SEMICONDUCTOR SECTOR REPORT

SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600

MARKET HIGHLIGHTS Inside this issue MARKETMARKET HIGHLIGHTSHIGHLIGHTS ƒ Two significant baseband IC transactions were announced in Q3’07. In August, LSI Logic (NYSE:LSI) signed a definitive agreement to sell its mobile products business, which designs semiconductors and software for cellular telephone Market Highlights handsets and complete chip-level solution for satellite digital audio radio applications, to Infineon (NYSE:IFX) for an Summary Performance aggregate amount of $495MM. In addition, Taiwan chip designer MediaTek (TPE:2454) announced the $350MM acquisition of the baseband chipset operation from (NYSE:ADI). Observations ƒ Six semiconductor companies registered for initial public offering in Q3’07 (including Memsic (:MEMS) Sonics Trading Data (NASDAQ:SNCS), Rubicon (NASDAQ:RBCN), Allegro Microsystems (NASDAQ:ALGM), Entropic (NASDAQ:ENTR), and Intellon (NASDAQ:INTL), marking a significant increase in IPO registration activity relative to the first and second quarters Transaction Activity of 2007. Savvian Update ƒ In July, Sumitomo Chemical (TYO:4005) announced the acquisition of Cambridge Display Technology (CDT) (NASDAQ:OLED), a developer of technologies based on polymer organic light emitting diodes (P-OLEDs). The acquisition, completed at a 107% premium over CDT’s 90-day average closing share price, is indicative of the significant market growth predicted for P-OLEDs as the technology seeks to displace current technologies in large panel televisions and lighting applications. ƒ The overall semiconductor market ended Q3’07 relatively flat following a trough in valuations mid-quarter. The sector has rebounded since mid-August with total semiconductor billings up 13% in Jul-Aug, tracking above normal seasonality.

San Francisco Office SUMMARY Q3 STOCK PERFORMANCE 150 California Street San Francisco, CA 94111 112 Phone: (415) 318-3600 108 +2.6% New York Office 104 +1.5% 7 Times Square, 100 +0.4% Suite 2501 +0.4% New York, NY 10036 96 -1.1% Phone: (212) 999-7090 92 -7.4% Indexed Price Chicago Office 88 71 S Wacker Drive, 84 Suite 1230 Chicago, IL 60606 80 Phone: (312) 212-8210 7/02/07 7/13/07 7/27/07 8/08/07 8/21/07 8/31/07 9/14/07 9/28/07

NASDAQ SOX IC IP & EDA Equipment Services & Materials

OBSERVATIONS ƒ While the pullback in the credit markets has negatively impacted the feasibility of large cap buyouts and attractiveness of debt financings, the deal pace for more traditional M&A transactions and equity financings has maintained a very healthy For further information, clip. In fact, Q3 saw an increase over Q2 for both number of M&A transactions announced and private financings please contact: completed. ƒ Six U.S.-based semiconductor companies filed for an initial public offering in Q3, signaling both the increasing openness of Bryce Dakin institutional investors to earlier stage growth stories, and ironically, the continued challenges faced by private semiconductor companies trying to secure funding on attractive terms. Director ƒ (NASDAQ:QCOM) cracked the top-10 list of semiconductor companies in Q2, the first time a fabless company Phone: (415) 318-3673 has held that distinction. Other volatility in the top-10 rankings was caused by significant shifts in the NAND Flash (up) and [email protected] DRAM (down) markets. Notably, Flash manufacturing capacity is predicted to pass DRAM in 2008. ƒ The demonstrated growth of focused fabless companies is coincident with more broadly diversified IDMs continuing to Mark Waissar streamline and optimize their portfolios with “divisional M&A”. The prior referenced cellphone baseband IC divisional sales this past quarter by both Analog Devices (NYSE:ADI) and LSI Logic (NYSE:LSI) are examples of IDM streamlining and Managing Director optimizing and indicative of the increasing costs to develop and maintain leading-edge, highly integrated IC solutions. Phone: (415) 318-3650 ƒ The Capital Equipment segment continues to face challenges including: moderated equipment spending across end [email protected] markets (with the exception of NAND Flash memory), increasing tool development costs, and rising customer concentration. Interestingly, the capital equipment segment has represented a disproportionately low percentage of overall M&A deal volume. SEMICONDUCTOR SECTOR STOCK PERFORMANCE

Sector 1 Month Sector 3 Month Sector 1 Year

Metrology, Test and Packaging Equipment 10.1% Discretes 3.5% Packaging / Testing Services 73.9% Packaging / Testing Services 8.2% Wafer Processing Equipment 1.8% Foundries 11.0% 5.9% EDA (0.2%) Analog / Linear 13.2% Multimedia 5.6% SOX (1.1%) Discretes 11.5% Intellectual Property 3.1% Analog / Linear (2.1%) SOX 10.0% Analog / Linear 3.0% Intellectual Property (2.7%) Intellectual Property 9.6% EDA 2.2% Wireless (3.5%) EDA 7.2% Foundries 2.0% Wireline (4.1%) Wafer Processing Equipment 4.2% Discretes 1.7% Packaging / Testing Services (6.3%) Wireless 3.2% SOX 0.5% Foundries (9.5%) Wafer and Materials 2.3% Wireline 0.2% Memory (11.3%) Wireline (2.4%) Processors (0.6%) Multimedia (11.4%) Metrology, Test and Packaging Equipment (3.8%) Wafer Processing Equipment (0.7%) PLD / ASIC (15.7%) Processors (4.4%) Memory (0.9%) Processors (15.9%) PLD / ASIC (5.1%) Wafer and Materials (1.5%) Metrology, Test and Packaging Equipment (17.1%) Multimedia (12.2%) PLD / ASIC (2.0%) Wafer and Materials (18.6%) Memory (12.8%)

Notes: Represents median price change for each category over specified time period. SOX represents index of semiconductor public companies.

Q3 Best Performers – Large Cap Q3 Best Performers – S/M Cap LTM Best Performers – Large Cap LTM Best Performers – S/M Cap Sigma Designs 79% Cambridge Display 82% ALi Corp 345% Elan Micro 468% ALi Corp 62% Echelon Corp 58% Sigma Designs 223% Pan Jit Intl. 309% Varian SEA 36% Pan Jit Intl. 46% SunPower Corp. 199% Weltrend Semi 307% Macronix 35% Catalyst Semi 44% ANADIGICS 153% Echelon Corp 204%

Notes: Large Cap consists of companies with current market capitalization greater than $1Bn as of Sep 30, 2007. Small / Mid Cap consists of companies with current market capitalization between $100MM and $1Bn as of Sep 30, 2007. Q3 and LTM as of Sep 30, 2007.

SEMICONDUCTOR SECTOR TRADING MULTIPLES

Combined EPS Market AV / Revenue AV / EBITDA Price / EPS CY 07E Price / Long Term Revenue Growth Cap ($MM) CY 07E CY 08E CY 07E CY 08E CY 07E CY 08E PEG Book Growth 08E/07E Y/Y MRQ

Median Multiples

Processors $164,011 3.8 x 3.0 x 9.8 x 9.3 x 22.7 x 18.4 x 1.1 3.0 x 16.8% 17.8% 8.4% Wireless 134,655 2.9 x 2.1 x 14.7 x 10.3 x 20.7 x 17.9 x 1.0 3.8 x 19.5% 21.5% 13.6% Wafer Processing Equipment 106,391 2.0 x 1.8 x 11.7 x 10.8 x 17.2 x 16.2 x 1.0 2.2 x 17.0% 10.7% 1.1% Foundries 75,229 2.7 x 2.0 x 10.9 x 5.6 x 19.7 x 18.1 x 0.7 1.5 x 24.4% 21.0% (6.7%) Analog / Linear 74,896 3.6 x 3.1 x 15.0 x 12.3 x 24.5 x 19.4 x 1.2 3.3 x 17.0% 13.5% 1.5% Memory 62,408 1.3 x 1.2 x 13.6 x 10.4 x 41.0 x 24.5 x 1.8 2.0 x 17.0% 15.2% 12.5% Multimedia 54,717 1.6 x 1.3 x 9.5 x 8.6 x 18.5 x 14.4 x 0.7 1.9 x 21.7% 14.1% 0.2% Wireline 42,676 1.8 x 2.0 x 25.2 x 13.1 x 31.8 x 24.9 x 1.1 2.0 x 20.7% 18.9% (5.5%) PLD / ASIC 40,050 1.9 x 1.7 x 13.2 x 9.6 x 24.0 x 18.5 x 1.2 2.1 x 15.0% 8.9% (3.8%) Wafer and Materials 32,791 1.4 x 1.2 x 10.5 x 8.3 x 23.5 x 15.9 x 0.9 1.8 x 17.5% 10.7% 4.8% Metrology, Test and Packaging Equipment 21,969 1.4 x 1.3 x 12.3 x 7.7 x 25.1 x 16.9 x 0.9 1.7 x 16.4% 15.9% (11.6%) Packaging / Testing Services 19,371 1.9 x 1.6 x 6.3 x 5.5 x 14.0 x 11.1 x 0.7 2.4 x 17.5% 14.5% (8.1%) Discretes 17,536 1.4 x 1.3 x 8.6 x 7.5 x 21.8 x 15.5 x 1.0 1.8 x 14.5% 8.1% 5.6% Intellectual Property 13,380 5.2 x 5.3 x 16.6 x 14.3 x 30.5 x 28.8 x 1.0 2.3 x 23.8% 19.0% 26.5% EDA 12,436 2.4 x 2.1 x 12.2 x 9.4 x 19.8 x 18.5 x 0.9 2.8 x 20.5% 11.7% 11.2%

Mean 2.4 x 2.1 x 12.7 x 9.5 x 23.7 x 18.6 x 1.0 2.3 x 18.6% 14.8% 3.3% Median 1.9 x 1.8 x 12.2 x 9.4 x 22.7 x 18.1 x 1.0 2.1 x 17.5% 14.5% 1.5%

Notes: Source: Reuters, FactSet and Street Estimates As of Sep 29, 2007.

SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600 SELECTED MERGER & ACQUISITION TRANSACTIONS

$MM Ann / Close Deal Date Status Target / Unit Name Buyer Name Value Target Business Description

9/24/07 Completed Alarity Corp. ARC International PLC $6 Provides IP solutions and services 9/14/07 Completed Havok, Inc. Intel Corp. ND Provides interactive software and services 9/12/07 Completed Intel Corp. / Modular Communications Platforms Business Radisys Corp. 25 Manufactures modular communications equipment 9/10/07 Announced Planet ATE, Inc. Intersil Corp. 58 Manufactures semiconductors and other electric components 9/10/07 Announced Gennum Corp. / Manufacturing Operations The Gores Group LLC 15 Designs and manufactures semiconductors 9/10/07 Completed Analog Devices, Inc. / Baseband Chipset Operations MediaTek, Inc. 350 Develops baseband chips 9/5/07 Announced Tarari, Inc. LSI Corp. 85 Designs and develops content processor silicon 9/4/07 Announced ASE Test Ltd. Advanced Semiconductor Engineering, Inc. 784 Provides semiconductor engineering testing services 8/30/07 Announced IBM Corp. / Infineon Technologies AG / Altis Semiconductor Global Information Services ND Manufactures semiconductor components for comm, automotive and security apps 8/27/07 Announced Chipidea Microelectronica SA MIPS Technologies, Inc. 147 Develops analog and mixed-signal IP and turnkey solutions 8/23/07 Announced Vitesse Semiconductor Corp. / Storage Products Business Maxim Integrated Products, Inc. 75 Manufactures high-performance ICs for system manufacturers 8/21/07 Completed Peak Devices, Inc. TriQuint Semiconductor, Inc. ND Develops wide band, multi purpose RF power transistor technology 8/21/07 Completed Southland Micro Systems Statek Holdings, Inc. 25 Manufactures memory IP and modules 8/20/07 Announced LSI Corp. / Mobile Products Unit Infineon Technologies AG 495 Manufactures semiconductor and software for cell phones 8/15/07 Completed Designs, Inc. Texas Instruments, Inc. ND Designs and manufactures circuits 8/13/07 Announced Sirenza Microdevices, Inc. RF Micro Devices, Inc. 906 Designs and supplies RF components for the wireless and wireline TCOMM market 8/3/07 Announced Hynix Semiconductor, Inc. / 8-inch Memory Chip Prod Ops China Resources Logic Ltd. 400 Engages in computer memory chips production 7/31/07 Completed Cambridge Display Technology Inc. Sumitomo Chemical Co. Ltd. 285 Develops display technology 7/25/07 Completed LSI Corp. / Assembly & Test Ops (Thailand) STATS ChipPAC 100 Assembly and test 7/24/07 Completed Sonaptic Ltd. Wolfson Microelectronics PLC 40 Develops audio technologies for mobile devices 7/16/07 Completed MOSAID Technologies Inc. / IP Product Dev Business Synopsys Inc. 15 Licensing and development of semiconductors 7/12/07 Completed Apex Microtechnology Corp. Cirrus Logic, Inc. 42 Designs and manufactures hybrid and monolithic microelectronic components

Notes: Source: Mergerstat, Company Filings, CapIQ, Wall Street Research ND represents Deal Value that were Not Disclosed.

SELECTED FINANCING ACTIVITY

$MM Effective Deal Effective Deal Date Company Value Business Description Date Company Value Business Description

Debt Offering Venture Capital

Develops and manufactures a range of semiconductors for Designs and develops ICs for high-speed communications 9/11/07 Avago Technologies Finance Pte. Ltd. $1,000 9/27/07 Quellan, Inc. $20 processing optical, audio, and radio frequency equipment

Develops and supplies Ethernet passive optical network 9/17/07 Teknovus, Inc. 28 Follow-on Equity Offering (EPON) chipsets and embedded software for the fiber

Offers silicon-based digital media processors for IP video Offers low-power RF and baseband ICs for the GPS and 9/26/07 Sigma Designs Inc. 184 9/17/07 NemeriX SA 23 technology, media players, HDTVs, and PCs wireless industries

Engages in the development and marketing of network Develops and manufactures ultra wideband chipsets for radar, 9/17/07 LanOptics Ltd. 42 9/17/07 Time Domain Corporation 25 processors precision tracking, and wireless communications

Provides wireless and wireline broadband communication Develops wireless universal serial bus and ultra wide band 8/28/07 Metalink, Ltd. 28 9/13/07 Alereon, Inc. 40 silicon solutions wireless chipsets

Designs and manufactures semiconductor capital equipment Develops system fabric devices for electronic equipment 8/24/07 Aviza Technology, Inc. 42 9/6/07 XMOS Limited 16 and process technologies designs and offers products in the form of chips Develops analog and mixed-signal devices for digital media 8/28/07 Analogix Semiconductor, Inc. 14 PIPE (Equity & Debt) & Rule 144a Financings and communications interconnect applications

Engages in the design, marketing, and sale of ARM Cortex- Engages in the design, development, and distribution of 8/22/07 Luminary Micro, Inc. 25 8/23/07 Syntax-Brillian Corporation 20 M3 processor-based microcontrollers HDTVs utilizing LCD and LCoS technologies Provides RF, mixed-signal, and digital signal processing Provides processing solutions for the computing, graphics, 8/21/07 Telegent Systems, Inc. 20 8/14/07 Advanced Micro Devices Inc. 1,500 solutions for mobile video applications and consumer electronics markets

Provides wireless and wireline broadband communication 8/20/07 Novafora Inc. 12 Develops digital video silicons for the video processing sector 8/8/07 Metalink, Ltd. 19 silicon solutions Develops digital video display interface and processing Designs and manufactures light-emitting diodes and laser 8/8/07 Parade Technologies, Ltd. 15 7/17/07 Advanced Optoelectronic Technology 26 products diodes Develops and markets high-performance wafers for advanced 8/7/07 Silicon Genesis, Inc. 23 IPO electronic and opto-electronic devices Designs and develops electronic solutions that enable mobile Provides semiconductor sensor and system solutions based 8/6/07 Mirics Semiconductor Inc. 12 9/28/07 MEMSIC, Inc. (Filed) 100 on integrated MEMS technology and mixed signal circuit digital broadcast reception design Develops solutions for the Flash memory market, optimizing Engages in developing crystalline products for LEDs, RFICs, 8/1/07 Anobit Technologies Ltd. 17 9/5/07 Rubicon Technology, Inc. (Filed) 100 Flash memory devices for storage solutions blue laser diodes, optoelectronics, and other optical apps Offers analog, radio frequency, and microwaves ICs for Provides intelligent interconnect solutions that manage the on- 7/30/07 Acco Group 10 8/24/07 Sonics, Inc. (Filed) 80 semiconductor and system manufacturing industries chip communications in SoC devices Delivers programmable packet and transport processors, and Designs and manufactures magnetic sensor integrated 7/26/07 Bay Microsystems, Inc. 16 8/8/07 Allegro Microsystems, Inc. (Filed) 115 circuits (ICs) and application-specific analog power network elements for broadband networks semiconductors Designs and delivers physical layer ICs for wireline and Engages in the design, development, and marketing of 7/23/07 Plato Networks, Inc. 20 7/27/07 Entropic Communications, Inc. (Filed) 100 wireless applications systems solutions to enable connected home entertainment Engages in the design, development, and marketing of Designs and sells integrated circuits for powerline 7/18/07 Symwave, Inc. 12 7/12/07 Intellon Corporation (Filed) 100 analog/mixed-signal ICs and system solutions communications 7/10/07 Xanadu Wireless BV 11 Designs wireless ICs with a focus on 802.15.4

Develops hybrid battery management technology solutions for 7/4/07 Techtium Ltd. 10 portable devices

Designs chipsets for mobile applications that solve mobile 7/4/07 DiBcom S.A. 27 digital terrestrial television reception problems

Notes: Source: CapIQ, includes transactions in Q3’07 greater than $10MM

SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600 SAVVIAN TRANSACTIONS IN 2007

Strategic Acquired by Acquired Minority Investment in Investment by Acquisition of Acquired by

Front Line Management

We advised the seller We advised the buyer We advised the Special Financial Advisor We advised the buyer We advised the seller Committee of the investor

Acquired by Acquired by Merger With Divestiture of Acquired by Acquired by Cell Phone Innovation Interactive HowStuffWorks Distribution Management and International Business We advised the seller We advised the seller We advised INTAC We advised the seller We advised the seller We advised the buyer

Acquired by Common Stock Divestiture of Preferred Acquired by Acquired by Cleanroom Integrated PIPE Solutions Business Stock

We advised the seller Placement Agent We advised the seller We advised the seller Financial Advisor We advised the seller

Secondary Acquisition of Silicon Valley Sale of Semiconductor Automatic Acquired by Strategic Preferred Tech Center from Test Equipment Assets to Public Alternatives Stock Review Equity Offering

We advised the buyer We advised the seller We advised the seller Financial Advisor Financial Advisor Financial Advisor

Semiconductor & Electronics related transactions highlighted in blue ABOUT SAVVIAN ADVISORS LLC Savvian Advisors, LLC is a leading investment bank serving growth companies through its merger and acquisition advisory and capital market financing services. Savvian professionals cover a broad array of industries, including the technology, media, communications, healthcare, business services, financial technology and consumer commerce sectors. Savvian has offices in San Francisco, New York and Chicago.

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SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600