Two Thousand and Three has been a year in which we further strengthened our global business position and reinforced our D-Link brand position as one of the world's leading designers, developers and manufacturers of networking, broadband and communication solutions. We are stronger than ever before, and we are prepared for the next phase of our Company's growth.

In 2003, the Company aggressively drove record global consolidated revenue of US $728 million (NT $25.0 billion) and a net income of US $40 million (NT $1,374 million), compared to fiscal 2002 US $583.6 million (NT $20.2 billion) and a net income of US $25 million (NT $868 million). Consolidated revenue increased 24% during this year while growing gross margin to 31.2% overall.

Increased investments in digital home technologies, channel expansion and global market development with affordable standard-based products resulted in significant market share increases. In 2003, we successfully improved earnings 59% from 2002 and maximized return on equity to 13.5%.

As we move toward the year 2004, the creation of greater shareholder value continues to be the key driving factor behind our actions.

Globally Positioned In-Market

The Company gained a distinct advantage in 2003 over our competition by already being globally positioned in-country through 87 offices serving more than 100 countries worldwide. In-market data collection and technology assessments acquired from in-country D-Link business units allowed

the Company to build global marketplace business plans that embrace each market individually with standard-based product offerings. Since we are already in-market globally in sales, marketing and support, the Company is better able to integrate key product initiatives and ideas in harmony globally.

North American Region

For the year, the North America Region grew 31% and accounted for 37% of the globally consolidated revenue in 2003. Operating with greater resources than ever before, the North American region embraced extended responsibilities and provided a leadership role in strategic product development and product marketing in 2003. In addition to research and development, sales and marketing services and regional management for North America, the region has made significant inroads with emerging technologies such as wireless, Voice over Internet Protocol (VoIP) and teleconferencing technologies.

European Region

Following a strategic reorganization, our European business units drove a steady revenue increase, posting a solid 30% gain in 2003, and represents 25% of the revenue for the Company. The European business units also achieved significant success with 43% of sales coming from high-speed wireless sales to the D-Link business community by threading the new product lines to distribution channels and existing reseller partners. About 25% of the business in Europe was earned from European consumers at retail and e-tail segments.

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