Bringing value to Malaysia through a privileged partnership

1. Dan Ellsworth President & CEO World Micro, Inc. June 13, 2011 Bringing value to Malaysia through a privileged partnership Collaborating For success

2. Please refer to your TAKE-AWAYS™ brochure for additional details related to this presentation No need to stress about taking notes… Take-aways™

3. Bringing value to Malaysia through a privileged partnership Content Partnership and collaborationNCIA, IDEA Supply chain structure World Micro marketing plan overview Benefits to Penang and Malaysia Investment plans In this presentation…

4. “World Micro has opened an Asian hub in Penang. Its biggest competitive advantage is its counterfeit inspection, detection and abatement and RF ID expertise. WM’s expansion would be the first of its kind in Malaysia . It not only benefits WM, but also the Malaysian economic and industrial ecosystems. This amounts to a ‘re-branding’ of Malaysia – a safe harbor for non counterfeit parts and a regional center of excellence in electronics manufacturing.” Vision 2020. A far view. Not a dream but reality. Together we achieve it. ”Wawasan 2020Satu pandangan jauhBukan impian malah kenyataanBersama kita jayakan”Composed by Akbar Nawab “We are privileged to become a ‘partner for growth’ of the Malaysian ecosystem.”

5. “A program of collaboration" to help grow the Malaysian electronics economic ecosystem through the introduction of programs to position Malaysia to become the Asian center of influence and education toward eliminating counterfeit electronic (CF) components.” A collaboration has been proposed An opportunity to lead an industry

6. “The objectives of the Northern Corridor Implementation Authority (NCIA) are: “To promote and accelerate the development of the region into a world class economic region and a choice destination for investment, work and living…” Companies such as WMC can be given incentives if the right value is brought into the country. NCIA driving force in regional growth Incentives provided for workable programs

7. Advances trade ethics Establishes standards Provides industry education Provides certification programs classes and workshops designed to train for counterfeit parts detection Conducts inspector certification program IDEA is structured, proven, and ready to deploy New standard ready to roll out. Able to certify Malay workforce.

8. “Through collaboration between the NCIA and World Micro, and with guidance and support from the U.S. – based IDEA, programs will be created to benefit the region -- and the country. This can profoundly impact Malaysia's role in the worldwide electronic components supply chain and enhance its reputation in the Malay marketplace. “ A Shared vision NCIA incentives and IDEA support can help to build a safe haven

9. A proposal for contribution to training, development, and awareness programs was created and has been submitted. It lays the foundation for moving the collaboration forward. Moving forward. Some details:

10. Three types of distributors This group of suppliers has focused on satisfying the needs that traditional franchise distribution is currently unable to provide and can “take care of the last 20% of parts requirements that cause 80% of the headaches". Relationships in the electronics and electrical products (E&E) chain Supply chain structure

11. It is important to draw a distinction between Independent Distributors and Brokers. Because they are both called upon to help with obsolete parts, the names are often used interchangeably. However, a Broker is a supplier who lacks a well-documented Quality Control System, lacks the global footprint needed to support Tier-1 OEM’s and CM’s, and does not carry inventory. These firms typically focus all of their efforts on supplying only obsolete and hard to get parts. The industry has failed to distinguish the important role independent distributors play in the supply chain Supply chain: Brokers

12. General areas of support There are two specific areas where WM can support Malaysia in these formative years of growth. The first of these is “Process Lag” – the increasing pent-up demand for training of the local Malaysian workforce in new industry methods such as RFID tagging and testing standards. The second area of focus is counterfeit abatement training and awareness aimed at preventing unethical or criminal opportunism, made especially visible by the example of counterfeit electronic components entering the Malaysian and thereafter, world supply chain (one estimate claims that five percent of the world’s counterfeit parts come out of or through Malaysia). Assures that supplier is able to assist with issues that cannot be adequately addressed with other distributor models Supply chain: independent distributor value

13. Education is a first step Marketing plan and related intelligence Missing links: Counterfeit training, RF ID technology and training Target audience: More than 90 percent of all businesses in Malaysia are categorized as SMEs, a from-the-ground-up approach that brings awareness training and education in the area of counterfeit abatement as well as an introduction to RFID technology is suggested. “Educated SME companies will play an important role in the quality of products produced and shipped out of Malaysia and will impact the Malaysian economy favorably.” World Micro’s plan: top level view

14. Program summary Marketing plan and related intelligence 1. World Micro proposes the creation of a two-year training program. 2. In consideration of WM’s contribution to the ecosystem, the company asks for financial considerations to offset the costs associated with the creation of the programs and expenses associated with the company’s establishment in Penang. 3. Training programs will cover RFID tagging and counterfeit abatement issues and methods and the programs will target specific audiences. WM suggests that SMEs comprise the first sector to receive this training. 4. WM is engaging in PR activities and is offering NCIA and the Malaysian government, at its discretion, the opportunity to collaborate on far-reaching news and other media initiatives for the benefit of the Malaysian ecosystem. 5. WM will start the training program development and will seek direction from NCIA and IDEA for specific items to be considered in the program. Local candidates are currently being interviewed. 6. WM asks that specific financial incentives be granted to ensure the success of the proposed program. World Micro’s plan – top level view

15. Lower logistics cost for EMS companies equals better competitive pricing Improved reputation for Malaysia as a center for genuine electronic components Improved awareness of counterfeit electronics and an organized approach to overcome it Create air cargo activities for the airport Direct jobs creation at WM and increasing at EMS companies) Knowledge creation for Malaysian E&E industry on specific skills Benefits to Penang: Help reach the goals of Wawasan 2020 Incentives provided for workable programs

16. Warehouse in final build-out in FCZ VP of quality on siteEMS companies training started Director of operations on-site Equipment (like X-Ray etc..) has been purchased locally Hiring in process Expanded location (additional space) will be occupied in late fall Investment plans “We already have feet on the ground.”

17. World Micro will make investments of approximately RM7,125,000 during its start-up phase and toward the end of the second year of operations in Penang For training and development, WM is requesting one-hundred percent of a soft-loan, which amounts to approximately RM2,620,000. Further, WM seeks consideration of a 30 percent forbearance on this soft loan after a three-year period. That is, WM is asking that the soft loan, if granted, will be repaid at 70 percent of the original loan, after a three-year period. Investment plans Loans and forbearance

18. “WM and its dedicated staff is fully committed to building a strong business presence in Asia and we are confident that a collaborative approach to our expansion will result in substantial benefits to Malaysia, its reputation, and its economy. If we are able to work together, our goals can be met quickly and with great rewards--- such benefits will be meaningful, fruitful and have long lasting effects.” Sincerely, Dan Ellsworth, President & CEO World Micro (M) Sdn. Bhd. . Winning together World Micro is committed to building a winning relationship

19. Dan Ellsworth President & CEO World Micro, Inc. Collaborating for success Thank you For Your Time Today