<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>a70911e10-k405.txt
<DESCRIPTION>FORM 10-K
<TEXT>

<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

         [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended DECEMBER 31, 2000.
                                       Or

         [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                  For the transition period from _______ to ________.

                         COMMISSION FILE NUMBER: 1-5740

                               DIODES INCORPORATED
             (Exact name of registrant as specified in its charter)

             DELAWARE                                          95-2039518
 (State or other jurisdiction of                            (I.R.S. Employer
  incorporation or organization)                          Identification Number)

      3050 EAST HILLCREST DRIVE
     WESTLAKE VILLAGE, CALIFORNIA                                 91362
(Address of principal executive offices)                       (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (805) 446-4800

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

  SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR
                                VALUE $0.66 2/3

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the 5,012,082 shares of Common Stock held by
non-affiliates of the registrant, based on the closing price of the Common Stock
on the Nasdaq National Market on March 16, 2001 of $9.00 per share, was
approximately $45,108,738. The number of shares of the registrant's Common Stock
outstanding as of March 16, 2001, was 9,214,705 including 1,075,672 shares of
treasury stock.

                       DOCUMENT INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A in connection with
the 2001 Annual Meeting are incorporated by reference into Part III of this
Report. Such Proxy Statement will be filed with the Securities and Exchange
Commission not later than 120 days after the registrant's fiscal year ended
December 31, 2000.


                                      -1-

<PAGE>   2


                                     PART I

ITEM 1. BUSINESS

GENERAL

               Diodes Incorporated (the "Company"), a Delaware corporation, is
engaged in the manufacture, sale and distribution of discrete semiconductors
worldwide, primarily to manufacturers in the communications, computer,
electronics, and automotive industries, and to distributors of electronic
components. In addition to the Company's corporate headquarters in Westlake
Village, California, which provides sales, marketing, engineering and
warehousing functions, the Company's wholly-owned subsidiary, Diodes Taiwan
Corporation, Ltd. ("Diodes-Taiwan"), maintains a sales, engineering, and
purchasing facility in Taipei, Taiwan. The Company also has a 95% interest in
Shanghai KaiHong Electronics Co., Ltd. ("Diodes-China" or "KaiHong"), a sales
and manufacturing facility in Shanghai, China. In addition, in December 2000,
the Company acquired FabTech Incorporated ("Diodes-FabTech" or "FabTech"), a
silicon wafer manufacturer located near Kansas City, Missouri. See "Item 1. -
New Developments."

STRATEGY

               The Company's strategy is to become a vertically integrated
manufacturer and supplier of discrete semiconductors. The Company intends to
control every step of the manufacturing and distribution process, from product
concept to manufacturing, packaging, and distribution. In order to become a
vertically integrated manufacturer and supplier, the Company intends to
integrate six areas of operations: sales and marketing, product development,
wafer foundry, package development, and assembly/testing.

               In order to develop higher technology/higher margin products, as
well as to fulfill its wafer requirements, the Company acquired FabTech, Inc.
Diodes-FabTech has the silicon wafer manufacturing equipment, facilities and
technology, as well as an experienced engineering team, required to develop
higher technology products.

               In addition to becoming a vertically integrated manufacturer and
supplier, the Company intends to expand its existing sales force in Asia and
develop a sales force in Europe. The Company intends to significantly expand its
Asian sales force to capture market share in Taiwan, China, Hong Kong, Singapore
and other Southeast Asia markets. The Company also intends to develop sales
channels in Europe to capture market share in countries such as England, France,
and Germany, among others. The Company will target OEM customers directly as
well as leverage its distribution network.

               In 2000, the Company invested over $16 million in plant and
equipment at its Diodes-China manufacturing facility, bringing the total amount
to approximately $38.9 million. Diodes-China is the Company's packaging and
testing facility in Mainland China. Diodes-China uses chips or die from silicon
wafers and manufactures them into various packages and technologies.

NEW DEVELOPMENTS

               VISHAY/LPSC
               In July 1997, Vishay Intertechnology, Inc. ("Vishay") and the
Lite-On Group, a Taiwanese consortium, formed a joint venture -- Vishay/Lite-On
Power Semiconductor Pte., Ltd. ("Vishay/LPSC") -- to acquire Lite-On Power
Semiconductor Corp. ("LPSC"), the Company's largest shareholder and a member of
The Lite-On Group of the Republic of China. The Lite-On Group, with worldwide
sales of approximately $4.5 billion, is a leading manufacturer of power
semiconductors, computer peripherals, and communication products. The
Vishay/LPSC joint venture included the worldwide discrete power semiconductor
business of LPSC and the Asian passive component business of Vishay. Vishay held
a 65% controlling interest in the joint venture, and The Lite-On Group held the
other 35%. In March 2000, Vishay agreed to sell their 65% interest in
Vishay/LPSC back to The Lite-On Group. In December 2000, LPSC merged with Dyna
Image Corporation of Taipei, Taiwan, the world's largest Contact Image Sensors
("CIS") manufacturer. CIS are primarily used in fax machines, scanners, and copy
machines. C.H. Chen, the Company's President and CEO, remains Vice Chairman of
the combined company now called Lite-On Semiconductor Corporation ("LSC").

               DIODES-TAIWAN
               In October 2000, the Company moved its Taiwan manufacturing to
China. The Taiwan manufactured products were lower technology products and
fairly labor intensive. The cost savings of moving the manufacturing to the
Company's qualified minority partner in Diodes-China were attractive and
necessary to meet market demand. In connection with the manufacturing move, the
Company sold approximately $150,000 of equipment to the 5% minority partner of
Diodes-


                                      -2-
<PAGE>   3

China. Diodes-Taiwan continues as the Company's Asia-Pacific sales, logistics
and distribution center. Diodes-China participates in final testing, inspection
and packaging of products formerly manufactured by Diodes-Taiwan.

               FABTECH
               On December 1, 2000, the Company purchased all the outstanding
capital stock of FabTech Incorporated, a Delaware corporation located in Lee's
Summit, Missouri from LSC, the Company's largest shareholder. Founded in 1996,
the 5-inch wafer foundry specializes in Schottky technology products. The
manufacturing facility consists of approximately 110,000 square feet, including
a 16,000 square foot clean room, 70,000 square feet of manufacturing equipment
and offices, and 40,000 square feet of storage and mechanical area. The facility
is leased from a third party.

               FabTech's wafer foundry provides the Company with the
manufacturing base and top-tier R&D team to develop higher-margin,
next-generation semiconductor products. FabTech's engineering staff includes
eight senior engineers, with over 190 collective years of experience in the
semiconductor industry. FabTech currently has eight patents pending in
technologies from ruggedized Schottky devices to thirty-five hundred volt
Ultra-Fast devices. FabTech will provide the Company a foundation to intensify
R&D initiatives aimed at developing innovative products in the areas of
miniaturization, integrated discretes, and developing chip-scale discretes.

               The FabTech purchase price consisted of approximately $6 million
in cash and an earnout of up to $30 million if FabTech meets specified earnings
targets over a four-year period. In addition, FabTech is obligated to repay an
aggregate of approximately $19 million, consisting of (i) approximately $13.6
million payable, together with interest at LIBOR plus 1%, to LSC through March
31, 2002, (ii) approximately $2.6 million payable, together with interest at
LIBOR plus 1.1%, to the Company through February 28, 2001 and (iii)
approximately $3.0 million payable to a financial institution, which amount was
repaid on December 4, 2000 with the proceeds of a capital contribution by the
Company. The acquisition was financed internally and through bank credit
facilities.

               FabTech has entered into a Volume Purchase Agreement dated as of
October 25, 2000 with LSC pursuant to which LSC is obligated to purchase from
FabTech, and FabTech is obligated to manufacture and sell to LSC, a specified
number of Schottky wafers. In addition, LSC is obligated to purchase from
FabTech at least 90% of the total number of such wafers purchased by LPSC from
all sources, provided that FabTech is competitive in pricing and quality.

               FabTech has also entered into management incentive agreements and
severance agreements with its two officers pursuant to which they may be
entitled to (i) bonuses if FabTech meets specified earnings targets over a
four-year period and (ii) severance payments if they are terminated without
"cause" (as defined in the incentive agreements). In addition, FabTech has also
entered into management incentive agreements with certain of its key employees,
pursuant to which they may be entitled to bonuses if FabTech meets specified
earnings targets over a four-year period.

               RECENT RESULTS
               Beginning late in the fourth quarter of 2000, the Company and the
semiconductor industry as a whole experienced a sharp inventory correction
primarily in two key markets, communications and computers. This downturn has
continued into the first quarter of 2001. Although the Company's market share
has remained stable, market conditions for its core product lines have not
improved, while demand for silicon wafers, the fundamental raw materials used in
manufacturing discrete semiconductors, has deteriorated further.

               The negative impact to earnings is largely attributable to
reduced capacity utilization of the Company's manufacturing assets and changes
in product mix, both of which have had a negative impact on gross margins. Due
to market conditions, capacity utilization at Diodes' FabTech subsidiary has
decreased 45% as compared to the previous year, while Diodes-China's utilization
has decreased 15%.

               The risks of becoming a fully integrated manufacturer are
amplified in an industry-wide slowdown because of the fixed costs associated
with manufacturing facilities. The Company has responded to this cyclical
downturn by implementing programs to cut operating costs, including reducing its
worldwide workforce by 26%, primarily at the FabTech and Diodes-China
manufacturing facilities. The Company will continue to actively adjust its cost
structure as dictated by market conditions.

                                      -3-
<PAGE>   4

               Although no clear short term change in market conditions exist,
long term, the Company believes that it will continue to generate value for
shareholders and customers, not just from its expanded Diodes-China
manufacturing and FabTech's foundry assets, but also by the addition of a true
technology component to the Company. Although market conditions changed just as
the new initiative started, the Company will continue to pursue its goal of
becoming a total solution provider. This is a multi-year initiative that will
increase the Company's ability to serve its customers' needs, while establishing
the Company at the forefront of the next generation of discrete technologies.

PRODUCTS

               Technology in the semiconductor industry is ever changing and the
products traditionally sold by the Company have been mature products. The
additions of state-of-art surface mount manufacturing capability at Diodes-China
and our newly acquired wafer fabrication facility, Diodes-FabTech, have enabled
the Company to advance technologically with the industry leaders, and to move
ahead in technical advances in both silicon technology and product
implementation. These new technologies will offer higher profit and growth
potential.

               PRODUCT TECHNOLOGY
               Semiconductors come in two basic configurations: discretes and
integrated circuits ("IC's"). The Company is engaged in the manufacture, sale,
and distribution of discrete semiconductors, which are fixed-function components
such as:

<TABLE>
<CAPTION>

<S>                                                 <C>                                 <C>
Schottky Rectifiers                                 Standard Recovery Rectifiers        Transient Voltage Suppressors ("TVS")
Schottky Diodes                                     Bridge Rectifiers                   NPN Transistors
Super-Fast & Ultra-Fast Recovery Rectifiers         Switching Diodes                    PNP Transistors
Fast Recovery Rectifiers                            Zener Diodes                        MOSFET - N-Channel
MOSFET - P-Channel
</TABLE>


               In terms of function, IC's are far more complex than discrete
semiconductors. They are multi-function devices of the sort found in computer
memory boards and central processing units. IC's, characterized by rapid changes
in both production and application, and the desire to put ever-more intelligence
into ever-smaller packages, have required the development of manufacturing
techniques that are sophisticated and expensive.

               Discretes, which effectively tie integrated circuits to their
surrounding environments and enable them to work, come in hundreds of
permutations and vary according to voltage, current, power handling capability,
and switching speed. In a standard industry classification, those discrete
semiconductors operating at less than one watt are referred to as low-power
semiconductors, while those operating at greater than one watt are termed power
semiconductors. Both types of semiconductors are found in a wide assortment of
commercial instrumentation and communication equipment, in consumer products
like televisions and telephones, and in automotive, computer and industrial
electronic products.

               Arrays bridge the gap between discretes and IC's. Arrays consist
of more than one discrete semiconductor housed in a single package. Recently,
the Company has added about 100 new 6-pin surface mount array part numbers to
its semiconductor offering. With the flexibility of domestic engineering and
fast-reaction manufacturing facilities in the Far East, the Company is finding
enthusiastic interest in its offering of Application Specific Multi-Chip Circuit
arrays.

               Silicon wafers are the basic raw material used in producing all
types of semiconductors. Many highly sophisticated and tightly controlled
processes are used to develop finished semiconductor wafers from the raw
starting material. They include high precision lapping and polishing, photo
lithography, chemical vapor deposition of epitaxy, doping and oxidation
processes, plasma deposition, ion implantation, metal plating, sintering and
sputtering, chemical etching, annealing and reaction. Finished wafers are then
cut into very small die in order to be assembled into the appropriate surface
mount or leaded package at the semiconductor assembly factory.

               PRODUCT PACKAGING
               Almost as important as the technology of the discrete component,
is the component packaging. The industry trend is to fit discrete components
into ever-smaller and more efficient surface-mount packages. Smaller packaging
provides a reduction in board space, height, and weight and is well suited for
battery-powered, hand-held and wireless applications such as cellular phones,
pagers, modems, notebook and palmtop computers and accessories where space is at
a premium. The objective is to fit the same functionality and power handling
features into smaller packages. The Company's packaging capabilities include:

                                      -4-
<PAGE>   5

<TABLE>
<CAPTION>

<S>                                  <C>                               <C>
Surface Mount:
--------------
SOT-23                               SOT-523                           SMB
SOT-25                               SOD-523                           SMC
SOT-143                              SC-82                             DPAK
SOT-89                               SC-89                             D2PAK
SOD-123                              SC-59                             MELF
SOD-323                              SC-75                             MiniMELF
SOT-363                              SMA

Leaded:
-------
DO-15                                DO-201AD                          A-405
DO-35                                TO-220AC                          TO-3P
DO-41                                TO-220AB                          Numerous Bridge Rectifier Packages
</TABLE>


MANUFACTURING AND SIGNIFICANT VENDORS

               The Company's Far East subsidiary, Diodes-China, manufactures
product for sale primarily to North America and Asia. Diodes-China's
manufacturing focuses on SOT-23 and SOD-123 products, as well as sub-miniature
packages such as SOT-363, SOT-563, and SC-75. These surface-mount devices
("SMD") are much smaller in size and are used in the computer and communication
industries, destined for cellular phones, notebook computers, pagers, PCMCIA
cards, modems, and garage door transmitters, among others. Diodes-China's
state-of-the-art facilities have been designed to develop even smaller,
higher-density products as electronic industry trends to portable and hand-held
devices continue. Diodes-China purchases silicon wafers from FabTech, however,
the majority are currently purchased from other wafer vendors.

               Acquired in December 2000, FabTech's wafer foundry is located in
Lee's Summit, Missouri. FabTech manufactures primarily 5-inch silicon wafers
which are the building blocks for semiconductors. FabTech has full foundry
capabilities including processes such as silicon epitaxy, silicon oxidation,
photolithography and etching, ion implantation and diffusion, low pressure and
plasma enhanced chemical vapor deposition, sputtered and evaporated metal
deposition, wafer backgrinding, and wafer probe and ink.

               FabTech purchases polished silicon wafers and then, by using the
various technologies listed above, in conjunction with many chemicals and gases,
fabricates several layers on the wafers, including epitaxial silicon, ion
implants, dielectrics, and metals, with various patterns. Depending upon these
layers and the die size (which is determined during the Photolithography process
and completed at the customer's packaging site where the wafer is sawed into
square or rectangular die), different types of wafers with various currents,
voltages, and switching speeds are produced.

               At Diodes-China, silicon wafers are received, inspected and
stored in a highly controlled environment awaiting the assembly operation. At
the first step of assembly, the wafers are mounted in a supporting ring, and
using automatic machinery, the wafers are sawn with very thin, high speed
diamond blades into tiny semiconductor "dice", numbering as many as 200,000 per
5" diameter wafer. Dice are then loaded onto a handler, which automatically
places the dice, one by one, onto lead frames, which are package specific, where
they are eutectically bonded to the lead frame pad by a thermosonic process.
Next, automatic wire bonders make the necessary electrical connections from the
die to the leads of the lead frame, using 1 mili-inch (0.001") diameter gold
wire. The fully automatic assembly machinery then molds the epoxy case around
the die and lead frame to produce the desired semiconductor product. Next is the
trim, form, test, mark and re-test operation. Finally the parts are placed onto
special carrier tapes and a cover tape seals the parts in place. The taped parts
are then spooled onto reels and boxed for shipment.

               Each step of the process is precisely controlled and monitored to
assure world-class quality. Samples of each device type are periodically
subjected to rigorous 1,000 hour high reliability testing to assure that the
devices will meet all customers' expectations in the most demanding of
applications.

               As a result of the Company's total commitment to product quality
and customer satisfaction, the Company's corporate headquarters received
official ISO 9002 Certification of Registration from Underwriters Laboratories,
the leading third-party certification organization in the United States and the
largest in North America. ISO 9000 certifications consist of a series of
paradigms for the establishment of systems and protocols to facilitate the
creation and maintenance of superior quality-control techniques. Subsequently,
both the Diodes-China and Diodes-Taiwan facilities have received official ISO
9002 Certification of Registration. With its underlying premise that true
product quality requires a total quality system, ISO certification is often
required of vendors seeking to establish relationships with original equipment
manufacturers ("OEMs")

                                      -5-
<PAGE>   6

doing business in intensely competitive global markets. The newly acquired
Diodes-FabTech was ISO 9002 and ISO 9001 certified in 1997, QS 9000 certified
(required of many suppliers to the automotive industry) in 1998, and QS 9000
with AEC-A100 Supplement certified (recommended for semiconductor manufacturers
that supply the automotive industry) in 1999.

               All of the products sold by the Company, as well as the materials
used by the Company in its manufacturing operations, are available both
domestically and abroad. In 2000, the three largest external suppliers of
products to the Company were LSC and two unrelated vendors. Approximately 14%
and 17% of the Company's sales were from product manufactured by LSC in 2000 and
1999, respectively. During 2000, approximately 15% and 7% of the Company's sales
were from products manufactured by the two external vendors, compared to 9% and
7% in 1999, respectively. In addition, sales of products manufactured by
Diodes-China, Diodes-Taiwan, and Diodes-FabTech, the Company's three
manufacturing subsidiaries, were approximately 33%, 6%, and 4% in 2000,
respectively, versus 23%, 11%, and 4% in 1999, respectively. The Company
anticipates that Diodes-China will become an increasingly valuable supplier. No
other manufacturer of discrete semiconductors accounted for more than 5% of the
Company's sales in 2000 and 1999.

               The Company's Diodes-China manufacturing facility receives wafers
from FabTech, among others. Output from the FabTech facility includes wafers
used in the production of Schottky barrier diodes, fast recovery epitaxial
diodes (FREDs), and other widely used value-added products. Schottky barrier
diodes are employed in the manufacture of the power supplies found in personal
computers, telecommunications devices and other applications where high
frequency, low forward voltage and fast recovery are required.

               Although the Company believes alternative sources exists for the
products of any of its suppliers, the loss of any one of its principal suppliers
or the loss of several suppliers in a short period of time could have a
materially adverse effect on the Company until an alternate source is located
and has commenced providing such products or raw materials.

SALES, MARKETING AND DISTRIBUTION

               The Company's major customers in the communications, computer,
electronics and automotive industries include: Intel Corp., Cisco Systems, Inc.,
Sony Corp., Nortel Networks Corp., Delphi Automotive, Bose Corp., and Scientific
Atlanta, Inc. The Company is not dependent on any one major customer to support
its level of sales. For the fiscal year ended December 31, 2000, not one
customer accounted for more than 7% of the Company's sales. The twenty largest
customers accounted, in total, for approximately 58% of the Company's sales in
2000, compared to 54% in 1999.

               Over the years, there has been a tendency among some larger
manufacturers to limit or de-emphasize the production and marketing of discrete
components in favor of integrated and hybrid circuits. With fewer
service-oriented sources of discrete components available to OEMs, the Company
has been able to capture additional market share. The Company's products
primarily include catalog items, but also include units designed to specific
customer requirements.

               The Company sells its products through its own internal and
regional sales departments, as well as through representatives and distributors.
The Company's sales team, aided by the sales force of approximately 30
independent sales representatives located throughout North America and Asia,
supplies approximately 200 OEM accounts. In 2000, OEM customers accounted for
approximately 55% of the Company's sales, compared to approximately 58% in 1999.
OEM customers range from small, privately held electronics companies to Fortune
500 companies.

               The Company further supplies approximately 40 stocking
distributors (45% of 2000 sales), who collectively sell to approximately 10,000
customers on the Company's behalf. The Company's world-wide distribution network
includes Future, Arrow, Avnet, DigiKey, Jaco, Kent, Reptron, and All American,
among others.

               Through ongoing sales and customer service efforts, the Company
continues to develop business relationships with companies who are considered
leaders in their respective market segments, such as automotive,
telecommunications, personal computers, computer peripherals and industrial. The
Company's marketing efforts also have benefited from an ongoing program to
develop strategic alliances with manufacturers, such as LSC and FabTech, among
others, to better control its destiny in terms of the price, the quality and
especially the availability of the products it sells.

               The Company's products are sold primarily in North America and
the Far East, both directly to end users and through electronic component
distributors. In 2000, approximately 54% and 46% of the Company's products were
sold in North America and the Far East, respectively, compared to 56% and 44% in
1999, respectively. See Note 11 of "Notes to Consolidated Financial Statements"
for a description of the Company's adoption of SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. The increase in the
percentage of sales in the Far East is expected to continue as the Company
believes there is greater potential to increase market share in that region due
to the expanding base of electronic product manufacturers.

                                      -6-
<PAGE>   7

               In 1999, Diodes-Taiwan began purchasing silicon wafers, a new
product line, from FabTech for resale to customers in the Far East. Silicon
wafer sales were $9,837,000 and $4,005,000 in 2000 and 1999, respectively. The
gross margin percentage on sales of silicon wafers is currently far below that
of the Company's standard product line. Initially a complementary service for
some customers rather than a focused product line, silicon wafers will be a
focused product line supplied by FabTech to its current customer base, as well
as to Diodes-China for use in its manufacturing process.

               Through Diodes-Taiwan, the Company employs a general manager who
acts as the Far East purchasing liaison with respect to product procurement from
other vendors located in the Far East. Diodes-Taiwan also sells product to
customers in Taiwan, Korea, and Singapore, among others.

COMPETITION

               Numerous semiconductor manufacturers and distributors serve the
discrete semiconductor components market where competition is intense. Some of
the larger companies include Fairchild Semiconductor, International Rectifier,
Rohm, Phillips, On Semiconductor, and General Semiconductor, many of whom have
greater financial, marketing, distribution, brand name recognition and other
resources than the Company. Accordingly, in response to market conditions, the
Company from time to time may reposition product lines or decrease prices, which
may adversely affect the Company's profit margins on such product lines.
Competitiveness in sales of the Company's products is determined by the price
and quality of the product and the ability of the Company to provide delivery
and customer service in keeping with the customers' needs. The Company believes
that it is well equipped to be competitive in respect to these requirements.

ENGINEERING

               The Company's engineering consists of customer/applications
engineers and product development engineers who drive the direction of the
Company's future product lines. Their primary function is to work closely with
market-leading customers to further refine, expand and improve the Company's
product range within the Company's product types and packages. In addition,
customer requirements and acceptance of new package types is assessed and new,
higher density and more energy-efficient packages are developed to satisfy
customers' needs. Working with customers to integrate multiple types of
technologies within the same package, the Company's applications engineers
reduce the required number of components and thus circuit board size
requirements, while increasing the component technology to a higher level.

               Product engineers work directly with the semiconductor wafer
design and process engineers at FabTech who craft die designs needed for
products that precisely match our customer's requirements. Further, FabTech's
R&D engineers are developing discrete semiconductor technologies which are
expected to propel the Company to a leadership position in our field. Direct
contact with the Company's manufacturing facilities allows the manufacturing of
up-to-date products that are in line with current technical requirements. With
the addition of FabTech, the Company now has the capability to capture the
customer's electrical and packaging requirements through its
customer/applications engineers and product development engineers, and then
transfer those requirements to FabTech's R&D and engineering department, so that
the customer's requirements can be translated, designed, and manufactured with
full control, even to the elemental silicon level.

PATENTS

               In the past, patents have not proven to be significant to our
business. However, competition has required that the Company pursue patent
protection for certain devices, particularly those developed or in development
at FabTech. The Company currently has eight patents pending in technologies
ranging from ruggedized Schottky devices to thirty-five hundred volt Ultra-Fast
devices. To protect future products from use by competitors, the Company will
pursue patent protection.

INVENTORY

               In general, the Company maintains sufficient inventories of
standard products at its U.S. facility and Diodes-Taiwan facility to permit
rapid delivery of customers' orders. In addition, the Company continuously
coordinates with strategic alliances and subcontractors to support product
demand. The Company has implemented a program in coordination with its
distributors, enabling the Company to transfer inventory from distributors to
OEM customers to better manage the Company's on-hand inventory.

               The Company's inventory is composed of discrete semiconductors,
which are, for the most part, standardized in electronic related industries.
Historically, finished goods inventory turns over approximately four times


                                      -7-
<PAGE>   8

annually. Due to the market slowdown, which began late in the fourth quarter of
2000, inventory turns has decreased to approximately 2.5 times. The Company has
no special inventory or working capital requirements that are not in the
ordinary course of business.

BACKLOG

               The amount of backlog to be shipped during any period is
dependent upon various factors and all orders are subject to cancellation or
modification, usually without penalty to the customer. Orders are generally
booked from one to twelve months in advance of delivery. The rate of booking new
orders can vary significantly from month to month. The Company and the industry
as a whole are experiencing a trend towards shorter lead-times (the amount of
time between the date a customer places an order and the date the customer
requires shipment). The amount of backlog at any date depends upon various
factors, including the timing of the receipt of orders, fluctuations in orders
of existing product lines, and the introduction of any new lines. Accordingly,
the Company believes that amount of backlog at any date is not meaningful and is
not necessarily indicative of actual future shipments. The Company strives to
maintain proper inventory levels to support customers' just-in-time order
expectations.

EMPLOYEES

               As of December 31, 2000, the Company employed a total of 791
employees. At such date, the Company employed 73 full-time employees in the
United States, Diodes-Taiwan employed an additional 37 employees, Diodes-China
employed a total of 469 employees, and Diodes-FabTech employed a total of 212
employees. None of the Company's employees is subject to a collective bargaining
agreement. The Company considers its relations with its employees to be good.

               The Company has responded to the industry slowdown by reducing
its world wide workforce approximately 26% from the third quarter of 2000,
primarily at its FabTech and Diodes-China manufacturing facilities. As of
February 28, 2001, the Company employed a total of 735 employees: 69 at its
North American headquarters, 33 at Diodes-Taiwan, 474 at Diodes-China, and 159
at Diodes-FabTech. The Company will continue to actively adjust its cost
structure as market conditions warrant.

IMPORTS AND IMPORT RESTRICTIONS

               During 2000, the Company's U.S. operations, which accounted for
approximately 54% of the Company's total sales, imported substantially all of
its products, of which approximately 46% was imported from Mainland China and
approximately 39% from Taiwan. The balance of the imports is from Germany,
Japan, India, the Philippines, England and Korea, among others. As a result, the
Company's operations are subject to the customary risks of doing business
abroad, including, but not limited to, the difficulty and expense of maintaining
foreign sourcing channels, cultural and institutional barriers to trade,
fluctuations in currency exchange rates, restrictions on the transfer of funds
and the imposition of tariffs, political instability, transportation delays,
expropriation, import and export controls and other non-tariff barriers
(including export licenses and changes in the allocation of quotas), as well as
the uncertainty regarding the future relationship between China and Taiwan, and
other U.S. and foreign regulations that may apply to the export and import of
the Company's products, and which could have a material adverse effect on the
Company. Any significant disruption in the Company's Taiwanese or Chinese
sources of supply or in the Company's relationship with its suppliers located in
Taiwan or China could have a material adverse effect on the Company.

               The Company transacts business with foreign suppliers primarily
in United States dollars. To a limited extent, and from time to time, the
Company contracts (e.g., a portion of the equipment purchases for the
Diodes-China expansion) in foreign currencies, and, accordingly, its results of
operations could be materially affected by fluctuations in currency exchange
rates. Due to the limited number of contracts denominated in foreign currencies
and the complexities of currency hedges, the Company has not engaged in hedging
to date. If the volume of contracts written in foreign currencies increases, and
the Company does not engage in currency hedging, any substantial change in the
value of such currencies could have a material adverse effect on the Company's
results of operations. Management believes that the current contracts written in
foreign currencies are not significant enough to justify the costs inherent in
currency hedging.

                Imported products are also subject to United States customs
duties and, in the ordinary course of business, the Company from time to time is
subject to claims by the United States Customs Service for duties and other
charges. The Company attempts to reduce the risk of doing business in foreign
countries by, among other things, contracting in U.S. dollars, and, when
possible, maintaining multiple sourcing of product groups from several
countries.

                                      -8-
<PAGE>   9

ENVIRONMENTAL MATTERS

               The Company has received a claim from one of its former U.S.
landlords regarding potential groundwater contamination at a site in which the
Company engaged in manufacturing from 1967 to 1973. The landlord has alleged
that the Company may have some responsibility for cleanup costs. Investigations
into the landlord's allegations are ongoing and in the early stages. The Company
does not anticipate that the ultimate outcome of this matter will have a
material adverse effect on its financial condition.

RISK FACTORS

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISION OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

               Except for the historical information contained herein, the
matters addressed in this Annual Report on Form 10-K constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements are subject to a variety of risks and
uncertainties, including those discussed below and elsewhere in this Annual
Report on Form 10-K that could cause actual results to differ materially from
those anticipated by the Company's management. The Private Securities Litigation
Reform Act of 1995 (the "Act") provides certain "safe harbor" provisions for
forward-looking statements. All forward-looking statements made on this Annual
Report on Form 10-K are made pursuant to the Act.

               All forward-looking statements contained in this Annual Report on
Form 10-K are subject to, in addition to the other matters described in this
Annual Report on Form 10-K, a variety of significant risks and uncertainties.
The following discussion highlights some of these risks and uncertainties.
Further, from time to time, information provided by the Company or statements
made by its employees may contain forward-looking information. There can be no
assurance that actual results or business conditions will not differ materially
from those set forth or suggested in such forward-looking statements as a result
of various factors, including those discussed below.

               VERTICAL INTEGRATION
               We are in the process of vertically integrating our business. Key
elements of this strategy include (i) expanding our manufacturing capacity, (ii)
establishing wafer foundry and research and development capability through the
acquisition of FabTech and (iii) establishing sales, marketing, product
development, package development and assembly/testing operations in
company-owned facilities or through the acquisition of established contractors.
We have a limited history upon which an evaluation of the prospects of our
vertical integration strategy can be based. There are certain risks associated
with our vertical integration strategy, including:

        -   difficulties associated with owning a manufacturing business,
            including, but not limited to, the maintenance and management of
            manufacturing facilities, equipment, employees and inventories and
            limitations on the flexibility of controlling overhead;
        -   difficulties implementing our Oracle Enterprise Resource Planning
            system;
        -   difficulties expanding our operations in Asia and developing new
            operations in Europe;
        -   difficulties developing and implementing a successful research and
            development team; and
        -   difficulties developing proprietary technology.

               ECONOMIC CONDITIONS
               The discrete segment of the semiconductor industry is highly
cyclical, and the value of our business may decline during the "down" portion of
these cycles. During recent years, we, as well as many others in our industry,
experienced significant declines in the pricing of, as well as demand for, our
products and lower facilities utilization. The market for discrete
semiconductors may experience renewed, possibly more severe and prolonged,
downturns in the future. The markets for our products depend on continued demand
in the communications, computer, electronic and automotive markets, and these
end-markets may experience changes in demand that could adversely affect our
operating results and financial condition.

               COMPETITION
               The discrete semiconductor industry is highly competitive. We
expect intensified competition from existing competitors and new entrants.
Competition is based on price, product performance, product availability,
quality, reliability and customer service. We compete in various markets with
companies of various sizes, many of which are larger and have greater financial,
marketing, distribution, brand names and other resources than we have, and thus
may be better able to pursue acquisition candidates and to withstand adverse
economic or market conditions. In addition, companies not currently in direct
competition with us may introduce competing products in the future. Some of our
current major competitors are On


                                      -9-
<PAGE>   10
Semiconductor, General Semiconductor, Inc., Fairchild Semiconductor Corporation,
International Rectifier Corporation, Rohm, and Phillips. We may not be able to
compete successfully in the future, or competitive pressures may harm our
financial condition or our operating results.

               FOREIGN OPERATIONS
               We expect revenues from foreign markets to continue to represent
a significant portion of our total revenues. In addition, we maintain facilities
or contract with entities in the Philippines, Taiwan, Germany, Japan, England,
India, and China, among others. There are risks inherent in doing business
internationally, including:

        -   changes in, or impositions of, legislative or regulatory
            requirements, including tax laws in the United States and in the
            countries in which we manufacture or sell our products;
        -   trade restrictions; transportation delays; work stoppages; economic
            and political instability;
        -   changes in import/export regulations, tariffs and freight rates;
        -   difficulties in collecting receivables and enforcing contracts
            generally; and
        -   currency exchange rate fluctuations.

               VARIABILITY OF QUARTERLY RESULTS
               We have experienced, and expect to continue to experience, a
substantial variation in net sales and operating results from quarter to
quarter. We believe that the factors which influence this variability of
quarterly results include:

        -   general economic conditions in the countries where we sell our
            products;
        -   seasonality and variability in the computer market and our other end
            markets;
        -   the timing of our and our competitors' new product introductions;
        -   product obsolescence;
        -   the scheduling, rescheduling and cancellation of large orders by our
            customers;
        -   the cyclical nature of demand for our customers' products;
        -   our ability to develop new process technologies and achieve volume
            production at our fabrication facilities;
        -   changes in manufacturing yields;
        -   adverse movements in exchange rates, interest rates or tax rates;
            and
        -   the availability of adequate supply commitments from our outside
            suppliers or subcontractors.

               Accordingly, a comparison of the Company's results of operations
from period to period is not necessarily meaningful and the Company's results of
operations for any period are not necessarily indicative of future performance.

               NEW TECHNOLOGIES
               We cannot assure you that we will successfully identify new
product opportunities and develop and bring products to market in a timely and
cost-effective manner, or that products or technologies developed by others will
not render our products or technologies obsolete or noncompetitive. In addition,
to remain competitive, we must continue to reduce package sizes, improve
manufacturing yields and expand our sales. We may not be able to accomplish
these goals.

               PRODUCTION
               Our manufacturing efficiency will be an important factor in our
future profitability, and we cannot assure you that we will be able to maintain
or increase our manufacturing efficiency. Our manufacturing processes require
advanced and costly equipment and are continually being modified in an effort to
improve yields and product performance. We may experience manufacturing problems
in achieving acceptable yields or experience product delivery delays in the
future as a result of, among other things, capacity constraints, construction
delays, upgrading or expanding existing facilities or changing our process
technologies, any of which could result in a loss of future revenues. Our
operating results also could be adversely affected by the increase in fixed
costs and operating expenses related to increases in production capacity if
revenues do not increase proportionately.

               FUTURE ACQUISITIONS
               As part of our business strategy, we expect to review acquisition
prospects that would implement out vertical integration strategy or offer other
growth opportunities. While we have no current agreements and no active
negotiations underway with respect to any acquisitions, we may acquire
businesses, products or technologies in the future. In the event of future
acquisitions, we could:

        -   use a significant portion of our available cash;
        -   issue equity securities, which would dilute current stockholders
            percentage ownership;
        -   incur substantial debt;

                                      -10-
<PAGE>   11
        -   incur or assume contingent liabilities, known or unknown;
        -   incur amortization expenses related to goodwill or other
            intangibles; and
        -   incur large, immediate accounting write-offs.

               Such actions by us could harm our operating results and/or
adversely influence the price of our common stock.

               INTEGRATION OF ACQUISITIONS
               During fiscal year 2000, we acquired FabTech. We may continue to
expand and diversify our operations with additional acquisitions. If we are
unsuccessful in integrating these companies or product lines with our
operations, or if integration is more difficult than anticipated, we may
experience disruptions that could have a material adverse effect on our
business, financial condition and results of operations. Some of the risks that
may affect our ability to integrate or realize any anticipated benefits from
companies we acquire include those associated with:

        -   unexpected losses of key employees or customers of the acquired
            company;
        -   conforming the acquired company's standards, processes, procedures
            and controls with our operations;
        -   coordinating our new product and process development;
        -   hiring additional management and other critical personnel;
        -   increasing the scope, geographic diversity and complexity of our
            operations;
        -   difficulties in consolidating facilities and transferring processes
            and know-how;
        -   diversion of management's attention from other business concerns;
            and
        -   adverse effects on existing business relationships with customers.

               BACKLOG
               The amount of backlog to be shipped during any period is
dependent upon various factors and all orders are subject to cancellation or
modification, usually without penalty to the customer. Orders are generally
booked from one to twelve months in advance of delivery. The rate of booking new
orders can vary significantly from month to month. The Company and the industry
as a whole are experiencing a trend towards shorter lead-times (the amount of
time between the date a customer places an order and the date the customer
requires shipment). The amount of backlog at any date depends upon various
factors, including the timing of the receipt of orders, fluctuations in orders
of existing product lines, and the introduction of any new lines. Accordingly,
the Company believes that amount of backlog at any date is not meaningful and is
not necessarily indicative of actual future shipments. The Company strives to
maintain proper inventory levels to support customers' just-in-time order
expectations.

               PRODUCT RESOURCES
               We sell products primarily pursuant to purchase orders for
current delivery, rather than pursuant to long-term supply contracts. Many of
these purchase orders may be revised or canceled without penalty. As a result,
we must commit resources to the production of products without any advance
purchase commitments from customers. Our inability to sell, or delays in
selling, products after we devote significant resources to them could have a
material adverse effect on our business, financial condition and results of
operations.

               QUALIFIED PERSONNEL
               Our future success depends, in part, upon our ability to attract
and retain highly qualified technical, sales, marketing and managerial
personnel. Personnel with the necessary expertise are scarce and competition for
personnel with these skills is intense. We may not be able to retain existing
key technical, sales, marketing and managerial employees or be successful in
attracting, assimilating or retaining other highly qualified technical, sales,
marketing and managerial personnel in the future. If we are unable to retain
existing key employees or are unsuccessful in attracting new highly qualified
employees, our business, financial condition and results of operations could be
materially and adversely affected.

               EXPANSION
               Our ability to successfully offer our products in the discrete
semiconductor market requires effective planning and management processes. Our
past growth, and our targeted future growth, may place a significant strain on
our management systems and resources, including our financial and managerial
controls, reporting systems and procedures. In addition, we will need to
continue to train and manage our workforce worldwide.

               SUPPLIERS
               Our manufacturing operations depend upon obtaining adequate
supplies of materials, parts and equipment on a timely basis from third parties.
Our results of operations could be adversely affected if we are unable to obtain
adequate supplies of materials, parts and equipment in a timely manner or if the
costs of materials, parts or equipment increase significantly. From time to
time, suppliers may extend lead times, limit supplies or increase prices due to
capacity constraints


                                      -11-
<PAGE>   12

or other factors. Although we generally use materials, parts and equipment
available from multiple suppliers, we have a limited number of suppliers for
some materials, parts and equipment. While we believe that alternate suppliers
for these materials, parts and equipment are available, an interruption could
materially impair our operations.

               ENVIRONMENTAL REGULATIONS
               We are subject to a variety of United States federal, foreign,
state and local governmental laws, rules and regulations related to the use,
storage, handling, discharge or disposal of certain toxic, volatile or otherwise
hazardous chemicals used in our manufacturing process. Any of these regulations
could require us to acquire equipment or to incur substantial other expenses to
comply with environmental regulations. If we were to incur substantial
additional expenses, product costs could significantly increase, thus materially
and adversely affecting our business, financial condition and results of
operations. Any failure to comply with present or future environmental laws,
rules and regulations could result in fines, suspension of production or
cessation of operations, any of which could have a material adverse effect on
our business, financial condition and results of operations.

               PRODUCT LIABILITY
               One or more of our products may be found to be defective after we
have already shipped such products in volume, requiring a product replacement,
recall, or a software fix which would cure the defect but impede performance. We
may also be subject to product returns which could impose substantial costs and
have a material and adverse effect on our business, financial condition and
results of operations. Product liability claims may be asserted with respect to
our technology or products. Although we currently have product liability
insurance, there can be no assurance that we have obtained sufficient insurance
coverage, or that we will have sufficient resources, to satisfy all possible
product liability claims.

               SYSTEM OUTAGES
               Risks are presented by electrical or telecommunications outages,
computer hacking or other general system failure. To try to manage our
operations efficiently and effectively, we rely heavily on our internal
information and communications systems and on systems or support services from
third parties. Any of these are subject to failure. System-wide or local
failures that affect our information processing could have material adverse
effects on our business, financial condition, results of operations and cash
flows. In addition, insurance coverage for the risks described above may be
unavailable.

               DOWNWARD PRICE TRENDS
               Our industry is intensely competitive and prices for existing
products tend to decrease steadily over their life cycle. There is substantial
and continuing pressure from customers to reduce the total cost of using our
parts. To remain competitive, we must achieve continuous cost reductions through
process and product improvements. We must also be in a position to minimize our
customers' shipping and inventory financing costs and to meet their other goals
for rationalization of supply and production. Our growth and the profit margins
of our products will suffer if our competitors are more successful in reducing
the total cost to customers of their products than we are.

               OBSOLETE INVENTORIES
               The life cycles of some of our products depend heavily upon the
life cycles of the end products into which our products are designed. Products
with short life cycles require us to manage closely our production and inventory
levels. Inventory may also become obsolete because of adverse changes in end
market demand. We may in the future be adversely affected by obsolete or excess
inventories which may result from unanticipated changes in the estimated total
demand for our products or the estimated life cycles of the end products into
which our products are designed.


FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

               With respect to foreign operations see Notes 1, 10 and 11 of
"Notes to Consolidated Financial Statements."


ITEM 2. PROPERTIES

               The Company's primary physical properties during the year ended
December 31, 2000, were as follows:

        A. The Company's headquarters and product distribution center is located
           in an industrial building at 3050 East Hillcrest Drive, Westlake
           Village, CA 91362, and consists of approximately 30,900 square feet.
           The Company, who is the primary lessee under a lease that has been
           extended five years and expires in 2003, has two five-year options to
           extend the term of the lease.

                                      -12-
<PAGE>   13

        B. Regional sales offices located in the U.S., leased at less than
           $1,000 per month, at the following locations:

           1.  6200 Falls for the Neuse Road, Suite 200, Raleigh, NC 27609
           2.  One Overlook Drive, Suite 6B, Amherst, NH 03031
           3.  160-D East Wend, Lemont, IL 60439
           4.  500 Newport Center Drive, Suite 930, Newport Beach, CA 92660
           5.  2901 Moorpark Avenue, San Jose, CA 95128

        C. Industrial premises consisting of approximately 9,000 square feet and
           located at 5Fl. 501-16 Chung-Cheng Road, Hsin-Tien City, Taipei,
           Taiwan, Republic of China. These premises, owned by Diodes-Taiwan,
           are used as a warehousing facility. The facility is subject to a
           mortgage held by Chang-Hwa Commercial Bank, which matures on November
           11, 2003, and is secured by land and buildings.

        D. Industrial premises consisting of approximately 7,000 square feet and
           located at 2Fl. 501-15 Chung-Cheng Road, Hsin-Tien City, Taipei,
           Taiwan, Republic of China. These premises, owned by Diodes-Taiwan,
           are used as sales and administrative offices. The facility is subject
           to a mortgage held by Chang-Hwa Commercial Bank, which matures on
           February 27, 2003, and is secured by land and buildings.

        E. Industrial building located at No. 1 Chen Chun Road, Xingqiao Town,
           Songjiang County, Shanghai, Peoples Republic of China. This
           building, consisting of approximately 50,000 square feet, is the
           corporate headquarters and product distribution and manufacturing
           facility for Diodes-China. The building is owned by Shanghai KaiHong
           Electronics Co., Ltd., of which the Company is a 95% joint venture
           partner.

        F. Industrial building located at 777 N. Blue Parkway Suite 350, Lee's
           Summit, MO 64086 USA. Acquired in December 2000, Diodes-FabTech's
           5-inch wafer foundry includes a 16,000 sq. ft. clean room within a
           70,000 sq. ft. manufacturing facility formerly owned by AT&T, under
           a lease that expires in 2009.

               The Company believes its current facilities are adequate for the
foreseeable future. See Notes 3 and 12 of "Notes to Consolidated Financial
Statements."

ITEM 3. LEGAL PROCEEDINGS

               The Company is, from time to time, involved in litigation
incidental to the conduct of its business. The Company does not believe that any
currently pending litigation, to which it is a party, will have a material
adverse affect on its financial condition or results of operations.

               The Company has received a claim from one of its former U.S.
landlords regarding potential ground-water contamination at a site in which the
Company engaged in manufacturing from 1967 to 1973. The landlord has alleged
that the Company may have some responsibility for cleanup costs. Investigations
into the landlord's allegations are ongoing, however, the Company does not
anticipate that this event will have a material effect on its financial results.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               No matter was submitted to a vote of security holders by the
Company during the last three months of the year ending December 31, 2000.

                                      -13-
<PAGE>   14

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

               The Company's Common Stock is traded on the Nasdaq National
Market ("Nasdaq") under the symbol "DIOD." Prior to June 19, 2000, the Company's
Common Stock was traded on the American Stock Exchange ("AMEX"). In July 2000,
the Company effected a 50% stock dividend in the form of a three-for-two stock
split. The ex-dividend date was July 17, 2000. The following table shows the
range of high and low closing sales prices per share, adjusted for the
three-for-two stock split, for the Company's Common Stock for each fiscal
quarter from January 1, 1999 as reported by Nasdaq and AMEX.


<TABLE>
<CAPTION>

      ------------------------------------------------------------------------
                CALENDAR QUARTER                    CLOSING SALE PRICE OF
                      ENDED                             COMMON STOCK
      ------------------------------------------------------------------------
                                                    HIGH              LOW
                                                -------------     ------------
      <S>                                       <C>               <C>
      First quarter (through March 16)2001....   $ 15.500          $ 8.375
      ------------------------------------------------------------------------
      Fourth quarter 2000.....................     17.750            8.563
      Third quarter 2000......................     28.333           15.000
      Second quarter 2000.....................     33.000           17.000
      First quarter 2000......................     25.583           11.667
      ------------------------------------------------------------------------
      Fourth quarter 1999.....................     14.333            4.000
      Third quarter 1999......................      6.417             3.833
      Second quarter 1999.....................      5.958             2.708
      First quarter 1999......................      4.583             2.833
      ------------------------------------------------------------------------
</TABLE>


               On March 16, 2001, the closing sale price of the Company's Common
Stock as reported by Nasdaq was $9.00, and there were approximately 3,000
stockholders of record. Stockholders are urged to obtain current market
quotations for the Common Stock.

               No cash dividends have been declared to shareholders during the
past three years and the Company does not expect to declare cash dividends in
the foreseeable future. The payment of dividends is within the discretion of the
Company's Board of Directors, and will depend upon, among other things, the
Company's earnings, financial condition, capital requirements, and general
business conditions. In addition, the Company's bank credit agreement includes
covenants restricting dividend payments.

                                      -14-
<PAGE>   15

ITEM 6. SELECTED FINANCIAL DATA

               The following selected financial data for the fiscal years ended
December 31, 1996, 1997, 1998, 1999 and 2000 is qualified in its entirety by,
and should be read in conjunction with, the other information and financial
statements, including the notes thereto, appearing elsewhere herein (in 000's
except per share data).

<TABLE>
<CAPTION>

                                                              YEAR ENDED DECEMBER 31,
                                               ------------------------------------------------------

                                                    1996       1997        1998       1999      2000
                                                    ----       ----        ----       ----      ----
<S>                                             <C>        <C>         <C>        <C>       <C>
            INCOME STATEMENT DATA

Net sales                                       $ 57,727   $ 67,016    $ 61,328   $ 79,251  $118,462

Gross profit                                      15,073     18,727      15,402     20,948    37,427

Selling, general and administrative expenses      10,386     11,137      11,016     13,670    18,955

Income from operations                             4,687      7,590       4,386      7,278    18,472

Interest expense, net                                351         62         281        292       940

Other income                                          64        243          93        182       501

Income before taxes and minority interest          4,400      7,771       4,198      7,168    18,033

Provision for income taxes                         1,673      2,631       1,511      1,380     2,496

Minority interest in joint venture earnings          238       (15)        (14)      (219)     (642)

Net income                                         2,965      5,125       2,673      5,569    14,895

Earnings per share:
     Basic                                        $ 0.40     $ 0.69      $ 0.35     $ 0.73    $ 1.85
     Diluted                                      $ 0.37     $ 0.62      $ 0.33     $ 0.68    $ 1.62
Number of shares used in computation:
     Basic                                         7,439      7,457       7,544      7,625     8,071
     Diluted                                       8,043      8,223       8,057      8,204     9,222
</TABLE>

<TABLE>
<CAPTION>


                                                                AS OF DECEMBER 31,
                                               ------------------------------------------------------

                                                    1996       1997        1998       1999      2000
                                                    ----       ----        ----       ----      ----
<S>                                             <C>        <C>         <C>        <C>       <C>
             BALANCE SHEET DATA
Total assets                                    $ 32,546   $ 38,354    $ 45,389   $ 62,407  $112,950

Working capital                                   17,403     18,699      16,639     15,903    17,291

Long-term debt                                     4,288      3,226       5,991      4,672    15,997

Stockholders' equity                              19,464     24,453      27,460     34,973    51,253
</TABLE>



              No cash dividends were paid to shareholders during the years 1996
through 2000.

                                      -15-
<PAGE>   16

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS


               The following discussion of the Company's financial condition and
results of operations should be read together with the consolidated financial
statements and the notes to consolidated financial statements included elsewhere
in this Form 10-K. Except for the historical information contained herein, the
matters addressed in this Item 7 constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are subject to a variety of risks and uncertainties,
including those discussed below under the heading "Cautionary Statement for
Purposes of the "Safe Harbor" Provision of the Private Securities Litigation
Reform Act of 1995" and elsewhere in this Report on Form 10-K, that could cause
actual results to differ materially from those anticipated by the Company's
management. The Private Securities Litigation Reform Act of 1995 (the "Act")
provides certain "safe harbor" provisions for forward-looking statements. All
forward-looking statements made in this Annual Report on Form 10-K are made
pursuant to the Act.

GENERAL

               Diodes Incorporated (the "Company") is a manufacturer and
distributor of high-quality discrete semiconductor devices to leading
manufacturers in the communications, computer, electronics, and automotive
industries, and to distributors of electronic components. The Company's products
include small signal transistors and MOSFETs, transient voltage suppressors
(TVSs), zeners, diodes, rectifiers and bridges, as well as silicon wafers used
in manufacturing these products.

               SALES
               The Company's products are sold primarily in North America and
the Far East, both directly to end users and through electronic component
distributors. In 2000, approximately 54% and 46% of the Company's products were
sold in North America and the Far East, respectively, compared to 56% and 44% in
1999, respectively. See Note 11 of "Notes to Consolidated Financial Statements"
for a description of the Company's adoption of SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. The increase in the
percentage of sales in the Far East is expected to continue as the Company
believes there is greater potential to increase market share in that region due
to the expanding base of electronic product manufacturers.

               Beginning in 1998, the Company increased the amount of product
shipped to larger distributors. Although these sales were significant in terms
of total sales dollars and gross margin dollars, they generally were under
agreements that resulted in lower gross profit margins for the Company when
compared to sales to smaller distributors and OEM customers. As the
consolidation of electronic component distributors continues, the Company
anticipates that a greater portion of its distributor sales will be to the
larger distributors, and thus may result in lower gross profit margins for this
sales channel.

               In 1999, Diodes-Taiwan began purchasing silicon wafers, a new
product line, from FabTech for resale to customers in the Far East. Silicon
wafer sales were $9,837,000 and $4,005,000 in 2000 and 1999, respectively. The
gross margin percentage on sales of silicon wafers is currently far below that
of the Company's standard product line. Initially a complementary service for
some customers rather than a focused product line, silicon wafers will now be a
focused product line supplied by FabTech to its current customer base, as well
as to Diodes-China for use in its manufacturing process.

               REPORTING SEGMENTS
               For financial reporting purposes, the Company is deemed to engage
in two industry segments: North America and the Far East. Both segments focus on
discrete semiconductor devices. The North American segment includes the
corporate offices in California (Diodes-North America) as well as FabTech, Inc.
("FabTech" or "Diodes-FabTech"), the newly acquired 5-inch wafer foundry located
in Missouri. Diodes-North America procures and distributes products primarily
throughout North America and provides management, warehousing, engineering and
logistics support. Diodes-FabTech manufactures silicon wafers for use by
Diodes-China as well as for sale to its customer base. The Far East segment
includes the operations of Diodes-Taiwan and Diodes-China. Diodes-China
manufactures product for, and distributes product to, both the North American
and Taiwan segments, as well as to trade customers. Diodes-Taiwan procures
product from, and distributes product primarily to, customers in Taiwan, Korea,
Singapore, and Hong Kong.

               DIODES-TAIWAN
               Until October 2000, Diodes-Taiwan also manufactured product for
sale to Diodes-North America and to trade customers. The Company moved its
Taiwan manufacturing to China because the Taiwan manufactured products were
lower technology products, fairly labor intensive, and the cost savings of
moving the manufacturing to the Company's qualified minority partner in
Diodes-China were attractive and necessary to meet market demand. In connection
with the manufacturing move, the Company sold approximately $150,000 of
equipment to the minority partner of Diodes-China. Diodes-Taiwan continues as
the Company's Asia-Pacific sales, logistics and distribution center.
Diodes-China participates in

                                      -16-
<PAGE>   17

final testing, inspection and packaging of these products, formerly manufactured
by Diodes-Taiwan. Diodes-Taiwan also procures some product for the Company's
North American operations.

               VISHAY/LPSC
               In July 1997, Vishay Intertechnology, Inc. ("Vishay") and the
Lite-On Group, a Taiwanese consortium, formed a joint venture -- Vishay/Lite-On
Power Semiconductor Pte., Ltd. ("Vishay/LPSC") -- to acquire Lite-On Power
Semiconductor Corp. ("LPSC"), the Company's largest shareholder and a member of
The Lite-On Group of the Republic of China. The Lite-On Group, with worldwide
sales of approximately $4.5 billion, is a leading manufacturer of power
semiconductors, computer peripherals, and communication products. The
Vishay/LPSC joint venture included the worldwide discrete power semiconductor
business of LPSC and the Asian passive component business of Vishay. Vishay held
a 65% controlling interest in the joint venture, and The Lite-On Group held the
other 35%. In March 2000, Vishay agreed to sell their 65% interest in
Vishay/LPSC back to The Lite-On Group. In December 2000, LPSC merged with Dyna
Image Corporation of Taipei, Taiwan, the world's largest Contact Image Sensors
("CIS") manufacturer. CIS are primarily used in fax machines, scanners, and copy
machines. C.H. Chen, the Company's President and CEO, remains Vice Chairman of
the combined company now called Lite-On Semiconductor Corporation ("LSC").

               MANUFACTURING AND VENDORS
               The Company's Far East subsidiary, Diodes-China, manufactures
product for sale primarily to North America and Asia. Diodes-China's
manufacturing focuses on SOT-23 and SOD-123 products, as well as sub-miniature
packages such as SOT-363, SOT-563, and SC-75. These surface-mount devices
("SMD") are much smaller in size and are used primarily in the computer and
communication industries, destined for cellular phones, notebook computers,
pagers, PCMCIA cards and modems, as well as in garage door transmitters, among
others. Diodes-China's state-of-the-art facilities have been designed to develop
even smaller, higher-density products as electronic industry trends to portable
and hand-held devices continue. Diodes-China purchases silicon wafers from
FabTech, however, the majority are currently purchased from other wafer vendors.

               Since 1997, the Company's manufacturing focus has primarily been
in the development and expansion of Diodes-China. To date, the Company and its
minority partner have increased property, plant and equipment at the facility to
approximately $40 million. The equipment expansion allows for the manufacture of
additional SOT-23 packaged components as well as other surface-mount packaging,
including the smaller SOD packages.

               The Company will continue its strategic plan of locating
alternate sources of its products and raw materials, including those provided by
its major suppliers. Alternate sources include, but are not limited to,
Diodes-China and other sourcing agreements in place, as well as those in
negotiation. The Company anticipates that the effect of the loss of any one of
its major suppliers will not have a material adverse effect on the Company's
operations, provided that alternate sources remain available. The Company
continually evaluates alternative sources of its products to assure its ability
to deliver high-quality, cost-effective products.

               FABTECH
               Acquired on December 1, 2000, FabTech's wafer foundry is located
in Lee's Summit, Missouri. FabTech manufactures primarily 5-inch silicon wafers
which are the building blocks for semiconductors. FabTech has full foundry
capabilities including processes such as silicon epitaxy, silicon oxidation,
photolithography and etching, ion implantation and diffusion, low pressure and
plasma enhanced chemical vapor deposition, sputtered and evaporated metal
deposition, wafer backgrinding, and wafer probe and ink.

               The FabTech purchase price consisted of approximately $6 million
in cash and an earnout of up to $30 million if FabTech meets specified earnings
targets over a four-year period. In addition, FabTech is obligated to repay an
aggregate of approximately $19 million, consisting of (i) approximately $13.6
million payable, together with interest at LIBOR plus 1%, to LSC through March
31, 2002, (ii) approximately $2.6 million payable, together with interest at
LIBOR plus 1.1%, to the Company through February 28, 2001 and (iii)
approximately $3.0 million payable to a financial institution, which amount was
repaid on December 4, 2000 with the proceeds of a capital contribution by the
Company. The acquisition was financed internally and through bank credit
facilities.

               FabTech purchases polished silicon wafers, and then by using the
various technologies listed above, in conjunction with many chemicals and gases,
fabricates several layers on the wafers, including epitaxial silicon, ion
implants, dielectrics, and metals, with various patterns. Depending upon these
layers and the die size (which is determined during the photolithography process
and completed at the customer's packaging site where the wafer is sawed into
square or rectangular die), different types of wafers with various currents,
voltages, and switching speeds are produced.

                                      -17-
<PAGE>   18


               RECENT RESULTS
               Beginning in the second half of 1999, and continuing through the
first three quarters of 2000, industry demand exceeded industry capacity. The
Company's gross profit margins reached a peak of 34.4% in the third quarter of
2000. In addition, OEM customers and distributors increased their inventory
levels. As semiconductor manufacturers, including the Company, increased
capacity, the U.S. economy slowed causing a sharp decline in sales in the fourth
quarter of 2000. Although gross profit margins for year 2000 were 31.6%, the
gross profit in the fourth quarter of 2000 decreased to 28.3%. The excess
capacity, coupled with the decreased demand and higher inventory levels, has
continued into 2001 and the Company expects further deterioration of its gross
profit margins until such a time as demand increases and the Company utilizes
more of its available capacity.

               The discrete semiconductor industry has been subject to severe
pricing pressures, causing the Company's gross profit margins to decline from
28.3% in 1995 to 25.1% in 1998. Although manufacturing costs have been falling,
excess manufacturing capacity and over-inventory has caused selling prices to
fall to a greater extent than manufacturing cost. To compete in this highly
competitive industry, in recent years, the Company has committed substantial
resources to the development and implementation of two areas of operation: (i)
sales and marketing, and (ii) manufacturing. Emphasizing the Company's focus on
customer service, additional personnel and programs have been added. In order to
meet customers' needs at the design stage of end-product development, the
Company has employed additional applications engineers. These applications
engineers work directly with customers to assist them in "designing in" the
correct products to produce optimum results. Regional sales managers, working
closely with manufacturers' representative firms and distributors, have also
been added in the U.S. and the Far East to help satisfy customers' requirements.
In addition, the Company has continued to develop relationships with major
distributors who inventory and sell the Company's products.

               Beginning late in the fourth quarter of 2000, the Company and the
semiconductor industry as a whole experienced a sharp inventory correction
primarily in two key markets, communications and computers. This downturn has
continued into the first quarter of 2001. Although the Company's market share
has remained stable, market conditions for its core product lines have not
improved, while demand for silicon wafers, the fundamental raw materials used in
manufacturing discrete semiconductors, has deteriorated further.

               The negative impact to earnings is largely attributable to
reduced capacity utilization of the Company's manufacturing assets and changes
in product mix, both of which have had a negative impact on gross margins. Due
to market conditions, capacity utilization at Diodes' FabTech subsidiary has
decreased 45% as compared to the previous year, while Diodes-China's utilization
has decreased 15%.

               The risks of becoming a fully integrated manufacturer are
amplified in an industry-wide slowdown because of the fixed costs associated
with manufacturing facilities. The Company has responded to this cyclical
downturn by implementing programs to cut operating costs, including reducing its
worldwide workforce by 26%, primarily at the FabTech and Diodes-China
manufacturing facilities. The Company will continue to actively adjust its cost
structure as dictated by market conditions.

               Although no clear short-term change in market conditions exist,
long term, the Company believes that it will continue to generate value for
shareholders and customers, not just from its expanded Diodes-China
manufacturing and FabTech's foundry assets, but also by the addition of a true
technology component to the Company. Although market conditions changed just as
the new initiative started, the Company will continue to pursue its goal of
becoming a total solution provider. This is a multi-year initiative that will
increase the Company's ability to serve its customers' needs, while establishing
the Company at the forefront of the next generation of discrete technologies.

               The Company's overall effective tax rate decreased to 13.8% in
2000 from 19.3% in 1999. The decrease in the Company's effective tax rate is due
primarily to Diodes-China's increased net income at a preferential tax rate of
0%. From 2001 through 2003, the tax rate at Diodes-China should be 13.5%
(one-half of the normal tax rate of 27%). The Company, however, has received
indications from the local taxing authority in Shanghai that the 0% tax holiday
may be extended beyond 2000, but currently, no assurances can be made regarding
the preferential tax treatment extension. In addition, it is currently not known
whether the taxing authority for the central government of the People's Republic
of China ("PRC") will participate in this extended tax holiday arrangement.
Based upon expected tax rates in the U.S., Taiwan and China, and the expected
profitability of each of the Company's four business segments during the balance
of the year, it is anticipated that for 2001 the provision for income taxes
should be in the range of 10% to 20% of pre-tax income.

               In accordance with tax treaty arrangements, the Company receives
full credit against its U.S. Federal tax liability for corporate taxes paid in
Taiwan and China. The repatriation of funds from Taiwan and China to the Company
may be subject to state income taxes. In the years ending December 31, 1999 and
2000, Diodes-Taiwan distributed dividends of approximately $1.5 million and $2.6
million, respectively, which is included in Federal and state taxable income.
Deferred

                                      -18-
<PAGE>   19

taxes have been provided for all remaining undistributed earnings. As of
December 31, 2000, accumulated and undistributed earnings of Diodes-China is
approximately $17 million. The Company has not recorded deferred Federal or
state tax liabilities (estimated to be $6.8 million) on these earnings since the
Company considers its investment in Diodes-China to be permanent, and has no
plans, intentions or obligation to distribute any part or all of that amount
from China to the United States.


RESULTS OF OPERATIONS

               The following table sets forth, for the periods indicated, the
percentage that certain items in the statement of income bear to net sales and
the percentage dollar increase (decrease) of such items from period to period.
<TABLE>
<CAPTION>

                                            PERCENT OF NET SALES                        PERCENTAGE DOLLAR INCREASE (DECREASE)
                                          YEAR ENDED DECEMBER 31,                               YEAR ENDED DECEMBER 31,
                          --------------------------------------------------------------------------------------------------------

                           1996         1997        1998       1999        2000     `96 to `97  `97 to `98  `98 to `99  `99 TO `00
                          -------     -------     -------     -------     -------   ----------  ----------  ----------  ----------

<S>                        <C>        <C>         <C>         <C>         <C>       <C>         <C>         <C>         <C>
Net sales                   100.0%      100.0%      100.0%      100.0%      100.0%       16.1%       (8.5)%      29.2%       49.5%

Cost of goods sold          (73.9)      (72.1)      (74.9)      (73.6)      (68.4)       13.2        (4.9)       26.9        39.0
                          -------     -------     -------     -------     -------     -------     -------     -------     -------

Gross profit                 26.1        27.9        25.1        26.4        31.6        24.2       (17.8)       36.0        78.7

Operating expenses          (18.0)      (16.6)      (18.0)      (17.2)      (16.0)        7.2        (1.1)       24.1        38.7
                          -------     -------     -------     -------     -------     -------     -------     -------     -------

Income from operations        8.1        11.3         7.2         9.2        15.6        61.9       (42.2)       65.9       153.8

Interest expense, net        (0.6)       (0.1)       (0.5)       (0.4)       (0.8)      (82.3)      353.2         3.9       221.9

Other income                  0.1         0.4         0.2         0.2         0.4       279.7       (61.7)       95.7       175.3
                          -------     -------     -------     -------     -------     -------     -------     -------     -------

Income before taxes and
minority interest             7.6        11.6         6.8         9.0        15.2        76.6       (46.0)       70.7       151.6
Income taxes                  2.9         3.9         2.4         1.7         2.1        57.3       (42.6)       (8.7)       80.9
                          -------     -------     -------     -------     -------     -------     -------     -------     -------

Minority interest             0.4        (0.1)        0.0        (0.3)       (0.5)     (106.3)       (6.7)    (1,464.3)    (193.2)

Net income                    5.1         7.6         4.4         7.0        12.6        72.8       (47.8)      108.3       167.5
</TABLE>

               The following discussion explains in greater detail the
consolidated financial condition of the Company. This discussion should be read
in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere herein.

2000 COMPARED TO 1999

               Net sales for 2000 increased approximately $39,211,000 to
$118,462,000 from $79,251,000 for 1999. The 49.5% increase was due primarily to
(i) a 41.7% increase in units sold, as a result of an increased demand for the
Company's products, primarily in the Far East and (ii) sales of silicon wafers
totaling $9,837,000, versus $4,005,000 in 1999. Diodes-China's trade sales in
2000 were $6,610,000, compared to $3,389,000 in the same period last year. A
6.3% increase in the Company's average selling price, primarily in the Far East,
also contributed to increased sales. Due to an industry-wide slowdown that began
late in the fourth quarter, the Company anticipates pricing pressures will
increase significantly in 2001.

               Gross profit for 2000 increased 78.7% to $37,427,000 from
$20,948,000 for 1999. Of the $16,479,000 increase, $10,365,000 was due to the
49.5% increase in net sales while $6,113,000 was due to the increase in gross
margin percentage from 26.4% in 1999 to 31.6% in 2000. Manufacturing profit at
Diodes-China at higher gross profit margins was the primary contributor to the
increase, partially offset by an increase in the sale of wafers at a generally
lower margin than then Company's other products, as well as increased sales to
larger distributors. Although gross profit margins strengthened in 2000, pricing
pressures continue to exist on many of the Company's product lines and gross
profit margin is expected to decrease in 2001. Average selling prices in 2000
increased approximately 6.3%. As the trend of consolidation among electronic
component distributors continues, the Company anticipates that a greater portion
of its distributor sales will be to larger distributors, usually under
agreements resulting in lower than historical gross profit margins.

                                      -19-
<PAGE>   20

               For 2000, selling, general and administrative expenses ("SG&A")
increased $5,285,000 to $18,955,000 from $13,670,000 for 1999. The 38.7%
increase in SG&A was due primarily to increases in management expenses at
Diodes-China, higher Company-wide marketing and advertising expenses, increased
sales commissions at Diodes-Taiwan, and additional sales and engineering
personnel. SG&A as a percentage of sales decreased to 16.0% from 17.2% in the
comparable period last year, primarily due to the 49.5% increase in net sales.

               Net interest expense for 2000 increased $940,000, due primarily
to an increased use of the Company's credit facility to support the expansion of
Diodes-China versus the same period last year. The Company's interest expense is
primarily the result of the term loan by which the Company is financing (i) the
investment in Diodes-China's manufacturing facility and (ii) the acquisition of
FabTech. Interest income is primarily the interest charged to FabTech for the
first 11 months of 2000, under the Company's formal loan agreement, as well as
earnings on its cash balances.

               Other income for 2000 increased approximately $319,000 compared
to the same period last year, due primarily to currency exchange gains at the
Company's subsidiaries in Taiwan and China.

               The Company's overall effective tax rate decreased to 13.8% in
2000 from 19.3% in 1999. The decrease in the Company's effective tax rate is due
primarily to Diodes-China's increased net income at a preferential tax rate of
0%. From 2001 through 2003, the tax rate at Diodes-China should be 13.5%
(one-half of the normal tax rate of 27%). The Company, however, has received
indications from the local taxing authority in Shanghai that the 0% tax holiday
may be extended beyond 2000, but currently, no assurances can be made regarding
the preferential tax treatment extension. In addition, it is currently not known
whether the taxing authority for the central government of the People's Republic
of China ("PRC") will participate in this extended tax holiday arrangement.
Based upon expected tax rates in the U.S., Taiwan and China, and the expected
profitability of each of the Company's four business segments during the balance
of the year, it is anticipated that for 2001 the provision for income taxes
should be in the range of 10% to 20% of pre-tax income.

               For the years ended December 31, 1999 and 2000, Diodes-Taiwan
distributed dividends of approximately $1.5 million and $2.6 million,
respectively, which is included in Federal and state taxable income for the
respective years. Deferred taxes have been provided for all remaining
undistributed earnings in excess of statutory permanent capital requirements of
Diodes-Taiwan. As of December 31, 2000, accumulated and undistributed earnings
of Diodes-China is approximately $17 million. The Company has not recorded
deferred Federal or state tax liabilities (estimated to be $6.8 million) on
these earnings since the Company considers its investment in Diodes-China to be
permanent, and has no plans, intentions or obligation to distribute any part or
all of that amount from China to the United States.

               In 2000, Diodes-China contributed to the Company's profitability
and, therefore, the $642,000 minority interest in joint venture represents the
minority investor's 5% share of the joint venture's profit. The increase in the
joint venture earnings for 2000 is primarily the result of increased sales. The
joint venture investment is eliminated in consolidation of the Company's
financial statements and the activities of Diodes-China are included therein. As
of December 31, 2000, the Company had a 95% controlling interest in the joint
venture.

               The Company generated net income of $14,895,000 (or $1.85 basic
earnings per share, $1.62 diluted earnings per share) in 2000, as compared to
$5,569,000 (or $0.73 basic earnings per share, $0.68 diluted earnings per share)
for 1999. This $9,326,000 or 167.5% increase is due primarily to the 49.5% sales
increase at gross profit margins of 31.6% compared to gross profit margins of
26.4% in 1999.

1999 COMPARED TO 1998

               Net sales for 1999 increased approximately $17,923,000 to
$79,251,000 from $61,328,000 for 1998. The 29.2% increase was due primarily to
(i) a 36.0% increase in units sold, as a result of an increased demand for the
Company's products, primarily in the Far East and (ii) $4,005,000 sales of
silicon wafers, a new product line. Diodes-China's trade sales in 1999 were
$3,389,000, compared to $280,000 in the same period last year. The increase in
units sold was partly offset by a 7.1% decrease in the Company's average selling
price, primarily in the Far East. In the fourth quarter of 1999, average selling
prices rose 3.6% and 5.0%, compared to the fourth quarter 1998 and the third
quarter 1999, respectively. The Company anticipates pricing pressures could
continue, though the severity may slowly diminish.

               In 1999, Diodes-Taiwan began purchasing silicon wafers, a new
product line, from FabTech for resale to customers in the Far East. The gross
margin percentage on sales of silicon wafers, though still profitable, is far
below that of the Company's standard product line. Silicon wafer sales are a
complementary service for some customers, rather than a focused product line.

                                      -20-
<PAGE>   21

               Gross profit for 1999 increased $5,546,000 to $20,948,000 from
$15,402,000 for 1998. The 36.0% increase was due primarily to the 29.2% increase
in net sales. Manufacturing profit at Diodes-China at higher gross profit
margins contributed to an increase in gross margin percentage to 26.4% for 1999
compared to 25.1% for 1998. Although gross profit margins strengthened in the
third and fourth quarters of 1999, pricing pressures continue to exist on many
of the Company's product lines, and there can be no guarantee that margins will
continue to improve. Average selling prices in 1999 decreased approximately
7.1%, which represents decreases in average selling prices in the Far East and
North America of approximately 18.3% and 7.9%, respectively, compared to 1998.
In addition, as the trend of consolidation among electronic component
distributors continues, the Company anticipates that a greater portion of its
distributor sales will be to larger distributors, usually under agreements
resulting in lower than historical gross profit margins.

               For 1999, selling, general and administrative expenses ("SG&A")
increased $2,654,000 to $13,670,000 from $11,016,000 for 1998. The 24.1%
increase in SG&A was due primarily to increases in management expenses at
Diodes-China, higher Company-wide marketing and advertising expenses, increased
sales commissions at Diodes-Taiwan, and additional sales and engineering
personnel. SG&A as a percentage of sales decreased to 17.2% from 18.0% in the
comparable period last year, primarily due to the 29.2% increase in net sales.

               Net interest expense for 1999 increased $11,000, due primarily to
an increased use of the Company's credit facility to support the expansion of
Diodes-China versus the same period last year. The Company's interest expense is
primarily the result of the term loan by which the Company is financing (i) the
investment in Diodes-China's manufacturing facility and (ii) the $2.6 million
receivable, including accrued interest, advanced to FabTech. Interest income is
primarily the interest charged to FabTech, a related party, under the Company's
formal loan agreement, as well as earnings on its cash balances.

               Other income for 1999 increased approximately $89,000 compared to
the same period last year, due primarily to currency exchange gains at the
Company's subsidiaries in Taiwan and China.

               The Company's overall effective federal, state, and foreign tax
rate decreased to 19.3% in 1999 from 36.0% in 1998. This decrease is due
primarily to Diodes-China's increase in net income at a tax rate of 0%. Through
December 31, 1997, the Company had undistributed earnings at Diodes-Taiwan for
which no deferred income tax liability had been recorded since, at that time,
management considered this investment to be permanent, and no plans or
intentions existed to distribute the capital of its Taiwan subsidiary. Changes
in Taiwan income tax policies in 1998 caused management to reconsider its
investment strategies in the fourth quarter of 1998 for current and future
earnings at Diodes-Taiwan. While a portion of its investment will remain in
Taiwan, a distribution of approximately $4.5 million will be made by
Diodes-Taiwan to the Company. Approximately $1.5 million was distributed in
1999, and the remaining is scheduled to be distributed in 2000. The decision was
made, in part, because the changes in Taiwan income tax policies made it less
favorable to accumulate earnings at Diodes-Taiwan and, in part, to allow the
Company to redirect its financial resources from Diodes-Taiwan to its expansion
of Diodes-China.

               In 1999, Diodes-China contributed to the Company's profitability
and, therefore, the $219,000 minority interest in joint venture represents the
minority investor's 5% share of the joint venture's profit. The increase in the
joint venture earnings for 1999 is primarily the result of increased sales. The
joint venture investment is eliminated in consolidation of the Company's
financial statements and the activities of Diodes-China are included therein. As
of December 31, 1999, the Company had a 95% controlling interest in the joint
venture.

               The Company generated net income of $5,569,000 (or $0.73 basic
earnings per share, $0.68 diluted earnings per share), as compared to $2,673,000
(or $0.35 basic earnings per share, $0.33 diluted earnings per share) for 1998.
This $2,896,000 or 108.3% increase is due primarily to the 29.2% sales increase
at gross profit margins of 26.4% compared to gross profit margins of 25.1% in
1998.

FINANCIAL CONDITION

        LIQUIDITY AND CAPITAL RESOURCES

               Cash provided by operating activities in 2000 was $10.2 million
compared to $8.0 million in 1999 and $5.5 million in 1998. The primary sources
of cash flows from operating activities in 2000 were net income of $14.9 million
and depreciation of $5.0 million. The primary sources of cash flows from
operating activities in 1999 were net income of $5.6 million and an increase in
accounts payable of $5.3 million. The primary use of cash flows from operating
activities in 2000 was an increase in inventories of $9.3 million and an
increase in accounts receivable of $2.2 million. The primary use of cash flows
from operating activities in 1999 was an increase in accounts receivable of $5.4
million and an increase in inventories of $2.8 million. The primary sources of
cash flows from operating activities in 1998 were net income of $2.7 million and
a

                                      -21-
<PAGE>   22

decrease in accounts receivable of $1.8 million. The primary use of cash flows
from operating activities in 1998 was a decrease in accounts payable of $1.3
million.

               Since December 31, 1999, accounts receivable from customers has
increased 31.8% due to a slowing trend in payments from major distributors, as
well as from the 49.5% increase in sales. The Company does not expect this trend
to result in additional bad debt expense. The Company continues to closely
monitor its credit policies, while at times providing more flexible terms,
primarily to its Far East customers, when necessary. The ratio of the Company's
current assets to current liabilities on December 31, 2000 was 1.4 to 1,
compared to a ratio of 1.7 to 1 and 2.6 to 1 as of December 31, 1999 and 1998,
respectively.

               Cash used by investing activities was $21.4 million in 2000,
compared to $9.3 million in 1999 and $9.8 million in 1998. The primary
investment in all three years was for additional manufacturing equipment and
expansion at the Diodes-China manufacturing facility.

               On December 1, 2000, the Company purchased all the outstanding
capital stock of FabTech Incorporated, a 5-inch wafer foundry located in Lee's
Summit, Missouri from Lite-On Semiconductor Corporation ("LSC"), the Company's
largest shareholder. The purchase price consisted of approximately $6 million in
cash and an earnout of up to $30 million if FabTech meets specified earnings
targets over a four-year period. In addition, FabTech is obligated to repay an
aggregate of approximately $19 million, consisting of (i) approximately $13.6
million payable, together with interest at LIBOR plus 1%, to LSC through March
31, 2002, (ii) approximately $2.6 million payable, together with interest at
LIBOR plus 1.1%, to the Company through February 28, 2001 and (iii)
approximately $3.0 million payable to a financial institution, which amount was
repaid on December 4, 2000 with the proceeds of a capital contribution by the
Company. The acquisition was financed internally and through bank credit
facilities.

               Cash provided by financing activities was $12.1 million in 2000,
compared to $2.4 million in 1999 and $4.3 million in 1998. Diodes has a $26.6
million credit agreement with a major bank providing a working capital line of
credit up to $9 million, term commitment notes up to $10 million for plant
expansion and financing the acquisition of FabTech, and $7.6 million for
Diodes-China operations. Interest on outstanding borrowings under the credit
agreement is payable monthly at LIBOR plus a negotiated margin. Fixed borrowings
require fixed principal plus interest payments for sixty months thereafter. The
agreement has certain covenants and restrictions, which, among other matters,
requires the maintenance of certain financial ratios and operating results, as
defined in the agreement. The Company was in compliance with the covenants as of
December 31, 2000.

               The working capital line of credit expires July 1, 2002. During
2000, average and maximum borrowings outstanding on the line of credit were
$3,645,000 and $6,691,000, respectively. The weighted average interest rate on
outstanding borrowings was 8.9% for the year ended December 31, 2000.

               In addition, Diodes-China operates with two unsecured working
capital credit facilities. One credit facility provides for advances of up to $3
million with interest at 7.0% per annum. The second credit facility provides for
advances of RMB$9.3 million ($1,002,000 as of December 31, 2000) with interest
of 5.6% to 6.7% per annum. As of December 31, 2000 the balance on these notes
was $4,003,000.

               The Company has used its credit facility primarily to fund the
expansion at Diodes-China and for the FabTech acquisition, as well as to support
its operations. The Company believes that the continued availability of this
credit facility, together with internally generated funds, will be sufficient to
meet the Company's current foreseeable operating cash requirements.

               Total working capital increased approximately 8.7% to $17.3
million as of December 31, 2000, from $15.9 million as of December 31, 1999. The
Company believes that such working capital position will be sufficient for
foreseeable growth opportunities. The Company's debt to equity ratio increased
to 1.20 at December 31, 2000, from 0.78 at December 31, 1999. It is anticipated
that this ratio may increase as the Company continues to use its credit
facilities to fund additional inventory sourcing opportunities.

               As of December 31, 2000, the Company has no material plans or
commitments for capital expenditures other than in connection with the expansion
at Diodes-China and the Company's implementation of an Oracle Enterprise
Resource Planning software package, planned for late 2001. However, to ensure
that the Company can secure reliable and cost effective inventory sourcing to
support and better position itself for growth, the Company is continuously
evaluating additional internal manufacturing expansion, as well as additional
outside sources of products. The Company believes its financial position will
provide sufficient funds should an appropriate investment opportunity arise and
thereby, assist the Company in improving customer satisfaction and in
maintaining or increasing market share.

                                      -22-
<PAGE>   23

               Inflation did not have a material effect on net sales or net
income in fiscal years 1998, 1999 or 2000. A significant increase in inflation
would affect future performance.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

               FOREIGN CURRENCY RISK. The Company faces exposure to adverse
movements in foreign currency exchange rates, primarily in Asia. The Company's
foreign currency risk may change over time as the level of activity in foreign
markets grows and could have an adverse impact upon the Company's financial
results. Certain of the Company's assets, including certain bank accounts and
accounts receivable, and liabilities exist in non-U.S. dollar denominated
currencies, which are sensitive to foreign currency exchange fluctuations. These
currencies are principally the Chinese Yuan, the Taiwanese dollar, the Japanese
Yen, and the Hong Kong dollar. Because of the relatively small size of each
individual currency exposure, the Company does not employ hedging techniques
designed to mitigate foreign currency exposures. Therefore, the Company could
experience currency gains and losses.

               INTEREST RATE RISK. The Company has a credit agreement with a
U.S. financial institution at an interest rate equal to LIBOR plus a negotiated
margin. A sharp rise in interest rates could have an adverse impact upon the
Company's cost of working capital and its interest expense. The Company does not
currently hedge this potential interest rate exposure.

               POLITICAL RISK. The Company has a significant portion of its
assets (54% in 2000 and 57% in 1999) in Mainland China and Taiwan. The
possibility of political conflict between the two countries or with the United
States could have an adverse impact upon the Company's ability to transact
business through these important business segments and generate profits.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

               See "Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K" for the Company's Consolidated Financial Statements and the
notes and schedules thereto filed as part of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

               Not Applicable.

                                    PART III

               Item 10: Directors and Executive Officers of the Registrant, Item
11: Executive Compensation, Item 12: Security Ownership of Certain Beneficial
Owners and Management, and Item 13: Certain Relationships and Related
Transactions, are omitted since the Company intends to file a definitive proxy
statement, in connection with its annual meeting of stockholders, with the
Securities and Exchange Commission pursuant to Regulation 14A within 120 days
after the end of the Company's fiscal year ended December 31, 2000. The
information required by those items is set forth in that proxy statement and
such information is incorporated by reference in this Form 10-K.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

        (a)    FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>

               <S>                                                                            <C>
               (1)  Financial statements:                                                     Page
                                                                                              ----
                      Independent Auditors' Report                                            25

                      Consolidated Balance Sheet at December 31, 1999 and 2000                26 to 27

                      Consolidated Statement of Income for the Years Ended
                      December 31, 1998, 1999, and 2000                                       28
</TABLE>

                                      -23-
<PAGE>   24

<TABLE>
<CAPTION>

               <S>                                                                            <C>
                      Consolidated Statement of Stockholders' Equity for the Years
                      Ended December 31, 1998, 1999, and 2000                                 29

                      Consolidated Statement of Cash Flows for the Years Ended
                      December 31, 1998, 1999, and 2000                                       30 to 31

                      Notes to Consolidated Financial Statements                              32 to 46

               (2)  Schedules:

                      Report of Independent Accountants on Financial Statements and
                      Schedules                                                               47

                      Schedule II -- Valuation and Qualifying Account                         48
</TABLE>


        (c)    REPORTS ON FORM 8-K

                      The Company filed a Form 8-K on December 14, 2000 and
                      filed a Form 8-K/A on February 9, 2001 with the Securities
                      and Exchange Commission.

        (b)    EXHIBITS

                      See the Index to Exhibits at page 30 of this Annual Report
                      on Form 10-K for exhibits filed or incorporated by
                      reference.

                                      -24-
<PAGE>   25

                          INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
Diodes Incorporated and Subsidiaries


We have audited the accompanying consolidated balance sheets of Diodes
Incorporated and Subsidiaries as of December 31, 2000 and 1999 and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three year period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Diodes
Incorporated and Subsidiaries as of December 31, 2000 and 1999, and the
consolidated results of their operations and cash flows for each of the years in
the three year period ended December 31, 2000, in conformity with generally
accepted accounting principles.


MOSS ADAMS LLP



/s/ Moss Adams LLP
Los Angeles, California
January 30, 2001

                                      -25-
<PAGE>   26

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,                                     1999                 2000
--------------------------------------------------------------------------------
<S>                                         <C>                  <C>
ASSETS

CURRENT ASSETS
  Cash                                      $  3,557,000         $  4,476,000
  Accounts receivable
    Customers                                 14,962,000           19,723,000
    Related parties                               90,000              615,000
    Other                                        300,000               26,000
                                            ------------         ------------
                                              15,352,000           20,364,000
    Allowance for doubtful accounts              297,000              311,000
                                            ------------         ------------
                                              15,055,000           20,053,000

Inventories                                   16,575,000           31,788,000
Deferred income taxes                          1,700,000            4,387,000
Prepaid expenses and other                       762,000              686,000
                                            ------------         ------------

           Total current assets               37,649,000           61,390,000

PROPERTY, PLANT AND EQUIPMENT, net            20,909,000           45,129,000

ADVANCES TO RELATED PARTY VENDOR               2,561,000                   --

DEFERRED INCOME TAXES                            146,000              616,000

OTHER ASSETS
  Goodwill, net                                  969,000            5,318,000
  Miscellaneous                                  173,000              497,000
                                            ------------         ------------

           Total assets                     $ 62,407,000         $112,950,000
                                            ============         ============
</TABLE>

--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.


                                       26
<PAGE>   27
DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,                                                                   1999                 2000
------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Line of credit                                                           $  3,237,000         $  7,750,000
  Accounts payable
    Trade                                                                     7,716,000           10,710,000
    Related parties                                                           1,821,000            1,008,000
  Accrued liabilities                                                         5,782,000            8,401,000
  Income taxes payable                                                          878,000            1,370,000
  Current portion of long-term debt
    Related party                                                                    --           11,049,000
    Other                                                                     2,312,000            3,811,000
                                                                           ------------         ------------
           Total current liabilities                                         21,746,000           44,099,000
DEFERRED COMPENSATION                                                            57,000                   --
LONG-TERM DEBT, net of current portion
  Related party                                                                      --            2,500,000
  Other                                                                       4,672,000           13,497,000
MINORITY INTEREST IN JOINT VENTURE                                              959,000            1,601,000
STOCKHOLDERS' EQUITY
    Class A convertible preferred stock -
        par value $1 per share; 1,000,000
        shares authorized; no shares issued and outstanding                          --                   --
    Common stock - par value $.66 2/3 per share;
        30,000,000 shares authorized; 9,008,282 shares in 1999 and
        9,201,704 shares in 2000 issued and outstanding                       6,006,000            6,134,000
    Additional paid-in capital                                                5,886,000            7,143,000
    Retained earnings                                                        24,863,000           39,758,000
                                                                           ------------         ------------
                                                                             36,755,000           53,035,000
    Less: Treasury stock - 1,075,672 shares of
        common stock, at cost                                                 1,782,000            1,782,000
                                                                           ------------         ------------

                                                                             34,973,000           51,253,000
                                                                           ------------         ------------

           Total liabilities and stockholders' equity                      $ 62,407,000         $112,950,000
                                                                           ============         ============
</TABLE>

--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.

                                       27
<PAGE>   28

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                            1998                   1999                  2000
----------------------------------------------------------------------------------------------------------
<S>                                            <C>                    <C>                    <C>
NET SALES                                      $  61,328,000          $  79,251,000          $ 118,462,000

COST OF GOODS SOLD                                45,926,000             58,303,000             81,035,000
                                               -------------          -------------          -------------

      Gross profit                                15,402,000             20,948,000             37,427,000

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                          11,016,000             13,670,000             18,955,000
                                               -------------          -------------          -------------

      Income from operations                       4,386,000              7,278,000             18,472,000

OTHER INCOME (EXPENSES)
  Interest income                                    304,000                316,000                392,000
  Interest expense                                  (585,000)              (608,000)            (1,332,000)
  Other                                               93,000                182,000                501,000
                                               -------------          -------------          -------------

      Income before income taxes
         and minority interest                     4,198,000              7,168,000             18,033,000

INCOME TAX PROVISION                              (1,511,000)            (1,380,000)            (2,496,000)
                                               -------------          -------------          -------------

      Income before minority interest              2,687,000              5,788,000             15,537,000

MINORITY INTEREST IN JOINT VENTURE                   (14,000)              (219,000)              (642,000)
                                               -------------          -------------          -------------

NET INCOME                                     $   2,673,000          $   5,569,000          $  14,895,000
                                               =============          =============          =============

EARNINGS PER SHARE
      Basic                                    $        0.35          $        0.73          $        1.85
                                               =============          =============          =============
      Diluted                                  $        0.33          $        0.68          $        1.62
                                               =============          =============          =============

  Number of shares used in computation
      Basic                                        7,543,596              7,625,277              8,070,960
                                               =============          =============          =============
      Diluted                                      8,056,428              8,204,168              9,221,949
                                               =============          =============          =============
</TABLE>

--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.

                                       28
<PAGE>   29

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1998, 1999, AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                    Common stock
                                        --------------------------------------
                                                     Shares in                         Additional        Retained      Common stock
                                        Shares        Treasury          Amount       paid-in capital     earnings       in treasury
                                        ------       ---------          ------       ---------------     --------      ------------
<S>                                <C>               <C>              <C>            <C>                <C>            <C>
BALANCE,
  December 31, 1997                   8,551,529        1,075,672      $ 5,701,000      $ 3,811,000      $16,621,000      $ 1,782,000

  Exercise of stock options
   including $78,000 income
   tax benefit                           95,000                            63,000          292,000

  Net income for the year
    ended December 31, 1998                  --               --               --               --        2,673,000               --
                                    -----------      -----------      -----------      -----------      -----------      -----------

BALANCE,
  December 31, 1998                   8,646,529        1,075,672        5,764,000        4,103,000       19,294,000        1,782,000

  Exercise of stock options
   including $961,000 income
   tax benefit                          361,753               --          242,000        1,783,000               --               --

  Net income for the year
    ended December 31, 1999                  --               --               --               --        5,569,000               --
                                    -----------      -----------      -----------      -----------      -----------      -----------

BALANCE,
  December 31, 1999                   9,008,282        1,075,672        6,006,000        5,886,000       24,863,000        1,782,000

  Exercise of stock options
   including $1,048,000 income
   tax benefit                          193,422               --          128,000        1,257,000               --               --

  Net income for the year
    ended December 31, 2000                  --               --               --               --       14,895,000               --
                                    -----------      -----------      -----------      -----------      -----------      -----------

BALANCE,
  December 31, 2000                   9,201,704        1,075,672      $ 6,134,000      $ 7,143,000      $39,758,000      $ 1,782,000
                                    ===========      ===========      ===========      ===========      ===========      ===========
</TABLE>

--------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.


                                       29
<PAGE>   30

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                          1998               1999              2000
----------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                  $  2,673,000       $  5,569,000       $ 14,895,000
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation and amortization                             1,168,000          2,787,000          5,003,000
       Minority interest earnings                                   14,000            219,000            642,000
       Loss on disposal of property, plant and equipment            53,000             45,000             13,000
       Interest income accrued on advances to vendor              (203,000)          (195,000)                --
       Changes in operating assets and liabilities
            Accounts receivable                                  1,779,000         (5,437,000)        (2,161,000)
            Inventories                                           (252,000)        (2,798,000)        (9,277,000)
            Prepaid expenses and other                             278,000           (240,000)            38,000
            Deferred income taxes                                  519,000         (1,269,000)        (1,195,000)
            Accounts payable                                    (1,315,000)         5,333,000            445,000
            Accrued liabilities                                  1,480,000          2,361,000            267,000
            Income taxes payable                                  (665,000)         1,670,000          1,538,000
                                                              ------------       ------------       ------------

             Net cash provided by operating activities           5,529,000          8,045,000         10,208,000
                                                              ------------       ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Collection of advances to related party vendor                        --            658,000                 --
  Investment in subsidiary, net of cash acquired                        --                 --         (4,709,000)
  Purchases of property, plant and equipment                    (9,793,000)        (9,942,000)       (16,968,000)
  Proceeds from sales of property, plant and equipment              27,000              1,000            288,000
                                                              ------------       ------------       ------------

             Net cash used by investing activities              (9,766,000)        (9,283,000)       (21,389,000)
                                                              ------------       ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Advances (repayments) on line of credit, net                    (188,000)         2,425,000          1,496,000
  Net proceeds from the issuance of common stock                   256,000            983,000            337,000
  Proceeds from long term debt                                  10,388,000          1,000,000         12,801,000
  Repayments of long-term debt                                  (6,534,000)        (2,124,000)        (2,534,000)
  Minority interest of joint venture investment                    405,000             96,000                 --
                                                                                 ------------       ------------

             Net cash provided by financing activities           4,327,000          2,380,000         12,100,000
                                                              ------------       ------------       ------------

INCREASE IN CASH                                                    90,000          1,142,000            919,000
CASH, beginning of year                                          2,325,000          2,415,000          3,557,000
                                                              ------------       ------------       ------------
CASH, end of year                                             $  2,415,000       $  3,557,000       $  4,476,000
                                                              ============       ============       ============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       30
<PAGE>   31

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                               1998                       1999                 2000
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                       <C>                       <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the year for:
    Interest                                                    $          584,000        $          602,000        $ 1,243,000
                                                                ==================        ==================        ===========
    Income taxes                                                $        1,658,000        $        1,171,000        $ 2,151,000
                                                                ==================        ==================        ===========

  Non-Cash Activities:
    Tax benefit related to stock options
    credited to paid-in capital                                 $           78,000        $          961,000        $ 1,048,000
                                                                ==================        ==================        ===========

  Assets acquired in purchase of FabTech:
    Cash                                                                                                            $   441,000
    Accounts receivable                                                                                               2,837,000
    Inventory                                                                                                         5,936,000
    Prepaid expenses and other                                                                                          286,000
    Deferred tax asset                                                                                                1,962,000
    Plant and equipment                                                                                              12,510,000
                                                                                                                    -----------
                                                                                                                    $23,972,000
                                                                                                                    ===========

  Liabilities assumed in purchase of FabTech:
    Line of credit                                                                                                  $ 3,017,000
    Accounts payable                                                                                                  1,736,000
    Accrued liabilities                                                                                               2,352,000
    Income tax payable                                                                                                    2,000
    Long-term debt                                                                                                   13,549,000
                                                                                                                    -----------
                                                                                                                    $20,656,000
                                                                                                                    ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       31
<PAGE>   32

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

                NATURE OF OPERATIONS - Diodes Incorporated and its subsidiaries
manufacture and distribute discrete semiconductor devices to manufacturers in
the communications, computing, electronics and automotive industries. The
Company's products include small signal transistors and MOSFETs, transient
voltage suppressors (TVSs), zeners, Schottkys, diodes, rectifiers and bridges.
The products are sold primarily throughout North America and Asia.

                PRINCIPLES OF CONSOLIDATION - The consolidated financial
statements include the accounts of the parent company, Diodes Incorporated
(Diodes), its wholly-owned subsidiaries; Diodes Taiwan Corporation, Ltd.
(Diodes-Taiwan) and FabTech, Inc. (FabTech or Diodes-FabTech); and its majority
(95%) owned subsidiary, Shanghai KaiHong Electronics Co., Ltd. (Diodes-China).
Diodes acquired FabTech on December 1, 2000. See Note 15 for a summary of the
acquisition and proforma financial information.

All significant intercompany balances and transactions have been eliminated in
consolidation.

                REVENUE RECOGNITION - Revenue is recognized when the product is
shipped to both end users and electronic component distributors. The Company
reduces revenue in the period of sale for estimates of product returns and other
allowances.

                PRODUCT WARRANTY - The Company generally warrants its products
for a period of one year from the date of sale. Warranty expense historically
has not been significant.

                INVENTORIES - Inventories are stated at the lower of cost or
market value. Cost is determined principally by the first-in, first-out method.

                PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment
are depreciated using straight-line and accelerated methods over the estimated
useful lives, which range from 20 to 55 years for buildings and 1 to 10 years
for machinery and equipment. Leasehold improvements are amortized using the
straight-line method over 1 to 5 years.

                GOODWILL - The excess of the cost of purchased companies over
the fair value of the net assets at the dates of acquisition comprises goodwill.
Goodwill is amortized using the straight-line method over 20 to 25 years.
Amortization expense for the year ended December 31, 2000 was $62,000, and for
each of the years ended December 31, 1998 and 1999 was $44,000. As of December
31, 1999 and 2000, accumulated amortization is $176,000 and $194,000,
respectively.

                INCOME TAXES - Income taxes are accounted for using an asset and
liability approach whereby deferred tax assets and liabilities are recorded for
differences in the financial reporting bases and tax bases of the Company's
assets and liabilities. Income taxes are further explained in Note 7.



                                       32
<PAGE>   33

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

                CONCENTRATION OF CREDIT RISK - Financial instruments which
potentially subject the Company to concentrations of credit risk include trade
accounts receivable. Credit risk is limited by the dispersion of the Company's
customers over various geographic areas, operating primarily in the electronics
manufacturing and distribution industries. The Company performs on-going credit
evaluations of its customers and generally requires no collateral from its
customers. Historically, credit losses have not been significant.

                The Company maintains cash balances at major financial
institutions in the United States, Taiwan, and China. Accounts at each
institution in the United States are insured by the Federal Deposit Insurance
Corporation up to $100,000. Accounts at each institution in Taiwan are insured
by the Central Deposit Insurance Company up to NT$1,000,000 (approximately
US$30,000 as of December 31, 2000).

                FOREIGN OPERATIONS - Through its subsidiaries, the Company
maintains operations in Taiwan and China for which the functional currency is
the U.S. dollar. Assets and liabilities of its foreign operations which are
denominated in currency other than the U.S. dollar are not hedged and therefore
are subject to fluctuations in the currency exchange rate between the U.S.
dollar and foreign currencies (primarily NT dollar and Renminbi Yuan). Monetary
assets and liabilities denominated in foreign currencies are translated at the
year-end exchange rates. Included in net income are foreign currency exchange
gains (losses) of approximately $111,000, $(3,000) and $266,000 for the years
ended December 31, 1998, 1999 and 2000, respectively.

                EARNINGS PER SHARE - Earnings per share are based upon the
weighted average number of shares of common stock and common stock equivalents
outstanding, net of common stock held in treasury. Earnings per share is
computed using the "treasury stock method" under Financial Accounting Standards
Board Statement No. 128.

                Options exercisable for 502,000 shares of common stock have been
excluded from the computation of diluted earnings per share because their effect
is currently anti-dilutive.

                STOCK SPLIT -- On July 14, 2000, the Company effected a
three-for-two stock split for shareholders of record as of June 28, 2000 in the
form of a 50% stock dividend. All share and per share amounts in the
accompanying financial statements and footnotes reflect the effect of this stock
split.

                USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires that
management make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.



                                       33
<PAGE>   34

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

                STOCK-BASED COMPENSATION -- As permitted by SFAS 123, Accounting
for Stock-Based Compensation, the Company continues to apply APB Opinion No. 25
(APB 25) and related interpretations in accounting for its stock option plans.
Under SFAS 123, a fair value method is used to determine compensation cost for
stock options or similar equity instruments. Compensation is measured at the
grant date and is recognized over the service or vesting period. Under APB 25,
compensation cost is the excess, if any, of the quoted market price of the stock
at the measurement date over the amount that must be paid to acquire the stock.
The new standard requires disclosure of the proforma effect on income as if the
Company had adopted SFAS 123 (see Note 8).

                RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND PROPOSED
ACCOUNTING CHANGES -- During 2000, the Financial Accounting Standards Board
(FASB) issued Statements of Financial Accounting Standard No. 140 ("Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities--a replacement of FASB Statement 125"), No. 139 ("Rescission of FASB
Statement No. 53 Financial Reporting by Producers and Distributors of Motion
Picture Films and amendments to FASB Statements No. 63, 89, and 121") and No.
138 ("Accounting for Derivative Instruments and Hedging Activities--an amendment
of Financial Accounting Standard Statement No. 133") which are effective for
years after 2000. Management believes these pronouncements will not have a
material effect on the Company's financial statements or disclosures.

                A recently issued Proposed Statement of Financial Accounting
Standards pertaining to "Business Combinations and Intangible Assets --
Accounting for Goodwill" is currently in exposure draft form. Among other
matters, statement proposes to eliminate amortization of goodwill, but subject
goodwill to a periodic impairment test. It is unknown at this time what
accounting changes, if any, will be included in the final statement on this
issue, which is expected to be released in 2001.

                RECLASSIFICATIONS -- Certain 1999 and 1998 amounts as well as
unaudited quarterly financial data presented in the accompanying financial
statements have been reclassified to conform with 2000 financial statement
presentation.

NOTE 2 - INVENTORIES

<TABLE>
<CAPTION>
                                1999                  2000
                            -----------            -----------
<S>                         <C>                    <C>
Finished goods              $10,176,000            $18,603,000
Work-in-progress                886,000              2,683,000
Raw materials                 5,513,000             10,502,000
                            -----------            -----------

                            $16,575,000            $31,788,000
                            ===========            ===========
</TABLE>



                                       34
<PAGE>   35

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                             1999                     2000
                                         ------------             ------------
<S>                                      <C>                      <C>
Buildings                                $  1,539,000             $  2,002,000
Leasehold improvements                      3,026,000                5,901,000
Construction in-progress                           --                  465,000
Machinery and equipment                    21,737,000               46,934,000
                                         ------------             ------------

                                           26,302,000               55,302,000
Less accumulated depreciation
   and amortization                        (5,716,000)             (10,496,000)
                                         ------------             ------------
                                           20,586,000               44,806,000
Land                                          323,000                  323,000
                                         ------------             ------------

                                         $ 20,909,000             $ 45,129,000
                                         ============             ============
</TABLE>

NOTE 4 - BANK CREDIT AGREEMENT AND LONG-TERM DEBT

        BANK CREDIT AGREEMENT-- Diodes has a $26.6 million credit agreement with
a major bank providing a working capital line of credit up to $9 million, term
commitment notes up to $10 million for plant expansion and financing the
acquisition of FabTech, and $7.6 million for Diodes-China operations. Interest
on outstanding borrowings under the complete credit agreement is payable monthly
at LIBOR plus a negotiated margin. Fixed borrowings require fixed principal plus
interest payments for sixty months thereafter. The agreement has certain
covenants and restrictions which, among other matters, requires the maintenance
of certain financial ratios and operating results, as defined in the agreement.
The Company was in compliance with the covenants as of December 31, 2000.

        The working capital line of credit expires July 1, 2002. During 2000,
average and maximum borrowings outstanding on the line of credit were $3,645,000
and $6,691,000, respectively. The weighted average interest rate on outstanding
borrowings was 8.9% for the year ended December 31, 2000.

        Diodes-China operates with two unsecured working capital credit
facilities. One credit facility provides for advances of up to $3 million with
interest at 7.0% per annum. The second credit facility provides for advances of
RMB $9.3 million ($1,002,000 as of December 31, 2000) with interest of 5.6% to
6.7% per annum. As of December 31, 2000 the balance on these notes is
$4,003,000.



                                       35
<PAGE>   36

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 4 - BANK CREDIT AGREEMENT AND LONG-TERM DEBT (Continued)

        LONG-TERM DEBT-- Long-term debt as of December 31 is comprised of the
following:

<TABLE>
<CAPTION>
                                                                   1999                    2000
                                                                -----------            -----------
<S>                                                             <C>                    <C>
LOAN PAYABLE to bank secured by buildings and land,
monthly principal payments of NT$84,000
(approximately $3,000 U.S.) plus interest at 7% per
annum through November 2003                                     $   116,000            $    79,000

NOTE PAYABLE to a customer for advances made to the
Company. Amount to be repaid quarterly by price
concessions, with any remaining balance due by
February 2003, unsecured and interest-free                               --              2,458,000

NOTE PAYABLE to LPSC, a major stockholder of the
Company (Note 10), due in an initial installment of
$3,549,000 plus interest on March 31, 2001 and in
equal quarterly installments of $2,500,000 plus
interest thereafter through March 31, 2002. The note
bears interest at LIBOR plus 1% and is subordinated
to the interest of the Company's primary lender,
unsecured                                                                --             13,549,000

LOANS PAYABLE to bank secured by substantially all
assets, due in aggregate monthly principal payments
of $518,000 plus interest at LIBOR plus 1.5% through
February 2005

                                                                  6,868,000             14,771,000
                                                                -----------            -----------

                                                                  6,984,000             30,857,000
Current portion                                                   2,312,000             14,860,000
                                                                -----------            -----------

                                                                $ 4,672,000            $15,997,000
                                                                ===========            ===========
</TABLE>



                                       36
<PAGE>   37

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 4 - BANK CREDIT AGREEMENT AND LONG-TERM DEBT (Continued)

        The aggregate maturities of long-term debt for future years ending
December 31 are:


<TABLE>
<S>             <C>
2001            $14,860,000
2002              9,504,000
2003              4,765,000
2004              1,405,000
2005                323,000
                -----------
                $30,857,000
                ===========
</TABLE>


NOTE 5 - ACCRUED LIABILITIES

<TABLE>
<CAPTION>
                                                      1999                  2000
                                                   ----------            ----------
<S>                                                <C>                   <C>
Employee compensation and payroll taxes            $1,552,000            $3,937,000
Sales commissions                                     553,000             1,001,000
Refunds to product distributors                       347,000               491,000
Other                                               1,824,000             2,045,000
Equipment purchases                                 1,506,000               927,000
                                                   ----------            ----------

                                                   $5,782,000            $8,401,000
                                                   ==========            ==========
</TABLE>


NOTE 6 - VALUATION OF FINANCIAL INSTRUMENTS

        The Company's financial instruments include cash, accounts receivable,
accounts payable, working capital line of credit, and long term debt. The
Company does not hold or issue derivative financial instruments and estimates
the carrying amounts of all financial instruments described above with the
exception of interest-free debt, to approximate fair value based upon current
market conditions, maturity dates, and other factors. The fair value of
interest-free debt of $2,458,000 as of December 31, 2000 is approximately
$2,025,000.



                                       37
<PAGE>   38

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 7 - INCOME TAXES

        The components of the income tax provisions are as follows:


<TABLE>
<CAPTION>
                                               1998                    1999                    2000
                                            -----------             -----------             -----------
<S>                                         <C>                     <C>                     <C>
Current tax provision (benefit)
    Federal                                 $   (82,000)            $   804,000             $ 1,376,000
    Foreign                                   1,089,000               1,845,000               2,314,000
    State                                       (15,000)                     --                   1,000
                                            -----------             -----------             -----------
                                                992,000               2,649,000               3,691,000
Deferred tax provision (benefit)                519,000              (1,269,000)             (1,195,000)
                                            -----------             -----------             -----------
                                            $ 1,511,000             $ 1,380,000             $ 2,496,000
                                            ===========             ===========             ===========
</TABLE>

        A reconciliation between the effective tax rate and the statutory tax
rates for the years ended December 31, 1998, 1999 and 2000 are as follows:

<TABLE>
<CAPTION>
                                          1998                             1999                             2000
                                ------------------------         ------------------------         ------------------------
                                                  Percent                          Percent                          Percent
                                                  of pretax                       of pretax                        of pretax
                                  Amount          earnings         Amount          earnings         Amount          earnings
                                -----------       --------       -----------      ---------       -----------      ---------
<S>                             <C>               <C>            <C>              <C>             <C>              <C>
Federal tax                     $ 1,422,000         34.0         $ 2,363,000         34.0         $ 6,131,000         34.0
State franchise tax,
  net of federal benefit            242,000          5.8             403,000          5.8           1,046,000          5.8
Foreign income taxed
  at lower rates                   (145,000)        (3.5)         (1,416,000)       (20.4)         (4,572,000)       (25.4)
Other                                (8,000)        (0.2)             30,000          0.4            (109,000)        (0.6)
                                -----------         ----         -----------         ----         -----------         ----

  Income tax provision          $ 1,511,000         36.1         $ 1,380,000         19.8         $ 2,496,000         13.8
                                ===========         ====         ===========         ====         ===========         ====
</TABLE>



        In accordance with the current taxation policies of the Peoples Republic
of China (PRC), Diodes-China was granted a tax holiday for the years ended
December 31, 1999 through 2003. Earnings were subject to 0% tax rates in 1999
and 2000, and earnings in 2001 through 2003 will be taxed at 13.5% (one half the
normal rate of the combined local and central government tax rate of 27%), and
at normal rates thereafter. The Company has received indications from the local
taxing authority in Shanghai that the tax holiday may be extended beyond 2003.
It is not known whether the taxing authority for the central government of the
PRC will participate in this extended tax holiday arrangement.

        Earnings of Diodes-Taiwan are currently subject to a tax rate of 35%,
which is comparable to the U.S. Federal tax rate for C corporations.



                                       38
<PAGE>   39

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 7 - INCOME TAXES (Continued)

        In accordance with tax treaty arrangements, the Company receives full
credit against its U.S. Federal tax liability for corporate taxes paid in Taiwan
and China. The repatriation of funds from Taiwan and China to the Company may be
subject to state income taxes. In the years ending December 31, 1999 and 2000,
Diodes-Taiwan distributed dividends of approximately $1.5 million and $2.6
million, respectively, which is included in Federal and state taxable income.
Deferred taxes have been provided for all remaining undistributed earnings. As
of December 31, 2000, accumulated and undistributed earnings of Diodes-China is
approximately $17 million. The Company has not recorded deferred Federal or
state tax liabilities (estimated to be $6.8 million) on these earnings since the
Company considers its investment in Diodes-China to be permanent, and has no
plans, intentions or obligation to distribute any part or all of that amount
from China to the United States.

        At December 31, 1999 and 2000, the Company's deferred tax assets and
liabilities are comprised of the following items:


<TABLE>
<CAPTION>
                                                            1999                   2000
                                                         -----------            -----------
<S>                                                      <C>                    <C>
DEFERRED TAX ASSETS, CURRENT
   Inventory cost                                        $ 1,008,000            $ 1,653,000
   Accrued expenses and accounts receivable                  325,000              1,039,000
   Net operating loss carryforwards and other                367,000              1,695,000
                                                         -----------            -----------

                                                         $ 1,700,000            $ 4,387,000
                                                         ===========            ===========

DEFERRED TAX ASSETS, NON-CURRENT
   Plant, equipment and intangible assets                $   146,000            $(3,128,000)
   Net operating loss carryforwards and other                     --              3,744,000
                                                         -----------            -----------

                                                         $   146,000            $   616,000
                                                         ===========            ===========
</TABLE>

NOTE 8 - STOCK OPTION PLANS

                The Company has stock option plans for directors, officers, and
employees, which provide for non-qualified and incentive stock options. The
Board of Directors determines the option price (not to be less than fair market
value for the incentive options) at the date of grant. The options generally
expire ten years from the date of grant and are exercisable over the period
stated in each option. Approximately 226,000 shares were available for future
grants under the plans as of December 31, 2000.



                                       39
<PAGE>   40

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 8 - STOCK OPTION PLANS (Continued)

<TABLE>
<CAPTION>
                                                           Outstanding Options
                                      -------------------------------------------------------------
                                                                      Exercise Price Per Share
                                                             --------------------------------------
                                                                                         Weighted
                                        Number                   Range                   Average
                                      ----------             -------------            -------------
<S>                                   <C>                    <C>                      <C>
Balance, December 31, 1997             1,486,750              $   .58-7.00                     3.42
Granted                                  600,001                 3.33-6.67                     5.01
Exercised                                (95,000)                1.25-4.00                     2.70
Canceled                                 (70,000)                     4.00                     4.00
                                      ----------             -------------            -------------

Balance, December 31, 1998             1,921,751                  .58-7.50                     3.94
Granted                                  175,500                 4.50-8.50                     5.01
Exercised                               (361,756)                 .58-4.00                     2.72
Canceled                                 (73,999)                3.33-6.67                     4.79
                                      ----------             -------------            -------------

Balance, December 31, 1999             1,661,496                 1.25-8.50                     4.28
Granted                                  512,100               14.88-23.92                    22.16
Exercised                               (193,506)                1.25-5.00                     3.43
Canceled                                 (34,498)               5.00-23.92                    10.30
                                      ----------             -------------            -------------

Balance, December 31, 2000             1,945,592              $1.25-$23.92            $        8.95
                                      ==========             =============            =============
</TABLE>

        The Company also has an incentive bonus plan which reserves shares of
stock for issuance to key employees. As of December 31, 2000, 186,000 shares
remain available for issuance under this plan. No shares were issued under this
incentive bonus plan for years ended December 31, 1998 through 2000.

        Had compensation cost for the Company's 1998, 1999, and 2000 options
granted been determined consistent with SFAS 123, the Company's net income and
diluted earnings per share would approximate the proforma amounts below:


<TABLE>
<CAPTION>
                                             As Reported                 Proforma
                                            --------------            --------------
<S>                                         <C>                       <C>
1998 Net income                             $    2,673,000            $    1,813,000
      Diluted earnings per share            $          .33            $          .23
                                            ==============            ==============
1999 Net income                             $    5,569,000            $    5,040,000
      Diluted earnings per share            $          .68            $          .61
                                            ==============            ==============
2000 Net income                             $   14,895,000            $   11,797,000
      Diluted earnings per share            $         1.62            $         1.28
                                            ==============            ==============
</TABLE>



                                       40
<PAGE>   41

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 9 - MAJOR SUPPLIERS

                The Company purchases a significant amount of its inventory from
two suppliers, one of which is a related party (Note 10). During 1998, 1999, and
2000, purchases from these suppliers amounted to approximately 43%, 28%, and
23%, respectively, of total inventory purchases including 27%, 19% and 16%,
respectively, from the related party. There is a limited number of suppliers for
these materials.


NOTE 10 - RELATED PARTY TRANSACTIONS

                LITE-ON POWER SEMICONDUCTOR CORPORATION - In July 1997, Vishay
Intertechnology, Inc. ("Vishay") and the Lite-On Group, a Taiwanese consortium,
formed a joint venture - Vishay/Lite-On Power Semiconductor Pte., LTD.
("Vishay/LPSC") - to acquire Lite-On Power Semiconductor Corp. ("LPSC"), a 38%
shareholder of the Company and a member of the Lite-On Group of the Republic of
China. Vishay is one of the largest U.S. and European manufacturer of passive
electronic components and a major producer of discrete semiconductors and power
integrated circuits. The Lite-On Group is a leading manufacturer of power
semiconductors, computer peripherals, and communication products.

                In March 2000, Vishay agreed to sell its 65% interest in the
Vishay/LPSC joint venture to the Lite-On Group, the 35% owner. Because of this
transaction, the Lite-On Group, through LPSC, its wholly-owned subsidiary,
indirectly owns approximately 38% of the Company's common stock. The Company
considers its relationship with LPSC to be mutually beneficial and the Company
and LPSC will continue its strategic alliance as it has since 1991. The
Company's subsidiaries buy product from and sell product to LPSC. Net sales to
and purchases from LPSC were as follows for years ended December 31:


<TABLE>
<CAPTION>
                                     1998                   1999                   2000
                                 -----------            -----------            -----------
<S>                              <C>                    <C>                    <C>
Net sales                        $   905,000            $ 1,064,000            $   633,000
Gross profit on sales                180,000                200,000                120,000
Purchases                         13,320,000             10,844,000             12,898,000
</TABLE>


                As a result of the acquisition of FabTech from LPSC (See Note
15), the Company is indebted to LPSC in the amount of $13,549,000 as of December
31, 2000. Terms of the debt are indicated in Note 4. Interest expense accrued
for the year ended December 31, 2000 on this debt was $87,000. FabTech, has
entered into a volume purchase agreement with LPSC pursuant to which LPSC is
obligated to purchase from FabTech, and FabTech is obligated to manufacture and
sell to LPSC, minimum and maximum purchase quantities of wafers through December
2003. Minimum monthly quantities range from 16,000 wafers in the first year to
30,000 wafers in the final year of the agreement.



                                       41
<PAGE>   42

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - RELATED PARTY TRANSACTIONS (Continued)

                OTHER RELATED PARTIES- For the years ended December 31, 1999,
and 2000, Diodes-China purchased approximately $1,810,000 and $1,970,000,
respectively, of its inventory purchases from companies owned by its 5% minority
shareholder.

Accounts receivable from and accounts payable to related parties were as follows
as of December 31:



<TABLE>
<CAPTION>
                                  1999                  2000
                               ----------            ----------
<S>                            <C>                   <C>
Accounts receivable
  LPSC                         $   90,000            $  490,000
  Other                                --               125,000
                               ----------            ----------
                               $   90,000            $  615,000
                               ==========            ==========
Accounts payable
  LPSC                         $1,680,000            $  712,000
  Other                           141,000               296,000
                               ----------            ----------
                               $1,821,000            $1,008,000
                               ==========            ==========
</TABLE>

NOTE 11 - SEGMENT INFORMATION

                Information about the Company's operations in the United States
and Asia are presented herein. Items transferred among the Company and its
subsidiaries are transferred at prices to recover costs plus an appropriate mark
up for profit. Inter-company revenues, profits and assets have been eliminated
to arrive at the consolidated amounts.

                Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by the chief decision maker, or decision making group, in deciding how
to allocate resources and in assessing performance. The Company's chief
decision-making group consists of the President and Chief Executive Officer,
Chief Financial Officer and Vice President of Far East Operations. The operating
segments are managed separately because each operating segment represents a
strategic business unit whose function and purpose differs from the other
segments.

                The Company's reportable operating segments include the domestic
operations (Diodes and FabTech) located in the United States and the Asian
operations (Diodes-Taiwan located in Taipei, Taiwan; and Diodes-China located in
Shanghai, China). Diodes Incorporated markets discrete semiconductor devices to
manufacturers and distributors in North America. FabTech, Inc., manufactures and
distributes 5-inch silicon wafers for use in the Company's internal
manufacturing processes at Diodes-China, as well as to trade customers.
Diodes-Taiwan markets and sells discrete semiconductor devices throughout Asia
and to Diodes Incorporated. Diodes-China manufactures discrete semiconductor
devices for sale to Diodes Incorporated, Diodes-Taiwan and third-party customers
in Asia.



                                       42
<PAGE>   43

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11- SEGMENT INFORMATION (Continued)

                The accounting policies of the operating segments are the same
as those described in the summary of significant accounting policies. The
Company evaluates performance based on stand-alone operating segment income.
Revenues are attributed to geographic areas based on the location of the market
producing the revenues.


<TABLE>
<CAPTION>
                                                                                             Consolidated
                                             Asia                      U.S.A.                  Segments
                                         -------------             -------------             -------------
<S>                                      <C>                       <C>                       <C>
           2000
      -------------
Total sales                              $ 104,815,000             $  67,127,000             $ 171,942,000
Intersegment sales                         (50,781,000)               (2,699,000)              (53,480,000)
                                         -------------             -------------             -------------
    Net sales                            $  54,034,000             $  64,428,000             $ 118,462,000
                                         =============             =============             =============

Depreciation and amortization            $   4,405,000             $     598,000             $   5,003,000
Operating income                            18,699,000                  (227,000)               18,472,000
Assets                                      61,149,000                51,801,000               112,950,000
Capital expenditures                        16,177,000                   791,000                16,968,000

           1999
      -------------
Total sales                              $  58,932,000             $  47,688,000             $ 106,620,000
Intersegment sales                         (23,903,000)               (3,466,000)              (27,369,000)
                                         -------------             -------------             -------------
    Net sales                            $  35,029,000             $  44,222,000             $  79,251,000
                                         =============             =============             =============

Depreciation and amortization            $   2,448,000             $     339,000             $   2,787,000
Operating income                             8,783,000                (1,505,000)                7,278,000
Assets                                      35,824,000                26,583,000                62,407,000
Capital expenditures                         9,438,000                   504,000                 9,942,000

           1998
      -------------
Total sales                              $  31,869,000             $  45,600,000             $  77,469,000
Intersegment sales                         (13,916,000)               (2,225,000)              (16,141,000)
                                         -------------             -------------             -------------
    Net sales                            $  17,953,000             $  43,375,000             $  61,328,000
                                         =============             =============             =============

Depreciation and amortization            $     849,000             $     319,000             $   1,168,000
Operating income                             3,647,000                   739,000                 4,386,000
Assets                                      24,195,000                21,194,000                45,389,000
Capital expenditures                         9,658,000                   135,000                 9,793,000
</TABLE>



                                       43
<PAGE>   44

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 12 - COMMITMENTS AND CONTINGENCIES

                OPERATING LEASES - The Company leases its offices, manufacturing
plants and warehouses under operating lease agreements expiring through December
2010. The Company may, at its option, extend the lease for a five-year term upon
termination. Rent expense amounted to approximately $269,000, $327,000, and
$503,000, for the years ended December 31, 1998, 1999 and 2000, respectively.

                Future minimum lease payments under non-cancelable operating
leases for years ending December 31 are:

<TABLE>
<S>                   <C>
      2001            $ 2,325,000
      2002              2,343,000
      2003              2,369,000
      2004              2,402,000
      2005              1,770,000
Thereafter              5,905,000
                      -----------

                      $17,114,000
                      ===========
</TABLE>


                OTHER MATTER - The Company has received a claim from one of its
former U.S. landlords regarding potential groundwater contamination at a site in
which the Company engaged in manufacturing from 1967 to 1973. The landlord has
alleged that the Company may have some responsibility for cleanup costs.
Investigations into the landlord's allegations are ongoing and in the early
stages. The Company does not anticipate that the ultimate outcome of this matter
will have a material adverse effect on its financial condition.


NOTE 13 - EMPLOYEE BENEFIT PLANS

                The parent company maintains a 401(k) profit sharing plan (the
Plan) for the benefit of qualified employees at the parent company's location.
Employees who participate may elect to make salary deferral contributions to the
Plan up to 15% of the employees' eligible payroll. The parent company makes a
contribution of $1 for every $2 contributed by the participant up to 6% of the
participant's eligible payroll. In addition, the parent company may make a
discretionary contribution to the entire qualified employee pool, in accordance
with the Plan. For the years ended December 31, 1998, 1999, and 2000, the parent
company's total contribution to the Plan was approximately $161,000, $204,000,
and $307,000, respectively.

                FabTech maintains a 401(k) profit sharing plan (the FabTech
Plan) for the benefit of qualified employees. Employees may contribute up to 20%
of their eligible compensation, subject to annual Internal Revenue Code maximum
limitations. FabTech may make discretionary contributions up to 40% of the first
5% of each employee's annual contributions. FabTech's matching contributions for
the month of December 2000 was approximately $6,000.



                                       44
<PAGE>   45

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 14 -- MANAGEMENT INCENTIVE AGREEMENTS

                The Company has entered into several management incentive
agreements with various members of FabTech's management. The agreements provide
members of management guaranteed annual compensation as well as contingent
compensation based on the annual profitability of FabTech and subject to a
maximum annual amount. Guaranteed and contingent compensation is applicable only
to individuals participating in management as of the last day of each fiscal
year. Future minimum payments provided for by the management incentive
agreements for the years ended December 31, are:


<TABLE>
<CAPTION>
                                       Maximum
                Guaranteed            Contingent              Total
                ----------            ----------            ----------
<S>             <C>                   <C>                   <C>
2001            $  375,000            $  125,000            $  500,000
2002               375,000               437,000               812,000
2003               375,000               750,000             1,125,000
2004               375,000               938,000             1,313,000
                ----------            ----------            ----------

                $1,500,000            $2,250,000            $3,750,000
                ==========            ==========            ==========
</TABLE>


NOTE 15 -- BUSINESS ACQUISITION

                On December 1, 2000, Diodes purchased all of the outstanding
capital stock of FabTech, Inc. from LPSC (a 38% shareholder of Diodes). FabTech
operates a 5-inch silicon wafer foundry in Lee's Summit, Missouri.

                The acquisition was accounted for using the purchase method of
accounting, whereby the assets and liabilities acquired were recorded at their
estimated fair values. The terms of the stock purchase required an initial cash
payment of approximately $5,150,000, including acquisition costs. In addition,
the agreement provides for a potential earnout of up to $30 million based upon
FabTech attaining certain earnings targets over the four year period immediately
following the purchase. As a condition to the purchase agreement, certain
officers and management of FabTech will receive a total of $2,475,000. Of this
amount, $975,000 was accrued by FabTech as incentive compensation for services
rendered prior to the acquisition. The remaining $1,500,000 will be accrued
ratably over four years following the acquisition, subject to continued
employment with the Company (see Note 14). The amount of cash paid to the seller
at closing was reduced by $975,000, and any portion of the $1,500,000 contingent
liability paid by the Company in the future will be reimbursed by the seller.

                The excess of the purchase price over the fair value of assets
acquired (goodwill) amounted to approximately $4,410,000, which is being
amortized on the straight-line method over 20 years.

                The results of operations of FabTech are included in the
consolidated financial statements from the date of acquisition. The following
represents the unaudited proforma results of operations as if Fab Tech had been
acquired at the beginning of 1999 and 2000.



                                       45
<PAGE>   46

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 15 -- BUSINESS ACQUISITION (CONTINUED)

<TABLE>
<CAPTION>
                                       Year Ended December 31,
                              -----------------------------------------
                                    1999                      2000
                              ---------------           ---------------
<S>                           <C>                       <C>
Net sales                     $    95,829,000           $   138,821,000

Net income                          4,487,000                14,211,000

Earnings per share
       Basic                             0.59                      1.76
       Diluted                           0.55                      1.54
</TABLE>

                The proforma results do not represent the Company's actual
operating results had the acquisition been made at the beginning of 1999 or
2000, or the results which may be expected in the future.

NOTE  16 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)


<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                   --------------------------------------------------------------------------------
                                    March 31                June 30               Sept. 30                Dec. 31
                                   -----------            -----------            -----------            -----------
<S>                                <C>                    <C>                    <C>                    <C>
FISCAL 2000
     Net sales                     $27,437,000            $32,600,000            $32,332,000            $26,093,000
     Gross profit                    8,437,000             10,489,000             11,121,000              7,380,000
     Net income                      3,140,000              4,320,000              4,650,000              2,785,000
     Earnings per share
       Basic                              0.39                   0.54                   0.57                   0.34
       Diluted                            0.34                   0.46                   0.50                   0.31
</TABLE>


<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                   --------------------------------------------------------------------------------
                                    March 31                June 30               Sept. 30                Dec. 31
                                   -----------            -----------            -----------            -----------
<S>                                <C>                    <C>                    <C>                    <C>
FISCAL 1999
     Net sales                     $16,032,000            $18,229,000            $21,750,000            $23,240,000
     Gross profit                    3,910,000              4,429,000              5,888,000              6,721,000
     Net income                        690,000                825,000              1,684,000              2,370,000
     Earnings per share
       Basic                              0.09                   0.11                   0.22                   0.30
       Diluted                            0.09                   0.10                   0.21                   0.27
</TABLE>



                                       46
<PAGE>   47

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE


To the Board of Directors and Stockholders
Diodes Incorporated and Subsidiaries



Our audits of the consolidated financial statements of Diodes Incorporated and
Subsidiaries referred to in our report dated January 30, 2001 appearing in item
8 in this Annual Report on Form 10-K also included an audit of the financial
statement schedule listed in item 14(a) of this Form 10-K. In our opinion, these
financial statement schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.



MOSS ADAMS LLP


/s/ Moss Adams LLP
Los Angeles, California
January 30, 2001


                                       47

<PAGE>   48




DIODES INCORPORATED

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>


                    COL A                              COL B          COL C            COL D           COL E
                                                     Balance at    Additions
                                                    beginning of   to costs &                        Balance at
                 Description                          period        expenses         Deductions    end of period
----------------------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>             <C>             <C>
Years ended December 31,

1998
Allowance for doubtful accounts                     $   74,000      $   36,000      $       --      $  110,000
Reserve for slow moving and obsolete inventory         785,000       1,935,000       1,808,000         912,000

1999
Allowance for doubtful accounts                     $  110,000      $  187,000      $       --      $  297,000
Reserve for slow moving and obsolete inventory         912,000       1,528,000         622,000       1,818,000

2000
Allowance for doubtful accounts                     $  297,000      $   22,000      $    8,000      $  311,000
Reserve for slow moving and obsolete inventory       1,818,000       1,915,000         562,000       3,171,000
</TABLE>


                                       48
<PAGE>   49

                                   SIGNATURES

               Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

DIODES INCORPORATED (Registrant)


/s/ C.H. Chen                                              March 28, 2001
------------------------------------
C.H. CHEN
President & Chief Executive Officer
(Principal Executive Officer)


/s/ Carl Wertz                                             March 28, 2001
------------------------------------
CARL WERTZ
Chief Financial Officer, Treasurer, and Secretary
(Principal Financial and Accounting Officer)




               In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant, and in the
capacities indicated, on March 28, 2001.


/s/ Raymond Soong                           /s/ C.H. Chen
------------------------------------        -----------------------------------
RAYMOND SOONG                                   C.H. CHEN
Chairman of the Board of Directors              Director


/s/ Michael R. Giordano                     /s/ M.K. Lu
------------------------------------        -----------------------------------
MICHAEL R. GIORDANO                             M.K. LU
Director                                        Director


/s/ David Lin                               /s/ John M. Stich
------------------------------------        -----------------------------------
DAVID LIN                                       JOHN M. STICH
Director                                        Director


/s/ Shing Mao
------------------------------------
SHING MAO
Director


/s/ Leonard M. Silverman
------------------------------------
LEONARD M. SILVERMAN
Director

                                       49
<PAGE>   50

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                              Sequential
NUMBER  DESCRIPTION                                                                          Page Number
------  -----------                                                                          -----------
<S>     <C>                                                                                  <C>
3.1     Certificate of Incorporation of Diodes Incorporated (the "Company")
        dated July 29, 1968 (1)

3.2     Amended By-laws of the Company dated August 14, 1987 (2)

3.3     Amended Certificate of Incorporation of the Company dated June 12, 2000
        (25)

10.1    Stock Purchase and Termination of Joint Shareholder Agreement (3)

10.2    1994 Credit Facility Agreement between the Company and Wells Fargo Bank,
        National Association (4)

10.3*   Company's 401(k) Plan - Adoption Agreement (5)

10.4*   Company's 401(k) Plan - Basic Plan Documentation #03 (5)

10.5*   Employment Agreement between the Company and Pedro Morillas (6)

10.6*   Company's Incentive Bonus Plan (7)

10.7*   Company's 1982 Incentive Stock Option Plan (7)

10.8*   Company's 1984 Non-Qualified Stock Option Plan (7)

10.9*   Company's 1993 Non-Qualified Stock Option Plan (7)

10.10*  Company's 1993 Incentive Stock Option Plan (5)

10.11   $6.0 Million Revolving Line of Credit Note (8)

10.12   Credit Agreement between Wells Fargo Bank and the Company dated November
        1, 1995 (8)

10.13   KaiHong Compensation Trade Agreement for SOT-23 Product (9)

10.14   KaiHong Compensation Trade Agreement for MELF Product (10)

10.15   Lite-On Power Semiconductor Corporation Distributorship Agreement (11)

10.16   Loan Agreement between the Company and FabTech Incorporated (12)

10.17   KaiHong Joint Venture Agreement between the Company and Mrs. J.H. Xing
        (12)

10.18   Quality Assurance Consulting Agreement between LPSC and Shanghai KaiHong
        Electronics Company, Ltd. (13)

10.19   Loan Agreement between the Company and Union Bank of California, N.A.
        (13)

10.20   First Amendment to Loan Agreement between the Company and Union Bank of
        California, N.A. (14)

10.21   Guaranty Agreement between the Company and Shanghai KaiHong Electronics
        Co., Ltd. (14)

10.22   Guaranty Agreement between the Company and Xing International, Inc. (14)

10.23   Fifth Amendment to Loan Agreement (15)

10.24   Term Loan B Facility Note (15)

10.25   Bank Guaranty for Shanghai KaiHong Electronics Co., LTD (16)

10.26   Consulting Agreement between the Company and J.Y. Xing (17)

10.27   Software License Agreement between the Company and Intelic Software
        Solutions, Inc. (18)

10.28   Diodes-Taiwan Relationship Agreement for FabTech Wafer Sales (19)

10.29   Separation Agreement between the Company and Michael A. Rosenberg (20)

10.30   Stock Purchase Agreement dated as of November 28, 2000, among Diodes
        Incorporated, FabTech, Inc. and Lite-On Power Semiconductor Corporation
        (24)

10.31   Volume Purchase Agreement dated as of October 25, 2000, between FabTech,
        Inc. and Lite-On Power Semiconductor Corporation (24)

10.32   Credit Agreement dated as of December 1, 2000, between Diodes
        Incorporated and Union Bank of California (24)

10.33   Subordination Agreement dated as of December 1, 2000, by Lite-On Power
        Semiconductor Corporation in favor of Union Bank of California (24)

10.34   Subordinated Promissory Note in the principal amount of $13,549,000 made
        by FabTech, Inc. payable to Lite-On Power Semiconductor Corporation (24)

11      Statement regarding Computation of Per Share Earnings

21      Subsidiaries of the Registrant

23.1    Consent of Independent Public Accountants

99.1    Press Release; Diodes Comments On Vishay/LPSC Announcement (21)

99.2    Press Release; Diodes Incorporated Announces Appointment Of New
        President and Chief Executive Officer (21)

99.3    Press Release; Diodes Incorporated To Invest Additional $9 Million In
        Manufacturing Facility (21)

99.4    Press Release; Diodes Incorporated Reports Record Quarterly Revenues and
        Earnings (21)

99.5    Press Release; Diodes Incorporated Retains Coffin Communications Group
        As Investor Relations Counsel (22)
</TABLE>



<PAGE>   51

<TABLE>
<S>     <C>                                                                                  <C>
99.6    Press Release; John M. Stich Appointed To Board Of Diodes Incorporated
        (22)

99.7    Press Release; C.H. Chen Addresses Diodes Shareholders at Annual Meeting
        (22)

99.8    Press Release; Diodes, Inc. Announces Move to NASDAQ and Declares
        Three-for-Two Stock Split (22)

99.9    Press release; Diodes, Inc. to Trade Ex-Dividend of Three-for-Two Stock
        Split (22)

99.10   Press release; Diodes, Inc. Posts Record Results for Second Quarter 2000
        -- Net Income Up 424% (22)

99.11   Press release; Diodes, Inc. Launches Next Generation Product Lines (23)

99.12   Press release; Forbes Magazine Names Diodes, Inc. One of 200 Best Small
        Companies in U.S. (23)

99.13   Diodes, Inc. Announces Conference Call To Discuss Q3 Financial Results
        (23)

99.14   Diodes, Inc. to Acquire Wafer Fab (23)

99.15   Diodes, Inc. Reports Record Third Quarter Earnings (23)

99.16   Diodes, Inc. Announces Conference Call To Discuss Year End and Q4
        Financial Results


99.17   Opinion of Duff & Phelps, LLP dated November 28, 2000 (24)

99.18   Diodes, Inc. Announces Successful Completion of FabTech Acquisition (24)

99.19   Diodes Manufacturing Receives Environmental Management Certification
        ISO-14001

99.20   Diodes Incorporated Comments on First-Quarter Outlook

99.21   Diodes, Inc. Reports Fourth Quarter and Record Year End Results
</TABLE>


(1)     Previously filed as Exhibit 3 to Form 10-K filed with the Commission for
        fiscal year ended April 30, 1981, which is hereby incorporated by
        reference.

(2)     Previously filed as Exhibit 3 to Form 10-K filed with the Commission for
        fiscal year ended April 30, 1988, which is hereby incorporated by
        reference.

(3)     Previously filed with the Company's Form 8-K, filed with the Commission
        on July 1, 1994, which is hereby incorporated by reference.

(4)     Previously filed as Exhibit 10.4 to Form 10-KSB/A filed with the
        Commission for fiscal year ended December 31, 1993, which is hereby
        incorporated by reference.

(5)     Previously filed with Company's Form 10-K, filed with the Commission on
        March 31, 1995, which is hereby incorporated by reference.

(6)     Previously filed as Exhibit 10.6 to Form 10-KSB filed with the
        Commission on August 2, 1994, for the fiscal year ended December 31,
        1993, which is hereby incorporated by reference.

(7)     Previously filed with Company's Form S-8, filed with the Commission on
        May 9, 1994, which is hereby incorporated by reference.

(8)     Previously filed with Company's Form 10-Q, filed with the Commission on
        November 14, 1995, which is hereby incorporated by reference.

(9)     Previously filed as Exhibit 10.2 to Form 10-Q/A, filed with the
        Commission on October 27, 1995, which is hereby incorporated by
        reference.

(10)    Previously filed as Exhibit 10.3 to Form 10-Q/A, filed with the
        Commission on October 27, 1995, which is hereby incorporated by
        reference.

(11)    Previously filed as Exhibit 10.4 to Form 10-Q, filed with the Commission
        on July 27, 1995, which is hereby incorporated by reference.

(12)    Previously filed with Company's Form 10-K, filed with the Commission on
        April 1, 1996, which is hereby incorporated by reference.

(13)    Previously filed with Company's Form 10-Q, filed with the Commission on
        May 15, 1996, which is hereby incorporated by reference.



<PAGE>   52

(14)    Previously filed with Company's Form 10-K, filed with the Commission on
        March 26, 1997, which is hereby incorporated by reference.

(15)    Previously filed with Company's Form 10-Q, filed with the Commission on
        May 11, 1998, which is hereby incorporated by reference.

(16)    Previously filed with Company's Form 10-Q, filed with the Commission on
        August 11, 1998, which is hereby incorporated by reference.

(17)    Previously filed with Company's Form 10-Q, filed with the Commission on
        November 11, 1998, which is hereby incorporated by reference.

(18)    Previously filed with Company's Form 10-K, filed with the Commission on
        March 26, 1999, which is hereby incorporated by reference.

(19)    Previously filed with Company's Form 10-Q, filed with the Commission on
        August 10, 1999, which is hereby incorporated by reference.

(20)    Previously filed with Company's Form 10-K, filed with the Commission on
        March 28, 2000, which is hereby incorporated by reference.

(21)    Previously filed with Company's Form 10-Q, filed with the Commission on
        May 10, 2000, which is hereby incorporated by reference.

(22)    Previously filed with Company's Form 10-Q, filed with the Commission on
        August 4, 2000, which is hereby incorporated by reference.

(23)    Previously filed with Company's Form 10-Q, filed with the Commission on
        November 13, 2000, which is hereby incorporated by reference.

(24)    Previously filed with Company's Form 8-K, filed with the Commission on
        December 14, 2000, which is hereby incorporated by reference.

(25)    Previously filed with Company's Definitive Proxy Statement, filed with
        the Commission on May 1, 2000, which is hereby incorporated by
        reference.

*       Constitute management contract, compensatory plans and arrangements
        which are required to be filed pursuant to Item 601 of Regulation S-K.



</TEXT>
</DOCUMENT>
