Selling, general and administrative expenses were among the lowest in our industry at 12.7 % of revenue. • 

Investment in research and development increased 67 % to $3.4  million or 1.8 % of revenue. • 

Net income improved 153 % to a record $25.6 million, or $1.65  per share. • 

Our balance sheet is strong: in 2004 , Diodes generated cash flow from operations of $29.3  million, a 56 % increase from 2003 , which we used, in part, to reduce our total debt by $3.6  million. We ended the year with $19  million in cash and unused and available credit facilities of $32  million. Finally, shareholders’ equity increased to $112.1  million, a 57 % increase. 

These financial results reflect our continued dedication to our strategy of producing leading-edge technology and running efficient, streamlined operations. In all we do, dedication and commitment are key. On the technology side, our products keep getting smaller and more energy-efficient while offering the same powerful – and oftentimes even increased – performance. We are bringing to market a broad range of products that offer very real benefits in both size and performance for a growing number of next-generation portable and mobile electronics that are vital to our end-consumers’ 

Raymond Soong 

Chairman of the Board 

busy lives: Diodes’ products are used in computers, consumer electronics, industrial, automotive, and communications devices in many of the conveniences that have become staples in our modern world. We realized early on that diversification is another significant factor in long-term success, and we have thus pursued a policy of growing our markets both vertically and horizontally. 

We are also responding to an increasing demand, especially from Europe and Asia, for environmentally- friendly products by eliminating lead (Pb) from lead plating. Therefore, as we continue to listen and respond to our customers’ needs… 

…We Are Transforming The Future. 

You cannot talk of the future without revisiting the past. So let us first review the highlights of the year 2004 . 

On the technological side, we developed a series of sophisticated new products during the year: 

We launched a new line of subminiature SOT- 563 discrete semiconductor components, continuing our range of subminiature discretes and arrays targeted to markets including mobile phone, digital-audio player, and portable handheld electronics. • 

C. H. Chen 

President and Chief Executive Officer 

