March 2007

The outlook for MEMS growth and some established MEMS suppliers is bullish. Worldwide sales of MEMS devices totaled $5.26 billion in 2005, and sales are expected to sustainably grow 15-20% annually over the next five years. These opportunities are spawning new divisions within existing companies and scores of startups - mostly fabless companies.

Many of these new entrants hope to target the same market "sweet spots" for low-cost, high-volume standard MEMS products that can generate sales in the tens of millions of devices. These markets include sensors for automotive applications and for disposable medical products, inertial devices, microphones for electronic gadgets and resonators for time bases. Competition in these markets will intensify and increase pressure on both profitability and the staying power required to serve customers for 10 to 20 years.

Tronics is uniquely differentiated from these increasingly crowded segments. We have forged a different path since our founding nearly a decade ago by focusing exclusively on fully custom-MEMS components. We have a proven record of producing unique MEMS devices for specific, demanding applications - devices that our customers can envision, but cannot acquire on the market.

In short, we are firmly focused on growing by constantly improving our core competency. We collaborate with and guide our customers from start to finish, and commit to relationships that will serve and support their needs for the long term.

The MEMS industry historically has struggled to attain profitability, which raises concerns for customers, who need a partner that can deliver high-quality MEMS and ensure long-term relationships. Tronics is traveling its own path to profitability, based on our precise and well-developed strategy, a cost-effective business model that supports that strategy and reliable and rigorous execution of what we do best.

Our recognized leadership in the specialized segment of custom MEMS, our continued growth and our ongoing investments in advanced manufacturing, packaging and testing capabilities underscore Tronics' stability and commitment for years to come.

My team and I look forward to discussing your needs and ideas for custom MEMS components.

Sincerely yours,

Peter Pfluger, CEO