Diodes Incorporated and Subsidiaries management ’ s discussion and analysis of financial condition  and results of operations The following discussion of the Company’s financial  condition and results of operations should be read together  with the consolidated financial statements and the notes to  consolidated financial statements included elsewhere in this  Form 10-K. Except for the historical information contained  herein, the matters addressed in this Item 7 constitute  “forward-looking statements” within the meaning of Section  27A of the Securities Act of 1933, as amended, and Section  21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “continue,”  “estimate,” “expect,” “intend,” “may,” “project,” “will” and similar expressions. Such forward-looking statements are subject to a variety of risks and uncertainties, including  those discussed above under the heading “Cautionary  Statement for Purposes of the “Safe Harbor” Provision of  the Private Securities Litigation Reform Act of 1995” and  elsewhere in this Annual Report on Form 10-K, that could  cause actual results to differ materially from those anticipated by the Company’s management. The Private Securities  Litigation Reform Act of 1995 (the “Act”) provides certain  “safe harbor” provisions for forward-looking statements. All  forward-looking statements made in this Annual Report on  Form 10-K are made pursuant to the Act. The Company  does not undertake to update its forward-looking statements  to reflect actual events and outcomes or later events. We sell a wide variety of discrete semiconductor prod- ucts, as well as silicon wafers used in the manufacture  of these products, primarily to manufacturers in the  communications, computing, industrial, consumer  electronics and automotive markets, and to distributors  of electronic components to end-customers in these mar- kets. Our technologies include high density diode and  transistor arrays in multi-pin surface-mount packages; PowerDI $^{tm}$, high-performance surface-mount packages; performance Schottkys, switching and rectifier diodes;  single and dual pre-biased transistors; performance tight  tolerance and low current zener diodes; subminiature  surface-mount packages; transient voltage suppressors  (TVS and TSPD); small signal transistors and MOSFETs;  and standard, fast, ultra-fast, and super-fast rectifiers. Because of the electronics industry trend towards  moving manufacturing to lower operating cost coun- tries in Asia, the Company has focused primarily on  customers in China, Taiwan, Korea and Hong Kong.  We sell to Asian customers (59% of 2004 sales) primarily  through our wholly owned subsidiaries, Diodes-Taiwan  and Diodes-Hong Kong. The Asian discrete semicon- ductor market is the largest and fastest growing market  in which the Company participates. An increase in the percentage of sales in Asia is expected as we have  significantly increased our sales presence there and believe there is greater potential to increase market  share in that region due to the expanding base of electronics product manufacturers. The majority (66% in 2004) of our sales are to major  OEMs such as Intel Corporation, Cisco Systems Incor- porated, Sony Corporation, Nortel Networks Corpora- tion, Delphi Automotive, Bose Corporation, Scientific  Atlanta Incorporated, Samsung Electronics, Asustek  Computer, Inc., Quanta and LG Electronics, Inc. Our  distribution network (34% of 2004 sales) includes major  distributors such as Arrow Electronics, Inc., Avnet, Inc., Digi-Key Corporation, Future Electronics, Ltd.,  Jaco Electronics, Inc., Reptron Electronics, Inc., and  All American Semiconductor, Inc. The Company rapidly responds to the demands of the global marketplace by continuing to increase its in- vestment in research and development, and by focusing  on expanding its product portfolio and closely control- ling product quality and time-to-market. As a result of  the Company shifting development priorities toward  specialized configurations, such as the Company’s  high-density array devices, the Company is introduc- ing a range of new products that improve the trade-off  between size, performance and power consumption for  surface-mount packages. Our products are designed into a broad range of  end-products such as notebook computers, flat-panel  displays, set-top boxes, game consoles, digital cameras,  cellular phones, PDAs, power supplies, security systems,  network routers and switches, as well as into automo- tive safety controls, GPS navigation, satellite radios and  audio/video players. Overview 14 PowerDI is a trademark of Diodes Incorporated.