Bringing value to Malaysia through a privileged

partnership

Dan EllsworthPresident & CEOWorld Micro, Inc.June 13, 2011

COLLABORATING

FOR SUCCESS

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Bringing value to Malaysia through a privileged

partnership In this presentation…

CONTENTPartnership and collaboration

NCIA, IDEA

Supply chain structure

World Micro marketing plan overview

Benefits to Penang and Malaysia

Investment plans

”Wawasan 2020Satu pandangan jauh

Bukan impian malah kenyataanBersama kita jayakan”

Composed by Akbar Nawab

“We are privileged to become a ‘partner for growth’ of the Malaysian ecosystem.”

“World Micro has opened an Asian hub in Penang. Its biggest competitive advantage is its counterfeit inspection, detection and abatement and RF ID expertise.

WM’s expansion would be the first of its kind in Malaysia . It not only benefits WM, but also the Malaysian economic and industrial ecosystems.

This amounts to a ‘re-branding’ of Malaysia – a safe harbor for non counterfeit parts and a regional center of excellence in electronics manufacturing.”

Vision 2020. A far view. Not a dream but reality. Together we achieve it.

A collaboration has been proposed An opportunity to lead an industry

“A program of collaboration" to help grow the Malaysian electronics economic ecosystem through the introduction of programs to position Malaysia to become the Asian center of influence and education toward eliminating counterfeit electronic (CF) components.”

NCIA driving force in regional growth Incentives provided for workable programs

“The objectives of the Northern Corridor Implementation Authority (NCIA) are:

“To promote and accelerate the development of the region into a world class economic region and a choice destination for investment, work and living…”

Companies such as WMC can be given incentives if the right value is brought into the country.

IDEA is structured, proven, and ready to deploy

New standard ready to roll out. Able to certify Malay workforce.

Advances trade ethics

Establishes standards

Provides industry education

Provides certification programsclasses and workshops designed to train for counterfeit parts detection

Conducts inspector certification program

A Shared vision NCIA incentives and IDEA support can help to build a safe haven

“Through collaboration between the NCIA and World Micro, and with guidance and support from the U.S. – based IDEA, programs will be created to benefit the region -- and the country. This can profoundly impact Malaysia's role in the worldwide electronic components supply chain and enhance its reputation in the Malay marketplace. “

Moving forward. Some details:

A proposal for contribution to training, development, and awareness programs was created and has been submitted. It lays the foundation for moving the collaboration forward.

Supply chain structure

Relationships in the electronics and electrical products (E&E) chain

Three types of distributors

This group of suppliers has focused on satisfying the needs that traditional franchise distribution is currently unable to provide and can “take care of the last 20% of parts requirements that cause 80% of the headaches".

Supply chain: BrokersThe industry has failed to distinguish the important role independent distributors play in the supply chain

It is important to draw a distinction between Independent Distributors and Brokers. Because they are both called upon to help with obsolete parts, the names are often used interchangeably. However, a Broker is a supplier who lacks a well-documented Quality Control System, lacks the global footprint needed to support Tier-1 OEM’s and CM’s, and does not carry inventory. These firms typically focus all of their efforts on supplying only obsolete and hard to get parts.

Supply chain: independent

distributor value

Assures that supplier is able to assist with issues that cannot be adequately addressed with other distributor models

There are two specific areas where WM can support Malaysia in these formative years of growth. The first of these is “Process Lag” – the increasing pent-up demand for training of the local Malaysian workforce in new industry methods such as RFID tagging and testing standards.

The second area of focus is counterfeit abatement training and awareness aimed at preventing unethical or criminal opportunism, made especially visible by the example of counterfeit electronic components entering the Malaysian and thereafter, world supply chain (one estimate claims that five percent of the world’s counterfeit parts come out of or through Malaysia).

General areas of support

World Micro’s plan: top level view

“Educated SME companies will play an important role in the quality of products produced and shipped out of Malaysia and will impact the Malaysian economy favorably.”

Marketing plan and related intelligence

Education is a first step

Missing links: Counterfeit training, RF ID technology and training

Target audience: More than 90 percent of all businesses in Malaysia are categorized as SMEs, a from-the-ground-up approach that brings awareness training and education in the area of counterfeit abatement as well as an introduction to RFID technology is suggested.

World Micro’s plan – top level

view

Program summary

1. World Micro proposes the creation of a two-year training program.

2. In consideration of WM’s contribution to the ecosystem, the company asks for financial considerations to offset the costs associated with the creation of the programs and expenses associated with the company’s establishment in Penang.

3. Training programs will cover RFID tagging and counterfeit abatement issues and methods and the programs will target specific audiences. WM suggests that SMEs comprise the first sector to receive this training.

4. WM is engaging in PR activities and is offering NCIA and the Malaysian government, at its discretion, the opportunity to collaborate on far-reaching news and other media initiatives for the benefit of the Malaysian ecosystem.

5. WM will start the training program development and will seek direction from NCIA and IDEA for specific items to be considered in the program. Local candidates are currently being interviewed.

6. WM asks that specific financial incentives be granted to ensure the success of the proposed program.

Marketing plan and related intelligence

Benefits to Penang: Help reach the goals

of Wawasan 2020

Incentives provided for workable programs

Lower logistics cost for EMS companies equals better competitive pricing

Improved reputation for Malaysia as a center for genuine electronic components

Improved awareness of counterfeit electronics and an organized approach to overcome it

Create air cargo activities for the airport

Direct jobs creation at WM and increasing at EMS companies)

Knowledge creation for Malaysian E&Eindustry on specific skills

Investment plans“We already have feet on the ground.”

Warehouse in final build-out in FCZ

VP of quality on siteEMS companies training started

Director of operations on-site

Equipment (like X-Ray etc..) has been purchased locally

Hiring in process

Expanded location (additional space) will be occupied in late fall

Investment plansLoans and forbearance

World Micro will make investments of approximately RM7,125,000 during its start-up phase and toward the end of the second year of operations in Penang

For training and development, WM is requesting one-hundred percent of a soft-loan, which amounts to approximately RM2,620,000.

Further, WM seeks consideration of a 30 percent forbearance on this soft loan after a three-year period. That is, WM is asking that the soft loan, if granted, will be repaid at 70 percent of the original loan, after a three-year period.

Winning together World Micro is committed to building a winning relationship

“WM and its dedicated staff is fully committed to building a strong business presence in Asia and we are confident that a collaborative approach to our expansion will result in substantial benefits to Malaysia, its reputation, and its economy. If we are able to work together, our goals can be met quickly and with great rewards--- such benefits will be meaningful, fruitful and have long lasting effects.”

Sincerely,

Dan Ellsworth, President & CEOWorld Micro (M) Sdn. Bhd..

Collaborating for success

Dan EllsworthPresident & CEOWorld Micro, Inc.

THANK YOU

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