Press Release
Sunplus and Grandtech Agree to Merge
Hsinchu, Taiwan, August 13, 2001 ˇV Sunplus Technology (Sunplus)(TSE:2401, FTSE:SUPD) and Grandtech Semiconductor (Grandtech) today announced that they have signed an agreement to merge Grandtech with and into Sunplus. The merger agreement was approved today by the boards of directors of both Sunplus and Grandtech. The exchange ratio for Grandtech to Sunplus shares will be 2 to 1 respectively. The consolidation date of the merger is targeted for December 15, 2001, at which time Grandtech will be absorbed into Sunplus. The merged entity will operate as Sunplus.

Grandtech, established in June 1997, is a fabless IC company in image processing products. Currently the leading company of digital still camera and scanner Ics in Taiwan, Grandtech's paid-in capital is NT$ 214.8 million. Its major shareholders is the management team and Lin-Shih Investment Company (with 36 percent invested interest in Grandtech), which is a company 100% held by Sunplus.

Sunplus Chairman Mr. Chou-Che Huang stated, "Sunplus is aggressively building our core technology through our own R&D programs and by carefully selecting opportunities to cooperate with companies that have unique intellectual property. Through various types of collaborative models - including mergers and acquisitions, joint ventures and strategic alliances, we continue to build-up new intellectual properties for our customersˇ¦ future needs."

Mr. Eric Chen, Grandtech's Chairman, said, "Grandtech is a relatively new player in the IC industry. Since its establishment four years ago, Grandtech has built a strong foundation for future growth as a result of the excellent performance of its R&D team and marketing force ion digital still camera and scanner image processors. However, given the growing attraction of the competitive advantage of being the industry leader, the synergy of the combined organization should produce more substantial results than could be achieved by Sunplus or Grandtech separately."

"Sunplus is not only Taiwanˇ¦s number one consumer IC company but also a reputable design house recognized around the world. Grandtech's major shareholders have agreed to support this merger," continued Mr. Chen. "We believe that the merger further solidifies Sunplus' leading position in the consumer electronic industry and is in the best short- and long-term interests of Grandtech's shareholders."

The major details of the merger agreements are as follows:
1. The contemplated merger shall be implemented by way of "Absorption". The merged entity will operate as Sunplus.
2. The consolidation date of this merger is targeted for December 15, 2001.
3. The exchange ratio for Grandtech to Sunplus shares will be 2 to 1 respectively.
4. The Chairman of the Board, Directors and Supervisors of Sunplus need not be re-elected as a result of the merger.
5. According to government regulations, the merger is subject to the approval of regulatory authorities, and shall be carried out after the stockholders meetings of both companies.