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<p>Advanced Material Strategies</p> <p>Linx Strategic Supply Chain ServiceOverview PresentationLinx 617.273.8837 617.273.8837 973.698.2331#1Linx ConsultingWe create knowledge and develop unique insights at the intersection of electronic thin film processes and the chemicals industry</p> <p>We help our clients to succeed through our:Experience in global electronics and advanced materials and thin film processing industries:</p> <p> Experience in the global chemicals industryExperience at Device ProducersExperience at OEMsGlobal network and capabilitiesAdvanced modeling capabilities</p> <p>SemiLCDPackagingPVNano TechnologyOther LINX 617.273.8837 973.698.2331#2Electronic Materials, 2012</p> <p> SEE BEYOND THE 617.273.8837 973.698.2331#3High Confidence Decision Support Services LINX 617.273.8837 973.698.2331#4Industry Analysis Reports OfferedCMP Technologies and Markets</p> <p>Advanced Thin Films for FEOL and BEOL Applications</p> <p>Emerging Materials Opportunities for Advanced Semiconductor Devices Logic</p> <p>Emerging Materials Opportunities for Advanced Semiconductor Devices - Memory</p> <p>Advanced Cleaning and Surface Preparation: Technologies and Markets </p> <p>Advanced Patterning Forecasting</p> <p>Chemicals and Materials for TSV Applications</p> <p>Wafer Polishing Technologies and Markets</p> <p>Impact of 450mm Wafers on Processes and Materials</p> <p>Advanced Materials and Chemicals for Photovoltaic Cells and Modules</p> <p> LINX 617.273.8837 973.698.2331#5What is Linx-Supply Chain OptimizationLinx is a leading industry consulting firm focused on helping our clients to succeed by overcoming the challenges inherent in becoming or remaining a WORLD-CLASS advanced materials supplier. We accomplish this through offering innovative insight and solutions to quality management systems requirements, which drive changes that transform the perception of quality as a cost center to quality as a differentiator, that customers are willing to pay for, and the company from a bulk vendor to a world-class solutions provider</p> <p>Linx Services OfferedQuality system auditing or pre-audit assessmentSupplier quality system benchmarkingQuality/Product Management system set-up or augmentationExcursion management </p> <p>Key Deliverables are enablingEnables executives to make informed decisions around product line managementEnables end-users to assess and select strategic partners for next generation materials development. Is a critical component of due-diligence supporting M&amp;A 617.273.8837 973.698.2331#6Supply-Chain Optimization BackgroundMarket trend is to push supplier quality into the supply chain</p> <p>End customers (End-user) are pushing suppliers to avoid costly firefighting by pre-emptively qualifying the supply chain</p> <p>Some companies are developing collaborative programmes which are firewalled and confidential</p> <p>Others are demanding more information with an expectation of supplier transparency for the whole supply chain.</p> <p>Suppliers need to set up effective audit trails for all sub suppliers</p> <p>This may lie within the capability of large suppliers, but small and medium size suppliers may not have the expertise to develop acceptable supply change qualification 617.273.8837 973.698.2331#7Incumbent Supplier Base is being Challenged</p> <p>New material formulations being introducedNew suppliers bring innovationMature formulations used for new applicationsTechnology cycles are being compressedNew suppliers have a steep learning curveEnd-users have limited process characterization resourcesHendry ISS 2013Hendry ISS 617.273.8837 973.698.2331#8New Materials are Increasing Rapidly</p> <p>New Devices and ArchitecturesThe Quality DilemmaNew Materials are often found in / required for the most critical applicationsNew materials lead to new value chainsNew value chains lead to new sourcesNew sources are usually 617.273.8837 973.698.2331#9The Entire Value Chain is Being 617.273.8837 973.698.2331#10What is Needed?Companies at all levels in the value chain need help in establishing and managing quality systems and the impact of excursions. Linx Consulting offers solutions to all participants that are designed to:End-usersPrime SuppliersSub SuppliersQuality system auditing</p> <p>Excursion management </p> <p>Systemic Reporting tools.</p> <p>Quality system auditing or pre-audit assessment</p> <p>Supplier quality system benchmarking</p> <p>Quality/Product Management system set-up or augmentation</p> <p>Excursion management </p> <p>Identification of toll manufacturers</p> <p>Quality system auditing or pre-audit assessment</p> <p>Supplier quality system benchmarking</p> <p>Quality/Product Management system set-up or augmentation</p> <p>Excursion management </p> <p> 617.273.8837 973.698.2331#11World Class Supply chain Management Be Prepared for the Excursion Well controlled manufacturing at the supplier leads to product qualification</p> <p>Changed process at the sub-supplier changes end product performance</p> <p>See Beyond The HorizonSourcingReactionPurificationPackagingShippingReceivingReactionFormulationPurificationApplication TestQCDistillationShippingQCSupplierSubSupplierSubSupplierPurificationNew Requirement's</p> <p>Sub-supplier process mapping during product development</p> <p>Beyond CofA material fingerprinting</p> <p>Understand and Control variation where possible</p> <p> 617.273.8837 973.698.2331#12What is happening today?IC Manufacturers are making changesFocusing on formulation sub-suppliersAre evaluating strategic supplier readinessImposed significant fines for quality manual violationsActively eliminating under performing suppliers Suppliers need assistance to overcome barriers:Executive SponsorshipAssignment of talent and resources for changeCommitment to attainment of quality goals EducationUnderstanding WHAT and WHYInvolvementAll aspects of sales and operations are stakeholders for quality metricsPriceEnd users need to pay for the appropriate level of testing and production 617.273.8837 973.698.2331#13Impact of Excursions</p> <p>IMPACT to:Raws Qualified ProductOn WaferPacked ChipsConsumer ProductBusinessOperating capitalGood Will1/Technical ID Root CauseRecurrence of IssueDetection location</p> <p> 617.273.8837 973.698.2331#14Dollarized Impact of Supply Chain ExcursionHigh Volume manufacturerDelay of Ramp$2-10 B/ YrTools Idle or re-tasked for excursion support$M - 1.4M / day Additional Wafer InspectionsNon-standard operationsAdditional tool capacity may be needed in HVM operationsAdditional Incoming material screeningNon-standard operationsAdditional capitol may be required needed for HVM operationsAdditional Wafer inspectionsNon-standard operationsExternal services $5K $20K per weekTask force Meeting1 3x per day1/wk Senior Management ReviewsFormulated Product SupplierAdditional inspections mandatedOperating margins reduced significantlyRe-engagement of R&amp;D staffR&amp;D staff no longer available for other developmentOther activities with end user suspended until excursion is fixedNew specification development$20K-$5M additional capitalExpedited Logistics charges$2-$5K for Land Freight /sample$10-$20K for air freight / sampleTask force meetingsWill need 1 Full time TF manager1-3x per day with end-user1-2x per day internalVP of Operations/Business Expected to attend</p> <p>Excursions are expensive including direct and indirect 617.273.8837 973.698.2331#15</p> <p>Why Linx?The advanced materials and tooling market is again evolving. New platform development is costly and risky. End-users are identifying new strategic partners and suppliers who they can rely on to help meet their business goals. Supply chain risk has been identified as a significant vulnerability. In response to this, FABs are rethinking strategic partnerships to focus on suppliers who have consistently met project deliverables and not slipped on manufacturing ramp schedules. </p> <p> 617.273.8837 973.698.2331#16Engagement ModelsClient would like to buy from supplier but it is obvious that quality systems do not meet standardsModel: Linx service to perform client supplier initial gap assessment. Assessed supplier then hires Linx to address gap areas and prep for qualification audit.</p> <p>Client is involved in acquisition of a target company and is completing Due diligenceModel: Linx performs technical assessment of targets capability to meet proposed industry technical deliverables. Client can use report as a component of due diligence.</p> <p>Client needs to know where critical supply chain baseline isModel: Linx performs baseline assessment on list of suppliers ranking them and highlighting areas for improvement vs. industry normal. </p> <p>Client has a supplier management program but must complete detailed assessments (AML?) in short time.Model: Linx supplements existing quality team to complete audits and establish roadmaps for gap closure as an extension its own internal team.</p> <p>Client is small and does not have experienced people in place. Model: Linx acts as quality representative. Linx would be on retainer to the client and on call with a specified number of hours per month. External Disclosure Not 617.273.8837 973.698.2331#Linx Service offering: Pre-AuditVerification of systems and adherence to those systems is at the core in maintaining a culture of quality and continuous improvement. Semiconductor manufacturers perform audits regular to asses the readiness of their supplier base. These audits are invasive and the preparation for the audit can be a daunting. Linx provides guidance and focus to have a successful customer audit.</p> <p>Pre-Audit Program Deliverables</p> <p>Review of end-users audit forms and questionsCompletion of end-users pre-audit formsAnalysis &amp; prioritization of gaps needed to be addressed prior to actual customer auditParticipation in the end-user audit if requested.</p> <p>Pre-Audit MethodologyPre-Audit work will begin with a review of the pre-audit forms with the customers quality and operations team leads to align on expectations.The level of involvement on completing the pre-audit questionnaires will depend on the scope requested by the customerThe completed questionnaire will be returned to the end-user after review by initial pre-audit team. A final document will be presented to the customer highlighting items (red flags) and mitigation requirements if 617.273.8837 973.698.2331#18Linx Service offering: AuditVerification of systems and adherence to those systems is at the core in maintaining a culture of quality and continuous improvement. Quality system auditing is a program for materials manufacturers to asses its ability pilot and ramp new suppliers or materials.</p> <p>Audit Program Deliverables </p> <p>Development of Customized Audit TemplatesField Audits of Supplier and critical component suppliers Analysis &amp; Recommended Prioritization of Needed Improvements </p> <p>MethodologyThe assessment will begin with a questionnaire sent to the audit target from the customer.The on-site portion will consist of site inspections and detailed discussions of selected portions of the assessment checklists. A final document will be presented to the customer highlighting key findings and any recommended improvements. 617.273.8837 973.698.2331#19Linx Service offering: System BenchmarkingThe advanced materials manufactures quality system strength is limited by the capability of its suppliers. Advanced materials formulations are complex and many use components from a variety of suppliers, typically not supplying solely to the electronics market. Periodically it is advantageous for an end-user to asses the aggregate ranking of its supplier base. The benchmarking program allows a customer to rank its overall supplier performance vs. best known methods and suppliers not in the customers supply chain.</p> <p>Benchmarking Program / Deliverables Development of Customized Benchmarking Templates and Focus AreasDevelopment of Customized Audit TemplatesField Audits of SuppliersAnalysis and Comparison to Best Known Methods</p> <p>Benchmarking Methodology</p> <p>The customer and Linx will agree on current supplier and extra-supplychain data setsPeer Benchmarking is also possible in this program The supplier audits will follow the standard audit methodology.A final document will be presented to the customer aggregating the data and presenting an overall supply chain health, gaps and feedback from the participants concerning the customers 617.273.8837 973.698.2331#20Linx Service offering: Excursion ManagementA materials development and integration program is inherently risky but the rewards for a successful ramp are substantial. During the final selection process and high volume ramps end-users depend on their materials suppliers to identify and eliminate material variation with minimal interruption or involvement from the end users technical teams. Occasionally an interaction in the integrated process requires the end-user to devote considerable resources to work with the supplier to contain, identify and systematize fixes for deviations of form fit and function. This is impactive to suppliers and failure to manage this correctly sours the relationship with the end-user resulting in loss of future business as well as disqualification for the current process(es).</p> <p>Excursion Management Program </p> <p>Define parameters required for excursion closure requirementsAttend excursion task force meetings ( internal, end-user or both)Provide excursion management tools / techniques and guidance to customer excursion managerFinal report will document root cause and suggested gap closure activities</p> <p>MethodologyWill join customer internal problem solving teamReview data and evaluate completeness of data already gathered to identify problemWill review containment activities for effectivenessOnce root cause is identified will work with customer team to implement 617.273.8837 973.698.2331#21Linx-Supply Chain Service Provides SolutionsEnables executives to make informed decisions around product line management</p> <p>Enables end-users to assess and select strategic partners for next generation materials development.</p> <p>Is a critical component of due-diligence supporting M&amp;A 617.273.8837 973.698.2331#22</p>