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DESWELL INDUSTRIES, INC. ESTABLISHES A NEW SUBSIDIARY TO OPERATE 70,000 SQUARE FEET INJECTION MOLDING FACILITY IN DONGGUAN, CHINA HONG KONG (March 20, 2000) - Deswell Industries, Inc. (NASDAQ NM: DSWL) today announced that the Company has created a new plastic injection subsidiary, Jetcrown Industrial (Dongguan) Ltd., which will operate a factory in Dongguan, China. The new 70,000 square feet factory, which is leased from the local Government, will employ approximately 400 workers. Deswell anticipates purchasing 40 sets of new injection molding machines and high precision tooling machines for this state-of-the-art facility. 28 sets of new injection molding machines will be installed by mid-May and the remaining will be installed by mid-July. The Company anticipates investing approximately $3 millions in the new subsidiary. Operations should commence at Deswell's Dongguan factory in mid-May. Mr. Richard Lau, Chief Executive Officer of Deswell, said, "The Dongguan subsidiary will provide critical expansion capabilities for Deswell at a significantly lower cost compared to our other factories by virtue of it being located slightly further inland. For example, we estimate saving 30% in rental and labor costs compared to what we pay at our Shekou facility." A separate management team will be established at the new subsidiary. Deswell's Shekou team will oversee the implementation of systems and provide software and technical support. Deswell manufactures injection-molded plastic parts and components and electronic products and subassemblies and metallic products for original equipment manufacturers ("OEMs") and contract manufacturers at its factories in the People's Republic of China. The Company produces a wide variety of plastic parts and components used in the manufacture of consumer and industrial products; printed circuit board assemblies using surface mount ("SMT"), and pin-through hole ("PHT") interconnection technologies; and finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals. The Company's customers include Mita Industrial (H.K.) Limited, Epson Precision (H.K.) Ltd., Namtai Electronics (Shenzhen) Co. Ltd., Inter-Tel Incorporated, Vtech Communications Ltd., Behringer Holdings (Pte) Ltd. and Shakespeare (H.K.) Limited. To learn more about Deswell Industries, Inc., please visit the Company's web site at www.deswellindustries.com. John Nesbett, ext. 303 |
