Pixelplus Reports Financial Results for Fiscal Fourth Quarter 2008

SEOUL, South Korea, June 29 /PRNewswire-FirstCall/ -- Pixelplus Co., Ltd.
(Pink Sheets: PXPLY), a fabless semiconductor company in Korea that designs,
develops, and markets CMOS image sensors for various consumer electronics
applications, today announced unaudited financial results for the fourth
quarter of fiscal 2008, which ended on December 31, 2008.

Based on these unaudited results of operations which were prepared in
accordance with Korean GAAP on a non-consolidated basis, revenue for the
fourth quarter of fiscal 2008 was 4.5 billion Korean won (US$3.6 million),
compared to 4.5 billion Korean won (US$3.6 million) in the third quarter of
fiscal 2008, and 4.1 billion Korean won (US$3.2 million) in the fourth quarter
of fiscal 2007.

Net loss in the fourth quarter of fiscal 2008 was 5.8 billion Korean won
(US$4.6 million), or a net loss of 1,706 Korean won(US$1.40) per diluted ADS,
compared to a net loss of 3.3 billion Korean won (US$2.6 million), or a net
loss of 977 Korean won(US$0.80) per diluted ADS, in the third quarter of
fiscal 2008, and a net loss of 4.2 billion Korean won (US$3.3 million), or a
net loss of 1,262 Korean won(US$1.00) per diluted ADS, in the fourth quarter
of fiscal 2007.

Revenue for fiscal 2008 was 16.2 billion Korean won (US$12.8 million),
compared to 17.3 billion Korean won (US$13.7 million) for fiscal 2007. Net
loss for fiscal 2008 was 13.9 billion Korean won (US$11.0 million), or a net
loss of 4,110 Korean won(US$3.30) per diluted ADS, compared to a net loss of
7.9 billion Korean won (US$6.3 million), or a net loss of 2,433 Korean
won(US$1.90) per diluted ADS, for fiscal 2007.

The Company sold roughly 7.3 million image sensors in the fourth quarter of
2008, which represented a decrease of about 0.1 million from its sale of
around 7.4 million units in the third quarter of 2008. Further, the Company
sold approximately 26.1 million image sensors in fiscal 2008, which
represented an increase of about 14.5 million units from its sale of roughly
11.6 million image sensors in fiscal 2007. Separately, the Company furnished
approximately 0.4 million image sensors arising from its supply of services to
a leading Japanese module maker in the fourth quarter of 2008, and provided
over 3.4 million image sensors arising from its supply of services to this
Japanese module maker in fiscal 2008. So, in terms of combined figures, the
Company sold and supplied a total of about 7.7 million image sensors in the
fourth quarter of 2008 and a total of roughly 29.5 million image sensors in
fiscal 2008.

Gross margin for the fourth quarter of fiscal 2008 was 4.6%, compared to 15.3%
in the third quarter of fiscal 2008. The Company's lower-than-expected gross
margin was mainly due to its greater-than-expected decrease in the average
selling price of its image sensors sold in the fourth quarter of 2008. In
addition, the Company's lower-than-expected gross margin was attributed to its
greater-than-anticipated decrease in the total number of VGA image sensors
sold in the fourth quarter of 2008, which caused the Company to incur excess
inventory of those sensors and sustain a valuation loss of 600 million Korean
won(US$470,000) arising from that excess inventory.

The U.S. dollar amounts disclosed in this press release are presented solely
for the convenience of the reader, and have been converted at the rate of
1,262 Korean won to one U.S. dollar, which is the noon buying rate of the U.S.
Federal Reserve Bank of New York in effect on December 31, 2008. Such
conversions should not be construed as representations that the Korean won
amounts represent, have been, or could be, converted into, U.S. dollars at
that or any other rate.

"We are confident that the Company's complete and successful transition to our
SoC image sensors based on PlusPixel2(TM) technology will enable us to achieve
our goals, and we will continue to dedicate all of our efforts and energies on
achieving our long-term growth targets and business strategies through
developing new products, entering new markets, and securing new design wins,"
said Dr. S.K. Lee, CEO and Founder of Pixelplus. "Steadily growing demand for
our third generation image sensors based on PlusPixel2(TM) technology is
expected to positively affect the Company's results of operations, based on
the assumption that current order flows continue. Our cutting-edge products,
including our PO4010 CIF 'System-on-a-Chip' or 'SoC', PO6030 VGA SoC, and
PC1030 NTSC/PAL image sensors, as well as our PM1002, which is the Company's
SoC processor for various image recognition applications, continue to perform
in line with our expectations, and we have more products in various stages of
development and deployment than ever in our history. In addition, we are very
encouraged that we continue to effectively manage our operating expenses, and
believe this demonstrates that we have significantly lowered our breakeven
point over the course of the last few quarters. We also continue to develop
our core strategic business with first and second-tier mobile camera phone
manufacturers in Korea, with key distributors as well as manufacturers of
security and surveillance applications and notebook embedded cameras in China,
Hong Kong, and Taiwan, and with a leading module marker in Japan through our
co-development of image sensors, and we will do everything possible to ramp
new sources of revenue in moving forward. We are encouraged by our prospects
and expect to steadily improve our growth and return to profitability in the
second half of 2009 fueled by the strength of our new product line, as well as
growth within the mobile, security and surveillance, and automotive
applications markets which is expected to continue and ramp gradually upward
in 2009."

Pixelplus will separately issue an announcement to discuss the Company's first
quarter 2009 results on or before July 31, 2009.

Korean GAAP
The financial results mentioned in this earnings release were prepared and
presented in accordance with Korean GAAP on a non-consolidated basis.
Significant differences exist between Korean GAAP and U.S. GAAP, including
accounting principles with respect to the consolidation of financial results
of any subsidiary, which might be material to the non-consolidated financial
information provided in this release.

About Pixelplus Co., Ltd.
Pixelplus is a South Korea-based developer of high-performance,
high-resolution, and cost-effective CMOS image sensors for use primarily in
mobile camera phones. In addition to mobile phones, Pixelplus provides CMOS
image sensors and SoC solutions for use in webcams and notebook embedded
cameras, toys and games, and security and surveillance system applications.

As a fabless semiconductor company, Pixelplus is focused on creating
proprietary design technologies to develop CMOS image sensors with sharp,
colorful and enhanced image quality, size efficiency, and low power
consumption.

Forward Looking Statement
This earnings release contains certain statements that are not historical in
nature but are "forward-looking statements" within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally can be identified by the use of
forward-looking terminology, such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe," "project," or "continue" or the negative
of such words or other similar words. Pixelplus cautions readers that
forward-looking statements are based on the Company's current expectations,
estimates and assumptions about our company and our industry, and are subject
to a number of risks and uncertainties. Actual results may differ materially
from those contained in such forward-looking statements. Investors are
directed to Pixelplus' reports and documents filed from time to time with the
U.S. Securities and Exchange Commission for a description of various factors
that should be considered before investing in Pixelplus' securities. These
factors may cause Pixelplus' results to differ materially from the
forward-looking statements made in this release. The forward-looking
statements speak only as of the date of this earnings release and Pixelplus
assumes no duty or obligation to update them to reflect new, changing, or
unanticipated events or circumstances. The financial results for the fourth
quarter of 2008 contained in this document have not been audited by Pixelplus'
independent registered public accountants.
Contact:

Shane Y. Hong
Pixelplus Co., Ltd.
6th Floor, Gyeonggi R&DB Center
906-5 Iui-dong, Yeongtong-gu
Suwon-si, Gyeonggi-do, 443-766
Republic of Korea
+82-31-888-5300

OR

Taylor Rafferty:
London - Emilia Whitbread at +44 (0) 20 7614 2900
New York - Jessica McCormick at +1 212 889 4350
E-mail pixelplus@taylor-rafferty.com

Pixelplus Co., Ltd.
Non-Consolidated Statements of Operations
(In millions of Korean won, except per ADS data)
(unaudited)

THREE MONTHS ENDED YEAR ENDED
Dec. 31, Dec. 31 Dec. 31, Dec. 31,
2008 2007 2008 2007

Revenues 4,514 4,059 16,196 17,284
Products 4,173 3,852 15,270 12,836
Services 341 207 925 4,448

Cost of revenues 4,306 4,159 14,725 15,274
Products 4,289 4,139 14,608 14,200
Services 16 20 117 1,074

Gross profit 209 (99) 1,471 2,010

Operating expenses 3,540 3,451 13,452 12,395
Selling, general and
administrative 2,858 2,010 9,244 6,896
Research and
development, net of
government grants 682 1,440 4,208 5,500

Income(loss) from
operations (3,331) (3,550) (11,982) (10,385)

Other income(expense)
Interest
income(expense), net (154) 71 (241) 239
Foreign exchange gain
(loss), net (612) 46 (618) 110
Others, net (854) (76) (312) 2,817
Income(loss) before
income taxes (4,951) (3,509) (13,153) (7,219)
Income tax expenses - - - -
Income(loss) before
gain(loss) from
equity method
investments, net and
minority interest (4,951) (3,509) (13,153) (7,219)
Gain(loss) from equity
method investments,
net (857) (696) (773) (696)
Minority interest
Before cumulative
effect of change in
accounting principle (5,808) (4,205) (13,925) (7,914)
Cumulative effect of
change in accounting
principle - - - -
Net Income (loss) (5,808) (4,205) (13,925) (7,914)
======= ======= ======== =======

Accretion of preferred
shares - - - -
Net income(loss)
attributable to
common shareholders (5,808) (4,205) (13,925) (7,914)
======= ======= ======== =======
Income(Loss) per ADS
- basic and diluted (1,706) (1,262) (4,110) (2,433)
ADSs used in computing
Income(loss) per ADS 3,403,433 3,332,537 3,388,461 3,253,317
- basic and diluted

Pixelplus Co., Ltd.
Non-Consolidated Balance Sheets
(In millions of Korean won, except per ADS data)
(Unaudited)

Dec. 31, 2008 Dec. 31, 2007
Assets
Cash and cash equivalents 93 317
Restricted cash 5,000 6,002
Accounts receivable, net 2,080 3,165
Inventories, net 2,225 1,424
Other current assets 905 1,868
Total current assets 10,303 12,775

Other non current assets 6,126 6,221

Total assets 16,429 18,996
====== ======

Liabilities, minority interest
and Shareholders' equity
Trade accounts payable 3,574 542
Other accounts payable 2,029 682
Short-term borrowings 8,460 5,617
Other current liabilities 2,380 1,137
Total current liabilities 16,443 7,978

Long-term borrowings 2,272 -
Other non current liabilities 811 422
Total liabilities 19,525 8,400

Shareholders' equity
Common stock 3,403 3,333
Additional paid-in capital 7507 38,338
Accumulated other comprehensive loss (81) (99)
Accumulated deficit (13,925) (30,976)
Total Shareholders' equity (3,096) 10,596
Total liabilities, minority
interest and Shareholders' equity 16,429 18,996
====== ======

The Company's functional currency on its financial statements is the Korean
won. Please note that the numbers specified for the fiscal year 2007 in the
consolidated financial statements provided in the Company's Form 20-F, which
were converted at the rate of 935.8 Korean won to one U.S. dollar in effect on
December 31, 2007, are different from the numbers specified for the fiscal
year 2007 in the above non-consolidated financial statements which were
prepared in accordance with Korean GAAP.

SOURCE Pixelplus Co., Ltd.

Shane Y. Hong, Pixelplus Co., Ltd., +82-31-888-5300; or London, Emilia
Whitbread, +44(0)20-7614-2900, or New York, Jessica McCormick,
+1-212-889-4350, pixelplus@taylor-rafferty.com, both of Taylor Rafferty, for
Pixelplus