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Investments in Privately-held Companies | 6 Months Ended
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Jun. 30, 2012
Investments in Privately-held Companies [Abstract] |
Investments in Privately-held Companies | Note 10. Investments in Privately-held Companies We have made strategic investments in private companies located in China in order to gain access to raw materials at a competitive cost that are critical to our substrate business. The investments are summarized below (in thousands):
|  | Investment Balance as of |  |  |  |  |
|  | June 30, |  | December 31, |  | Accounting |  | Ownership |
Company |  | 2012 |  | 2011 |  | Method |  | Percentage |
Beijing JiYa Semiconductor Material Co., Ltd |  | $ | 3,331 |  | $ | 996 |  | Consolidated |  | 46 | %
Nanjing Jin Mei Gallium Co., Ltd |  | 592 |  | 592 |  | Consolidated |  | 83 | %
Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd |  | 410 |  | 410 |  | Consolidated |  | 70 | %
|  | $ | 4,333 |  | $ | 1,998 |  |  |  |  |
Donghai County Dongfang High Purity Electronic Materials Co., Ltd. |  | $ | 2,100 |  | $ | 2,167 |  | Equity |  | 46 | %
Xilingol Tongli Germanium Co. Ltd |  |  | 3,800 |  |  | 3,881 |  | Equity |  | 25 | %
Emeishan Jia Mei High Purity Metals Co., Ltd |  | 1,037 |  | 1,001 |  | Equity |  | 25 | %
|  | $ | 6,937 |  | $ | 7,049 |  |  |  |  |
Our ownership of Beijing Ji Ya Semiconductor Material Co., Ltd. (JiYa) is 46%. We continue to consolidate JiYa as we have significant influence in management and have majority control of the board. Our Chief Executive Officer is chairman of the JiYa board, while our president of China operations and our vice president of China administration and our vice president of wafer production are also members of the board. Our ownership of Nanjing Jin Mei Gallium Co., Ltd. (Jin Mei) is 83%. We continue to consolidate Jin Mei as we have significant influence in management and have majority control of the board. Our Chief Executive Officer is chairman of the Jin Mei board, while our president of China operations and our vice president of China administration are also members of the board. Our ownership of Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd (BoYu) is 70%. We continue to consolidate BoYu as we have a significant influence in management and have majority control of the board. Our Chief Executive Officer is chairman of the BoYu board, while our president of China operations and our vice president of China administration are also members of the board. Although we have representation on the boards of directors of each of these companies, the daily operations of each of these companies are managed by local management and not by us. Decisions concerning their respective short term strategy and operations, any capacity expansion and annual capital expenditures, and decisions concerning sales of finished product, are made by local management without input from us. During the three months ended June 30, 2012 and 2011, the three consolidated joint ventures had income of $2.7 million and $4.5 million, respectively, of which $1.1 million and $2.0 million, respectively, was allocated to minority interests, resulting in income of $1.6 million and $2.5 million, respectively, included in our net income. During the six months ended June 30, 2012 and 2011, the three consolidated joint ventures had income of $5.3 million and $7.1 million, respectively, of which $2.4 million and $3.1 million, respectively, was allocated to minority interests, resulting in income of $2.8 million and $4.0 million, respectively, included in our net income. The investment balances for three equity investment entities that are not consolidated are included in "other assets" in our condensed consolidated balance sheets and totaled $6.9 million and $7.0 million as of June 30, 2012 and December 31, 2011, respectively. We own 46% of the ownership interests in one of these companies and 25% in each of the other two companies. These three companies are not considered variable interest entities because:
| · | all three companies have sustainable businesses of their own;
| · | our voting power is proportionate to our ownership interests;
| · | we only recognize our respective share of the losses and/or residual returns generated by the companies if they occur; and
| · | we do not have controlling financial interest in, do not maintain operational or management control of, do not control the board of directors of, and are not required to provide additional investment or financial support to any of these companies.
These three equity investment entities had net equity losses of $91,000 and net equity earnings of $309,000 for the three months ended June 30, 2012 and 2011, respectively, and recorded as "other income (expense), net" in the condensed consolidated statements of operations. These three equity investment entities had net equity losses of $128,000 and net equity earnings of $382,000 for the six months ended June 30, 2012 and 2011, respectively, and recorded as "other income (expense), net" in the condensed consolidated statements of operations. Net income recorded from all of these joint ventures was $1.5 million and $2.8 million for the three months ended June 30, 2012 and 2011, respectively. Net income recorded from all of these joint ventures was $2.7 million and $4.4 million for the six months ended June 30, 2012 and 2011, respectively. Undistributed retained earnings relating to all our investments in all these companies were $26.5 million and $23.8 million as of June 30, 2012 and December 31, 2011, respectively. We also maintain minority investments indirectly in privately-held companies through our consolidated joint ventures. These minority investments are accounted for under the equity method in the books of our consolidated joint ventures. As of June 30, 2012 and December 31, 2011, our consolidated joint ventures included these minority investments in "other assets" in the condensed consolidated balance sheets with a carrying value of $1.8 million and $1.3 million, respectively. We also maintain minority investments directly in two privately-held companies accounted for under the cost method and we do not have the ability to exercise significant influence over their operations. As of June 30, 2012 and December 31, 2011, our investments in these two unconsolidated privately-held companies had a carrying value of $392,000 and are included in "other assets" in the condensed consolidated balance sheets.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 + Details
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