International Region: Asia, Australia, and the Pacific Rim

The Asia Pacific and other Emerging Markets Region grew 12% in 2003 and represents 25% of the revenue for the Company. D-Link International business units report to the strategically located headquarters in The Synergy, Singapore and cover more than 23 countries including Japan, Australia, India, South America, Russia, and the Middle East.

We are one of the top three broadband Customer Premises Equipment suppliers in Japan. In Australia, we were able to capture a 75% market share by being the number one Digital Subscriber Line provider with telecommunication companies across the board. In India, the Company is the market leader of low-end networking, high-end networking and structured cabling.

Greater China Region

Greater China grew 21% in 2003 and represents 13% of the revenue for the Company.We have established a strong position within China and continue to be a primary networking and communications gear provider in this expansive, untapped market. In addition, we strengthened our alliances with key telecommunications companies, including China Telecom, China’s largest wireline service provider.

The success in China can be attributed to aggressive relationship-based marketing and in-country recognition of the special needs for our customers resulting in a rolling list of new contract wins from major vertical accounts including provincial governments, schools, financial institutions and service providers.

Alpha Networks

Last year we implemented an initiative to reorganize the Company and separate the D-Link brand business from the D-Link OEM/ODM business - which is now named Alpha Networks. Dividing these key, but separate, operations into two distinct business operations allowed each company to sharpen their focus on channels and customers, ultimately resulting in building greater shareholder equity.

Alpha Networks will begin with 1,250 D-Link employees, engineers and designers. It has the current OEM/ODM customer base, the Hsinchu and Dongguan factories and the transfer of key test equipment to allow maximum capacity to immediately take on new business relationships.

As part of the expansion plan for 2004, we intend to unleash and grow the Alpha Networks OEM/ODM contract business by expanding it to an independent investment and launching it into a public offering. We have already taken investments from Quanta Computer (17%) and some venture capital (7.72%) to allow Alpha Networks to become a simple IPO.

A Word of Thanks

We are confident about our future. We will continue to be driven by engineers and computer scientists, while looking to the market demand and our customers’ needs to determine the direction of our business.

Our Brand is strong, and with a wide array of award-winning networking, broadband and communications solutions for corporate environments, small office, and home connectivity, D-Link is well positioned to take advantage of the global market opportunities that lie ahead.

I wish to thank our shareholders, customers, and employees for their support in 2003. We are ready to meet the challenges that lay ahead as we direct our resources to growth areas, unleash the spirit and energy within each D-Link individual, and spark the drive to achieve a more competitive and successful D-Link in 2004 and beyond.