
Background

Market Opportunity & Trends

Virtual Wire Progress & Market Position

Strategy & Product Direction

Financial Projections

Investment Highlights
March 2001 Company Confidential
2

March 2001 Company Confidential
3


3G market will launch in Japan and will experience explosive growth to 140M subscribers 1 by 2004

Multi-mode 3G and 2.5G will deploy in Europe, 200M Subscribers 2 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 investors
Source 1 : Ovum Report on 3G
Source 2 : Wit SoundView Report on GPRS
March 2001 Company Confidential
4


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
March 2001 Company Confidential
5

Technology
License
Technology House
SASKEN
Chipset / SOC
March 2001
RISC, DSP
Cores
High speed memories etc.
Process
Technology
Low Power
Design
UMC
Physical Libraries
SOC Technology
Virtual Silicon
Handset
Developers
End User
Device
Developers
Company Confidential
6

March 2001
Source: NTT DoCoMo Website
Company Confidential
7

Source: NTT DoCoMo Website
March 2001 Company Confidential
8


Background

Market Opportunity & Trends

Virtual Wire Progress & Market Position

Strategy & Product Direction

Financial projections

Investment Highlights
March 2001 Company Confidential
9


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 *
Source* Herscel Shosteck Associates

All devices communicate

Person to Person

Person to Machine

Machine to Machine
March 2001 Company Confidential
10

CDMA IS95A
2.5G
IS95B 1xRTT
3G cdma2000
TDMA
GSM
IS136
GSM
2.5G
GPRS
EDGE
3G
WCDMA
14.4kbps 64kbps/ 384kbps 2Mbps
144kbps
March 2001 Company Confidential
11

March 2001 Company Confidential
12

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
FIXED INTERNET PORTALS

Legacy
- Very successful in attracting traffic

Expectation
- Translate success to mobile
Internet
MOBILE OPERATORS
 Legacy
- Invested heavily on UMTS licenses
 Expectation
- To rule over the mobile Internet value chain, especially through strong portals
MVNOs
 Legacy
Strong brands
 Expectation
Expand brand relationship to new environments to enhance revenues
CAR MANUFACTURERS

Legacy
- Traditional mobile environment and closeness to consumer

Expectation
- Gain multimedia service revenues as “hardware” managing service
NEW PLAYERS
 Legacy
- Entrepreneurs sensing an opportunity
 Expectation
- Become a leading point of access to mobile Internet by moving fast
CONTENT PROVIDERS

Legacy
- Popular, strong brands

Expectation
- Increase channels of distribution and move in portal space
Players have different legacies and expectations. Competition through partnerships and alliances is sure to become intense…
March 2001 Company Confidential
13


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.
March 2001 Company Confidential
14

1600
1400
1200
1000
800
600
$8B
400
200
0
Total Wless
Total 3G Chips
Chipset Revenue $M
2002
823
3
2003
932
15
2004 2005 2006 2007
1,037 1,142 1,244 1,355
41 122 216 384
60 300 820 2440 4320 7680
Source: Ovum Report on 3G
Assumptions ;
 ASP of $20 a chipset 1

Rapid revenue growth to over 12 billion, in 6 years
Note 1 : Base band
March 2001 Company Confidential
15


Background

Market Opportunity & Trends

Virtual Wire Progress & Technology

Strategy & Product Direction

Financial projections

Investment Highlights
March 2001 Company Confidential
16


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
March 2001 Company Confidential
17


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

FlexSi Tm 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
March 2001 Company Confidential
18


Executive Officers
Michael Kliment
CEO and President
Prior: Virtual Silicon, COMPASS, VLSI, Intel
Dipu Pramani
Sr VP of Engineering
Prior: VLSI, AMI
Suresh Agarwal
VP of Marketing & Business Development prior: Neomagic,Chips and Technology,AMD
Joseph Drori
VP Engineering, SOC design
Prior: Xicor, National
Sylvia Shively
Corporate Controller
Prior: Virtual Silicon, DSP Group


Board of Directors
Michael Kliment
CEO and President
Tony Moroyan
President, Via Sphere
Rajiv Mody 1
CEO, SASKEN
Taylor Scanlon
CEO and President of Virtual Silicon

Note 1 SASKEN can have up to 2 board seats
March 2001 Company Confidential
19


 Technical Advisors
Dipankar Raychaudhury
Chief Scientist, Iospan , San Jose
Professor of Electrical Engineering and Director of the Wireless Information
Network Lab (WINLAB) at Rutgers University, New Jersey
Expertise 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 Kao
CEO, Artest , Sunnyvale
Founder of Test and assembly contract house for rf and digital chips.
Expertise in production test of communication chips
David Pye
Senior VP of Manufacturing, Triquint semiconductor , Hillsboro, Oregon
Key supplier of RF components for wireless and high speed optical networks.
Expertise in RF and communication markets
March 2001 Company Confidential
20


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.
March 2001 Company Confidential
21


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 Shively
Prior: Corporate Controller for, Virtual Silicon, DSP Group Inc. and DSP
Semiconductor.
Has over 10 years experience in financial analyst and controller positions.
March 2001 Company Confidential
22

6

Wireless system design and reference design are being done in Bangalore.
3
HW
RF
Wireless
17

Chip design center is being established in Silicon Valley
VLSI
12
38 people today doubling over the next 12 months

Operations will be based in
Silicon Valley

Initial wafer fabrication will be done at UMC

Test engineering will be based in Silicon Valley
March 2001 Company Confidential
23

120
100
80
ENGINEERING
SALES
MARKETING
G&A
60
40
20
0
2000 2001 2002 2003
Calendar Years
Company Confidential
2004
March 2001
2005
24

Compliance
Access Scheme
Mode
Chip rate
Application Data Rates
CRC support
FEC codes
Interleaving
Spreading
Scrambling
3GPP R'99
Wideband – Code Division Multiple
Access (W-CDMA)
Frequency Division Duplex (FDD)
3.84 Mcps

128 Kbps (uplink)

384 Kbps (downlink)
Yes

Convolution Codes(Rate:1/2,1/3)

Turbo Codes (Rate:1/3)

Puncturing and Repetition for variable data rates
Inter and Intra Frame Interleaving
Walsh codes
 SF [4 – 512] downlink
 SF [4 – 256] uplink
Gold sequences of length 38400 chips
March 2001 Company Confidential
25


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
March 2001 Company Confidential
26

TM
Digital
I/O &
Control
Hardware accelerator
I/F
Mem BOPS SRAM
DMA
Memory/
Expansion bus
MDB
AHB
DMA
ARM 922T SRAM
PLL/
Clock
APB
Peripherals
RS232
USB
SIM
Clock
Example of a WCDMA SOC with some standard peripheral interfaces
Hardware 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.
March 2001 Company Confidential
27

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.
March 2001 Company Confidential
28


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.
March 2001 Company Confidential
29

Digital
I/O &
Control
Hardware accelerator
I/F
Mem BOPS SRAM
DMA
Memory/
Expansion bus
MDB
AHB
DMA
ARM 922T SRAM
PLL/
Clock
Programmable controller
Media
Processor
Clock
WCDMA baseband processor with a configurable interface to an external media processor or to a standard computer/industrial bus.
March 2001 Company Confidential
30

1999
Start of WCDMA Program
Algorithm Development
Hardware/Software Partition
Development Platforms
First Silicon Flexi-platform
Custom Chip Sets
Year
2000 2001 2002 2003
March 2001 Company Confidential
31


Background

Market Opportunity & Trends

Virtual Wire Progress & Technology

Strategy & Product Direction

Financial projections

Investment Highlights
March 2001 Company Confidential
32


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.
March 2001 Company Confidential
33

Board based platform to verify Hardware/Software solution for W-CDMA .
Platform SOC solution implementing W-CDMA
SP/PE
SP/PE
SP/PE
+ VWI
Embedded core in multiple designs
March 2001
One chip custom solution
Company Confidential
34


PDA providers

Portable computer providers

Auto electronics

Home networking

Consumer electronics

Industrial electronics
March 2001 Company Confidential
35


Development Platform for development, testing and demonstration

Wireless platform on chip with WCDMA processor and reconfigurable 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, GSM
March 2001 Company Confidential
36


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
Our experience and proprietary technology positions
Virtual Wire to become the leading supplier in this market !
March 2001 Company Confidential
37


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
March 2001 Company Confidential
38


Background

Market Opportunity & Trends

Virtual Wire Progress & Technology

Strategy & Product Direction

Financial projections

Investment Highlights
March 2001 Company Confidential
39

T o ta l R e v e n u e
T o ta l C o st o f G o o d s S o l d
G r o ss P r o fi t
T o ta l O p e r a ti n g E x p e n se s
O p e r a ti n g P r o fi t (L o ss)
O th e r I n c o m e / E x p e n se
N e t I n c o m e (L o ss)
H e a d c o u n t
E n g in e e rin g
M a rk e t in g
S a le s
G & A
F Y 0 2
$ -
$ 1 7 1
$ (1 7 1 )
$ 6 , 6 6 8
$ (6 , 8 3 9 )
$ 6 1 8
$ (6 , 2 2 1 )
6 0
6
2
3
March 2001
F Y 0 3
$ 2 , 0 0 0
F Y 0 4
$ 5 4 , 0 0 0
F Y 0 5
$ 1 4 0 , 0 0 0
F Y 0 6
$ 2 2 0 , 0 0 0
$ 2 , 2 2 8 $ 2 7 , 9 5 7 $ 7 0 , 0 0 0 $ 1 1 0 , 0 0 0
$ (2 2 8 ) -1 1 % $ 2 6 , 0 4 3 4 8 % $ 7 0 , 0 0 0 5 0 % $ 1 1 0 , 0 0 0 5 0 %
$ 8 , 5 9 8
$ (8 , 8 2 6 )
$ 1 6 2
$ (8 , 6 6 4 )
$ 1 0 , 3 5 0
$ 1 5 , 6 9 3
$ (3 )
$ 1 5 , 6 9 0
$ 1 2 , 1 6 0
$ 5 7 , 8 4 0
$ -
$ 5 7 , 8 4 0
$ 1 3 , 5 6 6
$ 9 6 , 4 3 4
$ -
$ 9 6 , 4 3 4
7 6
8
4
4
Company Confidential
8 5
8
6
5
8 6
8
7
5
8 6
8
8
5
40


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
250,000
200,000
150,000
100,000
50,000
-
Revenue vs Expenses
FY02 FY03 FY04 FY05 FY06
Revenue
Expense
March 2001 Company Confidential
41


Background

Market Opportunity & Trends

Virtual Wire Progress & Technology

Strategy & Product Direction

Financial projections

Investment Highlights
March 2001 Company Confidential
42


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
to investors

Goal is to close series B by early Q2
March 2001 Company Confidential
43

24% Virtual Silicon
56%
SASKEN
Employees
20%
10 Million Shares
$8.5 + Million Invested
Virtual Silicon
SASKEN
New Investors
Employees 20%
X Million Shares
$16-20 Million New Investment
March 2001 Company Confidential
44