Diodes, FabTech enter $2.5M wafer fab pact

Electronic News, Feb 19, 1996

Westlake Village, Calif.--Diodes, Inc. entered into an agreement with FabTech, Inc. whereby Diodes will gain a new supply of processed wafers used in the manufacture of several types of discrete semiconductors. Under terms of the agreement, Diodes will provide FabTech with approximately $2.5 million in working capital to be used in upgrading, reconfiguring and starting-up operations at an existing wafer fabrication facility located in the AT&T building in Lee's Summit, Mo.

Diodes said it expects to begin receiving wafers from FabTech by 3Q96. Given current levels of pricing and demand, it said, "FabTech production will contribute substantially to Diodes' net sales in 1997, with further increases in subsequent years."

FabTech is a newly-created subsidiary of Lite-On Power Semiconductor Corp., a Taiwanese company that since 1991 has been a major shareholder of Diodes' common stock, and for which Diodes acts as North American marketing agent.

David Lin, president and CEO of Diodes, said that the agreement with FabTech is indicative of the company's desire to participate in the sourcing of advanced-technology discrete components without becoming directly involved in the manufacturing process.

"The agreement with FabTech is similar to the sourcing agreement we announced in June 1995 with Shanghai Kai Hong Electronics Co. Ltd.--each formalizes a strategic alliance that will enhance Diodes' ability to assure its customers timely delivery of the products they require," Mr. Lin said, adding "This capability is at the heart of the company's program to build market share by expanding its product line and strengthening customer loyalty."

Output from the facility is expected to include Schottky barrier diodes, fast recovery epitaxial diodes (FREDs) and other widely used value-added products. Schottky barrier diodes, said by Diodes to currently be in short supply worldwide, are employed in the manufacture of the power supplies found in personal computers, telecommunications devices and myriad other applications where high-frequency, low-forward voltage and fast recovery are required.