Pericom Board Sends Letter to Shareholders Strongly Recommending They Vote "FOR" the Proposed Acquisition by Diodes

Pericom SemiconductorCorporation ("Pericom" or the "Company") (NASDAQ: PSEM) today announced thatits Board of Directors sent a letter to its shareholders urging them to vote"FOR" the previously announced merger agreement (the "Diodes Agreement")with Diodes Incorporated ("Diodes") (NASDAQ: DIOD), pursuant to whichPericom shareholders are entitled to promptly receive $17.00 per share incash, subject only to Pericom shareholder approval. The letter, a copy ofwhich is included below, addresses the Board's significant concerns with theclear and fundamental risks associated with the offer made by MontageTechnology Group Limited ("Montage"), including risks and uncertaintiesregarding Montage's ability (or unwillingness) to obtain financing andregulatory approvals for an acquisition of Pericom and Montage's ability toultimately close a transaction with Pericom in a timely fashion, if at all.The letter to shareholders also responds to and clarifies a number ofmisleading statements that Montage has repeatedly made in communications toPericom shareholders in its effort to conceal the significant risksassociated with Montage's offer. Pericom has mailed a white proxy card to its shareholders in connection withits Special Meeting of Shareholders (the "Special Meeting"), which isscheduled to be held on November 20, 2015. The Special Meeting is beingcalled primarily to seek shareholder approval of the Diodes Agreement.Pericom shareholders of record as of the close of business on September 22,2015 are entitled to vote at the Special Meeting. In connection with the Special Meeting, Pericom has filed an investorpresentation with the U.S. Securities Exchange Commission ("SEC") detailingthe rationale for the Board's unanimous approval of the Diodes Agreement andthe Board's unanimous decision to reject the inferior offer from Montagebased on the significant and unacceptable risks associated with that offer. November 5, 2015 Dear Shareholders, A Special Meeting of Shareholders of Pericom Semiconductor Corporation willbe held on November 20, 2015, at which you will be asked to approve theAgreement and Plan of Merger between Diodes Incorporated and Pericom, datedSeptember 2, 2015 (the "Diodes Agreement"). The Pericom Board of Directorsunanimously recommends that Pericom shareholders vote "FOR" the acquisitionof Pericom by Diodes. Your vote in support of the proposed acquisition byDiodes is essential to lock in the substantial cash premium represented bythe $17.00 per share purchase price offered by Diodes, which we believe isclearly in the best interests of Pericom shareholders. THE MONTAGE OFFER IS CLEARLY NOT IN THE BEST INTERESTS OF PERICOMSHAREHOLDERS BECAUSE THE HIGHLY UNCERTAIN PREMIUM IS INSUFFICIENT TOOUTWEIGH THE SIGNIFICANT TIMING AND DEAL CERTAINTY RISKS ASSOCIATED WITH THEOFFER In summary, the key elements of the Montage Offer that the Pericom Board ofDirectors find most troubling are: -- Despite its claims, the one-page financing letters provided by Montage's lenders are not full commitments to finance a transaction with Pericom; -- For example, the one-page letter from the Bank of China Shanghai Pudong Branch states that any financing to be provided to Montage "needs to be evaluated by [Bank of China's] committee and willnot be issued until all the conditions that [Bank of China] requires and admits are fully satisfied". However, the Bank of China Shanghai Pudong Branch's letter does not include any details regarding what those conditions may be and, despite repeated requests, Montage has not provided any further information regarding such conditions. -- Montage has removed regulatory approvals as a condition to closing although they still must be obtained for a lawful closing; -- Cannot contract away the oversight of third party regulators and to suggest such an action demonstrates a move to hide the facts -- Because Montage is a Cayman company with few assets in the UnitedStates, enforcement of any judgment against Montage will be problematic -- arisk Montage itself clearly stated in its IPO prospectus; and -- If for any reason, Montage is unable or unwilling to close the proposed transaction with Pericom, the only real recourse for Pericomshareholders may be the $43 million reverse break-up fee (vs. $400 million of market premium from Diodes). As you may know, subsequent to signing the Diodes Agreement, the PericomBoard received an unsolicited acquisition offer from Montage TechnologyGroup Limited ("Montage") with a proposed purchase price of $18.50 per share(the "Montage Offer"). Clearly, the additional $1.50 per share premiumcompared to the price offered by Diodes merited serious consideration by thePericom Board. However, the Pericom Board has a duty to obtain the highestvalue reasonably available to our shareholders, and in carrying out suchduty, the Pericom Board must consider all factors, including the likelihoodof completing a transaction. Accordingly, we devoted a significant amount oftime and resources to fully evaluating the Montage Offer and conducted athorough analysis and comparison of the Montage and Diodes offers todetermine what is in the best interests of our shareholders. After careful consideration and extensive consultation with our independentfinancial advisor, Cowen and Company, and outside legal advisors, includingLatham & Watkins and Lee & Li, and extensive discussions and negotiationswith Montage and its advisors, the Pericom Board of Directors unanimouslydetermined that the premium represented by the Montage Offer is highlyuncertain, does not outweigh or adequately compensate our shareholders forthe very real possibility that Montage would not be able to close anacquisition of Pericom, and is clearly not in the best interests of ourshareholders. As discussed in greater detail below, the Board's unanimous decision wasbased, in part, on the serious doubts and concerns that the Board has withrespect to Montage's ability to obtain the financing and regulatoryapprovals necessary to consummate an acquisition of Pericom. -- Despite numerous and repeated requests by Pericom, both prior to and following execution of the Diodes Agreement, Montage has refused to provide customary, reliable or sufficient financing commitments to consummate a transaction with Pericom. The only reasonable conclusion that can be drawn from Montage's otherwise inexplicable failure to provide such commitments despite having repeated opportunities and many months to do so is that Montage is indeed unable to actually secure such financing. -- Montage has also dismissed and failed to thoughtfully consider the implications of, or even how it plans to address, the myriad of regulatory approvals that will be required in connection with an acquisition of Pericom, including approvals from numerous governmental agencies in the People's Republic of China (PRC) and Taiwan (which will almost certainly require divestiture of Taiwanese assets by Pericom) and from the Committee on Foreign Investments in the U.S. (CFIUS). Indeed, rather than actually addressing Pericom's concerns with respect to the regulatory approvals required in a revised offer received November 4, Montage avoids the issue entirely by simply eliminating any requirement that regulatory approvals be obtained. While this might be the quickest way to "address" Pericom's concerns with respect to regulatoryapprovals, regulatory oversight cannot be contracted away, and an acquisition of Pericom by Montage will still be subject to regulatory filings and regulatory scrutiny. Simply stated, Pericom's concerns with respect to obtaining regulatory approvals have not been cured by Montage's hasty attempt to contractually do away with legally required approvals. We believe Montage is consistently misrepresenting the one-page financingletters as "committed financing" and challenge Montage to be transparentwith investors and make available the one-page financing letters as providedby Bank of China Shanghai Pudong Branch and CEC. Despite repeated requestsand many months to do so, Montage has yet to provide the Pericom Board withany level of reasonable assurance that it has secured committed financing orthat it has a legitimate plan to obtain regulatory approvals. As a result,the Montage Offer asks Pericom shareholders to sacrifice a highly certain,near-term $17.00 per share offer from Diodes in the hopes of obtaining, atsome point in the future, if at all, a highly uncertain premium from a buyerwho has consistently failed to address the material risks associated withits offer. We believe that there is a substantial risk that pursuing atransaction with Montage would leave our shareholders holding the bag, withnothing more than a $43 million reverse breakup fee (which amounts to lessthan 11% of the $400 million value represented by the premium offer fromDiodes) as compensation if Montage cannot (or chooses not to) close thedeal.