PSE Circular for Brokers No. 195-00

January 27, 2000 PSE CIRCULAR FOR BROKERS NO. 195-00 January 27, 2000 The Philippine Stock Exchange Textite Building, Exchange Road Ortigas Center, Pasig City Attention : Listing and Compliance Dept . RE : Music Vaults to Leadership Position in Network Processor Market Gentlemen: David Walls, President of MUSIC Semiconductors, Inc. the wholly-owned Networking Subsidiary of MUSIC Corporation based in San Jose, California, U.S.A. and a leading supplier of networking semiconductors, announced the acquisition of innovative Technology, LLc. a pioneer in network processing and switching technology. Innovative Technology has filed for a number of patents related to its unique packet switching technology incorporated into MUSIC's Allegro Family of products. These products are based around the most cost effective high performance gigabit switching architecture available today, supporting 16 gigabit times. The Allegro Network Processor combined with the Allegro Switch Fabric provides an 8 to 128 port scalable programmable packet processing solution supporting layers 2 thru 7. MUSIC's acquisition of innovative will allow it to rapidly expand its penetration into the fast growing $6.4 billion switch and routes market place. Together with MUSIC's address processing and memory products the merger of these unique technologies will further facilitate MUSIC to other industry giants like Cisco Systems, Nortal Networks and Lucant Technology, highly integrated semiconductors (System on a Chip) which will reduce cost and time to market for these customers. Such products form the cornerstone of MUSIC's drive into the network processing and switching market and are expected to begin contributing significantly to MUSIC's revenues by 2001. In accordance with US GAAP, the cost at the acquisition, classified as if it to Purchased R & D, has been expensed in December 1999. (SGD.) MICHAEL BURTON Chief Executive Officer