0001104659-21-096693 | 10-Q | XBRL Viewer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 03, 2021	Jul. 20, 2021
Document and Entity Information
Entity Registrant Name	SILICON LABORATORIES INC.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 03, 2021
Document Transition Report	false
Entity File Number	000-29823
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-2793174
Entity Address, Address Line One	400 West Cesar Chavez
Entity Address, City or Town	Austin
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	78701
City Area Code	512
Local Phone Number	416-8500
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	SLAB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		44,764,087
Entity Central Index Key	0001038074
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 303,084	$ 202,720
Short-term investments	314,183	521,963
Accounts receivable, net	99,546	95,169
Inventories	52,269	47,861
Prepaid expenses and other current assets	94,378	87,103
Current assets held for sale	297,543	21,005
Total current assets	1,161,003	975,821
Property and equipment, net	139,362	135,803
Goodwill	376,389	376,389
Other intangible assets, net	140,581	163,483
Other assets, net	78,667	76,675
Non-current assets held for sale		265,316
Total assets	1,896,002	1,993,487
Current liabilities:
Accounts payable	70,820	54,949
Current portion of convertible debt, net		134,480
Deferred revenue and returns liability	12,811	12,986
Other current liabilities	70,552	81,650
Current liabilities held for sale	699	433
Total current liabilities	154,882	284,498
Convertible debt, net	439,654	428,945
Other non-current liabilities	73,712	79,752
Non-current liabilities held for sale		451
Total liabilities	668,248	793,646
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued
Common stock - $0.0001 par value; 250,000 shares authorized; 44,764 and 43,925 shares issued and outstanding at July 3, 2021 and January 2, 2021, respectively	4	4
Additional paid-in capital	200,716	204,359
Retained earnings	1,027,105	993,664
Accumulated other comprehensive income (loss)	(71)	1,814
Total stockholders' equity	1,227,754	1,199,841
Total liabilities and stockholders' equity	$ 1,896,002	$ 1,993,487

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jul. 03, 2021	Jan. 02, 2021
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000	250,000
Common stock, shares issued	44,764	43,925
Common stock, shares outstanding	44,764	43,925

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Condensed Consolidated Statements of Operations
Revenues	$ 169,492	$ 114,350	$ 327,349	$ 232,368
Cost of revenues	73,194	47,771	139,297	96,942
Gross profit	96,298	66,579	188,052	135,426
Operating expenses:
Research and development	64,832	57,992	128,847	115,702
Selling, general and administrative	42,953	40,350	85,407	84,802
Operating expenses	107,785	98,342	214,254	200,504
Operating loss	(11,487)	(31,763)	(26,202)	(65,078)
Other income (expense):
Interest income and other, net	647	3,267	3,522	6,518
Interest expense	(6,486)	(11,778)	(17,810)	(17,319)
Loss from continuing operations before income taxes	(17,326)	(40,274)	(40,490)	(75,879)
Provision (benefit) for income taxes	1,165	(4,229)	3,157	(8,443)
Loss from continuing operations	(18,491)	(36,045)	(43,647)	(67,436)
Income from discontinued operations, net of income taxes	38,423	34,222	77,088	67,857
Net income (loss)	$ 19,932	$ (1,823)	$ 33,441	$ 421
Basic earnings (loss) per share:
Continuing operations (in dollars per share)	$ (0.41)	$ (0.82)	$ (0.98)	$ (1.54)
Net income (in dollars per share)	0.44	(0.04)	0.75	0.01
Diluted earnings (loss) per share:
Continuing operations (in dollars per share)	(0.41)	(0.82)	(0.98)	(1.54)
Net income (in dollars per share)	$ 0.44	$ (0.04)	$ 0.73	$ 0.01
Weighted-average common shares outstanding:
Basic (in shares)	44,803	43,761	44,481	43,699
Diluted (in shares)	45,756	43,761	45,794	44,219

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Condensed Consolidated Statements of Comprehensive Income
Net income (loss)	$ 19,932	$ (1,823)	$ 33,441	$ 421
Net changes to available-for-sale securities
Unrealized gains (losses) arising during the period	(564)	3,068	(1,400)	2,598
Reclassification for gains included in net income (loss)	(39)	(121)	(397)	(222)
Net changes to cash flow hedges
Unrealized gains (losses) arising during the period	388	496	(269)	(311)
Reclassification for (gains) losses included in net income (loss)	(160)	282	(320)	423
Other comprehensive income (loss), before tax	(375)	3,725	(2,386)	2,488
Provision (benefit) for income taxes	(78)	783	(501)	523
Other comprehensive income (loss)	(297)	2,942	(1,885)	1,965
Comprehensive income	$ 19,635	$ 1,119	$ 31,556	$ 2,386

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings Cumulative effect of adoption of accounting standard	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Cumulative effect of adoption of accounting standard	Total
Balance at Dec. 28, 2019	$ 4	$ 133,793	$ 525	$ 980,608	$ 646	$ 525	$ 1,115,051
Balance (in shares) at Dec. 28, 2019	43,496
Increase (Decrease) in Stockholders' Equity
Net income (loss)				421			421
Other comprehensive loss					1,965		1,965
Stock issuances, net of shares withheld for taxes		(8,999)					(8,999)
Stock issuances, net of shares withheld for taxes (in shares)	509
Repurchases of common stock		(16,287)					(16,287)
Repurchases of common stock (in shares)	(209)
Stock-based compensation		29,799					29,799
Convertible debt activity		35,171					35,171
Balance at Jul. 04, 2020	$ 4	173,477		981,554	2,611		1,157,646
Balance (in shares) at Jul. 04, 2020	43,796
Balance at Apr. 04, 2020	$ 4	116,553		983,377	(331)		1,099,603
Balance (in shares) at Apr. 04, 2020	43,670
Increase (Decrease) in Stockholders' Equity
Net income (loss)				(1,823)			(1,823)
Other comprehensive loss					2,942		2,942
Stock issuances, net of shares withheld for taxes		7,295					7,295
Stock issuances, net of shares withheld for taxes (in shares)	126
Stock-based compensation		14,458					14,458
Convertible debt activity		35,171					35,171
Balance at Jul. 04, 2020	$ 4	173,477		981,554	2,611		1,157,646
Balance (in shares) at Jul. 04, 2020	43,796
Balance at Jan. 02, 2021	$ 4	204,359		993,664	1,814		$ 1,199,841
Balance (in shares) at Jan. 02, 2021	43,925						43,925
Increase (Decrease) in Stockholders' Equity
Net income (loss)				33,441			$ 33,441
Other comprehensive loss					(1,885)		(1,885)
Stock issuances, net of shares withheld for taxes		(11,344)					(11,344)
Stock issuances, net of shares withheld for taxes (in shares)	453
Repurchases of common stock		(18,982)					(18,982)
Repurchases of common stock (in shares)	(142)
Stock-based compensation		27,431					27,431
Convertible debt activity		(748)					(748)
Convertible debt activity (in shares)	528
Balance at Jul. 03, 2021	$ 4	200,716		1,027,105	(71)		$ 1,227,754
Balance (in shares) at Jul. 03, 2021	44,764						44,764
Balance at Apr. 03, 2021	$ 4	199,576		1,007,173	226		$ 1,206,979
Balance (in shares) at Apr. 03, 2021	44,749
Increase (Decrease) in Stockholders' Equity
Net income (loss)				19,932			19,932
Other comprehensive loss					(297)		(297)
Stock issuances, net of shares withheld for taxes		6,473					6,473
Stock issuances, net of shares withheld for taxes (in shares)	157
Repurchases of common stock		(18,982)					(18,982)
Repurchases of common stock (in shares)	(142)
Stock-based compensation		13,649					13,649
Balance at Jul. 03, 2021	$ 4	$ 200,716		$ 1,027,105	$ (71)		$ 1,227,754
Balance (in shares) at Jul. 03, 2021	44,764						44,764

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jul. 04, 2020
Operating Activities
Net income	$ 33,441	$ 421
Adjustments to reconcile net income to cash provided by operating activities of continuing operations:
Income from discontinued operations, net of income taxes	(77,088)	(67,857)
Depreciation of property and equipment	8,184	7,711
Amortization of intangible assets and other assets	22,902	20,486
Amortization of debt discount and debt issuance costs	11,822	8,359
Loss on extinguishment of convertible debt	3,370	3,685
Stock-based compensation expense	22,620	24,461
Deferred income taxes	(5,644)	1,177
Changes in operating assets and liabilities:
Accounts receivable	(4,377)	7,070
Inventories	(4,447)	8,021
Prepaid expenses and other assets	(5,489)	22,976
Accounts payable	14,711	(769)
Other current liabilities and income taxes	(10,626)	(15,480)
Deferred revenue and returns liability	(175)	6,678
Other non-current liabilities	(3,464)	1,146
Net cash provided by operating activities of continuing operations	5,740	28,085
Investing Activities
Purchases of marketable securities	(80,426)	(199,347)
Sales and maturities of marketable securities	286,649	255,112
Purchases of property and equipment	(10,779)	(9,051)
Purchases of other assets	(578)	(820)
Acquisition of businesses, net of cash acquired		(316,809)
Net cash provided by (used in) investing activities of continuing operations	194,866	(270,915)
Financing Activities
Proceeds from issuance of debt		845,000
Payments on debt	(140,572)	(597,446)
Repurchases of common stock	(18,982)	(16,287)
Payment of taxes withheld for vested stock awards	(19,732)	(16,756)
Proceeds from the issuance of common stock	8,388	7,757
Net cash provided by (used in) financing activities of continuing operations	(170,898)	222,268
Discontinued Operations
Operating activities	72,674	72,418
Investing activities	(2,018)	(1,343)
Net cash provided by discontinued operations	70,656	71,075
Increase in cash and cash equivalents	100,364	50,513
Cash and cash equivalents at beginning of period	202,720	227,146
Cash and cash equivalents at end of period	$ 303,084	$ 277,659

Significant Accounting Policies

6 Months Ended

Jul. 03, 2021

Significant Accounting Policies

Significant Accounting Policies

1. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly the condensed consolidated financial position of Silicon Laboratories Inc. and its subsidiaries (collectively, the “Company”) at July 3, 2021 and January 2, 2021, the condensed consolidated results of its operations for the three and six months ended July 3, 2021 and July 4, 2020, the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 3, 2021 and July 4, 2020, the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended July 3, 2021 and July 4, 2020, and the Condensed Consolidated Statements of Cash Flows for the six months ended July 3, 2021 and July 4, 2020. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and six months ended July 3, 2021 are not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited Condensed Consolidated Financial Statements do not include certain footnotes and financial presentations normally required under U.S. generally accepted accounting principles (GAAP). Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended January 2, 2021, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 3, 2021.

The Company prepares financial statements on a 52- or 53-week fiscal year that ends on the Saturday closest to December 31. Fiscal 2021 will have 52 weeks. Fiscal 2020 had 53 weeks with the extra week occurring in the first quarter of the year. In a 52-week year, each fiscal quarter consists of 13 weeks.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. The Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year.

The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The estimate is based on information available to the Company, including recent sales activity and pricing data. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. The Company records a right of return asset in prepaid expenses and other current assets for the costs of distributor inventory not meeting revenue recognition criteria. A corresponding deferred revenue and returns liability amount is recorded for unrecognized revenue associated with such costs. The Company’s products carry a one-year replacement warranty. Payments are typically due within 30 days of invoicing and do not include a significant financing component.

1. Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, using one of two retrospective transition methods. Early adoption is permitted for fiscal periods beginning after December 15, 2020. The Company expects the primary impacts of this new standard will be to increase the carrying value of its convertible debt by approximately $78.5 million, with an offsetting reduction in additional paid-in capital, and reduce its reported interest expense. In addition, should the Company be required to use the if-converted method for calculating diluted earnings per share, the number of shares used in such calculation could potentially increase. The Company will continue to evaluate the effect that the adoption of this ASU will have on its financial statements.

Discontinued Operations

6 Months Ended

Jul. 03, 2021

Discontinued Operations

Discontinued Operations

2. Discontinued Operations

On April 22, 2021, the Company entered into an Asset Purchase Agreement pursuant to which Skyworks Solutions, Inc. agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $2.75 billion in cash. The transaction closed on July 26, 2021. The financial results of the infrastructure and automotive business, which are readily distinguishable from other components of the Company, have been presented as discontinued operations in the Condensed Consolidated Financial Statements.

The following table presents the financial results of the infrastructure and automotive business (the “discontinued operations”) in the Company’s condensed consolidated statements of operations (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Revenues	$	108,064	$	93,183	$	205,712	$	190,042
Costs of revenues and operating expenses		70,143		54,352		130,917		113,948
Income from discontinued operations before income taxes		37,921		38,831		74,795		76,094
Provision (benefit) for income taxes		(502)		4,609		(2,293)		8,237
Income from discontinued operations	$	38,423	$	34,222	$	77,088	$	67,857

Income from discontinued operations per share:
Basic	$	0.86	$	0.78	$	1.73	$	1.55
Diluted	$	0.84	$	0.78	$	1.68	$	1.53

2. Discontinued Operations (Continued)

The following table summarizes the assets and liabilities of the infrastructure and automotive business held for sale (in thousands):


	July 3,		January 2,
	2021		2021
Assets
Inventories	$	30,176	$	18,801
Prepaid expenses and other current assets		1,876		2,204
Goodwill		255,543		255,543
Other assets		9,947		9,772
Total assets held for sale	$	297,543	$	286,321

Liabilities
Other current liabilities	$	699	$	433
Other non-current liabilities		—		451
Total liabilities held for sale	$	699	$	884

Continuing Involvement

In connection with the closing of the sale, the Company entered into certain ancillary agreements with Skyworks, including a Transition Services Agreement ("TSA"). Through the TSA, the Company will sublease certain premises to Skyworks and provide various temporary support services for three to eighteen months, depending on the service provided. Although the services provided under the TSA will generate continuing cash flows between the Company and Skyworks for the duration of the TSA, the amounts are not expected to be material to the ongoing operations of either entity. In addition, the Company has no contractual ability through the TSA or any other agreement to significantly influence the operating or financial policies of Skyworks.

Earnings (Loss) Per Share

6 Months Ended

Jul. 03, 2021

Earnings (Loss) Per Share

Earnings (Loss) Per Share

3. Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted loss per share from continuing operations (in thousands, except per share data):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Loss from continuing operations	$	(18,491)	$	(36,045)	$	(43,647)	$	(67,436)

Shares used in computing basic loss per share		44,803		43,761		44,481		43,699

Effect of dilutive securities:
Stock-based awards and convertible debt		—		—		—		—
Shares used in computing diluted loss per share		44,803		43,761		44,481		43,699

Loss per share:
Basic	$	(0.41)	$	(0.82)	$	(0.98)	$	(1.54)
Diluted	$	(0.41)	$	(0.82)	$	(0.98)	$	(1.54)

3. Earnings (Loss) Per Share (Continued)

For the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, approximately 0.0 million, 0.4 million, 0.0 million and 0.3 million shares, respectively, consisting primarily of restricted stock awards (RSUs) and market stock awards (MSUs) granted under our 2009 Stock Incentive Plan, were not included in the diluted loss per share calculation since the shares were anti-dilutive. Further, diluted shares for the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020 excluded 1.0 million, 0.3 million, 1.3 million and 0.5 million shares, respectively, due to the Company’s loss from continuing operations for the periods.

The Company intends to settle the principal amount of its convertible senior notes in cash and any excess value in shares in the event of a conversion. Accordingly, shares issuable upon conversion of the principal amount using the treasury stock method have been excluded from the calculation of diluted earnings per share. If the market value of the notes under certain prescribed conditions exceeds the conversion amount, the excess is included in the denominator for the computation of diluted earnings per share using the treasury stock method. For the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, approximately 0.5 million, 0.0 million, 0.8 million and 0.2 million shares, respectively, were included in the denominator for the calculation of diluted earnings per share. See Note 8, Debt, to the Condensed Consolidated Financial Statements for additional information.

Fair Value of Financial Instruments

6 Months Ended

Jul. 03, 2021

Fair Value of Financial Instruments

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The fair values of the Company’s financial instruments are recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data.

4. Fair Value of Financial Instruments (Continued)

The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.


	Fair Value Measurements
	at July 3, 2021 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	161,586	$	—	$	—	$	161,586
Corporate debt securities		—		—		—		—
Total cash equivalents	$	161,586	$	—	$	—	$	161,586

Short-term investments:
Government debt securities	$	18,313	$	56,305	$	—	$	74,618
Corporate debt securities		—		239,565		—		239,565
Total short-term investments	$	18,313	$	295,870	$	—	$	314,183

Other assets, net:
Auction rate securities	$	—	$	—	$	5,100	$	5,100
Total	$	—	$	—	$	5,100	$	5,100

Total	$	179,899	$	295,870	$	5,100	$	480,869


	Fair Value Measurements
	at January 2, 2021 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	75,606	$	—	$	—	$	75,606
Corporate debt securities		—		14,995		—		14,995
Government debt securities		2,355		2,564		—		4,919
Total cash equivalents	$	77,961	$	17,559	$	—	$	95,520

Short-term investments:
Government debt securities	$	38,461	$	104,112	$	—	$	142,573
Corporate debt securities		—		379,390		—		379,390
Total short-term investments	$	38,461	$	483,502	$	—	$	521,963

Other assets, net:
Auction rate securities	$	—	$	—	$	5,340	$	5,340
Total	$	—	$	—	$	5,340	$	5,340

Total	$	116,422	$	501,061	$	5,340	$	622,823

4. Fair Value of Financial Instruments (Continued)

Valuation methodology

The Company’s cash equivalents and short-term investments that are classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company’s inability to liquidate the securities. The Company’s derivative instruments are valued using discounted cash flow models. The assumptions used in preparing the valuation models include foreign exchange rates, forward and spot prices for currencies and market observable data of similar instruments.

Contractual maturities of investments

The Company’s investments are reported at fair value, with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheet. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments and money market funds at July 3, 2021 (in thousands):


			Fair
	Cost		Value
Due in one year or less	$	324,890	$	325,468
Due after one year through ten years		149,864		150,001
Due after ten years		6,300		5,400
	$	481,054	$	480,869

Available-for-sale investments

The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of July 3, 2021	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	21,082	$	(26)	$	—	$	—	$	21,082	$	(26)
Corporate debt securities		47,314		(68)		—		—		47,314		(68)
Auction rate securities		—		—		5,100		(900)		5,100		(900)
	$	68,396	$	(94)	$	5,100	$	(900)	$	73,496	$	(994)


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of January 2, 2021	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	10,146	$	(5)	$	—	$	—	$	10,146	$	(5)
Corporate debt securities		51,909		(74)		—		—		51,909		(74)
Auction rate securities		—		—		5,340		(660)		5,340		(660)
	$	62,055	$	(79)	$	5,340	$	(660)	$	67,395	$	(739)

The gross unrealized losses as of July 3, 2021 and January 2, 2021 were due primarily to changes in market interest rates and the illiquidity of the Company’s auction-rate securities. The Company’s auction-rate securities have been illiquid since 2008 when auctions for the securities failed because sell orders exceeded buy orders. These securities have a contractual maturity date of 2046. The Company is unable to predict if these funds will become available before their maturity date.

4. Fair Value of Financial Instruments (Continued)

The Company records an allowance for credit loss when a decline in investment market value is due to credit-related factors. When evaluating an investment for impairment, the Company reviews factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, the Company’s intent to sell or the likelihood that it would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. As of July 3, 2021, there were no material declines in the market value of available-for-sale investments due to credit-related factors.

At July 3, 2021 and January 2, 2021, there were no material unrealized gains associated with the Company’s available-for-sale investments.

Level 3 fair value measurements

The following summarizes quantitative information about Level 3 fair value measurements.

Auction rate securities


Fair Value at
July 3, 2021
(000s)		Valuation Technique	Unobservable Input	Weighted Average
$	5,100	Discounted cash flow	Estimated yield	1.19%

			Expected holding period	10 years

			Estimated discount rate	2.26%

Significant changes in any of the unobservable inputs used in the fair value measurement of auction rate securities in isolation could result in a significantly lower or higher fair value measurement. An increase in expected yield would result in a higher fair value measurement, whereas an increase in expected holding period or estimated discount rate would result in a lower fair value measurement. Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate.

The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 3, 2021 (in thousands):

Assets


	Three Months		Six Months
Auction Rate Securities	Ended		Ended
Beginning balance	$	5,262	$	5,340
Loss included in other comprehensive income (loss)		(162)		(240)
Balance at July 3, 2021	$	5,100	$	5,100

Fair values of other financial instruments

The Company’s debt is recorded at cost, but is measured at fair value for disclosure purposes. The fair value of the Company’s convertible senior notes is determined using observable market prices. The notes are traded in less active markets and are therefore classified as a Level 2 fair value measurement. As of July 3, 2021 and January 2, 2021, the fair value of the 0.625% convertible senior notes due in 2025 was $743.2 million and $671.4 million, respectively.

The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

- 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

Derivative Financial Instruments

6 Months Ended

Jul. 03, 2021

Derivative Financial Instruments

Derivative Financial Instruments

5. Derivative Financial Instruments

The Company uses derivative financial instruments to manage certain exposures to the variability of foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows.

Cash Flow Hedges

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive income (loss) in the Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income (loss) may be recognized in the Consolidated Statement of Income based on an assessment of the contracts at the time of termination.

The Company has entered into foreign currency forward contracts for a portion of its forecasted operating expenses denominated in the Euro, Norwegian Krone, Indian Rupee and Hungarian Forint. As of July 3, 2021, the contracts had maturities of one to six months and an aggregate notional value of $23.1 million. Gains expected to be reclassified into earnings in the next twelve months were not material. The fair value of the contracts, contract gains or losses recognized in other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income into earnings were not material for any of the periods presented.

Non-designated Hedges

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Consolidated Statement of Income in the same period as the remeasurement loss and gain of the related foreign currency denominated asset or liability. The Company does not apply hedge accounting to these foreign currency forward contracts.

As of July 3, 2021, the Company held two foreign currency forward contracts denominated in Singapore Dollars with a notional value of $8.9 million and one foreign currency forward contract denominated in Indian Rupees with a notional value of $5.3 million. The fair value of foreign contracts and contract losses recognized in income were not material for any of the periods presented.

Balance Sheet Details

6 Months Ended

Jul. 03, 2021

Balance Sheet Details

Balance Sheet Details

6. Balance Sheet Details

The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands):

Inventories


	July 3,		January 2,
	2021		2021
Work in progress	$	45,306	$	41,747
Finished goods		6,963		6,114
	$	52,269	$	47,861

Acquisition

6 Months Ended

Jul. 03, 2021

Acquisition

Acquisition

7. Acquisition

Redpine Signals

On April 28, 2020, the Company acquired the Wi-Fi® and Bluetooth® business of Redpine Signals for $316.8 million in cash. This strategic acquisition accelerated the Company’s roadmap for Wi-Fi and Bluetooth silicon and software solutions, while further scaling the Company’s engineering team.

Debt

6 Months Ended

Jul. 03, 2021

Debt

Debt

8. Debt

0.625% Convertible Senior Notes

On June 1, 2020, the Company completed a private offering of $535 million principal amount convertible senior notes (the “2025 Notes”). The 2025 Notes bear interest semi-annually at a rate of 0.625% per year and mature on June 15, 2025.

The 2025 Notes are convertible at an initial conversion rate of 8.1498 shares of common stock per $1,000 principal amount of the 2025 Notes, or approximately 4.4 million shares of common stock, which is equivalent to a conversion price of approximately $122.70 per share. The conversion rate is subject to adjustment under certain circumstances. Holders may convert the 2025 Notes under the following circumstances: during any calendar quarter after the calendar quarter ended on September 30, 2020 if the closing price of the Company’s common stock for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than or equal to $159.51 per share, representing 130% of the conversion price of the 2025 Notes; during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of our common stock and the conversion rate on each such trading day; if specified distributions or corporate events occur; if the Notes are called for redemption; or at any time after March 15, 2025. The Company may redeem all or any portion of the 2025 Notes, at its option, on or after June 20, 2023, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period. Upon conversion, the 2025 Notes may be settled in cash, shares of the Company’s common stock or a combination of cash and shares, at the Company’s election.

The Company incurred debt issuance costs of approximately $10.4 million, which was allocated to the liability and equity components in proportion to the allocation of the proceeds. The costs allocated to the liability component are being amortized as interest expense over the term of the 2025 Notes using the effective interest method.

1.375% Convertible Senior Notes

On March 6, 2017, the Company completed a private offering of $400 million principal amount convertible senior notes (the “2022 Notes”). The Notes bore interest semi-annually at a rate of 1.375% per year and were scheduled to mature on March 1, 2022.

On January 6, 2021, the Company issued a notice of redemption for the remaining $140.6 million principal amount of the 2022 Notes. Prior to the redemption, the Company received conversion notices representing $130.4 million principal amount of the notes. The Company paid $130.4 million in cash and issued 528,022 shares of common stock for the conversions. Notes representing $10.2 million principal amount were redeemed at par, plus accrued interest. All note conversions and redemptions were completed by March 22, 2021. The Company recognized a loss on debt extinguishment of $3.4 million during the three months ended April 3, 2021, which was recorded in interest expense in the Condensed Consolidated Statements of Operations.

8. Debt (Continued)

Convertible Debt, Net

The principal balances of the 2025 Notes and 2022 Notes (together, the “Notes”) were separated into liability and equity components, and recorded initially at fair value. The excess of the principal amounts of the liability components over their carrying amounts represent the debt discount, which are amortized to interest expense over the term of the Notes using the effective interest method. The carrying amounts of the liability components was estimated by discounting the contractual cash flows of similar non-convertible debt at an appropriate market rate at the date of issuance.

The carrying amount of the Notes consisted of the following (in thousands):


	July 3,		January 2,
	2021		2021
Liability component
Principal	$	535,000	$	675,567
Unamortized debt discount		(88,701)		(103,953)
Unamortized debt issuance costs		(6,645)		(8,189)
Net carrying amount	$	439,654	$	563,425

Equity component
Net carrying amount	$	107,927	$	108,438

The liability components of the Notes are recorded in convertible debt on the Consolidated Balance Sheet. The equity components of the Notes are recorded in additional paid-in capital. The effective interest rate for the liability component was 5.336% for the 2025 Notes and 4.75% for the 2022 Notes. As of July 3, 2021, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.0 years for the 2025 Notes.

Interest expense related to the notes was comprised of the following (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Contractual interest expense	$	836	$	1,374	$	1,999	$	2,841
Amortization of debt discount		4,992		4,132		10,930		7,378
Amortization of debt issuance costs		374		491		892		981
	$	6,202	$	5,997	$	13,821	$	11,200

Credit Facility

The Company and certain of its domestic subsidiaries (the “Guarantors”) have a $400 million revolving credit facility with a maturity date of August 7, 2024. The credit facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company also has an option to increase the size of the borrowing capacity by up to the greater of an aggregate of $250 million and 100% of EBITDA of the last four fiscal quarters, plus an amount that would not cause a secured leverage ratio (funded debt secured by assets/EBITDA) to exceed 3.25 to 1.00, subject to certain conditions.

The credit facility, other than swingline loans, will bear interest at the Eurodollar rate plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Wells Fargo prime rate, the Federal Funds rate plus 0.50% and the Eurodollar Base Rate plus 1.00%) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the Eurodollar rate loans range from 1.00% to 1.75% and for base rate loans range from 0.00% to 0.75%, depending in each case, on the leverage ratio as defined in the credit facility.

8. Debt (Continued)

The credit facility contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a net leverage ratio (funded indebtedness/EBITDA) of no more than 4.25 to 1, a secured leverage ratio of no more than 3.50 to 1, and a minimum interest coverage ratio (EBITDA/interest payments) of no less than 2.50 to 1. As of July 3, 2021, the Company was in compliance with all covenants of the credit facility. The Company’s obligations under the credit facility are guaranteed by the Guarantors and are secured by a security interest in substantially all assets of the Company and the Guarantors.

Commitments and Contingencies

6 Months Ended

Jul. 03, 2021

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Legal Proceedings

The Company is involved in various legal proceedings that have arisen in the normal course of business. While the ultimate results cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its Consolidated Financial Statements.

Revenues

6 Months Ended

Jul. 03, 2021

Revenues

Revenues

10. Revenues

A portion of the Company's sales are made to distributors under agreements allowing certain rights of return and/or price protection related to the final selling price to the end customers. These factors impact the timing and uncertainty of revenues and cash flows. During the three months ended July 3, 2021 and July 4, 2020 and the six months ended July 3, 2021 and July 4, 2020, the Company recognized revenue of $8.4 million, $8.5 million, $9.3 million and $9.5 million, respectively, from performance obligations that were satisfied in previous reporting periods. The following disaggregates the Company's revenue by sales channel (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Distributors	$	137,933	$	96,244	$	265,919	$	193,765
Direct customers		31,559		18,106		61,430		38,603
	$	169,492	$	114,350	$	327,349	$	232,368

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Stock-Based Compensation

6 Months Ended

Jul. 03, 2021

Stock-Based Compensation

Stock-Based Compensation

11. Stock-Based Compensation

In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 Purchase Plan”). In fiscal 2017, the stockholders of the Company approved amendments to both the 2009 Plan and the 2009 Purchase Plan. The purpose of the amendments was to authorize additional shares of common stock for issuance, to comply with changes in applicable law, to improve the Company’s corporate governance and to implement other best practices.

Stock-based compensation costs are based on the fair values on the date of grant for stock awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as restricted stock awards (RSUs), performance stock units (PSUs) and restricted stock awards (RSAs)) are estimated based on their intrinsic values. The fair values of market stock awards (MSUs) are estimated using a Monte Carlo simulation. The fair values of stock options and employee stock purchase plans are estimated using the Black-Scholes option-pricing model.

11. Stock-Based Compensation (Continued)

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Cost of revenues	$	199	$	200	$	436	$	375
Research and development		5,488		5,612		11,118		11,534
Selling, general and administrative		5,565		6,006		11,066		12,552
		11,252		11,818		22,620		24,461
Income tax benefit		577		945		1,259		2,122
	$	10,675	$	10,873	$	21,361	$	22,339

The Company had approximately $110.8 million of total unrecognized compensation costs related to equity grants under the 2009 Plan as of July 3, 2021 that are expected to be recognized over a weighted-average period of approximately 2.4 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

Income Taxes

6 Months Ended

Jul. 03, 2021

Income Taxes

Income Taxes

12. Income Taxes

Provision (benefit) for income taxes includes both domestic and foreign income taxes at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Income tax expense (benefit) was $1.2 million and $(4.2) million for the three months ended July 3, 2021 and July 4, 2020, resulting in effective tax rates of (6.7)% and 10.5%, respectively. Income tax expense (benefit) was $3.2 million and $(8.4) million for the six months ended July 3, 2021 and July 4, 2020, resulting in effective tax rates of (7.8)% and 11.1%, respectively.

The higher provision for income taxes for the three and six months ended July 3, 2021 was primarily due to the adoption of ASU 2019-12 Simplifying the Accounting for Income Taxes, as of the beginning of the current fiscal year and its requirement to reallocate income tax benefit from continuing operations to discontinued operations. Under ASU 2019-12, which is being applied prospectively from the date of adoption, the income tax benefit of a loss from continuing operations should be reallocated to discontinued operations if the Company would be unable to benefit from the loss without considering the income from discontinued operations. As such, the income tax benefit of $9.6 million associated with continuing operations for the three and six months ended July 3, 2021 was reallocated to discontinued operations. Prior to ASU 2019-12, if the Company reported a loss from continuing operations and income from discontinued operations, income from discontinued operations would be considered in determining the income tax benefit allocated to continuing operations.

Uncertain Tax Positions

As of July 3, 2021, the Company had gross unrecognized tax benefits, inclusive of interest, of $3.4 million, of which $2.7 million would affect the effective tax rate if recognized. During the six months ended July 3, 2021, the Company did not release any of its unrecognized tax benefits.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision (benefit) for income taxes. These amounts were not material for any of the periods presented.

12. Income Taxes (Continued)

Following the completion of the Norwegian Tax Administration (“NTA”) examination of the Company’s Norwegian subsidiary for income tax matters relating to fiscal years 2013 - 2016, the Company received an assessment from the NTA in December 2017 concerning an adjustment to its 2013 taxable income related to the pricing of an intercompany transaction. The Company is currently appealing the assessment. The adjustment to the pricing of the intercompany transaction results in approximately 141.3 million Norwegian kroner, or $16.4 million additional Norwegian income tax. The Company disagrees with the NTA’s assessment and believes the Company’s position on this matter is more likely than not to be sustained. The Company plans to exhaust all available administrative remedies, and if unable to resolve this matter through administrative remedies with the NTA, the Company plans to pursue judicial remedies.

The Company believes that it has accrued adequate reserves related to all matters contained in tax periods open to examination. Should the Company experience an unfavorable outcome in the NTA matter, however, such an outcome could have a material impact on its financial statements.

Tax years 2015 through 2021 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company is not currently under audit in any major taxing jurisdiction.

The Company does not expect material changes to its gross unrecognized tax benefits in the next 12 months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Subsequent Event

6 Months Ended

Jul. 03, 2021

Subsequent Event

Subsequent Event

13. Subsequent Event

On April 22, 2021, the Company entered into an Asset Purchase Agreement (the “Agreement”) pursuant to which Skyworks Solutions, Inc. agreed to acquire certain assets, rights, and properties, and assume certain liabilities, comprising the Company’s infrastructure and automotive business for $2.75 billion in cash. The sale was completed pursuant to the terms of the Agreement on July 26, 2021. The Company expects to record a gain on sale, net of income tax, of approximately $2.1 billion in its third fiscal quarter of 2021 upon the close of the sale.

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jul. 03, 2021
Significant Accounting Policies
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to inventories, goodwill, acquired intangible assets, other long-lived assets, revenue recognition, stock-based compensation and income taxes. Actual results could differ from those estimates, and such differences could be material to the financial statements.
Revenue Recognition	Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Substantially all of the Company’s contracts with customers contain a single performance obligation, the sale of mixed-signal integrated circuit (IC) products. This performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs upon delivery. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. The Company has opted to not disclose the amount of unsatisfied performance obligations as these contracts have original expected durations of less than one year. The transaction price reflects the Company’s expectations about the consideration it will be entitled to receive from the customer and may include fixed or variable amounts. Variable consideration primarily includes sales made to distributors under agreements allowing certain rights of return, referred to as stock rotation, and credits issued to the distributor due to price protection. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The estimate is based on information available to the Company, including recent sales activity and pricing data. The Company applies a constraint to its variable consideration estimate which considers both the likelihood of a return and the amount of a potential price concession. Variable consideration that does not meet revenue recognition criteria is deferred. The Company records a right of return asset in prepaid expenses and other current assets for the costs of distributor inventory not meeting revenue recognition criteria. A corresponding deferred revenue and returns liability amount is recorded for unrecognized revenue associated with such costs. The Company’s products carry a one-year replacement warranty. Payments are typically due within 30 days of invoicing and do not include a significant financing component.
Recent Accounting Pronouncements	1. Significant Accounting Policies (Continued) Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, using one of two retrospective transition methods. Early adoption is permitted for fiscal periods beginning after December 15, 2020. The Company expects the primary impacts of this new standard will be to increase the carrying value of its convertible debt by approximately $78.5 million, with an offsetting reduction in additional paid-in capital, and reduce its reported interest expense. In addition, should the Company be required to use the if-converted method for calculating diluted earnings per share, the number of shares used in such calculation could potentially increase. The Company will continue to evaluate the effect that the adoption of this ASU will have on its financial statements.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
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+ Details

Discontinued Operations (Tables)

6 Months Ended

Jul. 03, 2021

Discontinued Operations

Schedule of financial results, assets and liabilities from discontinued operations


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Revenues	$	108,064	$	93,183	$	205,712	$	190,042
Costs of revenues and operating expenses		70,143		54,352		130,917		113,948
Income from discontinued operations before income taxes		37,921		38,831		74,795		76,094
Provision (benefit) for income taxes		(502)		4,609		(2,293)		8,237
Income from discontinued operations	$	38,423	$	34,222	$	77,088	$	67,857

Income from discontinued operations per share:
Basic	$	0.86	$	0.78	$	1.73	$	1.55
Diluted	$	0.84	$	0.78	$	1.68	$	1.53

2. Discontinued Operations (Continued)

The following table summarizes the assets and liabilities of the infrastructure and automotive business held for sale (in thousands):


	July 3,		January 2,
	2021		2021
Assets
Inventories	$	30,176	$	18,801
Prepaid expenses and other current assets		1,876		2,204
Goodwill		255,543		255,543
Other assets		9,947		9,772
Total assets held for sale	$	297,543	$	286,321

Liabilities
Other current liabilities	$	699	$	433
Other non-current liabilities		—		451
Total liabilities held for sale	$	699	$	884

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

Earnings (Loss) Per Share (Tables)

6 Months Ended

Jul. 03, 2021

Earnings (Loss) Per Share

Schedule of computation of basic and diluted earnings (loss) per share

The following table sets forth the computation of basic and diluted loss per share from continuing operations (in thousands, except per share data):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Loss from continuing operations	$	(18,491)	$	(36,045)	$	(43,647)	$	(67,436)

Shares used in computing basic loss per share		44,803		43,761		44,481		43,699

Effect of dilutive securities:
Stock-based awards and convertible debt		—		—		—		—
Shares used in computing diluted loss per share		44,803		43,761		44,481		43,699

Loss per share:
Basic	$	(0.41)	$	(0.82)	$	(0.98)	$	(1.54)
Diluted	$	(0.41)	$	(0.82)	$	(0.98)	$	(1.54)

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jul. 03, 2021

Fair Value of Financial Instruments

Summary of valuation of the financial instruments

4. Fair Value of Financial Instruments (Continued)


	Fair Value Measurements
	at July 3, 2021 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	161,586	$	—	$	—	$	161,586
Corporate debt securities		—		—		—		—
Total cash equivalents	$	161,586	$	—	$	—	$	161,586

Short-term investments:
Government debt securities	$	18,313	$	56,305	$	—	$	74,618
Corporate debt securities		—		239,565		—		239,565
Total short-term investments	$	18,313	$	295,870	$	—	$	314,183

Other assets, net:
Auction rate securities	$	—	$	—	$	5,100	$	5,100
Total	$	—	$	—	$	5,100	$	5,100

Total	$	179,899	$	295,870	$	5,100	$	480,869


	Fair Value Measurements
	at January 2, 2021 Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash equivalents:
Money market funds	$	75,606	$	—	$	—	$	75,606
Corporate debt securities		—		14,995		—		14,995
Government debt securities		2,355		2,564		—		4,919
Total cash equivalents	$	77,961	$	17,559	$	—	$	95,520

Short-term investments:
Government debt securities	$	38,461	$	104,112	$	—	$	142,573
Corporate debt securities		—		379,390		—		379,390
Total short-term investments	$	38,461	$	483,502	$	—	$	521,963

Other assets, net:
Auction rate securities	$	—	$	—	$	5,340	$	5,340
Total	$	—	$	—	$	5,340	$	5,340

Total	$	116,422	$	501,061	$	5,340	$	622,823

Schedule of maturities of the Company's available-for-sale investments and money market funds


			Fair
	Cost		Value
Due in one year or less	$	324,890	$	325,468
Due after one year through ten years		149,864		150,001
Due after ten years		6,300		5,400
	$	481,054	$	480,869

Schedule of available-for-sale investments in continuous unrealized loss position by length of time


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of July 3, 2021	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	21,082	$	(26)	$	—	$	—	$	21,082	$	(26)
Corporate debt securities		47,314		(68)		—		—		47,314		(68)
Auction rate securities		—		—		5,100		(900)		5,100		(900)
	$	68,396	$	(94)	$	5,100	$	(900)	$	73,496	$	(994)


	Less Than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
As of January 2, 2021	Value		Losses		Value		Losses		Value		Losses
Government debt securities	$	10,146	$	(5)	$	—	$	—	$	10,146	$	(5)
Corporate debt securities		51,909		(74)		—		—		51,909		(74)
Auction rate securities		—		—		5,340		(660)		5,340		(660)
	$	62,055	$	(79)	$	5,340	$	(660)	$	67,395	$	(739)

Summary of quantitative information about level 3 fair value measurements

Auction rate securities


Fair Value at
July 3, 2021
(000s)		Valuation Technique	Unobservable Input	Weighted Average
$	5,100	Discounted cash flow	Estimated yield	1.19%

			Expected holding period	10 years

			Estimated discount rate	2.26%

Summary of activity in Level 3 financial instruments

The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 3, 2021 (in thousands):

Assets


	Three Months		Six Months
Auction Rate Securities	Ended		Ended
Beginning balance	$	5,262	$	5,340
Loss included in other comprehensive income (loss)		(162)		(240)
Balance at July 3, 2021	$	5,100	$	5,100

Balance Sheet Details (Tables)

6 Months Ended

Jul. 03, 2021

Balance Sheet Details

Schedule of Inventories

The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands):

Inventories


	July 3,		January 2,
	2021		2021
Work in progress	$	45,306	$	41,747
Finished goods		6,963		6,114
	$	52,269	$	47,861

Debt (Tables)

6 Months Ended

Jul. 03, 2021

Debt

Summary of information about the equity and liability components of convertible debt

The carrying amount of the Notes consisted of the following (in thousands):


	July 3,		January 2,
	2021		2021
Liability component
Principal	$	535,000	$	675,567
Unamortized debt discount		(88,701)		(103,953)
Unamortized debt issuance costs		(6,645)		(8,189)
Net carrying amount	$	439,654	$	563,425

Equity component
Net carrying amount	$	107,927	$	108,438

Schedule of components of interest expense

Interest expense related to the notes was comprised of the following (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Contractual interest expense	$	836	$	1,374	$	1,999	$	2,841
Amortization of debt discount		4,992		4,132		10,930		7,378
Amortization of debt issuance costs		374		491		892		981
	$	6,202	$	5,997	$	13,821	$	11,200

Revenues (Tables)

6 Months Ended

Jul. 03, 2021

Revenues

Schedule of disaggregation of revenue by product category

Schedule of disaggregation of revenue by sales channel


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Distributors	$	137,933	$	96,244	$	265,919	$	193,765
Direct customers		31,559		18,106		61,430		38,603
	$	169,492	$	114,350	$	327,349	$	232,368

Stock-Based Compensation (Tables)

6 Months Ended

Jul. 03, 2021

Stock-Based Compensation

Schedule of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income

11. Stock-Based Compensation (Continued)

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Operations (in thousands):


	Three Months Ended				Six Months Ended
	July 3,		July 4,		July 3,		July 4,
	2021		2020		2021		2020
Cost of revenues	$	199	$	200	$	436	$	375
Research and development		5,488		5,612		11,118		11,534
Selling, general and administrative		5,565		6,006		11,066		12,552
		11,252		11,818		22,620		24,461
Income tax benefit		577		945		1,259		2,122
	$	10,675	$	10,873	$	21,361	$	22,339

Significant Accounting Policies (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jul. 03, 2021	Jan. 02, 2021	Jan. 02, 2022
Significant Accounting Policies
Length of fiscal year	364 days	371 days
Number of days in each fiscal quarter for 52-week fiscal year	91 days
Minimum
Significant Accounting Policies
Length of fiscal year	364 days
Maximum
Significant Accounting Policies
Length of fiscal year	371 days
Cumulative effect of adoption of accounting standard \| Accounting Standards Update 2020-06 \| Forecast
Significant Accounting Policies
Increase in carrying value of convertible debt			$ 78.5

Discontinued Operations (Details) - USD ($)	3 Months Ended		6 Months Ended
Discontinued Operations (Details) - USD ($)	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020	Apr. 22, 2021	Jan. 02, 2021
Transition Services Agreement \| Minimum
Liabilities
Agreement term			3 months
Transition Services Agreement \| Maximum
Liabilities
Agreement term			18 months
Discontinued operations held-for-sale \| Infrastructure and automotive business
Income from discontinued operations, net of income taxes
Revenues	$ 108,064,000	$ 93,183,000	$ 205,712,000	$ 190,042,000
Costs of revenues and operating expenses	70,143,000	54,352,000	130,917,000	113,948,000
Income from discontinued operations before income taxes	37,921,000	38,831,000	74,795,000	76,094,000
Provision (benefit) for income taxes	(502,000)	4,609,000	(2,293,000)	8,237,000
Income from discontinued operations	$ 38,423,000	$ 34,222,000	$ 77,088,000	$ 67,857,000
Income from discontinued operations per share:
Basic	$ 0.86	$ 0.78	$ 1.73	$ 1.55
Diluted	$ 0.84	$ 0.78	$ 1.68	$ 1.53
Assets
Inventories	$ 30,176,000		$ 30,176,000			$ 18,801,000
Prepaid expenses and other current assets	1,876,000		1,876,000			2,204,000
Goodwill	255,543,000		255,543,000			255,543,000
Other assets	9,947,000		9,947,000			9,772,000
Total assets held for sale	297,543,000		297,543,000			286,321,000
Liabilities
Other current liabilities	699,000		699,000			433,000
Other non-current liabilities						451,000
Total liabilities held for sale	$ 699,000		$ 699,000			$ 884,000
Discontinued operations held-for-sale \| Infrastructure and automotive business \| Skyworks Solutions, Inc.
Discontinued Operations
Asset Purchase Agreement sale amount					$ 2,750,000,000

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Earnings (loss) per share:
Loss from continuing operations	$ (18,491)	$ (36,045)	$ (43,647)	$ (67,436)
Shares used in computing basic earnings (loss) per share	44,803	43,761	44,481	43,699
Shares used in computing diluted loss per share	44,803	43,761	44,481	43,699
Earnings (loss) per share:
Loss per share, Basic (in dollars per share)	$ (0.41)	$ (0.82)	$ (0.98)	$ (1.54)
Loss per share, Diluted (in dollars per share)	$ (0.41)	$ (0.82)	$ (0.98)	$ (1.54)
Shares excluded from calculation of diluted shares due to loss from continuing operations	1,000	300	1,300	500
Shares attributable to dilutive effect of conversion of debt securities	500	0	800	200
RSUs and MSUs
Earnings (loss) per share:
Anti-dilutive securities excluded from computation of diluted earnings (loss) per share	0	400	0	300

Fair Value of Financial Instruments - Summary of financial instruments (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Financial assets and liabilities measured at fair value on a recurring basis
Short-term investments	$ 314,183	$ 521,963
Recurring
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	161,586	95,520
Short-term investments	314,183	521,963
Other assets, net	5,100	5,340
Total assets at fair value	480,869	622,823
Recurring \| Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	161,586	75,606
Recurring \| Corporate debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		14,995
Short-term investments	239,565	379,390
Recurring \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		4,919
Short-term investments	74,618	142,573
Recurring \| Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net	5,100	5,340
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	161,586	77,961
Short-term investments	18,313	38,461
Total assets at fair value	179,899	116,422
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents	161,586	75,606
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		2,355
Short-term investments	18,313	38,461
Recurring \| Significant Other Observable Inputs (Level 2)
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		17,559
Short-term investments	295,870	483,502
Total assets at fair value	295,870	501,061
Recurring \| Significant Other Observable Inputs (Level 2) \| Corporate debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		14,995
Short-term investments	239,565	379,390
Recurring \| Significant Other Observable Inputs (Level 2) \| Government debt securities
Financial assets and liabilities measured at fair value on a recurring basis
Cash equivalents		2,564
Short-term investments	56,305	104,112
Recurring \| Significant Unobservable Inputs (Level 3)
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net	5,100	5,340
Total assets at fair value	5,100	5,340
Recurring \| Significant Unobservable Inputs (Level 3) \| Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Other assets, net	$ 5,100	$ 5,340

Fair Value of Financial Instruments - Contractual maturities of investments (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Apr. 03, 2021	Jan. 02, 2021
Cost
Due in one year or less, Cost	$ 324,890
Due after one year through ten years, Cost	149,864
Due after ten years, Cost	6,300
Total Cost	481,054
Fair Value
Due in one year or less, Fair Value	325,468
Due after one year through ten years, Fair Value	150,001
Due after ten years, Fair Value	5,400
Total Fair Value	480,869
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months		$ 68,396	$ 62,055
Fair value of available-for-sale securities, continuous loss position for twelve months or greater		5,100	5,340
Total fair value of available-for-sale securities, continuous loss position		73,496	67,395
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses		(94)	(79)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses		(900)	(660)
Available-for-sale securities, total gross unrealized losses		$ (994)	(739)
Government debt securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	21,082		10,146
Total fair value of available-for-sale securities, continuous loss position	21,082		10,146
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(26)		(5)
Available-for-sale securities, total gross unrealized losses	(26)		(5)
Corporate debt securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	47,314		51,909
Total fair value of available-for-sale securities, continuous loss position	47,314		51,909
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(68)		(74)
Available-for-sale securities, total gross unrealized losses	(68)		(74)
Auction rate securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for twelve months or greater	5,100		5,340
Total fair value of available-for-sale securities, continuous loss position	5,100		5,340
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(900)		(660)
Available-for-sale securities, total gross unrealized losses	$ (900)		$ (660)

Fair Value of Financial Instruments - Auction rate securities (Details) - Auction rate securities - Significant Unobservable Inputs (Level 3) $ in Thousands	Jul. 03, 2021 USD ($) item Y	Apr. 03, 2021 USD ($)	Jan. 02, 2021 USD ($)
Weighted Average \| Estimated yield \| Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Unobservable Input	0.0119
Weighted Average \| Expected holding period \| Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Unobservable Input \| Y	10
Weighted Average \| Estimated discount rate \| Discounted cash flow
Quantitative information for Level 3 Fair Value Measurements Assets
Unobservable Input	0.0226
Recurring
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value balance at the end of the period \| $	$ 5,100	$ 5,262	$ 5,340

Fair Value of Financial Instruments - Activity in Level 3 financial instruments (Details) - Significant Unobservable Inputs (Level 3) - Recurring - Auction rate securities - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 03, 2021	Jul. 03, 2021
Fair value assets reconciliation of changes
Balance at the beginning of the period	$ 5,262	$ 5,340
Loss included in other comprehensive loss	(162)	(240)
Balance at the end of the period	$ 5,100	$ 5,100

Fair Value of Financial Instruments - Fair values of other financial instruments (Details) - USD ($) $ in Millions	Jul. 03, 2021	Jan. 02, 2021	Jun. 01, 2020	Mar. 06, 2017
0.625% Convertible Senior Notes (2025 Notes)
Fair values of other financial instruments
Interest rate (as a percent)	0.625%		0.625%
Fair value of debt	$ 743.2	$ 671.4
1.375% Convertible Senior Notes (2022 Notes)
Fair values of other financial instruments
Interest rate (as a percent)				1.375%

Derivative Financial Instruments (Details) - Foreign currency forward contracts $ in Millions	6 Months Ended
	Jul. 03, 2021 USD ($) contract
Non-designated Hedges
Derivative Financial Instruments
Number of foreign currency forward contracts held \| contract	2
Non-designated Hedges \| Singapore Dollars
Derivative Financial Instruments
Derivative, notional amount	$ 8.9
Non-designated Hedges \| Indian Rupees
Derivative Financial Instruments
Derivative, notional amount	5.3
Cash flow hedges
Derivative Financial Instruments
Derivative, notional amount	$ 23.1
Cash flow hedges \| Minimum
Derivative Financial Instruments
Maturity of contracts	1 month
Cash flow hedges \| Maximum
Derivative Financial Instruments
Maturity of contracts	6 months

Balance Sheet Details (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Inventories
Work in progress	$ 45,306	$ 41,747
Finished goods	6,963	6,114
Inventories	$ 52,269	$ 47,861

Acquisition (Details) $ in Millions	Apr. 28, 2020 USD ($)
Wi-Fi and Bluetooth technology \| Redpine Signals
Business Acquisition [Line Items]
Consideration paid in cash	$ 316.8

Debt - Convertible Senior Notes (Details) $ in Thousands			3 Months Ended	6 Months Ended
Debt - Convertible Senior Notes (Details) $ in Thousands	Jan. 06, 2021 USD ($) shares	Jun. 01, 2020 USD ($) D $ / shares	Apr. 03, 2021 USD ($)	Jul. 03, 2021 USD ($)	Jul. 04, 2020 USD ($)	Mar. 06, 2017 USD ($)
Debt
Loss on debt extinguishment				$ (3,370)	$ (3,685)
0.625% Convertible Senior Notes (2025 Notes)
Debt
Principal amount		$ 535,000
Semi-annual interest rate		0.625%		0.625%
Conversion rate, shares per $1,000 principal		8.1498
Conversion, number of shares of common stock		4,400
Initial conversion price \| $ / shares		$ 122.70
Debt issuance costs		$ 10,400
0.625% Convertible Senior Notes (2025 Notes) \| Conversion of Notes, Holders
Debt
Number of trading days within 30 trading day period \| D		20
Number of consecutive trading days \| D		30
Stock price trigger per share \| $ / shares		$ 159.51
Stock price trigger, as a percentage of conversion price		130.00%
Number of consecutive business days after the 10 consecutive trading day period \| D		5
Number of consecutive trading days before the five consecutive business days \| D		10
Maximum threshold stock price, as a percentage of conversion price		98.00%
0.625% Convertible Senior Notes (2025 Notes) \| Conversion of Notes, Company
Debt
Number of trading days within 30 trading day period \| D		20
Number of consecutive trading days \| D		30
Stock price trigger, as a percentage of conversion price		130.00%
1.375% Convertible Senior Notes (2022 Notes)
Debt
Principal amount						$ 400,000
Semi-annual interest rate						1.375%
1.375% Convertible Senior Notes (2022 Notes) \| Conversion of Notes, Holders
Debt
Principal amount of notes for conversion	$ 130,400
Cash paid upon conversion	$ 130,400
Number of shares issued in connection with conversion \| shares	528,022
Debt amount redeemed	$ 10,200
1.375% Convertible Senior Notes (2022 Notes) \| Conversion of Notes, Holders \| Interest expense
Debt
Loss on debt extinguishment			$ 3,400
1.375% Convertible Senior Notes (2022 Notes) \| Conversion of Notes, Company
Debt
Remaining principal amount	$ 140,600

Debt - Carrying amount of Notes (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jan. 02, 2021
0.625% Convertible Senior Notes (2025 Notes)
Equity component
Effective interest rate	5.336%
Amortization period of debt discount and debt issuance costs	4 years
1.375% Convertible Senior Notes (2022 Notes)
Equity component
Effective interest rate	4.75%
Convertible Senior Notes
Liability component
Principal	$ 535,000	$ 675,567
Unamortized debt discount	(88,701)	(103,953)
Unamortized debt issuance costs	(6,645)	(8,189)
Net carrying amount	439,654	563,425
Equity component
Net carrying amount	$ 107,927	$ 108,438

Debt - Interest expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Debt - Interest expense (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Interest expense related to the notes
Interest Expense, Total	$ 6,486	$ 11,778	$ 17,810	$ 17,319
Convertible Senior Notes
Interest expense related to the notes
Contractual interest expense	836	1,374	1,999	2,841
Amortization of debt discount	4,992	4,132	10,930	7,378
Amortization of debt issuance costs	374	491	892	981
Interest Expense, Total	$ 6,202	$ 5,997	$ 13,821	$ 11,200

Debt - Credit Facility (Details) $ in Millions	6 Months Ended
Debt - Credit Facility (Details) $ in Millions	Jul. 03, 2021 USD ($)
Credit Facility \| Scenario: Company's option to increase borrowing capacity
Debt
Additional increase in borrowing capacity of the line of credit available at the entity's option	$ 250
Additional increase in borrowing capacity based on EBITDA (as a percent)	100.00%
Maximum secured leverage ratio	3.25
Credit Facility \| Scenario: Credit facility debt covenants
Debt
Maximum net leverage ratio	4.25
Maximum secured leverage ratio	3.50
Minimum interest coverage ratio	2.50
Revolving Credit Facility
Debt
Maximum borrowing capacity	$ 400
Revolving credit facility, other than swingline loans \| Federal Funds
Debt
Interest rate margin (as a percent)	0.50%
Revolving credit facility, other than swingline loans \| Eurodollar Rate
Debt
Interest rate margin (as a percent)	1.00%
Revolving credit facility, other than swingline loans \| Eurodollar Rate \| Minimum
Debt
Interest rate margin (as a percent)	1.00%
Revolving credit facility, other than swingline loans \| Eurodollar Rate \| Maximum
Debt
Interest rate margin (as a percent)	1.75%
Revolving credit facility, other than swingline loans \| Base Rate \| Minimum
Debt
Interest rate margin (as a percent)	0.00%
Revolving credit facility, other than swingline loans \| Base Rate \| Maximum
Debt
Interest rate margin (as a percent)	0.75%
Letter of Credit
Debt
Maximum borrowing capacity	$ 25
Swingline Loans
Debt
Maximum borrowing capacity	$ 10

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Revenues
Revenue from performance obligations that were satisfied in previous reporting periods	$ 8,400	$ 8,500	$ 9,300	$ 9,500
Revenues	169,492	114,350	327,349	232,368
Distributors
Revenues
Revenues	137,933	96,244	265,919	193,765
Direct customers
Revenues
Revenues	$ 31,559	$ 18,106	$ 61,430	$ 38,603

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jul. 04, 2020	Jul. 03, 2021	Jul. 04, 2020
Stock-based compensation costs
Stock based compensation costs	$ 11,252	$ 11,818	$ 22,620	$ 24,461
Income tax benefit	577	945	1,259	2,122
Share based compensation costs after tax	10,675	10,873	21,361	22,339
Total unrecognized compensation costs related to awards	110,800		$ 110,800
Weighted-average period of recognition of unrecognized compensation costs			2 years 4 months 24 days
Cost of revenues
Stock-based compensation costs
Stock based compensation costs	199	200	$ 436	375
Research and development
Stock-based compensation costs
Stock based compensation costs	5,488	5,612	11,118	11,534
Selling, general and administrative
Stock-based compensation costs
Stock based compensation costs	$ 5,565	$ 6,006	$ 11,066	$ 12,552

Income Taxes (Details) $ in Thousands, kr in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) $ in Thousands, kr in Millions	Jul. 03, 2021 USD ($)	Jul. 04, 2020 USD ($)	Jul. 03, 2021 USD ($)	Jul. 03, 2021 NOK (kr)	Jul. 04, 2020 USD ($)
Income Taxes
Provision (benefit) for income taxes	$ 1,165	$ (4,229)	$ 3,157		$ (8,443)
Effective income tax rate (as a percent)	(6.70%)	10.50%	(7.80%)	(7.80%)	11.10%
Income tax expense (benefit), continuing operations	$ 9,600		$ 9,600
Gross unrecognized tax benefits	3,400		3,400
Gross unrecognized tax benefits which would affect the effective tax rate if recognized	$ 2,700		2,700
Norwegian \| 2013 \| Under appeal
Income Taxes
Additional income tax expense			$ 16,400	kr 141.3

Subsequent Event (Details) - Discontinued operations held-for-sale - Infrastructure and automotive business - USD ($)	3 Months Ended
	Oct. 02, 2021	Apr. 22, 2021
Skyworks Solutions, Inc.
Subsequent Event
Asset Purchase Agreement sale amount		$ 2,750,000,000
Subsequent event
Subsequent Event
Gain on sale, net of tax	$ 2,100,000,000