Chairman Statement

2015 Annual Report

Chairman’s statement
Financial Performance
The Group has invested heavily over the past few years into development of two chips, SPG101 and SPG102, four system products, Kcard, Kdrive, Mcard and Mdrive. Expenses remained high in 2015, however, it is expected to reduce in 2016. The Group has recorded revenue of RM19.25 million and a loss of RM10.05 million before impairment. The Group has recorded revenue of RM6.9 million in Q4 2015 and profit before impairment or an operating profit of RM1.87 million. The revenue and profit is largely affected by the economic sanction imposed on Russia, one of our areas of focus causing huge depreciation of their foreign exchange and also the record low price of the oil.
Industry trends and development
The IOT market is growing in general and there are more and more applications adopting Wi-Fi as the wireless connectivity instead of Bluetooth because Wi-Fi is on the IP network whereas Bluetooth is a short range point of point protocol that can’t connect to the Internet directly. Medical application is one of the fastest growth sectors of IOT because of the growth of the wearable devices for fitness and mobile healthcare market in the recent years. There is increasingly large number of home medical devices with Bluetooth connection and though slow, there is a trend to move towards adoption Wi-Fi on these devices. There is a variety of blood pressure monitors using different techniques of measuring, and also a large number of ECG devices, ranging from single lead to multiple leads. However, they are still largely Bluetooth devices and we expect these devices to move to Wi-Fi once they realized that the market needs to have a direct connection with the devices.
One important step forward in the development of IOT of the medical devices in 2016 is that the enabling CPAP machines to be Wi-Fi or Internet connected instead of Bluetooth. This is a significant breakthrough in the development of IOT as it is the first time that a medical device can upload data to the Cloud and can also be controlled from the Cloud using APP at the same time, making the data flow bi-directionally. It is also the first home medical device connected the Cloud that is used for treatment and not merely monitoring. I am proud that the Group is the pioneer in making this change with the release of Mcard.
The Group has developed and released Kcard late 2015 and Kdrive will be released in 2016. Kcard is largely used with digital cameras at this time, and some users have used it to IOT devices for uploading data to the Cloud. Kdrive is the ideal synchronized backup mobile Wi-Fi Flash drive for the mobile phones. Today, there is USB drive for backing up data from the laptop or PC, however, there is no wireless backup device for the smart phones. Kdrive is the wireless backup solution to the smart phones.
Prospects
With the series of products shipping in the pipeline, the Board is of the opinion that the Group is at the turning point of improving performance in the coming years. In addition to the revenue from the ASIC design service business, the revenue of the Group in the coming years is expected to increase with the shipment of the new products in general.
In the design service business, the growth of the Group in 2015 is affected by the oil price, the sanction and the 50% devaluation of currency in the customer countries. The budget or buying power in US Dollar term has reduced substantially as the transactions are US Dollar based. We expect this business to improve when the situation improved. The release of major IP blocks such as USB3.0 PHY will also greatly enhance the position of the business.
Though there is a drop of the digital camera market size overall, the digital cameras that need Kcard remains substantial. The number of players in the SD Wi-Fi card market is likely to drop as some of the players without the chip technology will not be able to move to the next generation. The Group has invested in development of SPG102, and we expect this will lead the Group into a dominant position in the SD Wi-Fi card market.
Kdrive is expected to make significant contribution to the business as it is intended to be used with the smart phones and it has much broader applications. We expect this product to make significant revenue to the Group in the coming years.

The Group has shipped the Mcard to go with the CPAP machines, making this the first home medical product that it has enabled to become IOT. The market size for CPAP machines is USD5b and it is growing at about 8% in the past few years. With the CPAP machines connected to the Internet, eliminating the hassle of the patients to regularly visit the doctors, the market is expected to grow at a much faster rate.
The Group is actively working on getting Mcard into other medical devices.

Research & Development (r&d)
Innovation, research and development have been the core competency of the Group and will remain the competitive edge of the Company. This is evident with the roll out of multiple pioneering and innovative products recently. The Group will continue to focus on research and development for the Kcard/Mcard applications to enable bigger IOT market.
Integration of the products into the IOT applications will be one of the areas of R&D focus for the Group moving forward. With the availability of Kcard/Mcard in mass production in 2016, the effort will be deployed on the development of other IOT applications. In addition to CPAP machines, the team will also be working with other home or wearable medical devices expanding the number of medical devices connecting to the Cloud.
Another area of development is the industrial applications of IOT. The Group has started the development work of enabling the equipment and devices in the factory or engineering lab to be connected to the Cloud. This will enable services or maintenance of the equipment be done with diagnostic software running in the Cloud, checking on the state of health of the equipment regularly.
IP development and ASIC design service remain a core part of the business and form the technology backbone of the Group. We will continue the effort of ultra-low power technology development to enhance the competitiveness of the Group.
appreciation
I wish to express my sincere appreciation to all the members of the Board of Directors who have continuously providing us with invaluable guidance, Shareholders who have been patiently providing us with their support and endorsement, dedicated employees who have been rendering their innovative effort into delivering the products, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
Eg Kah Yee
Chairman

 

2014 Annual Report

Chairman’s Statement
Financial Performance
The Group has been making investment into research and development of its own products namely SPG102 and also SD WiFi card and USB Wi-Fi drive and as a result, it has posted a net loss after taxation (“LAT”) of RM34.25 millions for the financial year ended (“FYE”) 31 December 2014, an increase of 353.78% compared to the previous financial year. The loss is largely attributed to lower revenue than expected and high fixed cost associated with the fabless IC design company where R&D engineering and EDA tools are the bulk of the cost. Despite of our success in the commercialization of Wi-Fi Secure Digital (“SD”) system-on-chip (“SoC”), SPG101, which goes into the SD Wi-Fi card that goes into the digital camera, the volume is lower than expected as the market for Digital Still Camera has declined substantially. There was also some delay last year in our new customers in launching this product. However, these products are all successfully developed and have gone into initial mass production. Additionally, we have co-developed with one of the customers the SD Transfer Jet card to be used with the Digital Still Camera, giving much higher data transfer speed. Nevertheless, as of the time that this statement is written, these new ODM customers have gone into initial mass production of their products. We expect the volume of these products to increase, making significant contribution to our future revenue.
Industry Trends and Development
The overall growth of semiconductor industry remains moderate as compared to previous years. However, Internet of Things (IOT) market is fast growing but the market trend is yet to stabilize. Recently, there are some wearable or smart devices that are coming into the market, namely the smart watches, smart glasses (or sunglasses) and smart pen. The market potential of these products is huge but it is yet to see how large this market could grow into at this time. Most of these devices are not equipped with Wi-Fi yet, and they are potential candidates that could adopt our SPG solutions. Currently most of these smart devices are pretty much standalone, i.e. not connecting to the Cloud and services, except with an APP running on the smart phones, and as soon as the application developers move into this market, these devices will be connected to the Cloud for various applications and services.
With the products taking shape and space in the market, there will be additional enhancement or features that will be added to these platforms, making these platforms targeting in more specific applications. We see these products are opportunities for our SPG product lines.
We also foresee these products will continue to grow in features and functionality extending to Cloud. Some of the intelligence and analysis will be growing in the Cloud, creating another set of business opportunities for players in the Cloud space. The combination or integration of wearable devices and the APP and Cloud will form a total solution for service providers or integrators to provide their services. IP camera with APP and Cloud will be integrated to traditional security companies that would like to offer services to monitor homes. Effectively, the market is moving and growing in the IOT space.
Prospects
The Board is of the opinion that the Group is at the turning point of improving performance in the coming years. Over the past 4 years, the Group has transformed from the ASIC design services to developing its down complete products, i.e. its own SoC, system board, Cloud and APP. There is a tremendous amount of effort in the past 6 months in completing our own SD Wi-Fi card and USB Wi-Fi drive and getting them into mass production in Q2-2015. We have also expanded the capability to develop the Cloud and APP as the center piece for the SD Wi-Fi card and USB Wi-Fi drive. We have completed development of an IOT solution or eco-system ranging from APP to chip (A2C).
In the design service business that Group currently has where we develop IP blocks and provide design services for ASIC/SoC, we are now capable of providing the complete solution design service ranging from APP, Cloud services, hardware system and chips. This is one of the very few companies in the world today that is capable of providing this total solution ranging from APP to chip design service. We plan to begin marketing this service at the second half of 2015.

While the Group continues to provide IP development, ASIC design service and sales of SPG chips, the Group will begin the shipment of Kcard at the end of Q2 2015 and Kdrive in Q3 2015. This will add another revenue stream to the Group with the product line of higher unit price.
The next generation of the SPG product line, SPG102 that has the USB2.0 and SD3.0, giving the chip the capability to expand into the USB market as well and the ability to support up to 2TB of Flash. This chip will be released to ODM customers in late Q3 and Q4 for design in, and we expect the product to contribute revenue in 2016.
Research & Development (R&D)
Innovation, Research & Development remains the core competency of the Group. The Group will continue to invest in the R&D to get the Group to the next level of capability, making the transformation to be one of the leading companies globally with APP to chip (or A2C) design capability. In the space of IP development for ASIC, the team has made great breakthrough. We have received certification of our USB2.0 PHY and we also USB3.0 PHY to be certified soon, making Key ASIC one of the very few companies in the world that has the capability to develop PHY. We have also developed SD3.0 IP that is used in the SPG102 tape out and it is proven functional in real silicon. We will continue to develop IP blocks that are needed in the development of Internet of Things (IOT) products.
The volume forecasted for some of ASIC customers is running as expected. There will be two ASICs tape out on 65nm this year, and we expect some volume from these chips sometime next year. These chips are long life span chips, and we expect these chips to generate on going revenue for the next few years.
The Group has completed the design of Kcard and Kdrive and will be shipping the end user products to the market soon. The team will be looking at development of a few other IOT “smart” products in the next 12-18 months using SPG102 chips. We will also be looking at launching this SPG102 platform soon, making it available for other ODM customers to develop any other “smart” products.
Finally and most interestingly in the area of R&D, the Group has built the capability to develop Cloud and APP, completing the IOT eco-system. With this capability, we now can design and develop a complete IOT system from APP to chip (“A2C”). This will allow us to extend our business model to include services beyond the Cloud.
Appreciation
I wish to express my sincere appreciation to all the members of the Board of Directors who have continuously providing us with invaluable guidance, Shareholders who have been patiently providing us with their support, dedicated employees who have been rendering their innovative effort into delivering the products, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
EG KAH YEE
Chairman

 

2013 Annual Report

Chairman’s Statement
FINANCIAL Performance 
The Group has posted a net loss after taxation (“LAT”) of RM7.55million for the financial year ended (“FYE”) 31 December  2013, a reduction of 60.43% as compared to the previous financial year loss.  The loss is largely attributed to lower revenue than expected and high fixed cost associated with the semiconductor company. Despite our success in the commercialization of Wi-Fi Secure Digital (“SD”) system-on-chip (“SoC”), the product has yet to reach its mass adoption as the promotional activities done by our existing customers are limited. Nevertheless, we are proactively acquiring new markets through discussion with system manufacturers in other countries to expand the usage of our product in other application targeting mainly high volume segment. With a couple more products in the pipeline for development, we are working towards to profitability in the near future.
INDuSTRY TRENDS AND DEvELoPmENT
What is the outlook for year 2014 semiconductor market trend? Forecasts in the last few months have been very positive ranging from about 4% to 20%. Half of the forecasts are in the 7% to 9% range. The most recent forecast at Semiconductor Intelligence is 10%. The 10% growth forecast is largely driven by an expectation of accelerating World GDP growth. The International Monetary Fund (IMF) calls for World GDP growth of 3.7% in 2014, up from 3.0% in 2013. Acceleration is driven by developed economies, with the U.S. expected to accelerate to 2.8% in 2014 versus 1.9% in 2013. The Euro Area should recover from a 0.4% decline in 2013 to 1.0% growth in 2014. The strongest growth continues to be in emerging and developing economies, growing 5.1% in 2014, up from 4.7% in 2013. Although China is forecast to decelerate slightly from 7.7% to 7.5%, most other developing economies are projected to show accelerating GDP growth in 2014. For 2014, analyst projects tablet growth of 43% while PCs should be flat. IDC’s compound annual growth rate (CAGR) from 2013 to 2017 for tablets is 16% and for smartphones is 14%. IDC expects smartphones will account for over 50% of total mobile phone units in 2013 and 75% in 2017. Tablet units should pass PC units by 2015 or 2016. How important are tablets and smartphones to semiconductor and more specific to the Company growth? Tablets and smartphones are not the only devices driving semiconductor growth, but they are certainly the most significant and it is the key driver for other consumer devices to grow. Key ASIC would likely be benefited through its own developed WiFi SD and WiFi USB disk that can supports real time wireless file sharing user experience with the massive tablet and smartphone increase in demand.
PRoSPECTS
The Board is of the opinion that the Group will improve its performances in the coming years and remain confident on the growth prospects of Key ASIC as a professional fabless ASIC/SoC design company in the world market. Our unique cross cultural research and development teams both in Malaysia and Taiwan are working cohesively to offer more innovative engineering capabilities and solution to our existing and potential new customers. Moving into 2014, the Group is focusing especially in two areas of growth which will improve our profitability. Our main priority would be developing new markets in countries like Japan, USA, Russia and China through our new marketing and sales strategies. Secondly, we will continue our effort to capture more system manufacturers with our removable Wi-Fi SD card and WiFi USB disk solutions. The market for removable flash storage card and USB disk are expected to growth approximately 10% to reach 2 billion units by 2014. Currently there are more than thousand millions of SD Flash cards and USB disk being shipped yearly, and the trend is have SD card and USB disk with Wi-Fi capability that will enable any device to connect to Internet or other devices through Wi-Fi network for files sharing in anytime and anywhere. Ultimately, most of the SD Flash cards and USB disk shipped will have Wi-Fi and we are well positioned to capitalize on this growth. The Wi-Fi SD card and WiFi USB disk is going to be used largely with digital cameras and standalone storage applications allowing users of digital camera and smartphone/tablet to transfer their video, images and other documents to another digital camera, laptops, smart phones, digital photo frames, remote server or send to the printer directly without having to connect with physical wire.  Currently, our chip is being adopted by some major digital camera manufacturers in Japan, and world class SD card manufacturers in Taiwan and China.
RESEARCH & DEvELoPmENT (R&D)
In aspect of R&D activities, the R&D team has been focusing on the activities that include ASIC design service capabilities, integrated circuit building blocks (also known as IP) development and products development. To continue expanding the R&D capabilities in supporting more variety of customers’ projects in different process nodes, the R&D team organization has been structured into 3 different divisions since year 2011 to focus on 3 major activities that are: 1. Foundry enablement and IP development activities,
2. ASIC/SoC design service activities, and
3. ASSP/CSSP design activities.
In year 2013, the company expanded the engineering operation and execution to cover more software, system, application design activities while continues leveraging both Taiwan and Malaysia engineering team strengths to be more competitive in design service, IP development and product development. In year 2013, Malaysia R&D engineering team has passed the 1st Surveillance Audit since both Taiwan and Malaysia R&D engineering team were ISO9001 certified in year 2012/2011. The company will continue exercising the Surveillance Audit for TWN R&D engineering team in coming year. This is to make sure that the company has continued to achieve greater discipline in engineering operation and execution. In product development, the R&D team has successfully promoted the SD Wi-Fi SoC chip to different customer base. The SoC supports the latest iSDIO w-type features and it is the first SD Wi-Fi chip in the world that supports the iSDIO specification that supports video streaming application, scanner application, medical devices application, Wi-Fi SD card reader and near field communication application. The company has developed own SD Wi-Fi card solution. The product is currently in the product manufacturing phase. The team has developed the company 2nd generation SD-Wi-Fi prototype that supports security, iSDIO w-type/p-type, SDIO 3.0 and SDXC 3.0. The prototype is currently under product qualification phase. The company will continue expanding the software/system team to develop the software including the kernel, drivers and applications. As for the IP development, the team has passed the internal USB3.0 compliance tests, and the USB3.0 prototype is currently under the product qualification phase. The company will continue promoting the USB3.0 PHY solution and offering the  complete USB3.0 solution to the customers while partnered with CAST, one of the prominent USB Controller IP vendors in the U.S. in coming year. The team has successfully passed the internal USB2.0 compliance tests, and the USB2.0 prototype with MSC application is currently under USB-IF USB2.0 Logo certification. The company will continue promoting the USB2.0 solution in Silterra 0.13G process in coming year. In addition, the company has developed other high speed analog IP such as PCIE2.0 PHY and many more IPs for different customer applications such as, LVDS IO, LDO, SAR ADC, PCEI IO, 0.18um/0.16um  CUPIO, etc. As of today, the company has more than 110 IPs in company IP portfolio. As for the ASIC design service, the team has developed the DDR IP hardening methodology to handle the customers in DSP, and digital TV segment in year 2013. The company has continued expanding its foundry process development by collaborating with GlobalFoundries and Fujitsu in 65nm process. The team has completed more than 40 customer projects with the different foundry process such as, Silterra, TSMC, UMC and Tower in year 2013. The team will increase the capacity to handle more customer projects in coming year.
APPRECIATIoN I wish to record my sincere appreciation to all the members of the Board of Directors, Shareholders, valuable employees, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you, EG KAH YEE Chairman

 

2012 Annual Report

Chairman’s Statement
fiNaNciaL performaNce
The Group has posted a net loss after taxation (“LAT”) of RM19.1 million for the financial year ended (“FYE”) 31 December 2012, a reduction of 50.9% as compared to the previous financial year loss. The loss is largely attributed to lower revenue than expected and high fixed cost associated with the semiconductor company. Despite our success in the commercialization of Wi-Fi Secure Digital (“SD”) system-on-chip (“SoC”), the product has yet to reach its mass adoption as the promotional activities done by our existing customers are limited. Nevertheless, we are proactively acquiring new markets through discussion with system manufacturers in other countries to expand the usage of our product in other application targeting mainly high volume segment.
Over the past few months, our Wi-Fi SD product has won a few more customers and they are in the process of designing into their products. Moving into 2013, we expect the volume to pick up significantly as compared to 2012. With a couple more products in the pipeline for development, we are working towards to profitability in the near future.
iNdustrY treNds aNd deveLopmeNt
The semiconductor industry experienced very marginal decrease in growth for the year of 2012 as compared to 2011 as reported by the Semiconductor Industry Association, a leading US Organisation represented by leading industry companies from the world. Despite the lower overall demand for electronic goods in 2012, the industry is however experiencing an increasing sales trend in the second half of 2012 indicating that the demand for electronic goods for 2013 is encouraging.
Revenues for the consumer electronics (CE) industry are projected to grow nearly three percent, reaching a new record-high of US$209.6 billion, according to the semi-annual industry forecast released by the Consumer Electronics Association. Mobile connected devices continue to be the main driver for the segment growth accounted for approximately forty three percent of the total forecast for 2013.
Tablets, smartphones and notebook computers are the main categories make up of mobile connected devices in the forecast by CE that accounted for US$91 billion included in the forecast. The Group is well positioned in these categories to provide engineering design solutions in very deep sub-micron foundry manufacturing process.
prospects
The Board is of the opinion that the Group will improve its performances in the coming years and remain confident on the growth prospects of Key ASIC as a fabless ASIC/SoC design company in the world market. Our unique cross cultural research and development team both in Malaysia and Taiwan are working cohesively to offer more innovative engineering capabilities and solution to our potential new customers.
Moving into 2013, the Group is focusing especially in two areas of growth which will improve our profitability. Our main priority would be developing new markets in countries like Russia and China through our new marketing and sales strategies. Secondly, we will continue our effort to capture more system manufacturers with our removable Wi-Fi SD card. The market for removable flash storage card is expected to growth approximately 19% to reach 1 billion units by 2013. Currently there are several hundred millions of SD Flash cards being shipped yearly, and the trend is have SD card with Wi-Fi capability that will enable any device with a SD slot to connect to Internet or any device through Wi-Fi network. Ultimately, most of the SD Flash cards shipped will have Wi-Fi and we are well positioned to capitalize on this growth.
The Wi-Fi SD card is going to be used largely with digital cameras allowing users of digital camera to transfer their video or images to another digital camera, laptops, smart phones, digital photo frames or send to the printer directly without having to remove the SD card from the slot. Currently, our chip is being adopted by some major digital camera manufacturers in Japan.

In aspect of R&D activities, the R&D team has been focusing on the activities that include ASIC design service capabilities, integrated circuit building blocks (also known as IP) development and products development. To continue expanding the R&D capabilities in supporting more variety of customers’ projects in different process nodes, the R&D team organization has been structured into 3 different divisions since year 2011 to focus on 3 major activities that are:
1. Foundry enablement and IP development activities,

2. ASIC/SoC design service activities, and
3. ASSP/CSSP design activities.
In year 2012, the company emphasized on engineering operation and execution by leveraging both Taiwan and Malaysia engineering team strengths to be more competitive in design service, IP development and product development. In year 2012, both Taiwan and Malaysia R&D engineering team were ISO9001 certified. This is a major milestone that the company has achieved to have great discipline in engineering operation and execution.
In product development, the R&D team has successfully released a new version of SD Wi-Fi chip into mass production. The SoC supports the latest iSDIO w-type features and it is the first SD Wi-Fi chip in the world that supports the iSDIO specification that supports video streaming application. Now, the Company is working on company 2nd generation SD-Wi-Fi prototype that supports security and SDXC 3.0. The company has expanded the software team to develop the software including the kernel, drivers and applications. .
The company will start promoting the USB 3.0 PHY solution by the end of year 2013. The prototype is under the product qualification phase. The company has partnered with CAST, one of the prominent USB Controller IP vendors in the U.S. to offer the complete USB3.0 solution to the customers. The company will start promoting the USB2.0 solution in Silterra 0.13G process in 3rd quarter of 2013. The USB2.0 prototype is currently under USB-IF certification. In addition, the company has developed many more IPs for SD application such as, Secure Digital High Capacity Controller IO (SDXC 3.0 UHS-1), low voltage detector, power switch, etc. As of today, the company has more than 80 IPs in company IP portfolio.
The company has successfully delivered more than 5 projects using TSMC 28nm in year 2012. The company has expanded its foundry process development by collaborating with Fujitsu in 65nm process. The team has completed more than 70 customer projects in year 2012. The team will increase the capacity to handle more customer projects in coming year.
appreciatioN
I wish to record my sincere appreciation to all the members of the Board of Directors, shares holders, valuable employees, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
eg KaH Yee
Chairman

 

2011 Annual Report

Chairman’s Statement
Financial Performance
With the continuous investment for new products development and the challenging market condition, the Group has posted a net loss after taxation (“LAT”) of RM38.6 million for the financial year ended (“FYE”) 31 December 2011, a reduction of 20.9 % as compared to the previous financial year. The loss is largely attributed to the continuous slowdown of the market in United States and Europe, and our continuous investment in research and development of new products that take 2-3 years.
As a result of our past R&D effort, we have now successfully commercialized the Wi-Fi Secure Digital (“SD”) SoC with initial shipment in late 2011. This product is now designed in by a few customers and we expect the volume will begin to be more significant in second half of 2012 after a few months of market trial and acceptance. With a couple more products in the pipeline for development, we are working towards to profitability in the near future.
Industry Trends and Development
The semiconductor industry experienced very marginal growth in the year of 2011 as compared to 2010 probably due to the economic situation in the United States and Europe. The situation is further hampered by the shortage of materials and parts due to the natural disaster in Japan and Thailand as also reported by the Semiconductor Association (“SIA”). However, the growth as reported by SIA was spurred mainly by the strong demand in other sector of semiconductor especially in the personal computers appliances, sensor and actuator.
With the launch of our removable Wi-Fi SD card, we have a product that we can establish our customer base into system manufacturers. The market for removable flash storage card is expected to growth approximately 19% to reach 1 billion units by 2013. Currently there are several hundred millions of SD Flash cards being shipped yearly, and the trend is have SD card with WiFi capability that will enable any device with a SD slot to connect to Internet or any device through WiFi network. Ultimately, most of the SD Flash cards shipped will have WiFi and we are well positioned to capitalize on this growth.
The WiFi SD card is going to be used largely with digital cameras allowing users of digital camera to transfer their video or images to another digital camera, laptops, smart phones, digital photo frames or send to the printer directly without having to remove the SD card from the slot. Currently, our chip is being adopted by some major digital camera manufacturers in Japan.
The Group’s wholly owned subsidiary in Taiwan continues to make progress in both new customer acquisition and product development. We will be focusing more in developing Taiwan and Japan market which is expected to be the revenue driver for the Group in year 2012.
Prospects
The Board is of the opinion that the Group will improve its performances in the coming years and remain confident on the growth prospects of Key ASIC as a fabless ASIC/SoC design company in the world market. Our unique cross cultural research and development team both in Malaysia and Taiwan are working cohesively to offer more innovative engineering capabilities and solution to our potential new customers. In addition to our ASIC OEM or turnkey business, we have successfully started our model of ASIC ODM in 2010, where we designed a product completely from chip, board, Operating System/Drivers and application software, offering the customers a complete solution, ready for mass production.

In aspect of R&D activities, the R&D team has been focusing on three major activities that include design service ASIC flow, integrated circuit building blocks (also known as IP) development and products development. The design service ASIC flow has been expanded to handle the front end SoC development such as generic SoC integration, testing and validation methodology. In year 2011, the R&D team organization has been structured to focus on 3 major activities that are:
1. Foundry enablement and IP development activities,

2. ASIC/SoC design service activities, and
3. ASSP/CSSP design activities.
In year 2011, the company emphasized on engineering operation and execution by leveraging both Taiwan and Malaysia engineering team strengths to be more competitive in design service, IP development and product development.
The R&D team has achieved the significant milestone this year by shipping the first ARM9 SoC for SD card with WiFi application. The SoC also comes with the latest iSDIO w-type features. This is the first SD-Wifi chip in the world that supports the iSDIO specification. The R&D team developed this product started from application specs to finishing product including the hardware and software. Now, the Company is working on company 2nd generation SD-Wifi that supports security and SDXC
3.0. The company has expanded the software team to develop the software including the kernel, drivers and applications.
During the financial year ended 31 December 2011, the R&D team has developed the new Universal Serial Bus (USB) 3.0 PHY. The development is under the product qualification phase. The company has completed the collaboration with other companies in US to offer the complete USB3.0 solution to customers. In addition, the company has developed many more IPs such as Universal Serial Bus (USB) 2.0 PHY, Secure digital High capacity controller (SDHC 2.0), Secure digital IO (SDIO), etc. There are lots of IPs have won the design-in in customers designs mainly in the surveillance cameras, touch panels, digital photo-frames, flash controller, etc. Many of these IP blocks such as SDHC, SDIO, CUP IOs, ADC/DAC, LDO, PLL, Analog-MUX, etc. are already in mass production. The company R&D team will continue focus the development on high speed analog IPs, and touch panel IPs. As of today, the company has more than 60 IPs in company IP portfolio.
As for the ASIC design service, the team has developed the low power methodology and also the hierarchical design methodology to handle the customers in communication, and FPGA segments. The team has completed more than 40 customer projects in year 2011. The team will increase the capacity to handle more customer projects in coming year. The company has also delivered 2 TSMC 28nm projects and 2 TSMC 45nm projects in year 2011.
Appreciation
I wish to record my sincere appreciation to all the members of the Board of Directors, shares holders, valuable employees, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
EG KAH YEE
Chairman
KEY ASIC BERHAD

 

 

2010 Annual Report

Chairman’s Statement
Financial Performance
The Group has posted a net loss after taxation (“LAT”) of RM48.8 million for the financial year ended (“FYE”) 31 December 2010 as compared to a net profit after taxation of RM9.8 million recorded over last corresponding financial year. The losses were mainly due to lower revenue and margin recorded and higher operations overheads incurred which were necessary to maintain the competitiveness of the Group’s research and development capabilities. The weakening of the US dollars as compared to the regional currencies during the year was also the contributing factor of widening the Group LAT by RM5.05 million recorded as loss on foreign exchange in our Statement of Comprehensive Income.
Our revenue recorded for the FYE 2010 is RM23.7 million which represent a decrease of 68% over the last corresponding financial year of RM74.2 million. The sharp decrease in our revenue was affected by the scarcity of the foundry production facilities as the world semiconductor industry turn around. This is because most of the major players in the industry are filling the most of the capacity in the foundries or prepaid to have the capacity made available for them.
Industry Trends and Development
The year 2010 was comparatively a good year for semiconductor due to rebuilding of the inventories in the value chain and recovering from the global financial crisis in 2008. The growth reported by the Semiconductor Industry Association for worldwide semiconductor sales was an astounding increase of 31.8 percent as compared to last year 2009. The relatively high growth was due to the increase from the much lower base in 2009 from the crisis, and stronger demand due to high consumer confidence overall.
Though this phenomenon double digit growth is a welcoming sign, it indeed posed a serious threat when the multinational companies (“MNC”) were back to the hiring mode again. The talents that have been well trained by the Group were highly sought after by multinational companies since our engineers have the reputation of delivering high end and sophisticated projects successfully. We did experience recruitment competition from the MNCs in the year 2010.
However, with our deepest sympathies to Japan on the recent earth quake and tsunami, the supply chain is expected to be interrupted. Many of the foundries basic raw materials in producing wafer are currently sourced from Japan and it is expected that these materials are not easily substituted. The industry players including us in the coming months ahead may have to face not only the competition for the shortage of production capacity but also facing the shortage of material supply which would in turn affect the production of chips.
On the other hand, the Group’s wholly owned subsidiary in Taiwan continues to make progress in both new customer acquisition and product development. We will be focusing more in developing Taiwan and Japan market which is expected to be the revenue driver for the Group in year 2011.
Prospects
The Board is of the opinion that the Group will improve its performances in the coming years and remain confident on the growth prospects of Key ASIC as a fabless ASIC/SoC design company in the world market. Our unique cross cultural research and development team both in Malaysia and Taiwan are working cohesively to offer more innovative engineering capabilities and solution to our potential new customers. In addition to our ASIC OEM or turnkey business, we have successfully started our model of ASIC ODM in 2010, where we designed a product completely from chip, board, Operating System/Drivers and application software, offering the customers a complete solution, ready for mass production.

In aspect of R&D activities, the R&D team has been focusing on three major activities that include design service ASIC flow, integrated circuit building blocks (also known as IP) development and products development. The design service ASIC flow has been expanded to handle the front end SoC development such as generic SoC integration, testing and validation methodology. In year 2010, the R&D team organization has been structured to focus on 3 major activities that are:
1. Foundry enablement and IP development activities,

2. ASIC/SoC design service activities, and
3. ASIC ODM/CSSP design activities.
In year 2010, the company emphasized on engineering operation and execution by leveraging both Taiwan and Malaysia engineering team strengths to be more competitive in design service, IP development and product development.
The R&D team has achieved the significant milestone this year by taping out the first ARM9 System-on-Chip (“SoC”) for Secure Digital (“SD”) card with WiFi application. This SoC chip is a first time success that the company has been shipping the product to customer this year. The R&D team developed this product started from application specs to finishing product including the hardware and software. Now, the Company is working on company 2nd generation SoC platform that with more features and enhancements in term of performance and power savings. The Company has expanded the software team to develop the software including the kernel, drivers and applications.
During the financial year ended 31 December 2010, the R&D team has developed the new Universal Serial Bus (USB) 3.0 PHY. The company has started the collaboration with other companies in US to offer the complete USB3.0 solution to customers. In addition, the company’s Peripheral Component Interconnect-express (PCI-e) 2.0 controller IP was also granted compliance certification by PCI-SIG industry consortium. Leveraging our analog IP’s, we have won the design-in of customers’ designs mainly in the surveillance cameras, touch panels, digital photo-frames, flash controller, etc. Many of the IP’s such as Chip Under Pad IO’s, Analog-to-Digital Converter/Digital-to-Analog Converter, Low-dropout Voltage, Phase-Locked Loop, analog-Multiplexer, etc are already in mass production. The Company R&D team will continue to focus the development on high speed analog IP’s, and touch panel IP’s. As of today, the Company has more than 80 IP’s in Company IP portfolio.
As for the ASIC design service, the team has developed the low power methodology and also the hierarchical design methodology to handle the customers in communication, and Field-programmable Gate Array segments. The team has completed more than 30 customer projects in year 2010. The team will increase the capacity to handle more customer projects in coming year.
Appreciation
I wish to record my sincere appreciation to all the members of the Board of Directors, shares holders, valuable employees, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
EG KAH YEE
Chairman

 

2009 Annual Report

Chairman’s Statement
Financial Performance
The Group has posted a net profit after taxation (“PAT”) of RM9.9 million for the financial year ended (“FYE”) 31 December 2009 as compared to RM19.7 million recorded over last corresponding financial year. The lower PAT recorded was mainly due to the slow recovery from the global financial crisis that hit the world in late 2008 which had resulted in lower order and lesser design win from customers. OUr revenue recorded for the FYE 2009 is RM74.2 million which represent a decrease of 21.8% over the last corresponding financial year of RM 94.8 million.
Industry Trends and Development
Although the global financial crisis impact has subsided, the worldwide semiconductor sales in 2009 were lower as compared to 2008 by about 9% or US$223 billion according to the press announcement published by Semiconductor Industry Association. However, the demand for consumer electronic goods remains healthy albeit slow in recovery following the global economic recession. The Group’s performances were affected by the downturn which carried through to year 2009 and resulted in lesser tape-out of devices.
The Group has completed its first acquisition of an ASIC design service company, Gateway Silicon Inc. (GSI) in Taiwan, now known as Key ASIC Inc. in October 2009. This acquisition has strengthened our presence in Taiwan and also given us immediate customer base in Japan. GSI was invested by Macronix and Chartered Semiconductor (now part of Global Foundry) and both of these shareholders have strong customer base globally that may be synergistic to Key ASIC. In addition to customers in Taiwan, GSI has existing customers in Japan that Key ASIC can now expand on.
More and more designs are moving down to 6Snm, 4Snm and even 32nm in the years to come. We are in a good position to leverage our engineering experience ofadvance process technologies to capturethistrend of growth. Wewill continue to build our expertise in targeted applications and be the leaders in those targeted market segments.
The Group has invested resources in developing the Customer Specific Standard Products (“CSSP”) or the ODM business, and we expect to see substantial revenue contribution from these projects in 2011 and subsequent years. We will continue to focus on building more and more CSSP business.
UTILISATION OF INITIAL PUBLIC OFFERING (“IPO”) PROCEEDS
The Company had on during the FYE 2009 utilized RMS8.6 million of the IPO proceeds and the category of utilization as according to our prospectus dated 8 January 2008 is as follows:­

Proposed Actual Utilisation Utilisation Balance Description IPO Proceeds Timeframe for utilisation RM’OOO RM’OOO RM’OOO
R&D-Capital expenditure Within 24 months of Listing 36,000 (28,069) 7,931
R&D-Operating expenditure Within 24 months of Listing 8,200 (8,200)
Working capital Within 12 months of Listing 33,300 (33,300)
Estimated listing expenses Within 6 months of Listing 3,300 (3,300)
80,800 (72,869) 7,931
The remaining IPO proceeds is expected to be fully utilized in the next financial year.
Chairman’s Statement (Cont’d)
PROSPECTS
The Board is in the opinion that the Group will maintain the performance ofthe Group in coming year and remain confident on the growth prospects of Key ASIC as a fabless ASIc/SoC design company. With the completion of GSI acquisition, the new wholly owned subsidiary is expected to contribute positively to the Group’s result in the coming years through its own customer’s base and most importantly, the unique combination of the R&D team, the Group is able to offer more innovative engineering solutions to our potential new customers.
RESEARCH & DEVELOPMENT (R&D)
In aspect of R&D activities, the R&D team has been focusing on three major activities that include design service ASIC flow, integrated circuit building blocks (also known as IP) development and products development. The design service ASIC flow has been expanded to handle the front end SoC development such as generic SoC integration, testing and validation methodology. In year 2009, the R&D team organization has been structured to focus on 3 major activities that are:­
1. Foundry enablement and IP development activities,
2. ASIc/SoC design service activities, and
3. ASIC ODM/CSSP design activities.
The R&D team has achieved the significant milestone this year by bringing the Company’s first IBM 65nm SoC chip to mass production. This 65nm SoC chip is a first time success. Now, the Company is working with customer to deliver the 2nd generation high quality video processor for Internet applications. In year 2009, the Company expanded its technology capability and capacity through acquisition of GSI in analog IP, Standard Cells development, HDMI application, LCD Controller application and Flash Controller.
During the financial year ended 31 December 2009, the R&D team has developed the Peripheral Component Interconnect (“PCI”)-Express 2.0 controller. The R&D team has submitted 4 technology patents application for this product in Malaysia and in US. In this year, many IPs were silicon qualified such as, Voltage Regulator, Phase Locked Loop, general purpose Circuit Under Pad (“CUP”) Input/Output (“I/O”), High-speed transceiver logic CUP I/O, Stub Series Terminated Logic CUP I/O and PCI CUP I/O IPs, Radio Frequencies Process Design Kit, ARM926EJS processor, and RTC.
The R&D team has been working on complete SoC product development in the domain of ARM application that can be applied to VolP and Flash Controller. A lot of efforts were given to develop the complete system (software and hardware) design including software driver development, field-programmable gate array prototyping (deVice containing programmable logic components), printed circuit board testing, production testing, reliability testing, etc. The team has done the software drivers, parametric and functional testing, and circuit board testing for the protocol and ARM platform product. In 2009, the Company will continue to focus on perfecting its design methodology, continue to expand its IP portfolio, and complete system design including software and hardware.
APPRECIATION
I wish to record my sincere appreciation to all the members of the Board of Directors, valuable employees, our indispensable business partners and associates, for their effort, contribution and their continuous support to the Company.
Thank you,
EG KAH VEE
Chairman

 

 

 

2008 Annual Report

Chairman’s Statement
Financial Performance
The Group has posted a net profit after taxation (“PAT”) of RM19.7 million for the financial year ended (“FYE”) 31 December 008 as compared to RM18.9 million recorded in the last corresponding financial year. Like most other companies, the Group’s revenue and profitability is affected by the global economic meltdown in the fourth quarter of 008. Albeit the slight increase of the PAT in the FYE 31 December 008, the business of the Group is built on a sound foundation that targets worldwide consumer electronic and communication sectors especially handheld devices and set-top boxes. Key ASIC is still in the infancy stage of growth although we have been approved by Securities Commission and Bursa Malaysia Securities Bhd (“Bursa Securities”) on 10 March 009 and 30 March 009 respectively to transfer our listing status from the MESDAQ Market to the Main Board of Bursa Securities. In that regard, we are and still investing consistently in development of new Intellectual Property (“IP”) library in keeping up with the latest technology demand in the market in order to retain existing market share and capture new market share. On a positive note, the Group achieved an astounding 68% growth in its revenue, recording a total of RM94.8 million for the FYE 31 December 008 as compared to RM56.3 million recorded by the Company in the last corresponding financial year. The increase of the revenue over the last corresponding financial year was largely contributed by the increase in chip-in­production as a result of successful designs that were being commercialised by our customers.
Industry Trends and Development The System-on-chip (“SoC”) product or Application Specific Standard Product (“ASSP”) companies are moving up the value chain by providing system customers with a complete chip, boards and software solution. Many of the chip companies are investing more engineers on system and software leaving the detailed chip implementation to the ASIC design service companies. The market is expected to continue to grow in the ASIC design service space in the next few years. Most of the design service companies in the United States of America chose not to invest in IP development at an early stage. As such, these companies are facing challenges from ASIC design companies with their own IPs such as Key ASIC. The recent economic downturn will put these companies under stress but at the same time, it has created greater opportunity for ASIC design companies that have IPs or of higher value add. However, the global financial crisis has affected consumer confidence and has greatly affected the spending behaviour. Hence, the anticipated demand for semiconductor goods fell sharply and many of the electronic goods giant producers are responding to the low demand by self-imposing production cut and delaying new product development, which in turn affects the business of Key ASIC. The industry is currently facing an unprecedented period of uncertainty as we enter year 009. A resumption of sales growth will depend in part on the effectiveness of various measures implemented in the United States of America and various countries to restore consumer confidence, improve liquidity and stimulate economic growth.
Utilisation of Initial Public Offering (“IPO”) Proceeds The Company had utilised RM58.6 million of the IPO proceeds up to FYE 31 December 008 and the category of utilisation according to our prospectus dated 8 January 008 is as follow:­
Proposed Actual Description of IPO Utilisation Utilisation Balance Proceeds Timeframe for utilisation RM’000 RM’000 RM’000 R&D-Capital expenditure Within 4 months of listing 36,000 (17,807) 18,193 R&D-Operating expenditure Within 4 months of listing  8,00 (4,04) 3,996 Working capital Within 1 months of listing 33,300 (33,300) – Estimated listing expenses Within 6 months of listing 3,300 (3,300) – 80,800 (58,611) ,189
 Prospects The Board of Directors is of the opinion that the Group performance will be subjected to the current global financial turmoil and despite the uncertainties surrounding the semiconductor industry, the Group will achieve a modest growth based on the following factors:­• Accumulated design expertise – We have over the years accumulated our design expertise and capability and has grown from a mere “outsourcing”repetitive work to providing “value-added”activities for our customers such as chip optimisation, to increase performance and lower power consumption on the customer existing chips.
• Large IPs library – We have a large IPs library and these IPs are optimised and silicon proven, designed primarily to target high growth semiconductor industry in the sector of communication, consumer electronics and wireless connectivity.
• Strategic partnership – We continue to have close technological collaboration with our strategic foundry partner, SilTerra and we also engaged other foundry to address the process technology gap that is currently not available at SilTerra. We have also started our strategic relationship with IBM Microelectronics in the advanced process technologies of 90nm, 65nm and potentially 45nm.
• Merger and acquisition – The current economic turmoil has presented vast opportunities for Key ASIC to merge with or acquire potential companies that synergise the growth rate which otherwise would seem to be impossible due to high valuation accorded to potential companies.
Research & Development (R&D) In the aspect of R&D activities, the R&D team has been focusing on three major activities that include ASIC design flow, integrated circuit building blocks or IPs development and SoC platform or product  development. The ASIC design flow has been expanded to handle the front end SoC development such as generic SoC integration, testing and validation methodology.  It has expanded to include the design flow for system including board design, firmware and software design. In year 008, the R&D team has grown their ASIC design capabilities to take in customers’ design starting from architectural and Register Transfer Level (“RTL”) optimisation which optimises the flow of circuitry signals between hardware registers and the logical operation all the way to Graphic Design Station (“GDS”) tape-out. The R&D team has achieved the significant milestone this year by delivering the first IBM 65nm SoC chip. There will be more 90nm and 65nm design activities in the future as our R&D team is well equipped to take on these new technical challenges. The R&D team has established the capability of delivering RTL development based on customers’ micro-architecture specifications all the way to GDS tape-out. The capability is proven from the designs that we have delivered to our customers.  During the FYE 31 December 008, the R&D team has been focusing on connectivity devices such as Peripheral Component Interconnect (“PCI”)-Express 1.1 controller and Physical Layer (“PHY”), Voltage Regulator, Custom SRAMs, Phase Locked Loop, general purpose Circuit/Chip Under Pad (“CUP”) Input/Output (“I/O”), High-speed transceiver logic CUP I/O, Stub Series Terminated Logic CUP I/O and PCI CUP I/O IPs development and testing. All these IPs are well tested and characterised using advanced and accurate testing and characterisation techniques and infrastructure. Our PCI-Express 1.1 IP was certified by PCI_SIG compliance workshop.  In 009, the R&D team plans to develop the PCI-Express .0. The R&D team has been working on complete SoC product development in the domain of wireless fidelity or more popularly known as Wi-Fi and Voice-over Internet Protocol since 007 in collaboration with some customers. The R&D team has taped-out the test chip of these SoCs. Much focus are given to develop the complete system (software and hardware) design including software driver development, field-programmable gate array prototyping (device containing programmable logic components), printed circuit board testing, production testing, reliability testing, etc. The R&D team has completed the software drivers, parametric and functional testing, and circuit board testing for the WiFi product. In 009, the Company will continue to focus on perfecting its design methodology, continue to expand its IP portfolio, and complete system design including software and hardware. In the FYE 31 December 008, Key ASIC has expensed out in the income statement a total of RM7.8 million of R&D expenditures.
Appreciation
I wish to record my sincere appreciation to all the members of the Board of Directors, valuable employees, shareholders and our indispensable business partners and associates, for their efforts, contributions and their continuous support to the Company. Thank you, EG KAH YEE Chairman

 

 

2007 Annual Report

CHAIRMAN’S STATEMENT
Financial Performance The Key ASIC Group came into existence during the financial year ended 31 December 2007. The Group has posted a profit after taxation of RM18.9 million for the financial year ended 31 December 2007 as compared with only RM5.6 million recorded by the Company in the last corresponding financial year. The sound profit performance was largely attributed to an increase in the gross margin in providing the Application Specific Integrated Circuit (“ASIC”) or System­on­Chip (“SoC”) design services to our customers as the Group started to enjoy cost benefit through economies of scale. On the other hand, the Group is experiencing a steady growth in its revenue, recording a total of RM56.3 million for the financial year ended 31 December 2007 as compared to RM50.6 million recorded by the Company in the last corresponding financial year. The increase of the revenue over the last corresponding financial year was partly contributed by the increase in chip­in­production as a result of successful designs that were being commercialised by our customers. Industry Trends and Development The fabless design service industry is pretty much driven by the development and sentiment happening in Taiwan as the two biggest listed ASIC/SoC design companies, Global Unichip Corporation and Faraday Technology Corporation and global foundries such as Taiwan Semiconductor Manufacturing Corporation and United Mircoelectronics Corporation are located in Taiwan. The Board of Directors are in the view that the semiconductor industry has not experienced a recession (i.e. negative year on year revenue growth) since mid­2002. The magnitude of unit growth has continued to shrink since mid­2004 while revenue growth of the industry as a whole has not shown an obvious cyclical trend since mid­2005. Another structural change in the semiconductor industry is the shift to the “Fabless” business model and “Fablite” models from integrated device manufacturers (IDMs) such as LSI Logic and Texas Instruments that some believe to have led to better efficiency which, in turn, has contributed to greater stability (a less cyclical nature) within the semiconductor industry. Trends in the global semiconductor industry also suggest that a sustained albeit modest recovery can be expected as consurer electronics demand typically, strengthens in a year coinciding with the Olympics. This would support electronics exports in several regional economies which are involved in this segment. The Beijing Olympics 2008 as well as the expansion in mobile penetration in emerging markets are anticipated to generate strong demand for semiconductors.
Utilisation of Initial Public Offering (“IPO”) Proceeds Subsequent to 31 December 2007, Key ASIC undertook an IPO of 202,000,000 ordinary shares of RM0.10 each at an issue price of RM0.40 per share, in conjunction with its listing on the MESDAQ Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Company was listed on the MESDAQ Market of Bursa Securities on 30 January 2008. The Prospectus of Key ASIC issued on 11 January 2008 sets out the proposed utilisation of proceeds raised from the IPO as follows :­Timeframe for Utilisation RM 000 R & D ­Capital expenditure Within 24 months of Listing 36,000 R & D ­Operating expenditure Within 24 months of Listing 8,200 Working capital Within 12 months of Listing 33,300 Estimated listing expenses Within 6 months of Listing 3,300 80,800 5
Prospects We are positive on the prospects of Key ASIC as a fabless ASIC/SoC design company for the next financial year based on the following factors:­• Accumulated design expertise – we have over the years accumulated our design expertise and capability and has grown from a mere “outsourcing” of repetitive work to “value­added” activities for our customers such as chip optimisation to increase performance and lower power consumption on the customer existing chips.
• Large Intellectual Properties (“IPs”) library – we have a large IPs library. Particularly, our IPs are silicon proven primarily focusing on high growth semiconductor industry in the sector of communication, consumer electronics and wireless connectivity.
• Strategic partnership – We continue to have close technological collaboration with our strategic foundry partner, Silterra that enable the first time silicon success and technology advantages for our customers’ products.
Research & Development (R&D) In aspect of R&D activities, the R&D team has been focusing on three major activities that include design service ASIC flow, integrated circuit building blocks (also known as IP) development and products development. The design service ASIC flow has been expanded to handle the front end SoC development such as generic SoC integration, testing and validation methodology. In year 2007, the R&D team has grown their design service ASIC capabilities to take in customers’ design starting from Register Transfer Level (“RTL”) optimisation which optimises the flow of circuitry signals between hardware registers and the logical operation all the way to Graphic Design Station (“GDS”) tape­out. The R&D team will continue to grow and is capable of delivering RTL development based on customers’ micro­architecture specifications all the way to GDS tape­out in year 2008. During the financial year ended 31 December 2007, the R&D team has been focusing on connectivity devices such as Peripheral Component Interconnect (“PCI”)­Express 1.1, Double Data Rate 2 PHY, Voltage Regulator, Custom SRAMs, Phase Locked Loop, general purpose Circuit Under Pad (“CUP”) Input/Output (“I/O”), High­speed transceiver logic CUP I/O, Stub Series Terminated Logic CUP I/O and PCI CUP I/O IPs development. In 2008, all these IPs will be tested and characterised using low cost testing and characterisation techniques and infrastructure. PCI­Express 1.1 IP will be certified by PCI_SIG compliance workshop. In 2008, the team is also looking into PCI­Express 2.0 development. The R&D team has been working on complete SoC product development in the domain of wireless fidelity or more popularly known as Wi­Fi and Voice over Internet Protocol in year 2007 for some customers. The team has taped­out the test chip of these SoCs. Lots of focus will be given to complete system (software and hardware) design including software driver development, field­programmable gate array prototyping (device containing programmable logic components), printed circuit board testing, production testing, reliability testing, etc. The team has done the software drivers, parametric and functional testing, and circuit board testing. In 2008, the Company will continue to focus on perfecting its design methodology, continue to expand its IP portfolio, and complete system design including software and hardware.
Appreciation I wish to record my sincere appreciation to all the members of the Board of Directors, valuable employees, our indispensable business partners and associates, for their efforts, contributions and continuous support to the Company. Thank you. EG KAH YEE Chairman

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