Q1 Memory Update

DRAM Changes – 2 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Electronic Equipment Factory Production  Consumption of end market equipment will define semiconductor growth in 2005  Mobil handset and PC consume in excess of 32 percent of all semiconductor components  Consumer Electronics remains fastest growing end use application at 12.5 percent Equipment Drives Growth Key Equipment Categories Source – iSuppli Corporation

DRAM Changes – 3 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Semiconductor Cycles Remain Alive  Industry analysts view 2005 significantly different based on market applications  Amplitude of cycles may be declining but frequency of “boom” and “bust” cycles continues to shorten  iSuppli forecast for 2005 is 6.2% 2005 iSuppli Forecast Source – iSuppli Corporation

DRAM Changes – 4 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Memory Market Forecast NAND Flash is the fastest growing segment : Opportunity  DRAM: $27B (2.2% over 2004 CAGR 04-09: 5.0%)  NAND: $7.1B (7% over 2004 CAGR 04-09: 16%)  NOR: $8.2B (-0.5% over 2004 CAGR 04-09: -2.2%) Source – iSuppli Corporation

DRAM Changes – 5 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending DRAM and NAND Bit Shipment & ASP Growths  NAND Bit Growth will slow down to DRAM level by 2009  NAND ASP decline will be more severe than DRAM ASP by 2009 Source – iSuppli Corporation

DRAM Changes – 6 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Worldwide DRAM Market Forecast  DRAM revenue will increase slightly in 2005 and will decline in 2006 Source – iSuppli Corporation

DRAM Changes – 7 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending 12-Inch DRAM Lines Are Overtaking 8-Inch  12-inch wafers will represent 55% of worldwide DRAM supply in 2006  Price decline will be significant in 2006  Most new 12-inch fabs from tier-one DRAM suppliers will produce NAND as well as DRAM 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percentage $0.000 $0.005 $0.010 $0.015 $0.020 $0.025 $ Inch PortionLess Than or Equal To 0.95-MicronMbit Price Source – iSuppli Corporation

DRAM Changes – 8 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending TAM: Technology and density  2005 is the cross-over year for 512Mb and DDR2  DDR2 and 512Mb premiums will be limited in 1H 2005  DDR3 adoption will be faster than 1Gb density unlike 512Mb & DDR2,where 512Mb was faster.

DRAM Changes – 9 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending TAM: DRAM Modules  Worldwide DRAM module market 2005: $21.7B  OEM modules represent 58% of the total market followed by white box (29%) and upgrade modules (13%)  Major module density will still be 256MB in 2005 and 2006  FBDIMM will capture 13% (2006) and 40% (2007) of total OEM server segment

DRAM Changes – 10 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Commodity and Legacy DRAM Margin Trend  128Mb SDRAM and 256Mb DDR are profitable DRAM  Decreasing legacy SDRAM prices squeezed margins during the quarter  iSuppli believes that 16Mb SDRAM profit margin has been negative since Q Source – iSuppli Corporation

DRAM Changes – 11 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Structural Change in Memory Market Two groups of suppliers  Product Diversification Group - Samsung, Hynix, Micron, Infineon  Commitment and Focus Group - Taiwan Memory Suppliers and Japanese Memory Suppliers - Taiwan Memory Suppliers : Foundry allocation Standard Deviation of OP margins (01-05E) – Samsung: 5.1% – Infineon: 12.8% – ProMos:28.6% – Micron: 29.6% – Hynix: 32.6% – Powerchip 35.6% – Nanya:39.9% Source – iSuppli Corporation & financial reports

DRAM Changes – 12 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending DRAM Suppliers’ 2004 Operational and Financial Risk 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0%10%20%30%40%50%60% Samsung Powerchip Micron Infineon Nanya Hynix (85%,33%) DRAM OP Margin Debt/Equity Ratio Promos Elpida  Samsung’s debt is nearly zero in 2004  Hynix debt-to-equity is 85% Source – iSuppli Corporation & financial reports

DRAM Changes – 13 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Suppliers Growth Risk  Samsung & Infineon: Big market shares and growing fast  Promos & Powerchip: Small market shares but growing fast  Hynix & Micron: Big market shares but growing slowly  Diversifying products  Elpida & Nanya: Small market shares and growing slowly  Stuck 0% 5% 10% 15% 20% 25% 30% Current Market Share Samsung Infineon Hynix Micron Powerchip ProMos Nanya Elpida Current Growth Potential Growth Decreasing Growth Stuck Indexed Bit Growth Rate 1.0 = 45% 3 yr CAGR Avg share Source – iSuppli Corporation

DRAM Changes – 14 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Handset Memory Update (Working RAM+Flash)  DRAM penetration is still limited in handsets as OEMs are still not sure about LPDRAM demand.  iSuppli expects that LPDRAM demand will increase starting from 256Mb density. (11% in 2004  37% in 2009 of total RAM market in handset)  NAND revenue will still represent small percentage of total market for Flash in handsets  Decreasing NOR price makes OEMs hesitate to covert to NAND  NOR + DRAM solution will be popular in the near future Source – iSuppli Corporation

DRAM Changes – 15 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Near Term Market Forecast  Q  Near term market condition is still negative. However,prices will rebound during the second quarter as suppliers will resist prices being under cost. 512Mb DDR2 prices will hit the bottom in the third quarter  256Mb DDR will have very high price pressure (could drop below $2)  DDR2 and 512Mb premiums will be reduced  2H 2005  DDR2 and 512Mb mix will increase overall 256Mb equiv ASP from Q2 ASP  Suppliers’ 90nm migration and PC demand is the key to the market growth

DRAM Changes – 16 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Data Flash (NAND) Market Update  Data Flash market revenue will increase by 8% to $7.2B in 2005  Upside potential (Optimistic Scenario : $8.2B)  Unit shipments will increase by 120% - 140% in 2005 Source – iSuppli Corporation

DRAM Changes – 17 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Data Flash TAM by density  Major density is moving quickly from 1Gb to 8Gb in 2005 Source – iSuppli Corporation

DRAM Changes – 18 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Flash Storage Card Market Forecast by Form Factor and Density  SD Card form factor (Mini-SD & Micro-SD) will prevail in the market while CF will decrease significantly  256MB and 512MB will represent over 50% of card market  44% of card market is still 128MB density and below (Mainly Bundled Market) Source – iSuppli Corporation

DRAM Changes – 19 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Data Flash Demand 2009 Flash Storage Card Demand 2005 Flash Storage Card Demand  Flash storage card will still dominate data flash consumption.  Handsets will overtake DSC in card demand Source – iSuppli Corporation

DRAM Changes – 20 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending USB Flash Drive Market Forecast by density  512MB and higher density USB drives will represent over 36% of total USB flash drive market  In 2006, over 60% of USB drive market will be 512MB and higher density  Unlike the Flash storage card market, low density USB drive is diminishing rapidly Source – iSuppli Corporation

DRAM Changes – 21 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Data Flash in Handset Market Different Types will exist  MDOC/One NAND:  Discrete NAND/MCP: &  Flash Storage Cards: Source – iSuppli Corporation Source – MobileReview.Com Source – iSuppli Corporation

DRAM Changes – 22 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Flash Revenue Market Shares in Handset  Intel and Spansion hold 52% of the market for flash in handset.  Total market for Flash in handset in 2004 including MCP was $6.1B  NAND revenue is expected to grow by 100% in 2005 Source – iSuppli Corporation

DRAM Changes – 23 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Mini HDD vs Flash  HDD have at least over three times cost advantage on a rolling yearly basis, 2004: 4GB HDD ~ $96 75 vs Flash 4GB ~ $ : 6 GB HDD ~$106 vs Flash 6 GB ~ $ : 8 GB HDD ~$107 vs Flash 8 GB ~$310  Battery power (100x), drop shock(10x) are distinct disadvantages over Flash  For lower density,Flash will be used while HDD will be mainly used for higher density applications in consumer application areas.