Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | FALSE |
Document Period End Date | 31-Dec-14 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
Trading Symbol | SIMO |
Entity Registrant Name | SILICON MOTION TECHNOLOGY CORP |
Entity Central Index Key | 1329394 |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 135,622,076 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets | ||
Cash and cash equivalents | $194,211 | $161,720 |
Short-term investments | 703 | 742 |
Notes and accounts receivable, net | 28,854 | 31,213 |
Inventories | 44,076 | 33,666 |
Restricted assets-current | 19,322 | 15,299 |
Deferred income tax assets, net | 1,278 | |
Prepaid expenses and other current assets | 3,274 | 2,621 |
Total current assets | 290,440 | 246,539 |
Long-term investments | 133 | 133 |
Property and equipment, net | 35,537 | 30,195 |
Deferred income tax assets, net | 1,909 | 714 |
Goodwill | 35,467 | 35,474 |
Other assets | 3,436 | 3,708 |
Total assets | 366,922 | 316,763 |
Current Liabilities | ||
Notes and accounts payable | 14,246 | 14,661 |
Income tax payable | 17,696 | 8,189 |
Current portion of long-term payable | 478 | 207 |
Deferred income tax liabilities, net | 388 | |
Accrued expenses and other current liabilities | 23,646 | 17,610 |
Total current liabilities | 56,454 | 40,667 |
Long-term payable, net of current portion | 284 | 211 |
Other long-term liabilities | 6,084 | 5,188 |
Total liabilities | 62,822 | 46,066 |
Commitments and Contingencies (Note 15) | ||
Shareholders' Equity | ||
Ordinary Shares at US$ 0.01 par value per share Authorized: 500,000 thousand shares Issued and outstanding: 131,630 thousand shares in 2013 and 135,622 thousand shares in 2014 | 1,356 | 1,316 |
Additional paid-in capital | 190,783 | 180,016 |
Accumulated other comprehensive income | 2,505 | 4,095 |
Retained Earnings | 109,456 | 85,270 |
Total shareholders' equity | 304,100 | 270,697 |
Total liabilities and shareholders' equity | $366,922 | $316,763 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Ordinary Shares, par value | $0.01 | $0.01 |
Ordinary Shares, Authorized | 500,000 | 500,000 |
Ordinary Shares, Issued | 135,622 | 131,630 |
Ordinary Shares, outstanding | 135,622 | 131,630 |
Consolidated_Statements_Of_Inc
Consolidated Statements Of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $289,323 | $225,308 | $281,370 |
COST OF SALES | 139,625 | 118,698 | 149,650 |
GROSS PROFIT | 149,698 | 106,610 | 131,720 |
OPERATING EXPENSES | |||
Research and development | 60,949 | 46,460 | 50,975 |
Sales and marketing | 16,324 | 13,597 | 15,919 |
General and administrative | 13,355 | 11,250 | 12,156 |
Total operating expenses | 90,628 | 71,307 | 79,050 |
OPERATING INCOME | 59,070 | 35,303 | 52,670 |
NON-OPERATING INCOME (EXPENSES) | |||
Gain from disposal of short-term investments | 4 | 122 | 2 |
Unrealized holding loss on short-term investment | 0 | 0 | -118 |
Dividend income | 17 | ||
Interest income | 2,215 | 1,845 | 1,433 |
Foreign exchange gain (loss), net | -606 | -25 | 390 |
Interest expense | -114 | -110 | -61 |
Other income, net | -1 | 13 | 1 |
Total non-operating income | 1,498 | 1,845 | 1,664 |
INCOME BEFORE INCOME TAX | 60,568 | 37,148 | 54,334 |
INCOME TAX EXPENSE | 16,101 | 9,772 | 7,116 |
NET INCOME | $44,467 | $27,376 | $47,218 |
EARNINGS PER ORDINARY SHARE: | |||
Basic | $0.33 | $0.21 | $0.37 |
Diluted | $0.33 | $0.20 | $0.35 |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING | |||
Basic (Thousands) | 134,604 | 132,259 | 129,259 |
Diluted (Thousands) | 136,787 | 134,567 | 134,504 |
EARNINGS PER ADS (one ADS equals four ordinary shares): | |||
Basic | $1.32 | $0.83 | $1.46 |
Diluted | $1.30 | $0.81 | $1.40 |
WEIGHTED AVERAGE ADS OUTSTANDING | |||
Basic (Thousands) | 33,651 | 33,065 | 32,315 |
Diluted (Thousands) | 34,197 | 33,642 | 33,626 |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $44,467 | $27,376 | $47,218 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX EFFECT OF NIL | |||
Change in net foreign currency translation adjustments | -1,202 | 633 | 1,947 |
Change in deferred pension gain (loss) | -388 | -203 | -337 |
OTHER COMPREHENSIVE INCOME (LOSS) | -1,590 | 430 | 1,610 |
TOTAL COMPREHENSIVE INCOME | $42,877 | $27,806 | $48,828 |
Consolidated_Statements_Of_Cha
Consolidated Statements Of Changes In Shareholders' Equity (USD $) | Total | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (accumulated deficit) | Treasury Stock |
In Thousands | ||||||
BEGINNING BALANCE at Dec. 31, 2011 | $201,500 | $1,246 | $161,968 | $2,055 | $36,231 | |
BEGINNING BALANCE (in shares) at Dec. 31, 2011 | 124,572 | |||||
Net income | 47,218 | 47,218 | ||||
Other comprehensive income | 1,610 | 1,610 | ||||
Stock-based compensation expenses | 11,802 | 11,802 | ||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units, shares | 5,468 | |||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units | 136 | 54 | 82 | |||
Ending Balance at Dec. 31, 2012 | 262,266 | 1,300 | 173,852 | 3,665 | 83,449 | |
Ending Balance (in shares) at Dec. 31, 2012 | 130,040 | |||||
Net income | 27,376 | 27,376 | ||||
Other comprehensive income | 430 | 430 | ||||
Stock-based compensation expenses | 10,262 | 10,262 | ||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units, shares | 5,154 | |||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units | 346 | 52 | 294 | |||
Share repurchase | -10,018 | -10,018 | ||||
Dividends declared (US$0.15 per ordinary share) | -19,965 | -19,965 | ||||
Treasury stock retired, shares | -3,564 | |||||
Treasury stock retired | -36 | -4,392 | -5,590 | 10,018 | ||
Ending Balance at Dec. 31, 2013 | 270,697 | 1,316 | 180,016 | 4,095 | 85,270 | |
Ending Balance (in shares) at Dec. 31, 2013 | 131,630 | |||||
Net income | 44,467 | 44,467 | ||||
Other comprehensive income | -1,590 | -1,590 | ||||
Stock-based compensation expenses | 10,347 | 10,347 | ||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units, shares | 3,992 | |||||
Issuance of ordinary shares upon exercise of employee stock options and restricted stock units | 460 | 40 | 420 | |||
Dividends declared (US$0.15 per ordinary share) | -20,281 | -20,281 | ||||
Ending Balance at Dec. 31, 2014 | $304,100 | $1,356 | $190,783 | $2,505 | $109,456 | |
Ending Balance (in shares) at Dec. 31, 2014 | 135,622 |
Consolidated_Statements_Of_Cha1
Consolidated Statements Of Changes In Shareholders' Equity (Parenthetical) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividends declared, per share | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.15 | $0.15 | $0 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $44,467 | $27,376 | $47,218 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Unrealized holding loss on short-term investment | 0 | 0 | 118 |
Depreciation and amortization | 6,917 | 6,429 | 5,881 |
Gain from disposal of short-term investments | -4 | -122 | -2 |
Stock-based compensation | 10,347 | 10,262 | 11,802 |
Loss on disposal of property and equipment | 18 | 5 | 26 |
Deferred income taxes | 471 | 1,181 | 1,582 |
Changes in operating assets and liabilities: | |||
Short-term investments | 14,265 | -12,018 | |
Notes and accounts receivable | 2,359 | 5,572 | 2,002 |
Inventories | -10,410 | -1,523 | -1,828 |
Prepaid expenses and other current assets | -678 | -403 | 248 |
Other assets | 67 | -143 | 590 |
Notes and accounts payable | -415 | -11,981 | 5,644 |
Accrued expenses and other current liabilities | 5,543 | -7,415 | 6,390 |
Income tax payable | 9,507 | 3,520 | 1,362 |
Other liabilities | 536 | 2,105 | 221 |
Net cash provided by operating activities | 68,725 | 49,128 | 69,236 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Return of capital from long-term investments | 46 | ||
Purchase of property and equipment | -11,596 | -12,772 | -4,280 |
Changes in restricted assets | -3,817 | -89 | -469 |
Net cash used in investing activities | -15,413 | -12,815 | -4,749 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of ordinary shares upon exercise of employee stock options | 514 | 422 | 224 |
Share repurchase | -10,018 | ||
Dividends paid | -20,224 | -19,897 | |
Net cash provided by (used in) financing activities | -19,710 | -29,493 | 224 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 33,602 | 6,820 | 64,711 |
EFFECT OF EXCHANGE RATE CHANGES | -1,111 | 166 | 1,260 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 161,720 | 154,734 | 88,763 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 194,211 | 161,720 | 154,734 |
SUPPLEMENTAL INFORMATION | |||
Interest paid | 71 | 86 | |
Income taxes paid | $5,892 | $2,947 | $3,256 |
Organization_and_Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2014 | |
Organization and Operations | 1. ORGANIZATION AND OPERATIONS |
Silicon Motion Technology Corporation (“SMTC”, collectively with its subsidiaries the “Company”) was incorporated in the Cayman Islands on January 27, 2005. The Company is a fabless semiconductor company that designs, develops and markets, high-performance, low-power semiconductor solutions to OEMs and other customers in the mobile storage and mobile communications markets. In the mobile storage market, the Company’s key products are microcontrollers used in solid state storage devices such as SSDs, eMMCs and other embedded flash applications, as well as removable storage products such as flash memory cards and USB flash drives. For the mobile communications market, the Company’s key products are handset transceivers and mobile TV IC solutions. | |
The Company acquired SMI Taiwan in April 2005. Originally SMI Taiwan was known as Feiya Technology Corporation (“Feiya”), a Taiwan corporation which was incorporated in April 1997 but had changed its name to SMI Taiwan after acquiring in August 2002 Silicon Motion, Inc., a California corporation (“SMI USA”), which was incorporated in November 1995. Feiya was originally a flash memory products company and SMI USA a graphics processor company. In April 2007, the Company acquired FCI, a leading designer of RF ICs for mobile TV and wireless communications based in South Korea. The Company established Silicon Motion BV in the Netherlands in 2011 with the purpose of expanding its business activities in Europe, as well as providing supervisory, financing, legal support, accounting services and shareholding for the Company’s businesses in other parts of the world. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||||||||||||||||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The consolidated financial statements include the accounts of SMTC and its wholly-owned subsidiaries. The Company owns 100% of the outstanding shares in all of its subsidiaries, except for FCI which the Company owns over 99.9%. All significant intercompany balances and transactions have been eliminated upon consolidation. | |||||||||||||||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. The actual results could differ from those estimates. | |||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||||||||||||||||||||||
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, investment in debt securities and accounts receivable. Cash is deposited with high credit-quality financial institutions. For accounts receivable, the Company performs ongoing credit evaluations of its customers’ financial condition and the Company maintains an allowance for doubtful accounts receivable based upon a review of the expected collectibility of individual accounts. | |||||||||||||||||||||||||||||||||||||
The Company sells semiconductor solutions to leading module makers and OEMs worldwide. The Company provides high performance flash memory storage controllers to companies such as SK Hynix, Netcom, Micron, Samsung, Sony, and Transcend. The Company is a leading supplier of controllers used in eMMC embedded memory, flash memory cards, and USB flash drives. The Company provides innovative mobile communications ICs primarily to LG and Samsung. Sales to one customer in 2012, and two customers in 2013 and 2014 accounted for 10% or more of our net revenue, represented 35%, 46% and 47% of our net revenue in 2012, 2013 and 2014, respectively. In 2012, the significant customer was Samsung and in 2013 and 2014, Samsung and SK Hynix. The Company’s top ten customers in 2012, 2013 and 2014 accounted for approximately 75%, 76% and 76% of net sales. | |||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||||||||||||||
The carrying amount of the Company’s financial instruments, including cash and cash equivalents, notes and accounts receivable and notes and accounts payables approximates fair value due to the short-term maturity of the instruments. Fair values of short-term investments represent quoted market prices, if available. If no quoted market prices are available, fair values are estimated based on discounted cash flow, or other valuation techniques. Long-term investments are privately-held companies where there is no readily determinable market value and are recorded using the cost method, since the cost of obtaining verifiable fair value is unreasonably high. The Company periodically evaluates these investments for impairment. If it is determined that an other-than-temporary decline has occurred in the carrying value, an impairment loss is recorded for that period. The Company’s long-term liabilities approximate their fair values as they contain interest rates that vary according to market interest rates. | |||||||||||||||||||||||||||||||||||||
Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that assets or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the Company. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||||||||||||||||||||||
Level 1 — Use unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||||||||
Level 2 — Use observable inputs other than Level 1 prices such as quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||||||||||||||||||||||
Level 3 — Use inputs that are generally unobservable and reflect the use of significant management judgments and estimates. | |||||||||||||||||||||||||||||||||||||
See Note 17, “Fair Value Measurement”, for the related disclosure. | |||||||||||||||||||||||||||||||||||||
Cash Equivalents | |||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments with maturities within three months from the date of purchase to be cash equivalents. | |||||||||||||||||||||||||||||||||||||
Short-term Investments | |||||||||||||||||||||||||||||||||||||
The Company’s short-term investments are short-term income yielding investments with original maturities greater than three months from the purchase date and remaining maturities less than one year. These short-term investments consist primarily of bond funds that are bought and held principally for the purpose of selling them in the near term and are classified as trading securities as well as structured notes designated at the fair value. They are reported at fair value with the subsequent changes in fair value recorded in earnings as unrealized gains and losses. | |||||||||||||||||||||||||||||||||||||
Allowance for Doubtful Receivables | |||||||||||||||||||||||||||||||||||||
An allowance for doubtful receivables is provided based on a review of the collectability of accounts receivables. The Company determines the amount of allowance for doubtful receivables by examining the historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. | |||||||||||||||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||||||||||||||
Inventories are stated at the lower of cost or market value. Inventories are recorded at standard cost and adjusted to the approximate weighted-average cost at the balance sheet date. Market value represents the current replacement cost for raw materials, work in process and finished goods. The Company assesses its inventory for estimated obsolescence or unmarketable inventory based upon management’s assumptions about future demand and market conditions. In estimating reserves for obsolescence, the Company primarily evaluates estimates based on the timing of the introduction of new products and the quantities remaining of old products and provides reserves for inventory on hand in excess of the estimated demand. Estimated losses on slow-moving items are recognized and included in the allowance for losses. | |||||||||||||||||||||||||||||||||||||
Long-term Investments | |||||||||||||||||||||||||||||||||||||
The Company has long-term investments in companies that it does not exercise significant influence and accounts for these investments under the cost method. Management regularly evaluates financial information related to these investments to determine whether an other than temporary decline in their value exists. Factors indicative of an other than temporary decline include recurring operating losses, credit defaults and subsequent rounds of financings at an amount below the cost basis of the investment. Management periodically weighs all quantitative and qualitative factors in determining if any impairment loss exists. When a decline in value is deemed to be other-than-temporary, the Company recognizes an impairment loss in other income and expense. | |||||||||||||||||||||||||||||||||||||
Property and Equipment | |||||||||||||||||||||||||||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Significant additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. | |||||||||||||||||||||||||||||||||||||
Depreciation is computed using the straight-line method over estimated useful lives that range as follows: buildings — 25 to 50 years; machinery and equipment — 3 to 6 years; furniture and fixtures — 3 to 8 years; software — 1 to 5 years; leasehold and buildings improvement — the shorter of the estimated useful life or lease term, which is generally 2 to 6 years. Depreciation expense recognized for the years ended December 31, 2012, 2013 and 2014 was approximately US$5,881 thousand, US$6,429 thousand and US$6,917 thousand, respectively. | |||||||||||||||||||||||||||||||||||||
Upon the sale or other disposal of property and equipment, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is credited or charged to operating income. | |||||||||||||||||||||||||||||||||||||
Government Grants | |||||||||||||||||||||||||||||||||||||
Grants received by the Company from the Korean government to assist with specific research and development activities are deducted from those research and development costs incurred, in the period in which the related expenses are incurred, to the extent that they are non-refundable. Government grants that were used for the acquisition of fixed assets are deducted from the acquisition costs of the acquired assets and amortized over the useful lives of the related assets. The Company recognizes refundable government grants as long-term payable and current portion of long-term payable on its consolidated balance sheet. | |||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||||||
Goodwill is the excess of the purchase price paid over the fair value of the net tangible and intangible assets acquired in a business combination. Intangible assets, which consist primarily of core technology and customer relationship, are amortized over their estimated useful lives, of 4 years at the time of acquisition. | |||||||||||||||||||||||||||||||||||||
Impairment of Goodwill and Long-Lived Assets | |||||||||||||||||||||||||||||||||||||
The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying value may not be recoverable. The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset and its eventual disposition. The estimate of cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors. Estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, technological changes, economic conditions, changes to the business model or changes in operating performance. If the sum of the undiscounted cash flows is less than the carrying value, an impairment loss is recognized, measured as the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined by reference to quoted market prices, if available, or discounted cash flows, as appropriate. See Note 9, “Goodwill and Acquired Intangible Assets,” regarding impairment testing in fiscal year 2012, 2013 and 2014. | |||||||||||||||||||||||||||||||||||||
The Company monitors the recoverability of goodwill recorded in connection with acquisitions, by reporting unit, annually, or sooner if events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company conducts its annual impairment test of goodwill on November 30. Reporting units may be operating segments as a whole or an operation one level below an operating segment, referred to as a component. Goodwill impairment is tested using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchases price over the amounts assigned to assets and liabilities. Estimating fair value is performed by utilizing various valuation approaches, such as income approach or market approach. The total of all reporting unit fair values was also compared to the Company’s market capitalization plus control premium for reasonableness. See Note 9, “Goodwill and Acquired Intangible Assets,” regarding impairment testing. | |||||||||||||||||||||||||||||||||||||
Other Assets | |||||||||||||||||||||||||||||||||||||
Other assets primarily consist of industrial property right and deposits for office leases. | |||||||||||||||||||||||||||||||||||||
Restricted Assets | |||||||||||||||||||||||||||||||||||||
Restricted assets consist of deposits required for litigation and restricted cash. Restricted cash represents cash set aside as collateral for obtaining capacity and borrowings as well as cash received from government grants with restriction on its usage. | |||||||||||||||||||||||||||||||||||||
Pension Costs | |||||||||||||||||||||||||||||||||||||
For employees under defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees’ individual pension accounts. For employees under defined benefit pension plans, pension costs are recorded based on actuarial calculations. | |||||||||||||||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||||||||||||||
Revenue from product sales is generally recognized upon shipment to the customer provided that the Company has received a signed purchase order, the price is fixed or determinable, transfer of title has occurred in accordance with the shipping terms specified in the arrangement with the customer, collectibility from the customer is considered reasonably assured, product returns are reasonably estimable and there are no remaining significant obligations or customer acceptance requirements. Revenue on development service orders is generally recognized upon completion and customer acceptance of contractually agreed milestones. | |||||||||||||||||||||||||||||||||||||
The Company grants certain distributors limited rights of return and price protection rights on unsold products. The return rights are generally limited to five percent of the monetary value of products purchased within the preceding six months, provided that the distributor places a corresponding restocking order of equal or greater value. An allowance for sales returns for distributors and all customers is recorded at the time of sale based on historical returns information available, management’s judgment and any known factors at the time the financial statements are prepared that would significantly affect the allowance. Price protection rights are based on the inventory products the distributors have on hand at the date the price protection is offered. A reserve for price adjustments is recorded based on the estimated products on hand at the distributors and historical experience. The Company incurred actual price adjustments to distributors are minimal. | |||||||||||||||||||||||||||||||||||||
The Company provides a warranty period of one year for manufacturing defects of its products. Warranty returns have been infrequent and relate to defective or off-specification parts. The Company estimates a reserve for warranty based on historical experience and records this amount to cost of sales. For the years ended December 31, 2012, 2013 and 2014, the Company did not experience significant costs associated with warranty returns. | |||||||||||||||||||||||||||||||||||||
Research and Development | |||||||||||||||||||||||||||||||||||||
Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge that will be useful in developing new products or at significantly enhancing existing products as well as expenditures incurred for the design and testing of product alternatives. All expenditures related to research and development activities of the Company are charged to operating expenses when incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. | |||||||||||||||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||||||||||||||
The provision for income tax represents income tax paid and payable for the current year plus the changes in the deferred income tax assets and liabilities during the years. Deferred income tax assets are recognized for net operating loss carryforwards, research and development credits, and temporary differences. The Company believes that uncertainty exists regarding the realizability of certain deferred income tax assets and, accordingly, has established a valuation allowance for those deferred income tax assets to the extent the realizability is not deemed to be more likely than not. Deferred income tax assets and liabilities are measured using enacted tax rates. | |||||||||||||||||||||||||||||||||||||
The Company utilizes a two step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained in a dispute with taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. | |||||||||||||||||||||||||||||||||||||
SMI Taiwan, the Company’s largest operating company is a Taiwan registered company. Under Taiwan tax regulations, the current year’s earnings, on an after tax basis, that are not distributed in the following year are subject to a 10% additional income tax. This 10% additional income tax is recognized in the period during which the related earnings are generated. | |||||||||||||||||||||||||||||||||||||
The Taiwan government enacted the Income Basic Tax Act (“the IBT Act”), which became effective on January 1, 2006. The alternative minimum tax (“AMT”) imposed under the IBT Act is a supplemental tax levied at a rate of 10% which is payable if the income tax payable determined pursuant to the Income Tax Law is below the minimum amount prescribed under the IBT Act. The taxable income for calculating the AMT includes most of the income that is exempted from income tax under various laws and statutes. The Company has considered the impact of the IBT Act in the determination of its tax liabilities. Under the IBT Act amended in August 2012, the standard deduction and the tax rate of AMT were amended from NT$1,000 thousand to be NT$500 thousand and from 10% to 12%, respectively. The amended IBT Act is effective on January 1, 2013. | |||||||||||||||||||||||||||||||||||||
Foreign Currency Transactions | |||||||||||||||||||||||||||||||||||||
Foreign currency transactions are recorded at the rates of exchange in effect when the transaction occurs. Gains or losses, resulting from the application of different foreign exchange rates when cash in foreign currency is converted into the entities’ functional currency, or when foreign currency receivables and payables are settled, are credited or charged to income in the period of conversion or settlement. At the balance sheet date, assets and liabilities denominated in foreign currencies are remeasured based on prevailing exchange rates and any resulting gains or losses are credited or charged to income. | |||||||||||||||||||||||||||||||||||||
Translation of Foreign Currency Financial Statements | |||||||||||||||||||||||||||||||||||||
The reporting currency of the Company is the U.S. dollars. The functional currency of some of the Company’s subsidiaries is the local currency of the respective entity. Accordingly, the financial statements of the foreign subsidiaries were translated into U.S. dollars at the following exchange rates: assets and liabilities — current rate on the balance sheet date; shareholders’ equity — historical rates; income and expenses — average rate during the period. The resulting translation adjustment is recorded as a separate component of comprehensive income. | |||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||
Comprehensive income and loss represents net income (loss) plus the results of certain changes in shareholders’ equity during a period from non-owner sources. The following table presents the components of accumulated other comprehensive income (loss) as of December 31, 2012, 2013 and 2014: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2013 | Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||||||||||||||
Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | |||||||||||||||||||||||||||||
currency | benefit | other | currency | benefit | other | currency | benefit | other | |||||||||||||||||||||||||||||
items | pension | comprehensive | items | pension | comprehensive | items | pension | comprehensive | |||||||||||||||||||||||||||||
plans | income (loss) | plans | income (loss) | plans | income (loss) | ||||||||||||||||||||||||||||||||
Beginning balance | 1,976 | 79 | 2,055 | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | ||||||||||||||||||||||||||
Current-period change | 1,947 | (337 | ) | 1,610 | 633 | (203 | ) | 430 | (1,202 | ) | (388 | ) | (1,590 | ) | |||||||||||||||||||||||
Ending balance | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | 3,354 | (849 | ) | 2,505 | |||||||||||||||||||||||||
Legal Contingencies | |||||||||||||||||||||||||||||||||||||
The Company is currently involved in various claims and legal proceedings. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to the pending claims and litigation and revises these estimates as appropriate. Such revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial position. | |||||||||||||||||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||||||||||||||
Basic earnings per share are computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if stock options and other dilutive securities were exercised. Dilutive securities are excluded from the computation of the diluted income per share in periods when their effect is anti-dilutive. The Company’s dilutive securities consist of employee stock options and restricted stock units. The effect of dilutive securities including employee stock options and restricted stock units were 5,245 thousand shares (1,311 thousand ADSs), 2,308 thousand shares (577 thousand ADSs) and 2,183 thousand shares (546 thousand ADSs) for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718 Compensation — Stock Compensation. The Company uses the Black-Scholes valuation model for the valuation of stock options and recognizes compensation expense on a straight-line basis over the requisite service period of the award. The value of our restricted stock units is based on the fair value of our shares on the date of grant and expensed over the vesting period. | |||||||||||||||||||||||||||||||||||||
Prior to the initial declaration of a quarterly cash dividend on January 22, 2013, the fair value of restricted stock units (“RSUs”) was measured based on the grant date share price, as we did not historically pay cash dividends on our common stock. For awards granted on or subsequent to January 22, 2013, the fair value of RSUs was measured based on the grant date share price, less the present value of expected dividends during the vesting period, discounted at a risk-free interest rate. | |||||||||||||||||||||||||||||||||||||
Treasury Stock | |||||||||||||||||||||||||||||||||||||
Treasury stock is stated at cost and shown as a reduction to shareholders’ equity. | |||||||||||||||||||||||||||||||||||||
The Company retires ordinary shares repurchased under a share repurchase plan. Accordingly, upon retirement the excess of the purchase price over par value is allocated between additional paid-in capital and retained earnings based on the average issuance price of the shares repurchased. A repurchase of ADSs is recorded as treasury stock until the Company completes the withdrawal of the underlying ordinary shares from the ADS program. | |||||||||||||||||||||||||||||||||||||
Dividends | |||||||||||||||||||||||||||||||||||||
Our Board of Directors declared payment of our first quarterly dividend on our common stock in January 2013 and the first dividend payment was made on March 4, 2013. Our Board of Directors has subsequently declared and paid dividends in each successive quarter, including in 2014. The payment of future cash dividends are subject to the Board’s continuing determination that the payment of dividends are in the best interests of the Company’s shareholders and are in compliance with all laws and agreements of the Company applicable to the declaration and payment of cash dividends. | |||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||||||||||||||||||
In February 2013, the FASB issued an accounting update, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date. The guidance requires an entity to measure such obligations as the sum of the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus additional amounts the reporting entity expects to pay on behalf of its co-obligors. The new guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In March 2013, the FASB issued an accounting update that amended guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In July 2013, the FASB issued an accounting update, which creates new guidance regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The guidance is effective for fiscal years beginning after December 15, 2013 and early adoption is permitted. Since this guidance is a change in financial statement presentation only, its adoption did not have material impact on the Company’s result of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In April 10, 2014, the FASB issued an accounting update, which changes the criteria for reporting discontinued operations for all public and nonpublic entities. The guidance requires only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. The guidance also requires entities 1) to expand their disclosures about discontinued operations to include more information about assets, liabilities, income, and expenses and 2) to disclose the pre-tax income attributable to a disposal of “of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.” The guidance is effective for fiscal years beginning after December 15, 2014 and early adoption is prohibited. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In May 2014, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for fiscal years beginning after December 15, 2016 and early adoption is prohibited. The new guidance is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In June 2014, the FASB issued an accounting update, which clarifies the accounting for share-based payments. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. The guidance is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In August 2014, the FASB issued new standard related to the presentation of financial statements when there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about our ability to continue as a going concern, and if so, to provide related footnote disclosures. The standard is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In February 2015, the FASB issued an accounting update to amend the consolidation analysis. All legal entities are subject to reevaluation under the revised consolidation model. The amendment is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted. The adoption of this amendment is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. |
Cash_And_Cash_Equivalents
Cash And Cash Equivalents | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Cash And Cash Equivalents | 3. CASH AND CASH EQUIVALENTS | ||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Cash and deposits in bank | 19,025 | 38,851 | |||||||
Time deposits | 142,695 | 155,360 | |||||||
161,720 | 194,211 | ||||||||
ShortTerm_Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2014 | |
Short-Term Investments | 4. SHORT-TERM INVESTMENTS |
The Company classified certain short-term investments as trading securities in 2012, 2013 and 2014. Realized gains on sales of these trading securities were US$2 thousand, US$4 thousand and US$4 thousand for the years ended December 31, 2012, 2013 and 2014, respectively. The amount of unrealized losses related to trading securities at year end were US$118 thousand, nil and nil for the years ended December 31, 2012, 2013 and 2014, respectively. Structured notes matured in May 2013 and the Company recognized the gain of US$118 thousand. |
Notes_and_Accounts_Receivable
Notes and Accounts Receivable | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Notes and Accounts Receivable | 5. NOTES AND ACCOUNTS RECEIVABLE | ||||||||||||
December 31 | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Notes receivable | 251 | 192 | |||||||||||
Trade accounts receivable | 33,296 | 31,256 | |||||||||||
33,547 | 31,448 | ||||||||||||
Allowance for doubtful accounts | (1,275 | ) | (1,167 | ) | |||||||||
Allowance for sales returns and discounts | (1,059 | ) | (1,427 | ) | |||||||||
31,213 | 28,854 | ||||||||||||
The changes in the allowances are summarized as follows: | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Allowances for doubtful accounts | |||||||||||||
Balance, beginning of year | 2,648 | 1,634 | 1,275 | ||||||||||
Additions (reversals) charged to expense, net | (663 | ) | (359 | ) | (108 | ) | |||||||
Write-offs | (351 | ) | — | — | |||||||||
Balance, end of year | 1,634 | 1,275 | 1,167 | ||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Allowances for sales returns and discounts | |||||||||||||
Balance, beginning of year | 2,709 | 1,919 | 1,059 | ||||||||||
Additions | 297 | 1,320 | 1,600 | ||||||||||
Write-offs | (1,087 | ) | (2,180 | ) | (1,232 | ) | |||||||
Balance, end of year | 1,919 | 1,059 | 1,427 | ||||||||||
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventories | 6. INVENTORIES | ||||||||
The components of inventories are as follows: | |||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Finished goods | 9,117 | 9,787 | |||||||
Work in process | 17,218 | 20,835 | |||||||
Raw materials | 7,331 | 13,454 | |||||||
33,666 | 44,076 | ||||||||
The Company wrote down US$1,631 thousand, US$2,503 thousand and US$4,561 thousand in 2012, 2013 and 2014, respectively, for estimated obsolete or unmarketable inventory. |
LongTerm_Investments
Long-Term Investments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Long-Term Investments | 7. LONG-TERM INVESTMENTS | ||||||||||||||||
As of December 31, 2013 and 2014, the Company held equity investments in several privately-held companies with the carrying value as follows: | |||||||||||||||||
Percentage | December 31 | ||||||||||||||||
of | |||||||||||||||||
Ownership | |||||||||||||||||
2013 | 2014 | 2013 | 2014 | ||||||||||||||
US$ | US$ | ||||||||||||||||
Cost method: | |||||||||||||||||
Cashido Corp. (Cashido) | 2.1 | % | 2.1 | % | 104 | 104 | |||||||||||
Vastview Technology, Corp. (Vastview) | 2.9 | % | 2.9 | % | 29 | 29 | |||||||||||
133 | 133 | ||||||||||||||||
In July 2001, the Company invested in the common stock of Cashido. At the time of our investment, Cashido manufactured flash memory storage devices. Cashido currently focuses on the manufacture of computer accessories and ozone based sterilization devices. | |||||||||||||||||
In December 2006 and February 2007, the Company invested US$3,360 thousand in the common stock of Vastview. Vastview is a fabless semiconductor company that develops and markets driver ICs and other ICs for the TFT-LCD industry. In 2009 and 2013, the Company received US$808 thousand and US$46 thousand from Vastview which reduced its share capital. From 2008 to 2010, the Company had recognized impairment charges of US$2,462 thousand in its investment in Vastview. No impairment charges were incurred since 2011. | |||||||||||||||||
The Company accounts for these investments using the cost method. These investments are evaluated for impairment on an annual basis or as circumstances warrant. The Company believed there was no other than temporary impairment for the years ended December 31, 2012, 2013 and 2014, respectively. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment | 8. PROPERTY AND EQUIPMENT | ||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Cost: | |||||||||
Land | 6,650 | 8,058 | |||||||
Buildings | 16,711 | 19,813 | |||||||
Machinery and equipment | 12,038 | 13,443 | |||||||
Furniture and fixtures | 4,407 | 5,131 | |||||||
Leasehold and buildings improvement | 3,753 | 4,229 | |||||||
Software | 25,939 | 29,796 | |||||||
Total | 69,498 | 80,470 | |||||||
Accumulated depreciation: | |||||||||
Buildings | 1,869 | 2,240 | |||||||
Machinery and equipment | 9,083 | 10,573 | |||||||
Furniture and fixtures | 3,224 | 3,492 | |||||||
Leasehold and buildings improvement | 2,988 | 3,064 | |||||||
Software | 22,160 | 25,807 | |||||||
39,324 | 45,176 | ||||||||
Prepayment and construction in progress | 21 | 243 | |||||||
30,195 | 35,537 | ||||||||
In April 2006, the Company leased its land and buildings located in Taipei, Taiwan, to a third party under a three-year operating lease. Net carrying value of the leased land and building as of December 31, 2014 was US$603 thousand and US$161 thousand, respectively. The lessee renewed the three year operating lease with the Company in March 2009 and 2012. Annual rental income from the lease is about US$41 thousand each year. |
Goodwill_and_Acquired_Intangib
Goodwill and Acquired Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets | 9. GOODWILL AND ACQUIRED INTANGIBLE ASSETS | ||||||||||||||||||||||||||||||||
Intangible assets: The intangible assets acquired from the Company’s acquisition of FCI and Centronix in 2007 are as follows: | |||||||||||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Accumulated | Net | Cost | Accumulated | Accumulated | Net | ||||||||||||||||||||||||||
Impairment | Amortization | Carrying | Impairment | Amortization | Carrying | ||||||||||||||||||||||||||||
Amount | Amount | ||||||||||||||||||||||||||||||||
Core technology | 15,809 | (4,474 | ) | (11,335 | ) | — | 15,809 | (4,474 | ) | (11,335 | ) | — | |||||||||||||||||||||
Customer relationship | 8,325 | — | (8,325 | ) | — | 8,325 | — | (8,325 | ) | — | |||||||||||||||||||||||
Order backlog | 1,243 | — | (1,243 | ) | — | 1,243 | — | (1,243 | ) | — | |||||||||||||||||||||||
Total | 25,377 | (4,474 | ) | (20,903 | ) | — | 25,377 | (4,474 | ) | (20,903 | ) | — | |||||||||||||||||||||
No impairment losses were recognized in 2012, 2013 and 2014. Amortization expense of acquisition-related intangible assets was nil thousand for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||||||||||||||||||
Goodwill: Goodwill is not amortized, but instead is reviewed and tested for impairment at least annually and whenever events or circumstances occur which indicate that goodwill might be impaired. Impairment of goodwill is tested at the Company’s reporting unit level by comparing the carrying amount, including goodwill, to the fair value. | |||||||||||||||||||||||||||||||||
In performing the analysis, the Company uses the best information available, including reasonable and supportable assumptions and projections. If the carrying amount of the reporting unit exceeds its implied fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any. The Company performed its annual impairment test on November 30. The goodwill that resulted from the Company’s acquisition of FCI and Centronix in 2007 was US$66,300 thousand. The Company’s fiscal 2012, 2013 and 2014 impairment test concluded there was no impairment. In October 2011, the Company purchased BTL’s assets and assumed US$156 thousand of goodwill. Total goodwill was US$35,474 thousand and US$35,467 thousand as of December 31, 2013 and 2014, respectively. | |||||||||||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Foreign | Net | Cost | Accumulated | Foreign | Net | ||||||||||||||||||||||||||
Impairment | Currency | Carrying | Impairment | Currency | Carrying | ||||||||||||||||||||||||||||
Adjustment | Amount | Adjustment | Amount | ||||||||||||||||||||||||||||||
Goodwill | 66,330 | (30,808 | ) | (18 | ) | 35,474 | 66,330 | (30,808 | ) | (25 | ) | 35,467 |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Current Liabilities | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Wages and bonus | 6,741 | 12,093 | |||||||
Research and development payable | 3,012 | 2,468 | |||||||
License fees and royalties | 2,637 | 2,982 | |||||||
Professional fees | 1,765 | 1,714 | |||||||
Equipment | 359 | 1,170 | |||||||
Others | 3,096 | 3,219 | |||||||
17,610 | 23,646 | ||||||||
Pension_Plan
Pension Plan | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Pension Plan | 11. PENSION PLAN | ||||||||||||||||||||||||
SMI Taiwan, the Company’s largest operating company is a Taiwan registered company and subject to Taiwan’s Labor Pension Act (the “Act”), which became effective on July 1, 2005, and the pension mechanism under the Act is deemed a defined contribution plan. The employees who were subject to the Labor Standards Law prior to July 1, 2005 were allowed to choose to be subject to the pension mechanism under the Act or continue to be subject to the pension mechanism under the Labor Standards Law. For those employees who were subject to the Labor Standards Law prior to July 1, 2005 and still work for the same company after July 1, 2005 and have chosen to be subject to the pension mechanism under the Act, their seniority as of July 1, 2005 were maintained. The Act prescribes that the rate of contribution by an employer to employees’ pension accounts per month will not be less than 6% of each employee’s monthly salary. According to the Act, SMI Taiwan made monthly contributions and recognized pension costs of US$716 thousand, US$788 thousand and US$872 thousand for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||||||||||
The Company provides a defined benefit plan to the employees of SMI Taiwan under the Labor Standards Law that offers benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to a pension fund (the “Fund”), which is administered by the Labor Pension Fund Supervisory Committee established by the government (the “Committee”) and deposited in the Committee’s name in the Bank of Taiwan. The government is responsible for the administration of all the defined benefit plans for the companies in Taiwan under the Labor Standards Law. The government also sets investment policies and strategies, determines investment allocation and selects investment managers. As of December 31, 2013 and 2014, the asset allocation was primarily in cash, equity securities and debt securities. Furthermore, under the Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks. The government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. However, information on how investment allocation decisions are made, inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and significant concentrations of risk within plan assets is not fully made available to the Company by the government. Therefore, the Company is unable to provide the required fair value disclosures related to pension plan assets. Future contributions will be based on 2% of the employee salaries at that time. The Company estimates its contribution for the year ending December 31, 2015 to be US$57 thousand which was determined based on 2% of estimated salaries in 2015. | |||||||||||||||||||||||||
Starting in 2010, the Company provides a defined benefit pension plan to the Korean employees of FCI, the Company’s second largest operating company with at least one year of service. FCI’s overall investment strategy is to avoid a negative return on plan assets. FCI estimates its contribution for the year ending December 31, 2015 to be US$1,052 thousand. | |||||||||||||||||||||||||
For employees under defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees’ individual pension accounts. For employees under defined benefit pension plans, pension costs are recorded based on actuarial calculations. Determining the cost associated with such benefits is dependent on various actuarial assumptions, including discount rate, expected return on plan assets, compensation increase, employee mortality and turnover rates. The Company reviewed its actuarial assumptions at the measurement date on December 31 every year. The effect of modifications to assumptions is recorded in accumulated other comprehensive loss and amortized to net periodic cost over future periods using the corridor method. The Company believes that assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. Independent actuaries perform the required calculations to determine expense in accordance with U.S. GAAP. Actual results may differ from the actuarial assumptions and are generally accumulated and amortized into earnings over future periods. The net periodic costs are recognized as employees render services necessary to earn the benefits. | |||||||||||||||||||||||||
The changes in benefits obligation and plan assets and the reconciliation of funded status are as follows: | |||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Change in benefit obligation | |||||||||||||||||||||||||
Projected benefit obligation at beginning of year | 1,458 | 1,897 | 2,098 | ||||||||||||||||||||||
Service cost | 608 | 440 | 437 | ||||||||||||||||||||||
Interest cost | 77 | 58 | 58 | ||||||||||||||||||||||
Actuarial loss(gain) | (187 | ) | (202 | ) | 814 | ||||||||||||||||||||
Benefits paid | (59 | ) | (95 | ) | (87 | ) | |||||||||||||||||||
Projected benefit obligation at end of year | 1,897 | 2,098 | 3,320 | ||||||||||||||||||||||
Change in plan assets | |||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 1,376 | 1,925 | 2,319 | ||||||||||||||||||||||
Actual return on plan assets | 43 | 43 | 31 | ||||||||||||||||||||||
Employer contributions | 546 | 433 | 282 | ||||||||||||||||||||||
Benefits paid | (40 | ) | (82 | ) | (76 | ) | |||||||||||||||||||
Fair value of plan assets at end of year | 1,925 | 2,319 | 2,556 | ||||||||||||||||||||||
Funded status recognized as an other asset(liabilities) | 28 | 221 | (764 | ) | |||||||||||||||||||||
Amounts recognized in accumulated other comprehensive income consist of the following: | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Net loss | 257 | 460 | 848 | ||||||||||||||||||||||
Transition obligation | 1 | 1 | 1 | ||||||||||||||||||||||
Total recognized in accumulated other comprehensive income | 258 | 461 | 849 | ||||||||||||||||||||||
The accumulated benefit obligation for all defined benefit pension plans was US$1,332 thousand, US$1,369 thousand and US$1,762 thousand at December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||||||||||
The components of net periodic benefit cost are as follows: | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Service cost | 608 | 440 | 437 | ||||||||||||||||||||||
Interest cost | 77 | 58 | 58 | ||||||||||||||||||||||
Projected return on plan assets | (43 | ) | (47 | ) | (51 | ) | |||||||||||||||||||
Amortization of unrecognized net transition obligation and unrecognized net actuarial gain | — | (3 | ) | (19 | ) | ||||||||||||||||||||
Net periodic benefit cost | 642 | 448 | 425 | ||||||||||||||||||||||
Other changes in plan assets and benefit obligation recognized in other comprehensive loss: | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Recognize the decrease in net gain | 336 | 203 | 388 | ||||||||||||||||||||||
Amortization of net gain | 1 | — | — | ||||||||||||||||||||||
Total recognized in other comprehensive loss | 337 | 203 | 388 | ||||||||||||||||||||||
The estimated net gain for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is US$26 thousand. | |||||||||||||||||||||||||
Expected benefit payments: | |||||||||||||||||||||||||
US$ | |||||||||||||||||||||||||
2015 | 237 | ||||||||||||||||||||||||
2016 | 150 | ||||||||||||||||||||||||
2017 | 135 | ||||||||||||||||||||||||
2018 | 253 | ||||||||||||||||||||||||
2019 | 178 | ||||||||||||||||||||||||
2020 and thereafter | 972 | ||||||||||||||||||||||||
The actuarial assumptions to determine the benefit obligations were as follows: | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
Taiwan | Korea | Taiwan | Korea | Taiwan | Korea | ||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | |||||||||||||||||||||||||
Discount rate | 1.63 | % | 4 | % | 1.88 | % | 5.2 | % | 2 | % | 4.1 | % | |||||||||||||
Rate of compensation increase | 4.25 | % | 3 | % | 4.25 | % | 2.6 | % | 4.25 | % | 5 | % | |||||||||||||
Weighted-average assumptions used to determine net projected benefit cost: | |||||||||||||||||||||||||
Discount rate | 1.63 | % | 4 | % | 1.88 | % | 5.2 | % | 2 | % | 4.1 | % | |||||||||||||
Expected long-term return on plan assets | 1.88 | % | 3.1 | % | 2 | % | 3 | % | 2 | % | 2 | % | |||||||||||||
Rate of compensation increase | 4.25 | % | 3 | % | 4.25 | % | 2.6 | % | 4.25 | % | 5 | % | |||||||||||||
FCI’s pension plan assets at December 31, 2013 and 2014 were invested in guaranteed interest contracts insurance and fixed deposit, which are principal and interest guaranteed products and its fair value level is level 2. The assets out of which the obligations have to be settled, measured at their market value by discounting future cash flow with discount rate. The discount rate was determined based on the average future life of the plan’s participants and the market yields on the high quality Korean Corporate Bonds (AA-). Therefore, FCI has no concentration of risk in its plan assets. | |||||||||||||||||||||||||
The fair values of FCI’s pension plan assets at December 31, 2013 and 2014 are as follows: | |||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||
Guaranteed interest contract | |||||||||||||||||||||||||
Kyobo Life Insurance Co. Ltd. | 534 | 730 | |||||||||||||||||||||||
Fixed deposit | |||||||||||||||||||||||||
Industrial Bank of Korea | 855 | 875 | |||||||||||||||||||||||
1,389 | 1,605 | ||||||||||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes | 12. INCOME TAXES | ||||||||||||
The components of income tax expense are as follows: | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Current | 5,534 | 8,591 | 15,630 | ||||||||||
Deferred | 1,582 | 1,181 | 471 | ||||||||||
Income tax expense | 7,116 | 9,772 | 16,101 | ||||||||||
The income (loss) before income taxes for domestic and foreign entities is as follows: | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Domestic | (11,039 | ) | (8,080 | ) | (12,761 | ) | |||||||
Foreign | 65,373 | 45,228 | 73,329 | ||||||||||
54,334 | 37,148 | 60,568 | |||||||||||
Since the Company is based in the Cayman Islands, a tax-free country, domestic tax on pretax income is calculated at the Cayman Islands statutory rate of zero for each year. | |||||||||||||
The Company and its subsidiaries file separate income tax returns. A reconciliation of income tax expense on pretax income at statutory rate and income tax expense is shown below: | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Cayman statutory rate | — | — | — | ||||||||||
Tax on pretax income at statutory rate | 8,142 | 6,788 | 15,727 | ||||||||||
Tax-exempt income | (5,149 | ) | (4,325 | ) | (2,573 | ) | |||||||
Permanent differences | 861 | 1,730 | (396 | ) | |||||||||
Temporary differences | (2,290 | ) | 1,732 | (344 | ) | ||||||||
Alternative minimum tax | 4,340 | 2,203 | 1,170 | ||||||||||
Income tax (10%) on undistributed earnings | 2,631 | 3,396 | 2,491 | ||||||||||
Net changes in income tax credit | 5,518 | 708 | (899 | ) | |||||||||
Net changes in valuation allowance of deferred income tax assets | (3,879 | ) | (2,364 | ) | 733 | ||||||||
Net operating loss carryforwards | 604 | (189 | ) | (1,298 | ) | ||||||||
Liabilities related to unrealized tax benefits | 832 | (39 | ) | 91 | |||||||||
Adjustment of prior years’ taxes and others | (4,494 | ) | 132 | 1,399 | |||||||||
Income tax expense | 7,116 | 9,772 | 16,101 | ||||||||||
Deferred income tax assets (liabilities) are as follows: | |||||||||||||
December 31 | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Current: | |||||||||||||
Notes and accounts receivable | 142 | 141 | |||||||||||
Stock-based compensation | 679 | 615 | |||||||||||
Allowance for sales return | 123 | 105 | |||||||||||
Inventory reserve | 544 | 48 | |||||||||||
Foreign currency translation | 312 | (1,273 | ) | ||||||||||
Others | 561 | 504 | |||||||||||
Valuation allowance | (1,083 | ) | (528 | ) | |||||||||
1,278 | (388 | ) | |||||||||||
Non-current: | |||||||||||||
Inventory reserve | 590 | 766 | |||||||||||
Property and equipment | 651 | 452 | |||||||||||
Investment tax credits | 7,011 | 7,823 | |||||||||||
Net operating loss carryforwards | 8,540 | 9,621 | |||||||||||
Others | (885 | ) | (490 | ) | |||||||||
Valuation allowance | (15,193 | ) | (16,263 | ) | |||||||||
714 | 1,909 | ||||||||||||
The valuation allowance shown in the table above relates to net operating loss carryforwards, tax credits and temporary differences for which the Company believes that realization is uncertain. The change in the valuation allowance was a decrease of US$3,271 thousand, an increase of US$1,075 thousand, and an increase of US$515 thousand for the years ended December 31, 2012, 2013, and 2014, respectively. | |||||||||||||
The decrease in the valuation allowance in 2012 was primarily due to the utilization of net operating loss carryforwards in 2012 which had been previously fully provided. The increase in valuation allowance in 2013 and 2014 are primarily due to the uncertainty in generating sufficient taxable income in the future and utilization of operating loss carryforwards and research and development credits before they expire. In addition, profits generated from certain products of SMI Taiwan are exempted from income tax for five years beginning January 1, 2010 and January 1, 2012. | |||||||||||||
As of December 31, 2014, FCI had unused research and development tax credits of approximately US$3,754 thousand which will expire in 2015 to 2019. | |||||||||||||
As of December 31, 2014, the Company’s United States federal net operating loss carryforwards for federal income tax purposes were approximately US$7,794 thousand. If not utilized, the federal net operating loss carryforwards will expire in 2024. | |||||||||||||
As of December 31, 2014, the Company’s United States federal and state research and development tax credit carryforwards for federal and state income tax purposes were approximately US$2,391 thousand and US$1,678 thousand, respectively. If not utilized, the federal tax credit carryforwards will expire starting in 2023 while the state tax credit carryforward has no expiration date. | |||||||||||||
Current United States federal and California state laws include substantial restrictions on the utilization of net operating losses and credits in the event of an “ownership change” of a corporation. Accordingly, the Company’s ability to utilize net operating loss and tax credit carryforwards may be limited as a result of such “ownership change”. Such a limitation could result in the expiration of carryforwards before they are utilized. | |||||||||||||
Unrecognized Tax Benefit | |||||||||||||
A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US $ | US $ | US$ | |||||||||||
Balance, beginning of year | 2,657 | 3,520 | 5,815 | ||||||||||
Increases in tax positions taken in current year | 917 | 2,947 | 446 | ||||||||||
Decrease in tax position taken in prior year primarily related to the resolution of tax audit | (54 | ) | (652 | ) | (1,606 | ) | |||||||
Balance, end of year | 3,520 | 5,815 | 4,655 | ||||||||||
At December 31, 2014, the Company had US$4,655 thousand of unrecognized tax benefits that if recognized would affect the effective tax rate. For the years ended December 31, 2012, 2013 and 2014, the total amount of interest expense and penalties related to uncertain tax positions recorded in the provision for income tax expense was approximately US$499 thousand, US$627 thousand and US$343 thousand, respectively. The total amount of accrued interest and penalties recognized as of December 31, 2013 and 2014 was US$1,412 thousand and US$1,674 thousand, respectively. The Company does not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months. | |||||||||||||
The Company files income tax returns in United States and foreign jurisdictions. The following table summarizes the Company’s major jurisdictions and tax year that remain subject to examination by tax authorities as of December 31, 2014: | |||||||||||||
Tax Jurisdiction | Tax Years | ||||||||||||
SMI Taiwan | 2009 and onward | ||||||||||||
FCI | 2009 and onward | ||||||||||||
SMI USA | 2007 onward |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Shareholders' Equity | 13. SHAREHOLDERS’ EQUITY | ||||||||||||||||
Appropriations from Earnings | |||||||||||||||||
Pursuant to the laws and regulations of the ROC and the respective Articles of Incorporation, SMI Taiwan, the Company’s largest subsidiary, must make appropriations from annual earnings to non-distributable reserve which could affect the Company’s ability to pay cash or stock dividends, if any. SMI Taiwan subsidiary may only distribute dividends after it has made allowances as determined under ROC GAAP at each year-end for: | |||||||||||||||||
a. | Payment of taxes; | ||||||||||||||||
b. | Recovery of prior years’ deficits, if any; | ||||||||||||||||
c. | 10% of remaining balance after deduction for a and b as legal reserve; | ||||||||||||||||
d. | Special reserve based on relevant laws or regulations or 10% of remaining balance for deduction from above a to c as special reserve when necessary; | ||||||||||||||||
e. | Cash or stock bonus to employees at 0.01% of any remaining earnings after the above reserves have been appropriated, based on a resolution of the board of directors. If bonus to employees is in the form of stock, the bonus may also be appropriated to employees of subsidiaries under the board of directors’ approval; | ||||||||||||||||
Dividends | |||||||||||||||||
The Company declared cash dividends per ordinary share during the periods presented as follows: | |||||||||||||||||
2013 | 2014 | ||||||||||||||||
Dividends | Amount | Dividends | Amount | ||||||||||||||
Per Share | (in US$ | Per Share | (in US$ | ||||||||||||||
(US$) | thousands) | (US$) | thousands) | ||||||||||||||
First quarter | $ | 0.0375 | $ | 5,056 | $ | 0.0375 | $ | 5,056 | |||||||||
Second quarter | $ | 0.0375 | 5,042 | $ | 0.0375 | 5,060 | |||||||||||
Third quarter | $ | 0.0375 | 4,932 | $ | 0.0375 | 5,081 | |||||||||||
Fourth quarter | $ | 0.0375 | 4,935 | $ | 0.0375 | 5,084 | |||||||||||
$ | 19,965 | $ | 20,281 | ||||||||||||||
No dividends were declared in our fiscal year ended 2012. Future dividends, if any, on the Company’s outstanding ADSs and ordinary shares will be declared by and subject to the discretion of the Company’s board of directors. If the Company’s board of directors decides to distribute dividends, the form, frequency and amount of such dividends will depend upon the Company’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors our board of directors may deem relevant. | |||||||||||||||||
Any future dividend the Company declares will be paid to the holders of ADSs, subject to the terms of the deposit agreement, to the same extent as holders of the Company’s ordinary shares, to the extent permitted by applicable laws and regulations, less the fees and expenses payable under the deposit agreement. Any dividend the Company declares will be distributed by the depositary bank to the holders of our ADSs. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars. | |||||||||||||||||
Treasury Stock | |||||||||||||||||
On January 21, 2013, our Board of Directors approved share buyback plans to repurchase up to US$40 million of the Company’s ADSs during the period from January 22, 2013 to January 21, 2014. The program did not obligate the Company to acquire any particular amount of ADS and the program might be modified or suspended at any time at the Company’s discretion. All the treasury stock under this share repurchase program was retired in July 2013. | |||||||||||||||||
In the year ended December 31, 2013, the Company repurchased 891 thousand of ADSs for a total cost of US$10.0 million. The weighted average purchase price per ADS repurchased was US$11.24. |
Equity_Incentive_Plan
Equity Incentive Plan | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Incentive Plan | 14. EQUITY INCENTIVE PLAN | ||||||||||||
2004 Stock Option Plan and 2005 Equity Incentive Plan | |||||||||||||
In 2004, SMI Taiwan adopted a 2004 Employee Stock Option Plan (“the 2004 Plan”). The 2004 Plan reserved 8,000 options with each option exercisable into for 1,000 shares of common stock. The options may be granted to qualified employees of the Company or any of its domestic or foreign subsidiaries and expire no later than six years from the date of grant. The options were granted at an exercise price not lower than the market value of SMI Taiwan’s common stock at the date of the grant and vest over four years at certain percentages after two years from the date of grant. As part of the share exchange between the Company and the shareholders of SMI Taiwan effective on April 25, 2005, the Company agreed to assume the share options previously issued by SMI Taiwan. Subsequently on June 3, 2005, the Company amended the 2004 Plan such that options under the 2004 Plan are granted at an exercise price not lower than the market value of the Company’s ordinary shares at the date of the grant and vest over four years at certain percentages after one year from the date of grant. | |||||||||||||
On April 22, 2005, the Company adopted its 2005 Equity Incentive Plan (“the 2005 Plan”). The 2005 Plan provides for the grant of stock options, stock bonuses, restricted stock awards, restricted stock units and stock appreciation rights, which may be granted to employees (including officers), directors and consultants. The 2005 Plan reserved 10,000 thousand shares of ordinary shares, inclusive of the number of assumed share options under the 2004 Plan, for issuance upon the exercise of stock options. | |||||||||||||
In 2006, the Company amended the 2005 Plan to reserve an additional 15,000 thousand ordinary shares for issuance upon exercise of stock options and restricted stock units. In 2009, the Company amended the Plan to reserve an additional 15,000 thousand ordinary shares for issuance upon exercise of stock options and restricted stock units. | |||||||||||||
Restricted stock units are converted into shares of the Company’s ordinary shares upon vesting on one-for-one basis. The vesting of restricted stock unit is subject to the employee’s continuing service to the Company. The cost of these awards is determined using the fair value of the Company’s ordinary share on the date of the grant, and compensation is recognized on a straight-line basis over the requisite service period. The Company’s restricted stock units are considered non-vested share awards as defined under ASC 718. | |||||||||||||
In April 2010, the Company’s Board of Directors and Compensation Committee approved an employee stock option exchange program that required certain employees to exchange eligible stock options for a lesser number of new stock options that have approximately the same fair values as the options surrendered. Eligible options included stock options granted between August 17, 2005 and July 31, 2008 that had an exercised price above US$1.85. In 2010, 4,369 thousand eligible stock options were exchanged for 3,785 thousand new stock options granted. The new stock options have an exercise price of US$1.47, which was equal to the market price of the Company’s ordinary share on April 26, 2010, the date eligible stock options were surrendered and new stock options granted. The new stock options were issued under the 2005 Plan and are subject to its terms and conditions. The new stock options will continue to vest according to the original vesting schedule. Using the Black-Scholes option pricing model, the Company determined that the fair value of the surrendered stock options on a grant-by-grant basis was approximately equal, as of the date of the exchange, to the fair value of the new stock options granted, resulting in insignificant incremental share-based compensation. | |||||||||||||
Stock Option and Restricted Stock Units Activity | |||||||||||||
The following is a summary of, the 2004 Plan, and the 2005 Plan, which includes stock options and restricted stock units: | |||||||||||||
Unit | |||||||||||||
(in Thousands) | |||||||||||||
Available for grant at January 1, 2012 | 6,506 | ||||||||||||
Restricted stock units granted | (1,461 | ) | |||||||||||
Option and restricted stock units forfeited | 291 | ||||||||||||
Available for grant at December 31, 2012 | 5,336 | ||||||||||||
Restricted stock units granted | (1,893 | ) | |||||||||||
Option and restricted stock units forfeited | 123 | ||||||||||||
Available for grant at December 31, 2013 | 3,566 | ||||||||||||
Restricted stock units granted | (1,923 | ) | |||||||||||
Option and restricted stock units forfeited | 44 | ||||||||||||
Available for grant at December 31, 2014 | 1,687 | ||||||||||||
Stock Options | |||||||||||||
A summary of the stock option activity and related information is as follows: | |||||||||||||
Number of | Weighted | Weighted | |||||||||||
Options | Average | Average | |||||||||||
Shares | Exercise | Remaining | |||||||||||
(in Thousands) | Price | Contractual | |||||||||||
(US$) | Life | ||||||||||||
(Years) | |||||||||||||
Outstanding at January 1, 2012 | 1,849 | 1.47 | |||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (152 | ) | 1.47 | ||||||||||
Outstanding at December 31, 2012 | 1,697 | 1.47 | 3.14 | ||||||||||
Options vested and expected to vest after December 31, 2012 | 1,697 | 1.47 | 3.14 | ||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (287 | ) | 1.47 | ||||||||||
Outstanding at December 31, 2013 | 1,410 | 1.47 | 2.14 | ||||||||||
Options vested and expected to vest after December 31, 2013 | 1,410 | 1.47 | 2.14 | ||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (352 | ) | 1.46 | ||||||||||
Outstanding at December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
Options vested and expected to vest after December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
Options exercisable at December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
No stock options were granted in 2012, 2013 and 2014. The intrinsic value of options exercised, determined as of the date of option exercise, was US$318, US$594 and US$1,565 thousand in 2012, 2013 and 2014, respectively. | |||||||||||||
As of December 31, 2014, total unrecognized compensation cost related to non-vested share-based compensation awards granted under the Company’s stock option plans, net of estimated forfeitures, was nil. | |||||||||||||
The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of fiscal year 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 December 31, 2014. Intrinsic value will change in future periods based on the fair market value of the Company’s stock and the number of shares outstanding. | |||||||||||||
The total cash received from employees as a result of employee stock option exercises were US$224, US$422 and US$514 thousand for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||
The related tax effect for stock-based compensation benefit (expense) were US$631 thousand, US$343 thousand, and (US$24) thousand for 2012, 2013 and 2014, respectively. The related tax effect for stock-based compensation expense for option and restricted stock units exercised during 2012, 2013 and 2014 was US$1,560 thousand, US$1,599 thousand and US$1,231 thousand, respectively. The related tax effect was determined using the applicable tax rates in jurisdictions to which this expense relates. | |||||||||||||
Determining Fair Value | |||||||||||||
The Company estimated the fair value of each option grant on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, the option valuation model requires the input of highly subjective assumptions, including the expected stock price volatility. | |||||||||||||
Risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatilities are determined based on historical volatilities of the stock prices of the Company. Expected life represents the periods that the Company’s share-based awards are expected to be outstanding and was determined based on historical experience regarding similar awards, giving consideration to the contractual term of the share based awards. The dividend yield is zero as the Company has never declared or paid dividends on the ordinary shares or other securities by 2012. | |||||||||||||
Restricted Stock Units | |||||||||||||
A summary of the status of restricted stock units and changes is as follows: | |||||||||||||
Number of | Weighted | Weight | |||||||||||
Non-vested | Average | Average | |||||||||||
Stock Units | Grant | Remaining | |||||||||||
(in Thousands) | Date | Recognition | |||||||||||
Fair | Period | ||||||||||||
Value | (Years) | ||||||||||||
(US$) | |||||||||||||
Non-vested at January 1, 2012 | 11,164 | 1.99 | |||||||||||
Restricted stock units granted | 1,461 | 4.55 | |||||||||||
Restricted stock units vested | (5,316 | ) | 1.75 | ||||||||||
Restricted stock units forfeited | (291 | ) | 2.47 | ||||||||||
Non-vested at December 31, 2012 | 7,018 | 2.68 | 0.83 | ||||||||||
Restricted stock units granted | 1,893 | 3.13 | |||||||||||
Restricted stock units vested | (4,867 | ) | 2.6 | ||||||||||
Restricted stock units forfeited | (123 | ) | 2.6 | ||||||||||
Non-vested at December 31, 2014 | 3,921 | 2.9 | 0.43 | ||||||||||
Restricted stock units granted | 1,923 | 5.13 | |||||||||||
Restricted stock units vested | (3,640 | ) | 2.96 | ||||||||||
Restricted stock units forfeited | (44 | ) | 4.92 | ||||||||||
Non-vested at December 31, 2014 | 2,160 | 4.9 | 0.31 | ||||||||||
As of December 31, 2014, there was US$2,463 thousand of total unrecognized compensation cost related to restricted stock units granted under the 2005 Plan. | |||||||||||||
Stock-based Compensation Expense | |||||||||||||
The following table shows total stock-based compensation expense included in the Consolidated Statements of Income for the years ended December 31, 2012, 2013 and 2014. | |||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US $ | US $ | US$ | |||||||||||
Cost of sales | 375 | 308 | 282 | ||||||||||
Research and development | 7,055 | 6,351 | 6,773 | ||||||||||
Sales and marketing | 2,494 | 2,197 | 1,746 | ||||||||||
General and administrative | 1,878 | 1,406 | 1,546 | ||||||||||
11,802 | 10,262 | 10,347 | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies | 15. COMMITMENTS AND CONTINGENCIES |
FCI provided their employees with collateral for personal loans by depositing at a designated bank US$946 thousand and US$ 455 thousand at December 31, 2013 and 2014, respectively. Such amounts were accounted for as restricted cash. | |
Operating Leases | |
The Company entered into various operating lease agreements for office space that expire on various dates through April 2019. The Company recognized rent expense for the years ended December 31, 2012, 2013 and 2014 of US$1,609 thousand, US$1,763 thousand and US$1,981 thousand, respectively. The minimum operating lease payments expected under these leases as of December 31, 2014 were US$1,977 thousand, US$1,367 thousand, US$662 thousand, US$555 thousand, and US$183 thousand for the years ending December 31, 2015, 2016, 2017, 2018 and 2019, respectively. | |
Litigation | |
The Company are subject to legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Although the outcome of such proceedings and claims cannot be predicted with certainty, management does not believe that the outcome of any of these matters will have a material adverse effect on our business, results of operations, financial position or cash flows. Any litigation, however, involves potential risk and potentially significant litigation costs, and therefore there can be no assurance that any litigation which is now pending or which may arise in the future would not have such a material adverse effect on our business, financial position, results of operations or cash flows. | |
All American Semiconductor, Inc. (“All American” or “AASI”) was a former distributor for the Company. On April 25, 2007, All American filed for Chapter 11 bankruptcy protection. At the time of the filing, the Company had US$256 thousand of unpaid accounts receivable from All American. On April 17, 2009, SMI USA and related entities were named as defendants in an adversary proceeding filed by the AASI Creditor Liquidating Trust (“CLT”) in the bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of Florida. The CLT was seeking the return of allegedly avoidable transfers in the amount of US$854 thousand. The Company filed an answer and affirmative defenses. In March 2010, SMI USA settled with the CLT by paying the amount of US$220 thousand and on April 1, 2010, the Bankruptcy Court granted the motion to approve stipulations to compromise controversy. On August 23, 2010, the Court entered an order dismissing the adversary proceeding. | |
In June 2011, Liquidating Trustee for the CLT filed the AASI Creditor Liquidating Trustee’s Seventeenth Omnibus Objection to Claims but in August 2011, withdrew it with respect to SMI USA’s proof of claim. According to the CLT’s letter dated September 9, 2011, it is currently finalizing its claims review process and preparing for distribution to beneficiaries who are holders of allowed claims and have rights to a distribution pursuant to the Plan. In January 2012, January 2014 and December 2014, the Company received the first distribution of US$21 thousand, the second distribution of US$36 thousand, and the third distribution of US$12 thousand, respectively. | |
In 2006, FCI joined with other technology companies and invested in the Pangyo Silicon Park Construction Project Cooperative (“Pangyo Cooperative”) in Korea. In July 2010, FCI, TLi Inc. (“TLI”), OCI Materials Co., Ltd (“OCI”) and other companies withdrew from the Pangyo Cooperative and forfeited 10% of their total investment. FCI believes its loss was caused by bad will actions taken by TLI. In December 2011, FCI and OCI together filed a complaint against TLI at the Suwon District Court in Korea. In April 2013, the court dismissed the plaintiffs’ complaints. The plaintiffs have decided not to appeal the court’s decision. | |
16. SEGMENT INFORMATION |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Segment Information | 16. SEGMENT INFORMATION | ||||||||||||||||||||||||
The Company designs, develops and markets high performance, low-power semiconductor products for the multimedia consumer electronics market. The Company currently operates as one reportable segment. The chief operating decision maker is the Chief Executive Officer. | |||||||||||||||||||||||||
The Company groups its products into three categories, based on the markets and products in which its ICs may be used. The following summarizes the Company’s revenue by product category: | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Mobile Storage | 202,093 | 185,488 | 241,614 | ||||||||||||||||||||||
Mobile Communications | 67,564 | 31,022 | 40,034 | ||||||||||||||||||||||
Other products | 11,713 | 8,798 | 7,675 | ||||||||||||||||||||||
281,370 | 225,308 | 289,323 | |||||||||||||||||||||||
Revenue is attributed to a geographic area based on the bill-to location. The following summarizes the Company’s revenue by geographic area: | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Taiwan | 74,034 | 47,653 | 57,244 | ||||||||||||||||||||||
United States | 20,230 | 22,528 | 26,265 | ||||||||||||||||||||||
Japan | 5,363 | 3,936 | 11,180 | ||||||||||||||||||||||
Korea | 137,797 | 115,287 | 150,557 | ||||||||||||||||||||||
China | 37,507 | 29,129 | 35,008 | ||||||||||||||||||||||
Others | 6,439 | 6,775 | 9,069 | ||||||||||||||||||||||
281,370 | 225,308 | 289,323 | |||||||||||||||||||||||
Major customers representing at least 10% of net sales | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | % | US$ | % | US$ | % | ||||||||||||||||||||
Samsung | 98,368 | 35 | 36,037 | 16 | 30,065 | 10 | |||||||||||||||||||
SK Hynix | * | * | 67,977 | 30 | 107,227 | 37 | |||||||||||||||||||
* | Less than 10% | ||||||||||||||||||||||||
Long-lived assets (property and equipment, net) by geographic area were as follows: | |||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Taiwan | 16,799 | 24,066 | 28,739 | ||||||||||||||||||||||
United States | 58 | 54 | 142 | ||||||||||||||||||||||
Korea | 2,226 | 1,773 | 2,477 | ||||||||||||||||||||||
China | 4,303 | 4,302 | 4,179 | ||||||||||||||||||||||
23,386 | 30,195 | 35,537 | |||||||||||||||||||||||
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Measurement | 17. FAIR VALUE MEASUREMENT | ||||||||||||||||
The following section describes the valuation methodologies the Company uses to measure assets and liabilities at fair value. | |||||||||||||||||
The Company uses quoted prices in active markets for identical assets to determine fair value where applicable. This pricing methodology applies to Level 1 investments such as bond funds. For the years ended December 31, 2013 and 2014, none of the Company’s assets measured on a recurring basis was determined by using significant unobservable inputs. | |||||||||||||||||
The following table presents our assets measured at fair value on a recurring basis as of December 31, 2013 and 2014: | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
US$ | US$ | US$ | US$ | ||||||||||||||
Assets | |||||||||||||||||
Short-term investments — trading bond funds | 742 | — | — | 742 | |||||||||||||
December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
US$ | US$ | US$ | US$ | ||||||||||||||
Assets | |||||||||||||||||
Short-term investments — trading bond funds | 703 | — | — | 703 | |||||||||||||
Those assets required to be measured at fair value on a nonrecurring basis and the associated losses were nil during the years ended December 31, 2012, 2013 and 2014 and please refer to Note 2, “Summary of Significant Accounting Policy” and Note 10, “Goodwill and Acquired Intangible Assets” for the significant assumption were used. | |||||||||||||||||
The Company reviews the carrying values of financial assets carried at cost when impairment indicators are present. The fair values of assets without quoted market price are determined based on management judgment with the best available information. The impairment charge was determined based on the difference between the Company’s carrying value and the proportionate ownership of the investee’s net assets at year end. |
Subsequent_Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Event | 18. SUBSEQUENT EVENT |
In April 2015, the Company announced a definitive agreement to acquire Shannon Systems (“Shannon”), a leading supplier of enterprise-class PCIe SSD and storage array solutions to China’s internet and other industries. | |
Under the terms of the agreement, the Company will pay approximately US$57.5 million, which includes a combination of cash, equity and contingency payments. The transaction has been approved by the boards of directors of both companies, is subject to customary closing conditions, including regulatory review and approval, and is expected to close by the end of July 2015. The Company does not expect the business acquisition to be a significant business acquisition. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||||||||||||||||||||||||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The consolidated financial statements include the accounts of SMTC and its wholly-owned subsidiaries. The Company owns 100% of the outstanding shares in all of its subsidiaries, except for FCI which the Company owns over 99.9%. All significant intercompany balances and transactions have been eliminated upon consolidation. | |||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. The actual results could differ from those estimates. | |||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||||||||||||||||||||||||||
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, investment in debt securities and accounts receivable. Cash is deposited with high credit-quality financial institutions. For accounts receivable, the Company performs ongoing credit evaluations of its customers’ financial condition and the Company maintains an allowance for doubtful accounts receivable based upon a review of the expected collectibility of individual accounts. | |||||||||||||||||||||||||||||||||||||
The Company sells semiconductor solutions to leading module makers and OEMs worldwide. The Company provides high performance flash memory storage controllers to companies such as SK Hynix, Netcom, Micron, Samsung, Sony, and Transcend. The Company is a leading supplier of controllers used in eMMC embedded memory, flash memory cards, and USB flash drives. The Company provides innovative mobile communications ICs primarily to LG and Samsung. Sales to one customer in 2012, and two customers in 2013 and 2014 accounted for 10% or more of our net revenue, represented 35%, 46% and 47% of our net revenue in 2012, 2013 and 2014, respectively. In 2012, the significant customer was Samsung and in 2013 and 2014, Samsung and SK Hynix. The Company’s top ten customers in 2012, 2013 and 2014 accounted for approximately 75%, 76% and 76% of net sales. | |||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||||||||||||||||||||||
The carrying amount of the Company’s financial instruments, including cash and cash equivalents, notes and accounts receivable and notes and accounts payables approximates fair value due to the short-term maturity of the instruments. Fair values of short-term investments represent quoted market prices, if available. If no quoted market prices are available, fair values are estimated based on discounted cash flow, or other valuation techniques. Long-term investments are privately-held companies where there is no readily determinable market value and are recorded using the cost method, since the cost of obtaining verifiable fair value is unreasonably high. The Company periodically evaluates these investments for impairment. If it is determined that an other-than-temporary decline has occurred in the carrying value, an impairment loss is recorded for that period. The Company’s long-term liabilities approximate their fair values as they contain interest rates that vary according to market interest rates. | |||||||||||||||||||||||||||||||||||||
Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that assets or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the Company. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||||||||||||||||||||||
Level 1 — Use unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||||||||
Level 2 — Use observable inputs other than Level 1 prices such as quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||||||||||||||||||||||
Level 3 — Use inputs that are generally unobservable and reflect the use of significant management judgments and estimates. | |||||||||||||||||||||||||||||||||||||
See Note 17, “Fair Value Measurement”, for the related disclosure. | |||||||||||||||||||||||||||||||||||||
Cash Equivalents | Cash Equivalents | ||||||||||||||||||||||||||||||||||||
The Company considers all highly liquid investments with maturities within three months from the date of purchase to be cash equivalents. | |||||||||||||||||||||||||||||||||||||
Short-term Investments | Short-term Investments | ||||||||||||||||||||||||||||||||||||
The Company’s short-term investments are short-term income yielding investments with original maturities greater than three months from the purchase date and remaining maturities less than one year. These short-term investments consist primarily of bond funds that are bought and held principally for the purpose of selling them in the near term and are classified as trading securities as well as structured notes designated at the fair value. They are reported at fair value with the subsequent changes in fair value recorded in earnings as unrealized gains and losses. | |||||||||||||||||||||||||||||||||||||
Allowance for Doubtful Receivables | Allowance for Doubtful Receivables | ||||||||||||||||||||||||||||||||||||
An allowance for doubtful receivables is provided based on a review of the collectability of accounts receivables. The Company determines the amount of allowance for doubtful receivables by examining the historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. | |||||||||||||||||||||||||||||||||||||
Inventories | Inventories | ||||||||||||||||||||||||||||||||||||
Inventories are stated at the lower of cost or market value. Inventories are recorded at standard cost and adjusted to the approximate weighted-average cost at the balance sheet date. Market value represents the current replacement cost for raw materials, work in process and finished goods. The Company assesses its inventory for estimated obsolescence or unmarketable inventory based upon management’s assumptions about future demand and market conditions. In estimating reserves for obsolescence, the Company primarily evaluates estimates based on the timing of the introduction of new products and the quantities remaining of old products and provides reserves for inventory on hand in excess of the estimated demand. Estimated losses on slow-moving items are recognized and included in the allowance for losses. | |||||||||||||||||||||||||||||||||||||
Long-term Investments | Long-term Investments | ||||||||||||||||||||||||||||||||||||
The Company has long-term investments in companies that it does not exercise significant influence and accounts for these investments under the cost method. Management regularly evaluates financial information related to these investments to determine whether an other than temporary decline in their value exists. Factors indicative of an other than temporary decline include recurring operating losses, credit defaults and subsequent rounds of financings at an amount below the cost basis of the investment. Management periodically weighs all quantitative and qualitative factors in determining if any impairment loss exists. When a decline in value is deemed to be other-than-temporary, the Company recognizes an impairment loss in other income and expense. | |||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||||||||||||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Significant additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. | |||||||||||||||||||||||||||||||||||||
Depreciation is computed using the straight-line method over estimated useful lives that range as follows: buildings — 25 to 50 years; machinery and equipment — 3 to 6 years; furniture and fixtures — 3 to 8 years; software — 1 to 5 years; leasehold and buildings improvement — the shorter of the estimated useful life or lease term, which is generally 2 to 6 years. Depreciation expense recognized for the years ended December 31, 2012, 2013 and 2014 was approximately US$5,881 thousand, US$6,429 thousand and US$6,917 thousand, respectively. | |||||||||||||||||||||||||||||||||||||
Upon the sale or other disposal of property and equipment, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is credited or charged to operating income. | |||||||||||||||||||||||||||||||||||||
Government Grants | Government Grants | ||||||||||||||||||||||||||||||||||||
Grants received by the Company from the Korean government to assist with specific research and development activities are deducted from those research and development costs incurred, in the period in which the related expenses are incurred, to the extent that they are non-refundable. Government grants that were used for the acquisition of fixed assets are deducted from the acquisition costs of the acquired assets and amortized over the useful lives of the related assets. The Company recognizes refundable government grants as long-term payable and current portion of long-term payable on its consolidated balance sheet. | |||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | ||||||||||||||||||||||||||||||||||||
Goodwill is the excess of the purchase price paid over the fair value of the net tangible and intangible assets acquired in a business combination. Intangible assets, which consist primarily of core technology and customer relationship, are amortized over their estimated useful lives, of 4 years at the time of acquisition. | |||||||||||||||||||||||||||||||||||||
Impairment of Goodwill and Long-Lived Assets | Impairment of Goodwill and Long-Lived Assets | ||||||||||||||||||||||||||||||||||||
The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying value may not be recoverable. The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset and its eventual disposition. The estimate of cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors. Estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, technological changes, economic conditions, changes to the business model or changes in operating performance. If the sum of the undiscounted cash flows is less than the carrying value, an impairment loss is recognized, measured as the amount by which the carrying value exceeds the fair value of the asset. Fair value is determined by reference to quoted market prices, if available, or discounted cash flows, as appropriate. See Note 9, “Goodwill and Acquired Intangible Assets,” regarding impairment testing in fiscal year 2012, 2013 and 2014. | |||||||||||||||||||||||||||||||||||||
The Company monitors the recoverability of goodwill recorded in connection with acquisitions, by reporting unit, annually, or sooner if events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company conducts its annual impairment test of goodwill on November 30. Reporting units may be operating segments as a whole or an operation one level below an operating segment, referred to as a component. Goodwill impairment is tested using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchases price over the amounts assigned to assets and liabilities. Estimating fair value is performed by utilizing various valuation approaches, such as income approach or market approach. The total of all reporting unit fair values was also compared to the Company’s market capitalization plus control premium for reasonableness. See Note 9, “Goodwill and Acquired Intangible Assets,” regarding impairment testing. | |||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets | ||||||||||||||||||||||||||||||||||||
Other assets primarily consist of industrial property right and deposits for office leases. | |||||||||||||||||||||||||||||||||||||
Restricted Assets | Restricted Assets | ||||||||||||||||||||||||||||||||||||
Restricted assets consist of deposits required for litigation and restricted cash. Restricted cash represents cash set aside as collateral for obtaining capacity and borrowings as well as cash received from government grants with restriction on its usage. | |||||||||||||||||||||||||||||||||||||
Pension Costs | Pension Costs | ||||||||||||||||||||||||||||||||||||
For employees under defined contribution pension plans, pension costs are recorded based on the actual contributions made to employees’ individual pension accounts. For employees under defined benefit pension plans, pension costs are recorded based on actuarial calculations. | |||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||||||||||||||
Revenue from product sales is generally recognized upon shipment to the customer provided that the Company has received a signed purchase order, the price is fixed or determinable, transfer of title has occurred in accordance with the shipping terms specified in the arrangement with the customer, collectibility from the customer is considered reasonably assured, product returns are reasonably estimable and there are no remaining significant obligations or customer acceptance requirements. Revenue on development service orders is generally recognized upon completion and customer acceptance of contractually agreed milestones. | |||||||||||||||||||||||||||||||||||||
The Company grants certain distributors limited rights of return and price protection rights on unsold products. The return rights are generally limited to five percent of the monetary value of products purchased within the preceding six months, provided that the distributor places a corresponding restocking order of equal or greater value. An allowance for sales returns for distributors and all customers is recorded at the time of sale based on historical returns information available, management’s judgment and any known factors at the time the financial statements are prepared that would significantly affect the allowance. Price protection rights are based on the inventory products the distributors have on hand at the date the price protection is offered. A reserve for price adjustments is recorded based on the estimated products on hand at the distributors and historical experience. The Company incurred actual price adjustments to distributors are minimal. | |||||||||||||||||||||||||||||||||||||
The Company provides a warranty period of one year for manufacturing defects of its products. Warranty returns have been infrequent and relate to defective or off-specification parts. The Company estimates a reserve for warranty based on historical experience and records this amount to cost of sales. For the years ended December 31, 2012, 2013 and 2014, the Company did not experience significant costs associated with warranty returns. | |||||||||||||||||||||||||||||||||||||
Research and Development | Research and Development | ||||||||||||||||||||||||||||||||||||
Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge that will be useful in developing new products or at significantly enhancing existing products as well as expenditures incurred for the design and testing of product alternatives. All expenditures related to research and development activities of the Company are charged to operating expenses when incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. | |||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||||||||||||||||||
The provision for income tax represents income tax paid and payable for the current year plus the changes in the deferred income tax assets and liabilities during the years. Deferred income tax assets are recognized for net operating loss carryforwards, research and development credits, and temporary differences. The Company believes that uncertainty exists regarding the realizability of certain deferred income tax assets and, accordingly, has established a valuation allowance for those deferred income tax assets to the extent the realizability is not deemed to be more likely than not. Deferred income tax assets and liabilities are measured using enacted tax rates. | |||||||||||||||||||||||||||||||||||||
The Company utilizes a two step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained in a dispute with taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. | |||||||||||||||||||||||||||||||||||||
SMI Taiwan, the Company’s largest operating company is a Taiwan registered company. Under Taiwan tax regulations, the current year’s earnings, on an after tax basis, that are not distributed in the following year are subject to a 10% additional income tax. This 10% additional income tax is recognized in the period during which the related earnings are generated. | |||||||||||||||||||||||||||||||||||||
The Taiwan government enacted the Income Basic Tax Act (“the IBT Act”), which became effective on January 1, 2006. The alternative minimum tax (“AMT”) imposed under the IBT Act is a supplemental tax levied at a rate of 10% which is payable if the income tax payable determined pursuant to the Income Tax Law is below the minimum amount prescribed under the IBT Act. The taxable income for calculating the AMT includes most of the income that is exempted from income tax under various laws and statutes. The Company has considered the impact of the IBT Act in the determination of its tax liabilities. Under the IBT Act amended in August 2012, the standard deduction and the tax rate of AMT were amended from NT$1,000 thousand to be NT$500 thousand and from 10% to 12%, respectively. The amended IBT Act is effective on January 1, 2013. | |||||||||||||||||||||||||||||||||||||
Foreign Currency Transactions | Foreign Currency Transactions | ||||||||||||||||||||||||||||||||||||
Foreign currency transactions are recorded at the rates of exchange in effect when the transaction occurs. Gains or losses, resulting from the application of different foreign exchange rates when cash in foreign currency is converted into the entities’ functional currency, or when foreign currency receivables and payables are settled, are credited or charged to income in the period of conversion or settlement. At the balance sheet date, assets and liabilities denominated in foreign currencies are remeasured based on prevailing exchange rates and any resulting gains or losses are credited or charged to income. | |||||||||||||||||||||||||||||||||||||
Translation of Foreign Currency Financial Statements | Translation of Foreign Currency Financial Statements | ||||||||||||||||||||||||||||||||||||
The reporting currency of the Company is the U.S. dollars. The functional currency of some of the Company’s subsidiaries is the local currency of the respective entity. Accordingly, the financial statements of the foreign subsidiaries were translated into U.S. dollars at the following exchange rates: assets and liabilities — current rate on the balance sheet date; shareholders’ equity — historical rates; income and expenses — average rate during the period. The resulting translation adjustment is recorded as a separate component of comprehensive income. | |||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||
Comprehensive income and loss represents net income (loss) plus the results of certain changes in shareholders’ equity during a period from non-owner sources. The following table presents the components of accumulated other comprehensive income (loss) as of December 31, 2012, 2013 and 2014: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2013 | Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||||||||||||||
Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | |||||||||||||||||||||||||||||
currency | benefit | other | currency | benefit | other | currency | benefit | other | |||||||||||||||||||||||||||||
items | pension | comprehensive | items | pension | comprehensive | items | pension | comprehensive | |||||||||||||||||||||||||||||
plans | income (loss) | plans | income (loss) | plans | income (loss) | ||||||||||||||||||||||||||||||||
Beginning balance | 1,976 | 79 | 2,055 | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | ||||||||||||||||||||||||||
Current-period change | 1,947 | (337 | ) | 1,610 | 633 | (203 | ) | 430 | (1,202 | ) | (388 | ) | (1,590 | ) | |||||||||||||||||||||||
Ending balance | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | 3,354 | (849 | ) | 2,505 | |||||||||||||||||||||||||
Legal Contingencies | Legal Contingencies | ||||||||||||||||||||||||||||||||||||
The Company is currently involved in various claims and legal proceedings. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to the pending claims and litigation and revises these estimates as appropriate. Such revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial position. | |||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||||||||||||||||||||||||||||
Basic earnings per share are computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if stock options and other dilutive securities were exercised. Dilutive securities are excluded from the computation of the diluted income per share in periods when their effect is anti-dilutive. The Company’s dilutive securities consist of employee stock options and restricted stock units. The effect of dilutive securities including employee stock options and restricted stock units were 5,245 thousand shares (1,311 thousand ADSs), 2,308 thousand shares (577 thousand ADSs) and 2,183 thousand shares (546 thousand ADSs) for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718 Compensation — Stock Compensation. The Company uses the Black-Scholes valuation model for the valuation of stock options and recognizes compensation expense on a straight-line basis over the requisite service period of the award. The value of our restricted stock units is based on the fair value of our shares on the date of grant and expensed over the vesting period. | |||||||||||||||||||||||||||||||||||||
Prior to the initial declaration of a quarterly cash dividend on January 22, 2013, the fair value of restricted stock units (“RSUs”) was measured based on the grant date share price, as we did not historically pay cash dividends on our common stock. For awards granted on or subsequent to January 22, 2013, the fair value of RSUs was measured based on the grant date share price, less the present value of expected dividends during the vesting period, discounted at a risk-free interest rate. | |||||||||||||||||||||||||||||||||||||
Treasury Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||
Treasury stock is stated at cost and shown as a reduction to shareholders’ equity. | |||||||||||||||||||||||||||||||||||||
The Company retires ordinary shares repurchased under a share repurchase plan. Accordingly, upon retirement the excess of the purchase price over par value is allocated between additional paid-in capital and retained earnings based on the average issuance price of the shares repurchased. A repurchase of ADSs is recorded as treasury stock until the Company completes the withdrawal of the underlying ordinary shares from the ADS program. | |||||||||||||||||||||||||||||||||||||
Dividends | Dividends | ||||||||||||||||||||||||||||||||||||
Our Board of Directors declared payment of our first quarterly dividend on our common stock in January 2013 and the first dividend payment was made on March 4, 2013. Our Board of Directors has subsequently declared and paid dividends in each successive quarter, including in 2014. The payment of future cash dividends are subject to the Board’s continuing determination that the payment of dividends are in the best interests of the Company’s shareholders and are in compliance with all laws and agreements of the Company applicable to the declaration and payment of cash dividends. | |||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||||||||||||||||||||||
In February 2013, the FASB issued an accounting update, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of the guidance is fixed at the reporting date. The guidance requires an entity to measure such obligations as the sum of the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus additional amounts the reporting entity expects to pay on behalf of its co-obligors. The new guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In March 2013, the FASB issued an accounting update that amended guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In July 2013, the FASB issued an accounting update, which creates new guidance regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The guidance is effective for fiscal years beginning after December 15, 2013 and early adoption is permitted. Since this guidance is a change in financial statement presentation only, its adoption did not have material impact on the Company’s result of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In April 10, 2014, the FASB issued an accounting update, which changes the criteria for reporting discontinued operations for all public and nonpublic entities. The guidance requires only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. The guidance also requires entities 1) to expand their disclosures about discontinued operations to include more information about assets, liabilities, income, and expenses and 2) to disclose the pre-tax income attributable to a disposal of “of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.” The guidance is effective for fiscal years beginning after December 15, 2014 and early adoption is prohibited. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In May 2014, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for fiscal years beginning after December 15, 2016 and early adoption is prohibited. The new guidance is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flows. | |||||||||||||||||||||||||||||||||||||
In June 2014, the FASB issued an accounting update, which clarifies the accounting for share-based payments. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. The guidance is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In August 2014, the FASB issued new standard related to the presentation of financial statements when there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about our ability to continue as a going concern, and if so, to provide related footnote disclosures. The standard is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. | |||||||||||||||||||||||||||||||||||||
In February 2015, the FASB issued an accounting update to amend the consolidation analysis. All legal entities are subject to reevaluation under the revised consolidation model. The amendment is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted. The adoption of this amendment is not expected to have a material impact on the Company’s results of operations, financial position or cash flow. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The following table presents the components of accumulated other comprehensive income (loss) as of December 31, 2012, 2013 and 2014: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | Year Ended December 31, 2013 | Year Ended December 31, 2014 | |||||||||||||||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||||||||||||||
Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | Foreign | Defined | Accumulated | |||||||||||||||||||||||||||||
currency | benefit | other | currency | benefit | other | currency | benefit | other | |||||||||||||||||||||||||||||
items | pension | comprehensive | items | pension | comprehensive | items | pension | comprehensive | |||||||||||||||||||||||||||||
plans | income (loss) | plans | income (loss) | plans | income (loss) | ||||||||||||||||||||||||||||||||
Beginning balance | 1,976 | 79 | 2,055 | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | ||||||||||||||||||||||||||
Current-period change | 1,947 | (337 | ) | 1,610 | 633 | (203 | ) | 430 | (1,202 | ) | (388 | ) | (1,590 | ) | |||||||||||||||||||||||
Ending balance | 3,923 | (258 | ) | 3,665 | 4,556 | (461 | ) | 4,095 | 3,354 | (849 | ) | 2,505 | |||||||||||||||||||||||||
Cash_And_Cash_Equivalents_Tabl
Cash And Cash Equivalents (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Details of Cash and Cash Equivalents | |||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Cash and deposits in bank | 19,025 | 38,851 | |||||||
Time deposits | 142,695 | 155,360 | |||||||
161,720 | 194,211 | ||||||||
Notes_and_Accounts_Receivable_
Notes and Accounts Receivable (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Notes and Accounts Receivable | |||||||||||||
December 31 | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Notes receivable | 251 | 192 | |||||||||||
Trade accounts receivable | 33,296 | 31,256 | |||||||||||
33,547 | 31,448 | ||||||||||||
Allowance for doubtful accounts | (1,275 | ) | (1,167 | ) | |||||||||
Allowance for sales returns and discounts | (1,059 | ) | (1,427 | ) | |||||||||
31,213 | 28,854 | ||||||||||||
Changes in Allowances | The changes in the allowances are summarized as follows: | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Allowances for doubtful accounts | |||||||||||||
Balance, beginning of year | 2,648 | 1,634 | 1,275 | ||||||||||
Additions (reversals) charged to expense, net | (663 | ) | (359 | ) | (108 | ) | |||||||
Write-offs | (351 | ) | — | — | |||||||||
Balance, end of year | 1,634 | 1,275 | 1,167 | ||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Allowances for sales returns and discounts | |||||||||||||
Balance, beginning of year | 2,709 | 1,919 | 1,059 | ||||||||||
Additions | 297 | 1,320 | 1,600 | ||||||||||
Write-offs | (1,087 | ) | (2,180 | ) | (1,232 | ) | |||||||
Balance, end of year | 1,919 | 1,059 | 1,427 | ||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Components of Inventory | The components of inventories are as follows: | ||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Finished goods | 9,117 | 9,787 | |||||||
Work in process | 17,218 | 20,835 | |||||||
Raw materials | 7,331 | 13,454 | |||||||
33,666 | 44,076 | ||||||||
LongTerm_Investments_Tables
Long-Term Investments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity Investments with Carrying Value | As of December 31, 2013 and 2014, the Company held equity investments in several privately-held companies with the carrying value as follows: | ||||||||||||||||
Percentage | December 31 | ||||||||||||||||
of | |||||||||||||||||
Ownership | |||||||||||||||||
2013 | 2014 | 2013 | 2014 | ||||||||||||||
US$ | US$ | ||||||||||||||||
Cost method: | |||||||||||||||||
Cashido Corp. (Cashido) | 2.1 | % | 2.1 | % | 104 | 104 | |||||||||||
Vastview Technology, Corp. (Vastview) | 2.9 | % | 2.9 | % | 29 | 29 | |||||||||||
133 | 133 | ||||||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment | |||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Cost: | |||||||||
Land | 6,650 | 8,058 | |||||||
Buildings | 16,711 | 19,813 | |||||||
Machinery and equipment | 12,038 | 13,443 | |||||||
Furniture and fixtures | 4,407 | 5,131 | |||||||
Leasehold and buildings improvement | 3,753 | 4,229 | |||||||
Software | 25,939 | 29,796 | |||||||
Total | 69,498 | 80,470 | |||||||
Accumulated depreciation: | |||||||||
Buildings | 1,869 | 2,240 | |||||||
Machinery and equipment | 9,083 | 10,573 | |||||||
Furniture and fixtures | 3,224 | 3,492 | |||||||
Leasehold and buildings improvement | 2,988 | 3,064 | |||||||
Software | 22,160 | 25,807 | |||||||
39,324 | 45,176 | ||||||||
Prepayment and construction in progress | 21 | 243 | |||||||
30,195 | 35,537 | ||||||||
Goodwill_and_Acquired_Intangib1
Goodwill and Acquired Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Intangible Assets Acquired from Acquisition | Intangible assets: The intangible assets acquired from the Company’s acquisition of FCI and Centronix in 2007 are as follows: | ||||||||||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Accumulated | Net | Cost | Accumulated | Accumulated | Net | ||||||||||||||||||||||||||
Impairment | Amortization | Carrying | Impairment | Amortization | Carrying | ||||||||||||||||||||||||||||
Amount | Amount | ||||||||||||||||||||||||||||||||
Core technology | 15,809 | (4,474 | ) | (11,335 | ) | — | 15,809 | (4,474 | ) | (11,335 | ) | — | |||||||||||||||||||||
Customer relationship | 8,325 | — | (8,325 | ) | — | 8,325 | — | (8,325 | ) | — | |||||||||||||||||||||||
Order backlog | 1,243 | — | (1,243 | ) | — | 1,243 | — | (1,243 | ) | — | |||||||||||||||||||||||
Total | 25,377 | (4,474 | ) | (20,903 | ) | — | 25,377 | (4,474 | ) | (20,903 | ) | — | |||||||||||||||||||||
Carrying Value of Goodwill | |||||||||||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Foreign | Net | Cost | Accumulated | Foreign | Net | ||||||||||||||||||||||||||
Impairment | Currency | Carrying | Impairment | Currency | Carrying | ||||||||||||||||||||||||||||
Adjustment | Amount | Adjustment | Amount | ||||||||||||||||||||||||||||||
Goodwill | 66,330 | (30,808 | ) | (18 | ) | 35,474 | 66,330 | (30,808 | ) | (25 | ) | 35,467 |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Current Liabilities | |||||||||
December 31 | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Wages and bonus | 6,741 | 12,093 | |||||||
Research and development payable | 3,012 | 2,468 | |||||||
License fees and royalties | 2,637 | 2,982 | |||||||
Professional fees | 1,765 | 1,714 | |||||||
Equipment | 359 | 1,170 | |||||||
Others | 3,096 | 3,219 | |||||||
17,610 | 23,646 | ||||||||
Pension_Plan_Tables
Pension Plan (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Change in Benefits Obligation and Plan Assets and Reconciliation of Funded Status | The changes in benefits obligation and plan assets and the reconciliation of funded status are as follows: | ||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Change in benefit obligation | |||||||||||||||||||||||||
Projected benefit obligation at beginning of year | 1,458 | 1,897 | 2,098 | ||||||||||||||||||||||
Service cost | 608 | 440 | 437 | ||||||||||||||||||||||
Interest cost | 77 | 58 | 58 | ||||||||||||||||||||||
Actuarial loss(gain) | (187 | ) | (202 | ) | 814 | ||||||||||||||||||||
Benefits paid | (59 | ) | (95 | ) | (87 | ) | |||||||||||||||||||
Projected benefit obligation at end of year | 1,897 | 2,098 | 3,320 | ||||||||||||||||||||||
Change in plan assets | |||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 1,376 | 1,925 | 2,319 | ||||||||||||||||||||||
Actual return on plan assets | 43 | 43 | 31 | ||||||||||||||||||||||
Employer contributions | 546 | 433 | 282 | ||||||||||||||||||||||
Benefits paid | (40 | ) | (82 | ) | (76 | ) | |||||||||||||||||||
Fair value of plan assets at end of year | 1,925 | 2,319 | 2,556 | ||||||||||||||||||||||
Funded status recognized as an other asset(liabilities) | 28 | 221 | (764 | ) | |||||||||||||||||||||
Amounts Recognized in Accumulated Other Comprehensive Income | Amounts recognized in accumulated other comprehensive income consist of the following: | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Net loss | 257 | 460 | 848 | ||||||||||||||||||||||
Transition obligation | 1 | 1 | 1 | ||||||||||||||||||||||
Total recognized in accumulated other comprehensive income | 258 | 461 | 849 | ||||||||||||||||||||||
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost are as follows: | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Service cost | 608 | 440 | 437 | ||||||||||||||||||||||
Interest cost | 77 | 58 | 58 | ||||||||||||||||||||||
Projected return on plan assets | (43 | ) | (47 | ) | (51 | ) | |||||||||||||||||||
Amortization of unrecognized net transition obligation and unrecognized net actuarial gain | — | (3 | ) | (19 | ) | ||||||||||||||||||||
Net periodic benefit cost | 642 | 448 | 425 | ||||||||||||||||||||||
Other Changes in Plan Assets And Benefit Obligation Recognized In Other Comprehensive Loss | Other changes in plan assets and benefit obligation recognized in other comprehensive loss: | ||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Recognize the decrease in net gain | 336 | 203 | 388 | ||||||||||||||||||||||
Amortization of net gain | 1 | — | — | ||||||||||||||||||||||
Total recognized in other comprehensive loss | 337 | 203 | 388 | ||||||||||||||||||||||
Expected Benefit Payments | Expected benefit payments: | ||||||||||||||||||||||||
US$ | |||||||||||||||||||||||||
2015 | 237 | ||||||||||||||||||||||||
2016 | 150 | ||||||||||||||||||||||||
2017 | 135 | ||||||||||||||||||||||||
2018 | 253 | ||||||||||||||||||||||||
2019 | 178 | ||||||||||||||||||||||||
2020 and thereafter | 972 | ||||||||||||||||||||||||
Actuarial Assumptions to Determine Benefit Obligations | The actuarial assumptions to determine the benefit obligations were as follows: | ||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
Taiwan | Korea | Taiwan | Korea | Taiwan | Korea | ||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | |||||||||||||||||||||||||
Discount rate | 1.63 | % | 4 | % | 1.88 | % | 5.2 | % | 2 | % | 4.1 | % | |||||||||||||
Rate of compensation increase | 4.25 | % | 3 | % | 4.25 | % | 2.6 | % | 4.25 | % | 5 | % | |||||||||||||
Weighted-average assumptions used to determine net projected benefit cost: | |||||||||||||||||||||||||
Discount rate | 1.63 | % | 4 | % | 1.88 | % | 5.2 | % | 2 | % | 4.1 | % | |||||||||||||
Expected long-term return on plan assets | 1.88 | % | 3.1 | % | 2 | % | 3 | % | 2 | % | 2 | % | |||||||||||||
Rate of compensation increase | 4.25 | % | 3 | % | 4.25 | % | 2.6 | % | 4.25 | % | 5 | % | |||||||||||||
Fair Values Of FCI's Pension Plan Assets | The fair values of FCI’s pension plan assets at December 31, 2013 and 2014 are as follows: | ||||||||||||||||||||||||
December 31 | |||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||
US$ | US$ | ||||||||||||||||||||||||
Guaranteed interest contract | |||||||||||||||||||||||||
Kyobo Life Insurance Co. Ltd. | 534 | 730 | |||||||||||||||||||||||
Fixed deposit | |||||||||||||||||||||||||
Industrial Bank of Korea | 855 | 875 | |||||||||||||||||||||||
1,389 | 1,605 | ||||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Components of Income Tax Expense | The components of income tax expense are as follows: | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Current | 5,534 | 8,591 | 15,630 | ||||||||||
Deferred | 1,582 | 1,181 | 471 | ||||||||||
Income tax expense | 7,116 | 9,772 | 16,101 | ||||||||||
Income (Loss) Before Income Taxes for Domestic and Foreign Entities | The income (loss) before income taxes for domestic and foreign entities is as follows: | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Domestic | (11,039 | ) | (8,080 | ) | (12,761 | ) | |||||||
Foreign | 65,373 | 45,228 | 73,329 | ||||||||||
54,334 | 37,148 | 60,568 | |||||||||||
Reconciliation of Income Tax Expense on Pretax Income at Statutory Rate and Income Tax Expense | The Company and its subsidiaries file separate income tax returns. A reconciliation of income tax expense on pretax income at statutory rate and income tax expense is shown below: | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Cayman statutory rate | — | — | — | ||||||||||
Tax on pretax income at statutory rate | 8,142 | 6,788 | 15,727 | ||||||||||
Tax-exempt income | (5,149 | ) | (4,325 | ) | (2,573 | ) | |||||||
Permanent differences | 861 | 1,730 | (396 | ) | |||||||||
Temporary differences | (2,290 | ) | 1,732 | (344 | ) | ||||||||
Alternative minimum tax | 4,340 | 2,203 | 1,170 | ||||||||||
Income tax (10%) on undistributed earnings | 2,631 | 3,396 | 2,491 | ||||||||||
Net changes in income tax credit | 5,518 | 708 | (899 | ) | |||||||||
Net changes in valuation allowance of deferred income tax assets | (3,879 | ) | (2,364 | ) | 733 | ||||||||
Net operating loss carryforwards | 604 | (189 | ) | (1,298 | ) | ||||||||
Liabilities related to unrealized tax benefits | 832 | (39 | ) | 91 | |||||||||
Adjustment of prior years’ taxes and others | (4,494 | ) | 132 | 1,399 | |||||||||
Income tax expense | 7,116 | 9,772 | 16,101 | ||||||||||
Deferred Income Tax Assets (Liabilities) | Deferred income tax assets (liabilities) are as follows: | ||||||||||||
December 31 | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Current: | |||||||||||||
Notes and accounts receivable | 142 | 141 | |||||||||||
Stock-based compensation | 679 | 615 | |||||||||||
Allowance for sales return | 123 | 105 | |||||||||||
Inventory reserve | 544 | 48 | |||||||||||
Foreign currency translation | 312 | (1,273 | ) | ||||||||||
Others | 561 | 504 | |||||||||||
Valuation allowance | (1,083 | ) | (528 | ) | |||||||||
1,278 | (388 | ) | |||||||||||
Non-current: | |||||||||||||
Inventory reserve | 590 | 766 | |||||||||||
Property and equipment | 651 | 452 | |||||||||||
Investment tax credits | 7,011 | 7,823 | |||||||||||
Net operating loss carryforwards | 8,540 | 9,621 | |||||||||||
Others | (885 | ) | (490 | ) | |||||||||
Valuation allowance | (15,193 | ) | (16,263 | ) | |||||||||
714 | 1,909 | ||||||||||||
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US $ | US $ | US$ | |||||||||||
Balance, beginning of year | 2,657 | 3,520 | 5,815 | ||||||||||
Increases in tax positions taken in current year | 917 | 2,947 | 446 | ||||||||||
Decrease in tax position taken in prior year primarily related to the resolution of tax audit | (54 | ) | (652 | ) | (1,606 | ) | |||||||
Balance, end of year | 3,520 | 5,815 | 4,655 | ||||||||||
Summary of Major Jurisdictions and Tax Year Subject to Examination by Tax Authorities | The following table summarizes the Company’s major jurisdictions and tax year that remain subject to examination by tax authorities as of December 31, 2014: | ||||||||||||
Tax Jurisdiction | Tax Years | ||||||||||||
SMI Taiwan | 2009 and onward | ||||||||||||
FCI | 2009 and onward | ||||||||||||
SMI USA | 2007 onward |
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Cash Dividends Declared Per Ordinary Share | The Company declared cash dividends per ordinary share during the periods presented as follows: | ||||||||||||||||
2013 | 2014 | ||||||||||||||||
Dividends | Amount | Dividends | Amount | ||||||||||||||
Per Share | (in US$ | Per Share | (in US$ | ||||||||||||||
(US$) | thousands) | (US$) | thousands) | ||||||||||||||
First quarter | $ | 0.0375 | $ | 5,056 | $ | 0.0375 | $ | 5,056 | |||||||||
Second quarter | $ | 0.0375 | 5,042 | $ | 0.0375 | 5,060 | |||||||||||
Third quarter | $ | 0.0375 | 4,932 | $ | 0.0375 | 5,081 | |||||||||||
Fourth quarter | $ | 0.0375 | 4,935 | $ | 0.0375 | 5,084 | |||||||||||
$ | 19,965 | $ | 20,281 | ||||||||||||||
Equity_Incentive_Plan_Tables
Equity Incentive Plan (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Plan Includes Stock Options and Restricted Stock Units | The following is a summary of, the 2004 Plan, and the 2005 Plan, which includes stock options and restricted stock units: | ||||||||||||
Unit | |||||||||||||
(in Thousands) | |||||||||||||
Available for grant at January 1, 2012 | 6,506 | ||||||||||||
Restricted stock units granted | (1,461 | ) | |||||||||||
Option and restricted stock units forfeited | 291 | ||||||||||||
Available for grant at December 31, 2012 | 5,336 | ||||||||||||
Restricted stock units granted | (1,893 | ) | |||||||||||
Option and restricted stock units forfeited | 123 | ||||||||||||
Available for grant at December 31, 2013 | 3,566 | ||||||||||||
Restricted stock units granted | (1,923 | ) | |||||||||||
Option and restricted stock units forfeited | 44 | ||||||||||||
Available for grant at December 31, 2014 | 1,687 | ||||||||||||
Summary of Stock Option Activity | A summary of the stock option activity and related information is as follows: | ||||||||||||
Number of | Weighted | Weighted | |||||||||||
Options | Average | Average | |||||||||||
Shares | Exercise | Remaining | |||||||||||
(in Thousands) | Price | Contractual | |||||||||||
(US$) | Life | ||||||||||||
(Years) | |||||||||||||
Outstanding at January 1, 2012 | 1,849 | 1.47 | |||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (152 | ) | 1.47 | ||||||||||
Outstanding at December 31, 2012 | 1,697 | 1.47 | 3.14 | ||||||||||
Options vested and expected to vest after December 31, 2012 | 1,697 | 1.47 | 3.14 | ||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (287 | ) | 1.47 | ||||||||||
Outstanding at December 31, 2013 | 1,410 | 1.47 | 2.14 | ||||||||||
Options vested and expected to vest after December 31, 2013 | 1,410 | 1.47 | 2.14 | ||||||||||
Options forfeited | — | — | |||||||||||
Options exercised | (352 | ) | 1.46 | ||||||||||
Outstanding at December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
Options vested and expected to vest after December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
Options exercisable at December 31, 2014 | 1,058 | 1.47 | 1.35 | ||||||||||
Summary of Restricted Stock Units and Changes | A summary of the status of restricted stock units and changes is as follows: | ||||||||||||
Number of | Weighted | Weight | |||||||||||
Non-vested | Average | Average | |||||||||||
Stock Units | Grant | Remaining | |||||||||||
(in Thousands) | Date | Recognition | |||||||||||
Fair | Period | ||||||||||||
Value | (Years) | ||||||||||||
(US$) | |||||||||||||
Non-vested at January 1, 2012 | 11,164 | 1.99 | |||||||||||
Restricted stock units granted | 1,461 | 4.55 | |||||||||||
Restricted stock units vested | (5,316 | ) | 1.75 | ||||||||||
Restricted stock units forfeited | (291 | ) | 2.47 | ||||||||||
Non-vested at December 31, 2012 | 7,018 | 2.68 | 0.83 | ||||||||||
Restricted stock units granted | 1,893 | 3.13 | |||||||||||
Restricted stock units vested | (4,867 | ) | 2.6 | ||||||||||
Restricted stock units forfeited | (123 | ) | 2.6 | ||||||||||
Non-vested at December 31, 2014 | 3,921 | 2.9 | 0.43 | ||||||||||
Restricted stock units granted | 1,923 | 5.13 | |||||||||||
Restricted stock units vested | (3,640 | ) | 2.96 | ||||||||||
Restricted stock units forfeited | (44 | ) | 4.92 | ||||||||||
Non-vested at December 31, 2014 | 2,160 | 4.9 | 0.31 | ||||||||||
Stock-based Compensation Expense | The following table shows total stock-based compensation expense included in the Consolidated Statements of Income for the years ended December 31, 2012, 2013 and 2014. | ||||||||||||
Year Ended December 31 | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US $ | US $ | US$ | |||||||||||
Cost of sales | 375 | 308 | 282 | ||||||||||
Research and development | 7,055 | 6,351 | 6,773 | ||||||||||
Sales and marketing | 2,494 | 2,197 | 1,746 | ||||||||||
General and administrative | 1,878 | 1,406 | 1,546 | ||||||||||
11,802 | 10,262 | 10,347 | |||||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Long-Lived Assets (Property and Equipment, Net) by Geographic Area | Long-lived assets (property and equipment, net) by geographic area were as follows: | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Taiwan | 16,799 | 24,066 | 28,739 | ||||||||||||||||||||||
United States | 58 | 54 | 142 | ||||||||||||||||||||||
Korea | 2,226 | 1,773 | 2,477 | ||||||||||||||||||||||
China | 4,303 | 4,302 | 4,179 | ||||||||||||||||||||||
23,386 | 30,195 | 35,537 | |||||||||||||||||||||||
Product | |||||||||||||||||||||||||
Net Sales | The following summarizes the Company’s revenue by product category: | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Mobile Storage | 202,093 | 185,488 | 241,614 | ||||||||||||||||||||||
Mobile Communications | 67,564 | 31,022 | 40,034 | ||||||||||||||||||||||
Other products | 11,713 | 8,798 | 7,675 | ||||||||||||||||||||||
281,370 | 225,308 | 289,323 | |||||||||||||||||||||||
Customer Lists | |||||||||||||||||||||||||
Net Sales | Major customers representing at least 10% of net sales | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | % | US$ | % | US$ | % | ||||||||||||||||||||
Samsung | 98,368 | 35 | 36,037 | 16 | 30,065 | 10 | |||||||||||||||||||
SK Hynix | * | * | 67,977 | 30 | 107,227 | 37 | |||||||||||||||||||
* | Less than 10% | ||||||||||||||||||||||||
Country | |||||||||||||||||||||||||
Net Sales | The following summarizes the Company’s revenue by geographic area: | ||||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||||||||||
US$ | US$ | US$ | |||||||||||||||||||||||
Taiwan | 74,034 | 47,653 | 57,244 | ||||||||||||||||||||||
United States | 20,230 | 22,528 | 26,265 | ||||||||||||||||||||||
Japan | 5,363 | 3,936 | 11,180 | ||||||||||||||||||||||
Korea | 137,797 | 115,287 | 150,557 | ||||||||||||||||||||||
China | 37,507 | 29,129 | 35,008 | ||||||||||||||||||||||
Others | 6,439 | 6,775 | 9,069 | ||||||||||||||||||||||
281,370 | 225,308 | 289,323 | |||||||||||||||||||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Assets Measured at Fair Value on Recurring Basis | The following table presents our assets measured at fair value on a recurring basis as of December 31, 2013 and 2014: | ||||||||||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
US$ | US$ | US$ | US$ | ||||||||||||||
Assets | |||||||||||||||||
Short-term investments — trading bond funds | 742 | — | — | 742 | |||||||||||||
December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
US$ | US$ | US$ | US$ | ||||||||||||||
Assets | |||||||||||||||||
Short-term investments — trading bond funds | 703 | — | — | 703 |
Recovered_Sheet1
Summary Of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 |
USD ($) | USD ($) | USD ($) | TWD | Customers accounted for 10% or more | Customers accounted for 10% or more | Customers accounted for 10% or more | Amended in August 2012 | Minimum | Maximum | American Depositary Shares | American Depositary Shares | American Depositary Shares | Ordinary Shares | Ordinary Shares | Ordinary Shares | Software | Software | Core technology and customer relationship | Buildings | Buildings | Machinery and Equipment | Machinery and Equipment | Furniture and Fixtures | Furniture and Fixtures | Leasehold And Building Improvement | Leasehold And Building Improvement | FCI | |
Customer | Customer | Customer | Net revenue | Net revenue | Net revenue | TWD | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||||
Consolidated interest acquire in subsidiary | 100.00% | 99.90% | ||||||||||||||||||||||||||
Top ten customer sales in percentage | 76.00% | 76.00% | 75.00% | 75.00% | ||||||||||||||||||||||||
Major customers percentage of net sales | 47.00% | 46.00% | 35.00% | |||||||||||||||||||||||||
Number of customers accounted for 10% or more sales | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||
Short term investment maturity period | 3 months | 1 year | ||||||||||||||||||||||||||
Property plant and equipment estimated useful life | 1 year | 5 years | 25 years | 50 years | 3 years | 6 years | 3 years | 8 years | 2 years | 6 years | ||||||||||||||||||
Depreciation and amortization | $6,917 | $6,429 | $5,881 | |||||||||||||||||||||||||
Intangible asset amortized over estimated useful lives | 4 years | |||||||||||||||||||||||||||
Warranty period for manufacturing defects of products | 1 year | |||||||||||||||||||||||||||
Evaluation of tax benefits realized upon settlement | 50.00% | |||||||||||||||||||||||||||
Income tax under IBT act effective date | 1-Jan-06 | |||||||||||||||||||||||||||
Minimum Alternative Tax On Income under IBT act | 12.00% | |||||||||||||||||||||||||||
Standard deduction tax amount | 1,000 | 500 | ||||||||||||||||||||||||||
Standard deduction tax rate | 10.00% | 10.00% | 12.00% | |||||||||||||||||||||||||
Amendment Effective Date | 1-Jan-13 | |||||||||||||||||||||||||||
The effect of dilutive securities of employee stock options and restricted stock units | 546 | 577 | 1,311 | 2,183 | 2,308 | 5,245 |
Components_of_Accumulated_Othe
Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, Foreign currency items | $4,556 | $3,923 | $1,976 |
Current-period change, Foreign currency items | -1,202 | 633 | 1,947 |
Ending balance, Foreign currency items | 3,354 | 4,556 | 3,923 |
Beginning balance, Defined benefit pension plans | -461 | -258 | 79 |
Current-period change, Defined benefit pension plans | -388 | -203 | -337 |
Ending balance, Defined benefit pension plans | -849 | -461 | -258 |
Beginning balance, Accumulated other comprehensive income (loss) | 4,095 | 3,665 | 2,055 |
Current-period change, Accumulated other comprehensive income (loss) | -1,590 | 430 | 1,610 |
Ending balance, Accumulated other comprehensive income (loss) | $2,505 | $4,095 | $3,665 |
Details_of_Cash_and_Cash_Equiv
Details of Cash and Cash Equivalents (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and deposits in bank | $38,851 | $19,025 | ||
Time deposits | 155,360 | 142,695 | ||
Cash and Cash Equivalents, at Carrying Value | $194,211 | $161,720 | $154,734 | $88,763 |
Short_Term_Investments_Additio
Short Term Investments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gain (Loss) on Investments [Line Items] | |||
Realized gains on sales of short-term investments, trading securities | $4 | $4 | $2 |
Unrealized holding loss on short-term investment | 0 | 0 | 118 |
Gain on structured notes | $118 |
Summary_of_Notes_and_Accounts_
Summary of Notes and Accounts Receivable (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Accounts and Other Receivables [Line Items] | ||||
Notes receivable | $192 | $251 | ||
Trade accounts receivable | 31,256 | 33,296 | ||
Trade Accounts And Notes Receivable Gross Current | 31,448 | 33,547 | ||
Allowance for doubtful accounts | -1,167 | -1,275 | -1,634 | -2,648 |
Allowance for sales returns and discounts | -1,427 | -1,059 | -1,919 | -2,709 |
Notes and accounts receivable, net | $28,854 | $31,213 |
Change_in_Allowances_Detail
Change in Allowances (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowances for doubtful accounts | |||
Balance, beginning of year | $1,275 | $1,634 | $2,648 |
Additions (reversals) charged to expense, net | -108 | -359 | -663 |
Write-offs | -351 | ||
Balance, end of year | 1,167 | 1,275 | 1,634 |
Allowances for sales returns and discounts | |||
Balance, beginning of year | 1,059 | 1,919 | 2,709 |
Additions | 1,600 | 1,320 | 297 |
Write-offs | -1,232 | -2,180 | -1,087 |
Balance, end of year | $1,427 | $1,059 | $1,919 |
Components_of_Inventories_Deta
Components of Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Finished goods | $9,787 | $9,117 |
Work in process | 20,835 | 17,218 |
Raw materials | 13,454 | 7,331 |
Inventory, Net | $44,076 | $33,666 |
Inventories_Additional_Informa
Inventories - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory [Line Items] | |||
Inventory written down | $4,561 | $2,503 | $1,631 |
Equity_Investments_with_Carryi
Equity Investments with Carrying Value (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Cost-method Investments [Line Items] | ||
Long-term investments | $133 | $133 |
Cashido Corp. (Cashido) | ||
Schedule of Cost-method Investments [Line Items] | ||
Long-term investments | 104 | 104 |
Equity Investments Percentage of Ownership | 2.10% | 2.10% |
Vastview Technology, Corp. (Vastview) | ||
Schedule of Cost-method Investments [Line Items] | ||
Long-term investments | $29 | $29 |
Equity Investments Percentage of Ownership | 2.90% | 2.90% |
Longterm_Investment_Additional
Long-term Investment - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 36 Months Ended | 48 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2007 | Dec. 31, 2009 | Dec. 31, 2010 | Dec. 31, 2014 | |
Schedule of Cost-method Investments [Line Items] | |||||||
Cost method investment impairments other than temporary | $0 | $0 | $0 | ||||
Vastview Technology, Corp. (Vastview) | |||||||
Schedule of Cost-method Investments [Line Items] | |||||||
Invested in common stock | 3,360,000 | ||||||
Cost method investment capital return | 46,000 | 808,000 | |||||
Recognized an impairment charges | $2,462,000 | $0 |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | |||
Land | $8,058 | $6,650 | |
Buildings | 19,813 | 16,711 | |
Machinery and equipment | 13,443 | 12,038 | |
Furniture and fixtures | 5,131 | 4,407 | |
Leasehold and buildings improvement | 4,229 | 3,753 | |
Software | 29,796 | 25,939 | |
Total | 80,470 | 69,498 | |
Accumulated Depreciation | 45,176 | 39,324 | |
Prepayment and construction in progress | 243 | 21 | |
Property, Plant and Equipment, Net | 35,537 | 30,195 | 23,386 |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated Depreciation | 25,807 | 22,160 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated Depreciation | 2,240 | 1,869 | |
Machinery and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated Depreciation | 10,573 | 9,083 | |
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated Depreciation | 3,492 | 3,224 | |
Leasehold and buildings improvement | |||
Property, Plant and Equipment [Line Items] | |||
Accumulated Depreciation | $3,064 | $2,988 |
Property_And_Equipment_Additio
Property And Equipment - Additional Information (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Operating Leased Assets [Line Items] | |
Operating leased renewal period of land and buildings | 3 years |
Annual lease and rental income | $41 |
Land | |
Operating Leased Assets [Line Items] | |
Net carrying value lease asset | 603 |
Buildings | |
Operating Leased Assets [Line Items] | |
Net carrying value lease asset | $161 |
Intangible_Assets_Acquired_fro
Intangible Assets Acquired from Acquisition (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Intangible Assets [Line Items] | ||
Accumulated Impairment | ($30,808) | ($30,808) |
FCI and Centronix | ||
Intangible Assets [Line Items] | ||
Cost | 25,377 | 25,377 |
Accumulated Impairment | -4,474 | -4,474 |
Accumulated Amortization | -20,903 | -20,903 |
Net Carrying Amount | 0 | 0 |
FCI and Centronix | Core Technology | ||
Intangible Assets [Line Items] | ||
Cost | 15,809 | 15,809 |
Accumulated Impairment | -4,474 | -4,474 |
Accumulated Amortization | -11,335 | -11,335 |
Net Carrying Amount | 0 | 0 |
FCI and Centronix | Customer Relationships | ||
Intangible Assets [Line Items] | ||
Cost | 8,325 | 8,325 |
Accumulated Amortization | -8,325 | -8,325 |
Net Carrying Amount | 0 | 0 |
FCI and Centronix | Order backlog | ||
Intangible Assets [Line Items] | ||
Cost | 1,243 | 1,243 |
Accumulated Amortization | -1,243 | -1,243 |
Net Carrying Amount | $0 | $0 |
Recovered_Sheet2
Goodwill And Acquired Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2007 | Oct. 30, 2011 | |
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Amortization of intangible assets | $0 | $0 | $0 | ||
Intangible asset impairment losses | 0 | 0 | 0 | ||
Goodwill impairment | 0 | 0 | 0 | ||
Goodwill | 35,467,000 | 35,474,000 | |||
FCI and Centronix | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Goodwill acquired during period | 66,300,000 | ||||
BusinessAcquisitionOne | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Goodwill acquired during period | $156,000 |
Carrying_Value_of_Goodwill_Det
Carrying Value of Goodwill (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | ||
Cost | $66,330 | $66,330 |
Accumulated Impairment | -30,808 | -30,808 |
Foreign Currency Adjustment | -25 | -18 |
Net Carrying Amount | $35,467 | $35,474 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses and Other Current Liabilities [Line Items] | ||
Wages and bonus | $12,093 | $6,741 |
Research and development payable | 2,468 | 3,012 |
License fees and royalties | 2,982 | 2,637 |
Professional fees | 1,714 | 1,765 |
Equipment | 1,170 | 359 |
Others | 3,219 | 3,096 |
Accrued expenses and other current liabilities | $23,646 | $17,610 |
Pension_Plan_Additional_Inform
Pension Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Contributions and Recognized Pension Costs under Labor Pension Act | $872,000 | $788,000 | $716,000 |
Contributions Based on Percentage Employee Salaries under Labor Standards Law | 2.00% | ||
Estimated Future Contributions under Labor Standards Law in 2015 | 57,000 | ||
Accumulated benefit obligation | 1,762,000 | 1,369,000 | 1,332,000 |
Estimated amortization of net gain from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year | 26,000 | ||
FCI | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Estimated Future Contributions under Labor Standards Law in 2015 | 1,052,000 | ||
Fair Value, Inputs, Level 2 | FCI's Pension Plan Assets | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Concentration of risk | $0 | $0 | |
Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percentage of Contribution by an Employer to Employees Pension | 6.00% |
Changes_in_Benefits_Obligation
Changes in Benefits Obligation And Plan Assets And Reconciliation of Funded Status (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in benefit obligation | |||
Projected benefit obligation at beginning of year | $2,098 | $1,897 | $1,458 |
Service cost | 437 | 440 | 608 |
Interest cost | 58 | 58 | 77 |
Actuarial loss (gain) | 814 | -202 | -187 |
Benefits paid | -87 | -95 | -59 |
Projected benefit obligation at end of year | 3,320 | 2,098 | 1,897 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 2,319 | 1,925 | 1,376 |
Actual return on plan assets | 31 | 43 | 43 |
Employer contributions | 282 | 433 | 546 |
Benefits paid | -76 | -82 | -40 |
Fair value of plan assets at end of year | 2,556 | 2,319 | 1,925 |
Funded status recognized as an other asset (liabilities) | ($764) | $221 | $28 |
Amounts_Recognized_in_Accumula
Amounts Recognized in Accumulated Other Comprehensive Income (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net loss | $848 | $460 | $257 | |
Transition obligation | 1 | 1 | 1 | |
Total recognized in accumulated other comprehensive income | $849 | $461 | $258 | ($79) |
Components_of_Net_Periodic_Ben
Components of Net Periodic Benefit Cost (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net Periodic Benefit Cost: | |||
Service cost | $437 | $440 | $608 |
Interest cost | 58 | 58 | 77 |
Projected return on plan assets | -51 | -47 | -43 |
Amortization of unrecognized net transition obligation and unrecognized net actuarial gain | -19 | -3 | |
Net periodic benefit cost | $425 | $448 | $642 |
Other_Changes_in_Plan_Assets_a
Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Loss): | |||
Recognize the decrease in net gain | $388 | $203 | $336 |
Amortization of net gain | 1 | ||
Total recognized in other comprehensive loss | $388 | $203 | $337 |
Expected_Benefit_Payments_Deta
Expected Benefit Payments (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Schedule of Pension Expected Future Benefit Payments [Line Items] | |
2015 | $237 |
2016 | 150 |
2017 | 135 |
2018 | 253 |
2019 | 178 |
2020 and thereafter | $972 |
Actuarial_Assumptions_to_Deter
Actuarial Assumptions to Determine Benefit Obligations (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Taiwan | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 2.00% | 1.88% | 1.63% |
Rate of compensation increase | 4.25% | 4.25% | 4.25% |
Weighted-average assumptions used to determine net projected benefit cost: | |||
Discount rate | 2.00% | 1.88% | 1.63% |
Expected long-term return on plan assets | 2.00% | 2.00% | 1.88% |
Rate of compensation increase | 4.25% | 4.25% | 4.25% |
Korea | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 4.10% | 5.20% | 4.00% |
Rate of compensation increase | 5.00% | 2.60% | 3.00% |
Weighted-average assumptions used to determine net projected benefit cost: | |||
Discount rate | 4.10% | 5.20% | 4.00% |
Expected long-term return on plan assets | 2.00% | 3.00% | 3.10% |
Rate of compensation increase | 5.00% | 2.60% | 3.00% |
Fair_Values_Of_FCIs_Pension_Pl
Fair Values Of FCI's Pension Plan Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Schedule of Pension Plan Assets by Fair Value [Line Items] | ||||
Fair value of FCI's pension plan assets | $2,556 | $2,319 | $1,925 | $1,376 |
Total | ||||
Schedule of Pension Plan Assets by Fair Value [Line Items] | ||||
Fair value of FCI's pension plan assets | 1,605 | 1,389 | ||
Guaranteed interest contract | Kyobo Life Insurance Co. Ltd. | ||||
Schedule of Pension Plan Assets by Fair Value [Line Items] | ||||
Fair value of FCI's pension plan assets | 730 | 534 | ||
Fixed Deposit | Industrial Bank of Korea | ||||
Schedule of Pension Plan Assets by Fair Value [Line Items] | ||||
Fair value of FCI's pension plan assets | $875 | $855 |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current | $15,630 | $8,591 | $5,534 |
Deferred | 471 | 1,181 | 1,582 |
Income tax expense | $16,101 | $9,772 | $7,116 |
Income_loss_Before_Income_Taxe
Income (loss) Before Income Taxes for Domestic and Foreign Entities (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items] | |||
Income (loss) before income taxes, domestic | ($12,761) | ($8,080) | ($11,039) |
Income (loss) before income taxes, foreign | 73,329 | 45,228 | 65,373 |
INCOME BEFORE INCOME TAX | $60,568 | $37,148 | $54,334 |
Reconciliation_of_Income_Tax_E
Reconciliation of Income Tax Expense on Pretax Income at Statutory Rate and Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation Of Income Taxes [Line Items] | |||
Cayman statutory rate | $0 | $0 | $0 |
Tax on pretax income at statutory rate | 15,727 | 6,788 | 8,142 |
Tax-exempt income | -2,573 | -4,325 | -5,149 |
Permanent differences | -396 | 1,730 | 861 |
Temporary differences | -344 | 1,732 | -2,290 |
Alternative minimum tax | 1,170 | 2,203 | 4,340 |
Income tax (10%) on undistributed earnings | 2,491 | 3,396 | 2,631 |
Net changes in income tax credit | -899 | 708 | 5,518 |
Net changes in valuation allowance of deferred income tax assets | 733 | -2,364 | -3,879 |
Net operating loss carryforwards | -1,298 | -189 | 604 |
Liabilities related to unrealized tax benefits | 91 | -39 | 832 |
Adjustment of prior years' taxes and others | 1,399 | 132 | -4,494 |
Income tax expense | $16,101 | $9,772 | $7,116 |
Deferred_Income_Tax_Assets_lia
Deferred Income Tax Assets (liabilities) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current: | ||
Notes and accounts receivable | $141 | $142 |
Stock-based compensation | 615 | 679 |
Allowance for sales return | 105 | 123 |
Inventory reserve | 48 | 544 |
Foreign currency translation | -1,273 | 312 |
Others | 504 | 561 |
Valuation allowance | -528 | -1,083 |
Deferred Tax Assets, Net of Valuation Allowance, Current | -388 | 1,278 |
Non-current: | ||
Inventory reserve | 766 | 590 |
Property and equipment | 452 | 651 |
Investment tax credits | 7,823 | 7,011 |
Net operating loss carryforwards | 9,621 | 8,540 |
Others | -490 | -885 |
Valuation allowance | -16,263 | -15,193 |
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | $1,909 | $714 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Tax Credit Carryforward [Line Items] | |||
Change in valuation allowance | $515 | $1,075 | ($3,271) |
Income tax exemption term | 5 years | ||
Income tax holiday description | Profits generated from certain products of SMI Taiwan are exempted from income tax for five years beginning January 1, 2010 and January 1, 2012 | ||
Unrecognized tax benefits that would affect effective tax rate | 4,655 | ||
Total amount of interest expense and penalties | 343 | 627 | 499 |
Total amount of accrued interest and penalties | 1,674 | 1,412 | |
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards for income tax purposes | 7,794 | ||
Federal net operating loss carryforwards expiration year | 2024 | ||
Research And Development | Federal | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax assets tax credit carryforwards | 2,391 | ||
Tax credit carryforward expiration year for federal | 2023 | ||
Research And Development | State | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax assets tax credit carryforwards | 1,678 | ||
Tax credit carryforward expiration year for state | No expiration date | ||
FCI | Research And Development | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax assets tax credit carryforwards | $3,754 | ||
FCI | Research And Development | Minimum | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit expiration period | 2015 | ||
FCI | Research And Development | Maximum | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit expiration period | 2019 |
Reconciliation_of_Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Balance, beginning of year | $5,815 | $3,520 | $2,657 |
Increases in tax positions taken in current year | 446 | 2,947 | 917 |
Decrease in tax position taken in prior year primarily related to the resolution of tax audit | -1,606 | -652 | -54 |
Balance, end of year | $4,655 | $5,815 | $3,520 |
Summary_of_Major_Jurisdictions
Summary of Major Jurisdictions and Tax Year Subject to Examination Tax Authorities (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Taiwan | |
Income Tax Examination [Line Items] | |
Years Subject to Income Tax Examination | 2009 and onward |
FCI | |
Income Tax Examination [Line Items] | |
Years Subject to Income Tax Examination | 2009 and onward |
United States | |
Income Tax Examination [Line Items] | |
Years Subject to Income Tax Examination | 2007 onward |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 21, 2013 | Dec. 31, 2012 |
Retained Earnings Adjustments [Line Items] | ||||||||||||
Dividend distribution allowance description | SMI Taiwan subsidiary may only distribute dividends after it has made allowances as determined under ROC GAAP at each year-end for: a. Payment of taxes; b. Recovery of prior yearsb deficits, if any; c. 10% of remaining balance after deduction for a and b as legal reserve; d. Special reserve based on relevant laws or regulations or 10% of remaining balance for deduction from above a to c as special reserve when necessary; e. Cash or stock bonus to employees at 0.01% of any remaining earnings after the above reserves have been appropriated, based on a resolution of the board of directors. If bonus to employees is in the form of stock, the bonus may also be appropriated to employees of subsidiaries under the board of directorsb approval; | |||||||||||
Dividend declared | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.15 | $0.15 | $0 | |
Treasury stock, share repurchase program retire period | 2013-07 | |||||||||||
American Depositary Shares | ||||||||||||
Retained Earnings Adjustments [Line Items] | ||||||||||||
ADSs repurchased during period, shares | 891 | |||||||||||
ADSs repurchased during period, cost | $10 | |||||||||||
Average purchase price per ADS | $11.24 | |||||||||||
American Depositary Shares | Maximum | ||||||||||||
Retained Earnings Adjustments [Line Items] | ||||||||||||
Repurchase of shares | 40 |
Cash_Dividends_Declared_Per_Or
Cash Dividends Declared Per Ordinary Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Dividends [Line Items] | |||||||||||
Dividend Per Share | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.04 | $0.15 | $0.15 | $0 |
Amount | $5,084 | $5,081 | $5,060 | $5,056 | $4,935 | $4,932 | $5,042 | $5,056 | $20,281 | $19,965 |
Equity_Incentive_Plan_Addition
Equity Incentive Plan - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Apr. 30, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2006 | Dec. 31, 2004 | Dec. 31, 2011 | Apr. 22, 2005 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of option outstanding | 1,058,000 | 1,410,000 | 1,697,000 | 1,849,000 | |||||
Number of option exercisable | 1,058,000 | ||||||||
Stock option exchange for new stock option granted | 4,369,000 | ||||||||
Stock options exercise price | $1.47 | ||||||||
Eligible stock options exchanged for new stock options granted | 3,785,000 | ||||||||
Stock Option Granted | 0 | 0 | 0 | ||||||
Stock Option Granted Intrinsic Value | $1,565 | $594 | $318 | ||||||
Total unrecognized compensation cost related to non-vested share-based compensation | |||||||||
Cash received from employee toward stock option exercise | 514 | 422 | 224 | ||||||
Tax effect for stock-based compensation benefit (expense) | -24 | 343 | 631 | ||||||
Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock option granted exercise price | $1.85 | ||||||||
2005 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of option exercisable | 10,000,000 | ||||||||
Ordinary shares for issuance upon exercise of stock options and restricted stock units | 15,000,000 | 15,000,000 | |||||||
Conversion ratio of restricted stock unit to ordinary shares | One-for-one | ||||||||
Employee Stock Option Plan, 2004 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of option outstanding | 8,000 | ||||||||
Number of option exercisable | 1,000 | ||||||||
Option expiration period | 6 years | ||||||||
Employee stock option description | The options may be granted to qualified employees of the Company or any of its domestic or foreign subsidiaries and expire no later than six years from the date of grant. The options were granted at an exercise price not lower than the market value of SMI Taiwan's common stock at the date of the grant and vest over four years at certain percentages after two years from the date of grant. As part of the share exchange between the Company and the shareholders of SMI Taiwan effective on April 25, 2005, the Company agreed to assume the share options previously issued by SMI Taiwan. Subsequently on June 3, 2005, the Company amended the 2004 Plan such that options under the 2004 Plan are granted at an exercise price not lower than the market value of the Company's ordinary shares at the date of the grant and vest over four years at certain percentages after one year from the date of grant. | ||||||||
Restricted Stock Units | 2005 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized compensation cost related to non-vested share-based compensation | 2,463 | ||||||||
Stock Options And Restricted Stock Units Exercised | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Tax effect for stock-based compensation benefit (expense) | $1,231 | $1,599 | $1,560 |
Summary_of_Plan_Includes_Stock
Summary of Plan Includes Stock Options and Restricted Stock Units (Detail) (Stock Option And Restricted Stock Unit Plans) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Option And Restricted Stock Unit Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Available for grant at beginning date | 3,566 | 5,336 | 6,506 |
Restricted stock units granted | -1,923 | -1,893 | -1,461 |
Option and restricted stock units forfeited | 44 | 123 | 291 |
Available for grant at ending balance | 1,687 | 3,566 | 5,336 |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity and Related Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Number of Options Shares | |||
Outstanding at beginning period | 1,410 | 1,697 | 1,849 |
Options forfeited | 0 | 0 | 0 |
Options exercised | -352 | -287 | -152 |
Outstanding at ending period | 1,058 | 1,410 | 1,697 |
Options vested and expected to vest after ending period | 1,058 | 1,410 | 1,697 |
Options exercisable at ending period | 1,058 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning period | $1.47 | $1.47 | $1.47 |
Options forfeited | $0 | $0 | $0 |
Options exercised | $1.46 | $1.47 | $1.47 |
Outstanding at ending period | $1.47 | $1.47 | $1.47 |
Options vested and expected to vest after ending period | $1.47 | $1.47 | $1.47 |
Options exercisable at ending period | $1.47 | ||
Weighted Average Remaining Contractual Life | |||
Outstanding at ending period | 1 year 4 months 6 days | 2 years 1 month 21 days | 3 years 1 month 21 days |
Options vested and expected to vest after ending period | 1 year 4 months 6 days | 2 years 1 month 21 days | 3 years 1 month 21 days |
Options exercisable at ending period | 1 year 4 months 6 days |
Summary_of_Status_of_Restricte
Summary of Status of Restricted Stock Units and Changes (Detail) (Restricted Stock Units, USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock Units | |||
Number of Nonvested Stock Units | |||
Nonvested at beginning period | 3,921 | 7,018 | 11,164 |
Restricted stock units granted | 1,923 | 1,893 | 1,461 |
Restricted stock units vested | -3,640 | -4,867 | -5,316 |
Restricted stock units forfeited | -44 | -123 | -291 |
Nonvested at ending period | 2,160 | 3,921 | 7,018 |
Weighted Average Grant Date Fair Value | |||
Nonvested at beginning period | $2.90 | $2.68 | $1.99 |
Restricted stock units granted | $5.13 | $3.13 | $4.55 |
Restricted stock units vested | $2.96 | $2.60 | $1.75 |
Restricted stock units forfeited | $4.92 | $2.60 | $2.47 |
Nonvested at ending period | $4.90 | $2.90 | $2.68 |
Weighted Average Remaining Recognition Period (Years) | |||
Nonvested at ending period | 3 months 22 days | 5 months 5 days | 9 months 29 days |
Table_Of_Stockbased_Compensati
Table Of Stock-based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $10,347 | $10,262 | $11,802 |
Cost of Sales | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 282 | 308 | 375 |
Research and Development Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 6,773 | 6,351 | 7,055 |
Selling and Marketing Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 1,746 | 2,197 | 2,494 |
General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $1,546 | $1,406 | $1,878 |
Commitments_And_Contingencies_
Commitments And Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||
In Thousands, unless otherwise specified | Jul. 31, 2010 | Mar. 31, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2012 | Jan. 31, 2014 | Dec. 31, 2014 | Apr. 17, 2009 | Apr. 25, 2007 |
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Operating lease rental expenses | $1,981 | $1,763 | $1,609 | |||||||
Minimum operating lease payment, 2015 | 1,977 | 1,977 | ||||||||
Minimum operating lease payment, 2016 | 1,367 | 1,367 | ||||||||
Minimum operating lease payment, 2017 | 662 | 662 | ||||||||
Minimum operating lease payment, 2018 | 555 | 555 | ||||||||
Minimum operating lease payment, 2019 | 183 | 183 | ||||||||
Adversary proceeding pending on litigation filled by AASI creditor liquidating trust | 854 | |||||||||
Litigation settlement expenses | 220 | |||||||||
Percentage of total investment forfeited from FCI, TLi Inc. ("TLI"), OCI Materials Co., Ltd ("OCI")upon withdrew from the Pangyo Cooperative | 10.00% | |||||||||
FCI | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Restricted cash deposited | 455 | 946 | 455 | |||||||
All American | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Unpaid accounts receivable from distributor, filed for Chapter 11 bankruptcy protection | 256 | |||||||||
All American | First Distribution | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Distribution claim received as beneficiary | 21 | |||||||||
All American | Second Distribution | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Distribution claim received as beneficiary | 36 | |||||||||
All American | Third Distribution | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Distribution claim received as beneficiary | $12 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Reportable segment | 1 |
Revenue_by_Product_Category_De
Revenue by Product Category (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||
Net sales | $289,323 | $225,308 | $281,370 |
Mobile Storage | |||
Segment Reporting Information [Line Items] | |||
Net sales | 241,614 | 185,488 | 202,093 |
Mobile Communications | |||
Segment Reporting Information [Line Items] | |||
Net sales | 40,034 | 31,022 | 67,564 |
Other products | |||
Segment Reporting Information [Line Items] | |||
Net sales | $7,675 | $8,798 | $11,713 |
Revenue_by_Geographic_Area_Det
Revenue by Geographic Area (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $289,323 | $225,308 | $281,370 |
Taiwan | |||
Net sales | 57,244 | 47,653 | 74,034 |
United States | |||
Net sales | 26,265 | 22,528 | 20,230 |
Japan | |||
Net sales | 11,180 | 3,936 | 5,363 |
Korea | |||
Net sales | 150,557 | 115,287 | 137,797 |
China | |||
Net sales | 35,008 | 29,129 | 37,507 |
Others | |||
Net sales | $9,069 | $6,775 | $6,439 |
Major_customers_representing_a
Major customers representing at least 10% of net sales (Detail) (Net revenue, USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Samsung | ||||
Receivables From Major Customers [Line Items] | ||||
Revenue major customer | $30,065 | $36,037 | $98,368 | |
Major customers percentage of net sales | 10.00% | 16.00% | 35.00% | |
SK Hynix | ||||
Receivables From Major Customers [Line Items] | ||||
Revenue major customer | $107,227 | $67,977 | [1] | |
Major customers percentage of net sales | 37.00% | 30.00% | [1] | |
[1] | Less than 10% |
Longlived_Assets_Property_And_
Long-lived Assets (Property And Equipment, net) by Geographic Area (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $35,537 | $30,195 | $23,386 |
Taiwan | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 28,739 | 24,066 | 16,799 |
United States | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 142 | 54 | 58 |
Korea | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | 2,477 | 1,773 | 2,226 |
China | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net | $4,179 | $4,302 | $4,303 |
Assets_Measured_at_Fair_Value_
Assets Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Short-term investments - trading bond funds | $703 | $742 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Short-term investments - trading bond funds | $703 | $742 |
Fair_Value_Measurement_Additio
Fair Value Measurement - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Assets fair value disclosure nonrecurring basis | $0 | $0 | $0 |
Assets measured at fair value nonrecurring basis, loss incurred | $0 | $0 | $0 |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (Subsequent Event, Shannon, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Apr. 30, 2015 |
Subsequent Event | Shannon | |
Subsequent Event [Line Items] | |
Business acquisition consideration transferred | $57.50 |