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To: Synapsid who wrote (2308)	1/27/1999 7:08:00 PM
From: DiViT	Respond to of 3493

Shinco is an ESS customer... - 50 models??? Chinese Information Ministry issues antifake logos for super VCD players 01/27/99 BBC Worldwide Monitoring Source: Xinhua news agency, Beijing, in English 0016 gmt 27 Jan 99/BBC Worldwide Monitoring/(c) BBC Text of report by Xinhua news agency Beijing, 27th January: Fifty models of super VCD players made by Shinco Electronics Group and another 29 domestic manufacturers have been given permission by the Ministry of the Information Industry to add a logo to VCD players indicating that they are not fakes or been illegally copied. Designed by the ministry, the attached antifake label is aimed at establishing industry standards and to better protect consumers' interests. On 1st November 1998, the ministry promulgated technical standards for super VCD players and the licence approval was granted 25th January. According to ministry regulations, the manufacturers can apply for the right to use the logo on a voluntary basis and once approved will receive an official certificate. Government watch-dogs will keep a close eye on the super VCD player manufacturers and reserve their right to revoke the use of the logo.

To: Synapsid who wrote (2308)	1/27/1999 8:16:00 PM
From: Synapsid	Respond to of 3493

Having listened to the CC, I am getting a more positive picture. The company was cautious and conservative, but it sounded pretty good. The gross margins seem to be alright for the PC space, especially in view of the fact that most audio chips ESS sold were still ISA-bus parts, with a strong transition to PCI expected in the first half of '99, although sales of the Maestro-2 and Solo-1 PCI audio chips already increased strongly during the quarter. There was one statement by the CFO that he was conservatively modelling gross margins because new competitors could lower the ASP of new products. This could provide potential upside. The fourth quarter was very strong for video (VCD) products, although that market (and the PC market) is highly seasonable with a peak in the fourth quarter. They were seeing strong demand continuing in Q1, but expect seasonality to remain a factor in Q1 compared to Q4 as it has in the past. They mentioned design wins in audio and video as well as several communications (modem) design wins that are to start shipping in the first half 1999. Finally, there was quite a bit of emphasis on the Internet-related products, which may in some extent be seen as diversification from the cut-throat PC space.