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The Company

• Mission Statement:

“To implement Quantum Mechanics in the world of Semiconductor Fabrication & Information

Technology”• Has exclusive rights to a patented new way to design computer

chips• To overcome the limitations of existing technology

• Ownership:– Caltech- JPL/NASA - 30%– Quantumatics Llc - 70%

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What is the problem that semiconductor chip manufacturing is about to face?

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The Challenges

• Miniaturization will push optical lithography to sub 57 nanometer resolution by 2005– Using existing techniques for such design needs

is cost prohibitive

• Advancements in chip design and material science by themselves, may not be sufficient

Lithography is a process to transfer circuit images onto substrates

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What is our answer to the problem?

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The Technology

• Miniaturization depends on the distance between the trough and the peak

• By “entangling” multiple photons, Quantumatics will be able to reduce distance between the trough and the peak

To achieve the same degree of miniaturization, existing technology will have to use ultra-small wavelength laser systems that are very costly

Existing Technology

QuantumaticsTM’ Technology

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How does our technology provide a compelling solution?

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The Value Proposition

• Quantumatics proposes a technology to overcome the barrier in such a manner that the– Chip makers will be able to:

• Make more powerful chips from the same wafer

• Save capital equipment costs

• Make more chips

• Reduce production costs

• Our solution is to retrofit existing equipments and make them ready for the next technology node– Cost saving of ~ $60 M per fab plant per year

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Quantumatics has exclusive rights to quantum lithography - a breakthrough and patented technique to make powerful computer chips for tomorrow’s Information Technology needs.

We will now define our target market...

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The Market

Quantumatics plans to target:– Lithography Equipment & Process

• Stepper / Scanner machines

• Reticle manufacturing machines

• Reticle / mask

– Semiconductor products • Microprocessors & Microcontrollers

• Optoelectronics & Flash memories

• Programmable Logic Devices

• Digital Signal Processors

These are the two main types of machines that deal with patterning

Masks or reticles are used to transfer the image of the chip’s design onto the wafer. This process is called patterning

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Let us now explore the market potential…Segment Size & Growth

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Stepper / Scanner Market Segment

• World market size - Sales – $3.8 B in 2000, $9.3 B in 2010

• Growth – Dataquest - 41.0% in 2001,

– VLSI Research -14.3% CAGR* 2000 - 2005

– Our estimate -12.0% CAGR 2000 - 2011

*CAGR: Compounded Annual Growth Rate

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Reticle Market Segment

• Reticle making equipment– World market size - Sales

• $373 M in 2000, $1.3 B in 2011

– Growth • 17% CAGR - MSDW* & our analysis

*MSDW: Morgan Stanley Dean Witter

• Reticle– World market size - Sales

• $2.2 B in 2002, $6.1 B in 2011

– Growth• 14% CAGR - MSDW & our analysis

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Semiconductor Products Segment: 2000 - 2008

• Microprocessor

• Microcontroller

• Programmable Logic Devs

• Digital Signal Processors

• Flash Memories

– $37.1 B - $77.3 B, 10% CAGR

– $13.3 B - $77.9 B, 25% CAGR

– $ 5.0 B - $26.9 B, 23% CAGR

– $ 5.9 B - $44.6 B, 29% CAGR

– $10.0 B - $65.9 B, 27% CAGR

Source: Needham & Co. 212288

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Who is the customer for this technology?

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The Target Customer

• Primary: – Scanner/Stepper Manufacturers

• Nikon, ASM Lithography & Canon

– Reticle Equipment makers• AMAT (acquired ETEC), Hitachi & JEOL

• Secondary: – Semiconductor chip makers

• Intel, AMD, IBM, Texas Instruments, NEC, ST, etc

– Reticle makers• DuPont, Photronics, DNP, Toppan, Align-Rite etc

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Who will compete with us?

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The Competition

• Competition will come from:– Existing technologies

• Optical Lithography - Extreme Ultra Violet– The consortium of Intel, Motorola, AMD, IBM, etc

– Emerging technologies• Stimulation Emission Depletion• Scanning Near Field Optical Lithography

• Existing customers are investing to advance Optical Lithography

• The emerging technologies are theories waiting to be worked on

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What is our execution strategy?

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Business Model

• Partner with the equipment makers to design and develop Quantumlithography modules

– R&D licenses / agreements for Prototype Development

• Sell the modules to the equipment makers who will use the technology to make the machines

– Product licenses / agreements for Manufacturing

• Join hands with the sales force of the equipment maker

• Develop core competency in quantum-optics

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Proof of Concept Prototyping Manufacturing Selling

Us Equipment Maker

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How do we make money?

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Revenue Model

Licensing based revenue model

– Primary customers will license the technology to make quantum scanners & reticle making machines• Quantumatics will get 10% of the sales revenue

– Secondary customers will pay royalties for the use of Quantumatics’ technology• Quantumatics will get 1% of the sales revenue

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Who will run the company...

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Management Team

• CEO: Giovanni A. della Rossa– Successfully started two technology companies in Italy:

• Eidos Spa - computer graphics company

• Quantum Image - multimedia presentations co.

• Chief Financial Officer– MBA from the Anderson School-UCLA

– or from Stanford University

• Chief Technology Officer– An expert from the semiconductor industry

• To direct the development & acceptance of quantum tech.

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Who will advise us...

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Technical Advisors

• Scientists from the Jet Propulsion Lab / NASA - Caltech

• Scientific Advisory Board– Comprising of scientists from academia

– Industry experts

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What is our project plan and what are some of the milestones?

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Planned Timeline & Milestones

FH’05 Quantum Optics Technology Center setup

SH’ 05 Proof-of-concept established; Second stage financing

FH’ 06 First stage stepper prototype; First stage reticle equipment prototype

SH’ 06 Stepper & reticle equipment prototypes ready for manufacturing

FH’ 07 Manufacturing partners identified and first units rolled out

SH’ 07 Manufacturing problems resolved – Products ready for installation

2008 First full year of licensing revenues from equipment sales

2009 First full year of licensing revenues from IC product sales

2010 The payback year

2011 We start reaping the fruits of our hard work

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What does the plan imply financially?

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Sales Forecast - StepperStepper Sales Drive All Revenues

Sales Forecast - Stepper

01020304050607080

2007

2008

2009

2010

2011

Un

its

So

ld

• Machine Sales occur due to:– New Fabs

– Fab Upgrades

• Every Quarter:– 10 new fabs

– 15 fabs upgrade

• Average order size for a new fab is 11 latest generation scanners

• Average order size for upgrading a fab is 4 latest generation scanners

Sales Forecast Assumption:By 2011, 32% of all latest machines sold by an equipment maker will be quantum

Source: S G Cowen & Company Analysis

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Financial Projections

• The business is expected to start generating revenue after 2 years of securing the financing

• The business is expected to start making profit from fourth year of operation

• Gross Margins: 70% -200000

20000400006000080000

100000120000

$'000

2005 2008 2011

Revenue Gross Profit

Net Income

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Cash Flow Projections

• The business is extremely cash rich

• Not much cash tied-up in non-productive assets

• Capital requirements:– $2.7 MM 1st year

– $5.4 MM 2nd year

• Payback period: 5 years

-10.000

0

10.000

20.000

30.000

40.000

50.000

60.000

'06 '08 '10

$' 000

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How do we succeed?

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Keys To Success & Uncertainty

• Successful proof-of-concept– Technology center to be setup by year end

• Successful prototyping for manufacturing• Strategic Alliance with at least one of Nikon,

Canon, ASM Lithography for steppers & AMAT, Hitachi and JEOL for reticle making machines

• Semiconductor Industry Assoc. support and recognition in the SIA Roadmap

2122881 - 1.9 2 - 2.9 3 - 3.9Uncertainty Score out of 5

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How much money do we need to make this plan a success?

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Capital Requirements

2.7

5.4

0

1

2

3

4

5

6

First Second

R ounds of Financing

$'M

Second Round after 12 months

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Why Should You Invest ?

• First company to patent quantum lithography

• Quantum lithography is one of the first commercial applications of quantum technology - the one that will give birth to new paradigms in computing

• You will be credited for the next big wave in the semiconductor industry after the development of the IC*

$100

$1978

Amounts in real dollars

2002 2011

Your money will grow at 53% annual rate†

† It assumes that no other cash disbursements occur to the investor prior to the exit & investor owns 10% of the equity* IC stands for integrated circuit

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May we address your concern about the gestation period?

– What is the minimum that you can make in this deal and how soon?

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Can You Exit Earlier?

• ABSOLUTELY!• Several technology leaders have started to invest

in advancing quantum technology– Quantum lithography will offer a strategic fit &

– Provide them with a competitive advantage

• Hence, it may be possible to sell your share of the equity to a company interested in our technology

• We expect the valuation to at least double by the end of the initial phase

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No wonder the Press all around the world is excited....

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Media Coverage

• American Institute of Physics• Chicago Tribune• CNN• Daily Post (London)• Daily Telegraph (London)• Nature• The New York Times• The Times of India• USA Today