Pixelworks (PXLW) 10-Q 9 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 02, 2018
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, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		36,606,885

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 18,057	$ 27,523
Short-term marketable securities	6,069	0
Accounts receivable, net	5,771	4,640
Inventories	3,041	2,846
Prepaid expenses and other current assets	1,762	1,328
Total current assets	34,700	36,337
Property and equipment, net	5,062	5,605
Other assets, net	1,312	1,338
Acquired intangible assets, net	4,607	5,856
Goodwill	18,407	18,407
Total assets	64,088	67,543
Current liabilities:
Accounts payable	2,187	1,436
Accrued liabilities and current portion of long-term liabilities	13,814	16,387
Current portion of income taxes payable	251	445
Total current liabilities	16,252	18,268
Long-term liabilities, net of current portion	883	1,487
Convertible debt	0	6,069
Income taxes payable, net of current portion	2,300	2,282
Total liabilities	19,435	28,106
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred stock	0	0
Common stock	427,090	418,891
Accumulated other comprehensive income	17	20
Accumulated deficit	(382,454)	(379,474)
Total shareholders’ equity	44,653	39,437
Total liabilities and shareholders’ equity	$ 64,088	$ 67,543

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Revenue, net	[1]	$ 21,472	$ 18,758	$ 56,015	$ 62,189
Cost of revenue	[2]	10,235	9,747	27,442	29,585
Gross profit		11,237	9,011	28,573	32,604
Operating expenses:
Research and development	[3]	5,322	5,325	16,208	14,732
Selling, general and administrative	[4]	5,070	6,583	14,643	15,382
Restructuring		414	1,481	1,035	1,481
Total operating expenses		10,806	13,389	31,886	31,595
Income (loss) from operations		431	(4,378)	(3,313)	1,009
Interest income (expense) and other, net	[5]	(112)	(528)	729	(728)
Income (loss) before income taxes		319	(4,906)	(2,584)	281
Provision (benefit) for income taxes		88	(200)	396	902
Net income (loss)		$ 231	$ (4,706)	$ (2,980)	$ (621)
Income (loss) per share, basic		$ 0.01	$ (0.14)	$ (0.08)	$ (0.02)
Income (loss) per share, diluted		$ 0.01	$ (0.14)	$ (0.08)	$ (0.02)
Weighted Average Number of Shares Outstanding, Basic		36,195	32,552	35,697	30,545
Weighted Average Number of Shares Outstanding, Diluted		37,993	32,552	35,697	30,545
[1]	Includes deferred revenue fair value adjustment of 52, 25, 52, and 25
[2]	Includes: Inventory step-up and backlog amortization97 1,016 458 1,016Amortization of acquired intangible assets298 199 894 199Stock-based compensation87 57 231 179
[3]	Includes: Stock-based compensation609 445 1,831 1,121
[4]	Includes: Acquisition-related costs— 1,611 — 2,505Stock-based compensation762 855 1,983 1,796Amortization of acquired intangible assets101 67 303 67
[5]	Includes: Fair value adjustment on convertible debt conversion option— 122 — 122Discount accretion on convertible debt fair value— 72 69 72Gain on debt extinguishment— — (1,272) —

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Amortization of acquired intangible assets			$ 1,197	$ 266
Inventory step-up and backlog amortization			458	1,016
Gain on debt extinguishment	$ 0	$ 0	1,272	0
Fair Value Adjustment of Convertible Debt	0	122	0	122
Discount accretion on convertible debt fair value	0	72	69	72
Revenue, net
Deferred revenue fair value adjustment	52	25	52	25
Cost of revenue
Inventory step-up and backlog amortization	97	1,016	458	1,016
Stock-based compensation	87	57	231	179
Cost of revenue | Acquired intangible assets
Amortization of acquired intangible assets	298	199	894	199
Research and development
Stock-based compensation	609	445	1,831	1,121
Selling, general and administrative
Amortization of acquired intangible assets	101	67	303	67
Stock-based compensation	762	855	1,983	1,796
Acquisition and integration	0	1,611	0	2,505
Interest expense and other, net
Gain on debt extinguishment	0	0	(1,272)	0
Fair Value Adjustment of Convertible Debt	0	122	0	122
Discount accretion on convertible debt fair value	$ 0	$ 72	$ 69	$ 72

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Other Comprehensive Income [Abstract]
Net loss	$ 231	$ (4,706)	$ (2,980)	$ (621)
Other comprehensive income (loss):
Unrealized loss on available-for-sale securities	(1)	0	(3)	0
Total comprehensive income (loss)	$ 230	$ (4,706)	$ (2,983)	$ (621)

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net loss	$ (2,980)	$ (621)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	4,045	3,096
Depreciation and amortization	2,682	2,714
Gain on debt extinguishment	(1,272)	0
Amortization of acquired intangible assets	1,197	266
Inventory step-up and backlog amortization	458	1,016
Discount accretion on convertible debt fair value	69	72
Deferred income tax benefit	(53)	0
Accretion on short-term marketable securities	(21)	0
Reversal of uncertain tax positions	(19)	(191)
Fair value adjustment on convertible debt conversion option	0	122
Other	14	106
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net	(1,131)	(998)
Inventories	(602)	342
Prepaid expenses and other current and long-term assets, net	(348)	76
Accounts payable	739	(926)
Accrued current and long-term liabilities	(2,400)	4,597
Income taxes payable	(166)	1,158
Net cash provided by operating activities	212	10,829
Cash flows from investing activities:
Purchases of short-term marketable securities	(6,298)	0
Purchases of property and equipment	(1,731)	(2,300)
Proceeds from maturities of short-term marketable securities	250	0
Cash received in connection with acquisition of business	0	1,901
Net cash used in investing activities	(7,779)	(399)
Cash flows from financing activities:
Payments on convertible debt	(2,220)	(953)
Proceeds from issuance of common stock under employee equity incentive plans	1,507	2,196
Payments on asset financings	(1,186)	(920)
Payments on line of credit related to acquisition	0	(4,046)
Net cash used in financing activities	(1,899)	(3,723)
Net increase (decrease) in cash and cash equivalents	(9,466)	6,707
Cash and cash equivalents, beginning of period	27,523	19,622
Cash and cash equivalents, end of period	18,057	26,329
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds received	613	284
Cash paid during the period for interest	363	370
Non-cash investing and financing activities:
Value of debt converted into shares	2,644	0
Acquisitions of property and equipment and other assets under extended payment terms	330	3,558
Value of shares issued in acquisition	$ 0	$ 16,975

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2018
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 application specific integrated circuits ("ASIC") solutions for high-quality energy efficient video applications. In addition, we offer a suite of solutions for advanced media processing and 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, 2018, we had an intellectual property portfolio of 399 patents related to the visual display of digital image data. We focus our research and development efforts on developing video algorithms that improve quality, and architectures that reduce system power, cost, bandwidth and increase overall system performance and device functionality. We seek to expand our technology portfolio through internal development and co-development with business partners, and we continually evaluate acquisition opportunities and other ways to leverage our technology into other high-value markets. 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, 2018 and 2017 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, 2017 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 14, 2018, 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, 2018 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2018. Revenue On January 1, 2018 we adopted the new requirements of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), under the modified retrospective approach. Therefore, the requirements of ASU 2014-09 have only been applied to existing contracts (those for which the entity has remaining performance obligations) as of, and new contracts after, the date of initial application, or January 1, 2018. ASU 2014-09 is not applied to contracts that were completed before the effective date. The adoption of this new standard did not result in an adjustment to our consolidated financial statements but we have included additional disclosures in our periodic reports, however, we cannot guarantee that there will be no unforeseen effects of this new standard on our financial statements in the future. We generate all of our revenue from contracts with customers. Revenue is recognized when control of the promised good or service is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our principal revenue generating activities consist of the following: Product Sales - We sell integrated circuit products, also known as “chips” or “ICs”, based upon a customer purchase order, which includes a fixed price per unit. We have elected to account for shipping and handling as activities to fulfill the promise to transfer the goods, and not evaluate whether these activities are promised services to the customer. We generally satisfy our single performance obligation upon shipment of the goods to the customer and recognize revenue at a point in time upon shipment of the underlying product. Our shipments are subject to limited return rights subject to our limited warranty for our products sold. In addition, we may provide other credits to certain customers pursuant to price protection and stock rotation rights, all of which are considered variable consideration when estimating the amount of revenue to recognize. We use the “most likely amount” method to determine the amount of consideration to which we are entitled. Our estimate of variable consideration is reassessed at the end of each reporting period based on changes in facts and circumstances. Historically, returns and credits have not been material. Engineering Services - We enter into contracts for professional engineering services that include software development and customization. We identify each performance obligation in our engineering services agreements (“ESAs”) at contract inception. The ESA generally includes project deliverables specified by the customer. The performance obligations in the ESA are generally combined into one deliverable, with the pricing for services stated at a fixed amount. Services provided under the ESA generally result in the transfer of control over time. We recognize revenue on ESAs based on the proportion of labor hours expended to the total hours expected to complete the contract performance obligation. ESAs could include substantive customer acceptance provisions. In ESAs that include substantive customer acceptance provisions, we recognize revenue upon customer acceptance. Other - From time-to-time, we enter into arrangements for other revenue generating activities, such as providing technical support services to customers through technical support agreements. In each circumstance, we evaluate such arrangements for our performance obligations which generally results in the transfer of control for such services over time. Historically, such arrangements have not been material to our operating results. The following table provides information about disaggregated revenue based on the preceding categories for the three and nine months ended September 30, 3018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 IC sales $ 20,669 $ 53,800 Engineering services and other 803 2,215 Total revenues $ 21,472 $ 56,015 For segment information, including revenue by geographic region, see "Note 11: Segment Information". Our contract balances include accounts receivable, deferred revenue and our liability for warranty returns. For information concerning these contract balances, see "Note 3: Balance Sheet Components". Payment terms and conditions for goods and services provided vary by contract; however, payment is generally required within 30 to 60 days of invoicing. As a practical expedient, we do not adjust the amount of consideration for this financing component as the period between the transfer of goods or services and the customer’s payment is, at contract inception, expected to be one year or less. We have not identified any costs incurred associated with obtaining a contract with a customer which would meet the criteria to be capitalized, therefore, these costs are expensed as incurred. We have not disclosed the aggregate amount of the transaction price allocated to unsatisfied performance obligations because all of our revenue contracts have an original expected duration of one year or less. Recent Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting ("ASU 2018-07"). ASU 2017-01 reduces cost and complexity and improves financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). We elected to early adopt ASU 2018-07 on July 1, 2018. The adoption of this update did not have a material impact on our financial position, results of operations, or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, 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 became effective for us on January 1, 2018, with early adoption permitted. The adoption of this update on January 1, 2018 did not 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. As permitted by ASU 2017-04, Pixelworks has elected to early adopt the amendments contained in ASU 2017-04 for our annual impairment test of goodwill during the fourth quarter of 2017. Accordingly, our 2017 goodwill impairment analysis was based on and reflected the requirements of ASU 2017-04. The adoption of this update did not have a material impact on 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"), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842 ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We expect to elect the “practical expedient package,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We do not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect this standard will have a material effect on our financial statements. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office operating leases; and (2) providing significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities between now and adoption. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. 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 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, 2018
Business Combinations [Abstract]
Acquisition	ACQUISITION On August 2, 2017, we acquired 100% of the outstanding shares of ViXS (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 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 chief executive officer of ViXS (the "CEO") was terminated in connection with the closing of the transaction. As a result, we recognized an expense of $1,115 , which consisted of $800 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 was included within selling, general and administrative within our consolidated statement of operations for the year ended December 31, 2017. The purchase price was 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 3,175 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 ) (1,432 ) Goodwill $ 18,407 The allocation of the purchase price was based upon various estimates and assumptions. Below are the significant valuations that were performed in connection with the Acquisition: • 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 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 $2,191 to record inventory at fair value. We will recognize this within cost of goods sold as the inventory is sold. As of September 30, 2018, the remaining balance of the inventory step-up is $29 , which we expect to be fully recognized over the next 3 months. We 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.

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2018
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	BALANCE SHEET COMPONENTS Accounts Receivable, Net Accounts receivable are contract assets that arise from the performance of our performance obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They 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 $ 5,810 $ 4,687 Less: allowance for doubtful accounts (39 ) (47 ) Accounts receivable, net $ 5,771 $ 4,640 The following is the change in our allowance for doubtful accounts: Nine Months Ended September 30, 2018 2017 Balance at beginning of period $ 47 $ 32 Additions charged (reductions credited) (8 ) 8 Balance at end of period $ 39 $ 40 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 was recorded at fair value. Inventories consist of the following: September 30, December 31, Finished goods $ 1,612 $ 1,115 Work-in-process 1,429 1,731 Inventories $ 3,041 $ 2,846 Property and Equipment, Net Property and equipment consists of the following: September 30, December 31, Gross carrying amount $ 25,187 $ 23,072 Less: accumulated depreciation and amortization (20,125 ) (17,467 ) Property and equipment, net $ 5,062 $ 5,605 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., and consist of the following: September 30, December 31, Developed technology $ 5,050 $ 5,050 Customer relationships 1,270 1,270 Backlog and tradename 410 410 6,730 6,730 Less: accumulated amortization (2,123 ) (874 ) Acquired intangible assets, net $ 4,607 $ 5,856 Intangible assets are amortized over the following estimated useful lives: developed technology and customer relationships, 3 to 5 years; and tradename, 18 months. Backlog was fully amortized as of September 30, 2018. Amortization expense for intangible assets was $450 and $1,248 for the three and nine months ended September 30, 2018, respectively, $349 and $945 were included in cost of revenue for the three and nine months ended September 30, 2018, respectively and $101 and $303 were included in selling, general and administrative for the three and nine months ended September 30, 2018, respectively, in the condensed consolidated statements of operations. As of September 30, 2018, future estimated amortization expense is as follows: Three months ending December 31: 2018 $ 399 Years ending December 31: 2019 1,505 2020 1,496 2021 1,117 2022 90 $ 4,607 Acquired intangible assets are 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. There were no such triggering events requiring an impairment assessment of other intangible assets during the nine months ended September 30, 2018. Goodwill Goodwill resulted from the Acquisition, whereby we recorded goodwill of $18,407 . See "Note 2: Acquisition" for information concerning the Acquisition. Goodwill is not amortized; however, we 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 nine months ended September 30, 2018. We 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 $ 4,144 $ 5,400 Accrued interest payable 3,040 2,770 Accrued royalties 2,689 2,610 Current portion of accrued liabilities for asset financings 1,228 1,701 Accrued costs related to restructuring 227 352 Deferred revenue 134 418 Liability for warranty returns 15 17 Other 2,337 3,119 Accrued liabilities and current portion of long-term liabilities $ 13,814 $ 16,387 Deferred revenues are contract liabilities that arise when cash payments are received or due in advance of the satisfaction of our performance obligations. Any increase in deferred revenues is driven by cash payments received or due in advance of satisfying our performance obligation pursuant to the contract with the customer. Any decrease in deferred revenues is due to the recognition of revenue related to satisfying our performance obligation. The changes in deferred revenue and the liability for warranty returns are as follows: Nine Months Ended September 30, 2018 2017 Deferred revenue: Balance at beginning of period $ 418 $ — Revenue recognized (864 ) — Revenue deferred 580 458 Balance at end of period $ 134 $ 458 Liability for warranty returns: Balance at beginning of period $ 17 $ 28 Charge-offs (10 ) (9 ) Provision 8 15 Balance at end of period $ 15 $ 34 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, July 21, 2017 and December 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 28, 2018. 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, 2018, we were in compliance with all of the terms of the Revolving Loan Agreement, as amended. As of September 30, 2018 and December 31, 2017, we had no outstanding borrowings under the Revolving Line.

Convertible Debt

Convertible Debt	9 Months Ended
	Sep. 30, 2018
Debt Disclosure [Abstract]
Convertible Debt	CONVERTIBLE DEBT As part of the Acquisition, we assumed secured convertible debt and 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. On January 12, 2018, the Company provided notice to the holders of the convertible debt of its election to redeem the convertible debt in full as of March 13, 2018. Subsequently, certain holders of the convertible debt elected to convert their convertible debt into shares of common stock of Pixelworks pursuant to the terms of the convertible debt. This resulted in the issuance of 435,353 shares of our common stock which was valued at an aggregate of $2,644 . We paid an aggregate of CAD $2,875 (equivalent to $2,220 USD) to redeem the convertible debt of those holders who did not elect to convert their convertible debt. The extinguishment of the debt during the first quarter of 2018 resulted in a gain of $1,272 which is recorded in interest income (expense) and other, net within our condensed consolidated statement of operations. For the nine months ended September 30, 2018, interest expense consisted of $66 related to the contractual rate of interest and $69 related to accretion of the discount. During the nine months ended September 30, 2018, we recorded net foreign currency losses of approximately $(15) in other expense.

Marketable Securities and Fair

Marketable Securities and Fair Value Measurements	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value Measurements	MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities As of September 30, 2018 and December 31, 2017, all of our marketable securities are classified as available-for-sale and consist of the following: Cost Unrealized Gain (Loss) Fair Value Short-term marketable securities: As of September 30, 2018: Commercial paper $ 1,741 $ — $ 1,741 U.S. government treasury bills 1,590 — 1,590 Corporate debt securities 2,739 (1 ) 2,738 $ 6,070 $ (1 ) $ 6,069 As of December 31, 2017: Commercial paper $ — $ — $ — U.S. government treasury bills — — — Corporate debt securities — — — $ — $ — $ — Unrealized holding gains and losses are recorded in accumulated other comprehensive income, a component of shareholders’ equity, in the condensed consolidated balance sheets. 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, 2018 and December 31, 2017: Level 1 Level 2 Level 3 Total As of September 30, 2018: Assets: Cash equivalents: Money market funds $ 13,491 $ — $ — $ 13,491 Commercial paper — 499 — 499 Corporate debt securities — $ 250 $ — 250 Short-term marketable securities: U.S. government treasury bills 1,590 — — 1,590 Corporate debt securities — 2,738 — 2,738 Commercial paper — 1,741 — 1,741 As of December 31, 2017: Assets: Money market funds 23,402 — — 23,402 Liabilities: Convertible debt - including conversion feature — 5,300 — 5,300 Conversion feature - convertible debt — 2,350 — 2,350 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 60% , credit spread of 13.13% and risk free rate of 1.87% . 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 were not required after the Acquisition date.

Restructurings

Restructurings	9 Months Ended
	Sep. 30, 2018
Restructuring and Related Activities [Abstract]
Restructurings	RESTRUCTURINGS In April 2018, we executed a restructuring plan to make the operation of the Company more efficient. The plan includes an approximately 5% reduction in workforce, primarily in the areas of development, marketing and administration. The plan also includes closing the Hong Kong office and reducing the size of the Toronto office. 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. Total restructuring expense included in our statement of operations for the nine month periods ended September 30, 2018 and 2017 is comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Operating expenses — restructuring: Facility closure and consolidations $ 321 $ — $ 321 $ — Employee severance and benefits 93 1,481 714 1,481 Total restructuring expense $ 414 $ 1,481 $ 1,035 $ 1,481 During the three months ended September 30, 2018, all the restructuring expense recorded related to the April 2018 plan. During the nine months ended September 30, 2018, we recorded $19 in restructuring expense related to the September 2017 plan and $1,016 related to the April 2018 plan, for total expense of $1,035 . The following is a rollforward of the accrued liabilities related to restructuring for the nine month period ended September 30, 2018: Balance as of December 31, 2017 Expensed Payments Balance as of September 30, 2018 Employee severance and benefits $ 352 $ 714 $ (1,066 ) $ — Facility closure and consolidations — 321 (94 ) 227 Accrued costs related to restructuring $ 352 $ 1,035 $ (1,160 ) $ 227

Research and Development

Research and Development	9 Months Ended
	Sep. 30, 2018
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 (the "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 were 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 offsets to research and development expense of $1,780 and $1,311 during the three months ended September 30, 2018 and 2017, respectively, and $3,780 and $4,000 during the nine months ended September 30, 2018 and 2017, respectively.

Interest Income (Expense) and O

Interest Income (Expense) and Other, Net	9 Months Ended
	Sep. 30, 2018
Other Income and Expenses [Abstract]
Interest Income (Expense) and Other, Net	INTEREST INCOME (EXPENSE) AND OTHER, NET Interest income (expense) and other, consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Interest expense $ (190 ) $ (385 ) $ (676 ) $ (631 ) Interest income 78 51 202 97 Gain on debt extinguishment — — 1,272 — Discount accretion on convertible debt fair value — (72 ) (69 ) (72 ) Fair value adjustment on convertible debt conversion option — (122 ) — (122 ) Total interest income (expense) and other, net $ (112 ) $ (528 ) $ 729 $ (728 )

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Incomes Taxes	INCOME TAXES The provision for income taxes during the 2018 and 2017 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 $19 and $191 during the first nine months of 2018 and 2017, 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, with the exception of Canada, as we believe that it is more likely than not that we will realize a benefit from those assets. As of September 30, 2018 and December 31, 2017, the amount of our uncertain tax positions was a liability of $1,673 and $1,735 , respectively, as well as a contra deferred tax asset of $932 and $777 , 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 $31 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 condensed consolidated statements of operations. The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. As of September 30, 2018, we have not completed our accounting for all of the tax effects of the Act. We will continue to make and refine our calculations as additional analysis is completed. Our estimates may also be affected as we gain a more thorough understanding of the tax law. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. We recorded a provisional amount of $28,973 as of December 31, 2017 related to the remeasurement of certain deferred tax balances, offset by a corresponding change in the valuation allowance. The Act subjects a U.S. shareholder to current tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred. We have elected to recognize the resulting tax on GILTI as a period expense in the period the tax is incurred. We have made sufficient progress in our calculations to reasonably estimate the effect on our estimated annual effective tax rate. Due to net operating loss carryforwards and valuation allowance, this adjustment did not impact our effective tax rate. The accounting for the tax effects of the Act will be finalized in the quarter ending December 31, 2018.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Share	EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) $ 231 $ (4,706 ) $ (2,980 ) $ (621 ) Weighted average shares outstanding - basic 36,195 32,552 35,697 30,545 Dilutive effect of employee equity incentive plans 1,798 — — — Diluted weighted average shares outstanding 37,993 32,552 35,697 30,545 Net income (loss) per share: Basic $ 0.01 $ (0.14 ) $ (0.08 ) $ (0.02 ) Diluted $ 0.01 $ (0.14 ) $ (0.08 ) $ (0.02 ) The following shares were excluded from the calculation of diluted net income (loss) per share as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Employee equity incentive plans 65 4,035 3,367 3,853 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 were 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, 2018
Segment Reporting [Abstract]
Segment Information	SEGMENT INFORMATION We function as 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, 2018 2017 2018 2017 Japan $ 18,766 $ 17,303 $ 49,167 $ 50,664 China 1,277 631 3,915 1,227 Taiwan 641 218 907 6,315 United States 555 454 1,428 575 Europe 142 118 193 2,059 Korea 91 34 405 821 Other — — — 528 $ 21,472 $ 18,758 $ 56,015 $ 62,189 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, 2018 2017 2018 2017 Distributors: All distributors 44 % 40 % 39 % 46 % Distributor A 35 % 25 % 29 % 27 % End customers: 1 Top five end customers 83 % 88 % 82 % 79 % End customer A 49 % 60 % 53 % 48 % End customer B 11 % 2 % 8 % 1 % End customer C 4 % 8 % 4 % 10 % 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 53 % 38 % Account Y 20 % 29 %

Risks and Uncertainties

Risks and Uncertainties	9 Months Ended
	Sep. 30, 2018
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, 2018
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, 2018, 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. Other Contractual Obligation As part of the Acquisition discussed in "Note 2: Acquisition", we acquired debt associated with an agreement with the Government of Canada called Technology Partnerships Canada ("TPC"). As part of the TPC agreement, ViXS Systems Inc. was provided funding to assist in research and development expenses of which a portion was later required to be repaid because the conditions for repayment were met. The scheduled payments are made on a quarterly basis and end in January 2024. As of September 30, 2018, $460 is included in accrued liabilities and current portion of long-term liabilities in our consolidated balance sheet and $625 is included in long-term liabilities, net of current portion in our consolidated balance sheet.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Condensed Consolidated Financial Statements	Condensed Consolidated Financial Statements The financial information included herein for the three and nine month periods ended September 30, 2018 and 2017 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, 2017 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 14, 2018, 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, 2018 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2018.
Revenue	Revenue On January 1, 2018 we adopted the new requirements of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), under the modified retrospective approach. Therefore, the requirements of ASU 2014-09 have only been applied to existing contracts (those for which the entity has remaining performance obligations) as of, and new contracts after, the date of initial application, or January 1, 2018. ASU 2014-09 is not applied to contracts that were completed before the effective date. The adoption of this new standard did not result in an adjustment to our consolidated financial statements but we have included additional disclosures in our periodic reports, however, we cannot guarantee that there will be no unforeseen effects of this new standard on our financial statements in the future. We generate all of our revenue from contracts with customers. Revenue is recognized when control of the promised good or service is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our principal revenue generating activities consist of the following: Product Sales - We sell integrated circuit products, also known as “chips” or “ICs”, based upon a customer purchase order, which includes a fixed price per unit. We have elected to account for shipping and handling as activities to fulfill the promise to transfer the goods, and not evaluate whether these activities are promised services to the customer. We generally satisfy our single performance obligation upon shipment of the goods to the customer and recognize revenue at a point in time upon shipment of the underlying product. Our shipments are subject to limited return rights subject to our limited warranty for our products sold. In addition, we may provide other credits to certain customers pursuant to price protection and stock rotation rights, all of which are considered variable consideration when estimating the amount of revenue to recognize. We use the “most likely amount” method to determine the amount of consideration to which we are entitled. Our estimate of variable consideration is reassessed at the end of each reporting period based on changes in facts and circumstances. Historically, returns and credits have not been material. Engineering Services - We enter into contracts for professional engineering services that include software development and customization. We identify each performance obligation in our engineering services agreements (“ESAs”) at contract inception. The ESA generally includes project deliverables specified by the customer. The performance obligations in the ESA are generally combined into one deliverable, with the pricing for services stated at a fixed amount. Services provided under the ESA generally result in the transfer of control over time. We recognize revenue on ESAs based on the proportion of labor hours expended to the total hours expected to complete the contract performance obligation. ESAs could include substantive customer acceptance provisions. In ESAs that include substantive customer acceptance provisions, we recognize revenue upon customer acceptance. Other - From time-to-time, we enter into arrangements for other revenue generating activities, such as providing technical support services to customers through technical support agreements. In each circumstance, we evaluate such arrangements for our performance obligations which generally results in the transfer of control for such services over time. Historically, such arrangements have not been material to our operating results.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting ("ASU 2018-07"). ASU 2017-01 reduces cost and complexity and improves financial reporting for share-based payments issued to non-employees (for example, service providers, external legal counsel, suppliers, etc.). We elected to early adopt ASU 2018-07 on July 1, 2018. The adoption of this update did not have a material impact on our financial position, results of operations, or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, 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 became effective for us on January 1, 2018, with early adoption permitted. The adoption of this update on January 1, 2018 did not 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. As permitted by ASU 2017-04, Pixelworks has elected to early adopt the amendments contained in ASU 2017-04 for our annual impairment test of goodwill during the fourth quarter of 2017. Accordingly, our 2017 goodwill impairment analysis was based on and reflected the requirements of ASU 2017-04. The adoption of this update did not have a material impact on 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"), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842 ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019, with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We expect to elect the “practical expedient package,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We do not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect this standard will have a material effect on our financial statements. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office operating leases; and (2) providing significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities between now and adoption. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases.
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 share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates.
Receivables, Policy	Accounts receivable are contract assets that arise from the performance of our performance obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They 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). Inventory acquired as part of the Acquisition was recorded at fair value.
Co-Development Arrangements, Policy	As amounts become due and payable, they are offset against research and development expense on a pro rata basis.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Disaggregation of Revenue	The following table provides information about disaggregated revenue based on the preceding categories for the three and nine months ended September 30, 3018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 IC sales $ 20,669 $ 53,800 Engineering services and other 803 2,215 Total revenues $ 21,472 $ 56,015

Acquisition (Tables)

Acquisition (Tables)	9 Months Ended
	Sep. 30, 2018
Business Combinations [Abstract]
Purchase Price Allocation	The purchase price was 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 3,175 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 ) (1,432 ) Goodwill $ 18,407

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2018
Balance Sheet Related Disclosures [Abstract]
Accounts Receivable, Net	Accounts receivable consists of the following: September 30, December 31, Accounts receivable, gross $ 5,810 $ 4,687 Less: allowance for doubtful accounts (39 ) (47 ) Accounts receivable, net $ 5,771 $ 4,640
Allowance for Doubtful Accounts	The following is the change in our allowance for doubtful accounts: Nine Months Ended September 30, 2018 2017 Balance at beginning of period $ 47 $ 32 Additions charged (reductions credited) (8 ) 8 Balance at end of period $ 39 $ 40
Inventories	Inventories consist of the following: September 30, December 31, Finished goods $ 1,612 $ 1,115 Work-in-process 1,429 1,731 Inventories $ 3,041 $ 2,846
Property and Equipment, Net	Property and equipment consists of the following: September 30, December 31, Gross carrying amount $ 25,187 $ 23,072 Less: accumulated depreciation and amortization (20,125 ) (17,467 ) Property and equipment, net $ 5,062 $ 5,605
Acquired Intangible Assets, Net	Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following: September 30, December 31, Developed technology $ 5,050 $ 5,050 Customer relationships 1,270 1,270 Backlog and tradename 410 410 6,730 6,730 Less: accumulated amortization (2,123 ) (874 ) Acquired intangible assets, net $ 4,607 $ 5,856
Future Amortization Expense	As of September 30, 2018, future estimated amortization expense is as follows: Three months ending December 31: 2018 $ 399 Years ending December 31: 2019 1,505 2020 1,496 2021 1,117 2022 90 $ 4,607
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 $ 4,144 $ 5,400 Accrued interest payable 3,040 2,770 Accrued royalties 2,689 2,610 Current portion of accrued liabilities for asset financings 1,228 1,701 Accrued costs related to restructuring 227 352 Deferred revenue 134 418 Liability for warranty returns 15 17 Other 2,337 3,119 Accrued liabilities and current portion of long-term liabilities $ 13,814 $ 16,387
Deferred Revenue & Liability for Warranty Returns	The changes in deferred revenue and the liability for warranty returns are as follows: Nine Months Ended September 30, 2018 2017 Deferred revenue: Balance at beginning of period $ 418 $ — Revenue recognized (864 ) — Revenue deferred 580 458 Balance at end of period $ 134 $ 458 Liability for warranty returns: Balance at beginning of period $ 17 $ 28 Charge-offs (10 ) (9 ) Provision 8 15 Balance at end of period $ 15 $ 34

Marketable Securities and Fai_2

Marketable Securities and Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis	As of September 30, 2018 and December 31, 2017, all of our marketable securities are classified as available-for-sale and consist of the following: Cost Unrealized Gain (Loss) Fair Value Short-term marketable securities: As of September 30, 2018: Commercial paper $ 1,741 $ — $ 1,741 U.S. government treasury bills 1,590 — 1,590 Corporate debt securities 2,739 (1 ) 2,738 $ 6,070 $ (1 ) $ 6,069 As of December 31, 2017: Commercial paper $ — $ — $ — U.S. government treasury bills — — — Corporate debt securities — — — $ — $ — $ —
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, 2018 and December 31, 2017: Level 1 Level 2 Level 3 Total As of September 30, 2018: Assets: Cash equivalents: Money market funds $ 13,491 $ — $ — $ 13,491 Commercial paper — 499 — 499 Corporate debt securities — $ 250 $ — 250 Short-term marketable securities: U.S. government treasury bills 1,590 — — 1,590 Corporate debt securities — 2,738 — 2,738 Commercial paper — 1,741 — 1,741 As of December 31, 2017: Assets: Money market funds 23,402 — — 23,402 Liabilities: Convertible debt - including conversion feature — 5,300 — 5,300 Conversion feature - convertible debt — 2,350 — 2,350

Restructurings (Tables)

Restructurings (Tables)	9 Months Ended
	Sep. 30, 2018
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, 2018 and 2017 is comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Operating expenses — restructuring: Facility closure and consolidations $ 321 $ — $ 321 $ — Employee severance and benefits 93 1,481 714 1,481 Total restructuring expense $ 414 $ 1,481 $ 1,035 $ 1,481
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, 2018: Balance as of December 31, 2017 Expensed Payments Balance as of September 30, 2018 Employee severance and benefits $ 352 $ 714 $ (1,066 ) $ — Facility closure and consolidations — 321 (94 ) 227 Accrued costs related to restructuring $ 352 $ 1,035 $ (1,160 ) $ 227

Interest Income (Expense) and_2

Interest Income (Expense) and Other, Net (Tables)	9 Months Ended
	Sep. 30, 2018
Other Income and Expenses [Abstract]
Interest Income (Expense) and Other, net	Interest income (expense) and other, consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Interest expense $ (190 ) $ (385 ) $ (676 ) $ (631 ) Interest income 78 51 202 97 Gain on debt extinguishment — — 1,272 — Discount accretion on convertible debt fair value — (72 ) (69 ) (72 ) Fair value adjustment on convertible debt conversion option — (122 ) — (122 ) Total interest income (expense) and other, net $ (112 ) $ (528 ) $ 729 $ (728 )

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Share	The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) $ 231 $ (4,706 ) $ (2,980 ) $ (621 ) Weighted average shares outstanding - basic 36,195 32,552 35,697 30,545 Dilutive effect of employee equity incentive plans 1,798 — — — Diluted weighted average shares outstanding 37,993 32,552 35,697 30,545 Net income (loss) per share: Basic $ 0.01 $ (0.14 ) $ (0.08 ) $ (0.02 ) Diluted $ 0.01 $ (0.14 ) $ (0.08 ) $ (0.02 )
Antidilutive Securities Excluded from Computation of Earnings Per Share	The following shares were excluded from the calculation of diluted net income (loss) per share as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Employee equity incentive plans 65 4,035 3,367 3,853 Convertible debt — 625 — 211

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2018
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, 2018 2017 2018 2017 Japan $ 18,766 $ 17,303 $ 49,167 $ 50,664 China 1,277 631 3,915 1,227 Taiwan 641 218 907 6,315 United States 555 454 1,428 575 Europe 142 118 193 2,059 Korea 91 34 405 821 Other — — — 528 $ 21,472 $ 18,758 $ 56,015 $ 62,189
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, 2018 2017 2018 2017 Distributors: All distributors 44 % 40 % 39 % 46 % Distributor A 35 % 25 % 29 % 27 % End customers: 1 Top five end customers 83 % 88 % 82 % 79 % End customer A 49 % 60 % 53 % 48 % End customer B 11 % 2 % 8 % 1 % End customer C 4 % 8 % 4 % 10 % 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 53 % 38 % Account Y 20 % 29 %

Basis of Presentation - Disaggr

Basis of Presentation - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 21,472	$ 56,015
IC sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	20,669	53,800
Engineering services and other
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 803	$ 2,215

Basis of Presentation (Details)

Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2018patent
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of patents held	399
Revenue, performance obligation, description of timing	Payment terms and conditions for goods and services provided vary by contract; however, payment is generally required within 30 to 60 days of invoicing.

Acquisition - Additional Inform

Acquisition - Additional Information (Details) - USD ($)	Aug. 02, 2017	Sep. 30, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Long-term debt		$ 0	$ 6,069,000
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	1,115,000
Severance pay	$ 800,000
Period of severance payments	24 months
Cost of accelerated vesting of restricted stock units	$ 315,000
Research and development in process	0
Inventory	3,175,000
Deferred tax assets	62,992,000
Valuation allowance	62,972,000
Goodwill expected tax deductible amount	0
ViXS Systems, Inc. | Fair Value Adjustment to Inventory
Business Acquisition [Line Items]
Inventory	2,191,000	$ 29,000
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, 2018	Dec. 31, 2017
Assets acquired:
Goodwill		$ 18,407	$ 18,407
ViXS Systems, Inc.
Business Acquisition [Line Items]
Purchase price	$ 16,975
Assets acquired:
Cash and cash equivalents	1,901
Accounts receivable	968
Inventories	3,175
Property and equipment	964
Other assets	1,562
Identifiable intangible assets	6,730
Goodwill	18,407
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)
Less net liabilities assumed	$ (1,432)

Balance Sheet Components - Acco

Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Accounts Receivable, Net [Abstract]
Accounts receivable, gross	$ 5,810	$ 4,687
Less: allowance for doubtful accounts	(39)	(47)	$ (40)	$ (32)
Accounts receivable, net	$ 5,771	$ 4,640

Balance Sheet Components - Allo

Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of period	$ 47	$ 32
Additions charged (reductions credited)	(8)	8
Balance at end of period	$ 39	$ 40

Balance Sheet Components - Inve

Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Finished goods	$ 1,612	$ 1,115
Work-in-process	1,429	1,731
Inventories	$ 3,041	$ 2,846

Balance Sheet Components - Prop

Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
Gross carrying amount	$ 25,187	$ 23,072
Less: accumulated depreciation and amortization	(20,125)	(17,467)
Property and equipment, net	$ 5,062	$ 5,605

Balance Sheet Components - Acqu

Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	$ 6,730	$ 6,730	$ 6,730
Less: accumulated amortization	(2,123)	(2,123)	(874)
Acquired intangible assets, net	4,607	4,607	5,856
Amortization of acquired intangible assets including backlog	450	1,248
Cost of revenue
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets including backlog	349	945
Selling, general and administrative
Finite-Lived Intangible Assets [Line Items]
Amortization of acquired intangible assets including backlog	101	303
Developed technology
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	5,050	$ 5,050	5,050
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	1,270
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	$ 410
Estimated useful lives		18 months

Balance Sheet Components - Futu

Balance Sheet Components - Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Balance Sheet Related Disclosures [Abstract]
2,018	$ 399
2,019	1,505
2,020	1,496
2,021	1,117
2,022	90
Acquired intangible assets, net	$ 4,607	$ 5,856

Balance Sheet Components - Good

Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Aug. 02, 2017
Goodwill [Line Items]
Goodwill	$ 18,407	$ 18,407
ViXS Systems, Inc.
Goodwill [Line Items]
Goodwill			$ 18,407

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities and Current Portion of Long-Term Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Balance Sheet Related Disclosures [Abstract]
Accrued payroll and related liabilities	$ 4,144	$ 5,400
Accrued interest payable	3,040	2,770
Accrued royalties	2,689	2,610
Current portion of accrued liabilities for asset financings	1,228	1,701
Accrued costs related to restructuring	227	352
Deferred revenue	134	418	$ 458	$ 0
Liability for warranty returns	15	17	$ 34	$ 28
Other	2,337	3,119
Accrued liabilities and current portion of long-term liabilities	$ 13,814	$ 16,387

Balance Sheet Components - Defe

Balance Sheet Components - Deferred Revenue & Liability for Warranty Returns (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Deferred Revenue [Abstract]
Balance at beginning of period	$ 418	$ 0
Revenue recognized	(864)	0
Revenue deferred	580	458
Balance at end of period	134	458
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	17	28
Charge-offs	(10)	(9)
Provision	8	15
Balance at end of period	$ 15	$ 34

Balance Sheet Components - Shor

Balance Sheet Components - Short-Term Line of Credit (Narrative) (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Dec. 21, 2017
Balance Sheet Related Disclosures [Abstract]
Maximum borrowing capacity			$ 10,000,000
Line of credit facility, component of calculation for maximum borrowing amount under formula advances			$ 1,000,000
Line of credit facility maximum borrowing capacity limited by eligible AR			80.00%
Line of credit facility, maximum borrowing capacity under non-formula advances			$ 10,000,000
Short term line of credit	$ 0	$ 0

Convertible Debt - Additional I

Convertible Debt - Additional Information (Details) $ in Thousands, $ in Thousands	Jan. 12, 2018USD ($)shares	Jan. 12, 2018CAD ($)shares	Aug. 02, 2017shares	Sep. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)	Sep. 30, 2017USD ($)
Debt Instrument [Line Items]
Value of debt converted into shares							$ 2,644	$ 0
Gain on debt extinguishment				$ 0		$ 0	1,272	0
Discount accretion on convertible debt fair value				$ 0		$ 72	69	$ 72
Convertible Debt
Debt Instrument [Line Items]
Converted instrument, shares issued | shares	435,353	435,353
Value of debt converted into shares	$ 2,644
Repayments of convertible debt	$ 2,220	$ 2,875
Gain on debt extinguishment					$ 1,272
Convertible Debt | 10% convertible notes
Debt Instrument [Line Items]
Interest expense, debt							66
Discount accretion on convertible debt fair value							69
Foreign currency transaction gain (loss)							$ (15)
ViXS Systems, Inc.
Debt Instrument [Line Items]
Shares issued per acquired share (in shares) | shares			0.04836

Marketable Securities and Fai_3

Marketable Securities and Fair Value Measurements - Schedule of Short Term Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost	$ 6,070	$ 0
Unrealized Gain (Loss)	(1)	0
Fair Value	6,069	0
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost	1,741	0
Unrealized Gain (Loss)	0	0
Fair Value	1,741	0
U.S. government treasury bills
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost	1,590	0
Unrealized Gain (Loss)	0	0
Fair Value	1,590	0
Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cost	2,739	0
Unrealized Gain (Loss)	(1)	0
Fair Value	$ 2,738	$ 0

Marketable Securities and Fai_4

Marketable Securities and Fair Value Measurements - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	$ 6,069	$ 0
Convertible debt - including conversion feature		5,300
Conversion feature - convertible debt		2,350
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Convertible debt - including conversion feature		0
Conversion feature - convertible debt		0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Convertible debt - including conversion feature		5,300
Conversion feature - convertible debt		2,350
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Convertible debt - including conversion feature		0
Conversion feature - convertible debt		0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	250
Corporate debt securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0
Corporate debt securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	250
Corporate debt securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	13,491	23,402
Money market funds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	13,491	23,402
Money market funds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0	0
Money market funds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	499
Commercial paper | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0
Commercial paper | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	499
Commercial paper | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0
U.S. government treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	1,590	0
U.S. government treasury bills | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	1,590
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	2,738	0
Corporate debt securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	0
Corporate debt securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	2,738
Corporate debt securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	1,741	$ 0
Commercial paper | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	0
Commercial paper | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	1,741
Commercial paper | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Short-term marketable securities:	$ 0

Marketable Securities and Fai_5

Marketable Securities and Fair Value Measurements - Additional Information (Details) - Convertible Debt	12 Months Ended
	Dec. 31, 2017
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Volatility rate	60.00%
Credit spread	13.13%
Risk free interest rate	1.87%

Restructurings (Details)

Restructurings (Details) - USD ($) $ in Thousands	1 Months Ended		9 Months Ended
	Apr. 30, 2018	Sep. 30, 2017	Sep. 30, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring expense			$ 1,035
April 2018 Plan
Restructuring Cost and Reserve [Line Items]
Restructuring expense			1,016
Approximate reduction in workforce from restructuring plan (percent)	5.00%
2017 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Restructuring expense			$ 19
Approximate reduction in workforce from restructuring plan (percent)		15.00%

Restructurings - Components of

Restructurings - Components of Restructuring Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Restructuring Cost and Reserve [Line Items]
Total restructuring expense	$ 414	$ 1,481	$ 1,035	$ 1,481
Operating expenses — restructuring:
Restructuring Cost and Reserve [Line Items]
Facility closure and consolidations	321	0	321	0
Employee severance and benefits	$ 93	$ 1,481	$ 714	$ 1,481

Restructurings - Restructuring

Restructurings - Restructuring Reserve Rollforward (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018USD ($)
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2017	$ 352
Expensed	1,035
Payments	(1,160)
Balance as of September 30, 2018	227
Employee severance and benefits
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2017	352
Expensed	714
Payments	(1,066)
Balance as of September 30, 2018	0
Facility closure and consolidations
Restructuring Reserve [Roll Forward]
Balance as of December 31, 2017	0
Expensed	321
Payments	(94)
Balance as of September 30, 2018	$ 227

Research and Development (Detai

Research and Development (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	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	$ 1,780	$ 1,311		$ 3,780	$ 4,000

Interest Income (Expense) and_3

Interest Income (Expense) and Other, Net (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Income and Expenses [Abstract]
Interest expense		$ (190)	$ (385)	$ (676)	$ (631)
Interest income		78	51	202	97
Gain on debt extinguishment		0	0	1,272	0
Discount accretion on convertible debt fair value		0	(72)	(69)	(72)
Fair value adjustment on convertible debt conversion option		0	(122)	0	(122)
Total interest income (expense) and other, net	[1]	$ (112)	$ (528)	$ 729	$ (728)
[1]	Includes: Fair value adjustment on convertible debt conversion option— 122 — 122Discount accretion on convertible debt fair value— 72 69 72Gain on debt extinguishment— — (1,272) —

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Reversal of uncertain tax positions	$ 19	$ 191
Liability for uncertain tax positions	1,673		$ 1,735
Reduction to deferred tax assets	932		777
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	$ 31
Deferred tax expense, re-measurement of certain deferred tax assets and liabilities			$ 28,973

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, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Net income (loss)	$ 231	$ (4,706)	$ (2,980)	$ (621)
Weighted average shares outstanding, basic	36,195	32,552	35,697	30,545
Dilutive effect of employee equity incentive plans	1,798	0	0	0
Diluted weighted average shares outstanding	37,993	32,552	35,697	30,545
Income (loss) per share, basic	$ 0.01	$ (0.14)	$ (0.08)	$ (0.02)
Income (loss) per share, diluted	$ 0.01	$ (0.14)	$ (0.08)	$ (0.02)

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, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
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)	65	4,035	3,367	3,853
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	625	0	211

Segment Information - Geographi

Segment Information - Geographic Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue, net	[1]	$ 21,472	$ 18,758	$ 56,015	$ 62,189
Japan
Revenue, net		18,766	17,303	49,167	50,664
China
Revenue, net		1,277	631	3,915	1,227
Taiwan
Revenue, net		641	218	907	6,315
United States
Revenue, net		555	454	1,428	575
Europe
Revenue, net		142	118	193	2,059
Korea
Revenue, net		91	34	405	821
Other
Revenue, net		$ 0	$ 0	$ 0	$ 528
[1]	Includes deferred revenue fair value adjustment of 52, 25, 52, and 25

Segment Information - Revenue b

Segment Information - Revenue by Major Customer (Details) - Revenue, net		3 Months Ended		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
All distributors
Revenue, Major Customer
Percentage of revenue		44.00%	40.00%	39.00%	46.00%
Distributor A
Revenue, Major Customer
Percentage of revenue		35.00%	25.00%	29.00%	27.00%
Top five end customers
Revenue, Major Customer
Percentage of revenue	[1]	83.00%	88.00%	82.00%	79.00%
End customer A
Revenue, Major Customer
Percentage of revenue	[1]	49.00%	60.00%	53.00%	48.00%
End customer B
Revenue, Major Customer
Percentage of revenue	[1]	11.00%	2.00%	8.00%	1.00%
End customer C
Revenue, Major Customer
Percentage of revenue	[1]	4.00%	8.00%	4.00%	10.00%
[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) - Accounts Receivable	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Account X
Segment Reporting Information
Percentage of accounts receivable	53.00%	38.00%
Account Y
Segment Reporting Information
Percentage of accounts receivable	20.00%	29.00%

Commitments and Contingencies (

Commitments and Contingencies (Details) - ViXS Systems, Inc. - Research And Development Expense Payment $ in Thousands	Sep. 30, 2018USD ($)
Accrued Liabilities And Current Portion Of Long Term Debt
Other Commitments [Line Items]
Other Commitment	$ 460
Long-term Debt
Other Commitments [Line Items]
Other Commitment	$ 625