Contents :

1. INTRODUCTION

On behalf of the Board of Directors of AIC, we are pleased to announce that AIC Semiconductor Sdn. Bhd. ("AICS"), a subsidiary of AIC has on 1 July 2006 entered into a basic agreement ("Basic Agreement") with Samsung Electronics Co., Ltd. ("SEC") and an assembly supply agreement ("Assembly Supply Agreement") with KEC Corporation ("KEC"). The Basic Agreement and Assembly Supply Agreement are collectively referred to as the Agreements.

2. BACKGROUND INFORMATION

AICS is incorporated in Malaysia on 15 August 1995. It is principally involved in the design, procurement, sales, assembly and test of integrated circuit chips and other ancillary activities. AIC has an effective equity interest of 75% in AICS.

SEC, which is part of the renowned Samsung group of companies, is incorporated in Korea and listed on the Korean stock exchange. SEC is one of the world's largest semiconductor manufacturers and is also involved in the manufacturing and sale of consumer electronic products.

KEC is a company which is also incorporated in Korea and listed on the Korean stock exchange. KEC is principally involved in the manufacture of discrete semiconductors and other electronic components.

3. SALIENT TERMS OF THE AGREEMENTS

The Agreements entail AICS assembling and testing of semiconductor chip packages for SEC and KEC in accordance with the terms and conditions of the Basic Agreement and Assembly Supply Agreement respectively.

The Basic Agreement shall be for a period of one (1) year from 1 July 2006 and will continue until terminated by either party giving notice in writing. The Basic Agreement shall automatically be extended on a year-to-year basis unless or until either party hereto gives the other, one (1) month written notice stating its intention not to renew the Basic Agreement prior to expiration of the Basic Agreement.

The Assembly Supply Agreement is also for a period of one (1) year from 1 July 2006. The Assembly Supply Agreement can be terminated or renewed by either AICS or KEC, by giving the other party a ninety (90) days written notice stating its intention to do so.

4. RATIONALE

The Agreements represent a major milestone for our semiconductor division and also marks the beginning of a long-term relationship which will mutually benefit the parties as the purchase and supply commitment will provide stability to business, improve time-to-market and utilisation of production capacity.

The Agreements are expected to enhance the overall business and earnings potential of AIC's semiconductor division. The Agreements are expected to generate revenues of approximately RM25 million for the first year, ie from 1 July 2006 to 30 June 2007.

5. EFFECTS

a) Share Capital and Substantial Shareholding

The Agreements will not have any effect on the share capital and substantial shareholding of the Company.

b) Net Tangible Assets ("NTA")

The Agreements will not have any effect to the consolidated NTA of AIC and its subsidiaries ("AIC Group").

c) Earnings

The Agreements will not have any material effect to the earnings of the AIC Group for the financial year ending 31 December 2006. However, the Agreements are expected to contribute positively to the future earnings of the AIC Group.

6. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTEREST

None of the Directors and substantial shareholders of AIC has any interest, direct or indirect, in the Agreements.

7. APPROVALS

The Agreements are not subject to the approval of shareholders of AIC or any regulatory authorities.

8. DIRECTORS' STATEMENT

The Board of Directors of AIC is of the opinion that the Agreements are in the best interest of the AIC Group.

This announcement is dated 4 July 2006.