• Display products shipment increased 53% to reach 142.2 million units

• Sales grew by 37% and reached US$84.7 million and net profit was US$1.0 million

• Book to bill ratio for the year ended 31 December 2010 stood at 1.0

• The Group’s new product solutions, target to match the new trend of electronic products, are ready to capture new business opportunities from high growth market segments such as smartphone, tablet PC and touch applications

(Hong Kong – 24 March 2011) – Solomon Systech (International) Limited ("Solomon Systech" or "the Group"; SEHK: 2878) achieved continuous improvement in its business, recording profitable annual results for the year ended 31 December 2010 ("2010").

In 2010, the Group's sales totaled US$84.7 million (2009: US$61.8 million) supported by market recovery, the Group managed to fulfill incremental demand for electronic products and recorded a revenue growth of 37% year-on-year, despite the tight wafer capacity for overall semiconductor industry.

Gross profit was US$25.6 million, up by 25% due to rise in sales revenue.  Gross margin was 30%, which remained within the industry range.  The Group recorded a net profit attributable to the Company's equity holders of US$1.0 million, an increase of 52%.  

As on 31 December 2010, the Group had total cash, bank deposits and equivalents of US$79.6 million.  To retain the earnings for further business development, the Board of the Company recommended no final dividend payable for 2010.

Dr. Humphrey Leung, Managing Director of the Group, said, "We successfully captured the growing demand as our revenue growth outpacing that of the semiconductor industry in 2010.  By extending our effort to understand deeper customer's requirement and the needs of the end market, and work closely with our manufacturing partners, we were able to fulfill the rapidly increasing demand from customers.  We continued to focus our product development on our five business units, each of which was able to deliver innovative new products and grow in different market segments in 2010."

Business Review
During FY2010, the Group shipped a total of 142.2 million display IC units, representing a year-on year increase of 53%.  Each quarter of 2010 recorded a year-on-year increase in shipment quantity ranging from 34% to 81% compared to 2009.  All individual product families also enjoyed an increase of product shipped.  Most noteworthy for the Advanced Display family, shipment quantities were up more than 90% year-on-year.

For the 2010 product shipment:

• Mobile Display increased mainly due to the upside demand for smartphones equipped with bigger displays and new touch panel features

• Advanced Display surged as OLED display technology continued to expand into new applications and matured as a cost competitive and value-added solution.  Also, New Display ICs showed significant improvement in unit delivery as their application in electronic shelf labels was gaining market acceptance

• Large Display business unit commenced its operation in Beijing in 2010 and had delivered a small quantity of new large display TFT driver samples to customers in 2H 2010 for qualification

• Display System Solution increased business on the relatively high unit price products for pico-projector and mobile phone applications

• Green Power business shipped an initial volume of LED driver IC and LED power module for indoor LED lighting

With great emphasis on R&D, the Group devoted US$15.1 million to R&D expenses, representing 18% of total sales revenue in 2010.  In particular, resources were dedicated to the development of promising new technologies in system design, mixed signal high integration IC design, software and application solutions.

Apart from the operation front, three new members of the Board of Directors were appointed during the year. All three of them offer valuable in-depth knowledge of the electronics industry and also hold numerous directorship positions in other technology corporations in China.  Their extensive experience and expertise will greatly benefit Solomon Systech.

Prospects
Analysts in general are expecting single digit growth for the 2011 semiconductor market.  Nevertheless, there are segments that will grow much more rapidly, possibly at a double digit rate.  These high growth segments are in particularly those that match the latest electronic products advancement. It could include complex SoCs and specialty ICs for consumer electronic products such as smartphones, tablet PCs and other applications with touch sensing function.  Solomon Systech is well-positioned to have our display driver ICs, touch panel ICs, advanced display ICs and multimedia system solutions ready to target for smartphones, tablet PCs and any touch panel applications. In 2011, more driver ICs for higher resolution, bigger size display as well as new 3G Android system solutions will be developed targeting at smartphones and tablet PCs market. Also, a complete portfolio of touch panel ICs is to be launched to the market. It will cover a wide range of touch panel applications from single touch remote control or dimmer switch to multi-touch tablets. All-in-all, the Group will benefit from the high growth rate of these latest consumer electronics market segment.

While the Group has always been addressing the global market, China is undoubtedly a high growth market for electronics and semiconductors.  Business opportunities are extended from mobile consumer electronics to LCD TVs and green energy.  That can be seen from the China's 12^th Five-Year Plan proposed, of which implementation is to begin in 2011. In addition to the existing display products and system solutions for mobile consumer electronics, the Group's large display driver ICs and LED backlight units, with an aim to address the huge LCD TV market in China, are underway to complete customers' qualification for mass production. Regarding the green energy which China Government has put emphasis on, the Group also has LED lighting solutions from the Green Power business unit to address the LED indoor and outdoor lighting. Different product families of the Group have different appropriate products and solutions in place and are well prepared to capture the huge market opportunity in China.

With the changing market situation and new market trend, Solomon Systech sees great opportunities ahead as each of its five business units has its own technology leading IC products and solutions in place.  On the other hand, the world wafer capacity is still expected to be tight in 2011.  Its strategic focus for the year ahead is to:

• Generate revenue with its new products

• Continue to develop new products and technologies to stay ahead of competition

• Dedicate strategic effort to expand its business in the booming China market

• Manage the supply chain capacity and product delivery lead time

"The combination of our new product solutions and our new BOD members' expertise and extensive business connections will create synergies that add values to our stakeholders and bring sustainable growth to the Group," concluded Dr. Leung.

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  Solomon Systech (International) Limited
 CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2010