Philips FDS Enters Into Co-development Agreement With Hana MicroDisplay to Manufacture LCoS Panels.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 28, 2000

Agreement Demonstrates Philips FDS' Commitment to Commercialize

This Breakthrough Technology and Enhance the Company's

Broad Portfolio of Advanced Display Solutions

Philips Flat Display Systems (FDS), one of the world's largest suppliers of active matrix liquid crystal displays (AMLCDs) and a business group of Royal Philips Electronics of the Netherlands, today announced it has entered into a co-development agreement with Hana MicroDisplay Technologies, Inc. (HMTI), Twinsburg, Ohio, to manufacture liquid-crystal-on-silicon (LCoS) panels.

LCoS is a new breakthrough projection display technology targeted for use in large-scale consumer and business applications, including desktop monitors, multimedia projectors and large screen televisions. Philips FDS and several other of today's leading display manufacturers around the world are aggressively looking at ways to commercialize this technology as it potentially offers tremendous advantages in terms of picture quality, resolution and cost.

LCoS as a technology, however, is still facing several challenges, which it has to overcome in order to acquire acceptance as a mainstream display technology. Therefore, Philips FDS and HMTI have decided to join efforts in developing LCoS manufacturing processes. Under the terms of the agreement, Philips FDS and HMTI will collaborate on the manufacture of LCoS panels at HMTI's 18,000-square-foot advanced LCoS manufacturing facility in Ohio. Key to the agreement, both parties will work closely together, sharing proprietary display specifications and manufacturing and process expertise to cost-effectively produce high-quality LCoS panels.

According to Wald Siskens, general manager of Philips FDS' LCoS group, the agreement with HMTI is the latest in a series of steps Philips FDS has undertaken to further the company's efforts to be at the forefront of display innovation. "By partnering with HMTI, we hope to accelerate our progress toward successfully bringing this exciting display technology to market, thereby expanding our suite of cutting-edge display solutions. HMTI's ability to manufacture LCoS panels -- reliably and cost effectively -- were significant factors leading to this agreement. By utilizing HMTI's established manufacturing facility, rather than building our own facility, we can focus our resources on the other critical design factors necessary to commercialize this breakthrough technology."

"HMTI is pleased to announce the signing of the co-development agreement with Philips FDS," said Luc Bauer, HMTI president and CEO. "It will allow a much quicker introduction of leading LCoS products to market by combining the unique skills of Philips FDS' research and development resources with HMTI's state-of-the-art manufacturing capabilities in Ohio."

Hana Microdisplay Technologies, Inc. http://www.hanagroup.com/h_hmti.htm provides world-class microdisplay foundry services and advanced development activities from its facilities in Ohio. Its "open fab" business model allows HMTI to provide to its customers the highest possible quality and cost effective manufacturing services, using the best available technologies in the microdisplay industry. HMTI is a member of the Hana Microelectronics Group http://www.hanagroup.com, one of the world's leading "Electronic Manufacturing Service" corporations providing IC packaging and microelectronics assembly and test services in many locations around the world. Hana Microelectronics is listed on the Securities Exchange of Thailand under the symbol (HANA).

Philips Flat Display Systems (FDS) manufactures and markets state-of-the-art flat panel displays including passive and active matrix LCD and Polymer LED products. A full line of display panels is available for desktop monitor, industrial, automotive, telecommunications, hand-held and medical system applications. Through its joint ventures -- LG.Philips LCD and Hosiden and Philips Displays (HAPD) -- Philips FDS is one of the world's largest AMLCD manufacturers. Philips FDS is part of Philips Components, a division of Royal Philips Electronics of the Netherlands. Philips FDS is headquartered in San Jose, Calif., and maintains facilities throughout Europe, the Americas and Asia-Pacific.

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 31.5 billion in 1999. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 226,900 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, medical systems, and IT services (Origin). Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at www.news.philips.com.

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