GEM News Release

GEM Services, Inc. Opens High-Quality, Low-Cost Semiconductor Assembly and Test Facility in Shanghai

The Industry's First Outsource Manufacturing Facility in China Dedicated To Power Semiconductors

Santa Clara, California, January 17, 2001-GEM Services, Inc., a multinational semiconductor assembly and test service provider, today announced the opening of its new, wholly-owned assembly and test facility in Shanghai, China. GEM specializes in assembly and test of power semiconductor packages. This new GEM factory is optimized for the unique processes and materials used in power semiconductors.

"We believe this facility has the lowest cost structure for power packages of any outsourcing manufacturing facility in the world," stated R. J. Kulle, GEM's President and CEO. "Our team's proven track record and well-developed skill set in China and Asia Pacific provides much added value for our customers."

"Until GEM was founded," continued Kulle, "the industry lacked a focused outsourcing company for power semiconductors, particularly for small-outline, surface-mount packages. This void became critical in recent years with the exploding demand for portable, battery powered communications and computing systems. So our customers are delighted with GEM's power semiconductor expansion into China."

GEM will invest $40 million to equip the new 30,000-square-foot (2800-square-meter) building in the Shanghai Jiading Industrial Zone, part of metropolitan Shanghai. Qualification runs began in July 2000, and volume production began in October 2000. In support of its customer base-which includes three of the largest power semiconductor manufacturers worldwide with combined power device sales of more than $1.5 billion-GEM plans to reach a full production capacity of 1.1 billion units per year by end of 2001. GEM will employ 400 people at this first phase of business development.

Initially, this Shanghai operation will assemble and test DPAK, SO-8, and TSSOP-8 packages. Additional packages under current consideration are the SOT-23, SOT-223, and TSOP-6, derivatives of TSOP-6, and other advanced, small footprint, surface-mount packages. GEM has also constructed a second factory building at the Jiading site where production will begin in the second quarter of 2001.

Founded in 1998, GEM provides total management of semiconductor assembly and test. Specializing in power semiconductors and modules, GEM Services offers complete backend services at its manufacturing facilities in China . The company also provides turnkey assembly of components and assemblies, packaging design, plus selection and management of outsource manufacturing facilities through the company's network in the Pacific Rim.

GEM Services, Inc. is a privately held company incorporated in the Cayman Islands with three wholly-owned subsidiaries: GEM Services USA in North America, GEM Electronics, Inc. in Taiwan, and GEM Services Hong Kong, Ltd., which owns the subsidiary, GEM Electronics Shanghai Co., Ltd.