Document:

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                                                                    Exhibit 10.6

                          ACKNOWLEDGMENT AND AGREEMENT

         This is to acknowledge that I have received a copy of the Company's
Employee Handbook and understand that it sets forth the terms and conditions of
my employment as well as my duties, responsibilities and obligations toward the
Company. I understand and agree that it is my responsibility to read and
familiarize myself with the provisions of the Employee Handbook and to abide by
the rules, policies and standards set forth in the Employee Handbook.

         I also acknowledge that, except for the policies of at-will employment
and arbitration, the terms and conditions set forth in this handbook may be
modified, changed or deleted at any time without prior notice to me and other
employees provided such changes are in writing and approved by the President of
Company. Any agreement of any kind pertaining to my employment must be in
writing.

         I also acknowledge that my employment with Company is not for a
specified period of time and can be terminated at any time for any reason,
without cause or notice, by me or by the Company. I acknowledge that no
statements or representations regarding my employment can alter the foregoing.
As to the circumstances in which employment may be terminated, this is the
entire agreement between me and the Company; there are no oral or collateral
agreements of any kind. I agree to abide by the terms of the Employment,
Confidentiality, Assignment of Inventions, and arbitration Agreement executed by
me and the Company.

         I further agree, in accordance with the Company's Arbitration Policy,
that I will submit any dispute arising under or involving my employment with
Company or the termination of employment to binding arbitration within one year
of the date the dispute first arose. I agree that arbitration shall be the
exclusive forum for resolving all disputes arising out of or involving my
employment with Company or the termination of that employment. I agree that I
will be entitled to legal representation, at my own cost, during any such
arbitration. I further understand that I will be responsible for half of the
cost of the arbitrator and any incidental costs of arbitration.

                                           /s/ Jow H. Peng
                                       ----------------------------------------
                                                            Employee's signature

                                           Jow H. Peng
                                       ----------------------------------------
                                                       Employee's Name [printed]

                                       ----------------------------------------
                                                                           Date

NOTE TO THE EMPLOYEE: THE ORIGINAL OF THIS FORM WILL GO INTO YOUR PERSONNEL
FILE. A COPY OF THE FORM WILL BE SENT TO YOU BY THE HUMAN RESOURCES DEPARTMENT.

                                                                              26
<PAGE>

          EMPLOYMENT, CONFIDENTIALITY & INVENTION ASSIGNMENT AGREEMENT

         As a condition and in consideration of my employment with Integrated
Technology Express, Inc., its subsidiaries, affiliates, successors or assigns
(together the "Company"), I agree:

1.       AT-WILL EMPLOYMENT. MY EMPLOYMENT WITH THE COMPANY IS FOR AN
UNSPECIFIED DURATION AND IS "AT-WILL" EMPLOYMENT. MY EMPLOYMENT MAY BE
TERMINATED BY EITHER THE COMPANY OR BY ME AT ANY TIME, WITH OR WITHOUT GOOD
CAUSE OR FOR ANY OR NO CAUSE, WITH OR WITHOUT NOTICE.

2.       CONFIDENTIAL INFORMATION. At all times I will hold in confidence and
not use, except for the benefit of the Company, or disclose without prior
written authorization, any Company Confidential Information. "Confidential
Information" includes any and all proprietary information, trade secrets or
know-how acquired during my employment either directly or indirectly in writing,
orally or by observation, provided that Confidential Information does not
include matter which became publicly known and generally available in a lawful
manner. In addition, I will not improperly use or disclose any proprietary
information or trade secrets of any former or concurrent employer or of any
other, nor will I bring or keep any such information in any form on Company
premises or property.

3.       INVENTIONS.
         (a) INVENTIONS RETAINED AND LICENSED. I have attached as EXHIBIT A a
list describing all inventions, original works of authorship, protectible matter
and trade secrets in which I hold rights and which are not assigned to the
Company (collectively "Prior Inventions"); if no such list is attached, there
are no such Prior Inventions. I grant the Company a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made, modify, use, sell,
offer for sale, import, and otherwise distribute any Prior Invention which I
incorporate into any Company process, product and/or property.
         (b) ASSIGNMENT OF INVENTIONS. I will promptly make full written
disclosure and I assign to the Company, or its designees, all right, title, and
interest in and to any and all inventions, works of authorship, protectible
matter and trade secrets which during my employment I may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice (collectively "Inventions"), except as provided in
Section 3(f) below. All protectible works of authorship which are made by me
(solely or jointly with others) within the scope of and during my employment are
works made for hire," as that term is defined in the United States Copyright
Act.
         (c) MAINTENANCE OF RECORDS. I will maintain adequate and current
written records of all Inventions, and these records will remain with and belong
to the Company.
         (d) PATENT AND COPYRIGHT REGISTRATIONS. During and after my employment,
I will cooperate fully to secure, register and enforce the Company's rights in
the Inventions in any and all countries, including without limitation signing
appropriate documents. In and under all circumstances in which I fail to and/or
cannot execute such documents, I irrevocably designate and appoint the Company
and its designees as my agent and attorney, to execute and file any such
applications and do all other acts to further the prosecution, issuance and
enforcement of such registrations and rights.
         (e) EXCEPTION TO ASSIGNMENTS. I understand that the provisions of this
Agreement requiring assignment of Inventions to the Company do not apply to any
invention which qualifies fully under the provisions of California Labor Code
Section 2870, but nevertheless will promptly advise the Company in writing of
any inventions that I believe meet the criteria of such Section.
         (f) CONFLICT OF INTEREST, COMPANY EMPLOYEE MANUAL AND POLICY
GUIDELINES. During the term of my employment, I will strictly adhere to the
requirements of the Company Employee Manual, Conflict of Interest and all
applicable Company guidelines and policies.
         (g) RETURN OF COMPANY DOCUMENTS. Immediately upon the end of my
employment, I will deliver to the Company (and will not keep in my possession,
recreate or deliver to anyone else) any and all tangible items and reproductions
of information developed by me pursuant to my employment with the Company or
otherwise belonging to the Company, and will certify my compliance with this
requirement in writing.

                                      -1-
<PAGE>

         (h) NOTIFICATION. The Company may notify any third party, including
without limitation, any new or future employer, about my rights and obligations
under this Agreement.
         (i) SOLICITATION OF EMPLOYEES. For a period of twelve months
immediately following my employment, I shall neither directly nor indirectly
solicit, induce, recruit or encourage any Company employees to leave their
employment, nor will I attempt or assist any others to do so.

4.       ARBITRATION AND EQUITABLE RELIEF.
         (a) ARBITRATION. Except as provided in Section 4(b) below, any and all
disputes or controversies arising out of, relating to, or concerning this
Agreement, shall be settled exclusively by arbitration to be held in Santa Clara
County, California, in accordance with the rules then in effect of the Asia
Pacific Arbitration Association. The arbitrator may grant injunctions or other
relief in such dispute or controversy, and the arbitration shall include
provisions for protecting Company Confidential Information against disclosure.
The decision of the arbitrator shall be final, conclusive and binding on the
parties and judgment may be entered thereon in any court having jurisdiction.
The Company and I shall each pay one-half of the costs and expenses of such
arbitration, and each of us shall separately pay our counsel fees and expenses.
         THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ANY AND/OR
ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP (EXCEPT AS PROVIDED IN SECTION
4(B) BELOW), including, but not limited to, any and all claims for violation of
any federal, state or municipal statute, law and/or regulation, including, but
not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act of 1990, the Fair Labor Standards Act, the California Fair
Employment and Housing Act, and Labor Code Section 201, ET SEQ.
         (b) EQUITABLE REMEDIES. It would be impossible or inadequate to measure
and calculate the Company's damages from any breach of the covenants set forth
in sections 2 and/or 3. Thus, in addition to any other right or remedy and
without any requirement of a bond or security, if I breach any of such sections,
the Company will be entitled to an injunction from a court of competent
jurisdiction restraining such breach or threatened breach and to specific
performance.
         (c) CONSIDERATION. Each party's promise to resolve claims exclusively
by arbitration is consideration for other party's promise to do the same, and I
am offered employment in consideration of and based upon my promise to
arbitrate.

5.       GENERAL PROVISIONS.
         (a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement
will be governed by the laws of the State of California, and I hereby expressly
consent to the personal jurisdiction of the courts located in California for any
lawsuit filed there against me by the Company.
         (b) ENTIRE AGREEMENT. This Agreement sets forth, the entire agreement
and understanding between the Company and me relating to the subject matter
herein and merges all prior discussions between us. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
         (c) SEVERABILITY. If one or more of the provisions in this Agreement
are deemed void by law, then the remaining provisions will continue in full
force and effect.
         (d) SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.

/s/ Jow H. Peng
----------------------------------          -----------------------------------
Employee Signature                          Company Signature

Date:                Print Employee Name:      Jow H. Peng
      ----------                           ------------------------------------

                                      -2-
<PAGE>

                                    EXHIBIT A

                            LIST OF PRIOR INVENTIONS
                         & ORIGINAL WORKS OF AUTHORSHIP

<TABLE>
<CAPTION>

                                                     Identifying Number
Title                      Date                      or Brief Description
<S>                        <C>                       <C>

</TABLE>

      No inventions or improvements
----
      Additional Sheets Attached
----

Signature of Employee:
                       ------------------------------
Print Name of Employee:
                        -----------------------------
Date:
      ------------------------

NOTICE: CALIFORNIA LABOR CODE SECTION 2870 EMPLOYMENT AGREEMENTS; ASSIGNMENT OF
        RIGHTS PROVIDES:
         "Any  provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
         Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer.
         Result from any work performed by the employee for the employer.
         To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable."

                                      -3-<PAGE>
                                                                   Exhibit 10.7

[LOGO]                                           [LETTERHEAD]

August 18th, 1997

Jow H. Peng
44477 Parkmeadow Drive
Fremont, CA 94539

Dear Jow,

We have enjoyed talking with you and feel that your abilities and interests are
a good match for the needs of Integrated Technology Express, Inc. (ITE). We are
please to offer you the position of Director of Marketing-Communications
commencing October 1st, 1997.

Your salary for this position will be $134,000 per year. Subject to approval
from ITE's Board of Directors, you will be granted 80,000 shares (40,000 more
shares will be granted after one year employment with ITE, the vesting schedule
will be the same like the original 80,000 shares) of incentive stock option to
purchase common stocks of ITE at a price to be decided by ITE's board of
directors. For your reference the most recent stock option grants in March 1997
was priced at US$1.275 per share. The option is to be fully vested over four
years with a vesting schedule of 20%, 25%, 30% and 25% each year commencing
from the date of grant. Health and dental/vision insurance plan are also
available after 30 days waiting period.

This letter confirms your representation to us that (i) you are not a party to
any employment agreement or other contract or arrangement which prohibits your
full time employment with ITE (ii) you will not disclose any trade secret or
confidential information of any third party to ITE, and (iii) you do not know
of any conflict which would restrict your employment with ITE.

By accepting a position with ITE, you acknowledge that your employment is on an
at-will basis and for an unspecified duration. Neither this offer letter nor
any policy or procedure of ITE nor any other verbal representations shall
confer any right to continuing employment. Either ITE or you may terminate your
employment relationship at any time, with or without cause. You further
understand that neither job performance, promotions, accommodations, bonuses
and the like shall imply an obligation on the part of ITE to continue
employment.

The terms of this offer are considered confidential information to ITE and we
trust that you will treat it confidentially as between you and the Board of
Directors.

If you have any questions concerning this offer, please contact Helen Hsu
immediately at (408) 980-8168. If the terms of this offer are acceptable to
you, please contact me. If you accept our offer, please sign this offer letter
where indicated and return it to me at your earliest convenience.

We look forward to having you join the ITE team.

Very truly yours,

Integrated Technology Express, Inc.

/s/ Max Liu
--------------------------------------
Max Liu
Sr. Director, Communications Product Division         Accepted and agreed

                                                         By:  /s/ Jao Pang
                                                            --------------------

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