Diodes Incorporated (DIOD)

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Diodes Incorporated (DIOD)

UBS Global Technology Conference

November 14, 2012 9:00 a.m. ET


Laura Mehrl - Director, Investor Relations


Unidentified Speaker

Thanks for coming out. We are going to get started with our first presentation in this room. Our next speaker here is from Diodes. It’s my pleasure to welcome Laura Mehrl from Diodes. She is the Director of Investor Relations. So our format is going to be 25 minutes of presentation here or so and we will have few questions after that, and then there is a breakout session in the Broadway Conference Room, just one floor down. So we will have more Q&A over there. With that I will and it over to Laura. Thank you.

Laura Mehrl

Thank you. Good morning everyone. Welcome to Diodes presentations. I will get started here. So here is the safe harbor statement. Everyone is probably familiar with it. So for the sake of time I will not review it in detail but we do encourage you to review our detailed SEC disclosure which can be found in Investors Section of our website at www.diodes.com.

So this is our CEO and President. CEO, Dr. Lu. He has been with the company since 2005 and before that his entire career is with Texas Instruments. Held several top executive positions from President TI Asia and General Manager of Memory group and Senior VP of Analog and Logic. He has been in board of directors for ten years even though he has been CEO since 2005.

So about Diodes. Diodes is a global leading semiconductor manufacturer and supplier, IC provider, and our focus is application specific product and serving the high volume market segment, computing, consumer and industrial, communication, automotive.

Our business objective is continuously achieve above market profitable growth. Our strategy is to utilizing our cost effective innovative packaging, design excellence and process technology to address the high volume application. So here is the semiconductor SAM and we serve the high volume discrete, standard logic and standard analog. So together the SAM we are serving is about $26 billion to $32 billion and you can see as end of last year our revenue was $635 million. So we are only about 2% to 3% of our SAM, so we have plenty of opportunity to grow. We don’t necessarily count on market growth. We mainly grow by gaining market share and we have been doing that for almost last decade.

Diodes has been growing in many different ways. In product sales we have aggressively introduced new product and also through our performance improvement. Both have increased our SAM and revenue. Each quarter during earnings call our Senior VP Marketing will announce during that quarter how many discrete and how many analog products are being introduced during that quarter across how many platforms.

In packaging, which is our competitive advantage and in addition to cost reduction and capacity expansion, we are mainly focused in developing power in smaller package with higher density. So that’s from packaging side. From application space, we have really increased our customer space tremendously and once we get into each account we do good service though we also expand our application, our footprint in different application. As we introduced more and more new products we also increase the content of each application. That’s how we are ramping up. That’s the way actually we gain market share. We don’t really gain certain competitors, we mainly gain market share by expanding our footprint with each large accounts.

So for those of you who know Diodes before 2006, Diodes was a pure provider of discrete. Then after Dr. Lu become our President and CEO, he led us into analog, standard analog space by buying two small companies. And then in 2010, we stepped into standard logic. So as I mentioned earlier, one of the ways we grow, we have prepared to reprocess technology, especially after we bought Zetex in 2008. Zetex has a lot of -- has own fab in UK and has prepared to reprocess technology. With that we have developed, in last several years we have developed and introduced several family of, we call trademark product. And that have tremendously increased our SAM as well.

For example, before Zetex we only have standard SKY Rectifier and after introduction to our trademark DIODESTAR, that lead us into Energy Star applications. Similar things that we used to just have low-end MOSFET and Zetex bring in to the high-end MOSFET and also we research process technology. We developed DIOFET for mid-end applications and DIODESTAR for high applications. Similar things in analog space we used to just Bipolar LDO, now we have CMOS LDO. Just during this earnings call Mark King has been talking about several quarter of record revenue for CMOS LDOs. And similarly in DC to DC synchronized space, it’s been record revenue. So these really really help us to grow.

Here is the examples of high volume applications. About six years ago we didn’t have any product go into this application. But then in 2006, we bought Anachip. So there [high] sensor and power management enabled us into this application and after that it’s just like mushroom bloom. Our discrete, analog and now logic, all go into this application. And for last several years this has been our key driver, revenue drive in mobile applications.

And similar thing, several years ago we didn’t have any product going into this TV and monitor applications either. But SBR from acquisition APD in 2006 enabled us into this application, then the Zetex LED/LCD drivers MOSFET enabled us increase our large steps into this application. And now you can see all this products into this application. Another thing to be noticed is that all these products are standard products going into all applications. Just like earlier in the cellphones you can see LED driver, you can see all these products go into (inaudible) current monitors. They are used in mobile applications and then they are also used in TV and monitor. And similar story goes to computing.

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