Hsinchu, Taiwan – January 8, 2007 – Epistar Corp. today announced that it has defeated claims of patent infringement brought by Phillips Lumileds Lighting Company, LLC. (“Lumileds”), on all but one ancillary product line. On January 8, 2007, Administrative Law Judge (ALJ) Sidney Harris of the United States International Trade Commission (“USITC”) issued his Initial Determination, finding that Epistar’s Omnidirectional Mirror Adhesion (“OMA”) and Glue Bond (“GB”) LEDs do not infringe any of the three patents asserted by Lumileds.

Epistar is a leading producer of advanced LEDs used in display, signaling and lighting applications. On November 4, 2005, Lumileds filed a complaint with the USITC, alleging that Epistar’s OMA LEDs and the GB and Metal Bond (“MB”) LEDs of United Epitaxy Corp. (“UEC”) infringe Lumileds’ U.S. Patent Nos. 5,376,580, 5,502,316 and 5,008,718. (Respectively “the ’580 patent, “the ’316 patent” and “the ’718 patent.”) On December 31, 2005, the merger between Epistar and UEC was completed, and Epistar became the only respondent in the investigation.

The ALJ found that the Epistar OMA and GB LEDs do not directly or indirectly infringe any of the asserted claims of the three patents. The ALJ also found that Epistar’s MB LEDs do not infringe any of the asserted claims of the ’580 or ’316 patent. In Judge Harris’s opinion, the MB LEDs infringe two claims of the ’718 patent. However, the MB product line is a legacy product of the Epistar-UEC merger. Furthermore, Epistar is ready to go into production with a new generation of MB series LEDs, which Epistar believes will obviate the issues with the ’718 patent altogether. Therefore, even if the USITC adopts Judge Harris’s infringement finding regarding the MB LEDs, the impact on Epistar will be negligible. Nevertheless, Epistar believes that this finding is based on an erroneous interpretation of the two claims of ’718 patent, and will petition for the USITC to reject this particular finding. The USITC is not expected to issue its Final Determination until May 8, 2007.

“Epistar and UEC developed these High-Brightness AlGaInP LEDs using its own proprietary technology, and they are significantly different from the claims of the asserted patents and the LEDs developed by Lumileds. Epistar has at all times been confident that Lumileds’s claims were without merit, and looks forward to competing fairly with Lumileds in the marketplace, where customers are overwhelmingly in

support of Epistar’s products because of their superior performances, competitive prices, and responsive and prompt customer services,” said Epistar President Dr. B.J. Lee.

Please contact Rider Chang (+886-3-5783078#2203) for any inquiries.