Increase our penetration of the markets we serve. We currently address AC-DC
applications with power outputs up to approximately 500 watts, gate-driver
applications ranging from a few kilowatts up to gigawatts, and motor-drive
applications up to approximately 400 watts. Through our research and
? development efforts, we seek to introduce more advanced products for these
markets offering higher levels of integration and performance compared to
earlier products. We also continue to expand our sales and
documentation and design-support tools and services to help customers use our
products. These tools and services include our PI Expert™ design software, which
we offer free of charge, and our transformer-sample service.
Increase the size of our addressable market. Prior to 2010 our addressable
market consisted of AC-DC applications with up to about 50 watts of output, a
served available market (SAM) opportunity of approximately $1.5 billion. Since
that time we have expanded our SAM to more than $4 billion through a variety of
means. These include the introduction of products that enable us to address
higher-power AC-DC applications (such as our Hiper™ product families), the
introduction of LED-driver products, and our entry into the gate-driver market
? through the acquisition of CT-Concept Technologie AG in 2012. In 2016 we
introduced the SCALE-iDriverTM family of ICs, broadening the range of
gate-driver applications we can address, and in 2018 we introduced our
BridgeSwitch™ motor-driver ICs, addressing BLDC motors, as described above. We
have recently introduced a series of automotive-qualified versions of our
products, including SCALE-iDriver, InnoSwitch™ and LinkSwitch™ ICs, targeting
the EV market; we expect to introduce additional products targeting EVs in the
future, and expect automotive applications to become a significant portion of
We intend to continue expanding our SAM in the years ahead through all of the means described above.
Critical Accounting Policies and Estimates
Our critical accounting policies are as follows:
The following table sets forth certain operating data as a percentage of net revenues for the periods indicated.
Comparison of the three and six months ended June 30, 2022 and 2021
decreased year-over-year in the three- and six-month periods reflecting weaker demand from customers serving Chinese smartphone OEMs compared to stronger demand in the prior year periods, as customers attempted to capitalize on economic sanctions affecting the mobile-phone business of a key competitor.
Our revenue mix by end market for the three and six months ended June 30, 2022 and 2021, was as follows:
Sales to distributors accounted for 73% and 74% in the three and six months ended June 30, 2022, respectively, and 76% and 77%, respectively, in the corresponding periods of 2021. Direct sales to OEMs and power-supply manufacturers accounted for the remainder.
No other customers accounted for 10% or more of our net revenues in these periods.
R&D expenses increased for the three and six months ended June 30, 2022, as compared to the corresponding periods of 2021, primarily due to higher salary and related expenses driven by increased headcount and increased product development expenses. These increases were partially offset by reduced stock-based compensation expense related to performance-based awards.
Sales and marketing expenses $ 16.0 $ 15.3 $ 32.4 $ 29.4 Headcount (at period end)
S&M expenses increased in the three and six months ended June 30, 2022, as compared to the corresponding periods of 2021, due to higher salary and related expenses stemming from higher headcount and increased travel and tradeshow related expenses.
Other income. Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses. The table below compares other income for the three and six months ended June 30, 2022 and 2021:
Other income increased for the three and six months ended June 30, 2022 as compared to the corresponding periods of 2021, primarily due to gains on foreign currency exchange.
Provision for income taxes $ 5.0 $ 3.3 $ 10.3 $ 4.3 Effective tax rate
$4.1 million decrease in prepaid expenses and other assets. These sources of cash were partially offset by a $12.0 million increase in inventories and a $2.5 million decrease in taxes payable and accrued liabilities.
As of June 30, 2022, there were no material changes in our contractual commitments from those reported in our Annual Report on Form 10-K for the year ended December 31, 2021.
Information with respect to this item may be found in Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in our Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.
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