Benchmark Maintains Hold on Diodes

The Benchmark Company has published a research report on Diodes DIOD after Toshiba announced its plans to cut discrete component production. In the report, Benchmark writes, "Toshiba announced on Wednesday, November 30 that it plans to cut discrete component production due to: 1) weak market demand for discrete components and 2) Toshiba's inability to stay competitive on a global basis given the rise in the Japanese yen. Toshiba, with approximately 8% discrete component market share, is the market share leader in this highly fragmented market. We view Toshiba's decision to curtail discrete component production as a long-term positive for Diodes, Inc. Toshiba plans to remove production capacity over the next nine months. As this happens, we believe the demand environment for discrete semiconductors should improve in early 2012 as inventory destocking no longer acts as a headwind. Considering these factors, pricing for discrete components could begin to firm in 1H 2012." Benchmark maintains its Buy rating and $27 price target on Diodes, which is currently trading up $1.03 from yesterday's $18.81 closing price.