Pericom Board Issues Open Letter to Shareholders Urging Them to Vote the WHITE Proxy Card "FOR" the Diodes Merger Agreement

In light of Montage's attempt -- once again -- to mislead Pericom shareholders, we think it's important to repeat the FACTS. To make it absolutely clear to Montage that its misstatements and flat-out falsehoods aren't fooling anyone, we've included language from Proxy Mosaic's recommendation (italicized below):

  • Montage's proposed financing for its offer comes in the form of one-page financing letters from Bank of China Shanghai Pudong Branch and China Electronics Financial Co Ltd. -- both of which lack specific terms and suffer from broad and vague conditions to Montage's receipt of a loan, making any "commitment" thereunder effectively meaningless. The experts agree, stating:

    • "[W]hile Diodes has received explicit financing commitments from Bank of America to proceed with an acquisition of Pericom pending target shareholder approval, the certainty of Montage's financing commitments have continually been in question since negotiations began. The heart of the issue lies in Montage's brief commitment letter, which affords the Bank of China's credit committee the ability to approve or withdraw financing for the deal."

    • "While Montage contests Pericom's apprehension with respect to the certainty of the proposed loan, what it cannot dispute is the lack of progress made in exploring alternative funding arrangements and the general lack of clarity contained in the financing letters, making the required commitments seem instead like letters of intent."

  • Despite its attempts to convince you otherwise, Montage cannot "contract away" oversight or authority of government regulators by simply stating that such oversight or approvals are no longer necessary to complete a transaction with Pericom. Furthermore, Montage's proposed merger agreement allows Montage to walk away from the transaction and refuse to close if any one of numerous regulatory agencies (including, among others, the Committee on Foreign Investment in the United States (CFIUS) and government entities in Taiwan and China) enacts or issues an order making illegal or permanently enjoining the transaction. Once again, the experts agree, noting:

    • "The promise to assume all regulatory risks after the transaction is closed seems, in our opinion, misguided, if not impossible... "

    • "We believe the premium offered by Montage, which is only modestly higher than Diodes, does not justify the potential for a delayed or potentially blocked transaction."

  • Even if Montage chose not to walk away from the transaction, overcoming any hurdles imposed by such governmental entities would substantially delay your receipt of the per share purchase price. Once more, the experts agree, concluding:

    • "[W]hile any review is sure to extend the period before closing, it appears that Montage's claims of expedited closure may be overstated and, if correct, could place considerable downside risk on Pericom's valuation if legal hurdles prove difficult to clear."

    • "Integrated Silicon Solutions Inc., a comparable California-based chipmaker with no significant military applications, underwent several rounds of approval spanning roughly six months after agreeing to be purchased by a Chinese buyer who submitted CFIUS approval. This example leads us to believe that the regulators in the United States are keen to closely monitor transactions involving U.S.-based chipmakers and Chinese buyers."

In sum, despite Montage's misleading claims throughout its multiple communications to Pericom shareholders, Montage has proven unable (or unwilling) to assemble a viable offer. Despite our repeated requests, Montage has not provided adequate assurance that it can overcome the substantial financial, regulatory, timing and other risks associated with closing a Montage-Pericom transaction. These concerns are not abstract -- they are obvious and significant risks that make Montage's offer unviable.

Pericom shareholders, it really all comes down to this:

Why is Montage trying to fool us with its unsubstantiated and repeated claims of committed financing when there clearly is none? Why does Montage think it can convince us that regulatory laws don't apply to its offer simply by its flashy yet ineffective attempt to "contract away" regulatory oversight? Why does Montage think Pericom shareholders won't see past its superficial "premium" price that lacks certain value? Why does Montage have to resort to a constant stream of misleading statements about its inferior offer? What is Montage trying to hide from us?

Many intermediate conclusions can be drawn from these questions, including that Montage is simply unconcerned with eroding the trust of the Pericom Board and with its responsibility to provide Pericom shareholders with access to accurate information regarding its offer. However, we cannot help but to draw the ultimate conclusion: Montage won't (or simply can't) assemble a viable offer to purchase Pericom.

Pericom shareholders should not pay the price for Montage's questionable tactics. Don't be misled by Montage's reckless misstatements and falsehoods. Montage's offer lacks certainty and cannot rationally be considered superior -- regardless of the supposed "premium" -- to Diodes' fully-funded and "quick-to-close" offer.

As leading proxy advisor ISS concluded, "Given the apparent heightened risks, shareholders might question whether giving up the certainty of the 'bird-in-the-hand' for an offer that may not ever be consummated with Montage is worth the risk. A vote FOR the Diodes transaction as currently structured is warranted."

YOUR VOTE IS IMPORTANT -- SUBMIT THE WHITE PROXY CARD TO SUPPORT THE CERTAIN VALUE OFFERED BY A TRANSACTION WITH DIODES.

THERE IS STILL TIME TO VOTE YOUR SHARES BY PHONE OR INTERNET!

Pericom's upcoming Special Meeting is important in delivering the best outcome for our shareholders. The Pericom Board unanimously recommends that you vote "FOR" the Diode's Merger Agreement on the WHITE proxy card.

Time remains to vote your shares and lock in the substantial premium of the Diodes Merger Agreement. If you have any questions or need assistance voting "FOR" the Diodes Merger Agreement on the WHITE proxy card, please call Mackenzie Partners, Inc., Pericom's proxy solicitor at (212) 929-5500 or toll free at (800) 322-2885.

We thank you for your continued support of Pericom and hope to see you at Friday's Special Meeting.

Regards,
Pericom Semiconductor Corporation Board of Directors

By: /s/ Alex Hui
Name: Alex Hui
Title: Chief Executive Officer, President and Chairman of the Pericom Board of Directors

By: /s/ John Hui
Name: John Hui
Title: Senior Vice President, R&D and Member of the Pericom Board of Directors

By: /s/ Mike Sophie
Name: Mike Sophie
Title: Member of the Pericom Board of Directors

By: /s/ Hau Lee
Name: Hau Lee
Title: Member of the Pericom Board of Directors

By: /s/ Simon Wong
Name: Simon Wong
Title: Member of the Pericom Board of Directors

By: /s/ John East
Name: John East
Title: Member of the Pericom Board of Directors

Forward Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not limited to, the ability of the parties to consummate the proposed transaction; satisfaction of closing conditions to the consummation of the proposed transaction; the impact of the announcement of the proposed transaction on Pericom's relationships with its employees, existing customers or potential future customers; and such other risks and uncertainties pertaining to Pericom's business as detailed in its filings with the SEC on Forms 10-K and 10-Q, which are available on the SEC's website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Pericom assumes no obligation to update any forward-looking statement contained in this document.

Important Additional Information

Pericom has filed a definitive proxy statement and relevant documents in connection with the special meeting of the shareholders of Pericom at which the Pericom shareholders will consider certain proposals regarding the potential acquisition of Pericom by Diodes Incorporated (the "Special Meeting Proposals"). Pericom and its directors and executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from Pericom's shareholders in connection with the Special Meeting Proposals. SHAREHOLDERS OF PERICOM ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. The definitive proxy statement and other relevant documents filed with the SEC may be obtained free of charge at the SEC's website at www.sec.gov . In addition, security holders will be able to obtain free copies of the definitive proxy statement from Pericom by contacting Pericom's Investor Relations by telephone at (408) 232-9100, or by mail Pericom Semiconductor Corporation, 1545 Barber Lane, Milpitas, California 95035 or by going to Pericom's Investor Relations page on its corporate website at www.pericom.com .




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