The Short Answer
Diodes stock (DIOD) is qualitatively halal and its known financial ratios pass, but the overall result is incomplete. The March 31, 2026 filing does not provide a universal prohibited-revenue numerator.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-15.
55.386 / 2,497.728
404.25 / 2,497.728
698.523 / 2,497.728
5.445 / 354.966
- Financial
- Pass
- Overall
- Incomplete
Debt/assets is 2.22%, liquidity/assets is 16.18%, receivables-plus-cash/assets is 27.97% and disclosed interest income is 1.53%; known ratios pass, while activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known financial ratios pass; this is not an index-membership claim and activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known debt, liquidity and disclosed income ratios pass; this is not an official classification.
- Financial
- Not calculated
- Overall
- Incomplete
A licensed historical market-cap series is not stored.
Business-activity disclosure
Diodes manufactures power, analog and discrete semiconductor products for automotive, industrial, computing and consumer markets. The general semiconductor activity is generally permissible, while customer and end-use revenue is not reduced to a universal prohibited-revenue numerator.
Limitation: The filing does not classify every customer end use by a universal Sharia category; activity remains qualitative.
Purification
Diodes discloses $5.445 million of interest income for the quarter, but ZakatInvest does not prescribe a scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from Diodes' March 31, 2026 Form 10-Q.
- Debt includes $30.047 million of lines of credit, $1.635 million current debt and $23.704 million long-term debt; operating lease liabilities are excluded.
- Cash is $394.062 million and short-term investments are $10.188 million; equity investments are excluded from interest-bearing securities.
- Net accounts receivable is $304.461 million and first-quarter revenue is $354.966 million.
- The filing reports $5.445 million of interest income for the quarter; no fixed purification percentage is prescribed.
- Power, analog and discrete semiconductor products are generally permissible, while automotive, industrial and consumer end uses remain qualitative.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Designing and manufacturing general-purpose semiconductors is generally permissible. Diodes has low known leverage, and disclosed interest income is 1.53% of quarterly revenue; no universal prohibited-revenue numerator is disclosed.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Diodes's Business Activity
Diodes designs and manufactures broad-based semiconductors. Its products include:
- Discrete devices: Diodes, transistors, and rectifiers
- Analog & mixed-signal: Power-management and signal-processing ICs
- Logic & protection: Standard logic and circuit-protection products
Designing and manufacturing these semiconductors is permissible at the activity level — they are general-purpose components used across many industries.
Concerns to Be Aware Of
1. Interest Income on Cash
Diodes holds a cash and investments balance that generates interest income. Verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of returns.
2. Debt Ratio
Diodes typically operates with low leverage and a net-cash or near-net-cash position. Confirm the debt-to-market-cap ratio against the 33% threshold at the time of investment.
3. Cyclicality
As a broad-based semiconductor manufacturer, revenue and margins are cyclical and sensitive to inventory and end-market demand. This is a business and valuation consideration rather than a Sharia screen concern.
Filing-Based Ratios (March 31, 2026)
Based on Diodes' Form 10-Q:
- Debt / Assets: 2.22%
- Cash + interest-bearing securities / Assets: 16.18%
- Receivables + cash / Assets: 27.97%
- Disclosed interest income / Revenue: 1.53%
Methodology Interpretation
The known FTSE, MSCI and Malaysia financial ratios pass. Activity and prohibited-revenue classification remain incomplete, so this is not a universal certification.
Bottom Line
Diodes (DIOD) has a generally permissible semiconductor business and passes the known financial ratios in this filing, but the overall result remains incomplete because activity and prohibited-revenue classification are not universal quantitative measures. Investors should apply their chosen methodology and purification policy.
For Muslim investors seeking semiconductor exposure, DIOD sits alongside other halal-screened names like ON Semiconductor (ON) and Microchip Technology (MCHP).
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