spectacular announcement

For immediate release 9 January 2008
Arasor acquires Novalux to leverage JV with ZTE in China

Arasor International Ltd. (ARR.AX) has acquired the assets of California based
Novalux Inc to leverage Arasor’s recently announced joint venture with ZTE in China.
The acquisition, accomplished through the issuance of USD$7m in ARR stock and the
assumption of debt, will allow Arasor to take further control of the laser display and
projection value chain enabling Arasor to:

- Double its revenue from the display market as light engines can contain up to
three Novalux laser chips and three Arasor optical chips
- Secure Seiko Epson, Young Optics, Oerlikon and other customers via
exclusive licenses as Arasor now owns the complete light source solution for
laser TV
- Stimulate the display market with critical manufacturing infrastructure, funded
with capital from the ZTE joint venture, for the $110 billion display market
- Quickly secure a team of employees with vast experience in laser display and
related technologies.

By acquiring Novalux’s assets, Arasor can now provide an end-to-end solution in the
manufacture of light sources in the nascent laser display industry in order to realize
the full potential of its joint venture with ZTE in China for the manufacture of light
sources and light engines.

This acquisition underpins Arasor’s business strategy as it now means the company
can control the growth of the sector, limit competition and margin pressure while
doubling revenue potential from higher margin products.

Novalux was founded in 1998 on the back of the telecommunications boom to provide
lasers for both telecommunications and display. These early telecom years and over
USD$150M in venture capital to date have provided Novalux with a valuable legacy: a
state-of-the art gallium arsenide semiconductor fabrication facility in the heart of
Silicon Valley, and stringent Telcordia qualification.

Novalux’s patented platform, called “Necsel,” enables devices such as laser TV, laser
pocket projectors and laser cinema projectors. The company had been funded by a
significant amount of venture capital from investors, including Oerlikon Optics (an


Arasor customer and light engine manufacturer for a number of the world’s largest
television brands), Morgan Stanley Ventures and Crescendo Ventures.

Arasor chief executive Dr Simon Cao says, “The acquisition continues to move us
towards our goal of being a world leading innovator and manufacturer of technology
that enhances the performance of many types of electronic equipment.

“With our recently announced joint venture with ZTE, Arasor has control of the value
chain, path to market and significant external capacity to finance the growth of the
laser display market well into the next decade.

“We have experienced unprecedented growth in telecommunications products and
2008 will see the scale-up of our consumer division to satisfy demand. With the
imminent release of laser TV’s, we are excited to be able to provide a complete light
source solution for the major brands and the ZTE joint venture. This significantly
increases our earnings potential and our ability to negotiate with large global
customers.

“Most importantly, no other company will be able to provide this unified solution, Dr
Cao says”

A majority of the shares will be escrowed up to 12 months. The direct financial impact
of the approximately $20m transaction will be discussed in Arasor’s annual financial
reports to the marketplace in February 2008.


About Laser Display Technology

At the heart of all microdisplay-based projection systems is the light engine—the most
common are branded under the DLPTM or 3LCDTM categories, and several LCOS
varieties are also popular. The engine is the set of optics and electronics that
illuminates and projects red, green and blue (RGB) light onto the screen.

Novalux Necsel lasers incorporate Arasor optical chips to create the red, green and
blue light for laser display. Laser and optical chip sets simplify all types of light
engine configurations, reducing system cost. They allow smaller light engines,
shrinking overall unit size. And they enhance performance, enabling a brighter, more
colorful, and more efficient display product.

Replacing traditional lamps and optics within a light engine with laser and optical chip
sets enables laser displays that:
- are brighter
- are more colorful
- are more reliable
- use less power
- highly scaleable using wafer-based chip manufacturing