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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
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 0-3698
SILICONIX INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 94-1527868
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2201 Laurelwood Road
Santa Clara, California 95054
(Address of principal executive offices)
(408) 988-8000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
(Title of Class)
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 [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates is
$46,356,000, based upon the closing price for the registrant's Common Stock on
March 11, 1999 ($23.8125).
The number of shares of the registrant's Common Stock, $0.01 par value,
outstanding at March 11, 1999 was 9,959,680.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Siliconix incorporated 1998 Annual Report to Shareholders:
Parts I, II, and IV.
2. Portions of the definitive Proxy Statement dated April 30, 1999 to be filed
with the Securities and Exchange Commission on or about April 30, 1999,
pursuant to Section 14 of the Securities Exchange Act of 1934, in
connection with the 1999 Annual Meeting of Shareholders of Siliconix
incorporated: Part III.
PART I
Item 1. Business
General
Siliconix designs, markets, and manufactures power and analog semiconductor
products. The Company focuses on technologies and products for the
communications, computer, and automotive markets; additionally, many of the
Company's products are also used in instrumentation and industrial applications.
Founded in 1962, Siliconix uses its advanced technology and applications
expertise to develop value-added products for power management and conversion.
These products serve two types of markets. The first type, represented by the
communications and computer markets, exhibits design cycles as short as a few
months and product life cycles as short as six to twelve months, thus creating
numerous new opportunities for the Company. The other type, represented by the
automotive market, exhibits long design cycles, sometimes as much as four or
five years, and product life cycles as long or longer. Participation in both
types of businesses helps the Company balance growth opportunities with research
and development investments required to maintain technology leadership.
Siliconix was a member of TEMIC Semiconductors, a division of the
Daimler-Benz microelectronics consortium, for several years. On December 16,
1997, Daimler-Benz announced that it had agreed to sell the Semiconductor
Division of TEMIC, which included its 80.4% interest in Siliconix, to Vishay
Intertechnology, Inc. ("Vishay") of Malvern, Pennsylvania. The acquisition was
completed on March 2, 1998, and on that date Vishay became the Company's largest
shareholder. The Company's products are now marketed with the Siliconix brand
name under the Vishay umbrella.
Coincident with the acquisition of the majority interest in Siliconix by
Vishay , Richard J. Kulle stepped down as Siliconix President and CEO and was
replaced by Dr. King Owyang, formerly Executive Vice President, Technology &
Silicon Operations. Dr. Owyang has been employed by Siliconix for eleven years
and served in his previous position for approximately six years. From the
beginning of his employment, Dr. Owyang led the technology advances which are
the foundation of Siliconix's growth and profitability.
Products
All of the analog and power products produced by Siliconix can be divided
into two general classes: discrete devices and integrated circuits (ICs).
Discrete devices are active components that generate, control, regulate,
amplify, or switch electronic signals or energy. They must be interconnected
with other, passive components (e.g., resistors, capacitors, inductors, etc.) to
create an electronic circuit. ICs consist of a number of active and passive
components, interconnected on a single chip, that are intended to perform a
specific function.
The Company's discrete power MOSFETs (an acronym for "metal oxide
semiconductor field effect transistors") and power ICs are designed for similar
applications and can often be used together as chip sets with complementary
performance characteristics optimized for a specific application.
Power MOSFETs are the Company's fastest growing products in terms of sales.
In this product line, Siliconix has focused on low-voltage products that are
prevalent in battery-operated products (e.g., notebook computers and cellular
phones) and in automotive systems. Siliconix has maintained technology
leadership in low-voltage, surface-mount power MOSFETs through advances in both
silicon technologies and product packaging. Advanced silicon process
technologies, such as the Company's "Trench" technology, offer very high cell
densities and low device on-resistance. These process technologies have been
coupled with innovative packaging techniques to create surface-mount product
families, such as LITTLE FOOT(R) power MOSFETs, that provide customers with size
and performance benefits as well as manufacturing compatibility with digital
integrated circuits.
Siliconix power ICs include power conversion and interface ICs, and motor
control ICs. The Company's power conversion and interface ICs are based on
low-voltage mixed-signal silicon processes that offer customers higher
frequencies without compromising efficiencies compared to competitive products.
They are used in applications where an input voltage from a battery or other
supply source must be converted to a level that is compatible with logic signals
used by microprocessors and other electronic components in the system. The
Company's motor control ICs are used to control motion in data storage
applications (e.g., optical and hard disk drives) and to control the speed of
small motors in office equipment (e.g., printers and copy machines).
The Company's mature product lines include discrete small-signal
transistors and signal processing ICs (i.e., analog switches and multiplexers).
The small-signal transistors range from junction field-effect transistors
(JFETs), Siliconix's original product line, which remain critical for some
applications, to newer transistor processes, such as the Company's DMOS
processes, which offer performance advantages over competitors' similar product
lines. The analog switches and multiplexers are primarily used in
instrumentation and industrial equipment that receives and/or outputs real-world
analog signals. The latest additions to the group are the new low voltage analog
switches and small signal MOSFETs in the very tiny SC-70 package.
Manufacturing
The Company's manufacturing operations are strategically located to support
customer manufacturing locations, to cultivate growth markets, and to access
cost-effective engineering talent. All of the Company's manufacturing sites use
Statistical Process Control methods of total quality control and have ISO 9000
certification.
Siliconix fabricates wafers for its advanced power products at its Santa
Clara, California manufacturing headquarters, where the Company maintains a
Class 1 (clean room classification) six-inch wafer fab. Further capacity for
wafer fabrication of power products was added during 1997 by way of a
manufacturing capacity agreement with a current subsidiary of Vishay in a Class
1 facility in Itzehoe, Germany. Wafers for analog switches, multiplexers, and
low power discrete devices are fabricated in the Company's four-inch wafer fab
in Santa Clara. In 1997, fabrication of the Company's JFETs was transferred to
an unaffiliated foundry in Beijing, China.
Assembly and testing of the Company's products are performed in Company
facilities in Taiwan and Shanghai, China, and by subcontractors in the
Philippines, China, and the United States.
Raw materials used by the Company include single-crystal silicon wafers,
chemicals, gases, metal wire, and ceramic, plastic, and glass-to-metal packages.
Although these materials are generally available from two or more sources, the
industry has experienced difficulties in obtaining supplies of some raw
materials from time to time; such difficulties in the future could adversely
affect the Company's operations.
Government regulations impose various environmental controls on the
discharge of certain chemicals and gases used in the manufacturing process. The
Company believes that its activities substantially conform to present and
anticipated regulations and is constantly upgrading its Santa Clara facility to
ensure continued compliance with such regulations. In 1990, the Company reached
a settlement for cleanup of soil and ground water at a site the Company occupied
prior to 1972, with the current owner of that site, and settled a lawsuit
against its insurance carriers in 1992 and 1993 with respect to this matter. The
Company also established a remedial activity to remove soil and groundwater
contamination at its Santa Clara site in 1990. For details on these matters, see
Item 3, Legal Proceedings. While the Company has experienced only limited
effects on its operations from environmental regulations, there can be no
assurance that changes in such regulations will not impose the need for
additional capital equipment or other requirements.
Sales
From 1993 to 1998, Siliconix sales were handled by the sales organization
of TEMIC Semiconductors, the semiconductor division of the Daimler-Benz
microelectronics group, which included Siliconix, Telefunken Semiconductors,
Matra MHS, and Dialog Semiconductor. Unifying the sales activities for these
four companies brought value to customers by allowing them to deal with one
entity for a broader range of their semiconductor needs. Since the acquisition
of a majority interest in the Company by Vishay , the Company's products have
been sold by the Vishay worldwide sales organization, which consists of much of
the same worldwide structure of sales representatives and distributors that was
established for TEMIC Semiconductors.
The sales organizations are regionally based, functioning as agents that
earn a commission as a fixed percentage of sales and performing all
sales-related activities. The following table shows net sales and the percentage
of the Company's net sales on a geographic basis for the periods indicated
(dollars in thousands).
Years ended December 31
-----------------------
1998 1997 1996
---- ---- ----
United States $ 70,282 25% $ 91,673 29% $ 74,268 28%
Europe 72,168 26% 90,480 28% 71,739 27%
Japan 19,700 7% 33,359 10% 51,065 19%
Taiwan 29,530 10% 19,448 6% 17,008 6%
Singapore 36,425 13% 34,473 11% 25,093 9%
Asia Pacific 45,012 16% 29,901 9% 14,433 5%
All other 9,229 3% 22,217 7% 15,328 6%
---------- ------- ---------- ------- ---------- ------
$ 282,346 100% $ 321,551 100% $ 268,934 100%
The Company markets its products in different geographic areas as follows.
United States and Canada: Sales are made by the United States and Canada
("North American") field sales force and manufacturer's representative
organizations. Manufacturer's representatives are compensated by commissions
only. Area sales managers coordinate these representatives and the North
American sales force. North American sales headquarters are located in Monroe,
Connecticut. Regional sales offices are located in or near Sanford, Maine;
Chicago, Illinois; Tampa, Florida; Houston, Texas; Santa Clara, California; and
Orange County, California. In addition, the Company has direct sales offices for
automotive customers in Troy, Michigan and Kokomo, Indiana.
Sales not made directly to original equipment manufacturers are made
through distributors, which currently have approximately 350 locations
throughout the United States and Canada. Certain distributors are provided with
contractual protection for their inventory against reductions in published
prices and against product obsolescence.
Europe Sales are made by the European sales force and manufacturer's
representative organizations. As in North America, sales not made directly to
the original equipment manufacturers are made through distributors, with
approximately 125 locations. These distributors are provided with certain
inventory obsolescence and price protections similar to those granted to
domestic distributors.
Japan: Sales in Japan are made both by the Japan sales force and
distributors.
Asia Pacific: Sales are made in Hong Kong, Korea, Taiwan, The People's
Republic of China and in Southeast Asia, by the Asia-Pacific sales force,
headquartered in Singapore. In these locations, as in the United States, sales
are made directly to original equipment manufacturers through field sales
engineers or through manufacturer's representatives. Direct sales agents and
representatives are compensated by commissions only. Sales not made directly to
original equipment manufacturers are made through distributors, which currently
have approximately 75 locations in the region.
Sales in the rest of the world are made through manufacturer's
representatives, stocking representatives and distributors.
For further information, (see Note 7 of Notes to Consolidated Financial
Statements) which is incorporated herein by reference.
Order Backlog
As of December 31, 1998, the backlog of orders booked was $62.4 million.
The backlog as of December 31, 1997 was $74.1 million. The Company includes in
backlog only open orders which have been released by the customer for shipment
in the calendar year 1999. The Company's customers encounter uncertain and
changing demand for their products. They typically order products from the
Company based on their forecasts. If demand falls below customers' forecasts, or
if customers do not control their inventory effectively, they may cancel or
reschedule their shipments previously ordered from the Company, in many
instances without the payment of any penalty. Therefore, backlog is not
necessarily indicative of sales for any future period.
Competition
The semiconductor industry is highly competitive. Many of the Company's
competitors are larger companies with greater financial resources and limited
dependency on semiconductor products as their sole source of sales and earnings.
The Company has been able to compete effectively by being selective in its
choice of products and markets, and by being a technology leader in those areas.
Through closely established customer relationships, the Company acquires
in-depth applications know-how for the markets it serves and develops products
that specifically address customer needs.
Research and Development
Research and development activities are directed toward expanding
technology leadership. Focus is on developing new products and processes, and
activities are ongoing to improve the cycle time from new product development to
product release. Total expenditures were $17.1 million in 1998, $17.8 million in
1997 and $20.8 million in 1996. Significant effort has been expended on new
power products and ICs where continued rapid market growth is expected, (see
Note 2 of Notes to Consolidated Financial Statements).
Patents and Licenses
Siliconix protects its technology leadership by securing patents on
proprietary products and processes. As of December 31, 1998, Siliconix owned 147
U.S. patents, covering primarily semiconductor device structures, processes, and
circuitry. Expiration dates for these patents range from 1999 to 2017. An
additional 14 patents have been allowed but not yet issued. There were also 60
U.S. patent applications pending. The Company believes that, as it increasingly
utilizes these patents in the design and manufacture of its products, its
royalty obligations will decrease significantly, (see Note 8 of Notes to
Consolidated Financial Statements).
Employees
On December 31, 1998, the Company employed 1,642 people, of whom 703 were
employed in the United States, 923 in Asia, and 16 in Europe.
There are no collective bargaining agreements between the Company and its
employees, and there have been no work stoppages due to labor difficulties. The
Company considers its relations with its employees to be excellent.
Executive Officers
The following sets forth the name, age, offices presently held, business
experience, and principal occupation of the Company's executive officers:
Name Office Presently Held
---- ---------------------
King Owyang President, Chief Executive Officer
Mike Chang Executive Vice President, Technology &
Silicon Operations
Jens Meyerhoff Senior Vice President Administration and Chief
Financial Officer
Hamza Yilmaz Senior Vice President
John Cox Vice President, Worldwide Environmental, Health &
Safety Affairs
Dr. Owyang, age 53, joined the Company in January 1988 as a divisional Vice
President of Research and Development. He assumed additional responsibility for
Corporate Reliability and Quality Assurance in April 1990. He became Vice
President, Engineering in May 1990; Executive Vice President, Technology and
Silicon Operations in April 1992; and President and Chief Executive Officer in
March 1998. Dr. Owyang holds B.S. and Ph.D. degrees in Physics.
Dr. Chang, age 53, joined the Company in December 1987 as Manager of
Process Technology. He became Director, Fab Operations in April 1992; Senior
Director, Worldwide Fab Operations in April 1995; and Executive Vice President,
Technology & Silicon Operations in October 1998. Dr. Chang holds B.S. and Ph.D.
degrees in Electrical Engineering.
Mr. Meyerhoff, age 34, joined the Company in May 1995 as Senior Manager of
Systems and Reporting. He became Director, Product Unit Controlling in April
1997; Senior Director and Corporate Controller in March 1998; and Chief
Financial Officer and Senior Vice President Administration in October 1998.
Prior to joining the Company, Mr. Meyerhoff served as Manager, Planning and
Controlling at a subsidiary of Daimler-Benz Rail Systems Division in Pittsburgh,
Pennsylvania from January 1992 to April 1995. Mr. Meyerhoff holds an M.B.A. in
Finance and Information Technology.
Dr. Yilmaz, age 44, joined the Company in March 1988 as Manager of Device
Design and Engineering. He become World Wide Product and Test Engineering Senior
Manager in July 1992; Director in June 1993; Senior Director, IC Design and
Engineering and Acting Senior Director, World Wide Product and Test Engineering
in October 1995; Senior Director of Engineering for the Power MOSFET Business
Unit in July 1996; and Vice President and head of the Power MOSFET Business Unit
in August 1997. He assumed the additional post of Senior Vice President in
October 1998. Dr. Yilmaz holds B.S., M.S. and Ph.D. degrees in Electrical
Engineering.
Mr. Cox, age 50, joined the Company in April 1997 as Vice President,
Worldwide Environmental, Health & Safety Affairs. He devotes approximately
one-half of his time to the Company's affairs. Since September 1995, he has also
been Executive Vice President and Principal Consultant of EnviroBusiness, Inc.,
an environmental consulting firm to high-technology industries, specializing in
semiconductor and semiconductor equipment manufacturers. For more than the
previous five years, he served as Corporate Director of Safety, Health &
Environmental Affairs of Shipley Company.
Item 2. Properties.
The Company owns its principal manufacturing plant and general offices
which are located in four two-story buildings totaling 234,600 square feet on a
13-acre site in Santa Clara, California. TEMIC Semiconductor North America,
Inc., a subsidiary of the Company, leases approximately 11,700 square feet of
office space in Basking Ridge, New Jersey. Siliconix Limited, a subsidiary of
the Company, currently occupies, under an agreement with TEMIC UK Limited
(formerly an affiliated company), approximately 2,000 square feet of space in
premises located in Bracknell, United Kingdom, where the Company's European
Headquarters are located. Vishay Asia Pte. Ltd., also a subsidiary of the
Company, leases approximately 17,300 square feet of administrative space in
premises in Singapore, where the Company's Asia Administrative Headquarters are
located. Siliconix (Taiwan) Limited, an indirect subsidiary of the Company, owns
a 50,000-square-foot portion of a building in the Nan-Tse Export Processing
Zone, a suburb of Kaohsiung, Taiwan, which consists of manufacturing and general
office space. TEMIC Japan KK, another subsidiary of the Company, leases 3,400
square feet of general office space in Tokyo. Shanghai Simconix Co. Ltd., a
joint venture between the Company and the Shanghai Institute of Metallurgy (the
"SIM"), leases 41,000 square feet of manufacturing and general office space in
Shanghai from the SIM.
Item 3. Legal Proceedings.
In 1996, the Company was a party to two environmental proceedings. The
first involved property that the Company vacated in 1972. In July 1989, the
California Regional Water Quality Control Board ("RWQCB") issued Cleanup and
Abatement Order No. 89-115 both to the Company and the current owner of the
property. The Order alleged that the Company contaminated both the soil and the
groundwater on the property by the improper disposal of certain chemical
solvents. The RWQCB considered both parties to be liable for the contamination
and sought to have them decontaminate the site to acceptable levels. The Company
subsequently reached a settlement of this matter with the current owner of the
property. The settlement also provided that the current owner will indemnify the
Company and its employees, officers, and directors against any liability that
may arise out of any governmental agency actions brought for environmental
cleanup of the subject site, including liability arising out of RWQCB Order No.
89-115, to which the Company remains nominally subject.
The second proceeding involves the Company's Santa Clara, California
facility, which the Company has owned and occupied since 1969. In February 1989,
the RWQCB issued Cleanup and Abatement Order No. 89-27 to the Company. The Order
is based on the discovery of contamination of both the soil and the groundwater
on the property by certain chemical solvents. The Order calls for the Company to
specify and implement interim remedial actions and to evaluate final remedial
alternatives. The RWQCB issued a subsequent order requiring the Company to
complete the decontamination. The Company is complying with the RWQCB's orders.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
As of March 11, 1999, there were 736 holders of record of the Company's
Common Stock. Under Delaware law, the Company may pay dividends only from
retained earnings or, if none, from net profits for the current or preceding
fiscal year. In addition, the Company is indirectly bound by a restrictive
covenant contained in the Vishay Intertechnology's Credit Agreement with its
lending banks which precludes the payment of dividends. The Company has paid no
dividends since December 1980 in order to retain the Company's earnings to fund
future growth requirements. No change in such policy is anticipated in the near
future.
A presentation of the highest and lowest "last trade" price for the
Company's Common Stock for each quarterly period during 1998 and 1997 is
incorporated by reference from the Company's 1998 Annual Report to Shareholders,
portions of which are filed as Exhibit 13 hereto. The Company's Common Stock
trades on the Nasdaq Stock Market under the symbol "SILI."
Item 6. Selected Financial Data.
Incorporated by reference from the Company's 1998 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Incorporated by reference from the Company's 1998 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk.
Incorporated by reference from the Company's 1998 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
Item 8. Financial Statements and Supplementary Data.
The financial statements and reports of independent auditors are
incorporated by reference from the Company's 1998 Annual Report to Shareholders,
portions of which are filed as Exhibit 13 hereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
Report of Ernst and Young LLP,
To the Board of Directors and Shareholders of Siliconix incorporated
We have audited the accompanying consolidated balance sheet of
Siliconix incorporated as of December 31, 1998, and the related consolidated
statements of operations, shareholders' equity and cash flows for the year then
ended. These consolidated statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1998 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Siliconix incorporated at December 31, 1998, and the result of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
San Jose, California
January 21, 1999
Board of Directors
Siliconix incorporated:
We have audited the accompanying consolidated balance sheet of Siliconix
incorporated as of December 31, 1997, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the years in the
two-year period ended December 31, 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
mistatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Siliconix
incorporated as of December 31, 1997, and the results of their operations and
their cash flows for each of the years in the two-year period ended December 31,
1997, in conformity with generally accepted accounting principles.
KPMG LLP
Mountain View, California
January 21, 1998
PART III
Item 10. Directors and Executive Officers of the Registrant.
The executive officers of the Company are identified in Item 1 of Part I of
this Annual Report on Form 10-K. Identification of the directors of the Company
is incorporated by reference from the "Election of Directors" section of the
Company's definitive Proxy Statement dated April 30, 1999 to be mailed to
shareholders in connection with the 1999 Annual Shareholders Meeting and filed
with the Securities and Exchange Commission on or about April 30, 1999 (the
"Proxy Statement").
Item 11. Executive Compensation.
Incorporated by reference from the "Compensation of Officers and Directors"
and "Report of Compensation Committee" sections of the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference from the "Security Ownership" section of the
Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
Incorporated by reference from the "Certain Transactions" section of the
Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Documents Filed as Part of Form 10-K
1. Financial Statements
Independent Auditors' Reports on the Financial Statements.
The remainder of the Financial Statements and reports of independent
auditors are incorporated by reference from the Company's 1998 Annual
Report to Shareholders, portions of which are filed as Exhibit 13
hereto.
Consolidated Statements of Operations for the years ended December 31,
1998, 1997, and 1996
Consolidated Balance Sheets as of December 31, 1998 and 1997
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1997, and 1996
Notes to Consolidated Financial Statements
Quarterly Financial Data (unaudited)
2. Financial Statement Schedule
A. Independent Auditors' Reports on Financial Statement Schedule
II. Valuation and Qualifying Accounts
All other schedules have been omitted as the required information
is reported or incorporated by reference elsewhere in this Annual
Report or is not applicable.
3. Exhibits
3.1 Restated Certificate of Incorporation/1/
3.2 Bylaws/2/
10.2 One-Year Key Professional Incentive Bonus Plan/1/
10.3 Key Professional Performance Unit Plan/2/
10.5 Amended and Restated License Agreement dated April 10, 1990
between the Company and International Rectifier Corporation/1/
10.6 Amendment to Amended and Restated License Agreement dated
December 21, 1990 between the Company and International
Rectifier Corporation/1/
10.10 Pension Contract dated January 26, 1995 between Richard J.
Kulle and TEMIC TELEFUNKEN microelectronic GmbH/3/
10.11 Special Retention Bonus Plan of Siliconix incorporated/4/
10.12 Change-in-Control Severance Plan of Siliconix incorporated/4/
10.13 Special Retention Bonus Plan (1998) of Siliconix incorporated
/5/
10.14 Amendment No. 1 to Change-in-Control Severance Plan of
Siliconix incorporated/5/
10.15 Amendment No. 1 to Siliconix One-Year Key Professional
Incentive Bonus Plan/5/
10.16 Amendment No. 2 to Siliconix One-Year Key Professional
Incentive Bonus Plan/5/
10.17 Amendment No. 1 to Siliconix Key Professional Performance Unit
Plan/5/
10.18 Amendment No. 2 to Siliconix Key Professional Performance Unit
Plan/5/
10.19 Separation Agreement and Mutual Release dated March 11, 1998
among Richard Kulle, Siliconix incorporated and Vishay
Intertechnology, Inc.
10.20 Amendment No. 1 to Separation Agreement and Mutual Release
dated March 19, 1998 among Richard Kulle, Siliconix
incorporated and Vishay Intertechnology, Inc.
10.21 Promissory Note from Siliconix incorporated to Vishay
Intertechnology, Inc. in the principal amount of $34,570,000
dated March 2, 1998
10.22 Promissory Note from Siliconix incorporated to Vishay
Intertechnology, Inc. in the principal amount of $16,000,000
dated May 26, 1998
(footnotes on following page)
10.23 Revolving Intercompany Promissory Note from Siliconix
incorporated to Vishay Intertechnology, Inc. in the maximum
principal amount of $35,000,000 dated May 26, 1998
13 Portions of Siliconix incorporated 1998 Annual Report to
Shareholders
21 Subsidiaries of the Company
27 Financial Data Schedule
- - ---------------------
/1/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, filed with the SEC on
April 15, 1991.
/2/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, filed with the SEC on
April 1, 1996.
/3/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, filed with the SEC on
April 10, 1995.
/4/Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on May 14,
1997.
/5/Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1997, filed with the SEC on
November 12, 1997.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K in the last quarter of the
year ended December 31, 1998.
Report of Ernst & Young LLP, Independent Auditors
To the Board of Directors and Shareholders of Siliconix, Incorporated:
We have audited the consolidated financial statements of Siliconix incorporated
as of December 31, 1998 and for the year ended December 31, 1998, and have
issued our report thereon dated January 21, 1999 (included elsewhere in this
Annual Report on Form 10-K). Our audit also included the financial statement
shcedule listed in Item 14(a)(2) of this Annual Report on Form 10-K. This
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audit.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
San Jose, California
January 21, 1999
REPORT ON FINANCIAL STATEMENT SCHEDULE ON INDEPENDENT AUDITORS
The Board of Directors
Siliconix incorporated:
The audit referred to in our report dated January 21, 1998 included the related
financial statmenet schedule as of December 31, 1997, and for each of the years
in the two-year period ended December 31, 1997, as listed in the Index in Item
14(a)2 herein. The financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statement schedule based on our audit. In our opinion, the financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects,
the information set forth therein.
KPMG LLP
Mountain View, California
January 21, 1998
SILICONIX INCORPORATED
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31
(IN THOUSANDS)
Additions
---------
Balance
At Charged to Balance
Beginning Costs and Charged to At End
of Period Expenses Revenues Deductions of Period
--------- -------- -------- ---------- ---------
1996:
Allowance for Doubtful Accounts $ 1,841 $ 329 $ - $ 69 $ 2,101
Allowance for Price Adjustments 443 - 3,945 4,288 100
Allowance for Returned Parts and
Distributor Adjustments 3,242 - 18,636 15,474 6,404
----- ------- ------ ------ -----
$ 5,526 $ 329 $22,581 $ 19,831 $ 8,605
1997:
Allowance for Doubtful Accounts $ 2,101 $ 545 $ - $ 458 $ 2,188
Allowance for Price Adjustments 100 - 4,712 4,421 391
Allowance for Returned Parts and
Distributor Adjustments 6,404 - 24,818 21,878 9,344
----- ------- ------ ------- ------
$ 8,605 $ 545 $29,530 $ 26,757 $11,923
1998:
Allowance for Doubtful Accounts $ 2,188 $ 1,266 $ - $ 586 $ 2,868
Allowance for Price Adjustments 391 - 6,687 6,328 750
Allowance for Returned Parts and
Distributor Adjustments 9,344 - 23,319 21,890 10,773
------- ------- ------ ------- ------
$ 11,923 $ 1,266 $30,006 $28,804 $14,391
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 26, 1999
SILICONIX INCORPORATED
By: /s/King Owyang
-----------------------------
King Owyang
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer
/s/King Owyang President, Chief Executive
- - ----------------------------- Officer and a Director March 26, 1999
King Owyang
Principal Financial and Accounting Officer
/s/Jens Meyerhoff Senior Vice President Administration and
- - ----------------------------- Chief Financial Officer March 26, 1999
Jens Meyerhoff
/s/Everett Arndt Director March 26, 1999
- - ----------------------------
Everett Arndt
/s/Lori Lipcaman Director March 26, 1999
- - ----------------------------
Lori Lipcaman
/s/Glyndwr Smith Director March 26, 1999
- - ----------------------------
Glyndwr Smith
INDEX TO EXHIBITS
Exhibit
-------
3.1 Restated Certificate of Incorporation/1/
3.2 Bylaws/2/
10.2 One-Year Key Professional Incentive Bonus Plan/1/
10.3 Key Professional Performance Unit Plan/2/
10.5 Amended and Restated License Agreement dated April 10, 1990
between the Company and International Rectifier Corporation/1/
10.6 Amendment to Amended and Restated License Agreement dated
December 21, 1990 between the Company and International
Rectifier Corporation/1/
10.10 Pension Contract dated January 26, 1995 between Richard J.
Kulle and TEMIC TELEFUNKEN microelectronic GmbH/3/
10.11 Special Retention Bonus Plan of Siliconix incorporated/4/
10.12 Change-in-Control Severance Plan of Siliconix incorporated/4/
10.13 Special Retention Bonus Plan (1998) of Siliconix
incorporated/5/
10.14 Amendment No. 1 to Change-in-Control Severance Plan of
Siliconix incorporated/5/
10.15 Amendment No. 1 to Siliconix One-Year Key Professional
Incentive Bonus Plan/5/
10.16 Amendment No. 2 to Siliconix One-Year Key Professional
Incentive Bonus Plan/5/
10.17 Amendment No. 1 to Siliconix Key Professional Performance Unit
Plan/5/
10.18 Amendment No. 2 to Siliconix Key Professional Performance Unit
Plan/5/
10.19 Separation Agreement and Mutual Release dated March 11, 1998
among Richard Kulle, Siliconix incorporated and Vishay
Intertechnology, Inc.
10.20 Amendment No. 1 to Separation Agreement and Mutual Release
dated March 19, 1998 among Richard Kulle, Siliconix
incorporated and Vishay Intertechnology, Inc.
10.21 Promissory Note from Siliconix incorporated to Vishay
Intertechnology, Inc. in the principal amount of $34,570,000
dated March 2, 1998
10.22 Promissory Note from Siliconix incorporated to Vishay
Intertechnology, Inc. in the principal amount of $16,000,000
dated May 26, 1998
(footnotes on following page)
10.23 Revolving Intercompany Promissory Note from Siliconix
incorporated to Vishay Intertechnology, Inc. in the maximum
principal amount of $35,000,000 dated May 26, 1998
13 Portions of Siliconix incorporated 1998 Annual Report to
Shareholders
21 Subsidiaries of the Company
27 Financial Data Schedule
- - ---------------------
/1/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, filed with the SEC on
April 15, 1991.
/2/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, filed with the SEC on
April 1, 1996.
/3/Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, filed with the SEC on
April 10, 1995.
/4/Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on May 14,
1997.
/5/Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1997, filed with the SEC on
November 12, 1997.