Taiwan, April 27, 2006 ¡V MStar Semiconductor, Inc. (¡§MStar¡¨), a market leader in IC design and image processing technologies for LCD flat panel television and computer monitors, has learned that, on April 24, a Complaint was filed by Genesis Microchip Inc. (¡§Genesis¡¨) with the International Trade Commission (¡§ITC¡¨) to enforce the exclusion order issued by the ITC in August 2004. Despite a favorable ruling obtained by MStar from U.S. Customs and Border Protection (¡§U.S. Customs¡¨) that MStar¡¦s products may be lawfully imported into the United States, Genesis has claimed MStar is in violation of the Commission¡¦s exclusion order. The Commission¡¦s 2004 exclusion order covers MStar MST series Monitor controllers (not including TV controllers). After the ITC issued this order, MStar announced the release of a new Monitor controller family, the Tsunami series, which does not practice the technology covered by the ITC order. MStar approached U.S. Customs (the agency tasked with enforcing ITC exclusion orders) to confirm that the new Tsunami series controllers are non-infringing and thus not subject to exclusion by Customs. After a proceeding at which Genesis presented the same arguments it has now raised before the ITC, U.S. Customs ruled that Tsunami series controllers are not covered by the Commission¡¦s 2004 exclusion order, and thus that they may be lawfully imported. In addition to obtaining a favorable Customs determination with respect to Tsunami series controllers, MStar appealed the ITC¡¦s decision with respect to its MST series of controllers to the United States Court of Appeals for Federal Circuit (¡§the Federal Circuit¡¨). The Federal Circuit conducted a hearing on MStar¡¦s appeal on April 7, 2006, and is expected to issue a decision on the merits. If MStar prevails on its appeal, the ITC¡¦s decision will be reversed, and the ITC¡¦s exclusion order will be rescinded entirely. Even though Genesis has asked for an enforcement proceeding, the ITC may determine not to institute such a proceeding on various grounds, including the prospect that the pending Federal Circuit appeal will resolve this matter in MStar¡¦s favor. MStar is optimistic that if the ITC does institute an enforcement proceeding, the ITC will reject Genesis¡¦s arguments just as Customs did, and agree that the Tsunami chip does not infringe the Genesis patent. Although the enforcement proceeding may take more than a year to conclude, MStar expects that ultimately its Tsunami product will be fully vindicated. From the moment it introduced the product line, MStar has believed that the Tsunami chip is a fundamentally different design, which is beyond the coverage of the ITC exclusion order. Particularly in light of the favorable Customs determination and the imminent ruling of the Federal Circuit, MStar is disappointed by Genesis¡¦s new efforts to use costly and time consuming litigation to halt legitimate competition. Because Customs has already cleared Tsunami controllers for importation into the United States, MStar does not believe that its business or customers will be impacted by the new ITC proceeding. Steve Yang, President of MStar, has said that ¡§We regret that Genesis continues to use legal proceedings as the tool to stop the loss of their business. The timing of the filing of this enforcement proceedings does not make any sense and it only consumes more resource from both parties on the issues which have been investigated and determined before.¡¨