Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 14 – RELATED PARTY TRANSACTIONS

We conduct business with a related party company, Lite-On Semiconductor Corporation, and its subsidiaries and affiliates (“LSC”), and Nuvoton Technology Corporation and its subsidiaries and affiliates (collectively, “Nuvoton”). LSC is our largest stockholder, owning approximately 17% of our outstanding Common Stock as of December 31, 2014, and is a member of the Lite-On Group of companies. Raymond Soong, the Chairman of the Board of Directors, is the Chairman of LSC, and is the Chairman of Lite-On Technology Corporation (“LTC”), a significant shareholder of LSC. C.H. Chen, our former President and Chief Executive Officer and currently the Vice Chairman of the Board of Directors, is also Vice Chairman of LSC and a board member of LTC. Dr. Keh-Shew Lu, our President and Chief Executive Officer and a member of our Board of Directors, is a board member of LTC, and a board member of Nuvoton. L.P. Hsu, a member of our Board of Directors serves as a consultant to LTC, and is a supervisor of the board of Nuvoton. We consider our relationships with LSC, a member of the Lite-On Group of companies, and Nuvoton to be mutually beneficial and we plan to continue our strategic alliance with LSC and Nuvoton.

We also conduct business with a significant company, Keylink International (B.V.I.) Inc. and its subsidiaries and affiliates (“Keylink”). Keylink is our 5% joint venture partner in our Shanghai assembly and test facilities. In addition, Chengdu Ya Guang Electronic Company Limited (“Ya Guang”) is our 5% joint venture partner in our two Chengdu assembly and test facilities, however, we have no material transactions with Ya Guang.  The Audit Committee of the Board reviews all related party transactions for potential conflict of interest situations on an ongoing basis, all in accordance with such procedures as the Audit Committee may adopt from time to time.

Lite-On Semiconductor Corporation (LSC) – We sold products to LSC totaling approximately 1% of our net sales for the years ended December 31, 2014, 2013 and 2012, respectively.

Net sales to, and purchases from, LSC were as follows for years ended December 31:

	2014		2013		2012
Net sales	$	751	$	770	$	1,054
Purchases	$	31,588	$	35,329	$	33,928

Keylink International (B.V.I.) Inc. – We sell products to, and purchase inventory from, companies owned by Keylink. We sold products to companies owned by Keylink, totaling 1%, 1% and 3% of net sales for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, our subsidiaries in China lease their manufacturing facilities in Shanghai from, and subcontract a portion of our manufacturing process (metal plating and environmental services) to, Keylink. We also pay a consulting fee to Keylink. The aggregate amounts for these services for the years ended December 31, 2014, 2013 and 2012 were approximately $19 million, $17 million and $19 million, respectively.

Net sales to, and purchases from, companies owned by Keylink were as follows for years ended December 31:

	2014		2013		2012
Net sales	$	9,465	$	10,559	$	19,336
Purchases	$	8,122	$	8,030	$	7,826

Nuvoton Technology Corporation – We purchase wafers from Nuvoton that we use in the production of finished goods.  

Net purchases from Nuvoton are as follows (in thousands):

	2014		2013
Purchases	$	12,697	$	8,317

Accounts receivable from, and accounts payable to, LSC, Keylink, and Nuvoton were as follows as of December 31:

	2014		2013
Accounts receivable
LSC	$	215	$	140
Keylink		4,142		4,927
	$	4,357	$	5,067
Accounts payable
LSC	$	4,458	$	5,670
Keylink	$	6,472	$	6,505
Nuvoton	$	1,167	$	770
	$	12,097	$	12,945