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Related Party Transactions
12 Months Ended
Dec. 31, 2018
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 15.5% of our outstanding Common Stock as of December 31, 2018, and is a member of the Lite-On Group of companies. We sold products to LSC totaling less than 1% of our net sales for the years ended December 31, 2018, 2017 and 2016, respectively.  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. 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 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 (“Keylink”). Keylink is our 5% partner in our Shanghai assembly and test facilities.   We sell products to, and purchase inventory from, companies owned by Keylink. We sold products to companies owned by Keylink, totaling approximately 1% of net sales for each of the years ended December 31, 2018, 2017 and 2016. 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 years ended December 31, 2018, 2017 and 2016 were approximately $16.6 million, $17.1 million and $16.1 million, respectively.   In addition, Chengdu Ya Guang Electronic Company Limited (“Ya Guang”) is our 2% partner in one of our Chengdu assembly and test facilities and our 5% partner in our other Chengdu assembly and test facilities; however, we have no material transactions with Ya Guang, other than this joint venture.  We also purchase materials from Jiyuan Crystal Photoelectric Frequency Technology Ltd. (“JCP”) an FCP manufacturing company in which we have made an equity investment and account for using the equity method of accounting.

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 net sales and purchases from related parties for the twelve months ended December 31:

 

 

2018

 

 

2017

 

 

2016

 

LSC

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

1,179

 

 

$

1,406

 

 

$

852

 

Purchases

$

21,126

 

 

$

24,313

 

 

$

21,936

 

Keylink

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

12,227

 

 

$

8,856

 

 

$

9,125

 

Purchases

$

3,581

 

 

$

3,827

 

 

$

5,054

 

Nuvoton

 

 

 

 

 

 

 

 

 

 

 

Purchases

$

11,152

 

 

$

11,407

 

 

$

10,386

 

JCP

 

 

 

 

 

 

 

 

 

 

 

Purchases

$

600

 

 

$

1,105

 

 

$

826

 

 

The table below sets forth accounts receivable from and accounts payable to related parties at December 31:

 

 

2018

 

 

2017

 

LSC

 

 

 

 

 

 

 

Accounts receivable

$

286

 

 

$

342

 

Accounts payable

$

2,696

 

 

$

3,308

 

Keylink

 

 

 

 

 

 

 

Accounts receivable

$

6,264

 

 

$

4,089

 

Accounts payable

$

4,656

 

 

$

5,016

 

Nuvoton

 

 

 

 

 

 

 

Accounts payable

$

1,939

 

 

$

1,121

 

JCP

 

 

 

 

 

 

 

Accounts payable

$

151

 

 

$

317