Transition to the Next Phase Crossing the Chasm

Transition to the Next Phase… Crossing the Chasm Kevin Jong Hoon Lee Chief Executive Director i. Park Silicon Valley jhlee@iparksv. com 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 1

Objective of the presentation: The Presidential Committee • • • Quick Overview of Silicon Valley; Korean IT Perspective Challenges of Korean IT Companies in the US Market i. Park SV Introduction & Lessons from i. Park. SV experiment Foods for Thoughts (Daeduk R&D Operations) Q&As 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 2

Updates from American IT Market Battle Field (i. Park Silicon Valley Story) • Economic indicators: a “mixed bag” positive signs but still cautious about high tech & impact of interest rate hikes, War on terror in 2004/2005 Fortune 100 IT companies are optimistic and are beginning to invest again - VC’s are interested primarily in narrowly defined growth areas with global mkt potential. - Signs of slow “Jobless recovery”. The trends of “Outsourcing IT” to China & India is very controversial in hotly debated election year • Telecom industry is stagnant, but showing some signs of life: Smart phone/Digital Camera markets are growing fast but still waiting for killer applications - Broadband & VOIP gaining market momentum. • Convergence between computing devices and appliance will be in full swing: - Personal utility: cell phone + PDA + MP 3 + digital camera; - Home Digital Appliance : wireless networking + appliance/security controller + remote access) • The margins for electronic commodity products are thinner than ever forcing large resellers to restructure to stay afloat. • Open Source/Linux momentum & delays in Microsoft Longhorn may open up a major opportunity for Open Source/Linux vendors to play. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 3

Silicon Valley • Silicon Valley 30 mile area around San Jose, CA, • San Jose the “Capitol of Silicon Valley” 50 miles south of San Francisco • Cities included in Silicon Valley Atherton, Campbell, Cupertino, Los Altos, Los Gatos, Menlo Park, Mountain View, Palo Alto, Redwood City, San Jose, Santa Clara, Saratoga, and Sunnyvale Total area Total population Total jobs 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 1, 500 sq mi 2. 4 M 1. 2 M 4

Silicon Valley “High-Tech Heaven” orld’s largest concentration of high-tech companies W 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 5

Silicon Valley is the undisputed epicenter of technology innovation The Valley garners a third of all U. S. venture capital funding, according to the National Venture Capital Association (NVCA). 4000 IT companies with IT related revenue about $200 B 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 6

Living in Silicon Valley § Quality of Life Beautiful, near mountains and ocean climate is among the best in the United States Entertainment, Resorts – Near San Francisco, Tahoe, Yosemite, Napa, Monterey, Santa Cruz, etc Ranked among the most desirable areas to live in the United States § High Cost of Living 4 of the 5 most expensive cities in U. S. are in or around Silicon Valley 47% higher than the U. S. average Housing Crunch Avg price of a home in Silicon Valley = $767, 206 (US Avg = $270, 000) Avg monthly rent for 2 bedroom apartment in Santa Clara = $1, 600 (compare with $880 for Austin, Texas) Some softening of prices in past 12 months § 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 7

Employment in SV by Industry 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 8

Employment Compensation in SV US Nationwide Avg Salary (2003): $37, 300 Avg Silicon Valley Salary (2003): $62, 400 Avg SV Salary in Software Industry (2002) : $113, 700 Avg SV Salary in Corporate Offices (2002) : $95, 500 Avg SV Salary in Computer & Communications Hardware (2002) : $110, 000 Source: SV Joint Venture 2004 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 9

The Valley’s Ethnic Composition 39% of residents were born in a foreign country Migration patterns have raised the education level of the region. San Jose is now the third most educated area in the country as measured by college graduates. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 10

The Valley’s Foreign Workforce § Foreign workers with H Visas § Companies Sponsoring the Most H Visas Source: SF Chronicle 09/01 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential Source: SF Chronicle 09/00 11

VC Investment Trend in Silicon Valley $5. 6 Billion in 2003 ( - 19% from 2002) 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 12

’ 03 Korean IT Export to U. S. By Product Group PRODUCT CATEGORY Mobile Communication TOTAL $4, 870 M LAN Equipment $7 M Broadband Equipment $7 M PC & Server $31 M Mobile Computing Device $415 M Storage Device $363 M Digital Media $539 M LCD Monitor $771 M Printer $134 M Digital TV $364 M Set Top Box $170 M Memory $2, 342 M Rechargeable Battery $33 M Software & Contents $65 M Semiconductor Components 12/06/04 – Kevin JH Lee ’ 03 Total Export to U. S. $11. 7 B $1, 798 M By industry i. Park Silicon Valley Confidential 13

Key Findings Korean IT Companies Small to medium size typical ventures companies ipark deals with • • • Enthusiasm for key Technologies/Product Features Product/Technology Centric Approach vs Customer Value/Demand – Vs Taiwanese ventures who have root in Silicon Valley Lack Marketing expertise with CEOs mostly R&D background Common Issues of US Marketing Approaches: – Vague Product Positioning – Lack of Competitive Analysis – No Brand recognition – Unclear target segment – Little or No understanding of US Channel Structure – Entry Price, Market driven pricing Psychological & Cultural Barrier for US market Only a Few ready for US entry – Stage of company maturity (no full span of products) – Financial support (Mktg, Channel Dev, Post-support ) – Experience of Mgmt team (i. e. , CEO) – Almost no ideas on next steps… 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 14

Steps to enter the market Korean IT companies need results in a fast, cost effective manner. Unfortunately, these steps can’t be skipped, takes time and money. Set up MKTG & Target the right Penetrate Sales operations market segments proper channels 12/06/04 – Kevin JH Lee Close deals i. Park Silicon Valley Confidential Revenue growth 15

Why They failed? How i. Park can help? Every Step Can Be A CHASM Unless Obstacles are Removed Set up MKTG & Sales operations • Localization • Packaging • Local Operation & Offices • Local Staffing • Support Infrastructure • Value Chain Understanding Target the right market segments • Competitive Analysis • Identifying penetration segment • Differentiators • Product Positioning • Market driven Pricing • Introductory PR • Trade Shows • Incentive Schedule Penetrate proper channels Close deals Revenue growth • Tactical Channel Plan • HQ Support for Deals • Setting up Sales Team • Incentive Management • Channel Networking • Promotion • Training of Support Team Most Korean IT companies failed to cross the chasm in the US. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 16

Stop repeating the same mistakes • Education & Consulting (in US & Korea) • New Tenant Company Qualification Process Typical cost lost: $200 -300 K/yr – Maintaining US office $1 -2 M/yr – for active Marketing programs 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 17

Target, before shoot! - right target segmentation - right channel - right strategies - right people • • 12/06/04 – Kevin JH Lee Korean venture companies has only one silver bullet – You miss the first target, you are out… – not enough marketing fund, resources i. Park should lead them cross the chasm i. Park Silicon Valley Confidential 18

Service Model Phase I (up to 2003) No clear differentiation with KOTRA Model Market Enablers US IT Channels & Buyers Korean IT Companies q. Beachhead, Infrastructure, Operations focused q. Too general all technologies, all industries, all channels, do it all program q. Loose criteria in selecting Korean IT companies & ME’s q. Mainly networking with Market Enablers, unqualified 1: 1 Match q. Individual company focused q. No meaningful success story/brand/market share 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 19

Beyond the Chasm: New Service Model Phase II, (Since 2 H 2003) Industry & Channel Specific Partners US IT Channels & Buyers OEM VAR’s SI & SP Distributors End Users / Consumer Tier 1 Focused Companies Korean IT Companies Industry/Product Sweet Spot Based Success model: Nasdaq, M&A, Tech Alliance, Funding KIPA Programs Software Biz Digital Contents Incubation IT So. C q. Education q. Rigorous selection q. Preparation for US Op q. Orientation q. Setup q. Resource q. Refined Service Levels q. Country Marketing q. Predefined “Success” q. Revenue driven q. Industry marketing q. Bi Directional Approach q. Vertical/niche market q. Lead by success examples Matching Korea’s Best Products with Top US Channel Partners 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 20

New Roles, Priority, Value Add from i. Parksv Help Top Tier company in the target industry cross the chasm… Build the success model rest of the whole industry can follow Set up MKTG & Sales presence i. Park Involvement Success model exists– Kevin at ipark 12/06/04 JH Lee Target the right Market segments Penetrate proper channels Close deals Revenue growth Higher Value Bigger Impact Repeatable Industry Expertise Success model not exist yet i. Park Silicon Valley Confidential IT Company Involvement 21

i. Park SV Sweet Spot (Current) Mfg/Commodity Takeover by China: Seek higher value chain - Build up key success factors for Enterprise solutions, Software&Middleware in ubiquitous network - Maximize Korean IT core competence, better ROI, quicker results, and New Growth Engines Digital Contents Packaged S/W System Integration 12/06/04 – Kevin JH Lee Games Online Mobile Network Vertical Solution S/W D/T Utility S/W Linux based packaged S/W US MARKET Opportunities Embedded S/W Next Gen. Wireless/Mobile Devices Intelligent Home Network Appliance servers, Post PC IT So. C Consumer Electronics e-Gov solutions POS solutions Education solutions Latin American market i. Park Silicon Valley Confidential 22

Transition to i. Park. SV Phase II Focus on target industries, 9 New Growth Engines Create a success formula for target industries Phase II(2004 -2008) Phase I(2000 -2003) • • • General Industry Generic Market Individual company Generalist Infrastructure Focus • • • No success model to follow • Building Management • Struggle with Occupancy rate • • Focus on selected industry segments Vertical/Niche market Industry marketing, Korea Country Marketing Industry Specialist/Expert Programs for high value/impact Create the first success story in each target industry • Nasdaq, M&As, Funding, Tech Alliances -Success story: Jump-start a target industry vs individual company Reduce the “industry time to market” Stop repeating the same mistakes, repeatable Success model for others in the same industry to follow 12/06/04 – Kevin JH Lee • i. Park Silicon Valley Confidential 23

100% Occupancy 25 Tenant Companies 4. 8 Satisfaction Rating 08 9 New Growth Engines 1 NASDAQ Company Annually 1 M&A Model Annually G o a l s : #1 Brand in 3 Product Areas – te g ic $1 B i lli on 3. Goals + 1 SI Projects Annually Pa r t n e r i n g 2 R&Ds + IRs US C 00 ha St nne ra l P t e gi art c A ne l lia rs nc e Pa r tn er s Partners ati 50 + 100

Transition to i. Parksv Phase II Y 2003 Achievements/Y 2004 directions Create a success formula for the target industry Y 2003 Initiatives • • • Y 2004 Directions Organization Stabilization Refine Processes/System Infra Focus on “Client Side” Initiatives Individual Company Satisfaction Image – Damage Control Mode Hit the ground Running • Struggle with Tenancy rate (end 67%) • • • Acceleration, Motivation Flawless Execution, Execution… Expand to “Channel Side” initiative Industry/Country Marketing Positive Positioning, Differentiation Early Success Story by Industry • 2 3 Success Stories > $10+M, M&A, • Create success formula to follow • 80+% tenancy ratio (88%: Current) Build Success Model: Jump start the “target industry” vs “individual company” Clearly differentiate with KOTRA model - Success model to copy by others in the same industry 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 25

Highlights – 2004 YTD 1. Exceed all major performance goals for i. Park. SV Sales Revenue: over $80 M (04 Target: $68 M), Top Client Satisfaction Survey result Major improvement on Occupancy rate: 93% (from 67%, end of ’ 03) 2. The first NASDAQ company ever from i. Park programs Leadis Technologies, i. Park Graduation Company, $84 M proceed – Goldman Saacs 3. Major Success Stories from key US Trade Show – Gartner Group Global Hauri won the “Best Software Product Awards” – Retailvision, April 2004 i. Park Silicon Valley receives the “International Partnership Award” – Varvision, Sep 2004 4. Built New Business Processes & New Service Implementation New Industry Sweet spot, New i. Park SV Service model New tenant selection (Tier I/II) process, New Channel Partner selection Process 5. Revamp i. Park. SV Advisory Board, launch STAR Initiatives Chairman of Fenick&West, Dr. Miller, President Gartner Vision, Lee Ting, 4 more under nego STAR Strategic Alliance with HP, Intel, Cisco, Oracle, SUN, etc 6. Major Positive i. Park. SV perceptions – (from extremely negative a year ago) Over 20+ Press Coverage (local, Korea) on Key medias, local community, 2000+ visitors i. Park Silicon Valley as a mark of prestige club of top class Korean company 7. Focused Tenant Customer Satisfaction Programs – Manage expectation 23 issues, 13 suggestions identified and being addressed (from ’ 03) Professional talk Series, F 3 Meetings, 1: 1 Business Review, Foundation Service, Premium Service Achieved the best Client satisfaction rate among i. Parks with resident companies – 1 H 2004 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 26

“The first success ever worldwide from the Gov’t driven incubation program” i. Park. SV will repeat similar Nadaq Success Annually by 2008 “Congratulations to Leadis Technology ” (Nastaq Symbol : LDIS) Let’s make “LEADIS TECHNOLOGY” a great model for future additions to NASDAQ by i. Park SV companies. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 27

12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 28

Priceless Achievement – Korea Country Marketing i. Park. SV will repeat similar Success Annually: Top 3 Korean Brands by 2008 • Global Hauri receives BEST SW PRODUCT AWARD – April 2004, Indian Wells NOMINEES Computer Associates Global Hauri Jasc Software Susteen You Software 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 29

Food for Thoughts: Daeduk R&D Cluster (I) • Vision Sharing – Prioritize, Focus, Win Global Competition – Global Competitiveness Perspective: • • China, Zhongguancun – China Market Access, Growth potential Taiwan, Hsinchu – World class semiconductor companies, one stop shopping India, Bangalore – Software Quality, low Cost Daeduk – what’s the competitive advantage? – World Class positioning • Unique Korea Brand exclusively backed by Central Gov’t • Focus on new growth engine ( i. e. 3 new IT trends vs Korea’s strengths) – Change Management • Strong Sponsorship from the top, National Assembly • Endorsement from Press, Opinion Leaders, General Public 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 30

Food for Thoughts: Daeduk R&D Cluster (II) • Cooperation models among R&D, Univ, Gov’t and private sector – – HP’s R&D Model – Role definition of Central Lab, Product Division R&D Centers Reduce “Strategic Korean Industry Time to Market” against Taiwan/China… Build new success business model for Strategic Industry (New Growth Engine) Well Defined Value Proposition: KAIST, ETRI, ITA, KIPA, Samsung/LG, Venture Companies, i. Park/KOTRA/KITA, and other Gov’t bodies • Role of Gov’t – Focus on Infrastructure – Avoid direct benefit to private companies – Coordination & facilitation KAIST, ETRI, ITA, KIPA, Samsung/LG, Venture Companies, i. Park/KOTRA/KITA – Business Like Operation Model for Daeduk Cluster Operations • Current Gov’t Audit system is a sure way to kill the innovation Transparent/Fairness vs Out of box/Profit/Result oriented • MBO (Hoshin) management • Compensation must linked strictly to MBO – upside potential by achievement 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 31

Food for Thoughts: Daeduk R&D Cluster (III) • Commercialization of World Class products – Getting Tier I level Korean companies as well as Global hi tech companies • Easy to get quality R&D resources • Test bed, Korea (Gov’t) Market Access, International Standard, Labor Union • A Better Place to Live and work – Entice top quality Human Resources – Entrepreneurship is the source of Silicon Valley Innovation • Culture change of Current R&D Centers – Daeduk version Gold rush • Infrastructure for start up companies, need to create success cases • Daeduk Employment cluster expansion –> Marketing, Biz Development, Venture Capital, other professional Service (Consulting, Design, Manufacturing, QA…etc) • Level up the commercialization process, Product Development Life Cycle Investigation, I/L Phase, ERS Phase, IDS Phase, IMS Phase, Sales and Marketing 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 32

Mission – i. Park Silicon Valley “Our mission is to establish and promote thriving partnerships between U. S. IT channels & Korean IT client companies, and provide an effective gateway for Korean IT companies to successfully penetrate the United States marketplace. ” 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 33

Client Company Satisfaction Project: • 28 issues, 13 suggestions identified based on client feedback – – – – – Inter client company network Marketing Center function lacking Too much focus on Korea based companies vs. client companies at ipark Lack of qualified HR, accounting, legal referral Share success and Failure stories Demotivated by other inactive companies at i. Park campus is too quiet, no success story Ipark staff is arrogant, not aggressive enough No service after 6: 00 pm…etc, etc… • Assigned project manager by each topic – Implemented 10 immediate improvement project – Some with deeper root causes will take longer time Our top priority for all ipark staffs – 2004 and beyond 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 34

Client Company Satisfaction – Progress ID Action 1 Refine & communicate refined Service Levels that i. Park. SV provides. Done 2 Recruit more companies (pending mission statement & service level confirmation) based on new selection criteria. >>> This will lead into rigorous renewal criteria and process for current tenant companies. In Progress 3 Beginner’s Orientation & Set up Handbook Done 4 Quality referral services (HR, Legal, Travel, Accounting, Freight Forwarder, Marcom) Done 5 Create an intranet and publish newsletter for inter client company communication & resource sharing In Progress 6 Regularly schedule business review meetings between sponsoring BDM & client company Done 7 Provide emergency contact numbers (for i. Park services) at appropriate locations Done 8 Brown Bag Lunch events Introduce Service Providers & Market Channel teams Share success stories Done 9 Celebration events & peer networking Light social event w/ company milestones celebrations i. Park provides food & drinks Done 10 Implement rigorous client business reviews and tenancy renewal process. In Progress 12/06/04 – Kevin JH Lee Owner / Notes i. Park Silicon Valley Confidential 35

100% Occupancy 25 Tenant Companies 4. 8 Satisfaction Rating 08 9 New Growth Engines 1 NASDAQ Company Annually 1 M&A Model Annually G o a l s : #1 Brand in 3 Product Areas – te g ic $1 B i lli on 3. Goals + 1 SI Projects Annually Pa r t n e r i n g 2 R&Ds + IRs US C 00 ha St nne ra l P t e gi art c A ne l lia rs nc e Pa r tn er s Partners ati 50 + 100

New Mission & Services MIC Mission § Accelerating Informatization § Promotion of IT industry § Deregulation and Market Liberalization New i. Park Silicon Potential Shared Services § Sales & Marketing § Business Planning § Order Fulfillment § Operations § Education Valley Mission “Our mission is to establish a bridge in order to accelerate the success of Korean High. Tech companies in Old i. Park Mission “Our mission is to establish and promote thriving partnerships between U. S. IT channels & Korean IT client companies, and provide an effective gateway for Korean IT companies to successfully penetrate the United States marketplace. ” 12/06/04 – Kevin JH Lee America and to facilitate partnerships between America’s Technology Leaders and Korea ” i. Park Silicon Valley Confidential Potential Representation Activities § Represent MIC § Strategic Relations § Market Intelligence § Korean IT Promotion § Education 37

i. Park Silicon Valley Future Activities Tomorrow Today 2% Strategic Partnering STAR 8% 40% 50% Kor. VC Relations G 2 G SI in Latin. A Korean Tech Mktg Basic Mktg for Tenants Education Software Product Focus Incubation & Administration 100% Occupancy 29 Tenant Companies Logistics, VIPs, Visitors Referrals (Accounting, Law, etc. ) 12/06/04 – Kevin JH Lee Exports 2000 $68 M $75 M 2004 MIC Strategic Initiatives 10% STAR Partner Top 100 R&D Investment Korean & US VC Relations Market Intelligence G 2 G SI in Latin Am. SI in North Am. 30% Korean Tech Mktg Basic Mktg for Tenants i. Park University (on-line and classroom) 8 -3 -9 Product Focus Marketing Operations Referrals (Accounting, Law, etc. ) Logistics, VIPs, Visitors Incubation & Administration i. Park Silicon Valley Confidential $300 M 2008 30% 38 $500 M 2012

Strategy 1: Strategic Alignment STAR Program Initiatives: Strategic Technology Alliance Relationships (STAR): Fortune IT 100, HP, Intel, Cisco, Oracle, etc US & Americas Market Opportunities MIC Strategic Initiatives, U. S. Fortune 100 IT Korean IT Companies Partners, Channel Requirements Success Program Elements i. Park SV “K 2008” KIPA direction & requirements 12/06/04 – Kevin JH Lee MIC Strategy i. Park Silicon “ 8 -3 -9” Valley Confidential 39

Strategy 2 : Organizational Peak Performance 3 rd phase A significant gap exists… but we are climbing! K 2008 i. Park. SV (2008): Where We’re Going 2 nd phase Ø Annual IT Revenues of US $1 B Ø Korea brand image for quality in target products Ø Top-Tier Korean companies/ Top-Tier US partners Ø Quarterly success, eg: NASDAQ, R&D, SI projects Ø Focused organization executing clear strategies i. Park. SV (2004): Where We Are Now üRefined new Business Processes & New Service üRevenues of US $70 M+ üRecruited new Korean portfolio companies üBeginning to see significant success stories (eg: Leadis NASDAQ listing) üNow in “execution mode” for numerous programs/ initiatives 1 st phase i. Park. SV (2000 - 2003): Where We Were in the Past u u u Established a beachhead, some infrastructure & “incubator” operation Lack of selection criteria for Korean companies No meaningful success story or “brand” recognition No Success model to follow; no organizational continuity Lack of focus; fuzzy mission, no clear strategies or processes 40

Strategy 3: i. Park. SV Product Focus – 9 New Growth Engines Mfg/Commodity Takeover by China: Seek higher value chain - Build up key success factors for Enterprise solutions, Software&Middleware in ubiquitous network - Maximize Korean IT core competence, better ROI, quicker results, and 9 New Growth Engines Digital Contents Packaged S/W System Integration 12/06/04 – Kevin JH Lee Games Online Mobile Network Vertical Solution S/W D/T Utility S/W Linux based packaged S/W US MARKET Opportunities Embedded S/W Next Gen. Wireless/Mobile Devices Intelligent Home Network Appliance servers, Post PC IT So. C Consumer Electronics e-Gov solutions POS solutions Education solutions Latin American market i. Park Silicon Valley Confidential 41

Strategy 4: Tier I Portfolio Company Focus New Addition in 2004: Mtekvision, Pixelplus, Haansoft, Namo, Netpia 1 • • 4 Product Readiness • • Differentiator Mature products Localization Ready for US Launch Success Potential within 18 months 3 • • Market Readiness • • • Financial Stability P&L for 6 Q Funding source & investment plan 2 CEO Commitment 12/06/04 – Kevin JH Lee • • Marketing plan Channel Penetration Plan Demand Generation Plan Support Plan Prepared for Logistics CEO’s Vision Management track records Willing to hire local professionals Willing to track the metric with KIPA/i. Park Silicon Valley Confidential 42

Strategy 5: Partnering for Success Industry & Channel Partners US IT Channels & Buyers OEM VAR’s SI & SP Distributors End Users / Consumers Tier 1 Qualified Companies Korean IT Companies Targeted Products & “ 8 -3 -9” Focus Nadaq, M&As, Funding, Tech Alliances 12/06/04 – Kevin JH Lee Matching Korea’s Best Products with Top US Channels & IT Partners i. Park Silicon Valley Confidential 43

Current Status: Who are our # 1 client? Business-Style Operation Model HQs Global Marketing HQs Regional Business Center Vision $110 B IT Export, 2007 & Mission IT 8 -3 -9 Strategy: 8 Services 3 Infrastructures 9 New Growth Engines Foreign Investment, R&D, IT Hub MIC KIPA i. Park SV üManage budget effectively üSet Quarterly & Annual Goals üExecute & build Market/Industry opportunities, strategies, tactics, Alliance programs Operations Client Co. Services Korea Country/Industry Marketing Strategic Alliances – Fortune IT 100, Channels 44

BDM Task Realignment Product Area Jose Eric Forest Steve Primary SI ES/PS DC Secondary ES/PS DC SI ES/PS Programs • Channel Program project Mgmt • Latin America • Quarterly Campaign • Intranet • Link to KIPA DB • MDF • Retail penetration • Eva. L Unit • MIC initiative Support • Shared Services • KR IT promo site (IR, R&D ctr) • Open Source • STAR • Strategic Consult • Graduation Cos • i. Park Newsletter • Industry Reports • City Campaign • Test bed • 1: 1 in Korea TBH JK* • Customer Satisfaction • Intranet • News letter / Manual • Road Show @ Korea • Market Rsrch Kevin* • MBOs • Cstmer Satisfaction • Client sel/renewal process • Pink sheet • VIPs • Evangelist Trade Show Var. Vision (N+I) (GOV) Retail. Vision ’ 05 (CES) (NAB) IT Opp. Soft. Expo (Semicon) (Supercom) AGC, GDC (E 3) (Tokyo Gameshow) (CES) Client Companies • Mega. Vision • Hauri • Cybernet • Verifia • Danam • Joo. Hong • Namo • GDS • Omni. Key • Rex. Soft • EGO • BT Logics • Haansoft • Peach. Tel • Fine Digital • Netpia • All BC companies • Mtekvision • IPS • Paion • Usmico • Nextreaming • Macroimpact • Leadis • Phi. AM • Xrosstech • e MDT • Binary Craft • Inus • Candidates • Korea Based Operation • Weekly Reports • Web site (Spanish) • Web site (Eng) • Mkt report • Advisory Board • M&A • Funding • CEO rpt/Kobiz • F 3 • Client Com • Accounting • Facility Mgmt • Orientation I • Advisory Bord • BDM Process • Community • Press • KIN i. Park Silicon Valley Confidential

Tier One Profile A Tier 1 company is entitled to receive “Premium Services” from i-Park SV. MUST: 1. 2. 3. 4. 5. 6. 7. 8. 9. Have potential / differentiator in US market Product must have gone through a whole product life cycle in commercial/government market including provisioning. Reference able customer base more than 10 customers (sales to universities, strategic investors, or Chaebol do not count) Short term success potential (with the success goals accomplished in 24 months and the measurable milestones are accomplished. ) Must have most of “High Want” items in place in 3 months after engaging US operation. Solid financial plan & investment capacity for US growth and sustaining phases of operation for the first 2 years CEO’s commitment and leadership Willing to hire English speaking US execs with industry expertise in appropriate roles Agreed upon metrics for success with i Park SV High Want: 1. 2. 3. 4. 5. 6. 7. 8. 9. 12/06/04 – Kevin JH Lee KIPA / i Park SV strategic industry / product focus alignment The product has been localized for US launch Appropriate product presentation and collateral material available for US market Marketing plan strategy and tactics, identified funding, committed resources Channel Plan Profile of the right Channel Partner (VAR’s, SI’s, Distributors) Sales Plan Direct/Indirect. full description of strategy and tactics including market level Support Plan L 1, L 2, L 3, geo specific resources Revenue forecast, quarterly Strong US based management team with proven track record of success & empowered by the headquarter i. Park Silicon Valley Confidential 46

Tier Two Profile A Tier-2 company is entitled to receive “Foundation Services” from i-Park. MUST: 1. 2. 3. 4. 5. 6. 7. Have US market potential Product must have gone through a whole product life cycle in commercial/government market including provisioning. Mid term success potential (with the success goals accomplished in 36 months and the measurable milestones are accomplished. ) Must be ready to become a Tier 1 company within 12 months or less. Solid financial plan for US operation CEO’s commitment and leadership Agreed upon metrics for success with i Park SV High Want: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. KIPA / i Park SV Strategic industry focus alignment Product has been positioned for US launch Have a market differentiator Appropriate product presentation and collateral material available for US market Marketing plan; strategy and tactics, identified funding, committed resources Channel plan; profile of the right Channel Partner (VAR’s, SI’s, Distributors) Sales plan; Direct/Indirect. Full description of strategy and tactics including market level Support plan; L 1, L 2, L 3, geo specific resources Revenue forecast, quarterly Willing to engage English speaking Resources Strong management team with proven track record of success 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 47

Definition of “Success” (of a US operation) • The primary objectives of US operation should be measurable in terms of : – – Revenue Goal • 10% or more of world wide revenue in the past one year is accomplished in 18 months • Repeated purchase order received from the customer in the first 12 months M&A by a US industry leading company • Estimated appraised value of the company is $3 M or more Successful funding by a US investor for a long term business • $2 M or more raised by funding Technology partnership with a US industry leading company • Evaluated case by case • The client company must state the goals as part of their intention statement. • Once agreed upon, the metrics for “success” will be tracked during regular review meetings and it will be used to measure the success of the US operation. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 48

Foundation Services 1. Initial Setup Assistance a. Handbook & guidelines for initial US operation setup b. Orientation session c. Referral services for Value Added Service Providers – HR / Acct / Legal / Travel / Freight Forwarders d. General i Park SV program participation (“Go To Market” lunch seminars, peer networking) 2. Review of business plans a. Initial Business Planning Session – Checklist b. Gap Analysis – Marketing activities, – Channel development activities, – Sales interaction activities and – Support activities c. Referral services for Product & market development services – Technical writer, Marcom & QA – Product certification – Local manufacturing partners (warehouse, logistics, repackage, re branding) 3. Market Exposure 1. Tradeshow schedule announcements 2. Organization of group participation to the tradeshows 3. Introductions to US IT Channel and Buyer communities 4. Executive Sponsorship a. Monthly review meetings with an identified i Park SV Executive Sponsor. b. Facilitating periodic team management sessions c. Success metric development and management d. Regular communication with KR HQ CEO and exec staff 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 49

Premium Services All services from “Foundation Services” are included plus: 1. 2. 3. Reviews & advisory of business plans a. Business Plan – Product & market analysis / penetration strategy / fit for market / – management team / Financial Plan b. Marketing plan – Competitive positioning and key selling point (s) / Target segments – Localization / Marketing collateral – Marcom/Tradeshow – Pricing c. Channel Development Plan – Direct and/or channel strategy / Discount & commission / Pre sales support d. Sales Plan – Sales collaterals / Training plan/ Licensing strategy e. Support Plan – L 1, 2, & 3 / RMA process / Logistics Accelerated Market Exposure a. Online Channel marketing b. Assistance with deal structure and relationship management c. Personal introductions and sponsorship within US IT Channel and Buyer communities d. Market Development Funding (pending KIPA’s budget approval) Executive Sponsorship a. Weekly 1: 1 meetings b. Tactical engagement at agreed upon levels c. Personal introductions and sponsorship within US value added service provider communities (Financial services, Legal, HR, Investors, Freight Forwarders) d. Executive management team consulting (Review of operation & finance) 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 50

Premier Channel Partners Criteria CP partners who qualify as a Premier Channel Partner company are entitled to receive “Premier Services” from i Park Silicon Valley. MUST: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Have existing channel(s) for products in i. Park Sweet Spot in US market Have at least 12 existing national or regional reference accounts Have a proven track record of success with minimum annual revenues of $100 M Have at least 50 full time employees Be capable of immediately managing high volumes* of product Demonstrate financial stability (eg: based on D&B or equivalent report) Have top management commitment to engaging with i. Park Silicon Valley Be willing to designate a program and/or relationship manager Be committed to communicating clearly market dynamics and product priorities Be willing to commit to sharing revenue forecast information on a monthly basis Highly Desired: 1. 2. 3. 4. 5. 6. 7. 8. National or Regional reputation (i. e. : recognized by industry analysts & publications) Capable of providing professional guidance in marketing, pricing, packaging, & program development Be willing to co invest in developing and building long term relationship with Korea Be capable and willing to finance product flows or bill customers directly Be capable of providing online inventory sales and auctions Pre and Post Sales support programs Online ordering, RMA, & technical support capabilities Ability to interface and communicate effectively with Korean companies * See volume requirement based on product area 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 51

Project Partners & Channel Masters CP candidates not qualifying for Premier status may be considered on a project basis if they meet the criteria outlined below. MUST: 1. 2. 3. 4. 5. 6. 7. 8. Demonstrate access to channel(s) for products in i. Park. SV Sweet Spot in US Market Proven experience in successfully moving product through channels within the North Americas Have a documented plan for success in a targeted product area Have solid financial backing (demonstrate by bank reference or equivalent objective measurement) Have CEO or equivalent commitment to the process of engaging with i. Park Silicon Valley Designate a project manager to interface with i. Park SV Establish and document agreed upon metrics for success with i Park SV Commit to regularly communicating revenue forecasts, market requirements & product priorities Highly Desired: 1. 2. 3. 4. 5. 6. 7. Expertise in a focused product area aligned with i Park SV Capable of providing some gap analysis and guidance prior to product launch Have a team of qualified professionals in: marketing, technical and sales roles Committed to providing basic gap analysis and guidance in the following areas: collateral materials, pricing, marketing, pre and post sales support Capable of providing assistance and coordination for financing and logistics in US Willing to be compensated on a success based formula Strong management team with proven track record of success 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 52

Example: ES Focus Areas, Product Groups & Partners * Maximize Korean IT core competence, better ROI, quicker results, and future direction Industry Embedded Software Premier Channel Partners Product Groups § § § Intelligent Home network & server (Cable/x. DSL modem, Set. Top Box, home appliance control) Appliance servers (NAS/SAN server, Video server, Vo. IP, LB, DVR, AP router) Consumer Electronics (Digital Camera, PDA, Mobile phones, Memory cards, MP 3) IO devices (sound card, security devices, CAT device) PC Mall Compugen More Direct Datel Alvaka Networks RAM Group SOS Network Max Group Hypertec Additional Target Channel Partners Targus Systemax Equus Channel Masters Consultants Worldnet Market. Link Simkavitz & Assoc. Man & Machine Mach Speed Peterson Comp. RAD Direct Wholesalecomputer Computerstop Sona Wintec Vicious PC Kontron Net 2 Sky Microsel Channel. Match GPS applications And much more Legend : Blue italic indicates i. Park. SV Sweet Spot product areas Red italic is “opportunistic projects” 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 53

BDM Task Organization Chart Product Area Jose Eric Forest Steve Primary SI ES/PS DC Secondary ES/PS DC SI ES/PS Programs • Channel Program project Mgmt • Latin America • Quarterly Campaign • Intranet • Link to KIPA DB • MDF • Retail penetration • Eva. L Unit Support • Shared Services • KR IT promo site • MIC initiative (IR, R&D ctr) • Open Source • STAR • Strategic Consult • Graduation Cos • i. Park Newsletter • Industry Reports • City Campaign • Test bed • 1: 1 in Korea TBH JK* Kevin* • Customer Satisfaction • Intranet • News letter / Manual • Road Show @ Korea • Market Rsrch • MBOs • Cstmer Satisfaction • Client sel/renewal process • Pink sheet • VIPs • Evangelist Trade Show Var. Vision (N+I) (GOV) Retail. Vision ’ 05 (CES) (NAB) (ISPCON) IT Opp. Soft. Expo (Semicon) (Supercom) AGC, GDC (E 3) (Tokyo Gameshow) (CES) Client Companies • Mega. Vision • Hauri • Cybernet • Verifia • Danam • Joo. Hong • Namo • GDS • Omni. Key • Rex. Soft • EGO • BT Logics • Haansoft • Peach. Tel • Fine Digital • Netpia • All BC companies • Mtekvision • IPS • Paion • Usmico • Nextreaming • Macroimpact • Leadis • Phi. AM • Xrosstech • e MDT • Binary Craft • Inus • Candidates • Korea Based Operation • Weekly Reports • Web site (Spanish) • Web site (Eng) • Mkt report • Advisory Board • M&A • Funding • CEO rpt/Kobiz • F 3 • Client Com • Accounting • Facility Mgmt • Orientation I • Advisory Bord • BDM Process • Community • Press • KIN 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 54 * JK & Kevin are assisting BDM teams from operation and management sides.

Y 2005 Roadmap Recruit Tier 1 KC 90% Tenancy Biz Development Operation STAR 15+ Tier 1 Tenants 95% + Tenancy Monthly Market Research Newsletter Monthly Professional Talk Series Intranet Spring Road Show Fall Road Show SI-Latin America F/S Visits (tentative) Channel Partner MDF Soft Expo Channel Acceleration ESP SSP Virtual WH DC Test Bed Business Access Center Marketing Recruit Tier 1 KC DC City Campaign DC Test Bed KC Recruit Korean IT Promotion 12/06/04 – Kevin JH Lee 2005 Q 1 QP QP i. Park Silicon Valley Confidential Q 2 Q 3 QP QP Q 4 55

Chinese Influence in Global IT VALUE CHAIN R&D MFG MKT SALES CHANNEL SUPPORT • Commodity • Volume driven OEM • Cost Driver • Low Tier Quality DIST SUCCESS FACTORS 1. 2. 3. 4. 5. SI Low cost of MFG O/H Low Labor Cost Inner Circle of Chinese Business Financing Games w/ “low touch” Commodity Products Low Margin & Volume Game 12/06/04 – Kevin JH Lee RETAIL VAR i. Park Silicon Valley Confidential • HDD • PC Accessories 56

Indian Influence in Global IT VALUE CHAIN R&D MFG MKT SALES CHANNEL SUPPORT • Software Focused • Outsourcing • Own Biz ID’s OEM SUCCESS FACTORS 1. 2. 3. 4. 5. 6. 7. 8. 9. High level of education Fluent English Business Savvy rather than Product Driven Lower Cost of Professional Labor 172 K business process jobs outsourced to India 45% growth expected every year (per NASCOM) $4. 5 B invested into India $0. 5 B invested from India (per WSJ) 12/06/04 – Kevin JH Lee DIST i. Park Silicon Valley Confidential SI • Outsourcing • Partnership RETAIL VAR 57

Possible Areas of Korean Influence R&D • Leading-edge tech • Fast dev. cycles MFG MKT SALES CHANNEL • Agile execution • High value MFG & INFRA OEM Invest HERE! DIST SUCCESS FACTORS 1. 2. 3. 4. 5. SI Strong in latest technology & products Visionary & Strategic Push from Government High Value Added MFG & Infrastructure Fast Turnaround BUT NOT SUCCESSFUL IN SALES & MARKETING 12/06/04 – Kevin JH Lee SUPP i. Park Silicon Valley Confidential RETAIL • Educate KR IT companies about Channel Biz • Build credibility of KR IT companies • Tangible Incentives • Partnership • Networking & VIPs • Success stories VAR 58

R&D HUB in Korea BIG PICTURE : FIRST, IDENTIFY A TECHNOLOGY AREA THAT KOREA IS ALREADY STRONG AND WELL POSITIONED TO CONTRIBUTE TO THE GLOBAL IT COMMUNITY : OPEN SOURCE / LINUX SECOND, EXPAND THE TECHNICAL BREADTH TO OTHER R&D AREAS SUCH AS DIGITAL CONTENTS, ON LINE GAMES, BROADBAND TECHNOLOGY, TELECOM / INTELLIGENT NETWORK, MOBILE TECHNOLOGY DISPLAY TECHNOLOGY TO ATTRACT MORE HIGH TECH COMPANIES AND POSITION KOREAN IT COMPANIES AS LEADERS IN GLOBAL IT MARKET. 12/06/04 – Kevin JH Lee i. Park Silicon Valley Confidential 59