18 Dialog Semiconductor Plc | Annual report and accounts 2012 |  Section 2 | Business review Our products and key customers continued Automotive and industrial Design, development and production Dialog supplies motor control ASICs to a leading  European automotive supplier who in turn  delivers Dialog-based windscreen wiper motor  products addressing mid- to high-end European  cars. Additionally, our first product for a  customer in Japan went into production  in 2012.  bulb LED lighting solutions. These devices seek  to deliver optimal control and regulation of  light sources, while maximising their service life.  Through intelligent control, using advanced  digital signal processing, these devices help  to minimise energy consumption.  Dialog outsources its wafer production to select  foundries, principally in Taiwan, Singapore and  China, which provide high-quality products  and have the ability to meet both our stringent  qualification requirements and tight deadlines.  Manufacture, assembly and testing The final assembly of our chips is outsourced  to a number of qualified subcontractors in Asia.  Our test programmes, based on our own and  individual customers’ specifications, are  developed by our test engineers in parallel with  the design process. All test development is  undertaken at our Nabern facility in Germany  using the same type of test equipment and  handling interfaces as our offshore test  subcontractors to speed up the production  transfer process and volume ramp.  We are justifiably proud of the quality and  feature-rich functionality of our mixed signal integrated circuits, achieving high  integration levels. These devices capitalise on Dialog’s expertise  and knowledge of technologies ranging from  power management systems and mixed signal  design, to high voltage circuits and embedded  microprocessors on a single integrated circuit  in an automotive-qualified CMOS process,  including flash memory. Dialog’s power management and clock  companion ICs for the Intel Atom and Freescale  i.MX series of processors provide an optimum  solution for next generation infotainment  systems. These help to deliver video, high fidelity  audio and better GPS and other multimedia  support that reacts in real time to the changing  external environment. For the industrial market, Dialog develops  innovative control ASICs, both for conventional  light sources, such as fluorescent or High- Intensity Discharge (“HID”) lamps. Our future  development focus is on energy-efficient retrofit  Innovation is vital to our continued success.  During 2012, we invested US$127.9 million,  or 16.5% of our revenue, in research and  development. Our ability to develop mixed  signal Application Specific Integrated Circuits  (ASICs) and Application Specific Standard  Products (ASSPs) designs rapidly enables us  to respond to customers’ needs for new, higher  performance solutions while reducing cost.  Our strategy of modifying and reusing a wide  set of specialised analog building blocks speeds  up the design process. In addition, our use of  industry standard design tools increases the level  of automation and the quality of verification in  our products. Our commitment to continuously  deepen our expertise has resulted in increased  levels of integration and product innovation in all business sectors. All production testing and warehousing of our  final products is outsourced to our Asian test  subcontract partners, enabling direct drop  shipments to our end customers. We have also  created a specialist offshore operations and  a support centre in Taiwan. We have our own  manufacturing and technical engineers close to  foundries and assembly and test subcontractors  in Asia. By being “on the spot” to resolve any  potential engineering issues quickly, they can  forestall potential delays in production. Dialog’s power management and clock companion  ICs for the Intel Atom and Freescale i.MX series of  processors provide an optimum solution for next  generation infotainment systems.  During 2012, Dialog invested US$127.5 million,  or 16.5% of our revenue, in research  and development. From left: 