, respectively at December 31, 2014, that will begin to expire in 2022 for federal income tax purposes and in 2015 for state income tax purposes. The Company has additional federal and state NOL carryover as of December 31, 2014 of $29,204 and $12,417, respectively, arising from an excess stock option deduction that were not recognized in the financial statements. These excess stock option compensation benefits will be credited to additional paid-in capital when it reduces current taxable income. At December 31, 2014, the Company has NOL carryforwards of $3,215 for its Taiwan subsidiary which begin to expire in 2019, and capital allowance carryover of $30,459 for the Singapore subsidiary, which does not expire. A full valuation allowance has been provided on U.S. NOL and Singapore capital allowance carryforwards, and partial valuation allowance has been provided on the Taiwan NOL.


At December 31, 2014, the Company has federal and state research and development (“R&D”) tax credit carryforwards of $21,059 and $23,853, respectively. The federal tax credits will begin to expire in 2024, unless previously utilized. Some state tax credits will begin to expire in 2022 and some do not expire. A full valuation allowance has been provided on R&D tax credit carryforwards.


Pursuant to Internal Revenue Code sections 382 and 383, use of the Company’s NOL and R&D credits generated prior to June 2004 are subject to an annual limitation due to a cumulative ownership percentage change that occurred in that period. The Company has had two changes in ownership, one in December 2000 and the second in June 2004, that resulted in an annual limitation on NOL and R&D credit utilization. The NOL and R&D credit carryover of Cortina, are also subject to annual limitation under Internal Revenue Code sections 382 and 383. The acquisition of Cortina caused an ownership change that resulted in an annual limitation, as well as Cortina’s legacy annual limitation amount from ownership changes prior to acquisition. The NOL and R&D credit carryforward which will expire unused due to annual limitation is not recognized for financial statement purposes and is not reflected in the above carryover amounts.


The Company’s NOL carryforwards include Cortina’s federal and state pre-acquisition NOL of $49,609 and $32,033, respectively. These NOL carryforwards will begin to expire in 2024 for federal and 2016 for state. The Company’s R&D credit carryforwards included Cortina’s federal and state pre-acquisition credits of $6,033 and $7,977, respectively. The federal R&D credit carryforward will begin to expire in 2027. While some state tax credits will begin to expire in 2022, most do not expire. In addition, Cortina has $2,859 capital loss carryover which expires in 2018. The utilization of Cortina’s pre-acquisition tax attributes is subject to certain annual limitations under Internal Revenue Code sections 382 and 383. No benefit for these tax attributes was recorded upon the close of the acquisition, as the benefit from these tax attributes did not meet the "more-likely-than-not" standard.


The Company operates under tax holiday in Singapore, which is effective through May 2020. The tax holiday is conditional upon meeting certain employment, activities and investment thresholds. The Singapore tax holiday did not impact the Company’s Singapore taxes for the years 2014, 2013, and 2012 due to losses and valuation allowance.


The following table summarizes the changes in gross unrecognized tax benefits:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Balance as of January 1

  $ 8,031     $ 6,155     $ 4,132  

Increases based on tax positions related to the current year

    3,102       1,918       1,418  

Increase (decreases) based on tax positions of prior year

    (61 )     (42 )     605  

Gross increases for acquired unrecognized tax benefits

    33,935              

Statute of limitation expirations

    (926 )            

Balance as of December 31

  $ 44,081     $ 8,031     $ 6,155  

As of December 31, 2014, the Company had approximately $4,370 of unrecognized tax benefits that if recognized would affect the effective income tax rate. The Company believes that before the end of next year, it is reasonably possible that the gross unrecognized tax benefit may decrease by approximately $1,750 due to resolution of the state audit.


The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company recorded $14 interest in the year ended December 31, 2014, and no interest or penalties in the years ended December 31, 2013 and 2012.


The Company files income tax returns in the U.S. federal jurisdiction, various states and certain foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for tax years ended on or before December 31, 2010 or to California state income tax examinations for tax years ended on or before December 31, 2009. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or credit carryforward.


The Company does not provide for U.S. income taxes on undistributed earnings of its controlled foreign corporations as the Company intends to reinvest these earnings indefinitely outside the United States. At December 31, 2014, certain foreign subsidiaries had cumulative undistributed earnings while others had accumulated deficit. The cumulative undistributed earnings as of December 31, 2014 was $3,395 that, if repatriated, is not expected to result in additional tax liability as these earnings would be absorbed by the NOL and research credit carryover. No U.S. deferred tax asset was recorded for the accumulated deficit as it was not apparent as of December 31, 2014, that such deferred tax asset would reverse in the foreseeable future.


The Company paid $715 for various state and foreign income taxes during the year ended December 31, 2014.


In October 2012, the Company received notification from the California Franchise Tax Board that the 2009 and 2010 California tax returns will be examined. The Company believes it has adequate reserve for its uncertain tax positions, however, there is no assurance that the taxing authorities will not propose adjustments that are different from the Company’s expected outcome  and such adjustments may impact the provision for income taxes. The California Franchise Tax Board examination is on-going as of report date.


In June 2013, the Singapore subsidiary received notification from the Inland Revenue Authority of Singapore that the 2010 tax return will be reviewed. The review is on-going as of report date.


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Note 10 - Earnings Per Share
12 Months Ended
Dec. 31, 2014
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]

10. Earnings Per Share


The following shows the computation of basic and diluted earnings per share:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 
Numerator                        

Net loss

  $ (22,608 )   $ (13,178 )   $ (20,691 )
                         

Denominator

                       

Weighted average common stock

    32,707,868       29,495,856       28,391,528  

Less weighted average unvested common stock subject to repurchase and unvested restricted stock award

          (2,851 )     (12,848 )

Weighted average common stock—basic and diluted

    32,707,868       29,493,005       28,378,680  
                         

Earnings per share

                       

Basic

  $ (0.69 )   $ (0.45 )   $ (0.73 )

Diluted

  $ (0.69 )   $ (0.45 )   $ (0.73 )

The following securities were not included in the computation of diluted earnings per share as inclusion would have been anti-dilutive:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Common stock options

    3,350,112       4,373,642       4,797,873  

Warrant to purchase redeemable convertible preferred stock

          1,696       2,142  

Unvested restricted stock award and restricted stock unit

    3,705,415       3,030,202       1,608,464  
      7,055,527       7,405,540       6,408,479  

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Note 11 - Stock-based Compensation
12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11. Stock-Based Compensation


In June 2010, the Board of Directors approved the Company’s 2010 Stock Incentive Plan (the “2010 Plan”), which became effective in November 2010. The 2010 Plan provides for the grants of restricted stock, stock appreciation rights and stock unit awards to employees, non-employee directors, advisors and consultants. The Board of Directors administers the 2010 Plan, including the determination of the recipient of an award, the number of shares subject to each award, whether an option is to be classified as an incentive stock option or nonstatutory option, and the terms and conditions of each award, including the exercise and purchase prices and the vesting or duration of the award. Options granted under the 2010 Plan are exercisable only upon vesting. At December 31, 2014, 1,570,319 shares of common stock have been reserved for future grants under the 2010 Plan.


Stock Option Awards


The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Risk-free interest rate

          1.41 %     1.32 %

Expected life (in years)

          6.25       6.22  

Dividend yield

                 

Expected volatility

          50 %     50 %

The following table summarizes information regarding options outstanding:


   

Number of
Shares

   

Weighted
Average
Exercise
Price Per Share

   

Weighted
Average
Remaining
Contractual
Life

   

Aggregate
Intrinsic
Value

 

Outstanding at December 31, 2013

    3,883,097     $ 9.26       6.33     $ 16,229  

Granted

                           

Exercised

    (788,196 )     5.45                  

Canceled

    (89,307 )     12.52                  

Outstanding at December 31, 2014

    3,005,594     $ 10.16       6.12     $ 25,302  

Exercisable at December 31, 2014

    2,349,476     $ 9.69       5.82     $ 20,880  

Vested and expected to vest in the future as of December 31, 2014

    3,001,391     $ 10.16       6.12     $ 25,273  

The intrinsic value of options outstanding, exercisable and vested and expected to vest is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the respective balance sheet dates.


The weighted average grant date fair value per share of stock options granted to employees during the years ended December 31, 2014, 2013 and 2012 was $0, $4.82 and $6.18, respectively.


The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was $7,800, $7,313, and $6,861, respectively. The intrinsic value of exercised options is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date. Cash received from the exercise of stock options was $4,298, $2,905 and $1,828, respectively, for the years ended December 31, 2014, 2013 and 2012.


Stock Option Exchange Offer


On September 20, 2012, the Company commenced an offering to eligible employees to voluntarily exchange certain vested and unvested stock option grants. Under the program, eligible employees holding options to purchase the Company’s common stock were given the opportunity to exchange certain of their existing options, with exercise prices at or above $16.63 per share for a predetermined smaller number of stock options to be granted following the expiration of the tender offer with exercise prices equal to the fair market value of one share of the Company’s common stock on the day the new awards were issued. Stock options to purchase an aggregate of 508,399 shares with exercise prices ranging from $16.63 to $22.07 were eligible for tender at the commencement of the program. The Company’s directors and executive officers were not eligible to participate in the program. The program is structured as a value-neutral exchange. The replacement awards would be targeted at providing value that is, in the aggregate, not greater than the fair value of the exchanged stock options. This means that the employees who participate in the program are expected to receive a number of replacement awards with an aggregate value that does not exceed the aggregate value of the stock options surrendered in the exchange. The terms and conditions of the new options, including the vesting schedules, will be substantially the same as the terms and conditions of the options cancelled.


On October 19, 2012, the offer period ended and the Company accepted for exchange and cancellation 464,899 vested and unvested eligible options to purchase common stock, with a weighted average exercise price of $21.06. In exchange, the Company issued 353,779 vested and unvested options to purchase shares of the Company’s common stock with an exercise price of $8.93, the closing price of the Company’s common stock on October 22, 2012. Using the Black-Scholes option pricing model, the Company determined that the fair value of the surrendered stock options on a grant-by-grant basis was approximately equal, as of the date of the exchange, to the fair value of the eligible stock options exchanged, resulting in insignificant incremental share-based compensation.


 Restricted Stock Units and Awards


The Company granted restricted stock units (RSUs) to members of the Board of Directors and employees. Most of the Company’s outstanding restricted stock units vest over four years with vesting contingent upon continuous service. The Company estimates the fair value of restricted stock units using the market price of the common stock on the date of the grant. The fair value of these awards is amortized on a straight-line basis over the vesting period.


The following table summarizes information regarding outstanding restricted stock units:


   

Number of
Shares

   

Weighted
Average
Grant Date Fair Value Per Share

 

Outstanding at December 31, 2013

    3,209,567     $ 11.69  

Granted

    2,878,836       13.99  

Vested

    (1,098,924 )     12.61  

Canceled

    (199,857 )     11.92  

Outstanding at December 31, 2014

    4,789,622     $ 12.85  

Expected to vest in the future as of December 31, 2014

    4,712,501          

On October 16, 2014, the Compensation Committee of the Board of Directors granted one-time employment RSU awards of 1,000,000 shares to certain Cortina employees who entered employment with the Company commencing upon the closing of the acquisition. The awards vest over four years with vesting contingent upon continuous service.


The Company granted restricted stock awards (RSAs) to certain members of the Board of Directors. The Company estimates the fair value of the RSAs using the market price of the common stock on the date of the grant. As of December 31, 2011, the Company had 21,425 of which 8,576 RSAs vested during the year ended December 31, 2012, resulting to 12,849 unvested RSAs outstanding as of December 31, 2012. During 2013, 9,998 RSAs vested, resulting to 2,851 unvested RSAs outstanding as of December 31, 2013. All remaining unvested RSAs of $2,851 vested during the year ended December 31, 2014.


Employee Stock Purchase Plan


In December 2011, the Company adopted the Employee Stock Purchase Plan (“ESPP”). Participants purchase the Company's stock using payroll deductions, which may not exceed 15% of their total cash compensation. Pursuant to the terms of the ESPP, the "look-back" period for the stock purchase price is six months. Offering and purchase periods will begin on February 10 and August 10 of each year. Participants will be granted the right to purchase common stock at a price per share that is 85% of the lesser of the fair market value of the Company's common shares at the beginning or the end of each six-month period.


The ESPP imposes certain limitations upon an employee’s right to acquire common stock, including the following: (i) no employee shall be granted a right to participate if such employee immediately after the election to purchase common stock, would own stock possessing 5% or more to the total combined voting power or value of all classes of stock of the Company, and (ii) no employee may be granted rights to purchase more than $25 fair value of common stock for each calendar year. The maximum aggregate number of shares of common stock available for purchase under the ESPP is one million shares. Total common stock issued under the ESPP during the years ended December 31, 2014, 2013 and 2012 was 264,886, 279,074 and 101,088, respectively.


The fair value of employee stock purchase plan is estimated at the start of offering period using the Black-Scholes option pricing model with the following average assumptions for the years ended December 31, 2014, 2013 and 2012:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Risk-free interest rate

    0.07 %     0.10 %     0.13 %

Expected life (in years)

    0.50       0.49       0.50  

Dividend yield

                 

Expected volatility

    40 %     45 %     81 %

Estimated fair value

  $ 3.55     $ 2.86     $ 4.69  

Stock-Based Compensation Expense


Stock-based compensation expense is included in the Company’s results of operations as follows:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Cost of revenue

  $ 1,260     $ 1,086     $ 726  

Research and development

    12,420       8,586       5,833  

Sales and marketing

    4,079       3,204       2,660  

General and administrative

    4,701       4,102       3,240  
    $ 22,460     $ 16,978     $ 12,459  

As of December 31, 2014, total unrecognized compensation cost related to unvested stock options and awards prior to the consideration of expected forfeitures, was approximately $52,068, which is expected to be recognized over a weighted-average period of 2.88 years.


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Note 12 - Employee Benefit Plan
12 Months Ended
Dec. 31, 2014
Disclosure Text Block Supplement [Abstract]
Compensation and Employee Benefit Plans [Text Block]

12. Employee Benefit Plan


The Company has established a 401(k) tax-deferred savings plan (the “Plan”) which permits participants to make contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. The Company may, at its discretion, make matching contributions to the Plan. Furthermore, the Company is responsible for administrative costs of the Plan. The Company has not made contributions to the Plan since its inception.


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Note 13 - Fair Value Measurements
12 Months Ended
Dec. 31, 2014
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]

13. Fair Value Measurements


The guidance on fair value measurements requires fair value measurements to be classified and disclosed in one of the following three categories:


Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;


Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability, or


Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).


The Company measures its investments in marketable securities at fair value using the market approach which uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company has cash equivalents which consist of money market funds valued using the amortized cost method, in accordance with Rule 2a-7 under the 1940 Act which approximates fair value.


The following table presents information about assets and liabilities required to be carried at fair value on a recurring basis:


December 31, 2014

 

Total

   

Level 1

   

Level 2

 

Assets

                       

Cash equivalents:

                       

Money market funds

  $ 1,457     $     $ 1,457  

Investment in marketable securities:

                       

US treasury securities

    2,057       2,057        

Municipal bonds

    19,712             19,712  

Corporate notes/bonds

    16,392             16,392  

Asset backed securities

    747             747  
    $ 40,365     $ 2,057     $ 38,308  

December 31, 2013

 

Total

   

Level 1

   

Level 2

 

Assets

                       

Cash equivalents:

                       

Money market funds

  $ 5,119     $     $ 5,119  

Investment in marketable securities:

                       

US treasury securities

    25,072       25,072        

Municipal bonds

    34,983             34,983  

Corporate notes/bonds

    28,648             28,648  

Certificate of deposit

    1,501             1,501  

Asset backed securities

    686             686  
    $ 96,009     $ 25,072     $ 70,937  

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Note 14 - Segment and Geographic Information
12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]
Segment Reporting Disclosure [Text Block]

14. Segment and Geographic Information


The Company operates in one reportable segment. Revenue by region is classified based on the locations to which the product is transported, which may differ from the customer’s principal offices.


The following table sets forth the Company’s revenue by geographic region:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

China

  $ 54,312     $ 23,039     $ 20,724  

United States

    22,918       22,389       21,582  

Korea

    10,123       21,818       17,424  

Other

    68,789       35,418       31,476  
    $ 156,142     $ 102,664     $ 91,206  

As of December 31, 2014, $6,153 of long-lived tangible assets are located outside the United States of which $3,463 are located in Taiwan. As of December 31, 2013, $5,217 of long-lived tangible assets are located outside the United States of which $4,694 are located in Taiwan.


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Note 15 - Commitments and Contingencies
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]

15. Commitments and Contingencies


Leases


The Company leases its facility under noncancelable lease agreements expiring in various years through 2019. The Company also licenses certain software used in its research and development activities under a term license subscription and maintenance arrangement.


Future minimum lease payments under noncancelable operating leases having initial terms in excess of one year are as follows:


   

December 31, 2014

 

2015

  $ 15,131  

2016

    10,749  

2017

    4,380  

2018

    1,744  

2019

    1,259  
    $ 33,263  

For the years ended December 31, 2014, 2013 and 2012, lease operating expense was $8,193, $5,990 and $3,980, respectively.


Noncancelable Purchase Obligations


 We depend upon third party subcontractors to manufacture our wafers. Our subcontractor relationships typically allow for the cancellation of outstanding purchase orders, but require payment of all expenses incurred through the date of cancellation. As of December 31, 2014, the total value of open purchase orders for wafers was approximately $10,278.


Legal Proceedings


Netlist, Inc. v. Inphi Corporation, Case No. 09-cv-6900 (C.D. Cal.)


On September 22, 2009, Netlist filed suit in the United States District Court, Central District of California, or the Court, asserting that the Company infringes U.S. Patent No. 7,532,537. Netlist filed an amended complaint on December 22, 2009, further asserting that the Company infringes U.S. Patent Nos. 7,619,912 and 7,636,274, collectively with U.S. Patent No. 7,532,537, the patents-in-suit, and seeking both unspecified monetary damages to be determined and an injunction to prevent further infringement. These infringement claims allege that the Company’s iMB™ and certain other memory module components infringe the patents-in-suit. The Company answered the amended complaint on February 11, 2010 and asserted that the Company does not infringe the patents-in-suit and that the patents-in-suit are invalid. In 2010, Company filed inter partes requests for reexamination with the United States Patent and Trademark Office (the “USPTO”), asserting that the patents-in-suit are invalid.


On August 27, 2010, the USPTO ordered the request for Inter Partes Reexamination for U.S. Patent No. 7,636,274 and found a substantial new question of patentability based upon each of the different issues that the Company raised as the reexamination requestor. On September 27, 2011, the Patent Office issued a First Office Action based on the Netlist '274 Patent Reexamination Request and rejected 91 of its 97 claims. On October 27, 2011, Netlist responded to the USPTO determination by amending some but not all of the claims, adding new claims and making arguments as to the validity of the rejected claims in view of the cited references. The Company provided rebuttable comments to the USPTO on November 28, 2011. On March 12, 2012, the Examiner issued an Action Closing Prosecution, indicating that the claims pending contain allowable subject matter, and Netlist did not respond to the Action Closing Prosecution in the time provided by the USPTO. On June 22, 2012, the USPTO issued a Right of Appeal Notice, and on July 23, 2012, the Company filed a Notice of Appeal. The Company filed the Appeal Brief on September 24, 2012 and Netlist filed its Responsive Brief on October 24, 2012. The parties received an Examiner’s Answer dated April 16, 2013 from the USPTO that maintained the rejections set forth on the Right of Appeal Notice dated June 22, 2012. The Company filed a Rebuttal Brief on May 16, 2013 and a Request for Oral Hearing on June 7, 2013. The appeal hearing took place on November 20, 2013. The Patent Trial and Appeal Board (PTAB) issued its decision on January 16, 2014, finding the Examiner erred in declining to adopt 8 of the 9 different rejections that had been proposed by us. The Company requested a rehearing of the decision not to adopt the remaining one rejection that had been proposed by the Company and was not adopted by the PTAB on February 18, 2014. In papers dated March 18, 2014, Netlist provided rebuttal comments to the request for rehearing and also requested re-opening of prosecution with respect to the claims that the PTAB had rejected, and in that request to re-open prosecution amended the independent claims that stood rejected. The Company filed comments with respect to these proposed amended claims on April 17, 2014, which were refiled in a slightly different form on September 5, 2014. On June 26, 2014, the PTAB issued a decision on the request for rehearing, which included a rejection of further claims pursuant to the Company’s request and on July 28, 2014, Netlist provided a response to the USPTO cancelling those claims that had been rejected in the decision on the request for rehearing. On September 26, 2014, the PTAB remanded the proceedings back to the Examiner, with instructions to consider part, but not all, of the Company’s comments that had been previously filed on September 5, 2014. On October 10, 2014, the Company filed a Petition to the Director of the USPTO seeking reconsideration of the PTAB remand of September 26, 2014, and requesting that all of the comments that the Company previously filed on September 5, 2014 should have been entered for consideration by the Examiner, The USPTO denied this Petition and a communication from the Examiner, with instructions to consider part, but not all, of the Company’s comments that had been previously filed on September 5, 2014 is expected as the next substantive step of the proceeding, as prosecution otherwise remains closed. The proceeding is expected to continue in accordance with established Inter Partes Reexamination procedures. The Company may consider filing an appeal to any determination made by the USPTO with the Federal Circuit Court of Appeals.


On September 8, 2010, the USPTO ordered the request for Inter Partes Reexamination for U.S. Patent No. 7,532,537 and found a substantial new question of patentability based upon different issues that the Company raised as the reexamination requestor. The USPTO accompanied this Reexamination Order of U.S. Patent No. 7,532,537 with its own evaluation of the validity of this patent, and rejected some but not all of claims. In a response dated October 8, 2010, Netlist responded to the USPTO determination by amending some but not all of the claims, adding new claims and making arguments as to why the claims were not invalid in view of the cited references. The Company provided rebuttable comments to the USPTO on November 8, 2010 along with a Petition requesting an increase in the number of allowed pages of the rebuttable comments. On January 20, 2011, the USPTO granted the Petition in part. The Company then filed updated rebuttal comments on January 27, 2011 in compliance with the granted Petition. The USPTO has considered these updated rebuttal comments, and in a communication dated June 15, 2011, continued to reject all the previously rejected claims. The USPTO also rejected all the claims newly added in the October 8, 2010 Netlist response. In a further communication dated June 21, 2011, the USPTO issued an Action Closing Prosecution indicating that it would confirm the patentability of four claims and reject all the other pending claims. On August 22, 2011, Netlist responded to the Action Closing Prosecution by further amending some claims and making arguments as to the validity of the rejected claims in view of the cited references. The Company submitted rebuttal comments on September 21, 2011. In a further communication dated February 7, 2012, the USPTO issued a Right of Appeal Notice, which also indicated that the previous amendments to claim made by Netlist would be entered, and that the current pending claims, as amended, were patentable. The Company filed a Notice of Appeal at the USPTO on March 8, 2012, within the time period provided for filing the Notice of Appeal and Netlist did not file Notice of Cross-Appeal. The Company filed its Appeal Brief on May 8, 2012, and Netlist filed its Responsive Brief on July 2, 2012. The parties received an Examiner’s Answer dated April 16, 2013 from the USPTO that maintained the rejections set forth on the Right of Appeal Notice dated February 7, 2012. The Company filed a Rebuttal Brief on May 16, 2013 and a Request for Oral Hearing on June 7, 2013. The appeal hearing took place in front of the PTAB on November 20, 2013. The PTAB issued its decision on January 16, 2014, affirming the Examiner’s decision as to all of the challenged claims. On February 18, 2014, the Company made a request for rehearing of the decision, and in papers dated March 18, 2014, Netlist provided rebuttal comments to the request for rehearing. On August 13, 2014, the PTAB denied our request for rehearing, and on October 15, 2014, the Company filed a Notice of Appeal to the Court of Appeals for the Federal Circuit. An Appeal Brief was filed with the Court of Appeals for the Federal Circuit on February 3, 2015 and an Opposition Brief filed by Netlist in the Court of Appeals for the Federal Circuit is expected as the next substantive step of the proceeding, as prosecution otherwise remains closed. The proceeding is expected to continue in accordance with established Inter Partes Reexamination procedures.


On September 8, 2010, the USPTO ordered the request for Inter Partes Reexamination for U.S. Patent No. 7,619,912 and found a substantial new question of patentability based upon different issues that the Company raised as the reexamination requestor. The USPTO accompanied this Reexamination Order of U.S. Patent No. 7,619,912 with its own evaluation of the validity of this patent, and initially determined that all of the claims were patentable based upon the Company’s request for Inter Partes Reexamination. Netlist did not comment upon this Reexamination Order. The USPTO on February 28, 2011 also merged the Proceedings of our Reexamination of U.S. Patent No. 7,619,912, bearing Control No. 90/001,339 with Inter Partes Reexamination Proceeding 95/000,578 filed October 20, 2010 on behalf of SMART Modular Technologies, Inc. and Inter Partes Reexamination Proceeding 95/000,579 filed October 21, 2010 on behalf of Google, Inc. In each of these other Reexamination Proceedings, the USPTO had indicated that there existed a substantial new question of patentability with respect to certain claims of U.S. Patent No. 7,619,912, but had not accompanied the Reexamination Orders related thereto with its own evaluation of the validity of this patent, indicating that such evaluation would be forthcoming at a later time. This further evaluation was received in an Office Action dated April 4, 2011, in which the Examiner rejected a substantial majority of the claims based upon a number of different rejections, including certain of the rejections originally proposed by the Company in its Request for Reexamination. This Office Action also indicated that one claim was deemed to be patentable over the prior art of record in the merged Reexamination Proceedings. After seeking and obtaining an extension of time to respond to the Office Action dated April 4, 2011, Netlist served its response on July 5, 2011, which added new claims and made arguments as to why the originally filed claims were not invalid in view of the cited references. Each of the merged Reexamination Requestors, including the Company, submitted rebuttal comments by August 29, 2011. The USPTO considered this Netlist response and each of the rebuttal comments, and in an Office Action dated October 14, 2011, continued to reject most, but not all of the previously rejected claims, as well as rejected claims that had been added by Netlist in its July 5, 2011 response. After seeking and obtaining an extension of time to respond to the Office Action dated October 14, 2011, Netlist served its response on January 13, 2012, which response made amendments based upon subject matter that had been indicated as allowable in the Office Action dated October 14, 2011, added other new claims and made arguments as to why all of these claims should be allowed. The three different merged Reexamination Requestors, including the Company, timely submitted rebuttal comments on or about February 13, 2012. The USPTO issued a Non-final Office Action on November 13, 2012, rejecting some claims and indicating that others contained allowable subject matter. On January 14, 2013, Netlist filed a Response to the Non-final Office Action which presented further claim amendments and evidence supporting its positions regarding patentability. Rebuttal comments from the Company and the other Requestors were filed on February 13, 2013. On March 21, 2014, the USPTO issued an Action Closing Prosecution in which the USPTO indicated that certain of the pending claims were allowable and other of the pending claims were rejected, and on June 18, 2014 issued a Right of Notice of Appeal. By July 18, 2014, the Company as well as other Requesters each filed Notices of Appeal, and Netlist filed a Cross Appeal on July 30, 2014. By September 30, 2014, each of the Requestors as well as Netlist had filed their respective Appeal Briefs, and by October 30, 2014 each of the Requestors as well as Netlist had filed their respective Responses to the previously filed Appeal Briefs. Reply Briefs by Requesters and Netlist were filed on or before February 18, 2015 and consideration by the USPTO will be the next substantive step of the proceeding, as currently prosecution otherwise will remain closed. The merged proceeding is expected to continue in accordance with established Inter Partes Reexamination procedures.


The reexamination proceedings could result in a determination that the patents-in-suit, in whole or in part, are valid or invalid, as well as modifications of the scope of the patents-in-suit.


Based on these papers the Court in January 2014 ordered a continued stay of the proceedings, took the litigation off the active court calendar, and requested that the parties file a joint status report on May 1, 2014 and every 120 days thereafter advising the Court as to status of the reexamination proceedings at which times, the Court could decide to maintain or lift the stay.


While the Company intends to defend the foregoing lawsuit vigorously, litigation, whether or not determined in the Company’s favor or settled, could be costly and time-consuming and could divert management’s attention and resources, which could adversely affect the Company’s business.


Based on the nature of the litigation, the Company is currently unable to predict the final outcome of this lawsuit and therefore, cannot determine the likelihood of loss nor estimate a range of possible loss. However, because of the nature and inherent uncertainties of litigation, should the outcome of these actions be unfavorable, the Company’s business, financial condition, results of operations or cash flows could be materially and adversely affected.


As a result of acquisition of Cortina, the Company is currently working to settle a patent dispute involving Cortina and Vitesse Semiconductor Corporation (Vitesse). The patent dispute involves a certain patent family owned by Vitesse associated with error correction. The Company is currently in discussion with Vitesse in good faith to settle the dispute. The Company believes that the probable liability of this claim would be $750 which the Company recorded s of the acquisition date and December 31, 2014. Based on the Agreement and Plan of Merger dated July 30, 2014, we would be indemnified for future settlement arising from this claim, up to an amount of $750. Accordingly, we recorded an indemnification asset in the amount of $750 as of the acquisition date. However, because of the nature and inherent uncertainties, should the outcome of the settlement be unfavorable, the Company’s business, financial condition, results of operations or cash flows could be materially and adversely affected.


Indemnifications


In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnifications. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2014 and December 31, 2013.


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Note 16 - Related Party Transactions
12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]

16. Related Party Transactions


In 2007, the Company entered into a software subscription and maintenance agreement with Cadence Design Systems, Inc. (“Cadence”), a related party company. A former member of the Company’s Board of Directors is also the Chief Executive Officer, President and a director of Cadence. The Company committed to pay $7,000 payable in 16 quarterly payments through May 2011. In December 2010, the software subscription and maintenance agreement was renewed effective June 30, 2011. Under the new agreement, the Company committed to pay $5,250 payable in 10 quarterly payments through November 2013. In June 2012, the software subscription and maintenance agreement was amended to include new licensed materials effective on September 28, 2012 and expired on December 31, 2013. Under this amendment, the Company committed to pay $2,129 payable in 5 quarterly payments through November 2013. The Company paid $2,224 in the year ended December 31, 2012. Operating lease expense related to this agreement included in research and development expense was $2,467 for the year ended December 31, 2012.


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Note 17 - Supplementary Financial Information (Unaudited)
12 Months Ended
Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Quarterly Financial Information [Text Block]

Supplementary Financial Information (Unaudited)


Quarterly Results of Operations


   

Year Ended December 31, 2014

 
   

Mar. 31,
2014

   

Jun. 30,
2014

   

Sept. 30,
2014

   

Dec. 31,
2014
(1)

 
   

(in thousands, except per share amounts)

 

Total revenue

  $ 31,189     $ 33,922     $ 36,278     $ 54,753  

Gross profit

    20,126       21,626       23,275       20,627  

Net income (loss)

    (995 )     2,634       (6,857 )     (17,390 )

Basic earnings per share

    (0.03 )     0.08       (0.22 )     (0.47 )

Diluted earnings per share

    (0.03 )     0.08       (0.22 )     (0.47 )

   

Year Ended December 31, 2013

 
   

Mar. 31,
2013

   

Jun. 30,
2013

   

Sept. 30,
2013

   

Dec. 31,
2013

 
   

(in thousands, except per share amounts)

 

Total revenue

  $ 22,584     $ 24,339     $ 26,611     $ 29,130  

Gross profit

    14,292       15,446       16,815       19,016  

Net income (loss)

    (7,671 )     (1,474 )     (2,760 )     (1,273 )

Basic earnings per share

    (0.27 )     (0.05 )     (0.09 )     (0.04 )

Diluted earnings per share

    (0.27 )     (0.05 )     (0.09 )     (0.04 )

(1)

On October 3, 2014, we completed the acquisition of Cortina, including its high-speed interconnect and optical transport product lines. The results of operations of Cortina and estimated fair value of assets acquired and liabilities assumed were included in our financial statements from the acquisition date. This acquisition resulted in a significant change in our statement of operations in 2014 which includes increase cost of goods sold resulting from the step-up inventory acquired from Cortina and amortization of acquired intangibles.


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Accounting Policies, by Policy (Policies)
12 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation


The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of Inphi, Cortina and subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Business Combinations Policy [Policy Text Block]

Business Combinations


The Company accounts for acquisitions of business using the purchase method of accounting, which requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.


Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies where applicable. Although, the Company believes the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include future expected cash flows from product sales, customer contracts and acquired technologies, expected costs to develop in-process research and development (IPR&D) into commercially viable products and estimated cash flows from the projects when completed and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates


The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


On an ongoing basis, management evaluates its estimates, including those related to (i) the collectibility of accounts receivable and allowance for distributors’ price discounts; (ii) write down for excess and obsolete inventories; (iii) warranty obligations; (iv) the value assigned to and estimated useful lives of long-lived assets; (v) the realization of tax assets and estimates of tax liabilities and tax reserves; (vi) the valuation of equity securities; (vii) amounts recorded in connection with acquisitions; (viii) recoverability of intangible assets and goodwill and (ix) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company engages third party valuation specialists to assist with estimates related to the valuation of financial instruments and assets associated with various contractual arrangements, and valuation of assets acquired in connection with acquisitions. Such estimates often require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions or circumstances.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation


The Company and its subsidiaries use the U.S. dollar as its functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the exchange rate in effect during the period the transaction occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency transactions are included in the Consolidated Statements of Operations as part of “Other income (expense)”. Foreign currency gain or loss in 2014, 2013 and 2012 were not material.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents


The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents with major financial institutions and, at times, such balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. Cash equivalents primarily consist of money market funds.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Market Value of Financial Instruments


The carrying amount reflected in the balance sheet for cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, approximate fair value due to the short-term nature of these financial instruments.

Investment, Policy [Policy Text Block]

Investments in Marketable Securities


Investments in marketable securities consist of available-for-sale securities. These investments are recorded at fair value with changes in fair value, net of applicable taxes, recorded as unrealized gains (losses) as a component of accumulated other comprehensive income in stockholders' equity. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in Other (expense) income, net. The cost basis for realized gains and losses on available-for-sale securities is determined on a specific identification basis. Investments are made based on our investment policy which restricts the types of investments that can be made. The Company classified available-for-sale securities as short-term as the investments are available to be used in current operations.

Inventory, Policy [Policy Text Block]

Inventories


Inventories are stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Inventories are reduced for write downs based on periodic reviews for evidence of slow-moving or obsolete parts. The write-down is based on comparison between inventory on hand and estimated future sales for each specific product. Once written down, inventory write downs are not reversed until the inventory is sold or scrapped. Inventory write downs are also established when conditions indicate that the net realizable value is less than cost due to physical deterioration, obsolescence, changes in price level or other causes. Inventory valuation reserves were $1,949 and $1,479, as of December 31, 2014 and 2013, respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment


Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is provided on property and equipment over the estimated useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. Repairs and maintenance are charged to expense as incurred. Useful lives by asset category are as follows:


Asset Category

Years 

Office equipment

3 years

Software

3 years

Leasehold improvements

Shorter of lease term or estimated useful life

Production equipment

2 years

Computer equipment

5 years

Lab equipment

5 years

Furniture and fixtures

7 years


 Equipment Under Capital Leases


The Company leases certain of its equipment under capital lease agreements. The assets and liabilities under capital leases are initially recorded at the fair value of the assets under lease. The capital lease obligation outstanding at December 31, 2014 was $142, payable in 2015.


Intangible Assets


Intangible assets represent rights acquired for developed technology, customer relationships, trade mark, patents and IPR&D in connection with the acquisition of Cortina. Intangible assets with finite useful lives are amortized over periods ranging from five to ten years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed, or if that pattern cannot be reliably determined, using a straight-line amortization method. Acquired IPR&D is capitalized and amortization commences upon completion of the underlying projects. If any of the projects are abandoned, the Company would be required to impair the related IPR&D asset.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Impairment of Long-lived Assets and Goodwill


Long-lived Assets


The Company assesses the impairment of long-lived assets, which consist primarily of property and equipment and intangible assets, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Events or changes in circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is utilized, significant declines in the estimated fair value of the overall Company for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces.


If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the assets.


Goodwill


Goodwill is recorded when the consideration paid for a business acquisition exceeds the fair value of net tangible and intangible assets acquired. Goodwill is measured and tested for impairment on an annual basis during the fourth fiscal quarter or more frequently if the Company believes indicators of impairment exist.  


The performance of the test involves a two-step process. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. As the Company has only one reporting unit, the fair value of the reporting unit is determined by taking the market capitalization of the Company as determined through quoted market prices and adjusted for control premiums and other relevant factors. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process is only performed if a potential impairment exists, and it involves determining the difference between the fair value of the reporting unit's net assets other than goodwill and the fair value of the reporting unit. If the difference is less than the net book value of goodwill, impairment exists and is recorded. In the event that the Company determines that the value of goodwill has become impaired, the Company will record an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company has not been required to perform this second step of the process because the fair value of the reporting unit has significantly exceeded its book value at every measurement date. The guidance also provides the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. There was no impairment of goodwill in 2014, 2013 and 2012.

Internal Use Software, Policy [Policy Text Block]

Internal Use Software Costs


Certain external computer software costs acquired for internal use are capitalized. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized costs are included within property and equipment.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition


The Company’s products are fully functional at the time of shipment and do not require additional production, modification, or customization. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred, the fee is fixed or determinable, and collection is reasonably assured. The Company’s sales arrangements do not include multiple elements.


Product revenue is recognized upon shipment of product to customers, net of accruals for estimated sales returns and allowances, which to date, have not been significant. However, some of the Company’s sales are made through distributors under arrangements that allow for price protection or rights of return on product unsold by the distributors. Product revenue on sales made through distributors with rights of return or price protection is deferred until the distributors sell the product to end customers. Sales to distributors are included in deferred revenue and the Company includes the related costs in inventory until sale to the end customers occurs. Price protection rights allow distributors the right to a credit in the event of declines in the price of the Company’s product that they hold prior to the sale to an end customer. In the event that the Company reduces the selling price of products held by distributors, deferred revenue related to distributors with price protection rights is reduced upon notification to the customer of the price change. Additionally, certain distributors may receive a credit for the price discounts associated with the distributors' customers that purchased those products. The Company estimates the extent of these distributor price discounts at each reporting period to reduce accounts receivable and deferred revenue, but does not issue these discounts to the distributor until the inventory is sold to the distributors' customers. The Company’s sales to direct customers are made primarily pursuant to standard purchase orders for delivery of products. The Company generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment.

Cost of Sales, Policy [Policy Text Block]

Cost of Revenue


Cost of revenue includes cost of materials, such as wafers processed by third-party foundries, cost associated with packaging and assembly, test and shipping, cost of personnel, including stock-based compensation, and equipment associated with manufacturing support, logistics and quality assurance, warranty cost, write down of inventories, amortization of production mask costs, amortization of developed technology, amortization of step-up values of inventory, overhead and an allocated portion of occupancy costs.

Standard Product Warranty, Policy [Policy Text Block]

Warranty


The Company’s products are under warranty against defects in material and workmanship generally for a period of one or two years. The Company accrues for estimated warranty cost at the time of sale based on anticipated warranty claims and actual historical warranty claims experience including knowledge of specific product failures that are outside of the Company’s typical experience. The warranty obligation is determined based on product failure rates, cost of replacement and failure analysis cost. If actual warranty costs differ significantly from these estimates, adjustments may be required in the future. As of both December 31, 2014 and 2013, the warranty liability was $110 and $40, respectively.


The following table sets forth changes in warranty accrual included in other accrued expenses in the Company’s consolidated balance sheets:


   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Beginning balance

  $ 40     $ 40     $ 40  

Warranty liabilities assumed in acquisition

    79              

Settlements

    (9 )            
    $ 110     $ 40     $ 40  

On November 3, 2014, the Company received a claim notification from an insurance company asserting a claim of approximately $4,000 for field installation repair and replacement costs incurred by a customer in 2011. The Company believes that it had fulfilled its contractual obligation to provide warranty repair and replacement, but has referred the matter to its insurance carrier at the request of the insurance company. As of December 31, 2014, the Company believes that the liability under this claim is not probable. Nevertheless, resolutions of third-party claims are inherently uncertain and as such, an unfavorable outcome could ultimately impact the Company’s business, cash flow and results of operations.


In 2010, the Company was informed of a claim related to repair and replacement costs in connection with shipments of over 4,000 integrated circuits made by the Company during the summer and fall of 2009. The Company assessed, provided and accumulated additional warranty reserves based on estimated, probable costs to replace units. In 2012, based on additional investigation and discussions with the customer, the Company booked an additional warranty cost of $750. This amount was recorded as a reduction to revenue. In June 2012, the Company entered into a settlement agreement with the customer in which the Company paid $1,750 in July 2012.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expense


Research and development expense consists of costs incurred in performing research and development activities including salaries, stock-based compensation, employee benefits, occupancy costs, pre-production engineering mask costs, overhead costs and prototype wafer, packaging and test costs. Research and development costs are expensed as incurred. The Company enters into development agreements with some of our customers. Recoveries from nonrecurring engineering services are recorded as an offset to product development expense incurred in support of this effort since these activities do not represent an earning process core to our business and serve as a mechanism to partially recover development expenditures. These reimbursements are recognized upon completion and acceptance by the customer of contract deliverables or milestones. The Company recorded approximately $10,250, $1,000 and $2,484 as offset to research and development expense for the years ended December 31, 2014, 2013 and 2012, respectively.

Selling and Marketing [Policy Text Block]

Sales and Marketing Expense


Sales and marketing expense consists of salaries, stock-based compensation, employee benefits, travel and trade show costs. The Company expenses sales and marketing costs as incurred. Advertising expenses for the years ended December 31, 2014, 2013 and 2012 were not material.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

General and Administrative Expense


General and administrative expense consists of salaries, stock-based compensation, employee benefits and expenses for executive management, legal and finance. In addition, general and administrative expense includes fees for professional services and occupancy costs. These costs are expensed as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes


Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must also make judgments in evaluating whether deferred tax assets will be recovered from future taxable income. To the extent that it believes that recovery is not likely, the Company must establish a valuation allowance. The carrying value of the Company’s net deferred tax asset is based on whether it is more likely than not that the Company will generate sufficient future taxable income to realize these deferred tax assets. A valuation allowance is established for deferred tax assets which the Company does not believe meet the “more likely than not” criteria. The Company’s judgments regarding future taxable income may change over time due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company’s assumptions and consequently its estimates change in the future, the valuation allowance the Company has established may be increased or decreased, resulting in a material respective increase or decrease in income tax expense (benefit) and related impact on the Company’s reported net income (loss).


In accordance with FASBs guidance on Accounting for Uncertainty in Income Taxes, the Company performs a comprehensive review of uncertain tax positions regularly. In this regard, an uncertain tax position represents an expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or claim, which has not been reflected in measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company does not recognize the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in our consolidated financial statements. The Company recognizes potential interest and penalties on uncertain tax positions within provision (benefit) for income taxes on the consolidated statement of operations.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation


Stock-based compensation for stock option and restricted stock units issued to the Company’s employees is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis. The fair value of restricted stock units is based on the fair market value of the Company’s common stock on the date of grant. The Company uses the Black-Scholes option-pricing model for valuing stock option awards granted to employees and directors at the grant date. Determining the fair value of stock option awards at the grant date requires the input of various assumptions, including fair value of the underlying common stock, expected future share price volatility, expected term, risk-free interest rate and dividend rate. Changes in these assumptions can materially affect the fair value of the options. The Company based its estimate of expected volatility on the estimated volatility of similar entities whose share prices are publicly available. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding to the expected life of the options. The weighted average expected life of options was calculated using the simplified method. This decision was based on the lack of relevant historical data due to the Company’s limited experience. The expected dividend yield is zero because the Company has not historically paid dividends and has no present intention to pay dividends. The Company establishes the estimated forfeiture rates based on historical experience. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period which is equal to the vesting period.


The Company has elected to treat share-based payment awards with graded vesting schedules and time-based service conditions as single awards and recognizes stock-based compensation expense on a straight-line basis (net of estimated forfeitures) over the requisite service period.


The Company recognizes non-employee stock-based compensation expenses based on the estimated fair value of the equity instrument determined using the Black-Scholes option-pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The fair value of each non-employee variable stock award is re-measured each period until a commitment date is reached, which is generally the vesting date.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Share


Basic earnings per share is calculated by dividing income allocable to common stockholders (after the reduction for any preferred stock dividends assuming current income for the period had been distributed) by the weighted average number of shares of common stock outstanding, net of shares subject to repurchase by the Company, during the period. Diluted earnings per share is calculated by dividing the net income allocable to common stockholders by the weighted average number of common shares outstanding, adjusted for the effects of potentially dilutive common stock, which are comprised of stock options, restricted stock units and employee share purchase plan.

Segment Reporting, Policy [Policy Text Block]

Segment Information


The Company operates in one segment related to the design, development and sale of high speed analog connectivity components that operate to maintain, amplify and improve signal integrity at high speeds in a wide variety of applications. The Company’s chief operating decision-maker is its Chief Executive Officer, who reviews operating results on an aggregate basis and manages the Company’s operations as a single operating segment.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements


In January 2014, the Company adopted the guidance on the Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The guidance provides that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments in this update do not require new recurring disclosures. The adoption of this guidance had no impact on the Company’s financial statements.


In May 2014, the Financial Accounting Standards Board issued guidance on “Revenue from Contracts with Customers.” The new revenue recognition guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance is effective for the Company on January 1, 2017. Early application is not permitted. The new guidance permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that the new revenue recognition guidance will have on the consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor determined the effect of the standard on the ongoing financial reporting.


In November 2014, the Financial Accounting Standards Board, issued authoritative guidance that provides guidance on whether and at what threshold an acquired business or not-for-profit organization can apply pushdown accounting. This guidance provides an option to apply pushdown accounting in the separate financial statements of an acquired entity upon the occurrence of an event in which an acquirer obtains control of the acquired entity. The guidance is effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of this guidance is not expected to have any significant impact in the consolidated financial statements.

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Note 1 - Organization and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]
Schedule of Estimated Useful Lives of Long Lived Assets [Table Text Block]

Asset Category

Years 

Office equipment

3 years

Software

3 years

Leasehold improvements

Shorter of lease term or estimated useful life

Production equipment

2 years

Computer equipment

5 years

Lab equipment

5 years

Furniture and fixtures

7 years

Schedule of Product Warranty Liability [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Beginning balance

  $ 40     $ 40     $ 40  

Warranty liabilities assumed in acquisition

    79              

Settlements

    (9 )            
    $ 110     $ 40     $ 40  
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Note 2 - Acquisition (Tables)
12 Months Ended
Dec. 31, 2014
Note 2 - Acquisition (Tables) [Line Items]
Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Cash

  $ 52,509  

Common stock

    77,958  
    $ 130,467  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Cash

  $ 17,201  

Receivables

    15,155  

Inventories

    30,002  

Other current assets

    1,685  

Property and equipment

    4,751  

Identifiable intangible assets

    80,660  

In-process research and development

    1,750  

Other noncurrent assets

    366  

Accounts payable, accrued expenses and other current liabilities

    (22,796 )

Deferred tax liabilities, noncurrent

    (725 )

Other liabilities

    (1,112 )

Total identifiable net assets

    126,937  

Goodwill

    3,530  

Net assets acquired

  $ 130,467  
Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

Estimated percent complete

    5 %

Estimated time to complete

 

18 months

 

Estimated cost to complete

  $ 12,548  

Discount rate

    26.5 %
Business Acquisition, Pro Forma Information [Table Text Block]
   

Pro Forma
Year Ended
December 31,
2014

   

Pro Forma
Year Ended
December 31,
2013

 
   

(unaudited)

   

(unaudited)

 

Revenue

  $ 224,116     $ 191,966  

Net loss

  $ (8,500 )   $ (28,427 )

Earnings per share – basic

  $ (0.23 )   $ (0.82 )

Earnings per share – diluted

  $ (0.23 )   $ (0.82 )
Cortina Systems, Inc. [Member]
Note 2 - Acquisition (Tables) [Line Items]
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]
   

Estimated

Fair Value

   

Estimated

Useful Life (Years)

 
                 

Developed technology

  $ 71,570       5-8  

Customer relationships

    8,170       10  

Trade name

    920       5  

In-process research and development

    1,750        
    $ 82,410          
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Note 3 - Investments (Tables)
12 Months Ended
Dec. 31, 2014
Investments Schedule [Abstract]
Available-for-sale Securities [Table Text Block]
   

December 31, 2014

 
   

Cost

   

Gross

Unrealized

Gain

   

Gross

Unrealized

Loss

   

Fair Value

 

Available-for-sale securities:

                               

US treasury securities

  $ 2,056     $ 1     $     $ 2,057  

Municipal bonds

    19,686       43       (17 )     19,712  

Corporate notes/bonds

    16,381       32       (21 )     16,392  

Asset backed securities

    750             (3 )     747  

Total investments

  $ 38,873     $ 76     $ (41 )   $ 38,908  
   

December 31, 2013

 
   

Cost

   

Gross

Unrealized

Gain

   

Gross

Unrealized

Loss

   

Fair Value

 

Available-for-sale securities:

                               

US treasury securities

  $ 25,061     $ 11     $     $ 25,072  

Municipal bonds

    34,912       105       (34 )     34,983  

Corporate notes/bonds

    28,565       105       (22 )     28,648  

Certificate of deposit

    1,500       1             1,501  

Asset backed securities

    685       1             686  

Total investments

  $ 90,723     $ 223     $ (56 )   $ 90,890  
Investments Classified by Contractual Maturity Date [Table Text Block]
   

Cost

   

Fair Value

 

Due in one year or less

  $ 13,613     $ 13,656  

Due between one and five years

    25,260       25,252  
    $ 38,873     $ 38,908  
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Note 4 - Concentrations (Tables)
12 Months Ended
Dec. 31, 2014
Risks and Uncertainties [Abstract]
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]
   

December 31,

 

Accounts Receivable

 

2014

   

2013

 

Customer A

    *       11%  

Customer B

    *       *  

Customer C

    18%       *  
   

Year Ended December 31,

 

Revenue

 

2014

   

2013

   

2012

 

Customer A

    13%       12%       19%  

Customer B

    *       15       15  

Customer C

    *       *       *  
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Note 5 - Inventories (Tables)
12 Months Ended
Dec. 31, 2014
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]
   

December 31,

 
   

2014

   

2013

 
                 

Raw materials

  $ 5,803     $ 670  

Work in process

    2,409       2,001  

Finished goods

    18,438       4,096  
    $ 26,650     $ 6,767  
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Note 6 - Property and Equipment, Net (Tables)
12 Months Ended
Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]
   

December 31,

 
   

2014

   

2013

 
                 

Laboratory and production equipment

  $ 48,522     $ 34,443  

Office, software and computer equipment

    15,855       8,649  

Furniture and fixtures

    1,762       834  

Leasehold improvements

    5,212       3,952  
      71,351       47,878  

Less accumulated depreciation

    (35,853 )     (25,418 )
    $ 35,498     $ 22,460  
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Note 7 - Goodwill and Identifiable Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets [Table Text Block]
   

December 31, 2014

 
   

Gross

   

Accumulated

Amortization

   

Net

 

Developed technology

  $ 71,570     $ 2,857     $ 68,713  

Customer relationships

    8,170       201       7,969  

Trade name

    920       46       874  

Patents

    1,579       112       1,467  

In-process research and development

    1,750             1,750  
    $ 83,989     $ 3,216     $ 80,773  
Finite-lived Intangible Assets Amortization Expense [Table Text Block]

Cost of goods sold

  $ 2,857  

Sales and marketing

    201  

General and administrative

    158  
    $ 3,216  
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2015

  $ 12,730  

2016

    12,704  

2017

    12,678  

2018

    12,645  

2019

    11,075  

Thereafter

    17,191  
    $ 79,023  
Finite-Lived Intangible Assets, Remaining Amortization Period [Table Text Block]

Developed technology

    6.27  

Customer relationship

    9.75  

Others

    10.71  
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Note 8 - Other Long-term Liabilities (Tables)
12 Months Ended
Dec. 31, 2014
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]
Other Noncurrent Liabilities [Table Text Block]
   

December 31,

 
   

2014

   

2013

 
                 

Deferred rent

  $ 1,930     $ 1,471  

Income tax payable

    4,687       3,295  

Deferred tax liabilities

    792       1,099  
    $ 7,409     $ 5,865  
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Note 9 - Income Taxes (Tables)
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

United States

  $ (2,684 )   $ (2,507 )   $ (2,852 )

Foreign

    (18,186 )     (8,919 )     (4,166 )

Total

  $ (20,870 )   $ (11,426 )   $ (7,018 )
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Current:

                       

U.S. Federal

  $ 350     $ 1,816     $ 3,760  

U.S. State

    55       1       (132 )

Foreign

    846       98       91  
      1,251       1,915       3,719  
                         

Deferred:

                       

U.S. Federal

    895       (135 )     4,842  

U.S. State

                5,088  

Foreign

    (408 )     (28 )     24  
      487       (163 )     9,954  

Total

  $ 1,738     $ 1,752     $ 13,673  
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Provision (benefit) at statutory rate

  $ (7,096 )   $ (3,886 )   $ (2,456 )

State income taxes

    1,651       303       200  

Research and development credits

    (7,384 )     (5,850 )     (1,345 )

Change in valuation allowance

    5,271       6,781       15,247  

Foreign earnings, taxed at different rates

    6,381       2,888       1,649  

Unrecognized tax benefits

    1,713       1,708       1,487  

Stock-based compensation

    166       142       336  

Tax exempt income

    (83 )     (157 )     (197 )

Prior year return to provision adjustment

    292       (257 )     (1,264 )

Cortina acquisition transaction cost

    444              

Other

    383       80       16  
    $ 1,738     $ 1,752     $ 13,673  
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
   

December 31,

 
   

2014

   

2013

 

Deferred tax assets

               

Net operating loss carry forwards

  $ 8,314     $ 8,532  

Research and development credits

    30,637       15,460  

Stock-based compensation

    6,966       5,192  

Accrued expenses and allowances

    2,117       1,592  

Amortization and depreciation

    1,052        

Other temporary differences

    3,461       111  

Valuation allowance

    (39,682 )     (22,448 )

Total deferred tax assets

    12,865       8,439  
                 

Deferred tax liabilities

               

Subpart F income on foreign subsidiaries earnings

    (5,981 )     (5,621 )

Acquired intangible assets

    (6,157 )      

Amortization and depreciation

          (2,790 )

Other deferred tax liabilities

    (820 )      

Total deferred tax liabilities

    (12,958 )     (8,411 )

Deferred tax assets (liabilities), net

  $ (93 )   $ 28  
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Balance as of January 1

  $ 8,031     $ 6,155     $ 4,132  

Increases based on tax positions related to the current year

    3,102       1,918       1,418  

Increase (decreases) based on tax positions of prior year

    (61 )     (42 )     605  

Gross increases for acquired unrecognized tax benefits

    33,935              

Statute of limitation expirations

    (926 )            

Balance as of December 31

  $ 44,081     $ 8,031     $ 6,155  
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Note 10 - Earnings Per Share (Tables)
12 Months Ended
Dec. 31, 2014
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 
Numerator                        

Net loss

  $ (22,608 )   $ (13,178 )   $ (20,691 )
                         

Denominator

                       

Weighted average common stock

    32,707,868       29,495,856       28,391,528  

Less weighted average unvested common stock subject to repurchase and unvested restricted stock award

          (2,851 )     (12,848 )

Weighted average common stock—basic and diluted

    32,707,868       29,493,005       28,378,680  
                         

Earnings per share

                       

Basic

  $ (0.69 )   $ (0.45 )   $ (0.73 )

Diluted

  $ (0.69 )   $ (0.45 )   $ (0.73 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Common stock options

    3,350,112       4,373,642       4,797,873  

Warrant to purchase redeemable convertible preferred stock

          1,696       2,142  

Unvested restricted stock award and restricted stock unit

    3,705,415       3,030,202       1,608,464  
      7,055,527       7,405,540       6,408,479  
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Note 11 - Stock-based Compensation (Tables)
12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Risk-free interest rate

          1.41 %     1.32 %

Expected life (in years)

          6.25       6.22  

Dividend yield

                 

Expected volatility

          50 %     50 %
Schedule of Share-based Compensation, Activity [Table Text Block]
   

Number of
Shares

   

Weighted
Average
Exercise
Price Per Share

   

Weighted
Average
Remaining
Contractual
Life

   

Aggregate
Intrinsic
Value

 

Outstanding at December 31, 2013

    3,883,097     $ 9.26       6.33     $ 16,229  

Granted

                           

Exercised

    (788,196 )     5.45                  

Canceled

    (89,307 )     12.52                  

Outstanding at December 31, 2014

    3,005,594     $ 10.16       6.12     $ 25,302  

Exercisable at December 31, 2014

    2,349,476     $ 9.69       5.82     $ 20,880  

Vested and expected to vest in the future as of December 31, 2014

    3,001,391     $ 10.16       6.12     $ 25,273  
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]
   

Number of
Shares

   

Weighted
Average
Grant Date Fair Value Per Share

 

Outstanding at December 31, 2013

    3,209,567     $ 11.69  

Granted

    2,878,836       13.99  

Vested

    (1,098,924 )     12.61  

Canceled

    (199,857 )     11.92  

Outstanding at December 31, 2014

    4,789,622     $ 12.85  

Expected to vest in the future as of December 31, 2014

    4,712,501          
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Risk-free interest rate

    0.07 %     0.10 %     0.13 %

Expected life (in years)

    0.50       0.49       0.50  

Dividend yield

                 

Expected volatility

    40 %     45 %     81 %

Estimated fair value

  $ 3.55     $ 2.86     $ 4.69  
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

Cost of revenue

  $ 1,260     $ 1,086     $ 726  

Research and development

    12,420       8,586       5,833  

Sales and marketing

    4,079       3,204       2,660  

General and administrative

    4,701       4,102       3,240  
    $ 22,460     $ 16,978     $ 12,459  
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Note 13 - Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2014
Fair Value Disclosures [Abstract]
Fair Value, Assets Measured on Recurring Basis [Table Text Block]

December 31, 2014

 

Total

   

Level 1

   

Level 2

 

Assets

                       

Cash equivalents:

                       

Money market funds

  $ 1,457     $     $ 1,457  

Investment in marketable securities:

                       

US treasury securities

    2,057       2,057        

Municipal bonds

    19,712             19,712  

Corporate notes/bonds

    16,392             16,392  

Asset backed securities

    747             747  
    $ 40,365     $ 2,057     $ 38,308  

December 31, 2013

 

Total

   

Level 1

   

Level 2

 

Assets

                       

Cash equivalents:

                       

Money market funds

  $ 5,119     $     $ 5,119  

Investment in marketable securities:

                       

US treasury securities

    25,072       25,072        

Municipal bonds

    34,983             34,983  

Corporate notes/bonds

    28,648             28,648  

Certificate of deposit

    1,501             1,501  

Asset backed securities

    686             686  
    $ 96,009     $ 25,072     $ 70,937  
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Note 14 - Segment and Geographic Information (Tables)
12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]
   

Year Ended December 31,

 
   

2014

   

2013

   

2012

 

China

  $ 54,312     $ 23,039     $ 20,724  

United States

    22,918       22,389       21,582  

Korea

    10,123       21,818       17,424  

Other

    68,789       35,418       31,476  
    $ 156,142     $ 102,664     $ 91,206  
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Note 15 - Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
   

December 31, 2014

 

2015

  $ 15,131  

2016

    10,749  

2017

    4,380  

2018

    1,744  

2019

    1,259  
    $ 33,263  
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Note 17 - Supplementary Financial Information (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Schedule of Quarterly Financial Information [Table Text Block]
   

Year Ended December 31, 2014

 
   

Mar. 31,
2014

   

Jun. 30,
2014

   

Sept. 30,
2014

   

Dec. 31,
2014
(1)

 
   

(in thousands, except per share amounts)

 

Total revenue

  $ 31,189     $ 33,922     $ 36,278     $ 54,753  

Gross profit

    20,126       21,626       23,275       20,627  

Net income (loss)

    (995 )     2,634       (6,857 )     (17,390 )

Basic earnings per share

    (0.03 )     0.08       (0.22 )     (0.47 )

Diluted earnings per share

    (0.03 )     0.08       (0.22 )     (0.47 )
   

Year Ended December 31, 2013

 
   

Mar. 31,
2013

   

Jun. 30,
2013

   

Sept. 30,
2013

   

Dec. 31,
2013

 
   

(in thousands, except per share amounts)

 

Total revenue

  $ 22,584     $ 24,339     $ 26,611     $ 29,130  

Gross profit

    14,292       15,446       16,815       19,016  

Net income (loss)

    (7,671 )     (1,474 )     (2,760 )     (1,273 )

Basic earnings per share

    (0.27 )     (0.05 )     (0.09 )     (0.04 )

Diluted earnings per share

    (0.27 )     (0.05 )     (0.09 )     (0.04 )
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Note 1 - Organization and Summary of Significant Accounting Policies (Details) (USD $)
Share data in Millions, unless otherwise specified
1 Months Ended 12 Months Ended 0 Months Ended
Jul. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2009
Nov. 03, 2014
Oct. 03, 2014
Dec. 31, 2011
Note 1 - Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Payments to Acquire Businesses, Gross $ 52,509,000
Inventory Valuation Reserves 1,949,000 1,479,000
Capital Lease Obligations, Current 142,000
Goodwill, Impairment Loss 0 0 0
Product Warranty Accrual 110,000 40,000 40,000 40,000
Number of Integrated Circuits Shipped to Customer 4,000
Additional Warranty 750,000
Product Warranty Accrual, Payments 1,750,000 9,000
Research and Development Expense, Adjustments 10,250,000 1,000,000 2,484,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Payments 0
Number of Reportable Segments 1
Field Installation Repair and Replacement [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Loss Contingency, Damages Sought, Value 4,000,000
Cortina Systems, Inc. [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Payments to Acquire Businesses, Gross $ 52,509,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) 5.3
Minimum [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life 5 years
Product Warranty Term 1 year
Maximum [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life 10 years
Product Warranty Term 2 years
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Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category
12 Months Ended
Dec. 31, 2014
Office Equipment [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 3 years
Software and Software Development Costs [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 3 years
Leasehold Improvements [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Leasehold improvements Shorter of lease term or estimated useful life
Equipment [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 2 years
Computer Equipment [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 5 years
Lab Equipment [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 5 years
Furniture and Fixtures [Member]
Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Useful Lives By Asset Category [Line Items]
Useful life 7 years
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Note 1 - Organization and Summary of Significant Accounting Policies (Details) - Changes in Warranty Accrual (USD $)
In Thousands, unless otherwise specified
1 Months Ended 12 Months Ended
Jul. 31, 2012
Dec. 31, 2014
Dec. 31, 2012
Dec. 31, 2011
Changes in Warranty Accrual [Abstract]
Beginning balance $ 40 $ 40 $ 40
Warranty liabilities assumed in acquisition 79
Settlements (1,750) (9)
$ 110 $ 40 $ 40
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Note 2 - Acquisition (Details) (USD $)
In Thousands, except Share data in Millions, unless otherwise specified
12 Months Ended 0 Months Ended 3 Months Ended
Dec. 31, 2014
Oct. 03, 2014
Dec. 31, 2014
Note 2 - Acquisition (Details) [Line Items]
Payments to Acquire Businesses, Gross $ 52,509
General and Administrative Expense [Member] | Cortina Systems, Inc. [Member]
Note 2 - Acquisition (Details) [Line Items]
Business Combination, Acquisition Related Costs 1,091
In Process Research and Development [Member] | Cortina Systems, Inc. [Member]
Note 2 - Acquisition (Details) [Line Items]
Research and Development in Process 1,750
Cortina Systems, Inc. [Member]
Note 2 - Acquisition (Details) [Line Items]
Payments to Acquire Businesses, Gross 52,509
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) 5.3
Escrow Deposit 16,500
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual 21,018
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual $ 10,018
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Note 2 - Acquisition (Details) - Fair Value of Consideration Transferred (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Fair Value of Consideration Transferred [Abstract]
Cash $ 52,509
Common stock 77,958
$ 130,467
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Note 2 - Acquisition (Details) - Summary of Preliminary Purchase Price Allocation (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Note 2 - Acquisition (Details) - Summary of Preliminary Purchase Price Allocation [Line Items]
Goodwill $ 9,405 $ 5,875
Cortina Systems, Inc. [Member]
Note 2 - Acquisition (Details) - Summary of Preliminary Purchase Price Allocation [Line Items]
Cash 17,201
Receivables 15,155
Inventories 30,002
Other current assets 1,685
Property and equipment 4,751
Identifiable intangible assets 80,660
In-process research and development 1,750
Other noncurrent assets 366
Accounts payable, accrued expenses and other current liabilities (22,796)
Deferred tax liabilities, noncurrent (725)
Other liabilities (1,112)
Total identifiable net assets 126,937
Goodwill 3,530
Net assets acquired $ 130,467
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Note 2 - Acquisition (Details) - Summary of the Estimated Fair Value of Intangible Assets and Their Estimated Useful Lives (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Fair Value $ 82,410
Developed Technology Rights [Member] | Minimum [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life 5 years
Developed Technology Rights [Member] | Maximum [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Useful Life 8 years
Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Fair Value 71,570
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Fair Value 8,170
Finite-Lived Intangible Assets, Estimated Useful Life 10 years
Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Fair Value 920
Finite-Lived Intangible Assets, Estimated Useful Life 5 years
In Process Research and Development [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Estimated Fair Value $ 1,750
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Note 2 - Acquisition (Details) - Significant Assumptions Underlying the Valuation of IPR&D (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Significant Assumptions Underlying the Valuation of IPR&D [Abstract]
Estimated percent complete 5.00%
Estimated time to complete 18 months
Estimated cost to complete (in Dollars) $ 12,548
Discount rate 26.50%
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Note 2 - Acquisition (Details) - Unaudited Pro Forma Summary of Consolidated Results of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Unaudited Pro Forma Summary of Consolidated Results of Operations [Abstract]
Revenue $ 224,116 $ 191,966
Net loss $ (8,500) $ (28,427)
Earnings per share – basic $ (0.23) $ (0.82)
Earnings per share – diluted $ (0.23) $ (0.82)
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Note 3 - Investments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Note 3 - Investments (Details) [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions 22
Minority Interest in Early Stage Private Company [Member] | Maximum [Member]
Note 3 - Investments (Details) [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent 10.00%
Minority Interest in Early Stage Private Company [Member]
Note 3 - Investments (Details) [Line Items]
Cost Method Investments, Original Cost $ 5,000 $ 2,621
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Note 3 - Investments (Details) - Summary of Investments by Investment (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Available-for-sale securities:
US treasury securities,Cost $ 38,873 $ 90,723
US treasury securities, Gross Unrealized Gain 76 223
US treasury securities, Gross Unrealized Loss (41) (56)
US treasury securities, Fair Value 38,908 90,890
US Treasury Securities [Member]
Available-for-sale securities:
US treasury securities,Cost 2,056 25,061
US treasury securities, Gross Unrealized Gain 1 11
US treasury securities, Fair Value 2,057 25,072
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities:
US treasury securities,Cost 19,686 34,912
US treasury securities, Gross Unrealized Gain 43 105
US treasury securities, Gross Unrealized Loss (17) (34)
US treasury securities, Fair Value 19,712 34,983
Corporate Debt Securities [Member]
Available-for-sale securities:
US treasury securities,Cost 16,381 28,565
US treasury securities, Gross Unrealized Gain 32 105
US treasury securities, Gross Unrealized Loss (21) (22)
US treasury securities, Fair Value 16,392 28,648
Asset-backed Securities [Member]
Available-for-sale securities:
US treasury securities,Cost 750 685
US treasury securities, Gross Unrealized Gain 1
US treasury securities, Gross Unrealized Loss (3)
US treasury securities, Fair Value 747 686
Certificates of Deposit [Member]
Available-for-sale securities:
US treasury securities,Cost 1,500
US treasury securities, Gross Unrealized Gain 1
US treasury securities, Fair Value $ 1,501
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Note 3 - Investments (Details) - Contractual Maturities of Available-for-Sale Securities (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Contractual Maturities of Available-for-Sale Securities [Abstract]
Due in one year or less $ 13,613
Due in one year or less 13,656
Due between one and five years 25,260
Due between one and five years 25,252
38,873
$ 38,908 $ 90,890
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Note 4 - Concentrations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Note 4 - Concentrations (Details) [Line Items]
Allowance for Doubtful Accounts Receivable (in Dollars) 165 152
Allowance for distributors’ Price Adjustment (in Dollars) 2,206
Customer D [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member]
Note 4 - Concentrations (Details) [Line Items]
Concentration Risk, Percentage 11.00% 14.00%
Customer A, and Subcontractors [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member]
Note 4 - Concentrations (Details) [Line Items]
Concentration Risk, Percentage 18.00% 20.00% 23.00%
Customer B, and Subcontractors [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member]
Note 4 - Concentrations (Details) [Line Items]
Concentration Risk, Percentage 16.00% 15.00%
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Note 4 - Concentrations (Details) - Concentration Risk, by Risk Factor (Customer Concentration Risk [Member])
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Customer A [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk percentage    [1] 11.00%
Customer A [Member] | Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Concentration risk percentage 13.00% 12.00% 19.00%
Customer B [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk percentage    [1]    [1]
Customer B [Member] | Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Concentration risk percentage    [1] 15.00% 15.00%
Customer C [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk percentage 18.00%    [1]
Customer C [Member] | Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Concentration risk percentage    [1]    [1]    [1]
[1] Less than 10% of total accounts receivable or total revenue
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Note 5 - Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Inventory Disclosure [Abstract]
Other Inventory, Materials, Supplies and Merchandise under Consignment, Gross $ 2,798 $ 543
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Note 5 - Inventories (Details) - Inventory (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Inventory [Abstract]
Raw materials $ 5,803 $ 670
Work in process 2,409 2,001
Finished goods 18,438 4,096
$ 26,650 $ 6,767
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Note 6 - Property and Equipment, Net (Details) (Property and Equipment [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Property and Equipment [Member]
Note 6 - Property and Equipment, Net (Details) [Line Items]
Depreciation $ 10,897 $ 7,508 $ 4,908
Capitalized Computer Software, Gross 4,582 2,815
Capitalized Computer Software, Amortization $ 614 $ 283 $ 280
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Note 6 - Property and Equipment, Net (Details) - Property and Equipment (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross $ 71,351 $ 47,878
Less accumulated depreciation (35,853) (25,418)
35,498 22,460
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross 48,522 34,443
Other Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross 15,855 8,649
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross 1,762 834
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross $ 5,212 $ 3,952
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Note 7 - Goodwill and Identifiable Intangible Assets (Details) (Cortina Systems, Inc. [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Cortina Systems, Inc. [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) [Line Items]
Goodwill, Acquired During Period $ 3,530
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Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Identifiable Intangible Assets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross $ 83,989
Finite Lived Intangible Assets, Accumulated Amortization 3,216
Finite Lived Intangible Assets, Net 80,773
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross 71,570
Finite Lived Intangible Assets, Accumulated Amortization 2,857
Finite Lived Intangible Assets, Net 68,713
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross 8,170
Finite Lived Intangible Assets, Accumulated Amortization 201
Finite Lived Intangible Assets, Net 7,969
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross 920
Finite Lived Intangible Assets, Accumulated Amortization 46
Finite Lived Intangible Assets, Net 874
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross 1,579
Finite Lived Intangible Assets, Accumulated Amortization 112
Finite Lived Intangible Assets, Net 1,467
In Process Research and Development [Member]
Finite-Lived Intangible Assets [Line Items]
Finite Lived Intangible Assets, Gross 1,750
Finite Lived Intangible Assets, Net $ 1,750
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Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Finite-lived Intangible Assets, Accumulated Amortization (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Finite-lived Intangible Assets, Accumulated Amortization [Line Items]
Amortization $ 3,216
Cost of Sales [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Finite-lived Intangible Assets, Accumulated Amortization [Line Items]
Cost of goods sold 2,857
Selling and Marketing Expense [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Finite-lived Intangible Assets, Accumulated Amortization [Line Items]
Amortization 201
General and Administrative Expense [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Finite-lived Intangible Assets, Accumulated Amortization [Line Items]
Amortization $ 158
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Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Amortization of Intangible Assets, Future Amortization Expense (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Amortization of Intangible Assets, Future Amortization Expense [Abstract]
2015 $ 12,730
2016 12,704
2017 12,678
2018 12,645
2019 11,075
Thereafter 17,191
$ 79,023
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Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Intangible Assets Weighted-average Amortization Periods
12 Months Ended
Dec. 31, 2014
Developed Technology Rights [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Intangible Assets Weighted-average Amortization Periods [Line Items]
Finite-Lived Intangible Assets 6 years 98 days
Customer Relationships [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Intangible Assets Weighted-average Amortization Periods [Line Items]
Finite-Lived Intangible Assets 9 years 9 months
Other Intangible Assets [Member]
Note 7 - Goodwill and Identifiable Intangible Assets (Details) - Intangible Assets Weighted-average Amortization Periods [Line Items]
Finite-Lived Intangible Assets 10 years 259 days
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Note 8 - Other Long-term Liabilities (Details) - Other Long-term Liabilities (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Other Long-term Liabilities [Abstract]
Deferred rent $ 1,930 $ 1,471
Income tax payable 4,687 3,295
Deferred tax liabilities 792 1,099
$ 7,409 $ 5,865
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Note 9 - Income Taxes (Details) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Note 9 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 34.00% 34.00% 35.00%
Deferred Tax Charge $ 3,261,000 $ 4,200,000
Deferred Tax Amortization Period 8 years
Deferred Tax Assets, Valuation Allowance 39,682,000 22,448,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount 17,234,000 6,768,000 15,247,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate 4,370,000
Significant (Increase) Decrease in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound 1,750,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense 14,000 0 0
Undistributed Earnings of Foreign Subsidiaries 3,395,000
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | Cortina Systems, Inc. [Member]
Note 9 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount 6,033,000
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member]
Note 9 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount 21,059,000
Domestic Tax Authority [Member] | Cortina Systems, Inc. [Member]
Note 9 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards 49,609,000
Domestic Tax Authority [Member]
Note 9 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Valuation Allowance 14,827,000
Operating Loss Carryforwards 67,951,000
Net Operating Loss Carryforward Excess Tax Deduction Related to Stock Based Compensation 29,204,000
Foreign Tax Authority [Member] | Tax Authority, Taiwan [Member]
Note 9 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards 3,215,000
Foreign Tax Authority [Member] | Inland Revenue, Singapore (IRAS) [Member]
Note 9 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards 30,459,000
Foreign Tax Authority [Member]
Note 9 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Valuation Allowance 853,000
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | Cortina Systems, Inc. [Member]
Note 9 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount 7,977,000
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member]
Note 9 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount 23,853,000
State and Local Jurisdiction [Member] | Cortina Systems, Inc. [Member]
Note 9 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards 32,033,000
State and Local Jurisdiction [Member]
Note 9 - Income Taxes (Details) [Line Items]
Operating Loss Carryforwards 34,904,000
Net Operating Loss Carryforward Excess Tax Deduction Related to Stock Based Compensation 12,417,000
State and Foreign Jurisdiction [Member]
Note 9 - Income Taxes (Details) [Line Items]
Income Taxes Paid 715,000
Capital Loss Carryforward [Member] | Cortina Systems, Inc. [Member]
Note 9 - Income Taxes (Details) [Line Items]
Tax Credit Carryforward, Amount $ 2,859,000
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Note 9 - Income Taxes (Details) - Income Before Income Taxes (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Before Income Taxes [Abstract]
United States $ (2,684) $ (2,507) $ (2,852)
Foreign (18,186) (8,919) (4,166)
Total $ (20,870) $ (11,426) $ (7,018)
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Note 9 - Income Taxes (Details) - Components of Income Tax Expense (Benefit) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Components of Income Tax Expense (Benefit) [Abstract]
U.S. Federal $ 350 $ 1,816 $ 3,760
U.S. State 55 1 (132)
Foreign 846 98 91
1,251 1,915 3,719
U.S. Federal 895 (135) 4,842
U.S. State 5,088
Foreign (408) (28) 24
487 (163) 9,954
Total $ 1,738 $ 1,752 $ 13,673
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Note 9 - Income Taxes (Details) - Effective Income Tax Rate Reconciliation (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Effective Income Tax Rate Reconciliation [Abstract]
Provision (benefit) at statutory rate $ (7,096) $ (3,886) $ (2,456)
State income taxes 1,651 303 200
Research and development credits (7,384) (5,850) (1,345)
Change in valuation allowance 5,271 6,781 15,247
Foreign earnings, taxed at different rates 6,381 2,888 1,649
Unrecognized tax benefits 1,713 1,708 1,487
Stock-based compensation 166 142 336
Tax exempt income (83) (157) (197)
Prior year return to provision adjustment 292 (257) (1,264)
Cortina acquisition transaction cost 444
Other 383 80 16
$ 1,738 $ 1,752 $ 13,673
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Note 9 - Income Taxes (Details) - Components of Company's Net Deferred Taxes (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Deferred tax assets
Net operating loss carry forwards $ 8,314 $ 8,532
Research and development credits 30,637 15,460
Stock-based compensation 6,966 5,192
Accrued expenses and allowances 2,117 1,592
Amortization and depreciation 1,052
Other temporary differences 3,461 111
Valuation allowance (39,682) (22,448)
Total deferred tax assets 12,865 8,439
Deferred tax liabilities
Subpart F income on foreign subsidiaries earnings (5,981) (5,621)
Acquired intangible assets (6,157)
Amortization and depreciation (2,790)
Other deferred tax liabilities (820)
Total deferred tax liabilities (12,958) (8,411)
Deferred tax assets (liabilities), net $ (93) $ 28
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Note 9 - Income Taxes (Details) - Summary of Changes in Gross Unrecognized Tax Benefits (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Summary of Changes in Gross Unrecognized Tax Benefits [Abstract]
Balance as of January 1 $ 8,031 $ 6,155 $ 4,132
Increases based on tax positions related to the current year 3,102 1,918 1,418
Increase (decreases) based on tax positions of prior year (61) (42) 605
Gross increases for acquired unrecognized tax benefits 33,935
Statute of limitation expirations (926)
Balance as of December 31 $ 44,081 $ 8,031 $ 6,155
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Note 10 - Earnings Per Share (Details) - Computation of Basic and Diluted Earnings Per Share (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Numerator
Net loss (in Dollars) $ (17,390) [1] $ (6,857) $ 2,634 $ (995) $ (1,273) $ (2,760) $ (1,474) $ (7,671) $ (22,608) $ (13,178) $ (20,691)
Denominator
Weighted average common stock 32,707,868 29,495,856 28,391,528
Less weighted average unvested common stock subject to repurchase and unvested restricted stock award (2,851) (12,848)
Weighted average common stock—basic and diluted 32,707,868 29,493,005 28,378,680
Earnings per share
Basic (in Dollars per share) $ (0.47) [1] $ (0.22) $ 0.08 $ (0.03) $ (0.04) $ (0.09) $ (0.05) $ (0.27) $ (0.69) $ (0.45) $ (0.73)
Diluted (in Dollars per share) $ (0.47) [1] $ (0.22) $ 0.08 $ (0.03) $ (0.04) $ (0.09) $ (0.05) $ (0.27) $ (0.69) $ (0.45) $ (0.73)
[1] On October 3, 2014, we completed the acquisition of Cortina, including its high-speed interconnect and optical transport product lines. The results of operations of Cortina and estimated fair value of assets acquired and liabilities assumed were included in our financial statements from the acquisition date. This acquisition resulted in a significant change in our statement of operations in 2014 which includes increase cost of goods sold resulting from the step-up inventory acquired from Cortina and amortization of acquired intangibles.
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Note 10 - Earnings Per Share (Details) - Securities Not Included in Computation of Earnings Per Share
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities 7,055,527 7,405,540 6,408,479
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities 3,350,112 4,373,642 4,797,873
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities 1,696 2,142
Restricted Stock Award and Restricted Stock Unit [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities 3,705,415 3,030,202 1,608,464
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Note 11 - Stock-based Compensation (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended 0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Oct. 16, 2014
Dec. 31, 2011
Note 11 - Stock-based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) $ 0 $ 4.82 $ 6.18
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value (in Dollars) $ 7,800 $ 7,313 $ 6,861
Proceeds from Stock Options Exercised (in Dollars) 4,298 2,905 1,828
Number of Options Eligible for Swap 508,399
Number of Options Exchange 464,899
Weighted Average Exercise Price of OptionsExchange (in Dollars per share) $ 21.06
Number of Options Issued from Exchange 353,779
Exercise Price of New Options Issued (in Dollars per share) $ 8.93
Look-Back Period of Employee Stock Purchase Plan 6 months
Stock Issued During Period, Shares, Employee Stock Purchase Plans 264,886 279,074 101,088
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) 52,068
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 2 years 321 days
Restricted Stock Units (RSUs) [Member] | Certain Cortina Employees [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period 4 years
Restricted Stock Units (RSUs) [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Vesting Period of Restricted Stock Units Granted 4 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 2,878,836
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period 1,098,924
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 4,789,622 3,209,567
Restricted Stock [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number 21,425
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period 2,851 9,998 8,576
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 2,851 12,849
Minimum [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Exercise Price of Options Eligible for Swap (in Dollars per share) $ 16.63
Maximum [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Exercise Price of Options Eligible for Swap (in Dollars per share) $ 22.07
Two Thousand and Ten Stock Incentive Plan [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance 1,570,319
Employee Stock Option Plan [Member]
Note 11 - Stock-based Compensation (Details) [Line Items]
Maximum Percentage of Aggregate Cash Compensation for Purchase of Stock Using Payroll Deduction 15.00%
Purchase Price Per Share as Percentage of Market Value 85.00%
Percentage of Combined Voting Power or Value of All Classes of Stock Not Eligible to Participate 5.00%
Fair Value of Common Stock in Calendar Year Per Employee Not Eligible to Participate (in Dollars) $ 25
Maximum Aggregate Number of Shares of Common Stock Available for Purchase Under the Employee Stock Purchase Plan 1,000,000
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Note 11 - Stock-based Compensation (Details) - Fair Value Option Grant Weighted Average Assumptions Using Black-Scholes Option Pricing Model
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Fair Value Option Grant Weighted Average Assumptions Using Black-Scholes Option Pricing Model [Abstract]
Risk-free interest rate 1.41% 1.32%
Expected life (in years) 6 years 3 months 6 years 80 days
Dividend yield         
Expected volatility 50.00% 50.00%
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Note 11 - Stock-based Compensation (Details) - Information Regarding Options Outstanding (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Information Regarding Options Outstanding [Abstract]
Outstanding at December 31, 2013 3,883,097
Outstanding at December 31, 2013 $ 9.26
Outstanding at December 31, 2013 6 years 43 days 6 years 120 days
Outstanding at December 31, 2013 $ 16,229
Outstanding at December 31, 2014 3,005,594
Outstanding at December 31, 2014 $ 10.16
Outstanding at December 31, 2014 6 years 43 days 6 years 120 days
Outstanding at December 31, 2014 25,302
Exercisable at December 31, 2014 2,349,476
Exercisable at December 31, 2014 $ 9.69
Exercisable at December 31, 2014 5 years 299 days
Exercisable at December 31, 2014 20,880
Vested and expected to vest in the future as of December 31, 2014 3,001,391
Vested and expected to vest in the future as of December 31, 2014 $ 10.16
Vested and expected to vest in the future as of December 31, 2014 6 years 43 days
Vested and expected to vest in the future as of December 31, 2014 $ 25,273
Exercised (788,196)
Exercised $ 5.45
Canceled (89,307)
Canceled $ 12.52
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Note 11 - Stock-based Compensation (Details) - Information Regarding Outstanding Restricted Stock Units (Restricted Stock Units (RSUs) [Member], USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2012
Restricted Stock Units (RSUs) [Member]
Note 11 - Stock-based Compensation (Details) - Information Regarding Outstanding Restricted Stock Units [Line Items]
Outstanding at December 31, 2013 3,209,567
Outstanding at December 31, 2013 (in Dollars per share) $ 11.69
Granted 2,878,836
Granted (in Dollars per share) $ 13.99
Vested (1,098,924)
Vested (in Dollars per share) $ 12.61
Canceled (199,857)
Canceled (in Dollars per share) $ 11.92
Outstanding at December 31, 2014 4,789,622 3,209,567
Outstanding at December 31, 2014 (in Dollars per share) $ 12.85 $ 11.69
Expected to vest in the future as of December 31, 2014 4,712,501
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Note 11 - Stock-based Compensation (Details) - Fair Value of Employee Stock Purchase Plan (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Note 11 - Stock-based Compensation (Details) - Fair Value of Employee Stock Purchase Plan [Line Items]
Risk-free interest rate 1.41% 1.32%
Expected life (in years) 6 years 3 months 6 years 80 days
Expected volatility 50.00% 50.00%
Employee Stock Purchase Plan [Member]
Note 11 - Stock-based Compensation (Details) - Fair Value of Employee Stock Purchase Plan [Line Items]
Risk-free interest rate 0.07% 0.10% 0.13%
Expected life (in years) 6 months 178 days 6 months
Expected volatility 40.00% 45.00% 81.00%
Estimated fair value (in Dollars per share) $ 3.55 $ 2.86 $ 4.69
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Note 11 - Stock-based Compensation (Details) - Stock-Based Compensation Expense (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-Based Compensation Expense $ 22,460 $ 16,978 $ 12,459
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-Based Compensation Expense 1,260 1,086 726
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-Based Compensation Expense 12,420 8,586 5,833
Selling and Marketing Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-Based Compensation Expense 4,079 3,204 2,660
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-Based Compensation Expense $ 4,701 $ 4,102 $ 3,240
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Note 13 - Fair Value Measurements (Details) - Information about Assets and Liabilities Required to be Carried at Fair Value on Recurring Basis (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Investment in marketable securities:
Total fair value of assets $ 40,365 $ 96,009
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents:
Cash equivalents 1,457 5,119
Money Market Funds [Member]
Cash equivalents:
Cash equivalents 1,457 5,119
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investment in marketable securities:
Investment in marketable securities 2,057 25,072
US Treasury Securities [Member]
Investment in marketable securities:
Investment in marketable securities 2,057 25,072
Municipal Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Investment in marketable securities:
Investment in marketable securities 19,712 34,983
Municipal Bonds [Member]
Investment in marketable securities:
Investment in marketable securities 19,712 34,983
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment in marketable securities:
Investment in marketable securities 16,392 28,648
Corporate Debt Securities [Member]
Investment in marketable securities:
Investment in marketable securities 16,392 28,648
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment in marketable securities:
Investment in marketable securities 747 686
Asset-backed Securities [Member]
Investment in marketable securities:
Investment in marketable securities 747 686
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Investment in marketable securities:
Investment in marketable securities 1,501
Certificates of Deposit [Member]
Investment in marketable securities:
Investment in marketable securities 1,501
Fair Value, Inputs, Level 1 [Member]
Investment in marketable securities:
Total fair value of assets 2,057 25,072
Fair Value, Inputs, Level 2 [Member]
Investment in marketable securities:
Total fair value of assets $ 38,308 $ 70,937
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Note 14 - Segment and Geographic Information (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Note 14 - Segment and Geographic Information (Details) [Line Items]
Number of Reportable Segments 1
Outside the United States [Member]
Note 14 - Segment and Geographic Information (Details) [Line Items]
Long-Lived Tangible Assets Located Outside Country 6,153 $ 5,217
TAIWAN, PROVINCE OF CHINA
Note 14 - Segment and Geographic Information (Details) [Line Items]
Long-Lived Tangible Assets Located Outside Country 3,463 $ 4,694
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Note 14 - Segment and Geographic Information (Details) - Revenue by Geographic Region (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue by Geographic Region $ 54,753 [1] $ 36,278 $ 33,922 $ 31,189 $ 29,130 $ 26,611 $ 24,339 $ 22,584 $ 156,142 $ 102,664 $ 91,206
CHINA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue by Geographic Region 54,312 23,039 20,724
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue by Geographic Region 22,918 22,389 21,582
KOREA, REPUBLIC OF
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue by Geographic Region 10,123 21,818 17,424
Other Country [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue by Geographic Region $ 68,789 $ 35,418 $ 31,476
[1] On October 3, 2014, we completed the acquisition of Cortina, including its high-speed interconnect and optical transport product lines. The results of operations of Cortina and estimated fair value of assets acquired and liabilities assumed were included in our financial statements from the acquisition date. This acquisition resulted in a significant change in our statement of operations in 2014 which includes increase cost of goods sold resulting from the step-up inventory acquired from Cortina and amortization of acquired intangibles.
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Note 15 - Commitments and Contingencies (Details) (USD $)
12 Months Ended 0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Sep. 27, 2011
Jun. 21, 2011
Apr. 01, 2011
Note 15 - Commitments and Contingencies (Details) [Line Items]
Operating Leases, Rent Expense, Net $ 8,193,000 $ 5,990,000 $ 3,980,000
Value of Open Purchase Orders 10,278,000
Number of Claims Confirming Patentability Related to Action Closing Prosecution 4
Number of Claims Deemed Patentable 1
Estimated Litigation Liability 0 0
Netlist Inc [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Loss Contingency, Claims Dismissed, Number 91
Loss Contingency, Pending Claims, Number 97
Cortina Systems, Inc. [Member]
Note 15 - Commitments and Contingencies (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability 750,000
Amount to be Refunded from Escrow $ 750,000
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Note 15 - Commitments and Contingencies (Details) - Future Minimum Lease Payments Under Noncancelable Operating Leases (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Future Minimum Lease Payments Under Noncancelable Operating Leases [Abstract]
2015 $ 15,131
2016 10,749
2017 4,380
2018 1,744
2019 1,259
$ 33,263
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Note 16 - Related Party Transactions (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 12 Months Ended
Sep. 30, 2012
Jun. 30, 2011
Dec. 31, 2007
Dec. 31, 2012
Related Party Transactions [Abstract]
Payment to Related Party $ 2,129 $ 5,250 $ 7,000
Number of Installment Committed to Pay 5 10 16
Related Party Transaction, Amounts of Transaction 2,224
Related Party Transaction, Expenses from Transactions with Related Party $ 2,467
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Note 17 - Supplementary Financial Information (Unaudited) (Details) - Quarterly Results of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Quarterly Results of Operations [Abstract]
Total revenue $ 54,753 [1] $ 36,278 $ 33,922 $ 31,189 $ 29,130 $ 26,611 $ 24,339 $ 22,584 $ 156,142 $ 102,664 $ 91,206
Gross profit 20,627 [1] 23,275 21,626 20,126 19,016 16,815 15,446 14,292 85,654 65,569 58,522
Net income (loss) $ (17,390) [1] $ (6,857) $ 2,634 $ (995) $ (1,273) $ (2,760) $ (1,474) $ (7,671) $ (22,608) $ (13,178) $ (20,691)
Basic earnings per share (in Dollars per share) $ (0.47) [1] $ (0.22) $ 0.08 $ (0.03) $ (0.04) $ (0.09) $ (0.05) $ (0.27) $ (0.69) $ (0.45) $ (0.73)
Diluted earnings per share (in Dollars per share) $ (0.47) [1] $ (0.22) $ 0.08 $ (0.03) $ (0.04) $ (0.09) $ (0.05) $ (0.27) $ (0.69) $ (0.45) $ (0.73)
[1] On October 3, 2014, we completed the acquisition of Cortina, including its high-speed interconnect and optical transport product lines. The results of operations of Cortina and estimated fair value of assets acquired and liabilities assumed were included in our financial statements from the acquisition date. This acquisition resulted in a significant change in our statement of operations in 2014 which includes increase cost of goods sold resulting from the step-up inventory acquired from Cortina and amortization of acquired intangibles.
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