Silicon Border Development Silicon Border Asian Cost Structure in North America Q2 2009

Silicon Border Development About Silicon Border 10,000 acre North American Science Park with world-class infrastructure Developed by semiconductor industry executives Asian cost structure in North America Our Mission “to make it easy to locate high technology at Silicon Border”

Silicon Border Development Participating in Our Success

Silicon Border Development

Building Technology Clusters Solar Products Flat Panel Display Devices Semiconductor and Opto MEMs & NANO technology Aerospace & Ultra Precision Machining

Silicon Border Development North American Market California 7 th largest GDP in the World Mexico 14 th largest GDP in the World Larger than: Singapore, Malaysia, Thailand, Philippines and Indonesia Combined. North American Market - at $16.4 Trillion GDP - is the largest market in the World Mexico has Duty Free Agreements with 43 countries USA, Japan, European Union

Silicon Border Development X Mexicali SiliconCorridor North American Silicon Corridor

Silicon Border Development

Why Mexicali? Proximity to Largest Market in the World Abundant Power and Water –New power plants –Colorado River Outstanding Human Resources & Education –1,250,000 people in Mexicali –3,500,000 people in USA –Mexican & U.S. Universities –State University (UABC) in the park Close to a majority of U.S. technology clusters –San Diego 2 hour drive, LA & Phoenix 3-4 hours –Silicon Valley, Dallas & Austin < 2 hours by air

Silicon Border Development Air and Sea LA/Long Beach – North America’s largest Expanded Ports in Baja including a new $7 Billion mega port; rail through Mexicali Direct flights to anywhere from LAX –just 3 hours from Mexicali Direct Flights from Tijuana to Tokyo & Shanghai

Silicon Border Development Ground Transportation Deliver goods by truck to LA or Phoenix in hours, not days The current border crossing is automated –Currently 2000 trucks per day…50% capacity –A new border crossing is planned next to Silicon Border

600 MW Sempra Power Plant Silicon Border Development

1200 MW Intergen Power Plant

Silicon Border Development Abundant Water from Colorado River

Silicon Border Development

Silicon Border Advantages Low cost power for volume users 7 cents High quality power source 1 kilometer Natural Gas 42” hp line; industrial rate Low cost water about 40 cents per m 3 Low cost, educated labor $2 per hour Engineers $25k per year

Silicon Border Development Incentives for Silicon Border Tenants Incentives for Silicon Border Tenants Preferred Tax Rates/Status < 3% Cash Grants and/or Tax Credits better than 10 year Tax Holiday 5 year Payroll & Education Tax Holiday 10 year R & D Tax Credits/Grants Scholarship Assistance Training Reimbursements

Silicon Border Development Mexican Engineers Current engineering school enrollment greater in Mexico than the USA! –719,000 in Mexico –370,000 in United States Familiarity with current CAD tools Fluency in English Need challenging jobs !!

Silicon Border Development Educational Infrastructure UABC State University, best state university in Mexico, bachelor, master, PhD 40,000 Students/8,000 in Engineering Engineering Campus at Silicon Border CETYS Private University, bachelor, master ITM Federal University, bachelor, master, PhD Polytechnic Universidad new polytechnic University in Mexicali

Silicon Border Development Mexican Intellectual Property Rights Excellent Intellectual Property Law –modeled after U.S. IP Law Governed by –the Industrial Property Law, –the Federal Copyright Law, –and international treaties

Silicon Border Development ARAIZA Hotel Mexicali

Silicon Border Development Modern Shopping Mexicali

Silicon Border Development Executive Housing Mexicali

Roads to the USA Market Silicon Border Development

Jan. 2009

Silicon Border Development

March 2009 Waste Treatment Building

Waste Treatment Plant March 2009

Fire Protection Control Center Silicon Border Development

Fire Protection Pump Room April, 2009 Silicon Border Development

Water Storage April, 2009

Water Distribution PumpsApril, 2009

Jan. 2009

Silicon Border Development Conclusions Proximity and Access to USA is excellent Government Committed -- Cash and Tax incentives Secure location, good IP protection laws Power and Water Human Capital & Education Mexico graduates over 75,000 engineers annually Border proximity makes it easy to recruit USA Engineers Free trade with USA & 42 other Countries Excellent Incentives and Wage structure in Mexico makes the Region cost competitive with Asia! Join the Technology Leaders already in Mexico

Silicon Border Development Technology Leaders Already in Mexico

Silicon Border Development Michael P. Oliver Executive Vice President Tel Contact