(11 July 2004) – Wafer Systems Limited (“Wafer Systems” / “Group”) (stock code: 8198) today announced that it has won contracts of total worth more than HK$10 million from a number of major automobile manufacturers, including Volkswagen Automotive Co., Ltd., Daimler Chrysler (Benz), Toyota Motor Corporation and SAIC GM Wuling Automobile Co,. Ltd., to provide network infrastructure security solutions and information systems services. The winning of these contracts proves that Wafer Systems not only enjoys a good reputation among multinational telecommunication enterprises, such reputation also extends to multinational car makers. They laid for the Group a solid foundation for penetrating the quickly developing automobile industry.

As more and more international automobile manufacturers set up plants and offices in China, it becomes a must to have effective communication systems to connect them with their headquarters. Other than providing these major automobile manufacturers with quality network information solutions, Wafer Systems is also required to assure the secured flow of information. It will implement a network security solution and provide professional advice for Volkswagen Automotive Co., Ltd., and set up for Toyota Motor Corporation’s Tianjin production plant an overall network infrastructure solution, and undertake for Daimler Chrysler (Benz) network expansion security projects.

Manager of Information Technology of Volkswagen Automotive Co., Ltd., said, “We are very impressed with Wafer Systems’ experience in the field of network security and their outstanding project management capabilities. Having a safe transmission network is of utmost importance to us as we have so many branch offices in different parts of the world. We are very pleased with Wafer Systems’ remarkable project management and after-sales services. They adhered to the strictest process management and file management standards from start to finish of the project and also provide comprehensive after-sales services including 7X24 hours technical support and solve problems with exceptional efficiency.”

Chief Executive Officer of Wafer Systems, Mr. Ringo Chan, said, “It is our pleasure to be offering networking and other services to such prominent clients in the automobile industry. We are very proud that we are able to meet our clients’ stringent requirements for tailored network infrastructure systems with our advanced technology and quality services The successful projects marked the expansion and diversification of our customer base and that our advanced technology and quality service are recognized by an increasing number of multinational corporation clients.”

According to the forecast of the China Association of Automobile Manufacturers (CAAM), the total number of vehicles manufactured for export will reach 5.1 million in 2004, a 20% rise over that in 2003. Also, automobile manufacturers are increasing the export of vehicles from their China production plants to the Asia Pacific region, and even to the USA and Europe. All these are evidence of China becoming an important base for global automobile manufacturers to expand their businesses, and for Wafer Systems, an immense pool of business opportunities for building its multinational automobile enterprise client base.

Mr. Chan concluded, “The success of these projects for our renowned automobile industry clients testified our commitment to develop business with the automobile industry. With the automobile industry in China rapidly developing, more and more multinational automobile enterprises are entering the market. This will in turn boost the demand among these enterprises for quality network infrastructure. As one of the leaders in the network infrastructure industry with a good reputation among multinational corporation clients, we have full confidence in achieving success in serving the automobile industry hence securing a larger market share.”