0001040161-23-000050 | 10-Q | XBRL Viewer

Marketable Securities and Fair Value Measurements

9 Months Ended

Sep. 30, 2023

FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value:

Level 1:Valuations based on quoted prices in active markets for identical assets and liabilities.

Level 2:Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3:Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The following table presents information about our assets measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:


	Level 1		Level 2		Level 3		Total
As of September 30, 2023:
Assets:
Cash equivalents:
Certificates of deposit	$	10,000	$	—	$	—	$	10,000
Money market funds	970		—		—		970







As of December 31, 2022:
Assets:
Cash equivalents:
Money market funds	$	18,836	$	—	$	—	$	18,836
Certificates of deposit	5,000		—		—		5,000

We primarily use the market approach to determine the fair value of our financial assets. The fair value of our current assets and liabilities, including accounts receivable and accounts payable approximates the carrying value due to the short-term nature of these balances. We have currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with U.S. GAAP.

- 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

Redeemable Non-controlling Interest and Equity Interest of PWSH Sold to Employees (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Carrying Value Non-Controlling Interest, Beginning Balance			$ 10,909
Net loss attributable to redeemable non-controlling interest	$ (334)	$ 0	(779)	$ 470
Effect of foreign currency translation attributable to redeemable non-controlling interest			(889)
Carrying Value Non-controlling Interest, Ending Balance	23,986		23,986
Equity Sale To Investors And ESOP
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Carrying Value Non-Controlling Interest, Beginning Balance			28,919
Net loss attributable to redeemable non-controlling interest			(149)
Effect of foreign currency translation attributable to redeemable non-controlling interest			(1,372)
Carrying Value Non-controlling Interest, Ending Balance	$ 27,398		$ 27,398

- Definition

Amount of equity (deficit) attributable to noncontrolling interest. Excludes temporary equity.

+ References

+ Details

- Definition

Amount of Net Income (Loss) attributable to noncontrolling interest.

+ References + Details

Interest Income and Other, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Other Income and Expenses [Abstract]
Interest income	$ 500	$ 165	$ 1,487	$ 388
Interest expense	(29)	(10)	3	(32)
Other income	0	10	125	72
Total interest income and other, net	$ 471	$ 165	$ 1,615	$ 428

Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	$ 6,730	$ 6,730
Less: accumulated amortization	(6,730)	(6,730)
Acquired intangible assets, net	0	0
Developed technology
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	5,050	5,050
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	1,270	1,270
Backlog and tradename
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	$ 410	$ 410

Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Revenue is recognized when control of the promised good or service is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our principal revenue generating activities consist of the following:

Product Sales - We sell integrated circuit products, also known as “chips” or “ICs”, based upon a customer purchase order, which includes a fixed price per unit. ICs are sold into two target end markets: Mobile and Home & Enterprise. We have elected to account for shipping and handling as activities to fulfill the promise to transfer the goods, and not evaluate whether these activities are promised services to the customer. We generally satisfy our single performance obligation upon shipment of the goods to the customer and recognize revenue at a point in time upon shipment of the underlying product.

Our shipments are subject to limited return rights subject to our limited warranty for our products sold. In addition, we may provide other credits to certain customers pursuant to price protection and stock rotation rights, all of which are considered variable consideration when estimating the amount of revenue to recognize. We use the “most likely amount” method to determine the amount of consideration to which we are entitled. Our estimate of variable consideration is reassessed at the end of each reporting period based on changes in facts and circumstances. Historically, returns and credits have not been material.

Engineering Services - We enter into contracts for professional engineering services that include software development and customization. We identify each performance obligation in our engineering services agreements (“ESAs”) at contract inception. The ESA generally includes project deliverables specified by the customer. The performance obligations in the ESA are generally combined into one deliverable, with the pricing for services stated at a fixed amount. Services provided under the ESA generally result in the transfer of control over time. We recognize revenue on ESAs based on the proportion of labor hours expended to the total hours expected to complete the contract performance obligation. ESAs could include substantive customer acceptance provisions. In ESAs that include substantive customer acceptance provisions, we recognize revenue upon customer acceptance.

License Revenue - On occasion, we derive revenue from the license of our internally developed intellectual property ("IP"). Additionally, for certain IP license agreements, royalties are collected as customers sell their own products that incorporate our IP. IP licensing agreements that we enter into generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements generally include license fees or royalty fees relating to our IP and support service fees, resulting in two performance obligations. We evaluate each performance obligation, which generally results in the transfer of control at a point in time for the license fee and over time for support services. Royalties are recognized as revenue is earned, generally when the customer sells its products that incorporate our IP.

Other - From time-to-time, we enter into arrangements for other revenue generating activities, such as providing technical support services to customers through technical support agreements. In each circumstance, we evaluate such arrangements for our performance obligations which generally results in the transfer of control for such services over time. Historically, such arrangements have not been material to our operating results.

The following table provides information about disaggregated revenue based on the preceding categories, with IC sales disaggregated further into net revenue from external customers for each group of similar products, for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
IC sales	$	15,972	$	17,188	$	39,187	$	52,337
Engineering services, license and other	60		364		416		921
Total revenues	$	16,032	$	17,552	$	39,603	$	53,258

IC sales by end market:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Mobile market	$	8,237	$	5,738	$	18,158	$	18,519
Home & Enterprise market	7,735		11,450		21,029		33,818
Total IC sales	$	15,972	$	17,188	$	39,187	$	52,337

For segment information, including revenue by geographic region, see "Note 10: Segment Information".

Our contract balances include accounts receivable and deferred revenue. For information concerning these contract balances, see "Note 2: Balance Sheet Components".

Payment terms and conditions for goods and services provided vary by contract; however, payment is generally required within 30 to 60 days of invoicing.

We have not identified any material costs incurred associated with obtaining a contract with a customer which would meet the criteria to be capitalized, therefore, these costs are expensed as incurred.

There is no amount of transaction price allocated to unsatisfied performance obligations with an original expected duration of greater than one year.

Revenue related to the Cinema market was not material during the three and nine months ended September 30, 2023 and 2022, and was therefore included in the engineering services, license revenue and other category within the Mobile market.

- 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
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Commitments and Contingencies (Details) $ in Thousands	9 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Other Commitments [Line Items]
Purchase obligation, delivery period	90 days
ViXS Systems, Inc. \| Accrued Liabilities And Current Portion Of Long Term Debt \| Research And Development Expense Payment
Other Commitments [Line Items]
Other Commitment	$ 128

Balance Sheet Components

9 Months Ended

Sep. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

BALANCE SHEET COMPONENTS

Accounts Receivable, Net

Accounts receivable are contract assets that arise from the performance of our obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments.

Accounts receivable net, consist of the following:


	September 30, 2023		December 31, 2022
Accounts receivable, gross	$	10,191	$	10,124
Less: allowance for doubtful accounts	(26)		(77)
Accounts receivable, net	$	10,165	$	10,047

The following is the change in our allowance for doubtful accounts:


	Nine Months Ended
	September 30,
	2023		2022
Balance at beginning of period	$	77	$	36
Reductions credited	(51)		(10)

Balance at end of period	$	26	$	26

Inventories

Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value).

Inventories consist of the following:


	September 30, 2023		December 31, 2022
Finished goods	$	4,251	$	480
Work-in-process	1,654		1,280
Inventories	$	5,905	$	1,760

Property and Equipment, Net

Property and equipment, net consists of the following:


	September 30, 2023		December 31, 2022
Gross property and equipment	$	25,084	$	20,792
Less: accumulated depreciation and amortization	(18,522)		(16,160)
Property and equipment, net	$	6,562	$	4,632

Acquired Intangible Assets, Net

In connection with the acquisition of ViXS (the "Acquisition"), we recorded certain identifiable intangible assets. Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following:


	September 30, 2023		December 31, 2022
Developed technology	$	5,050	$	5,050
Customer relationships	1,270		1,270
Backlog and tradename	410		410
	6,730		6,730
Less: accumulated amortization	(6,730)		(6,730)
Acquired intangible assets, net	$	—	$	—

Developed technology and customer relationships were fully amortized as of March 31, 2022, tradename was fully amortized as of March 31, 2019 and backlog was fully amortized as of September 30, 2018.

Goodwill

Goodwill resulted from the Acquisition, whereby we recorded goodwill of $18,407.

Goodwill is not amortized; however, we review goodwill for impairment annually and whenever events or changes in circumstances indicate that the fair value of the reporting unit may be less than its carrying value. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in our business climate or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continued losses or adverse changes in legal factors, regulation or business environment or a sustained decrease in stock price. Our stock price has declined recently, however, combined with our assessment of other events and circumstances, we do not believe this to be a current triggering event requiring a goodwill impairment assessment as of September 30, 2023. . We perform our annual impairment assessment for goodwill on November 30 of each year.

Accrued Liabilities and Current Portion of Long-Term Liabilities

Accrued liabilities and current portion of long-term liabilities consist of the following:


	September 30, 2023		December 31, 2022
Accrued payroll and related liabilities	$	3,938	$	3,632
Operating lease liabilities, current	2,423		1,391
Current portion of accrued liabilities for asset financings	1,295		876
Deferred revenue	400		230
Accrued interest payable	88		246
Accrued commissions and royalties	30		210


Other	2,029		2,264
Accrued liabilities and current portion of long-term liabilities	$	10,203	$	8,849

Deferred revenues are contract liabilities that arise when cash payments are received or due in advance of the satisfaction of our performance obligations. Any increase in deferred revenues is driven by cash payments received or due in advance of satisfying our performance obligation pursuant to the contract with the customer. Any decrease in deferred revenues is due to the recognition of revenue related to satisfying our performance obligation.

The change in deferred revenue is as follows:


	Nine Months Ended
	September 30,
	2023		2022
Deferred revenue:
Balance at beginning of period	$	230	$	50
Revenue deferred	385		940
Revenue recognized	(215)		(730)
Balance at end of period	$	400	$	260

Balance Sheet Components - Accrued Liabilities and Current Portion of Long-Term Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Accrued payroll and related liabilities	$ 3,938	$ 3,632
Operating lease liabilities, current	2,423	1,391
Current portion of accrued liabilities for asset financings	1,295	876
Deferred revenue	400	230
Accrued interest payable	88	246
Accrued commissions and royalties	30	210
Other	2,029	2,264
Accrued liabilities and current portion of long-term liabilities	$ 10,203	$ 8,849

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (23,211)	$ (13,626)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	3,677	4,038
Depreciation and amortization	3,211	3,490
Deferred income tax expense	314	396
Reversal of uncertain tax positions	(2)	(121)
Amortization of acquired intangible assets	0	90
Changes in operating assets and liabilities:
Accounts receivable, net	(118)	(2,062)
Inventories	(4,145)	(1,247)
Prepaid expenses and other current and long-term assets, net	4,683	3,131
Accounts payable	1,133	(276)
Accrued current and long-term liabilities	(2,268)	(5,084)
Income taxes payable	(300)	(232)
Net cash used in operating activities	(17,026)	(11,503)
Cash flows from investing activities:
Purchases of property and equipment	(3,440)	(1,287)
Purchases of licensed technology	0	(1,415)
Net cash used in investing activities	(3,440)	(2,702)
Cash flows from financing activities:
Net proceeds from issuance of equity interest to non-controlling interest	14,596	10,738
Payments on asset financings	(932)	(892)
Proceeds from issuance of common stock under employee equity incentive plans	299	387
Net cash provided by financing activities	13,963	10,233
Net decrease in cash and cash equivalents	(6,503)	(3,972)
Cash and cash equivalents, beginning of period	56,821	61,587
Cash and cash equivalents, end of period	50,318	57,615
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes, net of refunds received	302	17
Cash paid during the period for interest	116	153
Non-cash investing and financing activities:
Acquisitions of property and equipment and other assets under extended payment terms	$ 1,980	$ 160

Segment Information - Accounts Receivable by Major Customer (Details) - Accounts Receivable - Customer Concentration Risk	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Account W
Segment Reporting Information
Percentage of accounts receivable	62.00%	31.00%
Account X
Segment Reporting Information
Percentage of accounts receivable	27.00%	27.00%
Account Y
Segment Reporting Information
Percentage of accounts receivable	0.00%	12.00%
Account Z
Segment Reporting Information
Percentage of accounts receivable	0.00%	11.00%

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

LEASES

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities and current portion of long-term liabilities, and operating lease liabilities in our condensed consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating lease ROU assets also exclude lease incentives received. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

We have operating leases for office buildings and two vehicles. Our leases have remaining lease terms of one year to four years. Supplemental information related to lease expense and valuation of the ROU assets and lease liabilities was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating lease cost:	$	765	$	659	$	2,129	$	2,004


	Nine Months Ended
	September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,025		$	2,076
Supplemental non-cash information related to lease liabilities arising from obtaining right-of-use assets	3,881			734
Weighted average remaining lease term (in years)	2.39			2.90
Weighted average discount rate	6.93		%	4.18		%

Future minimum lease payments under non-cancellable leases as of September 30, 2023 were as follows:


Operating Lease Payments
Three months ending December 31, 2023	$	594
Years ending December 31:
2024	2,733
2025	1,856
2026	698
Thereafter	86



Total operating lease payments	5,967
Less imputed interest	(501)
Total operating lease liabilities	$	5,466

As of September 30, 2023, we had no operating lease liabilities that had not commenced.

Interest Income and Other, Net

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Interest Income and Other, Net

INTEREST INCOME AND OTHER, NET

Interest income and other, net, consists of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Interest income	$	500	$	165	$	1,487	$	388
Interest expense	(29)		(10)		3		(32)
Other income	—		10		125		72



Total interest income and other, net	$	471	$	165	$	1,615	$	428

Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Income Statement [Abstract]

Revenue, net

$ 16,032

$ 17,552

$ 39,603

$ 53,258

Cost of revenue

^[1]

9,150

8,756

22,870

26,351

Gross profit

6,882

8,796

16,733

26,907

Operating expenses:

Research and development

^[2]

8,752

8,445

23,925

24,126

Selling, general and administrative

^[3]

5,776

5,082

17,316

16,590

Total operating expenses

14,528

13,527

41,241

40,716

Loss from operations

(7,646)

(4,731)

(24,508)

(13,809)

Interest income and other, net

471

165

1,615

428

Total other income, net

471

165

1,615

428

Loss before income taxes

(7,175)

(4,566)

(22,893)

(13,381)

Provision (benefit) for income taxes

158

(70)

318

245

Net loss

(7,333)

(4,496)

(23,211)

(13,626)

Less: Net (income) loss attributable to redeemable non-controlling interest and non-controlling interest

334

779

(470)

Net loss attributable to Pixelworks Inc.

$ (6,999)

$ (4,496)

$ (22,432)

$ (14,096)

Net loss attributable to Pixelworks Inc. per share - basic (dollars per share)

$ (0.12)

$ (0.08)

$ (0.40)

$ (0.26)

Net loss attributable to Pixelworks Inc. per share - diluted (dollars per share)

$ (0.12)

$ (0.08)

$ (0.40)

$ (0.26)

Weighted average shares outstanding - basic

56,410

54,826

55,917

54,120

Weighted average shares outstanding - diluted

56,410

54,826

55,917

54,120

[1]


(1) Includes:
Stock-based compensation	21	(47)	67	20
Amortization of acquired intangible assets	—	—	—	72

[2]


(2) Includes stock-based compensation			452						565						1,470						1,795

[3]


(3) Includes:
Stock-based compensation	779	776	2,140	2,223
Amortization of acquired intangible assets	—	—	—	18

Redeemable Non-controlling Interest and Equity Interest of PWSH Sold to Employees (Tables)

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

The components of the change in redeemable non-controlling interests for the nine months ended September 30, 2023 are presented in the following table (in thousands):


Carrying Value of Redeemable Non-Controlling Interest as of January 1, 2023	$	28,919


Net loss attributable to redeemable non-controlling interest	(149)
Effect of foreign currency translation attributable to redeemable non-controlling interest	(1,372)
Carrying Value of Redeemable Non-Controlling Interest as of September 30, 2023	$	27,398

The following table reconciles the initial investment by the Purchasers and the carrying value of their non-controlling interest as of the Closing Date (as defined in the Equity Transfer Agreement):


Carrying Value of Permanent Equity Non-Controlling Interest as of January 1, 2023	$	10,909


Increase in additional paid-in capital	14,742
Net loss attributable to non-controlling interest	(630)
Closing and direct costs incurred	(146)
Effect of foreign currency translation attributable to non-controlling interest	(889)
Carrying Value of Permanent Equity Non-Controlling Interest as of September 30, 2023	$	23,986

Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounts Receivable, after Allowance for Credit Loss [Abstract]
Accounts receivable, gross	$ 10,191	$ 10,124
Less: allowance for doubtful accounts	(26)	(77)	$ (26)	$ (36)
Accounts receivable, net	$ 10,165	$ 10,047

Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Non-Controlling Interest
Beginning Balance (in shares) at Dec. 31, 2021		53,367,136
Beginning Balance at Dec. 31, 2021	$ 40,221	$ 475,644	$ (468)	$ (434,955)	$ 0
Stock issued under employee equity incentive plans (in shares)		630,876
Stock issued under employee equity incentive plans	217	$ 217
Stock-based compensation expense	1,049	$ 1,049
Foreign currency translation adjustment	(152)		(152)
Net income (loss)	(4,592)			(4,592)
Ending Balance (in shares) at Mar. 31, 2022		53,998,012
Ending Balance at Mar. 31, 2022	36,743	$ 476,910	(620)	(439,547)	0
Beginning Balance (in shares) at Dec. 31, 2021		53,367,136
Beginning Balance at Dec. 31, 2021	40,221	$ 475,644	(468)	(434,955)	0
Net income (loss)	(14,096)
Ending Balance (in shares) at Sep. 30, 2022		54,836,039
Ending Balance at Sep. 30, 2022	44,461	$ 480,069	2,705	(449,051)	10,738
Beginning Balance (in shares) at Mar. 31, 2022		53,998,012
Beginning Balance at Mar. 31, 2022	36,743	$ 476,910	(620)	(439,547)	0
Stock issued under employee equity incentive plans (in shares)		233,860
Stock-based compensation expense	1,695	$ 1,695
Foreign currency translation adjustment	1,668		1,668
Net income (loss)	(5,008)			(5,008)
Ending Balance (in shares) at Jun. 30, 2022		54,231,872
Ending Balance at Jun. 30, 2022	35,098	$ 478,605	1,048	(444,555)	0
Stock issued under employee equity incentive plans (in shares)		604,167
Stock issued under employee equity incentive plans	170	$ 170
Stock-based compensation expense	1,294	$ 1,294
Foreign currency translation adjustment	1,657		1,657
Net proceeds from issuance of equity interest to non-controlling interest	10,738				10,738
Net income (loss)	(4,496)			(4,496)
Ending Balance (in shares) at Sep. 30, 2022		54,836,039
Ending Balance at Sep. 30, 2022	44,461	$ 480,069	2,705	(449,051)	10,738
Beginning Balance (in shares) at Dec. 31, 2022		55,113,186
Beginning Balance at Dec. 31, 2022	43,331	$ 481,229	2,178	(450,985)	10,909
Stock issued under employee equity incentive plans (in shares)		606,539
Stock issued under employee equity incentive plans	156	$ 156
Stock-based compensation expense	1,166	$ 1,166
Foreign currency translation adjustment	(366)		(333)		(33)
Net proceeds from issuance of equity interest to non-controlling interest	14,596				14,596
Net loss attributable to non-controlling interest	(338)				(338)
Net income (loss)	(9,396)			(9,396)
Ending Balance (in shares) at Mar. 31, 2023		55,719,725
Ending Balance at Mar. 31, 2023	49,149	$ 482,551	1,845	(460,381)	25,134
Beginning Balance (in shares) at Dec. 31, 2022		55,113,186
Beginning Balance at Dec. 31, 2022	43,331	$ 481,229	2,178	(450,985)	10,909
Net loss attributable to non-controlling interest	(630)
Net income (loss)	(22,432)
Ending Balance (in shares) at Sep. 30, 2023		56,693,517
Ending Balance at Sep. 30, 2023	40,213	$ 485,205	4,439	(473,417)	23,986
Beginning Balance (in shares) at Mar. 31, 2023		55,719,725
Beginning Balance at Mar. 31, 2023	49,149	$ 482,551	1,845	(460,381)	25,134
Stock issued under employee equity incentive plans (in shares)		396,703
Stock-based compensation expense	1,259	$ 1,259
Foreign currency translation adjustment	1,577		2,353		(776)
Net loss attributable to non-controlling interest	(107)				(107)
Net income (loss)	(6,037)			(6,037)
Ending Balance (in shares) at Jun. 30, 2023		56,116,428
Ending Balance at Jun. 30, 2023	45,841	$ 483,810	4,198	(466,418)	24,251
Stock issued under employee equity incentive plans (in shares)		577,089
Stock issued under employee equity incentive plans	143	$ 143
Stock-based compensation expense	1,252	$ 1,252
Foreign currency translation adjustment	161		241		(80)
Net loss attributable to non-controlling interest	(185)				(185)
Net income (loss)	(6,999)			(6,999)
Ending Balance (in shares) at Sep. 30, 2023		56,693,517
Ending Balance at Sep. 30, 2023	$ 40,213	$ 485,205	$ 4,439	$ (473,417)	$ 23,986

Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

EARNINGS (LOSS) PER SHARE

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss	$	(7,333)	$	(4,496)	$	(23,211)	$	(13,626)
Less: Net (income) loss attributable to redeemable non-controlling interest and non-controlling interest	334		—		779		(470)

Net loss attributable to Pixelworks, Inc. - for purposes of earnings per share calculation	$	(6,999)	$	(4,496)	$	(22,432)	$	(14,096)
Weighted average shares outstanding - basic and diluted	56,410		54,826		55,917		54,120




Net loss attributable to Pixelworks, Inc. per share - basic and diluted	$	(0.12)	$	(0.08)	$	(0.40)	$	(0.26)

Basic and diluted earnings (loss) per share was computed by dividing the net income (loss) by the weighted-average number of common shares outstanding for the period. The numerator adjustments include an allocation of PWSH income to the non-controlling interests, the redeemable non-controlling interests and the employee owned entities. The equity interest associated with the employee-owned entities are considered participating securities at PWSH and will be allocated income, however, they are not required to fund losses, and therefore, no allocations of losses will be made to the employee owned entities in periods of loss at PWSH. Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the employee stock purchase plan.

The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands):


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Employee equity incentive plans	4,183	3,997	4,001	4,003

Non- controlling Interest (Tables)

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

The components of the change in redeemable non-controlling interests for the nine months ended September 30, 2023 are presented in the following table (in thousands):


Carrying Value of Redeemable Non-Controlling Interest as of January 1, 2023	$	28,919


Net loss attributable to redeemable non-controlling interest	(149)
Effect of foreign currency translation attributable to redeemable non-controlling interest	(1,372)
Carrying Value of Redeemable Non-Controlling Interest as of September 30, 2023	$	27,398

The following table reconciles the initial investment by the Purchasers and the carrying value of their non-controlling interest as of the Closing Date (as defined in the Equity Transfer Agreement):


Carrying Value of Permanent Equity Non-Controlling Interest as of January 1, 2023	$	10,909


Increase in additional paid-in capital	14,742
Net loss attributable to non-controlling interest	(630)
Closing and direct costs incurred	(146)
Effect of foreign currency translation attributable to non-controlling interest	(889)
Carrying Value of Permanent Equity Non-Controlling Interest as of September 30, 2023	$	23,986

Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	$ 77	$ 36
Reductions credited	(51)	(10)
Balance at end of period	$ 26	$ 26

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 03, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	000-30269
Entity Registrant Name	PIXELWORKS, INC
Entity Central Index Key	0001040161
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	OR
Entity Tax Identification Number	91-1761992
Entity Address, Address Line One	16760 SW Upper Boones Ferry Rd., Ste. 101
Entity Address, City or Town	Portland
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97224
City Area Code	503
Local Phone Number	601-4545
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PXLW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		56,693,517

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Accounts Receivable, Net

Accounts receivable net, consist of the following:


	September 30, 2023		December 31, 2022
Accounts receivable, gross	$	10,191	$	10,124
Less: allowance for doubtful accounts	(26)		(77)
Accounts receivable, net	$	10,165	$	10,047

Allowance for Doubtful Accounts

The following is the change in our allowance for doubtful accounts:


	Nine Months Ended
	September 30,
	2023		2022
Balance at beginning of period	$	77	$	36
Reductions credited	(51)		(10)

Balance at end of period	$	26	$	26

Inventories

Inventories consist of the following:


	September 30, 2023		December 31, 2022
Finished goods	$	4,251	$	480
Work-in-process	1,654		1,280
Inventories	$	5,905	$	1,760

Property and Equipment, Net

Property and equipment, net consists of the following:


	September 30, 2023		December 31, 2022
Gross property and equipment	$	25,084	$	20,792
Less: accumulated depreciation and amortization	(18,522)		(16,160)
Property and equipment, net	$	6,562	$	4,632

Acquired Intangible Assets, Net

Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following:


	September 30, 2023		December 31, 2022
Developed technology	$	5,050	$	5,050
Customer relationships	1,270		1,270
Backlog and tradename	410		410
	6,730		6,730
Less: accumulated amortization	(6,730)		(6,730)
Acquired intangible assets, net	$	—	$	—

Accrued Liabilities and Current Portion of Long-Term Liabilities

Accrued liabilities and current portion of long-term liabilities consist of the following:


	September 30, 2023		December 31, 2022
Accrued payroll and related liabilities	$	3,938	$	3,632
Operating lease liabilities, current	2,423		1,391
Current portion of accrued liabilities for asset financings	1,295		876
Deferred revenue	400		230
Accrued interest payable	88		246
Accrued commissions and royalties	30		210


Other	2,029		2,264
Accrued liabilities and current portion of long-term liabilities	$	10,203	$	8,849

Contract with Customer, Contract Asset, Contract Liability, and Receivable

The change in deferred revenue is as follows:


	Nine Months Ended
	September 30,
	2023		2022
Deferred revenue:
Balance at beginning of period	$	230	$	50
Revenue deferred	385		940
Revenue recognized	(215)		(730)
Balance at end of period	$	400	$	260

Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Aug. 02, 2017
Goodwill [Line Items]
Goodwill	$ 18,407	$ 18,407
ViXS Systems, Inc.
Goodwill [Line Items]
Goodwill			$ 18,407

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We operate in one segment: the design, development, marketing and sale of IC solutions for use in electronic display devices. We generate our revenue from two broad product markets: the Mobile market and the Home & Enterprise market. The chief operating decision maker, or CODM, is our CEO. Our CODM evaluates financial performance and allocates resources using financial information reported on a company-wide basis. The Cinema market does not contribute material revenue and is therefore being included in this one segment.

Geographic Information

Revenue by geographic region, is as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
China	$	8,777	$	5,482	$	20,906	$	21,371
Japan	7,070		10,908		17,752		27,604
Taiwan	185		464		836		2,421
United States	—		648		109		1,736
Korea	—		50		—		50
Europe	—		—		—		76

	$	16,032	$	17,552	$	39,603	$	53,258

Significant Customers

The percentage of revenue attributable to our distributors, top five end customers, and individual distributors or end customers that represented 10% or more of revenue in at least one of the periods presented, is as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Distributors:
All distributors	60	%	57	%	63	%	61	%
Distributor A	50	%	29	%	45	%	33	%
Distributor B	4	%	23	%	8	%	16	%

End customers: 1
Top five end customers	93	%	83	%	88	%	79	%
End customer A	40	%	39	%	37	%	36	%
End customer B	26	%	15	%	25	%	13	%
End customer C	20	%	—	%	12	%	—	%
End customer D	3	%	12	%	4	%	6	%
End customer E	—	%	13	%	—	%	19	%

1End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.

The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:


	September 30, 2023		December 31, 2022
Account W	62	%	31	%
Account X	27	%	27	%
Account Y	—	%	12	%
Account Z	—	%	11	%

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES Indemnifications Certain of our agreements include indemnification provisions for claims from third parties relating to our intellectual property. It is not possible for us to predict the maximum potential amount of future payments or indemnification costs under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. We have not made any payments under these agreements in the past, and as of September 30, 2023, we have not incurred any material liabilities arising from these indemnification obligations. In the future, however, such obligations could materially impact our results of operations. Legal Proceedings We are subject to legal matters that arise from time to time in the ordinary course of our business. Although we currently believe that resolving such matters, individually or in the aggregate, will not have a material adverse effect on our financial position, our results of operations, or our cash flows, these matters are subject to inherent uncertainties and our view of these matters may change in the future. Other Contractual Obligations As part of the Acquisition, we acquired debt associated with an agreement with the Government of Canada called Technology Partnerships Canada ("TPC"). As part of the TPC agreement, ViXS Systems, Inc. was provided funding to assist in research and development expenses of which a portion was later required to be repaid because the conditions for repayment were met. The scheduled payments are made on a quarterly basis and end in January 2024. As of September 30, 2023, $128 is included in accrued liabilities and current portion of long-term liabilities in our condensed consolidated balance sheets. Contract Manufacturers In the normal course of business, we commit to purchase products from our contract manufacturers to be delivered within the next approximately 90 days. In certain situations, should we cancel an order, we could be required to pay cancellation fees. Such obligations could impact our immediate results of operations but would not materially affect our business.

Basis of Presentation (Details)	Sep. 30, 2023 patent
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of patents held	278

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Supplemental Information Related to Leases

Supplemental information related to lease expense and valuation of the ROU assets and lease liabilities was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating lease cost:	$	765	$	659	$	2,129	$	2,004


	Nine Months Ended
	September 30,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,025		$	2,076
Supplemental non-cash information related to lease liabilities arising from obtaining right-of-use assets	3,881			734
Weighted average remaining lease term (in years)	2.39			2.90
Weighted average discount rate	6.93		%	4.18		%

Future Minimum Payments Under Non-cancellable Leases

Future minimum lease payments under non-cancellable leases as of September 30, 2023 were as follows:


Operating Lease Payments
Three months ending December 31, 2023	$	594
Years ending December 31:
2024	2,733
2025	1,856
2026	698
Thereafter	86



Total operating lease payments	5,967
Less imputed interest	(501)
Total operating lease liabilities	$	5,466

Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
IC sales	$	15,972	$	17,188	$	39,187	$	52,337
Engineering services, license and other	60		364		416		921
Total revenues	$	16,032	$	17,552	$	39,603	$	53,258

IC sales by end market:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Mobile market	$	8,237	$	5,738	$	18,158	$	18,519
Home & Enterprise market	7,735		11,450		21,029		33,818
Total IC sales	$	15,972	$	17,188	$	39,187	$	52,337

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Incomes Taxes	INCOME TAXES The provision for income taxes during the 2023 and 2022 periods is primarily comprised of current and deferred tax expense in profitable cost-plus foreign jurisdictions, accruals for tax contingencies in foreign jurisdictions and benefits for the reversal of previously recorded foreign tax contingencies due to the expiration of the applicable statutes of limitation. We recorded a benefit for the reversal of previously recorded foreign tax contingencies of $2 and $121 during the first nine months of 2023 and 2022, respectively. As we do not believe that it is more likely than not that we will realize a benefit from our U.S. net deferred tax assets, including our U.S. net operating losses, we continue to provide a full valuation allowance against essentially all of those assets, therefore, we do not incur significant U.S. income tax expense or benefit. We have not recorded a valuation allowance against our other foreign net deferred tax assets, with the exception of Canada and China, as we believe that it is more likely than not that we will realize a benefit from those assets. As of September 30, 2023 and December 31, 2022, the amount of our uncertain tax positions was a liability of $381 and $378, respectively, as well as a contra deferred tax asset of $1,443 and $1,353, respectively. A number of years may elapse before an uncertain tax position is resolved by settlement or statute of limitation. Settlement of any particular position could require the use of cash. If the uncertain tax positions we have accrued for are sustained by the taxing authorities in our favor or if the statute of limitation expires, the reduction of the liability will reduce our effective tax rate. We reasonably expect reductions in the liability for unrecognized tax benefits and interest and penalties of approximately $3 within the next twelve months due to the expiration of statutes of limitation in foreign jurisdictions. We recognize interest and penalties related to uncertain tax positions in income tax expense in our condensed consolidated statements of operations.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	BASIS OF PRESENTATION Nature of Business Pixelworks is a leading provider of high-performance and power-efficient visual processing semiconductor and software solutions that enable consistently high-quality and authentic viewing experiences in a wide variety of applications. We define our primary target markets as Mobile (smartphone and tablet), Home & Enterprise (projectors, personal video recorders ("PVR"), and over-the-air ("OTA") streaming devices), and Cinema (creation, remastering, and delivery of digital video content). Previously we classified our primary target markets as Mobile, Projector, Video Delivery and Cinema, but have since aggregated the Projector and Video Delivery categories into one market called "Home & Enterprise". Pixelworks has been a pioneer in visual processing technology for over 20 years. We were one of the first companies to commercially launch a video System on Chip ("SoC") capable of deinterlacing 1080i HDTV signals and one of the first companies with a commercial dual-channel 1080i deinterlacer integrated circuit. We launched one of the industry’s first single-chip SoCs for digital projection. We were the first company to integrate motion estimation / motion compensation technology ("MEMC") as a mobile-optimized solution for smartphones. In 2019, we introduced our Hollywood award-winning TrueCut MotionTM® video platform, the industry’s first motion grading technology that allows fine tuning of motion appearance in cinematic content. As of September 30, 2023, we had an intellectual property portfolio of 278 patents related to the visual display of digital image data. We focus our research and development efforts on developing video algorithms that improve quality, and architectures that reduce system power, cost, bandwidth and increase overall system performance and device functionality. We seek to expand our technology portfolio through internal development and co-development with business partners, and we continually evaluate acquisition opportunities and other ways to leverage our technology into other high-value markets. Our core visual processing technology intelligently processes digital images and video from a variety of sources and optimizes the content for a superior viewing experience. Rapid growth in video and gaming consumption, combined with the move towards bright, high resolution, high frame rate and high refresh rate displays, especially in mobile, is increasing the demand for our solutions. Our technologies can be applied across a wide range of applications: cinema theaters, low-power mobile tablets, smartphones, streaming devices, and digital projectors for the home, school, or the workplace. Our products are designed and optimized for power, cost, bandwidth, viewer experience, and overall system performance, according to the requirements of the specific application. On occasion, we have also licensed our technology. During the third quarter of 2021, we engaged in a strategic plan to re-align our Mobile and Home & Enterprise businesses to improve their focus on their Asia-centered customers and employee stakeholders. Our subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. (or "PWSH"), now operates these businesses as a full profit-and-loss center underneath Pixelworks. In connection with this strategic plan, the Company and PWSH closed three separate financing transactions in 2021 and 2022, which are further described in "Note 13: Redeemable Non-Controlling Interest and Equity Interest of PWSH Sold to Employees" and "Note 14: Non-Controlling Interest", which are incorporated by reference into this section. PWSH is in the process of preparing to file an application for an initial public offering of PWSH shares on the Shanghai Stock Exchange’s Science Technology Innovation Board, known as the STAR Market (the “Listing”). We believe that the Listing will have many benefits, including improved access to new capital markets and the funding of PWSH’s growth worldwide. The process of going public on the STAR Market is lengthy and includes several periods of review by various government agencies of the People’s Republic of China (“PRC”), such as the Shanghai Stock Exchange (“SSE”) and the China Securities Regulatory Commission (“CSRC”). There is no guarantee that PWSH will be approved for a Listing at any point in the future. The CSRC and the SSE have recently tightened the standards for the STAR Market and are currently advising companies that are not yet profitable under China GAAP standards against filing an IPO application in the present environment. The Company believes this is in large part due to the current economic conditions in China and the recent performance of companies already listed on the STAR Market that were not profitable at the time of their IPO. PWSH is not currently profitable under China GAAP standards. The CSRC and the SSE may relax the standards, but there is no guarantee that this will happen in any particular time frame. The Company will continue to prepare our application so it is ready to file once the situation changes or PWSH achieves profitability under China GAAP standards. Any listing of PWSH on the STAR Market will not change the status of PXLW as a U.S. public company. We are neither a PRC operating company nor do we conduct our operations in China through the use of variable interest entities. Pixelworks was founded in 1997 and is incorporated under the laws of the state of Oregon. On August 2, 2017, we acquired ViXS Systems, Inc., a corporation organized in Canada ("ViXS"). Condensed Consolidated Financial Statements The financial information included herein for the three and nine months ended September 30, 2023 and 2022 is prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and is unaudited. Such information reflects all adjustments, consisting of only normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of our condensed consolidated financial statements for these interim periods. The financial information as of December 31, 2022 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 8, 2023, and should be read in conjunction with such consolidated financial statements. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2023. Recent Accounting Pronouncements The Company’s recently adopted accounting pronouncements are disclosed in "Note 2. Summary of Significant Accounting Policies" in Part II, Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 8, 2023. We did not adopt any new accounting pronouncements during the three or nine months ended September 30, 2023. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, useful lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates.

Earnings (Loss) Per Share - Antidilutive Effect on Weighted Average Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Employee equity incentive plans
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,183	3,997	4,001	4,003

Leases - Supplemental information related to leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost:	$ 765	$ 659	$ 2,129	$ 2,004
Operating cash flows from operating leases			2,025	2,076
Supplemental non-cash information related to lease liabilities arising from obtaining right-of-use assets			$ 3,881	$ 734
Weighted average remaining lease term (in years)	2 years 4 months 20 days	2 years 10 months 24 days	2 years 4 months 20 days	2 years 10 months 24 days
Weighted average discount rate	6.93%	4.18%	6.93%	4.18%

Balance Sheet Components - Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Change in Contract with Customer, Liability [Abstract]
Balance at beginning of period	$ 230	$ 50
Revenue deferred	385	940
Revenue recognized	(215)	(730)
Balance at end of period	$ 400	$ 260

Research and Development (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Research and Development (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development arrangement, receivable recognized	$ 43	$ 0	$ 1,943	$ 1,838
Upfront Payment
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development arrangement, receivable	5,800		5,800
First Additional Payment
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development arrangement, receivable	2,500		2,500
Second Additional Payment
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development arrangement, receivable	1,900		1,900
Third Additional Payment
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development arrangement, receivable	$ 1,300		$ 1,300

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Reversal of uncertain tax positions	$ 2	$ 121
Liability for uncertain tax positions	381		$ 378
Reduction to deferred tax assets	1,443		$ 1,353
Estimated decrease in total gross unrecognized tax benefits as a result of resolutions of global tax examinations and expiration of applicable statutes of limitations, including interest and penalties	$ 3

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 50,318	$ 56,821
Accounts receivable, net	10,165	10,047
Inventories	5,905	1,760
Prepaid expenses and other current assets	2,307	3,745
Total current assets	68,695	72,373
Property and equipment, net	6,562	4,632
Operating lease right-of-use assets	5,365	3,331
Other assets, net	2,145	3,580
Goodwill	18,407	18,407
Total assets	101,174	102,323
Current liabilities:
Accounts payable	4,356	3,143
Accrued liabilities and current portion of long-term liabilities	10,203	8,849
Current portion of income taxes payable	138	519
Total current liabilities	14,697	12,511
Long-term liabilities, net of current portion	1,645	1,005
Deposit liability	13,227	13,537
Operating lease liabilities, net of current portion	3,043	2,148
Income taxes payable, net of current portion	951	872
Total liabilities	33,563	30,073
Commitments and contingencies (Note 12)
Redeemable non-controlling interest	27,398	28,919
Shareholders’ equity:
Preferred stock		0
Common stock	485,205	481,229
Accumulated other comprehensive income	4,439	2,178
Accumulated deficit	(473,417)	(450,985)
Total Pixelworks, Inc. shareholders’ equity	16,227	32,422
Non-controlling interest	23,986	10,909
Total shareholders' equity	40,213	43,331
Total liabilities, redeemable non-controlling interest and shareholders’ equity	$ 101,174	$ 102,323

Leases - Narrative (Details) $ in Thousands	9 Months Ended
Leases - Narrative (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Liabilities for leases that have not yet commenced	$ 0
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms on operating leases	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms on operating leases	4 years

Non-controlling Interest

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Non-controlling Interest

REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY INTEREST OF PWSH SOLD TO EMPLOYEES

During the third quarter of 2021, Pixelworks and our subsidiary, PWSH, entered into a capital increase agreement (the "Capital Increase Agreement") with certain private equity and strategic investors based in China (collectively, the “Investors”) and certain entities which collectively are owned by approximately 75% of the employees of PWSH and its subsidiaries (collectively, the “ESOP”) (together, the “Investors” and the “ESOP” are referred to below as the “Capital Contributors”). The ESOP entities do not qualify as Employee Share Ownership Programs under IRC 4975(e)(7), but do qualify as employee share ownership plans qualified under the laws of China, under which the employees hold a pro rata share of an ESOP partnership entity that then holds an equity ownership in trust for employees.

Under the Capital Increase Agreement, during 2021, the Investors invested approximately $30,844 in exchange for a redeemable non-controlling equity interest of 10.45% of PWSH and the ESOP entities invested approximately $12,329 in exchange for a redeemable non-controlling equity interest representing 5.95% of PWSH, which includes a discount of 30% from the valuation paid by the Investors. The agreement further provided that the Capital Contributors have a liquidation preference in PWSH, a right to co-sell their interest in PWSH along with the Company on the same terms and conditions as the Company, a right to participate on a pro rata basis in any future financing rounds of PWSH, and the Company’s agreement while it remains an owner of PWSH and for two (2) years thereafter to not compete with the business of PWSH, nor solicit or otherwise cause any of PWSH’s core employees or customers to end their relationship with PWSH. These rights all expire upon initial public offering on the STAR Market.

Prior to entering into a certain supplemental agreement, each Investor had the right to require PWSH to redeem the entire equity interest held by such Investor, at the original purchase price paid plus 3% annual interest, if PWSH did not consummate an initial public offering on the STAR Market on or before June 30, 2024. Based on this contingency, the initial carrying amount of the redeemable non-controlling interests was recorded at fair value on the date of issuance of PWSH equity interests, net of issuance costs and presented in temporary equity on the condensed consolidated balance sheets. Until the interest that was to accrue on the redeemable non-controlling interest was deleted with the Supplemental Agreement, the Company had elected to accrete changes in the redemption value of the redeemable non-controlling interests from the issuance date through the earliest redemption date of June 30, 2024 using the interest method (as the non-controlling interest was probable of becoming redeemable upon the passage of time for the original issuance price plus 3% annual interest).

On March 24, 2022, Pixelworks and our subsidiary, PWSH, entered into a Supplemental Agreement to the Capital Increase Agreement (the “Supplemental Agreement”) with the Capital Contributors. The Supplemental Agreement, among other things, deletes the interest that was to accrue on the redemption obligation of affiliated entities of PWSH, and adds a provision that will suspend the redemption obligation on the date PWSH files its initial public offering listing documents pending the approval of such documents by the applicable authorities. The suspension ends if PWSH withdraws the listing application or such application is finally rejected, at which point the redemption obligation will once again become effective with a deadline of the later of the date of the withdrawal/rejection and June 30, 2024.

In connection with the Supplemental Agreement, on March 24, 2022, Pixelworks and the Capital Contributors entered into a Side Letter to the Capital Increase Agreement (“Side Letter”) which provides that, in the event of a change in control of Pixelworks, Pixelworks shall ensure that the definitive agreement related to such transaction includes a post-closing repurchase covenant that requires the successor entity in such transaction to repurchase all of PWSH’s equity held by a Capital Contributor at the original subscription price plus 20% upon the request of the Capital Contributor within 60 days after (a) the change in control; or (b) if PWSH fails to consummate its initial public offering by June 30, 2024, because Pixelworks decides against pursuing the offering. If PWSH continues to diligently pursue the application but the initial public offering still fails to launch by June 30, 2024, the redemption obligation of the Supplemental Agreement would instead apply. The Side Letter terminates on the launch date of PWSH’s initial public offering.

After entering into the Supplemental Agreement, the redeemable non-controlling interest will no longer accrete up to a redemption amount because the interest component has been removed. The Investors will continue to hold PWSH equity and be considered as a redeemable non-controlling interest, however, the redeemable non-controlling interest is only probable of becoming redeemable upon the passage of time for its original issuance price. Therefore, until the redemption feature expires, we will only allocate profits to the redeemable non-controlling interest and continue to recognize the non-controlling interest at an amount at least equal to its redemption value. Because the redeemable non-controlling interest is denominated in RMB, it will be revalued to USD at the end of each reporting period, with the changes in carrying value attributable to foreign currency being reflected within accumulated other comprehensive income on the condensed consolidated balance sheets.

Each of the ESOP entities has the right to require a repurchase of the entire equity interest held by such ESOP entities at the original purchase price paid plus 5% annual interest, if PWSH does not achieve its Listing on or before December 31, 2024. Because the ESOP entities are owned by employees of PWSH and its subsidiaries and employees are required to render service until either the initial public offering on the STAR Market or repurchase date, the equity interest owned by the ESOP entities will be accounted for under ASC 718 (Compensation - Stock Compensation). The initial carrying amount of the investment has been recorded as a long-term deposit liability on the condensed consolidated balance sheets as the initial public offering cannot be considered probable at this time. We will recognize the periodic interest component of the award as compensation expense and accrete the long-term deposit liability to its redemption value as of December 31, 2024. Because the long-term deposit liability is denominated in RMB and is considered a monetary liability as defined in ASC 255 (Changing Prices), it will be revalued to USD at the end of each reporting period, with the changes in carrying value recorded as foreign currency gain/loss in our condensed consolidated statements of operations. The Supplemental Agreement does not remove the obligation to repurchase the ESOP interests if PWSH fails to consummate an initial public offering by December 31, 2024 along with the 5% annual simple interest.

On December 21, 2022, the Company and its subsidiary, PWSH, entered into a capital increase agreement (the “CIA”) with Jing Xin Ying (Shanghai) Management Consulting Partnership (Limited Partnership), an entity owned by certain of the employees of PWSH (the “ESOP”). The ESOP invested approximately $1,407 in exchange for an equity interest in PWSH of 0.54%, based on a pre-money valuation of PWSH of RMB 1,750,000 ($251,256 USD), which includes a discount of 50%.

The CIA provides that if there is a change in control of PWSH that closes prior to its filing an application for the Listing, each capital contributor would be entitled to a minimum return of 10% on the price they paid for their respective equity interest, payable by the Company in cash at the close of the change in control transaction, with such right terminating automatically upon the filing by PWSH of the Listing. The ESOP has a redemption right that is identical to that held by the other ESOP investors from the financing round that closed in 2021: if the Listing is not consummated prior December 31, 2024, the 2022 ESOP may elect to require a repurchase of its respective equity interest for a price equal to the initial purchase price paid plus annual simple interest at a rate of 5%.

The process of going public on the STAR Market includes several periods of review and is therefore a lengthy process. There can be no assurances that PWSH will complete the Listing by June 30, 2024, or at all. In the event Pixelworks is required to redeem the entire equity interest held by the Investors or the ESOP entities, we may be required to seek additional capital in order to redeem their PWSH shares and there would be no assurances that such capital would be available on terms acceptable to us, if at all. Any redemptions could have a material adverse effect on our business, financial condition and results of operations. The listing of PWSH on China's STAR Market will not change our status as a U.S. public company.

The components of the change in redeemable non-controlling interests for the nine months ended September 30, 2023 are presented in the following table (in thousands):


Carrying Value of Redeemable Non-Controlling Interest as of January 1, 2023	$	28,919


Net loss attributable to redeemable non-controlling interest	(149)
Effect of foreign currency translation attributable to redeemable non-controlling interest	(1,372)
Carrying Value of Redeemable Non-Controlling Interest as of September 30, 2023	$	27,398

NON-CONTROLLING INTEREST

On August 15, 2022, the Company entered into an Equity Transfer Agreement with certain private equity investors based in China (Hainan Qixin Investment Partnership (Limited Partnership) and Suzhou Saixiang Equity Investment Partnership (Limited Partnership)) (collectively, the “Purchasers”). Under this agreement, the Purchasers agreed to pay to the Company, subject to customary closing conditions, a total of 87,500 RMB, approximately $10,738 (net of issuance costs) at closing, in exchange for a 2.74% equity interest in PWSH. The Company incurred costs related to the sale of equity in PWSH of $275 paid to a third party for assisting in the transaction close as well as 8,408 RMB to fulfill Chinese withholding tax requirements. Both of these costs are direct and incremental and related to the sale of equity in PWSH and as such will be included as costs that reduce proceeds and carrying amount of the NCI in the Company’s balance sheet.

The Equity Transfer Agreement provides the Purchasers with some additional rights: (1) if there is a change in control of PWSH that closes prior to its filing an application for a listing on the STAR Board of the Shanghai Stock Exchange (the “Listing Application”), each Purchaser would be entitled to a minimum return of 10% on the price they paid for their respective equity interest, payable by the Company in cash at the close of the change in control transaction, with such right terminating automatically upon the filing by PWSH of the Listing Application; and (2) the Company would cause PWSH to give each Purchaser a right to participate on a pro rata basis in any future financing rounds of PWSH, which right also would expire on the filing of a Listing Application.

On December 21, 2022, the Company and its subsidiary, PWSH, entered into a capital increase agreement (the “CIA”) with certain private equity investors based in China who have agreed to pay a total of 99,000 RMB, approximately $14,596 (net of issuance costs) at closing, in exchange for an equity interest in PWSH of 2.76%, based on a pre-money value of PWSH of 3,500,000 RMB, approximately $501,400. This transaction closed in February 2023.

When the Company’s relative ownership interest in PWSH changes, adjustments to non-controlling interest and paid-in capital, tax effected, will occur. Because these changes in the ownership interest in PWSH do not result in a change of control, the transactions are accounted for as equity transactions under ASC Topic 810, Consolidation, which requires that any differences between the carrying value of the Company’s interest in PWSH and the fair value of the consideration received are recognized directly in equity and attributed to the controlling interest. Additionally, there are no substantive profit-sharing arrangements that would cause distributions to be other than pro rata. Therefore, profits and losses are attributed to the common shareholders of PWSH and non-controlling interest pro rata based on ownership interests in PWSH. The following table reconciles the initial investment by the Purchasers and the carrying value of their non-controlling interest as of the Closing Date (as defined in the Equity Transfer Agreement):


Carrying Value of Permanent Equity Non-Controlling Interest as of January 1, 2023	$	10,909


Increase in additional paid-in capital	14,742
Net loss attributable to non-controlling interest	(630)
Closing and direct costs incurred	(146)
Effect of foreign currency translation attributable to non-controlling interest	(889)
Carrying Value of Permanent Equity Non-Controlling Interest as of September 30, 2023	$	23,986

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Other Comprehensive Income [Abstract]
Net loss	$ (7,333)	$ (4,496)	$ (23,211)	$ (13,626)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment	161	1,657	1,372	3,173
Comprehensive loss	(7,172)	(2,839)	(21,839)	(10,453)
Less: Net (income) loss attributable to redeemable non-controlling interest and non-controlling interest	334	0	779	(470)
Total comprehensive loss attributable to Pixelworks, Inc.	$ (6,838)	$ (2,839)	$ (21,060)	$ (10,923)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount of Net Income (Loss) attributable to noncontrolling interest.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

Redeemable Non-controlling Interest and Equity Interest of PWSH Sold to Employees

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Redeemable Non-controlling Interest and Equity Interest of PWSH Sold to Employees

REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY INTEREST OF PWSH SOLD TO EMPLOYEES

The components of the change in redeemable non-controlling interests for the nine months ended September 30, 2023 are presented in the following table (in thousands):


Carrying Value of Redeemable Non-Controlling Interest as of January 1, 2023	$	28,919


Net loss attributable to redeemable non-controlling interest	(149)
Effect of foreign currency translation attributable to redeemable non-controlling interest	(1,372)
Carrying Value of Redeemable Non-Controlling Interest as of September 30, 2023	$	27,398

NON-CONTROLLING INTEREST


Carrying Value of Permanent Equity Non-Controlling Interest as of January 1, 2023	$	10,909


Increase in additional paid-in capital	14,742
Net loss attributable to non-controlling interest	(630)
Closing and direct costs incurred	(146)
Effect of foreign currency translation attributable to non-controlling interest	(889)
Carrying Value of Permanent Equity Non-Controlling Interest as of September 30, 2023	$	23,986

Earnings (Loss) Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net loss	$ (7,333)	$ (4,496)	$ (23,211)	$ (13,626)
Less: Net (income) loss attributable to redeemable non-controlling interest and non-controlling interest	334	0	779	(470)
Net loss attributable to Pixelworks, Inc. - for purposes of earnings per share calculation	$ (6,999)	$ (4,496)	$ (22,432)	$ (14,096)
Weighted average shares outstanding - basic	56,410	54,826	55,917	54,120
Weighted average shares outstanding - diluted	56,410	54,826	55,917	54,120
Net loss attributable to Pixelworks Inc. per share - diluted (dollars per share)	$ (0.12)	$ (0.08)	$ (0.40)	$ (0.26)
Net loss attributable to Pixelworks Inc. per share - basic (dollars per share)	$ (0.12)	$ (0.08)	$ (0.40)	$ (0.26)

- Definition

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

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- Definition

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

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-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-7

+ Details

- Definition

Amount of Net Income (Loss) attributable to noncontrolling interest.

+ References + Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 5
-Subparagraph (SAB Topic 6.B)
-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
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-Paragraph 1
-Subparagraph (a)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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-Section 45
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Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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-Name Accounting Standards Codification
-Section 45
-Paragraph 11
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-11

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Condensed Consolidated Financial Statements	Condensed Consolidated Financial Statements The financial information included herein for the three and nine months ended September 30, 2023 and 2022 is prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and is unaudited. Such information reflects all adjustments, consisting of only normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of our condensed consolidated financial statements for these interim periods. The financial information as of December 31, 2022 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 8, 2023, and should be read in conjunction with such consolidated financial statements. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2023.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company’s recently adopted accounting pronouncements are disclosed in "Note 2. Summary of Significant Accounting Policies" in Part II, Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 8, 2023. We did not adopt any new accounting pronouncements during the three or nine months ended September 30, 2023.
Use of Estimates	Use of EstimatesThe preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, useful lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates.
Receivables, Policy	Accounts receivable are contract assets that arise from the performance of our obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments.
Inventory, Policy	Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value).

- Definition

Disclosure of inventory accounting policy for inventory classes, including, but not limited to, basis for determining inventory amounts, methods by which amounts are added and removed from inventory classes, loss recognition on impairment of inventories, and situations in which inventories are stated above cost.

+ References + Details

Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Revenue by Geographic Region

Revenue by geographic region, is as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
China	$	8,777	$	5,482	$	20,906	$	21,371
Japan	7,070		10,908		17,752		27,604
Taiwan	185		464		836		2,421
United States	—		648		109		1,736
Korea	—		50		—		50
Europe	—		—		—		76

	$	16,032	$	17,552	$	39,603	$	53,258

Schedule of Revenue from Significant Customers


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Distributors:
All distributors	60	%	57	%	63	%	61	%
Distributor A	50	%	29	%	45	%	33	%
Distributor B	4	%	23	%	8	%	16	%

End customers: 1
Top five end customers	93	%	83	%	88	%	79	%
End customer A	40	%	39	%	37	%	36	%
End customer B	26	%	15	%	25	%	13	%
End customer C	20	%	—	%	12	%	—	%
End customer D	3	%	12	%	4	%	6	%
End customer E	—	%	13	%	—	%	19	%

1End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.

Schedule of Accounts Receivable Percentage from Significant Customers

The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:


	September 30, 2023		December 31, 2022
Account W	62	%	31	%
Account X	27	%	27	%
Account Y	—	%	12	%
Account Z	—	%	11	%

Non-controlling Interest - Narrative (Details) ¥ in Thousands, $ in Thousands					3 Months Ended
	Dec. 21, 2022 USD ($)	Dec. 21, 2022 CNY (¥)	Aug. 15, 2022 USD ($)	Aug. 15, 2022 CNY (¥)	Sep. 30, 2022 USD ($)
Noncontrolling Interest [Line Items]
Increase in non-controlling interest due to issuance of stock					$ 10,738
Equity Transfer Agreement
Noncontrolling Interest [Line Items]
Costs related to the sale of equity			$ 275	¥ 8,408
Minimum rate of return	10.00%	10.00%	10.00%	10.00%
The Purchasers \| Equity Transfer Agreement
Noncontrolling Interest [Line Items]
Increase in non-controlling interest due to issuance of stock	$ 14,596	¥ 99,000	$ 10,738	¥ 87,500
Ownership percentage by noncontrolling owners	2.76%	2.76%	2.74%	2.74%

Redeemable Non-controlling Interest and Equity Interest of PWSH Sold to Employees - Narrative (Details) ¥ in Thousands, $ in Thousands		3 Months Ended
	Dec. 21, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2023	Feb. 28, 2023 USD ($)	Feb. 28, 2023 CNY (¥)	Dec. 21, 2022 CNY (¥)	Mar. 24, 2022
Redeemable Noncontrolling Interest [Line Items]
Increase in non-controlling interest due to issuance of stock		$ 10,738
ESOP
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage				75.00%
Annual interest percentage included				0.05
ESOP \| Equity Sale to ESOP
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage	0.54%		5.95%				0.54%
Increase in non-controlling interest due to issuance of stock	$ 1,407		$ 12,329
Discount on valuation	0.50		0.30				0.50
Pre-money valuation	$ 251,256				$ 501,400	¥ 3,500,000	¥ 1,750,000
The Investors
Redeemable Noncontrolling Interest [Line Items]
Annual interest percentage upon change in control repurchase covenant								0.20
Annual interest percentage included				0.03
The Investors \| Equity Sale to Investors
Redeemable Noncontrolling Interest [Line Items]
Increase in non-controlling interest due to issuance of stock			$ 30,844
Ownership percentage by noncontrolling owners			10.45%

Risks and Uncertainties	9 Months Ended
Risks and Uncertainties	Sep. 30, 2023
Risks and Uncertainties [Abstract]
Risks and Uncertainties	RISKS AND UNCERTAINTIES Concentration of Suppliers We do not own or operate a semiconductor fabrication facility and do not have the resources to manufacture our products internally. We rely on a limited number of foundries and assembly and test vendors to produce all of our wafers and for completion of finished products. We do not have any long-term agreements with any of these suppliers. In light of these dependencies, it is reasonably possible that failure to perform by one of these suppliers could have a severe impact on our results of operations. Additionally, the concentration of these vendors within Taiwan and the People’s Republic of China increases our risk of supply disruption due to natural disasters, economic instability, political unrest or other regional disturbances. Risk of Technological Change The markets in which we compete, or seek to compete, are subject to rapid technological change, frequent new product introductions, changing customer requirements for new products and features, and evolving industry standards. The introduction of new technologies and the emergence of new industry standards could render our products less desirable or obsolete, which could harm our business. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash equivalents and accounts receivable. We limit our exposure to credit risk associated with cash equivalent balances by holding our funds in high quality, highly liquid money market accounts. We limit our exposure to credit risk associated with accounts receivable by carefully evaluating creditworthiness before offering terms to customers.

Interest Income and Other, Net (Tables)

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Interest Income and Other, Net

Interest income and other, net, consists of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Interest income	$	500	$	165	$	1,487	$	388
Interest expense	(29)		(10)		3		(32)
Other income	—		10		125		72



Total interest income and other, net	$	471	$	165	$	1,615	$	428

Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue from External Customer [Line Items]
Revenues	$ 16,032	$ 17,552	$ 39,603	$ 53,258
IC sales
Revenue from External Customer [Line Items]
Revenues	15,972	17,188	39,187	52,337
IC sales \| Mobile Market
Revenue from External Customer [Line Items]
Revenues	8,237	5,738	18,158	18,519
IC sales \| Home And Enterprise Market
Revenue from External Customer [Line Items]
Revenues	7,735	11,450	21,029	33,818
Engineering services, license and other
Revenue from External Customer [Line Items]
Revenues	$ 60	$ 364	$ 416	$ 921

- 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
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss	$	(7,333)	$	(4,496)	$	(23,211)	$	(13,626)
Less: Net (income) loss attributable to redeemable non-controlling interest and non-controlling interest	334		—		779		(470)

Net loss attributable to Pixelworks, Inc. - for purposes of earnings per share calculation	$	(6,999)	$	(4,496)	$	(22,432)	$	(14,096)
Weighted average shares outstanding - basic and diluted	56,410		54,826		55,917		54,120




Net loss attributable to Pixelworks, Inc. per share - basic and diluted	$	(0.12)	$	(0.08)	$	(0.40)	$	(0.26)

Antidilutive Securities Excluded from Computation of Earnings Per Share

The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands):


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Employee equity incentive plans	4,183	3,997	4,001	4,003

Segment Information - Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue, net	$ 16,032	$ 17,552	$ 39,603	$ 53,258
China
Revenue, net	8,777	5,482	20,906	21,371
Japan
Revenue, net	7,070	10,908	17,752	27,604
Taiwan
Revenue, net	185	464	836	2,421
United States
Revenue, net	0	648	109	1,736
Korea
Revenue, net	0	50	0	50
Europe
Revenue, net	$ 0	$ 0	$ 0	$ 76

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

+ Details

Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Gross property and equipment	$ 25,084	$ 20,792
Less: accumulated depreciation and amortization	(18,522)	(16,160)
Property and equipment, net	$ 6,562	$ 4,632

Noncontrolling Interest - Initial Investment Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Carrying Value Non-Controlling Interest, Beginning Balance			$ 10,909	$ 10,909
Net loss attributable to non-controlling interest	$ (185)	$ (107)	(338)	(630)
Effect of foreign currency translation attributable to redeemable non-controlling interest				(889)
Carrying Value Non-controlling Interest, Ending Balance	23,986			23,986
Equity Transfer Agreement
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Carrying Value Non-Controlling Interest, Beginning Balance			$ 10,909	10,909
Increase in additional paid-in capital				14,742
Closing and direct costs incurred				(146)
Carrying Value Non-controlling Interest, Ending Balance	$ 23,986			$ 23,986

- Definition

Amount of equity (deficit) attributable to noncontrolling interest. Excludes temporary equity.

+ References

+ Details

Segment Information - Revenue by Major Customer (Details) - Revenue Benchmark - Customer Concentration Risk

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

All distributors

Revenue, Major Customer

Percentage of revenue

60.00%

57.00%

63.00%

61.00%

Distributor A

Revenue, Major Customer

Percentage of revenue

50.00%

29.00%

45.00%

33.00%

Distributor B

Revenue, Major Customer

Percentage of revenue

4.00%

23.00%

8.00%

16.00%

Top five end customers

Revenue, Major Customer

Percentage of revenue

93.00%

^[1]

83.00%

^[1]

88.00%

79.00%

End customer A

Revenue, Major Customer

Percentage of revenue

40.00%

^[1]

39.00%

^[1]

37.00%

36.00%

End customer B

Revenue, Major Customer

Percentage of revenue

26.00%

^[1]

15.00%

^[1]

25.00%

13.00%

End customer C

Revenue, Major Customer

Percentage of revenue

20.00%

0.00%

12.00%

0.00%

End customer D

Revenue, Major Customer

Percentage of revenue

3.00%

12.00%

4.00%

6.00%

End customer E

Revenue, Major Customer

Percentage of revenue

0.00%

13.00%

0.00%

19.00%

[1]	End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors.

Leases - Future minimum lease payments under noncancellable leases (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
Three months ending December 31, 2023	$ 594
Years ending December 31:
2024	2,733
2025	1,856
2026	698
Thereafter	86
Total operating lease payments	5,967
Less imputed interest	(501)
Total operating lease liabilities	$ 5,466

Marketable Securities and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents information about our assets measured at fair value on a recurring basis in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:


	Level 1		Level 2		Level 3		Total
As of September 30, 2023:
Assets:
Cash equivalents:
Certificates of deposit	$	10,000	$	—	$	—	$	10,000
Money market funds	970		—		—		970







As of December 31, 2022:
Assets:
Cash equivalents:
Money market funds	$	18,836	$	—	$	—	$	18,836
Certificates of deposit	5,000		—		—		5,000

Revenue - Narrative (Details)	9 Months Ended
Revenue - Narrative (Details)	Sep. 30, 2023
Minimum
Disaggregation of Revenue [Line Items]
Contract With Customer, Terms Of Payment	30 days
Maximum
Disaggregation of Revenue [Line Items]
Contract With Customer, Terms Of Payment	60 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock-based compensation	$ (1,252)	$ (1,294)
Cost of revenue
Stock-based compensation	21	(47)	$ 67	$ 20
Cost of revenue \| Acquired intangible assets
Amortization of acquired intangible assets	0	0	0	72
Research and development
Stock-based compensation	452	565	1,470	1,795
Selling, general and administrative
Stock-based compensation	779	776	2,140	2,223
Amortization of acquired intangible assets	$ 0	$ 0	$ 0	$ 18

Marketable Securities and Fair Value Measurements - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	$ 10,000	$ 5,000
Certificates of deposit \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	10,000	5,000
Certificates of deposit \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0	0
Certificates of deposit \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0	0
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	970	18,836
Money market funds \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	970	18,836
Money market funds \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	0	0
Money market funds \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash equivalents:	$ 0	$ 0

Research and Development	9 Months Ended
Research and Development	Sep. 30, 2023
Research and Development [Abstract]
Research and Development	RESEARCH AND DEVELOPMENT During the third quarter of 2021, we entered into a best-efforts co-development agreement with a customer to defray a portion of the research and development expenses we expect to incur in connection with our development of an integrated circuit product. We expect our development costs to exceed the amounts received from the customer, and although we expect to sell units of the product to the customer, there is no commitment or agreement from the customer for such sales at this time. Additionally, we retain ownership of any modifications or improvements to our pre-existing intellectual property and may use such improvements in products sold to other customers. Under the co-development agreement, $5,800 was payable by the customer within 60 days of the date of the agreement and three additional payments of $2,500, $1,900 and $1,300 are each payable upon completion of certain development milestones. As amounts become due and payable, they are offset against research and development expense on a pro rata basis. We recognized offsets to research and development expense of $43 and $0, during the three months ended September 30, 2023 and 2022, respectively and $1,943 and $1,838 during the nine months ended September 30, 2023 and 2022, respectively.

Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Finished goods	$ 4,251	$ 480
Work-in-process	1,654	1,280
Inventories	$ 5,905	$ 1,760

Segment Information - Narrative (Details)	9 Months Ended
Segment Information - Narrative (Details)	Sep. 30, 2023 segment
Segment Reporting [Abstract]
Number of operating segments	1