DE DIOS & ASSOCIATES Focused on our clients’ objectives DRAM MARKET UPDATE April /11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 1

DE DIOS & ASSOCIATES Focused on our clients’ objectives  DRAM companies with aggressive PC/server-DRAM price increase plans for Q213 - Perceiving approaching true shortage - Samsung de-commits due to Galaxy S4/PS4 support - Limited buy-ahead activity in Q113  Market resistance due to impact on OEM/channel profit margins - Weak PC demand and competitive prices - The rate of price increase is more of the issue than peak price  Revisions of PC and server DRAM price forecast PC-DRAM Demand 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 2

DE DIOS & ASSOCIATES Focused on our clients’ objectives No PC Demand Boost from Ultrabook Ultrabook Penetration into Mobile PC Market March 2013 is estimated Notebook/Ultrabook Builds of Leading PC Companies Millions of Units 17% down Q412-Q113 18% below Q112 2% down Q113-Q213 22% below Q212 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 3 4% up Q213-Q313 13% below Q312

DE DIOS & ASSOCIATES Focused on our clients’ objectives Current Price Increase is Fastest since 2009 Seasonality of PC-DRAM Prices PC-DRAM Price Behavior in Previous Upturns 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 4 Assume 2013 price momentum through May – 4GB SODIMM price above $27

DE DIOS & ASSOCIATES Focused on our clients’ objectives Channel Resistance due to Margin Reduction Branded Channel Profit Margin Trend 4GB SODIMM Branded Channel Profit Margin Trend 2GB SODIMM 10% FOR MEDIAN -8% FOR LOW PRICE 9% FOR MEDIAN -10% FOR LOW PRICE 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 5

DE DIOS & ASSOCIATES Focused on our clients’ objectives Channel Price Elasticity to be Tested Branded Channel Resale Prices Needed for Supplier Price Momentum & 15% Margins Comparison of SODIMM OEM and Spot Price Trends 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 6

DE DIOS & ASSOCIATES Focused on our clients’ objectives DRAM Demand & Production Trends ALL DRAM Demand & Production Trend PC DRAM Demand & Production Trend 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 7 Bend demand down

DE DIOS & ASSOCIATES Focused on our clients’ objectives  Q113 buy ahead activity – only 3% above demand v. previous est. of 10% - Mostly DRAM channel stocking - DRAM companies inhibiting buy aheads  Expect Q213 buy ahead activity to continue at same constrained rate  OEMs and DRAM channel may be forced to reduce their inventory in 2H13 to meet their needs - If not, then supplier inventory will decrease more substantially and prices will rise further Impact of Buy Ahead Activity 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 8

DE DIOS & ASSOCIATES Focused on our clients’ objectives  Demand is still major uncertainty - Global economy - PC Units  Assumes that market inventory (weeks) will return to end-of-2012 levels  Greater chances of reduced to controlled supplier inventory Impact of 2H13 Demand on Supplier Inventory 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 9

DE DIOS & ASSOCIATES Focused on our clients’ objectives Trend of Market & Supplier Inventory – Blue Scenario 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 10

DE DIOS & ASSOCIATES Focused on our clients’ objectives  Price-increase momentum slows after May Samsung mix - Channel & OEM resistance  Higher peak price above $30 4GB SODIMM Price & Cost Trend, GB SODIMM OEM Price and Cost Trend $ $ $$ /11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 11

DE DIOS & ASSOCIATES Focused on our clients’ objectives  Sustained price increases from early 2009 bottom reached operating margins of ~30%  Current price momentum headed towards slightly higher margins  Cash margins and supplier confidence likely to boost capital spending on 2Xnm accelerated ramp and 2Ynm support - Industry can support 40-50% more capex than planned Profit Margins Return to 2010 Levels? 4GB SODIMM Operating and Cash Margin Trend 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 12

DE DIOS & ASSOCIATES Focused on our clients’ objectives PC-DRAM Price Forecast 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 13

DE DIOS & ASSOCIATES Focused on our clients’ objectives Impact of Price Forecast on PC OEMs Impact of DRAM Cost on Standard Notebook PC BOM Estimated OEM Spending on PC-DRAM, Millions of $ 2.4 pt. BOM increase Is large % of PC margin Q412 – Q spend is 24% over 2011, 62% over /11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 14

DE DIOS & ASSOCIATES Focused on our clients’ objectives Pressure for Higher 8GB 2Rx4 RDIMM Prices 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 15 Forecast of 2Gb-based 8GB RDIMM Prices Operating Margins: 8GB 2R RDIMM v. 4GB SODIMM

DE DIOS & ASSOCIATES Focused on our clients’ objectives Higher 16GB & 32GB RDIMM Price Forecast 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 16 Forecast of 16GB RDIMM Prices vs. other RDIMMs Operating Margins: 8GB 2R RDIMM v. 16GB RDIMM

DE DIOS & ASSOCIATES Focused on our clients’ objectives The Premium for Performance & Chipkill 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 17 Premium for System Memory Bandwidth & ChipkillComparison of Supplier Operating Margins

DE DIOS & ASSOCIATES Focused on our clients’ objectives RDIMM Price Forecast Table 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 18

DE DIOS & ASSOCIATES Focused on our clients’ objectives Potential Impact on 4Gb LPDDR2 Prices 4Gb LPDDR2 4GB DDR3 SODIMM 4Gb LPDDR2 Price and Cost Trend 4Gb LPDDR2 vs. 4GB SODIMM Operating Margin Range Price Range Manufacturing Cost 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 19

DE DIOS & ASSOCIATES Focused on our clients’ objectives  LPDDR3 x32 PoP prices will be isolated from LPDDR2 x32 PoP and DDR3L versions  Potential price decreases in 1H14 - Overall excess production - Slowing mobile DRAM demand growth - Mobile DRAM major source of bit sales  LPDDR3 competes with DDR3L-RS in 2H14 Outlook for Tablet Memory Prices 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 20 4Gb Equivalent Prices of DRAM Alternatives for Tablets

DE DIOS & ASSOCIATES Focused on our clients’ objectives  Strong price momentum through May but market will resist because of threat to OEM & channel profit margins  Continuing but lower-rate price increases in 2H13 as supplier inventories decrease  4GB SODIMM price increases will tend to lift server-module and LPDDR2 prices  Reduce content requirements because of supply constraints  OEMs and channel likely to release inventory in 2H13 to meet requirements  Higher capex for 2Xnm/1Ynm to boost output by late 2013/early 2014 and increase chance for moderate excess supply in 1H14 Conclusions 4/11/13 © 2013 DE DIOS & ASSOCIATES. ALL RIGHTS RESERVED. Reproduction prohibited without prior permission. 21