Third Quarter 2006 financial results approved by Holtek Board of Directors

October 18, 2006

The Holtek Board of Directors is pleased to announce today the approval of the third quarter’s 2006 financial results.

Holtek’s accumulated sales from January to September 2006 amounted to a total of NT$ 3,001 million, exhibiting an 11% increase when compared with sales for the same period in 2005. With major enhancements in its R&D capabilities, together with a trend toward a higher MCU product mix, Holtek’s average gross margin for the January to September period during 2006 was 45.2 %, showing a higher value when compared with the 41.8% amount for the same period in 2005. Holtek’s pre-tax earnings amounted to NT$876 million, representing a year-on-year 33% increase. With accumulated earnings after tax amounting to NT$816 million, this exhibited a year-on year 29% increase. As a result, the earnings per share for the period from January to September 2006 were NT$ 4.15 for pre-tax and NT$ 3.87 for after-tax based on the current outstanding shares. The accumulated earnings per share of NT$3.87 consists of NT$1.13 for the first quarter, NT$1.33 for the second quarter and NT$1.41 for the third quarter.

In examining the Holtek product lines, the breakdowns of each line as a percentage of overall sales, shows the standard MCU devices with 40%, consumer devices with 31%, PC peripheral devices with 14%, memory devices with 6%, communication devices with 6% and the remaining devices with 3% of the total sales. The total MCU sales, of which is included both standard and embedded MCU devices, accounts for 60% of the total sales for the January to September 2006 period.

In looking to the future, Holtek, in continuing to focus its research and development efforts in the area of MCU product development, while remaining firmly committed to offering its customers a range of extremely competitive products of high quality and reduced costs, fully intends to extend its range of application areas and increase its market share. In already having an extensive sales presence in both the Taiwan and China market areas, Holtek intends to extend its sales network in the European, US, Japanese and Korean etc. regional areas as well as expanding its MCU application presence in the high end home appliance, automotive, health care, metering, PC peripheral, security product and USB audio etc areas. The aforementioned demonstrates clearly how Holtek’s commitment to long term added value and continuous competitive enhancements remains firmly at the forefront of the Holtek management team’s objectives.