10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

Or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     .

Commission file number: 002-25577

DIODES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	95-2039518
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

4949 Hedgcoxe Road, Suite 200, Plano, Texas	75024
(Address of principal executive offices)	(Zip code)

(972) 987-3900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.66 2/3	DIOD	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐     No ☒

The number of shares of the registrant’s Common Stock outstanding as of August 2, 2021 was 44,963,486

.

Table of Contents

	Page
Part I – Financial Information
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
Part II – Other Information
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Mine Safety Disclosures	37
Item 5. Other Information	37
Item 6. Exhibits	38
Signatures	39

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	June 30,			December 31,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	292,650		$	268,065
Restricted cash		2,268			52,464
Short-term investments		7,386			6,142
Accounts receivable, net of allowances of $3,822 and $3,806 at   June 30, 2021 and December 31, 2020, respectively		339,142			320,061
Inventories		304,128			307,062
Prepaid expenses and other		96,904			70,193
Total current assets		1,042,478			1,023,987
Property, plant and equipment, net		522,182			530,815
Deferred income tax		52,249			57,841
Goodwill		159,584			158,331
Intangible assets, net		102,677			110,591
Other long-term assets		113,799			97,892
Total assets	$	1,992,969		$	1,979,457
Liabilities
Current liabilities:
Lines of credit	$	60,239		$	140,563
Accounts payable		181,919			168,045
Accrued liabilities and other		182,385			160,117
Income tax payable		17,316			19,177
Current portion of long-term debt		18,346			21,860
Total current liabilities		460,205			509,762
Long-term debt, net of current portion		222,712			288,179
Deferred tax liabilities		34,761			34,598
Other long-term liabilities		132,294			130,795
Total liabilities		849,972			963,334
Commitments and contingencies (See Note 9)
Stockholders' equity
Preferred stock - par value $1.00 per share; 1,000,000 shares authorized; no   shares issued or outstanding		-			-
Common stock - par value $0.66 2/3 per share; 70,000,000 shares   authorized; 44,730,897 and 44,276,194, issued and outstanding   at June 30, 2021 and December 31, 2020, respectively		35,998			35,692
Additional paid-in capital		455,683			449,598
Retained earnings		982,872			888,046
Treasury stock at cost, 9,262,833 shares at June 30, 2021 and 9,259,858 shares at December 31, 2020		(336,128	)		(335,910	)
Accumulated other comprehensive loss		(55,841	)		(73,606	)
Total stockholders' equity		1,082,584			963,820
Noncontrolling interest		60,413			52,303
Total equity		1,142,997			1,016,123
Total liabilities and stockholders' equity	$	1,992,969		$	1,979,457
The accompanying notes are an integral part of these condensed consolidated financial statements.

-3-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net sales	$	440,448		$	288,669		$	853,569		$	569,386
Cost of goods sold		280,646			187,177			555,131			372,052
Gross profit		159,802			101,492			298,438			197,334
Operating expenses
Selling, general and administrative		60,280			45,372			118,956			87,587
Research and development		29,987			21,322			57,646			45,000
Amortization of acquisition related intangible assets		4,060			4,021			8,083			8,242
Other operating expense (income)		118			(92	)		1,006			(216	)
Total operating expense		94,445			70,623			185,691			140,613
Income from operations		65,357			30,869			112,747			56,721
Other income (expense)
Interest income		818			168			1,586			441
Interest expense		(2,017	)		(2,653	)		(4,881	)		(3,898	)
Foreign currency (loss) gain, net		(510	)		(3,600	)		(1,789	)		(3,525	)
Unrealized gain on investments		5,261			-			8,916			-
Other income		1,837			1,274			4,154			1,275
Total other income (expense)		5,389			(4,811	)		7,986			(5,707	)
Income before income taxes and noncontrolling interest		70,746			26,058			120,733			51,014
Income tax provision		12,120			4,670			21,554			9,226
Net income		58,626			21,388			99,179			41,788
Less net income attributable to noncontrolling interest		(3,252	)		(355	)		(4,353	)		(587	)
Net income attributable to common stockholders	$	55,374		$	21,033		$	94,826		$	41,201
Earnings per share attributable to common stockholders:
Basic	$	1.24		$	0.41		$	2.13		$	0.80
Diluted	$	1.22		$	0.40		$	2.09		$	0.78
Number of shares used in earnings per share computation:
Basic		44,667			51,527			44,538			51,431
Diluted		45,380			52,569			45,327			52,517

The accompanying notes are an integral part of these condensed consolidated financial statements.

-4-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net income	$	58,626		$	21,388		$	99,179		$	41,788
Unrealized gain (loss) on defined benefit plan, net of tax		4,961			(16,570	)		6,855			(6,851	)
Unrealized (loss) gain on swaps and collars, net of tax		(2,027	)		817			1,799			(621	)
Unrealized foreign currency gain (loss), net of tax		12,849			6,733			9,111			(2,881	)
Comprehensive income		74,409			12,368			116,944			31,435
Less: Comprehensive income attributable to noncontrolling interest		(3,252	)		(355	)		(4,353	)		(587	)
Total comprehensive income attributable to common stockholders	$	71,157		$	12,013		$	112,591		$	30,848

The accompanying notes are an integral part of these condensed consolidated financial statements.

-5-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, March 31, 2021		53,860	$	35,908		(9,260	)	$	(335,910	)	$	446,697		$	927,498	$	(71,624	)	$	1,002,569		$	54,411		$	1,056,980
Total comprehensive income		-		-		-			-			-			55,374		15,783			71,157			3,252			74,409
Net changes in noncontrolling interests		-		-		-			-			(18	)		-					(18	)		3,000			2,982
Dividends to noncontrolling interests		-		-		-			-			-			-		-			-			(250	)		(250	)
Common stock issued for share-based plans		-		-		-			-			1,259			-		-			1,259			-			1,259
Share-based compensation		134		90		-			-			8,280			-		-			8,370			-			8,370
Deferred compensation plan		-		-		(3	)		(218	)		218			-		-			-			-			-
Tax related to net share settlement		-		-		-			-			(753	)		-		-			(753	)		-			(753	)
Balance,  June 30, 2021		53,994	$	35,998		(9,263	)	$	(336,128	)	$	455,683		$	982,872	$	(55,841	)	$	1,082,584		$	60,413		$	1,142,997
Balance, December 31, 2020		53,536	$	35,692		(9,260	)	$	(335,910	)	$	449,598		$	888,046	$	(73,606	)	$	963,820		$	52,303		$	1,016,123
Total comprehensive income		-		-		-			-			-			94,826		17,765			112,591			4,353			116,944
Net changes in noncontrolling interests		-		-		-			-			(22	)		-		-			(22	)		4,007			3,985
Dividends to noncontrolling interest		-		-		-			-			-			-		-			-			(250	)		(250	)
Common stock issued for share-based plans		458		306		-			-			1,797			-		-			2,103			-			2,103
Share-based compensation		-		-		-			-			14,138			-		-			14,138			-			14,138
Deferred compensation plan		-		-		(3	)		(218	)		218			-		-			-			-			-
Tax related to net share settlement		-		-		-			-			(10,046	)		-		-			(10,046	)		-			(10,046	)
Balance,  June 30, 2021		53,994	$	35,998		(9,263	)	$	(336,128	)	$	455,683		$	982,872	$	(55,841	)	$	1,082,584		$	60,413		$	1,142,997

The accompanying notes are an integral part of these condensed consolidated financial statements.

-6-

DIODES INCORPORATED AND SUBSIDIARIES (CONT.)

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

	Common stock				Treasury stock						Additional paid-in			Retained		Accumulated other comprehensive			Total Diodes Incorporated stockholders'			Noncontrolling			Total
	Shares		Amount		Shares			Amount			capital			earnings		loss			equity			interest			equity
Balance, March 31, 2020		52,932	$	35,289		(1,481	)	$	(38,457	)	$	427,543		$	810,126	$	(109,472	)	$	1,125,029		$	57,260		$	1,182,289
Total comprehensive income		-		-		-			-			-			21,033		(9,020	)		12,013			355			12,368
Acquisition of noncontrolling interests		-		-		-			-			(1,225	)		-		-			(1,225	)		(4,928	)		(6,153	)
Contributions from noncontrolling interests		-		-		-			-			-			-		-			-			999			999
Dividends to noncontrolling interests		-		-		-			-			-			-		-			-			(1,444	)		(1,444	)
Common stock issued for share-based plans		150		100		-			-			965			-		-			1,065			-			1,065
Share-based compensation		-		-		-			-			7,441			-		-			7,441			-			7,441
Deferred compensation plan		-		-		(2	)		(203	)		203			-		-			-			-			-
Tax related to net share settlement		-		-		-			-			(938	)		-		-			(938	)		-			(938	)
Balance,  June 30, 2020		53,082	$	35,389		(1,483	)	$	(38,660	)	$	433,989		$	831,159	$	(118,492	)	$	1,143,385		$	52,242		$	1,195,627
Balance, December 31, 2019		52,664	$	35,111		(1,457	)	$	(37,768	)	$	427,262		$	789,958	$	(108,139	)	$	1,106,424		$	46,359		$	1,152,783
Total comprehensive income		-		-		-			-			-			41,201		(10,353	)		30,848			587			31,435
Acquisition of noncontrolling interests		-		-		-			-			(1,225	)		-		-			(1,225	)		(4,928	)		(6,153	)
Contributions from noncontrolling interests		-		-		-			-			-			-		-			-			11,776			11,776
Dividends to noncontrolling interests		-		-		-			-			-			-		-			-			(1,552	)		(1,552	)
Common stock issued for share-based plans		418		278		-			-			787			-		-			1,065			-			1,065
Share-based compensation		-		-		-			-			11,678			-		-			11,678			-			11,678
Deferred compensation plan		-		-		(26	)		(892	)		892			-		-			-			-			-
Tax related to net share settlement		-		-		-			-			(5,405	)		-		-			(5,405	)		-			(5,405	)
Balance, June 30, 2020		53,082	$	35,389		(1,483	)	$	(38,660	)	$	433,989		$	831,159	$	(118,492	)	$	1,143,385		$	52,242		$	1,195,627

The accompanying notes are an integral part of these condensed consolidated financial statements.

-7-

DIODES INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2021			2020
Cash flows from operating activities
Net income	$	99,179		$	41,788
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of acquisitions
Depreciation		53,105			45,685
Amortization of intangible assets		8,083			8,242
Share-based compensation expense		14,764			12,394
Deferred income taxes		1,194			(2,317	)
Investment gain		(9,075	)		-
Other		287			1,084
Changes in operating assets:
Change in accounts receivable		(17,060	)		(7,573	)
Change in inventory		(2,451	)		(19,770	)
Change in other operating assets		(5,597	)		7,422
Changes in operating liabilities:
Change in accounts payable		19,456			16,767
Change in accrued liabilities		4,706			(6,429	)
Change in income tax payable		(2,332	)		(10,159	)
Change in other operating liabilities		(2,195	)		(400	)
Net cash flows provided by operating activities		162,064			86,734
Cash flows from investing activities
Acquisitions, net of cash received	-				591
Purchases of property, plant and equipment		(45,037	)		(30,728	)
Proceeds from sale of property, plant and equipment		3,042			174
Proceeds from maturity of short-term investments		4,020			6,186
Purchases of short-term investments		(5,160	)		(5,051	)
Additional acquisition of noncontrolling interests		(71	)		(6,130	)
Other		6,532			910
Net cash and cash equivalents used in investing activities		(36,674	)		(34,048	)
Cash flows from financing activities
Advances on lines of credit and short-term debt		6,404			53,647
Repayments of lines of credit and short-term debt		(88,307	)		(3,498	)
Proceeds from long-term debt		315,006			589,331
Repayments of long-term debt		(384,554	)		(390,334	)
Net proceeds from issuance of common stock		2,103			1,066
Repayment of and proceeds from finance lease obligation		(151	)		(445	)
Taxes paid related to net share settlement		(10,046	)		(5,405	)
Dividend distribution to noncontrolling interests		(250	)		(108	)
Capital contribution from noncontrolling interests		4,003			-
Other		(500	)		(2,470	)
Net cash and cash equivalents (used in) provided by financing activities		(156,292	)		241,784
Effect of exchange rate changes on cash and cash equivalents		5,291			644
Change in cash and cash equivalents, including restricted cash		(25,611	)		295,114
Cash and cash equivalents, beginning of period, including restricted cash		320,529			259,507
Cash and cash equivalents, end of period, including restricted cash	$	294,918		$	554,621

-8-

Supplemental Cash Flow Information
Interest paid during the period	$	4,545	$	1,746
Taxes paid during the period	$	23,904	$	21,743
Non-cash investing and financing activities:
Accounts payable balance related to the purchase of    property, plant and equipment	$	16,081	$	7,569
Dividend payable to noncontrolling interest	$	-	$	1,454

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown above.  The Company’s restricted cash primarily consisted of the cash required to be on deposit under our Asia credit facilities to support outstanding loan and import/export guarantees. As of June 30, 2021, restricted cash of $2.3 million was pledged as collateral for issuance of bank loans, bank acceptance notes and letters of credit.  

	Six Months Ended
	June 30,
	2021	2020
Current assets:
Cash and cash equivalents	$292,650	$503,206
Restricted cash (included in other current assets)	2,268	51,415
Total cash, cash equivalents and restricted cash	$294,918	$554,621

The accompanying notes are an integral part of these condensed consolidated financial statements.

-9-

DIODES INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – Summary of Operations and Significant Accounting Policies

Summary of Operations

Diodes Incorporated, together with its subsidiaries (collectively “Diodes”, the “Company,” “we” or “our” (Nasdaq: DIOD), a Standard and Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality, application specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the consumer electronics, computing, communications, industrial, and automotive markets.

The Company’s products include diodes, rectifiers, transistors, MOSFETs, GPP bridges, GPP rectifiers, protection devices, function-specific arrays, single gate logic, amplifiers and comparators, Hall-effect and temperature sensors, power management devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, and voltage references along with special function devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

The Company’s corporate headquarters and Americas’ sales office are located in Plano, Texas, and Milpitas, California. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City and Zhubei City, Taiwan; Shanghai, Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company’s wafer fabrication facilities are located in Oldham, England, Greenock, Scotland and Shanghai and Wuxi, China and Keelung and Hsinchu, Taiwan.  The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu and Wuxi, China as well as in Neuhaus, Germany and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong Kong; Oldham, England; Shanghai, Shenzhen, Wuhan and Yangzhou, China; Seongnam-si, South Korea; and Munich, Frankfurt, Germany; with support offices throughout the world.

Our product focus is on high-growth end-user equipment markets such as satellite TV set-top boxes, portable DVD players, datacom devices, ADSL modems, power supplies, medical devices (non-life support devices/systems), PCs and notebooks, flat panel displays, digital cameras, mobile handsets, AC-to-DC and DC-to-DC conversion, Wireless 802.11 LAN access points, brushless DC motor fans, serial connectivity, and automotive applications.

Basis of Presentation

The condensed consolidated financial data at December 31, 2020 are derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2021 (“Form 10-K”). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, operating results and cash flows in conformity with GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Form 10-K.  All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the period presented have been included in the interim period. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2021.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. As permitted under GAAP, interim accounting for certain expenses, including income taxes, are based on full year forecasts. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates taking into consideration discrete items occurring in a quarter.

Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted. Certain prior year’s balances may have been reclassified to conform to the current condensed consolidated financial statement presentation.

-10-

NOTE 2 – Earnings per Share

Earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted EPS is calculated similarly but includes potential dilution from the exercise of stock options and stock awards, except when the effect would be anti-dilutive.  During the three and six months ended June 30, 2021 and 2020, we paid no dividends on our Common Stock.

The table below sets forth the reconciliation between net income and the weighted average shares outstanding used for calculating basic and diluted EPS:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Earnings (numerator)
Net income attributable to common stockholders	$	55,374	$	21,033	$	94,826	$	41,201
Shares (denominator)
Weighted average common shares outstanding (basic)		44,667		51,527		44,538		51,431
Dilutive effect of stock options and stock awards outstanding		713		1,042		789		1,086
Adjusted weighted average common shares outstanding (diluted)		45,380		52,569		45,327		52,517
Earnings per share attributable to common stockholders
Basic	$	1.24	$	0.41	$	2.13	$	0.80
Diluted	$	1.22	$	0.40	$	2.09	$	0.78
Stock options and stock awards excluded from EPS   calculation because the effect would be anti-dilutive		6		8		3		3

NOTE 3 – Inventories

The table below sets forth inventories which are stated at the lower of cost or net realizable value:

	June 30, 2021		December 31, 2020
Finished goods	$	81,106	$	85,506
Work-in-progress		84,951		73,466
Raw materials		138,071		148,090
Total	$	304,128	$	307,062

NOTE 4 – Goodwill and Intangible Assets

The table below sets forth the changes in goodwill:

Balance at December 31, 2020	$	158,331
Foreign currency translation adjustment		1,253
Balance at June 30, 2021	$	159,584

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The table below sets forth the value of intangible assets, other than goodwill:

	June 30,			December 31,
	2021			2020
Intangible assets subject to amortization:
Gross carrying amount	$	246,687		$	245,176
Accumulated amortization		(148,793	)		(140,710	)
Foreign currency translation adjustment		(7,636	)		(7,781	)
Total		90,258			96,685
Intangible assets with indefinite lives:
Gross carrying amount		13,372			14,883
Foreign currency translation adjustment		(953	)		(977	)
Total		12,419			13,906
Total intangible assets, net	$	102,677		$	110,591

The table below sets forth amortization expense related to intangible assets subject to amortization:

Amortization expense	2021		2020
Three months ended June 30,	$	4,060	$	4,021
Six months ended June 30,	$	8,083	$	8,242

NOTE 5 – Income Tax Provision

The table below sets forth information related to our income tax expense:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Domestic pre-tax income	$	18,577		$	7,707		$	25,645		$	12,975
Foreign pre-tax income	$	52,169		$	18,351		$	95,088		$	38,039
Income tax provision	$	12,120		$	4,670		$	21,554		$	9,226
Effective tax rate		17.1	%		17.9	%		17.9	%		18.1	%
Impact of tax holidays on tax expense	$	(679	)	$	(241	)	$	(1,261	)	$	(1,315	)
Earnings per share impact of tax holidays:
Basic	$	0.02		$	0.01		$	0.03		$	0.03
Diluted	$	0.02		$	0.01		$	0.03		$	0.03

The decrease in the effective tax rate for the three and six months ended June 30, 2021 when compared to the three and six months ended June 30, 2020, is primarily attributable to the change in pre-tax earnings during the comparable periods.  

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries.  Any future distributions of foreign earnings will not be subject to additional U.S. income tax, but may be subject to non-U.S. withholding taxes.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012, or for the 2015 tax year. We are no longer subject to China income tax examinations by tax authorities for tax years before 2010. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2015. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may result from currently pending tax audits. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. As of June 30, 2021, the gross amount of unrecognized tax benefits was approximately $45.9 million.   

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It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

NOTE 6 – Share-Based Compensation

For the three and six months ended June 30, 2021, we recognized stock option expense of approximately $0.02 million and $0.04 million, respectively.  This stock option expense is related to stock options granted by Savitech Corporation (“Savitech”) in Savitech stock to their employees.  We acquired a controlling interest in Savitech in 2020.  The remainder of our share-based compensation expense was related to share grants. Approximately $2.1 million of cash proceeds were received from stock option exercises during the six months ended June 30, 2021. The table below sets forth the line items where share-based compensation expense was recorded:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Cost of goods sold	$	282	$	257	$	557	$	530
Selling, general and administrative		7,627		6,715		12,659		10,426
Research and development		734		729		1,548		1,438
Total share-based compensation expense	$	8,643	$	7,701	$	14,764	$	12,394

Share Grants – Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. All new grants are granted under the Company’s 2013 Equity Incentive Plan.  Restricted stock grants are measured based on the fair market value of the underlying stock on the date of grant, and compensation expense is recognized on a straight-line basis over the requisite four-year service period. 

Performance stock units (“PSUs”) are measured based on the fair market value of the underlying stock on the date of grant, and compensation expense is recognized over the three-year performance period, with adjustments made to the expense to recognize the probable payout percentage. PSUs will vest upon the Company achieving a cumulative 3-year non-GAAP operating income target for the applicable periods.

As of June 30, 2021, total unrecognized share-based compensation expense related to share grants was approximately $53.9 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.1 years.          

NOTE 7 – Segment Information and Net Sales

Segment Reporting. For financial reporting purposes, we operate in a single segment, standard semiconductor products, through our various manufacturing and distribution facilities. We aggregate our products because the products are similar and have similar economic characteristics, use similar production processes and share similar customer type. Our primary operations include operations in Asia, North America and Europe. No customer accounted for 10% or more of our net sales or outstanding accounts receivable at any point in the periods presented in this Quarterly Report. 

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The tables below set forth net sales based on the location of the subsidiary producing the net sale:

Three Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	483,083		$	261,725		$	67,598		$	812,406
Intercompany elimination		(176,404	)		(167,318	)		(28,236	)		(371,958	)
Net sales	$	306,679		$	94,407		$	39,362		$	440,448
Three Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	323,439		$	190,543		$	53,785		$	567,767
Intercompany elimination		(133,552	)		(121,545	)		(24,001	)		(279,098	)
Net sales	$	189,887		$	68,998		$	29,784		$	288,669
As of and for the
Six Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	954,152		$	508,552		$	127,772		$	1,590,476
Intercompany elimination		(355,354	)		(328,147	)		(53,406	)		(736,907	)
Net sales	$	598,798		$	180,405		$	74,366		$	853,569
Property, plant and equipment, net	$	412,421		$	25,044		$	84,717		$	522,182
Total assets	$	1,423,099		$	350,339		$	219,531		$	1,992,969
As of and for the
Six Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	625,302		$	358,715		$	112,786		$	1,096,803
Intercompany elimination		(250,473	)		(226,009	)		(50,935	)		(527,417	)
Net sales	$	374,829		$	132,706		$	61,851		$	569,386
Property, plant and equipment, net	$	355,704		$	24,435		$	70,476		$	450,615
Total assets	$	1,494,605		$	230,888		$	211,670		$	1,937,163

Disaggregation of Net Sales. We disaggregate net sales with customers into direct sales and distribution sales (“Distributors”) and by geographic area. Direct sales customers consist of those customers using our product in their manufacturing process, and Distributors are those customers who resell our products to third parties. We deliver our products to customers around the world for use in consumer electronics, computing, communications, industrial and automotive markets. Further, most of our contracts are fixed-price arrangements, and are short term in nature, ranging from days to several months.

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The tables below set forth net sales for the Company disaggregated into geographic locations based on shipment and by type (direct sales or Distributor):

	Three Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	353,312	$	223,056
Europe		54,056		43,145
Americas		33,080		22,468
Total net sales	$	440,448	$	288,669
Net Sales by Type
Direct sales	$	151,048	$	92,671
Distributor sales		289,400		195,998
Total net sales	$	440,448	$	288,669
	Six Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	687,937	$	433,861
Europe		102,442		90,076
Americas		63,190		45,449
Total net sales	$	853,569	$	569,386
Net Sales by Type
Direct sales	$	298,939	$	280,581
Distributor sales		554,630		288,805
Total net sales	$	853,569	$	569,386

Net sales from products shipped to China was $229.3 million and $152.4 million for the three months ended June 30, 2021 and 2020, respectively and $451.7 million and $291.3 million for the six months ended June 30, 2021 and 2020, respectively.

NOTE 8 – Debt

Short-term debt

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $173.1 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants.  These credit facilities bear interest at LIBOR or similar indices plus a specified margin.  Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of June 30, 2021, was approximately $111.8  million, net of a $60.2  million advanced under our foreign credit lines and $1.1 million credit used for import and export guarantee.   

Long-term debt

The Company maintains a long-term credit facility (“Credit Agreement”) consisting of a term loan with a current balance of $114.7 million and a $150.0 million revolving senior credit facility, of which nothing was drawn as of June 30, 2021.  The Company used a portion of the proceeds available under the term commitment and the revolving senior credit facility to finance the Company’s acquisition of Lite-On Semiconductor Corporation. The Credit Agreement contains certain financial and non-financial covenants, including, but not limited to, a maximum Consolidated Leverage Ratio, a minimum Consolidated Fixed Charge Coverage Ratio, and restrictions on liens, indebtedness, investments, fundamental changes, dispositions, and restricted payments (including dividends and share repurchases).  Furthermore, under the Credit Agreement, restricted payments, including dividends and share repurchases, are permitted in certain circumstances, including while the pro forma Consolidated Leverage Ratio is, both before and after giving effect to any such restricted payment, at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement.  In addition to the credit facilities described above, our 51% owned subsidiary, ERIS Technology Corporation (“ERIS”), has short-term debt of $17.2 million and long-term debt of $28.6 million from local Taiwan banks.  The ERIS debt matures in various periods from 2021 through 2033.  

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Borrowings outstanding as of June 30, 2021 and December 31, 2020, are set forth in the table below:

	June 30,			December 31,				Current Amount
Description	2021			2020			Interest Rate	Maturity
Short-term debt	$	60,239		$	140,567		Libor plus margin	Various during 2021 -2022
Long-term debt
Term loan and revolver	$	114,687		$	282,250		Libor plus margin	May 2024
Notes payable to Bank of Taiwan		2,574			4,154		Variable, 1.3% base	June 2033
Notes payable to Bank of China Trust Company		3,586			3,511		Taibor 3 month rate + 0.5%	December 2021
Notes payable to Bank of China Trust Company		16,727			16,714		Taibor 3 month rate + 0.5%	May 2024
Notes payable to E Sun Bank		3,586			3,511		1-M deposit rate plus 0.08%	December 2022
Notes payable to E Sun Bank		394			386		1-M deposit rate plus 0.08%	June 2027
Notes payable to E Sun Bank		1,757			1,721		1-M deposit rate plus 0.08%	June 2030
Notes payable to HSBC		100,000			-		Libor plus margin	January 2023
Total long-term debt		243,311			312,247
Less:  Current portion of long-term debt		(18,346	)		(21,860	)
Less:  Unamortized debt costs		(2,253	)		(2,208	)
Total long-term debt, net of current portion	$	222,712		$	288,179

NOTE 9 – Commitments and Contingencies

Purchase commitments – As of June 30, 2021, we had approximately $66.8 million in non-cancelable purchase contracts related to capital expenditures, primarily related to our manufacturing facilities in Asia.  As of June 30, 2021, we also had a commitment to purchase approximately $28.7 million of wafers to be used in our manufacturing process during 2021 and 2022.  

Defined Benefit Plan - We have a contributory defined benefit plan that covers certain employees in the United Kingdom.  As of June 30, 2021, the underfunded liability for this defined benefit plan was approximately $19.9 million.  An actuarial valuation was performed as of March 31, 2019, resulting in a deficit of approximately GBP 26.7 million (approximately $37.4 million based on a GBP: USD exchange rate of 1.4:1). As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $2.8 million based on a GBP: USD exchange rate of 1.4:1) to be paid in annual installments with effect from April 1, 2020 to address the deficit revealed by the valuation (with the first payment made by March 31, 2021, and payments to be made by December 31 each year thereafter). These contributions, together with the assumed asset outperformance, are expected to eliminate the deficit by December 31, 2028. Further, we will pay GBP 0.2 million (approximately $0.3 million based on GBP: USD exchange rate oat 1.4:1) in annual installments to cover expenses.

Contingencies – From time to time, we are involved in various legal proceedings that arise in the normal course of business. While we intend to defend any lawsuit vigorously, we presently believe that the ultimate outcome of any pending legal proceeding will not have any material adverse effect on our consolidated financial position, cash flows or operating results. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact our business and operating results for the period in which the ruling occurs or future periods.  Based on information available, we evaluate the likelihood of potential outcomes of all pending disputes. We record an appropriate liability when the amount of any liability associated with a pending dispute is deemed probable and reasonably estimable. In addition, we do not accrue for estimated legal fees and other directly related costs as they are expensed as incurred.  The Company is not currently a party to any pending litigation that the Company considers material.

Note 10 – Derivative Financial Instruments

We use derivative instruments to manage risks related to foreign currencies, interest rates and the net investment risk in our foreign subsidiaries. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic

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impact of these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment.

Hedges of Foreign Currency Risk - We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure. At June 30, 2021 and December 31, 2020, we had $215.6 million and $276.2 million, respectively, of outstanding foreign currency forward agreements that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC No. 815.  We have recorded foreign currency forward agreements with a fair value of less than $3.0 thousand on our consolidated balance sheet.   

Hedges of Interest Rate and Net Investment Risk -The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.  

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020:

	Other Current Liabilities				Other Liabilities
	2021		2020		2021		2020
Interest rate swaps and collars	$	624	$	2,008	$	-	$	610

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and six months ended June 30, 2021 and 2020:

	Amount of Gain or (Loss) Recognized in OCI on Derivative						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion  Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Instruments Designated as Hedging Instruments
	June 30,							June 30,							June 30,
	2021			2020				2021			2020				2021		2020
Three Months Ended
Interest rate swaps and collars	$	(6	)	$	(180	)	Interest expense	$	(166	)	$	(2	)	Interest expense	$	-	$	-
Cross currency swaps	$	(2,186	)	$	-		N/A	$	-		$	-		Interest income	$	616	$	-
Six Months Ended
Interest rate swaps and collars	$	(11	)	$	(1,571	)	Interest expense	$	(327	)	$	(73	)	N/A		-		-
Cross currency swaps	$	976		$	-		N/A		-			-		Interest income	$	1,226	$	-

We estimate that $0.2 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of June 30, 2021 will be reclassified into expense within the following 12 months. No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three and six months ended June 30, 2021 or 2020.

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	Amount of Gain or (Loss) Recognized in Net Income					Location of Gain or (Loss) Recognized in Net Income
Derivative Instruments Not Designated as Hedging Instruments
	June 30,
	2021		2020
Three Months Ended
Foreign currency forward contracts	$	4,599	$	(391	)	Foreign currency loss, net
Six Months Ended
Foreign currency forward contracts	$	1,793	$	(2,538	)	Foreign currency loss, net

As of June 30, 2021 and December 31, 2020, the Company had not posted any collateral related to these agreements.

NOTE 11 – Leases

The Company leases certain assets used in its business, including land, buildings and equipment.  These leased assets are used for operational and administrative purposes.

The components of lease expense are set forth in the table below:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating lease expense	$	4,149	$	3,669	$	8,384	$	7,399
Finance lease expense:
Amortization of assets		2		209		213		418
Interest on lease liabilities		-		6		1		13
Short-term lease expense		246		122		491		216
Variable lease expense		1,161		738		2,290		1,449
Total lease expense	$	5,558	$	4,744	$	11,379	$	9,495

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The table below sets forth supplemental balance sheet information related to leases.  In our condensed consolidated balance sheets, right of use (“ROU”) assets are included in other long-term assets while lease liabilities are located in accrued liabilities and other for the current portion and other long-term liabilities for the non-current portion:

	June 30, 2021	December 31, 2020
Operating leases:
Operating lease ROU assets	$60,587	$54,457
Current operating lease liabilities	13,787	10,663
Noncurrent operating lease liabilities	30,423	27,041
Total operating lease liabilities	$44,210	$37,704
Finance leases:
Finance lease ROU assets	$2,549	$2,507
Accumulated amortization	(2,518)	(2,298)
Finance lease ROU assets, net	$31	$209
Current finance lease liabilities	$12	$149
Non-current finance lease liabilities	21	24
Total finance lease liabilities	$33	$173
Weighted average remaining lease term (in years):
Operating leases	6.8	7.6
Finance leases	2.8	0.6
Weighted average discount rate:
Operating leases	4.0%	4.0%
Finance leases	3.7%	3.1%

The table below sets forth supplemental cash flow and other information related to leases:

	Six Months Ended
	June 30, 2021	June 30, 2020
Cash paid for the amounts included in the measurements of lease liabilities:
Operating cash outflows from operating leases	$10,973	$9,753
Operating cash outflows from finance leases	1	13
Financing cash outflow from finance leases	151	445
ROU assets obtained in exchange for lease liabilities incurred:
Operating leases	12,265	532

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The table below sets forth information about lease liability maturities:

	June 30, 2021
	Operating Leases		Finance Leases
Remainder of 2021	$	7,791	$	6
2022		14,253		13
2023		9,242		11
2024		4,359		5
2025		4,173		-
2026		2,742		-
2027 and thereafter		8,830		-
Total lease payments		51,390		35
Less: imputed interest		(7,180)		(2)
Total lease obligations		44,210		33
Less: current obligations		(13,787)		(12)
Long-term lease obligations	$	30,423	$	21

NOTE 12 – Employee Benefit Plans  

We maintain a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key employees and members of the Board of Directors. The Deferred Compensation Plan allows eligible participants to defer the receipt of eligible compensation, including equity awards, until designated future dates. We offset our obligations under the Deferred Compensation Plan primarily by investing in the actual underlying investments. At June 30, 2021 and December 31, 2020, these investments totaled approximately $14.1 million and $12.8 million, respectively.

NOTE 13 – Related Parties

We historically conducted business with a related party company, Lite-On Semiconductor Corporation (“LSC”), and its subsidiaries and affiliates.  LSC was also our largest stockholder, owning approximately 15% of our outstanding Common Stock., prior to the close of the acquisition of LSC by Diodes.   On November 30, 2020, we acquired LSC and LSC is no longer a stockholder or related party, but instead it is a wholly owned subsidiary of ours. Raymond Soong, the former Chairman of the Board of Diodes, was the Chairman of LSC and was the Chairman of Lite-On Technology Corporation (“LTC”), which was a significant shareholder of LSC. C.H. Chen, our former President and Chief Executive Officer and currently the Vice Chairman of the Board of Diodes, was also the Vice Chairman of LSC and a board member of LTC. Dr. Keh-Shew Lu, our current Chairman of the Board, President and Chief Executive Officer, is a board member of LTC and a board member of Nuvoton Technology Corporation (“Nuvoton”). We purchase wafers from Nuvoton for use in our production process. We also conduct business with Nuvoton and its subsidiaries and affiliates. We consider our relationship with Nuvoton to be mutually beneficial and we plan to continue our strategic alliance with Nuvoton.    

We conduct business with 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.   We sell products to, and purchase inventory from, companies owned by Keylink. We sold products to companies owned by Keylink, totaling approximately 1.0% and 1.7% of our net sales for the three months ended June 30, 2021 and 2020, respectively.  We sold products to companies owned by Keylink, totaling approximately 1.2% and 1.6% of our net sales for the six months ended June 30, 2021 and 2020, 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 paid to Keylink for the three months ended June 30, 2021 and, 2020 were approximately $4.3 million and $3.8 million, respectively.  The aggregate amounts paid to Keylink for the six months ended June 30, 2021 and, 2020 were approximately $8.7 million and $6.9 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 our 5% partner in our other Chengdu assembly and test facilities; however, we have no material transactions with Ya Guang, other than these joint ventures.  We also purchase materials from Jiyuan Crystal Photoelectric Frequency Technology Ltd. (“JCP”) a frequency control product manufacturing company in which we have made an equity investment and account for using the equity method of accounting.

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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 to and purchases from related parties:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
LSC
Net sales	$	-	$	171	$	-	$	299
Purchases	$	-	$	3,806	$	-	$	6,554
Nuvoton
Purchases	$	2,288	$	2,011	$	3,695	$	3,655
Keylink
Net sales	$	4,333	$	4,975	$	9,899	$	8,960
Purchases	$	501	$	426	$	980	$	831
JCP
Purchases	$	328	$	291	$	687	$	447

The table below sets forth accounts receivable from, and accounts payable to, related parties:

	June 30,		December 31,
	2021		2020
Nuvoton
Accounts receivable	$	-	$	10
Accounts payable	$	1,539	$	796
Keylink
Accounts receivable	$	39,660	$	35,365
Accounts payable	$	34,373	$	31,247
JCP
Accounts payable	$	379	$	357

Note 14 –Acquisitions and Divestitures

Manufacturing Subsidiary Located in China

In March 2021 Diodes entered into an agreement to sell a manufacturing subsidiary in China for total consideration of approximately $18.0 million, which includes a combination of cash and equity. The transaction is expected to close within the next twelve months and is subject to customary closing conditions and working capital adjustments.

Management determined that the disposal group met the held-for-sale criteria and reclassified the carrying value of the disposal group to assets held-for-sale, which is included in prepaid expenses and other in the consolidated balance sheet. The Company recognized no gain or loss on the reclassification of the disposal group to held-for-sale. A final determination of the value of the assets and liabilities divested has not been completed and the table below is considered preliminary. The table below sets forth the major classes of assets and liabilities that have been classified as held-for-sale on the condensed consolidated balance sheet:

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Assets
Cash and cash equivalents	$	4,936
Accounts receivable		154
Inventories, net		6,906
Property, plant and equipment		7,798
Deferred income tax		4,953
Other long-term assets		638
Assets classified as held for sale		25,385
Liabilities
Accounts payable		7,153
Accrued liabilities and other		1,106
Other long-term liabilities		637
Liabilities classified as held for sale		8,896
Net assets classified as held for sale (included in prepaid expenses and other)	$	16,489

LSC Acquisition

On November 30, 2020, the Company closed on its previously announced acquisition of LSC, a Taiwan-based supplier of “green” power-related discrete and analog semiconductor devices. The Company purchased LSC in order to include LSC’s “green” power-related semiconductor devices that are designed for power saving and low power dissipation to serve the power supply market, and to reacquire the 7,765,778 of the Company’s common shares owned by LSC, which was approximately 15% of our outstanding shares prior to the close of such acquisition. The reacquired shares were treated as a settlement of a pre-existing relationship and as a transaction separate and apart from the business combination along with the settlement of payables and receivables between the Company and LSC.  The reacquired shares are included in treasury stock on the Company’s balance sheet. There was no gain or loss on the settlement of the payables and receivables between the Company and LSC.

The Company recorded the purchase of LSC as a business combination, with the Company owning 100% of LSC.  LSC has been consolidated into the operations of the Company. The purchase price per the Share Swap Agreement was 42.50 TWD per outstanding LSC share. On November 30, 2020, the Company acquired the 307,371,139 outstanding shares of LSC for a total aggregate purchase price of approximately $453.4 million and total consideration of $154.0 million after adjustments for the settlement of pre-existing relationships. A portion of the LSC purchase price was funded by borrowings under the Company’s Credit Agreement.

The table below sets forth the fair value of the LSC assets acquired and liabilities assumed based on relative fair value at the date of acquisition and the corresponding line item in the Company’s consolidated balance sheet at the date of acquisition. During the period from January 1, 2021 and March 31, 2021, measurement period adjustments were made to inventories, property, plant and equipment, and accrued liabilities and other.  The adjustments represented a decrease to total assets acquired and a decrease to total liabilities assumed of $0.1 million. U.S. GAAP permits companies to complete the final determination of the fair values during the measurement period following the acquisition date. The size and breadth of the LSC acquisition will necessitate the use of this measurement period to adequately analyze and assess a number of the factors used in establishing the asset and liability fair values as of the acquisition date including (i) changes in fair values of property, plant and equipment and inventories, (ii) changes in fair value of certain liabilities assumed and (iii) tax impact associated with any other changes in fair value. Any potential adjustments made could be material in relation to the preliminary values. A final determination of the LSC assets acquired and liabilities assumed has not been completed and the table below is considered preliminary. The Company engaged a third party valuation specialist to assist with

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the assessment of any intangibles assets acquired as part of the LSC acquisition, and it was determined that there were no intangible assets as a result of the LSC acquisition.

Cash and cash equivalents	$		131,046
Accounts receivable			44,896
Inventories			55,710
Prepaid expenses and other current assets			11,447
Property, plant and equipment			67,952
Deferred income tax			15,732
Other long-term assets			26,037
Total assets acquired			352,820
Line of credit			88,508
Accounts payable			35,245
Accrued liabilities and other			48,992
Income tax payable			6,264
Deferred tax liabilities			8,941
Other long-term liabilities			10,783
Total liabilities assumed			198,733
Non-controlling interest		54
Net assets acquired	$		154,033

Savitech Acquisition

On February 5, 2020, the Company entered into an agreement to invest up to approximately $14.2 million to acquire at least 51% of Savitech Corporation (“Savitech”), a fabless semiconductor design company located in Zhubei City, Taiwan.  The Company will make the investment in two tranches.  The first tranche of $5.6 million, which provided the Company with a 33.6% ownership of Savitech, was made on March 4, 2020.  The initial tranche was funded with cash on hand. The second tranche, currently recorded in accrued liabilities and other, as shown in the table below, and currently valued at $9.1 million will increase the Company’s ownership to at least 51% of Savitech.   Based on preliminary reporting, as of June 30, 2021, it is estimated that Savitech exceeded the previously agreed-to revenue levels and based on this preliminary reporting, the Company accrued an additional $0.3 million related to the second tranche payment. After the Company verifies the preliminarily reported revenue by Savitech, the Company will make the second tranche payment.    

The Company recorded the purchase of Savitech as a business acquisition and now consolidates Savitech into its operations, based on the voting model, with a non-controlling interest related to the interest the Company does not own in Savitech. The Company made its investment in Savitech in order to increase the Company’s integrated circuit business.   Total purchase consideration recorded was $13.9 million. The goodwill will not be tax deductible. The Company also incurred acquisition costs of approximately $0.1 million that were recognized in selling, general and administrative expense. The table below sets forth the fair value of the assets and liabilities recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date of acquisition.  

Cash and cash equivalents	$	6.2
Prepaid expenses and other		0.7
Goodwill		13.9
Intangible assets, net		6.1
Other long-term assets		0.4
Accrued liabilities and other		10.2
Noncontrolling interest		11.8

Note 15 – Subsequent Event

During July 2021, the Company acquired an interest in an early stage fabless wafer design company by purchasing $10.0 million of preferred stock and a $5.0 million convertible promissory note.  The promissory note is convertible into additional preferred shares, has an interest rate of 3% and is due on the fifth anniversary of the transaction close.  

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Except for the historical information contained herein, the matters addressed in this Item 2 constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as identified under the heading “Cautionary Statement for Purposes of the “Safe Harbor” Provision of the Private Securities Litigation Reform Act of 1995” herein. Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed below under the heading “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, that could cause actual results to differ materially from those anticipated by our management. The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the PSLRA. We undertake no obligation to publicly release the results of any revisions to our forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events. Unless the context otherwise requires, the words “Diodes,” the “Company,” “we,” “us” and “our” refer to Diodes Incorporated and its subsidiaries. Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted.

This management’s discussion should be read in conjunction with the management’s discussion included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“Form 10-K”), previously filed with Securities and Exchange Commission (“SEC”) on February 22, 2021.

Overview

We are a leading global manufacturer and supplier of high-quality, application-specific standard products within the broad discrete, logic, analog and mixed-signal semiconductor markets. For detailed information, see Note 1 – Summary of Operations and Significant Accounting Policies, included in the condensed consolidated financial statements in Item 1 above.  Our products are sold primarily throughout Asia, North America and Europe. We believe that our focus on application-specific standard products utilizing innovative, highly efficient packaging and cost-effective process technologies, coupled with our collaborative, customer-focused product development, provides us with a meaningful competitive advantage relative to other semiconductor companies.

Factors Relevant to Our Results of Operations for the Three Months Ended June 30, 2021

● During the second quarter of 2021, net sales were $440.4 million, an increase of 52.5 % from the $288.7 million of net sales in the second quarter of 2020, and an increase of 6.6% from the $413.1 million of net sales in the first quarter of 2021.  

● Gross profit was $159.8 million, an increase of 57.5% from the $101.5 million of gross profit in the second quarter of 2020, and an increase of 15.3% from the $138.6 million of gross profit in the first quarter of 2021;

● Gross profit margin was 36.3% compared to gross profit margin of 35.2% in the second quarter of 2020, and 33.6% in the first quarter of 2021;

● Net income was $55.4 million, or $1.22 per diluted share, compared to net income of $21.0 million, or $0.40 per diluted share, in the second quarter of 2020, and net income of $39.5 million, or $0.87 per diluted share, in the first quarter of 2021; and

● Cash flow from operations was $93.9 million.  Net cash flow was a negative $36.2 million, which includes $27.9 million of capital expenditures and a net reduction in debt of $114.2 million.

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Recent Developments

LSC Acquisition

On November 30, 2020, the Company closed the acquisition of Lite-On Semiconductor Corporation (“LSC”), a Taiwan-based supplier of “green” power-related discrete analog semiconductor devices. Since the close of the acquisition the Company has focused on the integration of LSC into its operations.  The Company believes that the integration of LSC is progressing well as we have already begun to realize some of the benefits of manufacturing synergies from improved factory loading with both LSC and Diodes’ products. Our global manufacturing footprint is serving as a key advantage at a time when the broader semiconductor industry is challenged by supply and capacity constraints.

COVID-19

We remain focused on the safety and well-being of our stakeholders and on the service to our customers.  We will continuously review and assess the rapidly-changing COVID-19 pandemic and its impacts on our customers, our suppliers and our business so that we can seek to address those impacts.  We previously temporarily closed a manufacturing facility due to COVID-19 and no assurances can be provided that we will not be required to close or reduce our manufacturing production in the future in response to the COVID-19 pandemic or other events beyond our control.

As of June 30, 2021, our cash, cash equivalents, and short-term investments were $300.0 million, and we had access to additional borrowing capacity of $150.0 million under the revolving portion our Credit Agreement, which we believe assures us adequate liquidity to manage the impacts of the COVID-19 pandemic on our business and to cover cash needs for working capital, capital expenditures and acquisitions for at least the next 12 months. 

See “Risk Factors - The ultimate impact of the COVID-19 pandemic outbreak cannot be estimated at this time, but it may have a material adverse effect on our business, financial condition and results of operations.” in Item 1A of this Quarterly Report on Form 10-Q for an additional discussion of risks and potential risks of the COVID-19 pandemic on our business, financial condition and results of operations.

Results of Operations for the Three Months Ended June 30, 2021 and 2020

The table below sets forth the condensed consolidated statement of operations line items as a percentage of net sales.

	Percent of  Net Sales
	Three Months Ended June 30,
	2021		2020
Net sales		100%		100%
Cost of goods sold		(64)		(65)
Gross profit		36		35
Total operating expense		21		24
Income from operations		15		11
Total other expense		1		(2)
Income before income taxes and noncontrolling interest		16		9
Income tax provision		(3)		(2)
Net income		13		7
Net income attributable to common stockholders		13		7

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The following table and discussion explains in greater detail our consolidated operating results and financial condition for the three months ended June 30, 2021, compared to the three months ended June 30, 2020. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

	Three Months Ended
	June 30,
	2021			2020			Increase/(Decrease)			% Change
Net sales	$	440,448		$	288,669		$	151,779			52.6	%
Cost of goods sold		280,646			187,177			93,469			49.9	%
Gross profit		159,802			101,492			58,310			57.5	%
Total operating expense		94,445			70,623			23,822			33.7	%
Interest income		818			168			650			386.9	%
Interest expense		(2,017	)		(2,653	)		(636	)		(24.0	%)
Foreign currency (loss) gain, net		(510	)		(3,600	)		(3,090	)		(85.8	%)
Unrealized gain on investments		5,261			-			5,261		N/A
Other income		1,837			1,274			563			(44.2	%)
Income tax provision		12,120			4,670			7,450			159.5	%

Net sales increased approximately $151.8 million, or 52.6%, for the three months ended June 30, 2021, compared to the same period last year.  The 52.6% increase in net sales for the three months ended June 30, 2021 was driven by 27.5% organic growth attributable to the Company’s legacy business that existed prior to the LSC acquisition and 25.1% related to LSC. Revenue grew in all regions. The Company achieved records in global point-of-sale revenue, automotive and consumer end-user markets sales and sales of our Pericom branded products for high-end personal computers, servers and data center applications.  For the three months ended June 30, 2021, weighted-average sales price increased 6.8% when compared to the same period last year.

The table below sets forth our revenue as a percentage of total revenue by end-user market for the three months ended June 30, 2021 and 2020:

	Three Months Ended
	June 30,
	2021	2020
Industrial	22%	22%
Communications	17%	22%
Consumer	19%	27%
Computing	30%	19%
Automotive	12%	10%

With respect of total net sales by end-user markets, the LSC contribution to automotive, industrial, consumer and communication end-user markets was 7% or less for the three months ended June 30, 2021.  With respect to the percentage of total net sales by the computing end-user market, the LSC contribution for the three months ended June 30, 2021 was approximately 47% of total computing net sales.  

The industrial end-user market grew as we experienced strong demand for our products for low-dropout regulators for power tools, eMeters and other industrial applications. In the communications end-user market the Company has continued to focus on mobile, smartphone, and especially 5G applications. In the consumer end-user market the Company experienced increasing growth momentum in the IoT space. The computing end-user market grew due to continued demand for notebooks, Chromebooks, high-end PCs, servers and datacenter applications. The automotive end-user market grew as we captured both increasing market share and content gains as the Company penetrated new and existing automotive customers and applications.  

With respect to the three months ended March 31, 2021, (a) net sales attributable to the Company’s legacy business that existed prior to the LSC acquisition increased 23.8% when compared to the first quarter of 2020, and (b) net sales from LSC contributed 23.4% to the increase in net sales in the first quarter of 2021 when compared to the first quarter of 2020.

With respect to percentage of total net sales by end-user markets, the LSC contribution for the first quarter of 2021 to automotive, industrial, consumer and communication end-user markets was minimal, less than 7% contribution in each of these categories.   With respect to percentage of total net sales by the computing end-user market, the LSC contribution for the first quarter of 2021 was approximately 45% of total computing net sales. 

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Cost of goods sold increased approximately $93.5 million for the three months ended June 30, 2021, compared to the same period last year, due to the increased net sales during the second quarter of 2021.  As a percent of sales, cost of goods sold was 63.7% for the three months ended June 30, 2021, compared to 64.8% for the same period last year. Average unit cost increased approximately 5.0% for the three months ended June 30, 2021, compared to the same period last year due to cost increases from various subcontractors and foundries. For the three months ended June 30, 2021, gross profit increased approximately 57.5% when compared to the same period last year. Gross profit margin for the three month periods ended June 30, 2021 and 2020 was 36.3% and 35.2%, respectively.

Operating expenses for the three months ended June 30, 2021, increased $23.8 million when compared to the three months ended June 30, 2020. Operating expenses as a percentage of net sales was 21.4% and 24.5% for the three months ended June 30, 2021 and 2020, respectively. Selling, general and administrative expenses (“SG&A”) increased approximately $14.9 million, due to increases in wages and benefits and selling expenses as compared to the same period last year. Research and development expenses (“R&D”) increased approximately $8.7 million due to increases in wages and benefits and operating expenses as compared to the same period last year. SG&A, as a percentage of net sales, was 13.7% and 15.7% for the three months ended June 30, 2021 and 2020, respectively. R&D, as a percentage of net sales, was 6.8% and 7.4% for the three months ended June 30, 2021 and 2020, respectively.  

Interest income increased 386.9% for the three months ended June 30, 2021, compared to the same period last year, due to increased revenue related to cross currency swaps.  Interest expense decreased 24.0% for the three months ended June 30, 2021, compared to the same period last year. The decrease in interest expense for the three months ended June 30, 2021 was due to a decrease in the interest rate on our floating rate debt, partially offset by higher borrowing levels. Unrealized gain on investments increased from 2020 due to investment income from an investment the Company acquired in the LSC acquisition.

We recognized income tax expense of approximately $12.1 million and $4.7 million for the three months ended June 30, 2021 and 2020, respectively. The increase in income taxes for 2021 compared to 2020 was primarily attributable to an increase in pretax book income.  

Results of Operations for the Six Months Ended June 30, 2021 and 2020

The table below sets forth the condensed consolidated statement of operations line items as a percentage of net sales.

	Percent of  Net Sales
	Six Months Ended June 30,
	2021		2020
Net sales		100%		100%
Cost of goods sold		(65)		(65)
Gross profit		35		35
Total operating expense		22		25
Income from operations		13		10
Total other income (expense)		1		(1)
Income before income taxes and noncontrolling interest		14		9
Income tax provision		(3)		(2)
Net income		11		7
Net income attributable to common stockholders		11		7

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The following table and discussion explains in greater detail our consolidated operating results and financial condition for the six months ended June 30, 2021, compared to the six months ended June 30, 2020. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

	Six Months Ended
	June 30,
	2021			2020			Increase/(Decrease)			% Change
Net sales	$	853,569		$	569,386		$	284,183			49.9	%
Cost of goods sold		555,131			372,052			183,079			49.2	%
Gross profit		298,438			197,334			101,104			51.2	%
Total operating expense		185,691			140,613			45,078			32.1	%
Interest income		1,586			441			1,145			259.6	%
Interest expense		(4,881	)		(3,898	)		983			25.2	%
Foreign currency (loss) gain, net		(1,789	)		(3,525	)		(1,736	)		(49.2	%)
Unrealized gain on investments		8,916			-			8,916		N/A
Other income		4,154			1,275			2,879			225.8	%
Income tax provision		21,554			9,226			12,328			133.6	%

Net sales increased approximately $284.2 million for the six months ended June 30, 2021, compared to the same period last year, setting a record both organically and on a consolidated basis. The 49.9% increase in net sales for the three months ended June 30, 2021 was driven by 25.7% organic growth and 24.2% related to LSC. The Company achieved growth in global point-of-sale revenue, automotive and computing end-user markets combined with revenue growth for our Pericom branded products for high-end personal computers, servers and data center applications. For the six months ended June 30, 2021, weighted-average sales price increased 3.6% when compared to the same period last year.

The table below sets forth our revenue as a percentage of total revenue by end-user market for the six months ended June 30, 2021 and 2020:

	Six Months Ended
	June 30,
	2021	2020
Industrial	22%	24%
Communications	17%	23%
Consumer	19%	25%
Computing	30%	18%
Automotive	12%	11%

With respect of total net sales by end-user markets, the LSC contribution to automotive, industrial, consumer and communication end-user markets was 7% or less for the six months ended June 30, 2021.  With respect to the percentage of total net sales by the computing end-user market the LSC contribution for the six months ended June 30, 2021 was approximately 46% of total computing net sales.

The industrial end-user market grew as we experienced strong demand for our products for low-dropout regulators for power tools, eMeters and other industrial applications. In the communications end-user market the Company has continued to focus on mobile, smartphone, and especially 5G applications. In the consumer end-user market the Company experienced increasing growth momentum in the IoT space. The computing end-user market grew due to continued demand for notebooks, Chromebooks, high-end PCs, servers and datacenter applications. The automotive end-user market grew as we captured both increasing market share and content gains as the Company penetrated new and existing automotive customers and applications.

Cost of goods sold increased approximately $183.1 million for the six months ended June 30, 2021, compared to the same period last year, due to the increased net sales during 2021.  As a percent of sales, cost of goods sold was 65.0% for the six months ended June 30, 2021, compared to 65.3% for the same period last year. Average unit cost increased approximately 3.8% for the six months ended June 30, 2021, compared to the same period last year due to cost increases from various subcontractors and foundries. For the six months ended June 30, 2021, gross profit increased approximately 51.2% when compared to the same period last year. Gross profit margin for the three month periods ended June 30, 2021 and 2020 was 35.0% and 34.7%, respectively.

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Operating expenses for the six months ended June 30, 2021, increased $45.1 million when compared to the six months ended June 30, 2020. Operating expenses as a percentage of net sales was 21.8% and 24.7% for the six months ended June 30, 2021 and 2020, respectively. SG&A increased approximately $31.4 million, due to higher selling costs and wages and salaries. R&D increased approximately $12.6 million due to higher wages and benefits, higher selling expense and higher freight and duty costs, as compared to the same period last year. Amortization of acquisition related intangibles decreased $0.2 million, compared to the same period last year. SG&A, as a percentage of net sales, was 13.9% and 15.4% for the six months ended June 30, 2021 and 2020, respectively. R&D, as a percentage of net sales, was 6.8% and 7.9% for the six months ended June 30, 2021 and 2020, respectively.  

Interest income increased 259.6% for the six months ended June 30, 2021, compared to the same period last year, due to increased revenue related to cross currency swaps.  Interest expense increased 25.2% for the six months ended June 30, 2021, compared to the same period last year. The increase in interest expense for the six months ended June 30, 2021 was due to the increased debt related to the LSC acquisition and an increase in interest rates on the floating rate portion of our debt. Unrealized gain on investments increased from 2020 due to investment income from an investment the Company acquired in the LSC acquisition.

We recognized income tax expense of approximately $21.6 million and $9.2 million for the six months ended June 30, 2021 and 2020, respectively. The increase in income taxes for 2021 compared to 2020 was primarily attributable to an increase in pretax book income.

Financial Condition

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, funds from operations and, if necessary, borrowings under our credit facilities.

Short-term debt

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $173.1 million. At June 30, 2021, outstanding borrowings were $60.2 million and outstanding letters of credit were $1.1 million under the Asia credit facilities.  

Long-term debt

The Company maintains a long-term credit facility (“Credit Agreement”) consisting of a term loan with a current balance of $114.7 million and a $150.0 million revolving senior credit facility, of which nothing was drawn on June 30, 2021. The Credit Agreement matures in May 2023.

In addition to the liquidity provided by the Credit Agreement, our 51% owned subsidiary, ERIS Technology Corporation (“ERIS”), borrowed $17.2 million through a short term loan and $28.6 million on a long-term basis from local Taiwan banks.  The ERIS debt matures in periods from 2021 through 2033.

At June 30, 2021 and December 31, 2020, our working capital was $582.3 million and $514.2 million, respectively. We expect cash generated by our operations together with existing cash, cash equivalents, short-term investments and available credit facilities to be sufficient to cover cash needs for working capital, capital expenditures and acquisitions for at least the next 12 months.  

Capital expenditures (including accrued capital expenditures) for the six months ended June 30, 2021 and 2020 were $53.7 million and $28.3 million, respectively.  For the first six months of 2021 capital expenditures were approximately 6.3% of our net sales.  Capital expenditures for the six months ended June 30, 2021, is in line with our capital spending target range of 5% to 9% of net sales.  

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries. As of June 30, 2021, our foreign subsidiaries held approximately $213.6 million of cash, cash equivalents and investments of which approximately $38.1 million would be subject to a potential non-U.S. withholding tax if distributed outside the country in which the cash is currently held. All of this $38.1 million is held in Germany, China, Korea and Taiwan.

As of June 30, 2021, we had short-term investments totaling $7.4 million. These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short time frame but in doing so we generally forfeit all earned and future interest income.

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Discussion of Cash Flow

Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are cash and cash equivalents, short-term investments and our credit facilities. Our cash and cash equivalents and restricted cash decreased from $320.5 million at December 31, 2020 to $294.9 million at June 30, 2021.  This decrease is cash, cash equivalents and restricted cash reflects normal operations of the Company.  

The table below sets forth a summary of the condensed consolidated statements of cash flows:

	Six Months Ended June 30,
	2021			2020
Net cash flows provided by operating activities	$	162,064		$	86,734
Net cash and cash equivalents used in investing activities		(36,674	)		(34,048	)
Net cash and cash equivalents used in financing activities		(156,292	)		241,784
Effect of exchange rate changes on cash and cash equivalents		5,291			644
Net increase in cash and cash equivalents, including restricted cash	$	(25,611	)	$	295,114

Operating Activities

Net cash flows provided by operating activities for the six months ended June 30, 2021 was $162.1 million.  Net cash flows provided by operating activities for the six months ended June 30, 2021 resulted from net income of $99.2 million, depreciation and amortization of intangible assets of $61.2 million, share-based compensation of $14.8 million and an increase in deferred taxes of $1.2 million.  The increases were partially offset by a noncash gain on an investment of $9.1 million and a decrease in noncash working capital accounts of $5.5 million. Net cash flows provided by operating activities for the six months ended June 30, 2020 was $86.7 million.  Net cash flows provided by operating activities for the six months ended June 30, 2020 resulted from net income of $41.8 million, depreciation and amortization of intangible assets of $53.9 million, share-based compensation of $12.4 million, partially offset by a decrease in inventories of $19.8 million and a decrease in noncash working capital accounts, excluding inventory, of $0.4 million.  

Investing Activities

Net cash and cash equivalents used in investing activities was $36.7 million for the six months ended June 30, 2021. Net cash and cash equivalents used in investing activities for the six months ended June 30, 2021 was primarily due to the purchase of property, plant and equipment of $45.0 million and the net purchase of short-term investments of $1.1 million, partially offset by the proceeds from the sale of property, plant and equipment of $3.0 million and other investing cash inflows of $6.5 million for the six months ended June 30, 2021. Net cash and cash equivalents used in investing activities was $34.0 million for the six months ended June 30, 2020. Net cash and cash equivalents used in investing activities was primarily due to the purchase of property, plant and equipment of $30.7 million, and the additional investment by the Company’s subsidiary ERIS in Yea-Shin of $6.1 million, bring ERIS’ ownership of Yea-Shin to approximately 99.5%. These outflows of cash were partially offset by net proceeds from the maturity of short-term investments of $5.1 million for the six months ended June 30, 2020. 

Financing Activities

Net cash and cash equivalents used in financing activities was $156.3 million for the six months ended June 30, 2021. Net cash used in financing activities in the six months ended June 30, 2021 consisted primarily of $151.5 million of net reductions in our debt and taxes paid on net share settlements of $10.0 million, partially offset by a capital contribution by a noncontrolling interest on $4.0 million. Net cash and cash equivalents provided by financing activities was $241.8 million for the six months ended June 30, 2020. Net cash provided by financing activities in the six months ended June 30, 2020 consisted primarily of $249.1 million, net advances on our debt facilities, including $200.0 million in anticipation of closing the LSC acquisition, partially offset by taxes paid on net share settlements of $5.4 million. 

Use of Derivative Instruments and Hedging

We use interest rate swaps, foreign exchange forward contracts and cross currency swaps to provide a level of protection against interest rate risks and foreign exchange exposure.

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Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.  

Hedges of Foreign Currency Risk

We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure and to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC No. 815.  The fair value of our foreign exchange hedges approximates zero.

Off-Balance Sheet Arrangements

We do not have any transactions, arrangements or other relationships with unconsolidated entities that will affect our liquidity or capital resources. We have no special purpose entities that provide off-balance sheet financing, liquidity or market or credit risk support, nor do we engage in leasing, swap agreements, or outsourcing of research and development services that could expose us to liability that is not reflected on the face of our financial statements.

Contractual Obligations

There have been no material changes in our Contractual Obligations as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 22, 2021.  

Critical Accounting Policies

Our critical accounting policies are described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 22, 2021. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q in Note 1 – Summary of Operations and Significant Accounting Policies. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the condensed consolidated financial statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

Recently Issued Accounting Pronouncements

See Note 1 - Summary of Operations and Significant Accounting Policies, of the Notes to Condensed Consolidated Financial Statements, for detailed information regarding the status of recently issued accounting pronouncements, if any.

Available Information

Our Internet address is http://www.diodes.com.  Information included on, or accessible through, our website shall not be deemed to form a part of the Quarterly Report on Form 10-Q. We make available, free of charge through our Internet website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Our website also provides access to investor financial information, including SEC filings and press releases, as well as stock quotes and information on corporate governance compliance.

Cautionary Statement for Purposes of the “Safe Harbor” Provision of the Private Securities Litigation Reform Act of 1995

Except for the historical information contained herein, the matters addressed in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934. We generally identify forward-looking statements by the use of terminology such as “may,” “will,” “could,” “should,” “potential,” “continue,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” or similar phrases or the negatives of

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such terms. Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and in other reports we file with the SEC from time to time, that could cause actual results to differ materially from those anticipated by our management. The PSLRA provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the PSLRA.

All forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to, in addition to the other matters described in this Quarterly Report on Form 10-Q, a variety of significant risks and uncertainties. The following discussion highlights some of these risks and uncertainties. Further, from time to time, information provided by us or statements made by our employees may contain forward-looking information. There can be no assurance that actual results or business conditions will not differ materially from those set forth or suggested in such forward-looking statements as a result of various factors, including those discussed below.

For more detailed discussion of these factors, see the “Risk Factors” discussion in Item 1A of our most recent Annual Report on Form 10-K as filed with the SEC and in Part II, Item 1A of this Quarterly Report The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

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Risk Factors

RISKS RELATED TO OUR BUSINESS

The ultimate impact of the COVID-19 pandemic outbreak cannot be estimated at this time, but it may have a material adverse effect on our business, financial condition and results of operations.

During times of difficult market conditions, our fixed costs combined with lower net sales and lower profit margins may have a negative impact on our business, operating results and financial condition.

Downturns in the highly cyclical semiconductor industry or changes in end-market demand could adversely affect our operating results and financial condition.

The semiconductor business is highly competitive, and increased competition may harm our business, operating results and financial condition.

Delays in initiation of production at facilities due to implementing new production techniques or resolving problems associated with technical equipment malfunctions could adversely affect our manufacturing efficiencies, operating results and financial condition.

We are and will continue to be under continuous pressure from our customers and competitors to reduce the price of our products, which could adversely affect our growth and profit margins.

Our customers require our products to undergo a lengthy and expensive qualification process without any assurance of product sales and may demand to audit our operations from time to time.  A failure to qualify a product or a negative audit finding could adversely affect our net sales, operating results and financial condition.

Production at our manufacturing facilities could be disrupted for a variety of reasons, including natural disasters and other extraordinary events, which could prevent us from producing enough of our products to maintain our sales and satisfy our customers’ demands and could adversely affect our operating results and financial condition.

New technologies could result in the development of new products by our competitors and a decrease in demand for our products, and we may not be able to develop new products to satisfy changes in demand, which would adversely affect our net sales, market share, operating results and financial condition.

We may be subject to claims of infringement of third-party intellectual property rights or demands that we license third-party technology, which could result in significant expense, reduction in our intellectual property rights and a negative impact on our business, operating results and financial condition.

We depend on third-party suppliers for timely deliveries of raw materials, manufacturing services, product and process development, parts and equipment, as well as finished products from other manufacturers, and our reputation with customers, operating results and financial condition could be adversely affected if we are unable to obtain adequate supplies in a timely manner.

If we do not succeed in continuing to vertically integrate our business, we will not realize the cost and other efficiencies we anticipate, which could adversely affect our ability to compete, our operating results and financial condition.

Part of our growth strategy involves identifying and acquiring companies. We may be unable to identify suitable acquisition candidates or consummate desired acquisitions and, if we do make any acquisitions, we may be unable to successfully integrate any acquired companies with our operations, which could adversely affect our business, operating results and financial condition.

We are subject to litigation risks, including securities class action litigation and intellectual property litigation, which may be costly to defend and the outcome of which is uncertain and could adversely affect our business and financial condition.

We are subject to many environmental laws and regulations that could result in significant expenses and could adversely affect our business, operating results and financial condition.

We may incur additional costs and face emerging risks associated environmental, social and governance (“ESG”) factors impacting our operations.  

Our products, or products we purchase from third parties for resale, may be found to be defective and, as a result, warranty claims and product liability claims may be asserted against us and we may not have recourse against our suppliers, which may harm our business, reputation with our customers, operating results and financial condition.

We may fail to attract or retain the qualified technical, sales, marketing, finance and management/executive personnel required to operate our business successfully, which could adversely affect our business, operating results and financial condition.

We may not be able to achieve future growth, and any such growth may place a strain on our management and on our systems and resources, which could adversely affect our business, operating results and financial condition.

Obsolete inventories as a result of changes in demand for our products and change in life cycles of our products could adversely affect our business, operating results and financial condition.

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If our direct sales customers or our distributors’ customers do not design our products into their applications, our net sales may be adversely affected.

We are subject to interest rate risk that could have an adverse effect on our cost of working capital and interest expenses, which could adversely affect our business, operating results and financial condition.

Our hedging strategies may not be successful in mitigating our risks associated with interest rates or foreign exchange exposure or our counterparties might not perform as agreed.

We may have a significant amount of debt with various financial institutions worldwide. Any indebtedness could adversely affect our business, operating results, financial condition and our ability to meet payment obligations under such debt.

Restrictions in our credit facilities may limit our business and financial activities, including our ability to obtain additional capital in the future.

Our business benefits from certain Chinese government incentives. Expiration of, or changes to, these incentives could adversely affect our operating results and financial condition.

We operate a global business through numerous foreign subsidiaries, and there is a risk that tax authorities will challenge our transfer pricing methodologies or legal entity structures, which could adversely affect our operating results and financial condition.

The value of our benefit plan assets and liabilities is based on estimates and assumptions, which may prove inaccurate and the actual amount of expenses recorded in the consolidated financial statements could differ materially from the assumptions used.

Changes in actuarial assumptions for our defined benefit plan could increase the volatility of the plan’s asset value, require us to increase cash contributions to the plan and have a negative impact on our cash flows, operating results and financial condition.

Certain of our customers and suppliers require us to comply with their codes of conduct, which may include certain restrictions that may substantially increase our cost of doing business as well as have an adverse effect on our operating efficiencies, operating results and financial condition.

Compliance with government regulations and customer demands regarding the use of “conflict minerals” may result in increased costs and may have a negative impact on our business, operating results and financial condition.

There are risks associated with previous and future acquisitions. We may ultimately not be successful in overcoming these risks or any other problems encountered in connection with acquisitions.

If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal control over financial reporting, we may not be able to report our financial results accurately or detect fraud, which could harm our business and the trading price of our Common Stock.

RISKS RELATED TO OUR INTERNATIONAL OPERATIONS

Our international operations subject us to risks that could adversely affect our operations.

We have significant operations and assets in China, the U.K., Germany, Hong Kong and Taiwan and, as a result, will be subject to risks inherent in doing business in those jurisdictions, which may adversely affect our financial performance and operating results.

Significant uncertainties related to changes in governmental policies and participation in international trading partnerships or economic unions currently exist, and, depending upon how such uncertainties are resolved, the changes could have a material adverse effect on us.

Tariffs or other restrictions imposed by the United States Trade Representative may affect our operations in the U.S., may disrupt our activities in the U.S., may have an adverse impact on our profitability and results of operations and may encourage the independent development in China of products and electronic components that will compete with ours or displace our products and components, resulting in an adverse impact on our Chinese business.

The U.K.’s exit from the European Union will continue to have uncertain effects and could adversely impact our business, results of operations and financial condition.

A slowdown in the Chinese economy could limit the growth in demand for electronic devices containing our products, which would have a material adverse effect on our business, operating results and prospects.

Economic regulation in China could materially and adversely affect our business, operating results and prospects.

We could be adversely affected by violations of the United States’ Foreign Corrupt Practices Act, the U.K.’s Bribery Act 2010, China’s anti-corruption campaign and similar worldwide anti-bribery laws.

We are subject to foreign currency risk as a result of our international operations.

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China is experiencing rapid social, political and economic change, which has increased labor costs and other related costs that could make doing business in China less advantageous than in prior years. Increased labor costs in China could adversely affect our business, operating results and financial condition.

We may not continue to receive preferential tax treatment in Asia, thereby increasing our income tax expense and reducing our net income.

The distribution of any earnings of certain foreign subsidiaries may be subject to foreign income taxes, thus reducing our net income.

We could be adversely affected by the compromise or theft of our technology, know-how, data or intellectual property or a requirement that we yield rights in technology, know-how, data stored in foreign jurisdictions or intellectual property that we use in such foreign jurisdictions.

RISKS RELATED TO OUR COMMON STOCK

Variations in our quarterly operating results may cause our stock price to be volatile.

We may enter into future acquisitions and take certain actions in connection with such acquisitions that could adversely affect the price of our Common Stock.

Our directors, executive officers and significant stockholders hold a substantial portion of our Common Stock, which may lead to conflicts with other stockholders over corporate transactions and other corporate matters.

We were formed in 1959, and our early corporate records are incomplete. As a result, we may have difficulty in assessing and defending against claims relating to rights to our Common Stock purporting to arise during periods for which our records are incomplete.

Non-cash tender offers, debt equity swaps or equity exchanges to consummate our business activities are likely to have the effect of diluting the ownership interest of existing stockholders, including qualified stockholders who receive shares of our Common Stock in such business activities.

Anti-takeover effects of certain provisions of Delaware law and our Certificate of Incorporation and Bylaws, may hinder a take-over attempt.

Section 203 of Delaware General Corporation Law may deter a take-over attempt.

Certificate of Incorporation and Bylaw Provisions may deter a take-over attempt.

GENERAL RISK FACTORS

The success of our business depends on the strength of the global economy and the stability of the financial markets, and any weaknesses in these areas may have a material adverse effect on our net sales, operating results and financial condition.

Production at our manufacturing facilities could be disrupted for a variety of reasons, including natural disasters and other extraordinary events, which could prevent us from producing enough of our products to maintain our sales and satisfy our customers’ demands and could adversely affect our operating results and financial condition.

We may be adversely affected by any disruption in our information technology systems, which could adversely affect our cash flows, operating results and financial condition.

Terrorist attacks, or threats or occurrences of other terrorist activities, whether in the U.S. or internationally, may affect the markets in which our Common Stock trades, the markets in which we operate and our operating results and financial condition.

System security risks, data protection breaches, cyber-attacks and other related cybersecurity issues could disrupt our internal operations, and any such disruption could reduce our expected net sales, increase our expenses, damage our reputation and adversely affect our stock price.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risks as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 22, 2021.

Item 4. Controls and Procedures.

Our Chief Executive Officer, Keh-Shew Lu, and Chief Financial Officer, Brett R. Whitmire, with the participation of our management, carried out an evaluation, as of June 30, 2021, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer believe that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective at the reasonable assurance level to ensure that information required to be included in this Quarterly Report is:

• recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms; and

• accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions on required disclosure.

Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity’s disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors, mistakes or intentional circumvention of the established processes.

Changes in Internal Controls over Financial Reporting

There was no change in our internal control over financial reporting, known to our Chief Executive Officer or Chief Financial Officer, that occurred in the three months ended June 30, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any pending litigation that we consider material.

From time to time, we are involved in various legal proceedings that arise in the normal course of business. While we intend to defend any lawsuit vigorously, we presently believe that the ultimate outcome of any pending legal proceeding will not have any material adverse effect on our financial position, cash flows or operating results. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact our business and operating results for the period in which the ruling occurs or future periods.

Item 1A. Risk Factors.

There have been no material changes to our risk factors from those disclosed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 22, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.  

Number	Description	Form	Date of First Filing	Exhibit Number	Filed Herewith
3.1	Certificate of Incorporation, as amended	10-K	February 20, 2018	3.1
3.2	Amended By-laws of the Company as of January 6, 2016	8-K	January 11, 2016	3.1
4.1	Form of Certificate for Common Stock, par value $0.66 2/3 per share	S-3	August 25, 2005	4.1
31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification Pursuant to Rule 13a-14(a) /15d-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1*	Certification Pursuant to 18 U.S.C. 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2*	Certification Pursuant to 18 U.S.C. 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.				X
101.SCH	Inline XBRL Taxonomy Extension Schema				X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase				X
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase				X
104	Cover Page Interactive Data File, formatted in Inline XBRL				X

* A certification furnished pursuant to Item 601(b)(32) of the Regulation S-K will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

PLEASE NOTE: It is inappropriate for investors to assume the accuracy of any covenants, representations or warranties that may be contained in agreements or other documents filed as exhibits to this Quarterly Report on Form 10-Q. In certain instances the disclosure schedules to such agreements or documents contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants. Moreover, some of the representations and warranties may not be complete or accurate as of a particular date because they are subject to a contractual standard of materiality that is different from those generally applicable to stockholders and/or were used for the purpose of allocating risk among the parties rather than establishing certain matters as facts. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts at the time they were made or otherwise.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

	DIODES INCORPORATED
	(Registrant)
August 5, 2021	By: /s/ Keh-Shew Lu
Date	KEH-SHEW LU
	President and Chief Executive Officer
	(Principal Executive Officer)
August 5, 2021	By: /s/ Brett R. Whitmire
Date	BRETT R. WHITMIRE
	Chief Financial Officer
	(Principal Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Keh-Shew Lu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Diodes Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2021

/s/ Keh-Shew Lu

Keh-Shew Lu

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brett R. Whitmire, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Diodes Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 5, 2021

/s/ Brett R. Whitmire

Brett R. Whitmire

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 of Diodes Incorporated (the “Company”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 5, 2021

/s/ Keh-Shew Lu

Keh-Shew Lu

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Diodes Incorporated and will be furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 of Diodes Incorporated (the “Company”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  August 5, 2021

/s/ Brett R. Whitmire

Brett R. Whitmire

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Diodes Incorporated and will be furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 02, 2021
Cover [Abstract]
Document type	10-Q
Document period end date	Jun. 30, 2021
Amendment flag	false
Entity registrant name	DIODES INC /DEL/
Entity central index key	0000029002
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity common stock shares outstanding		44,963,486
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Trading Symbol	DIOD
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	002-25577
Entity Tax Identification Number	95-2039518
Entity Address, Address Line One	4949 Hedgcoxe Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75024
City Area Code	972
Local Phone Number	987-3900
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, Par Value $0.66 2/3
Security Exchange Name	NASDAQ
Document Quarterly Report	true
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XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 292,650	$ 268,065
Restricted cash	2,268	52,464
Short-term investments	7,386	6,142
Accounts receivable, net of allowances of $3,822 and $3,806 at June 30, 2021 and December 31, 2020, respectively	339,142	320,061
Inventories	304,128	307,062
Prepaid expenses and other	96,904	70,193
Total current assets	1,042,478	1,023,987
Property, plant and equipment, net	522,182	530,815
Deferred income tax	52,249	57,841
Goodwill	159,584	158,331
Intangible assets, net	102,677	110,591
Other long-term assets	113,799	97,892
Total assets	1,992,969	1,979,457
Current liabilities:
Lines of credit	60,239	140,563
Accounts payable	181,919	168,045
Accrued liabilities and other	182,385	160,117
Income tax payable	17,316	19,177
Current portion of long-term debt	18,346	21,860
Total current liabilities	460,205	509,762
Long-term debt, net of current portion	222,712	288,179
Deferred tax liabilities	34,761	34,598
Other long-term liabilities	132,294	130,795
Total liabilities	849,972	963,334
Commitments and contingencies (See Note 9)
Stockholders' equity
Preferred stock - par value $1.00 per share; 1,000,000 shares authorized; no shares issued or outstanding
Common stock - par value $0.66 2/3 per share; 70,000,000 shares authorized; 44,730,897 and 44,276,194, issued and outstanding at June 30, 2021 and December 31, 2020, respectively	35,998	35,692
Additional paid-in capital	455,683	449,598
Retained earnings	982,872	888,046
Treasury stock at cost, 9,262,833 shares at June 30, 2021 and 9,259,858 shares at December 31, 2020	(336,128)	(335,910)
Accumulated other comprehensive loss	(55,841)	(73,606)
Total stockholders' equity	1,082,584	963,820
Noncontrolling interest	60,413	52,303
Total equity	1,142,997	1,016,123
Total liabilities and stockholders' equity	$ 1,992,969	$ 1,979,457

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Accounts receivable, allowance	$ 3,822	$ 3,806
Preferred stock par value	$ 1.00	$ 1.00
Preferred stock shares authorized	1,000,000	1,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$ 0.666	$ 0.666
Common stock shares authorized	70,000,000	70,000,000
Common stock shares issued	44,730,897	44,276,194
Common stock shares outstanding	44,730,897	44,276,194
Treasury stock, shares	9,262,833	9,259,858

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Net sales	$ 440,448	$ 288,669	$ 853,569	$ 569,386
Cost of goods sold	280,646	187,177	555,131	372,052
Gross profit	159,802	101,492	298,438	197,334
Operating expenses
Selling, general and administrative	60,280	45,372	118,956	87,587
Research and development	29,987	21,322	57,646	45,000
Amortization of acquisition related intangible assets	4,060	4,021	8,083	8,242
Other operating expense (income)	118	(92)	1,006	(216)
Total operating expense	94,445	70,623	185,691	140,613
Income from operations	65,357	30,869	112,747	56,721
Other income (expense)
Interest income	818	168	1,586	441
Interest expense	(2,017)	(2,653)	(4,881)	(3,898)
Foreign currency (loss) gain, net	(510,000)	(3,600,000)	(1,789,000)	(3,525,000)
Unrealized gain on investments	5,261		8,916
Other income	1,837	1,274	4,154	1,275
Total other income (expense)	5,389,000	(4,811,000)	7,986,000	(5,707,000)
Income before income taxes and noncontrolling interest	70,746	26,058	120,733	51,014
Income tax provision	12,120	4,670	21,554	9,226
Net income	58,626	21,388	99,179	41,788
Less net income attributable to noncontrolling interest	(3,252)	(355)	(4,353)	(587)
Net income attributable to common stockholders	$ 55,374	$ 21,033	$ 94,826	$ 41,201
Earnings per share attributable to common stockholders:
Basic	$ 1.24	$ 0.41	$ 2.13	$ 0.80
Diluted	$ 1.22	$ 0.40	$ 2.09	$ 0.78
Number of shares used in earnings per share computation:
Basic	44,667	51,527	44,538	51,431
Diluted	45,380	52,569	45,327	52,517

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest [Abstract]
Net income	$ 58,626	$ 21,388	$ 99,179	$ 41,788
Unrealized gain (loss) on defined benefit plan, net of tax	4,961	(16,570)	6,855	(6,851)
Unrealized (loss) gain on swaps and collars, net of tax	(2,027)	817	1,799	(621)
Unrealized foreign currency gain (loss), net of tax	12,849	6,733	9,111	(2,881)
Comprehensive income	74,409	12,368	116,944	31,435
Less: Comprehensive income attributable to noncontrolling interest	(3,252)	(355)	(4,353)	(587)
Total comprehensive income attributable to common stockholders	$ 71,157	$ 12,013	$ 112,591	$ 30,848

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total Diodes Incorporated Stockholders' Equity	Noncontrolling Interest
BALANCE at Dec. 31, 2019	$ 1,152,783	$ 35,111	$ (37,768)	$ 427,262	$ 789,958	$ (108,139)	$ 1,106,424	$ 46,359
Common stock shares beginning at Dec. 31, 2019		52,664,000	(1,457,000)
Total comprehensive income	31,435				41,201	(10,353)	30,848	587
Acquisition/Net changes in noncontrolling interests	(6,153)			(1,225)			(1,225)	(4,928)
Contributions from noncontrolling interests	11,776							11,776
Dividends to noncontrolling interests	(1,552)							(1,552)
Common stock issued for share-based plans	1,065	$ 278		787			1,065
Common stock issued for share-based plans, shares		418,000
Share-based compensation	11,678			11,678			11,678
Deferred compensation plan			$ (892)	892
Deferred compensation plan, shares			(26,000)
Tax related to net share settlement	(5,405)			(5,405)			(5,405)
BALANCE at Jun. 30, 2020	1,195,627	$ 35,389	$ (38,660)	433,989	831,159	(118,492)	1,143,385	52,242
Common stock shares ending at Jun. 30, 2020		53,082,000	(1,483,000)
BALANCE at Mar. 31, 2020	1,182,289	$ 35,289	$ (38,457)	427,543	810,126	(109,472)	1,125,029	57,260
Common stock shares beginning at Mar. 31, 2020		52,932,000	(1,481,000)
Total comprehensive income	12,368				21,033	(9,020)	12,013	355
Acquisition/Net changes in noncontrolling interests	(6,153)			(1,225)			(1,225)	(4,928)
Contributions from noncontrolling interests	999							999
Dividends to noncontrolling interests	(1,444)							(1,444)
Common stock issued for share-based plans	1,065	$ 100		965			1,065
Common stock issued for share-based plans, shares		150,000
Share-based compensation	7,441			7,441			7,441
Deferred compensation plan			$ (203)	203
Deferred compensation plan, shares			(2,000)
Tax related to net share settlement	(938)			(938)			(938)
BALANCE at Jun. 30, 2020	1,195,627	$ 35,389	$ (38,660)	433,989	831,159	(118,492)	1,143,385	52,242
Common stock shares ending at Jun. 30, 2020		53,082,000	(1,483,000)
BALANCE at Dec. 31, 2020	$ 1,016,123	$ 35,692	$ (335,910)	449,598	888,046	(73,606)	963,820	52,303
Common stock shares beginning at Dec. 31, 2020	44,276,194	53,536,000	(9,260,000)
Total comprehensive income	$ 116,944				94,826	17,765	112,591	4,353
Acquisition/Net changes in noncontrolling interests	3,985			(22)			(22)	4,007
Dividends to noncontrolling interests	(250)							(250)
Common stock issued for share-based plans	2,103	$ 306		1,797			2,103
Common stock issued for share-based plans, shares		458,000
Share-based compensation	14,138			14,138			14,138
Deferred compensation plan			$ (218)	218
Deferred compensation plan, shares			(3,000)
Tax related to net share settlement	(10,046)			(10,046)			(10,046)
BALANCE at Jun. 30, 2021	$ 1,142,997	$ 35,998	$ (336,128)	455,683	982,872	(55,841)	1,082,584	60,413
Common stock shares ending at Jun. 30, 2021	44,730,897	53,994,000	(9,263,000)
BALANCE at Mar. 31, 2021	$ 1,056,980	$ 35,908	$ (335,910)	446,697	927,498	(71,624)	1,002,569	54,411
Common stock shares beginning at Mar. 31, 2021		53,860,000	(9,260,000)
Total comprehensive income	74,409				55,374	15,783	71,157	3,252
Acquisition/Net changes in noncontrolling interests	2,982			(18)			(18)	3,000
Dividends to noncontrolling interests	(250)							(250)
Common stock issued for share-based plans	1,259			1,259			1,259
Share-based compensation	8,370	$ 90		8,280			8,370
Share-based compensation, shares		134,000
Deferred compensation plan			$ (218)	218
Deferred compensation plan, shares			(3,000)
Tax related to net share settlement	(753)			(753)			(753)
BALANCE at Jun. 30, 2021	$ 1,142,997	$ 35,998	$ (336,128)	$ 455,683	$ 982,872	$ (55,841)	$ 1,082,584	$ 60,413
Common stock shares ending at Jun. 30, 2021	44,730,897	53,994,000	(9,263,000)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net income	$ 99,179	$ 41,788
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of acquisitions
Depreciation	53,105	45,685
Amortization of intangible assets	8,083	8,242
Share-based compensation expense	14,764	12,394
Deferred income taxes	1,194	(2,317)
Investment gain	(9,075)
Other	287	1,084
Changes in operating assets:
Change in accounts receivable	(17,060)	(7,573)
Change in inventory	(2,451)	(19,770)
Change in other operating assets	(5,597)	7,422
Changes in operating liabilities:
Change in accounts payable	19,456	16,767
Change in accrued liabilities	4,706	(6,429)
Change in income tax payable	(2,332)	(10,159)
Change in other operating liabilities	(2,195)	(400)
Net cash flows provided by operating activities	162,064	86,734
Cash flows from investing activities
Acquisitions, net of cash received		591
Purchases of property, plant and equipment	(45,037)	(30,728)
Proceeds from sale of property, plant and equipment	3,042	174
Proceeds from maturity of short-term investments	4,020	6,186
Purchases of short-term investments	(5,160)	(5,051)
Additional acquisition of noncontrolling interests	(71)	(6,130)
Other	6,532	910
Net cash and cash equivalents used in investing activities	(36,674)	(34,048)
Cash flows from financing activities
Advances on lines of credit and short-term debt	6,404	53,647
Repayments of lines of credit and short-term debt	(88,307)	(3,498)
Proceeds from long-term debt	315,006	589,331
Repayments of long-term debt	(384,554)	(390,334)
Net proceeds from issuance of common stock	2,103	1,066
Repayment of and proceeds from finance lease obligation	(151)	(445)
Taxes paid related to net share settlement	(10,046)	(5,405)
Dividend distribution to noncontrolling interests	(250)	(108)
Capital contribution from noncontrolling interests	4,003
Other	(500)	(2,470)
Net cash and cash equivalents (used in) provided by financing activities	(156,292)	241,784
Effect of exchange rate changes on cash and cash equivalents	5,291	644
Change in cash and cash equivalents, including restricted cash	(25,611)	295,114
Cash and cash equivalents, beginning of period, including restricted cash	320,529	259,507
Cash and cash equivalents, end of period, including restricted cash	294,918	554,621
Supplemental Cash Flow Information
Interest paid during the period	4,545	1,746
Taxes paid during the period	23,904	21,743
Non-cash investing and financing activities:
Accounts payable balance related to the purchase of property, plant and equipment	$ 16,081	7,569
Dividend payable to noncontrolling interest		$ 1,454

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020
Current assets:
Cash and cash equivalents	$ 292,650	$ 503,206
Restricted cash (included in other current assets)	2,268	51,415
Total cash, cash equivalents and restricted cash	294,918	$ 554,621
Pledged as Collateral
Current assets:
Restricted cash (included in other current assets)	$ 2,300

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Summary of Operations and Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Summary of Operations and Significant Accounting Policies

NOTE 1 – Summary of Operations and Significant Accounting Policies

Summary of Operations

Diodes Incorporated, together with its subsidiaries (collectively “Diodes”, the “Company,” “we” or “our” (Nasdaq: DIOD), a Standard and Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality, application specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the consumer electronics, computing, communications, industrial, and automotive markets.

The Company’s products include diodes, rectifiers, transistors, MOSFETs, GPP bridges, GPP rectifiers, protection devices, function-specific arrays, single gate logic, amplifiers and comparators, Hall-effect and temperature sensors, power management devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, and voltage references along with special function devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

The Company’s corporate headquarters and Americas’ sales office are located in Plano, Texas, and Milpitas, California. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City and Zhubei City, Taiwan; Shanghai, Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company’s wafer fabrication facilities are located in Oldham, England, Greenock, Scotland and Shanghai and Wuxi, China and Keelung and Hsinchu, Taiwan.  The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu and Wuxi, China as well as in Neuhaus, Germany and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong Kong; Oldham, England; Shanghai, Shenzhen, Wuhan and Yangzhou, China; Seongnam-si, South Korea; and Munich, Frankfurt, Germany; with support offices throughout the world.

Our product focus is on high-growth end-user equipment markets such as satellite TV set-top boxes, portable DVD players, datacom devices, ADSL modems, power supplies, medical devices (non-life support devices/systems), PCs and notebooks, flat panel displays, digital cameras, mobile handsets, AC-to-DC and DC-to-DC conversion, Wireless 802.11 LAN access points, brushless DC motor fans, serial connectivity, and automotive applications.

Basis of Presentation

The condensed consolidated financial data at December 31, 2020 are derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2021 (“Form 10-K”). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, operating results and cash flows in conformity with GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Form 10-K.  All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the period presented have been included in the interim period. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2021.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. As permitted under GAAP, interim accounting for certain expenses, including income taxes, are based on full year forecasts. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates taking into consideration discrete items occurring in a quarter.

Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted. Certain prior year’s balances may have been reclassified to conform to the current condensed consolidated financial statement presentation.

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Earnings Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 2 – Earnings per Share

Earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted EPS is calculated similarly but includes potential dilution from the exercise of stock options and stock awards, except when the effect would be anti-dilutive.  During the three and six months ended June 30, 2021 and 2020, we paid no dividends on our Common Stock.

The table below sets forth the reconciliation between net income and the weighted average shares outstanding used for calculating basic and diluted EPS:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Earnings (numerator)
Net income attributable to common stockholders	$	55,374	$	21,033	$	94,826	$	41,201
Shares (denominator)
Weighted average common shares outstanding (basic)		44,667		51,527		44,538		51,431
Dilutive effect of stock options and stock awards outstanding		713		1,042		789		1,086
Adjusted weighted average common shares outstanding (diluted)		45,380		52,569		45,327		52,517
Earnings per share attributable to common stockholders
Basic	$	1.24	$	0.41	$	2.13	$	0.80
Diluted	$	1.22	$	0.40	$	2.09	$	0.78
Stock options and stock awards excluded from EPS   calculation because the effect would be anti-dilutive		6		8		3		3

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Inventories

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Inventories

NOTE 3 – Inventories

The table below sets forth inventories which are stated at the lower of cost or net realizable value:

	June 30, 2021		December 31, 2020
Finished goods	$	81,106	$	85,506
Work-in-progress		84,951		73,466
Raw materials		138,071		148,090
Total	$	304,128	$	307,062

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 4 – Goodwill and Intangible Assets

The table below sets forth the changes in goodwill:

Balance at December 31, 2020	$	158,331
Foreign currency translation adjustment		1,253
Balance at June 30, 2021	$	159,584

The table below sets forth the value of intangible assets, other than goodwill:

	June 30,			December 31,
	2021			2020
Intangible assets subject to amortization:
Gross carrying amount	$	246,687		$	245,176
Accumulated amortization		(148,793	)		(140,710	)
Foreign currency translation adjustment		(7,636	)		(7,781	)
Total		90,258			96,685
Intangible assets with indefinite lives:
Gross carrying amount		13,372			14,883
Foreign currency translation adjustment		(953	)		(977	)
Total		12,419			13,906
Total intangible assets, net	$	102,677		$	110,591

The table below sets forth amortization expense related to intangible assets subject to amortization:

Amortization expense	2021		2020
Three months ended June 30,	$	4,060	$	4,021
Six months ended June 30,	$	8,083	$	8,242

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Income Tax Provision

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax Provision

NOTE 5 – Income Tax Provision

The table below sets forth information related to our income tax expense:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Domestic pre-tax income	$	18,577		$	7,707		$	25,645		$	12,975
Foreign pre-tax income	$	52,169		$	18,351		$	95,088		$	38,039
Income tax provision	$	12,120		$	4,670		$	21,554		$	9,226
Effective tax rate		17.1	%		17.9	%		17.9	%		18.1	%
Impact of tax holidays on tax expense	$	(679	)	$	(241	)	$	(1,261	)	$	(1,315	)
Earnings per share impact of tax holidays:
Basic	$	0.02		$	0.01		$	0.03		$	0.03
Diluted	$	0.02		$	0.01		$	0.03		$	0.03

The decrease in the effective tax rate for the three and six months ended June 30, 2021 when compared to the three and six months ended June 30, 2020, is primarily attributable to the change in pre-tax earnings during the comparable periods.  

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries.  Any future distributions of foreign earnings will not be subject to additional U.S. income tax, but may be subject to non-U.S. withholding taxes.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012, or for the 2015 tax year. We are no longer subject to China income tax examinations by tax authorities for tax years before 2010. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2015. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may result from currently pending tax audits. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. As of June 30, 2021, the gross amount of unrecognized tax benefits was approximately $45.9 million.   

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2021

Share Based Compensation [Abstract]

Share-Based Compensation

NOTE 6 – Share-Based Compensation

For the three and six months ended June 30, 2021, we recognized stock option expense of approximately $0.02 million and $0.04 million, respectively.  This stock option expense is related to stock options granted by Savitech Corporation (“Savitech”) in Savitech stock to their employees.  We acquired a controlling interest in Savitech in 2020.  The remainder of our share-based compensation expense was related to share grants. Approximately $2.1 million of cash proceeds were received from stock option exercises during the six months ended June 30, 2021. The table below sets forth the line items where share-based compensation expense was recorded:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Cost of goods sold	$	282	$	257	$	557	$	530
Selling, general and administrative		7,627		6,715		12,659		10,426
Research and development		734		729		1,548		1,438
Total share-based compensation expense	$	8,643	$	7,701	$	14,764	$	12,394

Share Grants – Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. All new grants are granted under the Company’s 2013 Equity Incentive Plan.  Restricted stock grants are measured based on the fair market value of the underlying stock on the date of grant, and compensation expense is recognized on a straight-line basis over the requisite four-year service period. 

Performance stock units (“PSUs”) are measured based on the fair market value of the underlying stock on the date of grant, and compensation expense is recognized over the three-year performance period, with adjustments made to the expense to recognize the probable payout percentage. PSUs will vest upon the Company achieving a cumulative 3-year non-GAAP operating income target for the applicable periods.

As of June 30, 2021, total unrecognized share-based compensation expense related to share grants was approximately $53.9 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.1 years.          

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Segment Information and Net Sales

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information and Net Sales

NOTE 7 – Segment Information and Net Sales

Segment Reporting. For financial reporting purposes, we operate in a single segment, standard semiconductor products, through our various manufacturing and distribution facilities. We aggregate our products because the products are similar and have similar economic characteristics, use similar production processes and share similar customer type. Our primary operations include operations in Asia, North America and Europe. No customer accounted for 10% or more of our net sales or outstanding accounts receivable at any point in the periods presented in this Quarterly Report. 

The tables below set forth net sales based on the location of the subsidiary producing the net sale:

Three Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	483,083		$	261,725		$	67,598		$	812,406
Intercompany elimination		(176,404	)		(167,318	)		(28,236	)		(371,958	)
Net sales	$	306,679		$	94,407		$	39,362		$	440,448
Three Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	323,439		$	190,543		$	53,785		$	567,767
Intercompany elimination		(133,552	)		(121,545	)		(24,001	)		(279,098	)
Net sales	$	189,887		$	68,998		$	29,784		$	288,669
As of and for the
Six Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	954,152		$	508,552		$	127,772		$	1,590,476
Intercompany elimination		(355,354	)		(328,147	)		(53,406	)		(736,907	)
Net sales	$	598,798		$	180,405		$	74,366		$	853,569
Property, plant and equipment, net	$	412,421		$	25,044		$	84,717		$	522,182
Total assets	$	1,423,099		$	350,339		$	219,531		$	1,992,969
As of and for the
Six Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	625,302		$	358,715		$	112,786		$	1,096,803
Intercompany elimination		(250,473	)		(226,009	)		(50,935	)		(527,417	)
Net sales	$	374,829		$	132,706		$	61,851		$	569,386
Property, plant and equipment, net	$	355,704		$	24,435		$	70,476		$	450,615
Total assets	$	1,494,605		$	230,888		$	211,670		$	1,937,163

Disaggregation of Net Sales. We disaggregate net sales with customers into direct sales and distribution sales (“Distributors”) and by geographic area. Direct sales customers consist of those customers using our product in their manufacturing process, and Distributors are those customers who resell our products to third parties. We deliver our products to customers around the world for use in consumer electronics, computing, communications, industrial and automotive markets. Further, most of our contracts are fixed-price arrangements, and are short term in nature, ranging from days to several months.

The tables below set forth net sales for the Company disaggregated into geographic locations based on shipment and by type (direct sales or Distributor):

	Three Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	353,312	$	223,056
Europe		54,056		43,145
Americas		33,080		22,468
Total net sales	$	440,448	$	288,669
Net Sales by Type
Direct sales	$	151,048	$	92,671
Distributor sales		289,400		195,998
Total net sales	$	440,448	$	288,669
	Six Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	687,937	$	433,861
Europe		102,442		90,076
Americas		63,190		45,449
Total net sales	$	853,569	$	569,386
Net Sales by Type
Direct sales	$	298,939	$	280,581
Distributor sales		554,630		288,805
Total net sales	$	853,569	$	569,386

Net sales from products shipped to China was $229.3 million and $152.4 million for the three months ended June 30, 2021 and 2020, respectively and $451.7 million and $291.3 million for the six months ended June 30, 2021 and 2020, respectively.

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Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt

NOTE 8 – Debt

Short-term debt

Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $173.1 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants.  These credit facilities bear interest at LIBOR or similar indices plus a specified margin.  Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of June 30, 2021, was approximately $111.8  million, net of a $60.2  million advanced under our foreign credit lines and $1.1 million credit used for import and export guarantee.   

Long-term debt

The Company maintains a long-term credit facility (“Credit Agreement”) consisting of a term loan with a current balance of $114.7 million and a $150.0 million revolving senior credit facility, of which nothing was drawn as of June 30, 2021.  The Company used a portion of the proceeds available under the term commitment and the revolving senior credit facility to finance the Company’s acquisition of Lite-On Semiconductor Corporation. The Credit Agreement contains certain financial and non-financial covenants, including, but not limited to, a maximum Consolidated Leverage Ratio, a minimum Consolidated Fixed Charge Coverage Ratio, and restrictions on liens, indebtedness, investments, fundamental changes, dispositions, and restricted payments (including dividends and share repurchases).  Furthermore, under the Credit Agreement, restricted payments, including dividends and share repurchases, are permitted in certain circumstances, including while the pro forma Consolidated Leverage Ratio is, both before and after giving effect to any such restricted payment, at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement.  In addition to the credit facilities described above, our 51% owned subsidiary, ERIS Technology Corporation (“ERIS”), has short-term debt of $17.2 million and long-term debt of $28.6 million from local Taiwan banks.  The ERIS debt matures in various periods from 2021 through 2033.  

Borrowings outstanding as of June 30, 2021 and December 31, 2020, are set forth in the table below:

	June 30,			December 31,				Current Amount
Description	2021			2020			Interest Rate	Maturity
Short-term debt	$	60,239		$	140,567		Libor plus margin	Various during 2021 -2022
Long-term debt
Term loan and revolver	$	114,687		$	282,250		Libor plus margin	May 2024
Notes payable to Bank of Taiwan		2,574			4,154		Variable, 1.3% base	June 2033
Notes payable to Bank of China Trust Company		3,586			3,511		Taibor 3 month rate + 0.5%	December 2021
Notes payable to Bank of China Trust Company		16,727			16,714		Taibor 3 month rate + 0.5%	May 2024
Notes payable to E Sun Bank		3,586			3,511		1-M deposit rate plus 0.08%	December 2022
Notes payable to E Sun Bank		394			386		1-M deposit rate plus 0.08%	June 2027
Notes payable to E Sun Bank		1,757			1,721		1-M deposit rate plus 0.08%	June 2030
Notes payable to HSBC		100,000			-		Libor plus margin	January 2023
Total long-term debt		243,311			312,247
Less:  Current portion of long-term debt		(18,346	)		(21,860	)
Less:  Unamortized debt costs		(2,253	)		(2,208	)
Total long-term debt, net of current portion	$	222,712		$	288,179

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 9 – Commitments and Contingencies

Purchase commitments – As of June 30, 2021, we had approximately $66.8 million in non-cancelable purchase contracts related to capital expenditures, primarily related to our manufacturing facilities in Asia.  As of June 30, 2021, we also had a commitment to purchase approximately $28.7 million of wafers to be used in our manufacturing process during 2021 and 2022.  

Defined Benefit Plan - We have a contributory defined benefit plan that covers certain employees in the United Kingdom.  As of June 30, 2021, the underfunded liability for this defined benefit plan was approximately $19.9 million.  An actuarial valuation was performed as of March 31, 2019, resulting in a deficit of approximately GBP 26.7 million (approximately $37.4 million based on a GBP: USD exchange rate of 1.4:1). As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $2.8 million based on a GBP: USD exchange rate of 1.4:1) to be paid in annual installments with effect from April 1, 2020 to address the deficit revealed by the valuation (with the first payment made by March 31, 2021, and payments to be made by December 31 each year thereafter). These contributions, together with the assumed asset outperformance, are expected to eliminate the deficit by December 31, 2028. Further, we will pay GBP 0.2 million (approximately $0.3 million based on GBP: USD exchange rate oat 1.4:1) in annual installments to cover expenses.

Contingencies – From time to time, we are involved in various legal proceedings that arise in the normal course of business. While we intend to defend any lawsuit vigorously, we presently believe that the ultimate outcome of any pending legal proceeding will not have any material adverse effect on our consolidated financial position, cash flows or operating results. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact our business and operating results for the period in which the ruling occurs or future periods.  Based on information available, we evaluate the likelihood of potential outcomes of all pending disputes. We record an appropriate liability when the amount of any liability associated with a pending dispute is deemed probable and reasonably estimable. In addition, we do not accrue for estimated legal fees and other directly related costs as they are expensed as incurred.  The Company is not currently a party to any pending litigation that the Company considers material.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 10 – Derivative Financial Instruments

We use derivative instruments to manage risks related to foreign currencies, interest rates and the net investment risk in our foreign subsidiaries. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic

impact of these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment.

Hedges of Foreign Currency Risk - We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure. At June 30, 2021 and December 31, 2020, we had $215.6 million and $276.2 million, respectively, of outstanding foreign currency forward agreements that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC No. 815.  We have recorded foreign currency forward agreements with a fair value of less than $3.0 thousand on our consolidated balance sheet.   

Hedges of Interest Rate and Net Investment Risk -The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.  

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020:

	Other Current Liabilities				Other Liabilities
	2021		2020		2021		2020
Interest rate swaps and collars	$	624	$	2,008	$	-	$	610

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and six months ended June 30, 2021 and 2020:

	Amount of Gain or (Loss) Recognized in OCI on Derivative						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion  Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Instruments Designated as Hedging Instruments
	June 30,							June 30,							June 30,
	2021			2020				2021			2020				2021		2020
Three Months Ended
Interest rate swaps and collars	$	(6	)	$	(180	)	Interest expense	$	(166	)	$	(2	)	Interest expense	$	-	$	-
Cross currency swaps	$	(2,186	)	$	-		N/A	$	-		$	-		Interest income	$	616	$	-
Six Months Ended
Interest rate swaps and collars	$	(11	)	$	(1,571	)	Interest expense	$	(327	)	$	(73	)	N/A		-		-
Cross currency swaps	$	976		$	-		N/A		-			-		Interest income	$	1,226	$	-

We estimate that $0.2 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of June 30, 2021 will be reclassified into expense within the following 12 months. No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three and six months ended June 30, 2021 or 2020.

	Amount of Gain or (Loss) Recognized in Net Income					Location of Gain or (Loss) Recognized in Net Income
Derivative Instruments Not Designated as Hedging Instruments
	June 30,
	2021		2020
Three Months Ended
Foreign currency forward contracts	$	4,599	$	(391	)	Foreign currency loss, net
Six Months Ended
Foreign currency forward contracts	$	1,793	$	(2,538	)	Foreign currency loss, net

As of June 30, 2021 and December 31, 2020, the Company had not posted any collateral related to these agreements.

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Leases

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

NOTE 11 – Leases

The Company leases certain assets used in its business, including land, buildings and equipment.  These leased assets are used for operational and administrative purposes.

The components of lease expense are set forth in the table below:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating lease expense	$	4,149	$	3,669	$	8,384	$	7,399
Finance lease expense:
Amortization of assets		2		209		213		418
Interest on lease liabilities		-		6		1		13
Short-term lease expense		246		122		491		216
Variable lease expense		1,161		738		2,290		1,449
Total lease expense	$	5,558	$	4,744	$	11,379	$	9,495

The table below sets forth supplemental balance sheet information related to leases.  In our condensed consolidated balance sheets, right of use (“ROU”) assets are included in other long-term assets while lease liabilities are located in accrued liabilities and other for the current portion and other long-term liabilities for the non-current portion:

	June 30, 2021	December 31, 2020
Operating leases:
Operating lease ROU assets	$60,587	$54,457
Current operating lease liabilities	13,787	10,663
Noncurrent operating lease liabilities	30,423	27,041
Total operating lease liabilities	$44,210	$37,704
Finance leases:
Finance lease ROU assets	$2,549	$2,507
Accumulated amortization	(2,518)	(2,298)
Finance lease ROU assets, net	$31	$209
Current finance lease liabilities	$12	$149
Non-current finance lease liabilities	21	24
Total finance lease liabilities	$33	$173
Weighted average remaining lease term (in years):
Operating leases	6.8	7.6
Finance leases	2.8	0.6
Weighted average discount rate:
Operating leases	4.0%	4.0%
Finance leases	3.7%	3.1%

The table below sets forth supplemental cash flow and other information related to leases:

	Six Months Ended
	June 30, 2021	June 30, 2020
Cash paid for the amounts included in the measurements of lease liabilities:
Operating cash outflows from operating leases	$10,973	$9,753
Operating cash outflows from finance leases	1	13
Financing cash outflow from finance leases	151	445
ROU assets obtained in exchange for lease liabilities incurred:
Operating leases	12,265	532

The table below sets forth information about lease liability maturities:

	June 30, 2021
	Operating Leases		Finance Leases
Remainder of 2021	$	7,791	$	6
2022		14,253		13
2023		9,242		11
2024		4,359		5
2025		4,173		-
2026		2,742		-
2027 and thereafter		8,830		-
Total lease payments		51,390		35
Less: imputed interest		(7,180)		(2)
Total lease obligations		44,210		33
Less: current obligations		(13,787)		(12)
Long-term lease obligations	$	30,423	$	21

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2021

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

NOTE 12 – Employee Benefit Plans  

We maintain a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key employees and members of the Board of Directors. The Deferred Compensation Plan allows eligible participants to defer the receipt of eligible compensation, including equity awards, until designated future dates. We offset our obligations under the Deferred Compensation Plan primarily by investing in the actual underlying investments. At June 30, 2021 and December 31, 2020, these investments totaled approximately $14.1 million and $12.8 million, respectively.

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Related Parties

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Parties

NOTE 13 – Related Parties

We historically conducted business with a related party company, Lite-On Semiconductor Corporation (“LSC”), and its subsidiaries and affiliates.  LSC was also our largest stockholder, owning approximately 15% of our outstanding Common Stock., prior to the close of the acquisition of LSC by Diodes.   On November 30, 2020, we acquired LSC and LSC is no longer a stockholder or related party, but instead it is a wholly owned subsidiary of ours. Raymond Soong, the former Chairman of the Board of Diodes, was the Chairman of LSC and was the Chairman of Lite-On Technology Corporation (“LTC”), which was a significant shareholder of LSC. C.H. Chen, our former President and Chief Executive Officer and currently the Vice Chairman of the Board of Diodes, was also the Vice Chairman of LSC and a board member of LTC. Dr. Keh-Shew Lu, our current Chairman of the Board, President and Chief Executive Officer, is a board member of LTC and a board member of Nuvoton Technology Corporation (“Nuvoton”). We purchase wafers from Nuvoton for use in our production process. We also conduct business with Nuvoton and its subsidiaries and affiliates. We consider our relationship with Nuvoton to be mutually beneficial and we plan to continue our strategic alliance with Nuvoton.    

We conduct business with 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.   We sell products to, and purchase inventory from, companies owned by Keylink. We sold products to companies owned by Keylink, totaling approximately 1.0% and 1.7% of our net sales for the three months ended June 30, 2021 and 2020, respectively.  We sold products to companies owned by Keylink, totaling approximately 1.2% and 1.6% of our net sales for the six months ended June 30, 2021 and 2020, 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 paid to Keylink for the three months ended June 30, 2021 and, 2020 were approximately $4.3 million and $3.8 million, respectively.  The aggregate amounts paid to Keylink for the six months ended June 30, 2021 and, 2020 were approximately $8.7 million and $6.9 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 our 5% partner in our other Chengdu assembly and test facilities; however, we have no material transactions with Ya Guang, other than these joint ventures.  We also purchase materials from Jiyuan Crystal Photoelectric Frequency Technology Ltd. (“JCP”) a frequency control product 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 to and purchases from related parties:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
LSC
Net sales	$	-	$	171	$	-	$	299
Purchases	$	-	$	3,806	$	-	$	6,554
Nuvoton
Purchases	$	2,288	$	2,011	$	3,695	$	3,655
Keylink
Net sales	$	4,333	$	4,975	$	9,899	$	8,960
Purchases	$	501	$	426	$	980	$	831
JCP
Purchases	$	328	$	291	$	687	$	447

The table below sets forth accounts receivable from, and accounts payable to, related parties:

	June 30,		December 31,
	2021		2020
Nuvoton
Accounts receivable	$	-	$	10
Accounts payable	$	1,539	$	796
Keylink
Accounts receivable	$	39,660	$	35,365
Accounts payable	$	34,373	$	31,247
JCP
Accounts payable	$	379	$	357

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Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Acquisitions and Divestitures

Note 14 –Acquisitions and Divestitures

Manufacturing Subsidiary Located in China

In March 2021 Diodes entered into an agreement to sell a manufacturing subsidiary in China for total consideration of approximately $18.0 million, which includes a combination of cash and equity. The transaction is expected to close within the next twelve months and is subject to customary closing conditions and working capital adjustments.

Management determined that the disposal group met the held-for-sale criteria and reclassified the carrying value of the disposal group to assets held-for-sale, which is included in prepaid expenses and other in the consolidated balance sheet. The Company recognized no gain or loss on the reclassification of the disposal group to held-for-sale. A final determination of the value of the assets and liabilities divested has not been completed and the table below is considered preliminary. The table below sets forth the major classes of assets and liabilities that have been classified as held-for-sale on the condensed consolidated balance sheet:

Assets
Cash and cash equivalents	$	4,936
Accounts receivable		154
Inventories, net		6,906
Property, plant and equipment		7,798
Deferred income tax		4,953
Other long-term assets		638
Assets classified as held for sale		25,385
Liabilities
Accounts payable		7,153
Accrued liabilities and other		1,106
Other long-term liabilities		637
Liabilities classified as held for sale		8,896
Net assets classified as held for sale (included in prepaid expenses and other)	$	16,489

LSC Acquisition

On November 30, 2020, the Company closed on its previously announced acquisition of LSC, a Taiwan-based supplier of “green” power-related discrete and analog semiconductor devices. The Company purchased LSC in order to include LSC’s “green” power-related semiconductor devices that are designed for power saving and low power dissipation to serve the power supply market, and to reacquire the 7,765,778 of the Company’s common shares owned by LSC, which was approximately 15% of our outstanding shares prior to the close of such acquisition. The reacquired shares were treated as a settlement of a pre-existing relationship and as a transaction separate and apart from the business combination along with the settlement of payables and receivables between the Company and LSC.  The reacquired shares are included in treasury stock on the Company’s balance sheet. There was no gain or loss on the settlement of the payables and receivables between the Company and LSC.

The Company recorded the purchase of LSC as a business combination, with the Company owning 100% of LSC.  LSC has been consolidated into the operations of the Company. The purchase price per the Share Swap Agreement was 42.50 TWD per outstanding LSC share. On November 30, 2020, the Company acquired the 307,371,139 outstanding shares of LSC for a total aggregate purchase price of approximately $453.4 million and total consideration of $154.0 million after adjustments for the settlement of pre-existing relationships. A portion of the LSC purchase price was funded by borrowings under the Company’s Credit Agreement.

The table below sets forth the fair value of the LSC assets acquired and liabilities assumed based on relative fair value at the date of acquisition and the corresponding line item in the Company’s consolidated balance sheet at the date of acquisition. During the period from January 1, 2021 and March 31, 2021, measurement period adjustments were made to inventories, property, plant and equipment, and accrued liabilities and other.  The adjustments represented a decrease to total assets acquired and a decrease to total liabilities assumed of $0.1 million. U.S. GAAP permits companies to complete the final determination of the fair values during the measurement period following the acquisition date. The size and breadth of the LSC acquisition will necessitate the use of this measurement period to adequately analyze and assess a number of the factors used in establishing the asset and liability fair values as of the acquisition date including (i) changes in fair values of property, plant and equipment and inventories, (ii) changes in fair value of certain liabilities assumed and (iii) tax impact associated with any other changes in fair value. Any potential adjustments made could be material in relation to the preliminary values. A final determination of the LSC assets acquired and liabilities assumed has not been completed and the table below is considered preliminary. The Company engaged a third party valuation specialist to assist with

the assessment of any intangibles assets acquired as part of the LSC acquisition, and it was determined that there were no intangible assets as a result of the LSC acquisition.

Cash and cash equivalents	$		131,046
Accounts receivable			44,896
Inventories			55,710
Prepaid expenses and other current assets			11,447
Property, plant and equipment			67,952
Deferred income tax			15,732
Other long-term assets			26,037
Total assets acquired			352,820
Line of credit			88,508
Accounts payable			35,245
Accrued liabilities and other			48,992
Income tax payable			6,264
Deferred tax liabilities			8,941
Other long-term liabilities			10,783
Total liabilities assumed			198,733
Non-controlling interest		54
Net assets acquired	$		154,033

Savitech Acquisition

On February 5, 2020, the Company entered into an agreement to invest up to approximately $14.2 million to acquire at least 51% of Savitech Corporation (“Savitech”), a fabless semiconductor design company located in Zhubei City, Taiwan.  The Company will make the investment in two tranches.  The first tranche of $5.6 million, which provided the Company with a 33.6% ownership of Savitech, was made on March 4, 2020.  The initial tranche was funded with cash on hand. The second tranche, currently recorded in accrued liabilities and other, as shown in the table below, and currently valued at $9.1 million will increase the Company’s ownership to at least 51% of Savitech.   Based on preliminary reporting, as of June 30, 2021, it is estimated that Savitech exceeded the previously agreed-to revenue levels and based on this preliminary reporting, the Company accrued an additional $0.3 million related to the second tranche payment. After the Company verifies the preliminarily reported revenue by Savitech, the Company will make the second tranche payment.    

The Company recorded the purchase of Savitech as a business acquisition and now consolidates Savitech into its operations, based on the voting model, with a non-controlling interest related to the interest the Company does not own in Savitech. The Company made its investment in Savitech in order to increase the Company’s integrated circuit business.   Total purchase consideration recorded was $13.9 million. The goodwill will not be tax deductible. The Company also incurred acquisition costs of approximately $0.1 million that were recognized in selling, general and administrative expense. The table below sets forth the fair value of the assets and liabilities recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date of acquisition.  

Cash and cash equivalents	$	6.2
Prepaid expenses and other		0.7
Goodwill		13.9
Intangible assets, net		6.1
Other long-term assets		0.4
Accrued liabilities and other		10.2
Noncontrolling interest		11.8

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Subsequent Event

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Event

Note 15 – Subsequent Event

During July 2021, the Company acquired an interest in an early stage fabless wafer design company by purchasing $10.0 million of preferred stock and a $5.0 million convertible promissory note.  The promissory note is convertible into additional preferred shares, has an interest rate of 3% and is due on the fifth anniversary of the transaction close.  

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Summary of Operations and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Operations

Summary of Operations

Diodes Incorporated, together with its subsidiaries (collectively “Diodes”, the “Company,” “we” or “our” (Nasdaq: DIOD), a Standard and Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality, application specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the consumer electronics, computing, communications, industrial, and automotive markets.

The Company’s products include diodes, rectifiers, transistors, MOSFETs, GPP bridges, GPP rectifiers, protection devices, function-specific arrays, single gate logic, amplifiers and comparators, Hall-effect and temperature sensors, power management devices, including LED drivers, AC-DC converters and controllers, DC-DC switching and linear voltage regulators, and voltage references along with special function devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The Company also has timing, connectivity, switching, and signal integrity solutions for high-speed signals.

The Company’s corporate headquarters and Americas’ sales office are located in Plano, Texas, and Milpitas, California. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City and Zhubei City, Taiwan; Shanghai, Yangzhou, China; Oldham, England; and Neuhaus, Germany. The Company’s wafer fabrication facilities are located in Oldham, England, Greenock, Scotland and Shanghai and Wuxi, China and Keelung and Hsinchu, Taiwan.  The Company has assembly and test facilities located in Shanghai, Jinan, Chengdu and Wuxi, China as well as in Neuhaus, Germany and Jhongli and Keelung, Taiwan. Additional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong Kong; Oldham, England; Shanghai, Shenzhen, Wuhan and Yangzhou, China; Seongnam-si, South Korea; and Munich, Frankfurt, Germany; with support offices throughout the world.

Our product focus is on high-growth end-user equipment markets such as satellite TV set-top boxes, portable DVD players, datacom devices, ADSL modems, power supplies, medical devices (non-life support devices/systems), PCs and notebooks, flat panel displays, digital cameras, mobile handsets, AC-to-DC and DC-to-DC conversion, Wireless 802.11 LAN access points, brushless DC motor fans, serial connectivity, and automotive applications.

Basis of Presentation

Basis of Presentation

The condensed consolidated financial data at December 31, 2020 are derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2021 (“Form 10-K”). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, operating results and cash flows in conformity with GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Form 10-K.  All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the period presented have been included in the interim period. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2021.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. As permitted under GAAP, interim accounting for certain expenses, including income taxes, are based on full year forecasts. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates taking into consideration discrete items occurring in a quarter.

Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted. Certain prior year’s balances may have been reclassified to conform to the current condensed consolidated financial statement presentation.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The table below sets forth the reconciliation between net income and the weighted average shares outstanding used for calculating basic and diluted EPS:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Earnings (numerator)
Net income attributable to common stockholders	$	55,374	$	21,033	$	94,826	$	41,201
Shares (denominator)
Weighted average common shares outstanding (basic)		44,667		51,527		44,538		51,431
Dilutive effect of stock options and stock awards outstanding		713		1,042		789		1,086
Adjusted weighted average common shares outstanding (diluted)		45,380		52,569		45,327		52,517
Earnings per share attributable to common stockholders
Basic	$	1.24	$	0.41	$	2.13	$	0.80
Diluted	$	1.22	$	0.40	$	2.09	$	0.78
Stock options and stock awards excluded from EPS   calculation because the effect would be anti-dilutive		6		8		3		3

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Inventories (Tables)

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory Current

The table below sets forth inventories which are stated at the lower of cost or net realizable value:

	June 30, 2021		December 31, 2020
Finished goods	$	81,106	$	85,506
Work-in-progress		84,951		73,466
Raw materials		138,071		148,090
Total	$	304,128	$	307,062

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Changes in Goodwill

The table below sets forth the changes in goodwill:

Balance at December 31, 2020	$	158,331
Foreign currency translation adjustment		1,253
Balance at June 30, 2021	$	159,584

Schedule of Intangible Assets Other Than Goodwill

The table below sets forth the value of intangible assets, other than goodwill:

	June 30,			December 31,
	2021			2020
Intangible assets subject to amortization:
Gross carrying amount	$	246,687		$	245,176
Accumulated amortization		(148,793	)		(140,710	)
Foreign currency translation adjustment		(7,636	)		(7,781	)
Total		90,258			96,685
Intangible assets with indefinite lives:
Gross carrying amount		13,372			14,883
Foreign currency translation adjustment		(953	)		(977	)
Total		12,419			13,906
Total intangible assets, net	$	102,677		$	110,591

Schedule of Amortization Expense Related to Intangible Assets

The table below sets forth amortization expense related to intangible assets subject to amortization:

Amortization expense	2021		2020
Three months ended June 30,	$	4,060	$	4,021
Six months ended June 30,	$	8,083	$	8,242

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Income Tax Provision (Tables)

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Schedule of Information Related to Income Tax Expense

The table below sets forth information related to our income tax expense:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Domestic pre-tax income	$	18,577		$	7,707		$	25,645		$	12,975
Foreign pre-tax income	$	52,169		$	18,351		$	95,088		$	38,039
Income tax provision	$	12,120		$	4,670		$	21,554		$	9,226
Effective tax rate		17.1	%		17.9	%		17.9	%		18.1	%
Impact of tax holidays on tax expense	$	(679	)	$	(241	)	$	(1,261	)	$	(1,315	)
Earnings per share impact of tax holidays:
Basic	$	0.02		$	0.01		$	0.03		$	0.03
Diluted	$	0.02		$	0.01		$	0.03		$	0.03

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Share Based Compensation [Abstract]

Schedule of Share-Based Compensation Expense

The table below sets forth the line items where share-based compensation expense was recorded:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Cost of goods sold	$	282	$	257	$	557	$	530
Selling, general and administrative		7,627		6,715		12,659		10,426
Research and development		734		729		1,548		1,438
Total share-based compensation expense	$	8,643	$	7,701	$	14,764	$	12,394

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Segment Information and Net Sales (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of Net Sales from Based on Location of the Subsidiary

The tables below set forth net sales based on the location of the subsidiary producing the net sale:

Three Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	483,083		$	261,725		$	67,598		$	812,406
Intercompany elimination		(176,404	)		(167,318	)		(28,236	)		(371,958	)
Net sales	$	306,679		$	94,407		$	39,362		$	440,448
Three Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	323,439		$	190,543		$	53,785		$	567,767
Intercompany elimination		(133,552	)		(121,545	)		(24,001	)		(279,098	)
Net sales	$	189,887		$	68,998		$	29,784		$	288,669
As of and for the
Six Months Ended June 30, 2021	Asia			Americas			Europe			Consolidated
Total sales	$	954,152		$	508,552		$	127,772		$	1,590,476
Intercompany elimination		(355,354	)		(328,147	)		(53,406	)		(736,907	)
Net sales	$	598,798		$	180,405		$	74,366		$	853,569
Property, plant and equipment, net	$	412,421		$	25,044		$	84,717		$	522,182
Total assets	$	1,423,099		$	350,339		$	219,531		$	1,992,969
As of and for the
Six Months Ended June 30, 2020	Asia			Americas			Europe			Consolidated
Total sales	$	625,302		$	358,715		$	112,786		$	1,096,803
Intercompany elimination		(250,473	)		(226,009	)		(50,935	)		(527,417	)
Net sales	$	374,829		$	132,706		$	61,851		$	569,386
Property, plant and equipment, net	$	355,704		$	24,435		$	70,476		$	450,615
Total assets	$	1,494,605		$	230,888		$	211,670		$	1,937,163

Schedule of Net Sales by Direct Sales or Distributor and Location

The tables below set forth net sales for the Company disaggregated into geographic locations based on shipment and by type (direct sales or Distributor):

	Three Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	353,312	$	223,056
Europe		54,056		43,145
Americas		33,080		22,468
Total net sales	$	440,448	$	288,669
Net Sales by Type
Direct sales	$	151,048	$	92,671
Distributor sales		289,400		195,998
Total net sales	$	440,448	$	288,669
	Six Months Ended
	June 30,
Net Sales by Region	2021		2020
Asia	$	687,937	$	433,861
Europe		102,442		90,076
Americas		63,190		45,449
Total net sales	$	853,569	$	569,386
Net Sales by Type
Direct sales	$	298,939	$	280,581
Distributor sales		554,630		288,805
Total net sales	$	853,569	$	569,386

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Debt

Borrowings outstanding as of June 30, 2021 and December 31, 2020, are set forth in the table below:

	June 30,			December 31,				Current Amount
Description	2021			2020			Interest Rate	Maturity
Short-term debt	$	60,239		$	140,567		Libor plus margin	Various during 2021 -2022
Long-term debt
Term loan and revolver	$	114,687		$	282,250		Libor plus margin	May 2024
Notes payable to Bank of Taiwan		2,574			4,154		Variable, 1.3% base	June 2033
Notes payable to Bank of China Trust Company		3,586			3,511		Taibor 3 month rate + 0.5%	December 2021
Notes payable to Bank of China Trust Company		16,727			16,714		Taibor 3 month rate + 0.5%	May 2024
Notes payable to E Sun Bank		3,586			3,511		1-M deposit rate plus 0.08%	December 2022
Notes payable to E Sun Bank		394			386		1-M deposit rate plus 0.08%	June 2027
Notes payable to E Sun Bank		1,757			1,721		1-M deposit rate plus 0.08%	June 2030
Notes payable to HSBC		100,000			-		Libor plus margin	January 2023
Total long-term debt		243,311			312,247
Less:  Current portion of long-term debt		(18,346	)		(21,860	)
Less:  Unamortized debt costs		(2,253	)		(2,208	)
Total long-term debt, net of current portion	$	222,712		$	288,179

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Fair Value of Interest Rate Related Derivative Financial Instruments and Their Classification on Our Condensed Consolidated Balance Sheets

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020:

	Other Current Liabilities				Other Liabilities
	2021		2020		2021		2020
Interest rate swaps and collars	$	624	$	2,008	$	-	$	610

Summary of Effect of Derivative Financial Instruments on Our Condensed Consolidated Statements of Operations

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and six months ended June 30, 2021 and 2020:

	Amount of Gain or (Loss) Recognized in OCI on Derivative						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion  Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Instruments Designated as Hedging Instruments
	June 30,							June 30,							June 30,
	2021			2020				2021			2020				2021		2020
Three Months Ended
Interest rate swaps and collars	$	(6	)	$	(180	)	Interest expense	$	(166	)	$	(2	)	Interest expense	$	-	$	-
Cross currency swaps	$	(2,186	)	$	-		N/A	$	-		$	-		Interest income	$	616	$	-
Six Months Ended
Interest rate swaps and collars	$	(11	)	$	(1,571	)	Interest expense	$	(327	)	$	(73	)	N/A		-		-
Cross currency swaps	$	976		$	-		N/A		-			-		Interest income	$	1,226	$	-

	Amount of Gain or (Loss) Recognized in Net Income					Location of Gain or (Loss) Recognized in Net Income
Derivative Instruments Not Designated as Hedging Instruments
	June 30,
	2021		2020
Three Months Ended
Foreign currency forward contracts	$	4,599	$	(391	)	Foreign currency loss, net
Six Months Ended
Foreign currency forward contracts	$	1,793	$	(2,538	)	Foreign currency loss, net

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Components of Lease Expense

The components of lease expense are set forth in the table below:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating lease expense	$	4,149	$	3,669	$	8,384	$	7,399
Finance lease expense:
Amortization of assets		2		209		213		418
Interest on lease liabilities		-		6		1		13
Short-term lease expense		246		122		491		216
Variable lease expense		1,161		738		2,290		1,449
Total lease expense	$	5,558	$	4,744	$	11,379	$	9,495

Supplemental Balance Sheet Information Related to Leases

The table below sets forth supplemental balance sheet information related to leases.  In our condensed consolidated balance sheets, right of use (“ROU”) assets are included in other long-term assets while lease liabilities are located in accrued liabilities and other for the current portion and other long-term liabilities for the non-current portion:

	June 30, 2021	December 31, 2020
Operating leases:
Operating lease ROU assets	$60,587	$54,457
Current operating lease liabilities	13,787	10,663
Noncurrent operating lease liabilities	30,423	27,041
Total operating lease liabilities	$44,210	$37,704
Finance leases:
Finance lease ROU assets	$2,549	$2,507
Accumulated amortization	(2,518)	(2,298)
Finance lease ROU assets, net	$31	$209
Current finance lease liabilities	$12	$149
Non-current finance lease liabilities	21	24
Total finance lease liabilities	$33	$173
Weighted average remaining lease term (in years):
Operating leases	6.8	7.6
Finance leases	2.8	0.6
Weighted average discount rate:
Operating leases	4.0%	4.0%
Finance leases	3.7%	3.1%

Supplemental Cash Flow and Other Information Related to Leases

The table below sets forth supplemental cash flow and other information related to leases:

	Six Months Ended
	June 30, 2021	June 30, 2020
Cash paid for the amounts included in the measurements of lease liabilities:
Operating cash outflows from operating leases	$10,973	$9,753
Operating cash outflows from finance leases	1	13
Financing cash outflow from finance leases	151	445
ROU assets obtained in exchange for lease liabilities incurred:
Operating leases	12,265	532

Schedule of Operating and Finance Lease Liability Maturities

The table below sets forth information about lease liability maturities:

	June 30, 2021
	Operating Leases		Finance Leases
Remainder of 2021	$	7,791	$	6
2022		14,253		13
2023		9,242		11
2024		4,359		5
2025		4,173		-
2026		2,742		-
2027 and thereafter		8,830		-
Total lease payments		51,390		35
Less: imputed interest		(7,180)		(2)
Total lease obligations		44,210		33
Less: current obligations		(13,787)		(12)
Long-term lease obligations	$	30,423	$	21

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Related Parties (Tables)

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Schedule of Net Sales and Purchases of Related Party Transactions

The table below sets forth net sales to and purchases from related parties:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
LSC
Net sales	$	-	$	171	$	-	$	299
Purchases	$	-	$	3,806	$	-	$	6,554
Nuvoton
Purchases	$	2,288	$	2,011	$	3,695	$	3,655
Keylink
Net sales	$	4,333	$	4,975	$	9,899	$	8,960
Purchases	$	501	$	426	$	980	$	831
JCP
Purchases	$	328	$	291	$	687	$	447

Schedule of Account Receivable and Payable of Related Party Transactions

The table below sets forth accounts receivable from, and accounts payable to, related parties:

	June 30,		December 31,
	2021		2020
Nuvoton
Accounts receivable	$	-	$	10
Accounts payable	$	1,539	$	796
Keylink
Accounts receivable	$	39,660	$	35,365
Accounts payable	$	34,373	$	31,247
JCP
Accounts payable	$	379	$	357

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Acquisitions and Divestitures (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Major Classes of Assets and Liabilities Classified as Held-for-Sale on Condensed Consolidated Balance Sheet

The table below sets forth the major classes of assets and liabilities that have been classified as held-for-sale on the condensed consolidated balance sheet

Assets
Cash and cash equivalents	$	4,936
Accounts receivable		154
Inventories, net		6,906
Property, plant and equipment		7,798
Deferred income tax		4,953
Other long-term assets		638
Assets classified as held for sale		25,385
Liabilities
Accounts payable		7,153
Accrued liabilities and other		1,106
Other long-term liabilities		637
Liabilities classified as held for sale		8,896
Net assets classified as held for sale (included in prepaid expenses and other)	$	16,489

Lite On Semiconductor

Summary of Fair Value of Assets and Liabilities Related to Acquisition Recorded in Condensed Consolidated Balance Sheet

The table below sets forth the fair value of the LSC assets acquired and liabilities assumed based on relative fair value at the date of acquisition and the corresponding line item in the Company’s consolidated balance sheet at the date of acquisition. During the period from January 1, 2021 and March 31, 2021, measurement period adjustments were made to inventories, property, plant and equipment, and accrued liabilities and other.  The adjustments represented a decrease to total assets acquired and a decrease to total liabilities assumed of $0.1 million. U.S. GAAP permits companies to complete the final determination of the fair values during the measurement period following the acquisition date. The size and breadth of the LSC acquisition will necessitate the use of this measurement period to adequately analyze and assess a number of the factors used in establishing the asset and liability fair values as of the acquisition date including (i) changes in fair values of property, plant and equipment and inventories, (ii) changes in fair value of certain liabilities assumed and (iii) tax impact associated with any other changes in fair value. Any potential adjustments made could be material in relation to the preliminary values. A final determination of the LSC assets acquired and liabilities assumed has not been completed and the table below is considered preliminary. The Company engaged a third party valuation specialist to assist with

the assessment of any intangibles assets acquired as part of the LSC acquisition, and it was determined that there were no intangible assets as a result of the LSC acquisition.

Cash and cash equivalents	$		131,046
Accounts receivable			44,896
Inventories			55,710
Prepaid expenses and other current assets			11,447
Property, plant and equipment			67,952
Deferred income tax			15,732
Other long-term assets			26,037
Total assets acquired			352,820
Line of credit			88,508
Accounts payable			35,245
Accrued liabilities and other			48,992
Income tax payable			6,264
Deferred tax liabilities			8,941
Other long-term liabilities			10,783
Total liabilities assumed			198,733
Non-controlling interest		54
Net assets acquired	$		154,033

Savitech Acquisition

Summary of Fair Value of Assets and Liabilities Related to Acquisition Recorded in Condensed Consolidated Balance Sheet

The table below sets forth the fair value of the assets and liabilities recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date of acquisition.  

Cash and cash equivalents	$	6.2
Prepaid expenses and other		0.7
Goodwill		13.9
Intangible assets, net		6.1
Other long-term assets		0.4
Accrued liabilities and other		10.2
Noncontrolling interest		11.8

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Earnings Per Share - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Earnings per share reconciliation disclosure			Earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted EPS is calculated similarly but includes potential dilution from the exercise of stock options and stock awards, except when the effect would be anti-dilutive.
Common stock dividends paid	$ 0	$ 0	$ 0	$ 0

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Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings (numerator)
Net income attributable to common stockholders	$ 55,374	$ 21,033	$ 94,826	$ 41,201
Shares (denominator)
Weighted average common shares outstanding (basic)	44,667	51,527	44,538	51,431
Dilutive effect of stock options and stock awards outstanding	713	1,042	789	1,086
Adjusted weighted average common shares outstanding (diluted)	45,380	52,569	45,327	52,517
Earnings per share attributable to common stockholders
Basic	$ 1.24	$ 0.41	$ 2.13	$ 0.80
Diluted	$ 1.22	$ 0.40	$ 2.09	$ 0.78
Stock options and stock awards excluded from EPS calculation because the effect would be anti-dilutive	6	8	3	3

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Inventories - Schedule of Inventory Current (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Finished goods	$ 81,106	$ 85,506
Work-in-progress	84,951	73,466
Raw materials	138,071	148,090
Total	$ 304,128	$ 307,062

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Goodwill and Intangible Assets - Schedule of Changes in Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Goodwill
Goodwill beginning balance	$ 158,331
Foreign currency translation adjustment	1,253
Goodwill ending balance	$ 159,584

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Goodwill and Intangible Assets - Schedule of Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Intangible assets subject to amortization
Gross carrying amount	$ 246,687	$ 245,176
Accumulated amortization	(148,793)	(140,710)
Foreign currency translation adjustment	(7,636)	(7,781)
Total	90,258	96,685
Intangible assets with indefinite lives
Gross carrying amount	13,372	14,883
Foreign currency translation adjustment	(953)	(977)
Total	12,419	13,906
Total intangible assets, net	$ 102,677	$ 110,591

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Goodwill and Intangible Assets - Schedule of Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 4,060	$ 4,021	$ 8,083	$ 8,242

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Income Tax Provision - Schedule of Information Related to Income Tax Expense (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Domestic pre-tax income	$ 18,577	$ 7,707	$ 25,645	$ 12,975
Foreign pre-tax income	52,169	18,351	95,088	38,039
Income tax provision	$ 12,120	$ 4,670	$ 21,554	$ 9,226
Effective tax rate	17.10%	17.90%	17.90%	18.10%
Impact of tax holidays on tax expense	$ (679)	$ (241)	$ (1,261)	$ (1,315)
Earnings per share impact of tax holidays:
Basic	$ 0.02	$ 0.01	$ 0.03	$ 0.03
Diluted	$ 0.02	$ 0.01	$ 0.03	$ 0.03

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Income Tax Provision - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 45.9
Income tax examination, description	We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012, or for the 2015 tax year. We are no longer subject to China income tax examinations by tax authorities for tax years before 2010. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2015. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may result from currently pending tax audits. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense.
Significant change in unrecognized tax benefits, nature of event	It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months.
Significant change in unrecognized tax benefits is reasonably possible, estimated range not possible	At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

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Share-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expense	$ 8,643	$ 7,701	$ 14,764	$ 12,394
Cash proceeds received from stock option exercises			$ 2,100
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition			2 years 1 month 6 days
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized	53,900		$ 53,900
Restricted Stock Awards and Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period			4 years
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition			4 years
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period			3 years
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition			3 years
Savitech
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expense	$ 20		$ 40

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Share-Based Compensation - Schedule of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 8,643	$ 7,701	$ 14,764	$ 12,394
Cost of Goods Sold
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share-based compensation expense	282	257	557	530
Selling, General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share-based compensation expense	7,627	6,715	12,659	10,426
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 734	$ 729	$ 1,548	$ 1,438

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Segment Information and Net Sales - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) Customer	Jun. 30, 2020 USD ($) Customer
Entity Wide Revenue Major Customer [Line Items]
Number of customer did not account for 10% or greater of net sales | Customer			0	0
Net sales	$ 440,448	$ 288,669	$ 853,569	$ 569,386
China
Entity Wide Revenue Major Customer [Line Items]
Net sales	$ 229,300	$ 152,400	$ 451,700	$ 291,300

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Segment Information and Net Sales - Schedule of Net Sales From Based on Location of the Subsidiary (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Net sales	$ 440,448	$ 288,669	$ 853,569	$ 569,386
Property, plant and equipment, net	522,182	450,615	522,182	450,615	$ 530,815
Total assets	1,992,969	1,937,163	1,992,969	1,937,163	$ 1,979,457
Operating Segments
Segment Reporting Information [Line Items]
Net sales	812,406	567,767	1,590,476	1,096,803
Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	(371,958)	(279,098)	(736,907)	(527,417)
Asia
Segment Reporting Information [Line Items]
Net sales	306,679	189,887	598,798	374,829
Property, plant and equipment, net	412,421	355,704	412,421	355,704
Total assets	1,423,099	1,494,605	1,423,099	1,494,605
Asia | Operating Segments
Segment Reporting Information [Line Items]
Net sales	483,083	323,439	954,152	625,302
Asia | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	(176,404)	(133,552)	(355,354)	(250,473)
Americas
Segment Reporting Information [Line Items]
Net sales	94,407	68,998	180,405	132,706
Property, plant and equipment, net	25,044	24,435	25,044	24,435
Total assets	350,339	230,888	350,339	230,888
Americas | Operating Segments
Segment Reporting Information [Line Items]
Net sales	261,725	190,543	508,552	358,715
Americas | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	(167,318)	(121,545)	(328,147)	(226,009)
Europe
Segment Reporting Information [Line Items]
Net sales	39,362	29,784	74,366	61,851
Property, plant and equipment, net	84,717	70,476	84,717	70,476
Total assets	219,531	211,670	219,531	211,670
Europe | Operating Segments
Segment Reporting Information [Line Items]
Net sales	67,598	53,785	127,772	112,786
Europe | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	$ (28,236)	$ (24,001)	$ (53,406)	$ (50,935)

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Segment Information and Net Sales - Schedule of Net Sales by Direct Sales or Distributor and Region (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	$ 440,448	$ 288,669	$ 853,569	$ 569,386
Direct Sales
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	151,048	92,671	298,939	280,581
Distributor Sales
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	289,400	195,998	554,630	288,805
Asia
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	353,312	223,056	687,937	433,861
Europe
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	54,056	43,145	102,442	90,076
Americas
Segment Reporting Revenue Reconciling Item [Line Items]
Total net sales	$ 33,080	$ 22,468	$ 63,190	$ 45,449

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Debt - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Line Of Credit Facility [Line Items]
Lines of credit unused and available	$ 111,800,000
Line of credit facility advanced under foreign credit line	60,200,000
Line of Credit Facility Credit Used For Guarantee	1,100,000
Long term debt	$ 243,311,000	$ 312,247,000
ERIS Technology Corporation
Line Of Credit Facility [Line Items]
Percentage of shares acquired by subsidiary in acquiree	51.00%
Short-term debt	$ 17,200,000
Long term debt	$ 28,600,000
Debt maturity period term	2021 through 2033
Term Commitment
Line Of Credit Facility [Line Items]
Lines of credit maximum borrowing capacity	$ 114,700,000
Revolver
Line Of Credit Facility [Line Items]
Lines of credit maximum borrowing capacity	$ 150,000,000.0
Credit Agreement
Line Of Credit Facility [Line Items]
Financial and non-financial convenants, description	Furthermore, under the Credit Agreement, restricted payments, including dividends and share repurchases, are permitted in certain circumstances, including while the pro forma Consolidated Leverage Ratio is, both before and after giving effect to any such restricted payment, at least 0.25 to 1.00 less than the maximum permitted under the Credit Agreement.
Unsecured
Line Of Credit Facility [Line Items]
Lines of credit maximum borrowing capacity	$ 173,100,000

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total long-term debt	$ 243,311	$ 312,247
Less: Current portion of long-term debt	(18,346)	(21,860)
Less: Unamortized debt costs	(2,253)	(2,208)
Long-term debt, net of current portion	222,712	288,179
Various during 2021 - 2022
Debt Instrument [Line Items]
Short-term debt	$ 60,239	140,567
Short-term debt, Interest Rate	Libor plus margin
Notes Payable to Bank | Bank of Taiwan | June 2033
Debt Instrument [Line Items]
Total long-term debt	$ 2,574	4,154
Long-term debt, Interest Rate	Variable, 1.3% base
Notes Payable to Bank | China Trust Bank | May 2024
Debt Instrument [Line Items]
Total long-term debt	$ 16,727	16,714
Long-term debt, Interest Rate	Taibor 3 month rate + 0.5%
Notes Payable to Bank | China Trust Bank | December 2021
Debt Instrument [Line Items]
Total long-term debt	$ 3,586	3,511
Long-term debt, Interest Rate	Taibor 3 month rate + 0.5%
Notes Payable to Bank | E Sun Bank | December 2022
Debt Instrument [Line Items]
Total long-term debt	$ 3,586	3,511
Long-term debt, Interest Rate	1-M deposit rate plus 0.08%
Notes Payable to Bank | E Sun Bank | June 2027
Debt Instrument [Line Items]
Total long-term debt	$ 394	386
Long-term debt, Interest Rate	1-M deposit rate plus 0.08%
Notes Payable to Bank | E Sun Bank | June 2030
Debt Instrument [Line Items]
Total long-term debt	$ 1,757	1,721
Long-term debt, Interest Rate	1-M deposit rate plus 0.08%
Notes Payable to Bank | HSBC | January 2023
Debt Instrument [Line Items]
Total long-term debt	$ 100,000
Long-term debt, Interest Rate	Libor plus margin
Term Loan and Revolver | May 2024
Debt Instrument [Line Items]
Total long-term debt	$ 114,687	$ 282,250
Long-term debt, Interest Rate	Libor plus margin

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Commitments and Contingencies - Additional Information (Details) £ in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($) $ / £	Jun. 30, 2021 GBP (£) $ / £	Mar. 31, 2019 USD ($) $ / £	Mar. 31, 2019 GBP (£) $ / £
Commitments And Contingencies Disclosure [Abstract]
Purchase Commitments	$ 66.8
Long-term purchase commitment, Amount	$ 28.7
Defined benefit plan, estimated future employer contributions in current fiscal year, description	We have a contributory defined benefit plan that covers certain employees in the United Kingdom.  As of June 30, 2021, the underfunded liability for this defined benefit plan was approximately $19.9 million.  An actuarial valuation was performed as of March 31, 2019, resulting in a deficit of approximately GBP 26.7 million (approximately $37.4 million based on a GBP: USD exchange rate of 1.4:1). As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $2.8 million based on a GBP: USD exchange rate of 1.4:1) to be paid in annual installments with effect from April 1, 2020 to address the deficit revealed by the valuation (with the first payment made by March 31, 2021, and payments to be made by December 31 each year thereafter). These contributions, together with the assumed asset outperformance, are expected to eliminate the deficit by December 31, 2028. Further, we will pay GBP 0.2 million (approximately $0.3 million based on GBP: USD exchange rate oat 1.4:1) in annual installments to cover expenses.
Defined benefit plan, annual future benefit payments	$ 2.8	£ 2.0
Unfunded liability of defined benefit plan, deficit			$ 37.4	£ 26.7
Defined benefit plan, additional annual future benefit payments	$ 0.3	£ 0.2
GBP:USD exchange rate | $ / £	1.4	1.4	1.4	1.4
Unfunded liability of defined benefit plan	$ 19.9

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Derivative Financial Instruments - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Objectives for using derivative instruments	The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
Net derivative gain will be reclassified from AOCI into net income	$ 200,000
Posted collateral related to agreements	0	$ 0
Foreign Currency Forward Contracts
Derivative [Line Items]
Fair value of foreign currency derivative instruments not designated as hedging	215,600,000	$ 276,200,000
Maximum | Foreign Currency Forward Contracts
Derivative [Line Items]
Fair value of foreign exchange hedges	$ 3,000.0

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Derivative Financial Instruments - Summary of Fair Value of Interest Rate Related Derivative Financial Instruments and Their Classification on Our Condensed Consolidated Balance Sheets (Details) - Interest Rate Swaps and Collars - Designated as Hedging Instrument - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Other Current Liabilities
Derivative [Line Items]
Fair value of derivative instruments, liability derivatives	$ 624	$ 2,008
Other Liabilities
Derivative [Line Items]
Fair value of derivative instruments, liability derivatives		$ 610

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Derivative Financial Instruments - Summary of Effect of Derivative Financial Instruments on Our Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Designated as Hedging Instrument | Interest Rate Swaps and Collars
Derivative Instruments Gain Loss [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative	$ (6)	$ (180)	$ (11)	$ (1,571)
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Interest expense		Interest expense
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income	$ (166)	(2)	$ (327)	(73)
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion Excluded from Effectiveness Testing)	Interest expense		N/A
Designated as Hedging Instrument | Cross Currency Swaps
Derivative Instruments Gain Loss [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative	$ (2,186)		$ 976
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	N/A		N/A
Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion Excluded from Effectiveness Testing)	Interest income		Interest income
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	$ 616		$ 1,226
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts
Derivative Instruments Gain Loss [Line Items]
Amount of Gain or (Loss) Recognized in Net Income	$ 4,599	$ (391)	$ 1,793	$ (2,538)
Location of Gain or (Loss) Recognized in Net Income	Foreign currency loss, net		Foreign currency loss, net

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Leases [Abstract]
Operating lease expense	$ 4,149	$ 3,669	$ 8,384	$ 7,399
Finance lease expense:
Amortization of assets	2	209	213	418
Interest on lease liabilities		6	1	13
Short-term lease expense	246	122	491	216
Variable lease expense	1,161	738	2,290	1,449
Total lease expense	$ 5,558	$ 4,744	$ 11,379	$ 9,495

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Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Operating leases:
Operating lease ROU assets	$ 60,587	$ 54,457
Current operating lease liabilities	13,787	10,663
Noncurrent operating lease liabilities	30,423	27,041
Total operating lease liabilities	44,210	37,704
Finance leases:
Finance lease ROU assets	2,549	2,507
Accumulated amortization	(2,518)	(2,298)
Finance lease ROU assets, net	31	209
Current finance lease liabilities	12	149
Non-current finance lease liabilities	21	24
Total finance lease liabilities	$ 33	$ 173
Weighted average remaining lease term (in years):
Operating leases	6 years 9 months 18 days	7 years 7 months 6 days
Finance leases	2 years 9 months 18 days	7 months 6 days
Weighted average discount rate:
Operating leases	4.00%	4.00%
Finance leases	3.70%	3.10%

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Leases - Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash paid for the amounts included in the measurements of lease liabilities:
Operating cash outflows from operating leases	$ 10,973	$ 9,753
Operating cash outflows from finance leases	1	13
Financing cash outflow from finance leases	151	445
ROU assets obtained in exchange for lease liabilities incurred:
Operating leases	$ 12,265	$ 532

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Leases - Schedule of Operating and Finance Lease Liability Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Leases [Abstract]
Operating Leases, Remainder of 2021	$ 7,791
Operating Leases, 2022	14,253
Operating Leases, 2023	9,242
Operating Leases, 2024	4,359
Operating Leases, 2025	4,173
Operating Leases, 2026	2,742
Operating Leases, 2027and thereafter	8,830
Operating Leases, Total lease payments	51,390
Operating Leases, Less: imputed interest	(7,180)
Total operating lease liabilities	44,210	$ 37,704
Operating Leases, Less: current obligations	(13,787)	(10,663)
Noncurrent operating lease liabilities	30,423	27,041
Finance Leases, Remainder of 2021	6
Finance Leases, 2022	13
Finance Leases, 2023	11
Finance Leases, 2024	5
Finance Leases, Total lease payments	35
Finance Leases, Less: imputed interest	(2)
Total finance lease liabilities	33	173
Finance Leases, Less: current obligations	(12)	(149)
Non-current finance lease liabilities	$ 21	$ 24

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Employee Benefit Plans - Additional Information (Details) - Deferred Compensation Plan - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Deferred compensation arrangements, overall, description	We maintain a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key employees and members of the Board of Directors. The Deferred Compensation Plan allows eligible participants to defer the receipt of eligible compensation, including equity awards, until designated future dates. We offset our obligations under the Deferred Compensation Plan primarily by investing in the actual underlying investments. At June 30, 2021 and December 31, 2020, these investments totaled approximately $14.1 million and $12.8 million, respectively.
Deferred compensation plan assets	$ 14.1	$ 12.8

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Related Parties - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Lite On Semiconductor
Related Party Transaction [Line Items]
Related Party ownership of common stock	15.00%		15.00%
Related Party Transaction, Description of Transaction			LSC was also our largest stockholder, owning approximately 15% of our outstanding Common Stock., prior to the close of the acquisition of LSC by Diodes.
Keylink
Related Party Transaction [Line Items]
Related Party ownership of common stock	5.00%		5.00%
Related Party Transaction, Description of Transaction			Keylink is our 5% joint venture partner in our Shanghai assembly and test facilities.
Related Party Transaction Revenues Percentage from Transactions with Related Party	1.00%	1.70%	1.20%	1.60%
Related Party Transaction Consulting Fees from Transactions with Related Party	$ 4.3	$ 3.8	$ 8.7	$ 6.9
Chengdu Ya Guang Electronic Company Limited ("Ya Guang")
Related Party Transaction [Line Items]
Related Party Transaction, Description of Transaction			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 our 5% partner in our other Chengdu assembly and test facilities
Chengdu Ya Guang Electronic Company Limited ("Ya Guang") | Chengdu | Assembly and Test Facility One
Related Party Transaction [Line Items]
Related Party ownership of common stock	2.00%		2.00%
Chengdu Ya Guang Electronic Company Limited ("Ya Guang") | Chengdu | Assembly and Test Facility Two
Related Party Transaction [Line Items]
Related Party ownership of common stock	5.00%		5.00%

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Related Parties - Schedule of Net Sales and Purchases of Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Lite On Semiconductor
Related Party Transaction [Line Items]
Net sales from related parties		$ 171		$ 299
Purchases from related parties		3,806		6,554
Nuvoton
Related Party Transaction [Line Items]
Purchases from related parties	$ 2,288	2,011	$ 3,695	3,655
Keylink
Related Party Transaction [Line Items]
Net sales from related parties	4,333	4,975	9,899	8,960
Purchases from related parties	501	426	980	831
JCP
Related Party Transaction [Line Items]
Purchases from related parties	$ 328	$ 291	$ 687	$ 447

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Related Parties - Schedule of Account Receivable and Payable of Related Party Transactions (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Nuvoton
Related Party Transaction [Line Items]
Accounts receivable		$ 10
Accounts payable	$ 1,539	796
Keylink
Related Party Transaction [Line Items]
Accounts receivable	39,660	35,365
Accounts payable	34,373	31,247
JCP
Related Party Transaction [Line Items]
Accounts payable	$ 379	$ 357

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Acquisitions and Divestitures - Additional Information (Details)			1 Months Ended	6 Months Ended
	Nov. 30, 2020 USD ($) shares	Feb. 05, 2020 USD ($) Tranche	Mar. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jul. 31, 2021 USD ($)	Nov. 30, 2020 $ / shares	Mar. 04, 2020 USD ($)
Lite On Semiconductor
Business Acquisition [Line Items]
Acquisition date	Nov. 30, 2020
Business acquisition shares repurchased | shares	7,765,778
Business acquisition shares repurchased percentage	15.00%
Business combination separately recognized transactions, gain or loss on settlement of accounts payables	$ 0
Business combination separately recognized transactions, gain or loss on settlement of accounts receivables	$ 0
Percentage of shares acquired by subsidiary in acquiree	100.00%
Business acquisition, share price | $ / shares						$ 42.50
Business acquisition, shares acquired | shares	307,371,139
Purchase price	$ 453,400,000
Total consideration after adjustments for the settlement of pre-existing relationship	154,000,000.0
Decrease in recognized identifiable assets acquired due to measurement period adjustments	100,000
Decrease in recognized identifiable liabilities assumed due to measurement period adjustments	100,000
Intangible assets	$ 0
Savitech Corporation (“Savitech”)
Business Acquisition [Line Items]
Business acquisition, date of acquisition agreement		Feb. 05, 2020
Agreement amount to be invested		$ 14,200,000
Ownership percentage							33.60%
Number of tranche investment | Tranche		2
Total consideration paid		$ 13,900,000
Savitech Corporation (“Savitech”) | Minimum
Business Acquisition [Line Items]
Ownership percentage		51.00%
Savitech Corporation (“Savitech”) | Minimum | Subsequent Event
Business Acquisition [Line Items]
Ownership percentage					51.00%
Savitech Corporation (“Savitech”) | Selling, General and Administrative
Business Acquisition [Line Items]
Acquisition costs		$ 100,000
Savitech Corporation (“Savitech”) | Tranche One
Business Acquisition [Line Items]
Investment amount							$ 5,600,000
Savitech Corporation (“Savitech”) | Tranche Two
Business Acquisition [Line Items]
Accrued additional investment amount				$ 300,000
Savitech Corporation (“Savitech”) | Tranche Two | Maximum | Subsequent Event
Business Acquisition [Line Items]
Investment amount					$ 9,100,000
Assets Held-for-Sale
Business Acquisition [Line Items]
Total consideration paid			$ 18,000,000.0
Discontinued operation description and timing of disposal				The transaction is expected to close within the next twelve months and is subject to customary closing conditions and working capital adjustments.
Gain or loss on reclassification of disposal group to held-for-sale			$ 0

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Acquisitions and Divestitures - Summary of Major Classes of Assets and Liabilities Classified as Held-for-Sale on Condensed Consolidated Balance Sheet (Details) - Assets Held-for-Sale $ in Thousands	Mar. 31, 2021 USD ($)
Assets
Cash and cash equivalents	$ 4,936
Accounts receivable	154
Inventories, net	6,906
Property, plant and equipment	7,798
Deferred income tax	4,953
Other long-term assets	638
Assets classified as held for sale	25,385
Liabilities
Accounts payable	7,153
Accrued liabilities and other	1,106
Other long-term liabilities	637
Liabilities classified as held for sale	8,896
Net assets classified as held for sale (included in prepaid expenses and other)	$ 16,489

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Acquisitions and Divestitures - Summary of Fair Value of Assets and Liabilities Related to Acquisition Recorded in Condensed Consolidated Balance Sheet (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020	Nov. 30, 2020	Mar. 04, 2020
Business Acquisition [Line Items]
Goodwill	$ 159,584,000	$ 158,331,000
Lite On Semiconductor
Business Acquisition [Line Items]
Cash and cash equivalents			$ 131,046,000
Accounts receivable			44,896,000
Inventories			55,710,000
Prepaid expenses and other current assets			11,447,000
Property, plant and equipment			67,952,000
Deferred income tax			15,732,000
Intangible assets, net			0
Other long-term assets			26,037,000
Total assets acquired			352,820,000
Line of credit			88,508,000
Accounts payable			35,245,000
Accrued liabilities and other			48,992,000
Income tax payable			6,264,000
Deferred tax liabilities			8,941,000
Other long-term liabilities			10,783,000
Total liabilities assumed			198,733,000
Non-controlling interest			54,000
Net assets acquired			$ 154,033,000
Savitech Acquisition
Business Acquisition [Line Items]
Cash and cash equivalents				$ 6,200,000
Prepaid expenses and other current assets				700,000
Goodwill				13,900,000
Intangible assets, net				6,100,000
Other long-term assets				400,000
Accrued liabilities and other				10,200,000
Non-controlling interest				$ 11,800,000

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Subsequent Event - Additional Information - (Details) - Subsequent Event - Fabless Wafer Design Company shares in Millions, $ in Millions	1 Months Ended
	Jul. 31, 2021 USD ($) shares
Subsequent Event [Line Items]
Payments for convertible promissory note | $	$ 5.0
Interest rate	3.00%
Preferred Stock
Subsequent Event [Line Items]
Business acquisition, shares acquired | shares	10.0