DIODES INC /DEL/ Commitments Disclosure
Note 17 – Commitments and Contingencies
Lease commitments – We lease offices, manufacturing plants, equipment, vehicles, and warehouses under various lease agreements expiring through 2048. For information related to our lease commitments see Note 9.
In addition, we have the following land right leases. None of the leases requires a rental payment.
|
|
Term (years) |
|
Expiration Date |
Chengdu, China |
|
50 |
|
2061 |
Shanghai, China* |
|
50 |
|
2056 |
Shanghai, China* |
|
50 |
|
2058 |
Shandong, China |
|
50 |
|
2058 |
Yangzhou, China |
|
50 |
|
2065 |
* Separate leases by separate Diodes’ subsidiaries
Purchase commitments – We have entered into non-cancelable purchase contracts for capital expenditures, primarily for manufacturing equipment, for approximately $51.9 million at December 31, 2025. As of December 31, 2025, we also had a commitment to purchase approximately $52.4 million of wafers to be used in our manufacturing process. These wafer purchases are scheduled to occur through 2031.
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 current 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 on 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. We record the appropriate liability when the amount 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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 9, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 12, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Mar 11, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.