Election Form

Before submitting this Election Form, please make sure you have received, read and understand the documents that make up this offer, including: (1) the Offer to Exchange Certain Outstanding Options for New Options (the “Offer to Exchange”); (2) the related Cover Letter to Eligible Employees from Scott Howarth dated March 2, 2009; (3) this Election Form, including the instructions that follow; and (4) the Withdrawal Form. The offer is subject to the terms of these documents and expires at 5:00 p.m., Pacific Time, on April 1, 2009, unless extended.

Your eligible options are identified in a listing sent separately to you at work. If you have not received a listing by March 9, 2009, contact Thanh Ha immediately by e-mail at tha@issi.com.

If you wish to participate in the stock option exchange program, please check the appropriate box:


Grant Number(s):		Grant Date(s):

(attach additional sheet(s) if necessary)

BY PARTICIPATING, I AGREE TO ALL TERMS OF THE OFFER AS SET FORTH IN THE OFFER DOCUMENTS.

You may exchange outstanding options granted to you by ISSI under our 1998 Stock Plan, our Nonstatutory Stock Plan or our 2007 Incentive Compensation Plan with an exercise price greater than or equal to $6.00 per share for a lesser number of new options that will have an exercise price equal to the closing price on the exchange date, which is expected to be April 2, 2009. The number of new options you receive depends upon the number and exercise price of the eligible options submitted for exchange, as described in Section 3 of the Offer to Exchange. Your new options will be subject to the terms and conditions, including the vesting schedule, described in Section 10 of the Offer to Exchange. Vesting on any date is subject to your continued service to ISSI or one of its subsidiaries through each relevant vesting date. You will give up your rights to your current options that are exchanged for new options.

If you choose to participate in the offer, you must deliver to ISSI a properly completed Election Form before 5:00 p.m., Pacific Time, on April 1, 2009 by printing out an Election Form, completing it and delivering it to us via:

Only Election Forms that are properly completed and actually received by the deadline will be accepted. The delivery of the Election Form and any other required documents is at your risk. Delivery will be deemed made only when actually received by ISSI. In all cases, you should allow sufficient time to ensure timely delivery. We intend to confirm the receipt of your Election Form by e-mail within two (2) U.S. business days. If you have not received such an e-mail confirmation, it is your responsibility to ensure that your Election Form has been received. Election forms submitted by any other means than those set forth above, including interoffice or U.S. mail (or other post) and Federal Express (or similar delivery service), are not permitted.

Our receipt of your Election Form is not by itself an acceptance of your options for exchange. For purposes of the offer, we will be deemed to have accepted options for exchange that are validly submitted and not properly withdrawn as of when we give oral or written notice to the option holders generally of our acceptance for exchange of such options, which notice may be made by press release, e-mail or other method of communication. ISSI will not accept any alternative, conditional or contingent submission of options for exchange. Although it is our intent to send you an e-mail confirmation of receipt of this Election Form, by completing and submitting this Election Form, you waive any right to receive any notice except as provided for in the Offer to Exchange. Any confirmation of receipt sent to you will merely be a notification that we have received your Election Form and will not mean that your options have been accepted for exchange.

You may select which eligible options you wish to exchange on a grant by grant basis. If you want to exchange options covered by a particular grant, you must submit for exchange all the options covered by that grant. If you already have exercised a portion of an eligible option, your election will apply to the portion that remains outstanding and unexercised. However, if an eligible option is subject to a domestic relations order (or comparable legal document as the result of the end of a marriage), only the portion (and it must be the entire portion) beneficially owned by the eligible employee may be submitted for exchange.

You can later choose not to exchange some or all of the options you previously selected for exchange at any time before 5:00 p.m., Pacific Time, on April 1, 2009, or any later expiration date if ISSI extends the offer beyond that time. In addition, although ISSI currently intends to accept your validly submitted options for exchange promptly after the expiration of the offer, if we have not accepted your options by 5:00 p.m., Pacific Time, on April 29, 2009, you may withdraw submitted options at any time thereafter.

To withdraw some or all of your options previously submitted for exchange you must properly submit a Withdrawal Form as specified in the instructions to the Withdrawal Form. If you again change your mind and wish to exchange some or all of your eligible options, you must properly submit another Election Form before the expiration date. You will be bound by the last properly submitted Election Form or Withdrawal Form we receive prior to the expiration date.

Election Forms submitted via e-mail, fax or hand delivery must be signed by the employee holding the options or another person with the legal authority to act on behalf of the employee. The signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever. If your name has been legally changed since your option agreement was signed, please submit proof of the legal name change. Your signature and submission of the Election Form indicates that you have read and agreed to the terms of the Offer to Exchange Certain Outstanding Options for New Options as set forth in the offer documents provided.

If this Election Form is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and proper evidence satisfactory to ISSI of the authority of that person to act in that capacity must be submitted with this Election Form.

In addition to signing this Election Form, you must print your name, legal name (if different than the name you use), date, department in which you work and your current e-mail address.

Any questions and any requests for copies of the Offer to Exchange or other forms may be directed to Thanh Ha by e-mail to tha@issi.com. Copies will be furnished promptly at ISSI’s expense.

We will determine, in our discretion, whether options have been validly submitted for exchange in this offer, including the time of receipt of election and Withdrawal Forms. Our determination will be final and binding on all parties. We reserve the right to reject any Election Form that we determine is not in appropriate form or any options submitted for exchange that we determine are unlawful to accept. We will accept for exchange all validly submitted options that are not subsequently and validly withdrawn. We also reserve the right to waive any of the conditions of the offer or any defect or irregularity in any submission of any particular options or for any particular option holder, provided that if we grant any such waiver it will be granted with respect to all option holders and options submitted for exchange. No options will be deemed to have been properly submitted for exchange until all defects or irregularities have been cured by the employee or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities, nor will anyone incur any liability for failure to give any notice. This is a one-time offer, and we will strictly enforce the expiration of the offering period, subject only to an extension that we may grant in our discretion.

In addition to the documents making up this offer, you should be sure to read the other documents referenced in the Offer to Exchange before deciding to participate in this offer.

If you are subject to taxation in the United States, you should refer to Section 15 of the Offer to Exchange, which contains important tax information. If you are subject to taxation or social insurance contributions in China or Taiwan, you should refer to Schedule C of the Offer to Exchange, which contains important tax and social insurance information. We strongly recommend that you consult with your personal financial, legal and/or tax advisors with respect to the federal or non-U.S., state and local tax consequences of participating or not participating in this offer.




Employee Signature				Date


Employee Name (please print)				Employee ID Number


Legal Name, if different (please print)				E-mail Address