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<SEC-DOCUMENT>0001144204-06-004627.txt : 20060208
<SEC-HEADER>0001144204-06-004627.hdr.sgml : 20060208
<ACCEPTANCE-DATETIME>20060208145312
ACCESSION NUMBER:		0001144204-06-004627
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20060206
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060208
DATE AS OF CHANGE:		20060208

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIODES INC /DEL/
		CENTRAL INDEX KEY:			0000029002
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				952039518
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	002-25577
		FILM NUMBER:		06588711

	BUSINESS ADDRESS:	
		STREET 1:		3050 E HILLCREST DR
		CITY:			WESTLAKE VILLAGE
		STATE:			CA
		ZIP:			91362
		BUSINESS PHONE:		8054464800

	MAIL ADDRESS:	
		STREET 1:		3050 E HILLCREST DR SUITE 200
		STREET 2:		3050 E HILLCREST DR SUITE 200
		CITY:			WESTLAKE VILLAGE
		STATE:			CA
		ZIP:			913623154
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v034868_8k.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

                                February 6, 2006
                Date of Report (Date of earliest event reported)

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

  Delaware                          1-5740                95-2039518
  (State or other          (Commission File Number)       (I.R.S. Employer
  jurisdiction of                                         Identification Number)
  incorporation)

                            3050 East Hillcrest Drive
                           Westlake Village, California                 91362
                        (Address of principal executive offices)      (Zip Code)

                                 (805) 446-4800
              (Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))
<PAGE>

Item 2.02 Results of Operations and Financial Condition

      On February 6, 2006, Diodes Incorporated issued a press release announcing
fourth quarter 2005 earnings. A copy of the press release is attached as Exhibit
99.1.

      On February 6, 2006, Diodes Incorporated hosted a conference call to
discuss its fourth quarter 2005 results. A copy of the transcript is attached as
Exhibit 99.2.

      During the conference call on February 6, 2006, Dr. Keh-Shew Lu, President
and CEO of Diodes Incorporated, as well as Carl C. Wertz, Chief Financial
Officer, and Mark King, Sr. Vice President of Sales and Marketing made
additional comments during a question and answer session. A copy of the
transcript is attached as Exhibit 99.3.

      The information in this Form 8-K and the Exhibits attached hereto shall
not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1984, except as shall
be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(c)  Exhibits

      Exhibit 99.1 - Press Release dated February 6, 2006

      Exhibit 99.2 - Conference call transcript dated February 6, 2006

      Exhibit 99.3 - Question and answer transcript dated February 6, 2006


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated:   February 7, 2006                            DIODES INCORPORATED

                                                     By /s/ Carl C. Wertz
                                                     CARL C. WERTZ
                                                     Chief Financial Officer


                                  EXHIBIT INDEX

Exhibit       Description
Number

99.1          Press Release dated February 6, 2006
99.2          Conference call transcript dated February 6, 2006
99.3          Question and answer transcript dated February 6, 2006
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v034868_ex99-1.txt
<TEXT>
[DIODES INCORPORATED]

FOR IMMEDIATE RELEASE

              Diodes Incorporated Reports Record Fourth Quarter and
                             Full Year 2005 Results

             o Annual revenues up 15.6% to a record $214.8 million
         o Annual net income increases 30.4% to a record $33.3 million

Westlake Village, California, February 6, 2005 - Diodes Incorporated (Nasdaq:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported record financial results for the fourth quarter
and fiscal year 2005 ended December 31, 2005.

Fourth Quarter Highlights:
>>  Revenues increased 28% to $61.4 million
>>  Gross margin improved 100 basis points to 34.9%
>>  Operating income increased 17% to a record $11.6 million
>>  Net income increased 37% to a record $10 million, or $0.36 per share

Revenues for the fourth quarter of 2005 were $61.4 million, a 28.1% increase
from the fourth quarter of 2004, and a sequential increase of 13.2% from the
third quarter of 2005. Net income for the quarter increased 37.0% to a record
$10.0 million compared to $7.3 million for the fourth quarter of 2004. Diluted
earnings per share were $0.36 for the fourth quarter of 2005, as compared to
$0.31 for the same period last year (adjusted for the 3-for-2 stock split in
December 2005).

For the twelve months ended December 31, 2005, revenues increased 15.6% to a
record $214.8 million versus $185.7 million in the same period last year. For
the full year 2005, the Company earned a record $33.3 million, or $1.29 per
share, versus $25.6 million, or $1.10 per share, in 2004.

Dr. Keh-Shew Lu, President and CEO of Diodes Incorporated, commented: "2005 was
another terrific year for Diodes with record-breaking revenues and earnings,
capped off by a spectacular fourth quarter. We are continuing to execute our
strategy to expand our addressable markets and are on track for continued
profitable growth. Our recent acquisition of Anachip Corporation is in line with
our long-term growth strategy and is currently being integrated as we completed
the acquisition in early January. Moreover, Anachip gives us a jump-start into
standard analog products, which complements our current product offerings. Our
research and development efforts continue to provide Diodes with new
opportunities and are resulting in new products and establishing Diodes as a
technology leader for discrete semiconductors. We anticipate we will continue to
grow our share of our served markets in North America, Asia and Europe and are
looking forward to taking the company to the next level of success in 2006."

<PAGE>

End Markets

Diodes' sales growth continued to be driven by robust demand in Asia, which
constituted 65.4% of 2005 revenues compared to 59.1% last year. North America
generated 32% of total sales, with Europe contributing 2.6%.

Mark King, Vice President of Sales and Marketing, said: "Asia sales continued to
be driven by the computer and consumer sector lead by end equipment, digital
audio players and notebook computers. We continued our strong share increase in
notebooks during the quarter, and we also showed gains in game consoles and
mobile handsets. Lead time lengthened on commodity products in the quarter, and
we saw some short-term shortages which resulted in prices continuing to hold
firm into the first quarter of 2006."

"Sales from accounts in the United States and built in Asia remained brisk, with
good overall design activity. Array designs remained very popular with
heightened interest in custom arrays and sustained interest in our
PowerDI(TM)123 and PowerDI(TM)5. Distributor inventory was flat for the quarter
and remains at a very healthy two-year low, while distributor backlog was strong
going into the 2006.

"In Europe, we are realizing the benefits of our expanded distribution platform,
with record market share and strong design win activity, including wins on new
European branded handsets," said Mr. King.

Additional Financial Highlights

Gross profit for the fourth quarter of 2005 was $21.4 million compared to $18.9
million in the third quarter of 2005, and increased 32.1% over the $16.2 million
in the fourth quarter of 2004. Gross margins were slightly improved from the
third quarter of 2005 at 34.9% of sales. Compared to the prior-year quarter,
gross margin rose by 100 basis points due to an improved product mix, new
product revenue expansion and manufacturing cost efficiencies. For the year,
gross margin increased 190 basis points to 34.6% from 32.7% last year.

For the quarter, SG&A expenses were $8.8 million, or 14.4% of sales, as compared
to $5.4 million, or 11.4% of sales, in the comparable quarter last year. SG&A
expenses were up due to performance based incentives and commissions combined
with the share grant expense.

Research and development expenses were flat, as a percent of revenues, compared
to the third quarter of 2005 at 1.7% and down from fourth quarter 2004 of 1.9%.

Operating income for the fourth quarter increased 17.2% to a record $11.6
million, or 18.8% of sales, compared to $9.9 million for the fourth quarter of
2004. Other income for the fourth quarter of 2005 was $0.8 million, due
primarily to interest earned on proceeds from the follow-on offering.

The Company recorded a $2.0 million income tax provision for the fourth quarter
for an effective tax rate of 16.5%.

Capital expenditures for the current quarter were $8.4 million and $24.7 million
for the full year. Depreciation expense for the quarter was $4.3 million and
$16.2 million for the full year.

<PAGE>

At December 31, 2005, Diodes had $113.6 million in cash and short-term
investments, $146.7 million in working capital and $9.5 million in term debt.
For the fiscal 2005, shareholder equity doubled to $225.5 million. Cash from
operations was $10.1 million for the quarter and $50.6 million for the year of
2005.

EBITDA for the three months ended December 31, 2005 was $15.8 million,
representing an increase of $2.9 million, or 22.1%, from EBITDA of $12.9 million
for the three months ended December 31, 2004, and an increase of $1.6 million,
or 11.0%, from EBITDA of $14.2 million from the third quarter of 2005. EBITDA
for the twelve months ended December 31, 2005 was $56.0 million, representing an
increase of $10.1 million, or 22.1%, from EBITDA of $45.9 million for the same
period of last year. A reconciliation of this non-GAAP financial measure to the
Company's net income is set out in the attached schedule.

Business Outlook

"Heading into 2006, we continue to experience a positive demand environment for
our discrete semiconductor products as Diodes becomes increasingly recognized as
an innovation leader for discretes. The Anachip acquisition is being integrated
as planned and is expanding our product line in analog and mixed signal devices.
The contributions from Anachip will be seen in the first quarter of 2006, and
will provide an initial foundation for developing analog and mixed signal
devices that meet the needs of our global customer base," said Dr. Lu.

"As, a result we expect that first quarter revenues will increase 16-20%
sequentially with an increase in gross profit dollars of 8-11%. The gross profit
margin on the analog products is currently in the mid-20% range, with the
expectation to improve the margin above our discrete product lines as we execute
our strategy and realize synergies going forward. SG&A, as a percentage of
revenue, should improve compared to the fourth quarter of 2005, offsetting our
increased investment in research and development to approximately 2.6% of
revenue. In addition, we expect first quarter non-cash stock option expense
related to FAS123R to be approximately $1.5 million. For the full year 2006, we
expect to continue to outperform the growth of the discrete semiconductor
market."

Conference Call

Diodes Incorporated will hold its fourth quarter conference call for all
interested persons at 2 p.m. Pacific Time (5 p.m. Eastern Time) today to discuss
its results. This conference call will be broadcast live over the Internet and
can be accessed by all interested parties on the investor section of Diodes'
website at www.diodes.com. To listen to the live call, please go to the Investor
section of Diodes website and click on the Conference Call link at least fifteen
minutes prior to the start of the call to register, download, and install any
necessary audio software. For those unable to participate during the live
broadcast, a replay will be available shortly after the call on Diodes website
for 60 days.

About Diodes Incorporated

Diodes Incorporated (Nasdaq: DIOD) is a leading manufacturer and supplier of
high-quality discrete and analog semiconductor products, primarily to the
communications, computing, industrial, consumer electronics and automotive
markets. The Company's corporate sales, marketing, engineering and logistics
headquarters is located in Southern California, with two manufacturing
facilities in Shanghai, China, a wafer fabrication plant in Kansas City,
Missouri, engineering, sales, warehouse and logistics offices in Taipei, Taiwan
and Hong Kong, and sales and support offices throughout the world. Diodes, Inc.
recently acquired Anachip Corporation, a fabless analog IC company in Hsinchu
Science Park, Taiwan.

<PAGE>

Diodes, Inc.'s product focus is on subminiature surface-mount discrete devices,
analog power management ICs and Hall-effect sensors all of which are widely used
in end-user equipment such as TV/Satellite set top boxes, portable DVD players,
datacom devices, ADSL modems, power supplies, medical devices, wireless
notebooks, flat panel displays, digital cameras, mobile handsets, DC to DC
conversion, Wireless 802.11 LAN access points, brushless DC motor fans, and
automotive applications. For further information, including SEC filings, visit
the Company's website at http://www.diodes.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: Any statements set forth above that are not historical facts are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
such factors as fluctuations in product demand, the introduction of new
products, the Company's ability to maintain customer and vendor relationships,
technological advancements, impact of competitive products and pricing, growth
in targeted markets, risks of foreign operations, and other information detailed
from time to time in the Company's filings with the United States Securities and
Exchange Commission.

Source:  Diodes Incorporated
CONTACT: Carl Wertz, Chief Financial Officer, Diodes Incorporated (805) 446-4800
e-mail:  carl_wertz@diodes.com
or
Crocker Coulson, President, Coffin Communications Group,
(818) 789-0100, e-mail: crocker.coulson@ccgir.com
- --------------------------------------------------------------------------------

Recent news releases, annual reports, and SEC filings are available at the
Company's website: http://www.diodes.com. Written requests may be sent directly
to the Company, or they may be e-mailed to: diodes-fin@diodes.com.

        CONSOLIDATED CONDENSED INCOME STATEMENT and BALANCE SHEET FOLLOWS

<PAGE>


                      DIODES INCORPORATED AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                       Three Months Ended                    Twelve Months Ended
                                                          December 31,                           December 31,
                                                --------------------------------      --------------------------------
                                                    2004                2005              2004                2005
                                                -------------      -------------      -------------      -------------
<S>                                             <C>                <C>                <C>                <C>
Net sales                                       $  47,887,000      $  61,367,000      $ 185,703,000      $ 214,765,000
Cost of goods sold                                 31,676,000         39,960,000        124,968,000        140,388,000
                                                -------------      -------------      -------------      -------------
     Gross profit                                  16,211,000         21,407,000         60,735,000         74,377,000

Selling and general administrative expenses         5,439,000          8,816,000         23,503,000         30,285,000
Research and development expenses                     902,000          1,025,000          3,422,000          3,713,000
Loss (gain) on disposal of fixed assets                    --              3,000             14,000           (102,000)
                                                -------------      -------------      -------------      -------------
    Total operating expenses                        6,341,000          9,844,000         26,939,000         33,896,000

    Income from operations                          9,870,000         11,563,000         33,796,000         40,481,000

Other income (expense)
    Interest income                                    14,000            752,000             28,000            819,000
    Interest expense                                 (164,000)          (132,000)          (665,000)          (598,000)
    Other                                            (385,000)           199,000           (418,000)           406,000
                                                -------------      -------------      -------------      -------------
                                                     (535,000)           819,000         (1,055,000)           627,000

Income before income taxes and minority
 interest                                           9,335,000         12,382,000         32,741,000         41,108,000
Income tax provision                               (1,836,000)        (2,049,000)        (6,514,000)        (6,685,000)
                                                -------------      -------------      -------------      -------------
Income before minority interest                     7,499,000         10,333,000         26,227,000         34,423,000

Minority interest in joint veture earnings           (170,000)          (292,000)          (676,000)        (1,094,000)
                                                -------------      -------------      -------------      -------------
Net income                                      $   7,329,000      $  10,041,000      $  25,551,000      $  33,329,000
                                                =============      =============      =============      =============
Earnings per share
    Basic                                       $        0.35      $        0.40      $        1.27      $        1.44
    Diluted                                     $        0.31      $        0.36      $        1.10      $        1.29
                                                =============      =============      =============      =============
Number of shares used in computation
    Basic                                          20,845,500         25,169,874         20,106,414         23,168,180
    Diluted                                        23,562,000         28,024,223         23,207,157         25,894,384
                                                =============      =============      =============      =============
</TABLE>


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


                      DIODES INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEET

                                     ASSETS
<TABLE>
<CAPTION>

                                                              December 31,       December 31,
                                                                 2004               2005
                                                             -------------      -------------
                                                                                 (unaudited)
<S>                                                          <C>                <C>
CURRENT ASSETS
        Cash and equivalents                                 $  18,970,000      $  73,288,000
        Short-term investments                                          --         40,348,000
                                                             -------------      -------------
                Total cash and short-term investments           18,970,000        113,636,000

        Accounts receivable
                Customers                                       38,682,000         48,348,000
                Related parties                                  5,526,000          6,804,000
                                                             -------------      -------------
                                                                44,208,000         55,152,000
                Less: Allowance for doubtful receivables          (432,000)          (534,000)
                                                             -------------      -------------
                                                                43,776,000         54,618,000

        Inventories                                             22,238,000         24,611,000
        Deferred income taxes, current                           2,453,000          2,541,000
        Prepaid expenses and other current assets                4,243,000          5,326,000
        Prepaid income taxes                                       406,000                 --
                                                             -------------      -------------
                   Total current assets                         92,086,000        200,732,000


PROPERTY, PLANT AND EQUIPMENT, at cost, net
        of accumulated depreciation and amortization            60,857,000         68,930,000

DEFERRED INCOME TAXES, non current                               7,970,000          8,466,000

OTHER ASSETS
        Equity investment                                               --          5,872,000
        Goodwill                                                 5,090,000          5,090,000
        Other                                                    1,798,000            425,000
                                                             -------------      -------------
TOTAL ASSETS                                                 $ 167,801,000      $ 289,515,000
                                                             =============      =============
</TABLE>


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


                      DIODES INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                             December 31,       December 31,
                                                                                2004               2005
                                                                            -------------      -------------
                                                                                                (unaudited)
<S>                                                                         <C>                <C>
CURRENT LIABILITIES
        Line of credit                                                      $   6,167,000      $   3,000,000
        Accounts payable
                 Trade                                                         17,274,000         19,290,000
                 Related parties                                                3,936,000          7,250,000
        Income tax payable                                                        978,000          1,470,000
        Accrued liabilities                                                    10,481,000         18,312,000
        Current portion of long-term debt
                 Related party                                                  2,500,000                 --
                 Other                                                          1,014,000          4,621,000
        Current portion of capital lease obligations                              165,000            138,000
                                                                            -------------      -------------
                   Total current liabilities                                   42,515,000         54,081,000

LONG-TERM DEBT, net of current portion
                 Related party                                                  1,250,000                 --
                 Other                                                          6,583,000          4,865,000

CAPITAL LEASE OBLIGATIONS, net of current portion                               2,172,000          1,618,000

MINORITY INTEREST IN JOINT VENTURE                                              3,133,000          3,477,000
                                                                            -------------      -------------
STOCKHOLDERS' EQUITY
        Preferred stock - par value $1.00 per share; 1,000,000 shares
                 authorized; no shares issued and outstanding
        Common stock - par value $0.66 2/3 per share;
                30,000,000 shares authorized; 23,644,901 and 25,258,119
                 shares issued at December 31, 2004
                 and December 31, 2005, respectively                           15,763,000         16,839,000
        Additional paid-in capital                                             16,262,000         94,664,000
        Retained earnings                                                      81,330,000        114,659,000
                                                                            -------------      -------------
        Less:                                                                 113,355,000        226,162,000
            Treasury stock - 2,420,262 and no shares of
                common stock, at cost, at 2004 and 2005, respectively          (1,782,000)                 0
            Accumulated other comprehensive gain (loss)                           575,000           (688,000)
                                                                            -------------      -------------
                                                                               (1,207,000)          (688,000)

                   Total stockholders' equity                                 112,148,000        225,474,000
                                                                            -------------      -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    167,801,000        289,515,000
                                                                            =============      =============
</TABLE>

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


                      DIODES INCORPORATED AND SUBSIDIARIES
               CONSOLIDATED RECONCILIATION OF NET INCOME TO EBITDA

EBITDA represents earnings before net interest expense, income tax provision,
depreciation and amortization. Our management believes EBITDA is useful to
investors because it is frequently used by securities analysts, investors and
other interested parties in evaluating companies in our industry. In addition,
our management believes that EBITDA is useful in evaluating our operating
performance compared to that of other companies in our industry because the
calculation of EBITDA generally eliminates the effects of financing and income
taxes and the accounting effects of capital spending, which items may vary for
different companies for reasons unrelated to overall operating performance. As a
result, our management uses EBITDA as a measure to evaluate the performance of
our business. However, EBITDA is not a recognized measurement under generally
accepted accounting principles, or GAAP, and when analyzing our operating
performance, investors should use EBITDA in addition to, and not as an
alternative for, income from operations and net income, each as determined in
accordance with GAAP. Because not all companies use identical calculations, our
presentation of EBITDA may not be comparable to similarly titled measures of
other companies. Furthermore, EBITDA is not intended to be a measure of free
cash flow for our management's discretionary use, as it does not consider
certain cash requirements such as a tax and debt service payments.

The following table provides a reconciliation of Net Income to EBITDA:
<TABLE>
<CAPTION>

                                       Three Months Ended        Twelve Months Ended
                                          December 31,              December 31,
                                     ---------------------      ---------------------
(in thousands)                         2004         2005          2004         2005
                                     --------     --------      --------     --------
<S>                                  <C>          <C>           <C>          <C>
Net Income                           $  7,329     $ 10,041      $ 25,551     $ 33,329
Plus:
   Interest expense, net                  150         (620)          637         (221)
   Income tax provision                 1,836        2,049         6,514        6,685
   Depreciation and amortization        3,631        4,341        13,173       16,228
                                     --------     --------      --------     --------
    EBITDA                           $ 12,946     $ 15,811      $ 45,875     $ 56,021
                                     ========     ========      ========     ========
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>v034868_ex99-2.txt
<TEXT>
Diodes Fourth Quarter 2005 Conference Call
Participants: Dr. Keh-Shew Lu, Carl Wertz & Mark King

Introduction: Crocker Coulson, CCG

Good afternoon and welcome to Diodes' fourth quarter 2005 earnings conference
call.

With us today are Diodes' President and CEO, Dr. Keh-Shew Lu, Chief Financial
Officer, Carl Wertz, and Mark King, VP of Sales and Marketing.

Before I turn the call over to them, may I remind our listeners that in this
call management's prepared remarks contain forward-looking statements, which are
subject to risks and uncertainties, and management may make additional
forward-looking statements in response to your questions.

Therefore, the Company claims the protection of the safe harbor for
forward-looking statements that is contained in the Private Securities
Litigation Reform Act of 1995. Actual results may differ from those discussed
today, and therefore we refer you to a more detailed discussion of the risks and
uncertainties in the Company's filings with the Securities & Exchange
Commission.

1
<PAGE>

In addition, any projections as to the Company's future performance
represent management's estimates as of February 6, 2006. Diodes assumes no
obligation to update these projections in the future as market conditions
change.

For those of you unable to listen to the entire call at this time, a recording
will be available via webcast for 60 days at the investor relations section of
Diodes' website at www.diodes.com.

And now I'd like to turn the call over Diodes' CEO, Dr. Keh-Shew Lu.

2
<PAGE>

DR. Keh-Shew Lu, CEO of Diodes

Welcome everyone, and thank you for joining us on the call today.

I am excited about our outstanding performance in the fourth quarter and for the
entire 2005 year. Diodes' market share again hit a new high in the quarter, and
we continued to outperform the discrete semiconductor segment and the overall
semiconductor industry.

Here are major earnings highlights we published this afternoon:

 o Fourth quarter revenues increased by 28.1% over the year-ago quarter to $61.4
   million.

 o New product revenue reached 15.6% of total sales.

 o Gross margin increased 100 basis points to 34.9% versus the same period a
   year ago.

 o Operating income increased 17% to $11.6 million.

 o And, net income for the quarter rose 36.8% to a record $10 million.

I think we can all agree that these are exceptional results, and reflect the
combination of favorable demand environment with a proven business strategy and
great execution by our team here at Diodes.

3
<PAGE>

For the full year, we posted the following record results:

 o Record revenues of $214.8 million, an increase of 15.6% from 2004

 o Gross margins were 34.6% compared to 32.7% in 2004

 o Record net income of $33.3 million--an increase of 30% compared to a year ago

Our long-term strategic vision is to achieve sustained profitable growth by
leveraging our innovative discrete component technology and take advantage of
adjacent product opportunities, including the standard linear analog and mixed
signal technologies. We are putting our strategy into action by aggressively
introducing new products, leveraging our strengths in next-generation multi-chip
devices, distinguishing ourselves through our intense customer service,
expanding our manufacturing capacity, and pursuing strategic acquisitions.

This business strategy is being successfully executed.

4
<PAGE>

 o We are continuing with our investments in R&D of next-generation
   technologies. With a number of important new packaging platforms
   introduced during 2005, we are seeing these translate in to strong design
   wins and new product revenues, enhancing our margins and profitability.

 o We also continue to pursue and achieve manufacturing excellence. Last
   month, two of our manufacturing facilities in China were awarded ISO's
   TS16949 certification. This certification represents an automotive
   industry-recognized level of quality, and it provides customers with
   added confidence in their decision to partner with Diodes.

 o We remain prudent and financially disciplined in maintaining operating
   costs, maximizing cash through our working capital management, and deploying
   capital in the best interest of our shareholders.

For fiscal 2005, we generated strong cash flow on robust revenues and improved
profit margins. Our balance sheet is very strong with $114 million in cash and
short-term investments and total debt-to-equity of 28.4%. In addition to the $5
million at the end of December, we have used $25 million of our cash in the
first quarter of 2006 to close the acquisition.

5
<PAGE>

When we went out to meet with investors for our secondary offering, we made it
clear that acquisitions would be an important element of our strategy to expand
our addressable markets. We also said that our initial focus would be on
standard linear product that would leverage our strengths in cost efficient
packaging and enables us to rapidly build share with our existing customer base.

The acquisition of Anachip, which closed on January 10th of this year, fits in
the center of this strategy. Anachip's main product focus is Power Management
ICs. The analog devices they produce are used in LCD monitor/TV's, wireless LAN
802.11 access points, brushless DC motor fans, portable DVD players, datacom
devices, ADSL modems, TV/satellite set-top boxes, and power supplies. They bring
an excellent design team with strong capabilities in a range of targeted analog
and power management technologies.

This acquisition also shows our disciplined approach to making acquisitions.
Diodes paid approximately $30 million to acquire Anachip, which had revenues of
approximately $35 million in power management in 2005. Again, this acquisition
will be accretive for 2006.

6
<PAGE>

What's more, we see significant synergies to be obtained as we integrate Anachip
with our operations. This includes growth opportunities from offering their
devices to our global customer base and significant cost synergies as we
integrate into our operations.

This is the first of our acquisitions that will enable us to accelerate our
organic growth while leveraging our innovative discrete component technology,
our world-class packaging capabilities and our sales and marketing channels.
Last quarter, I told you that you could expect to see our first analog product
come to market in the first half of 2006, with meaningful revenues in the second
half of the year. The acquisition of Anachip puts us significantly ahead of
schedule, and will generate significant analog revenues for Diodes in the first
quarter of this year. I plan on providing more details about our exciting
product road map in the quarters to come.

7
<PAGE>

In summary, Diodes had an outstanding year in 2005 and we see even greater
horizons before us in 2006. We have an excellent, disciplined team in place and
I am very pleased to be able to make a contribution to the Company's success.
With that, I'm going to turn it over to Carl to discuss the financials in more
detail.

8
<PAGE>

4Q05 Financials: Carl Wertz

Thanks, Dr. Lu, and good afternoon everyone.

Fourth quarter revenues were significantly stronger than expected, as Diodes
continued to gain share in an improving market. And our net income continued to
set new records.

 o Revenues for 4Q were $61.4 million, an increase of 28.1% from the same
   period last year. On a sequential basis our revenue rose 13.2% from our
   record third quarter sales of $54.2 million. New product sales were
   15.6% of revenue compared to 14.1% in the previous quarter.

 o Gross margin was 34.9%, for the quarter, and up 100 basis points from
   the fourth quarter of 2004. This was primarily due to an improved
   product mix.

 o For the quarter, Selling, General & Administrative expenses were $8.8
   million, or 14.4% of sales, compared to $5.4 million or 11.4% of sales
   in the last year's fourth quarter. The SG&A primarily reflects the
   share grant expense, performance based incentives, and sales
   commissions.

9
<PAGE>

 o Research and development investment was slightly over $1 million, or
   1.7% of revenues, for the quarter. On a percentage of sales basis, this
   was in-line compared the third quarter's 1.7%, or $938,000 and down on
   a percentage of sales basis, from a year ago when we reported $902,000,
   or 1.9% of revenues, as our revenue growth outpaced the R&D investment.

 o Operating income rose 17.2% to $11.6 million, or 18.8% of sales, from $9.9
   million, in the year-ago quarter.

 o Depreciation was $4.3 million for the quarter and $16.2 million for the year.

 o EBITDA for the quarter was $15.8 million and $56.0 million for the year.

 o Our effective income tax rate in the fourth quarter was 16.5%, compared
   to 15.7% last quarter. In the fourth quarter of 2005, we repatriated
   $24 million from our foreign subsidiaries to the U.S. to take advantage
   of the tax incentives offered under the American Jobs Creation Act.

10
<PAGE>

 o Net income for the fourth quarter reached a record $10 million, or
   $0.36 per diluted share, up 37.0% from $7.3 million, or $0.31 per
   share, in the same period last year. This is adjusted for the 3-for-2
   stock split on December 1st. On a sequential basis, net income
   increased 19.8% from $8.4 million, or $0.34 per share in the third
   quarter of 2005.

 o Turning to the balance sheet, we had $114 million in cash and
   short-term investments and $150 million in working capital as of
   December 31, 2005. Keep in mind we used approximately $30 million to
   close the Anachip acquisition, so this will have to be taken into
   account when projecting interest income going forward.

At the end of the quarter, we had $9.5 million in term debt, as compared to
$11.3 million at the beginning of the year. Our total debt balance is $12.5
million, down from $17.5 million a year ago, and our total debt to equity
ratio improved to 28.4% from 49.6% a year ago.

11
<PAGE>

 o Inventories were at $24.6 million, with inventory turns at an improved
   6.4 times in the quarter compared to 5.5 times in the third quarter.

 o Days sales outstanding was 83 days in the fourth quarter compared to 82 days
   in the prior quarter.

 o Capital expenditures were $8.4 million in the fourth quarter and $24.7
   million for the full year. This was in line with our objective of
   meeting increased demand and investing in equipment to increase our
   manufacturing efficiencies.

 o Our Outlook

As Dr. Lu mentioned earlier, 2005 was an outstanding year highlighted by
significant growth at Diodes, based on the combination of relatively favorable
market conditions, excellent customer reception to our next-generation devices,
and our continued expansion into certain geographic regions and new customers.

Heading into 2006, we continue to experience a positive demand environment
for our discrete semiconductor products as Diodes becomes increasingly
recognized as an innovation leader for discretes. The Anachip acquisition
is being integrated as planned and will enable us to accelerate our
expansion into analog and mixed signal devices. The contributions from
Anachip will be seen beginning in the first quarter of 2006.

12
<PAGE>

As a result we expect that first quarter revenues will increase 16-20%
sequentially with a corresponding gross profit dollar increase of 8-11%. The
analog margin is currently in the mid-20% range with the expectation to improve
the margin above our discrete product lines as we execute our strategy and
realize synergies going forward.

SG&A, as a percentage of revenue, should improve compared to the fourth quarter
of 2005, offsetting our increased investment in research and development to
approximately 2.6% of revenue.

13
<PAGE>

In addition, we expect first quarter non-cash stock option expense related to
FAS123R to be approximately $1.5 million. For the full year 2006, we expect to
continue to outperform the growth of the discrete semiconductor market.

As reflected in our guidance, we continue to foresee a positive demand
environment heading into 2006 for Diodes' discrete semiconductor products,
and believe that our expansion into adjacent categories will be an important
new element in delivering profitable growth to our shareholders.

With that said, I'm now going to turn the discussion over to Mark King, our
Vice President of Sales and Marketing. Mark will discuss our new products,
market opportunities, and give you a view of the direction of the general
marketplace.

14
<PAGE>

Markets and Growth Strategies - Mark King

Thanks, Carl and good afternoon everyone.

From a sales and marketing perspective, the fourth quarter was very active and
successful -- with record sales, strong new product revenues, and robust design
win activities. We continue to broaden and deepen our product offerings,
employing our latest generation packaging, including the Power DI5, PowerDI 123,
SOD523 and array lines, with 21 new part numbers introduced during the quarter
spanning eight different product series. Our new DFN platform, introduced in the
second quarter of 2005, has been highly successful, with customers seeing strong
benefits from the innovative quad flat leadless packaging that combines an
ultra-miniature footprint with superior power dissipation. We are also seeing a
healthy level of interest in our application specific complex arrays, which
combine multiple, disparate discrete technologies into a single, very
cost-effective package.

We are very excited about the new analog and power management devices we are
able to offer following the acquisition of Anachip and are in the process of
finalizing a new product road map that aligns these technologies with our highly
efficient packaging capabilities. Our customers and distributors are very
receptive to the new products we are now able to offer them, and see these
standard linear devices as a great fit with Diodes' value proposition.

15
<PAGE>

We see a lot of opportunities to grow our position on the board with these
existing customers in adjacent technologies.

Geographic Breakout
Our market share reached new highs across the globe during the quarter. Asia
remains the strongest growth driver accounting for 65% of total revenues,
followed by North America at 32%, and 3% of revenues coming from Europe.

In Asia, sales continued to be driven by the computer and consumer sector. We
continued our strong share increase in notebooks during the quarter, and we also
showed gains in game consoles and mobile handsets. While ASPs for the fourth
quarter declined by 15% year-over-year, this was largely offset by declining
costs on higher unit volumes. Lead times lengthened on commodity products in the
quarter, and we saw some short-term shortage situations in commodity products,
and product pricing continues to be stable heading into the first quarter of
2006.

16
<PAGE>

In North America, both OEM and distributor sales were stronger then expected
during the quarter. These results were driven by strong OEM demand in the areas
of TV set-top boxes and hand- held medical devices. Pricing pressure on
commodity products eased. Product lead times have increased for certain
commodities and we even saw some transitory shortages on select devices. ASPs
were off only 3% year-over-year, and actually increased from Q3 levels. Sales
from accounts designed in the U.S. and built in Asia remained brisk, with good
overall design win activity. Our array designs remained very popular with
heightened interest in custom arrays and continuing strong uptake for devices
employing our advanced, proprietary PowerDI123 and PowerDI5 packaging.

Distributor inventory levels were flat for the quarter and remains at a very
healthy two-year low, while distributor backlog was strong going into the New
Year.

North American wafer sales were also very strong during the fourth quarter,
although we expect these trade sales to gradually trend down in future quarters
as we continue to transition more of our wafers to internal usage.

17
<PAGE>

In Europe, revenues were up 12% sequentially on record sales in a relatively
flat market. We saw the first signs of price stabilization in the quarter on
commodity products and some lengthening in lead times from the traditional
suppliers. Design activity was quite strong in the quarter, and included wins on
new cell phone platforms that should contribute to strengthening our position in
Europe over 2006. The expansion of our distributor network over the last year is
really beginning to pay off in increased activity and revenues, and we feel very
confident about our potential to continue to build share.

Moving to Market Segments...

The biggest driver of our sales was notebooks in our computer and peripherals
segment, while digital audio devices were the strongest contributor in our
consumer markets segment. For the fourth quarter, our segment breakout was: 38%
consumer, 34% computer and peripherals, 17% industrial, 7% telecom and 4%
automotive.

Design Wins

Design activity was very strong in the quarter on a broad base of products in
all product categories. We continue to see excellent momentum in our PowerDI
platforms, our array and our new DFN platform. As a result, we had multiple wins
at 58 new or exiting accounts in the quarter.

18
<PAGE>

Notable design wins include:

o  PowerDI 5 wins for a DC fan, optical networking equipment, and a Tablet PC

o  PowerDI 123 wins in a portable GPS system, PDA, DC Fan, LCD module and two
   different cell phone platforms. This included a PD123 Zener at major
   branded European manufacturer.

o  Multiple and broad base product wins on three different Set-top box
   platform and two different LCD TV platforms

o  Multiple Array wins in DSL and Cable modem, notebook computer, and the latest
   game console.

o  Performance Schottky wins in a hard disk drive, a game console and notebook
   computers.

19
<PAGE>

With the addition of Anachip Corporation, we look forward to reporting next
quarter on the design progress on standard analog and power management lines.
Our investment in R&D continues to grow. And more importantly we are seeing a
tremendous yield from this investment in the form of innovative new products,
design wins and new product revenue - all of which adds up to improving margins
and profitability.

In Summary

We are very pleased with our fourth quarter results, which clearly exceeded our
initial expectations.

Orders were strong during the fourth quarter, with book to bill ratio remaining
above one. Pricing trends on commodity products have improved. In the discrete
segment, we believe that we are positioned in the right markets, with the right
products, in order to fully exploit the growth opportunities created by the
ongoing miniaturization of computing and consumer electronics devices. We are
very well situated with our key accounts in Asia, and see opportunities to grow
our share of the European market. Despite a healthy level of investment during
2005, our facilities in China are running at near capacity, and it may be some
time before we see a reversal of that trend.

20
<PAGE>

The acquisition of Anachip is a great fit with our existing product portfolio,
manufacturing strengths, and customer base.

It puts us ahead of schedule in our plans to enter the analog market and we look
forward to reporting meaningful revenues and design win activity for our
standard products in the first half of 2006. As Dr. Lu mentioned we expect to
realize synergies on both the revenue and the cost side over the next several
quarters, which will make this acquisition even more beneficial to our
shareholders. As we integrate Anachip's existing products into our packaging
facilities, we continue to see a better mix of sales by moving toward higher
margined products.

In summary, we see another exciting and growth-oriented year for Diodes in 2006.

With that, let's open the floor to questions. Operator?

21
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
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<TEXT>
QUESTION AND ANSWER SECTION

Operator: [Operator Instruction]. Your first question comes from Alex Gauna with
UBS.

[Q - Alex Gauna]: Hi guys, thank you. I was wondering within the outlook, if you
could give a little color on what you except to be happening with your organic
business plus breaking out a little bit more detail the Anachip contribution,
and also on core gross margins what the trend is here in the near term?

[A]: Okay. Gauna, this is tough to do, let me just answer. We, you know, we
really don't want to separate the revenue from our, you know, organic growth and
from the Anachip, because due to, you know, we are going to be - have more than
just Anachip and therefore, you know, it really don't make sense. But, if at all
we might separate the running between the discrete and analog, we would not like
to separate from, you know, our DII orbiting its organic growth from the
Anachip. As you know, we put it our growth for the next - for this quarter,
first Q of 2006. We put it like, we say 16 to 20% growth, and our, you know, I
can tell you our organic growth have only few portion you know, its probably
comfortable you know, with our last quarter. Some forget we have 7 percent, and
then, you know, 13 percent, continued two quarter of growth. And, so, you know,
you don't really expect these as our own organic growth, will be pretty in a
comfortable will be pretty good. And, then, and on that our Anachip growth, then
keep as a total of 16 to 20% revenue growth in 1Q from 4Q.

[Q - Alex Gauna]: Sir, if I understood you correctly, despite, or otherwise, the
seasonal softness, you are seeing organic growth continue sequentially into the
March quarter, is that correct?

[A]: I think, we say it's comparable to the fourth quarter.

[Q - Alex Gauna]: I got it.

[A]: Okay. And, you know, because we are coming off of a little bit stronger
growth in the industry experience over the last two quarters. So, you know, we,
you know, traditionally the first quarter is slightly softer than the fourth
quarter, but we expect it to be right around parity.

[Q - Alex Gauna]: Okay, very good. And, I am wondering you mentioned major wins
in Europe, I believe specifically with the cellphone platforms. How far along
are you in terms of securing new design wins in software? What kind of
contribution is that making to revenues overall at this point?

[A]: I think, the overall contribution is still pretty low, but, the opportunity
and the progress is quite good. You know, we are putting more and more focus on
this marketplace, and with the emergence of China as a key design area for this
product line will - that plays into our strategy quite well. But, we are making
continued progress, but it's, you know, it's slow moving and so forth. So, it's
still not a significant part of our revenue.

[A]: And, December, those revenue may not show in the European revenue, and now
the design wins down in Europe, many times will be procure - the procurement
will be in Asia. And therefore, you know, you may not measure discrete, a major
revenue growth in Europe but you are going to see a major, you know, design win
activity in the cellphone but European manufactures.

[Q - Alex Gauna]: I got it, very good. And, I was wondering also with regard to
Dr. Lu, you mentioned clearly that you are ahead of schedule in your move to
analog mix signal with Anachip acquisition. But, could you give us an update, I
didn't understand clearly, are you still on track with your core analog
developments for product releases in the first half of the year and ramp in the
second?
<PAGE>

[A]: The answer is yes. We are taking some of the Anachip analog sales, and then
try to you know, coding for building our factory in China, at the same time, you
know, we try to make sure all the quality meet our requirements, and those was
on schedule. And, you are going to see series of a new product analog product
announce in the first half of this year.

[A]: There was some overlap in the developments we were working on it and some
of the areas they were, and we are also researching some of the product areas
that they are not really weren't focused on because of their scale and their
ability to compete in those marketplaces, we plan to bring those up very
rapidly. So, we have a two pronged approach with that product line.

[Q - Alex Gauna]: Okay, very good thank you congratulations, powerful quarter.

[A]: Thank you.

[A]: Thanks a lot.

Operator: Your next question comes from Michael Bertz with WR Hambrecht.

[Q - Michael Bertz]: Good afternoon gentlemen, nice quarter.

[A]: Thank you.

[A]: Thank you.

[Q - Michael Bertz]: Listen, quick question here then, the increase in R&D into
the first quarter here, is it pretty much primarily going to come from, you
know, adding Anachip guys or is there some other expense increasing you are
seeing from your own efforts like in analog?

[A]: Well, the answer is yes, you know, is coming from Anachip, but, you know,
again if we will describe what we have said is SG&A, you know, to put them into
the Diodes - and that will offset the increase of the R&D and so some of them
could be the, you know, how do you - category the R&D versus SG&A. But the total
you know, which deal target our motto you know, we want to be somewhere about 2%
to 3 percent. So, even we show our R&D now it's higher than last quarter, which
is not really worth us, okay, because that's been with in our which is motto.
And then, with the key goal, after the, you know, we acquire Anachip, and with
Anachip and then, you know, our new product come out those growth, of the grain
menu [ph] will be able to as a percent of R&D will be able to reduce it.
Therefore, you know, it is still within our financial motto, of 2 to 3% R&D.

[Q - Michael Bertz]: Okay. Fair enough thanks, Keh-Shew. On the - as you look in
the quarters ahead, may be Mark, it is direct question to answer these
questions, you look at, you know, the European business, but seems to be
improving pretty well, any thoughts about, you know, the target for a percentage
of revenue might get from your customers over there business is right for you
there?

[A]: Yeah, you know, we were striving to get it to be about 5% of our revenue,
but I am looking now between 4 and 5% of our revenue. But, you know, when we
add, we throw on the acquisition and we throw on a little bit higher growth than
expected in the fourth quarter and it may change. So, I guess between 4 and 5. I
think we are running about 3% now. Our progress is good. Hopefully, we continue
to have this problem, because we are going to the other regions that much
faster. But, I think that the things are going very well there.
<PAGE>

[Q - Michael Bertz]: Okay, fair enough. And then, I know we touched on this a
little bit and you kind of gave us a sense about, you know, commenting about the
core business, you know, basically being flat into the first quarter. But, if we
can look back at Anachip just for our purposes modeling-wise, what - do you have
an estimate of what they do about in the fourth quarter in terms of revenue?

[A]: I don't have it here. But, you know, I need to put a couple of points here.
#1, most of the Anachip customers, before we apply a synergy and before we use
it for all major customers, its all centralized in Asia, in China. And, you
know, and typically 1Q on them, you know, for those Asian markets typically
would be, you know, spread or going down, okay. But, they are lying down; I do
not have those - the number in front of me to answer that. But, you know, I
think they are probably comparable too.

[Q - Michael Bertz]: Okay, great. And then, thinking about in terms of, you
know, gross margins, obviously you talked about them being little bit softer
than corporate average right now, but, you know, overtime becoming higher. How
should be think about that in terms of your plans for, you know, on a quarterly
basis, increasing gross margins for the analog side of the business?

[A]: You know, we can't monitor exactly because we have exact, you know, we have
been, you know, we have only been in there since January 10. But, we are
packaging synergies; we have customer synergies and so forth. They are very
focused on - they only have Asian customers, which is the most competitive
market in the world, so the global customer base will help them, the packaging
synergies will help a great deal and frankly at, you know, at $35 million a
year, they just had no scale. So, we can add some scale in there. So, we see
significant opportunities going forward to achieve margins higher than our
present margin - run rate.

[A]: If you look at our announcement we just said, after we finished the
integration and we apply most of the synergies, we are able to get in gross
margins higher than our on discrete gross margin. And, you know, no doubt if you
look at most at today they have no packaging capability in themselves. So, they
are outsourcing their packaging. #2, you know, their scales. With that kind of
scales, you know, even they cannot get the good price, you know, both in the
wafer and at the packaging cost. Therefore, if we apply our synergy from the
making function and apply to our markets, you know, global market inside of just
Asia markets, you are going to see the gross margin shipping improve
significantly.

[Q - Michael Bertz]: Okay. Fair enough. Let me just ask if I could be little
more direct, you guys have run almost 35% the last couple of quarters here, you
know, what - obviously its going to be down, probably reading your numbers that
you gave in your release somewhere in the 32 something percent range for the
next quarter of your Q1. At what point might we think it would be accretive
around 35% range, you know, whether that maybe 3Q or 4Q of this year?

[A]: No, I think it's really difficult for us to forecast that. But, I think you
can be comfortable that I think it should start to come back towards that figure
starting in the second quarter and advancing throughout the year, weather being
[indiscernible]. Remember, we are very focused on gross margin dollars versus
gross margin percent. We think it's very dangerous for us to get concerned about
the percent. We've got some product lines that we need to roll-out and we need
to roll-out in volume that in the initial stages it might be less profitable,
but over time become very very profitable to our overall cost structure. So, you
know, I think it's just too complex right now for us to model that clear for you
at this time.

[Q - Michael Bertz]: Okay.

[A]: We are going to see the profits dollar going to be continuing to improve,
you know, because that's what we really focus on.
<PAGE>

[Q - Michael Bertz]: Okay, great. And then, one last question, in terms of where
you are seeing better traction with the analog and I guess, this is more about,
you know, your go-to-market strategy, are you seeing more uptake in the design
activity where things are going to distributors or things that you are doing
directly with OEMs?

[A]: Again, we are still new in seeing where they are, really the design
activity until very recently isall in Asia, okay. And, it's basically been key
OEM.

[Q - Michael Bertz]: Okay.

[A]: Okay. And, many of - there is already a significant overlap in our customer
base, okay withthere key OEM and in our core end equipments. But, we have some
other areas where we focus more then we can add value very rapidly in that
marketplace. But, it will take us sometime togenerate the design wins at the
global customer base.

[Q - Michael Bertz]: Okay, great. Thanks guys, congratulations.

[A]: Thank you.

[A]: Thank you.Operator: Your next question comes from Ramesh Misra with C.E.
Unterberg.

[Q - Ramesh Misra]: Good evening everyone.

[A]: Hi.

[Q - Ramesh Misra]: On Anachip, what foundry are they using?

[A]: Well, they are using different foundries; you are talking about wafer fabs,
right?

[A]: Yes, correct.

[A]: They are using different ones, okay, they used in charter before and then
they used in LAC [ph] and the break even try to go to PSMC [ph].

[Q - Ramesh Misra]: Okay.

[A - Keh-Shew Lu]: So, they use in different kinds of functions.

[Q - Ramesh Misra]: So, would you be able to pull that into your Kansas City
facility or do you expect to maintain that at those locations at this time?

[A - Keh-Shew Lu]: No, we could not have any claim at this movement to put in a
path. And, youknow, one thing, I think you remember there is when on the row -
ratio wise talking about, in mymind, you know, silicon is not really where the
value is. And, so my first priority actually try to, you know, see how soon we
can roll over those into how many question site, those was really moreimportant
and give me a better synergy.

[Q - Ramesh Misra]: Okay.

[A - Keh-Shew Lu]: And, you know, we refer, you know, I have to mention, you
know, you are talking about couple of thousand that, you know, 6" inch wafers
those in my mind, you know, I think is not priority wise, it's not critical for
me. Therefore I probably was intend to, you know, this server have many
questions in website at this moment.

[Q - Ramesh Misra]: Okay. Now, In terms of your capacity at, you know, Shanghai
facility that seems to be running pretty full. How do you see capacity ramping
up over there in terms of being able to accommodate Anachip? I suppose, right
now, Anachip has also been using an external back-end, some other back-end
facility, right?
<PAGE>

[A - Keh-Shew Lu]: You are right, you are correct. Right now they all
outsourced, you know, they know low internal packaging capability, therefore
they are outsourcing their packaging. And, but you know, come together our last
quarter 4Q, you know, every quarter, we are putting capital recommend in our
channel fair, much on our packaging facility. Therefore, you know, we will not
back capacity, we will meet our integrations.

[Q - Ramesh Misra]: Thank you.

[A - Keh-Shew Lu]: We will continue putting, you know, our CapEx into China to
support this ramp up, you know, this consolidations.

[Q - Ramesh Misra]: I see...

[A - Keh-Shew Lu]: And, you look at that, you know, even last year, we continue
putting the money so we will continue do the DCF [ph].

[Q - Ramesh Misra]: Great.

[A]: May sell it - you know, many of these packages that Anachip uses in their
product line, we already have. And, then in the fourth quarter of last year, we
have mentioned that we were adding too, because either we bought them or didn't
buy we need to those two packages. So, we added SLIC and stock 223 [ph] in the
fourth quarter into our line. So, we are well....

[A - Keh-Shew Lu]: We put in the development.

[A]: Yeah, in development.

[A - Keh-Shew Lu]: The development is a SL-8 [ph] okay, which is the linear type
of packaging, 18SL [ph] package. So, in last December - last year fourth
quarter, we quick off that development, okay. And, we would try to qualify, you
know, probably first half, not probably, which we try to quantify, if one key -
first perhaps on DCA.

[Q - Ramesh Misra]: Okay.

[A - Keh-Shew Lu]: And, then we are able to support in Anachips integration.

[Q - Ramesh Misra]: Okay. So, Dr. Lu is it safe to assume that most of the
backbend packaging of Anachip will get transferred over to FKE [ph] well in the
next two quarters or so?

[A - Keh-Shew Lu]: No.

[Q - Ramesh Misra]: No.

[A]: You know, as we are going to do our best to integrate into our China
packaging facility.

[Q - Ramesh Misra]: Okay.

[A]: But again, you know, we are going to be very focused on where the most cost
saving is going to be and if there are certain lines that we want to move over,
that's where we will put the capital expenditures and we will move it over.

[Q - Ramesh Misra]: Okay.

[A]: And, currently we have no issues on, you know, getting that contract right
now, but the goal is to bring the manufacturing profit about, just like we have
done with our expansion in China to beginwith.
<PAGE>

[Q - Ramesh Misra]: Great, Okay. And then one last question, sorry go ahead.

[A - Keh-Shew Lu]: Not all the packages in a chip used, we had the capability.

[A]: But, majority of it's...

[A]: Our intent is to bring over to China.

[A - Keh-Shew Lu]: That's right.

[A]: But, we don't if it's going to be third, fourth or which quarter is coming
and ultimately end of the year.

[A - Keh-Shew Lu]: We will take a time.

[Q - Ramesh Misra]: Okay, got it. And then, just one final very quick question,
your R&D increase in Q1, is that mostly because of Anachip or is that also a
part of the original plan within the rest about?

[A - Keh-Shew Lu]: It's majority is leading, I can say its coming for energy.

[Q - Ramesh Misra]: I see, okay, all right. Thanks very much and congratulations
on that greatguidance.

[A - Keh-Shew Lu]: Thank you.

[Q - Ramesh Misra]: Okay.

Operator: Your next question comes from Gary Mobley with A.G. Edwards.

[Q - Gary Mobley]: Hi guys.

[A]: Hi Gary.

[A]: Hi.

[Q - Gary Mobley]: How should we think about the growth rate of Anachip versus
the it linear analog market you are looking back and then looking forward as
well?

[A]: I think Gary you can ask to give us a couple more quarters to analyze that.

[Q - Gary Mobley]: Okay, which you may you may know what it was, you know,
looking back in time, was it at par to the overall market?

[A]: The last half of 2005 was pretty strong for them.

[A]: Yeah, well, you know, don't - if you got exact Anachip history, you know,
Anachip has not really preformed very well in the past. And they just gradually
improved their performance last year. So, like Carl said, second half when I see
it, they were pretty good.

[Q - Gary Mobley]: Sure. And...
<PAGE>

[A]: You know pretty good performance. And if we bid it, you know, that's the
reason we want to buy it, we bid it, we kept another barrier [ph] to it, okay.
Their problem is, there was all hornet [ph] in China market, in Taiwan, in Asia
market, and we did it with our, you know, global customer base and with our
capability up and supportive. We should be able to help them to grow their
revenue [indiscernible]. So, I am more looking, you know, back to - you know
looking at in the future, I am not worried too much about in the past, because
we all know their problem and we all know those problem, it's like our you know,
our advantage to solve that problem, and that's the reason we purchased this
company.

[Q - Gary Mobley]: Sure. Now, would it be foolish to simply extrapolate out
about $11 million in potential quarterly per quarter contribution from Anachip
out for the full year?

[A]: I am sorry, what's the question?

[Q - Gary Mobley]: Now, your - inside Anachip guidance, roughly $11 million for
the quarter and would it be foolish just to simply extrapolate that out for the
balance of the year?

[A]: Hopefully, we continue to get some sequentially growth out of it. But, more
important, even it stays relatively constant, we want to get some more of that
manufacturing margin.

[A]: So, we talk manufacturers margin Dollars. And, Gary you have known us for
long time, you know, that we go after the most aggressive revenue we can give
and we've outperformed the discretes 2X. But, I have a feeling Dr. Lu is not
going to let us sit down just let us to one times excellent.

[Q - Gary Mobley]: So, I am going to tell you, you know, #1 we are not looking
at gross margin percent. But, from gross data point of view, our expense may
continue to contribute due to two, one could be the gross from the revenue and
one could be our growth from the synergies. So, I would not take it as that
important that same you know, 8 to 10% and then just stay there, no way. But, we
will continue, try the investor gross margin dollar increase.

[Q - Gary Mobley]: Okay. And Mark, the pricing resilience that you guys have
seen in the past few months, how sustainable do you think that is? And, when
would you expect it to turn downward - hit the normal, you know, 5 to 6% annual
rate?

[A - Mark King]: Well, I kind of have a philosophy on it. We believe that quite
honestly that there has been an under-investment in packaging for some time now.
And, every time we see just a little bit of growth in the marketplace, we hit
the ceiling on the packaging. So, I am not sure how long it can be sustained.
But, we are seeing - at the end of the year, we did see some people running into
some difficulties supporting their customer base in these areas. And, I think if
you look at the CapEx expenditures for these type of devices and packages
throughout the world, I think you will see that, you know, it could go on for
some period of time. People are very careful about investing in these areas. So,
if you can look at our growth in units, you can see that - I think we have not
corrected our strategy so far. So, I expect it to continue.

[Q - Gary Mobley]: Okay. And, Carl, last question for you. What would you expect
you GAAP tax rate to be for the first quarter and for the balance of the year?

[A - Carl Wertz]: That's always a tough one to forecast. You know, it's
fluctuating between the 17 to 16 to 15 range, up and down. I think we are
modeling it somewhere in the 16% range, is probably a safe estimate.

[Q - Gary Mobley]: But, with FAS 123(R) in there, it should go up, right?
<PAGE>

[A - Carl Wertz]: It will go up some, yes. And, quite frankly, we are in the
process of having that model done by an outside consulting firm. So, we are not
exactly sure what the tax effect will be on that.

[Q - Gary Mobley]: Okay. But, figure the Pro-Forma rate around the high-teen
percent?

[A - Carl Wertz]: Yeah. I would figure, you know, 16 to 18% range.

[Q - Gary Mobley]: Okay. Very good. Thank you, guys.

Operator: Your next question comes from Steve Smigie with Raymond James.

[Q - Steven Smigie]: Great. Thank you. Congratulations on a very nice quarter.

[A]: Thank you.

[A]: Thank you.

[Q - Steven Smigie]: My first question is, how far are you in the integration
process and how long do you get everything integrated? I guess sort of a
follow-on to that is, do you do another acquisition in 2006 or does it take you
a while to digest the existing one?

[A]: Okay. Number one, you know, how far - what integration? You know me. I
don't have much patience. The integration for sales and marketing is already
done.

[Q - Steven Smigie]: Okay.

[A]: Okay? After we announce it or after we close it, in the next couple of
days, we order sales and marketing people integrate with our sales marketing
people before the Chinese New Year. Okay? And, then, you know, for - we are
start working on the packages. This will, you know, Joe said this already in a
chip before the Chinese New Year, probably two day after the closing to look at
their packaging requirement and see what we can do. Okay? And markets always
start talking to their guys, try to see how to we pick those product to sell in
our global market our customer base. So, integration has already started. Now,
when they are going to complete? It will depend on, you know, if you are depend
on packaging, it take a while. Okay? If you are talking about, you know,
announced new product, yeah, again, we are on the way to announce the new
product. And so, I don't know what do you want to build if you want to complete,
but I can tell you, you want to see those senior - we already said, we are going
to see those synergy, majority seniority contribution, before end of the year we
should see most of the synergy.

[Q - Steven Smigie]: Okay.

[A]: But, it is a complicated, it's no and no and this is not, you know, they
are all one kind of things that our business is continued improvement, very
difficult to say when it will be completed, but it's always starting.

[Q - Steven Smigie]: As you say, Jayor [ph] has been very busy.

[A]: You know me. Okay, and what's your next question?

[Q - Steven Smigie]: How quickly can you get through another acquisition, is
that sort of how you are thinking? I am just trying to push you, it just seems,
you know, as you pointed out, you are not willing to rest, so is there another
one coming or...?

[A]: Well, let me put these, where I see we want to careful, because our
resource is more in the power resource, because to get it acquired and then to
integrate and to get it stabilized, it take a time. Okay. So, you know, depend
on how big next deal is. I probably will agree to make a big deal at the first
quarter, I mean, first half this year, the first half this year if I would do
it, it will be smaller one.....
<PAGE>

[Q - Steven Smigie]: Right.

[A]: Now, any major one probably, you know, probably second half or may be 2007,
depend on opportunity, we are not. We don't want to rush into make a big deal.
You know, I continually open my eyes, open my mind, looking that deeper
opportunity and then whenever you get the right deal, raw opportunity, meet with
our strategy, meet with our synergy requirement, meet with our criteria, then we
are not hesitate to take an action.

[Q - Steven Smigie]: Okay, great. Question on option expense, the guidance that
you gave, I assume that's the pro forma guidance and then the option expense
guidance you gave would take earnings down separate from that?

[A]: Correct.

[A]: All right.

[Q - Steven Smigie]: That's going to be...

[A]: Well, it's going to be, you know, FASB earnings come first quarter, but
that will be - for the first time in Diode's history a pro forma of statement
that will show you the breakout between what there was before and after.

[Q - Steven Smigie]: Okay. Okay, and last question is just, in terms of - going
back with acquisition, in terms of the synergies, obviously that the gross
margins and the revenue synergies that you talked about, I think you already
talked a little bit about what's happening in R&D but is there something else to
happens with SG&A there, I mean there are certainly redundant capacities, you
know, other stuff to come out yet, how does that work?

[A]: Steve, there is definitely going to be some SG&A synergies there too

[Q - Steven Smigie]: Okay.

[A]: As we mentioned, there are same sales, we are merging the sales teams
together with same customer base, but we are not looking to necessarily cut
people as we grow, we are going to lead more people anyway.

[Q - Steven Smigie]: Okay.

[A]: Let me - I'll let Mark or Dr....

[A - Mark King]: Let me answer this one, you know, we buy the company not just
to put [indiscernible] we are buying that company because they have a design and
community product, I mean they have a team, an engineer team. So, from that
point of view we are not going to help sales anybody, right. Those - you know,
we may need to be upgrade the people's capability, but we are not going to cut
that those R&D.

[Q - Steven Smigie]: Okay.

[A - Mark King]: From their aspect let's enough. Now, sales and marketing -
market care, I tell you on that, because we are a consultant.
<PAGE>

[A]: In all reality in the expensive markets we did not have a significant
amount of overlaps, we were able to consolidate that easily. In the Asian market
place we've been trying to expand our sales force dramatically, so we are going
to look at it that we just have more opportunities to call on more customers. So
in the acquisition we gained sales and applications very small group in Korea,
we've been trying to put that in place for years. Okay, so we just think we're
going to able to spread our wings a little bit more and move in, actually now in
the sales area, between sales and application in China now we have 60 people on
the street.

[A]: Yeah.

[A]: So we should be able to really be able to broaden the accounts of that we
can call on. And we think that that's a better approach rather than cutting
people, we just need to grow sales more.

[A]: And, in there, we might to need to get a bigger space. Actually in the
channel you know, we are looking for - if we were to consolidate altogether into
the same buildings. So, we may need to come on, you know, get a bigger space.
So, anyway we are on the expansion mode so, we are not really going to look and
just they are the people scale [indiscernible] that's not our strategy anyway.

[Q - Steven Smigie]: Okay. Great, thank you very much.

[A]: Okay. But that's the percent, you know, it will be improved because when
revenue start growing, you know, as a percent it will be improved.

[Q - Steven Smigie]: Okay.

[A]: Okay.

[A]: Next.

Operator: Your next question comes from Andrew Root with OTA Access [ph].

[Q - Andrew Root]: Thank you. Just a couple of quick questions, do you have a
CapEx and depreciation - do you have CapEx, depreciation estimates for 2006?

[A]: Well, I can give you some CapEx guidance what we try to do since, you know,
we are continuing expanding our assembly capability and capacity in China. Okay,
and to support the Anachip and, you know, come out more new capacity for the
[indiscernible] type of product, you know, we are still holding our CapEx
expenditure somewhere around 10% to 12% of our revenue. Now, where it is depend
on the market. For example, if second half of this year were to start a market
it's not as good as what we are looking at then we sure will cut it back. But,
we spend it when we see the capacity. You know, I think in the road show I
talked to everybody, I say for assembly capacity is very easy and very short
lead time to put in press. You know, all you really need to do is go one more
floor and then buy some equipment, you know, in a couple months. You should be
able to get the capacity you needed. So, therefore, we can easily adjust our
CapEx expenditure, okay, according to the market requirement. Right now, we try
to do with somewhere around 10 to 12% of our revenues.

[Q - Andrew Root]: [indiscernible] is running around 6% revenue right now?

[A]: No, no. We are running about 6.5, depreciation?

[Q - Andrew Root]: Depreciation?

[A]: I don't know, let me see. About 7 percent

[Q - Andrew Root]: Yeah. Is that is a good number to use for next year or is it
more of a fixed number?
<PAGE>

[A]: I am sorry what was the question?

[Q - Andrew Root]: What's the depreciation forecast for `06?

[A]: Well, we had 16 - little over 16 for the whole year. So, probably somewhere
between 18 and 18.5 I would estimate. It is hard to tell. I do not have all the
numbers in front of me being over in London but it will sum that will become
fully depreciated during that year or two, so I am not sure exactly what the
amount is?

[Q - Andrew Root]: Yes, it's not precise, that is fine.

[A]: Okay.

[Q - Andrew Root]: The second question is, I know you mentioned that seasonally,
you know, you said growth would be down, but by looking at the last 10 years,
you only ever had one March quarter where you were down 1% and the average
increase was actually 5.4 percent. So, the flat guidance and the street was
actually modeling up three for organic, I am just wondering the flat guidance
seems to be, you know, few points softer than what I was guessing, is it
conservatism or can you give little more color on that?

[A]: Yeah, I think we just had a pretty exceptional second half of the year.

[Q - Andrew Root]: Okay.

[A]: And we are coming off of 6 out of 8 record quarters, okay. And so, you
know, we are up - you know, I mean if you look at the industry and you look at
what people have said, you know, we are anywhere between 2 to 3 x, our first
quarter is projected over what their growth is over their first quarter of last
year. So, I think, we might just be a little bit ahead of our self. So, you
know, we want a - we, you know, I think we just need to be careful and
conservative on guiding up.

[Q - Andrew Root]: Now that makes complete sense. I appreciate it.

[A]: Okay.

[Q - Andrew Root]: Thank you.

[A]: Thank you.

Operator: At this time there are no further questions.

Company Representative

Okay. Thank you very much. That will be the conclusion of today's conference
call. Thank you.

                             Company Representative

Thank you.

                             Company Representative

Thanks everybody. Talk to you next quarter. Operator: You may now disconnect.
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