Silicon Laboratories (SLAB) 10-Q27 Jul 222022 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 02, 2022	Jul. 19, 2022
Document and Entity Information
Entity Registrant Name	SILICON LABORATORIES INC.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 02, 2022
Document Transition Report	false
Entity File Number	000-29823
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-2793174
Entity Address, Address Line One	400 West Cesar Chavez
Entity Address, City or Town	Austin
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	78701
City Area Code	512
Local Phone Number	416-8500
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	SLAB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		34,223,488
Entity Central Index Key	0001038074
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Current assets:
Cash and cash equivalents	$ 504,850	$ 1,074,623
Short-term investments	972,845	964,582
Accounts receivable, net	72,106	98,313
Inventories	74,026	49,307
Prepaid expenses and other current assets	86,138	51,748
Total current assets	1,709,965	2,238,573
Property and equipment, net	149,447	146,516
Goodwill	376,389	376,389
Other intangible assets, net	99,784	118,978
Other assets, net	83,813	77,839
Total assets	2,419,398	2,958,295
Current liabilities:
Accounts payable	95,365	47,327
Current portion of convertible debt, net		450,599
Deferred revenue and returns liability	10,696	13,849
Other current liabilities	126,058	157,052
Total current liabilities	232,119	668,827
Convertible debt, net	528,564
Other non-current liabilities	53,371	77,044
Total liabilities	814,054	745,871
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued
Common stock - $0.0001 par value; 250,000 shares authorized; 34,223 and 38,481 shares issued and outstanding at July 2, 2022 and January 1, 2022, respectively	3	4
Retained earnings	1,619,396	2,214,839
Accumulated other comprehensive loss	(14,055)	(2,419)
Total stockholders' equity	1,605,344	2,212,424
Total liabilities and stockholders' equity	$ 2,419,398	$ 2,958,295

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jul. 02, 2022	Jan. 01, 2022
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000	250,000
Common stock, shares issued	34,223	38,481
Common stock, shares outstanding	34,223	38,481

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Condensed Consolidated Statements of Income
Revenues	$ 263,150	$ 169,492	$ 496,964	$ 327,349
Cost of revenues	99,247	73,194	177,289	139,297
Gross profit	163,903	96,298	319,675	188,052
Operating expenses:
Research and development	83,511	64,832	161,053	128,847
Selling, general and administrative	49,013	42,953	93,660	85,407
Operating expenses	132,524	107,785	254,713	214,254
Operating income (loss)	31,379	(11,487)	64,962	(26,202)
Other income (expense):
Interest income and other, net	3,445	475	4,944	1,624
Interest expense	(1,667)	(6,486)	(3,347)	(17,810)
Income (loss) from continuing operations before income taxes	33,157	(17,498)	66,559	(42,388)
Provision for income taxes	10,994	1,165	22,683	3,157
Equity-method earnings	(28)	172	1,166	1,898
Income (loss) from continuing operations	22,135	(18,491)	45,042	(43,647)
Income from discontinued operations, net of income taxes		38,423		77,088
Net income	$ 22,135	$ 19,932	$ 45,042	$ 33,441
Basic earnings (loss) per share:
Continuing operations (in dollars per share)	$ 0.62	$ (0.41)	$ 1.22	$ (0.98)
Net income (in dollars per share)	0.62	0.44	1.22	0.75
Diluted earnings (loss) per share:
Continuing operations (in dollars per share)	0.60	(0.41)	1.18	(0.98)
Net income (in dollars per share)	$ 0.60	$ 0.44	$ 1.18	$ 0.73
Weighted-average common shares outstanding:
Basic (in shares)	35,722,000	44,803,000	36,862,000	44,481,000
Diluted (in shares)	36,604,000	45,756,000	38,063,000	45,794,000

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 22,135	$ 19,932	$ 45,042	$ 33,441
Net changes to available-for-sale securities
Unrealized losses arising during the period	(3,013)	(564)	(12,705)	(1,400)
Reclassification for (gains) losses included in net income	374	(39)	423	(397)
Net changes to cash flow hedges
Unrealized gains (losses) arising during the period	(3,001)	388	(3,545)	(269)
Reclassification for (gains) losses included in net income	1,092	(160)	1,092	(320)
Other comprehensive loss, before tax	(4,548)	(375)	(14,735)	(2,386)
Provision (benefit) for income taxes	(959)	(78)	(3,099)	(501)
Other comprehensive loss	(3,589)	(297)	(11,636)	(1,885)
Comprehensive income	$ 18,546	$ 19,635	$ 33,406	$ 31,556

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings Cumulative effect of adoption of accounting standard	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Cumulative effect of adoption of accounting standard	Total
Balance at Jan. 02, 2021	$ 4	$ 204,359		$ 993,664	$ 1,814		$ 1,199,841
Balance (in shares) at Jan. 02, 2021	43,925
Increase (Decrease) in Stockholders' Equity
Net income				33,441			33,441
Other comprehensive loss					(1,885)		(1,885)
Stock issuances, net of shares withheld for taxes		(11,344)					(11,344)
Stock issuances, net of shares withheld for taxes (in shares)	453
Repurchases of common stock		(18,982)					(18,982)
Repurchases of common stock (in shares)	(142)
Stock-based compensation		27,431					27,431
Convertible debt activity		(748)					(748)
Convertible debt activity (in shares)	528
Balance at Jul. 03, 2021	$ 4	200,716		1,027,105	(71)		1,227,754
Balance (in shares) at Jul. 03, 2021	44,764
Balance at Apr. 03, 2021	$ 4	199,576		1,007,173	226		1,206,979
Balance (in shares) at Apr. 03, 2021	44,749
Increase (Decrease) in Stockholders' Equity
Net income				19,932			19,932
Other comprehensive loss					(297)		(297)
Stock issuances, net of shares withheld for taxes		6,473					6,473
Stock issuances, net of shares withheld for taxes (in shares)	157
Repurchases of common stock		(18,982)					(18,982)
Repurchases of common stock (in shares)	(142)
Stock-based compensation		13,649					13,649
Balance at Jul. 03, 2021	$ 4	200,716		1,027,105	(71)		1,227,754
Balance (in shares) at Jul. 03, 2021	44,764
Balance at Jan. 01, 2022	$ 4			2,214,839	(2,419)		$ 2,212,424
Balance (in shares) at Jan. 01, 2022	38,481						38,481,000
Increase (Decrease) in Stockholders' Equity
Net income				45,042			$ 45,042
Other comprehensive loss					(11,636)		(11,636)
Stock issuances, net of shares withheld for taxes		(7,593)					(7,593)
Stock issuances, net of shares withheld for taxes (in shares)	301
Repurchases of common stock	$ (1)	(19,675)		(580,522)			(600,198)
Repurchases of common stock (in shares)	(4,559)
Stock-based compensation		27,268					27,268
Balance at Jul. 02, 2022	$ 3		$ (59,963)	1,619,396	(14,055)	$ (59,963)	$ 1,605,344
Balance (in shares) at Jul. 02, 2022	34,223						34,223,000
Balance at Apr. 02, 2022	$ 4			2,018,117	(10,466)		$ 2,007,655
Balance (in shares) at Apr. 02, 2022	37,204
Increase (Decrease) in Stockholders' Equity
Net income				22,135			22,135
Other comprehensive loss					(3,589)		(3,589)
Stock issuances, net of shares withheld for taxes		1,161					1,161
Stock issuances, net of shares withheld for taxes (in shares)	159
Repurchases of common stock	$ (1)	(15,561)		(420,856)			(436,418)
Repurchases of common stock (in shares)	(3,140)
Stock-based compensation		$ 14,400					14,400
Balance at Jul. 02, 2022	$ 3		$ (59,963)	$ 1,619,396	$ (14,055)	$ (59,963)	$ 1,605,344
Balance (in shares) at Jul. 02, 2022	34,223						34,223,000

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Operating Activities
Net income	$ 45,042	$ 33,441
Adjustments to reconcile net income to cash provided by operating activities of continuing operations:
Income from discontinued operations, net of income taxes		(77,088)
Depreciation of property and equipment	10,561	8,184
Amortization of other intangible assets	19,194	22,902
Amortization of debt discount and debt issuance costs	994	11,822
Loss on extinguishment of convertible debt	3	3,370
Stock-based compensation expense	27,264	22,620
Equity-method earnings	(1,166)	(1,898)
Deferred income taxes	(9,344)	(5,644)
Changes in operating assets and liabilities:
Accounts receivable	26,207	(4,377)
Inventories	(24,714)	(4,447)
Prepaid expenses and other assets	(25,286)	(3,591)
Accounts payable	25,606	14,711
Other current liabilities and income taxes	(3,418)	(10,626)
Deferred revenue and returns liability	(3,153)	(175)
Other non-current liabilities	(4,416)	(3,464)
Net cash provided by operating activities of continuing operations	83,374	5,740
Investing Activities
Purchases of marketable securities	(554,267)	(80,426)
Sales of marketable securities	27,404	186,626
Maturities of marketable securities	511,296	100,023
Purchases of property and equipment	(12,322)	(10,779)
Purchases of other assets		(578)
Net cash provided by (used in) investing activities of continuing operations	(27,889)	194,866
Financing Activities
Payments on debt	(21)	(140,572)
Repurchases of common stock	(579,040)	(18,982)
Payment of taxes withheld for vested stock awards	(13,958)	(19,732)
Proceeds from the issuance of common stock	6,365	8,388
Net cash used in financing activities of continuing operations	(586,654)	(170,898)
Discontinued Operations
Operating activities	(38,604)	72,674
Investing activities	0	(2,018)
Net cash provided by (used in) discontinued operations	(38,604)	70,656
Increase (decrease) in cash and cash equivalents	(569,773)	100,364
Cash and cash equivalents at beginning of period	1,074,623	202,720
Cash and cash equivalents at end of period	$ 504,850	$ 303,084

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
Significant Accounting Policies	Jul. 02, 2022
Significant Accounting Policies
Significant Accounting Policies	1. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The information included herein contains all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly Silicon Laboratories Inc.’s (the “Company”) financial position, results of its operations, comprehensive income, stockholders’ equity and cash flows. The Condensed Consolidated Balance Sheet as of January 1, 2022 was derived from the Company’s audited Consolidated Financial Statements. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and six months ended July 2, 2022 are not necessarily indicative of the results to be expected for the full year. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended January 1, 2022, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 2, 2022. The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2022 will have 52 weeks and fiscal 2021 had 52 weeks. In a 52-week year, each fiscal quarter consists of 13 weeks. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. The Company periodically reviews the assumptions used in its financial statement estimates. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. The Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The estimate is based on information available to the Company, including recent sales activity and pricing data. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. The Company records a right of return asset in prepaid expenses and other current assets for the costs of distributor inventory not meeting revenue recognition criteria. A corresponding deferred revenue and returns liability amount is recorded for unrecognized revenue associated with such costs. The Company’s products carry a one-year replacement warranty. Payments are typically due within 30 days of invoicing and do not include a significant financing component. 1. Significant Accounting Policies (Continued) Adoption of New Accounting Standard Convertible Instruments The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40 Increase Financial Statement Line Item (Decrease) Current portion of convertible debt, net $ 76,991 Other non-current liabilities $ (17,028) Retained earnings $ (59,963) The primary impact of the Company’s adoption of ASU 2020-06 was to increase the carrying value of its convertible debt, representing the unamortized debt discount, and reduce deferred tax liabilities related to convertible debt. The adoption reduced reported interest expense recorded in connection with convertible debt, which increased basic earnings per share and diluted earnings per share by $0.11 and $0.11, respectively, for the three months ended July 2, 2022, and by $0.22 and $0.21, respectively, for the six months ended July 2, 2022.

Discontinued Operations

Discontinued Operations	6 Months Ended
Discontinued Operations	Jul. 02, 2022
Discontinued Operations.
Discontinued Operations	2. Discontinued Operations On July 26, 2021, the Company sold its infrastructure and automotive business to Skyworks Solutions, Inc. for $2.75 billion in cash. The financial results of the infrastructure and automotive business, which are readily distinguishable from other components of the Company, have been presented as discontinued operations in the Condensed Consolidated Financial Statements because the sale represented a strategic shift for the Company. The following table presents the financial results of the infrastructure and automotive business (the “discontinued operations”) in the Company’s Condensed Consolidated Statements of Income (in thousands, except per share data): Three Months Ended Six Months Ended July 3, July 3, 2021 2021 Revenues $ 108,064 $ 205,712 Costs of revenues 45,091 83,910 Operating expenses 25,052 47,007 Income from discontinued operations before income taxes 37,921 74,795 Provision (benefit) for income taxes (502) (2,293) Income from discontinued operations $ 38,423 $ 77,088 Income from discontinued operations per share: Basic $ 0.86 $ 1.73 Diluted $ 0.84 $ 1.68 2. Discontinued Operations (Continued) Continuing Involvement In connection with the closing of the sale, the Company entered into certain ancillary agreements with Skyworks, including a Transition Services Agreement (“TSA”). Through the TSA, the Company has subleased certain premises to Skyworks and will provide or provides various temporary support services for three

Earnings (Loss) Per Share

Earnings (Loss) Per Share	6 Months Ended
Earnings (Loss) Per Share	Jul. 02, 2022
Earnings (Loss) Per Share
Earnings (Loss) Per Share	3. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted earnings (loss) per share from continuing operations (in thousands, except per share data): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Income (loss) from continuing operations $ 22,135 $ (18,491) $ 45,042 $ (43,647) Shares used in computing basic income (loss) per share 35,722 44,803 36,862 44,481 Effect of dilutive securities: Convertible debt and stock-based awards 882 — 1,201 — Shares used in computing diluted income (loss) per share 36,604 44,803 38,063 44,481 Income (loss) per share: Basic $ 0.62 $ (0.41) $ 1.22 $ (0.98) Diluted $ 0.60 $ (0.41) $ 1.18 $ (0.98) The Company has irrevocably elected to settle the principal amount of its convertible senior notes in cash and intends to settle any excess value in shares in the event of a conversion. For the three months ended July 2, 2022 and July 3, 2021 and the six months ended July 2, 2022 and July 3, 2021, approximately 0.6 million, 0.5 million, 0.8 million and 0.8 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share. See Note 7, Debt

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
Fair Value of Financial Instruments	Jul. 02, 2022
Fair Value of Financial Instruments
Fair Value of Financial Instruments	4. Fair Value of Financial Instruments The fair values of the Company’s financial instruments are recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 – Inputs other than Level 1 that are directly or indirectly observable, such as quoted prices for similar assets or liabilities and quoted prices in less active markets. Level 3 – Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data. 4. Fair Value of Financial Instruments (Continued) The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value Measurements at July 2, 2022 Using Quoted Prices in Significant Other Active Markets for Observable Identical Assets Inputs Description (Level 1) (Level 2) Total Assets: Cash equivalents: Money market funds $ 275,655 $ — $ 275,655 Government debt securities 23,617 5,003 28,620 Corporate debt securities — 16,934 16,934 Total cash equivalents $ 299,272 $ 21,937 $ 321,209 Short-term investments: Government debt securities $ 211,319 $ 92,343 $ 303,662 Corporate debt securities — 669,183 669,183 Total short-term investments $ 211,319 $ 761,526 $ 972,845 Total $ 510,591 $ 783,463 $ 1,294,054 Fair Value Measurements at January 1, 2022 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 845,740 $ — $ — $ 845,740 Corporate debt securities — 3,552 — 3,552 Government debt securities — 2,950 — 2,950 Total cash equivalents $ 845,740 $ 6,502 $ — $ 852,242 Short-term investments: Government debt securities $ 71,509 $ 119,612 $ — $ 191,121 Corporate debt securities — 773,461 — 773,461 Total short-term investments $ 71,509 $ 893,073 $ — $ 964,582 Other assets, net: Auction rate securities $ — $ — $ 4,980 $ 4,980 Total $ — $ — $ 4,980 $ 4,980 Total $ 917,249 $ 899,575 $ 4,980 $ 1,821,804 4. Fair Value of Financial Instruments (Continued) Valuation methodology The Company’s cash equivalents and short-term investments that are classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; quoted prices in less active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company’s inability to liquidate the securities. The Company’s foreign currency derivative instruments are valued using discounted cash flow models. The assumptions used in preparing the valuation models include foreign exchange rates, forward and spot prices for currencies and market observable data of similar instruments. Contractual maturities of investments The Company’s investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss in the Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at July 2, 2022 (in thousands): Fair Cost Value Due in one year or less $ 582,705 $ 577,005 Due after one year through ten years 450,388 440,743 Due after ten years 650 650 $ 1,033,743 $ 1,018,398 Available-for-sale investments The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of July 2, 2022 Value Losses Value Losses Value Losses Government debt securities $ 304,308 $ (5,200) $ 2,051 $ (60) $ 306,359 $ (5,260) Corporate debt securities 630,420 (9,918) 9,416 (190) 639,836 (10,108) $ 934,728 $ (15,118) $ 11,467 $ (250) $ 946,195 $ (15,368) Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of January 1, 2022 Value Losses Value Losses Value Losses Government debt securities $ 126,957 $ (750) $ — $ — $ 126,957 $ (750) Corporate debt securities 418,917 (1,451) 326 (1) 419,243 (1,452) Auction rate securities — — 4,980 (1,020) 4,980 (1,020) $ 545,874 $ (2,201) $ 5,306 $ (1,021) $ 551,180 $ (3,222) The gross unrealized losses as of July 2, 2022 were due primarily to changes in market interest rates. The gross unrealized losses as of January 1, 2022 were due primarily to changes in market interest rates and the illiquidity of the Company’s auction-rate securities. 4. Fair Value of Financial Instruments (Continued) The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of July 2, 2022, there were no material declines in the market value of available-for-sale investments due to credit-related factors. At July 2, 2022 and January 1, 2022, there were no material unrealized gains associated with the Company’s available-for-sale investments. Level 3 fair value measurements The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 2, 2022 (in thousands): Assets Three Months Six Months Auction Rate Securities Ended Ended Beginning balance $ 4,944 $ 4,980 Sales (1) (6,000) (6,000) Loss recognized in earnings 300 300 Gain included in other comprehensive loss 756 720 Balance at July 2, 2022 $ — $ — (1) Fair values of other financial instruments The Company’s debt is recorded at cost, but is measured at fair value for disclosure purposes. The fair value of the Company’s convertible senior notes is determined using observable market prices. The notes are traded in less active markets and are therefore classified as a Level 2 fair value measurement. As of July 2, 2022 and January 1, 2022, the fair value of the notes was $671.0 million and $944.3 million, respectively. The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
Derivative Financial Instruments	Jul. 02, 2022
Derivative Financial Instruments
Derivative Financial Instruments	5. Derivative Financial Instruments The Company uses derivative financial instruments to manage certain exposures to the variability of foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows. 5. Derivative Financial Instruments (Continued) Cash Flow Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive loss in the Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the contracts at the time of termination. The Company has entered into foreign currency forward contracts for a portion of its forecasted operating expenses denominated in the Euro, Hungarian Forint, Indian Rupee and Norwegian Krone. As of July 2, 2022, the contracts had maturities of one Non-designated Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Consolidated Statement of Income in the same period as the remeasurement loss and gain of the related foreign currency denominated asset or liability. The Company does not apply hedge accounting to these foreign currency forward contracts. As of July 2, 2022, the Company held foreign currency forward contracts denominated in Hungarian Forint and Indian Rupees with an aggregate notional value of $6.3 million. The fair value of the foreign contracts and contract gains and losses recognized in income were not material for any of the periods presented.

Supplemental Information

Supplemental Information	6 Months Ended
Supplemental Information	Jul. 02, 2022
Supplemental Information
Supplemental Information	6. Supplemental Information The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories July 2, January 1, 2022 2022 Work in progress $ 53,744 $ 36,078 Finished goods 20,282 13,229 $ 74,026 $ 49,307 Lease income The Company leases a portion of its headquarter facilities to other tenants. Lease income from operating leases was $3.7 million and $1.6 million during the six months ended July 2, 2022 and July 3, 2021, respectively.

Debt

Debt	6 Months Ended
Debt	Jul. 02, 2022
Debt
Debt	7. Debt 0.625% Convertible Senior Notes On June 1, 2020, the Company completed a private placement of $535 million principal amount convertible senior notes (the “2025 Notes”). The 2025 Notes bear interest semi-annually at a rate of 0.625% per year and mature on June 15, 2025. The 2025 Notes are convertible at a conversion rate of 8.1980 shares of common stock per $1,000 principal amount of the 2025 Notes, or approximately 4.4 million shares of common stock, which is equivalent to a conversion price of approximately $121.98 per share. The conversion rate is subject to adjustment under certain circumstances. Holders may convert the 2025 Notes under the following circumstances: during any calendar quarter after the calendar quarter ended on September 30, 2020 if the closing price of the Company’s common stock for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than or equal to $159.51 per share, representing 130% of the conversion price of the 2025 Notes (“the Sales Price Trigger”); during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of our common stock and the conversion rate on each such trading day; if specified distributions or corporate events occur; if the Notes are called for redemption; or at any time after March 15, 2025. The Company may redeem all or any portion of the 2025 Notes, at its option, on or after June 20, 2023, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period. As of January 1, 2022, upon conversion, the 2025 Notes could be settled in cash, shares of the Company’s common stock or a combination of cash and shares, at the Company’s election. On January 2, 2022, the Company irrevocably elected cash settlement for the principal amount of the 2025 Notes. The Company intends to settle any excess value in shares in the event of a conversion. The 2025 Notes were classified as current liabilities at January 1, 2022 due to the Sales Price Trigger condition being met on January 1, 2022. The Sales Price Trigger condition has not been met during the six months ended July 2, 2022, therefore the net carrying amount of the 2025 Notes is now classified as a non-current liability. The principal balance of the 2025 Notes was initially separated into liability and equity components, and recorded at fair value. The excess of the principal amount of the liability component over its carrying amount represented the debt discount, which was amortized to interest expense over the term of the 2025 Notes using the effective interest method. With the Company’s adoption of ASU 2020-06 in fiscal 2022, the principal balance of the 2025 Notes is no longer separated between liability and equity components. This resulted in an increase to the carrying value of its convertible debt, representing the unamortized debt discount as of January 2, 2022, with an offsetting reduction in stockholders’ equity. The Company incurred debt issuance costs of approximately $10.4 million, which were allocated to the liability and equity components in proportion to the allocation of the proceeds. Upon the adoption of ASU 2020-06, the equity component was reclassified to liabilities and remeasured to reflect cumulative amortization since the issuance of the 2025 Notes. The carrying amount of the 2025 Notes consisted of the following (in thousands): July 2, January 1, 2022 2022 Liability component Principal $ 534,980 $ 535,000 Unamortized debt discount — (78,519) Unamortized debt issuance costs (6,416) (5,882) Net carrying amount $ 528,564 $ 450,599 Equity component Net carrying amount $ — $ 107,928 7. Debt (Continued) The liability component of the 2025 Notes is recorded in convertible debt on the Consolidated Balance Sheet. Prior to the Company’s adoption of ASU 2020-06, the equity component of the 2025 Notes was recorded in stockholders’ equity. The effective interest rate for the liability component was 5.336%. As of July 2, 2022, the remaining period over which the debt issuance costs will be amortized was 3.0 years. Interest expense related to the notes was comprised of the following (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Contractual interest expense $ 839 $ 836 $ 1,684 $ 1,999 Amortization of debt discount — 4,992 — 10,930 Amortization of debt issuance costs 497 374 994 892 $ 1,336 $ 6,202 $ 2,678 $ 13,821 Credit Facility The Company and certain of its domestic subsidiaries (the “Guarantors”) have a $400 million revolving credit facility with a maturity date of August 7, 2024. The credit facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $250 million and 100% of EBITDA of the last four fiscal quarters, plus an amount that would not cause a secured leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.25 to 1.00, subject to certain conditions. The credit facility, other than swingline loans, will bear interest at the Eurodollar rate plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50% and the Eurodollar Base Rate plus 1.00%) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the Eurodollar rate loans range from 1.00% to 1.75% and for base rate loans range from 0.00% to 0.75%, depending in each case, on the leverage ratio as defined in the credit facility. The credit facility contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a net leverage ratio (funded indebtedness/EBITDA) of no more than 4.25 to 1, a secured leverage ratio of no more than 3.50 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1. As of July 2, 2022, the Company was in compliance with all covenants of the credit facility. The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors. As of July 2, 2022, no amounts were outstanding on the credit facility.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 02, 2022
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Legal Proceedings The Company is involved in various legal proceedings that have arisen in the normal course of business. While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Consolidated Financial Statements.

Revenues

Revenues	6 Months Ended
Revenues	Jul. 02, 2022
Revenues
Revenues	9. Revenues The Company groups its products as Industrial & Commercial or Home & Life based on the target markets they address. The following represents revenue by product category (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Industrial & Commercial $ 144,144 $ 89,412 $ 270,813 $ 168,137 Home & Life 119,006 80,080 226,151 159,212 $ 263,150 $ 169,492 $ 496,964 $ 327,349 A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers. These factors impact the timing and uncertainty of revenues and cash flows. The Company periodically reviews the assumptions used to estimate consideration it will be entitled to receive from customers. In the second quarter of fiscal 2022, the Company adjusted certain assumptions used to estimate the constraint on variable consideration, which increased revenue by $11.4 million and $5.0 million in the three and six months ended July 2, 2022, respectively. During the three months ended July 2, 2022 and July 3, 2021 and the six months ended July 2, 2022 and July 3, 2021, the Company recognized revenue of $36.5 million, $8.4 million, $32.0 million and $9.3 million, respectively, from performance obligations that were satisfied in previous reporting periods. The following disaggregates the Company's revenue by sales channel (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Distributors $ 211,943 $ 137,933 $ 404,208 $ 265,919 Direct customers 51,207 31,559 92,756 61,430 $ 263,150 $ 169,492 $ 496,964 $ 327,349

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jul. 02, 2022
Stock-Based Compensation
Stock-Based Compensation	10. Stock-Based Compensation Stock-based compensation costs are based on the fair values on the date of grant for stock awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as restricted stock units (RSUs), performance stock units (PSUs) and restricted stock awards (RSAs)) are estimated based on their intrinsic values. The fair values of market stock awards (MSUs) are estimated using a Monte Carlo simulation. The fair values of stock options and employee stock purchase plans are estimated using the Black-Scholes option-pricing model. The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Cost of revenues $ 274 $ 199 $ 546 $ 436 Research and development 7,703 5,488 14,694 11,118 Selling, general and administrative 6,412 5,565 12,024 11,066 14,389 11,252 27,264 22,620 Income tax benefit 1,371 577 3,215 1,259 Share-based compensation – continuing operations 13,018 10,675 24,049 21,361 Share-based compensation – discontinued operations, net — 1,634 — 3,109 Total $ 13,018 $ 12,309 $ 24,049 $ 24,470 The Company had approximately $130.4 million of total unrecognized compensation cost related to equity grants as of July 2, 2022 that is expected to be recognized over a weighted-average period of approximately 2.4 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

Income Taxes

Income Taxes	6 Months Ended
Income Taxes	Jul. 02, 2022
Income Taxes
Income Taxes	11. Income Taxes Provision for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Income tax expense was $11.0 million and $1.2 million for the three months ended July 2, 2022 and July 3, 2021, resulting in effective tax rates of 33.2% and (6.7)%, respectively. Income tax expense was $22.7 million and $3.2 million for the six months ended July 2, 2022 and July 3, 2021, resulting in effective tax rates of 33.5% and (7.8)%, respectively. The increase in the effective tax rate for the three and six months ended July 2, 2022 was primarily due to the application of FASB ASU 2019-12, Simplifying the Accounting for Income Taxes, Under ASU 2019-12, the income tax benefit of a loss from continuing operations should be recognized in discontinued operations if the Company would be unable to benefit from the loss without considering the income from discontinued operations. As such, tax benefits associated with losses incurred for the three and six months ended July 3, 2021 were recognized in discontinued operations. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Under the Act, research and experimental expenditures incurred for tax years beginning after December 31, 2021 must be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted. The Company has elected to treat global intangible low-taxed income (GILTI) as a period cost so the capitalization of research and experimental costs in GILTI increases the Company’s provision for income taxes. Uncertain Tax Positions As of July 2, 2022, the Company had gross unrecognized tax benefits, inclusive of interest, of $4.3 million, all of which would affect the effective tax rate if recognized. During the six months ended July 2, 2022, the Company did not release any unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. These amounts were not material for any of the periods presented. Following the completion of the Norwegian Tax Administration (“NTA”) examination of the Company’s Norwegian subsidiary for income tax matters relating to fiscal years 2013 - 2016, the Company received an assessment from the NTA in December 2017 concerning an adjustment to its 2013 taxable income related to the pricing of an intercompany transaction. The Company is currently appealing the assessment. The adjustment to the pricing of the intercompany transaction results in approximately 141.3 million Norwegian kroner, or $14.2 million, additional Norwegian income tax. The Company disagrees with the NTA’s assessment and believes the Company’s position on this matter is more likely than not to be sustained. The Company plans to exhaust all available administrative remedies, and if unable to resolve this matter through administrative remedies with the NTA, the Company plans to pursue judicial remedies. The Company believes that it has accrued adequate reserves related to all matters contained in tax periods open to examination. Should the Company experience an unfavorable outcome in the NTA matter, however, such an outcome could have a material impact on its financial statements. Tax years 2015 through 2022 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company is not currently under audit in any major taxing jurisdiction. The Company believes it is reasonably possible that its gross unrecognized tax benefits will decrease by approximately $0.5 million, inclusive of interest, in the next 12 months due to the lapse of the statute of limitations.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jul. 02, 2022
Significant Accounting Policies
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements. The Company periodically reviews the assumptions used in its financial statement estimates.
Revenue Recognition	Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. The Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The estimate is based on information available to the Company, including recent sales activity and pricing data. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. The Company records a right of return asset in prepaid expenses and other current assets for the costs of distributor inventory not meeting revenue recognition criteria. A corresponding deferred revenue and returns liability amount is recorded for unrecognized revenue associated with such costs. The Company’s products carry a one-year replacement warranty. Payments are typically due within 30 days of invoicing and do not include a significant financing component.
Adoption of New Accounting Standard	Adoption of New Accounting Standard Convertible Instruments The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40 Increase Financial Statement Line Item (Decrease) Current portion of convertible debt, net $ 76,991 Other non-current liabilities $ (17,028) Retained earnings $ (59,963) The primary impact of the Company’s adoption of ASU 2020-06 was to increase the carrying value of its convertible debt, representing the unamortized debt discount, and reduce deferred tax liabilities related to convertible debt. The adoption reduced reported interest expense recorded in connection with convertible debt, which increased basic earnings per share and diluted earnings per share by $0.11 and $0.11, respectively, for the three months ended July 2, 2022, and by $0.22 and $0.21, respectively, for the six months ended July 2, 2022.

Significant Accounting Polici_3

Significant Accounting Policies (Tables)	6 Months Ended
Significant Accounting Policies (Tables)	Jul. 02, 2022
Significant Accounting Policies
Schedule of material changes recorded in connection with the cumulative-effect adjustment	The following reflects the material changes recorded in connection with the cumulative-effect adjustment (in thousands): Increase Financial Statement Line Item (Decrease) Current portion of convertible debt, net $ 76,991 Other non-current liabilities $ (17,028) Retained earnings $ (59,963)

Discontinued Operations (Tables

Discontinued Operations (Tables)	6 Months Ended
Discontinued Operations (Tables)	Jul. 02, 2022
Discontinued Operations.
Schedule of financial results, assets and liabilities from discontinued operations	The following table presents the financial results of the infrastructure and automotive business (the “discontinued operations”) in the Company’s Condensed Consolidated Statements of Income (in thousands, except per share data): Three Months Ended Six Months Ended July 3, July 3, 2021 2021 Revenues $ 108,064 $ 205,712 Costs of revenues 45,091 83,910 Operating expenses 25,052 47,007 Income from discontinued operations before income taxes 37,921 74,795 Provision (benefit) for income taxes (502) (2,293) Income from discontinued operations $ 38,423 $ 77,088 Income from discontinued operations per share: Basic $ 0.86 $ 1.73 Diluted $ 0.84 $ 1.68

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	6 Months Ended
Earnings (Loss) Per Share (Tables)	Jul. 02, 2022
Earnings (Loss) Per Share
Schedule of computation of basic and diluted earnings (loss) per share	The following table sets forth the computation of basic and diluted earnings (loss) per share from continuing operations (in thousands, except per share data): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Income (loss) from continuing operations $ 22,135 $ (18,491) $ 45,042 $ (43,647) Shares used in computing basic income (loss) per share 35,722 44,803 36,862 44,481 Effect of dilutive securities: Convertible debt and stock-based awards 882 — 1,201 — Shares used in computing diluted income (loss) per share 36,604 44,803 38,063 44,481 Income (loss) per share: Basic $ 0.62 $ (0.41) $ 1.22 $ (0.98) Diluted $ 0.60 $ (0.41) $ 1.18 $ (0.98)

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	6 Months Ended
Fair Value of Financial Instruments (Tables)	Jul. 02, 2022
Fair Value of Financial Instruments
Summary of valuation of the financial instruments	The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value Measurements at July 2, 2022 Using Quoted Prices in Significant Other Active Markets for Observable Identical Assets Inputs Description (Level 1) (Level 2) Total Assets: Cash equivalents: Money market funds $ 275,655 $ — $ 275,655 Government debt securities 23,617 5,003 28,620 Corporate debt securities — 16,934 16,934 Total cash equivalents $ 299,272 $ 21,937 $ 321,209 Short-term investments: Government debt securities $ 211,319 $ 92,343 $ 303,662 Corporate debt securities — 669,183 669,183 Total short-term investments $ 211,319 $ 761,526 $ 972,845 Total $ 510,591 $ 783,463 $ 1,294,054 Fair Value Measurements at January 1, 2022 Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Assets: Cash equivalents: Money market funds $ 845,740 $ — $ — $ 845,740 Corporate debt securities — 3,552 — 3,552 Government debt securities — 2,950 — 2,950 Total cash equivalents $ 845,740 $ 6,502 $ — $ 852,242 Short-term investments: Government debt securities $ 71,509 $ 119,612 $ — $ 191,121 Corporate debt securities — 773,461 — 773,461 Total short-term investments $ 71,509 $ 893,073 $ — $ 964,582 Other assets, net: Auction rate securities $ — $ — $ 4,980 $ 4,980 Total $ — $ — $ 4,980 $ 4,980 Total $ 917,249 $ 899,575 $ 4,980 $ 1,821,804
Schedule of maturities of the Company's available-for-sale investments and money market funds	The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at July 2, 2022 (in thousands): Fair Cost Value Due in one year or less $ 582,705 $ 577,005 Due after one year through ten years 450,388 440,743 Due after ten years 650 650 $ 1,033,743 $ 1,018,398
Schedule of available-for-sale investments in continuous unrealized loss position by length of time	The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of July 2, 2022 Value Losses Value Losses Value Losses Government debt securities $ 304,308 $ (5,200) $ 2,051 $ (60) $ 306,359 $ (5,260) Corporate debt securities 630,420 (9,918) 9,416 (190) 639,836 (10,108) $ 934,728 $ (15,118) $ 11,467 $ (250) $ 946,195 $ (15,368) Less Than 12 Months 12 Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of January 1, 2022 Value Losses Value Losses Value Losses Government debt securities $ 126,957 $ (750) $ — $ — $ 126,957 $ (750) Corporate debt securities 418,917 (1,451) 326 (1) 419,243 (1,452) Auction rate securities — — 4,980 (1,020) 4,980 (1,020) $ 545,874 $ (2,201) $ 5,306 $ (1,021) $ 551,180 $ (3,222)
Summary of activity in Level 3 financial instruments	The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 2, 2022 (in thousands): Assets Three Months Six Months Auction Rate Securities Ended Ended Beginning balance $ 4,944 $ 4,980 Sales (1) (6,000) (6,000) Loss recognized in earnings 300 300 Gain included in other comprehensive loss 756 720 Balance at July 2, 2022 $ — $ — (1)

Supplemental Information (Table

Supplemental Information (Tables)	6 Months Ended
Supplemental Information (Tables)	Jul. 02, 2022
Supplemental Information
Schedule of Inventories	The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories July 2, January 1, 2022 2022 Work in progress $ 53,744 $ 36,078 Finished goods 20,282 13,229 $ 74,026 $ 49,307

Debt (Tables)

Debt (Tables)	6 Months Ended
Debt (Tables)	Jul. 02, 2022
Debt
Summary of information about the equity and liability components of convertible debt	The carrying amount of the 2025 Notes consisted of the following (in thousands): July 2, January 1, 2022 2022 Liability component Principal $ 534,980 $ 535,000 Unamortized debt discount — (78,519) Unamortized debt issuance costs (6,416) (5,882) Net carrying amount $ 528,564 $ 450,599 Equity component Net carrying amount $ — $ 107,928
Schedule of components of interest expense	Interest expense related to the notes was comprised of the following (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Contractual interest expense $ 839 $ 836 $ 1,684 $ 1,999 Amortization of debt discount — 4,992 — 10,930 Amortization of debt issuance costs 497 374 994 892 $ 1,336 $ 6,202 $ 2,678 $ 13,821

Revenues (Tables)

Revenues (Tables)	6 Months Ended
Revenues (Tables)	Jul. 02, 2022
Revenues
Schedule of disaggregation of revenue	The following represents revenue by product category (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Industrial & Commercial $ 144,144 $ 89,412 $ 270,813 $ 168,137 Home & Life 119,006 80,080 226,151 159,212 $ 263,150 $ 169,492 $ 496,964 $ 327,349 Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Distributors $ 211,943 $ 137,933 $ 404,208 $ 265,919 Direct customers 51,207 31,559 92,756 61,430 $ 263,150 $ 169,492 $ 496,964 $ 327,349

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
Stock-Based Compensation (Tables)	Jul. 02, 2022
Stock-Based Compensation
Schedule of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income	The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2022 2021 2022 2021 Cost of revenues $ 274 $ 199 $ 546 $ 436 Research and development 7,703 5,488 14,694 11,118 Selling, general and administrative 6,412 5,565 12,024 11,066 14,389 11,252 27,264 22,620 Income tax benefit 1,371 577 3,215 1,259 Share-based compensation – continuing operations 13,018 10,675 24,049 21,361 Share-based compensation – discontinued operations, net — 1,634 — 3,109 Total $ 13,018 $ 12,309 $ 24,049 $ 24,470

Significant Accounting Polici_4

Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details)	6 Months Ended	12 Months Ended
	Jul. 02, 2022	Jan. 01, 2022
Significant Accounting Policies
Length of fiscal year	364 days	364 days
Number of days in each fiscal quarter for 52-week fiscal year	91 days
Minimum
Significant Accounting Policies
Length of fiscal year	364 days
Maximum
Significant Accounting Policies
Length of fiscal year	371 days

Significant Accounting Polici_5

Significant Accounting Policies - Adoption of New Accounting Standards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 02, 2022	Jan. 01, 2022
Significant Accounting Policies
Current portion of convertible debt, net						$ 450,599
Other non-current liabilities	$ 53,371		$ 53,371			77,044
Retained earnings	$ 1,619,396		$ 1,619,396			$ 2,214,839
Basic (in dollars per share)	$ 0.62	$ 0.44	$ 1.22	$ 0.75
Diluted (in dollars per share)	0.60	$ 0.44	1.18	$ 0.73
ASU 2020-06 \| Cumulative effect of adoption of accounting standard
Significant Accounting Policies
Current portion of convertible debt, net					$ 76,991
Other non-current liabilities					(17,028)
Retained earnings					$ (59,963)
Basic (in dollars per share)	0.11		0.22
Diluted (in dollars per share)	$ 0.11		$ 0.21

Discontinued Operations (Detail

Discontinued Operations (Details) - Discontinued operations - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	6 Months Ended
	Jul. 26, 2021	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Transition Services Agreement
Continuing Involvement
TSA fees			$ 3,500
Infrastructure and automotive business
Discontinued Operations
Asset Purchase Agreement sale amount	$ 2,750,000
Financial results of the infrastructure and automotive business
Revenues		$ 108,064		$ 205,712
Costs of revenues		45,091		83,910
Operating expenses		25,052		47,007
Income from discontinued operations before income taxes		37,921		74,795
Provision (benefit) for income taxes		(502)		(2,293)
Income from discontinued operations		$ 38,423		$ 77,088
Income from discontinued operations per share:
Basic		$ 0.86		$ 1.73
Diluted		$ 0.84		$ 1.68
Infrastructure and automotive business \| Transition Services Agreement \| Minimum
Continuing Involvement
Term of continuing involvement	3 months
Infrastructure and automotive business \| Transition Services Agreement \| Maximum
Continuing Involvement
Term of continuing involvement	18 months

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Earnings (Loss) Per Share
Income (loss) from continuing operations	$ 22,135	$ (18,491)	$ 45,042	$ (43,647)
Shares used in computing basic income (loss) per share	35,722	44,803	36,862	44,481
Effect of dilutive securities:
Convertible debt and stock-based awards	882		1,201
Shares used in computing diluted income (loss) per share	36,604	44,803	38,063	44,481
Income (loss) per share:
Income (loss) per share, Basic (in dollars per share)	$ 0.62	$ (0.41)	$ 1.22	$ (0.98)
Income (loss) per share, Diluted (in dollars per share)	$ 0.60	$ (0.41)	$ 1.18	$ (0.98)
Shares attributable to dilutive effect of conversion of debt securities	600	500	800	800

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Summary of financial instruments (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Financial assets and liabilities measured at fair value on a recurring basis
Short-term investments	$ 972,845	$ 964,582
Recurring
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	321,209	852,242
Short-term investments	972,845	964,582
Other assets, net		4,980
Total assets at fair value	1,294,054	1,821,804
Recurring \| Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	275,655	845,740
Recurring \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	28,620	2,950
Short-term investments	303,662	191,121
Recurring \| Corporate debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	16,934	3,552
Short-term investments	669,183	773,461
Recurring \| Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net		4,980
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	299,272	845,740
Short-term investments	211,319	71,509
Total assets at fair value	510,591	917,249
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	275,655	845,740
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	23,617
Short-term investments	211,319	71,509
Recurring \| Significant Other Observable Inputs (Level 2)
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	21,937	6,502
Short-term investments	761,526	893,073
Total assets at fair value	783,463	899,575
Recurring \| Significant Other Observable Inputs (Level 2) \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	5,003	2,950
Short-term investments	92,343	119,612
Recurring \| Significant Other Observable Inputs (Level 2) \| Corporate debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	16,934	3,552
Short-term investments	$ 669,183	773,461
Recurring \| Significant Unobservable Inputs (Level 3)
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net		4,980
Total assets at fair value		4,980
Recurring \| Significant Unobservable Inputs (Level 3) \| Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net		$ 4,980

Fair Value of Financial Instr_4

Fair Value of Financial Instruments - Contractual maturities of investments (Details) $ in Thousands	Jul. 02, 2022 USD ($)
Cost
Due in one year or less, Cost	$ 582,705
Due after one year through ten years, Cost	450,388
Due after ten years, Cost	650
Total Cost	1,033,743
Fair Value
Due in one year or less, Fair Value	577,005
Due after one year through ten years, Fair Value	440,743
Due after ten years, Fair Value	650
Total Fair Value	$ 1,018,398

Fair Value of Financial Instr_5

Fair Value of Financial Instruments - Available-for-sale investments (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	$ 934,728	$ 545,874
Fair value of available-for-sale securities, continuous loss position for twelve months or greater	11,467	5,306
Total fair value of available-for-sale securities, continuous loss position	946,195	551,180
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(15,118)	(2,201)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(250)	(1,021)
Available-for-sale securities, total gross unrealized losses	(15,368)	(3,222)
Government debt securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	304,308	126,957
Fair value of available-for-sale securities, continuous loss position for twelve months or greater	2,051
Total fair value of available-for-sale securities, continuous loss position	306,359	126,957
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(5,200)	(750)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(60)
Available-for-sale securities, total gross unrealized losses	(5,260)	(750)
Corporate debt securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	630,420	418,917
Fair value of available-for-sale securities, continuous loss position for twelve months or greater	9,416	326
Total fair value of available-for-sale securities, continuous loss position	639,836	419,243
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(9,918)	(1,451)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(190)	(1)
Available-for-sale securities, total gross unrealized losses	$ (10,108)	(1,452)
Auction rate securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for twelve months or greater		4,980
Total fair value of available-for-sale securities, continuous loss position		4,980
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses		(1,020)
Available-for-sale securities, total gross unrealized losses		$ (1,020)

Fair Value of Financial Instr_6

Fair Value of Financial Instruments - Activity in Level 3 financial instruments (Details) - Significant Unobservable Inputs (Level 3) - Recurring - Auction rate securities - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	May 31, 2022	Jul. 02, 2022	Jul. 02, 2022
Fair value assets reconciliation of changes
Beginning balance		$ 4,944	$ 4,980
Sales	$ (5,700)	(6,000)	(6,000)
Loss recognized in earnings		300	300
Gain included in other comprehensive income (loss)		756	720
Ending balance		$ 0	$ 0

Fair Value of Financial Instr_7

Fair Value of Financial Instruments - Fair values of other financial instruments (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Convertible Senior Notes
Fair values of other financial instruments
Fair value of debt	$ 671	$ 944.3

Derivative Financial Instrume_2

Derivative Financial Instruments (Details) - Foreign currency forward contracts $ in Millions	6 Months Ended
	Jul. 02, 2022 USD ($)
Non-designated Hedges \| Hungarian Forint
Derivative Financial Instruments
Derivative, notional amount	$ 6.3
Cash flow hedges
Derivative Financial Instruments
Derivative, notional amount	$ 32
Cash flow hedges \| Minimum
Derivative Financial Instruments
Maturity of contracts	1 month
Cash flow hedges \| Maximum
Derivative Financial Instruments
Maturity of contracts	6 months

Supplemental Information (Detai

Supplemental Information (Details) - USD ($) $ in Thousands	6 Months Ended
Supplemental Information (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Inventories
Work in progress	$ 53,744		$ 36,078
Finished goods	20,282		13,229
Inventories	74,026		$ 49,307
Lease income
Lease income	$ 3,700	$ 1,600

Debt - Convertible Senior Notes

Debt - Convertible Senior Notes (Details) - 0.625% Convertible Senior Notes (2025 Notes) $ / shares in Units, $ in Millions	Jun. 01, 2020 USD ($) D $ / shares
Debt
Principal amount \| $	$ 535
Semi-annual interest rate	0.625%
Conversion rate, shares per $1,000 principal	8.1980
Conversion, number of shares of common stock \| $	4.4
Initial conversion price \| $ / shares	$ 121.98
Debt issuance costs \| $	$ 10.4
Conversion of Notes, Holders
Debt
Number of trading days within 30 trading day period	20
Number of consecutive trading days	30
Stock price trigger per share \| $ / shares	$ 159.51
Stock price trigger, as a percentage of conversion price	130%
Number of consecutive business days after the 10 consecutive trading day period	5
Number of consecutive trading days before the five consecutive business days	10
Maximum threshold stock price, as a percentage of conversion price	98%
Conversion of Notes, Company
Debt
Number of trading days within 30 trading day period	20
Number of consecutive trading days	30
Stock price trigger, as a percentage of conversion price	130%

Debt - Convertible Debt, Net (D

Debt - Convertible Debt, Net (Details) - 0.625% Convertible Senior Notes (2025 Notes) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jan. 01, 2022
Equity component
Effective interest rate	5.336%
Amortization period of debt discount and debt issuance costs	3 years
Convertible Senior Notes
Liability component
Principal	$ 534,980	$ 535,000
Unamortized debt discount		(78,519)
Unamortized debt issuance costs	(6,416)	(5,882)
Net carrying amount	$ 528,564	450,599
Equity component
Net carrying amount		$ 107,928

Debt - Interest expense (Detail

Debt - Interest expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Debt - Interest expense (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Interest expense related to the notes
Interest Expense, Total	$ 1,667	$ 6,486	$ 3,347	$ 17,810
Convertible Senior Notes
Interest expense related to the notes
Contractual interest expense	839	836	1,684	1,999
Amortization of debt discount		4,992		10,930
Amortization of debt issuance costs	497	374	994	892
Interest Expense, Total	$ 1,336	$ 6,202	$ 2,678	$ 13,821

Debt - Credit Facility (Details

Debt - Credit Facility (Details) $ in Millions	6 Months Ended
Debt - Credit Facility (Details) $ in Millions	Jul. 02, 2022 USD ($)
Credit Facility
Debt
Amount outstanding	$ 0
Credit Facility \| Scenario: Company's option to increase borrowing capacity
Debt
Additional increase in borrowing capacity of the line of credit available at the entity's option	$ 250
Additional increase in borrowing capacity based on EBITDA (as a percent)	100%
Maximum secured leverage ratio	3.25
Credit Facility \| Scenario: Credit facility debt covenants
Debt
Maximum net leverage ratio	4.25
Maximum secured leverage ratio	3.50
Minimum interest coverage ratio	2.50
Revolving Credit Facility
Debt
Maximum borrowing capacity	$ 400
Revolving credit facility, other than swingline loans \| Federal Funds
Debt
Interest rate margin (as a percent)	0.50%
Revolving credit facility, other than swingline loans \| Eurodollar Rate
Debt
Interest rate margin (as a percent)	1%
Revolving credit facility, other than swingline loans \| Eurodollar Rate \| Minimum
Debt
Interest rate margin (as a percent)	1%
Revolving credit facility, other than swingline loans \| Eurodollar Rate \| Maximum
Debt
Interest rate margin (as a percent)	1.75%
Revolving credit facility, other than swingline loans \| Base Rate \| Minimum
Debt
Interest rate margin (as a percent)	0%
Revolving credit facility, other than swingline loans \| Base Rate \| Maximum
Debt
Interest rate margin (as a percent)	0.75%
Letter of Credit
Debt
Maximum borrowing capacity	$ 25
Swingline Loans
Debt
Maximum borrowing capacity	$ 10

Revenues (Details)

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Revenues
Revenues	$ 263,150	$ 169,492	$ 496,964	$ 327,349
Increase in revenue due to adjustment of certain assumptions used to estimate the constraint on variable consideration	11,400		5,000
Revenue from performance obligations that were satisfied in previous reporting periods	36,500	8,400	32,000	9,300
Distributors
Revenues
Revenues	211,943	137,933	404,208	265,919
Direct customers
Revenues
Revenues	51,207	31,559	92,756	61,430
Industrial and Commercial
Revenues
Revenues	144,144	89,412	270,813	168,137
Home and Life
Revenues
Revenues	$ 119,006	$ 80,080	$ 226,151	$ 159,212

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Stock-based compensation costs
Stock based compensation costs	$ 14,389	$ 11,252	$ 27,264	$ 22,620
Income tax benefit	1,371	577	3,215	1,259
Share based compensation costs after tax	13,018	12,309	24,049	24,470
Total unrecognized compensation costs related to awards	130,400		$ 130,400
Weighted-average period of recognition of unrecognized compensation costs			2 years 4 months 24 days
Continuing operations
Stock-based compensation costs
Share based compensation costs after tax	13,018	10,675	$ 24,049	21,361
Discontinued operations
Stock-based compensation costs
Share based compensation costs after tax		1,634		3,109
Cost of revenues
Stock-based compensation costs
Stock based compensation costs	274	199	546	436
Research and development
Stock-based compensation costs
Stock based compensation costs	7,703	5,488	14,694	11,118
Selling, general and administrative
Stock-based compensation costs
Stock based compensation costs	$ 6,412	$ 5,565	$ 12,024	$ 11,066

Income Taxes (Details)

Income Taxes (Details) $ in Thousands, kr in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) $ in Thousands, kr in Millions	Jul. 02, 2022 USD ($)	Jul. 03, 2021 USD ($)	Jul. 02, 2022 USD ($)	Jul. 02, 2022 NOK (kr)	Jul. 03, 2021 USD ($)
Income Taxes
Income tax expense (benefit)	$ 10,994	$ 1,165	$ 22,683		$ 3,157
Effective income tax rate (as a percent)	33.20%	(6.70%)	33.50%	33.50%	(7.80%)
Gross unrecognized tax benefits which would affect the effective tax rate if recognized	$ 4,300		$ 4,300
Reasonably possible amount of decrease in gross unrecognized tax benefits over the next 12 months	$ (500)		(500)
Norwegian Tax Administration \| 2013 \| Under appeal
Income Taxes
Estimate of additional income tax expense			$ 14,200	kr 141.3