JETY Business Plan

1
JETY Business Plan
Advanced Chip Design Center for the LCD
Consumer Electronics and Networking

• Sept 2003

Disclaimer This report is solely for the use of
potential investors. No part of this report may
be circulated, quoted, or reproduced for
distribution without prior written approval from
JETY TECHNOLOGY, Inc..
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Contents

• Executive Summary
• Background
• JETY Core Products
• JETY Unique Values
• Market Opportunity
• Design Block Diagrams
• Competition
• Team and Experience
• Financials (Expenses, Earnings, and Shares)
• Appendix 1 Design Team
• Appendix 2 Extra Market Information

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Executive Summary

• JETY is the spin-off start-up chip design company
  from QQ Technology Inc and JETY focuses on CMOS
  network chip development and its available IP can
  be used on LCD consumer electronic market
• Innovative, cost competitive chip sets based on
  common IP core developed by JETY
• Embedded LVDS controller for LCD
• High-speed transceiver for networking devices,
  including Ethernet switches, SAN switches,
  Routers, etc.
• Available low power and low pin count 80 Gbps
  switch fabric chip set
• Large and rapidly increasing addressable market
• LCD display
• Networking devices
• Market entry based on features and cost JETY
  will be at least 5X lower in cost with
  significant advancements over currently available
  solutions
• Founders have more than 30 years of chip design
  and business/marketing experiences in consume
  electronics and networking areas

4
QQ Technology Background

• Founded in November 2001
• IDG Venture Capital funded start up company
• IDGVC is the first American venture company in
  China
• Head Quartered in Beijing, China with office in
  San Jose, CA
• Seasoned senior management team from major US
  companies e.g., US Sprint, Lucent, Philips,
  Motorola, Conexant/Hotrail
• 50 employee in Beijing

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Mission

• ASIC chip design house
• Providing Advanced CMOS network chipset
• SerDes and other IP core
• Consume chips
• focus on China and World market

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Current Products

• 16 x 16 Based Switch Fabric Chipset
• 0.18 um CMOS QQ80 Queue Manager and Switch Fabric
  Chipset
• Low-power and High Performance SerDes Core on
  Faber-Channel and Ethernet Application

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Core Products

• LCD (Liquid Crystal Display) Flat Panel Chip Sets
  
• Target markets
• TFT (Thin Film Transistor) flat-panel display
  screen application
• Single/Dual/quad LVDS transmitter for
  XGA/SXGA/SXGA/UXGA, a display with
  1024x768/1280x1024/1400x1050/1600x1200 at wide
  effective rate of 800 Mbps to 3.125 Gbps per LVDS
  channel
• Single/Dual/quad LVDS receiver for
  XGA/SXGA/SXGA/UXGA, a display with
  1024x768/1280x1024/1400x1050/1600x1200 at wide
  effective rate of 800 Mbps to 3.125 Gbps per LVDS
  channel
• Key Features
• Single chip low pin count TQFP package with
  embedded Serializer/Deserializer circuit
• Wide range data rate and low power
• PLL requires No external components
• Support VGA, SVGA, XGA, SXGA, SXGA and UXGA
• Support single and dual links

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Core Products(Conts)

• Transceiver Chip Sets and IP core
• Target markets
• Single/Dual/quad high speed transceiver products,
  covering 800 Mbps to 10Gbps
• 1.0 and 2.0 USB PHY
• Used in network back-plane, Fibre-channel switch
  and SAN (Storage Area Network) switch
• Computer system I/O
• High-speed peripheral interface
• High End/Low End/Mid Range Routers
• Add/drop multiplexers
• Key Features
• Fully compliant with IEEE 802.3ae on XGXS, PHY
  XGXS
• Built-in 8B/10B encoder/decoder
• COMMA detection option
• Monolithic clock synthesis and clock recovery
  with automatic lock-to-reference clock function,
  no external components required
• With transmitter pre-emphasis and receiver
  equalization

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Market Opportunity LCD Monitor and NoteBook
Panel Display Chips
2.5B

• Significant Market Opportunity
• 1.1 Billion in 2002
• 2.5 Billion in 2005

1.9B
1.5B
1.1B
2001
2002
2003
2004
2005
Source a Major LCD manufacturer July 2003
SourceEstimates based on total growth from
previous years
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Market Opportunity Transceiver Products
1.6B
830 M
400 M
200 M
2001
2002
2003
2004
2005
Source
Estimates based on total growth from 2001 to 2005
from Pioneer Consulting
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LCD Market Opportunity Target Customers

• Taiwan Chei Mei
• KoreaSamsung
• LG Philips
• Japan Sharp and Hitachi
• Jing-Dong-Fang,BeiJing
• Those companies take over 80 market share
• China, next LCD manufactures will play an
  important role on the cost reduction and also is
  the huge internal LCD market

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Transceiver Market Opportunity Target Customers

• World-Wide Target Customers
• China Hua-wei, Putian, UTStarcom
• Japan NEC, FUJISU, TOSHIBA etc
• US Cisco, Juniper, Foundry-network, Extreme,
  Riverstone, Redback, HP, Dell, etc.
• Canada Actel, Nortel
• South Korea SAMSUNG
• Singapore Creative LAB
• Taiwan Ambit Microsystems Corp.

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LCD Market Opportunity

• According to recent market search by
  DisplaySearch, The number of LCD monitors shipped
  in the first quarter rose 8 percent from the
  previous quarter to 10.6 million units. It is 2
  times higher than the forecast DisplaySearch
  said it would be 4 percent rise. A very strong
  market trend has been showed in the first quarter
  of 2003.
• Based on the study by Market research firm IDC,
  the flat-panel monitors for desktop computers
  would surpass CRT monitor in revenue in 2003. IDC
  said declining price, along with aggressive
  bundling deals from PC makers, have sparked a
  rise in demand for flat-panel monitors. IDC
  mentioned that this year, flat-panel monitor
  revenue worldwide will likely come to around 20.4
  billion. Revenue from CRT, meanwhile, will come
  to 12.3 billion.
• In the first quarter, Korean company, Samsung
  market position hit 13.5 percent, Dell computer
  take 13.4 percent share, Hewlett-Packard has 8.5
  percent market share. These are top three
  companies in the LCD market. Also the main stream
  of the LCD market is still for the notebook
  computer.

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LCD Market Opportunity(Conts)

•  
• The revenue from LCD TVs was increased 56 percent
  sequentially to 204 million in the last fourth
  quarter, according to Austin Texas-based
  DisplaySearch.
• The top five LCD makers during the fourth quarter
  were LG. Philips LCD, Samsung, AU Optronics, Chei
  Mei/Idtech and Sharp. The companies had market
  shares of 19.2 percent, 17.1 percent, 12 percent,
  8 percent and 8 percent, respectively.
• In the October 2002, DisplaySearch expected LCD
  will generate 17.2 billion in sales, compared
  with 14.3 billion for CRT monitors. By mid-2004,
  shipments of flat panel monitors are expected to
  surpass CRT monitors, eventually outselling them
  by a ratio of more than 5-to-1 in 2006, according
  to DisplaySearch. Flat-panel display shipments
  are anticipated to reach 65.9 million in 2004,
  compared with 42.8 million for CRT monitors.

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LCD Market Opportunity(Conts)

•  
• Samsung Semiconductors Up on LCD Growth
• Online staff -- Electronic News, 7/16/2003
• Samsung Electronics Co. Ltd. today showed a
  slight 2.5 percent sequential revenue
  improvement, coming in with Q2 sales of 8.36
  billion (9.84 trillion Korean won).
• Semiconductors showed 6.8 percent growth
  quarter-over-quarter with 3.19 billion (3.76
  trillion KRW). Within semiconductors, TFT-LCD saw
  a notable 42 percent increase from Q1. Memory
  climbed 1.8 percent, while system LSI fell 4.4
  percent from Q1's results.
• Home appliances was the only other division to
  show growth, more than 21 percent increasing to
  824 million (970 billion KRW), while
  telecommunications and digital media fell 4.6
  percent and 1.3 percent to 2.7 billion (3.18
  trillion KRW) and 1.57 billion (1.85 trillion
  KRW), respectively.
• Overall LCD monitor revenue is really going to
  make an impact on the market. The key to join the
  game would be the good quality with lower price.
  That is highly match with JETYs technologies and
  business plan to reduce the cost by design high
  quality product in China.

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Transceiver Market Opportunity

• The forecast from Gartner Group, Inc for
  backplane transceiver is expected to grow at a
  compound annual growth rate of 52 to nearly 830
  million in 2004 (US alone). Major applications
  driving this growth are Gigabit and 10 Gigabit
  Ethernet switch systems, xDSL and cable modem
  broadband systems, and high-end transmission
  systems.
• USB is another high volume consumer products.

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Transceiver Block Diagram
TD 8/10 Bits
Transmit Buffer
8B/10B Encoder
Serializer
TBC/A-B-C-D
TX ClockGenerator
Transmitter
RD 8/10 Bits
Receiver
Channel Alignment
RX ClockRecovery
RBC/A-B-C-D
Receive Buffer
10B/8B Decoder
Comma Detect
RXP
Deserializer
Channel Alignment and Rate Matching
JTAG
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Switch Fabric Chipset Application
MIC
SPI-3
NPU
QE
QE
CSIX-L1
SeDe
SeDe
NPU
SPI-3
CSIX-L1
SeDe
SeDe
FIC
IXDP2400
SFC
NPU Network Processing Unit (IXP2400) SFC
Switching Fabric Card FIC Fabric Interface
Card MIC Media Interface Card
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LCD Product Road Map
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Competitive Position

• High Speed with small swing, Low noise and Low
  Power, Low price and Low pin count are JETYs
  product distinguishing characteristics.
• JETY, based on China 0.18um, 0.25um and 0.35um
  CMOS technology, is targeting at a better
  performance product with high quality at the
  lowest cost.
• The unique technology and engineering experience
  are keys to ensure JETY to deliver the high
  quality transceiver products.
• Design in China would be a big plus at the
  reduction of products cost

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Founding Team and Experience

• Dr. FC Lin, President and CEO, Founder
• With 15 years solid IC design experience on
  mixed-signal deeper sub-micro CMOS chip design
  field. Dr. Lin was Vice President of Engineering
  at QQ Technology and responsible for leading
  company in designing Switch-Fabric chipset with
  embedded innovative high speed transceiver analog
  circuit.
• Prior to joining QQ technology, Dr. Lin was
  Design Manager at Hotrail Inc, San Jose, where he
  designed high speed transceiver product and
  network chipset to lead the company to be
  acquired by Conexant System at 400 million in
  2000.
• Dr. Lin also spend few years as an Senior
  Design Engineer/project leader positions at
  Trident Micro-system, Philips Semi-conductor,
  Fairchirld Semi-conductor.
• Dr. Lin Held multiple US patents on
  mixed-signal and switch fabric network fields. He
  obtained Ph.D. at UC,DAVIS. BS in TsingHua
  University
• Wells Lai, VP Operations, Founder
• 10 years extensive marketing and engineering
  expertise in semiconductor industry. Helped bring
  IPO of a start-up semiconductor software company
  (Numerical Technologies company). Before that he
  held a key engineering position at IDT, a
  semiconductor manufacturing company.

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Founding Team and Experience (conts)

• Wang Kai, Director of Business Development
  (China)
• 12 years of experience in the industry in
  China and internationally. Most recently held the
  position of Senior Marketing/Sales Manager at
  AVANTI/SYNOPSYS , responsible for the Asia
  Pacific region. Obtained BSEE in TsingHua
  University

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Advisory Board

• Guang-yi li(??,??)
• Extensive experiences with network IC solutions.
  
• Luguang Yan(???, ??)
• President of NingBo University, Chairman of
  Scientific Committee of Institute of Electrical
  Engineering, Academician of the Academy of
  Sciences of China(??????,??????,??????????,???????
  ??)
• Xiong BingQun(?????)
• Ex-President and CEO, Founder of China Datang
  Telecom Technology and Industry, Standing member
  Science Tech committee MII China, Standing
  member Fellow China Institute of
  Communications, Fellow of China Institute of
  Electronics, Professor at Beijing University of
• P T (?????????,????,????????????,??????????
  ,??,????????)

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Financials
High Level Monthly Financials (Fiscal Year 2003)
All financial numbers are in thousands
Use of Funds
Require 2.0M to complete LCD Controller chip in
first year Require 2.0M to complete Transceiver
chip in second year Require 1.0M to IPO
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Financials Summary Revenue/Earnings Projection

• JETY will sell current Switch Fabric chipset to
  QQ and other companies.
• JETY is expected to tape-out its next chipset
  half year after first phase of funding is
  completed
• Revenues (starting from product shipment)
• First year US10M
• Second year US20M
• Profitability (starting from product shipment)
• First year net income US4M
• Second year net income US10M

Note Detailed income statements can be obtained
from JETY
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Share Structure

• Company current estimated cash values US3
  millions
• JETY plans to raise 5 millions to complete the
  product development in next 2 years

• JETY will be spin-off from QQ Technology and has
  20 Design Engineers
• Investors will receive certain percentage of
  ownership based on the amount of investment and
  the company value at the time of investment

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JETY Chip IC Design Team

• Dr. Taylor Lin
• With 15 years solid IC design experience on
  mixed-signal deeper sub-micro CMOS chip design
  field. Dr. Lin was Vice President of Engineering
  at QQ Technology and responsible for leading
  company in designing Switch-Fabric chipset with
  embedded innovative high speed transceiver analog
  circuit.
• Prior to joining QQ technology, Dr. Lin was
  Chip Design Manager at Hotrail Inc, San Jose,
  where he designed high speed transceiver products
  and network chipset to lead the company to be
  acquired by Conexant System at 400 million in
  2000.
• Dr. Lin also spend few years as an Senior
  Chip Design Engineer/project leader positions at
  Trident Micro-system, Philips Semi-conductor,
  Fairchirld Semi-conductor.
• Dr. Lin Held multiple US patents on
  mixed-signal and switch fabric network fields. He
  obtained Ph.D./MSEE at UC,DAVIS. BS in TsingHua
  University

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Team Member

• Dr. Johnny Zhang, Senior Analog Design Engineer
• Over 10 years experience in cutting edge
  mixed-signal IC design with prestigious companies
  such as ATT Bell Labs, Hewlett Packard,
  Conexant, etc. Experienced in Clock Data
  Recovery, Phase Locked Loop, Signal Integrity,
  Equalization/pre-emphasis, and analog block in
  CPU.
• Pioneered current mode high speed interconnects
  technologies (Cover story of EE Time Technology
  session). 6 USA patents on VLSI design granted.
• Ph.D. EE Focus on High Speed, Low power VLSI
  design
• Major Products Developed
• Conexant Quad Octal 3.125G Clock Data Recovery
  Chip Design Testing (0.18um CMOS)
• HP/CISCO 48x2.5 Gigabits router chip (0.15um
  CMOS, 2.5GHz)
• HP/INTEL Itanium II IA64 microprocessor (1Ghz,
  0.18uM CMOS)
• HP RISC microprocessor (0.35um)
• ATT/Bell Lab 6mW CMOS transceiver circuits
  design (0.35um)
• World first 3mW Giga Hertz GaAs transceiver
• waveJunction OC192 (10G) Add/Drop Line Card
• Dr. Zhang obtained Ph.D at UC, Santa Barbarla,
  BS at Beijing University.

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Team Member

• Henry Zhou, Senior Analog Design Engineer,System
  VLSI Division, Hewlett-Packard Company.
• Lead 5G CMOS Tranceiver design for High-end
  computer system chip sets.Define/Design/Develop
  Tranceiver architecture and analog circuitry
  including PLL, Driver, Receiver, CDR and
  Equalization. Develop 5Gbps computer system
  modeling and performance evaluation.
• Principle Design Engineer (06/2000-04/2002)
  Conexant/Mindspeed Inc.
• CMOS SERDE 3.125G/5G tranceiver design including
  Phase-Lock-Loop, Differential Amplifier,
  Clock-Data-Recovery, I/O Pre-emphasis and
  Equalization, and chip level ESD
  analysis.Supervising layout designers to meet
  layout matching and noise reduction. chip
  probing, measurement and debugging.SSTL/HSTL I/O
  design and characterization. I/O ring SSO noise
  simulation and analysis. Signal Integrity chip
  I/O, package and transmission line signal
  integrity analysis with spice modeling and S
  parameter measurements. It includes jitter,
  data-eye and receiver sensitivity analysis.
• Member of Technical Staff (02/1996-06/2000)Hewlett
  -Packard Company.
• HP PA-RISC Microprocessor Design ( bulk and SOI
  process with 800Mhz clock),Clock route analysis
• Engineer (02/95-02/96)
• Modeling System Integration Group, LSI Logic
  Inc.
• MSEE, Purdue University, Lafayette, Indiana.
• BSEE, Shanghai Jiao-Tong University, China.

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Team Member

• Li Li, Design Manager
• Over 4 years experience in logic design
  field.Currently Mr. Li is working on two 6
  million gate-count each chip using 0.18um CMOS
  technology.
• Mr. Li was working in HuaWei company for
  two years as an key design engineer.
• Mr. Li received his B.S. in EE dept.,
  Tsinhgua University,BeiJing.
• Lv Jie, Design Engineer
• Over 4 years experience in logic design
  field.Currently Mr. Li is working on two 6
  million gate-count each chip using 0.18um CMOS
  technology.
• Mr. Li was working in IXA company for two
  years as an key design engineer.
• Mr. Li received his B.S. in EE dept.,
  Tsinhgua University,BeiJing.
• Liu Dong, System Design Manager
• Over 4 years experience in system level PCB
  design field.Currently Mr. Liu is working on two
  6 million gate-count each chip evaluation
  reference design.
• Mr. Liu was working in HuaWei company for
  two years as an key PCB design engineer.
• Mr. Li received his B.S. in EE dept.,
  TianJin University.

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More LCD Market Information

• --With JETY Chip Products

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The current LCD Market in China

• The current LCD industry in China is young
  comparing with outside the world.
• Shenzhen Jinhua Displays Co. Ltd, SinoHero,
  Xiamen Ocular LCD Devices Co. and Jilin Caijing
  Digital High_tech Panels Ltd are major
  manufactures that make only small size LCD for
  cellular phone, radio, CD player and pager.
• The top six LCD makers are all invested by
  oversea corporation, and produce the 15 large
  LCD.
• Top Victory Electronics Co. Ltd Annual sales
  US670M Exports US530M.
• Kong Yue Electronics Information Industry Ltd.
  Annual sales US120M, Exports US24M
• Shenzhen KTC Computer Technology C0. Ltd. Annual
  sales US150M, Exports US0.1M
• Shenzhen Irico-Royal Information Electronics C0.
  Ltd. Annual sales US84.8M, Exports US55.0M
• Shanghai Visart Technologies Co. Ltd and
  Neijiang Direction Liquid Crystal Display Co.
  Ltd. Annual sales US28M/US26M

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The Market future of LCD

• The large size, high resolution, high speed
  control and rich color will be a big challenge to
  all main LCD manufactures in the world, who are
• Taiwan AU Optronics (AUO), Chi Mei
  Optoeletronics (CMO), Chunghua Picture Tube
  (CPT), Hannstar, Quanta Display and Toppoly
  Optoelectronics Corp.
• Japan Sharp, JVC, NEC LCD, Casio, Fujitsu, NEC,
  Mitsubishi and Sony
• Korea Samsung, LG.Philips and BOE-HYDIS
• U.S Planar

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The LCD future in China

• The new build LCD Manufactures with the latest
  advanced equipments will be the dominators in the
  China or in the world LCD market
• All Taiwans LCD companies want to move into the
  China in order to keep the ability of competition
• Samsung considers building a PDP panel in
  mainland China.
• BOE_Hydis plans to build fifth generation TFT-LCD
  in Beijing in 2005.
• NEC Corp is effectively moving a part of its LCD
  business to Shanghai in June of 2003.
• Sony will invest US42M to US83M in the
  construction of LCD plant in Wuxi.
• China will be the King of the LCD world

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JETYs position in the LCD Market

• All big LCD manufactures need strong support from
  its own design house or collaborate with others
• Samsung, the number one seller in Global LCD
  Market, selects Trident Microsystems Inc.s
  technologies to support its LCD TV, that are DPTV
  3DPRO video processor and panelPro Multimedia LCD
  controller.
• NEC LCD TV powered by Genesis Microchip
  Controllers
• Casio, Triscend corp. a U.S company collaborate
  on new LCDs development
• JETY will be the one in China and be partner
  with all LCD makers