01 Company Overview Dec 04

Slide1: 

Company Overview Dec., 2004

Matrix Semiconductor:Commercializing 3-D Integrated Circuits: 

Matrix Semiconductor: Commercializing 3-D Integrated Circuits Technology: Breakthrough Technology First high-volume approach to building ICs in three dimensions Producing ultra-dense, low-cost chips Products: Combining new value with backward compatibility Lowest price points for high density, field programmable memory 100 year archival storage Compatible with existing memory card formats Markets: Large, High Growth Consumer Applications Pre-recorded content for a wide array of portable electronics Consumable blank media for personal data storage (pictures, music, video, etc.) Partnerships: Coming to Market with Established Leaders Fabless manufacturing via TSMC, Amkor, Source Electronics Market entry via leadership brands

Slide3: 

Matrix Company Profile Management Team Dennis Segers CEO & President Matt Crowley VP Product Development Geoff Ribar CFO Siva Sivaram COO Dan Steere VP Sales & Marketing Liza Toth VP Intellectual Property Board of Directors Arjun Gupta Atiq Raza Bruce Dunlevie Mark Evans Dr. Mike Farmwald Prof. Tom Lee Bill Ruehle Dennis Segers Tom Goodrich Investors

Aren’t All ICs 3-D?: 

Aren’t All ICs 3-D? Strip away the multiple layers of interconnect & all ICs are 2-D. All active circuits are confined to the surface of the silicon wafer. Typical Memory IC

Why Build 3-D Chips?: 

Why Build 3-D Chips? Using techniques from LCD manufacturing, Matrix builds active circuits above the Si surface in layers of deposited Polysilicon. Polysilicon Memory Cell Array Support Circuits Building Cells Above the Silicon Surface

Why Build 3-D Chips?: 

Why Build 3-D Chips? The benefit of using deposited Polysilicon is that you can easily add more layers. Instead of having all of the memory cells spread out on a single 2-D plane… Support Circuits Building Cells Above the Silicon Surface

Why Build 3-D Chips?: 

Why Build 3-D Chips? We have now moved the cell arrays above the silicon surface and can move much of the support circuitry under the array. …we can divide up the cells into multiple, smaller layers. Support Circuits 3-D Cell Array

A Matrix 3-D Memory IC: 

A Matrix 3-D Memory IC 3-D Cell Arrays Support Circuits

Matrix 3-D Memory: 

Matrix 3-D Memory

Matrix 3-D Memory: 

Matrix 3-D Memory Standard CMOS Process Techniques No New Materials No New Equipment

Matrix 3-D Memory: 

Matrix 3-D Memory High-Density Nonvolatile Memory (NVM) Lowest cost per bit available Currently shipping 128Mb – 512Mb Field-Programmable Archival Life > 100 years Compatible with Existing Standards Fits in millions of existing slots Specs optimized for use in standard digital devices

Initial Target Markets: 

Initial Target Markets Pre-recorded Content Distribution Game cartridges and cards Kid’s Video Record albums Software applications and updates Consumable Blank Media Consumable memory cards for digital cameras, MP3 players, PDAs, cell phones, etc.

Portable Games & Video Entertainment: 

With Mask ROM, programming is done during wafer construction: Requires long forecasts and large minimum commitments Revenue hit from both over- and under-supply Matrix offers: Lower cost memory Higher density for advanced functionality Ability to program close to sale to optimize sales mix Reduced inventory costs and risks Portable Games & Video Entertainment

Slide14: 

Content for a Growing Base of Wireless Devices PDA, cell phone & gaming markets are growing rapidly. Expansion slots are becoming standard. Selling content for these applications – games, maps, dictionaries, music, software, etc. – viewed as strategic revenue opportunity by CE suppliers. Source: IDC, Semico, Garmin, Magellan

Consumable Blank Media: 

Consumable Blank Media Digital applications need a consumable media option Currently, Digital Camera = PC peripheral Mass market penetration requires an easy, affordable media alternative Matrix 3-D Memory enables media that is convenient, affordable, and secure Bought like film or CDs in multi-packs at checkout, extra capacity is always available Provides an automatic high-quality archive, protecting against accidental erasure, hard drive crashed, viruses, etc. Consumables sell in the billions of units (~3B 35mm rolls of film per year)

Market Opportunity: 

Market Opportunity Nonvolatile data storage growing at 37% CAGR over next 5 years Reaches $16 Billion by 2007 Semico With its cost and density advantages, Matrix 3-D Memory can address a significant share of these markets

Highly-Focused Business Model: 

Highly-Focused Business Model Hands-on Development with Fabless Manufacturing Local Process R&D through partnership with Cypress Semiconductor Production wafer fabrication at TSMC Production test & packaging at Amkor Content programming services through Source Electronics Benefit from $Billions Invested in Silicon and IC Development Partner with the fabless leaders gaining access to their infrastructure, resources, and experience Ramp quickly to high volume and scale with the rest of the industry Come to Market Under the Most-Recognized Consumer Brands Matrix will be a memory company, not a consumer products company Focus on Technology and Product Development Limit overhead by outsourcing all functions that are not core-competency Matrix retains ownership of all intellectual property

Business Model: 

Business Model Gross Margin 30-40% R&D 10-12% SG&A 8-10% Operating Income 15-20%

Current Status : 

Current Status Our core technology is proven Reliable Archival Manufacturable Supported by over 85 US patents issued and >125 pending 2nd Generation product started production in July 2004 Over 2 Million units shipped into retail applications Quality proven at some of the best electronic companies in the world Strong and growing customer list and backlog We plan on achieve profitability during the second half of 2005