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United States securities and exchange commission logo
November 7, 2022
Haley Aman
Chief Financial Officer
Pixelworks, Inc.
16760 SW Upper Boones Ferry Rd., Ste. 101
Portland, OR 97224
Re: Pixelworks, Inc.
Form 10-K for the
Fiscal Year ended December 31, 2021
Filed March 9, 2022
File No. 000-30269
Dear Haley Aman:
We have reviewed your September 27, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
September 8, 2022 letter.
Form 10-K for the Fiscal Year Ended December 31, 2021
Risk Factors
Company Specific Risks, page 18
1. We note that you have
proposed some disclosures to address the China Based Issuer
sample comments
referenced in prior comment two, although some applicable disclosure
points are not clearly
represented in your intended disclosures.
Please address the
specific language utilized for each disclosure point among sample
comments 2, 4, 5, 7, 8,
9, 14 and 15, by either proposing incremental disclosures,
identifying disclosures
that you believe are specifically responsive, or explaining to us
why you believe a
disclosure point is inapplicable.
Haley Aman
FirstName
Pixelworks,LastNameHaley Aman
Inc.
Comapany 7,
November NamePixelworks,
2022 Inc.
November
Page 2 7, 2022 Page 2
FirstName LastName
Please clarify the manner by which disclosures responsive to these
concerns will
appear within the Risk Factors section that begins on page 17 and be
represented among
the list of Risk Factors on page 2, where we believe that you should
segregate and
differentiate risks associated with having operations in China.
Managements Discussion and Analysis of Financial Condition and Results of
Operation
Overview, page 40
2. We note your response to prior comment three indicating that you
intend to provide
disclosure to clarify whether the pandemic and shortages in the global
semiconductor
business have adversely effected your key suppliers and manufacturing
partners, how
these may have also effected your outlook and business goals, and to
discuss the extent to
which your results of operations and capital resources have been
impacted.
You were also asked to discuss any efforts that you have undertaken to
mitigate these
concerns and any uncertainties arising from those efforts or which
otherwise prevail over
your ability to maintain or ensure product quality, reliability of
product development and
order fulfillment processes, or to obtain regulatory approvals.
Please submit the specific disclosures that you propose to address and
clarify these
concerns. We reissue prior comment three.
Results of Operations, page 42
3. We note your response to prior comment four including sample
disclosure based on the
results for 2021 compared to 2020, indicating that revenues for the
Mobile and Projector
key market segments increased to $19.4 million and $29.7 million,
respectively, and
together represent about 97% of IC sales revenues for 2021.
Given the revisions proposed in response to prior comment one, we
understand that IC
sales to the Video Delivery market segment represents the other 3%;
and that the balance
of revenues to this market segment plus those to the Cinema market
segment account for
all of the service revenues. Please clarify whether this is correct.
Please include volumetric measures of products sold, disclose the
extent to which changes
in revenues for the key market segments are attributable to changes in
volumes and
changes in prices, and discuss the reasons for material changes as
previously requested.
Provide us with a schedule including volumetric metrics of the key
products sold in each
key market segment, along with the revenues ascribed for each quarter
covered by your
annual and subsequent interim reports, reconciled to the consolidated
amounts, along with
an explanation of how your have considered these details for
disclosure.
Haley Aman
Pixelworks, Inc.
November 7, 2022
Page 3
Financial Statements
Note 7 - Revenue Recognition, page 69
4. We understand from your response to prior comment five that you would
rather not
disclose IC Sales for the four key market segments identified on page
8, notwithstanding
the criteria in FASB ASC 606-10-55-89 through 55-91.
However, as previously noted, you routinely discuss revenues in terms
of your target
markets, to include disclosures in investor presentations, earnings
releases, conference
calls, and MD&A. In your response to prior comment four you include
draft revisions that
specify revenues for the Mobile and Projector markets, and in your
response to prior
comment six, you confirm that your chief operating decision maker is
routinely provided a
breakdown of historical revenue and forecasted revenue for these
target markets.
We also note that in your August 2022 Investor Presentation, you
identify the Home and
Enterprise markets as "Mature business lines [that] fund Mobile &
[Cinema's] TrueCut
growth initiatives" and indicate that growth in the Mobile segment is
"contributing
increased portion of total revenue mix" from 36% in 2021 to 39% in the
second quarter of
2022. You identify and characterize drivers of the Mobile segment as
being "Fueled by
massive platform and content ecosystems." You also disclose the
revenue mix for
Mobile/Cinema's TrueCut and Projector/Video Delivery for the last four
fiscal years and
subsequent interim period, along with a target revenue mix that aims
to further increase
the significance of your growth markets to 60% with total revenues of
$100 million.
We continue to believe that you will need to disclose revenues for
each of your key
market segments to comply with FASB ASC 606-10-50-5, or to provide
clarifying
disclosure in the event that revenues for any of these markets are not
material. Please
submit the revisions that you propose to address these concerns.
You may contact Jenifer Gallagher, Staff Accountant, at (202) 551-3706,
or Karl Hiller,
Branch Chief, at (202) 551-3686, with any questions.
FirstName LastNameHaley Aman Sincerely,
Comapany NamePixelworks, Inc.
Division of
Corporation Finance
November 7, 2022 Page 3 Office of Energy
& Transportation
FirstName LastName