Global Alliance - Technology Ventures between US and Asia Pacific CIE-SEA Fall Conference, Sept. 23, 2001 Ronald Chwang, Acer Technology Ventures, America Chairman & President

Elements leads to Venture Success Idea Better faster cheaper; Brave new world Talent Vision, execution, experience Market Customer demand, value proposition Capital Self-generated profit; external investment Bond by a common interest - return for all stack holders

Cross Pacific Venture Model - North America focused Market Stock exchange North America Asia Pacific Idea Talent Investment Talent Investment

Cross Pacific Venture Model - Asia Pacific focused Market North AmericaAsia Pacific Stock exchange Market Idea Talent Investment Talent

Successful Examples Semiconductor Industry (Taiwan /US) Wafer Foundry Assembly & testing Fabless Chip Design Companies Software Industry (India /US) Programming outsourcing IT consulting and services Application development & remote support

Recent factors driving new venture models Internet & Communication Infrastructure Enable better global product & business collaboration Growing number of Asian Entrepreneurs Ideas and talent Opening of China domestic market Potential for self-sustaining growth Availability of Asian based venture capital More knowledgeable on Cross-Pacific investment

Cross Pacific Venture Model - New evolving model Idea Market Stock exchange North AmericaAsia Pacific Stock exchange Talent Investment Idea Talent Investment Market

Acer Technology Ventures Acer Group venture investment arm since 1997 Structured as an independent professional venture fund management company Funds under management: - ATVF - $40 million (100% Acer) - IP Fund One (May, 2000) - $260 million (40% Acer/60% institutions) Active value-added investment style

Taipei Shanghai Singapore Greater China, India, & Singapore Leading edge manufacturing System integration Service & channel infrastructure Expansion stage Asia Pacific Focus Silicon Valley US & Canada Technology innovation Hardware, Software IP& product Leading edge Service infrastructure Early stage North America Focus Cross Pacific Value add Acer Technology Ventures

The Greater China Opportunity It is not an over-night sudden phenomenon Well orchestrated, staged, progressive and effective opening up Challenges and uncertainty abound Three driving factors : –Availability of human resources –Potential of huge domestic market –Embracing the Global community : WTO, Olympics 2008

The Year 2000, a Watershed Year China replaces Taiwan as the world’s third largest hi-tech hardware supplier. Taiwan players contribute more than half of China outputs Taiwan hi-tech manufacturers intensified the offshore movement. The first time over 50% was made overseas. Over 30% of Taiwan companies’ manufacturing is based in Mainland.

China-bound Investment from Taiwan The PULL Huge potential local market Abundant resources (labor, land, engineer,….) WTO and China’s opening up Follow the supply-chain foot-step The PUSH Taiwan’s uncertain macro-economy outlook Cost and efficiency of the business environment MNC customers’ urge to move forward Potential exit for excessive funds

Venture investment in Taiwan High-tech and global business focus Successful venture investment practice Well accepted entrepreneur incentive system Matured corporate governance and SEC regulatory control High Liquidity stock market

China Challenges: Entrepreneur maturity Vision does not equal to Execution Separation of management and ownership Corporate governance and transparency Building solid business vs. making deals Technology focus vs. Customer focus

China Challenges: Market and business risks Government policy can influence economic decision WTO accession - not an overnight panacea to China problems Fragmented markets People Centric / Guanxi Respect and protection of IP

China Challenges: Return on Investment Legal, judicial and commercial support infrastructure Professional private venture practices Regulatory constrains and interpretation variance Sound and clear investment exit path for foreign investments

Venture opportunities in Greater China Wireless technology and applications Photonic industry Seamless heterogeneous telecommunication infrastructure solution Software OEM/outsourcing and remote support Biotech and healthcare

摸着石头过河 Feeling the stone while crossing the river

Focus, determination, and perseverance!

Together, we shall steer through the rough sea!