Conflict Minerals Rule (“CMR”) GSA Presentation

Presented by: Tom Melendrez, General Counsel & Exec VP Dan Wark, Vice President, Supply Chain Management August 22, 2013 COMPANY CONFIDENTIAL

Review • Disclaimer

• Background

• General

• Definitions

• Process – Applicability

– Assessment

• Compliance

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• Rulemaking arises out of concerns that the exploitation and trade of certain minerals (referred to as “conflict minerals”) by armed groups is helping to finance conflict in the Democratic Republic of Congo (DRC) region and is contributing to an emergency humanitarian crisis.

• Intent is to increase transparency regarding the use of conflict minerals to stakeholders, strengthen chain of custody and reduce funding for armed groups.

• Section 1502 of the Dodd-Frank Act amends the Securities and Exchange Act of 1934 to add Section 13(p). The SEC has promulgated Rule 13(p)-1.

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CMR Background

• A reporting company that manufactures or contracts to manufacture a product for which conflict minerals are “necessary“ to the functionality or production of such product must file a report on Form SD.

• No de minimis exception associated with “necessary”. • Applies to:

– all Exchange Act filers (“FILERS”) – domestic and foreign issuers

• Filings made on new Form SD: – calendar year reporting for ALL Filers, regardless of fiscal year end.

– first Form SD due May 31, 2014 (for CY 2013)

– due annually on May 31 thereafter

– deemed filed but not CEO/CFO certified

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General

Conflict minerals are defined as columbite-tantalite or coltan, cassiterite, gold, wolframite and their derivatives.

What minerals are covered? – Tantalum – Tin – Tungsten – Gold

The above are referred to as “3TG”.

What countries are covered? – Angola – Burundi – Central African Republic – Democratic Republic of the Congo – Rwanda – South Sudan – Tanzania – Uganda – Zambia

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CMR

• Fab Equipment → connectors, capacitors, targets • Wafer Fab → work metals, plug and contact,

copper barrier seed • Wafer Bump → solder • Wafer Test Sort → probe cards, capacitors,

testers • Package Assembly and Test → substrates,

laminates, wireboard bonders, handlers, testers • System Assembly and Test → PCBs, computers,

solder, connectors

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Semiconductor Operations

• Cost Effective, Time Efficient • Good Faith, Prudent RCOI and DD • Minimize Redundant Programs • Validated Information Sources • Retain Collaborative Supplier Engagements • Increase Supply Chain Management • Achieve Regulatory Objectives/Compliance • Information Exchange/Benchmarking

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Association Compliance Initiative

• Structured Inquiry/Assessment – Surveys – On Site Reviews – Material Origin/Product Composite

• Monitor Response/Compliance • Data Management • Engage Third Party Advisors • Consolidate and Report Results

– Form SD – CM Report

• Leverage Resources – EICC/GSA

• Transparency, Integrity, Accuracy 8

RCOI and DD Process

Applicability

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Assessment

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SEC Flow Chart

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Example of Letter Sent to Suppliers

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April 10, 2013 RE: Conflict Material – Action Required Vendor/Supplier On August 22, 2012 the U.S. Securities and Exchange Commission (SEC) adopted rules with new reporting requirements applicable to all U.S. public companies, including Exar. In order to fully satisfy our compliance obligations, we are requesting the complete, timely cooperation from our supply chain partners. Conflicts Minerals Legislation Due to a growing concern that the mining and transportation of Conflict Minerals, such as gold, tantalum, tin and tungsten (“ 3TG’) may finance ongoing conflict in the Democratic Republic of the Congo (“DRC”) or its neighboring countries, Congress incorporated Section 1502 into the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires public companies to determine and disclose whether any Conflict Minerals originate from the DRC or an adjoining country. Each year Exar will be required to report the following to SEC:

• Use of Conflict Minerals in our products, whether manufactured by Exar or our supply chain partners.

• The country of origin of identified Conflict Minerals: and • Whether or not Conflict Minerals originating in the DRC are conflict free that

they do not directly or indirectly finance or benefit armed groups in the DRC region.

Supply Chain Partners Our regulatory compliance effort also requires the involvement of you and your supply chain partners. In this regard, we request that your team immediately establish a process that identifies the following:

• Which of your products incorporates one or more Conflict Minerals: • Where any Conflict Minerals are produced: • Procurement procedure documents relative to Conflict Minerals: and • Section 1502 Conflict Mineral requirements to your impacted supplies policy and

compliance procedure on Conflict Minerals for your organization and your suppliers to act in a similar manner.

Please identify and provide complete contact information for the person responsible for your organization’s Conflict Minerals compliance so that we may direct all future communications.

Tracking Sheet

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3TG Compliance Program

XR Letter Sent Services

GSA Member

(Y/N) EICC (Y/N) Policy # Statement

Rec'd Process Program Validation 3TG Content BDO Review New

Suppliers

Other Communicat

ions

04/10/13 Board Assembly N Y

04/02/13 Board Assembly N N 4/4/2013

04/10/13 Board Assembly N N

04/10/13 Foundry N N 4/15/2013

04/10/13 Foundry y

04/02/13 Foundry 4/19/2013

04/10/13 Foundry Y Y

04/10/13 Foundry y Y

04/10/13 Foundry N

04/10/13 Foundry y Y

04/10/13 Foundry Y N

04/10/13 Foundry Y N

04/10/13 Foundry Y N

04/10/13 Foundry y

04/10/13 IC Assembly Y N 4/12/2013

04/10/13 IC Assembly Y N 4/12/2013

04/10/13 IC Assembly Y N 4/12/2013

04/10/13 IC Assembly y

04/10/13 IC Assembly y

04/02/13 IC Assembly N

04/10/13 IC Assembly N

04/10/13 IC Assembly N Y

04/10/13 IC Assembly y

04/10/13 IC Assembly y

04/10/13 IC Assembly y Y

04/10/13 IC Assembly y y

04/10/13 Private Label Y

04/10/13 Private Label N Y 4/12/2013

04/10/13 Private Label N

04/10/13 Private Label N Y

04/10/13 Purchased Parts N

04/10/13 Purchased Parts N Y

04/10/13 Turnkey y Y

04/10/13 Turnkey y

04/10/13 Turnkey N N 4/11/2013

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Conflict Minerals Reporting Template

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completion

Revision 2.01 December 21st 2012

The purpose of this document is to collect sourcing information on tin, tantalum, tungsten and gold used in products Link to Terms & Conditions

Mandatory fields are noted with an asterisk (*). The information collected in this template should be updated annually. Any changes within the annual cycle should be provided to your customers

Company Information

Company Name (*): CARSEM (M) SDN BHD

Declaration Scope (*): A. Company Level

Description of Scope:

Company Unique Identifier:

Address: Lot 52986, TAMAN MERU INDUSTRIAL ESTATE, JELAPANG, PO BOX 380, 30720 IPOH, PERAK, MALAYSIA

Authorized Company Representative Name (*): WAN FARIDAH

Representative Title: ESH SECTION MANAGER

Representative Email (*): wanfaridah@carsem.com

Representative Phone: 605-5262333

Date of Completion (*): 27-Feb-2013

Answer the following questions 1 - 6 based on the declaration scope indicated above

1) Are any of the following metals necessary to the functionality or production of your company's products that it manufactures or contracts to manufacture? If no for all metals, you are done with this survey. (*) Answer Comments

Tantalum (Ta) (*) No

Tin (Sn) (*) Yes

Gold (Au) (*) Yes

Tungsten (W) (*) No

2) Do the following metals (necessary to the functionality or production of your company's products) originate from the DRC or an adjoining country? (*) Answer Comments

Tantalum (Ta) (*)

Tin (Sn) (*) No

Gold (Au) (*) No

Tungsten (W) (*)

3) Do the following metals (necessary to the functionality or production of your products) come from a recycler or scrap supplier? (*) Answer Comments

Tantalum (Ta) (*)

Tin (Sn) (*) Uncertain or Unknown

Gold (Au) (*) Uncertain or Unknown

Tungsten (W) (*)

4) Have you received completed Conflict Minerals Reporting Templates from all of your suppliers? (*) Answer Comments Click here to enter smelter names

Tantalum (Ta) (*)

Tin (Sn) (*) Yes

Gold (Au) (*) Yes

Tungsten (W) (*)

5) For each of the following metals, have you identified all of the smelters your company and its suppliers use to supply the products included within the declaration scope indicated above? (*)

Answer Comments

Tantalum (Ta) (*)

Tin (Sn) (*) Yes all smelters have been provided

Gold (Au) (*) Yes all smelters have been provided

Tungsten (W) (*)

6) Have all of the smelters used by your company and its suppliers been validated as compliant in accordance with the Conflict-Free Smelter (CFS) Program and listed on the Compliant Smelter List for the following metals? (*) Answer Comments

Link to "CFS Compliant Smelter List"

Tantalum (Ta) (*)

Tin (Sn) (*) Yes listed in Smelter list

Gold (Au) (*) Yes listed in Smelter list

Tungsten (W) (*)

Answer the Following Questions at a Company Level

Question Answer Comments and Attachments

A. Do you have a policy in place that includes DRC conflict-free sourcing? (*) Yes A declaration of compliance

B. Is this policy publicly available on your website? (*) No

C. Do you require your direct suppliers to be DRC conflict-free? (*) Yes

D. Do you require your direct suppliers to source from smelters validated as compliant to a CFS protocol using the CFS Compliant Smelter List? (*) Yes smelters must be from DRC conflict free (smelter list)

E. Have you implemented due diligence measures for conflict-free sourcing? (*) Yes supplier declaration letter

F. Do you request your suppliers to fill out this Conflict Minerals Reporting Template? (*) Yes

G. Do you request smelter names from your suppliers? (*) Yes

H. Do you verify due diligence information received from your suppliers? (*) Yes (documentation review only)

I. Does your verification process include corrective action management? (*) Yes we do have corrective action management system

J. Are you subject to the SEC Conflict Minerals disclosure requirement rule? (*) No