Phoenix P.D.E. Co., Ltd.

Business conditions were difficult in 2005, yet we managed to maximize our sales and profitability. We managed to make Korea the world foremost PDP powder producer by expanding our production capacity and achieving global competitiveness. This segment will serve as a key platform for our future growth. Our business climate is expected to be more difficult in 2006 than it was last year, and the hurdles we face continue to get higher. The Won currency will continue to appreciate against the Dollar, while prices for raw and secondary materials are expected to rise. Environmental regulations continue to be tightened and competition in the marketplace is intensifying steadily. However, all of the employees at Phoenix PDE are dedicated to constant innovation and improvement and are unafraid of new challenges. Thus, we aim to carry out the following three objectives in the coming year: First, we will maintain our leadership position in the electronics materials segment. The display business should be brink in the coming year, with major sporting events such as the World Cup and Asian Games being held. Competition between the PDP and LCD formats for TV is severe, exerting downward price pressure on both. Phoenix PDE has built close relations with PDP makers. Second, we will focus our competencies on advancing the nano-materials business. We are currently developing nano-level metal materials, and expect some of our silver and solder products to be commercially available in the first half of 2006. Importantly, we aim to offer quality and precision that is superior to that of our competitors, and cultivate this segment into a future growth engine. Third, we will promote a corporate culture in which efficiency and passion thrive. In recent years we have been pursuing the Six Sigma program, TPS (Toyota Production System), and various innovation acceleration campaigns. May you and your families have a happy and prosperous 2006.