Message from the President

A voyage without end…

It was the French novelist Andre Gide who once said man cannot discover new oceans unless he has the courage to lose sight of the shore.

As we stand at the portal of a New Year that is also, most significantly, the 20th anniversary of our own company I find myself at one with that sentiment — up to a point.

After all, it is not just having the courage to set out on a voyage. It is the determination to keep sailing. To realize that behind every horizon there is another, and another. The voyage never ends. Especially in an ocean as boundless and as restless as the IT sector.

When I glance back at our achievements in an action driven 20 years I’m aware that it has been like that for Leadtek. But there is no time to sit back and rest on our laurels. We have got to go on building - building on the strength of our research and technology, on the strength of the world reputation of our products.

The very exponential nature of digital progress in the past 20 years or so gives us no alternative.

From the original Intel 8088 series CPUs to notebooks running at 3GB; from mobile phones the size of a shoe box and as heavy as lead with limited operational distance to less than palm sized GSM and 3G cell phones that take and store 5 mega pixel photos. Yet another area that Leadtek is moving into aggressively in the New Year.

Who would have thought back in 1986, when we launched our first computer graphics cards — the famous WinFast brand - that Leadtek would go on to become one of the world’s leading multi media solution providers?

Who would have though that IT specialists and reviewers in international publications would be calling a Leadtek gaming card one of world’s top ten ‘Fantas Tech’ toys on the market this holiday season, right up there with some of the world’s top brand names. Not to mention our TV cards and boxes and video telephony built on our own Codecs.

Again I think back to the all the excitement here at Leadtek ten years ago when those first images (at 6 to 12 fps) of kids on the West Coast of America talking to Grandmother’s in Taiwan appeared on VGA screens using our new PSTN based video conferencing system.

Almost simultaneously we launched our first basic rate 128 kbps ISDN video conferencing systems that set the tele -communications world on fire The era of affordable, mobile video Conferencing had been born. And Leadtek had made it happen.

Then when the world switched to broadband our labs and engineers were far from being caught unawares. Leadtek’s series of Broadband telephones were ready, mature products that enjoyed instant success. So much so that today Leadtek with its DSP technology is in fact the first company in partnership with France Telecom to implement video telephony for residential users.

There has been success heaped on success and crowned at CES 2006 with our Triple Play Box video telephony scooping the BEST of Innovations in the CES Innovations Awards Online/Intranet product category. This Triple-Play Set-Top-Box supports Video through streaming TV programs (IPTV), video on demand and video surveillance and will add yet another dimension to a world of seamless multimedia interconnectivity and communication enjoyed in the comfort of the viewers own living room.

Video-telephony, on the other hand, is readily supported with integrated telephony CODEC and protocols for more classic applications such as face-to-face chat and distance learning.

Leadtek is also a world class GPS OEM module provider and one of the world’s biggest GPS Value-Added manufacturers for GPS solutions. Our powerful new ‘touch button simple” personal navigator, is already a hot product while an AGPS solution for tracking and telematics is lined up for production in 2006..

From the outset of our voyage our compass points were clearly set. The stars were simply not enough. Leadtek intended to be nothing less than a performance leader in all its business categories. For this, streamlined operations with tight management and ‘ a fast to market approach’ was the only way to quick step our way to international competitiveness and a projected annual turnover in 2005 of US$300 million.

In this time too our number of employees has grown to more than 680, one third of which are skilled R& D engineers. Not surprisingly, Leadtek re-invests a whopping 5% of annual saoles, much higher than the industrial average, in research — a figure amounting to more than US$11 million in the fiscal year 2005.

For Leadtek, as a total multimedia communications solution provider, cutting edge technology in top quality, original and user friendly products, is a sine qua non. Now, with our 20th anniversary on the horizon, an exciting new chapter in the Leadtek story is about to unfold.

With quality and performance as our watchwords, Leadtek has its sights set on nothing less than top ranking International corporate status with a reputation as a pioneer in a brave new digital world at home, in office, in car, health care and on the fly with a nifty set of mobile devices.

We remain committed as never before to a reputation for reliable partnership and to being a performance leader in the industry.

Thank you for your continuing support and for counting on us.

Taipei, Dec. 31, 2005