SOMC Company Presentation

SemiconductorOutsource Management Company
Semiconductor
Outsource supporting companies subcontracting in Asia
“we bridge the gap”

Management
Company
supporting companies subcontracting in Asia

Day to Day Factory Management

Performance Improvements

Sourcing and Project Management

Confidential 1

Semiconductor Outsource Management Company

The Company
SOMC was founded in 2008 on the premise of supporting semiconductor companies worldwide with
alternative, affordable management representation at their subcontractors in Asia.

Our team has a combined experience of over 75 Headquarters is located in the heart of Asia, Bangkok
years in Foundry, Assembly and Test operations in Thailand, making it possible for us to be anywhere in
Asia , executing day to day management, Asia in just a few hours to support our
performance improvements and sourcing/project  IDM
management to accomplish  OEM
 Fabless
 Lower Costs/Increased profits
 ASIC
 Streamline operations
 Start-Up
 Improve product Quality
 Design
 On Time Delivery
small to mid-sized client companies.
for our clients.

SOMC Press
picked up by:

Confidential 2


SOMC’s Alignment with Success
SOMC, from inception, was designed to provide smaller, growing companies with what successful companies have
developed and perfected over years; Best Known Methods (BKM’s) for managing their subcontractors in Asia. And,
being intimately aware of the costs and nuances of managing in Asia, provide an effective and more affordable
solution to those who recognize the importance.

Our fundamental belief is subcontracted factories do not run effectively or efficiently with hands off management-
managing by remote control. A physical management presence in the factory is the most proactive approach for
success.

Successful Company’s Mfg Strategy for Subcons
Successful companies have known for decades having a presence in their subcon factories gives them distinct
advantages over their competitors.

They understand being in the factory improves their relationship with the subcon; better relationship, better service.

They know that a presence in the factory gives them the best opportunity to react/thwart issues, face to face, real-
time. “When management focuses on the problems, the problems go away”.

Confidential 3


Results Companies Achieve with a Factory Presence
 Ensure their company has a voice in the factory
Common Bad Things
 Work directly with the factory floor management face to face to improve  Missed deliveries/pushed our
Delivery, Cycle Time, Quality, Cost parts aside for another
customer
 Quickly address engineering/production issues on the floor, face to face
 Cycle Time too long/die not
moving
 Give and receive real time feedback/immediate responses
 Misprocessed lots/new process
 Develop highly responsive relationships to support manufacturing goals; not implemented
sprint capacity, cost down, heightened attention to manufacturing  Low Yields/Yield loss, throwing
issues/ indices money away
 Capacity is full /no sprint
 Improve manufacturing to a level it becomes a competitive tool in
available
growing their business
 Can’t get the subcontractor to
 Regularly avoid bad things from happening respond to emails

They know they must be proactive and cannot afford to be reactive.
SOMC embodies successful company strategies.
Confidential 4


Our Services Supporting a Presence in Asia
SOMC provides a broad range of management services to our semiconductor clients worldwide engaged
with Foundry, Assembly and Test subcontractors in Asia including:

Day to Day Subcontractor Management
 WIP Tracking and loading
 Monitor Cycle Time, Yields and On-time deliveries
 Daily follow-up communications
 Daily issue mitigation

Performance Improvement Management
 Cost Reduction/Negotiation
 Delivery/Cycle Time and Quality/Yield improvement
 Onsite Management presence driving performance
 Factory visits for partnership building, QBR’s or issue mitigation

Sourcing and Project Management
 New Package/Process Transfers and Qualifications
 Factory Capability Audits
 Supply Chain Optimization/Supplier Consolidation
 Subcon Selection/Price Negotiations

Confidential 5


SOMC’s Effectiveness 3 Panel Charts

 Our Services are designed to draw attention to real/potential
factory issues and react to them

 Our strong subcontractor affiliations in Asia positions us to
influence the kind of improvements small companies need to
excel.

 As seasoned senior executives we use well defined methods
for monitoring/measuring subcon performance

 Proactive data analysis gives us leading edge indicators of Performance Dash Boards
Subcon Management Q107

issues impacting Quality and Delivery Owned by JOF
OS Miss Line Items
Units
LI/WK
Q1O6
ACT
10.2
Q2O6
ACT
3.5
Q3O6 Q406 WKLY

3.5 3.15 3.0 0.0 0.0
Q107
ACT ACT BOQ WW01 WW02 WW03 WW04WW05 WW06 WW07 WW08 WW09 WW10 QTD
0.00
Q107
BOQ
3.0
Assy Outs Units 76,749 70,206 67,618 59130 3,952 4,217 4,620 8,837 51,375

SUMMARY
Test Outs Units 29,051 34,548 22,835 25770 903 1,829 1,674 3,503 11,736
Finish Outs Units 29,051 34,387 22,835 25770 903 1,829 1,674 3,503 11,736
Assy Mean Cycle Time Days 9.6 7.7 7.1 7.67 8.0 8.2 7.2 7.7 8.0

 We hold the factory accountable, “say what you’re going to Test / Finish Mean CT
Assy 95th Cycle Time
Test / Finish 95th CT
Days
Days
Days
4.3
17.7
20.2
4.7
12.6
18.0
6.2 7.16
11.5 12.45
23.4 24.29
8.0
12.0
11.0
4.17
13.9
17.94
4.27
10.4
16.11
4.52
13.3
16.26
8.0
12.0
11.0

do and do it”
Assy Outs Units 13,156 12,947 7,663 8654 694 678 665 1,343 9,023
Test / Finish Outs Units 736 884 800 330.8 6 98.0 101.0 199.0 72

XXX
Assy Mean Cycle Time Days 10.5 8.8 7.6 7.3 8.0 7.80 7.80 7.80 8.0
Assy 95th Cycle Time Days 20.0 14.2 12.3 12.3 12.0 13.90 9.70 13.30 12.0
Test / Finish Mean CT Days 8.2 11.1 7.3 4.1 8.0 7.10 12.80 10.10 8.0
Test / Finish 95th CT Days 19.5 32.8 12.9 7.1 11.0 7.10 16.50 16.50 11.0
Assy Outs Units 15,578 17,755 19,217 11857 493 1,174 808 1,981 6,412

XXX
 We have a solid understanding and fit in well with the cultural Mean Cycle Time
95th CT
Test / Finish
Days
Days
Units
9.0
14.8
12,747
6.7
9.2
9,579
6.6
9.3
7
9.2
10,299 14013
8.0
12.0
277
7.80
8.50
721
6.40
8.10
917
7.8
8.5
721
8.0
12.0
3,599

XXX
Mean Cycle Time Days 4.6 7.0 7.7 8.4 8.0 2.6 3.8 3.1 8.0

nuances in Asia XXX 95th CT
Test / Finish
Mean Cycle Time
Days
Units
Days
13.9
6,916
6.8
7.4
15,353
7.1
20.6 31.6
4,105 5971
12.1 7.5
11.0
201
8.0
8.1
571
8.7
8.7
371
8.2
8.2
571
8.5
11.0
2,616
8.0
95th CT Days 17.5 25.9 39.4 22.1 11.0 34.1 18.2 34.9 11.0

Assy Outs Units 10,532 29,608 38,106 30037 4,583 1,782 2,741 1,782 29,827.1
XXX

We are more than consultants, we are a true extension of

 95th CT
Turnkey
Days
Units
20.2
8,652
12.6
9,106
11.6 13.2
7,632 5283
12.0
430
11.7
399
10.1
427
11.7
826
12.0
5,587
XXX

Mean Cycle Time Days 7.4 6.0 6.7

your company and become your feet on the ground in Asia
5.2 10.0 10.2 7.7 8.9 10.0
95th CT Days 16.6 12.1 9.1 11.82 15.0 14.1 16.4 15.2 15.0

Assy Outs Units 560 505 492 258 21 0 9 9.18 274
XXX


95th CT Days 10.6 12.1 15.8 12.1 12.0 0.0 9.4 9.38 12.0

Confidential 6


Typical Engagements

SOMC has successfully performed many projects for clients including:

 Developed and implemented plans to improve  Provided and implemented improvement plans in
test cost per wafer and reduced defects for a Cycle Time/Delivery consistency for an IDM
Wafer Fab
 Developed and implemented Quality
 Developed strategic plans to consolidate supply improvements, scrap reductions and improved
chain in Asia - Foundry, Assembly and Test for a Yield for an IDM
Fabless company
 Provided plans and process improvements to
 Provided and implemented plans for reducing streamline and reduce shipping cost for an IDM
unit cost for a European image sensor products
company

 Provided day to day WIP tracking to monitor
Cycle Time, Yields and Delivery compliance for an
ASIC company

Confidential 7


Big Price Tags for a Presence in Asia - A Thing of the Past
SOMC clearly understands the benefits of a presence in Asia and how companies rationalize the expense.

Larger Companies typically use expats and/or hire locals to represent their companies in Asia knowing

 Both add headcount
 Expats full compensation is at least 1.5-2x base salary (more for a family package)
 Local Hires typically lack a broad range of expertise/experience, difficult to find, extra benefits for a local
hired by a foreign company

They are well aware that the benefits outweigh the cost and don’t hesitate to pay for it.

A major concern larger companies have is they want to manage their subcontractors with their own employee(s). SOMC
is a true extension of your company, we become a member of your team and that highly desirable company employee
tie is not lost.

SOMC can deliver the experience and expertise, in most cases more than you currently have with your existing
coverage, at a fraction of the cost.

When you need to expand your subcon operations, need to replace coverage
due to attrition, SOMC is a viable option for you to consider.
Why pay more unless you want to?
Confidential 8


Smaller Companies; Big Price Tags for a Presence in Asia - A Thing of the Past
Most small companies, resources and money are in short supply and opt to manage internally. They rationalize, it
saves money, that’s why I pay the subcon, our volume is too low, everything is ok, don’t need a middleman, etc.

The decision to manage internally is based primarily on cost. However, when cost is not a major issue, you need to
consider the impact of not having a presence in Asia because

 You cannot possibly achieve the results companies with a presence in Asia attain without being here

 Cost of getting here is expensive, time consuming and disruptive

 Building stronger partnerships via long distance is difficult at best

 Communications real time, all the time, with your subcon is impractical with respect to time zones

 Conducting frequent face to face meetings is impossible

Until now, cost has limited small companies from realizing the benefits associated
with a presence in Asia, which larger companies have capitalized on for years.
Cost is no longer a barrier………

Confidential 9


Our Cost Model
Our model truly sets SOMC apart. It is designed to make us the best option for small and large companies.

Fees are derived through short or long term contracts for
 Day to Day WIP Mgmt
 Performance Improvement Mgmt
Example Contract Cost
 Sourcing/Project Mgmt
and are based on our knowledge of the manpower needed to fulfill your Day to Day WIP Management service
services. Other typical considerations in our cost would include: number involves daily monitoring, issue
of lots/mo, number of subcon locations, include Fab and/or Test mitigation and real time
communication with the factory for
• Assembly WIP
SOMC is able to offer clients an affordable, low cost solution primarily • Cycle Time
due to four elements in our model • Yield
1. Our tight internal cost controls
2. We do not carry the cost baggage associated with an ex-pat and cost could be as little as $3k/mo.
3. We don’t have the extras of a local hire
4. We are already established in Asia

Routinely, we go the extra mile working within your budget constraints.
Confidential 10


Summary
All companies, small and large, benefit by having a presence in Asia to achieve both tangible and intangible results

SOMC brings the cost of having a presence in Asia down for small and large companies at a time when costs are going
higher

Our cost model is attractive to small companies wanting to realize the benefits of a presence in Asia without the high cost
structure; larger companies benefit from a lower cost structure as they expand or replace existing support

Our business model affords maximum flexibility for you to determine how much of a presence you require

SOMC Not Only Saves You Money But Makes You Money
 We don’t add to your headcount

 We save you on expensive travel, salaries, benefits

 We have a singular focus - factory performance

 We’re already here with feet on the ground, same time zone, face to face with your factory

 Our experience and expertise has delivered results for decades working with subcons

 Clients use our experience, performance and agility in Asia to facilitate business growth

Confidential 11


Typical Testimonials

Michael McKerreghan, President Director & COO, PT Unisem–Indonesia, “a visionary leader who can quickly
assess an enterprise and its business strategy”.....

Joel Camarda, Vice President Operations, Gtronix, Calif. “runs a tight ship. Simply stated, he delivers. He has
demonstrated success in numerous cultural environments”.......

Jeff Kaszubinski, Vice President Research and Development, Cypress Semiconductor , Calif., “aggressively
drove continuous improvement and accomplished the best metrics in the company”......

Bryan Patmon , Chief Marketing Officer and Executive Director at MemsTechnology-Malaysia, “An over
powering need to achieve”.......

Neal Kish, Global PCBA Commodity Supply Chain, BIO-RAD Laboratories, Calif., “SOMC exceeded the
requested deliverables in short order”.......

Confidential 12


Thank You

Confidential 13


Appendix

Confidential 14


Case Study 1: Charged with leading contract manufacturers in Asia-Pacific Region to provide production
support amounting to 50% of a $1 Billion plus Company’s total production

Methodology for Improvements
Met and conducted evaluations with new and existing
subcontractors
Due diligence in working with each subcontractor to
promote relationships, establishing common goals and
objectives
Moved product mix and volume to achieve best pricing,
quality, and delivery performance when required
Challenges
To head a team of operations, planning, finance, and engineering
staff based in the Philippines Results
To manage engineering support staff from California, China, 12-months into the project a noted 250% improvement
Taiwan, Indonesia and Thailand made in quality by reducing customer returned product
Improve relationships with current and new subcontractors to resulting in a $2.1 million dollar savings
enhance performance Finished parts cycle time reduced by 350% from 7-days
Goals: Reduce the number of subcontractors / ensure sprint to 2-days
capacity / improve qualification times / negotiate best pricing / Secured an 18% improvement in cost amounting to
rate new and existing subcontractors to improve metrics / annual savings of $11 million dollars
conduct quarterly business reviews with each subcontractor / Dramatic increase in the Client’s end customer’s
obtain industry benchmark data to drive world-class performance satisfaction
in operations

Confidential 15


SOMC Business Model
CUSTOMER
PARTNER
NETWORK OFFER RELATIONSHIP CUSTOMER
INFRASTRUCTURE Cooperative agreements
(Value •24/7 availability
•Act as company TARGET
(contracts) with Proposition) employees CUSTOMER
•Sales -Reps
•Represent only the client
•Mgm’t-Local and Country
We sell services •Adapt to their
Managers
to companies strategies/goals
CORE •Accounting •6 to 10 Customers
involved in •Win win relationships
•Marketing •Start-up , fabless
CAPABILITIES manufacturing •Best cost for value
•Pkg Design Engineering semicon company's,
in Asia
short and long DISTRIBUTION • private and revenue
• Education, knowledge and VALUE less $400mil
term CHANNEL
business, management CONFIGURATION specializing in •Don’t have
expertise manufacturing
semiconductors • Direct mailers
• 33 years of engineering, •HR/Payroll •Sourcing expertise in Asia
•Email Campaigns
operational manufacturing •Acct’ing /Legal interface •Project •Don’t have
•Personal network
experience •Marketing/Sales Outsource
management •Sales letters
• Supply chain mgm’t Coordination •Performance infrastructure
•Blogs
experience •Strategic and tactical •Don’t have to time to
capability •Cold/follow-up calls
•Contract Compliance/ do
improvement •Web site Google
Coordination •Total Adsense
•Research/Sourcing management •Press Releases
suppliers
•Face to Face

•Salaries/Benefits/
Commissions
•Office equipment/supplies/
FINANCE REVENUE
•Sourcing
•Project mgmt
COST
Postage STREAMS •Total Mgmt
STRUCTURE
•Legal fees •Consulting
•Rent/Utilities Confidential 16
•Transportation expense


SOMC is the Most Efficient, Cost Effective Option
Until now there have typically been 3 options for managing your subcontractors in Asia, which are
historically expensive and time consuming SOMC not only saves you money but
Expats helps you make money
 Added headcount
 We don’t add to your headcount
 Expensive: Full compensation 1.5-2x base salary (more for a family
package)  We save you on expensive travel,
salaries, benefits
Hire Local Management
 We have a singular factory focus
 Added headcount

 Typically lack a broad range of expertise/experience and difficult to find  We’re already here with feet on the
ground for your unplanned visits
 Extra benefits package for local mgmt hired by a foreign company
 We operate in the same time zones,
Manage Internally - sends the message to the subcon face to face with your factory
 One more task for an already overly burdened staff
 Experience and expertise/we’ve been
 Expensive travel to expedite parts/resolve engineering issues/team here decades working with subcons
building
 Our performance and agility in Asia is
 Time zone differences -no face time - adding difficulty resolving issues used to facilitate business growth
 Do not have 20 plus years working in Asia, directly with subcons

Confidential 17


COMPANY LOCATIONS
Semiconductor Outsource Management Co., Ltd
Founded in March, 2008

Address 9406 State Route 60, Wakeman, Ohio, 44889
Phone +1 408 806 6308
Web Site www.semiconoutsourcemgmtco.com

Semiconductor Outsource Management (Thailand) Co. LLC
Founded in May, 2009

Address Ban Su Pha Sarn, 65/48 Moo 4, Phra Ong Jaow Sai Road, Lard, Sa Wai, Lam Luk Ka,
Pathum Thani, Thailand, 12150
Phone +66 870 458 550
Fax +66 2 569 3243
Web site www.semiconoutsourcemgmtco.com

Confidential 18


The Benefits of Engaging SOMC
Our strong subcontractor affiliations in Asia positions us to influence the kind of improvements small
companies need to excel. You benefit from having us on the ground in Asia to take advantage of
 Face to face/daily presence/same time zones  Removing long distance communication barriers
 Seeing problems first hand  Saving cost; in some cases we cost no more than a
 Reduced client travel/Reduced time out of office for production supervisor
the client  Visiting the factory and staying when needed without
 Source more efficiently in the same time zone impacting important tasks back home

Our staff works together with clients to understand the client’s management objectives. We then
develop custom plans to meet objectives, including:

 Program/project timelines
 Budgetary/cost goals
 Quality goals
 Capacity requirements for growth
 Performance reporting and improvement plans
 Selecting the most qualified/cost effective subcontractor for the customer
 Improved working relationships with the subcontractor

Confidential 19


Bad things can/do happen in a factory….!
 Missed deliveries/pushed our parts aside for another customer
 Cycle Time too long/die not moving for 3 months
 Misprocessed lots/new process not implemented/thought they already fixed the process
 Low Yields/Yield loss, throwing money away
 Capacity is full /no sprint capacity
 Can’t get the subcontractor to respond to emails

When these real losses hit your bottom line, the importance of
being proactive in your factory management is apparent;
 $250k Lost-The factory just misprocessed product -process changes not implemented
 $2mil/yr Lost-Low yields/Yield loss, throwing product in the trash bin/no one looking
 $1.8mil/yr Lost –Not looking at competitive subcontract pricing

And, when this happens to you, you’ll will be scrambling for damage control.

Companies today cannot afford being reactive if they are to thrive/survive. Proactive is the only
way forward in today’s business environment. SOMC is the PROACTIVE answer.

Confidential 20

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