NOTE 10 – Related Parties

We conduct business with a related party company, Lite-On Semiconductor Corporation and its subsidiaries and affiliates (collectively, “LSC”), and Nuvoton Technology Corporation and its subsidiaries and affiliates (collectively, “Nuvoton”). LSC is our largest stockholder, owning approximately16.7% of our outstanding Common Stock as of June 30, 2017, 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 former 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 and Nuvoton to be mutually beneficial, and we plan to continue our strategic alliance with LSC and Nuvoton. We purchase wafers from Nuvoton for use in our production process.

We also conduct business with Keylink International (B.V.I.) Inc. and its subsidiaries and affiliates (collectively, “Keylink”). Keylink is our 5% joint venture partner in our Shanghai assembly and test facilities. We sell products to, and purchase inventory from Keylink. 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 paid to Keylink for the three months ended June 30, 2017 and 2016 were approximately $4.5 million and $4.3 million, respectively. The aggregate amounts for these services for the six months ended June 30, 2017 and 2016 were approximately $7.9 million and $8.4 million, respectively. In addition, Chengdu Ya Guang Electronic Company Limited (“Ya Guang”) is our 2% joint venture partner in one of our Chengdu assembly and test facilities and is our 5% joint venture partner in our other 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.

The table below sets forth sales to, and purchases from, LSC, Nuvoton and Keylink:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
LSC
Net sales	$	504	$	157	$	735	$	277
Purchases	$	7,142	$	6,717	$	13,161	$	11,927

Nuvoton
Purchases	$	3,376	$	2,675	$	6,285	$	5,622

Keylink
Net sales	$	2,413	$	2,246	$	4,235	$	4,157
Purchases	$	943	$	1,575	$	2,021	$	2,835

The table below sets forth accounts receivable from, and accounts payable to, LSC, Nuvoton and Keylink:

	June 30,		December 31,
	2017		2016
LSC
Accounts receivable	$	491	$	301
Accounts payable	$	5,092	$	4,333
Keylink
Accounts receivable	$	3,855	$	5,394
Accounts payable	$	4,917	$	4,295
Nuvoton
Accounts payable	$	1,812	$	950