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Opportunities for Series B Investors
2Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Market Position
Strategy & Product Direction
Financial Projections
Investment Highlights
3Company ConfidentialMarch 2001
Mission
of mobile data solutions for broadband wireless
services and products
Str
ateg
y &
Pro
duct
Dire
ctio
n
4Company ConfidentialMarch 2001
Investment Summary
3G market will launch in Japan and will experience explosive growth to 140M subscribers1 by 2004
Multi-mode 3G and 2.5G will deploy in Europe, 200M Subscribers2 by 2004
Early market entrants will be well positioned to take a reasonable market share
3G chip sets revenue will exceed $8 billion by 2007
Competition will be both existing players and new entrants, room for multiple players
Virtual Wire has a head start in the development of Chipset Solutions for 3G and already has a reference platform
Virtual Wire is well positioned to reward investorsSource1: Ovum Report on 3G
Bac
kgro
und
Source2: Wit SoundView Report on GPRS
5Company ConfidentialMarch 2001
Virtual Wire, Inc. Incorporated November 2000 - Sunnyvale California
Joint Venture formed by Virtual Silicon and SASKEN focused on next generation wireless business
Seasoned management team
38 full time employees with locations in Bangalore India and Silicon Valley
Key partners, SASKEN, Virtual Silicon, BOPS, and eASIC
System, Software, Hardware and Silicon experience in wireless communications
Bac
kgro
und
6Company ConfidentialMarch 2001
Technology HouseSASKEN
UMC
Process Technology
Low PowerDesign
RISC, DSPCores
High speedmemories etc.
TechnologyLicense
Physical Libraries
Chipset / SOCHandset
Developers
DeviceDevelopers
End User
3G Silicon Value Chain
SOC Technology
Virtual Silicon
1 Billion
by
2010
7Company ConfidentialMarch 2001
Source: NTT DoCoMo Website
3G More than just voiceM
arke
t O
ppor
tuni
ty &
Tre
nds
8Company ConfidentialMarch 2001
Source: NTT DoCoMo Website
3G More than just voiceM
arke
t O
ppor
tuni
ty &
Tre
nds
9Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Market Position
Strategy & Product Direction
Financial projections
Investment Highlights
10Company ConfidentialMarch 2001
Why Must Markets Evolve from 2G to 3G? Spectrum is a key motivator:
Access to new spectrum
Better use of existing spectrum
The bandwidth explosion Mobile data is now entrenched and user data rates are growing from 9.6
kbps to 64 kbps and more…
Content is king The need to access more than voice content… context & location sensitive
graphic data is increasing in demand for business and lifestyle
The “Killer Application” is more likely to be the “Killer Business Case” Where Content can be accessed from any source*
All devices communicate Person to Person
Person to Machine
Machine to Machine
Mar
ket
Opp
ortu
nity
& T
rend
s
Source* Herscel Shosteck Associates
11Company ConfidentialMarch 2001
CDMA
GSM
TDMA
IS95A IS95B 1xRTT cdma2000
IS136
GPRS
EDGEWCDMA
2.5G
2.5G
3G
3G
14.4kbps 64kbps/ 384kbps 2Mbps 144kbps
GSM
Evolution path to 3GM
arke
t O
ppor
tuni
ty &
Tre
nds
12Company ConfidentialMarch 2001
A Wireless Connected World!
RFmodem
Processor
abcde
Base Station
Base Station
ISP
Keyboard
Audio
Display
Visual
GPS
3G
PrinterPC
DSL
PDACamera
Base stn
MSC
Internet
Mar
ket
Opp
ortu
nity
& T
rend
s
13Company ConfidentialMarch 2001
Market Trends
EQUIPMENT VENDORS
Legacy- R+D investment in UMTS- Closeness to operator
Expectation- To be leading UMTS equipment
provider, possibly with increased “grip” on the end customer
CONTENT PROVIDERS
Legacy- Popular, strong brands
Expectation- Increase channels of distribution
and move in portal space
CAR MANUFACTURERS
Legacy- Traditional mobile environment
and closeness to consumer Expectation
- Gain multimedia service revenues as “hardware” managing service
FIXED INTERNET PORTALS
Legacy- Very successful in attracting traffic
Expectation- Translate success to mobile
Internet
NEW PLAYERS
Legacy- Entrepreneurs sensing an
opportunity Expectation
- Become a leading point of access to mobile Internet by moving fast
MVNOs
Legacy- Strong brands
Expectation- Expand brand relationship to new
environments to enhance revenues
Players have different legacies and expectations. Competition through partnerships and alliances is sure to become intense…
MOBILE OPERATORS
Legacy- Invested heavily on UMTS licenses
Expectation- To rule over the mobile Internet value
chain, especially through strong portals
14Company ConfidentialMarch 2001
Market Segmentation
Based on user groups the market can be split into three groups:
Vertical market The most profitable mobile data applications in the marketplace
today Examples: Transport and Logistics, Public Safety, Vending
machines, telemedicine
Business market (Nature of business dependant) Examples: Unified Messaging, Schedule management, File and
database access, Net meeting etc.
Consumer market (Lifestyle driven market) Defined by user attitudes and needs. Examples: Messaging, Radio, Music, Banking, Chat rooms,
Shopping etc.
15Company ConfidentialMarch 2001
Assumptions;
ASP of $20 a chipset1
Rapid revenue growth to over 12 billion, in 6 years
0
200
400
600
800
1000
1200
1400
1600
Total Wless 823 932 1,037 1,142 1,244 1,355
Total 3G Chips 3 15 41 122 216 384
2002 2003 2004 2005 2006 2007
Market for 3G Chipsets
$8B
Chipset Revenue $M 60 300 820 2440 4320 7680
Mill
ion
s o
f U
nit
s
Source: Ovum Report on 3G
Mar
ket
Opp
ortu
nity
& T
rend
s
Note1 : Base band
16Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Technology
Strategy & Product Direction
Financial projections
Investment Highlights
17Company ConfidentialMarch 2001
Progress Report March 1999: Participates in the evolution and dedicates a team to
develop a 3G reference platform for the “User Equipment” market
June 1999: Starts development of Broadband IP, RF and mix signal research
November 2000: Virtual Silicon and SASKEN form a joint venture Virtual Wire Inc. to aggressively pursue 3G with baseband chip sets
December 2000: Team of 38 employees assembled to focus development of WCDMA Reference Platform, and Silicon Products
To Date: $8.5M + invested and 250 Person Years of development complete
Implementation of 3GPP Release ‘99 compliant Hardware & Software including the Protocol stack
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
18Company ConfidentialMarch 2001
Positive Momentum Virtual Wire Inc., formed
Strong wireless Broadband System,Software and Hardware Team
3 Patent Applications for receiver design
Real time demonstration of Speech and Web browsing
Reference Board scheduled for Release Q2 2001
FlexSiTm silicon development started for Release Q4 2001
Actively engaged with customers in defining the 1st generation product
MOU signed with #1 supplier of RF component supplier in Japan
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
19Company ConfidentialMarch 2001
Management Team
Executive Officers Board of Directors
Michael KlimentCEO and President
Prior: Virtual Silicon, COMPASS, VLSI, Intel
Sylvia ShivelyCorporate Controller
Prior: Virtual Silicon, DSP Group
Michael Kliment CEO and President
Tony MoroyanPresident, Via Sphere
Rajiv Mody1
CEO, SASKEN
Joseph DroriVP Engineering, SOC designPrior: Xicor, National
Suresh Agarwal VP of Marketing & Business Development prior: Neomagic,Chips and Technology,AMD
Dipu Pramani Sr VP of Engineering
Prior: VLSI, AMI
Taylor Scanlon CEO and President of Virtual Silicon
Note1 SASKEN can have up to 2 board seats
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
20Company ConfidentialMarch 2001
Advisory Board
Technical Advisors
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
Dipankar RaychaudhuryChief Scientist, Iospan , San JoseProfessor of Electrical Engineering and Director of the Wireless InformationNetwork Lab (WINLAB) at Rutgers University, New JerseyExpertise in broadband access with emphasis on wireless networks.
Michael J S Smith Professor, Dept of Electrical Engineering , University of Hawaii Expertise in Reconfigurable logic and ASIC design . Georgios Giannakis Professor, Dept of Electrical and Computer Engineering, University of Minnesota, Minneapolis. Expertise in multicarrier wide-band wireless communication and signal processing.
Jen KaoCEO, Artest , SunnyvaleFounder of Test and assembly contract house for rf and digital chips.Expertise in production test of communication chips
David PyeSenior VP of Manufacturing, Triquint semiconductor, Hillsboro, OregonKey supplier of RF components for wireless and high speed optical networks.Expertise in RF and communication markets
21Company ConfidentialMarch 2001
Executive Team, Details CEO & President - Michael Kliment
Prior: Was CTO & Co-founder of Virtual Silicon, $20M run rate and 70 employees, top three providers of Physical IP. He has 20 years of management and business experience in the development of IC design technology for custom and ASIC applications. VLSI Technology, Compass Design Automation and Intel
Sr. VP of Engineering & Technology - Dipu Pramanik
Prior: Was Director of SOC Technology at Virtual Silicon and Director of RF Technology at VLSI Technology. Has over 20 years of semiconductor experience in the development of ASIC technology and introduction of advanced products in the areas of computing, networking and communications. Over 25 issued patents, AMI,Signetics
VP of SOC Engineering - Joseph Drori
Prior: Employee #5 Xicor Inc. Was Vice president of Engineering and Product Definition. Has over 20 years of semiconductor experience at Xicor developing over a 100 innovative products in the area of power management, low power DSP, integrated NVM, linear EEpots and specialty memory for smart cards and cellular phone applications.
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
22Company ConfidentialMarch 2001
Executive Team, Details VP of Marketing & Business Development- Suresh Agarwal
Prior: one of the first 10 employees of NeoMagic, Chips and Technology. Has 17 years of marketing, system and semiconductor experience. Instrumental in bringing NeoMagic from early stage to a successful public company. Suresh lead business unit, marketing and engineering efforts to measurable success. He is US patent holder in audio mixing and digital audio.
Corporate Controller - Sylvia ShivelyPrior: Corporate Controller for, Virtual Silicon, DSP Group Inc. and DSP
Semiconductor. Has over 10 years experience in financial analyst and controller positions.
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
23Company ConfidentialMarch 2001
Engineering Team Wireless system design and
reference design are being done in Bangalore.
Chip design center is being established in Silicon Valley
Operations will be based in Silicon Valley
Initial wafer fabrication will be done at UMC
Test engineering will be based in Silicon ValleyV
irtua
l Wire
Pro
gres
s &
Tec
hnol
ogy
17
12
3
6
RF
Wireless
VLSI
HW
38 people today doubling
over the next 12 months
24Company ConfidentialMarch 2001
An investment in people
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005
Calendar Years
Sta
ff H
ea
dc
ou
nt
ENGINEERINGSALESMARKETINGG&A
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
25Company ConfidentialMarch 2001
Compliance 3GPP R'99Access Scheme Wideband – Code Division Multiple
Access (W-CDMA)Mode Frequency Division Duplex (FDD)Chip rate 3.84 McpsApplication Data Rates 128 Kbps (uplink)
384 Kbps (downlink)CRC support YesFEC codes Convolution Codes(Rate:1/2,1/3)
Turbo Codes (Rate:1/3) Puncturing and Repetition for
variable data rates
Interleaving Inter and Intra Frame InterleavingSpreading Walsh codes
SF [4 – 512] downlink SF [4 – 256] uplink
Scrambling Gold sequences of length 38400 chips
Virt
ual W
ire s
yste
m s
pecs
System Specs
26Company ConfidentialMarch 2001
Roadmap for Development Platform Release 1.0 (Q2 2001)
Command line controller
Ethernet/USB/RS232/SIM card interfaces
Fully functional 3GPP Protocol Stack
3GPP Baseband Physical Layer (Baseline capabilities)
RF module and RF interface
Data Rates: Uplink - 64 Kbps, Downlink - 384 Kbps
Release 2.0 (Q3 2001) GUI interface
Support for speech services
Data Rates: Uplink - 64 Kbps, Downlink - 384 Kbps
Release 3.0 (Q4 2001) Support for Bearer services and simultaneous applications
Support for Turbo Coding
Symmetric Data rates in uplink and downlink (384 Kbps)
Inter-operability testing
Note: A Release implies a hardware-software implementation that has gone through the product verification phase
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
27Company ConfidentialMarch 2001
Example of a WCDMA SOC with some standard peripheral interfacesHardware accelerator consists of both the transmitter and receiver sections,including the RAKE receiver.Many of the cell search operations and bit processing are done in DSP.
DMASRAMHardware
accelerator
ARM 922T SRAM
PLL/Clock
BOPS
USB
RS232
SIM
AHB
DMA
APB
I/FMem
Memory/Expansionbus
Clock
Digital I/O & Control
PeripheralsMDB
FlexSiTM -Platform Chip
28Company ConfidentialMarch 2001
Features to be supported
Circuit switched (Voice) and packet switch (data) to support-Conversational and streaming class-Interactive and background class
Ability to interface baseband chip with third party media processors .
Power budget of 450mW.
29Company ConfidentialMarch 2001
Key Technical features
ARM 922T to run protocol stack , RTOS and drivers for peripherals
DSP core with >1000 MIPs to do portions of the physical layer processing and allow changes to the functionality , through firmware.
Low power receiver architecture.
Low power and leakage memory blocks
Low power turbo decoder block
Configurable bus interfaces.
30Company ConfidentialMarch 2001
DMASRAMHardware
accelerator
ARM 922T SRAM
PLL/Clock
BOPS
AHB
DMA
I/FMem
Memory/Expansionbus
Clock
Digital I/O & Control
MDB
Programmablecontroller
Media Processor
WCDMA baseband processor with a configurable interface to an external media processor or to a standard computer/industrial bus.
System Level Diagram
31Company ConfidentialMarch 2001
Product Rollout
Start of WCDMA Program
Algorithm Development
Hardware/Software Partition
Development Platforms
First Silicon Flexi-platform
Custom Chip Sets
Year
Virt
ual W
ire P
rogr
ess
& T
echn
olog
y
32Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Technology
Strategy & Product Direction
Financial projections
Investment Highlights
33Company ConfidentialMarch 2001
Business Strategy
Build a flexible W-CDMA platform with several industry standard interfaces.
Focus on Japan market where first rollout of W-CDMA will occur first
Provide dual mode capabilities supporting W-CDMA GSM and GPRS for Europe and Americas
Partner with key customers to drive development of products for target markets
Provide a complete hardware/software solution.
Str
ateg
y &
Pro
duct
Dire
ctio
n
34Company ConfidentialMarch 2001
Solutions
Board based platform to verify Hardware/Software solution for W-CDMA.
Platform SOC solutionimplementing W-CDMA
VWI
One chip custom solution Embedded core in multiple
designs
+SP/PESP/PE
SP/PEStr
ateg
y &
Pro
duct
Dire
ctio
n
35Company ConfidentialMarch 2001
Customers PDA providers
Portable computer providers
Auto electronics
Home networking
Consumer electronics
Industrial electronics
Str
ateg
y &
Pro
duct
Dire
ctio
n
36Company ConfidentialMarch 2001
Products
Development Platform for development, testing and demonstration
Wireless platform on chip with WCDMA processor and re-configurable logic for prototypes and custom industrial applications.
Digital chips incorporating WCDMA processor , with peripheral logic customized for different markets and applications.
Digital chips with multi-mode capabilities integrating, different standards like WCDMA, GPRS, GSMS
trat
egy
& P
rodu
ct D
irect
ion
37Company ConfidentialMarch 2001
Competition will be a mix of existing players and new
Existing: TI, Qualcomm, Intel, Conexant, Philips ….
Virtual Wire is focused on 3G and by virtue of building in: Japan deployment through strategic relationship
Multi-mode capability for legacy infrastructure
Re-configurable interfaces for different applications
Proprietary interface with the host processors
Custom features for mobile Industrial and business applications
Competitive StrategyS
trat
egy
& P
rodu
ct D
irect
ion
Our experience and proprietary technology positions Virtual Wire to become the leading supplier in this market !
38Company ConfidentialMarch 2001
Competitive Strategy In Progress
Currently in discussion with large Japanese companies that are currently building or supplying components to the 2G, 2.5G handsets and need a solution for 3G
Develop complete end to end solution
Use their Sales Channel, cross brand components
Share development platform
In discussion with suppliers of technology to application appliance market that need to add 3G
Real customer / end user
learn the needs of terminals and hand held appliances
Get and grow market share as the market develops
Str
ateg
y &
Pro
duct
Dire
ctio
n
39Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Technology
Strategy & Product Direction
Financial projections
Investment Highlights
40Company ConfidentialMarch 2001
Financials
FY02 FY03 FY04 FY05 FY06
Total Revenue -$ 2,000$ 54,000$ 140,000$ 220,000$
Total Cost of Goods Sold 171$ 2,228$ 27,957$ 70,000$ 110,000$
Gross Profit (171)$ (228)$ -11% 26,043$ 48% 70,000$ 50% 110,000$ 50%
Total Operating Expenses 6,668$ 8,598$ 10,350$ 12,160$ 13,566$
Operating Profit (Loss) (6,839)$ (8,826)$ 15,693$ 57,840$ 96,434$
Other Income/Expense 618$ 162$ (3)$ -$ -$
Net Income (Loss) (6,221)$ (8,664)$ 15,690$ 57,840$ 96,434$
HeadcountEngineering 60 76 85 86 86 Marketing 6 8 8 8 8 Sales 2 4 6 7 8 G&A 3 4 5 5 5
41Company ConfidentialMarch 2001
Financials
Expected Break even in the 3rd year
Revenue to exceed US $ 100 Million within 4 years of operation
Operating Margin targeted 50%
Assumes $16M Series B and $10M Series C
Revenue vs Expenses
-
50,000
100,000
150,000
200,000
250,000
FY02 FY03 FY04 FY05 FY06
Revenue
Expense
42Company ConfidentialMarch 2001
Agenda
Background
Market Opportunity & Trends
Virtual Wire Progress & Technology
Strategy & Product Direction
Financial projections
Investment Highlights
43Company ConfidentialMarch 2001
Investor Summary
Virtual Wire is unique startup opportunity with IP and Engineering capable of producing 3G baseband solutions
3G market is vast and segmentation will allow Virtual Wire to participate in the emerging $8B chipset market
Virtual Wire well poised to capture the early market resulting in significant rewards to investors
Goal is to close series B by early Q2
44Company ConfidentialMarch 2001
Ownership View
Employees
Virtual Silicon
SASKEN56%
24%
New Investors
Virtual Silicon
SASKEN
Employees20%
Series A Series B
20%
10 Million Shares
$8.5 + Million Invested
X Million Shares
$16-20 Million New Investment
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