Realtek continued to grow in 2007, posting a new revenue record. Our principal products such as Gigabit Ethernet Controllers, Wireless Local Area Network (WLAN) ICs, Audio Codecs, and LCD Monitor Controllers continually expanded sales volume. In addition, new products such as Card Reader Controllers, LCD TV Controllers, and Networked Media SoCs also made a contribution to reaching the new record high revenue.

Revenue for 2007 totaled TWD15.71 billion, an increase of 26.5% compared to 2006. Gross profit was TWD7.41 billion, an increase of 26.4% compared to 2006. Net income was approximately TWD1.88 billion, and Earnings Per Share was TWD3.3.

Our efforts to provide the ultimate in pioneering IC technology, along with our firm commitment to creating unique and innovative designs for a broad range of high-tech applications, have won the company a worldwide reputation. In June 2007, our RTL8111C Single-Chip PCIe Gigabit Ethernet Controller won “Best Choice of COMPUTEX TAIPEI 2007 Award”. The RTL8111C stood out for its innovation in breaking the technical power barrier; achieving total power consumption 60% less than competing products, making it ideal for the rapidly expanding mobile and portable device markets.

Technical competence is one of our greatest assets, and a primary reason for our position as one of the prime initiators of mainstream IT technology. In addition to participation in technical specification determination (Realtek is an IEEE member), we are often viewed as an industry benchmark and a catalyst for industry and technology trends. Our capacity for technological innovation is exemplified by our extensive systems knowledge and system integration expertise. In addition, our commitment to innovation and quality is solidifying our reputation for R&D and design expertise and for providing customers with the tools for success.

We are well positioned to take advantage of our product and technology portfolio to sustain growth in 2008. We are grateful to you, our shareholders, for your support. We appreciate your confidence in us and look forward to your continued support in the future.

Po-Len Yeh, Ph.D.                                            Sun-Chien Chiu

Chairman                                                          President