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1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW 15 SECURITIES LITIGATION. CLASS ACTION 16 DECLARATION OF SARA M. FOLCHI IN 17 SUPPORT OF DEFENDANTS’ This Document Relates To: OPPOSITION TO PLAINTIFF’S MOTION 18 FOR CLASS CERTIFICATION ALL ACTIONS. 19 [FILED CONCURRENTLY WITH DEFENDANTS’ OPPOSITION TO 20 PLAINTIFF’S MOTION FOR CLASS CERTIFICATION; REQUEST FOR 21 JUDICIAL NOTICE; DECLARATION OF LORI E. ROMLEY; AND [PROPOSED] 22 ORDER DENYING MOTION] 23 Date: January 13, 2006 Time: 9:00 a.m. 24 Judge: The Honorable Ronald M. Whyte 25 26

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1 DECLARATION OF SARA M. FOLCHI 2 I, Sara M. Folchi, hereby declare as follows: 3 1. I am an associate at the law firm of O'Melveny & Myers LLP, and an attorney 4 licensed to practice before all courts of the State of California and the United States District Court 5 for the Northern District of California. I am an attorney of record for defendants ESS 6 Technology, Inc. (“ESST”), Robert L. Blair, Patrick Ang, Frederick S.L. Chan, and James B. 7 Boyd. I provide this declaration in support of Defendants’ Opposition to Plaintiff’s Motion for 8 Class Certification. I have personal knowledge of the matters recited herein and, if called to do 9 so, could and would competently testify thereto. 10 2. Attached hereto as Exhibit 1 is a true and correct copy of ESST’s April 24, 2002 11 conference call transcript. Plaintiff references this conference call at paragraph 26 of his Second 12 Amended Complaint (“SAC”). 13 3. Attached hereto as Exhibit 2 is a true and correct copy of ESST’s July 24, 2002 14 conference call transcript. Plaintiff references this conference call at paragraph 31 of the SAC. 15 4. Attached hereto as Exhibit 3 is a true and correct copy of Barron’s August 5, 2002 16 article titled “TECHNOLOGY WEEK — Tech Trader: The Company's in the Chips, and That's a 17 Problem.” Plaintiff references this article at paragraph 32 of the SAC. I downloaded this 18 document on or about November 7, 2005 from Lexis. 19 5. Attached hereto as Exhibit 4 is a true and correct copy of Lead Plaintiff Steve 20 Bardack’s Amended Responses and Objections to Defendant ESS Technology’s First Set of 21 Special Interrogatories, dated October 28, 2005, and served on defendants. 22 6. Attached hereto as Exhibit 5 is a true and correct copy of an August 1, 2002 - 23 August 2, 2002 e-mail exchange between Steve Bardack, Robert Blair, and James Boyd. This 24 document was produced in this litigation by Bardack to defendants, and marked with Bates 25 number Bardack 0038-0039. 26 7. Attached hereto as Exhibit 6 is a true and correct copy of an August 1, 2002 e- 27 mail from Steve Bardack to Robert Blair. This document was produced in this litigation by

28 Bardack to defendants, and marked with Bates number Bardack 0004 . -1- FOLCHI DECLARATION ISO OPPOSITION TO CLASS CERTIFICATION – CASE NO. C-02-4497-RMW

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1 8. Attached hereto as Exhibit 7 is a true and correct copy of Steve Bardack’s 2 biography from Pathway Ventures. I downloaded this document on November 29, 2005, from the 3 internet address http://www.pathwayventures.com/team/index.html. 4 9. Attached hereto as Exhibit 8 is a true and correct copy of a July 25, 2002 e-mail 5 exchange between Steve Bardack and James Boyd. This document was produced in this litigation 6 by Bardack to defendants, and marked with Bates number Bardack 0019. 7 10. Attached hereto as Exhibit 9 is a true and correct copy of Steve Bardack’s 8 Ameritrade Account Modification Form, dated November 10, 2003. This document was 9 produced in this litigation by Ameritrade to defendants in response to a third party subpoena 10 issued by defendants, and marked with Bates number 3RDAME00000017-00000021. 11 11. Attached hereto as Exhibit 10 is a true and correct copy of Steve Bardack’s 12 Schwab One Account Application, dated March 5, 2001. This document was produced in this 13 litigation by Charles Schwab to defendants in response to a third party subpoena issued by 14 defendants, and marked with Bates number 3RDSCH00000001-00000004. 15 12. Attached hereto as Exhibit 11 is a true and correct copy of Steve Bardack’s 16 March 26, 2002 Schwab trade confirmation. This document was produced in this litigation by 17 Charles Schwab to defendants in response to a third party subpoena issued by defendants, and 18 marked with Bates number 3RDSCH00000301-00000302. 19 13. Attached hereto as Exhibit 12 is a true and correct copy of a September 4, 2002 e- 20 mail from Steve Bardack to Robert Blair and James Boyd. This document was produced in this 21 litigation by Bardack to defendants, and marked with Bates number Bardack 0010. 22 14. Attached hereto as Exhibit 13 is a true and correct copy of an August 5, 2002 e- 23 mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 24 Bardack to defendants, and marked with Bates number Bardack 0013. 25 15. Attached hereto as Exhibit 14 is a true and correct copy of another August 5, 2002 26 e-mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 27 Bardack to defendants, and marked with Bates number Bardack 0003.

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1 16. Attached hereto as Exhibit 15 is a true and correct copy of another August 5, 2002 2 e-mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 3 Bardack to defendants, and marked with Bates number Bardack 0008. 4 17. Attached hereto as Exhibit 16 is a true and correct copy of a May 31, 2002 and 5 June 4, 2002 e-mail exchange between Steve Bardack and James Boyd. This document was 6 produced in this litigation by Bardack to defendants, and marked with Bates number Bardack 7 0016. 8 18. Attached hereto as Exhibit 17 is a true and correct copy of a June 20 – June 21, 9 2002 e-mail exchange between Steve Bardack and James Boyd. This document was produced in 10 this litigation by defendants to Bardack, and marked with Bates number ESSFED001167872- 11 001167873. 12 19. Attached hereto as Exhibit 18 is a true and correct copy of an August 17, 2002 and 13 August 19, 2002 e-mail exchange between James Boyd, Robert Blair, and Steve Bardack. This 14 document was produced in this litigation by Bardack to defendants, and marked with Bates 15 number Bardack 0031-0032. 16 20. Attached hereto as Exhibit 19 is a true and correct copy of ESST’s Form 10Q for 17 the period ending March 31, 2002. O’Melveny & Myers LLP downloaded this document on or 18 about November 29, 2005 from the following internet address: http://www.10kwizard.com/main. 19 php?g=&hpage=1&. 20 21. Attached hereto as Exhibit 20 is a true and correct copy of ESST’s Form 10Q for 21 the period ending June 30, 2002. O’Melveny & Myers LLP downloaded this document on or 22 about November 29, 2005 from the following internet address: http://www.10kwizard.com/main. 23 php?g=&hpage=1&. 24 22. Attached hereto as Exhibit 21 is a true and correct copy of ESST’s Form 10Q for 25 the period ending September 30, 2002. O’Melveny & Myers LLP downloaded this document on 26 or about November 29, 2005 from the following internet address: http://www.10kwizard.com/ 27 main.php?g=&hpage=1&.

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1 23. Attached hereto as Exhibit 22 is a true and correct copy of the Transcript of the 2 November 18, 2005 deposition of Steve Bardack. 3 24. Attached hereto as Exhibit 23 is a true and correct copy of the Court’s Order on 4 Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint and Strike Portions 5 Thereof, filed on December 1, 2004. 6 25. Attached hereto as Exhibit 24 is a true and correct copy of the Court’s Order 7 Granting in Part Motion to Strike Allegations in Plaintiff’s Second Amended Complaint, filed on 8 February 22, 2005. 9 26. Attached hereto as Exhibit 25 is a true and correct copy of Sidoti & Company, 10 LLC’s March 19, 2002 Emerging Growth Research Morning Meeting Minutes regarding ESS 11 Technology, Inc. This document was produced in this litigation by plaintiff to defendants, and 12 marked with Bates number SIDOTA 00246-00247. 13 27. Attached hereto as Exhibit 26 is a true and correct copy of C. E. Unterberg, 14 Towbin’s July 18, 2002 Company Report on ESS Technology, Inc. O’Melveny & Myers LLP 15 obtained a copy of this report. 16 28. Attached hereto as Exhibit 27 is a true and correct copy of an August 5, 2002 17 Yahoo! Reuters article titled, “ESS Shares Tumble After Barron’s Article.” This document was 18 produced in this litigation by plaintiff to defendants, and marked with Bates number SIDOTA 19 00158-00159. 20 29. Attached hereto as Exhibit 28 is a true and correct copy of an August 5, 2002 21 Bloomberg article titled, “ESS Technology Falls on Barron’s Newspaper Report.” Plaintiff 22 references this article at paragraph 32 of the SAC. I downloaded this document on or about 23 November 7, 2005 from Lexis. 24 30. Attached hereto as Exhibit 29 is a true and correct copy of Steve Bardack’s 25 Schwab account statement for August 1, 2002 through August 31, 2002. This document was 26 produced in this litigation by Charles Schwab to defendants in response to a third party subpoena 27 issued by defendants, and marked with Bates number 3RDSCH00000284-00000285.

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1 31. Attached hereto as Exhibit 30 is a true and correct copy of Steve Bardack’s 2 Schwab account statement for September 1, 2002 through September 30, 2002. This document 3 was produced in this litigation by Charles Schwb to defendants in response to a third party 4 subpoena issued by defendants, and marked with Bates number 3RDSCH00000283. 5 32. Attached hereto as Exhibit 31 is a true and correct copy of the Certification of 6 Named Plaintiff Pursuant to Federal Securities Laws for lead plaintiff Steve Bardack, filed on 7 November 12, 2002. 8 33. Attached hereto as Exhibit 32 is a true and correct copy of an August 7, 2002 e- 9 mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 10 Bardack to defendants, and marked with Bates number Bardack 0005. 11 34. Attached hereto as Exhibit 33 is a true and correct copy of an August 6, 2002 e- 12 mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 13 [Bardack] to defendants, and marked with Bates number Bardack 0006. 14 35. Attached hereto as Exhibit 34 is a true and correct copy of an August 9, 2002 and 15 August 14, 2002 e-mail exchange between Steve Bardack, Robert Blair, and James Boyd. (depo 16 ex. 28) This document was produced in this litigation by [Bardack] to defendants, and marked 17 with Bates number Bardack 0030. 18 36. Attached hereto as Exhibit 35 is a true and correct copy of an August 6, 2002 e- 19 mail from Steve Bardack to Robert Blair. This document was produced in this litigation by 20 Bardack to defendants, and marked with Bates number Bardack 0007. 21 37. Attached hereto as Exhibit 36 is a true and correct copy of Steve Bardack’s 22 Schwab trade confirmations for November 6, 2002 and December 2, 2002. This document was 23 produced in this litigation by [Bardack] to defendants, and marked with Bates number Bardack 24 0045-0048. 25 38. Attached hereto as Exhibit 37 is a true and correct copy of Steve Bardack’s 26 February 2003 Ameritrade account statement. This document was produced in this litigation by 27 Bardack to defendants, and marked with Bates number Bardack 0337-0339.

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1 39. Attached hereto as Exhibit 38 is a true and correct copy of a September 27, 2002 2 e-mail from Steve Bardack to James Boyd. This document was produced in this litigation by 3 defendants to Bardack, and marked with Bates number ESSFED001168520. 4 40. As reflected in the Court’s docket, on or about September 13, 2002, the complaint 5 in Rann v. Patrick Ang, Robert L. Blair, James B. Boyd, and ESS Technology, Inc. was filed. 6 41. As reflected in the Court’s docket, on or about November 12 2002, Steve Bardack 7 filed a Motion to Appoint Steve Bardack as Lead Plaintiff and to Approve Steve Bardack’s 8 Selection of Lead Counsel. 9 42. As reflected in the Court’s docket, on or about January 29, 2003, this Court 10 entered an Order Granting Motion to Appoint Steve Bardack as Lead Plaintiff and Approving 11 Steve Bardack’s Selection of Lead Counsel. 12 43. As reflected in the Court’s docket, on or about February 6, 2003, lead plaintiff 13 Steve Bardack filed Lead Plaintiff Steve Bardack’s Complaint for Violations of the Federal 14 Securities Laws. 15 I declare under penalty of perjury under the laws of the United States of America that the 16 foregoing is true and correct. 17

18 Dated: December 2, 2005

19 By: /s/ Sara M. Folchi Sara M. Folchi 20 MP1:971982.1 21 22 23 24 25 26 27

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2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

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Exhibit 1 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 17

4 of 4 DOCUMENTS

Copyright 2002 FDCHeMedia, Inc. All Rights Reserved Copyright 2002 CCBN, Inc. All Rights Reserved FD (Fair Disclosure) Wire

April 24, 2002 Wednesday

Transcript 042402wp.710

LENGTH: 10847 words

HEADLINE: Q1 2002 ESS Technology Earnings Conference Call - Final

BODY: OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the ESS Technology First Quarter 2002 Results conference call. During the presentation all participants will be in a listen-only mode. Afterwards, you will be invited to participate in the question and answer session. At that time, if you have a question, please press the 1, fo l- lowed by the 4 on your telephone. As a reminder, this conference is being recorded Wednesday, April 24, 2002, and I would like to turn the conference over to Rebecca Mack (ph). Please go ahead. REBECCA MACK (ph), ESS TECHNOLOGY, INC.: Thank you. Good afternoon everyone, and thank you for joining the First Quarter 2002 Earnings conference call for ESS Tech- nology. By now you should have received a copy of the news release that was faxed within the past hour. If you have not yet received the release or cannot access it from our Web site, please call Wendy Chaffer (ph) at 510-492-1180, and she will send you one immediately. During the course of this teleconference we may make projections or other forward-looking statements regarding future events for the future financial performance of the company. We wish to caution you that these statements are only predictions, and that the actual events or results may differ materially. We therefore would direct and encourage you to refer to documents the company files from time to time with the Securities & Exchange Commission. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Joining me today is Fred Chan, chairman of ESS; Bob Blair, president and chief executive officer; and Jim Boyd, ESS' chief financial officer. Now, I'd like to turn the call over to Bob Blair, ESS' chief executive officer, who will provide an overview of the recently completed quarter. BOB BLAIR, CHIEF EXECUTIVE OFFICER, ESS TECHNOLOGY, INC.: Thank you, Rebecca. I'm pleased to report that our first quarter was extremely successful. Today it's more clear than ever that our strat- egy to become a leading consumer digital entertainment supplier is working. I'm very excited about ESS' just completed first quarter. Our revenues for the quarter was $79.1 million, which is a 56 percent increase over the prior year quarter, and is down only 5 percent from fourth quarter, the seasonally strongest quarter of the year. I'm especially pleased by the continued growth of our DVD business which grew revenues by an amazing 650 percent over the prior year quarter and 3 percent above the fourth quarter of last year despite Q1 being a seasonally slower quarter for the industry. The reasons for our success are two fold. First, the markets for ESS' principle products, digital video chips, both DVD and VCD, remain strong and are growing throughout the world. Second, because of the unique features, support and cost effectiveness of ESS' products, Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 17

Page 2 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos we continue to build on our number one market share in these strong video markets. In fact for the quarter we shipped over 12 million video units into this growing market. Most importantly, are DVD revenues and unit volumes continued their fast growth as we shipped over 5.4 million units in the quarter. This is over 780 percent unit growth from the prior year quarter and over 8 percent above the 5 million units we shipped in the fourth quarter of 2001, our previous record. Based on projections for the DVD market in 2002, we believe that this makes ESS the market share leader for DVD products for both the worldwide DVD market and the U.S. DVD market, with over 40 percent market share of the worldwide market. In addition, we believe that ESS currently provides over 50 percent of all the digital video player chips sold worldwide today. The reasons that ESS continues to grow its market share is simple. We offer products that have the most features, the highest quality audio and video, and we have the best customer support. This is why ESS' customers' products are outselling their competition and why our customers are gaining market share. Now I'd like to give you some more highlights from the recently completed quarter. The growth in our revenues came from our digital video products, both DVD and VCD products, which were both above projections. As projected, our PC product revenues continued to decline and came in at expectations. Our PC audio revenues were 7 percent of total revenues, and we project the PC audio revenues will continue to decline through- out 2002 and will be under 3 percent of total revenue for the complete year. Our VCD products continued to grow during the first quarter with total unit shipments driven by the Chinese New Year of over 6.7 million units, and VCD revenues came in above projections. We believe that ESS has approximately 60 percent of this VCD ma rket. Because of the Chinese demand, the new increase demand from India, Indonesia, Malaysia and Brazil are causing this market to continue to grow. India in particular has shown very strong growth in recent quarters. We project this market will continue to grow as people in these developing countries begin to enjoy the features and benefits of low- cost digital video. ESS has introduced a new product line, the (Visba II), into this market offering more features and lower costs. We will continue to introduce other new products into this market offering even more features to enable ESS to continue to dominate this market. Now I'd like to talk for a few minutes about our design lens. ESS continues to win designs in companies throughout the world for all levels of products. We are especially proud, however, of our recent design lens at Len Products (ph) in the UK and DENON in Japan which demonstrate the high quality in ESS' products. Len Products, one of the leading audio-video companies in the world recently chose ESS as its partner for developing high-end DVD and media server products. Together with Sony, ESS and Len will develop reference design platforms promoting the SACD audio format. Additionally, Len Products classic Luni (ph) system, which retails for over $3,000, utilizes ESS' Vibrato chips as its audio and video processor and recently won the popular Mechanics Editor's Choice Award at CES. This product has also been featured in audio file magazines throughout the world. At DENON in Japan, ESS continues its success with design lens in five different high-end DVD models ranging in price from $549 to over $3,000. Like Len Products, DENON utilizes ESS' wanted vibrato chips as the core audio and video processing in their system and bring to the market audiofile quality products. We believe these two customers clearly demonstrate that ESS' products offer the highest quality and most features available in the market today. The advantage to ESS of having these two leading audiofile customers is that when our products meet the extreme requirements demanded by this high-end market, we know that our audio and video quality is the best available. During recent quarters, ESS has also won many new designs at sub-$100 and mid level DVD players at companies throughout the world. These design lens are at companies with familiar names to most of us, such as Aiwa, Alpine, Apex, BBK, Clarion, Daewoo, DENON, GE, Kenwood, KOSS, Len, Molatta (ph), Onkyo, Panasonic, Philco, Phillips, RCA, Sampo, Samsung, Sanyo, Sharp, Shanko (ph), SonicBlue, TEAC, and TCL (ph). These players are popular throughout the world and demonstrate the widespread acceptance of ESS products and technologies. Additionally, ESS continues to partner with key DVD component suppliers throughout the world and have jointly developed advanced, low-cost, single board solutions. We are now partnering with Panasonic, Toshiba and Sanyo on these projects to ensure that ESS' customers have a choice of many advanced DVD solutions, which is another reason ESS has been the clear leader in the DVD market. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 4 of 17

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During the quarter we continued our development with several major new product families and the DVD and digi- tal entertainment markets which will be introduced during the coming 12 months. Included in these new products are the Vibrato II (ph) family of DVD system chip products which integrate the Servo front-end chip set together with exis t- ing vibrato progressive scan MPEG encoder and TV encoder to provide the most highly integrated, complete DVD so- lution. The product is planned to be introduced next quarter and is planned to begin volume shipments during the fourth quarter. ESS is now introducing our new MPEG encoder product. Currently, we are demo -ing a DVR utilizing our new MPEG encoder with our vibrato progressive scan products. We plan to begin shipping reference designs to our custom- ers next month and believe we will begin volume shipments in the fourth quarter. Our third new product is our lighted digital home system for DHS system monochip products. These products in- clude our Vibrato MPEG decoder integrated with a MIPS 4KC processor. Also included in the system on a chip product family are PCI and USV buses, DDRSV RAM memory controller, and progressive scan TV encoders. These products are planned to introduced in the fourth quarter with shipments beginning in early 2003. Our fourth new product is our latest own networking chip designed specifically for easily sharing entertainment content within the home. This chip allows audio and video content to be sent throughout homes without the inconven- ience of adding any new wires. This product will be introduced next quarter and is planned to begin production ship- ments in 2003. Our fifth new product line has been developed in partnership with NEC, and it's intended for set top boxes. ESS' advanced system controller chips with integrated communications capabilities will match with NEC's industry-leading MIPS processors and will form the heart of advanced set-top boxes. We will introduce this product in the third quarter and plan to begin production shipments in early 2003. Looking to the future, ESS believes the trend for consumer entertainment technologies to become digitized will continue. We believe this trend of technologies moving from the analog to the digital domain opens up exciting new opportunities and new markets for suppliers of advanced digital consumer entertainment products. Our vision of the future has true electronic platform sharing in the home - a PC continuing to do the task that it cur- rently performs very well, and a digital home system managing the entertainment throughout the home. We believe this new digital home system in the living room will manage broadcast video whether from cable or satellite, manage the playback, storage and recording of both audio and digital video, including digital photography, and distribute this enter- tainment content throughout the networked home. We believe that our dominant position in the DVD and digital video market and our new products planned for introductions later this year will enable our company to be a leading player in this new emerging consumer digital entertainment market. I will now turn the call over to Jim Boyd, our chief financial officer, to review the financial results from the first quarter. After Mr. Boyd completes his review, I will give guidance for the upcoming quarters. JIM BOYD, CHIEF FINANCIAL OFFICER, ESS TECHNOLOGY, INC.: Thank you, Bob. And good afternoon, everyone. Today ESS reports net revenue for the quarter ended March 31, 2002 of $79.1 mil- lion, an increase of 56 percent from our $15.8 million in the first quarter of 2001, and compares to $83.3 million for the fourth quarter of 2001. Our DVD revenue hit another quarterly record the third time in a row we have established a new quarterly record for DVD revenue. DVD revenues were $45.7 million, up $39.8 million or 650 percent over the same period last year. On a GAAP basis, net income for the quarter was 16.4 million or 34 cents per diluted share, which compares to 35 cents per diluted share for the fourth quarter of 2001 and a loss of 49 cents per diluted share for the first quarter of 2001. On a pro forma basis, for the first quarter of 2002, ESS had net income of $17.9 million or 37 cents per diluted share, which compares to a fourth quarter 2001 pro forma net income figure of $17 million or 37 cents per diluted share, and compares to a first quarter 2001 pro forma net loss of $1.7 million or a loss of 4 cents per diluted share. ESS defines pro forma net income to exclude investment gains and losses and acquisition-related costs. Gross profit for the first quarter of 2002 was $34.3 million. This represents a gross margin of 43 percent compared to 41 percent in the fourth quarter of 2001 and 22 percent in the first quarter of 2001. The increase in gross margin from Q4 2001 to Q1 2002 was primarily due to the product mix. R&D expenses for the first quarter of 2002 decreased Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 5 of 17

Page 4 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos slightly to 6.4 million or 8.1 percent of revenue compared with $6.7 million or 8 percent of revenue for Q4 2001, and compares to $6.4 million or 12.6 percent of revenue for the first quarter 2001. SG&A expenses were $1 million lower in the first quarter of 2002 at $10.4 million or approximately 13 percent of revenue, which compared to $11.4 million or 13.7 percent of revenue for the fourth quarter of 2001 and $8.7 million or 17 percent of revenue for Q1 2001. Net operating loss was $1.3 million in the first quarter versus a positive $700,000 in the fourth quarter 2001. The loss is due to a write-down of Cisco shares for other than temporary decline in value and is partially offset by interest income. Our effective tax rate was 5 percent in Q1 2002. Now, turning to our strong balance sheet. As of March 31, 2002, the company had over $207 million in cash and short-term investments, an increase of $78 million or 60 percent from our December 31, 2001 balance of $129 million. Part of the increase in cash this quarter is due to the $45.2 million of net proceeds from our secondary public offering which was completed in February. Accounts receivable. Net of allowance for (inaudible) accounts in Q1 was $40.1 million compared to $42.6 million at December 31, 2001. DSO was 46 days in Q1 2002 versus 47 in Q4 2001 and 68 in Q1 2001. As of March 31, 2002, net inventory was 37.5 million, the same net inventory balance as of December 31, 2001 and down 56 percent from $85.4 million as of March 31, 2001. Days of inventory was at 75 days in Q1 2002 versus 71 days in Q4 2001 and 194 days in Q1 2001. As of March 31, 2002, accounts payable and accrued expenses were $54.3 million versus $49.2 million as of De- cember 31, 2001 and $70.3 million as of December 31, 2000. Also there in the first quarter of 2000, ESS repurchased 10,000 shares of its common stock for a total purchase price of $184,000, or an $18.40 per share average. ESS has re- purchased a total of 1.6 million shares of its common stock under its current 2 million stock repurchase program an- nounced by its board on February 13, 2001. Also during the quarter ESS settled its patent lawsuit with PCTEL for $2 million. In summary, ESS had a very good quarter. Revenues, margins and profits were all higher. In addition, we improve cash from operations by $32.8 million and kept inventories at the right level. And now I'd like to turn the call back to Bob. BOB BLAIR: Thank you, Jim. I'd now like to continue by giving guidance for ESS' business for the next two quarters. I'll be giving out this guid- ance by product line segment. Looking forward, we believe that in Q2, which is the traditionally slowest quarter of the year, revenue will be flat to down slightly from the strong first quarter that we just completed. The reasons are, first of all, VCD shipments will decline after the hot Chinese New Year season and PC audio shipments will continue their decline. However, most im- portant we are projecting DVD shipments to continue to grow in Q2 both in revenue and in units. For the third quarter we are projecting an increase in revenue from Q2 as we enter the beginning of the hot Chris t- mas season. This growth will be fueled primarily by our many new DVD design lens throughout the world. We expect VCD sales to be slightly increased from the second quarter and PC audio sales to continue their decline. I will be breaking down our business based on the following three product lines: DVD, VCD and PC products which includes both audio and modem products. Because of the difficulty of projecting accurately beyond six months, we will only be giving revenue and earnings guidance for the next six months. Now for the numbers. For the second quarter of this year, despite the fact that we're in the traditionally slowest quarter of the year, we are increasing our previous second quarter guidance of $66 million to $70 million to new guidance of $76 million to 79 million. For the third quarter of this year we are projecting a sequential growth from Q2 revenues to $82 million to $87 million. This increase is being driven by ESS' success with their DVD products, the continued growth of the DVD mar- ket, and the beginning of a hot season. We project the following arrangements for the percent of our revenue and our respective product lines for the sec- ond and third quarters. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 6 of 17

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For DVD products we expect our total contribution to revenue to be between 68 and 73 percent, and we expect Q2 DVD revenue to go 10 to 20 percent over the first quarter just completed. We also expect the third quarter DVD reve- nue to grow an additional 10 to 20 percent over the second quarter DVD revenue. For our VCD products we expect them to contribute 20 to 23 percent of our total revenue and our PC products should contribute 6 to 8 percent of our total revenues. Our PC audio business continues to decline, and it's expected to be 2 to 4 percent of revenues with our modem business remaining at approximately 4 percent of total sales. We project our gross margin for the coming two quarters to be in the 38 to 40 percent range. On the expense line, we project R&D expenses to be in the 9 percent range, and SG&A will remain in the 13 to 14 percent range, depending on quarterly revenues. We project non-operating income to be in the 2 percent range, growing throughout the year as we continue to grow our cash. Our tax rate going forward is projected to be 5 percent for ESS operating income, and for the year we are using a post-secondary number of 50.6 million shares for EPS calculations. Therefore, we project earnings per share to be in the following ranges: For the second quarter this year we're projecting 24 to 28 cents, and for the third quarter of this year we're project- ing 25 to 30 cents on a fully diluted basis. This concludes our guidance for the coming two quarters. And the guidance will be posted tomo rrow on the ESS Web site where it will be available for the next two weeks. I'd now like to open the call up for questions. OPERATOR: Thank you. Ladies and gentlemen, if you wish to register for today's question and answer session, you will need to press the 1 followed by the 4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered, and you wish to withdraw your polling request, you may do so by pressing the 1 followed by the 3. If you are on a speaker phone, please pick up your handset before entering your request. One moment, please, for the first question. Our first question comes form Kalpesh Kapeta (ph) of CE Unterberg Tobin. Please go ahead with your question. KALPESH KAPETA (ph), UNTERBERG TOBIN: The question relates to the DVD revenues were up 6 percent I believe in units and 3 percent in revenues quarter to quarter. And one of your competitors reported yesterday, and their units were also up, but revenues were down 4 percent. Could you just care to share with us what the market dynamics are going into Q1? Is it just the overall market trend or are there any market share shifts going on? BOB BLAIR: Okay, Kalpesh. First of all, our units grew by 8 percent not 6 percent in the recent quarter. In the first quarter, our revenues we believe are - I believe you're speaking about our competitor down the street with a "Z". We believe that our revenues for the first quarter are about 1.6 times as high as their revenues. And we believe as theirs de- clined in the first quarter and our revenues grew in the first quarter, that means that we're growing faster than they are, and continuing to grow and widen our market share gains. Also for the year-over-year comparisons, we grew our revenue over 650 percent. And I believe that their growth was something well below one-half of that, something around 250 percent. Our products have more features than any of our competitors' products. We have the best field support. And we've been able to prove time and time again that our parts are the most cost effective, and that's why our customers are choosing us, and we're continuing to grow our market share. So we think that the market's growing tremendously overall, and we think that we're continuing to widen our market share above all of our other competitors. KALPESH KAPETA (ph): Do you also think that market grew in units quarter-over-quarter from Q4 to Q1? BOB BLAIR: That's very, very hard to tell. We normally see the parts that we ship and what our competitors re- port. But we think that the market, if it didn't grow, it was probably flat. And if it was down, it was very down very slightly. So we think that the market is very, very robust in the first quarter. But we can't tell absolutely how much it grew or did not grow. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 7 of 17

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KALPESH KAPETA (ph): And what are the kind of geography trends in the market? Our U.S. market is typically seasonally down from Q4 to Q1 and international also has a lower penetration. Do you think that market dynamics have shifted in geography this year? BOB BLAIR: A little bit. China had a very, very strong season in the Chinese New Year season. They consumed a lot more DVD players this year than I think people had expected. But we're seeing that around the world our products that ship into Europe and most importantly the products shipping into the United States have been very, very strong. So we're seeing around the world continued growth and strength in the DVD market. But I'd say that the Chinese New Year probably grew a little faster than any of us exp ected. KALPESH KAPETA (ph): My next question relates to your product families and road map. You mentioned that you're going to introduce Vibrato II in Q3 and will have volume shipments beginning Q4, and the encoder product fam- ily beginning only next year. How will it impact them this time? I would imagine it will impact them positively going forward once you have more revenues from the integrated products. And how much percentage of your revenue in 2003 could come from the integrated products versus the decoder products? BOB BLAIR: As far as your first question about ASP impact for this year, I don't think there will be very much impact because even when it begins shipping in the fourth quarter in volume, it will still be a small percentage of the total, so it will have minimal impact. And I think to the same extent that the video encoder in the first quarter will be small relative to the total VCDs and DVDs that we ship. So I don't think there will be a big ASP impact, although it will be positive. However, going forward in next year, I think that the Vibrato II certainly in the last half of the year will be the dominant product that we're shipping just as Vibrato is the dominant product in the second half of this year with the Swan being the dominant product in the first half of the year. So I think you'll see a similar pattern for next year. KALPESH KAPETA (ph): And lastly, on the encoder front, there seems to be some debate about the standards, the decision on the DVD rewrite. And also, what are the other factors that would enable the decoder DVD market to grow next year over this year? BOB BLAIR: Well, you're right about the standards, but I don't think that's the biggest problem with the market not growing. The biggest problem is the cost of the loaders themselves and the cost of the end product being so high. Ulti- mately to have this product or any product get traction in the consumer world, you need a price that's under $399, and under $299, and eventually under $199. We're not going to see that this year. I'm not sure that we'll see it next year for sure. I don't think it's a standards problem as much as the price. I think Microsoft getting behind the DVD Plus RW has shift a little momentum in that direction. But that really doesn't effect ESS too much because we will support whatever standards are out there with our encoding technology. We think this year and next year hard drives will become much more popular with the DVR products, and that will hap- pen sooner than the DVD recordables. But it's just a matter of time until the price comes down and the volumes go up. KALPESH KAPETA (ph): And you also have other designs besides the Samsung hard drive design that was dis- played at CEA earlier this year? BOB BLAIR: Yes. We have actually several new designs, but we have not made those announcements yet. You can probably expect to see those during this coming quarter. KALPESH KAPETA (ph): Sure. And lastly, what are the ASP trends in the DVD decoder market right now? BOB BLAIR: Well, ASPs obviously continue to decline; that's the nature of our business. We are not changing our forecast that we've been giving out for the last several months where we say we expect a year-over-year decline on our DVD ASPs in the neighborhood of 10 to 15 percent. We think that's going to be pretty solid still. KALPESH KAPETA (ph): Thank you very much. BOB BLAIR: Thank you. OPERATOR: Our next question comes from Peter Andrew of AG Edwards. Please proceed with your question. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 8 of 17

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PETER ANDREW, AG EDWARDS: Thanks. I've got a couple. You guys mentioned Panasonic, Toshiba and Sam- sung in your introductory comments. I was curious. Could you just clarify? Did you mention you're doing specialized board work for them? And if so, are there any volume commitments or anything else you can talk about? BOB BLAIR: What those are, those companies make Servo controllers and Servo loader boards. And what ESS has done is we've partnered with them so that we've customized our software so that when you use our products with their Servos that the total system cost is the lowest, and it's a total integrated solution on a single board that's low cost, high performance. We've done that with several companies. Those are the three largest and best known companies. PETER ANDREW: Okay. The next question has to do with seasonality It's obvious you're bucking the seasonality trend here in the early parts of this year. But typically, especially given when the Chinese New Year is next year, just at a high level, would it be too out of the realm for us to think Q4 might actually be down versus Q3? BOB BLAIR: It's too early to tell on that one, Peter. It's hard enough for this market to see out six months. I don't want to go out 9 or 12. PETER ANDREW: Okay. And I guess the last thing is, can you talk about the ramp of the Vibrato chip? BOB BLAIR: Yeah. It's actually ramping very quickly. Most of our customers either have changed over or are in the process of changing over. This quarter I believe our Swan chips are going to be just slightly over 50 percent of the total shipments. But next quarter and quarters beyond, the Vibrato is by far the bulk of our business. PETER ANDREW: Okay, thanks. And great numbers. BOB BLAIR: Okay. Thank you, Peter. OPERATOR: Rick Foust (ph), Adams, Harkness & Hill. Please go ahead with your question. RICK FOUST (ph), ADAMS, HARKNESS & HILL: Hi, guys. Great quarter. Can you hear me? BOB BLAIR: Sure can. RICK FOUST (ph): Okay, great. As Vibrato becomes greater than 50 percent starting next quarter, does that help to kind of buffer the ASPs events? BOB BLAIR: Yes, absolutely it does. As Vibrato has a larger ASP because of the integrated TV encoder, that does buffer the ASP reduction. Overall, when I look at the total mix of my DVD products for last year versus this year, that's where I get the 10 to 15 percent. If we did not have more integration in our products, it would be obviously a higher drop than that. But that's the nature of the semiconductor business, is you continually integrate more and more features to keep the price up and use new technologies to get the cost down. That's the business we're in. RICK FOUST (ph): What is roughly the premium of Vibrato to Swan, and also the progressive scan version of Vi- brato? BOB BLAIR: A TV encoder in the marketplace cost about $1.50. And so without giving specific numbers, to in- centivise our customers to want to change their boards, we charge them something less than $1.50 for the Vibrato over the Swan series. I'm sorry. Your other question? RICK FOUST (ph): Don't you have a progressive scan version of Vibrato? BOB BLAIR: Oh, yes. I'm sorry. Progressive scan. That depends on volumes, et cetera. But the progressive scan feature goes anywhere from $1 to $3 additionally above the regular product. That price has come down as more and more people are pushing progressive scan to be a standard. If it becomes a standard, that price premium will be reduced from those numbers. RICK FOUST (ph): All right. Just stepping back, you shipped 5.4 million units. I guess overall DVD market fore- casts are only in the low 40's, just over 40 million in the low 40's. This run rate obviously is implying greater than a 50 percent market share, especially if you ramp unit volume growth from here. Do you think people just have the market pegged too low or do you think your share is really hitting those types of numbers? Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 9 of 17

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BOB BLAIR: Well, we're not sure which it is. It could be either or a combination of them. We personally think that the market's going to be much bigger than 40 million. That would give us a tremendously high market share based on what our design lens and forecasts currently show. So we think it's going to be over 40 million. But regardless of how we do the numbers, we think we have well in excess of 40 percent market share in the market now. So we think we're above 40, and we think the forecast is above 40 million. RICK FOUST (ph): Okay, great. And the gross margin, did you give guidance for that? I may have missed that. BOB BLAIR: Yes. I said it should be in the 38 to 40 percent. RICK FOUST (ph): And why did that decline so much? BOB BLAIR: I think primarily it's the ASP reductions. I think, as I've told most people, that most ASP reductions happen in the first half of the year. So you're going to see that primarily in the second quarter. The first quarter they happen a little bit and towards the end of the quarter. That's why our gross margins were so high. It's just normal. Most ASPs drop in the first half of the year. RICK FOUST (ph): Okay, fair enough. And if my math serves me right, did you have about 35 percent of your revenue in VCD this quarter? BOB BLAIR: I don't remember the exact number. I believe it was about just slightly over 30 percent. RICK FOUST (ph): Okay, slightly over 30. All right. Thanks a lot. BOB BLAIR: You're welcome. OPERATOR: Steve Weber of Bentley Capital, please proceed with your question. STEVE WEBER (ph), BENTLEY CAPITAL: A couple of quick questions. One is about overall industry ship- ments. If you look at some of the industry data, it talks about some of the monthly total unit shipments, numbers that don't seem to make sense given the high number of units that you're shipping. Can you just square the figures that you're reporting with industry shipments? And then secondly, if you could just talk a little bit about Chans, and selling plan of stock, and sort of how you expect that to play out? BOB BLAIR: Okay. Let me take the first one. As far as the industry shipments, we're not sure what they really are because the only numbers we can see are reported by the Consumer Electronics Association, the CEA. And their num- bers are extremely low. We believe that ESS is shipping more units back into the United States than they're showing as their total sales in the United States. And we know we don't have 100 percent market share. So we contacted the CEA to find out how they get their numbers. And what they told us is that they get voluntary numbers reported by the various companies that sell DVDs, such as Sony and Toshiba and Panasonic, et cetera. And what we believe to be the case - they wouldn't tell us their complete list of companies - but what we believe to be the case is that they're not capturing the sales from some of the new entrants to the market, primarily many of the companies who are manufacturing in China. So we believe that the CEA numbers that are reported each week are quite misleading and very, very low. Be- cause if I ship 5.4 million units, at least half of those came back into the United States. And the total shipments the CEA reported in the first quarter were 2.5 million units. And so we know their numbers can't be right. We have some people trying to work with them to maybe find out how we can get the numbers improved, but at the moment they are what they are, and we don't know what the actual shipment numbers are. That's a good question. As far as the Chans, I think what I'll do is ask Jim Boyd, our CFO, to answer that one. Jim? JIM BOYD: Yes. Thanks, Steven. Last year ESS was advised by several investors and bankers that they would like to see the Chans family holdings reduced. They felt that it would increase the float in the stock without further dilution. In response, the Chans family agreed to increase the float and diversify their holdings by selling some shares. And since the fourth quarter of 2001, the Chans have sold approximately 14 percent of the company's shares. Just to summarize the numbers a little bit, before the sale, the Chans family owned over 34 percent, and now they still own approximately 20 percent. The Chans family believe strongly in the future of the company and remains a sig- Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 10 of 17

Page 9 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos nificant shareholder. The Chans have not sold any more shares since the secondary close in early February and does not have any current plans to sell any more. Did that answer your question, Steven? RICK FOUST (ph): Yeah, thanks a lot. JIM BOYD: You're welcome. OPERATOR: Dan Skovell (ph) of Neeham & Company, please proceed with your question. DAN SKOVELL (ph), NEEDUM & COMPANY: Yes, thank you. Good quarter. A couple of bookkeeping questions. What was your interest income stand alone for the quarter? JIM BOYD: About $1.2 million. DAN SKOVELL (ph): Obviously the shipment units here with the market size is what a lot of us are trying to get our arms around. Can you see or do you sense any sort of channel inventory build up from your perspective at all? BOB BLAIR: No. Our customers are still pushing us for deliveries. It's been this way since the third quarter of last year. They have continued to push us. They're demanding shipments. They're posting LCs, we're shipping, collecting the money. There's nothing that we can see at this point whatsoever of any inventory buildup in the channels. DAN SKOVELL (ph): Obviously it's a very dynamic space with a lot of growth and a lot of competitors. Can you kind of characterize the competitive environment? I mean, are you seeing more players fill in? Are you seeing a rejuve- nation by existing players or is it just sort of wild, wooly as it's always been? BOB BLAIR: Well, it's always been wild and wooly. I'd say as far as the current competitors, I'd say Zoran has been the biggest most direct competitor we've had for some time. We've seen less of C Cube (ph) since the LSI acquis i- tion. Taris (ph), I just read a report that they've shipped a million units in the last six months, and we really haven't seen much of them out there, but apparently they're shipping someplace. There are several new people coming into the mar- ket. Any market that's growing this fast and is this large is going to attract a lot of attention. So we see several people coming into the market. We think we've got the best features of any of their products out there. We've got the most robust solution. And we think that with all of the features and progressive scan and the integration we have, the new products we're introducing both in DVD and the digital home systems and the video encoder and PEG encoders, and all of the other products and technologies and features we have, we don't think that we're going to have any great loss of market share to any of these new entrants. We're keeping a close eye on them. We're working hard with our customers to make sure that they don't get any significant headway. And we don't think that overall we will be losing any significant market share to these guys. DAN SKOVELL (ph): Finally, Jim, can you comment on revenue recognition policy, especially with respect to Dynex out of Hong Kong? JIM BOYD: Yeah. Dan, thanks. We recognize inventory very strictly on a sell-to basis, and we have very little of it that we do have deferred in our quarterly statements. But we're very conservative in that area, and it's strictly on a sell- through. DAN SKOVELL (ph): Okay. And also on your guidance for gross margin, again, you're saying that's coming down due to selling price erosion. Is there any reason to think that it might sort of move back up toward the end of the year, or what are some of the dynamics we should be looking at there? BOB BLAIR: Well, I think you're going to see it move back up as far as selling prices that are staying flat, as more and more products migrate from the Swan to the Vibrato, which carries a higher price because of the TV encoder. And this particular quarter you do see the combination of lots of Swan sales and at the same time a lower selling price for that. So I think that this quarter will have the largest ASP reduction of the year. DAN SKOVELL (ph): Thank you. Again, good quarter. BOB BLAIR: Thanks, Dan. OPERATOR: Joseph Tau (ph) of Pacific Crest Securities, please proceed with your question. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 11 of 17

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JOSEPH TAU (ph), PACIFIC CREST SECURITIES: The question is in regard to the competitive situation. Bob, can you expand a little bit more with regards to entrants in Asia? You know there's been a lot of concern out there with regard to ASP decline and the ability of the Taiwanese manufacturers to put it at ASP gain. BOB BLAIR: Well, yeah, there are several new entrants in the marketplace. But it's not just ASPs. If you look at ESS' products, and you look at some of our competitors that we've been fighting with for a long time, a lot of our com- petitors have been willing to sell at lower prices than ESS. But they haven't gotten a lot of traction, they haven't gotten a lot of design lens because they didn't have the features and they didn't have the customers support that our customers required. It doesn't do my customer any good to pay 50 cents less for the part if the box sits on the shelf and doesn't sell. So it's not just cost that's going to determine this, it's a combination of features, total support, the product road map go- ing forward, and cost. So there's a lot of things that have to be looked at in here. We do have several new competitors coming into the market from the Taiwanese market. We're not taking them lightly; we're taking them seriously. But you have to remember that these people really don't have robust products that are mature at this point. They don't have experienced teams of people in the field that support these products. They in many cases have never even started pilot production or real production volumes on the products. And so it's going to take some time for these products to become mature enough for any major customer to really rely on them for their mainstream revenues. And so before any of that can happen we will have our own integrated chip that has progressive scan, all of our existing features, and is a solid, proven, robust solution into the marketplace. So because of all of that, we don't think the new entrants will take any significant amount of business away from us, and we think we'll continue to be the dominant supplier in DVD chips going forward. JOSEPH TAU (ph): But with those new entrants coming in, and then assuming that this industry like all other in- dustries where the ASP does decline, do you have any other longer term outlook on the effects on the gross margin? BOB BLAIR: Well, the nature of the semiconductor business, they need to introduce new products with new fea- tures that carry a higher selling price and move to lower and lower technologies to drop the cost and keep the delta be- tween them as high as possible because that's your gross margin. That's not going to change whether it's this quarter, next quarter or five years from now. And we're going to continue to do that. We have, I think we mentioned, five new product families of products coming out. As those move into production and move into the larger pieces of our revenue, they'll carry higher selling prices, and those new products typically have higher gross margins. So it's kind of hard to say what the gross marg ins will be specifically going forward, but we think that ESS has his- torically kept our gross margins in the high 30 percents to low 40 percents over a lot of years. And we see no reason to think that won't continue going forward. JOSEPH TAU (ph): One last question. With regard to the VCDs, it's good to see that VCD is not declining at that rate. I'm wondering what do you think about it eating into the growth of DVD. And then secondly, when it comes to the VCD revenues that you're recognizing, what are you seeing in terms of ASP declines there? BOB BLAIR: As far as the growth eating into DVD, I don't think that will happen. I think that the growth of the VCD is coming from emerging countries where price is paramount. I think India is a great example of a country that's recently started ramping up quite significantly in VCDs, and to buy a $35 VCD player is a lot easier than to buy a $65 DVD player. Ultimately, DVD prices will be reduced over the next two to four years so that DVD will eventually I be- lieve replace VCD, but that's some time away. As far as ASPs and VCD, there have been some new entrants also into the VCD market that have put pressure on pricing. We're seeing prices that have reduced to be somewhat below $4 in the ASPs for VCDs. But we have new prod- ucts that have lower cost, more integrated products that we're attacking this market with. So we think we'll be able to continue our dollar position in VCDs also. JOSEPH TAU (ph): And when you talk about introducing new products into those market from the VCD perspec- tive, is that taking a tremendous amount of resource from an R&D perspective to do something like that? BOB BLAIR: See, the VCD is basically the same architecture as the DVD chips. And so everything we develop and all the features we put on DVD basically we're able to very, very easily migrate those to the VCD platform assum- ing there's enough MIPS in the processor, which there almost always is. And so it's relatively easy to take the same fea- tures we've developed, which is the most fully-developed feature set of any DVD chip, and move many, many of those features onto the VCD quite easily. So the overhead to support the VCD is relatively easy because the architecture is identical to the DVD. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 12 of 17

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JOSEPH TAU (ph): Great. Thanks. BOB BLAIR: Sure, Joe. OPERATOR: Chris Kaso (ph) of Sound View Technologies Group, please go ahead with your question. CHRIS KASO (ph), SOUNDVIEW TECHNOLOGIES GROUP: Hi. It's Chris Kaso for Scott Reynold (ph). Good afternoon. BOB BLAIR: Good afternoon. CHRIS KASO (ph): Just wondering if you'd give some more color on the guidance that you've given for the next two quarters. And if you can provide some information regarding how much visibility you're getting back from your customers on that. I know you work on very short lead times. Do you have bookings for the quarter? What sort of fore- cast are they giving you for that led you to develop this guidance? Thank you. BOB BLAIR: Well, we have pretty visibility into the current quarter, and we have I'd say reasonable visibility into the third quarter. Our customers, we work very, very closely with them. We talk to them certainly on a several-times-a- week basis on all of our key customers and at least weekly on all customers, and we look at their projections, and we track it pretty closely. So we're pretty comfortable with the current quarter estimates and next quarter estimates. Typi- cally going into a quarter, we have approximately 40 percent of the end shipments on backlog, and we believe this quar- ter's no different. CHRIS KASO (ph): Okay. So you'd say backlog going into this quarter would be about the same as you had going into Q1? BOB BLAIR: It's, yes, similar. CHRIS KASO (ph): Okay, great. Thanks. And just on the competitive front as well, just to follow up on that, could you talk a little bit about the market share, your major customers? And if you could give some indication. It seems you're gaining some share overall as your customers are outgrowing the market. Could you talk about the activities, specifically head to head, against competitors of those big accounts? BOB BLAIR: Well, I'm not real sure. And plus I'm not sure that would be an appropriate thing for me to be dis- cussing if my competitor were listening, of where we think we are. I believe that we meet our competitors, all of them, head on. I'm not sure exactly what market share they end up taking at our customers because we don't see the absolute total picture. We think that there are a lot of battles going on out there, and we think we're winning most of them, and think that we'll continue to grow our business and market share. CHRIS KASO (ph): Okay, fair enough. And just one last question regarding waiver (ph) prices. What are you see- ing out of the foundries right now, and is that causing any difference from what you saw last year, perhaps helping or hurting gross margins going forward? BOB BLAIR: At the moment we are not seeing any price increases. We've heard rumors of them, but we haven't seen anything along those lines yet. As far as overall capacity, some of the FABs (ph), it depends. It's FAB (ph) specific or its technology specific. As far as some of the capacities tightening up, .18 is getting a little tighter; .22, .25 is still wide open. But so far we haven't had any impact on either our prices or our deliveries from the FABs (ph). CHRIS KASO (ph): Okay. Thanks very much. OPERATOR: Brian Alger (ph) of Pacific Growth Equities, please proceed with your question. BRIAN ALGER (ph), PACIFIC GROWTH EQUITIES: Hi, guys. Nice quarter. BOB BLAIR: Thank you. BRIAN ALGER (ph): I'm kind of looking at the market. You mentioned earlier that you thought about half of your chips were making their way back over to the United States somewhere or the other, and that was causing some of the discrepancy with maybe the CEA data. Other than the obvious, Apex and maybe Subsonic (ph), what are some of the brands we might be able to see in the U.S. stores that would - product model that we could recognize as far as having ESS technology in them today? BOB BLAIR: Well, actually, I think I read off a whole list of them earlier. If you like, I can give you those names again. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 13 of 17

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BRIAN ALGER (ph): Were all of those shipping to the U.S.? BOB BLAIR: I'm looking to see - I believe Philco does not. They're South America. TEAC - I believe every one of these - well, no, BBK and Molatta are China only, and Philco is South America. I believe all the rest of them, the GEs, Kenwood, KOSS, Daewoo, SonicBlue, TEACs, Phillips, Samsung, Sampo, Sanyo, Sharp, Panasonic, RCA, GE - all of those are U.S. RCA may be Europe and GE may be U.S. or vice versa. But they're all U.S. or Europe. BRIAN ALGER (ph): Okay. And specifically with Samsung, we talked a little bit earlier about the PDR design. Is that the design you're talking about shipping to the U.S. or do you have multiple designs within Samsung? BOB BLAIR: That's the only one that's been announced. Any other products, you'll have to wait another few months before I can discuss them. BRIAN ALGER (ph): Okay. But PDR is shipping in the U.S.? BOB BLAIR: I believe it's begun shipping this week actually to the U.S. BRIAN ALGER (ph): Okay, great. And just trying to get my arms around the market in China. I remember some time back we had kind of a discrepancy between VCD and a market called SVCD, and then DVD. Did the SVCD ma r- ket go away completely? BOB BLAIR: No, it's still there. We consider SVCD and VCD to be part of our VCD family because it's not DVD. And it has gone down significantly. I believe this year the total market is probably going to be under 5 million units for SVCD and the China market. So it's still there, but it's been reduced significantly. BRIAN ALGER (ph): Okay. And what would you guys gauge the total global VCD market as? I know the forecast originally had shown a declining year over year, but it sounds like with India and Indonesia ramping up that might not be your perception. BOB BLAIR: Yeah, we think that it's still somewhere in the low to mid 30 million per year. That's our personal es- timate. I don't have that from any marketing research source. That's based on what we're seeing and what we're ship- ping. We're shipping some 20 million units a year, and we have been for the last year or so. So we don't see the market changing too much. It's not shrinking as a lot of people thought. It's not growing a huge amount, but it's in that 30 to 35 million range we believe. BRIAN ALGER (ph): Okay. And you think you'll be able to maintain that two-thirds market share? BOB BLAIR: Yes. I think we've got about 60 percent. We're planning on keeping that. BRIAN ALGER (ph): Great. Again, nice quarter, guys. BOB BLAIR: Thank you. OPERATOR: Noah Freeman (ph) of Brookside Capital, please proceed with your question. Steven Peak of (Peak) Capital Management, please proceed with your question. STEVEN PEAK (ph), PEAK CAPITAL MANAGEMENT: Hi, guys. Great quarter. I missed some of the beginning of the call, but I'll ask this question anyway and see if you touched upon it earlier. The royalty issue with the Chinese OENs 1 (ph), did it affect the business at all in Q1? And two, does the resolution of the issue affect your business? BOB BLAIR: Actually, we did not see it affect our business whatsoever in the first quarter. And now that it's re- solved, we don't think it's going to significantly affect our business. If anything, it may allow more companies in the U.S. to feel more comfortable importing products from China, which may help our business. But overall, we don't see any direct, specific implication in either direction. STEVEN PEAK (ph): Okay, great. And then last quarter when discussing the secondary offering, you had said that it was technology related, the proceeds. Do you have a technological road map looking out a few years right now with the balance sheet so strong? What do you want to do in order, in effect... BOB BLAIR: We're looking at a few different things. Our new products that we're looking at and new technolo- gies, they're all aimed at the digital home system and home entertainment product lines. There's a couple things that we're looking at. We're looking at the possibility of acquiring some wireless technologies. There's some other possible Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 14 of 17

Page 13 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos powerline networking technologies that may be appropriate arts of the world. We're looking at some potential HDTV technologies and other set top box technologies. So we're investigating several different product lines, product segments and technologies that might be available and appropriate for us to look at. It's nice to have now over $200 million of cash in the bank. And so we have a lot more freedom and a lot more opportunities to look at these technologies for the future. STEVEN PEAK (ph): And lastly, did you break down revenue by region earlier? BOB BLAIR: No, we did not. I believe we've put that in our 10-Qs. I don't have it at my fingertips right now. But the bulk of our products ship into Taiwan and Hong Kong and China. It is not necessarily consumed there, but that's where their manufacturing is done. STEVEN PEAK (ph): Would you have a rough share for Japan? BOB BLAIR: Japan is a small percentage. It's in the neighborhood I believe of 5 percent, but it may be slightly un- der that. STEVEN PEAK (ph): And what about Europe and North America? BOB BLAIR: Almost zero. No one manufactures in Europe and North America, at least none of our customers. STEVEN PEAK (ph): Okay. Great. Great quarter. BOB BLAIR: Thank you. OPERATOR: Noah Freeman of Brookside Capital, please proceed with your question. NOAH FREEMAN, BROOKSIDE CAPITAL: Sorry about that, guys. I got disconnected when I went to pick up the phone the last time. First off, congratulations on a great quarter. I need you to hold my hand a little bit as something is confusing me here; that a lot of different people seem to be claiming to gain share at the same time. And I get a little bit nervous when what we're seeing is a lot of units being sold, but the CEMA (ph) data is showing a little bit less sell through. I was wondering if you could describe to me that it may or may not be inventory down in the channel and finis hed goods, maybe it's in the stores or at some other locations. I need you to help me out on that one a little bit, please. BOB BLAIR: Sure. First of all, I'm not sure what we discussed earlier. I had a question about the CEMA data, and we're sure that it's just totally incorrect to begin with. It's correct as far as it goes in the numbers that are being reported, but they are not capturing all of the suppliers of DVD products shipping into the United States. So while true, it's quite misleading. NOAH FREEMAN: Wouldn't the CEMA data have been as equally and accurate last year, so the apples to apples comparison should still stand even if it's wrong both years? Shouldn't it be wrong the same way? BOB BLAIR: No, not if the people that are not being reported are growing their market share, which I believe are mostly the people manufacturing in China who we all believe are growing their market share in this market. NOAH FREEMAN: Got it. BOB BLAIR: So as they become a more dominant position, the data becomes less relevant. That's the first piece. As far as the second piece of why don't we think there's inventory in the channel, it's pretty simple. A year ago in the first quarter of 2001, there was inventory in the channel. And how that ends up showing up on our business is that the Circuit Cities and Best Buys of the world didn't place orders for delivery on our customers, and more importantly, they didn't give letters of credit to these customers. And without those orders from Circuit City and Best Buy and those letters of credit, our customers in China who are not the most cash-rich people in the world cannot place orders on ESS, and they can't put out top letters of credit from the banks. And so until our customers have the order from the end cus- tomer, the Circuit City and Best Buys of the world, they can't post a letter of credit for us, and we can't ship. Our customers are continuing to post letters of credit. They are continuing to place orders with us, and they're con- tinuing to pay for those, which means that the end customers, the Circuit Cities and the Best Buys of the world, are con- tinuing to place orders on our customers. And I don't believe Circuit City would be buying products if they had a lot of inventory built up. So we don't have direct information into the inventories, but we have pretty logical information that Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 15 of 17

Page 14 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos there's not a lot of inventory in the channel. We know last year when the inventory was built up in the channel we were- n't getting orders like we are today. NOAH FREEMAN: Got it. Thank you for that. Another question, obviously there's a little bit of price decay in this quarter, more that might be the run rate for the year since the guidance of the - the annual is like 10 to 15 percent. BOB BLAIR: Yes? NOAH FREEMAN: Why hasn't the price decay stabilized in the second half of the year, and it happens more in the beginning of the year? BOB BLAIR: Well, typically, there's two price declines in the year, the first quarter and the third quarter. The third quarter, first of all, is products move into full production. You end up giving some volume discounts. In the fourth quar- ter, once a product moves into production in the prior third quarter, you know that there's not going to be any changes. No one's going to change horses in the middle of the stream, and so there's almost no price reductions given in the fourth quarter. You come around the first quarter, it's time to give some more price reductions because you want the new design lens for the next year, and those show up in the second quarter again. So it happens every year. It's seasonal. And you can always expect first and third-quarter price reductions with the first quarter being probably the largest. NOAH FREEMAN: Got it. One last question. I notice you guys have a very attractive tax rate. And I was wonder- ing how that came about, and whether we can continue to model that out into the future. Could you elaborate that a little bit? BOB BLAIR: Yeah. Let me have Jim see if he'll answer that. JIM BOYD: Yeah. Our products are manufactured in Taiwan and then sold overseas, so we run all our sales and expenses through an offshore Caymans subsidiary, thereby minimizing our effective tax rate. And it's tried and true por- tion of the IRS code. And as long as Congress doesn't change the rules, I think we'll continue to enjoy that rather low effective tax rate. NOAH FREEMAN: Great, guys. Thank you very much. Congrats on a good quarter again. BOB BLAIR: Thank you. OPERATOR: Our last question comes from Kalpesh Kapeta. Please continue with your follow-up question. KALPESH KAPETA (ph): Jim, you mentioned that you bought back 1.6 million shares out of the 2 million share buyback program. What was the average price that you bought back shares? JIM BOYD: $18.40. BOB BLAIR: No, no, no. Not for the 1.6. The 1.6... JIM BOYD: Oh, it was 1.6? I'm sorry. BOB BLAIR: -- was approximately $12. KALPESH KAPETA (ph): And you still have remaining 400,000 shares, right? BOB BLAIR: Yes. KALPESH KAPETA (ph): But you did a secondary offering, so I assume you can't use that portion until some time frame. JIM BOYD: Actually, I'm not sure. We aren't currently planning on repurchasing any shares, but I don't know spe- cifically if there are conditions on our being able to repurchase though. KALPESH KAPETA (ph): Sure. The next question is , Bob you mentioned the integration of Vibrato II. And you talk about the robustness that you have in your decoder and the features and the support, some of the differences that you talked about. Help me understand, if you are a front-end player, is it easy for a front-end guy to integrate the back end or the back-end people to integrate the front end? BOB BLAIR: Well, we believe that it's easier to move from the back end to the front end than vice versa, and let me explain that. The front end, there's a fair amount of technology that needs to be developed, but it's pretty much spe- Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 16 of 17

Page 15 Q1 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos cific to a specific optical pick-up and loader. So once you've done a Sanyo pick-up, and once you've got the bugs worked out and the code solid, that one's done. And you don't have to change it regardless of what's happening in the back end with the MPEG decoder. Now, on the MPEG decoder side, there is constant change. There are no features, there are new capabilities, there are new audio things, new video things, new digital photography, all kinds of different changes that are continuously and constantly changing on the back-end decoder side. And so it has a lot more software integration and a lot more po- tential problems than the front end. The front end, while there is a one-time d ifficulty - it's a one time job - the back-end is not only difficult, it's continuous and will never end. So we believe it's a lot more difficult to move from a front end to a back end than vice versa. KALPESH KAPETA (ph): And how long does it take once you decide to integrate either of these parts? BOB BLAIR: I couldn't tell you. You mean how long is it taking ESS? We started a few months ago. We'll intro- duce our product next quarter. KALPESH KAPETA (ph): Typically a company I meant, not just for ESS. If someone wanted to decide today or last month, a typical time horizon for that? BOB BLAIR: I couldn't say for sure. But I'd say you're probably looking at 12 to 18 months if you're looking at the front end. If you really want a solid back end, it's at least 18 months and maybe as many as two to two-and-a-half years if you really want a solid back end with all the features. So anybody that has a product now has been working on it for a long time. If they don't have a back-end solution, it's going to take them a while. And if they don't have both, and they want both, it's going to take them a real long time. KALPESH KAPETA (ph): Thank you. OPERATOR: Gentlemen, please continue with your presentation or closing remarks. BOB BLAIR: Okay. First of all, I'd like to thank everybody for all those questions. There were a lot of good ones. I'd like to close now by pointing out that ESS continues to expand our leading position for DVD and digital video solutions and their rapidly growing consumer entertainment market. We've successfully transformed the company into a consumer digital entertainment, digital home system company, but we continue to grow our market share in these new markets. We've just completed a quarter in which we saw the continued fast growth of our DVD products, we continue to gain design lens worldwide, we continue to grow our leading DVD market share, we completed a very successful sec- ondary public offering, and we improved an already strong balance sheet. We've got many exciting new product lines in development that are planned for introduction in the coming months that are all aimed specifically at this growing digi- tal entertainment market. Overall, it's been an extremely successful quarter, and I look forward to the continued growth and success during the balance of this year. I'd like to thank all of you for joining us on this conference call and for all of your questions. This will conclude the call now. OPERATOR: Ladies and gentlemen, that does include the conference call for today. We thank you for your par- ticipation and ask if you would please disconnect your line. [CCBN reserves the right to make changes to documents, content, or other information on this web site without ob- ligation to notify any person of such changes. In the conference calls upon which Event Transcripts are based, companies may make projections or other forward- looking statements regarding a variety of items. Such forward -looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking state- ment based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward- looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 17 of 17

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Exhibit 2 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 18

2 of 4 DOCUMENTS

Copyright 2002 FDCHeMedia, Inc. All Rights Reserved Copyright 2002 CCBN, Inc. All Rights Reserved FD (Fair Disclosure) Wire

July 24, 2002 Wednesday

Transcript 072402ad.714

LENGTH: 11923 words

HEADLINE: Q2 2002 ESS Technology Earnings Conference Call - Final

BODY: OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the ESS Technology's second-quarter 2002 results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1, followed by the 4, on your telephone. As a reminder, this conference is being recorded Wednesday, July 24th, 2002. I would now like to turn the conference over to Ms. Rebecca Mack of ESS Technology. Please go ahead, ma'am. REBECCA MACK, ESS TECHNOLOGY: Thank you. Good afternoon, everyone, and thank you for joining the second-quarter 2002 earnings conference call for ESS Technology. By now, you should have received a copy of the news release that was faxed within the past hour. If you have not yet received the release, or cannot access it from our website, please call Wendy [Chaffer] at 510-492-1180, and she will send you one immediately. During the course of this teleconference, we may ma ke projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that these statements are only predictions and that the actual events or results may differ materially. We, therefore, would direct and encourage you to refer to documents the company files from time to time with the Securities and Exchange Commission. Specifically, the year 2001 8-K and S-3 filings, and 2001 form 10-K report and first quarter of 2002 form 10-Q. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Joining us on the call today is Bob Blair, president and chief executive officer of ESS, and Jim Boyd, ESS's chief financial officer. Now I'd like to turn the call over to Jim Boyd, who will review the financial results of our recently-completed quar- ter. Jim? JIM BOYD, CFO, ESS TECHNOLOGY: Thank you, Rebecca. And good afternoon, everyone. Today, ESS reports net revenue for the quarter ended June 30th, 2002 of 86 million, an increase of 8.7% from 79.1 million for the first quarter of 2002, and an increase of 32.5% from the 64.9 million in the second quarter of 2001. On a GAAP basis, net income for the quarter was 17.3 million, or 36 cents per diluted share, which compares to 34 cents per diluted share for the first quarter of 2002, and a loss of 24 cents per diluted share for the second quarter of 2001. On a pro forma basis, for the second quarter of 2002, ESS had net income of 18 million, or 37 cents per diluted share, which compares to first quarter 2002 pro forma net income of 17.9 million, or 37 cents per diluted share, and second quarter 2001 pro forma net income of 4.3 million, or 10 cents per diluted share. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 18

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Pro forma net income excludes the effect of amortization of intangible assets, the effects of the write-down of in- vestments, the realized losses on the sale of fiscal stock, and the effects of discontinued operations. Gross profit for the second quarter of 2002 was 35.2 million. This represents a gross margin of 41%, compared to 43% in the first quarter of 2002 and 29% in the second quarter of 2001. The decrease in gross margins from Q1 to Q2 was primarily due to an increase in inventory reserves of 1.6 million or 1.9% of Q2's revenues. R and D expenses for the second quarter of 2002 increased to 7 million, or 8.1% of revenue, compared to 6.4 mil- lion, or 8.1% of revenue, for Q1 2002, and 7.6 million, or 11.7% of revenue for the second quarter of 2001. The increase in Q2 from Q1 2002 was primarily due to an increase - was primarily due to increased costs of match for the new product development. SG and A expenses for the second quarter of 2002 increased to 11.1 million, or ap- proximately 12.9% of revenue, compared to 10.4 million, or 13.1% of revenue for Q1 2002, and compared to 8.9 mil- lion, or 13.7% of revenue for Q2 2001. The increase in Q2 over Q1 of 2002 was primarily due to increases in commissions and advertising expenses. Net operating income was 1.1 million in the second quarter versus a loss of 1.3 million in the first quarter of 2002. The second quarter non-operating income is primarily made up of interest and rental income. Q1 2002's loss of 1.3 mil- lion was related to a write-down of fiscal shares for an other than temporary decline in value of 2.5 million, which was partially offset by interest and rental income during that quarter. We sold those fiscal shares during this quarter at a price substantially equal to that new book value. Our effective tax rate for both Q1 and Q2 in 2002 was 5%. Now turning to the balance sheet, as of June 30th, 2002, the company had approximately 100 - 181 million in cash and short-term investments, a decrease of 26 million from our March 31st, 2002 balance of 207 million, and an increase of 52 million from our December 31st, 2001 balance of 129 million. The decrease from Q1 to Q2 was mainly due to repurchases of the company's common stock during the quarter of 38.6 million. Thus, the company generated 12.6 million of cash during the quarter prior to repurchases. Accounts receivable net of allowance for doubtful accounts in Q2 was 34.6 million compared to 40.1 million at March 31st, 2002. DSO was down to 37 days in Q2 versus 46 days in Q1 and 53 days in Q2 of 2001. As of June 30th, 2002, net inventory was 49.2 million, an increase of 11.7 million from the quarter ended March 31st, 2002, and from the quarter ended March 31st, 2001. Likewise, days of inventory went up 88 days in Q2 versus 75 days in Q1, and 71 days in Q4 of 2001. As of June 30th, 2002, accounts payable and accrued expenses were 51.6 million versus 54.3 million as of March 31st, 2002, and 49.2 million as of December 31st, 2001. The decrease from Q1 to Q2 was primarily due to payments made in Q2 to inventory vendors. As I briefly mentioned earlier, during the quarter, ESS spent $38.6 million, an average of 16.4 cents per share, to repurchase 2.4 million shares of its common stock under its current stock repurchase program announced by its board on May 7th, 2002. In summary, ESS again had a very solid P and L and balance sheet performance this quarter. And now, I'd like to turn the call over to Bob Blair. BOB BLAIR, PRESIDENT AND CEO, ESS TECHNOLOGY: Thank you, Jim. I'm pleased to report that our sec- ond quarter was extremely successful. We continued to show that ESS's strategy to become a leading consumer digital entertainment supplier is working. I'm very excited about our recently completed second quarter. Our revenues for this normally slow quarter grew to 86 million, which is a 32-and-a-half percent increase over the prior-year quarter, and is a 8.7% increase from the first quarter. I'm especially pleased with the continued growth of our DVD business, which grew revenues by over 180% over the prior-year period, and 16% above the first quarter of this year, despite Q2 being a sea- sonally slower quarter for the industry. The reasons for our success are twofold. First, the markets for ESS's principal products, digital video chips, both DVD and VCD, remain strong and are growing throughout the world. And second, because of the unique features, sup- port, and cost-effectiveness of ESS's products, we continue to build on our number one market share in these strong video markets. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 4 of 18

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Most importantly, our DVD revenues and unit volumes continued their growth as we met our guidelines of sequen- tial DVD unit growth of 10 to 20%. This is over 200% unit growth from the prior-year quarter. Based on projections for the DVD market in 2002, we believe that ESS continues to be the market leader for DVD products for both - for the worldwide DVD market, with over 40% market share. In addition, when VCD products are included, we believe that ESS currently provides over 50% of all the digital video player chips sold worldwide. The reasons that ESS continues to grow its digital video business is simple. We offer products that have the most features, the highest quality audio and video and have the best customer support. Now, I'd like to give you some more highlights from the recently completed quarter. The growth in our revenues came from our digital video products, both DVD and VCD, as they were both above our projections. As projected, our PC product revenues came in at expecta- tions at about 3% of our total revenues. Our VCD products continued to grow during the second quarter, once again setting a new record for total units shipped, and VCD revenues came in above projections. We believe that ESS has increased our VCD market share during this quarter and now have approximately 65 to 70% of the worldwide VCD market, and we increased our margins and grained market share in this product line in a very, very competitive marketplace. We believe that the VCD market has grown significantly during the last 12 months and project that it will continue to grow as people in developing countries around the world begin to enjoy the features and benefits of affordable digital video entertainment. In the fourth quarter of 2001, ESS introduced the new VCD product, the Vista II, offering more features and lower cost. This new product has seen strong success in the marketplace and is one of the reasons that we achieved an increase in both our market share and our gross margins at the same time. Later this week, ESS will announce our latest VCD product, the Vista III, the world's first integrated VCD chip. We believe these new chips will enable ESS to continue to dominate this growing market. Going forward, ESS will introduce even more integrated solutions for the VCD market. With the street price of a VCD player under $30 throughout much of the world, we believe our VCD product line will continue to be a significant contributor to our revenues and profits for the next few years. Now, I'd like to talk for a moment about new design wins. ESS continues to win new designs at companies throughout the world for all levels and price points of DVD prod- ucts. I believe this last quarter was an ESS record for the number of new design wins ever. Worldwide, we run design after design. I will now list the customers where we achieved design wins and will then follow with some of the brand names that these new design wins are for. Because of ESS's technically superior audio and video products, and the dedicated sales and marketing efforts that ESS has put in place to penetrate the Japan market, we had a great quarter winning new designs at the following impor- tant Japanese customers. These are listed alphabetically. Aiwa, Alpine, Clarion, [Denon], [Fujitsu Ten], Panasonic, Sony memory stick division, and [Tutori] Sanyo. We're very excited about ESS's opportunities in this fast-moving Japanese market. In Korea, we also had great success. We continued our recent success at Samsung, with two additional design wins, and we also won new designs at Daiwoo, [Anam], and [Taiyung]. In China and Taiwan - in Taiwan, we won new de- signs at Apex, TTOM, AV Plus, BVK, CHMAVC, [Desai], [Lucky], [Optimedia], Orient Power, Shinko, Skyworth and Tecro. And throughout the rest of the world, we won new designs at [Gradiency], Phillips and CCE in South America, [Vestel] and [Lynn] in Europe, and Creative Labs in Singapore. Now, let me give you the retail brand names that these new design names will sell under. In alphabetical order, these brands are Aiwa, Alpine, Apex, Audiovox, [Blue Rupt] and [Carpor] in Europe, CCE in Brazil, Clarion, Creative Labs, Daiwoo, [Denon], Goodman, [Gradiency], Grundig, [Koss], [Lynn], [Lucky], Marantz, Panasonic, Phillips, RCA, Samsung, Sanyo, Schneider, Sharp, Sony, Teac, Thompson, and [Vestel]. And I'd like to point out that these are only the new design wins that we achieved during this recent quarter, and many of these are new customers to ESS. As you can see, we had a great quarter for designs. With these new design wins, we've continued our successful expansion of our customer base worldwide and continued to successfully penetrate the important Japanese and Korean markets for 2003 production. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 5 of 18

Page 4 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos

ESS's customers make products for all segments of the retail market, from product selling from under $100 to the highest end products selling for over $1,000. We believe it is the features and the quality of our DVD products and the support that we have in place that have allowed ESS to become the number one supplier of DVD chips worldwide and will enable us to continue to maintain our worldwide market leadership position. Additionally, ESS continues to partner with key DVD component suppliers throughout the world, and has jointly developed advanced low-cost single-board solutions. We continue to partner with many server companies, including Ali, Panasonic, Toshiba, Sanyo, Samsung, [ST Micro], and [Via], on these products to ensure that ESS's customers have a choice of many advanced DVD solutions, which is another reason that ESS has been the clear leader in the DVD ma r- ket. In fact, with both Panasonic and [ST Micro], ESS can now provide a real two-chip complete DVD system solution. Now I'd like to talk for a few moments about some new products at ESS. Our Vibrato II DVD product which inte- grates the server controller function with the MPEG decoder and TV encoder for our Vibrato product is planned to be available for customer evaluation in the September/October time frame. I'd like to point out one important aspect of this chip is its increased selling price. Today, a server controller sells for 6 to $8 and an MPEG decoder sells for 8 to $10. A key point to remember is that integrating these two functions together enables the new combined chip to sell for more than either individual chip on its own, significantly raising our average selling price. And because of the higher selling price of this integrated chip, we believe our overall DVD selling prices will increase in 2003 over 2002. This week, we introduced our Vantage MPEG encoder reference design, which enables video recording to be added to a DVD player to create an affordable digital video recorder, or DVR, and a DVD player combination. We believe that video recordable products, both DVR and recordable DVDs will be the next large growth product area in the consumer digital entertainment market, and ESS intends to be a lead inner this market by providing a high-quality, low-cost solu- tion to our customers worldwide. In addition to all the design wins for DVDs that I've already discussed, we won two major DVR design wins during this last quarter, one in Korea and one in China. These DVR/DVD combo products will be on the retail shelves this holiday season. Also, earlier this week, we introduced a new product line aimed specifically at the home audio market. Because of our architecture and programming capabilities of our chips, we're able to process virtually any of the audio formats and standards available in the world today. The list of audio standards is huge, including Dolby digital, DTS, DTS/TS, MP 3, WMA, KAC, DVD audio, SACD, and surround sound such as SRS surround, Sensora, and others. We believe that the market for these digital audio chips that can process all of these formats is huge and that we should be able to grow this into a very nice part of our future business. As I mentioned earlier, later this week we are introducing a new Vista III VCD chip, which integrates the TV en- coder together with the MPEG decoder, similar to our Vibrato DVD products. We believe this new VCD product will enable ESS to continue to dominate the VCD market while maintaining reasonable margins for this product line. Going forward, in the first half of next year, we plan to introduce the Vista IV product, which integrates the server controller functions with our Vista III to create the most integrated and lowest cost VCD solution available. Like the Vibrato II chip, the new Vista IV product with its integrated server function will have an increased selling price which will help ESS grow the VCD business. We have also developed a new product in partnership with NEC that is intended for settop boxes. ESS's advanced it will controller chips with integrated communications capabilities paired with NEC's industry leading [MIPS] processors has the heart of advanced settop boxes. We plan to introduce this product during the current quarter and should begin production shipments next year. In addition, we have developed an exciting new video phone product line that utilizes our video, audio, and com- munications technologies together for one application. We've worked with our former subsidiary, [Vialta], to develop this product and expect to begin volume shipments for the coming holiday season as this product will be on national retailers' shelves by September of this year. This is the first product that utilizes all of ESS's technology and is com- prised of several ESS chips with an average selling price about twice as high as a DVD decoder chip. And lastly, during the quarter, we will introduce our new router communications chip designed for distributing digital audio and video throughout the home over phone lines. This new home entertainment product enables high-speed affordable products to be built for sharing audio and video entertainment throughout the home without adding any addi- Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 6 of 18

Page 5 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos tional new wires. We believe that this is the most cost-effective home entertainment networking solution that will be available for the next few years. Looking to the future, ESS believes that the trend for consumer entertainment technologies to become digitized will continue. We believe this trend of technologies moving from the analog domain to the digital domain opens up exciting new opportunities and new markets for ESS. As I've stated previously, ESS's vision of the future has two electronic platforms sharing the home, a PC continuing to do the tasks that it currently performs very well, and a digital home sys- tem managing the entertainment in the home. We believe that this new digital home system in the living room will manage broadcast video from cable to satel- lite, manage the playback storage and recording of both digital audio and digital video including digital photography and distribute this entertainment content throughout the networked home. We believe that a dominant position in the DVD and digital video market and our new products planned for introduction in the coming months will enable our company to be a leading player in this emerging consumer digital entertainment market. I'd now like to continue by giving guidance for ESS business for the next two quarters. I will be giving out this guidance by product line segment. Because of the difficulty of projecting beyond six months, we will be only giving revenue and earnings guidance for two quarters. Looking forward, we believe that in Q3, which is the traditionally largest quarter of the year, revenue will be up from our second quarter that we just completed. This is because our customers are building for the coming holiday sea- son. This increase in overall shipment - or overall revenue comes despite the continued decline in our PC shipments. We are projecting both DVD and VCD shipments to grow in the third quarter. For the fourth quarter, we are projecting a slight sequential reduction in revenues from Q3 as the fourth-quarter normally is seasonally lower than the third quarter. I will be breaking down our business based on the following product lines: DVD, VCD, communications, and PC audio products. Now, for the numbers. For the third quarter, we are reiterating our previous Q3 guidance given out last month of 86 to $90 million of reve- nue. For the fourth quarter, we are projecting a sequential reduction from Q3 revenues to 80 to 86 million, and this re- duction is based on the anticipation that 2002 will exhibit normal seasonality with Q3 being the largest quarter of the year. We project the following ranges for the percent of revenue of our respective product lines for both Q3 and Q4. For our DVD products, we expect them to be 62 to 65% of revenue. We exp ect our Q3 DVD units to grow sequen- tially 10 to 15% over Q2 DVD levels and the Q4 DVD units to drop slightly from third-quarter levels. For our VCD products, we project that they will be 27 to 30% of total revenue. Communications products to be 4 to 5%. PC audio to continue to drop to 1 to 3% of total revenues. We project our gross margins to be 39 to 40% for the coming two quarters. On the expense line, we project that R and D expenses will be in the 7 to 8% range, and SG and A will remain in the 11 to 12% range, depending on the quar- terly revenues. We project non-operating income to be in the 1 to 2% range. Our tax rate going forward is projected to be 5% for ESS operating income, and for the second half of the year, we are using 47.4 million shares for earnings per share calcu- lations. Therefore, we project the earnings per share to be in the following ranges: For the third quarter, we are projecting 35 to 38 cents EPS; and for the fourth quarter, we are projecting 32 to 37 cents of EPS. This concludes our guidance for the coming two quarters. Looking beyond 2002, we believe that ESS will continue to be the leader in both DVD and VCD markets. We be- lieve that the growth in these video markets, the increasing selling prices of our new integrated DVD server and VCD server products, plus the emergence of the recordable video market will enable ESS to continue to grow revenue and earnings in 2003 and beyond. This guidance will be posted tomorrow on the ESS website, where it will be available for two weeks. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 7 of 18

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I'd now like to open the call up for questions.00:37:14 OPERATOR: Ladies and gentlemen, to register for a question, please press the 1 followed by the 4 on your push- button phone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your polling request, you may do so by pressing the 1, followed by the 3. If you are using a speakerphone, please pick up your handset before pressing the numbers. One moment, please, for the first question. Steven Weber with Bentley capital, please go ahead. ANALYST: Hi. Could you just talk a little bit more about the ASP issue? There was some confusion during the quarter about anticipated ASP declines this year versus next year. Could you just sort of give us a rundown on what's happening with ASPs and what you'd expect next year versus this year. BOB BLAIR: Yeah. Actually, it's a real good question. ASPs in the semiconductor business always go down, and for any given product, they typically go down someplace in the 20 to 25 and maybe as high as 30% range year over year. But what companies like ESS do is is we continue to add more features and integrate more functions so that we can keep adding to the value of our product, so we can keep the selling prices up. We then work with the latest technologies and smallest geometries to drive the cost of the product, and I think this year shows a good example of that. At the be- ginning of the year, or for all of last year, we sold primarily our [Swan] product that was an MPEG decoder that didn't have the TV encoder integrated into it. And as we've integrated the TV encoder into the Vibrato and that's become a larger and larger piece of our selling - of our total revenues, the increased value of the TV encoder being integrated into our MPEG decoder has helped offset the normal decline of selling prices. We've been saying for quite some time that we expected somewhere between 10 and 15% year-over-year reduction in selling prices at ESS because of moving more and more of our products into the Vibrato product line. At this point, based on the most recent forecast, it looks like at ESS, our reduction for year-over-year average will be approximately 15%, which is at the high end of the range we've given previously, but still within the range. Q4 over Q4 also looks like it will be in the 14 to 15% range. As I said, it would have been much higher, had it not been for the integration of the TV encoder, but the TV en- coder only has the value of approximately a dollar to $1.50, and so you only get a certain amount of ASP offset by inte- grating a TV encoder. Going forward into next year, the Vibrato II product will carry a much higher ASP increase because we're integrat- ing a 6 to $8 server capability rather than a 1 to $1.50 TV encoder value. So what we're seeing, based on the models that we have right now, is as we transition into the Vibrato II product, by the middle of next year, then through the end of next year, we're seeing actual ASP increases slightly each quarter during the quarter, and it looks like for next year, the selling price for DVD products at ESS should go up slightly year over year. Does that answer your question, Steven? ANALYST: Yeah. Thanks a lot. BOB BLAIR: Okay. Thanks. OPERATOR: Our next question comes from Peter Andrew with A. G. Edwards. Please go ahead. ANALYST: Thank you very much. There's been a lot of confusion about, you know, one, two, three, or even a four-chip solution from you and your competitors, either have today or bringing out very shortly in the market. Bob, I was wondering if you - you just talked about the AFPs on the chip count, but I was kind of wondering if you'd go a little bit more into the chip count on a functional basis? Can you basically clarify what you will have and what you see some of your closest competitors, like [Mediatech] or [Zoran], what they will have in terms of chip count or functionality? BOB BLAIR: Okay. All right. There's kind of four chips - or four functions in the heart of a DVD player, and on the server one, there's the server controller and the RF that are part of the total server solution. On the MPEG decode side, you've got the MPEG decoder and then you have an analog TV encoder that turns the decompressed digital signal into something that a TV set can understand. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 8 of 18

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So there's kind of four blocks. What ESS has done is we have integrated the MPEG decoder and the TV encoder into one chip, which is our Vi- brato chip that we have today. Our Vibrato II chip will add in the server controller chip, but does not add in the RF chip, so today, our solution is essentially a two to three-chip solution, depending on whether the server partner that we're working with has integrated the RF into his server controller or not. Both and Panasonic and [ST Micro] have done that, so if you use their latest server chip sets with our Vibrato, you get a two-chip combination. ANALYST: Okay. BOB BLAIR: I believe what [Mediatech] has done is they've taken the server controller with - without the RF cir- cuit and the MPEG decoder and have integrated that into a single chip and so they have essentially a three-chip solution, which is the RF, the - the server/MPEG decoder, and then the third chip, which is the TV encoder. Now, also, if they're going to do progressive scan products, they would need to add an additional circuit to do the progressive scan function- ality. I - that is built into our Vibrato product lines, so we wouldn't have to add any chips for that. As far as what [Zoran ] has announced, to be perfectly honest, I haven't seen the chip but I believe that it would be more similar to our Vibrato II chip, which would integrate the server controller, the MPEG decoder, and the TV en- coder, but leave the RF outside of the chip. So I think that what ESS and [Zoran] are doing is one step beyond, I believe, where [Mediatech] is currently, and we think that our technology and our features and the progressive scan and all of the other things that we've developed over the years gives us a really - really great opportunity to gain a lot of market share. The key time for design wins are in - at least in the China market is in the February through June time period, and quite frankly, [Mediatech] got a head start on us, and [Zoran], in that time period this year. I think next year, it will be a whole different ball game. I think we've got a superior product with more features, more bells and whistles, more capa- bilities, and I think that we will be able to continue to hold our own in the Chinese market and grow our market share. ANALYST: Okay. I was wondering if I could ask one more question. BOB BLAIR: Sure. ANALYST: You have a few investors that are a little concerned that the DVD market is kind of going to become like the VCD market, and I guess, Jim, can you talk about, from a pricing environment or an operating margin environ- ment, how the VCD market is doing for you guys overall, and then I guess can I also get a little talk about why, from a technical or an architecture perspective the DVD market will be more complex, have more bells and whistles, than the VCD area? BOB BLAIR: Yeah let me jump on some of those, and Jim, jump in if I miss anything here. On VCD margins, what we've been able to do is through some cost reductions and shrinking of the die, we've been able to get the margins to be going up on our VCD product lines. There was a point of a couple of quarters ago when we were under 20% and now we're in the mid-20s heading towards the 30s and hopefully next year we - with the new server chips that we're introducing that integrate the server, we expect to be in the mid-30s on those products going for- ward. So - but what we think is going to happen on VCD is that we'll be able to continue to raise our gross margin per- centage over time, and with the integration of the server into the product, we'll be able to actually increase the ASP of the product, making it a real nice business for ESS. As far as DVD, the DVD is much more complex. There's a lot more things that have to be done internally. It's just a much more difficult product. Our architectures are very similar, but one is kind of a super set of - a DVD is obviously a super set of the VCD, and all the specs and requirements are much tougher. I think that what you'll see is with more and more integration, I think you'll see that the ASPs will continue to rise. I think what you'll see is, I think you'll see the margins will probably, over time, go down. Right now, ESS's margins for DVD products are in excess of 50%, and over time, out over the next couple years, I can see that coming down to some- thing in the 40%. But I think it's going to be certainly greater than a 40% gross margin product line through at least the next 18 months. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 9 of 18

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ANALYST: Okay. Thank you very much. BOB BLAIR: Okay. OPERATOR: [inaudible] with CE Unterberg, please go ahead. ANALYST: Thank you. Bob, can you walk us through the plans for Vibrato II integration? You mentioned you will start sampling in September/October time frame. When will you be in volume production, and what is the nature of your relationship with [inaudible] lab with regards to that specific project? And does this Vibrato II chip, is it going to be your own front end or is it going to be using [inaudible] collaboration? Thanks. BOB BLAIR: Well, okay. As far as the timing, as I said, September/October is when we think we will be sampling our customers, and we will plan on ramping up production and I could see small production happening in the fourth quarter but the reality is, as most production and design wins, they'll come in the first quarter and beyond of next year. But the critical thing is that we'll have the part well before the February design cycle, which - at least for the China market, which we think will put us in very good position for China next year. As far as the front end is, yes, we are partnering with Ali on this, and we did that because we wanted to make sure that the first product when it comes to market is a proven product and customers won't have any reason to be worried. I think, as you know, Ali has been very successful in gaining market share in the server markets throughout Asia, and has - I'm not sure if they're number one, but they have taken [Mediatech]'s market share way down with a very, very proven solution and we wanted to make sure that our customers had no risk when we brought our product to market. ANALYST: My next question is, your competitive position at Apex going into the second half of this year com- pared to last year and compared to the first half of this year, how would you characterize it? BOB BLAIR: I would say that we - we are - I don't know if I'm still going to be the largest supplier at Apex or not. I'm going to be a principal supplier to Apex, but Apex has qualified [Mediatech] for at least one of their models. I be- lieve the 11 - or the 1010 mo del, I think, is the model they're using for [Mediatech]. I think [Zoran] still has their model 1200 and ESS still has most of the other models. And so I think that unfortunately we have lost market share at Apex, but I believe we are still, if not the largest supplier, certainly very close to the largest supplier at Apex. ANALYST: Thank you very much. OPERATOR: Our next question comes from Mark [Hotz] with [inaudible] partners. Please go ahead. ANALYST: Thank you for taking my call. I've been around the DVD/VCD chip game for a while and your inven- tory level is at this point in the cycle is quite alarming, especially given the so-called new products you're coming with. What exactly is this inventory? That's question one. Question two: I highly recommend you guys get in touch with your customers because I have pricing right now on these decoders in absolute freefall, and given your operating history of not really being able to predict the future, I highly suggest you guys go back to your core customers and get a better look at pricing before making some of these claims. And finally, there are various liquidity issues out there surrounding Apex. What are your reserves for their business and how many parts do they have that they've yet to pay for? Thank you. BOB BLAIR: Okay. Well, let me take these questions one at a time. Starting with inventory, the inventory actually is not alarming. It's - it's in product that is in full production. We have solid forecasts for it. I have a long operating history, both in VCD and DVD. Our inventories actually, at the end of the second quarter, were much too low, and as a policy, ESS has always gone into the third quarter, the Christmas season, with a strong inventory because many, many times in the past our competitors have tripped and had problems shipping or there's been large opportunities and up sides and ESS has been able to capitalize on them. And since these parts have long lifetimes, there is essentially zero probability or likelihood that they will be - become obsolete before I can ship them, and so I would - I would take a very strong statement to say that the inventories are not alarming at this point. As far as AFPs in freefall, we have contracts with many of our customers. AFPs are not in a freefall. AFPs have - have gone down. The - in this current quarter, we see the AFPs dropping somewhat, but it will drop less than 10% com- Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 10 of 18

Page 9 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos pared to the previous quarter. And looking into the fourth quarter, the ASP drops will be very, very small because once customers go into production with your products in the third quarter, they generally do not get large price reductions in the fourth quarter because they're not going to change horses in the middle of the stream. So I would also not agree with your characterization that AFPs are in freefall. They are - will be within the 15% that we have projected - 10 to 15% range that we have projected for quite a few months. ANALYST: Are you talking sequentially or year over year? BOB BLAIR: I'm saying year over year, 15%, and I'm saying less than 10% in the current quarter, which is always the big drop going into the third quarter, which is the manufacturing quarter of the year. ANALYST: Well, your Asian customers specifically state that come Q4, they expect pricing sub-5, right? So I don't - I don't know what card you're reading from and I don't know what the gig is, but I highly recommend you guys in this environment - because I can clearly remember what happened to you in VCD pricing. I clearly suggest you go back to the drawing board and make sure this pricing information is accurate. BOB BLAIR: Well, we look at our pricing and our forecasts on a weekly basis, but with respect, I will not agree with your characterization. ANALYST: Okay. How much - BOB BLAIR: As far as liquidity of Apex, I'm not sure what the liquidity is. We sell only to Apex's subcontractors and we only sell to Apex subcontractors with a bona fide letter of credit. So we never ship to any Apex subcontractor or, for that matter, almost anyone inside China, without a letter of credit posted in advance, and as far as how much they owe us that's uncollected today, as far as I know, it's zero. ANALYST: Okay. Thank you. OPERATOR: Brian Alger with Pacific growth equities, please go ahead. ANALYST: Hi, guys. Good afternoon. I want to congratulate you on a great quarter. Obviously, June was spec- tacular. Looking at the market, you know, there's obviously a lot of contention about what prices or what the competitive landscape may or may not be. Suffice it to say you guys are - are doing real well. Did you guys give us your share - or unit volume for the June quarter? BOB BLAIR: No, we did not give that specifically. What we're giving out, going forward, is we're going to be giv- ing out revenue breakouts for the various product lines. We're going to be giving you guys - or giving you more granu- larity on selling prices and I think it's in general overall volume levels. But we had - we had record shipments last quar- ter, and expect record unit volume shipments in the current quarter, but I think you guys have really - have become very, very good at cranking on spreadsheets and doing the numbers and I think with all of the information that we're giving you, you'll be able to come up with the units very easily. ANALYST: Fair enough. Looking at the guidance, Q3, as I understand it, 86 to 90. Obviously, that's flat to up slightly. I'm more concerned with December. You said that that seasonally down. Looking over your history going back to the mid -'90s, I'm seeing only one December where that was actually lower than a September. Can you - can you talk to the seasonality that you're now seeing that previously essentially has never existed? BOB BLAIR: Well, actually, we've talked about this, I think, over the years several times, and the base reason this - the season altogether, you didn't see it so much in the past is because a lot more of our business was coming from VCDs, which is the Chinese new year product, which is offset from the Christmas season by one year. Today, with over 60% of our business coming from DVDs, which is a different product line, and the majority of DVD business still is driven by Europe and the United States, which is very much the Christmas season, that we had forecasted last year that we thought going forward, that Q3 would be our largest quarter of the year. Last year, that was not the case because the - after September 11th, there was a huge shift to people switching from VCR movie rentals to DVDs, which has contin- ued to some degree to some point, but we think this year will be a normal season driven by the U.S. and Europe buying season. I think if you go back a little bit further in our history, Brian, and look at some of the numbers back in the mid-'90s, in the '95, '6's and '7's even I think you'll see that the third quarter was the largest season and that was driven primarily by the PC audio that was consumed in the United States, Europe, and Japan. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 11 of 18

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ANALYST: Well, I'm looking at them and actually in all three of those years, they were higher, but anyway. What percentage of your DVD units are going to China versus out of China? BOB BLAIR: We can't tell that for sure, but we think by far the majority of our products, probably 70% or so, are exported out of China. Probably 30% of the units that we sell into China stay there. ANALYST: Okay. Great. And then just one - one balance sheet question. And forgive me for my ignorance here if it's an obvious. You guys posted a profit of 17.3 on GAAP, and it looks like your retained earnings dropped by about 10 million. Now, I understand you had the - the share buyback, which you spent, what, roughly $38 million on, and that accounts for the cash change, but is that what's - what we're seeing come through not only the common stock line but also the retained earnings line? BOB BLAIR: Yes, it is. ANALYST: And is that because you paid over par? Is that just the bookkeeping of it? BOB BLAIR: I - I'll be honest. I'm not an accountant. I can nab our controller and get back to you with an answer to that, Brian. I don't have the specific answer, but I believe it's simply because of the stock repurchase. JIM BOYD: You take some to retained earnings and some to the par value. ANALYST: Okay. Great. Thanks, guys. Again, nice quarter in June. OPERATOR: Eric Ross with Investec, please go ahead. ANALYST: Yes. I had a couple questions on market share, first. Maybe you can go over your comments by [ST Micro] this morning, where they had claimed that they had gained a lot of share in the month - in the quarter of June in the DVD processor market. Maybe you can talk a little bit about market share to start with. BOB BLAIR: Well, you know, it's - I can talk about it, Eric. The problem is that there's no way to know how big the market is. You know, I've seen estimates at the beginning of this year of 42 million and then I saw estimates at 53 and now I've heard of estimates at 58. So I'm not sure how big the market is. If - you know, if all of us have as much market share as we think we do, it's about 150% of the market. I know how many units we're shipping. You know, we had shipped in the first quarter 5.4 million. We'd forecasted growing to 10 to 20%, and we were very, very successful in the second quarter, and so you can do the calculations and see we shipped over 6 million units in the second quarter, and if I shipped 5.4 in the first quarter, you can quickly see that I'm well in excess of 20 million units in the first half of the year. What market share that is, I don't know. We claim that we have something we believe greater than 40%. We can't know because I don't know what everybody else is ship- ping and I don't know how big the market is and there's no accurate statistics on it. ANALYST: Okay. Maybe you can talk a little bit, then, about the size of the DVD market. I mean, do you think that it's going to be 58 million, or what are you using kind of for your internal projections? BOB BLAIR: We've kind of been using a number internally for quite a while of 55 million. It's a big enough num- ber that it kind of makes sense, but it's not so huge to scare people if you - I think if you start talking 58, 60, 65 million units, that I've heard some people bandy around, I just - I don't know if it's really or not, and maybe 55 is even on the high side, but that's the number we use internally. ANALYST: Okay. What's the size that you're actually using internally for '03, while you're at it. ANALYST: I'm sorry. For '03? ANALYST: Yeah. BOB BLAIR: We're still debating that. There's a lot of question as to whether that should be in the 70s or what - I guess the question is, what part of the 70s it should be in. Will it be in the low 70s or the high 70s, because what's hap- pening is a lot more products are starting to use DVD chips. You've got DVDs in cars now and more GPS systems are including DVD chips and they can put all the GPS maps on one disk instead of on 16 discs. ANALYST: Sure. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 12 of 18

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BOB BLAIR: They can play MP 3 and WMA compressed audio in the cars and then if it's in park, it will actually let you play a movie. Another big area is all of the audio capabilities that are driving sales in the DVD players. Nobody would go out to- day, I believe, and buy a CD audio player. You'd buy a DVD that plays all the various types of audio formats. And many stereos - I think as a good example of another opportunity where there's - I'm not sure how many mini-stereos there are in the world, but I think I read a statistic that said that Thompson sells about 20 million all by themselves and they're in the process of moving a majority of those over to DVD players. And so there is huge potential opportunities for DVD products, not just in the stand-alone DVD player that sits on - next to your TV set in the living room, but I think that's what makes it so hard to forecast this market, how big it is and how big it's going to be, because I think there's so many sub-pieces that have grown up over the last couple of years. ANALYST: Sure. Maybe a similar question on VCD. I mean, I think VCD grew a little bit faster than you were ex- pecting, and I would guess that AFPs have declined even more rapidly in that market. Maybe you can talk about where that's growing to and when you think maybe that will shift over to DVD. BOB BLAIR: Yeah. We think that we saw surprising strength in the VCD market in the last 12 months. We had thought it would probably be about 35 million units this year. At this point, it looks like it may be closer to 45 million units, as far as the market. We've - we've had phenomenal success in that marketplace. It's grown quite higher than we'd expected and I think you've seen several of our earnings increases, and that's because of both VCD and DVD exceeding our expectations. As far as where it's going, with the products selling in many cases under $30 worldwide, we think with the momen- tum it has and the low cost, that we think it's probably got one, two, three years left in it. It's hard to tell. We're just go- ing to have to play it by ear and see what happens. But we think it probably has two or three years left. Maybe - you know, it's surprised us this far with its strength. Maybe as the prices continue to decline for DVDs, the prices will also continue to decline for DVDs [sic], and if - in most places of the world, a VCD product is a tremendous value, and there's not a whole lot of difference between a DVD box and a VCD box in most places in the world. So we think it's going to be there for a few years. We think it's - our opinion is it's probably around 45 million this year. We think that will probably remain constant for next year, and then going forward beyond that, we're not sure what will happen. ANALYST: Okay. And you talked, obviously, about integrating more functionality into your products. As you see more of these integrated products, should your AFPs and margins increase? BOB BLAIR: Well, certainly the - the AFPs increase when you do that. Gross margins, depending on the cost of how much you - you add the - if you're talking gross margin percentage, I would expect they would remain relatively flat. Gross margin dollars will probably go up, because of the higher selling price. ANALYST: So even in some of these combination boxes, your gross margin should stay around 40, 41%. BOB BLAIR: Oh, yes. ANALYST: Okay. BOB BLAIR: That's on - if you're looking at the weighted average for ESS, if that's what you're looking at, because our DVDs are well in excess of that, our VCDs are below that today, but the VCDs are rising and concurrently, the DVDs are coming down at the same time, and so we think overall, that the guidance will probably be in the very high 30s, low 40s as far as gross margin percentage for the company for the next several quarters. ANALYST: Okay. And maybe can you break out your percentage of revenues geographically? BOB BLAIR: Yeah. ANALYST: I don't recall seeing that. BOB BLAIR: If I take Hong Kong and China, it accounts for roughly 80% of our total revenue. The balance is - there's about 5% in Taiwan, and almost all the rest of it goes to Japan, Korea, and Singapore. ANALYST: Okay. And then one last question. The tax rate going forward, should we just assume 5% is the rate? BOB BLAIR: Yeah. ANALYST: For the next year as well. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 13 of 18

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BOB BLAIR: Yeah. We think that the - the tax structure we have set up is pretty, we think, very, very solid. It's been around for years. Of all of the things being discussed in Congress, what ESS is doing is not even being discussed as an issue, so we think that there's not going to be any structural changes, and the fact that our products are all manu- factured offshore and they're all - and they're virtually all sold offshore means that U.S. taxes did not have to be paid on the majority of the products, and so we think the 5%, according to our auditors, Pricewaterhouse, we think that that's a sustainable tax rate going forward. ANALYST: Actually, I have one - actually, one other question. If we can talk a little bit about pricing elasticity of the DVD boxes themselves, do you have any sort of ex-internal expectations for what may be a mid-range DVD box or a low-end DVD box, what it will be selling for this holiday season. BOB BLAIR: Well, low range, I've heard as low as $59. I think realistically, it's probably low range will be in the 69 to $79, and as far as what's a mid-range, probably 99 to 129 or 119. ANALYST: Okay. Great. Thank you. BOB BLAIR: Okay. Eric. OPERATOR: Barry [Nackison] with Fire Lake Research. Please go ahead. ANALYST: Yeah. First question is, you gave the prices of AFPs, I believe, of decoders integrated with the TV. Could you give that again? BOB BLAIR: Well, I said today, typically the TV - or DVD MPEG decoder with the integrated TV encoder, the Vibrato series, or an equivalent out of [Zoran] or someone I believe would sell in the 8 to $10 range and the higher the quality, the lower the price. And there are some exceptions to that, but that's the average. ANALYST: How low could volume discounts take that? I mean, like your highest - BOB BLAIR: I would - I would never discuss something like that on a conference call. ANALYST: Right, yeah. Okay. The other question is, could you give a little bit of a sense of the history of your competition from the Taiwanese companies such as [Mediatech]. You know, there's a lot of controversy around how well financed they are. Also, did [Mediatech] seem to set expectations too high recently, that they could take share? Did they disappoint there? You know, if you could give some context for these houses, you know, how well capitalized they are, what kind of R and D spending they do, stuff like that? BOB BLAIR: I'm sorry to be perfectly honest, I don't have that information. I have read it, but I don't remember it and I don't have it with me. So I - I just am not a competent authority to discuss that at this point. We could probably, you know, get back to you with something, but I don't have it at my fingertips right now. I'm sorry. ANALYST: All right. Well, I'll catch up with you at the next conference you're at and see if we can - yeah. All right. Thanks. Okay. OPERATOR: Leslie Feinberg with American capital, please go ahead. ANALYST: Hey, Bob. How you doing. Nice quarter. BOB BLAIR: Thank you, Leslie. ANALYST: Bob, question. On the guidance going forward - all my other questions were answered earlier. On the guidance going forward, it seems like your guidance - you're maintaining your guidance for the next quarter but it seems like you're trying to lower guidance going forward. How do you stand there? Do you see taking market share or losing more market share to people like [Mediatech] or [Zoran], or where do we stand there? BOB BLAIR: Well, I think honestly that the [Mediatech] is getting some traction in the marketplace. They've got a product that's some - they've got a nice integrated product. They're going to take some business in China, some in the third quarter, some in the fourth quarter, so I think the reality is they are out there in the market with a more integrated product than we have with a six-month head start and so they're going to get some traction. I think long-term, going forward in 2003 and beyond, I'm not really worried about it because I think we have supe- rior technology and I think we've got probably much better features and support, et cetera, than they will have. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 14 of 18

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As to the previous caller's questions about their financial situation, that - that is something else that I'm not sure how they will be. But we think that, you know, they're going to get some traction in the second half of this year, but we think we're still, by far, the number one supplier of DVD chips, and I think we've got a great future going forward. Next year, we've diversified our product line. [Mediatech] is only able to participate in the very low end of the DVD market at the Ch i- nese - some of the Chinese manufacturers. I doubt that you'll see them very much outside of China, and you won't see them in any high end boxes and we've been able to successfully expand our business and diversify around the world to all different product segments and so I don't see them as a huge competitor, long-term. ANALYST: How long do you think it will take for you to catch up to [Mediatech], with their newer products. BOB BLAIR: Our products that we're introducing in the September/October time period of this year will be vastly superior to what they have. ANALYST: And what about [Zoran]? What are they doing? What is there? BOB BLAIR: I'm not an expert on [Zoran] but I believe they have a product similar to our Vibrato II. I'm not sure when that will be in production. I think I've heard that it will be in production in the late fourth quarter of this year. ANALYST: All right. BOB BLAIR: The important design cycle, though, in the design cycles in China, at least happen in the February through June time period, and so I think both ESS and [Zoran] will have products for that design cycle. ANALYST: Going forward, are you trying to be conservative with that or - BOB BLAIR: We always want to give the street numbers we can meet or beat. If you look back at our track record for the last couple years, you'll see we've met every guidance we've given and in many, many cases we have raised guidance and exceeded it. So ESS wants to have numbers on the street that the street can believe in. ANALYST: All right. Thanks, Bob. BOB BLAIR: Okay, Leslie. OPERATOR: Dan Scovel with Needham and Company, please go ahead. ANALYST: Thank you. A good quarter. I'm sorry, did you provide revenue by product line for last quarter? BOB BLAIR: I'm not sure. If we didn't specifically, the revenue for DVDs last quarter was, I think, 61%, VCDs was 30%, and the PC audio, about 3%, I said, and communications was about 5%. I think that comes pretty close to a hundred. ANALYST: Okay. The - on the guidance that you provided, I'm sorry, can you repeat the video CD part of that? You said DVDs would be 62 to 65% of revenues. BOB BLAIR: Going forward and I said VCD would be 27 to 30. ANALYST: 27 to 30. Okay. The - you announced, obviously, a very long list of the design wins, and I thought you said you were well positioned for 2003. Is that to say that a lot of the design wins that you got in the - in the second quarter ramp more so next year rather than this year, or - or did I hear that wrong? BOB BLAIR: Well, I - what I - the 2003 comment was relative to the design wins in Japan. Design wins in Japan, at this point, will ramp into production in probably second quarter of 2003, will not come - there's a much, much longer design cycle in Japan and that was what that comment was about. ANALYST: Okay. BOB BLAIR: Most of the design wins outside of Japan will be in production this year. ANALYST: Okay. Another question, again, about guidance for the third quarter. Obviously it's - it is going up, which is good, and it is consistent with your previous comments. However, at the same time, as you said yourself, I mean, this is a peak season in terms of the consumer electronics, and we've seen some of your - some of your competi- tors guide for a significantly higher sort of growth. I mean, is that a sign of the loss of market share, or being conserva- tive, or both, or where - how should we be reading those sort of numbers? Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 15 of 18

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BOB BLAIR: Okay. I think that it's probably several things. First of all, we like to be conservative. Secondly, I think that the people that have guided higher, I think are primarily selling into the - or have a large part of their business coming from Japan. And Japan tends to build to forecasts rather than to order. And what that means is that those - the people supplying those companies will always have a huge third quarter because that's when they build for the Chris t- mas season. That's the good news. The bad news is potentially, that could create inventory in the channel for their cus- tomers' products. My customers tend to buy to fill orders, rather than to forecasts, so I think that there's a little bit of difference in the model, or at least the models of our customers between the companies. ANALYST: Okay. The - also, your new - your new offering in the digital audio space, I assume that you're pretty much going up against somebody like [Cerus Logic] there. How - I mean, how are you going to compete in that space? I believe they have a pretty strong position, and they've been there a while. BOB BLAIR: Yeah. I - well, yeah, I do think they have a good product and good position. I think, though, that we in many cases are selling to different customers. I think our product is clearly programmable. We've been able to add more and more and more features, and frankly, I think that our product is probably more affordable than some of the things that they're selling. So we've seen several design wins already, and we think we can continue it. The fact that we can do all of the for- mats, whether it's SACD, DVD audio, DTS, or WMA, MP 3, Dolby digital, whatever it happens to be, we can do all of that with the same chip, seems to be something that our customers have been very excited about, and we have gotten design wins already. ANALYST: Okay. Finally, you - you did provide a lot of competitive granularity at Apex. I was wondering if you could maybe give a similar take on what's happening at Shinko. Obviously, there's been a lot of - a lot of scuttlebutt coming around about - between Shinko and [Mediatech]. BOB BLAIR: I think - I think ESS is the dominant supplier at Shinko. I think we will remain the dominant supplier at Shinko. They, to a large degree, have - are pushing the progressive scan products into the China product line - or into the China market, rather, and [Mediatech] doesn't even have a progressive scan product at this point. Plus much of what Shinko builds for is for RCA and GE and Thompson, and those companies are going to use Thompson loaders and servers and won't be using a [Mediatech], and if you really look at ESS - or at Shinko's overall business, there's only a small percentage of it that I'm really at any risk of losing, and I believe that we will keep the majority of that. Will [Me- diatech] or someone else get any of Shinko's business? It's possible. Will ESS become the number two supplier? I think it's extremely unlikely. ANALYST: Okay. Great. Congratulations. Good luck. Thanks. BOB BLAIR: Thanks. OPERATOR: Joseph tell with Pacific Crest securities, please go ahead. ANALYST: Good afternoon, Bob, Jim. BOB BLAIR: Hi, Joe. ANALYST: Just wanted to find out a little bit more on the VCD market. Like could you elaborate more on what you're seeing out there? You've pretty much increased your guidance, you know, to 30% of revenue in the VCD market. I'm curious as to, you know, how much revenue growth that is and also in terms of unit share, you know, how much more do you think it's going to grow? BOB BLAIR: Well, we think that we have grown our market share from approximately - approximately 60% to probably close to 70%. There's one main competitor from Taiwan who is - who is - has most of the rest of the share and we think that our Vista II product has added much more capabilities and features at a very affordable price, and we've been able to shrink the die and get some good wafer prices and so we've been able to take the costs out of the product, and so that's why we've been able to gain market share and increase margins at the same time. As far as going forward, if you have 65 to 70% of the market, there's still room to grow, but it - it's not a huge amount as far as market share you can grow. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 16 of 18

Page 15 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos

Now, if the market remains at 45 million or in that neighborhood, it's still a very, very large market going forward, so we think it's a good steady business. It's kind of like it's almost like a hose. It just runs and the only question is, is how fast is it running. It's just good steady business for the company. ANALYST: And do you see the margins staying about the same for the VCD market? You know, my understand- ing on AFPs in this area are also that, you know, AFPs are declining probably faster there than they are in the DVD market. BOB BLAIR: Well, actually, they declined faster over the last 12 months, I would say, but they've been pretty sta- ble now for the last quarter, and I don't see much room for them to go much lower. If you - if you take apart our com- petitors' products and do a cost analysis, they - they aren't making nearly as much money as ESS is on our products. We've been able to cost-reduce the products. There will be some continued price erosion and frankly as we introduce our Vista III and our Vista IV, ESS will be the cause of that price erosion as we force our competitors into a more and more uncomfortable position and hopefully ESS will gain some more market share. ANALYST: Okay. On another note, with regards to your DVD products, I believe last quarter you gave kind of a breakdown on how fast you think people are transitioning from the [Swan] product into the Vibrato product and that obviously plays to your overall blended ASP. Can you give us an update on what's going - you know, how many people are actually into your Vibrato product at this point in time, and even looking forward, with regards to Vibrato II, because I think that the integrated products are pretty much anticipated for, you know, largely into Q1. You know, I want to - I'd like to find out a little bit more on what you're expecting in terms of how fast and how many of your customers will transition to Vibrato II. BOB BLAIR: Sure. Let's talk with Vibrato. Our [Swan] product was slightly larger in units in the second quarter we just completed. However, Vibrato will significantly pass [Swan] in the current third quarter of this year. Going forward, as far as the Vibrato II, we expect that Vibrato II - let me back up. Vibrato was introduced in the fourth quarter of 2001, and is -assuming the dominant position in revenue in the third quarter, which is nine months later of the following year. We think that something very similar will happen with Vibrato II. We'll introduce it in the fourth quarter this year, and it will be the dominant [inaudible] in the third quarter of next year. ANALYST: Okay. Is there any more granularity you might be able to give in terms of like percentage of, you know, Vibrato at this point in time as compared to [Swan] or . . . BOB BLAIR: Well, in the current quarter, roughly - roughly 60%, a little over 60% of the volume will be - or 65% of the volume this quarter will be the Vibrato. ANALYST: Okay. Another 35 then would consequently be on the [Swan] products? BOB BLAIR: Yeah. ANALYST: Okay. Do you expect - do you suspect that over 80% might be in the Vibrato by the holiday season? BOB BLAIR: By the fourth quarter? ANALYST: Yeah. Third and fourth quarter for the holiday season. BOB BLAIR: Well, the third quarter is the number I just gave you of the 65%. ANALYST: Oh, okay, okay. BOB BLAIR: The fourth quarter, it will be approaching 80%. In that - it will be in the 80% ballpark. ANALYST: Okay. And just one last question for you. With regards to design wins that you were talking about, you listed a whole bunch of customers and some design wins in Japan and Korea. Is there anything you can give us more detail on in terms of longer-term relationships or penetration into those accounts? BOB BLAIR: I'm not - ANALYST: Basically, I'm looking - I'm wondering if there's anything beyond, you know, the one or two design wins that - at any one given company in Japan and Korea. You know, is there - will there longer-term relationships that you've developed over that period of time to get into those accounts? Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 17 of 18

Page 16 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos

BOB BLAIR: Well, I think to get into any account in Japan, in particular - and Korea is almost the same - you have to have a really good product and you have to be talking with people, working with the people for months and months and months. I think any of our competitors would tell you the exact same thing. And as a company chooses your prod- uct and then chooses the second and then chooses the third and then maybe a fourth, what happens is it becomes easier and easier for new designs to use your product because they already have the user interface, they already have the pro- duction experience, they already have everything worked out. And so the longer you're selling products, then the more designs you're going to get, and assuming you have still the best products, and we think we do. And so as far as long- term formal relationships, no. I think that really it's just a matter of, you know, one step at a time, one new design win, the next one, the next one, and with time they'll just continue to add up. ANALYST: Okay. And just one last clarifying question. You know, for the third quarter, for the September quarter, what was the guidance range that you gave for VCDs? Was it 30 - 27 to 30% or did - BOB BLAIR: Yes. ANALYST: Okay. Thanks a lot. BOB BLAIR: Okay. Joe. OPERATOR: We have time for one final question, and that question will come from [Calpesh ] [Capetia]. Please go ahead. ANALYST: Jim, just a housekeeping item. You bought back 2.4 million shares. Is there a plan to buy back the re- maining, you know, out of the [inaudible] authorized buyback. BOB BLAIR: You know, we authorized buyback. I think we have just under 600,000 on that. It depends. If - if we think our stock is a - undervalued and a good opportunity, yeah, we would continue to be a buyer. So there's no change in that 3 million number, if it became enough of a bargain, we might even talk to the board about increasing it. Right now it's at 600,000 roughly which is left and we would be a buyer of that 600,000 in it looks like a good use of our money. ANALYST: And next question is, Bob, you mentioned the DVR and DVD combo product. I believe you had an- nounced earlier in the year Samsung SD 40 design win and you announced another design win, you said you had two design wins. Now, does that increase your content per box or is it the same content as you have in the DVD player. BOB BLAIR: No. What I was - the design wins I mentioned today, referenced today, have to do with our selling our MPEG encoder plus our MPEG decoder, and so it more than doubles our content in dollar terms in the box. ANALYST: Is that your own MPEG encoder that you initiated from NEC or - BOB BLAIR: It's - yes, it's from the IP that we've licensed from NEC. It is our own encoder. ANALYST: Great. And lastly, you mentioned, you know, the DVD unit growth in Q3 is going to be 10 to 15%, and ASP decline is going to be less than 10%, so do we take the, you know, total revenue growth to be in somewhere in mid-single digit range for DVDs? BOB BLAIR: For DVDs - JIM BOYD: Q3. BOB BLAIR: This is what I said. You guys are pretty good at cranking out spreadsheets. I think you'll come pretty close to the numbers. ANALYST: Thank you very much. BOB BLAIR: Okay, Calpesh. ANALYST: Bye. OPERATOR: Sir, did you have any closing comments? BOB BLAIR: Yes, I do. First of all, I'd like to thank everybody for the questions. I think they were good ones. And I'd like to close by point- ing out that ESS continues to grow its market share and continues to be the leading supplier of DVD and digital video Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 18 of 18

Page 17 Q2 2002 ESS Technology Earnings Conference Call - Final FD (Fair Disclos products in the rapidly growing digital entertainment market. We've become the largest semiconductor supplier of digi- tal video and audio products to this market, and we will continue - or we have continued to gain new design wins to help us maintain this leadership position. We've just completed a great quarter in which we've seen the continued growth of our DVD products. We grew both our DVD and VCD market shares. We received a record number of impor- tant new design wins in Japan and Korea and worldwide. We've gotten a lot of new products and developments that are planned for introduction in the coming months and they're all aimed specifically at the growing digital entertainment market. Overall, it's been a great quarter, and we look forward to continued growth and success through the balance of this year, and in 2003. And so I'd like to thank everybody for joining the conference call and for all of your questions and this will con- clude the call. OPERATOR: Ladies and gentlemen, that does conclude your conference for today. You may all01:30:24 discon- nect, and thank you for participating. [CCBN reserves the right to make changes to documents, content, or other information on this web site without ob- ligation to notify any person of such changes. In the conference calls upon which Event Transcripts are based, companies may make projections or other forward- looking statements regarding a variety of items. Such forward -looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking state- ment based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward- looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES CCBN ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. Copyright 2002, CCBN, Inc. All Rights Reserved.]

LOAD-DATE: December 27, 2002

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 3

Exhibit 3 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

Page 1 TECHNOLOGY WEEK --- Tech Trader: The Company's in the Chips, and Th

79 of 275 DOCUMENTS

Copyright 2002 Factiva, a Dow Jones and Reuters Company All Rights Reserved

(Copyright (c) 2002, Dow Jones & Company, Inc.) Barron's

August 5, 2002 Monday Correction Appended

SECTION: Pg. T1

LENGTH: 1079 words

HEADLINE: TECHNOLOGY W EEK --- Tech Trader: The Company's in the Chips, and That's a Problem

BYLINE: By Leslie P. Norton

BODY: The fortunes of ESS Technology took a steep downward spiral late last month when the Fremont, Calif., company said third-quarter sales and pricing assumptions would disappoint investors. ESS makes chips for DVD and video com- pact-disc players, has 40% of the DVD chip market and 60% of the VCD chip market, and has seen demand grow by leaps. The stock jumped 300% -plus in '01 as growth exceeded forecasts, and ESS has kept raising estimates. Gross margins clocked in at 50%. This year, earnings are expected to climb to $1.38 a share from 54 cents a year earlier. Yet last week the stock plumbed new lows as analysts slashed forecasts and took ESS off their buy lists. The shares are down 40% this year, to a little less than 13, taking a tumble after the company said fourth-quarter estimates were probably too high; the usually strong fourth quarter instead will be "seasonally weak," and gross margins probably will contract. In the second quarter gross margins fell to 40.9% from 43.3% the previous quarter, and ESS thinks they may fall to 38%. The reason: Average selling prices of DVD chips will fall by 15% this year. Some argue the pricing decay may be greater, extending ESS's slide. Short interest last week stood at 6.4 times average daily volume. Everybody is making DVD chips, and soon the world will be awash in them. The new players are Taiwanese, and one of the strongest is MediaTek, which analysts say has made big inroads with Apex, one of ESS's largest customers. Then there's Ali Corp.; output of DVD chips there has risen nearly eightfold since the first quarter, to one million a month. Sunplus, which makes chips for toys, plans to start volume shipments of DVD chips this quarter. And now, watch out for VIA Technologies, Taiwan's biggest fabless chip designer and, at the moment, largely a chip-set manufacturer. A VIA spokesman in Taiwan tells Barron's that VIA began making DVD chips in the last month. "We've been preparing the technology for the past couple of years. Basically we want to aggressively ramp up into the market. We're looking to achieve 30% to 40% of the DVD market," he says. And don't forget publicly traded Zoran, which controls the DVD chip market along with ESS. Even Needham & Co., one of ESS's biggest boosters, recently wrote: "We believe Zoran may be gaining relative DVD market share at this time." Then there's the issue of inventory, which in the second quarter climbed 31% to $49 million. Yet ESS is midway through a product transition, and is reported to be running behind on introducing chips for new recordable DVD players. ESS Chief Executive Bob Blair bristles at the assertion that ESS's growth story is over. Sure, the DVD market is drawing competition. But, he argues, ESS is the leading supplier and has lots of new products in the design cycle that will be introduced in the next few months, including upgrades to its DVD chips. And it turns out products for set-top boxes and home networking. "As you do more integration of new products, the selling prices will go up, not down," he asserts. Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

Page 2 TECHNOLOGY WEEK --- Tech Trader: The Company's in the Chips, and Th

In fact, Blair thinks average selling prices will rise 5% to 10% next year. He also notes that the company has re- cently had "design wins" from Panasonic, Samsung and Aiwa, showing geographic diversity. Such orders ought to show up in revenue next year. As for delays in recordable DVD chips, Blair says ESS achieved its dominance even though others were first to market, and ought to be able to do so again. Continues Blair: "The shorts would very much like to keep our price down. This company has no debt, leading market share, lots of new products. All analysts say we're going to make $1.40 to $1.60, and I'm at a $12 price. I would say that's overdone, wouldn't you?" Still, late last week it wasn't a pretty picture. Maintains Marc Cohodes, a short seller with Rocker Partners: "If your gross margin declines and your product becomes a flat-out commodity and sales roll over, then the stock can get cut in half." Many times, when investors give up on chip stocks, the shares head down to book and even below. For ESS, that's $4.67. Murphy's flaws For two years, Jack Hanbury, an Ashland, Ky., litigator turned day trader, has subscribed to Technology Investing newsletter, which is composed by widely quoted tech guru Michael Murphy. Last week Hanbury was sufficiently dis- gruntled with the collapse in tech stocks that he sent a six-page critique of the performance of the newsletter's stock picks to various reporters. Among other things, Hanbury took issue with Murphy picks such as JDS Uniphase, EMC, Corning, Sun Microsystems, Nokia, Check Point Software and Scientific Atlanta, noting their price collapses following Murphy's recommendations. He also cited Murphy's "consistent" bullishness "while tech stocks were in a free fall." His biggest bugaboo is the advertising on Murphy's newsletter that proclaims him "America's # 1 hi-tech stock picker." Writes Hanbury: "I'm no mathematician, but Murphy's subscribers . . . lost half their money since January of 2001." Murphy's advertising has been the subject of criticism before, specifically by Hulbert Financial Digest, which tracks the performance of newsletter writers. Murphy blames his distributor, Phillips Publishing. Hulbert notes that California Technology Stock Letter, Murphy's oldest newsletter, ranked in second place for the 10-year trailing period back in March '97. Since the end of '82, Hulbert says, CTSL's recommendations have fallen 71.7%, versus a 979% gain for the Wilshire 5000 and an 843% gain for the Nasdaq. Technology Investing has a slightly better track record. Since the end of '98, its recommendations are down 8.1%, compared with a 13.5% loss for the Wilshire and a 33% drop for Nasdaq. Returns in Murphy's tiny mutual funds, which invest in tech and biotech plays, have suffered too. In fact, assets are so depleted that Murphy is considering merging Monterey Murphy New World Technology and Monterey Murphy New World Core Technology. Of Hanbury's critique, he sighs: "Fundamentally the guy is right, if you start from a high in the tech market. It's been a terrible market for tech stocks. We still think these big tech names are in a substantially better position because so many erstwhile competitors have run out of money. The computer revolution has hardly begun." --- E-MAIL: [email protected] --- For Barron's subscription information call 1-800-BARRONS ext. 685 or inquire online at http://www.barronsmag.com/reader.html.

NOTES: PUBLISHER: Dow Jones & Company

CORRECTION: Corrections & Amplifications ESS Technology's gross margin was 33.6% in 2001. A figure reported by TechTrader on August 5 was in error. Also, analysts surveyed by IBES expect ESS to earn $1.44 a share this year. (Barron's Aug. 12, 2002)

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Exhibit 4 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 4 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

23 24 25 26 27 28

MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 4 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

28 MP1:972142.1 -1- MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 3

Exhibit 5 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 5 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

23 24 25 26 27 28

MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 5 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

28 MP1:972143.1 -1- MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 3

Exhibit 6 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 6 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

23 24 25 26 27 28

MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 6 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

28 MP1:972144.1 -1- MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 6

Exhibit 7 PathwayCase Ventures 5:02-cv-04497-RMW - The Team Document 151 Filed 12/02/2005 Page Page2 of 61 of 5

Steve Bardack PATHWAY VENTURES PRINCIPALS Jeffrey Zwelling Steve Bardack Jon Miller Steve has led numerous strategic planning and business development initiatives for media and Jason Lemkin technology companies. Steve led the team that Nadine Weil identified and assisted Blackstone in the due diligence of the $410 million leveraged buyout of David Feldman Columbia House. Prior to that, as Vice President of Strategy & Business Development at GeoCities, Lawrence Baeck Steve headed the M&A team and was a key person charged with defining the strategic direction and business model of the company. Steve led the RECENT PRESS commercial due diligence for the GeoCities IPO and was an integral member of the team responsible for the GeoCities acquisition by Yahoo for $4.6 billion. Previous to GeoCities, Steve served as Manager of the New Media Strategy Practice with LEK Consulting, developing strategy for companies that include Activision, Epson, Disney and Americast and consulted with Monitor Company. Steve holds a JD/MBA from the University of Southern California and a BA in Economics from the U.C. Berkeley.

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Jeffrey Zwelling Jeff is the co-founder and CEO of YLighting, the largest dealer of contemporary lighting and a best- practices e-commerce company. He was instrumental in identifying and assisting Blackstone in the due diligence of the $410 million leveraged buyout of Columbia House, and served as an online marketing consultant to the management team until the acquisition of Columbia House by BMG in 2005.

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In 2002, he led the team that sold the IP assets of VOD pioneer Diva Corp. for over $21 million. In addition, Jeff has worked with numerous online companies to help them improve their online marketing strategy and implementation. Jeff was formerly head of the business development team at GeoCities and led product development at Crystal Dynamics, a Kleiner Perkins-backed software company acquired by Eidos Interactive (EIDSY). Prior to that, Jeff was an intellectual property attorney at Loeb & Loeb in Los Angeles and a software developer from the age of 14. Jeff received a JD from the University of San Francisco, a BA from the University of California, Los Angeles, and completed the Stanford Business School Executive Program for Growing Companies. He received the 1993 National ASCAP-BMI Award for his article on Multimedia Law. He has been a featured speaker on online marketing at Shop.org, the Direct Marketing Association, Search Engine Strategies and other conferences.

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Jon Miller Jon was Vice President of Engineering and Product Development at BITMO, a wireless application software company, where he led the development of the company’s device-independent, voice-enabled messaging and browsing products. Prior to that, Jon was Vice President and Executive Producer at Crystal Dynamics, where he managed several entertainment software franchises totaling sales of over two million units. Jon was also Crystal’s senior technical manager, promoting software reuse across teams and products and developing the company’s project and asset management tools. Over the past 30 years, Jon has been an engineer, manager, executive and entrepreneur in areas including flight simulation, industrial automation, computer chip design, video games, programming language and compiler design, project and asset management, computer-aided

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instruction, interactive voice response systems and e- commerce. Jon received a BS in Computer Science and Electrical Engineering from MIT, and completed the Stanford Business School Executive Program for Growing Companies.

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Jason Lemkin Jason was President and Chief Business Officer of nanotechnology pioneer NanoGram Devices, acquired by Wilson Greatbatch Technologies in 2004. NanoGram Devices delivered an IRR in excess of 300% to its investors which included Venrock Associates and Bay Partners. He previously served as Vice President, Corporate Development, at NeoPhotonics Corporation, a leader in nano- enhanced integrated optical components. Prior to joining Pathway, Jason was head of corporate development at BabyCenter, now a subsidiary of Johnson & Johnson. At BabyCenter he led and negotiated the company's $800m acquisition and raised over $20 million in corporate and venture capital to spin-out its e-health division, Consumer Health Interactive. Jason also served as corporate counsel at Venture Law Group where he advised leading technology start-ups including MediaQ/nVidia, E-Tek Dynamics/JDSU, XYLAN/Alcatel, and Yahoo. Jason completed Stanford Graduate School of Business' Executive Management Program and holds a JD, Order of the Coif, from U.C. Berkeley and a BA from Harvard College.

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Nadine Weil Nadine was formerly a Manager of the Internet Practice at LEK Consulting, where she advised clients such as Inktomi, Infoseek Software (Ultraseek), GeoCities, Time Warner, GTE, Disney, PacifiCare, Institutional Venture Partners, and Australia's leading retailer David Jones. Nadine

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managed engagements for these clients focused on competitive strategy, business plans, financial models, partnerships, and M&A in the areas of B2B, B2C, new media, Internet tools, and Internet infrastructure. Prior to LEK, she was a Product Marketing Manager for the Electric Vehicle (EVI) at General Motors/Saturn, and she was a Tax Consultant for wealthy individuals and limited partnerships at Arthur Andersen in San Francisco. Nadine has an MBA from the Harvard Business School and a BS in Engineering from Stanford University. She is currently on the Board of Directors of the Harvard Business School Alumni Association and has passed the CFA Level 1 exam.

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David Feldman David was formerly Director of Business Development at BigVine.com, a Kleiner Perkins- funded B2B exchange, where he negotiated and closed operating agreements with Starwood Hotels and Resorts and Delta Air Lines, in addition to numerous online distribution deals. Prior to that, David worked in the Strategy and Business Development group at GeoCities, where he participated in negotiations with companies including Barnesandnoble.com, Egghead.com, Fogdog.com, Reel.com and Staples.com, and supported senior management on various product initiatives. He also worked in the Los Angeles office of LEK Consulting, where he advised clients in a wide range of industries, including new media and semiconductors. David received a BA in Biochemistry, with honors, from Harvard College and studied at the Graduate School of Law and Politics of the University of Tokyo.

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Lawrence Baeck Lawrence recently advised Epson, a $12 billion corporation, where he negotiated a multi-million

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dollar strategic investment in Applied Science Fiction, a digital imaging hardware manufacturer. He has also worked on Epson's behalf to identify potential non-PC platform opportunities and potential entry strategies in areas including set-top boxes, personal digital assistants, Windows CE devices, digital cameras and game consoles. Previously, he worked at music and entertainment developer LAUNCH Media, prior to its acquisition by Yahoo. At LAUNCH, Lawrence managed the implementation of a new music advertising vertical network. Lawrence also worked at LEK Consulting, where he specialized in telecommunications and healthcare, and as a valuation analyst for Ernst & Young. Lawrence received his MBA from Harvard Business School and holds a BA in Economics from Stanford University.

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Exhibit 8 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 8 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

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MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 8 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

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Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 3

Exhibit 9 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 9 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

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MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 9 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

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Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 1 of 3

Exhibit 10 Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 2 of 3

1 MEREDITH N. LANDY (S.B. #136489) LORI E. ROMLEY (S.B. #148447) 2 JOSHUA D. BAKER (S.B. #214389) SARA M. FOLCHI (S.B. #228540) 3 O’MELVENY & MYERS LLP 2765 Sand Hill Road 4 Menlo Park, California 94025-7019 Telephone: (650) 473-2600 5 Facsimile: (650) 473-2601 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, PATRICK 9 ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 In re ESS TECHNOLOGY, INC. Case No. C-02-4497-RMW (HRL) 15 SECURITIES LITIGATION. EXHIBIT 10 TO THE DECLARATION OF 16 SARA M. FOLCHI IN SUPPORT OF DEFENDANTS’ OPPOSITION TO 17 PLAINTIFF’S MOTION FOR CLASS This Document Relates To: CERTIFICATION 18 ALL ACTIONS. 19 20 Date: January 13, 2006 Time: 9:00 a.m. 21 Judge: The Honorable Ronald M. Whyte 22

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MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW

Case 5:02-cv-04497-RMW Document 151 Filed 12/02/2005 Page 3 of 3

1 MANUAL FILING NOTIFICATION 2 Regarding: EXHIBIT 10 to the DECLARATION OF SARA M. FOLCHI IN SUPPORT OF 3 DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR CLASS CERTIFICATION. 4 5 This filing is in paper or physical form only, and is being maintained in the case file in the 6 Clerk’s office. If you are a participant in this case, this filing will be served in hard-copy shortly. 7 For information on retrieving this filing directly from the court, please see the court's main web 8 site at http://www.cand.uscourts.gov under Frequently Asked Questions (FAQ). 9 10 This filing was not efiled for the following reason(s): 11 [ ] Voluminous Document (PDF file size larger than the efiling system allows) 12 [ ] Unable to Scan Documents 13 [ ] Physical Object (description): ______14 ______15 [ ] Non-Graphic/Text Computer File (audio, video, etc.) on CD or other media 16 [X] Item Under Seal 17 [ ] Conformance with the Judicial Conference Privacy Policy (General Order 53). 18 [ ] Other (description): ______19 ______20

21 Dated: December 2, 2005 Respectfully submitted,

22 O’MELVENY & MYERS LLP 23

24 By: /s/ Sara M. Folchi Sara M. Folchi 25 Attorneys for Defendants ESS TECHNOLOGY, INC., ROBERT L. BLAIR, 26 PATRICK ANG, FREDERICK S.L. CHAN, AND JAMES B. BOYD 27

28 MP1:972147.1 -1- MANUAL FILING NOTIFICATION – CASE NO. C-02-4497-RMW