Business Context and Reporting Period
Company: Diodes Incorporated
Filing Type: Form 8-K (Current Report)
Date of Report: November 5, 2010
Event: Entry into a Material Definitive Agreement (Item 1.01)
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. It discloses a specific capital commitment related to a new joint venture.
- Capital Contribution: The Company is expected to contribute at least US$47.5 million to the Joint Venture in installments over the first three years.
- Ownership Structure: The Company will initially own at least 95% of the Joint Venture.
Material Changes
On November 5, 2010, a wholly-owned subsidiary of Diodes Incorporated entered into a Joint Venture Agreement with Chengdu Ya Guang Electronic Company Limited ("Ya Guang").
- Purpose: To establish a semiconductor manufacturing facility in Chengdu, People's Republic of China.
- Scope: The facility will provide surface mounted component production, assembly, testing, and integrated circuit assembly and testing.
- Timeline: The facility will be developed in phases over a ten-year period.
- Conditions: The agreements are subject to various conditions and governmental approval.
Guidance, Outlook, and Risks
Outlook: The Company plans to execute a phased development of the new manufacturing facility over the next decade.
Risks and Contingencies:
- The formation of the Joint Venture and the Agreements are subject to governmental approval.
- The Agreements are subject to various unspecified conditions.
- Confidential treatment has been requested for portions of the Joint Venture Agreement filed as Exhibit 99.1.
Investor Verification Checklist
- Verify the status of required governmental approvals for the Chengdu facility.
- Review the full text of the Joint Venture Agreement (Exhibit 99.1) and Supplement (Exhibit 99.2) for specific conditions precedent.
- Monitor the schedule and actual disbursement of the US$47.5 million capital contribution over the first three years.
- Confirm the final ownership percentage once the Joint Venture is fully operational.