eXception VAR – an overview January 2006

eXception International eXception Group, a $95m T/O group of companies, employing 500 staff in value added PCB sales, PCB manufacture & EMS services

eXception VAR (formerly DDi International & prior to that, Kamtronics), is Europes largest and probably oldest, value added reseller of PCBs to a predominantly European customer base. T/O circa $40m, employing 40 eXception PCB (Formerly DDi Tewkesbury & prior to that Zlin ccts), is 1 of Uks largest and leading PCB manufacturers, focussing on quick turn and technically demanding PCBs/flex/flex-rigids, T/O circa $20m, employing 150 people eXception EMS (formerly DDi Technologies & prior to that, Calne Electronics), is 1 of UKs leading low-medium volume EMS providers. Employing 300 people, T/O $35m, eXception Group

eVAR services Supported by Best in Class supply base in China, Taiwan, Malaysia and UK Far East supply of low to high vol, 2-20L boards, no MOV no MOQ Supporting Far East lead-times from 10 w/days, DDP Extensive stocking/hubbing/buffering facilities in UK & USA Supporting STS,STL, JIT, Kan Ban All engineering, QA, sales, service support from local facility

Evolution of eXception VAR

Organisational Structure

Established 1990, employs 41, T/O plan for 2006 £22.5m, $40m Evolution of eXception VAR

Employees should enjoy coming to work Can do – will do work ethic Zero staff turnover, Zero sickness (avg <1 day per yr) Blame free environment Motivated and rewarded team Innovation encouraged Very flat management structure, equality throughout the organization. The Culture

No nightmares, no headaches. We open the gateway to off- shore sourcing for you by sharing our 16 yrs of experience. Place and forget, on-time, right quality and right quantity, best price. That we will always be able to do it, limited MOQ/MOV. We can source all pcbs for fabrication, not just the high volume. Agile and easy to work with, we are experienced PCB people. Innovative, creative and flexible, suggesting streamlines and improvement for efficient manufacturing. That they are the right fit customer for our business We are a successful PCB company, long term future Our spend total affords you the leveraged dollar prices that are offered to the largest OEMs. Customers Perceptions

Markets - Geographical

Markets - Segmentations

customer satisfaction : December different attributes relating to customer service are measured monthly, selection shown above

Delivering at every level, value adding PCB services as a competitive and strategic extension to procurement activities Total Supply Chain Partner – 4 Cornerstones Pricing Excellence Service Excellence

eXception VARs strength is their ability to manage a dynamic supply Far East supply chain supporting high mix/low to medium volume boards cost effectively for customers spending typically, $500k to $5m per year on bare PCBs Order Management – Customer Profile

Receive data, input, audit and check data Inspection & mechanical testing UK Purchase order received Despatch & invoice from UK or USA Manufacture in Far East, incl AOI & Electrical test. Manufacture in UK, incl AOI & EL test Hub, Stock, Manage stock Custom fit order management service Gerber data verified & controlled by UK engineers WIP status and delivery dates throughout manufacture to shipping monitored Approved manufacturers produce goods, 100% inspect, electrical and mechanical and conformance test to data Controlled shipping routes into Europe AQL inspection, mechanical and conformance testing in UK Delivery, local stocking, hubbing, KanBan, Edi, JIT etc fulfilment Order Management – Supply Chain Process

Risk Free added Value The Quarterly review structure is the formalisation of the jointly agreed customer & supplier business plan. The service bundle is specific and unique to every customer. Metrics & measurements are common to enable accurate comparison which leads to jointly agreed improvement programs. Exception VARs business plan is partly developed with knowledge of our top customers own business goals, - i.e., our directions need to converge. Order Management – Customer Service Tools

Each year as many as 100 different PCB suppliers in all major PCB geographical markets are market tracked to establish & react to pricing trends. This ensures World Class Pricing. eXception VAR strives to establish long term supply agreements with Best in Class suppliers Purchasing Management – Best in Class Supply

European Based Fast Turn/Prototype – now in group Low To Mid Volume, Medium technology, 15 parts/week on QTA (QS9000) Medium Volume High Technology (QS9000) Mid to high Volume, Mid Technology (QS9000) High Volume, Mid To High Technology Including HDI and thin core/fine line (QS9000) Global Flex– Flexibles Airpro – Microwaves volume technology Hanstar Taiwan TPC Mainland China 50sqm 16+ layers HDI capability High freq substrates Up to 10 layers Std technology Blind and buried Via capability 5000sqm Potechnics Mainland China Circuitech Global Flex Fast Turn Asia, Shenzhen Southern China t Concentric/Taishan Mid to high volume single sided QS9000 (inherited supplier) Mid to high volume Flexibles, PTFE based and backplanes Purchasing Management – Asian Supply

All suppliers must have QS / TS approval (or TS roadmap if only ISO9001 : 2000) All suppliers should have ISO14001 or roadmap to achieve All suppliers should have at least 1 best in class strength : –Technology –Lead–time flexibility –Batch size flexibility –Competitive pricing over a technology or volume range All suppliers must demonstrate acceptable delivery performance (> 90%) All suppliers must achieve minimum purchasing Spec Purchasing Management – Supplier Strategy

Complete resource & infrastructure to deliver any PCB requirement, on time, Right first time. Managing MRPs, self billing & comprehensive ship to line, buffer, consignment and customised stock programs offered. Logistics Management – Customised Resource

DOT – All customers. DOT is measured at +/- zero days against acknowledged delivery date and docked at customers premises Logistics Management – On Time Delivery

Operating within the QS / TS quality disciplines, all boards pass through additional inspection & verification at eXception VAR Quality Management – Risk Free Value Add Pricing Excellence Service Excellence

Ensuring Quality from Remote Manufacture Continuous Improvements – e VAR Drive Better Quality 8D Closed Loop Corrective Action TS benchmark for Quality Value Engineering Front end tooling control Quarterly Review meetings with suppliers Quality Management – Continuous Improvement

quality performance / customer metrics Overall quality performance : Jan – Dec month returns from customers is averaging 100 ppm (99.99% right first time) 12 month returns from customers is averaging 100 PPM (99.99% right first time)

8D corrective actions: Interim / containment response within 24hrs Closure within 14 days. Electronic format Utilised for both internal / external issues Corrective action = process actions Preventative = system / procedural actions Reviewed with suppliers - ensures not just paperwork exercise Documented drive for DFM improvements Quality Management – 8D Corrective Action

Single supply solution : from prototypes to serial deliveries, quick turn to yearly contract purchases Global support – UK / Asia / US (3 major time zones) Quality assured – Engineering through to Inspection Service / order management – place and forget Engineering managed & supported locally Asian manufacturing coupled with European and American knowledge. A proven management team with a motivated staff and many years of experience in PCB manufacture Exceptional experience – The market leading VAR with 16 years of Far East trading history. Best in Class approved suppliers Customer focused with a proven business strategy that is oriented around the growth and success of our customer. Summary

Contacts Alpha PCB Designs, Inc Alpha PCB Designs 6815 W. Higgins Ave. Chicago, Il Tom Bassias, Vice President Phone Fax Local Office of eXception VAR eXception VAR International 1069 Taft Street Rockville, MD Anne Ledger, Customer Service Manager, US Phone Fax

Section A – Automotive Protocols

Logistics Management – Automotive The current method for automotive management involves: Downloading MRP requirements via a secure URL site (wkly) Updating the wkly status report with new MRP information. This includes current consignment stock, WIP & product in transit ~ once completed this is then returned to the customer. Update e-VAR system and load any new orders / project requirements on the approved supplier. Receive wkly consignment usage and update the consignment file, querying and non-deliveries or stock discrepancies. Monitor ALL freight and record all deliveries made.

Logistics Management – Automotive Supply

Logistics Management – Automotive The results of this is that eXception VAR has been awarded Supplier of Year awards for Lean Enterprises (2003 & 2004) for the Pollak Group located in El Paso, and Supplier of the Year (2004) for the Stoneridge Group. eXception VAR PCBs are used by some of the largest automotive retailers in the world, as supplied to their sub-tier supply chain.

Section B – HDI

eXception VAR – Technology Development High Density Interconnections

HDI ability Through working with best in class suppliers in both mainland China and Taiwan, e-VAR can now support virtually any type of HDI requirement. Historically this has been limited to manufacturers that have wished to focus only on the higher volume batches - > 40 SQM. However as a result of benchmarking and working with current suppliers to support their technology revolutions this is no longer the case.

HDI ability We now have 4 approved suppliers that can support differing HDI needs: Technology Volume (SQM) Potechnics Vertex B / B via 1 + n + 1 S.F.P. Airpro 2 + n + 2 Stacked u via 20

HDI ability 1+2+1, – std 1+N without buried,extend to 1+N with buried via,extend to 1+N with buried via,extend to 1+N+N buried via,stack via,extend to 2+N staggered via,extend to 2+N+2 Combine with conventional blind via laser via with Cu plating filling More detail……………………….

HDI ability What does this mean in real terms? 250um 100um 1+6+1

HDI ability What does this mean in real terms? um 100um 300um

HDI ability What does this mean in real terms? Finish Board thickness 1.1 mm 250um 300um 350um 100um

HDI ability What does this mean in real terms? 200um 250um 100um 150um Finish Board thickness 1.1 mm stacked via

HDI ability In summary; whatever the HDI need, we can now offer a solution that best fits the volume:

Section C – Lead Time Development & Fast Turn Capability

Asian Fast Turn Until now fast turn had predominantly one source in geographical terms - the UK / Europe. And with this, UK / European pricing levels. The aim has been to be able to offer UK / European speed of manufacture, with pricing structures that are more in line with standard Asian pricing levels. The best of both worlds. eXception VAR can now support this through a fast turn facility based in southern China

Asian Fast Turn The lead times (ex works) available are: Double sided : 1-2 days Express / 3 + days Standard Standard multilayer : 2-3 days Express / 5 + days Standard NOTE: (i) Complexity of product and higher layer counts influence ML lead times, (ii) Capacity at time of quoting may also impact on above lead times. Laser direct imaging offers short cycles times and high precision…… which equals reliable fast turn.

Asian Fast Turn Products available: Material: FR4, High Tg, Halogen Free, Rogers, Arlon, Taconic, Hybrid build Max panel size: 23inch*35inch ( 584.2mm x 889mm ) Layer counts: DS – 26 Layer Product type: Standard / Complex HDI / Rigid Flex The standard PCB thickness: 0. 13mm - 7.0mm Max Aspect Ratio: 20:1 Min layer by layer spacing: 0.05mm Min track width/ gap 3/ 3mil (0.075/ 0.075mm) Board finishes such as : HASL / Immersion Gold / OSP / Immersion Ag & Sn / Pb-F HASL

Section D – Environmental Issues

Currently eXception VAR offers the following solutions for lead free surface finishes: Immersion Gold OSP / Entek Immersion silver Immersion Tin SnAgNi (Nihon Superior) SnAgCu SnCu Environmental Management – Lead Free

Focusing specifically on lead free HASL finishes by supplier, you can see the following ability to supply (Pollak (automotive) approved suppliers): These suppliers offer, what is believed to be, the best two lead free HASL finishes available that are currently available. SAC ~ is seen as the most widely available at this time, has a mid-range eutectic temp of 217 C, and offers excellent reliability. SN100C ~ offers a better granular structure, less risk of bridging, improved fillet formation and claims to offer improved wetting characteristics.

Environmental Management – Lead Free Consideration should be given to the fact that we have 2 different lead free HASL option at two different suppliers making our supply chain as diverse as possible. This means that if we change supplier, we have to consider that different finishes will be supplied. ~ Basically this means a specific part, with specific lead free HASL finish has to remain at a specific supplier. Unless changes to finish can be considered and approved by our customer..

Environmental Management – Lead Free Improvements currently in process at e-VAR are: 1.Base material reliability at higher processing temps. 2.Best peelable soldermask (type and thickness) for higher processing temps. We are looking into the idea that for higher processing temps (> 260 C) perhaps higher Tg is not the solution as layer counts increase. We have to consider the benefits that a phenolic based epoxy system can offer. Initial investigation in the industry suggests that higher layer counts are more susceptible to delamination at higher temps. Although, it is also believed to be an issue for PCBs with layer counts approaching 16 + Layers. Discussions with the supplier, Peters over their peelable soldermask has resulted in their recommendation to move from the standard SD2954 to SD2955 / SD2958. This mask is more resilient to higher temperatures, while maintaining the same electrical properties. e-VAR is now working with our suppliers to introduce its use as standard for LF processing.

RoHS – What does it mean? This is a European directive that aims to phase out substances that are seen as being hazardous, contained within electrical and electronics equipment. This goes slightly further that the WEEE directive in that even with recycling the content of heavy metals and flame retardants can pose risks to the environment. This directive includes: Mercury Cadmium Lead (already discussed during lead free initiatives) Chromium VI PBB – brominated flame retardant (BFR) PBDE – brominated flame retardant OBDE – brominated flame retardant Environmental Management – RoHS

RoHS / BFRs – Does it apply to PCBs? BFRs are used in laminates to act as a flame retardant, making them safe in terms of operating temperatures – basically preventing boards combusting at high temperature. The EU directive will only ban PBB, Penta-BDE and Oct-BDE out of the 75s BFRs. The EU directive has given producers a clear guarantee that no individual EU member may introduce separate restrictions or bans to the group of BFRs other that those details in the RoHS directive. Questions have been asked over the use of Deca-BDE, but during May 2004, the EU terminated the risk assessment of this BFR as no health risks had been identified. Environmental Management – RoHS

RoHS / BFRs – Do products from eXception VAR comply? The standard FR4 used by eXception VAR approved vendors DOES contain a BFR. However this is Tetra-Bromo-BisPhenol A or TBBPA. IPC have released a white paper on halogen free materials used within the PCB industry and this confirms that TBBPA has been qualified on a world wide basis, and has NO health, environmental or regulatory issues that shall exclude its use. However there are a number of marketing, as opposed to scientific, activities that call for its reduction (as opposed to ban) in PCB manufacturing. But these will not lead to the directive being altered. Therefore TBBPA is, and will remain, the major flame retardant used in the PCB industry. It may not mean that products are 100% halogen free, but they DO comply with the RoHS directive. Environmental Management – RoHS