“Using the Downturn as Downtime to Prepare for Long Term Growth Opportunities”

CEO 360 Degree Perspective:Measurement & Instrumentation

(M&I)

GIL 2009: North AmericaGrowth, Innovation and Leadership

A Frost & Sullivan Global Congress on Corporate Growth

September 13-16, 2009Scottsdale , Arizona

2

Global Perspective – Measurement & Instrumentation

Test & Measurement Semiconductors

2007 - ~ $50B

CAGR – 7.1 %

2007 - ~ $265B

CAGR – 5.6 %

2007 - ~ $41B

CAGR – 9.1 %

Sensors

M&I

2007

M&I

Test & Measurement

2007 - ~ $44.3B

CAGR – 5%

Semiconductors

2007 - ~ $200B

CAGR – (24)%

2007 - ~ $44B

CAGR – 9.2%

Sensors

2008

3

Global PerspectiveThe Complex Business Universe

Environmental Concerns Drive Demand

Wireless Standards Set Tone for New Products

BRIC & Other Emerging Economies

Struggling Economies

Measurement & Instrumentation Industry Global Environment

Measurement & Instrumentation Industry Global Environment

Source: Frost & Sullivan

4

Focus on Core Competencies

Innovative Approach

Standard Wireless Sensors

Superior Product Performance

Cost Efficient Solutions

Extending into the Critical Markets

Innovative Wireless Systems Newer Applications Areas

Complimentary Products and Accessories

Dissemination of Education to End-Users

Developing Common Acceptable Standards

Experience Spread over next 5 years (2008-2013)

TIME

MA

RK

ET

PE

NE

TR

AT

ION

Global PerspectiveWireless Standards Impacts New Product Development

2008 - 20092008 - 2009 20132013

Seamlessly Wireless World (?)

2008 - 2013

5

Economic PerspectiveThe Complex Business Universe

Current Slow-down of Economies leading to Budget Cuts

Growth in Rental/Leasing Market

Continued Industry Consolidation

News of Economies Getting over the Slump

Measurement & Instrumentation

Industry Economic Environment

Measurement & Instrumentation

Industry Economic Environment

Source: Frost & Sullivan

6

Economic PerspectiveStimulus Package Totals – World (2009)

China - $580BUS -

$850B

Europe - $280B

Japan - $110B

UK - $45B

India - $9B

7

Economic PerspectivePlanned US Federal Government Stimulus Spending (2009)

Planned Government Stimulus Spending

Defense and Security $16.448 billion

Federal and State Government

$45.472 billion

Commerce, Justice and Science

$17.842 billion

Transportation, Housing and Urban Development

$57.07 billion

Energy & Environment, $98.234 billion Agriculture and Rural

Development $15.986 billion

Labor, Health and Education

$66.15 billion

Source: CNN

8

GDP of key countries/regions in Europe – 2008 to 2013 indicates tough times ahead for economy pan Europe

Spain

France

Germany

Economic PerspectiveAnalysis across Europe

Britain

Italy

0.9%

-1.2%

0.4%

1.9%

2.1%

1.4%

1.4%

-0.7%

0.4%

2.0%

2.2%

0.2%

0.7%

-3.6%

-1.1%

1.5%

1.8%

0.7%

1.3%

-1.7%

0.2%

2.3%

2.5%

1.7%

0.3%

0.4%

1.2%

1.4%

1.5%

Eastern Europe

3.1%

2.2%

3.1%

2013 2012 2011 2010 2009 2008

Britain and Ireland in UK is likely to go into deep contraction in 2009 and 2010

Source: Economist

Germany is set for contraction in 2009 and is expected to bounce back in 2010

Eastern Europe is not growing at the rates since joining EU. The fall in growth rate have been rather dramatic in few counties

9

Integrated Industry Perspective Zooming In on End-user Industries

Source: Frost & Sullivan

General Purpose

Test

Communications Test Sensors

Aerospace Aerospace & Defense& Defense

Automotive & Automotive & TransportationTransportation

ElectronicsElectronics

Life SciencesLife Sciences

Aerospace Aerospace & Defense& Defense

Service Service ProvidersProviders

Equipment Equipment ManufacturersManufacturers

Automotive & Automotive & TransportationTransportation

Automotive & Automotive & TransportationTransportation

ElectronicsElectronics

Life SciencesLife Sciences

EnvironmentEnvironment

Life Sciences Life Sciences

Semiconductors

ResearchResearch

CommunicationsCommunications EnvironmentEnvironment

Chemicals & Chemicals & PetrochemicalsPetrochemicals

Aerospace Aerospace & Defense& Defense

Aerospace Aerospace & Defense& Defense

ResearchResearch

Process ControlProcess Control

CommunicationsCommunications

ElectronicsElectronics

10

Segment

Parameter

Analytical Instrumenta

tion

Manufacturing Test &

ATE

Communications Test

Dimensional Metrology

Mechanical Test

General Purpose test

Market Size 2007

$18.8billion

$7.6 billion $7.98 billion $6.4 billion $4.2 billion $3.7 billion

CAGR (2007-2010)

5.5% 7.2% 12.6% 6.1% 5.4% 4.8%

Leading Market Participants

Thermo FisherWaters CorpVarianHoriba Instruments

AdvantestAgilentCredenceTeradyneNational Instruments

Agilent AnritsuJDSURohde & Schwarz SpirentIxia

HBMMitutoyoCarl ZiessHexagon MetrologyVishay

Emerson ProcessGE InspectionB+KRockwell Automation

AgilentAnritsuRohde & SchwarzTektronix

Competitive Perspective Test & Measurement Industry

11

Competitive Perspective Semiconductors Industry

World Power-over-

Ethernet Chipsets

World LED Driver ICs

World LCD and OLED Driver ICs

North American

Digital VLSI Design

Services

World Battery

Management ICs

World DC-DC Converter

ICs

Market Size (2008) $91 million $1.04 billion $5.3 billion $727.9 million $1.4 billion $2.98 billion

CAGR (2008-2012)4.8% 10.4% 1.8%

8.8%14.6% 16.5%

Leading Market Participants

Maxim Integrated ProductsLinear

TechnologyTexas

InstrumentsMicrosemi

National Semiconduc

torMaxim

Integrated Products Texas

Instruments

SAMSUNGNovatek

Microelectronics Corp

NEC Electronics

IBMeSiliconQThinkFaraday

Technology Corporation

Texas Instruments

Intersil Corporation

Maxim Integrated Products

National Semiconduc

torLinear

Technology Maxim

Integrated Products

Segment

Parameter

12

Competitive Perspective Sensors 2008-2013

High

Growth Sensor Markets

Distance Sensor

Torque

Sensors

Humidity

Sensors

Scavenging Sensors

Acoustic Sensors

pH

Sensors

Rain

Sensors

Other Emerging Sensors

CAGR

2008-2013 19.2% 25.4% 20.5% 19.2% 19.2% 16.2% 16.3% 16.3%

Trend

Low Growth Sensor Markets

Load Cells

Sensor

Speed

Sensors

Motion Sensors

(Auto)

Level Sensors for Solids

Knock Sensor

CAGR

2008-2013 3.5% 3.4% 3.6% 3.8% 2.5%

Trend

High

Growth

Sensor

Technology

Wireless Semiconductor-Based

Sensors

CAGR

2008-201348.5% 16.7%

Trend

Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan’Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan’

13

Technology PerspectiveThe Complex Business Universe

Wireless & MEMS gaining ground

Test Automation

Embedded Instrumentation

Integration of Technologies

Zero-defect Manufacturing

Green Technologies

M&I Industry: The Focal Point of an Industry at a Crossroads

M&I Industry: The Focal Point of an Industry at a Crossroads

Source: Frost & Sullivan

14

Technology Perspective Communications Test & Measurement (2008 – 2013)

Dri

vers

High

Med

Low

10 GbELTE/WIMAX

QoE/Service

Assurance

3G MobileDataServices Security

DOCSIS

3.0

15

Technology Perspective – SemiconductorsMarket Impact of Key Trends

ProjectedImpact on the

SemiconductorIndustry

High Impact

Low Impact

Certainty

Low High

Increasing Chip Complexities

Co-existence of analog & digital logic on chip

MEMS Technology

Low Power Consumption

High Level of Integration

Shift to 3-D Packaging

High Growth Impact

LowGrowthImpact

MediumGrowthImpact

Source: Frost & Sullivan.

16

Technology Perspective Sensors

Dev

elo

pm

ent

Su

cces

s 2

008

2009 2010 2011 2012 2013

Embedded Piezoresistive Microantiliver Sensors – Using Gas Detection

Direct Monitoring & Control – Transformer Temperature

Wireless Sensor Use – Multi-Traffic Control

Solid State Sensor - Humidity Detection

Novel Overlap Functions – Wireless Sensing

Intelligent Sensing – Inverter-fed Induction Motors

Smart Sensor – Self Adaptive Sensor System

Imp

lem

enta

tio

n S

ucc

ess

2009

-201

3

17

Customer PerspectiveThe Complex Business Universe

Challenges Challenges

Impacting Impacting

Customer Customer

Relationship Relationship

ManagementManagement

Need for region/pr

oduct specific

distribution

channel strategy

Need for region/pr

oduct specific

distribution

channel strategy

Increasing Need of Global

Technical Support

Increasing Need of Global

Technical Support

Strong Demand

Growth in Emerging Markets

Strong Demand

Growth in Emerging Markets

Source: Frost & Sullivan

18

New Business Can Come from Non-traditional & Alternative Sources

• Security Security MarketMarket

• Alternative Power Alternative Power & Battery Needs& Battery Needs

Measurement & Measurement & InstrumentationInstrumentation

• Oil & Gas MarketOil & Gas Market

• Alternative Alternative Fuels MarketFuels Market

• Environmental Environmental MonitoringMonitoring

End-user / Customer Perspective – Market Opportunity Window for M&I Vendors

Increasing Security Concerns

Generation Shortfalls and Increasing Demand for Power in all Segments

Green House Effect and Impact of Environmental Degradations

Need to Enhance Yields and Ensure Pipeline Integrity

• Medical Medical MarketsMarkets

The Preferential Sector For Investment Opens New Untapped Opportunities

Need for Improved Healthcare

• Food & Food & Agriculture Agriculture

Soil Monitoring for Increased Yield

19

Best Practices PerspectiveThe Complex Business Universe

Source: Frost & Sullivan

Product Innovation and Differentiation

Product/Region Specific Distribution Strategy

Effective Customer Service Strategy

Customer Diversification & New End-users

Technological innovation leadership

New Markets for established products

Ability to establish brand awareness

Strategic mergers,

acquisitions, or joint ventures

Reorganization structured around growth strategy

Product Innovation and Differentiation

Product/Region Specific Distribution Strategy

Effective Customer Service Strategy

Customer Diversification & New End-users

Technological innovation leadership

New Markets for established products

Ability to establish brand awareness

Strategic mergers,

acquisitions, or joint ventures

Reorganization structured around growth strategy

Best Practices in M&I

20

Going ForwardFuture Scenarios

Global Diversification and

Product Specialization

Sustainable Technology &

Product Innovation

Market Facing Solution Providers

Downstream Vertical Integration

or Consolidation

M&I Industries:Effective Growth

Strategies

SustainablSustainable Growthe Growth

SustainablSustainable Growthe Growth

Source: Frost & Sullivan

Questions and Answers

Growth Success Story 1

Christine KingPresident & CEO

SMSC

GIL 2009: North AmericaGrowth, Innovation and Leadership

A Frost & Sullivan Global Congress on Corporate Growth

September 13-16, 2009Scottsdale , Arizona

Meeting of the Minds: The CEO 360 Degree Competitive Perspective Think Tank

Speakers

- Jason Urso, CTO & VP Technology, Honeywell Process Solutions - Atul Bhatnagar, President & CEO, Ixia - Calvin Harrison, VP Marketing & BD, Inneoquest Technologies, Inc. - Richard McDonell, Sr Group Manager, Product Marketing

GIL 2009: North AmericaGrowth, Innovation and LeadershipA Frost & Sullivan Global Congress on Corporate Growth

September 13-16, 2009Scottsdale , Arizona

Growth Success Story 2

Atul BhatnagarPresident & CEO

Ixia

GIL 2009: North AmericaGrowth, Innovation and Leadership

A Frost & Sullivan Global Congress on Corporate Growth

September 13-16, 2009Scottsdale , Arizona