Supply Chain Risk Assessments Advances in quantitative methods

Presentation Title – 2 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Four levels of supply chain risk management 1. Anecdotal, un-calibrated opinion  Read the papers, ask around, develop an opinion 2. Objective data informed opinion  Independent tracking of critical supply chain metrics, develop a more informed opinion or an informal model 3. Objective data, objective projections  Independent tracking of critical supply chain metrics that enable a projection of supply/demand balance with confidence levels 4. Quantification of risk  Risk quantified scenario planning  Multiple scenarios analyzed Supply Chain Projections Supply Chain Scenarios Opinion Objective w/ confidence levelOpinion Objective w/ confidence level Opinion 1 Objective Supply Chain information

Presentation Title – 3 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Critical supply chain metrics  Multi-sourced or substitutable products  Inventory  Capacity  Demand profiles and elasticity  Price – as the reflection of where supply = demand  Proprietary sole sourced products  Process Cpk (manufacturing and supply chain processes)  Available supplier capacities and inventories  Other demand for the capacity and end product demand for hardware that consume products that use the capacity

Presentation Title – 4 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Semiconductor supply chain – 2005 Semiconductor Suppliers $241,055 OEMs Top 10 $75,253 OEMs 11 To 100 $89,338 OEMs > 100 $76,464 Distributor EMS ODM $25,584 $24,894 $45,060 $69,323 $55,802 $50,222 $36,678 $42,432$42,774 $41,769$47,572 $5,803 $342 $5,580 $24,263 $690 $2,972 $4,169 $6,301 $16,311 $27,235 $16,168 All Semiconductor Flow Values are at Supplier Point-of-Purchase and Do Not Include Intermediate Mark-Ups  The semiconductor supply chain is highly inter-connected

Presentation Title – 5 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Days of Inventory for Communication Chip Companies

Presentation Title – 6 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Retail Computer Storage Wireless OEMs Networking Systems Automotive EMS ODM Distribution Semiconductor WSP Total Inventory Levels Relative to Targets *COGS, except Semi Companies and Semi Foundry, which are calculated on a Cost of Revenue basis

Presentation Title – 7 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Memory Semiconductor Factory Capacity and Utilization Q102Q202Q302Q402Q103Q203 Q303Q403Q104Q204Q304Q404Q105Q205Q305Q405Q106Q206Q306Q406Q107Q207 Q307Q Millions Sq.In./ Month Percentage Utilization Capacity million Sq. In/ mo.Memory Utilization

Presentation Title – 8 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Mobile PC Value Chain Entering Q2 2006, DOI Trends

Presentation Title – 9 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Component Health Watch Price and lead time trending for 12 different commodity groups

Presentation Title – 10 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Component Health Watch

Presentation Title – 11 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending CPT (Component Price Tracking) Price is adjusting factor to equalize supply and demand  So tracking and projecting REAL prices is the single most important factor in assessing supply chain risk Client can compare their survey points to CPT graphs Rolling Four-Quarter Forecast (Contract only) Graph a Single Price Type or Region or Combine the Graph Views

Presentation Title – 12 Copyright  | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending Predicting next month’s DRAM market  iSuppli has now constructed an “iSuppli Index” that uses our weekly pricing, inventory, mix, and capacity utilization data sets to accurately predict market dynamics month ahead (2 months ahead of release of WSTS) with very high confidence  A key step to giving quantitative market and supply chain risk measurements Coefficient t-statistic p-value iSuppli Index