1. Company Overview Dec., 2004

2. 2 Matrix Semiconductor: Commercializing 3-D Integrated Circuits  Technology: Breakthrough Technology  First high-volume approach to building ICs in three dimensions  Producing ultra-dense, low-cost chips  Products: Combining new value with backward compatibility  Lowest price points for high density, field programmable memory  100 year archival storage  Compatible with existing memory card formats  Markets: Large, High Growth Consumer Applications  Pre-recorded content for a wide array of portable electronics  Consumable blank media for personal data storage (pictures, music, video, etc.)  Partnerships: Coming to Market with Established Leaders  Fabless manufacturing via TSMC, Amkor, Source Electronics  Market entry via leadership brands

3. 3 Matrix Company Profile Management Team Dennis Segers CEO & President Matt Crowley VP Product Development Geoff Ribar CFO Siva SivaramCOO Dan Steere VP Sales & Marketing Liza Toth VP Intellectual Property Board of Directors Arjun Gupta Atiq Raza Bruce Dunlevie Mark Evans Dr. Mike Farmwald Prof. Tom Lee Bill Ruehle Dennis Segers Tom Goodrich Investors

4. 4 Aren’t All ICs 3-D? Strip away the multiple layers of interconnect & all ICs are 2-D. All active circuits are confined to the surface of the silicon wafer. Strip away the multiple layers of interconnect & all ICs are 2-D. All active circuits are confined to the surface of the silicon wafer. Typical Memory IC Memory Cell Array Support Circuits

5. 5 Why Build 3-D Chips? Using techniques from LCD manufacturing, Matrix builds active circuits above the Si surface in layers of deposited Polysilicon. Polysilicon Memory Cell Array Support Circuits Building Cells Above the Silicon Surface

6. 6 Why Build 3-D Chips? The benefit of using deposited Polysilicon is that you can easily add more layers. Instead of having all of the memory cells spread out on a single 2-D plane… Support Circuits Building Cells Above the Silicon Surface

7. 7 Why Build 3-D Chips? We have now moved the cell arrays above the silicon surface and can move much of the support circuitry under the array. …we can divide up the cells into multiple, smaller layers. Support Circuits 3-D Cell Array

8. 8 A Matrix 3-D Memory IC 3-D Construction Enables Higher Density at Low Cost 3-D Cell Arrays Support Circuits

9. 9 Matrix 3-D Memory Industry’s Highest Density Memory Technology Smallest Die Sizes for High Capacity Data Storage

10. 10 Matrix 3-D Memory Standard CMOS Process Techniques No New Materials No New Equipment

11. 11 Matrix 3-D Memory  High-Density Nonvolatile Memory (NVM)  Lowest cost per bit available  Currently shipping 128Mb – 512Mb  Field-Programmable  Archival Life > 100 years  Compatible with Existing Standards  Fits in millions of existing slots  Specs optimized for use in standard digital devices Ideal Feature Set for Mass Market Digital Memory

12. 12 Initial Target Markets  Pre-recorded Content Distribution  Game cartridges and cards  Kid’s Video  Record albums  Software applications and updates  Consumable Blank Media  Consumable memory cards for digital cameras, MP3 players, PDAs, cell phones, etc.

13. 13  With Mask ROM, programming is done during wafer construction:  Requires long forecasts and large minimum commitments  Revenue hit from both over- and under-supply  Matrix offers:  Lower cost memory  Higher density for advanced functionality  Ability to program close to sale to optimize sales mix  Reduced inventory costs and risks Portable Games & Video Entertainment

14. 14 Content for a Growing Base of Wireless Devices  PDA, cell phone & gaming markets are growing rapidly. Expansion slots are becoming standard.  Selling content for these applications – games, maps, dictionaries, music, software, etc. – viewed as strategic revenue opportunity by CE suppliers. Source: IDC, Semico, Garmin, Magellan

15. 15 Consumable Blank Media  Digital applications need a consumable media option  Currently, Digital Camera = PC peripheral  Mass market penetration requires an easy, affordable media alternative  Matrix 3-D Memory enables media that is convenient, affordable, and secure  Bought like film or CDs in multi-packs at checkout, extra capacity is always available  Provides an automatic high-quality archive, protecting against accidental erasure, hard drive crashed, viruses, etc. Consumables sell in the billions of units (~3B 35mm rolls of film per year)

16. 16 Market Opportunity  Nonvolatile data storage growing at 37% CAGR over next 5 years  Reaches $16 Billion by 2007 Semico With its cost and density advantages, Matrix 3-D Memory can address a significant share of these markets

17. 17 Highly-Focused Business Model  Hands-on Development with Fabless Manufacturing  Local Process R&D through partnership with Cypress Semiconductor  Production wafer fabrication at TSMC  Production test & packaging at Amkor  Content programming services through Source Electronics  Benefit from $Billions Invested in Silicon and IC Development  Partner with the fabless leaders gaining access to their infrastructure, resources, and experience  Ramp quickly to high volume and scale with the rest of the industry  Come to Market Under the Most-Recognized Consumer Brands  Matrix will be a memory company, not a consumer products company  Focus on Technology and Product Development  Limit overhead by outsourcing all functions that are not core-competency  Matrix retains ownership of all intellectual property

18. 18 Business Model  Gross Margin30-40%  R&D 10-12%  SG&A 8-10%  Operating Income15-20%

19. 19 Current Status  Our core technology is proven  Reliable  Archival  Manufacturable  Supported by over 85 US patents issued and >125 pending  2nd Generation product started production in July 2004  Over 2 Million units shipped into retail applications  Quality proven at some of the best electronic companies in the world  Strong and growing customer list and backlog  We plan on achieve profitability during the second half of 2005