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Document and Entity Information - USD ($)	12 Months Ended
Dec. 31, 2018	Feb. 20, 2019	Jun. 30, 2018
Document And Entity Information
Entity Registrant Name	APPLIED OPTOELECTRONICS, INC.
Entity Central Index Key	0001158114
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 715,024,373
Entity Common Stock, Shares Outstanding		19,882,613
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2018
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 55,646	$ 82,936
Restricted cash	2,358	1,012
Short-term investments		36
Accounts receivable - trade, net of allowance of $32 and $33, respectively	30,534	59,850
Inventories	93,256	75,768
Prepaid income tax	1,188	1,394
Prepaid expenses and other current assets	11,293	8,665
Total current assets	194,275	229,661
Property, plant and equipment, net	234,211	197,943
Land use rights, net	5,814	804
Intangible assets, net	3,977	4,007
Deferred income tax assets	21,714	12,801
Other assets, net	6,849	7,732
TOTAL ASSETS	466,840	452,948
Current liabilities
Current portion of notes payable and long-term debt	23,589	559
Accounts payable	29,910	43,624
Bank acceptance payable	4,628
Accrued income taxes		7,422
Accrued liabilities	19,291	19,103
Total current liabilities	77,418	70,708
Notes payable and long-term debt, less current portion	60,328	48,964
TOTAL LIABILITIES	137,746	119,672
Stockholders' equity:
Preferred Stock; 5,000 shares authorized at $0.001 par value; no shares issued and outstanding at December 31 2018 and December 31, 2017, respectively
Common Stock; 45,000 shares authorized at $0.001 par value; 19,810 and 19,451 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively	20	19
Additional paid-in capital	292,480	285,376
Accumulated other comprehensive income	602	9,743
Retained earnings	35,992	38,138
TOTAL STOCKHOLDERS' EQUITY	329,094	333,276
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 466,840	$ 452,948

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue, net	$ 267,465	$ 382,329	$ 260,713
Cost of goods sold	179,692	216,049	173,759
Gross profit	87,773	166,280	86,954
Operating expenses
Research and development	49,903	35,365	31,780
Sales and marketing	9,141	8,702	6,627
General and administrative	39,497	35,262	25,527
Total operating expenses	98,541	79,329	63,934
Income (loss) from operations	(10,768)	86,951	23,020
Other income (expense)
Interest income	282	221	247
Interest expense	(1,106)	(858)	(1,717)
Other income (expense), net	1,814	(1,788)	(547)
Total other income (expense), net	990	(2,425)	(2,017)
Income (loss) before income taxes	(9,778)	84,526	21,003
Income tax (expense) benefit	7,632	(10,575)	10,231
Net income (loss)	$ (2,146)	$ 73,951	$ 31,234
Net income (loss) per share
Basic	$ (0.11)	$ 3.87	$ 1.82
Diluted	$ (0.11)	$ 3.67	$ 1.76
Weighted average shares used to compute net income (loss) per share:
Basic	19,646,646	19,097,355	17,201,731
Diluted	19,646,646	20,139,105	17,712,928

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional paid-in capital	Accumulated other comprehensive gain (loss)	Retained earnings/(Accumulated deficit)	Total
Beginning balance, value at Dec. 31, 2015	$ 17	$ 233,336	$ 292	$ (68,247)	$ 165,398
Beginning balance, shares at Dec. 31, 2015	16,839
Public offering of common stock, net of value	$ 1	27,236			27,237
Public offering of common stock, net, in shares	1,126
Issuance of shares under equity plans, in shares	276
Stock options exercised, net of shares withheld for employee tax, value		859			859
Stock options exercised, net of shares withheld for employee tax, in shares	159
Share-based compensation		3,833			3,833
Foreign currency translation adjustment			(1,177)		(1,177)
Net income				31,234	31,234
Ending balance, value at Dec. 31, 2016	$ 18	265,264	(885)	(37,013)	227,384
Ending balance, shares at Dec. 31, 2016	18,400
Public offering of common stock, net of value	$ 1	21,571			21,572
Public offering of common stock, net, in shares	459
Stock options exercised, net of shares withheld for employee tax, value		(6,630)			(6,630)
Stock options exercised, net of shares withheld for employee tax, in shares	418
Issuance of restricted stock, net of shares withheld for employee tax, value		(2,631)			(2,631)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	174
Share-based compensation		7,795			7,795
Cumulative effect of previously unrecognized tax benefits				1,207	1,207
Foreign currency translation adjustment			10,628		10,628
Net income				73,951	73,951
Ending balance, value at Dec. 31, 2017	$ 19	285,376	9,743	38,138	333,276
Ending balance, shares at Dec. 31, 2017	19,451
Stock options exercised, net of shares withheld for employee tax, value		(2,073)			(2,073)
Stock options exercised, net of shares withheld for employee tax, in shares	121
Issuance of restricted stock, net of shares withheld for employee tax, value	$ 1	(1,943)			(1,942)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	238
Share-based compensation		11,120			11,120
Foreign currency translation adjustment			(9,141)		(9,141)
Net income				(2,146)	(2,146)
Ending balance, value at Dec. 31, 2018	$ 20	$ 292,480	$ 602	$ 35,992	$ 329,094
Ending balance, shares at Dec. 31, 2018	19,810

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating activities:
Net income (loss)	$ (2,146)	$ 73,951	$ 31,234
Adjustments to reconcile net income to net cash provided by operating activities:
Lower of cost or market adjustment for inventory	7,166	1,866	3,707
Depreciation and amortization	29,698	20,381	14,188
Amortization of debt issuance costs	42	81
Deferred income taxes, net	(8,964)	(114)	(11,426)
Loss (gain) on disposal of assets	7	97	126
Share-based compensation	11,120	7,795	3,833
Unrealized foreign exchange gain	(548)	330	(937)
Changes in operating assets and liabilities:
Accounts receivable, trade	29,316	(10,080)	(11,147)
Prepaid income tax	230	(1,386)
Inventories	(28,403)	(21,876)	10,207
Other current assets	(2,939)	(4,266)	4,119
Accounts payable	(13,714)	7,249	9,105
Accrued income taxes	(7,390)	6,204	988
Accrued liabilities	554	4,052	3,107
Net cash provided by operating activities	14,029	84,284	57,104
Investing activities:
Maturities of short-term investments	36	8	7,752
Purchase of property, plant and equipment	(71,854)	(66,968)	(49,442)
Purchase of land use rights	(5,591)
Proceeds from disposal of equipment	697	171	14
Deposits and prepaid for equipment	674	(2,871)	688
Purchase of intangible assets	(476)	(499)	(547)
Net cash used in investing activities	(76,514)	(70,159)	(41,535)
Financing activities:
Proceeds from issuance of notes payable and long-term debt, net of debt issuance costs	47,849		28,858
Principal payments of long-term debt and notes payable	(3,133)	(42,758)	(5,855)
Proceeds from line of credit borrowings	155,078	88,003	117,172
Repayments of line of credit borrowings	(165,569)	(39,003)	(163,068)
Proceeds from bank acceptance payable	4,595		5,850
Repayments of bank acceptance payable		(309)	(8,398)
Repayments of note payable			(1,000)
Exercise of stock options	120	1,460	859
Payments of tax withholding on behalf of employees related to share-based compensation	(4,137)	(10,721)
Proceeds from common stock offering, net		21,572	27,237
Net cash provided by financing activities	34,803	18,244	1,655
Effect of exchange rate changes on cash	1,738	(385)	1,947
Net increase (decrease) in cash, cash equivalents and restricted cash	(25,944)	31,984	19,171
Cash, cash equivalents and restricted cash at beginning of period	83,948	51,964	32,793
Cash, cash equivalents and restricted cash at end of period	58,004	83,948	51,964
Cash paid for:
Interest	848	872	1,689
Income taxes	8,470	5,835	$ (12)
Non-cash investing and financing activities:
Net change in accounts payable related to property and equipment additions	$ (1,151)	$ 4,582

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Presentation

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements relate to, among other things, allowance for doubtful accounts, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

3. Foreign Currency Translation

The functional currency for the Company’s foreign operations is the local currency. The assets and liabilities of these operations are translated at the rate of exchange in effect on the balance sheet date and sales and expenses are translated at monthly average rates. The resulting gains or losses from translation are included in a separate component of other comprehensive income. There is no tax effect on the foreign currency translation because it is management’s intent to reinvest the undistributed earnings of its foreign subsidiaries indefinitely. Transaction gains and losses resulting from re-measuring monetary asset and liability accounts that are denominated in a currency other than a subsidiary’s functional currency are included in net foreign exchange gain and loss and are included in net income except for those intercompany balances that are long-term investments in nature. The translation gain or losses from the long-term investment nature of intercompany balances are treated as translation adjustments and included in comprehensive income.

4. Fair Value

The carrying value of cash, cash equivalents and short-term investments, accounts receivable, accounts payable, and note receivable approximate their historical fair values due to their short-term maturities. The carrying value of the debt approximates its fair value due to the short-term nature of the debt since it renews frequently at current interest rates. Management believes that the interest rates in effect at each year end represent the current market rates for similar borrowings.

The fair value measurement standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard characterizes inputs used in determining fair value according to a hierarchy that prioritized inputs based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows:

Level 1—Inputs represent quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3—Inputs that are not observable from objective sources, such as management’s internally developed assumptions used in pricing an asset or liability.

Assets and liabilities that are required to be fair valued on a recurring basis include money market funds, marketable securities, equity instruments and contingent consideration.

Money market funds are valued with Level 1 inputs, using quoted market prices, and are included in cash and cash equivalents on the Company’s consolidated balance sheets.

5. Cash and Cash Equivalents

The Company considers all highly liquid securities with an original maturity of ninety days or less from the date of purchase to be cash equivalents. Cash in foreign accounts was approximately $8.0 million and $21.0 million at December 31, 2018 and 2017, respectively.

The Company maintains cash and cash equivalents at U.S. financial institutions for which the combined account balances in individual institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. As of December 31, 2018, approximately $46.1 million of U.S. deposits were not covered by FDIC insurance. The Company has not experienced any losses and believes it is not exposed to any significant risk with such accounts.

6. Restricted Cash/Compensating Balances

The Company is required to maintain a compensation deposit equal to 30% of its bank acceptance notes to vendors. The Company’s Taiwan and China subsidiaries also use time deposits for customs guarantees. As of December 31, 2018 and 2017, the amount of restricted cash was $2.4 million and $1.0 million, respectively.

7. Accounts Receivable/Allowance for Doubtful Accounts

The Company carries its accounts receivable at the net amount that it estimates to be collectible. An allowance for uncollectable accounts is maintained through a charge against operations. The allowance is determined by management review of outstanding amounts per customer, historical payments and the aging of accounts.

8. Concentration of Credit Risk and Significant Customers

Financial instruments which potentially subject the Company to concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company places all cash and cash equivalents with high-credit quality financial institutions.

The Company performs ongoing credit valuations of its customers’ financial condition whenever deemed necessary and generally does not require deposits or collateral to support customer receivables. The historical amount of losses on uncollectible accounts has been within the Company’s estimates. The Company generates much of its revenue from a limited number of customers. In 2018, 2017 and 2016, its top five customers represented 85.7%, 86.1% and 87.8% of its revenue, respectively. In 2018, Facebook, Microsoft and Amazon represented 38.3%, 22.1% and 12.1% of its revenue, respectively. In 2017, Amazon, Facebook and Microsoft represented 35.4%, 28.6% and 13.8% of its revenue, respectively. In 2016, Amazon, Microsoft and Arris represented 54.6%, 18.3% and 5.8% of its revenue, respectively. The five largest receivable balances for customers represented an aggregate of 70.2%, and 82.6% of total accounts receivable at December 31, 2018 and 2017, respectively. As of December 31, 2018, Microsoft, Amazon and Facebook represented 23.2%, 18.7% and 12.6% of total accounts receivable, respectively. As of December 31, 2017, Amazon and Microsoft represented 36.1% and 19.5% of total accounts receivable, respectively. No other customer represented greater than ten percent of revenue in 2018, 2017 or 2016 or greater than ten percent of total accounts receivable at December 31, 2018 or 2017.

9. Inventories

Inventories are stated at the lower of cost (average-cost method) or market. Work in process and finished goods includes materials, labor and allocated overhead. The Company assesses the valuation of its inventory on a periodic basis and provides write-offs for the value of estimated excess and obsolete inventory based on estimates of future demand.

10. Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the following estimated useful lives:


		Useful lives

Buildings		20 - 42 years
Land improvements		10 years
Machinery and equipment		2 - 20 years
Furniture and fixtures		3 - 7 years
Computer equipment and software		3 - 10 years
Leasehold improvements		The shorter of the life of the applicable lease or the useful life of the improvement
Transportation equipment		5 years

Major improvements are capitalized and expenditures for maintenance and repairs are expensed as incurred. Construction in progress represents property, plant and equipment under construction or being installed. Costs include original cost, installation, construction and other direct costs which include interest on borrowings used to finance the asset. Construction in progress is transferred to the appropriate fixed asset account and depreciation commences when the asset has been substantially completed and placed in service.

Land use rights allow the Company rights for 50 years to certain land in Ningbo, China on which the Company built a facility that included office space, manufacturing operations and employee dormitories. The land use rights are recorded at cost and are amortized on the straight-line basis over the useful life of the related contract. The land use rights expire on October 7, 2054 and December 28, 2067.

11. Intangible Assets

Intangible assets consist of intellectual property that is stated at cost less accumulated amortization. As of December 31, 2018, the Company had 265 total patents issued. The costs incurred to obtain such patents have been capitalized and are being amortized over an estimated life of 20 years. The Company periodically evaluates its intangible assets to determine whether events or changes in circumstances indicate that a patent or trademark may not be applicable to the Company’s current products or is no longer in use. If such a determination is made, the intangible asset is impaired and the remaining value of the patent or trademark will be expensed at that time.

12. Impairment of Long-Lived Assets

The Company accounts for impairment of long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment, (“ASC 360”). Long-lived assets consist primarily of property, plant and equipment. In accordance with ASC 360, the Company evaluates the carrying value of long-lived assets when it determines a triggering event has occurred, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When indicators exist, recoverability of assets is measured by a comparison of the carrying value of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset. Examples of such triggering events include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business, and a significant change in the operations of an acquired business. If such assets are determined not to be recoverable, the Company perform an analysis of the fair value of the asset group and will recognize an impairment loss when the fair value is less than the carrying amounts of such assets. The fair value, based on reasonable and supportable assumptions and projections, require subjective judgments. Depending on the assumptions and estimates used, the appraised fair value projected in the evaluation of long-lived assets can vary within a range of outcomes. The Company considers the likelihood of possible outcomes in determining the best estimate for the fair value of the assets. The Company did not record any asset impairment charges in 2018 or 2017.

13. Comprehensive Income (Loss)

ASC 220, Comprehensive Income, (“ASC 220”) establishes rules for reporting and display of comprehensive income and its components. ASC 220 requires that unrealized gains and losses on the Company’s foreign currency translation adjustments be included in comprehensive income (loss).

14. Share-based Compensation

The Company accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Share-based compensation expense is recognized based on the estimated grant date fair value in order to recognize compensation cost for those shares expected to vest. Compensation cost is recognized on a straight-line basis over the vesting period of the options and adjusted as forfeitures occur.

15. Revenue Recognition

The Company derives revenue from the manufacture and sale of fiber optic networking products. Revenue recognition follows the criteria of ASC 606, Revenue from Contracts with Customers. Specifically, the Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally this occurs with the transfer of control of products or services.

16. Product Warranty

The Company generally offers a one-year limited warranty for its products but it can extend for longer periods of three to five years for certain products sold to certain customers. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability for the amount of such costs at the time when product defects occur. Factors that affect the Company’s warranty liability include the historical and anticipated rates of warranty claims and cost to repair. While the Company believes that its warranty accrual is adequate, the actual warranty costs may exceed the accrual, cost of sales will increase in the future. As of December 31, 2018 and 2017, the amount of accrued warranty was $1.0 million and $1.1 million, respectively.

17. Advertising Costs

Advertising costs are charged to operations as incurred and amounted to approximately $0.5 million, $0.3 million and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.

18. Research and Development

Research and development costs are charged to operations as incurred. The Company receives reimbursement for certain development costs, which are capitalized when incurred, up to the reimbursable amount.

19. Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, Income Taxes. The liability method is used to account for deferred income taxes. Under the liability method, deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The ability to realize deferred tax assets is evaluated annually and a valuation allowance is provided if it is unlikely that the deferred tax assets will not give rise to future benefits in the Company’s tax returns.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

20. Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted in 2018

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The Company adopted the guidance on January 1, 2018, with no impact on the financial statements.

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. The Company evaluated its revenues and the new guidance had immaterial impact to recognition practices upon adoption on January 1, 2018. As part of the adoption, the Company elected to apply the new guidance on a modified retrospective basis. The Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. See Note C, "Revenue Recognition" for additional information on the required disclosures related to the impact of adopting this standard.

The FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities with further clarifications made in February 2018 with the issuance of ASU No. 2018-03. The amended guidance requires certain equity investments that are not consolidated and not accounted for under the equity method to be measured at fair value with changes in fair value recognized in net income rather than as a component of accumulated other comprehensive income (loss). It further states that an entity may choose to measure equity investments that do not have readily determinable fair values using a quantitative approach, or measurement alternative, which is equal to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted this amended guidance on January 1, 2018, with no impact on its financial statements.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. ASU No. 2018-05, effective 2018, expands income tax accounting and disclosure guidance to include SAB 118 issued by the SEC in December 2017. SAB 118 provides guidance on accounting for the income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and among other things allows for a measurement period not to exceed one year for companies to finalize the provisional amounts recorded as of December 31, 2017. See Note M, “Income Taxes” for additional information on the Company’s accounting for the Tax Act.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the Tax Cuts and Jobs Act (the "Tax Act"). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election. Effective the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost as there was no material impact from GILTI inclusions. See Note M, “Income Taxes” for additional information on the Company’s accounting for the Tax Act

Recent Accounting Pronouncements Yet to be Adopted

On February 25, 2016, the FASB released ASU No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The guidance is effective for public business entities in fiscal years beginning after December 15, 2018. The Company expects to adopt the new standard on January 1, 2019 and has elected to recognize a cumulative effect adjustment to the beginning balance sheet of retained earnings in the period of adoption pursuant to ASU 2018-11. The Company expects to use the package of practical expedients that allows it not reassess under the new standard its prior conclusion about lease identification, lease classifications and initial indirect costs. The Company will adopt this ASU on January 1, 2019 with a cumulative adjustment to retained earnings. The Company believes the most significant effects relate to the recognition of new ROU assets and lease liabilities on its balance sheet for its Taiwan branch. Upon adoption, the Company expects to recognize additional operating liabilities in approximately $10.3 million, with corresponding ROU assets of approximately $9.3 million based on the present value of the remaining minimum rental payments under the current leasing standards for existing operating leases. The Company has additionally assessed the impact of Topic 842 on its internal controls over financial reporting.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. The new standard is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. The Company is evaluating the impact the adoption of the new standard will have on its consolidated financial statements and related disclosures.

C. REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2018

Revenue Recognition

Revenue Recognition

NOTE C—REVENUE RECOGNITION

Revenue from Contracts with Customers

On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method. Under the modified retrospective method, the Company did not record a cumulative effect adjustment to retained earnings for initially applying the new guidance as no revenue recognition differences were identified in the timing or amount of revenue. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with its historic accounting under Revenue Recognition ("Topic 605").

The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with its customer are satisfied; generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps:

1. Identify the contract with a customer

A contract with a customer exists when (i) the Company enters into an agreement with a customer that defines each party's rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) both parties to the contract are committed to perform their respective obligations, (iii) the contract has commercial substance, and (iv) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's payment history or, in the case of a new customer, published credit and financial information pertaining to the customer.

2. Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether promised products or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised products or services are accounted for as a combined performance obligation. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard.

3. Determine the transaction price

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. To the extent the transaction price is variable, revenue is recognized at an amount equal to the consideration to which the Company expects to be entitled. This estimate includes customer sales incentives which are accounted for as a reduction to revenue and estimated using either the expected value method or the most likely amount method, depending on the nature of the program. The Company will adjust its consideration for any rebates if it is more likely than not that the rebate conditions will be met.

4. Allocate the transaction price to performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately.

5. Recognize revenue when or as the Company satisfies a performance obligation

The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer.

Disaggregation of Revenue

Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note P, "Segments and Geographic Information.”

Revenue is also classified by major product category and is presented below (in thousands):


	Years ended December 31,
	2018		% of Revenue	2017		% of Revenue	2016		% of Revenue
Data Center	$	200,236	74.9%	$	306,712	80.2%	$	201,314	77.2%
CATV		51,699	19.3%		60,756	15.9%		43,567	16.7%
Telecom		13,159	4.9%		12,899	3.4%		12,938	5.0%
FTTH		818	0.3%		490	0.1%		1,567	0.6%
Other		1,553	0.6%		1,472	0.4%		1,327	0.5%
Total Revenue	$	267,465	100.0%	$	382,329	100.0%	$	260,713	100.0%

E. EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2018

Net income (loss) per share

Earnings Per Share

NOTE E—EARNINGS PER SHARE

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from options and restricted stock units outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and dilutive earnings per share are the same.

The following table presents the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts):


	Year ended December 31,
	2018		2017		2016
Numerator:
Net income (loss)	$	(2,146)	$	73,951	$	31,234
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		19,647		19,097		17,202
Effect of dilutive options and restricted stock units		—		1,042		511
Diluted		19,647		20,139		17,713
Net income (loss) per share
Basic	$	(0.11)	$	3.87	$	1.82
Diluted	$	(0.11)	$	3.67	$	1.76

The following potentially dilutive securities were excluded from diluted net income (loss) per share as their effect would have been antidilutive during periods of net loss:


	As of December 31,
	2018	2017	2016
Employee stock options	263	—	—
Restricted stock units	117	—	—
Total antidilutive shares	380	—	—

I. FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE I—FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2018 (in thousands):


	Quoted prices		Significant
	in active		other
	markets for		observable		Significant
	identical		remaining		unobservable
	assets (Level 1)		inputs (Level 2)		inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	55,646	$	—	$	—	$	55,646
Restricted cash		2,358		—		—		2,358
Total assets	$	58,004	$	—	$	—	$	58,004
Liabilities:
Bank acceptance payable		—	$	4,628		—	$	4,628
Total liabilities	$	—	$	4,628	$	—	$	4,628

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2017 (in thousands):


	Quoted prices		Significant
	in active		other
	markets for		observable		Significant
	identical		remaining		unobservable
	assets (Level 1)		inputs (Level 2)		inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	82,936	$	—	$	—	$	82,936
Restricted cash		1,012		—		—		1,012
Short term investments		36		—		—		36
Total assets	$	83,984	$	—	$	—	$	83,984
Liabilities:
Bank acceptance payable		—	$	—		—	$	—
Total liabilities	$	—	$	—	$	—	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

J. NOTES PAYABLE AND LONG-TERM DEBT

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Notes Payable and Long-Term Debt

NOTE J—NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):


	December 31,
	2018		2017

Revolving line of credit with a U.S. bank up to $60,000 with interest at LIBOR plus 1.4%, maturing September 28, 2020	$	23,104	$	49,000
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024		20,067		—
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023		19,164		—
Revolving line of credit with a Taiwan bank up to $9,767 with interest at 2%, maturing May 31, 2019		3,256		—
Revolving line of credit with a Taiwan bank up to $7,000 with interest at 1.5%, maturing July 26, 2019		3,550		—
Notes payable to a finance company due in monthly installments with 4.5% interest, which matured May 27, 2018		—		559
Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021		6,331		—
Revolving line of credit with a China bank up to $18,599 with interest ranging from 3.7% to 4.6%		8,652		—
Sub-total		84,124		49,559
Less debt issuance costs, net		(207)		(36)
Grand total		83,917		49,523
Less current portion		(23,589)		(559)
Non-current portion	$	60,328	$	48,964

Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate	$	4,628	$	—

The current portion of long-term debt is the amount payable within one year of the balance sheet date of December 31, 2018.

Maturities of notes payable and long-term debt are as follows for the future years ending December 31 (in thousands):


2019	$	23,589
2020		31,375
2021		8,160
2022		6,242
2023		5,369
2024 and thereafter		9,182
Total outstanding	$	83,917

On September 28, 2017, the Company entered into a Loan Agreement, a Promissory Note, an Addendum to the Promissory Note, a BB&T Security Agreement, a Trademark Security Agreement, and a Patent Security Agreement (together the “Credit Facility”) with Branch Banking and Trust Company (“BB&T”). The Credit Facility provides the Company with a three year, $50 million, revolving line of credit. Borrowings under the Credit Facility will be used for general corporate purposes. The Company makes monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. The Company’s obligations under the Credit Facility are secured by the Company’s accounts receivable, inventory, intellectual property, and all business assets with the exception of real estate and equipment. Borrowings under the Credit Facility bear interest at a rate equal to the one-month LIBOR plus 1.50%. The Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties, and events of default applicable to the Company that are customary for agreements of this type.

On March 30, 2018, the Company executed a First Amendment to Loan Agreement, a Note Modification Agreement and Addendum to Promissory Note for $60 million, a Promissory Note and Addendum to Promissory Note for $26 million, a Promissory Note and Addendum to Promissory Note for $21.5 million, a Texas Deed of Trust and Security Agreement, an Assignment of Lease and Rent, and an Environmental Certification and Indemnity Agreement, (collectively, the “Amended Credit Facility”), with BB&T. The Amended Credit Facility amends the Company’s three-year $50 million line of credit with BB&T, originally executed on September 28, 2017 (the “Existing Loan”). The Amended Credit Facility (1) increases the principal amount of the three-year line of credit from $50 million to $60 million (the “Line of Credit”); (2) allows the Company to borrow an additional $26 million from BB&T in the form of a five-year capital expenditure loan (the “CapEx Loan”) and (3) allows the Company to borrow an additional $21.5 million in the form of a seventy-month real estate term loan (the “Term Loan”) to refinance the Company’s plant and facilities in Sugar Land, Texas. Borrowings under the Line of Credit bear interest at a rate equal to the one-month LIBOR plus a Line of Credit margin ranging between 1.40% and 2.0%. Borrowings under the CapEx Loan bear interest at a rate equal to the one-month LIBOR plus a CapEx Loan margin ranging between 1.30% and 2.0%. Borrowings under the Term Loan bear interest at a rate equal to the one-month LIBOR plus a Term Loan margin ranging between 1.15% and 2.0%. The Company is required to make monthly payments of principal and accrued interest with the final monthly payments being for all principal and accrued interest not yet paid. The Company’s obligations under the Amended Credit Facility are secured by the Company’s accounts receivable, inventory, equipment, intellectual property, real property, and virtually all business assets. As of December 31, 2018, the Company was in compliance with all covenants under the Amended Credit Facility. As of December 31, 2018, $23.1 million was outstanding under the Line of Credit, $20.1 million was outstanding under the Term Loan and $19.2 million was outstanding under the CapEx Loan.

On May 27, 2015, the Company’s Taiwan branch entered into a Purchase and Sale Contract and a Finance Lease Agreement with Chailease Finance Co, Ltd. (“Chailease”) in connection with certain equipment, structured as a sale lease-back transaction. Pursuant to the Purchase and Sale contract, the Company’s Taiwan branch sold certain equipment to Chailease for a purchase price of 180,148,532 New Taiwan dollars, approximately $6.0 million, and simultaneously leased the equipment back from Chailease pursuant to the Finance Lease Agreement. The monthly lease payments range from 3,784,000 New Taiwan dollars, approximately $0.1 million, to 3,322,413 New Taiwan dollars, approximately $0.1 million, during the term of the Finance Lease Agreement, including an initial payment in an amount of 60,148,532 New Taiwan dollars, approximately $2.0 million. The Finance Lease Agreement had a three-year term, with monthly payments, that matured on May 27, 2018. The title to the equipment was transferred to the Company’s Taiwan branch upon the expiration of the Finance Lease Agreement.

On June 19, 2018, Prime World entered into a one year revolving credit facility totaling 300 million New Taiwan dollars (“NT$”), or approximately $9.8 million, (the “Taiwan Credit Facility”) with Taishin International Bank in Taiwan (the “Bank”). Borrowing under the Taiwan Credit Facility will be used for short-term working capital. Prime World may draw upon the Taiwan Credit Facility from June 19, 2018 until May 31, 2019. The term of each draw shall be either 90 or 120 days. Borrowings under the Taiwan Credit Facility bear interest at a rate of 2.00% for 90 day draws and 1.95% for 120 day draws. At the end of the draw term, Prime World is required to make payments for all principal and accrued interest. The agreements for the Taiwan Credit Facility contain representations and warranties and events of default applicable to Prime World that are customary for agreements of this type. As of December 31, 2018, $3.3 million was outstanding under the Taiwan Credit Facility.

On October 3, 2018, Prime World entered into a revolving credit facility for up to $7 million, (the “Revolving Credit Facility”) with the Development Bank of Singapore (Taiwan) Ltd. (“DBS”). Borrowing under the Revolving Credit Facility will be used for short-term working capital. Prime World may draw upon the Revolving Credit Facility from October 3, 2018 until July 26, 2019. The term of each draw shall be either 60 or 90 days depending on the purpose of the draw. Borrowings under the Revolving Credit Facility bear interest at a rate equal to DBS’s cost of funds rate plus 1.25% for draws in U.S. Dollars and 1.35% plus the Bank’s cost of funds rate for draws in New Taiwan Dollars. As of the execution of the Revolving Credit Facility, DBS’s cost of fund’s rate is 0.77% for loans made in New Taiwan Dollars and 2.54% for loans made in U.S. Dollars. DBS’s cost of fund’s rate is adjusted daily. Prime World is required to make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. Prime World’s obligations under the Revolving Credit Facility is secured by promissory notes executed between Prime World and DBS at the time of each draw. The agreements for the Revolving Credit Facility contain representations and warranties and events of default applicable to the Prime World that are customary for agreements of this type. As of December 31, 2018, $3.6 million was outstanding under the Revolving Credit Facility.

On November 29, 2018, Prime World entered into a Purchase and Sale Contract (the “Sale Contract”) and a Finance Lease Agreement with Chailease Finance Co., Ltd. (“Chailease”) in connection with certain equipment, structured as a sale lease-back transaction. Pursuant to the Sale Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,340,468, or approximately $8.7 million. Simultaneously, Prime World leased the equipment back from Chailease for a term of three-years, pursuant to the Finance Lease Agreement. Prime World is obligated to pay an initial payment of NT$67,340,468, or approximately $2.2 million, thereafter the monthly lease payments range from NT$5,571,229, or $0.2 million, to NT$6,139,188, or approximately $0.2 million. Based on the lease payments made under the Finance Lease Agreement, the annual interest rate is calculated to be 3.5%. Upon an event of default under the Finance Lease Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease in the amount of NT$210,601,605, or approximately $6.8 million, subject to certain terms and conditions. The title of the equipment will be transferred to Prime World upon expiration of the Finance Lease Agreement. As of December 31, 2018, $6.3 million was outstanding under the Finance Lease Agreement.

On December 11, 2018, Prime World entered into a one-year credit facility totaling New Taiwan Dollars 150 million (the “Credit Facility”) with CTBC Bank Co., Ltd. (“CTBC”). Borrowing under the Credit Facility will be used for short-term working capital. Prime World may draw upon the Credit Facility from December 11, 2018 until October 31, 2019. The term of each draw shall be up to 120 days. Under the Credit Facility borrowing in New Taiwan Dollars will bear interest at a rate equal to CTBC’s Enterprise Swap Index Rate plus 1.2%; for all foreign currency borrowing interest bear at a rate equal to CTBC’s Cost of Fund lending rate plus 1.2%. As of the execution of the Credit Facility, CTBC’s Enterprise Swap Index Rate and Cost of Funds lending rate is 0.69% and 3.40% respectively. At the end of the draw term, Prime World is required to make payments for all principal and accrued interest. The agreements for the Credit Facility contain representations and warranties, and events of default applicable to Prime World that are customary for agreements of this type. As of December 31, 2018, there was no outstanding balance under the Credit Facility.

On September 21, 2018, the Company’s China subsidiary, Global Technology, Inc., entered into a five-year revolving credit line agreement, totaling 129,000,000 Chinese Renminbi, or RMB, or approximately $18.6 million, (the “Credit Line”) and a Security Agreement with China Construction Bank Co., Ltd., in Ningbo, China (“CCB”). Borrowing under the Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors. Global may draw upon the Credit Line between September 21, 2018 and September 17, 2023; however, the amount of available credit under the Credit Line may be reduced by CCB without notice to Global and may be decreased subject to changes of Chinese government regulations. Each draw bears interest equal to CCB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the Credit Line is secured by real property owned by Global in China and mortgaged to CCB under the terms of the Security Agreement. As of December 31, 2018, $8.7 million was outstanding under the Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $4.6 million.

As of December 31, 2018 and 2017, the Company had $69.4 million and $1.0 million of unused borrowing capacity, respectively.

One-month LIBOR rates were 2.50% and 1.56% at December 31, 2018 and 2017, respectively.

As of December 31, 2018 and 2017, there was $2.4 million and $1.0 million of restricted cash, investments or security deposit associated mainly with the loan facilities, respectively.

M. INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE M—INCOME TAXES

The sources of the Company’s income (loss) from operations before income taxes were as follows (in thousands):


	Year ended December 31,
	2018		2017		2016
Domestic	$	(11,444)	$	17,497	10,047
Foreign		1,666		67,029	10,956
Total income (loss) before income taxes	$	(9,778)	$	84,526	21,003

The provision for income tax expense (benefit) for the years ended December 31, was as follows (in thousands):


Current:	2018		2017		2016
Federal	$	—	$	—	$	(15)
State		80		(292)		256
Foreign		1,349		10,965		962
Total	$	1,429	$	10,673	$	1,203
Deferred:
Federal	$	(6,391)	$	2,015	$	(10,794)
State		61		(1,669)		(130)
Foreign		(2,731)		(444)		(510)
Total	$	(9,061)	$	(98)	$	(11,434)

Income tax (benefit) expense	$	(7,632)	$	10,575	$	(10,231)

Deferred income tax assets and liabilities result principally from net operating losses, different methods of recognizing depreciation, reserves for doubtful accounts and inventory, research and development credits and foreign tax credits. At December 31, the net deferred tax assets and liabilities are comprised of the following approximate amounts (in thousands):


	2018		2017
NOL carryforward	$	12,049	$	7,739
Inventory reserves		1,490		837
AMT credit		172		345
Unrealized gains and losses		69		92
Share-based compensation		510		732
Foreign tax credit		4,599		2,018
Research and development credits		6,648		4,626
Interest		208		—
Other		718		573
Deferred tax assets		26,463		16,962
Depreciation and amortization		(4,749)		(4,161)
Deferred tax liabilities		(4,749)		(4,161)
Deferred tax assets, net	$	21,714	$	12,801

The Company has a U.S. net operating loss carry forward of approximately $47.4 million, $32.8 million of which, if unused, expires between 2025 and 2032 and $14.6 million of which, can be carryforward indefinitely. The Company has U.S. and state research and development tax credits of $6.6 million, which, if unused, expire between 2028 and 2038. In addition, the Company has foreign tax credits of $4.6 million, which, if unused, will expire in 2027. Utilization of U.S. net operating losses and tax credit carry forwards are subject to an annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382. During 2016, the Company updated its Section 382 analysis resulting in the recognition of additional utilizable net operating losses. Additional ownership changes could result in the expiration of the net operating loss and tax credit carryforwards before utilization.

On October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory (“ASU 2016-16”), which requires the recognition of the income tax consequences of an intra-entity transfer of as asset, other than inventory, when the transfer occurs. The Company adopted guidance on January 1, 2018, with no impact on its financial statements.

A reconciliation of the U.S. federal income tax rate of 21%, 35% and 35% for the years ended December 31, 2018, 2017 and 2016, respectively, to the Company’s effective income tax rate follows (in thousands):


	2018		2017		2016
Expected taxes at statutory rate	$	(2,053)	$	29,584	$	7,351
Non-deductible/non-taxable items		1,020		1,212		565
Foreign rate differences		(1,043)		(11,656)		(654)
Foreign permanent differences		(1,067)		416		(1,005)
Increase (decrease) in valuation allowance		—		(1,700)		(13,063)
Share-based compensation		(1,325)		(10,348)		—
Section 382 limitation		—		—		(3,065)
Changes in tax rates		(103)		2,768		(361)
Transition tax adjustment, net of foreign tax credits		(1,777)		5,067		—
Research and development credits		(2,022)		(2,821)		—
Uncertain tax positions		—		(1,616)		—
Foreign other		514		—		—
Other, net		224		(331)		1
Tax (benefit) expense	$	(7,632)	$	10,575	$	(10,231)

The Company’s provision for income taxes in 2018 was lower than in 2017 primarily due to a decrease in pre-tax income and the impact of the 2017 Tax Act, partially offset by excess tax benefits from stock-based compensation, recording research and development credits, and the U.S. return-to-accrual adjustment as a result of the 2017 Tax Act as discussed below.

The Company’s provision for income taxes in 2017 was higher than in 2016 primarily due to an increase in pre-tax income and the provisional effect of the 2017 Tax Act, partially offset by excess tax benefits from stock-based compensation and recording research and development credits, including a portion of which were previously uncertain.

The Company’s wholly owned subsidiary, Prime World is a tax-exempt entity under the Income Tax Code of the British Virgin Islands.

The Company’s wholly owned subsidiary, Global Technology, Inc., has enjoyed preferential tax concessions in China as a national high-tech enterprise. In March 2007, China’s parliament enacted the PRC Enterprise Income Tax Law, or the EIT Law, under which, effective January 1, 2008, China adopted a uniform income tax rate of 25% for all enterprises including foreign invested enterprises. Global Technology, Inc. was recognized as a National high-tech enterprise in 2008 and was entitled to a 15% tax rate for a three year period from November 2008 to November 2017. Global Technology, Inc. renewed its National high-tech enterprise certificate and was therefore extended its three-year tax preferential status from November 2017 to November 2020. This tax holiday reduced its 2018 and 2017 income tax provision by approximately $0.5 and $1.4 million respectively, but had no overall effect on the 2016 income tax provision due to a full valuation allowance. This tax holiday increased its fiscal 2018 and 2017 diluted earnings per share by approximately $0.03 and $0.07 respectively, but had no effect on its 2016 diluted earnings per share due to the full valuation allowance. Effective January 1, 2016, China expanded the scope of the National high-tech enterprise to include additional deductions for qualifying research and development.

As of December 31, 2018, 2017 and 2016, the total amount of unrecognized tax benefit was $0.2 million, $0.2 million, and $1.8 million, respectively. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):


	2018		2017		2016
Unrecognized tax benefits — January 1	$	181	$	1,797	$	1,797
Gross increases — tax positions in prior period		—		—		—
Gross decreases — tax positions in prior period		—		(1,616)		—
Unrecognized tax benefits — December 31	$	181	$	181	$	1,797

As of December 31, 2018 and 2017, the Company had $0.2 million of unrecognized tax benefits related to U.S. tax benefits recognized for prior branch losses, respectively. As of December 31, 2016, the Company had $1.8 million of unrecognized tax benefits related to U.S. tax benefits recognized for prior year branch losses and research and development credits. If recognized, none of the amounts would have an impact on the Company’s effective tax rate, but rather would result in adjustments to other tax accounts, primarily deferred taxes.

The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, it has not accrued penalties or interest during 2018 as a result of net operating losses. During 2017 or 2016, the Company also accrued no penalties or interest.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s open tax years subject to examination in the U.S. federal and state jurisdictions are 2015 through 2017. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or tax credit carryforward. The Company is subject to examination for tax years 2010 forward for various foreign jurisdictions.

Effects of the Tax Cuts and Jobs Act

On December 22, 2017, the President of the United States signed Public Law No. 115-97, commonly referred to as the Tax Cut and Jobs Act of 2017 (the “Tax Act”). The Tax Act made significant changes to the U.S. tax code, which included, but were not limited to: a U.S. federal corporate tax rate decrease from 35% to 21%, effective January 1, 2018; a shift to a modified territorial tax regime, which requires companies to pay a one-time transition tax on the mandatory deemed repatriation of the cumulative earnings of certain foreign subsidiaries as of December 31, 2017; a new provision designed to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries; a limitation of the deduction for net operating losses; elimination of net operating loss carrybacks; immediate deductions for depreciation expense for certain qualified property; additional limitations on the deductibility of executive compensation and limitations on the deductibility of interest.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment data. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In third quarter of 2018, we completed our analysis to determine the effect of the Tax Act and the material impact of the Tax Act is described below.

The deemed repatriation transition tax (the “Transition Tax”) is a tax on certain previously untaxed accumulated and current earnings and profits (“E&P”) of our foreign subsidiaries. The company was able to reasonably estimate the Transition Tax and recorded a provisional Transition Tax obligation of $5.0 million, with a corresponding adjustment of $5.0 million to income tax expense for the year ended December 31, 2017. On the basis of revised E&P computations that were completed during the reporting period, the Company recognized an additional measurement-period adjustment of ($1.8) million to the Transition Tax obligation, with a corresponding adjustment of ($1.8) million to income tax expense during the reporting period, net of foreign tax credit considerations. The effect of the measurement-period adjustment on the 2018 effective tax rate was approximately 18.8%. The Transition Tax, which has now been determined to be complete, resulted in recording a total Transition Tax obligation of $3.2 million, with a corresponding adjustment of $3.2 million to income tax expense.

As of December 31, 2018, the Company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $44 million. Because $44 million of such earnings have previously been subject to the one-time transition tax on foreign earnings required by the 2017 Tax Act, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign and state taxes. The Company intends, however, to indefinitely reinvest these earnings and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs.

N. SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

NOTE N—SHARE-BASED COMPENSATION

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

the 1998 Share Incentive Plan

the 2000 Share Incentive Plan

the 2004 Share Incentive Plan

the 2006 Share Incentive Plan

the Amended and Restated 2013 Equity Incentive Plan (“2013 Plan”)

The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists.

Stock Options

Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and semi-annually thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity (in thousands, except per share data):



				Weighted				Weighted
		Weighted		Average				Average
		Average		Share Price		Weighted		Remaining	Aggregate
	Number of	Exercise		on Date of		Average		Contractual	Intrinsic
	shares	Price		Exercise		Fair Value		Life	Value
	(in thousands, except price data)
Outstanding, January 1, 2016	1,310		9.07			$	4.59		$	10,598
Exercised	(159)		6.91	$	19.90		2.56			2,071
Forfeited	(21)		7.96				3.29			273
Outstanding, December 31, 2016	1,130		9.40				4.90			15,872
Exercised	(418)		8.56	$	59.31		4.51			21,224
Forfeited	(176)		9.42				4.97			4,998
Outstanding, December 31, 2017	536		10.04				5.19			14,888
Exercised	(122)		9.79	$	36.18		5.00			3,223
Forfeited	(127)		9.92				5.10			697
Outstanding, December 31, 2018	287	$	10.19			$	5.31	4.60		1,503
Exercisable, December 31, 2018	287	$	10.19					4.60		1,503
Vested and expected to vest	287	$	10.19					4.60	$	1,503

As of December 31, 2018, there was no unrecognized stock option expense.

Restricted Stock Unit/Awards

The following is a summary of RSU/RSA activity (in thousands, except per share data):


		Weighted
		Average Share		Weighted		Aggregate
	Number of	Price on Date		Average Fair		Intrinsic
	shares	of Release		Value		Value
	(in thousands, except price data)
Outstanding at January 1, 2016	152			$	11.20	$	2,611
Granted	497	$	13.50		15.73		7,815
Released	(122)				14.09		1,644
Cancelled/Forfeited	(10)				15.38		180
Outstanding, December 31, 2016	517				14.79		12,128
Granted	510				38.87		19,803
Released	(289)	$	60.87		20.92		17,579
Cancelled/Forfeited	(31)				24.23		1,181
Outstanding, December 31, 2017	707				29.23		26,732
Granted	526				33.74		17,768
Released	(363)	$	33.86		28.87		12,306
Cancelled/Forfeited	(44)				32.91		680
Outstanding, December 31, 2018	826				32.07		12,744
Vested and expected to vest	826			$	32.07	$	12,744

The aggregate intrinsic value of RSUs and RSAs outstanding at December 31, 2018 was $12.7 million. Unrecognized compensation expense related to these RSUs and RSAs at December 31, 2018 was $24.0 million. This expense is expected to be recognized over 2.49 years.

Share-Based Compensation

The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award and expense is adjusted as forfeitures occur.

In 2014, the Company ceased issuing stock options and began issuing RSUs and RSAs as share-based compensation to employees. The Company estimates the fair value of RSUs and RSAs at the fair market value on the grant date.

Employee share-based compensation expenses recognized for the years ended December 31, were as follows (in thousands):

Share-Based compensation - by expense type:


	2018		2017		2016
Cost of goods sold	$	795	$	461	$	190
Research and development		2,419		1,496		591
Sales and marketing		925		481		357
General and administrative		6,981		5,357		2,695
Total share-based compensation expense	$	11,120	$	7,795	$	3,833

Share-Based compensation - by award type:



	2018		2017		2016
Employee stock options	$	12	$	853	$	1,460
Restricted stock units		11,108		6,942		2,373
Total share-based compensation expense	$	11,120	$	7,795	$	3,833

R. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE R—COMMITMENTS AND CONTINGENCIES

Commitments

The Company conducts part of its operations from leased facilities and also leases equipment. Rent expense was $1.2 million, $1.1 million and $1.1 million, respectively, for the years ended December 31, 2018, 2017 and 2016, respectively.

At December 31, 2018, the approximate minimum rental commitments under noncancellable leases in excess of one year that expire at varying dates through 2029 were as follows (in thousands):


Year ending December 31,	Amount
2019	$	1,233
2020		1,144
2021		1,031
2022		993
2023		1,017
thereafter		5,748
	$	11,166

Employment Agreements and Consultancy Agreements

The Company has entered into employment and indemnification agreements with three executive officers. These agreements provide that if their employment is terminated as a result of a change of control of the Company, or if their employment is terminated for certain other reasons set forth in the agreements, the Company will be required to pay a severance payment in an amount equal to their annual base salary, and other additional compensation due under the terms of the agreements.

The Company has also entered into employment and indemnification agreements with one other executive officer. These agreements provide that if their employment is terminated as a result of a change of control of the Company, the Company will be required to pay a severance payment in an amount equal to six months of their annual base salary and other additional compensation due under the terms of the agreements.

Contingencies

From time to time, the Company may be subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings, such as described below. The Company records a loss provision when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceeding described below.

Except for the lawsuits described below, the Company believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on it.

Class Action and Shareholder Derivative Litigation

On August 5, 2017, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Mona Abouzied v. Applied Optoelectronics, Inc., Chih-Hsiang (Thompson) Lin, and Stefan J. Murry, et al., Case No. 4:17-cv-02399. The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on August 3, 2017 that “we see softer than expected demand for our 40G solutions with one of our large customers that will offset the sequential growth and increased demand we expect in 100G.” The complaint requests unspecified damages and other relief. The Company disputes the allegations set forth in the complaint and is vigorously contesting the matter. The briefing on the Company’s motion to dismiss the complaint was completed on May 21, 2018, and the motion is still pending.

On August 7, 2018, a derivative lawsuit was filed in the United States District Court for the Southern District of Texas styled Lei Jin, derivatively on behalf of Applied Optoelectronics, Inc. v. Chih-Hsiang (“Thompson”) Lin, Stefan J. Murry, William H. Yeh, Alex Ignatiev, Richard B. Black, Min-Chu Chen, Alan Moore, and Che-Wei Lin and Applied Optoelectronics, Inc., No. 4:18-cv-02713 alleging breaches of fiduciary duties, unjust enrichment, and violations of Section 14(a) of the Exchange Act based on similar factual allegations as in the Abouzied Securities Class Action. On December 18, 2018, a second derivative complaint was filed styled Yiu Kwong Ng v. Chih-Hsiang (“Thompson”) Lin, Stefan J. Murry, William H. Yeh, Alex Ignatiev, Richard B. Black, Min-Chu Chen, Alan Moore, and Che-Wei Lin and Applied Optoelectronics, Inc., No. 4:18-cv-4751 alleging the same causes of actions as the Jin complaint and additional factual allegations regarding the Company’s announcement on September 28, 2018 that it had “identified an issue with a small percentage of 25G lasers within a specific customer environment.” On January 11, 2019, the court consolidated these two derivative actions, and on January 15, 2019, the court entered an order staying the actions pending the outcome of the motion to dismiss in the Abouzied Securities Class action and the forthcoming motion to dismiss in the Taneja Securities Class Action, described in the following paragraph. The complaint requests unspecified damages and other relief. The Company disputes the allegations and intends to vigorously contest the matter if and when the stay is lifted.

On October 1, 2018, a securities class action was filed in the United States District Court for the Southern District of Texas styled Gaurav Taneja v. Applied Optoelectronics, Inc., Thompson Lin, and Stefan Murry, Case No. 4:18-cv-3544. The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, the chief executive officer, and the chief financial officer, arising out of the Company’s announcement on September 28, 2018 that it had “identified an issue with a small percentage of 25G lasers within a specific customer environment.” The original complaint requests unspecified damages and other relief. The Company disputes the allegations set forth in the original complaint and intends to vigorously contest the matter. The case has been consolidated with two identical complaints that were subsequently filed on October 10, 2018 and October 18, 2018, styled Davin Pokoik v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry, Case No. 4:18-cv-3722 and Stephen McGrath v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry, respectively. The three cases were consolidated on January 4, 2019, and Mark Naglich was appointed Lead Plaintiff on that same date. The original complaint requests unspecified damages and other relief. The Company disputes the allegations in the complaint and intends to vigorously contest the matter. The deadline for Lead Plaintiff to file a consolidated amended complaint is March 5, 2019, and the deadline for our motion to dismiss is sixty days after the consolidated amended complaint is filed.

T. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

NOTE T—Selected Quarterly Financial Data (unaudited)

The following tables set forth a summary of the Company’s quarterly financial information for each of the four quarters for the years ended December 31, 2018 and 2017 (in thousands, except per share data):


	First		Second		Third		Fourth
Year ended December 31, 2018	Quarter		Quarter		Quarter		Quarter

Revenue	$	65,239	$	87,822	$	56,386	$	58,018
Cost of goods sold		39,403		53,959		38,849		47,481
Gross profit		25,836		33,863		17,537		10,537
Gross margin		39.6%		38.6%		31.1%		18.2%

Operating expenses:
Research and development		11,736		12,645		14,180		11,342
Sales and marketing		2,474		2,377		2,370		1,920
General and administrative		9,456		9,898		10,591		9,552
Total operating expenses		23,666		24,920		27,141		22,814

Income (loss) from operations		2,170		8,943		(9,604)		(12,277)
Interest and other income (expense), net		(1,046)		1,387		578		71
Net income (loss) before taxes		1,124		10,330		(9,026)		(12,206)
Income tax (expense) benefit		996		(2,296)		5,294		3,638
Net income (loss)	$	2,120	$	8,034	$	(3,732)	$	(8,568)

Net income (loss) per share—basic	$	0.11	$	0.41	$	(0.19)	$	(0.43)
Net income (loss) per share—diluted	$	0.11	$	0.40	$	(0.19)	$	(0.43)


	First		Second		Third		Fourth
Year ended December 31, 2017	Quarter		Quarter		Quarter		Quarter

Revenue	$	96,224	$	117,371	$	88,879	$	79,855
Cost of goods sold		54,752		64,089		49,507		47,701
Gross profit		41,472		53,282		39,372		32,154
Gross margin		43.1%		45.4%		44.3%		40.3%

Operating expenses:
Research and development		7,432		8,073		9,190		10,670
Sales and marketing		1,903		2,158		2,551		2,090
General and administrative		7,822		8,786		9,580		9,074
Total operating expenses		17,157		19,017		21,321		21,834

Income from operations		24,315		34,265		18,051		10,320
Interest and other expense, net		(872)		(111)		(541)		(901)
Net income before taxes		23,443		34,154		17,510		9,419
Income tax (expense) benefit		(3,654)		(5,083)		1,865		(3,703)
Net income	$	19,789	$	29,071	$	19,375	$	5,716

Net income per share—basic	$	1.06	$	1.52	$	1.00	$	0.29
Net income per share—diluted	$	1.00	$	1.43	$	0.95	$	0.28

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

Use of Estimates

2. Use of Estimates

Foreign Currency Translation

3. Foreign Currency Translation

Fair Value

4. Fair Value

Level 1—Inputs represent quoted prices in active markets for identical assets or liabilities.

Level 3—Inputs that are not observable from objective sources, such as management’s internally developed assumptions used in pricing an asset or liability.

Assets and liabilities that are required to be fair valued on a recurring basis include money market funds, marketable securities, equity instruments and contingent consideration.

Money market funds are valued with Level 1 inputs, using quoted market prices, and are included in cash and cash equivalents on the Company’s consolidated balance sheets.

Cash and Cash Equivalents

5. Cash and Cash Equivalents

Restricted Cash/Compensating Balances

6. Restricted Cash/Compensating Balances

Accounts Receivable/Allowance for Doubtful Accounts

7. Accounts Receivable/Allowance for Doubtful Accounts

Concentration of Credit Risk and Significant Customers

8. Concentration of Credit Risk and Significant Customers

Inventories

9. Inventories

Property, Plant and Equipment

10. Property, Plant and Equipment


		Useful lives

Buildings		20 - 42 years
Land improvements		10 years
Machinery and equipment		2 - 20 years
Furniture and fixtures		3 - 7 years
Computer equipment and software		3 - 10 years
Leasehold improvements		The shorter of the life of the applicable lease or the useful life of the improvement
Transportation equipment		5 years

Intangible Assets

11. Intangible Assets

Impairment of Long-Lived Assets

12. Impairment of Long-Lived Assets

Comprehensive Income (Loss)

13. Comprehensive Income (Loss)

Share-based Compensation

14. Share-based Compensation

Revenue Recognition

15. Revenue Recognition

Product Warranty

16. Product Warranty

Advertising Costs

17. Advertising Costs

Advertising costs are charged to operations as incurred and amounted to approximately $0.5 million, $0.3 million and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Research and Development

18. Research and Development

Income Taxes

19. Income Taxes

Recent Accounting Pronouncements

20. Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted in 2018

Recent Accounting Pronouncements Yet to be Adopted

E. EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2018

Net income (loss) per share

Schedule of Computation basic and diluted net loss per share

The following table presents the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts):


	Year ended December 31,
	2018		2017		2016
Numerator:
Net income (loss)	$	(2,146)	$	73,951	$	31,234
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		19,647		19,097		17,202
Effect of dilutive options and restricted stock units		—		1,042		511
Diluted		19,647		20,139		17,713
Net income (loss) per share
Basic	$	(0.11)	$	3.87	$	1.82
Diluted	$	(0.11)	$	3.67	$	1.76

Schedule of potentially dilutive securities


	As of December 31,
	2018	2017	2016
Employee stock options	263	—	—
Restricted stock units	117	—	—
Total antidilutive shares	380	—	—

I. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities at fair value

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2018 (in thousands):


	Quoted prices		Significant
	in active		other
	markets for		observable		Significant
	identical		remaining		unobservable
	assets (Level 1)		inputs (Level 2)		inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	55,646	$	—	$	—	$	55,646
Restricted cash		2,358		—		—		2,358
Total assets	$	58,004	$	—	$	—	$	58,004
Liabilities:
Bank acceptance payable		—	$	4,628		—	$	4,628
Total liabilities	$	—	$	4,628	$	—	$	4,628

The following table presents a summary of the Company’s financial instruments measured at fair value on a recurring basis as of December 31, 2017 (in thousands):


	Quoted prices		Significant
	in active		other
	markets for		observable		Significant
	identical		remaining		unobservable
	assets (Level 1)		inputs (Level 2)		inputs (Level 3)		Total
Assets:
Cash and cash equivalents	$	82,936	$	—	$	—	$	82,936
Restricted cash		1,012		—		—		1,012
Short term investments		36		—		—		36
Total assets	$	83,984	$	—	$	—	$	83,984
Liabilities:
Bank acceptance payable		—	$	—		—	$	—
Total liabilities	$	—	$	—	$	—	$	—

J. NOTES PAYABLE AND LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of notes payable and long-term debt

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):


	December 31,
	2018		2017

Revolving line of credit with a U.S. bank up to $60,000 with interest at LIBOR plus 1.4%, maturing September 28, 2020	$	23,104	$	49,000
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024		20,067		—
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023		19,164		—
Revolving line of credit with a Taiwan bank up to $9,767 with interest at 2%, maturing May 31, 2019		3,256		—
Revolving line of credit with a Taiwan bank up to $7,000 with interest at 1.5%, maturing July 26, 2019		3,550		—
Notes payable to a finance company due in monthly installments with 4.5% interest, which matured May 27, 2018		—		559
Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021		6,331		—
Revolving line of credit with a China bank up to $18,599 with interest ranging from 3.7% to 4.6%		8,652		—
Sub-total		84,124		49,559
Less debt issuance costs, net		(207)		(36)
Grand total		83,917		49,523
Less current portion		(23,589)		(559)
Non-current portion	$	60,328	$	48,964

Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate	$	4,628	$	—

Maturities of notes payable and long-term debt

Maturities of notes payable and long-term debt are as follows for the future years ending December 31 (in thousands):


2019	$	23,589
2020		31,375
2021		8,160
2022		6,242
2023		5,369
2024 and thereafter		9,182
Total outstanding	$	83,917

M. INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income or loss from operations before income taxes

The sources of the Company’s income (loss) from operations before income taxes were as follows (in thousands):


	Year ended December 31,
	2018		2017		2016
Domestic	$	(11,444)	$	17,497	10,047
Foreign		1,666		67,029	10,956
Total income (loss) before income taxes	$	(9,778)	$	84,526	21,003

Provision for income tax expense

The provision for income tax expense (benefit) for the years ended December 31, was as follows (in thousands):


Current:	2018		2017		2016
Federal	$	—	$	—	$	(15)
State		80		(292)		256
Foreign		1,349		10,965		962
Total	$	1,429	$	10,673	$	1,203
Deferred:
Federal	$	(6,391)	$	2,015	$	(10,794)
State		61		(1,669)		(130)
Foreign		(2,731)		(444)		(510)
Total	$	(9,061)	$	(98)	$	(11,434)

Income tax (benefit) expense	$	(7,632)	$	10,575	$	(10,231)

Net deferred tax assets and liabilities

At December 31, the net deferred tax assets and liabilities are comprised of the following approximate amounts (in thousands):


	2018		2017
NOL carryforward	$	12,049	$	7,739
Inventory reserves		1,490		837
AMT credit		172		345
Unrealized gains and losses		69		92
Share-based compensation		510		732
Foreign tax credit		4,599		2,018
Research and development credits		6,648		4,626
Interest		208		—
Other		718		573
Deferred tax assets		26,463		16,962
Depreciation and amortization		(4,749)		(4,161)
Deferred tax liabilities		(4,749)		(4,161)
Deferred tax assets, net	$	21,714	$	12,801

Reconciliation of the U.S. federal income tax rate


	2018		2017		2016
Expected taxes at statutory rate	$	(2,053)	$	29,584	$	7,351
Non-deductible/non-taxable items		1,020		1,212		565
Foreign rate differences		(1,043)		(11,656)		(654)
Foreign permanent differences		(1,067)		416		(1,005)
Increase (decrease) in valuation allowance		—		(1,700)		(13,063)
Share-based compensation		(1,325)		(10,348)		—
Section 382 limitation		—		—		(3,065)
Changes in tax rates		(103)		2,768		(361)
Transition tax adjustment, net of foreign tax credits		(1,777)		5,067		—
Research and development credits		(2,022)		(2,821)		—
Uncertain tax positions		—		(1,616)		—
Foreign other		514		—		—
Other, net		224		(331)		1
Tax (benefit) expense	$	(7,632)	$	10,575	$	(10,231)

Schedule of unrecognized tax benefits


	2018		2017		2016
Unrecognized tax benefits — January 1	$	181	$	1,797	$	1,797
Gross increases — tax positions in prior period		—		—		—
Gross decreases — tax positions in prior period		—		(1,616)		—
Unrecognized tax benefits — December 31	$	181	$	181	$	1,797

N. SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of option activity

The following is a summary of option activity (in thousands, except per share data):



				Weighted				Weighted
		Weighted		Average				Average
		Average		Share Price		Weighted		Remaining	Aggregate
	Number of	Exercise		on Date of		Average		Contractual	Intrinsic
	shares	Price		Exercise		Fair Value		Life	Value
	(in thousands, except price data)
Outstanding, January 1, 2016	1,310		9.07			$	4.59		$	10,598
Exercised	(159)		6.91	$	19.90		2.56			2,071
Forfeited	(21)		7.96				3.29			273
Outstanding, December 31, 2016	1,130		9.40				4.90			15,872
Exercised	(418)		8.56	$	59.31		4.51			21,224
Forfeited	(176)		9.42				4.97			4,998
Outstanding, December 31, 2017	536		10.04				5.19			14,888
Exercised	(122)		9.79	$	36.18		5.00			3,223
Forfeited	(127)		9.92				5.10			697
Outstanding, December 31, 2018	287	$	10.19			$	5.31	4.60		1,503
Exercisable, December 31, 2018	287	$	10.19					4.60		1,503
Vested and expected to vest	287	$	10.19					4.60	$	1,503

Summary of RSU/RSA activity

The following is a summary of RSU/RSA activity (in thousands, except per share data):


		Weighted
		Average Share		Weighted		Aggregate
	Number of	Price on Date		Average Fair		Intrinsic
	shares	of Release		Value		Value
	(in thousands, except price data)
Outstanding at January 1, 2016	152			$	11.20	$	2,611
Granted	497	$	13.50		15.73		7,815
Released	(122)				14.09		1,644
Cancelled/Forfeited	(10)				15.38		180
Outstanding, December 31, 2016	517				14.79		12,128
Granted	510				38.87		19,803
Released	(289)	$	60.87		20.92		17,579
Cancelled/Forfeited	(31)				24.23		1,181
Outstanding, December 31, 2017	707				29.23		26,732
Granted	526				33.74		17,768
Released	(363)	$	33.86		28.87		12,306
Cancelled/Forfeited	(44)				32.91		680
Outstanding, December 31, 2018	826				32.07		12,744
Vested and expected to vest	826			$	32.07	$	12,744

Schedule of employee stock-based compensation expenses

Employee share-based compensation expenses recognized for the years ended December 31, were as follows (in thousands):

Share-Based compensation - by expense type:


	2018		2017		2016
Cost of goods sold	$	795	$	461	$	190
Research and development		2,419		1,496		591
Sales and marketing		925		481		357
General and administrative		6,981		5,357		2,695
Total share-based compensation expense	$	11,120	$	7,795	$	3,833

Share-Based compensation - by award type:



	2018		2017		2016
Employee stock options	$	12	$	853	$	1,460
Restricted stock units		11,108		6,942		2,373
Total share-based compensation expense	$	11,120	$	7,795	$	3,833

T. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data


	First		Second		Third		Fourth
Year ended December 31, 2018	Quarter		Quarter		Quarter		Quarter

Revenue	$	65,239	$	87,822	$	56,386	$	58,018
Cost of goods sold		39,403		53,959		38,849		47,481
Gross profit		25,836		33,863		17,537		10,537
Gross margin		39.6%		38.6%		31.1%		18.2%

Operating expenses:
Research and development		11,736		12,645		14,180		11,342
Sales and marketing		2,474		2,377		2,370		1,920
General and administrative		9,456		9,898		10,591		9,552
Total operating expenses		23,666		24,920		27,141		22,814

Income (loss) from operations		2,170		8,943		(9,604)		(12,277)
Interest and other income (expense), net		(1,046)		1,387		578		71
Net income (loss) before taxes		1,124		10,330		(9,026)		(12,206)
Income tax (expense) benefit		996		(2,296)		5,294		3,638
Net income (loss)	$	2,120	$	8,034	$	(3,732)	$	(8,568)

Net income (loss) per share—basic	$	0.11	$	0.41	$	(0.19)	$	(0.43)
Net income (loss) per share—diluted	$	0.11	$	0.40	$	(0.19)	$	(0.43)


	First		Second		Third		Fourth
Year ended December 31, 2017	Quarter		Quarter		Quarter		Quarter

Revenue	$	96,224	$	117,371	$	88,879	$	79,855
Cost of goods sold		54,752		64,089		49,507		47,701
Gross profit		41,472		53,282		39,372		32,154
Gross margin		43.1%		45.4%		44.3%		40.3%

Operating expenses:
Research and development		7,432		8,073		9,190		10,670
Sales and marketing		1,903		2,158		2,551		2,090
General and administrative		7,822		8,786		9,580		9,074
Total operating expenses		17,157		19,017		21,321		21,834

Income from operations		24,315		34,265		18,051		10,320
Interest and other expense, net		(872)		(111)		(541)		(901)
Net income before taxes		23,443		34,154		17,510		9,419
Income tax (expense) benefit		(3,654)		(5,083)		1,865		(3,703)
Net income	$	19,789	$	29,071	$	19,375	$	5,716

Net income per share—basic	$	1.06	$	1.52	$	1.00	$	0.29
Net income per share—diluted	$	1.00	$	1.43	$	0.95	$	0.28

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - VARIOUS POLICIES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) patent	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Cash and cash equivalents	$ 55,646	$ 82,936
Cash in excess of FDIC insurance	$ 46,100
Percentage of bank acceptance notes and standby letters of credit	30.00%
Restricted cash	$ 2,358	1,012
Number of years of land use rights	50 years
Number of patents \| patent	265
Weighted average amortization period	8 years
Accrued product warranty	$ 995	1,118
Advertising Costs	500	$ 300	$ 200
Operating Lease, Liability	10,300
Operating Lease, Right-of-Use Asset	$ 9,300
Minimum
Product warranty extension period	3 years
Maximum
Product warranty extension period	5 years
Patents
Weighted average amortization period	20 years
Sales Revenue, Net \| Five Customers
Concentration of credit risk	85.70%	86.10%	87.80%
Sales Revenue, Net \| Amazon
Concentration of credit risk	12.10%	35.40%	54.60%
Sales Revenue, Net \| Facebook
Concentration of credit risk	38.30%	28.60%
Sales Revenue, Net \| Microsoft
Concentration of credit risk	22.10%	13.80%	18.30%
Sales Revenue, Net \| Arris
Concentration of credit risk			5.80%
Sales Revenue, Net \| No Other Customer [Member] \| Maximum
Concentration of credit risk	10.00%	10.00%	10.00%
Accounts Receivable \| Five Customers
Concentration of credit risk	70.20%	82.60%
Accounts Receivable \| Amazon
Concentration of credit risk	23.20%	36.10%
Accounts Receivable \| Facebook
Concentration of credit risk	12.60%
Accounts Receivable \| Microsoft
Concentration of credit risk	18.70%	19.50%
Accounts Receivable \| No Other Customer [Member] \| Maximum
Concentration of credit risk	10.00%	10.00%
Foreign Accounts
Cash and cash equivalents	$ 8,000	$ 21,000

E. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net income (loss)	$ (8,568)	$ (3,732)	$ 8,034	$ 2,120	$ 5,716	$ 19,375	$ 29,071	$ 19,789	$ (2,146)	$ 73,951	$ 31,234
Weighted average shares used to compute net income (loss) per share
Basic									19,646,646	19,097,355	17,201,731
Effective of dilutive options and restricted stock units										1,042,000	511,000
Diluted									19,646,646	20,139,105	17,712,928
Net income (loss) per share
Basic	$ (0.43)	$ (0.19)	$ 0.41	$ 0.11	$ 0.29	$ 1.00	$ 1.52	$ 1.06	$ (0.11)	$ 3.87	$ 1.82
Diluted	$ (0.43)	$ (0.19)	$ 0.40	$ 0.11	$ 0.28	$ 0.95	$ 1.43	$ 1.00	$ (0.11)	$ 3.67	$ 1.76

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

J. NOTES PAYABLE AND LONG-TERM DEBT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Mar. 30, 2018	Dec. 31, 2017
Notes payable and long-term debt	$ 84,124		$ 49,559
Less debt issuance costs, net	(207)		(36)
Grand Total	83,917		49,523
Current portion of notes payable and long-term debt	(23,589)		(559)
Long term portion of notes payable and long-term debt	60,328		48,964
Bank acceptance notes	4,628
Term loan 1
Notes payable and long-term debt	$ 20,067
Term loan 1 \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.15%
Term loan 2
Notes payable and long-term debt	$ 19,164
Term loan 2 \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.30%
Note payable 1
Notes payable and long-term debt			559
Stated interest rate	4.50%
Note payable 2
Notes payable and long-term debt	$ 6,331
Stated interest rate	3.40%
Bank Acceptance Notes Payable
Bank acceptance interest rate	0.00%
Revolving Line of Credit \| Revolving Line of Credit 1
Notes payable and long-term debt	$ 23,104		$ 49,000
Revolving Line of Credit \| Revolving Line of Credit 2
Notes payable and long-term debt	3,256
Revolving line of credit maximum borrowing capacity	$ 9,767
Basis spread on variable rate	2.00%
Revolving Line of Credit \| Revolving Line of Credit 3
Notes payable and long-term debt	$ 3,550
Revolving line of credit maximum borrowing capacity	$ 7,000
Basis spread on variable rate	1.50%
Revolving Line of Credit \| Revolving Line of Credit 4
Notes payable and long-term debt	$ 8,652
Revolving line of credit maximum borrowing capacity	18,599
Revolving Line of Credit \| Branch Banking and Trust Company \| Promissory Note One [Member]
Notes payable and long-term debt	23,100
Revolving line of credit maximum borrowing capacity	$ 60,000	$ 60,000
Revolving Line of Credit \| Branch Banking and Trust Company \| Promissory Note One [Member] \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.40%
Revolving Line of Credit \| Minimum \| Revolving Line of Credit 4
Stated interest rate	3.70%
Revolving Line of Credit \| Maximum \| Revolving Line of Credit 4
Stated interest rate	4.60%

J. NOTES PAYABLE AND LONG-TERM DEBT - Term Debt - Narrative2 (Details) $ in Thousands											12 Months Ended
	Dec. 11, 2018 USD ($)	Nov. 29, 2018 TWD ($)	Nov. 29, 2018 USD ($)	Oct. 03, 2018 USD ($)	Sep. 21, 2018 CNY (¥)	Jun. 19, 2018 TWD ($)	Mar. 30, 2018 USD ($)	Sep. 28, 2017 USD ($)	May 27, 2015 TWD ($)	May 27, 2015 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Nov. 29, 2018 USD ($)	Sep. 21, 2018 USD ($)	Jun. 19, 2018 USD ($)
Restricted cash											$ 2,358	$ 1,012
Repayments of outstanding balance											165,569	39,003	$ 163,068
Notes payable and long-term debt											84,124	49,559
Total outstanding											83,917	49,523
Bank acceptance notes outstanding											4,628
Unused borrowing capacity											69,400	1,000
Restricted cash, investments or security deposit associated with loan facilities											2,400	1,000
Restricted Cash											$ 2,358	$ 1,012
Bank Acceptance Notes Payable
Effective interest rate											0.00%
One Month LIBOR Rate
Basis spread on variable rate											2.50%	1.56%
Prime World [Member] \| Promissory note
Guarantee deposit		$ 210,601,605												$ 6,800
Revolving Line of Credit 2 \| Prime World [Member]
Revolving line of credit maximum borrowing capacity						$ 300,000,000										$ 9,800
Term of revolving credit facility						1 year
Stated interest rate						1.95%										1.95%
Revolving Line of Credit 2 \| Prime World [Member] \| Minimum
Draw term						90 days
Revolving Line of Credit 2 \| Prime World [Member] \| Maximum
Draw term						120 days
Stated interest rate						2.00%										2.00%
Revolving Line of Credit 2 \| Prime World [Member] \| Taiwan Interbank Offered Rate [Member]
Notes payable and long-term debt											$ 3,300
Revolving Line of Credit 3 \| Prime World [Member]
Revolving line of credit maximum borrowing capacity				$ 7,000
Notes payable and long-term debt											3,600
Revolving Line of Credit 3 \| Prime World [Member] \| Minimum
Draw term				60 days
Revolving Line of Credit 3 \| Prime World [Member] \| Maximum
Draw term				90 days
Revolving Line of Credit 3 \| Prime World [Member] \| U.S. Dollars
Stated interest rate				2.54%
Revolving Line of Credit 3 \| Prime World [Member] \| Cost of funds rate \| U.S. Dollars
Basis spread on variable rate				1.25%
Revolving Line of Credit 3 \| Prime World [Member] \| Cost of funds rate \| NTD
Stated interest rate				0.77%
Basis spread on variable rate				1.35%
CTBC Bank Co. Ltd. \| Enterprise Swap Index Rate
Base lending rate plus	1.2
CTBC Bank Co. Ltd. \| Prime World [Member]
Revolving line of credit maximum borrowing capacity	$ 150,000
Term of revolving credit facility	1 year
CTBC Bank Co. Ltd. \| Prime World [Member] \| Maximum
Draw term	120 days
CTBC Bank Co. Ltd. \| Prime World [Member] \| Cost of funds rate
Basis spread on variable rate	3.40%
Base lending rate plus	1.2
CTBC Bank Co. Ltd. \| Prime World [Member] \| Enterprise Swap Index Rate
Basis spread on variable rate	0.69%
China Construction Bank \| Revolving Line of Credit 4
Revolving line of credit maximum borrowing capacity					¥ 129,000,000										$ 18,600
Term of revolving credit facility					5 years
Notes payable and long-term debt											8,700
China Construction Bank \| Revolving Line of Credit 4 \| Bank Acceptance Notes Payable
Notes payable and long-term debt											4,600
Chailease Finance Co. Ltd. \| Finance Lease 1
Lease purchase price									$ 180,148,532	$ 6,000
Initial payment amount									$ 60,148,532	$ 2,000
Financial lease term									3 years	3 years
Chailease Finance Co. Ltd. \| Finance Lease 1 \| Minimum
Lease payment range price									$ 3,322,413	$ 100
Chailease Finance Co. Ltd. \| Finance Lease 1 \| Maximum
Lease payment range price									$ 3,784,000
Chailease Finance Co. Ltd. \| Prime World [Member] \| Finance Lease 2
Lease purchase price		267,340,468	$ 8,700
Initial payment amount		$ 67,340,468	$ 2,200
Financial lease term		3 years	3 years
Financial lease Interest rate		3.50%	3.50%
Finance lease agreement balance											6,300
Chailease Finance Co. Ltd. \| Prime World [Member] \| Finance Lease 2 \| Minimum
Lease payment range price		$ 5,571,229	$ 200
Chailease Finance Co. Ltd. \| Prime World [Member] \| Finance Lease 2 \| Maximum
Lease payment range price		$ 6,139,188	$ 200
Branch Banking and Trust Company \| Promissory Note One [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate							1.40%
Branch Banking and Trust Company \| Promissory Note One [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate							2.00%
Branch Banking and Trust Company \| First Credit Facility
Revolving line of credit maximum borrowing capacity								$ 50,000
Term of revolving credit facility								3 years
Term of loan								3 years
Branch Banking and Trust Company \| First Credit Facility \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate								1.50%
Revolving Line of Credit \| Revolving Line of Credit 2
Revolving line of credit maximum borrowing capacity											9,767
Notes payable and long-term debt											$ 3,256
Basis spread on variable rate											2.00%
Revolving Line of Credit \| Revolving Line of Credit 3
Revolving line of credit maximum borrowing capacity											$ 7,000
Notes payable and long-term debt											$ 3,550
Basis spread on variable rate											1.50%
Revolving Line of Credit \| Revolving Line of Credit 4
Revolving line of credit maximum borrowing capacity											$ 18,599
Notes payable and long-term debt											$ 8,652
Revolving Line of Credit \| Revolving Line of Credit 4 \| Minimum
Stated interest rate											3.70%
Revolving Line of Credit \| Revolving Line of Credit 4 \| Maximum
Stated interest rate											4.60%
Revolving Line of Credit \| Branch Banking and Trust Company \| Promissory Note One [Member]
Revolving line of credit maximum borrowing capacity							$ 60,000				$ 60,000
Notes payable and long-term debt											$ 23,100
Revolving Line of Credit \| Branch Banking and Trust Company \| Promissory Note One [Member] \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate											1.40%
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member]
Notes payable and long-term debt							$ 26,000				$ 19,200
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate							1.30%
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate							2.00%
Real estate term loan \| Branch Banking and Trust Company
Term of revolving credit facility							70 months
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member]
Notes payable and long-term debt							$ 21,500				$ 20,100
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate							1.15%
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate							2.00%

K. ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued payroll	$ 10,772	$ 11,693
Accrued rent	1,200	1,180
Accrued employee benefits	2,862	2,035
Accrued state and local taxes	1,088	951
Advance payments	426	441
Accrued product warranty	995	1,118
Accrued commission expenses	398	425
Accrued professional fees	315	181
Accrued capital expenditures	371
Accrued other	864	1,079
Total accrued liabilities	$ 19,291	$ 19,103

M. INCOME TAXES - PROVISION FOR INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal											$ (15)
State									$ 80	$ (292)	256
Foreign									1,349	10,965	962
Total									1,429	10,673	1,203
Deferred:
Federal									(6,391)	2,015	(10,794)
State									61	(1,669)	(130)
Foreign									(2,731)	(444)	(510)
Total									(9,061)	(98)	(11,434)
Income tax (benefit) expense	$ (3,638)	$ (5,294)	$ 2,296	$ (996)	$ 3,703	$ (1,865)	$ 5,083	$ 3,654	$ (7,632)	$ 10,575	$ (10,231)

M. INCOME TAXES - DEFERRED INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
NOL Carryforward	$ 12,049	$ 7,739
Inventory reserves	1,490	837
AMT credit	172	345
Unrealized gains and losses	69	92
Share-based compensation	510	732
Foreign tax credit	4,599	2,018
Research and development credits	6,648	4,626
Interest	208
Other	718	573
Deferred tax assets	26,463	16,962
Depreciation and amortization	(4,749)	(4,161)
Deferred tax liabilities	(4,749)	(4,161)
Deferred tax assets, net	$ 21,714	$ 12,801

M. INCOME TAXES - RECONCILIATION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Expected taxes at statutory rate									$ (2,053)	$ 29,584	$ 7,351
Non-deductible/non-taxable items									1,020	1,212	565
Foreign rate differences									(1,043)	(11,656)	(654)
Foreign permanent differences									(1,067)	416	(1,005)
Increase (decrease) in valuation allowance										(1,700)	(13,063)
Share based compensation									(1,325)	(10,348)
Section 382 limitation											(3,065)
Changes in tax rates									(103)	2,768	(361)
Transition tax adjustment, net of foreign tax credits									(1,777)	5,067
Research and development credits									(2,022)	(2,821)
Uncertain tax positions										(1,616)
Foreign other									514
Other, net									224	(331)	1
Income tax (benefit) expense	$ (3,638)	$ (5,294)	$ 2,296	$ (996)	$ 3,703	$ (1,865)	$ 5,083	$ 3,654	$ (7,632)	$ 10,575	$ (10,231)

N. SHARE-BASED COMPENSATION - OPTION ACTIVITY (Details) - Employee stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of Shares
Outstanding, beginning balance	536	1,130	1,310
Exercised	(122)	(418)	(159)
Forfeited	(127)	(176)	(21)
Outstanding, ending balance	287	536	1,130
Exercisable, ending balance	287
Vested and expected to vest	287
Weighted Average Exercise Price
Outstanding, beginning balance	$ 10.04	$ 9.40	$ 9.07
Exercised	9.79	8.56	6.91
Forfeited	9.92	9.42	7.96
Outstanding, ending balance	10.19	10.04	9.40
Exercisable, ending balance	10.19
Vested and expected to vest	10.19
Weighted Average Share Price on Date of Exercise	36.18	59.31	19.90
Weighted Average Fair Value [Abstract]
Outstanding, beginning balance	5.19	4.90	4.59
Exercised	5.00	4.51	2.56
Forfeited	5.10	4.97	3.29
Outstanding, ending balance	$ 5.31	$ 5.19	$ 4.90
Weighted Average Remaining Contractual Life
Outstanding, ending balance	4 years 7 months 6 days
Exercisable, ending balance	4 years 7 months 6 days
Vested and expected to vest	4 years 7 months 6 days
Aggregate Intrinsic Value
Aggregate intrinsic value, beginning balance	$ 14,888	$ 15,872	$ 10,598
Exercised	3,223	21,224	2,071
Forfeited	697	4,998	273
Aggregate intrinsic value, ending balance	1,503	$ 14,888	$ 15,872
Exercisable, ending balance	1,503
Vested and expected to vest	$ 1,503

N. SHARE-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of shares
Outstanding, beginning balance	707	517	152
Granted	526	510	497
Released	(363)	(289)	(122)
Cancelled/Forfeited	(44)	(31)	(10)
Outstanding, ending balance	826	707	517
Vested and expected to vest	826
Weighted Average Share Price On Date Of Granted			$ 13.50
Weighted Average Share Price on Date of Release	$ 33.86	$ 60.87
Weighted Average Fair Value
Outstanding, beginning balance	29.23	14.79	11.20
Granted	33.74	38.87	15.73
Released	28.87	20.92	14.09
Cancelled/Forfeited	32.91	24.23	15.38
Outstanding, ending balance	32.07	$ 29.23	$ 14.79
Vested and expected to vest	$ 32.07
Aggregate Intrinsic Value [Abstract]
Aggregate intrinsic value, outstanding	$ 26,732	$ 12,128	$ 2,611
Granted	17,768	19,803	7,815
Released	12,306	17,579	1,644
Cancelled/Forfeited	680	1,181	180
Aggregate intrinsic value, outstanding	12,744	$ 26,732	$ 12,128
Vested and expected to vest	$ 12,744

T. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Revenue, net	$ 58,018	$ 56,386	$ 87,822	$ 65,239	$ 79,855	$ 88,879	$ 117,371	$ 96,224	$ 267,465	$ 382,329	$ 260,713
Cost of goods sold	47,481	38,849	53,959	39,403	47,701	49,507	64,089	54,752	179,692	216,049	173,759
Gross Profit	$ 10,537	$ 17,537	$ 33,863	$ 25,836	$ 32,154	$ 39,372	$ 53,282	$ 41,472	87,773	166,280	86,954
Gross margin	18.20%	31.10%	38.60%	39.60%	40.30%	44.30%	45.40%	43.10%
Operating expenses:
Research and development	$ 11,342	$ 14,180	$ 12,645	$ 11,736	$ 10,670	$ 9,190	$ 8,073	$ 7,432	49,903	35,365	31,780
Sales and marketing	1,920	2,370	2,377	2,474	2,090	2,551	2,158	1,903	9,141	8,702	6,627
General and administrative	9,552	10,591	9,898	9,456	9,074	9,580	8,786	7,822	39,497	35,262	25,527
Total operating expenses	22,814	27,141	24,920	23,666	21,834	21,321	19,017	17,157	98,541	79,329	63,934
Income (loss) from operations	(12,277)	(9,604)	8,943	2,170	10,320	18,051	34,265	24,315	(10,768)	86,951	23,020
Interest and other income (expense), net	71	578	1,387	(1,046)	(901)	(541)	(111)	(872)	990	(2,425)	(2,017)
Income (loss) before income taxes	(12,206)	(9,026)	10,330	1,124	9,419	17,510	34,154	23,443	(9,778)	84,526	21,003
Income tax (expense) benefit	3,638	5,294	(2,296)	996	(3,703)	1,865	(5,083)	(3,654)	7,632	(10,575)	10,231
Net income (loss)	$ (8,568)	$ (3,732)	$ 8,034	$ 2,120	$ 5,716	$ 19,375	$ 29,071	$ 19,789	$ (2,146)	$ 73,951	$ 31,234
Net income (loss) per share basic	$ (0.43)	$ (0.19)	$ 0.41	$ 0.11	$ 0.29	$ 1.00	$ 1.52	$ 1.06	$ (0.11)	$ 3.87	$ 1.82
Net income (loss) per share diluted	$ (0.43)	$ (0.19)	$ 0.40	$ 0.11	$ 0.28	$ 0.95	$ 1.43	$ 1.00	$ (0.11)	$ 3.67	$ 1.76

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts	$ 32	$ 33
Preferred Stock par value	$ 0.001	$ 0.001
Preferred Stock shares authorized	5,000,000	5,000,000
Preferred Stock shares issued	0	0
Preferred Stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	45,000,000	45,000,000
Common stock shares issued	19,810,000	19,451,000
Common stock shares outstanding	19,810,000	19,451,000

A. ORGANIZATION AND OPERATIONS	12 Months Ended
A. ORGANIZATION AND OPERATIONS	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND OPERATIONS	NOTE A—ORGANIZATION AND OPERATIONS Applied Optoelectronics, Inc. (“AOI” or the “Company”) was incorporated in the State of Texas on February 28, 1997. In March 2013, the Company converted into a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment. The Company has manufacturing and research and development facilities located in the U.S., Taiwan and China. At its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components and performs research and development activities for laser component and optical module products. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World is the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of its data center transceiver products, including subassemblies and transceivers, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products. Prime World also operates a branch in Taiwan, which primarily manufactures transceivers. The Company also has a research and development center in Duluth, Georgia.

O. STOCKHOLDERS' EQUITY	12 Months Ended
O. STOCKHOLDERS' EQUITY	Dec. 31, 2018
Equity [Abstract]
Stockholders? Equity	NOTE O—STOCKHOLDERS’ EQUITY Common Stock The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 45,000,000 shares of common stock, all of which have been designated voting common stock. Preferred Stock The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. Public Offerings of Common Stock On October 17, 2016, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission effective November 1, 2016, providing for the public offer and sale of certain securities of the Company from time to time, at its discretion, up to an aggregate amount of $250 million. In connection with such Form S-3, the Company entered into an Equity Distribution Agreement with Raymond James & Associates, Inc. pursuant to which the Company may issue and sell shares of the Company’s stock having an aggregate offering price of up to $50.0 million (the “Second ATM Offering”) from time to time through Raymond James & Associates, Inc. On November 22, 2016, the Company commenced sales of common stock through the Second ATM Offering. The Company completed its Second ATM Offering in March 2017 and sold 1.6 million shares of common stock at a weighted average price of $31.55 per share, providing proceeds of $48.8 million, net of expenses and underwriting discounts and commissions.

Q. EMPLOYEE BENEFIT PLANS	12 Months Ended
Q. EMPLOYEE BENEFIT PLANS	Dec. 31, 2018
Compensation and Retirement Disclosure [Abstract]
EMPLOYEE BENEFIT PLANS	NOTE Q—EMPLOYEE BENEFIT PLANS On August 1, 2000, the Company established a 401(k) profit sharing plan covering employees meeting certain age and service requirements. The plan provides for discretionary Company contributions to be allocated based on the employee’s eligible contributions. The Company made contributions of $0.8 million, $0.6 million and $0.6 million to the 401(k) plan for the years ended December 31, 2018, 2017 and 2016, respectively. Employees of Global participate in a state-mandated social security program in China. Under this program, pension costs are recorded on the basis of required monthly contributions to employees’ individual accounts during their service periods. Under the regulations of the People’s Republic of China, Global is required to make fixed contributions to a fund, which is under the administration of the local labor departments. Pension expense for Global was $0.9 million, $0.8 million and $0.6 million in the years ended for the year ended December 31, 2018, 2017 and 2016, respectively. Employees Prime World’s Taiwan branch participate in a pension program under the Taiwan Labor Pension Act. Pension expense for the Prime World’s Taiwan branch was $0.9 million, $0.9 million and $0.8 million for the years ended December 31, 2018, 2017 and 2016, respectively.

S. SUBSEQUENT EVENTS	12 Months Ended
S. SUBSEQUENT EVENTS	Dec. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	NOTE S—SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were issued. On January 3, 2019, the Company repaid its revolving bank line of credit of $23.1 million. On January 21, 2019, Prime World entered into a second Purchase and Sale Contract (the “Second Sales Contract”), Promissory Note, and a second Finance Lease Agreement, (collectively, the “Second Financing Agreements”) with Chailease in connection with certain equipment, structured as a sale lease-back transaction. Pursuant to the Second Sales Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,333,186, or approximately $8.7 million. Simultaneously, Prime World leased the equipment back from Chailease for a term of three-years, pursuant to the Second Finance Lease Agreement. Prime World is obligated to pay an initial monthly payment of NT$67,333,186, or approximately $2.2 million, thereafter the monthly lease payments range from NT$5,570,167, or approximately $0.2 million to NT$6,082,131, or approximately $0.2 million. Based on the lease payments made under the Second Finance Lease Agreement, the annual interest rate is calculated to be 3.5%. Upon an event of default under the Second Finance Lease Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease at the amount of NT$209,555,736 or approximately $6.8 million, subject to certain terms and conditions. The title of the equipment will be transferred to Prime World upon expiration of the Second Finance Lease Agreement. On February 1, 2019, the Company executed a Second Amendment to Loan Agreement with BB&T. The original loan agreement with BB&T, executed on September 28, 2017, and a first amendment to the original loan agreement, executed on March 30, 2018, provided the Company with a three-year $60 million line of credit; a $26 million five-year capital expenditure loan (the “CapEx Loan”) and a $21.5 million seventy-month real estate term loan for the Company’s plant and facilities in Sugar Land, Texas. The Second Amendment to Loan Agreement extends the CapEx Loan draw-down date from March 30, 2019 to September 30, 2019, requires the Company to provide BB&T monthly financial statements and revises certain financial covenants.

A. ORGANIZATION AND OPERATIONS (Details)	Dec. 31, 2018 item
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of networking end markets	4

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, PLANT AND EQUIPMENT (Details)	12 Months Ended
	Dec. 31, 2018
Buildings \| Minimum
Estimated useful lives	20 years
Buildings \| Maximum
Estimated useful lives	42 years
Land improvements
Estimated useful lives	10 years
Machinery and equipment \| Minimum
Estimated useful lives	2 years
Machinery and equipment \| Maximum
Estimated useful lives	20 years
Furniture and fixtures \| Minimum
Estimated useful lives	3 years
Furniture and fixtures \| Maximum
Estimated useful lives	7 years
Computer equipment and software \| Minimum
Estimated useful lives	3 years
Computer equipment and software \| Maximum
Estimated useful lives	10 years
Transportation equipment
Estimated useful lives	5 years

C. REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
C. REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation of Revenue
Revenues	$ 58,018	$ 56,386	$ 87,822	$ 65,239	$ 79,855	$ 88,879	$ 117,371	$ 96,224	$ 267,465	$ 382,329	$ 260,713
Percentage of Revenue									100.00%
Data Center
Disaggregation of Revenue
Revenues									$ 200,236
Percentage of Revenue									74.90%
CATV
Disaggregation of Revenue
Revenues									$ 51,699
Percentage of Revenue									19.30%
Telecom
Disaggregation of Revenue
Revenues									$ 13,159
Percentage of Revenue									4.90%
FTTH
Disaggregation of Revenue
Revenues									$ 818
Percentage of Revenue									0.30%
Other
Disaggregation of Revenue
Revenues									$ 1,553
Percentage of Revenue									0.60%
Before Topic 606
Disaggregation of Revenue
Revenues										$ 382,329	$ 260,713
Percentage of Revenue										100.00%	100.00%
Before Topic 606 \| Data Center
Disaggregation of Revenue
Revenues										$ 306,712	$ 201,314
Percentage of Revenue										80.20%	77.20%
Before Topic 606 \| CATV
Disaggregation of Revenue
Revenues										$ 60,756	$ 43,567
Percentage of Revenue										15.90%	16.70%
Before Topic 606 \| Telecom
Disaggregation of Revenue
Revenues										$ 12,899	$ 12,938
Percentage of Revenue										3.40%	5.00%
Before Topic 606 \| FTTH
Disaggregation of Revenue
Revenues										$ 490	$ 1,567
Percentage of Revenue										0.10%	0.60%
Before Topic 606 \| Other
Disaggregation of Revenue
Revenues										$ 1,472	$ 1,327
Percentage of Revenue										0.40%	0.50%

D. CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Abstract
Cash and cash equivalents	$ 55,646	$ 82,936
Restricted Cash	2,358	1,012
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 58,004	$ 83,948	$ 51,964	$ 32,793

E. EARNINGS PER SHARE Earnings Per Share - Potentially Dilutive Shares (Details)	12 Months Ended
	Dec. 31, 2018 shares
Potentially dilutive securities excluded from EPS	380
Employee stock options
Potentially dilutive securities excluded from EPS	263
Restricted stock units
Potentially dilutive securities excluded from EPS	117

F. INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 30,214	$ 26,648
Work in process and sub-assemblies	49,192	31,060
Finished goods	13,850	18,060
Total inventory	$ 93,256	$ 75,768

G. PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property, plant and equipment, gross	$ 311,894	$ 262,213
Less accumulated depreciation and amortization	(95,233)	(70,194)
Property, plant and equipment after accumulated depreciation and amortization, excluding construction in progress and land	216,661	192,019
Construction in progress	16,449	4,823
Land	1,101	1,101
Total property, plant and equipment, net	234,211	197,943
Land improvements
Property, plant and equipment, gross	806	806
Building and improvements
Property, plant and equipment, gross	80,960	78,785
Machinery and equipment
Property, plant and equipment, gross	214,718	168,993
Furniture and fixtures
Property, plant and equipment, gross	5,043	4,663
Computer equipment and software
Property, plant and equipment, gross	9,709	8,248
Transportation equipment
Property, plant and equipment, gross	$ 658	$ 718

H. INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Gross Amount	$ 6,998	$ 6,538
Accumulated amortization	(3,021)	(2,531)
Intangible assets, net	3,977	4,007
Patents
Gross Amount	6,983	6,524
Accumulated amortization	(3,008)	(2,519)
Intangible assets, net	3,975	4,005
Trademarks
Gross Amount	15	14
Accumulated amortization	(13)	(12)
Intangible assets, net	$ 2	$ 2

H. INTANGIBLE ASSETS - AMORTIZATION SCHEDULE (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 505
2020	506
2021	506
2022	506
2023	506
thereafter	1,448
Amortization expense for intangible assets	$ 3,977

I. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Assets:
Cash and cash equivalents	$ 55,646	$ 82,936
Restricted cash	2,358	1,012
Short term investments		36
Total assets	58,004	83,984
Liabilities:
Bank acceptance payable	4,628
Total liabilities	4,628
Level 1 \| Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	55,646	82,936
Restricted cash	2,358	1,012
Short term investments		36
Total assets	58,004	$ 83,984
Level 2 \| Fair Value, Measurements, Recurring
Liabilities:
Bank acceptance payable	4,628
Total liabilities	$ 4,628

J. NOTES PAYABLE AND LONG-TERM DEBT - Debt Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Maturities of notes payable and long-term debt
2019	$ 23,589
2020	31,375
2021	8,160
2022	6,242
2023	5,369
2024 and thereafter	9,182
Total outstanding	$ 83,917	$ 49,523

M. INCOME TAXES - UNRECOGNIZED TAX BENEFIT (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Income Tax Disclosure [Abstract]
Unrecognized tax benefits - January 1	$ 1,797
Gross decreases - tax positions in prior period	(1,616)
Unrecognized tax benefits - December 31	$ 181

M. INCOME TAXES - NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		2 Months Ended		9 Months Ended		12 Months Ended			24 Months Ended	96 Months Ended
	Oct. 31, 2020	Oct. 31, 2017	Dec. 31, 2017	Dec. 31, 2008	Sep. 30, 2020	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2019	Dec. 31, 2016	Dec. 31, 2015
Net operating loss carryforward							$ 47,400
Net operating loss carry forward subject to expiration between 2025 and 2032							32,800
Net operating loss carry forward not subject to expiration							14,600
Foreign tax credit			$ 2,018				$ 4,599	$ 2,018
Federal income tax rate							21.00%	35.00%	35.00%
Reduction in income tax provision due to tax holiday							$ 500	$ 1,400
Increase in diluted earnings per share due to tax holiday							$ 0.03	$ 0.07
Unrecognized tax benefits			181				$ 181	$ 181	$ 1,797		$ 1,797	$ 1,797
Accrued penalties or interest			$ 0					$ 0	$ 0		$ 0
Global
Federal income tax rate	15.00%		15.00%		15.00%		25.00%			15.00%
China income tax rate		15.00%		15.00%		15.00%					15.00%

N. SHARE-BASED COMPENSATION - NARRATIVE (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) plan	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Minimum
Vesting period	4 years
Restricted stock units
Unrecognized compensation expense	$ 24,000
Unrecognized compensation expense recognized period	2 years 5 months 27 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 12,744	$ 26,732	$ 12,128	$ 2,611
Employee stock options
Number of incentive plans \| plan	5
Vesting rights (as a percent)	25.00%
Options Expiration Period	10 years
Unrecognized compensation expense	$ 0
2013 Plan \| Restricted stock units
Maximum term	10 years

O. STOCKHOLDERS' EQUITY - NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Oct. 17, 2016	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018
Common stock shares authorized			45,000,000		45,000,000
Preferred Stock shares authorized			5,000,000		5,000,000
Public offering of common stock, net of value			$ 21,572	$ 27,237
Proceeds from common share			$ 21,572	$ 27,237
Second ATM Offering
Public offering of common stock, net, in shares		1,600,000
Public offering of common stock, net of value	$ 250,000
Weighted average price per share		$ 31.55
Proceeds from common share		$ 48,800
Raymond James & Associates \| Second ATM Offering
Public offering of common stock, net of value	$ 50,000

P. SEGMENT AND GEOGRAPHIC INFORMATION - REVENUES (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Number of Reportable segment \| item									1
Revenues	$ 58,018	$ 56,386	$ 87,822	$ 65,239	$ 79,855	$ 88,879	$ 117,371	$ 96,224	$ 267,465	$ 382,329	$ 260,713
Before Topic 606
Revenues										382,329	260,713
United States
Revenues									10,795	18,209	18,035
Taiwan
Revenues									113,547	241,820	161,611
China
Revenues									$ 143,123	$ 122,300	$ 81,067

P. SEGMENT AND GEOGRAPHIC INFORMATION - LONG LIVED ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Long-lived assets	$ 244,002	$ 202,754	$ 148,869
United States
Long-lived assets	88,815	75,446	66,028
Taiwan
Long-lived assets	65,451	67,379	48,728
China
Long-lived assets	$ 89,736	$ 59,929	$ 34,113

R. COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 1,233
2020	1,144
2021	1,031
2022	993
2023	1,017
thereafter	5,748
Total future rental commitment	$ 11,166

R. COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) individual	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Rent expense \| $	$ 1.2	$ 1.1	$ 1.1
Number of executive officers \| individual	3

S. SUBSEQUENT EVENTS - NARRATIVE (Details) $ in Thousands						12 Months Ended
S. SUBSEQUENT EVENTS - NARRATIVE (Details) $ in Thousands	Jan. 21, 2019 TWD ($)	Jan. 21, 2019 USD ($)	Jan. 03, 2019 USD ($)	Nov. 29, 2018 TWD ($)	Nov. 29, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Feb. 01, 2019 USD ($)	Jan. 21, 2019 USD ($)	Nov. 29, 2018 USD ($)	Sep. 28, 2017 USD ($)
Repayment of revolving bank line of credit						$ 165,569	$ 39,003	$ 163,068
First Credit Facility \| Branch Banking and Trust Company
Credit line maximum borrowing capacity												$ 50,000
Term of loan												3 years
Subsequent Event [Member] \| Capital expenditure loan \| Branch Banking and Trust Company
Credit line maximum borrowing capacity									$ 26,000
Term of loan									5 years
Subsequent Event [Member] \| Real estate term loan \| Branch Banking and Trust Company
Credit line maximum borrowing capacity									$ 21,500
Term of loan									70 months
Subsequent Event [Member] \| Revolving Line of Credit 1 \| Revolving Line of Credit
Repayment of revolving bank line of credit			$ 23,100
Subsequent Event [Member] \| Second Credit Facility [Member] \| Branch Banking and Trust Company
Credit line maximum borrowing capacity									$ 60,000
Term of loan									3 years
Finance Lease 2 \| Prime World [Member] \| Chailease Finance Co. Ltd.
Lease purchase price				$ 267,340,468	$ 8,700
Financial lease term				3 years	3 years
Initial payment amount				$ 67,340,468	$ 2,200
Financial lease Interest rate				3.50%	3.50%
Finance Lease 2 \| Minimum \| Prime World [Member] \| Chailease Finance Co. Ltd.
Lease payment range price				$ 5,571,229	$ 200
Finance Lease 2 \| Maximum \| Prime World [Member] \| Chailease Finance Co. Ltd.
Lease payment range price				6,139,188	$ 200
Finance Lease 2 \| Subsequent Event [Member] \| Prime World [Member] \| Chailease Finance Co. Ltd.
Lease purchase price	$ 267,333,186	$ 8,700
Financial lease term	3 years	3 years
Initial payment amount	$ 67,333,186	$ 2,200
Financial lease Interest rate	3.50%	3.50%
Finance Lease 2 \| Subsequent Event [Member] \| Minimum \| Prime World [Member] \| Chailease Finance Co. Ltd.
Initial payment amount	$ 5,570,167	$ 200
Finance Lease 2 \| Subsequent Event [Member] \| Maximum \| Prime World [Member] \| Chailease Finance Co. Ltd.
Initial payment amount	6,082,131	$ 200
Promissory note \| Prime World [Member]
Guarantee deposit				$ 210,601,605							$ 6,800
Promissory note \| Subsequent Event [Member] \| Prime World [Member]
Guarantee deposit	$ 209,555,736									$ 6,800