1. George Scalise President Semiconductor Industry Association President

2. 2 Charter Members * SIA Board Company Advanced Micro Devices* Agere Systems* Altera* AMI Semiconductor Analog Devices* Atheros Communications Conexant Systems* Eastman Kodak Fairchild Semiconductor Freescale* IBM* Integrated Device Technology Intel* International Rectifier Intersil Corporation* Jazz Semiconductor Lansdale Semiconductor LSI Logic* Micron Technology* National Semiconductor* NVIDIA* ON Semiconductor Pixelworks PMC-Sierra QP Semiconductor QUALCOMM* QuickLogic Rambus Rochester Electronics Texas Instruments* Xilinx*

3. 3 Profile of the U.S. Semiconductor Industry 2005 Sales = $110 Billion 2005 World Market Share = 48.3% of $227.5 Billion Market U.S. Jobs = 225,000* Percent of Sales Outside U.S. Market = 77% R&D Investment = $18 Billion, 17%* Capital Equipment = $11 Billion, 10%* Historically about 25-30 Percent of Revenues Invested in the Future Source: SIA, U.S. DoL * Preliminary Numbers for 2005

4. 4 Although 73% of U.S. chip industry sales are outside the U.S. market, U.S. chip companies currently have most of their facilities and employment in the U.S. 27% of Sales in U.S. Market 55% of U.S. Industry’s Worldwide Employment in North America 77% of U.S.- Owned Capacity in the U.S. 75 % of U.S. Industry’s Labor Compensation in North America

5. 5 Cost of 1MB DRAM: 1974-2008 Source: DQ/Micron/WSTS $/MB DRAM

6. 6 IT Producing Industries Spur Growth Non-IT-Intensive Industries Intensive IT-Using Industries IT-Producing Industries IT Producing Industries are: Semiconductors, Computers, Communications, and Software. (50%) (25%) (72%) (25%) (3%)

7. Brian L. Halla Chairman of the Board, Chief Executive Officer National Semiconductor Corp. Chairman of the Board, Chief Executive Officer National Semiconductor Corp.

8. U.S. Competitiveness – Maintaining the Lead

9. 9 October 4, 1957

10. 10

11. 11 Space Race Breeds Tech

12. 12 Space Race Breeds Tech

13. 13 Space Race Breeds Tech

14. …That’s How We Got Here!

15. 15 We’ve Only Just Begun…   The Gold Rush is taking place…   in China   The next Gold Rush is coming...   in India   in Russia   The American Dream?   The Gold Rush is taking place…   in China   The next Gold Rush is coming...   in India   in Russia   The American Dream?

16. …Maintaining Momentum (Not Screwing This Up)

17. 17 The “Perfect Storm”...   AT&T break-up, Bell Labs’ demise   Shortened DARPA funding horizon   Declining foreign PhD candidate enrollment in U.S. universities   H1-B visa concerns limiting foreign PhD career paths in the U.S.   We have no new Sputnik threat   Emerging nations pushing R&D, tax incentives & stock options   U.S. falling behind in deploying new technology   K-12 schools not filling the pipeline   Distracting priorities   AT&T break-up, Bell Labs’ demise   Shortened DARPA funding horizon   Declining foreign PhD candidate enrollment in U.S. universities   H1-B visa concerns limiting foreign PhD career paths in the U.S.   We have no new Sputnik threat   Emerging nations pushing R&D, tax incentives & stock options   U.S. falling behind in deploying new technology   K-12 schools not filling the pipeline   Distracting priorities

18. 18 Competitiveness Programs   Innovate America   Rising Above the Gathering Storm   TechNet Innovation Initiative   Losing Competitive Advantage   Tech Industry at an Innovation Crossroads   Tapping America’s Potential   Computational Science: Ensuring America’s Competitiveness   Sustaining the Nation’s Innovation Ecosystems   Choose to Compete   Innovate America   Rising Above the Gathering Storm   TechNet Innovation Initiative   Losing Competitive Advantage   Tech Industry at an Innovation Crossroads   Tapping America’s Potential   Computational Science: Ensuring America’s Competitiveness   Sustaining the Nation’s Innovation Ecosystems   Choose to Compete

19. 19

20. 20 Where We Are Going   Fabulous future for our industry   What’s needed:   Funding for basic research & universities   Access to the best & the brightest   Awareness of the role of technology   Leadership!   Fabulous future for our industry   What’s needed:   Funding for basic research & universities   Access to the best & the brightest   Awareness of the role of technology   Leadership!