Company OverviewDec., 2004

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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

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Matrix Company Profile

Management TeamDennis 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

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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.

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

Memory CellArray

Support Circuits

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Why Build 3-D Chips?

Using techniques from LCD manufacturing, Matrix builds active circuits above the Si surface in layers of deposited Polysilicon.

Using techniques from LCD manufacturing, Matrix builds active circuits above the Si surface in layers of deposited Polysilicon.

Polysilicon Memory CellArray

Support Circuits

Building Cells Above the Silicon Surface

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Why Build 3-D Chips?

The benefit of using deposited Polysilicon is that you can easily add more layers.

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

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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 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

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A Matrix 3-D Memory IC

3-D Construction Enables Higher Density at Low Cost3-D Construction Enables Higher Density at Low Cost

3-D Cell Arrays

Support Circuits

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Matrix 3-D Memory

Industry’s Highest Density Memory

Technology

Industry’s Highest Density Memory

Technology

Smallest Die Sizes for High Capacity Data

Storage

Smallest Die Sizes for High Capacity Data

Storage

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Matrix 3-D Memory

• Standard CMOS Process Techniques• No New Materials• No New Equipment

Matrix IP Inventory

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Pending Applications End of Quarter

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Cumulative Patents

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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

Ideal Feature Set for Mass Market Digital MemoryIdeal Feature Set for Mass Market Digital Memory

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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.

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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

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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

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ons

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nits

2001 2002 2003 2004 2005 2006

Growth of Enabled Slots

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Consumable Blank Media

Digital applications need a consumable media optionCurrently, Digital Camera = PC peripheralMass 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 availableProvides 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)Consumables sell in the billions of units (~3B 35mm rolls of film per year)

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Market Opportunity

Nonvolatile data storage growing at 37% CAGR over next 5 years Reaches $16 Billion by 2007

Semico

Nonvolatile Memory Revenue Forecast - Data Storage (NAND flash, MROM, EPROM, EEPROM)

$3,444$4,435

$5,801

$8,334

$16,311

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

2002 2003 2004 2005 2006Year

Reven

ues W

orl

dw

ide (

$

Bil

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ns)

With its cost and density advantages, Matrix 3-D Memory can address a significant share of these markets

With its cost and density advantages, Matrix 3-D Memory can address a significant share of these markets

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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

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Business Model

Gross Margin 30-40%

R&D 10-12%

SG&A 8-10%

Operating Income 15-20%

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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