PALTEK · 0.5 1.5 2.5 3.5 Inventory S/T Loans ... • PLD Solutions ... Yoshio Sakurai Business:...

PALTEK CORPORATION (OTC: 7587)

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PALTEK CORPORATIONFY2001 Second Quarter/First Half Results August 10, 2001

PALTEK(OTC:7587)

Results Explanatory Meeting

Fiscal Year 2001Second Quarter, First Half


Agenda

• Semiconductor Market Overview

• First Half Results

• PALTEK Business Conditions (Parent)

• Subsidiaries & New Business Developments

• Year End Projections


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0

10,000

20,000

30,000

40,000

50,000

60,000

97Q1

97Q2

97Q3

97Q4

98Q1

98Q2

98Q3

98Q4

99Q1

99Q2

99Q3

99Q4

00Q1

00Q2

00Q3

00Q4

01Q1

01Q2

Source: WSTS

0

200

400

600

800

1,000

1,200

1,400

1,600

Total Semiconductor

MOS Memory

MOS FieldProgrammable LogicMOS Gate Array

Worldwide SemiconductorsWorldwide SemiconductorsWorldwide SemiconductorsWorldwide SemiconductorsTotal Semiconductor,MOS Memory

FPL, G/A Unit: Dollars in Millions


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

97Q197Q

297Q

397Q

498Q

198Q

298Q

398Q

499Q

199Q

299Q

399Q

400Q

100Q

200Q

300Q

401Q

101Q

2

Source: WSTS

0

200

400

600

800

1000

1200

Total Semiconductor

MOS Memory

MOS FieldProgrammable LogicMOS Gate Array

Americas SemiconductorsAmericas SemiconductorsAmericas SemiconductorsAmericas SemiconductorsTotal Semiconductor,MOS Memory FPL, G/A Unit: Dollars in Millions


3


0

2,000

4,000

6,000

8,000

10,000

12,000

97Q1

97Q2

97Q3

97Q4

98Q1

98Q2

98Q3

98Q4

99Q1

99Q2

99Q3

99Q4

00Q1

00Q2

00Q3

00Q4

01Q1

01Q2

Source: WSTS

0

50

100

150

200

250

300

350

400

450

500

Total Semiconductor

MOS Memory

MOS FieldProgrammable Logic

MOS Gate Array

Japan SemiconductorsJapan SemiconductorsJapan SemiconductorsJapan SemiconductorsTotal Semiconductor,MOS Memory

FPL, G/A Unit: Dollars in Millions


First Half Results

• Consolidated Sales : ¥10,079 Million– Annual Growth (+24%)

• Non-Consolidated Sales : ¥8,171 Million– Annual Growth (+12%)


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Sales

Operating Profit

Recurring Profit

10,079

518

454

24%

△52%

△60%

Annual Growth

Net Profit 63 △91%

First Half Results

Consolidated Results

Unit: Million Yen


Sales

Operating Profit

Recurring Profit

8,171

919

846

12%

△15%

△26%


First Half Results

Non-Consolidated Results

Unit: Million Yen Annual Growth


5


Inventory & Short-term Borrowings

3,3683,696

2,987

2,250

3,450

2,450

3.02.72.4

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

06/00 12/00 06月01日-0.5

0.5

1.5

2.5

3.5

Inventory

S/T Loans

InventoryTurnover/Mo

Non-Consolidated


0

1,000

2,000

3,000

4,000

5,000

1999 2,940 3,199 2,841 3,5072000 3,333 3,941 4,237 4,7442001 4,169 4,002

Q1 Q2 Q3 Q4

Sales by Quarter / Non-Consolidated

Annual Growth25% 2%

(Million Yen)

6,977(Est.)


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Sales Breakdown (First-Half)

• PLD Solutions 81% (Annual Growth 6%)

• NETWORK Solutions 19% (Annual Growth 60%)

Non-Consolidated


Sales to Customers Breakdown

0000

1,0001,0001,0001,000

2,0002,0002,0002,000

3,0003,0003,0003,000

4,0004,0004,0004,000

5,0005,0005,0005,000

6,0006,0006,0006,000

7,0007,0007,0007,000

8,0008,0008,0008,000

9,0009,0009,0009,000

98-H198-H198-H198-H1 99-H199-H199-H199-H1 00-H100-H100-H100-H1 01-H101-H101-H101-H1

Top 4Top 4Top 4Top 4

OthersOthersOthersOthers

(Unit: Million Yen)

61％

39％ 48％

48％ 43％

52％

52％57％

Non-Consolidated


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Top 4 Customers Breakdown

0%0%0%0%

5%5%5%5%

10%10%10%10%

15%15%15%15%

20%20%20%20%

25%25%25%25%

30%30%30%30%

35%35%35%35%

40%40%40%40%

45%45%45%45%

50%50%50%50%

1998

1998

1998

1998

1999

1999

1999

1999

2000

2000

2000

2000

2001/

Q1

2001/

Q1

2001/

Q1

2001/

Q1

2001

/Q2

2001

/Q2

2001

/Q2

2001

/Q2

NECNECNECNEC

ANRITSUANRITSUANRITSUANRITSU

SONYSONYSONYSONY

OKIOKIOKIOKI

(34%)

(15%)

(5%)

(4%)

(H1 Top4)Non-Consolidated


PLD - Product Category Mix

0%0%0%0%

10%10%10%10%

20%20%20%20%

30%30%30%30%

40%40%40%40%

50%50%50%50%

60%60%60%60%

70%70%70%70%

80%80%80%80%

90%90%90%90%

100%100%100%100%

00/Q1 00/Q2 00/Q3 00/Q4 01/Q1 01/Q2

MATURE & OTHERS• Low-end MAX/FLEX• Tools & IPs

MAINSTREAM• High-end MAX/FLEX• Low-end APEX

NEW• APEX Families• Excalibur• Mercury• ACEX• Nios IP


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RNC/MSCRNC/MSCRNC/MSCRNC/MSCRNC/MSCRNC/MSCRNC/MSCRNC/MSCBTSBTSBTSBTSBTSBTSBTSBTS

BTSBTSBTSBTSBTSBTSBTSBTS

DSLAMDSLAMDSLAMDSLAMDSLAMDSLAMDSLAMDSLAM

W-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMAW-CDMA

xDSLxDSLxDSLxDSLxDSLxDSLxDSLxDSLxDSLxDSLxDSLxDSL

FWAFWAFWAFWAFWAFWAFWAFWAFWAFWAFWAFWA

FTTHFTTHFTTHFTTHFTTHFTTHFTTHFTTHFTTHFTTHFTTHFTTH

ServerServerServerServerServerServerServerServer

Network Server/Network Server/Network Server/Network Server/Gate KeeperGate KeeperGate KeeperGate Keeper

Network Server/Network Server/Network Server/Network Server/Network Server/Network Server/Network Server/Network Server/Gate KeeperGate KeeperGate KeeperGate KeeperGate KeeperGate KeeperGate KeeperGate Keeper

OLTOLTOLTOLTOLTOLTOLTOLTONUONUONUONUONUONUONUONU

Intelligent Internet

Mobile Internet Broadband Internet

AccessAccessAccessAccessAccessAccessAccessAccessAccessAccessAccessAccess

RouterRouterRouterRouterRouterRouterRouterRouter

EdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeRouterRouterRouterRouterRouterRouterRouterRouter

EdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeEdge

EdgeEdgeEdgeEdgeEdgeEdgeEdgeEdgeRouterRouterRouterRouterRouterRouterRouterRouter

SwitchSwitchSwitchSwitchSwitchSwitchSwitchSwitch

PBXPBXPBXPBXPBXPBXPBXPBX

Applications - Access



WDMWDMWDMWDMWDMWDMWDMWDM

CoreCoreCoreCoreCoreCoreCoreCoreRouterRouterRouterRouterRouterRouterRouterRouter



CoreCoreCoreCoreCoreCoreCoreCore

RouterRouterRouterRouterRouterRouterRouterRouterMetro RingMetro RingMetro RingMetro RingMetro RingMetro RingMetro RingMetro Ring


Plans to sign on various distributor contracts with Plans to sign on various distributor contracts with Plans to sign on various distributor contracts with Plans to sign on various distributor contracts with suppliers of FTTH, optical and suppliers of FTTH, optical and suppliers of FTTH, optical and suppliers of FTTH, optical and InfiniBand InfiniBand InfiniBand InfiniBand technologiestechnologiestechnologiestechnologies

axelec CorporationName: axelec CorporationEstablished: June 1, 2001Headquarters: 2-3-12 Shin-Yokohama Kouhoku-ku, Yokohama 222-0033 JAPANCapital: 10 Million Yen President: Yoshio SakuraiBusiness: Provides Total Solutions that develop and enable the Broadband Network ・・・・Offerings include Hardware, Software, Support, Consulting Services － SAN (Storage Area Network) Technologies － Storage Router Technologies － Residential Gateway Technologies － Home Networking Technologies


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axelec Corporation

• Executive Biography, Yoshio Sakurai

– 1967 Joined NEC Corporation– 1995 Assistant General Manager, Switching Division– 1995 General Manager, Access Systems Division– 1998 General Manager, Engineering Division, NEC Communication Systems Co., Ltd.– 1999 Vice President, NEC Communication Systems

Kyushu Co., Ltd.– 2001 Joined PALTEK Corporation– 2001 Established axelec Corporation, President&CEO


Company: PLX Technology, Inc.Website: www.plxtech.comFounded: 1986Located: Sunnyvale, CaliforniaListed: Nasdaq: PLXTRevenues: $65 Million in 2000Solutions: High-speed interconnect silicon & software,

for PCI-based designs (Industry standard)(PCI - Peripheral Component Interconnect)

Customers: Communication Equipment Makers(Cisco, Lucent, Nortel, etc.)

axelec Corporation


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Company: NETsilicon, Inc.Website: www.netsilicon.comFounded: 1984Located: Waltham, MassachusettsListed: Nasdaq: NSILRevenues: $38 Million in 2000 (est.)Solutions: Ethernet Microprocessing Solutions Package

Ethernet Interface (ARM + Ethernet) Connecting equipment to Network/Ethernet

Customers: Nortel Networks, NEC, Kyocera, Ricoh, Sharp,Mitsubishi Electric, Minolta, Konica, etc.

axelec Corporation


http://www.cygnetinc.comTechnologies offered by Cygnet– VDSL（Very High Bit-Rate Digital Subscriber Line）

• Over 10Mbps

– HPNA 2.0 （Home Phoneline Networking Alliance）• Less than 10Mbps

– Gigabit Ethernet

Technology Tie-up with Novell,Joint Development Contract

Novell “BrainShare” Conference Participant(http://www.paltek.co.jp/corp/cygnet/index.htm)


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Bridge Remote Unit Access Concentrator

Cygnet Software

http://www.cygnetinc.com


MDU/MTUMDU/MTUMDU/MTUMDU/MTUEquipmentEquipmentEquipmentEquipmentProvided byProvided byProvided byProvided byCygnetCygnetCygnetCygnetTechnologiesTechnologiesTechnologiesTechnologies

ServiceServiceServiceServiceProviderProviderProviderProvider

Telephone lineTelephone lineTelephone lineTelephone line

Cygnet ProductCygnet ProductCygnet ProductCygnet Product

RouterRouterRouterRouter

#1 #2

#3 #4

#n-1 #n

Data lineData lineData lineData line

Bldg. Owners Property Service Provider Property

DSU or ONUDSU or ONUDSU or ONUDSU or ONU

Bridge Remote Unit

Access

Concentrator

Telephone line

MainDistribution

Frame (MDF) CygnetCygnetCygnetCygnet ProductProductProductProduct

http://www.cygnetinc.com


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HYPER-PALTEK

• First Accredited BQTF (Bluetooth Qualification Test Facility)Worldwide, and in North America

• One of four accredited laboratory facilities worldwide– HYPER is the only one in North America

• HYPER-PALTEK targets becoming a BQTF by year end 2001

Worldwide Bluetooth Qualified Products (BQB)： 200～300 items– In Japan: 10% of Worldwide– HYPER-PALTEK already has 20 qualifications in processHYPER-PALTEK takes majority share of Qualifications in Japan

http://www.hyper-paltek.com


Best Platform: PLDs

SoC Design

-- Chef, KitchenChef, Kitchen

-- Design Engineers

EDA TOOLS-- Cooking ToolsCooking Tools-- 3rd Party EDA ToolsIP

IP

Spinnaker Systemshttp://www.spinnaker.co.jp

-- RecipeRecipe

Various IPs

1111T-SRAM memory

SoCSoCSoCSoC/SLI/SLI/SLI/SLIIP

IP1111T-SRAM memory

-- Design Center, Lab


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MoSys - The SoC Embedded Memory

1111T-SRAM memory

1111T-SRAM memory

http://www.mosysinc.comMonolithic System Technology, Inc.NASDAQ: (MOSY) IPO on June 28, 2001

1111T-SRAM memory

1T-SRAM: Revolutionary Memory Technology Two to three times as dense as traditional SRAMs & consumes significantly less power 1) High Density 2) Low Power Consumption 3) High Speed 4) Low CostProduct: 1) IP (License) -- Fit large memory into SoC design 2) Semiconductor (Memory) -- For Volume ShipmentsCustomers: Tier One Electronics, Semiconductor,

and Foundry CompaniesMarkets: Communications Consumer Electronics


Announced Partners

Foundry Companies :Our foundry partners enable us toprovide silicon proven 1T-SRAMtechnology in the most popularprocesses to fabless semiconductorcompanies. Partners like Spinnaker :Other partnerships enable MoSys toprovide the 1T-SRAM technology in theform of memory compilers.Development of SoC/SystemLSI

Through partnerships, MoSys is expanding the availability of the1T-SRAM technology throughout the semiconductor market

http://www.mosysinc.com


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Announced Licensees

MoSys licenses its 1T-SRAM memorytechnology intellectual property tosemiconductor and systems companiesincluding those on this page for thedevelopment of Systems On Chips(SOCs).

These SOCs cover a wide range ofapplications in the communications andconsumer electronics markets.

Next Generation SoCs for Communications/Electronics Markethttp://www.mosysinc.com


http://www.alpha-denshi.co.jp

Alpha Electronics

• First Half Sales: ¥1,667 Mil (59%)• Year End Sales: ¥3,353 Mil (41%)

• Strong digital consumer demand,customers like SANYO


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Year End Projections

Sales

Operating Profit

Recurring Profit

18,947

654

576

1%

△69%

△73%


Annual Growth

Consolidated Results

Unit: Million Yen


Sales

Operating Profit

Recurring Profit

15,148

1,142

1,064

△7%

△49%

△54%


Year End Projections

Annual Growth

Non-Consolidated Results

Unit: Million Yen


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Safe Harbor Disclaimer

This presentation may provide projections or otherforward-looking statements regarding future events and/orfuture financial performance. We wish to caution youthat such statements are just predictions and that actualevents or results may differ materially due to changes inthe market and/or other business conditions.


IR ContactFor Inquiries, please contact:

Daniel BrandtManagerBusiness Development & Investor Relations

PALTEK Corporation2-3-12 Shin-Yokohama, Kouhoku-ku,Yokohama 222-0033 Japan

TEL: +81-45-477-2016FAX: +81-45-477-2012E-mail: [email protected]

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