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    1

    Arima Communications

    Company Profile

    Sep. 2007

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    2

    Content

    Company Profile

    Manufacturing Competency

    IT SystemBusiness Strategy

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    3

    Section One

    Company Profile

    Manufacturing Competency

    IT System

    Business Strategy

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    Founded : June, 1989 ( Arima Computer )

    Registered Capital : US$ 682 Million ( Group in 2005 )

    Chairman : Mr. Stephen Lee

    Employee : 13,500 worldwide ( Group )

    RD Engineers : 2,000 worldwide ( Group )

    Space : 4 M ft2 worldwide ( Group )

    Global Operations : Taiwan, China, Japan, USA, Europe

    Revenue : US$ 2 billions in 2005 ( Arima Group )

    Arima Group

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    Arima Computer

    Notebook PC

    Server

    LCD TV

    DVD Player / Recorder

    LCD Monitor

    Digital Audio / Video

    Digital Radio

    GSM / GPRS Handset

    Wireless Module

    Smart Phone

    EDGE Handset

    WCDMA Handset

    HSDPA Handset

    Color Filter

    Color LCD

    LED / LD :

    - Epiwafers

    - Chip

    - Device

    Lighting

    DVD OPU :

    - H / H Player- Slim Combo

    - Dual RW

    DVD Traverse /

    Drive for IT / CE

    Dynapack

    Battery Pack

    Mobile PhoneAccessory

    Edart

    Tooling

    Plastic Injection

    Metal Stamping

    Painting

    Cable / Harness

    Connector Thermal Module

    Acme

    Image Sensor

    Camera Module Flash Memory Card

    Axon

    Optical Lens :

    - Class / Plastic- Spherical /

    A spherical

    Prism / Collimator

    Avio Avalend

    Arima Group and Subsidiaries

    Arima

    Communications

    Arima

    Optoelectronics

    Arima Device

    IPOin

    1998

    Digital TV tuna

    controller CameraController

    Arima

    Display

    IPOin

    2004

    IPOin

    2003

    IPOin

    2004

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    Computer Communications

    Optoelectronic

    GSM / GPRS/EDGE

    WCDMA/HSDPAHandset

    Wireless Data Module

    /Smartphone

    PDA

    DSC/DVC

    Smart Phone

    LCD TV/Monitor

    Notebook PC/LCD PC

    Server/Workstation

    DVD Player

    DAB/DVB LED

    Laser Diode

    Image Sensor

    Camera Module

    Photonics

    ToolingPainting

    Plastic Injection / Metal StampingCable / Harness

    ConnectorFPC

    Color Filter

    LCD Display

    Optical Parts

    DVD Pickup Head

    Diversification Deployment

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    Arima Communications Profile

    Arima YK Taiwan Arima WJ China

    Founded in Aug

    1999

    Capital USD 110 Millions

    RD

    ChairmanStephen Lee

    PresidentOwen Chen

    Employee2500 persons

    250K ft2 828K ft2 TaiwanChina

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    2001

    2002

    2003

    2004

    2005

    2000

    2006

    1999

    Milestone

    Started to establish factory

    Got FTA certification for Tri-band mobile phone.Started Mass Production for the 1st Generation Tri-band Mobile Phone

    Nanjing R&D established in ChinaStarted to build Wujaing FactoryISO 14001, ISO 9001certificated

    Arima Yingko : BABT certificated

    Shipment over 1 million units / month

    Single model shipment reached 12 million units ( accumulated )

    IPO on 1st July in Taiwan. Stock code 8101

    Smartphone RD established in Taipei Taiwan

    3G RD established in ShingChu Taiwan

    Start to build 3rd factory in China

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    Wujiang Map (China)

    2hrs Driving Distance from Shanghai;

    100 Universities/Colleges within 4hrs Drive.

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    Arima Office Location in Taiwan

    Arima Group HQ

    Ying-Ge Factory

    Jhong-Jheng RD Center

    Da-Shu Factory

    Shin-chu RD Center

    Airport

    40min

    25 min

    25min

    30 min

    20min

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    To be a first class mobile device solution

    company to serve our worldwide partners.

    Company Vision

    ProductionCapability

    Best class in

    Quality

    Delivery Cost

    Service

    R&DCompetence

    Supply ChainManagement

    CostManagement

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    CompanyMission

    Cost effective

    technologiesGreat quality

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    Administration

    QualityAssurance

    Finance

    ChairmanStephen Lee

    Creative Design Center ManufactureEngineering

    InformationManagement

    R&D CenterBU 2

    Paul WangSVP

    Operation CenterBU 3

    PresidentOwen Chen

    Company Organization

    Strategic Planning

    BU 1

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    Shipment Unit: Million

    20032004 2005 2006

    10M 11M

    12M13M

    Shipment

    SoM2%

    1.4%1.3%

    1.4%

    Mobile phone quantity shipment #2 in Taiwan ODM companies from 2003 to 2006

    2007(e)

    15M

    1.5%

    Shipment record

    15,851,729Sales Unit: NTD thousand23,591,430 23,538,487

    Sales

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    B/W Phone

    A3618 GC75

    DB8000

    T100

    GPRS+ SMS + EMSGPRS+ i-modeGPRS+ DSC

    Z200

    2850

    Proven

    Record

    Technology&P

    roduct

    J200 K300

    N710 2860

    Symbian OSEDGESlider phoneTouch panel phone

    1st Smartphone w/Simbian 1st 1.3 MPx camera phone

    w/EDGEb for NEC 1st VGA camera phone for

    SEMC

    Technology & Product Proven Record

    N411i

    J210

    2005 2006

    Z300

    J220 J230

    2716 2890 3300

    Before 2004

    KG200KG300

    36003000Windows Mobile

    MP3 / MPEG4

    1.3 MP/2MP CCM

    3G / Smartphone

    1st MM featurephone for LGE

    1stSmartphonew/WM

    SEMCs 1st ODM modelT100 : Good result(10M shipment )SEMCs 1stClamshell

    OEM&ODM models for NEC1st VGA camera phone for NEC

    http://www.phonedaily.com/mobile/phone/?prod_id=1956http://www.phonedaily.com/mobile/phone/?prod_id=1957http://www.phonedaily.com/mobile/phone/?prod_id=1955
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    The business with LGE

    3.2M Camera

    MultimediaPhone

    KP320

    3 Products Launched

    2006 2007 2008 2009

    300K

    KG200

    KG300

    2.0M Camera

    Multimedia

    Phone(~300K

    1.3M Camera

    Multimedia

    Phone(~600K)

    0.3M Camera

    Multimedia

    Phone

    KG195/KG198

    (~1M

    1.3M CameraMultimediaPhone

    300KKP220

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    17Appreciation Certificate

    (FROM NEC, 2003)

    Excellent ODM partnership

    for LGESEMC T100

    10 Million units record

    Cellular phone 2710G-Mark Good Design Award

    Achievement & Award

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    ISO 9001Assessed & registered as meeting the

    requirements of ISO 9001: 1994

    - - - 16 April 2001 (issue 1)

    - - - Authorization by SGS U.K Ltd.

    Assessed & registered as meeting therequirements of ISO 9001: 2000

    - - - 08 Jan. 2004 (issue 2)

    (To remain valid subject to satisfactory

    maintenance of the system for 3 yearsfrom the above certificate issue date)

    Quality System

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    ISO 14001Assessed & registered as meeting the

    requirements of ISO 14001

    - - - 10 August 2001 (issue 1)- - - 15 August 2004 (issue 2)

    Authorization by SGS U.K Ltd.

    (To remain valid subject to satisfactory

    maintenance of the system for 3 years

    from the above certificate issue date)

    Environmental Management System

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    Company Profile

    Manufacturing Competency

    IT systemBusiness Strategy

    Section Two

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    Global Manufacture Center

    CustomersArima YK

    Supply Chain Management

    China MFG Center

    Arima LAM (MX/BZ)

    TaiwanHUB

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    Arima Yingge Taiwan & Wujiang China factories can be the manufacture site

    for customer products.

    Factory Location

    Founded: September 8, 2000

    Location: Wujiang, China

    Employees: 8,600 persons (Arima Group)

    Products: Notebook, Server,Cellular

    Phone, Tooling,Optical Pick-up

    Head, Battery Pack

    Founded: March, 2001

    Location: Yingko, Taiwan

    Employees: 1,800 persons

    Products: Mobile Phone

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    Total Area: 1,296,200 meter2

    Arima Wujiang Science Park & Community (China)

    Arima

    CommNew

    Building

    Dynapack

    NewBuilding

    EdartArima Computer

    ArimaCommCurrentBuilding

    Buld No.1

    Buld No.2

    Dorm8,9

    Dorm1,2

    Buld No.3

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    New Factory View

    Maximum Capacity:

    4 million units per month

    77K Meter

    2

    Opening Date:

    In Q1 of 2008

    Nearby Edart, Plastics

    can be just in time delivery

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    New Factory Layout

    1

    2

    34

    There are

    4 independentterminals.

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    Manufacture Capability Summary

    China and Taiwan and Latin

    America

    Make Different Product type in

    Finished Foods, CKD or

    SKD

    MultipleManufacturingsites

    Well Supply ChainManagementInfrastructure

    Arima subsidiaries can supplykey component withcompetitive cost

    Lower risk in material shortage On Time Delivery (VenderInventory Management System)

    SMT, RF test engineering,and in-house test system

    design, Test & Assemblyprocess development

    ExperiencedManufacturingEngineering

    Global delivery service withdifferent customization to morethan 2,000 locations in 88

    countries

    Global LogisticService

    From Pilot Production to over

    2M units shipment within two

    months

    Fast Ramp-upManufacturingCapability

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    Company Profile

    Manufacturing Competency

    IT SystemBusiness Strategy

    Section Three

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    Manufacture System Integration

    2 M units per month > 95% 1st passyield rate

    Door to door deliveryservice to 2000 locations

    Achievement

    High Efficiency

    High Speed

    Global Supply Chain

    ERPEnterprise Resources

    Planning

    SFCShop Floor

    Control

    SCMSupply ChainManagement

    EDIElectronic Data

    Interchange

    PDM

    Product DevelopmentManagement

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    x

    SMT

    99.65 %

    RF Calibration

    98.74 %

    Producible

    98.09 %

    Customization

    100 %x x

    First Pass Yield Rate

    96.52%=

    Production Quality

    Z300i (W641)

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    Office Network

    MES/SFCS Network Architecture

    ERP

    Data Base

    eRMA

    Data Base

    Internet

    Work

    Order

    Shipping QA Report

    system

    ME

    Production Network

    RS-485 Network

    Input

    BCR

    SFIS

    Data Base

    FunctionBCR Test result

    Server

    Anti-Virus Software Release

    ( LinuxFTP )

    SMO

    Production ReworkFQC

    /OQC

    Repair

    SPC

    Data Base

    KanBan

    DisplayTMO

    Backup

    Data Base

    Firewall

    S

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    IT System for Manufacture & Logistics

    Arima

    ERPAPS (i2 FP) / SCP

    Banks

    Suppliers

    Scheduling

    Planning

    Forecasting

    Forwarders

    Forwarders

    Customers

    Customers

    ERP

    ERP

    (OracleR11i)

    ERP

    MES

    (ArimaCustomizatio

    n)

    Web

    Ros

    ettaNet

    (CA/e

    BizArch)

    FTP

    Brokers

    Brokers

    Suppliers

    B2B system

    (eSkyLink)

    eProcurement

    ePayment

    eShipment

    eBanking

    eHUB

    eImport

    IQC/OLAP

    B2B system(Arima Customization)

    Sales Order

    /Response

    Invoicing

    PSI/iRuGo

    eExport

    Shipping

    Track & Trace

    /DDU

    DIS

    eRMA

    QI-Tools

    (System Integrated) (System Integrated)

    Web

    RosettaNet

    (CA/eBizArch)

    EDI

    (custom

    made)

    FTP

    EAI

    ATP

    Version date: 2006/03/01

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    AccessControl

    User Interface and Security

    Management

    Suppliers

    PM

    Planning

    Development &

    Manufacturing

    engineer

    Customer

    Role

    Based

    Portal

    Main Functions

    Other System I/F andSupporting Tools

    CAD Interface(Pro-E, Mentor, AutoCAD,Orcad, )

    MS-Office Interface

    ERP Interface

    Viewer

    Full Text Search

    Notes Interface

    ERP

    Product Life CostManagement

    Product Governance& ComplianceManagement

    Product Integration& Collaboration

    Management

    Product QualityManagement

    Product DataManagement

    Product PortfolioManagement

    PLM

    Workflows

    Workflows

    Overseas R&D

    CRMSCM

    IT application for Product Life Cycle Management

    MES (SFC)

    PVCS

    Agile

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    Arima Communications Strengths

    1

    The worldwide best class in qualitylevel and costmanagement.

    2Well infrastructure for global logistic service; offers door to doordelivery service to 88 countriescovering 2000 locations by DDUterm.

    3 The highest industrial class for more than95%first pass yield rate in product line.

    4 Shipped more than 40Mmobile phones toWorldwide market in the past four years.

    Strategic Partner with LGEin ODMbusiness5

    Purely ODM policy , avoidingconflict with customer.6

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    Company Profile

    Manufacturing Competency

    R&D CapabilityBusiness Strategy

    Section Four

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    Why Arima?

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    Arimacomms Intention

    Arimacomm will be LGEs best partner

    How to deploy on the next step?

    EMS d ODM St th

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    DesignCapability

    GlobalPresence

    Strength Strength

    EMS and ODM s Strength

    DemandPlanningSupplyPlanning SupplyManagement

    Order

    FulfillmentManagement

    Supply Chain Management Customer Relationship Management

    V l Ch i i EMS d ODM

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    ProductDevelopment

    SourcingNew Product

    Introduce

    PurchasingInboundLogistics

    Manufacturing(Global sites

    In EMS)

    GlobalDistributionOutboundLogistics

    After SalesService

    Handset industry value chain

    Value Chain in EMS and ODM

    ODM

    EMS

    Even though traditional EMS s delivery is better than ODM

    ,Arima can delivery extra value to customers!

    JDM b i d l

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    Design Involvement level: 0%~100%

    EMS JDM ODM

    HW + SWID/MECHValidation

    Certification

    JDM business model

    How ODM delivers extra value to Customer?

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    How ODM delivers extra value to Customer?

    Support Capability

    ID: color & materials approval

    Product verification / validationQuality assurance

    Product development process support

    Delivery

    Quality

    Cost

    Service

    M f t i d ti bilit M lti l tf

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    Manufacturing production capability- Multi-platform

    In-House (ODM+JDM)

    Made by customer (OEM)

    Arima Comm. is excellent inmanufacturing engineering skill

    Arima Comm. canmake fast ramp up

    production, no matterwhat kind of platform!

    Agere

    V l dd d E i ith C t A

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    Value added: Experience with Customer A

    Arima and Customer A have collaborated for

    product development in OEM business model !

    C2DesignPhase

    C3Engineering

    Prototype

    C4Factory

    Prototype

    C5

    Pilot Pun

    C6

    Mass

    Production

    C1Planning

    Phase

    FPprototype EP PP

    FastRamp up

    Earlyinvolvement

    MP

    Delivery

    Quality

    Cost

    Service

    Reduce ID lead time

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    Reduce ID lead time

    2D image

    & 3Dmodel

    IDconcept Product

    sample

    approval

    EP 0

    ID &Mech.

    Designdiscussion

    ColorDesign

    3DFinal

    C&Mand

    TargetsampleFinal

    FP

    Pre-process

    sampleapproval

    PP

    Processsample

    approval

    MPKick off EP 1 - - - - - - EP3

    Arima is capable to involve full ID design procedure.

    DeliveryQuality

    Cost

    Service

    3D model ,Mock up fabrication, feasibility study, 2nd vendor sample

    approved

    Arima

    Offer Qualified Verifications

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    Arima has set up synchronized facility andcapability

    Arima do full product verification and validationArima save customers resource and shorten the

    time to marketOur equipment and skill can offer TRR (Trial Run

    Request) service and save the time of componentrunning change

    Offer Qualified Verifications

    DeliveryQuality

    Cost

    Service

    Gl b l SCM t

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    Global SCM arrangement

    Supply chain management

    Order fulfillment

    Global SCM issueCreate Global HUB Concept

    Brazil factory will start to operate in 2008

    Global SCM Model

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    Critical factor:

    Global SCM

    Component Source Type

    Consign part In House Alliance

    Global SCM Model

    Strength Strength

    FlexibleReduce overhead

    Synergy efficiencyDepend onbusiness model

    Weakness Weakness

    The componentinfluence

    Overhead loading

    In House source

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    In House source

    Arima Display

    LCM

    Arima Optoelectronics 3rd Party

    Arima Device

    CCM

    Acme

    Auto Focus

    Lens

    AxonStrategicPartner

    Plastics

    LightGuide

    LEDChip LED Pack

    Alliance: Key Components

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    BB/PMU/TxRxTI ( General Feature Phone)EMP (3G and Above)MTK (Multimedia FeaturePhone)

    PASkyworks

    Anadgics

    VCO/TCXO/Xtl

    EpsonNDK

    Taisaw

    Memory

    SpansionIntel

    Samsung

    CCMABICOLiteOn

    ChiconyACME

    Saw FilterPanasonic ( )Murata ( )

    Samsung( )

    Alliance: Key Components

    LCD

    SIIWintek()

    LGE(Innotech)TPO () (for VGA)

    APIntelSamsung

    Alliance: Other Components

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    Alliance:Other Components

    ConnectorMurata

    Yokowo

    Charger

    PI

    HousingGreen PointYuanJin( )A-Tek

    GAEUAL( )

    KeypadSiliTechIchia ( )Taibound

    LensSurtec ()Mildex()

    Dome

    Printec ( )

    FPC

    Ichia ( )Adv. Tech ( )

    PCBUnitech

    UniMicron

    Shielding caseJinChya( )Heyang( )

    ANT

    PerlosAuden

    AccousticAAC/CST /NXP

    Current equipment and capacity plan

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    Current equipment and capacity plan

    Production lines today

    SMD FinalAssembly

    Customization& Packing

    WJ China 14 23 24

    YK Taiwan 8 7 11

    Total 22 30 35

    0

    10

    20

    30

    40

    50

    2006 2007 2008

    Others YK(Taiwan) WJ(China)

    31

    42 53

    Production Facility Update

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    Production Facility Update

    Will increase 3 SMT lines and assembly lines for feature phone orderfrom BU1 and BU2 customers in September,2007.

    Will add another five SMT lines in 2008 so the total SMT lines in WJ in2008 will be 22 lines at least.

    A. For YK Factory from 8 to10 SMT lines in 2007.

    B.For WJ Factory from 14 to 17 SMT lines in 2007.

    Add two new SMT lines in YK factory to increase SMT capacityfor new order from new customer and smart phones.

    This factory is dedicated for high-end product and smart phone(Certified: KDDI/Vodafone/BABT/Telefonica)

    Expansion plan for manufacture site

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    Expansion plan for manufacture site

    The Brazil factory ( Manaus ) will start to operate in2008 Q1 to support local production and customers.

    The initial production capacity will be 2M units annually

    and will expand capacity following customers requirements.

    South American

    Create Global HUB Concept

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    Create Global HUB Concept

    Now

    PO

    To-Be

    SMD PCBA Assembly Package

    ( WIP stock ) ( 5-7 days)

    Byair

    Rolling

    FCST

    Delivery

    DDUservice

    Over 2000deliverypointsin over 88countries

    PO

    ( 1-2 days)

    HUB A

    HUB B

    HUB C

    ( WIP stock )

    ( WIP stock )

    ( WIP stock )

    SMD PCBA Assembly

    Package

    Package

    Package

    Bysea

    Bysea

    Delivery

    Delivery

    Delivery

    DDUservice

    EDI flow for Door to Door shipment by DDU term

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    Arima Forwarder

    Flight information

    Invoice and Packing List

    Cargo tracking

    POD

    Clearance Document

    Delivery Note

    EDI flow for Door to Door shipment by DDU term

    Customers

    ORDERS

    ORDRSP

    DESADV

    FINANCIAL INVOICE

    POD

    VPN

    VPN

    End Customers Invoice

    Key Performance Indicators of Efficiency

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    innovativeODM model

    Key Performance Indicators of Efficiency

    SynergyEfficiency

    Delivery

    Quality

    Cost

    Service

    TraditionalODM

    TraditionalEMS

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    57


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