Silicon Storage Technology, Inc.
Form 10-K
For the Year Ended December 31, 2004
TABLE OF CONTENTS

2

PART I

Silicon Storage Technology, Inc., or SST or us or we, is a leading supplier of flash memory semiconductor devices for the digital consumer, networking, wireless communications and Internet computing markets.

We offer over 90 products based on our SuperFlash design and manufacturing process technology. Our customers include: 3Com, Apple, Asustek, BenQ, Cisco, Dell, First International Computer, or FIC, Gigabyte, Huawei, Hyundai, Infineon, Intel, IBM, Inventec, Legend, LG Electronics, or LG, Motorola, National Semiconductor, NEC, Nintendo, Nortel, Panasonic, Philips, Quanta, Samsung, Sanyo, Seagate, Siemens, Sony, Sony Ericsson, Texas Instruments and VTech.

We also license our SuperFlash technology to leading semiconductor companies including 1^st Silicon (Malaysia) Sdn. Bhd., Analog Devices, IBM, Motorola Inc., National Semiconductor Corporation, NEC Corporation, Oki Electric Industry Co., Samsung Electronics Co. Ltd., SANYO Electric Co., Ltd., Seiko Epson Corporation, Shanghai Huahong NEC Electronics Co., Ltd., Taiwan Semiconductor Manufacturing Co., Ltd., or TSMC, Toshiba Corporation and Winbond Electronics Corporation for applications in semiconductor devices that integrate flash memory with other functions on a single chip.

Our products are manufactured at leading wafer foundries and semiconductor manufacturers including Global Communication Semiconductor, Shanghai Grace Semiconductor Manufacturing Corporation, or Grace, Samsung Electronics Co., Ltd., SANYO Electric Co., Ltd., Seiko Epson Corporation, Shanghai Hua Hong NEC Electronics Co. Ltd., TSMC and Yasu Semiconductor Corporation, or Yasu. We also work with Grace, Powerchip Semiconductor Corporation, and TSMC to develop new technology for manufacturing our products.

The semiconductor industry has historically been cyclical, characterized by periodic changes in business conditions caused by product supply and demand imbalance. When the industry experiences downturns, they often occur in connection with, or in anticipation of, maturing product cycles and declines in general economic conditions. These downturns are characterized by weak product demand, excessive inventory and accelerated declines of selling prices. In some cases, downturns, such as the one we have experienced from late 2000 through 2002, have lasted for more than a year. We began to experience a slow recovery during 2002 through the first half of 2003. During the second half of 2003 and the first half of 2004, demand for our products increased sharply and we began to see improvements in the average selling prices of our products. However, we experienced a decrease in the average selling prices of our products as a result of the industry-wide oversupply and excessive inventory in the market in the second half of 2004. Our business could be further harmed by industry-wide prolonged downturns in the future.

We derived 88.5%, 90.0% and 86.0% of our net product revenues during 2002, 2003 and 2004, respectively, from product shipments to Asia. Additionally, substantially all of our wafer suppliers and packaging and testing subcontractors are located in Asia.

Semiconductor integrated circuits are critical components used in an increasingly wide variety of applications, such as computers and computer systems, communications equipment, consumer products and industrial automation and control systems. As integrated circuit performance has increased and size and cost have decreased, the use of semiconductors in these applications has grown significantly.

Historically, the demand for semiconductors has been driven by the PC market. In recent years, growth in demand for semiconductors relating to PCs has been outpaced by growth in demand for semiconductors that are used in digital electronic devices for communication and consumer applications. Communications applications include digital subscriber line modems, cable modems, networking equipment, wireless local area network, or WLAN, devices, cellular phones and Global Positioning Systems, or GPS. Consumer-oriented digital electronic devices include digital cameras, DVD players, MP3 players, personal data assistants, or PDAs, set-top boxes, Digital TVs and video games.

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In order to function correctly, PCs and other digital electronic devices require program code. The program code defines how devices function and affects how they are configured. In PCs, this program code, called BIOS, initiates the loading of the PC's operating system, which is then read from the disk drive. In the case of other digital electronic devices, the program code is stored in its entirety in nonvolatile memory, mostly in flash memory. As a result, virtually all digital electronic systems that use a processor or controller for computing, consumer, communications, and industrial applications require nonvolatile memory.

System manufacturers generally prefer nonvolatile memory devices that can be reprogrammed efficiently in the system in order to achieve several important advantages. With re-programmable memory, manufacturers can cost effectively change program codes in response to faster product cycles and changing market specifications. This in turn greatly simplifies inventory management and manufacturing processes. Re-programmable memory also allows the manufacturer to reconfigure or update a system either locally or through a network connection. In addition, in-system re-programmable devices can be used for data storage functions, such as storage of phone numbers for speed dialing in a cellular phone or captured images in a digital camera.

Flash memory is the predominant re-programmable nonvolatile memory device used to store program code and data. Flash memory can electrically erase select blocks of data on the device much faster and more simply than with alternative solutions, such as Erasable Programmable Read-Only Memory, or EPROM. Moreover, flash memory is significantly less expensive than other re-programmable solutions, such as Electrically Erasable Programmable Read-Only Memory, or EEPROMs. As a result, the demand for flash memory has grown dramatically. This growth has been fueled by the need for code sharing and other storage functions in a wide array of digital devices. According to a March 2005 Webfeet Research report, worldwide flash memory revenue was $17.3 billion in 2004 and is expected to grow to $19.8 billion in 2005 and $32.3 billion in 2009.

We are a leading supplier of flash memory semiconductor devices addressing the needs of high volume applications. We believe our proprietary flash memory technology, SuperFlash, offers superior performance to other flash memory solutions. In addition, we believe SuperFlash has benefits that include high reliability, fast, fixed erase time, the ability to be scaled to a smaller size and a low-cost manufacturing process. We offer over 90 products based on our proprietary SuperFlash design and manufacturing process technology. These products are produced to meet the needs of a wide range of digital consumer, networking, wireless communications and Internet computing markets. Our product offerings include standard flash products, application specific memory products, embedded controllers and mass data storage products. Our memory devices have densities ranging from 256 Kbit to 32 Mbit and are generally used for the storage of program code. Our flash embedded microcontrollers support concurrent flash read-while-write operations using In-Application Programming, or IAP. Our mass data storage products are used for storing images, music and other data in devices such as digital cameras and MP3 players.

Our objective is to be the leading worldwide supplier of flash memory devices and the leading licensor of embedded flash technology for program code storage applications. In addition, we intend to leverage our SuperFlash technology to penetrate the high-density mass data storage markets. We intend to achieve our objectives by:

Maintaining a leading position in the program code storage market. We believe that program code storage is an attractive segment of the flash memory market for a number of reasons. While experiencing continued growth in all densities, solutions for program code storage applications benefit from the increasing number and variety of digital electronic applications, longer product lives and lower density requirements relative to mass data storage applications. We believe that our proprietary SuperFlash technology is a superior product for program code storage applications because we believe it offers superior reliability and performance at a lower cost of manufacture than competing solutions.

Continuing to enhance our leading flash memory technology. We believe that our proprietary SuperFlash technology is less complicated, more reliable, more scalable and more cost-effective than competing flash memory technologies. Our ongoing research and development efforts are focused on enhancing our leading flash memory technology by working closely with technology partners who own wafer fabrication facilities with advanced lithographic and other manufacturing equipment.

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Introducing new products based on SuperFlash. We intend to introduce new standard memory and various application specific products. We continue to develop and expand our ComboMemory family. ComboMemory is a new class of devices for wireless and portable applications that combine volatile and nonvolatile memory on a single monolithic device or multiple die in a common package with optimized performance. We also continue to expand our flash microcontroller family and Advanced Technology Architecture, or ATA, controller products. In 2004, we continued to expand our family of serial flash products which now includes densities of 512kbit, 1Mbit, 2Mbit 4Mbit and 8Mbit. For PC BIOS applications, we are expanding our LPC Firmware Flash product offering to match all the densities offered in our Firmware Hub, or FWH, products.

Maintaining a leading position in licensing embedded flash technology. We believe that SuperFlash technology is well-suited for embedded memory applications, which integrate flash memory and other functions onto a monolithic chip. We intend to continue to license SuperFlash technology to semiconductor manufacturers for embedded flash applications, to enhance our technology and to facilitate integration at higher densities and higher levels of complexity.

Penetrating the high-density mass data storage market. Many digital electronic devices currently being introduced, such as MP3 players, digital cameras and PDAs, require high-density flash memory for storing music, pictures and other data that require mass data storage capacities. We believe that the market for high-density flash memory is attractive based on its potential size and growth. We further believe that SuperFlash technology can readily scale to address this market's needs as they change. We intend to leverage our leading technology and strong manufacturing partnerships to introduce high-density mass data storage flash products and to compete effectively in this market.

Leveraging our leading SuperFlash technology to become a premier provider of wireless memory solutions. We intend to leverage our leading SuperFlash technology to provide products for wireless applications such as cellular phones, GPS, WLAN, Bluetooth, data pagers and cordless telephones. We have designed low-density flash products for wireless modems, WLANs, data pagers, Bluetooth modules and cordless telephones, and we are currently designing higher density products for the cellular phone market. We intend to continue to develop our products to take advantage of the significant growth opportunities in the wireless applications market with specific focus on cellular phone, GPS, WLAN and Bluetooth applications.

Currently, we offer low and medium density devices (256 Kbit to 32 Mbit) that target a broad range of existing and emerging applications in the digital consumer, networking, wireless communications and Internet computing markets. Our products are segmented largely based upon attributes such as density, voltage, access speed, package and target application. We divide our flash products into three distinct reportable segments: the Standard Memory Product Group, or SMPG, the Application Specific Product Group, or ASPG, and the Special Product Group, or SPG.

SMPG. SMPG includes the Multi-Purpose Flash, or MPF, family, the Multi-Purpose Flash Plus, or MPF+, family and the Many-Time Programmable, or MTP, family. These product families allow us to produce products optimized for cost and functionality to support a broad range of mainstream applications that use nonvolatile memory products. Effective January 1, 2003, we transferred certain MTP products from SMPG to SPG. Effective July 1, 2003, we transferred the Small Sector Flash, or SSF, family from SMPG to SPG. Effective January 1, 2004, we transferred the last MTP series of products from SMPG to SPG. Accordingly, our segment revenues and gross profit information have been reclassified for presentation purposes as if transfers occurred as of January 1, 2002.

ASPG. ASPG includes Concurrent SuperFlash, Serial Flash, Firmware Hub, or FWH and Low Pin Count, or LPC, flash products. These products are designed to address specific applications such as cellular phones, hard disk drives, optical drives and PCs. ASPG also includes flash embedded controllers such as the ATA flash disk controller. Effective January 1, 2003, we transferred FlashFlex51 microcontroller products from ASPG to SPG. Accordingly, our segment revenues and gross profit information have been reclassified for presentation purposes as if the transfer occurred as of January 1, 2002.

5

Our Newly Acquired Businesses

During the second half of 2004, we acquired a majority ownership of Emosyn LLC and substantially all the assets of G-Plus, Inc., to help with our strategic growth.

SST Communications Corporation or SCC. SCC products include RF transceiver, synthesizer, power amplifier and switch products. These products provide end-to-end RF solutions to enable wireless multimedia and broadband networking applications. We formed SST Communications Corporation and acquired substantially all of the assets of G-Plus, Inc. on November 5, 2004. The segment data is reflected from this date through the end of the year.

Financial information by reportable segment is contained in Note 15 of the Notes to Consolidated Financial Statements and is incorporated herein by reference.

We license our SuperFlash technology to semiconductor manufacturers for use in embedded flash applications. We intend to increase our market share by entering into additional license agreements for our SuperFlash process and memory cell technology with leading wafer foundries and semiconductor manufacturers. We expect to continue to receive licensing fees and royalties from these agreements. We design our products using our patented memory cell technology and fabricate them using our patented process technology. As of December 31, 2004, we held 116 patents in the United States relating to certain aspects of our products and processes, with expiration dates ranging from 2010 to 2023, and have filed for several more. In addition, we hold several patents in Europe, Japan, Korea, Taiwan and Canada and have filed several foreign patent applications in Europe, Japan, Korea, Taiwan and Canada.

We provide high-performance flash memory solutions and other products to customers in four major markets: digital consumer, networking, wireless communications and Internet computing. Our customers benefit by obtaining products that we believe are highly reliable, technologically advanced and have attractive cost structures. As a result of these highly desirable benefits, we have developed relationships with many of the industry's leading companies. In digital consumer products, we provide products for consumer companies including Funai, Orion, Apple, Inventec, Reingncom, Telechips, Orient Power, Sagem, Bang & Olufsen, BenQ, Creative Technologies, Hitachi, JVC, LG, Lite-On, Teac, Premier, Teraoptix, ALCO, BBK, Innowave, Coship, Kaon Media, Sandmartin, Nintendo, Panasonic, Philips, Samsung, Sanyo, Sharp, Sony, Toshiba, Thomson Multimedia, TiVo, and Micronas. In networking, we provide products for Broadcom, Atheros, Conexant, Askey, Gemtech, Cisco, Sagem, Samsung, Tecom, Huawei, ZTE, Alpha Networks, Cybertan, Global Sun, Adtran, Dare, Free Box, Avocent and Linksys. In wireless communications, we provide products for companies including Cambridge Silicon Radio, Sagem, Mitsumi, Alps, Bang & Olufsen, LG, Maxon, RTX, Vtech and Wistron. In Internet computing, we provide a wide array of products for companies including Asustek, Compal, Dell, FIC, Gigabyte, HP, IBM, Inventec, LG, Mitac, Quanta, Samsung, HonHai (Foxconn), Fujitsu Siemans, Seagate, Western Digital Maxtor, Matrox and Wistron.

6

The following tables illustrate the geographic regions in which our customers or licensees operate based on the country to which the product is shipped by us or the logistics center or license revenue is generated.

                                                                Year ended December 31,
                                                  ---------------------------------------------
                                                      2002             2003            2004
                                                  ------------  ------------------  -----------
United States................................... $     21,871  $           19,600  $    32,833
Europe..........................................       10,599               9,957       28,863
Japan...........................................       28,465              27,575       35,233
Korea...........................................       30,321              25,214       36,715
Taiwan..........................................       91,219             109,254      125,491
China (including Hong Kong).....................       70,609              76,107      148,100
Other Asian countries...........................       21,574              27,334       41,963
                                                  ------------  ------------------  -----------
                                                 $    274,658  $          295,041  $   449,198
                                                  ============  ==================  ===========

We sell a majority of our products to customers in Asia through our representatives. We distribute a majority of our products through our logistics center. We also sell and distribute our products in North America and Europe through manufacturers' representatives and distributors. Our manufacturer representative and distributor relationships are generally cancelable, with reasonable notice, by either party.

As the Digital Consumer, Networking, Wireless Communications and Internet Computing industries continue to expand and diversify, new applications are likely to be developed. We believe our products are designed to address this expanding set of applications:

                                                                     Wireless                  Internet
         Digital Consumer                      Networking         Communications              Computing
- ----------------------------------------- -------------------- -------------------- ------------------------------
TV Replayer          Set-top Box          VoIP                 Cellular Phone       Information Appliance
Digital TV           CD-ROM Drive         DSL Modem            Data Pager           Notebook PC
Digital Camera       CD-RW Drive          Cable Modem          Cordless             Desktop PC
Digital Camcorder    DVD-ROM Drive        V.90/56K Modem          Telephone         Hard Disk Drive
DVD Player           DVD-RAM Drive        Wireless LAN         GPS on Cellular      LCD Monitor
DVD Recorder         DVD-RW Drive         Network                 Phone             Palm PC
VCD Player           Web Browser             Interface Card    Bluetooth            X-PC
MP3 Player           Hand-held GPS        Router/Switch           Applications      Server
Video Game           Electronic Toys                           Wireless Modems      Graphics Card
PDA                  Smart Cards                                                    Printer
Electronic Book      Memory Cards                                                   Copier/Scanner
Remote Controller    Electronic                                                     Bar Code Scanner
                        Organizer                                                   Thin Client System

We purchase wafers and sorted die from semiconductor manufacturing foundries, have this product shipped directly to subcontractors for packaging, testing, and finishing, and then ship the final product to our customers. Virtually all of our subcontractors are located in Asia.

Wafer and Sorted Die. During 2004, our major wafer fabrication foundries were TSMC, Grace, Sanyo, Samsung and Seiko-Epson. In 2004, wafer sort, which is the process of testing individual die on silicon wafer, was performed at King Yuan Electronics Company, Limited, or KYE, Lingsen, Samsung, Sanyo, Seiko-Epson and TSMC. Although capacity is not guaranteed, under these arrangements, we generally receive preferential treatment regarding wafer pricing and capacity. In order to obtain, on an ongoing basis, an adequate supply of wafers, we have considered and will continue to consider various possible options, including equity investments in foundries in exchange for guaranteed production volumes, the formation of joint ventures to own and operate foundries and the licensing of our proprietary technology. In 2001, we invested $50.0 million in Grace Semiconductor Manufacturing Corporation, or GSMC, a Cayman Islands company, which has been funded mostly by investors who reside outside of China. In March 2004 we invested an additional $33.2 million in GSMC. Grace is a subsidiary of GSMC and is located in Shanghai, People's Republic of China. Grace has been manufacturing our products since late 2003.

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Packaging, Testing and Finishing. In the assembly process, the individual die are separated and assembled into packages. Following assembly, the packaged devices require testing and finishing to segregate conforming from nonconforming devices and to identify devices by performance levels. Currently, all devices are tested and inspected pursuant to our quality assurance program at our domestic or international subcontracted test facilities or at our test facilities in Sunnyvale, California before shipment to customers. Certain facilities currently perform consolidated assembly, packaging, test and finishing operations all at the same location. During 2004, most subcontracted facilities performing the substantial majority of our operations were in Taiwan. The subcontractors with the largest amount of our activity are KYE, Lingsen, and Powertech Technology, Incorporated, or PTI. We hold equity investments in three subcontractors: Apacer Technology, Inc., or Apacer, KYE and PTI. For newly released products, the initial test and finishing activities are performed at our Sunnyvale facility.

We believe that our future success will depend in part on the development of next generation technologies with reduced feature size. During 2002, 2003 and 2004, we spent $47.1 million, $43.1 million and $46.9 million, respectively, on research and development. Our research efforts are focused on process development and product development. Our research strategy is to collaborate with our partners to advance our technologies. We work simultaneously with several partners on the development of multiple generations of technologies. In addition, we allocate our resources and personnel into category-specific teams to focus on new product development. From time to time we invest in, jointly develop with, license or acquire technology from other companies in the course of developing products.

The semiconductor industry is intensely competitive and has been characterized by price erosion, rapid technological change and product obsolescence. We compete with major domestic and international semiconductor companies, many of whom have substantially greater financial, technical, marketing, distribution, manufacturing and other resources than us. Our low density memory products, sales of which presently account for substantially all of our revenues, compete against products offered by Spansion (AMD/Fujitsu), Atmel, Intel, Macronix, STMicroelectronics, PMC and Winbond. Our medium-density memory products compete with products offered by Spansion, Intel, ST Microelectronics, Mitsubishi, Samsung, Sharp Electronics and Toshiba. If we are successful in developing our high-density products, these products will compete principally with products offered by Spansion (AMD/Fujitsu), Atmel, Fujitsu, Hitachi, Intel, Mitsubishi, Samsung, SanDisk, Sharp Electronics, STMicroelectronics and Toshiba, as well as any new entrants to the market. In addition, competition may come from alternative technologies such as ferroelectric random access memory device, or FRAM, technology.

The competition in the existing markets for some of our product families, such as the FlashFlex51 microcontroller product family, is extremely intense. We compete principally with major companies such as Atmel, Microchip Technology, Motorola Philips and Winbond in the microcontroller market. We may, in the future, also experience direct competition from our foundry partners. We have licensed to our foundry partners the right to fabricate certain products based on our proprietary technology and circuit design, and to sell such products worldwide, subject to royalty payments back to us. The Emosyn products compete with Masked ROM and flash or EEPROM offerings primarily from Infineon, Renesas, Samsung and STMicroelectronics. For the SCC products, the competition in the existing markets is also extremely intense. SCC competes primarily with Microsemi, SiGe, Micromobio, Anadigic and Maxim especially in the WLAN (WiFi 802) markets.

We compete principally on price, reliability, functionality and the ability to offer timely delivery to customers. While we believe that our low density products currently compete favorably on the basis of cost, reliability and functionality, it is important to note that some of our principal competitors have a significant advantage over us in terms of greater financial, technical and marketing resources. Our long-term ability to compete successfully in the evolving flash memory market will depend on factors both within and beyond our control, including access to advanced process technologies at competitive prices, successful and timely product development, wafer supply, product pricing, actions of our competitors and general economic conditions.

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Employees

As of December 31, 2004, we employed 600 individuals on a full-time basis, all but 206 of whom reside in the United States. Of these 600 employees, 90 were employed in manufacturing support, 254 in engineering, 125 in sales and marketing and 131 in administration, finance and information technology. Our employees are not represented by a collective bargaining agreement, nor have we ever experienced any work stoppage related to strike activity. We believe that our relationship with our employees is good.

The following table lists the names, ages and positions of our executive officers as of December 31, 2004. There are no family relationships between any executive officer of SST. Executive officers serve at the discretion of our board of directors.

We were incorporated in California in 1989. We make available free of charge on or through our Internet website, http://www.sst.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

                                                                   Year ended December 31,
                                                    -----------------------------------------------------
                                                      2000       2001       2002       2003       2004
                                                    ---------  ---------  ---------  ---------  ---------
                                                           (in thousands, except per share data)

Consolidated Statements of Operations Data:
Net revenues:
    Product revenues - unrelated parties.......... $ 408,708  $ 168,593  $ 100,620  $  86,549  $ 180,234
    Product revenues - related parties............    66,608     90,025    143,401    169,980    224,497
    License revenues - unrelated parties..........    14,945     35,412     30,637     38,512     44,311
    License revenues - related parties............        --         --         --         --        156
                                                    ---------  ---------  ---------  ---------  ---------
      Total net revenues..........................   490,261    294,030    274,658    295,041    449,198
Cost of revenues..................................   264,139    248,161    206,246    218,775    322,093
                                                    ---------  ---------  ---------  ---------  ---------
Gross profit......................................   226,122     45,869     68,412     76,266    127,105
                                                    ---------  ---------  ---------  ---------  ---------
Operating expenses:
    Research and development......................    41,535     50,380     47,069     43,144     46,904
    Sales and marketing...........................    27,968     26,794     25,498     22,272     28,295
    General and administrative....................    14,966     17,855     17,097     14,398     18,292
    Other.........................................     3,911      1,346         --     37,849      7,375
                                                    ---------  ---------  ---------  ---------  ---------
      Total operating expenses....................    88,380     96,375     89,664    117,663    100,866
                                                    ---------  ---------  ---------  ---------  ---------
Income (loss) from operations.....................   137,742    (50,506)   (21,252)   (41,397)    26,239
Interest and other income.........................    10,510      7,449      3,225      2,996      2,295
Interest and other expense........................      (691)      (437)      (242)      (350)      (281)
Impairment of equity investments..................        --     (3,274)    (7,757)        --       (509)
                                                    ---------  ---------  ---------  ---------  ---------
Income (loss) before provision for (benefit from)
    income taxes and minority interest............   147,561    (46,768)   (26,026)   (38,751)    27,744
Provision for (benefit from) income taxes.........    41,813    (17,772)   (10,931)    26,416      3,906
Minority interest.................................        --         --         --         --        (91)
                                                    ---------  ---------  ---------  ---------  ---------
Net income (loss)................................. $ 105,748  $ (28,996) $ (15,095) $ (65,167) $  23,929
                                                    =========  =========  =========  =========  =========
Net income (loss) per share - basic............... $    1.23  $   (0.32) $   (0.16) $   (0.69) $    0.25
                                                    =========  =========  =========  =========  =========
Net income (loss) per share - diluted............. $    1.13  $   (0.32) $   (0.16) $   (0.69) $    0.24
                                                    =========  =========  =========  =========  =========

Consolidated Balance Sheet Data:
Total assets...................................... $ 512,590  $ 446,760  $ 440,606  $ 396,361  $ 502,331
                                                    =========  =========  =========  =========  =========
Long-term obligations............................. $     279  $   1,793  $   1,873  $   1,423  $   1,307
                                                    =========  =========  =========  =========  =========
Shareholders' equity.............................. $ 416,635  $ 391,411  $ 381,851  $ 331,497  $ 375,984
                                                    =========  =========  =========  =========  =========

                                                             Year Ended
                                                         December 31, 2004
                                                  --------------------------------
                                                    Revenues         Purchases
                                                  ------------  ------------------
Silicon Technology Co., Ltd..................... $      7,943  $               --
Apacer Technology, Inc and related entities.....        2,359                 707
Silicon Professional Technology Ltd.............      214,195                  --
Grace Semiconductor Manufacturing Corporation...          156              59,278
King Yuan Electronics Company, Limited..........           --              38,248
Powertech Technology, Incorporated..............           --              14,718
                                                  ------------  ------------------
                                                 $    224,653  $          112,951
                                                  ============  ==================

                                                             Year Ended
                                                         December 31, 2003
                                                  --------------------------------
                                                    Revenues         Purchases
                                                  ------------  ------------------
Silicon Technology Co., Ltd..................... $      3,615  $               --
Apacer Technology, Inc and related entities.....        1,555               2,361
Silicon Professional Technology Ltd.............      164,810                  --
Grace Semiconductor Manufacturing Corporation...           --                  12
King Yuan Electronics Company, Limited..........           --              19,659
Powertech Technology, Incorporated..............           --               9,280
                                                  ------------  ------------------
                                                 $    169,980  $           31,312
                                                  ============  ==================

                                                             Year Ended
                                                         December 31, 2002
                                                  --------------------------------
                                                    Revenues         Purchases
                                                  ------------  ------------------
Silicon Technology Co., Ltd..................... $      2,089  $               --
Acer and related entities (1)...................          269                  --
Apacer Technology, Inc and related entities.....          899                 588
Professional Computer Technology Limited........          141                  --
Silicon Professional Technology Ltd.............      140,003                  --
King Yuan Electronics Company, Limited..........           --              18,163
Powertech Technology, Incorporated..............           --               8,378
                                                  ------------  ------------------
                                                 $    143,401  $           27,129
                                                  ============  ==================

                                                          December 31, 2003            December 31, 2004
                                                  --------------------------------  -----------------------
                                                                     Accounts                     Accounts
                                                    Accounts       Payable and       Accounts    Payable and
                                                   Receivable        Accruals       Receivable    Accruals
                                                  ------------  ------------------  -----------  ----------
Silicon Technology Co., Ltd..................... $        232  $               --  $       322  $       --

Apacer Technology, Inc and related entities.....          400                 736          458         320
Professional Computer Technology Limited........           --                  15           --          72
Silicon Professional Technology Ltd.............       40,588                 550       32,037         694
Grace Semiconductor Manufacturing Corporation...           --                  --          156      17,227
King Yuan Electronics Company, Limited..........           --               6,896           --      13,702
Powertech Technology, Incorporated..............           --               2,533           --       3,867
Other...........................................           --                   4           --          --
                                                  ------------  ------------------  -----------  ----------
                                                 $     41,220  $           10,734  $    32,973  $   35,882
                                                  ============  ==================  ===========  ==========