MaxLinear, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Significant Customer and Geographic Information

Significant Customer and Geographic Information

12 Months Ended

Dec. 31, 2019

Significant Customer and Geographic Information

Concentration of Credit Risk, Significant Customers and Geographic Information

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Significant Customers

The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1). The Company sells its products both directly to customers and through third-party distributors, both of which are referred to as the Company’s customers (Note 15). The Company makes periodic evaluations of the credit worthiness of its customers.

Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:



	Years Ended December 31,
	2019		2018		2017
Percentage of total net revenue
Customer A (direct)	14	%	18	%	25	%

Balances greater than 10% of accounts receivable, based on the Company's billings to the contract manufacturer customers, are as follows:



	December 31,
	2019		2018
Percentage of gross accounts receivable
Customer B	10	%	10	%

Suppliers comprising greater than 10% of total inventory purchases are as follows:



	Years ended December 31,
	2019		2018		2017
Vendor A	17	%	16	%	21	%
Vendor B	15	%	13	%	11	%
Vendor C	14	%	19	%	16	%
Vendor D	13	%	15	%	15	%
Vendor E	*		*		14	%

* Represents less than 10% of the inventory purchases for the respective period.

Geographic Information

The Company's consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):



	Years Ended December 31,
	2019				2018				2017
	Amount		% of total net revenue		Amount		% of total net revenue		Amount		% of total net revenue
Asia	$	265,122	84	%	$	312,877	81	%	$	372,103	89	%
United States	13,984		4	%	18,060		5	%	10,829		2	%
Rest of world	38,074		12	%	54,060		14	%	37,386		9	%
Total	$	317,180	100	%	$	384,997	100	%	$	420,318	100	%

The products shipped to individual countries representing greater than 10% of net revenue for each of the periods presented are as follows:



	Years Ended December 31,
	2019		2018		2017
Percentage of total net revenue
China	60	%	63	%	71	%

The determination of which country a particular sale is allocated to is based on the destination of the product shipment. No other individual country accounted for more than 10% of net revenue during these periods. Although a large percentage of the Company’s products is shipped to Asia, and in particular, China, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa, or EMEA markets and North American markets.

Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill, by geographic area are as follows (in thousands):



	As of December 31,
	2019				2018(1)
	Amount		% of total		Amount		% of total
United States	$	385,302	85	%	$	426,321	85	%
Singapore	63,556		14	%	71,945		14	%
Rest of world	5,034		1	%	3,368		1	%
Total	$	453,892	100	%	$	501,634	100	%

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(1) Amounts do not include leased right-of-use assets in the prior period due to the adoption of ASC 842 under the modified retrospective method with a cumulative effect adjustment to accumulated deficit as of January 1, 2019.