Alliance Fiber Optic Products (AFOP) 10-Q 9 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document and Entity Information [Abstract]	'	'
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-Mar-14	'
Entity Registrant Name	'ALLIANCE FIBER OPTIC PRODUCTS INC	'
Entity Central Index Key	'0001122342	'
Current Fiscal Year End Date	'--12-31	'
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	18,471,501

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Cash and cash equivalents	$19,491	$18,603
Short-term investments	31,859	28,076
Accounts receivable, net	13,961	11,566
Inventories, net	10,330	10,630
Deferred tax asset	5,378	6,036
Prepaid expense and other current assets	1,815	1,745
Total current assets	82,834	76,656
Long-term investments	10,498	10,453
Property and equipment, net	13,069	13,258
Other assets	178	198
Total assets	106,579	100,565
Current liabilities:	'	'
Accounts payable	11,761	11,657
Accrued expenses	7,649	7,134
Total current liabilities	19,410	18,791
Other long-term liabilities	601	600
Total liabilities	20,011	19,391
Commitments and contingencies (Note 8)	'	'
Stockholders' equity:	'	'
Preferred stock, par value $0.001: 5,000,000 shares authorized: no shares issued and outstanding at March 31, 2014 and December 31, 2013.	'	'
Common stock, $0.001 par value: 100,000,000 shares authorized; 18,428,461 and 18,408,261 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively.	18	18
Additional paid-in-capital	118,166	117,369
Accumulated deficit	-33,611	-38,625
Accumulated other comprehensive income	1,995	2,412
Stockholders' equity	86,568	81,174
Total liabilities and stockholders' equity	$106,579	$100,565

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets [Abstract]	'	'
Preferred stock, par value (in dollars per share)	$0.00	$0.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	18,428,461	18,408,261
Common stock, shares outstanding	18,428,461	18,408,261

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Income and Comprehensive Income (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements of Income and Comprehensive Income[Abstract]	'	'
Revenues	$24,882	$12,153
Cost of revenues	14,968	7,745
Gross profit	9,914	4,408
Operating expenses:	'	'
Research and development	1,108	813
Selling, marketing and administrative	2,336	1,828
Total operating expenses	3,444	2,641
Income from operations	6,470	1,767
Interest and other income, net	147	133
Net income before income tax	6,617	1,900
Provision for income taxes	-1,602	-50
Net income	5,015	1,850
Other comprehensive income:	'	'
Cumulative translation adjustments	-412	-445
Unrealized gain on investments	-6	7
Comprehensive income	$4,597	$1,412
Net income per share:	'	'
Basic	$0.27	$0.11
Diluted	$0.26	$0.10
Shares used in computing net income per share:	'	'
Basic	18,422	17,190
Diluted	19,070	17,812

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net income	$5,015	$1,850
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depreciation	684	452
Amortization of stock-based compensation	717	280
Provision for inventory valuation	-31	92
Deferred tax assets	658	'
Changes in assets and liabilities:	'	'
Accounts receivable	-2,395	-1,044
Inventories	331	-757
Prepaid expenses and other current assets	-70	-21
Other assets	20	2
Accounts payable	104	-408
Accrued expenses and other current liabilities	515	-355
Other long-term liabilities	1	-18
Net cash provided by operating activities	5,549	73
Cash flows from investing activities:	'	'
Purchase of short-term investments	-10,631	-240
Proceeds from sales and maturities of short-term investments	6,842	852
Purchase of long-term investments	-45	-44
Purchase of property and equipment	-648	-513
Net cash (used in) provided by investing activities	-4,482	55
Cash flows from financing activities:	'	'
Proceeds from the exercise of stock options	80	224
Repurchase of common stock	'	-796
Net cash provided by (used in) financing activities	80	-572
Effect of exchange rate changes on cash and cash equivalents	-259	-362
Net increase (decrease) in cash and cash equivalents	888	-806
Cash and cash equivalents at beginning of period	18,603	4,793
Cash and cash equivalents at end of period	19,491	3,987
Supplemental disclosure of cash flow information:	'	'
Cash paid for income taxes	($203)	($10)

Summary_of_Significant_Account

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies [Abstract]	'
Summary of Significant Accounting Policies	'
	1. Summary of Significant Accounting Policies
	The Company
	Alliance Fiber Optic Products, Inc. (the "Company") was incorporated in California on December 12, 1995 and reincorporated in Delaware on October 19, 2000. The Company designs, manufactures and markets fiber optic components for communications equipment manufacturers and service providers. The Company's headquarters are located in Sunnyvale, California, and it has operations in Taiwan and China.
	Basis of Presentation
	The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2014 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include the accounts of Alliance Fiber Optic Products, Inc. and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations.
	These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. The unaudited condensed consolidated financial statements as of March 31, 2014, and for the three months ended March 31, 2014 and 2013, reflect, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial information set forth herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any subsequent interim period or for an entire year.
	There have been no significant changes in the Company's critical accounting policies during the three months ended March 31, 2014 as compared to those disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2013.
	Revenue Recognition
	The Company recognizes revenue upon shipment of its products to customers, provided that it has received a purchase order, the price is fixed, collection of the resulting receivable is reasonably assured and transfer of title and risk of loss has occurred. Subsequent to the sale of products, the Company has no obligation to provide any modification or customization upgrades, enhancements or post contract customer support.
	Allowance for Doubtful Accounts
	Allowances are provided for estimated returns and potential uncollectable trade receivables. Provisions for return allowances are recorded at the time revenue is recognized based on historical returns, current economic trends and changes in customer demand. Such allowances are adjusted periodically to reflect actual and anticipated experience. The Company also identifies specific accounts considered to have a high risk of uncollectibility and reserves the full amount. Material differences may result in the amount and timing of revenue for any period than if management had made different judgments or utilized different estimates.
	Cash and Cash Equivalents
	The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of market rate accounts and certificates of deposit.
	Short-Term and Long-Term Investments
	The Company generally invests its excess cash in certificates of deposit and corporate bonds. Such investments are made in accordance with the Company's investment policy, which establishes guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates.
	Concentrations of Risk
	Connectivity products contributed 78.7% and 73.8% of the Company's revenues for the quarters ended March 31, 2014 and 2013, respectively. Optical passive products contributed 21.3% and 26.2% of the Company's revenues for the quarters ended March 31, 2014 and 2013, respectively.
	In the three month ended March 31, 2014 and 2013, the Company's 10 largest customers comprised 72.6% and 68.5% of the Company's revenues, respectively. For the three months ended March 31, 2014, one customer accounted for 40.6% of the Company's total revenues and the amount due from this customer was $4.2 million at March 31, 2014. For the three months ended March 31, 2013, three customers accounted for 16.2%, 10.5% and 10.3% of the Company's total revenues, respectively. Amounts due from these customers were $1.8 million, $1.1 million and $1.1 million, respectively, at March 31, 2013.

Recent_Accounting_Pronouncemen

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2014
Recent Accounting Pronouncements [Abstract]	'
Recent Accounting Pronouncements	'
	2. Recent Accounting Pronouncements
	In July 2013, the Financial Accounting Standards Board ("FASB") issued guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss or tax carryforward exists. The FASB concluded that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset except in certain circumstances the unrecognized tax benefit should be presented as a liability and should not be combined with deferred tax assets. The amendment is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
	In March 2013, the FASB issued guidance to clarify when to release cumulative foreign currency translation adjustments when an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity. The amendment is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively to derecognition events occurring after the effective date. Early adoption is permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
	In February 2013, the FASB issued guidance requiring presentation of amounts reclassified from each component of accumulated other comprehensive income. In addition, disclosure is required of the effects of significant reclassifications on income statement line items either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. For public entities, this guidance is effective prospectively for reporting periods beginning after December 15, 2012. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

Stockbased_Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2014
Stock-based Compensation [Abstract]	'
Stock-based Compensation	'
	3. Stock-based Compensation
	The Accounting Standards Codification ("ASC") 718 requires companies to record compensation expense for stock options measured at fair value, on the date of grant, using an option-pricing model. The fair value of stock options granted and stock purchased pursuant to the Employee Stock Purchase Plan ("ESPP") was determined using the Black-Scholes Model.
	Pursuant to the Company's 2000 Stock Incentive Plan, participants may be granted restricted stock units ("RSUs"), representing an unfunded, unsecured right to receive shares of the Company's common stock on the date specified in the recipient's award. The RSUs granted under the plan generally vest over two years at a rate of 50 percent per year, over three years at a rate of 33.3 percent per year, or over five years at a rate of 20 percent per year. The Company recognizes compensation expense on a straight-line basis over the vesting term of each award.
	Options granted under the 2000 Stock Incentive Plan generally vest over four years. Options are exercisable for not more than ten years.
	The following information relates to stock option activity for the three months ended March 31, 2014:
						Weighted
				Weighted		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
	Options	Shares		Price		Life	Value
	Outstanding at December 31, 2013	565,640		$	5.28
	Granted	274,400			12.5
	Exercised	(20,200	)		3.93
	Forfeited	(90,000	)		4.45
	Outstanding at March 31, 2014	729,840		$	8.13	8.47 Years	$	4,626,776
	Vested and expected to vest at March 31, 2014	611,838		$	7.96	8.47 Years	$	3,985,006
	Exercisable at March 31, 2014	127,900		$	4.02	4.77 Years	$	1,336,856
	The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of the first quarter of fiscal 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2014. This amount changes based on the fair market value of the Company's stock. The total intrinsic value of options exercised for the three months ended March 31, 2014 and 2013 was $0.2 million and $0.15 million, respectively.
	Cash received from option exercises during the three months ended March 31, 2014 and 2013 was $0.1 million and $0.2 million, respectively. Such amounts are included within the financing activities section in the accompanying condensed consolidated statements of cash flows.
	Options to purchase 274,400 shares of common stock were granted during the three months ended March 31, 2014. At March 31, 2014, there was $2.3 million of unrecognized compensation cost related to stock options and RSUs, all of which is expected to be realized over three years.
	The following table summarizes employee stock-based compensation expense resulting from stock options, RSUs and the ESPP (in thousands):
		Three Months Ended Mar. 31,
		2014		2013
	Included in cost of revenue	$	176	$	35
	Included in operating expenses:
	Research and development		83		33
	Selling, marketing and administrative		458		212
	Total		541		245
	Total stock-based compensation expense	$	717	$	280

Inventories_net

Inventories, net	3 Months Ended
	Mar. 31, 2014
Inventories, net [Abstract]	'
Inventories, net	'
	4. Inventories, net (in thousands)
		March 31,		December 31,
		2014		2013
	Inventories
	Finished goods	$	2,657	$	2,455
	Work-in-process		3,959		4,134
	Raw materials		3,714		4,041
		$	10,330	$	10,630

Net_Income_Per_Share

Net Income Per Share	3 Months Ended
	Mar. 31, 2014
Net Income Per Share [Abstract]	'
Net Income Per Share	'
	5. Net Income Per Share
	Basic net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the combination of dilutive common share equivalents, comprised of shares issuable under the Company's stock-based compensation plans, and the weighted average number of shares of common stock outstanding during the period. There were no incremental dilutive common share equivalents in the periods presented.
	The following table sets forth the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share data):
		Three Months Ended March 31,
		2014		2013
	Numerator:
	Net income	$	5,015	$	1,850
	Denominator:
	Shares used in computing net income per share:
	Basic		18,422		17,190
	Diluted		19,070		17,812
	Net income per share:
	Basic	$	0.27	$	0.11
	Diluted	$	0.26	$	0.1

Comprehensive_Income

Comprehensive Income	3 Months Ended
	Mar. 31, 2014
Comprehensive Income [Abstract]	'
Comprehensive Income	'
	6. Comprehensive Income
	Comprehensive income is defined as the change in equity of a company during a period resulting from transactions and other events and circumstances, excluding transactions resulting from investments by owners and distributions to owners. The difference between net income and comprehensive income for the Company is due to foreign exchange translations adjustments and unrealized loss on available-for-sale securities.

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2014
Income Taxes [Abstract]	'
Income Taxes	'
	7. Income Taxes
	The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
	The Company is subject to income tax in both the United States and various foreign jurisdictions. The effective tax rate is also affected by the taxable earnings in foreign jurisdictions with various different statutory tax rates. The Company reviews its expected annual effective income tax rates and makes changes on a quarterly basis as necessary based on certain factors such as forecasted annual operating income and valuation of deferred tax assets. The Company's effective tax rate was 24.20% and 2.65% for the three months ended March 31, 2014 and 2013, respectively. The Company's effective rate differs from its expected federal statutory rate primarily as a result of state taxes, foreign tax rate differences and permanent items.
	The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.
	Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The Company reduced deferred tax assets by $0.7 million as of March 31, 2014 as a result of net operating losses utilized against current taxable income.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies [Abstract]	'
Commitments and Contingencies	'
	8. Commitments and Contingencies
	Litigation:
	From time to time, the Company may be involved in litigation in the normal course of business. As of the date of these financial statements, the Company is not aware of any material legal proceedings pending or threatened against the Company.
	Indemnification and Product Warranty:
	The Company indemnifies certain customers, suppliers and subcontractors for attorney fees and damages and costs awarded against these parties in certain circumstances in which products are alleged to infringe third party intellectual property rights, including patents, trade secrets, trademarks or copyrights. In all cases, there are limits on and exceptions to the potential liability for indemnification relating to intellectual property infringement claims. The Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. As of March 31, 2014, the Company has not paid any claim or been required to defend any action related to indemnification obligations, and accordingly, the Company has not accrued any amounts for such indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
	The Company generally warrants products against defects in materials and workmanship and non-conformance to specifications for varying lengths of time. If there is a material increase in customer claims compared with historical experience, or if costs of servicing warranty claims are greater than expected, the Company may record a charge against cost of revenues. The Company accrued $0.09 million and $0.03 million for warranty reserves at each of March 31, 2014 and 2013.
	Operating Leases:
	The Company leases office space under long-term operating leases expiring at various dates through 2017.
	The Company's aggregate future minimum facility lease payments are as follows (in thousands):
	Years ending March 31:
	2014 (remaining nine months of the year)	$	490
	2015		278
	2016		29
	2017 and after		3
	Total	$	800

Related_Party_Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2014
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	9. Related Party Transactions
	As of March 31, 2014, and based on information filed with the Securities and Exchange Commission on January 4, 2002 for the year ended December 31, 2000, Foxconn Holding Limited ("Foxconn") and Hon Hai Precision Industry Co. Ltd. ("Hon Hai") held 17.4% of the Company's common stock. In the normal course of business, the Company sells products to and purchases raw materials from Hon Hai, who is the parent company of Foxconn. These transactions were made at prices and terms consistent with those of unrelated third parties. No sales of products to Hon Hai were made in either of the quarters ended March 31, 2014 and 2013. Purchases of raw materials from Hon Hai were $0.4 million and $0.3 million in the quarters ended March 31, 2014 or 2013. No amounts were due from Hon Hai at either of March 31, 2014 and 2013. Amounts due to Hon Hai were $0.4 million and $0.3 million at March 31, 2014 and 2013, respectively.

Fair_Value_of_Financial_instru

Fair Value of Financial instruments	3 Months Ended
	Mar. 31, 2014
Fair Value of Financial instruments [Abstract]	'
Fair Value of Financial instruments	'
	10. Fair Value of Financial instruments
	U.S. GAAP defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact a purchase or sale and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.
	The Company uses a fair value hierarchy established by U.S. GAAP that established a three-tiered fair value hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable to prioritize inputs used to measure fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. Those tiers are defined as follows:
	Level 1 -	inputs are quoted prices in active markets for identical assets or liabilities.
	Level 2 -	inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
	Level 3 -	inputs are unobservable and shall be used to the extent that observable inputs are not available in the overall fair value measurement.
	In 2012, the Company adopted Accounting Standards Update ("ASU") No. 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRS")" ("ASU 2011-04"). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 requires a reporting entity to disclose the reason for the measurement, where for recurring fair value measurements, the reason for measuring an asset or liability at fair value is often that either 1) it is required under other existing U.S. GAAP codification guidance or 2) the reporting entity has elected the fair value option under ASC 825. In regards to the Company, it is required under U.S. GAAP.
	ASU 2011-04 also requires reporting entities to disclose the following information for all Level 2 and Level 3 fair value measurement, where it requires that an entity must disclose a description of the valuation techniques and the inputs used in those measurements.
	For its Level 2 investments, the Company uses quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset.
	For all Level 3 measurements, ASU 2011-04 requires that an entity disclose quantitative information about the significant unobservable inputs used in those measurements. The Company has no Level 3 measurements.
	In addition, ASU 2011-04 requires reporting entities to make disclosure about amounts and reasons for all the transfers out of Level 1 and Level 2 fair value measurements. The Company had no such transfers for the quarter ended March 31, 2014.
	The adoption of ASU 2011-04 did not have a significant impact on the Company's financial statements.
	In accordance with the U.S. GAAP Codification Topic 820, the following table represent the fair value hierarchy for the Company's financial assets (investments) measured at fair value on a recurring basis as of March 31, 2014 and 2013:
			Fair Value Measurements at
			Reporting Date Using
					Quoted Prices		Significant
					in Active		Other		Significant
			Balance at		Markets for		Observable		Unobservable
			March 31,		Identical Assets		Inputs		Inputs
			2014		(Level 1)		(Level 2)		(Level 3)
	Cash equivalents:
	Money market mutual funds		$	1,014	$	1,014	$	-	$	-
	Marketable Securities:
	Time deposits			18,886		18,886		-		-
	Corporate bonds			12,973		-		12,973		-
	Long-term investments:
	Time deposits			10,498		10,498		-		-
	Total		$	43,371	$	30,398	$	12,973	$	-
			Fair Value Measurements at
			Reporting Date Using
					Quoted Prices		Significant
					in Active		Other		Significant
			Balance at		Markets for		Observable		Unobservable
			March 31,		Identical Assets		Inputs		Inputs
			2013		(Level 1)		(Level 2)		(Level 3)
	Cash equivalents:
	Money market mutual funds		$	1,994	$	1,994	$	-	$	-
	Marketable Securities:
	Time deposits			18,817		18,817		-		-
	Corporate bonds			9,059		-		9,059		-
	Long-term investments:
	Time deposits			10,318		10,318		-		-
	Total		$	40,188	$	31,129	$	9,059	$	-
	As of March 31, 2014 and 2013, the Company held investments in corporate bonds, certificates of deposit, and money market securities. The Company's cash and cash equivalents consist of investments with original maturities of 90 days or less from the date of purchase. The Company's short-term investments consist of corporate bonds and certificates of deposit with original maturities of 91 days or more from the date of purchase. The Company's long-term investments are comprised of certificates of deposit with original maturities of 365 days or more from the date of purchase.

Geographic_Segment_Information

Geographic Segment Information	3 Months Ended
	Mar. 31, 2014
Geographic Segment Information [Abstract]	'
Geographic Segment Information	'
	11. Geographic Segment Information
	The Company operates in a single industry segment. This industry segment is characterized by rapid technological change and significant competition.
	The following is a summary of the Company's revenues generated by geographic segments, revenues generated by product lines and identifiable assets located in these segments (in thousands):
		Three Months Ended March 31,
		2014		2013
	Revenues
	North America	$	15,881	$	7,870
	Europe		5,279		2,358
	Asia		3,722		1,925
		$	24,882	$	12,153
		Three Months Ended March 31,
		2014		2013
	Revenues
	Connectivity Products	$	19,581	$	8,971
	Optical Passive Products		5,301		3,182
		$	24,882	$	12,153
		March 31,		December 31,
		2014		2013
	Property and Equipment
	United States	$	105	$	40
	Taiwan		7,235		7,148
	China		5,729		6,070
		$	13,069	$	13,258

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies [Abstract]	'
Basis of Presentation	'
	Basis of Presentation
	The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2014 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include the accounts of Alliance Fiber Optic Products, Inc. and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations.
	These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. The unaudited condensed consolidated financial statements as of March 31, 2014, and for the three months ended March 31, 2014 and 2013, reflect, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial information set forth herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any subsequent interim period or for an entire year.
	There have been no significant changes in the Company's critical accounting policies during the three months ended March 31, 2014 as compared to those disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2013.
Revenue Recognition	'
	Revenue Recognition
	The Company recognizes revenue upon shipment of its products to customers, provided that it has received a purchase order, the price is fixed, collection of the resulting receivable is reasonably assured and transfer of title and risk of loss has occurred. Subsequent to the sale of products, the Company has no obligation to provide any modification or customization upgrades, enhancements or post contract customer support.
Allowance for Doubtful Accounts	'
	Allowance for Doubtful Accounts
	Allowances are provided for estimated returns and potential uncollectable trade receivables. Provisions for return allowances are recorded at the time revenue is recognized based on historical returns, current economic trends and changes in customer demand. Such allowances are adjusted periodically to reflect actual and anticipated experience. The Company also identifies specific accounts considered to have a high risk of uncollectibility and reserves the full amount. Material differences may result in the amount and timing of revenue for any period than if management had made different judgments or utilized different estimates.
Cash and Cash Equivalents	'
	Cash and Cash Equivalents
	The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of market rate accounts and certificates of deposit.
Short-Term and Long-Term Investments	'
	Short-Term and Long-Term Investments
	The Company generally invests its excess cash in certificates of deposit and corporate bonds. Such investments are made in accordance with the Company's investment policy, which establishes guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates.
Concentrations of Risk	'
	Concentrations of Risk
	Connectivity products contributed 78.7% and 73.8% of the Company's revenues for the quarters ended March 31, 2014 and 2013, respectively. Optical passive products contributed 21.3% and 26.2% of the Company's revenues for the quarters ended March 31, 2014 and 2013, respectively.
	In the three month ended March 31, 2014 and 2013, the Company's 10 largest customers comprised 72.6% and 68.5% of the Company's revenues, respectively. For the three months ended March 31, 2014, one customer accounted for 40.6% of the Company's total revenues and the amount due from this customer was $4.2 million at March 31, 2014. For the three months ended March 31, 2013, three customers accounted for 16.2%, 10.5% and 10.3% of the Company's total revenues, respectively. Amounts due from these customers were $1.8 million, $1.1 million and $1.1 million, respectively, at March 31, 2013.

Stockbased_Compensation_Tables

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2014
Stock-based Compensation [Abstract]	'
Schedule of Stock Options Activity	'
	The following information relates to stock option activity for the three months ended March 31, 2014:
						Weighted
				Weighted		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
	Options	Shares		Price		Life	Value
	Outstanding at December 31, 2013	565,640		$	5.28
	Granted	274,400			12.5
	Exercised	(20,200	)		3.93
	Forfeited	(90,000	)		4.45
	Outstanding at March 31, 2014	729,840		$	8.13	8.47 Years	$	4,626,776
	Vested and expected to vest at March 31, 2014	611,838		$	7.96	8.47 Years	$	3,985,006
	Exercisable at March 31, 2014	127,900		$	4.02	4.77 Years	$	1,336,856
Schedule of Employee Stock-Based Compensation Expense	'
	The following table summarizes employee stock-based compensation expense resulting from stock options, RSUs and the ESPP (in thousands):
		Three Months Ended Mar. 31,
		2014		2013
	Included in cost of revenue	$	176	$	35
	Included in operating expenses:
	Research and development		83		33
	Selling, marketing and administrative		458		212
	Total		541		245
	Total stock-based compensation expense	$	717	$	280

Inventories_net_Tables

Inventories, net (Tables)	3 Months Ended
	Mar. 31, 2014
Inventories, net [Abstract]	'
Schedule of Inventories	'
		March 31,		December 31,
		2014		2013
	Inventories
	Finished goods	$	2,657	$	2,455
	Work-in-process		3,959		4,134
	Raw materials		3,714		4,041
		$	10,330	$	10,630

Net_Income_Per_Share_Tables

Net Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2014
Net Income Per Share [Abstract]	'
Schedule of Computation of Basic and Diluted Net Income Per Share	'
	The following table sets forth the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share data):
		Three Months Ended March 31,
		2014		2013
	Numerator:
	Net income	$	5,015	$	1,850
	Denominator:
	Shares used in computing net income per share:
	Basic		18,422		17,190
	Diluted		19,070		17,812
	Net income per share:
	Basic	$	0.27	$	0.11
	Diluted	$	0.26	$	0.1

Commitments_and_Contingencies_

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies [Abstract]	'
Schedule of Aggregate Future Minimum Facility Lease Payments	'
	The Company's aggregate future minimum facility lease payments are as follows (in thousands):
	Years ending March 31:
	2014 (remaining nine months of the year)	$	490
	2015		278
	2016		29
	2017 and after		3
	Total	$	800

Fair_Value_of_Financial_instru1

Fair Value of Financial instruments (Tables)	3 Months Ended
	Mar. 31, 2014
Fair Value of Financial instruments [Abstract]	'
Schedule of Financial Assets at Fair Value	'
	In accordance with the U.S. GAAP Codification Topic 820, the following table represent the fair value hierarchy for the Company's financial assets (investments) measured at fair value on a recurring basis as of March 31, 2014 and 2013:
		Fair Value Measurements at
		Reporting Date Using
				Quoted Prices		Significant
				in Active		Other		Significant
		Balance at		Markets for		Observable		Unobservable
		March 31,		Identical Assets		Inputs		Inputs
		2014		(Level 1)		(Level 2)		(Level 3)
	Cash equivalents:
	Money market mutual funds	$	1,014	$	1,014	$	-	$	-
	Marketable Securities:
	Time deposits		18,886		18,886		-		-
	Corporate bonds		12,973		-		12,973		-
	Long-term investments:
	Time deposits		10,498		10,498		-		-
	Total	$	43,371	$	30,398	$	12,973	$	-
		Fair Value Measurements at
		Reporting Date Using
				Quoted Prices		Significant
				in Active		Other		Significant
		Balance at		Markets for		Observable		Unobservable
		March 31,		Identical Assets		Inputs		Inputs
		2013		(Level 1)		(Level 2)		(Level 3)
	Cash equivalents:
	Money market mutual funds	$	1,994	$	1,994	$	-	$	-
	Marketable Securities:
	Time deposits		18,817		18,817		-		-
	Corporate bonds		9,059		-		9,059		-
	Long-term investments:
	Time deposits		10,318		10,318		-		-
	Total	$	40,188	$	31,129	$	9,059	$	-

Geographic_Segment_Information1

Geographic Segment Information (Tables)	3 Months Ended
	Mar. 31, 2014
Geographic Segment Information [Abstract]	'
Schedule of Segment Reporting Information	'
	The following is a summary of the Company's revenues generated by geographic segments, revenues generated by product lines and identifiable assets located in these segments (in thousands):
		Three Months Ended March 31,
		2014		2013
	Revenues
	North America	$	15,881	$	7,870
	Europe		5,279		2,358
	Asia		3,722		1,925
		$	24,882	$	12,153
		Three Months Ended March 31,
		2014		2013
	Revenues
	Connectivity Products	$	19,581	$	8,971
	Optical Passive Products		5,301		3,182
		$	24,882	$	12,153
		March 31,		December 31,
		2014		2013
	Property and Equipment
	United States	$	105	$	40
	Taiwan		7,235		7,148
	China		5,729		6,070
		$	13,069	$	13,258

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Details) (USD $)

Mar. 31, 2014

Dec. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2013

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2014

Mar. 31, 2013

Mar. 31, 2013

Mar. 31, 2013

In Thousands, unless otherwise specified

Customer A [Member]

Customer A [Member]

Customer B [Member]

Customer C [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Sales [Member]

Product Concentration Risk [Member]

Product Concentration Risk [Member]

Product Concentration Risk [Member]

Product Concentration Risk [Member]

Customer Concentration Risk [Member]

Customer Concentration Risk [Member]

Customer Concentration Risk [Member]

Customer Concentration Risk [Member]

Customer Concentration Risk [Member]

Customer Concentration Risk [Member]

Connectivity Products [Member]

Connectivity Products [Member]

Optical Passive Products [Member]

Optical Passive Products [Member]

Customer A [Member]

Customer A [Member]

Customer B [Member]

Customer C [Member]

Concentration Risk [Line Items]

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Concentration Risk, Percentage

'

'

'

'

'

'

78.70%

73.80%

21.30%

26.20%

72.60%

68.50%

40.60%

16.20%

10.50%

10.30%

Accounts receivable, net

$13,961

$11,566

$4,200

$1,800

$1,100

$1,100

'

'

'

'

'

'

'

'

'

'

Stockbased_Compensation_Schedu

Stock-based Compensation (Schedule of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $)	3 Months Ended
	Mar. 31, 2014
Employee Stock Option [Member]	'
Shares	'
Outstanding, beginning balance	565,640
Granted	274,400
Exercised	-20,200
Forfeited	-90,000
Outstanding, ending balance	729,840
Vested and expected to vest, end of period	611,838
Exercisable, end of period	127,900
Weighted Average Exercise Price	'
Outstanding, beginning balance	$5.28
Granted	$12.50
Exercised	$3.93
Forfeited	$4.45
Outstanding, ending balance	$8.13
Vested and expected to vest, end of period	$7.96
Exercisable, end of period	$4.02
Weighted Average Remaining Contractual Life	'
Outstanding, ending balance	'8 years 5 months 19 days
Vested and expected to vest, end of period	'8 years 5 months 19 days
Exercisable, end of period	'4 years 9 months 7 days
Aggregate Intrinsic Value	'
Outstanding, ending balance	$4,626,776
Vested and expected to vest, end of period	3,985,006
Exercisable, end of period	$1,336,856

Stockbased_Compensation_Narrat

Stock-based Compensation (Narrative) (Details) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Unrecognized compensation cost	$2.30	'
Unrecognized compensation cost, recognition period	'3 years	'
Restricted Stock Units (RSUs) [Member] | Vesting Tranche One [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Vesting period	'2 years	'
Vesting rate	50.00%	'
Restricted Stock Units (RSUs) [Member] | Vesting Tranche Two [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Vesting period	'3 years	'
Vesting rate	33.30%	'
Restricted Stock Units (RSUs) [Member] | Vesting Tranche Three [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Vesting period	'5 years	'
Vesting rate	20.00%	'
Employee Stock Option [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Vesting period	'4 years	'
Plan duration	'10 years	'
Intrinsic value of options exercised	0.2	0.15
Cash received from option exercises	$0.10	$0.20

Stockbased_Compensation_Schedu1

Stock-based Compensation (Schedule of Employee Stock-Based Compensation Expense) (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]	'	'
Stock-based compensation expense	$717	$280
Cost of Revenue [Member]	'	'
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]	'	'
Stock-based compensation expense	176	35
Research and Development [Member]	'	'
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]	'	'
Stock-based compensation expense	83	33
Sales, Marketing and Administrative [Member]	'	'
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]	'	'
Stock-based compensation expense	458	212
Operating Expense [Member]	'	'
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]	'	'
Stock-based compensation expense	$541	$245

Inventories_net_Details

Inventories, net (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Inventories, net [Abstract]	'	'
Finished goods	$2,657	$2,455
Work-in-process	3,959	4,134
Raw materials	3,714	4,041
Inventory, Net	$10,330	$10,630

Net_Income_Per_Share_Details

Net Income Per Share (Details) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Numerator:	'	'
Net income	$5,015	$1,850
Weighted average of common shares outstanding	'	'
Basic	18,422	17,190
Diluted	19,070	17,812
Net income per share:	'	'
Basic	$0.27	$0.11
Diluted	$0.26	$0.10

Income_Taxes_Details

Income Taxes (Details) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income Taxes [Abstract]	'	'
Effective tax rate	24.20%	2.65%
Net operating losses utilized against current taxable income	$0.70	'

Commitments_and_Contingencies_1

Commitments and Contingencies (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Indemnification and Product Warranty:	'	'
Accrued warranty reserves	$90	$60
Operating Leases:	'	'
2014 (remaining nine months of the year)	490,000	'
2015	278,000	'
2016	29,000	'
2017 and after	3,000	'
Total	$800,000	'

Related_Party_Transactions_Det

Related Party Transactions (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Related Party Transaction [Line Items]	'	'
Ownership percentage	17.40%	'
Hon Hai Precision Industry Co. Ltd. [Member]	'	'
Related Party Transaction [Line Items]	'	'
Net sales to related party	$0	$0
Purchases of raw materials from related party	400,000	300,000
Amounts due from related party	0	0
Amounts due to related party	$400,000	$300,000

Fair_Value_of_Financial_instru2

Fair Value of Financial instruments (Details) (Fair Value, Measurements, Recurring [Member], USD $)	Mar. 31, 2014	Mar. 31, 2013
In Thousands, unless otherwise specified
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Cash equivalents	$1,014	$1,994
Total	43,371	40,188
Short-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	18,886	18,817
Corporate Bond Securities [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	12,973	9,059
Long-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	10,498	10,318
Fair Value, Inputs, Level 1 [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Cash equivalents	1,014	1,994
Total	30,398	31,129
Fair Value, Inputs, Level 1 [Member] | Short-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	18,886	18,817
Fair Value, Inputs, Level 1 [Member] | Corporate Bond Securities [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'
Fair Value, Inputs, Level 1 [Member] | Long-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	10,498	10,318
Fair Value, Inputs, Level 2 [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Cash equivalents	'	'
Total	12,973	9,059
Fair Value, Inputs, Level 2 [Member] | Short-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'
Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	12,973	9,059
Fair Value, Inputs, Level 2 [Member] | Long-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'
Fair Value, Inputs, Level 3 [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Cash equivalents	'	'
Total	'	'
Fair Value, Inputs, Level 3 [Member] | Short-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'
Fair Value, Inputs, Level 3 [Member] | Corporate Bond Securities [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'
Fair Value, Inputs, Level 3 [Member] | Long-Term Time Deposits [Member]	'	'
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]	'	'
Investments	'	'

Geographic_Segment_Information2

Geographic Segment Information (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Revenues	'	'	'
Revenues	$24,882	$12,153	'
Property and Equipment	'	'	'
Property and Equipment, net	13,069	'	13,258
North America [Member]	'	'	'
Revenues	'	'	'
Revenues	15,881	7,870	'
Europe [Member]	'	'	'
Revenues	'	'	'
Revenues	5,279	2,358	'
Asia [Member]	'	'	'
Revenues	'	'	'
Revenues	3,722	1,925	'
United States [Member]	'	'	'
Property and Equipment	'	'	'
Property and Equipment, net	105	'	40
Taiwan [Member]	'	'	'
Property and Equipment	'	'	'
Property and Equipment, net	7,235	'	7,148
China [Member]	'	'	'
Property and Equipment	'	'	'
Property and Equipment, net	5,729	'	6,070
Connectivity Products [Member]	'	'	'
Revenues	'	'	'
Revenues	19,581	8,971	'
Optical Passive Products [Member]	'	'	'
Revenues	'	'	'
Revenues	$5,301	$3,182	'