Milan, Italy; Tokyo, Japan; Seoul, South Korea; Taipei, Taiwan (Republic of China); and Camberley, United Kingdom. Customers do not place purchase orders with TSCs, but do so directly with the
Company or with our distributors. In Japan, customers place purchase orders with authorized distributors or, for certain products, VJCL.
We generally sell our products on the basis of our standard terms and conditions, and we most commonly warrant our products for a period of
two years. Effective January 1, 2017, we extended the warranty period to three years for a range of H Grade, M Grade, and MI Family
DC-DC
products sold after that date. In a limited number of
circumstances, we have entered into supply contracts with certain high-volume customers calling for extended warranty terms. With our distribution partners, we also enter into contracts providing for our product warranties to transfer to the end
customer upon final sale of our product(s) by the distributor.
Because of the technically complex nature of our products and the
applications they address, we maintain an extensive staff of Field Applications Engineers to support our own sales and customer support activities, as well as those of our channel partners. Field Application Engineers, based in our TSCs, provide
direct technical support worldwide by reviewing new applications and technical matters with our channel partners in support of existing and potential customers. Product Line Engineers, located in our Andover headquarters, support Field Application
Engineers assigned to all of our TSCs.
Our direct sales force focuses on higher-volume opportunities involving Advanced Products with
global OEMs (and the Original Design Manufacturers (ODMs) and contract manufacturers serving these OEMs). Because of the high level of product differentiation and the increasing complexity and challenges of customer requirements, we have
experienced, and may continue to experience, extended design cycles before production orders are received.
We also reach customers
through the electronic commerce capabilities of our website, www.vicorpower.com. Registered, qualified customers in the United States, Canada, and certain European countries are able to purchase selected products online. We expanded these
capabilities during 2018 to allow for higher-volume purchases, and we intend in 2019 to expand the geographic regions reached via our website.
Our
web-based
resources are an important element of our efforts to interact with and support
customers. Within our website,
PowerBench
TM
is a workspace of tools and references allowing engineers to select, architect, and implement power systems using our products. During
2018, we continued to enhance our highly differentiated
Whiteboard
TM
tool, which allows users to configure and analyze their own power system designs or those from an extensive library of
designs addressing a wide range of applications. Users can modify the operating condition for each component of their design to match the intended application and perform efficiency and loss analysis of individual components and the full power
system. We continue to enhance and expand the range and capabilities of engineering tools we make available online to customers and prospective customers.
As stated, our strategy involves maintaining high levels of customer engagement and support for design and engineering, which has resulted in
significant expansion of our sales and application engineering infrastructure over historical levels, notably across Asia. We incurred approximately $42,533,000, $40,438,000, and $37,967,000 in marketing and sales expenses in 2018, 2017, and 2016,
respectively, representing approximately 14.6%, 17.7%, and 19.0% of revenues in 2018, 2017, and 2016, respectively.
Manufacturing, Quality Assurance,
and Supply Chain Management
Our 230,000 sq. ft. manufacturing facility is located in Andover, Massachusetts, where we are
headquartered. In this facility, we manufacture Brick Products, with the exception of custom products produced by our Vicor Custom Power and VJCL subsidiaries, and Advanced Products, with the exception of products designed and sourced by our Picor
operating segment, which, given its fabless model, are manufactured, packaged, and tested by third party wafer foundries and packaging contractors in the United States and Asia.
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