The evolution of technology has made reality multimedia functions for mobile phones never before imagined. Digital photography, video playback, games, MP3 player, GPRS, PDA and other powerful functions have transformed mobile phones into irreplaceable companions in today's world, both at work and play. As everyone gets swept up in the mobile phone frenzy, it is the powerful functions that nevertheless require massive data storage, and memory cards are the critical product that makes those functions possible.

In 2005, approximately 740 million mobile phones were produced worldwide and card phones accounted for approximately 21.6% (160 million). In 2006, up to 860 million mobile phones are slated to be produced, with card phones accounting for around 33.7% (290 million). In 2007, up to 920 million mobile phones are expected to be produced, of which card phones should exceed 400 million or 43.4%. The above data clearly show that card phones are not only a mainstream trend today but will continue into the future.

Memory cards have continuously evolved toward an emphasis on lightweight, thin, compact design concepts. In 2005, miniSD won the support of major mobile phone makers because of its petite size and unique specifications and remains the leading choice for mobile phones in the first half of this year. However, with the launch of the microSD – the world's smallest memory card, 2006 is expected to be the year of this new favorite. MicroSD will be the star player going into 2007 and 2008. Its thumbnail size, however, will push further the technology envelope for manufacturers.

Why is this so? At 12mm x 11mm x 1mm, microSD is currently the world's smallest memory card product. Unlike traditional memory cards, such as SD and MMC, or even miniSD and RS-MMC, which can be manufactured using SMT assembly, ultra-mini memory cards, such as microSD and MMCmicro, must rely on COB packaging to enable mass production. Due to its thin and small size, microSD has brought semiconductor packaging into a new era. Most module makers or memory card manufacturers are equipped with SMT assembly lines but only a dynamic manufacturer like Kingmax, which has its own packaging/testing facility, has the vertical integration capabilities, directly purchasing wafer from upstream, cutting, packaging, testing and stacking, to create large-capacity microSD products within the miniscule space and steadily supplying to the world market. In particular, when it comes to higher capacities, such as 512MB and 1GB, few manufacturers in the world can continue to supply microSD products.

Kingmax's core competency leads competitors in time-to-market by more than three months, which is also further due to:

· Excellent relationship with vendors, enabling it to acquire high-tech wafers, such as the 70-nano wafer
· Advantages in substrate layout and flash, controller integration
· Acute insight into the market, allowing it to develop microSD products way ahead of competitors
· Powerful integration ability, including vertical integration, and evaluation and verification capability
· Up to 98% conformance rate, providing guarantee for product stability

It takes at least three weeks to take a product from discovery, preparation, test production to formal market launch. By the time competitors are ready, Kingmax would have moved on into the next stage of development. Memory card vendors without packaging/testing cabilities can only turn to outsourcing, which involves certain risks, including problems controlling cost and the conformance rate for each batch of products, inability to control time-to-market, with delivery and supply stability being the greatest problem because the outsource manufacturer does not only serve just one memory card maker. Therefore, competency in packaging/testing and strong integration abilities rules! In a market where microSD dominates, Kingmax is the king of mobile phone memory cards!