Pixelworks (PXLW) 10-Q 14 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 10, 2017
Entity Information [Line Items]
Entity Registrant Name	Pixelworks, Inc.
Entity Central Index Key	1,040,161
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		34,251,900

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 26,329	$ 19,622
Accounts receivable, net	5,084	3,118
Inventories	5,058	2,803
Prepaid expenses and other current assets	2,191	736
Total current assets	38,662	26,279
Property and equipment, net	6,271	3,793
Other assets, net	1,111	785
Acquired intangible assets, net	6,414	0
Goodwill	18,021	0
Total assets	70,479	30,857
Current liabilities:
Accounts payable	2,611	1,734
Accrued liabilities and current portion of long-term liabilities	16,199	7,860
Current portion of income taxes payable	763	140
Total current liabilities	19,573	9,734
Long-term liabilities, net of current portion	2,227	194
Convertible debt	5,761	0
Income taxes payable, net of current portion	2,223	1,880
Total liabilities	29,784	11,808
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred stock	0	0
Common stock	416,607	394,296
Accumulated other comprehensive income	10	10
Accumulated deficit	(375,922)	(375,257)
Total shareholders’ equity	40,695	19,049
Total liabilities and shareholders’ equity	$ 70,479	$ 30,857

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenue, net	[1]	$ 18,758	$ 13,656	$ 62,189	$ 37,403
Cost of revenue	[2]	9,747	7,099	29,585	20,839
Gross profit		9,011	6,557	32,604	16,564
Operating expenses:
Research and development	[3]	5,325	4,442	14,732	14,621
Selling, general and administrative	[4]	6,583	3,072	15,382	10,117
Restructuring		1,481	3	1,481	2,608
Total operating expenses		13,389	7,517	31,595	27,346
Income (loss) from operations		(4,378)	(960)	1,009	(10,782)
Interest expense and other, net	[5]	(528)	(99)	(728)	(305)
Income (loss) before income taxes		(4,906)	(1,059)	281	(11,087)
Provision (benefit) for income taxes		(200)	183	902	357
Net loss		$ (4,706)	$ (1,242)	$ (621)	$ (11,444)
Net loss per share - basic and diluted		$ (0.14)	$ (0.04)	$ (0.02)	$ (0.41)
Weighted average shares outstanding - basic and diluted		32,552	28,313	30,545	28,139
[1]	Includes amortization of deferred revenue fair value adjustment25 — 25 —
[2]	Includes: Inventory step-up and backlog amortization1,016 0 1,016 —Amortization of acquired intangible assets199 0 199 —Stock-based compensation57 49 179 139Restructuring— 27 — 1,777
[3]	Includes: Stock-based compensation445 401 1,121 1,222
[4]	Includes: Acquisition-related costs1,611 — 2,505 —Stock-based compensation855 334 1,796 495Amortization of acquired intangible assets67 — 67 —
[5]	Includes: Fair value adjustment on convertible debt conversion option122 — 122 —Discount accretion on convertible debt fair value72 — 72 —

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Inventory step-up and backlog amortization			$ 1,016	$ 0
Amortization of acquired intangible assets	$ 316		266	0
Fair value adjustment on convertible debt conversion option	122	$ 0	122	0
Discount accretion on convertible debt fair value	72	0	72	0
Revenue, net
Amortization of deferred revenue fair value adjustment	25	0	25	0
Cost of revenue
Inventory step-up and backlog amortization	1,016	0	1,016	0
Amortization of acquired intangible assets	249
Stock-based compensation	57	49	179	139
Restructuring	0	27	0	1,777
Cost of revenue | Acquired intangible assets
Amortization of acquired intangible assets	199	0	199	0
Research and development
Stock-based compensation	445	401	1,121	1,222
Selling, general and administrative
Amortization of acquired intangible assets	67	0	67	0
Stock-based compensation	855	334	1,796	495
Acquisition-related costs	1,611	0	2,505	0
Interest expense and other, net
Fair value adjustment on convertible debt conversion option	122	0	122	0
Discount accretion on convertible debt fair value	$ 72	$ 0	$ 72	$ 0

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net loss	$ (621)	$ (11,444)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation	3,096	1,856
Depreciation and amortization	2,714	2,638
Inventory step-up and backlog amortization	1,016	0
Amortization of acquired intangible assets	266	0
Reversal of uncertain tax positions	(191)	(170)
Fair value adjustment on convertible debt conversion option	122	0
Discount accretion on convertible debt fair value	72	0
Write off of certain assets to restructuring	0	1,744
Other	106	47
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net	(998)	2,093
Inventories	342	(101)
Prepaid expenses and other current and long-term assets, net	76	(40)
Accounts payable	(926)	(973)
Accrued current and long-term liabilities	4,597	(297)
Income taxes payable	1,158	85
Net cash provided by (used in) operating activities	10,829	(4,562)
Cash flows from investing activities:
Purchases of property and equipment	(2,300)	(1,783)
Cash received in connection with acquisition of business	1,901	0
Net cash used in investing activities	(399)	(1,783)
Cash flows from financing activities:
Payments on line of credit related to acquisition	(4,046)	(3,000)
Proceeds from issuance of common stock under employee equity incentive plans	2,196	403
Payments on convertible debt	(953)	0
Payments on asset financings	(920)	(1,069)
Net cash used in financing activities	(3,723)	(3,666)
Net increase (decrease) in cash and cash equivalents	6,707	(10,011)
Cash and cash equivalents, beginning of period	19,622	26,591
Cash and cash equivalents, end of period	26,329	16,580
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	370	107
Cash paid for income taxes, net of refunds received	284	411
Non-cash investing and financing activities:
Value of shares issued in acquisition	16,975	0
Acquisitions of property and equipment and other assets under extended payment terms	$ 3,558	$ 0

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	BASIS OF PRESENTATION Nature of Business Pixelworks designs, develops and markets visual display processing semiconductors, intellectual property cores, software and custom ASIC solutions for high-quality energy efficient video applications. In addition, we offer a suite of solutions for advanced media processing as well as the efficient delivery and streaming of video. We enable worldwide manufacturers to offer leading-edge consumer electronics and professional display products, as well as video delivery and streaming solutions for content service providers. Our core visual display processing technology intelligently processes digital images and video from a variety of sources and optimizes the content for a superior viewing experience. Pixelworks’ video coding technology reduces storage requirements, significantly reduces bandwidth constraint issues and converts content between multiple formats to enable seamless delivery of video, including over-the-air (OTA) streaming, while also maintaining end-to-end content security. The rapid growth in video-capable consumer devices, especially mobile, has increased the demand for visual display processing and video delivery technology in recent years. Our technologies can be applied to a wide range of devices from large-screen projectors to low-power mobile tablets, smartphones, high-quality video infrastructure equipment and streaming devices. Our products are architected and optimized for power, cost, bandwidth, and overall system performance, according to the requirements of the specific application. Our primary target markets include digital projection systems, tablets, smartphones, and OTA streaming devices. As of September 30, 2017, we had an intellectual property portfolio of 535 patents related to the visual display of digital image data. Pixelworks was founded in 1997 and is incorporated under the laws of the state of Oregon. On August 2, 2017, we acquired ViXS Systems, Inc., a corporation organized in Canada (“ViXS”). Condensed Consolidated Financial Statements The financial information included herein for the three and nine month periods ended September 30, 2017 and 2016 is prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and is unaudited. Such information reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the Company's condensed consolidated financial statements for these interim periods. The financial information as of December 31, 2016 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2016, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 8, 2017, and should be read in conjunction with such consolidated financial statements. The results of operations for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2017. Comprehensive Income (Loss) We report comprehensive income (loss) and its components following guidance set forth by the Financial Accounting Standards Board (the “FASB”), Accounting Standards Codification section 220-10, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income or loss and its components in the financial statements. During the three and nine month periods ended September 30, 2017 and 2016, aside from our net loss, there were no other items of comprehensive income or loss and therefore we have not included a statement of comprehensive income (loss) in our interim condensed consolidated financial statements. Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 will become effective for us on January 1, 2018, with early adoption permitted. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step from the quantitative goodwill impairment test. We will continue to have the option to perform a qualitative assessment to determine if a quantitative goodwill impairment test is necessary. ASU 2017-04 will become effective for us on January 1, 2020, with early adoption permitted. The impact of this standard on the calculation of future goodwill impairment tests will depend on the facts and circumstance existing at such time. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements, for example, an accounting policy election may be made to account for forfeitures as they occur, rather than based on an estimate of future forfeitures. In addition, under previous guidance, excess tax benefits and deficiencies from stock-based compensation arrangements were recorded in equity when the awards vested or were settled. ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies in the income statement. We adopted ASU 2016-09 on January 1, 2017, which included a policy election to account for forfeitures as they occur, and resulted in a cumulative-effect adjustment to retained earnings of $44 as of January 1, 2017. In addition, upon adoption the balance of the unrecognized excess tax benefits were recognized and the impact was recorded to retained earnings, including any change to the valuation allowance as a result of the adoption. Due to the full valuation allowance on the U.S. net deferred tax assets, this change did not impact our financial position, results of operations or cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. ASU 2016-02 will become effective for us on January 1, 2019. While we are currently assessing the impact ASU 2016-02 will have on our financial statements, we expect the primary impact to our financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments under noncancelable operating leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"), which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted ASU 2015-11 on January 1, 2017 and it did not have a material impact our financial position, results of operations, or cash flows. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which requires that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for us on January 1, 2018. We have developed an implementation plan to adopt this new guidance. As part of this plan, we are currently assessing the impact of the new guidance on our results of operations. Based on our procedures performed to date, we believe that the timing of revenue recognition for certain of our chip sales may be recognized over time as compared to current recognition which is at a point in time. This may require the Company to recognize revenue earlier than we are recognizing revenue under the current revenue recognition guidance and the impact will depend on the nature and amount of outstanding orders in process at the date of adoption. We currently believe this is the only item that will have a material impact on our financial statements, however, we will continue to evaluate the impact from ASU 2014-09 during the remainder of 2017. We intend to adopt ASU 2014-09 on January 1, 2018 and we have tentatively selected the modified retrospective transition method. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of convertible debt, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates.

Acquisition

Acquisition	9 Months Ended
	Sep. 30, 2017
Business Combinations [Abstract]
Acquisition	ACQUISITION On August 2, 2017, we acquired 100% of the outstanding shares of ViXS Systems, Inc. (“ViXS”), a Canadian corporation (the "Acquisition"). We issued 0.04836 of a share of our common stock in exchange for each share of ViXS common stock outstanding and for certain ViXS restricted stock units which were vested simultaneously with closing. ViXS designs and develops advanced video processing semiconductor solutions. The acquisition of ViXS added families of video processor components for consumer applications and cloud, video delivery and infrastructure markets, along with a companion family of networking components to our solutions. These factors contributed to establishing the purchase price and supported the premium paid over the fair value of the tangible and intangible assets acquired. The aggregate purchase price for ViXS was $16,975 and consisted of $16,316 related to the issuance of 3,586,021 shares of our common stock plus $659 related to: (i) the issuance of 202,043 unvested restricted stock units, in exchange for ViXS’ unvested restricted stock units, plus (ii) the issuance of 122,242 shares to a holder of ViXS restricted stock units which were vested simultaneously with closing. The purchase price calculations were based on the closing price of our common stock on the day the transaction closed. The ViXS chief executive officer (the "CEO") was terminated in connection with the closing of the transaction. As a result, we recognized expense of $1,382 , which consisted of $1,067 related to a severance agreement, payable over 24 months , and $315 related to accelerated vesting of the CEO’s ViXS restricted stock units which were exchanged for Pixelworks common stock at closing. Such amount is included within selling, general and administrative within our consolidated statement of operations for the three months ended September 30, 2017. The purchase price was preliminarily allocated to the assets and liabilities based on fair values as follows: Purchase price $ 16,975 Less net liabilities assumed: Assets acquired: Cash and cash equivalents 1,901 Accounts receivable 968 Inventories 3,561 Property and equipment 964 Other assets 1,562 Identifiable intangible assets 6,730 Liabilities assumed: Accounts payable (1,736 ) Accrued liabilities and other current liabilities (2,832 ) Revolving bank loan (4,046 ) Convertible debt (6,485 ) Other noncurrent liabilities (1,633 ) (1,046 ) Goodwill $ 18,021 The allocation of purchase price consideration to assets and liabilities is not yet finalized. The preliminary allocation of the purchase price was based upon preliminary estimates and assumptions that are subject to change within the measurement period (up to one year from the acquisition date). Below are the significant valuations that were performed associated with the acquisition which were based upon preliminary estimates: • We performed a valuation of the convertible debt. We assigned $4,762 of the purchase price to convertible debt, consisting of the contractual amount of $6,068 offset by a debt discount of $1,306 , and $1,723 to the embedded conversion feature. No other features of the debt were assigned value at the acquisition date. • We performed a valuation of acquired intangible assets. We have preliminarily assigned $5,050 of the purchase price to acquired developed technology with estimated lives of 5 years or less, $1,270 to customer relationships with estimated lives of 3 years or less, and $410 to backlog and trademark with estimated lives of 2 years or less. ViXS had no in-process research and development. • We recorded an inventory step-up of $2,415 to record inventory at fair value. We will recognize this within cost of goods sold as the inventory is sold which we expect to be over a period of approximately 12 months. We preliminarily recorded gross deferred tax assets of $62,992 , subject to a valuation allowance of $62,972 to recognize book basis and tax basis differences of various balance sheet assets and liabilities and corporate tax attributes acquired. The goodwill resulting from this transaction was assigned to Pixelworks, Inc., our sole reporting unit and is no t deductible for tax purposes. The results of ViXS’ operations are included in our consolidated statement of operations beginning on the date of acquisition. ViXS revenue of $1,985 and net loss of $(4,004) , which included $1,481 in restructuring charges, (see Note 6: "Restructurings") and $1,501 of non-cash amortization of acquisition and debt related items are included in our consolidated statement of operations for the three months ended September 30, 2017. The following table reflects the unaudited pro forma results of Pixelworks and ViXS as if the merger had taken place as of January 1, 2016: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue, net $ 19,926 $ 21,770 $ 72,315 $ 58,833 Net income (loss) $ (4,052 ) $ (3,768 ) $ 258 $ (22,873 ) Net income (loss) per share: Basic $ (0.12 ) $ (0.12 ) $ 0.01 $ (0.72 ) Diluted $ (0.12 ) $ (0.12 ) $ 0.01 $ (0.72 ) Weighted average shares outstanding: Basic 33,788 32,021 33,429 31,847 Diluted 33,788 32,021 35,516 31,847 The unaudited pro forma net income (loss) presented above includes adjustments for amortization of acquired intangible assets and other assets, and stock-based compensation as these items are expected to have a continuing effect on the consolidated results of operations of the combined company. The unaudited pro forma net income (loss) presented above does not reflect amortization of the $2,415 mark-up of acquired inventory to fair value, or acquisition-related costs of $1,806 and $3,055 for the three and nine months ended September 30, 2017, respectively, as they are not reflective of the ongoing operations of the combined entities. Net income reported for the nine months ended September 30, 2017 includes a $4,785 gain ViXS recognized on the sale of a product line during the period. The pro-forma information does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2017
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	BALANCE SHEET COMPONENTS Accounts Receivable, Net Accounts receivable are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments. Accounts receivable consists of the following: September 30, December 31, Accounts receivable, gross $ 5,124 $ 3,150 Less: allowance for doubtful accounts (40 ) (32 ) Accounts receivable, net $ 5,084 $ 3,118 The following is the change in our allowance for doubtful accounts: Nine Months Ended September 30, 2017 2016 Balance at beginning of period $ 32 $ 60 Additions charged (reductions credited) 8 (21 ) Balance at end of period $ 40 $ 39 Inventories Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value). Inventory acquired as part of the acquisition of ViXS is recorded at fair value. Inventories consist of the following: September 30, December 31, Finished goods $ 2,903 $ 1,707 Work-in-process 2,155 1,096 Inventories $ 5,058 $ 2,803 Property and Equipment, Net Property and equipment consists of the following: September 30, December 31, Gross carrying amount $ 27,898 $ 24,416 Less: accumulated depreciation and amortization (21,627 ) (20,623 ) Property and equipment, net $ 6,271 $ 3,793 Acquired Intangible Assets, Net In connection with the Acquisition, we recorded certain identifiable intangible assets. See Note 2: “Acquisition” for additional information. Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., our sole reporting unit, and consist of the following: September 30, December 31, Developed technology $ 5,050 $ — Customer relationships 1,270 — Backlog and tradename 410 — 6,730 — Less: accumulated amortization (316 ) — Acquired intangible assets, net $ 6,414 $ — Intangible assets are amortized over the following estimated useful lives: developed technology and customer relationships, 3 to 5 years; and tradename and backlog, 6 to 18 months. Amortization expense for intangible assets was $316 for the three months ended September 30, 2017, with $249 included in cost of revenue and $67 included in selling, general and administrative on the consolidated statement of operations. As of September 30, 2017, future estimated amortization expense is as follows: Three months ending December 31: 2017 $ 610 Years ending December 31: 2018 1,596 2019 1,505 2020 1,496 2021 1,117 2022 90 $ 6,414 Acquired intangible assets will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, past, current, or expected cash flow or operating losses associated with the asset and an expectation that the asset will be significantly utilized before the end of its useful life. There were no such triggering events requiring an impairment assessment of other intangible assets during the three months ended September 30, 2017. Goodwill Goodwill resulted from our acquisition of ViXS on August 2, 2017, whereby we recorded goodwill of $18,021 . See Note 2: “Acquisition” for information concerning the acquisition. Goodwill is not amortized; however, we will review goodwill for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in our business climate and a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continued losses and adverse changes in legal factors, regulation or business environment. There were no such triggering events requiring a goodwill impairment assessment during the three months ended September 30, 2017. We expect to perform our annual impairment assessment for goodwill on November 30 of each year. Accrued Liabilities and Current Portion of Long-Term Liabilities Accrued liabilities and current portion of long-term liabilities consist of the following: September 30, December 31, Accrued payroll and related liabilities $ 4,149 $ 2,169 Accrued commissions and royalties 2,618 2,427 Accrued interest payable 2,492 2,078 Current portion of accrued liabilities for asset financings 1,822 389 Accrued costs related to restructuring 795 60 Deferred revenue 458 — Liability for warranty returns 34 28 Other 3,831 709 Accrued liabilities and current portion of long-term liabilities $ 16,199 $ 7,860 The following is the change in our liability for warranty returns: Nine Months Ended September 30, 2017 2016 Liability for warranty returns: Balance at beginning of period $ 28 $ 49 Provision (benefit) 15 (4 ) Charge-offs (9 ) (20 ) Balance at end of period $ 34 $ 25 Short-Term Line of Credit On December 21, 2010, we entered into a Loan and Security Agreement with Silicon Valley Bank (the "Bank"), which was amended on December 14, 2012, December 4, 2013, December 18, 2015, December 15, 2016 and July 21, 2017 (as amended, the "Revolving Loan Agreement"). The Revolving Loan Agreement provides a secured working capital-based revolving line of credit (the "Revolving Line") in an aggregate amount of up to the lesser of (i) $10,000 , or (ii) $1,000 plus 80% of eligible domestic accounts receivable and certain foreign accounts receivable. The Revolving Line has a maturity date of December 29, 2017. In addition, the Revolving Loan Agreement provides for non-formula advances of up to $10,000 which may be made solely during the last five business days of any fiscal month or quarter and which must be repaid by us on or before the fifth business day after the applicable fiscal month or quarter end. Due to their repayment terms, non-formula advances do not provide us with usable liquidity. The Revolving Loan Agreement, as amended, contains customary affirmative and negative covenants as well as customary events of default. The occurrence of an event of default could result in the acceleration of our obligations under the Revolving Loan Agreement, as amended, and an increase to the applicable interest rate, and would permit the Bank to exercise remedies with respect to its security interest. As of September 30, 2017, we were in compliance with all of the terms of the Revolving Loan Agreement, as amended. As of September 30, 2017 and December 31, 2016, we had no outstanding borrowings under the Revolving Line. On July 21, 2017 and in connection with our acquisition of ViXS (see Note 2: “Acquisition”), we entered into Amendment No. 5 to the Revolving Loan Agreement with the Bank which provides the Bank’s consent to the Acquisition under the Revolving Loan Agreement and stipulates that any credit extensions are at the Bank’s sole discretion and provides the Company with relief from our compliance with certain affirmative and negative covenants while no credit extensions are outstanding.

Convertible Debt

Convertible Debt	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Convertible Debt	CONVERTIBLE DEBT As part of the Acquisition, we assumed secured convertible debt, which consists of the following as of September 30, 2017: 10% convertible notes, principal amount $ 5,149 Unamortized debt discount (1,234 ) Conversion feature, at fair value 1,846 $ 5,761 As a result of the change in control of ViXS, the convertible debt holders had a right to put the debt to the Company. A majority of the holders agreed to waive their right to accelerate and to accept 0.04836 share of our common stock for each share of ViXS common stock the holder would have been entitled to receive upon the exercise of the conversion option. During the three months ended September 30, 2017, we repaid $953 to those holders that did not agree to waive their rights. Key terms of the convertible debt include: • Currency - The convertible debt is denominated in Canadian dollars, with principal and interest payments made in Canadian dollars. As a result, we record foreign currency transaction gains or losses in our statement of operations related to the convertible debt. • Interest - Stated rate of 10% per year, payable semi-annually. If the five day volume weighted average market price of our common stock exceeds the U.S. dollar equivalent of CAD $16.54 for 15 consecutive trading days, the interest rate will reset to a fixed rate of 1.0% . The five day volume weighted average market price for our common stock did not exceed such threshold during the three months ended September 30, 2017. • Maturity - $2,484 of the principal amount of convertible notes is due September 2019 and $2,665 is due January 2020. • Conversion Option - Convertible at any time at the option of the holders into our common stock at a conversion price of CAD $7.24 per share for the convertible notes due September 2019 (of which the principal outstanding amount in Canadian dollars is CAD $3,040 ) and CAD $7.13 per share for the convertible notes due January 2020 (of which the principle outstanding amount in Canadian dollars is CAD $3,324 ), or 892,751 shares. • Redemption - Through December 31, 2017, we may redeem the convertible debt for 110% of the principal amount plus accrued and unpaid interest. Thereafter, we may redeem the convertible debt for 100% of the principal amount plus accrued and unpaid interest. • Default - There are certain events that require us to redeem the outstanding convertible debt for 100% of the principal plus accrued and unpaid interest. Such events include, but are not limited to, the failure to pay principal or interest in accordance with the terms of the agreement, the sale of intellectual property without the consent of the holders, and a change in control. For the three months ended September 30, 2017, interest expense consisted of $101 related to the contractual rate of interest and $81 related to accretion of the discount. During the three months ended September 30, 2017, we recorded net foreign currency losses of approximately $25 in other expense, $(9) of which was related to accretion of the discount. Conversion Feature Because our functional currency is the U.S. dollar and the convertible debt, including the conversion option, is denominated in Canadian dollars, it is not indexed to our stock. As a result, the conversion option of the convertible debt is separately identified and recognized at fair value as a derivative liability. For the three months ended September 30, 2017, $122 is included in other expense in our consolidated statement of operations for the increase in the fair value of the conversion feature. Interest Deceleration Feature The interest deceleration feature also qualifies as a derivative that requires separate accounting from the convertible debt. However, based on the terms of the convertible debt, we concluded that the interest deceleration will never occur because it would always be advantageous for us to call the convertible debt before the common stock reaches the price that triggers the reset. Accordingly, this derivative was assigned $0 value as of September 30, 2017.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value: Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities. Level 2: Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The following table presents information about our assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016: Level 1 Level 2 Level 3 Total As of September 30, 2017: Assets: Money market funds $ 23,626 $ — $ — $ 23,626 Liabilities: Convertible debt - including conversion feature $ — $ 5,450 $ — $ 5,450 Conversion feature - convertible debt — 1,846 — 1,846 As of December 31, 2016: Assets: Money market funds $ 17,960 $ — $ — $ 17,960 We primarily use the market approach to determine the fair value of our financial assets. The fair value of our current assets and liabilities, including accounts receivable and accounts payable approximates the carrying value due to the short-term nature of these balances. We have currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with U.S. GAAP. The fair value of the convertible debt conversion feature was calculated using the Tsiveriotis and Fernandes Convertible Debt Model. Three primary assumptions used in the calculations were: volatility of 70% , credit spread of 14.5% and risk free rate of 1.5% . The embedded conversion feature is measured at fair value on a recurring basis and included with convertible debt on our condensed consolidated balance sheet. Convertible debt was recorded at fair value in our condensed consolidated balance sheet on the date of the Acquisition, however fair value adjustments are not required after the Acquisition date.

Restructurings

Restructurings	9 Months Ended
	Sep. 30, 2017
Restructuring and Related Activities [Abstract]
Restructurings	RESTRUCTURINGS In September 2017, in connection with the Acquisition, we executed a restructuring plan to secure significant synergies between ViXS and Pixelworks. The plan included an approximately 15% reduction in workforce, primarily in the area of development, however, it also impacted administration and sales. In April 2016, we executed a restructuring plan to streamline our operations and product offerings and to align our expenses with current revenue levels. The plan included an approximately 24% reduction in workforce, primarily in the area of development, however, it also impacted operations, sales and marketing. The plan also included abandonment of certain assets resulting in impairment charges to write off the assets associated with markets we are no longer pursuing. Total restructuring expense included in our statement of operations for the nine month periods ended September 30, 2017 and 2016 is comprised of the following: Nine Months Ended September 30, 2017 2016 Cost of revenue — restructuring: Tooling and inventory write offs — 1,679 Employee severance and benefits — 98 — 1,777 Operating expenses — restructuring: Employee severance and benefits $ 1,481 $ 2,513 Licensed technology and other assets write offs — 65 Other — 30 1,481 2,608 Total restructuring expense $ 1,481 $ 4,385 The following is a rollforward of the accrued liabilities related to restructuring for the nine month period ended September 30, 2017: Balance as of December 31, 2016 Expensed Payments Balance as of September 30, 2017 Employee severance and benefits $ 60 $ 1,481 $ (746 ) $ 795 Accrued costs related to restructuring $ 60 $ 1,481 $ (746 ) $ 795

Research and Development

Research and Development	9 Months Ended
	Sep. 30, 2017
Research and Development [Abstract]
Research and Development	RESEARCH AND DEVELOPMEN T During the first quarter of 2017, we entered into a best efforts co-development agreement with a customer to defray a portion of the research and development expenses we expect to incur in connection with our development of an integrated circuit product to be sold exclusively to the customer. We expect our development costs to exceed the amounts received from the customer, and although we expect to sell units of the product to the customer, there is no commitment or agreement from the customer for such sales at this time. Additionally, we retain ownership of any modifications or improvements to our pre-existing intellectual property and may use such improvements in products sold to other customers. Under the co-development agreement, $4,000 was payable by the customer within 60 days of the date of the agreement and two additional payments of $2,000 are each payable upon completion of certain development milestones. As amounts become due and payable, they are offset against research and development expense on a pro rata basis. We recognized an offset to research and development expense of $1,311 and $4,000 during the three and nine months ended September 30, 2017, respectively.

Interest Expense and Other, Net

Interest Expense and Other, Net	9 Months Ended
	Sep. 30, 2017
Other Income and Expenses [Abstract]
Interest Expense and Other, Net	INTEREST EXPENSE AND OTHER, NET Interest expense and other, consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Interest expense 1 $ (385 ) $ (107 ) $ (631 ) $ (337 ) Fair value adjustment on convertible debt conversion option (122 ) — (122 ) — Discount accretion on convertible debt fair value (72 ) — (72 ) — Interest income 51 8 97 32 Total interest expense and other, net $ (528 ) $ (99 ) $ (728 ) $ (305 ) 1 Increase in the 2017 periods compared to the 2016 periods due to contractual interest on convertible debt, as well as imputed interest on short and long-term liabilities acquired as a part of the Acquisition.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Incomes Taxes	INCOME TAXES The provision for income taxes during the 2017 and 2016 periods is primarily comprised of current and deferred tax expense in profitable cost-plus foreign jurisdictions, accruals for tax contingencies in foreign jurisdictions and benefits for the reversal of previously recorded foreign tax contingencies due to the expiration of the applicable statutes of limitation. We recorded a benefit for the reversal of previously recorded foreign tax contingencies of $191 and $170 during the first nine months of 2017 and 2016, respectively. As we do not believe that it is more likely than not that we will realize a benefit from our U.S. net deferred tax assets, including our U.S. net operating losses, we continue to provide a full valuation allowance against essentially all of those assets, therefore, we do not incur significant U.S. income tax expense or benefit. We have not recorded a valuation allowance against our other foreign net deferred tax assets as we believe that it is more likely than not that we will realize a benefit from those assets. As of September 30, 2017 and December 31, 2016, the amount of our uncertain tax positions was a liability of $1,468 and $1,419 , respectively, and a reduction to deferred tax assets of $570 and $560 , respectively. A number of years may elapse before an uncertain tax position is resolved by settlement or statute of limitation. Settlement of any particular position could require the use of cash. If the uncertain tax positions we have accrued for are sustained by the taxing authorities in our favor, the reduction of the liability will reduce our effective tax rate. We reasonably expect reductions in the liability for unrecognized tax benefits and interest and penalties of approximately $18 within the next twelve months due to the expiration of statutes of limitation in foreign jurisdictions. We recognize interest and penalties related to uncertain tax positions in income tax expense in our consolidated statements of operations. We adopted ASU 2016-09 on January 1, 2017. We have excess tax benefits for which a benefit could not be previously recognized of $485 . Upon adoption, this balance was recognized and the impact was recorded to retained earnings, including any change to the valuation allowance as a result of the adoption. Due to the full valuation allowance on the U.S. net deferred tax assets, this change did not impact our financial position, results of operations or cash flows.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Earnings Per Share	EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net loss $ (4,706 ) $ (1,242 ) $ (621 ) $ (11,444 ) Weighted average shares outstanding - basic and diluted 32,552 28,313 30,545 28,139 Net loss per share - basic and diluted $ (0.14 ) $ (0.04 ) $ (0.02 ) $ (0.41 ) The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Employee equity incentive plans 4,035 4,952 3,853 4,643 Convertible debt 625 — 211 — Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the employee stock purchase plan. Potentially dilutive common shares from the convertible debt are determined by applying the if-converted method to the assumed conversion of the outstanding convertible debt.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
Segment Information	SEGMENT INFORMATION We have identified a single operating segment: the design and development of integrated circuits for use in electronic display devices. The majority of our assets are located in the United States. Geographic Information Revenue by geographic region, is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Japan $ 17,303 $ 11,255 $ 50,664 $ 31,207 China 631 394 1,227 891 United States 454 20 575 74 Taiwan 218 1,268 6,315 3,537 Europe 118 175 2,059 475 Korea 34 273 821 688 Other — 271 528 531 $ 18,758 $ 13,656 $ 62,189 $ 37,403 Significant Customers The percentage of revenue attributable to our distributors, top five end customers, and individual distributors or end customers that represented 10% or more of revenue in at least one of the periods presented, is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Distributors: All distributors 40 % 35 % 46 % 42 % Distributor A 25 % 17 % 27 % 24 % End customers: 1 Top five end customers 88 % 83 % 79 % 82 % End customer A 60 % 62 % 48 % 54 % End customer B 8 % 2 % 10 % 7 % 1 End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors. The following account represented 10% or more of total accounts receivable in at least one of the periods presented: September 30, December 31, Account X 70 % 54 %

Risks and Uncertainties

Risks and Uncertainties	9 Months Ended
	Sep. 30, 2017
Risks and Uncertainties [Abstract]
Risks and Uncertainties	RISKS AND UNCERTAINTIES Concentration of Suppliers We do not own or operate a semiconductor fabrication facility and do not have the resources to manufacture our products internally. We rely on a limited number of foundries and assembly and test vendors to produce all of our wafers and for completion of finished products. We do not have any long-term agreements with any of these suppliers. In light of these dependencies, it is reasonably possible that failure to perform by one of these suppliers could have a severe impact on our results of operations. Additionally, the concentration of these vendors within Taiwan and the People’s Republic of China increases our risk of supply disruption due to natural disasters, economic instability, political unrest or other regional disturbances. Risk of Technological Change The markets in which we compete, or seek to compete, are subject to rapid technological change, frequent new product introductions, changing customer requirements for new products and features, and evolving industry standards. The introduction of new technologies and the emergence of new industry standards could render our products less desirable or obsolete, which could harm our business. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash equivalents and accounts receivable. We limit our exposure to credit risk associated with cash equivalent balances by holding our funds in high quality, highly liquid money market accounts. We limit our exposure to credit risk associated with accounts receivable by carefully evaluating creditworthiness before offering terms to customers.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES Indemnifications Certain of our agreements include indemnification provisions for claims from third-parties relating to our intellectual property. It is not possible for us to predict the maximum potential amount of future payments or indemnification costs under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. We have not made any payments under these agreements in the past, and as of September 30, 2017, we have not incurred any material liabilities arising from these indemnification obligations. In the future, however, such obligations could materially impact our results of operations. Legal Proceedings We are subject to legal matters that arise from time to time in the ordinary course of our business. Although we currently believe that resolving such matters, individually or in the aggregate, will not have a material adverse effect on our financial position, our results of operations, or our cash flows, these matters are subject to inherent uncertainties and our view of these matters may change in the future.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. ASU 2017-01 will become effective for us on January 1, 2018, with early adoption permitted. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step from the quantitative goodwill impairment test. We will continue to have the option to perform a qualitative assessment to determine if a quantitative goodwill impairment test is necessary. ASU 2017-04 will become effective for us on January 1, 2020, with early adoption permitted. The impact of this standard on the calculation of future goodwill impairment tests will depend on the facts and circumstance existing at such time. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements, for example, an accounting policy election may be made to account for forfeitures as they occur, rather than based on an estimate of future forfeitures. In addition, under previous guidance, excess tax benefits and deficiencies from stock-based compensation arrangements were recorded in equity when the awards vested or were settled. ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies in the income statement. We adopted ASU 2016-09 on January 1, 2017, which included a policy election to account for forfeitures as they occur, and resulted in a cumulative-effect adjustment to retained earnings of $44 as of January 1, 2017. In addition, upon adoption the balance of the unrecognized excess tax benefits were recognized and the impact was recorded to retained earnings, including any change to the valuation allowance as a result of the adoption. Due to the full valuation allowance on the U.S. net deferred tax assets, this change did not impact our financial position, results of operations or cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. ASU 2016-02 will become effective for us on January 1, 2019. While we are currently assessing the impact ASU 2016-02 will have on our financial statements, we expect the primary impact to our financial position upon adoption will be the recognition, on a discounted basis, of our minimum commitments under noncancelable operating leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"), which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted ASU 2015-11 on January 1, 2017 and it did not have a material impact our financial position, results of operations, or cash flows. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which requires that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for us on January 1, 2018. We have developed an implementation plan to adopt this new guidance. As part of this plan, we are currently assessing the impact of the new guidance on our results of operations. Based on our procedures performed to date, we believe that the timing of revenue recognition for certain of our chip sales may be recognized over time as compared to current recognition which is at a point in time. This may require the Company to recognize revenue earlier than we are recognizing revenue under the current revenue recognition guidance and the impact will depend on the nature and amount of outstanding orders in process at the date of adoption. We currently believe this is the only item that will have a material impact on our financial statements, however, we will continue to evaluate the impact from ASU 2014-09 during the remainder of 2017. We intend to adopt ASU 2014-09 on January 1, 2018 and we have tentatively selected the modified retrospective transition method.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of convertible debt, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates.
Receivables, Policy	Accounts receivable are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments.
Inventory, Policy	Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value).
Co-Development Arrangements, Policy	As amounts become due and payable, they are offset against research and development expense on a pro rata basis.

Acquisition (Tables)

Acquisition (Tables)	9 Months Ended
	Sep. 30, 2017
Business Combinations [Abstract]
Purchase Price Allocation	The purchase price was preliminarily allocated to the assets and liabilities based on fair values as follows: Purchase price $ 16,975 Less net liabilities assumed: Assets acquired: Cash and cash equivalents 1,901 Accounts receivable 968 Inventories 3,561 Property and equipment 964 Other assets 1,562 Identifiable intangible assets 6,730 Liabilities assumed: Accounts payable (1,736 ) Accrued liabilities and other current liabilities (2,832 ) Revolving bank loan (4,046 ) Convertible debt (6,485 ) Other noncurrent liabilities (1,633 ) (1,046 ) Goodwill $ 18,021
Pro Forma Information	The following table reflects the unaudited pro forma results of Pixelworks and ViXS as if the merger had taken place as of January 1, 2016: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue, net $ 19,926 $ 21,770 $ 72,315 $ 58,833 Net income (loss) $ (4,052 ) $ (3,768 ) $ 258 $ (22,873 ) Net income (loss) per share: Basic $ (0.12 ) $ (0.12 ) $ 0.01 $ (0.72 ) Diluted $ (0.12 ) $ (0.12 ) $ 0.01 $ (0.72 ) Weighted average shares outstanding: Basic 33,788 32,021 33,429 31,847 Diluted 33,788 32,021 35,516 31,847

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2017
Balance Sheet Related Disclosures [Abstract]
Accounts Receivable, Net	Accounts receivable consists of the following: September 30, December 31, Accounts receivable, gross $ 5,124 $ 3,150 Less: allowance for doubtful accounts (40 ) (32 ) Accounts receivable, net $ 5,084 $ 3,118
Allowance for Doubtful Accounts	The following is the change in our allowance for doubtful accounts: Nine Months Ended September 30, 2017 2016 Balance at beginning of period $ 32 $ 60 Additions charged (reductions credited) 8 (21 ) Balance at end of period $ 40 $ 39
Inventories	Inventories consist of the following: September 30, December 31, Finished goods $ 2,903 $ 1,707 Work-in-process 2,155 1,096 Inventories $ 5,058 $ 2,803
Property and Equipment, Net	Property and equipment consists of the following: September 30, December 31, Gross carrying amount $ 27,898 $ 24,416 Less: accumulated depreciation and amortization (21,627 ) (20,623 ) Property and equipment, net $ 6,271 $ 3,793
Acquired Intangible Assets, Net	Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., our sole reporting unit, and consist of the following: September 30, December 31, Developed technology $ 5,050 $ — Customer relationships 1,270 — Backlog and tradename 410 — 6,730 — Less: accumulated amortization (316 ) — Acquired intangible assets, net $ 6,414 $ —
Future Amortization Expense	As of September 30, 2017, future estimated amortization expense is as follows: Three months ending December 31: 2017 $ 610 Years ending December 31: 2018 1,596 2019 1,505 2020 1,496 2021 1,117 2022 90 $ 6,414
Accrued Liabilities and Current Portion of Long-Term Liabilities	Accrued liabilities and current portion of long-term liabilities consist of the following: September 30, December 31, Accrued payroll and related liabilities $ 4,149 $ 2,169 Accrued commissions and royalties 2,618 2,427 Accrued interest payable 2,492 2,078 Current portion of accrued liabilities for asset financings 1,822 389 Accrued costs related to restructuring 795 60 Deferred revenue 458 — Liability for warranty returns 34 28 Other 3,831 709 Accrued liabilities and current portion of long-term liabilities $ 16,199 $ 7,860
Liability for Warranty Returns	The following is the change in our liability for warranty returns: Nine Months Ended September 30, 2017 2016 Liability for warranty returns: Balance at beginning of period $ 28 $ 49 Provision (benefit) 15 (4 ) Charge-offs (9 ) (20 ) Balance at end of period $ 34 $ 25

Convertible Debt (Tables)

Convertible Debt (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of Convertible Debt	As part of the Acquisition, we assumed secured convertible debt, which consists of the following as of September 30, 2017: 10% convertible notes, principal amount $ 5,149 Unamortized debt discount (1,234 ) Conversion feature, at fair value 1,846 $ 5,761

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	The following table presents information about our assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016: Level 1 Level 2 Level 3 Total As of September 30, 2017: Assets: Money market funds $ 23,626 $ — $ — $ 23,626 Liabilities: Convertible debt - including conversion feature $ — $ 5,450 $ — $ 5,450 Conversion feature - convertible debt — 1,846 — 1,846 As of December 31, 2016: Assets: Money market funds $ 17,960 $ — $ — $ 17,960

Restructurings (Tables)

Restructurings (Tables)	9 Months Ended
	Sep. 30, 2017
Restructuring and Related Activities [Abstract]
Restructuring Expense by Components	Total restructuring expense included in our statement of operations for the nine month periods ended September 30, 2017 and 2016 is comprised of the following: Nine Months Ended September 30, 2017 2016 Cost of revenue — restructuring: Tooling and inventory write offs — 1,679 Employee severance and benefits — 98 — 1,777 Operating expenses — restructuring: Employee severance and benefits $ 1,481 $ 2,513 Licensed technology and other assets write offs — 65 Other — 30 1,481 2,608 Total restructuring expense $ 1,481 $ 4,385
Schedule of Accrued Restructuring Liabilities	The following is a rollforward of the accrued liabilities related to restructuring for the nine month period ended September 30, 2017: Balance as of December 31, 2016 Expensed Payments Balance as of September 30, 2017 Employee severance and benefits $ 60 $ 1,481 $ (746 ) $ 795 Accrued costs related to restructuring $ 60 $ 1,481 $ (746 ) $ 795

Interest Expense and Other, N25

Interest Expense and Other, Net (Tables)	9 Months Ended
	Sep. 30, 2017
Other Income and Expenses [Abstract]
Schedule of Other Operating Cost and Expense, by Component	Interest expense and other, consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Interest expense 1 $ (385 ) $ (107 ) $ (631 ) $ (337 ) Fair value adjustment on convertible debt conversion option (122 ) — (122 ) — Discount accretion on convertible debt fair value (72 ) — (72 ) — Interest income 51 8 97 32 Total interest expense and other, net $ (528 ) $ (99 ) $ (728 ) $ (305 ) 1 Increase in the 2017 periods compared to the 2016 periods due to contractual interest on convertible debt, as well as imputed interest on short and long-term liabilities acquired as a part of the Acquisition.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Earnings Per Share	The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net loss $ (4,706 ) $ (1,242 ) $ (621 ) $ (11,444 ) Weighted average shares outstanding - basic and diluted 32,552 28,313 30,545 28,139 Net loss per share - basic and diluted $ (0.14 ) $ (0.04 ) $ (0.02 ) $ (0.41 )
Antidilutive Securities Excluded from Computation of Earnings Per Share	The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Employee equity incentive plans 4,035 4,952 3,853 4,643 Convertible debt 625 — 211 —

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
Schedule of Revenue by Geographic Region	Revenue by geographic region, is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Japan $ 17,303 $ 11,255 $ 50,664 $ 31,207 China 631 394 1,227 891 United States 454 20 575 74 Taiwan 218 1,268 6,315 3,537 Europe 118 175 2,059 475 Korea 34 273 821 688 Other — 271 528 531 $ 18,758 $ 13,656 $ 62,189 $ 37,403
Schedule of Revenue from Significant Customers	The percentage of revenue attributable to our distributors, top five end customers, and individual distributors or end customers that represented 10% or more of revenue in at least one of the periods presented, is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Distributors: All distributors 40 % 35 % 46 % 42 % Distributor A 25 % 17 % 27 % 24 % End customers: 1 Top five end customers 88 % 83 % 79 % 82 % End customer A 60 % 62 % 48 % 54 % End customer B 8 % 2 % 10 % 7 % 1 End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.
Schedule of Accounts Receivable Percentage from Significant Customers	The following account represented 10% or more of total accounts receivable in at least one of the periods presented: September 30, December 31, Account X 70 % 54 %

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Thousands	Jan. 01, 2017USD ($)	Sep. 30, 2017patent
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of patents held | patent		535
Adjustment to retained earnings | $	$ 44

Acquisition - Additional Inform

Acquisition - Additional Information (Details) - USD ($)	Aug. 02, 2017	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Long-term debt		$ 5,761,000	$ 5,761,000	$ 5,761,000	$ 0
Mark-up of inventory to fair value at acquisition date				2,415,000
Acquisition-related costs excluded from pro forma			$ 1,806,000	3,055,000
Gain recognized on the sale of a product line				$ 4,785,000
ViXS Systems, Inc.
Business Acquisition [Line Items]
Percent of outstanding shares acquired	100.00%
Shares issued per acquired share (in shares)	0.04836
Purchase price	$ 16,975,000
Integration related costs	1,382,000
Severance pay	$ 1,067,000
Period of severance payments	24 months
Cost of accelerated vesting of restricted stock units	$ 315,000
Inventory	3,561,000
Deferred tax assets	62,992,000
Valuation allowance	62,972,000
Goodwill expected tax deductible amount	0
Revenue of acquiree since acquisition date, actual		1,985,000
Net income (loss) of acquiree since acquisition date, actual		(4,004,000)
Restructuring		1,481,000
Amortization		$ 1,501,000
ViXS Systems, Inc. | Fair Value Adjustment to Inventory
Business Acquisition [Line Items]
Inventory	2,415,000
ViXS Systems, Inc. | Developed technology
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 5,050,000
Weighted average useful life	5 years
ViXS Systems, Inc. | Customer relationships
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 1,270,000
Weighted average useful life	3 years
ViXS Systems, Inc. | Backlog and tradename
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 410,000
Weighted average useful life	2 years
ViXS Systems, Inc. | Convertible Debt
Business Acquisition [Line Items]
Long-term debt	$ 4,762,000
Principal amount	6,068,000
Unamortized discount	1,306,000
Debt conversion feature	$ 1,723,000
ViXS Systems, Inc. | Holder of ViXS Restricted Stock, Vested at Closing
Business Acquisition [Line Items]
Stock issued due to acquisition (in shares)	122,242
ViXS Systems, Inc. | Restricted Stock Units (RSUs)
Business Acquisition [Line Items]
Value of shares issued	$ 659,000
Stock issued due to acquisition (in shares)	202,043
ViXS Systems, Inc. | Common Stock
Business Acquisition [Line Items]
Value of shares issued	$ 16,316,000
Stock issued due to acquisition (in shares)	3,586,021

Acquisition - Schedule of Purch

Acquisition - Schedule of Purchase Price Allocation of Assets and Liabilities (Details) - USD ($) $ in Thousands	Aug. 02, 2017	Sep. 30, 2017	Dec. 31, 2016
Assets acquired:
Goodwill		$ 18,021	$ 0
ViXS Systems, Inc.
Business Acquisition [Line Items]
Purchase price	$ 16,975
Assets acquired:
Cash and cash equivalents	1,901
Accounts receivable	968
Inventories	3,561
Property and equipment	964
Other assets	1,562
Identifiable intangible assets	6,730
Goodwill	18,021
Liabilities assumed:
Accounts payable	(1,736)
Accrued liabilities and other current liabilities	(2,832)
Other noncurrent liabilities	(1,633)
Less net liabilities assumed	(1,046)
ViXS Systems, Inc. | Line of Credit
Liabilities assumed:
Debt	(4,046)
ViXS Systems, Inc. | Convertible Debt
Liabilities assumed:
Debt	$ (6,485)

Acquisition - Schedule of Pro F

Acquisition - Schedule of Pro Forma Information (Details) - ViXS Systems, Inc. - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Business Acquisition [Line Items]
Revenue, net	$ 19,926	$ 21,770	$ 72,315	$ 58,833
Net income (loss)	$ (4,052)	$ (3,768)	$ 258	$ (22,873)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.12)	$ (0.12)	$ 0.01	$ (0.72)
Diluted (in dollars per share)	$ (0.12)	$ (0.12)	$ 0.01	$ (0.72)
Weighted average shares outstanding:
Basic (in shares)	33,788	32,021	33,429	31,847
Diluted (in shares)	33,788	32,021	35,516	31,847

Balance Sheet Components - Acco

Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Accounts Receivable, Net [Abstract]
Accounts receivable, gross	$ 5,124	$ 3,150
Less: allowance for doubtful accounts	(40)	(32)	$ (39)	$ (60)
Accounts receivable, net	$ 5,084	$ 3,118

Balance Sheet Components - Allo

Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of period	$ 32	$ 60
Additions charged (reductions credited)	8	(21)
Balance at end of period	$ 40	$ 39

Balance Sheet Components - Inve

Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Balance Sheet Related Disclosures [Abstract]
Finished goods	$ 2,903	$ 1,707
Work-in-process	2,155	1,096
Inventories	$ 5,058	$ 2,803

Balance Sheet Components - Prop

Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Balance Sheet Related Disclosures [Abstract]
Gross carrying amount	$ 27,898	$ 24,416
Less: accumulated depreciation and amortization	(21,627)	(20,623)
Property and equipment, net	$ 6,271	$ 3,793

Balance Sheet Components - Acqu

Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	$ 6,730		$ 6,730		$ 0
Less: accumulated amortization	(316)		(316)		0
Acquired intangible assets, net	6,414		6,414		0
Amortization of acquired intangible assets	316		266	$ 0
Cost of revenue
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets	249
Selling, general and administrative
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets	67	$ 0	67	$ 0
Developed technology
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	5,050		$ 5,050		0
Developed technology | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			3 years
Developed technology | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			5 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	1,270		$ 1,270		0
Customer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			3 years
Customer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			5 years
Backlog and tradename
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	$ 410		$ 410		$ 0
Backlog and tradename | Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			6 months
Backlog and tradename | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives			18 months

Balance Sheet Components - Futu

Balance Sheet Components - Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Balance Sheet Related Disclosures [Abstract]
2,017	$ 610
2,018	1,596
2,019	1,505
2,020	1,496
2,021	1,117
2,022	90
Acquired intangible assets, net	$ 6,414	$ 0

Balance Sheet Components - Good

Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Aug. 02, 2017	Dec. 31, 2016
Goodwill [Line Items]
Goodwill	$ 18,021		$ 0
ViXS Systems, Inc.
Goodwill [Line Items]
Goodwill		$ 18,021

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities and Current Portion of Long-Term Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
Accrued payroll and related liabilities	$ 4,149	$ 2,169
Accrued commissions and royalties	2,618	2,427
Accrued interest payable	2,492	2,078
Current portion of accrued liabilities for asset financings	1,822	389
Accrued costs related to restructuring	795	60
Deferred revenue	458	0
Liability for warranty returns	34	28	$ 25	$ 49
Other	3,831	709
Accrued liabilities and current portion of long-term liabilities	$ 16,199	$ 7,860

Balance Sheet Components - Liab

Balance Sheet Components - Liability for Warranty Returns (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 28	$ 49
Provision (benefit)	15	(4)
Charge-offs	(9)	(20)
Balance at end of period	$ 34	$ 25

Balance Sheet Components - Shor

Balance Sheet Components - Short-Term Line of Credit (Narrative) (Details) $ in Thousands	Jul. 21, 2017USD ($)
Balance Sheet Related Disclosures [Abstract]
Maximum borrowing capacity	$ 10,000
Line of credit facility, component of calculation for maximum borrowing amount under formula advances	$ 1,000
Line of credit facility maximum borrowing capacity limited by eligible AR	80.00%
Line of credit facility, maximum borrowing capacity under non-formula advances	$ 10,000

Convertible Debt - Schedule of

Convertible Debt - Schedule of Convertible Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt	$ 5,761	$ 0
Convertible Debt
Debt Instrument [Line Items]
Stated interest rate	10.00%
Convertible Debt | 10% convertible notes
Debt Instrument [Line Items]
Principal amount	$ 5,149
Unamortized debt discount	(1,234)
Conversion feature, at fair value	1,846
Long-term debt	$ 5,761
Stated interest rate	10.00%

Convertible Debt - Additional I

Convertible Debt - Additional Information (Details) CAD / shares in Units, CAD in Thousands, $ in Thousands	Aug. 02, 2017USD ($)shares	Sep. 30, 2017USD ($)sharesday	Dec. 31, 2017	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2017USD ($)CAD / shares	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2017CADCAD / shares
Debt Instrument [Line Items]
Repayments of debt							$ 953	$ 0
Discount accretion on convertible debt fair value				$ 72	$ 0		72	0
Fair value adjustment on convertible debt conversion option				122	$ 0		122	$ 0
Derivative liability		$ 0		$ 0		$ 0	$ 0
Minimum | Subsequent Event
Debt Instrument [Line Items]
Redemption price, percentage			100.00%
Maximum | Subsequent Event
Debt Instrument [Line Items]
Redemption price, percentage			110.00%
Convertible Debt
Debt Instrument [Line Items]
Stated interest rate		10.00%		10.00%		10.00%	10.00%		10.00%
Number of equity instruments (in shares) | shares		892,751
Fair value adjustment on convertible debt conversion option				$ 122
Convertible Debt | 10% convertible notes
Debt Instrument [Line Items]
Repayments of debt				$ 953
Stated interest rate		10.00%		10.00%		10.00%	10.00%		10.00%
Threshold trading days | day		5
Stock price trigger | CAD / shares						$ 16.54
Threshold consecutive trading days | day		15
Threshold trading days covenant, interest rate		1.00%		1.00%		1.00%	1.00%		1.00%
Principal amount		$ 5,149		$ 5,149		$ 5,149	$ 5,149
Interest expense, debt				101
Discount accretion on convertible debt fair value				81
Foreign currency transaction gain (loss)				25
Foreign currency gain (loss) due to accretion of discount				(9)
Convertible Debt | 10% Convertible Notes, Due September 2019
Debt Instrument [Line Items]
Principal amount		2,484		2,484		2,484	2,484		CAD 3,040
Conversion price (in dollars per share) | CAD / shares									CAD 7.24
Convertible Debt | 10% Convertible Notes, Due January 2020
Debt Instrument [Line Items]
Principal amount		$ 2,665		$ 2,665		$ 2,665	$ 2,665		CAD 3,324
Conversion price (in dollars per share) | CAD / shares									CAD 7.13
ViXS Systems, Inc.
Debt Instrument [Line Items]
Shares issued per acquired share (in shares) | shares	0.04836
ViXS Systems, Inc. | Convertible Debt
Debt Instrument [Line Items]
Principal amount	$ 6,068

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Money market funds	$ 23,626	$ 17,960
Convertible debt - including conversion feature	5,450
Conversion feature - convertible debt	1,846
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Money market funds	23,626	17,960
Convertible debt - including conversion feature	0
Conversion feature - convertible debt	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Money market funds	0	0
Convertible debt - including conversion feature	5,450
Conversion feature - convertible debt	1,846
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Money market funds	0	$ 0
Convertible debt - including conversion feature	0
Conversion feature - convertible debt	$ 0

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - Convertible Debt	9 Months Ended
	Sep. 30, 2017
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Volatility rate	70.00%
Credit spread	14.50%
Risk free interest rate	1.50%

Restructurings (Details)

Restructurings (Details)	1 Months Ended
	Sep. 30, 2017	Apr. 30, 2016
2017 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Approximate reduction in workforce from restructuring plan (percent)	15.00%
Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Approximate reduction in workforce from restructuring plan (percent)		24.00%

Restructurings - Components of

Restructurings - Components of Restructuring Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Restructuring Cost and Reserve [Line Items]
Total restructuring expense	$ 1,481	$ 3	$ 1,481	$ 2,608
Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Total restructuring expense			1,481	4,385
Restructuring Plan | Cost of revenue — restructuring:
Restructuring Cost and Reserve [Line Items]
Tooling and inventory write offs			0	1,679
Employee severance and benefits			0	98
Total restructuring expense			0	1,777
Restructuring Plan | Operating expenses — restructuring:
Restructuring Cost and Reserve [Line Items]
Employee severance and benefits			1,481	2,513
Licensed technology and other assets write offs			0	65
Other			0	30
Total restructuring expense			$ 1,481	$ 2,608

Restructurings - Restructuring

Restructurings - Restructuring Reserve Rollforward (Details) - Restructuring Plan $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2016	$ 60
Expensed	1,481
Payments	(746)
Balance as of September 30, 2017	795
Employee severance and benefits
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2016	60
Expensed	1,481
Payments	(746)
Balance as of September 30, 2017	$ 795

Research and Development (Detai

Research and Development (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Research and Development [Abstract]
Amount receivable as of date of development agreement		$ 4,000
Amounts payable upon completion of milestones		2,000
Research and development benefit recognized	$ 1,311	$ 4,000

Interest Expense and Other, N50

Interest Expense and Other, Net (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other Income and Expenses [Abstract]
Interest expense	[1]	$ (385)	$ (107)	$ (631)	$ (337)
Fair value adjustment on convertible debt conversion option		(122)	0	(122)	0
Discount accretion on convertible debt fair value		(72)	0	(72)	0
Interest income		51	8	97	32
Total interest expense and other, net	[2]	$ (528)	$ (99)	$ (728)	$ (305)
[1]	Increase in the 2017 periods compared to the 2016 periods due to contractual interest on convertible debt, as well as imputed interest on short and long-term liabilities acquired as a part of the Acquisition.
[2]	Includes: Fair value adjustment on convertible debt conversion option122 — 122 —Discount accretion on convertible debt fair value72 — 72 —

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Reversal of uncertain tax positions	$ 191	$ 170
Liability for uncertain tax positions	1,468		$ 1,419
Reduction to deferred tax assets	570		$ 560
Estimated decrease in total gross unrecognized tax benefits as a result of resolutions of global tax examinations and expiration of applicable statutes of limitations, including interest and penalties	18
Excess tax benefits	$ 485

Earnings Per Share - Earnings P

Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share [Abstract]
Net loss	$ (4,706)	$ (1,242)	$ (621)	$ (11,444)
Weighted average shares outstanding, basic	32,552	28,313	30,545	28,139
Net loss per share - basic and diluted	$ (0.14)	$ (0.04)	$ (0.02)	$ (0.41)

Earnings Per Share - Antidiluti

Earnings Per Share - Antidilutive Effect on Weighted Average Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Employee equity incentive plans
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,035	4,952	3,853	4,643
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	625	0	211	0

Segment Information - Geographi

Segment Information - Geographic Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue, net	[1]	$ 18,758	$ 13,656	$ 62,189	$ 37,403
Japan
Revenue, net		17,303	11,255	50,664	31,207
China
Revenue, net		631	394	1,227	891
United States
Revenue, net		454	20	575	74
Taiwan
Revenue, net		218	1,268	6,315	3,537
Europe
Revenue, net		118	175	2,059	475
Korea
Revenue, net		34	273	821	688
Other
Revenue, net		$ 0	$ 271	$ 528	$ 531
[1]	Includes amortization of deferred revenue fair value adjustment25 — 25 —

Segment Information - Major Cus

Segment Information - Major Customers (Narrative) (Details)	9 Months Ended
	Sep. 30, 2017
Segment Reporting Information
Number of customers included in five largest customer concentration disclosure	5
Revenue, net | Minimum
Segment Reporting Information
Concentration risk benchmark percentage	10.00%
Accounts Receivable | Minimum
Segment Reporting Information
Concentration risk benchmark percentage	10.00%

Segment Information - Revenue b

Segment Information - Revenue by Major Customer (Details) - Revenue, net		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
All distributors
Revenue, Major Customer
Percentage of revenue		40.00%	35.00%	46.00%	42.00%
Distributor A
Revenue, Major Customer
Percentage of revenue		25.00%	17.00%	27.00%	24.00%
Top five end customers
Revenue, Major Customer
Percentage of revenue	[1]	88.00%	83.00%	79.00%	82.00%
End customer A
Revenue, Major Customer
Percentage of revenue	[1]	60.00%	62.00%	48.00%	54.00%
End customer B
Revenue, Major Customer
Percentage of revenue	[1]	8.00%	2.00%	10.00%	7.00%
[1]	End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.

Segment Information - Accounts

Segment Information - Accounts Receivable by Major Customer (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Accounts Receivable | Account X
Segment Reporting Information
Percentage of accounts receivable	70.00%	54.00%