1. CONFIDENTIAL 1 July 2001 Sharp Corporation IC Card Business Development Center Integrated Circuit Group SHARP’s Smart Card

2. Smart Card CONFIDENTIAL 2 Smart Card Market Trend in Japan Within a few years, Smart Card Market in Japan will mature. 1, Residential Card with Multi-Application for public use - *Over 100 M Cards Trial : The research project on Cities Equipped Trial : The research project on Cities Equipped with Information Technologies with Information Technologies 2, Finance Card (Bank, Debit, Credit) - *Over 100 M Cards 3, UICC for 3GPP & future M-commerce (*:Market Size is estimated by NICSS.)

3. Smart Card CONFIDENTIAL 3 The research project on Cities Equipped with Information Technologies (Japanese Government Project) Sapporo city Fujisawa city Yokosuka city Tajimi city Yamagata city Komagane city Yamato city Tama Area (6 cities) Aizu -Wakamatsu city Joetsu city Toyoda city Tsu city Ikeda city Habikino city Maikata city Hanshin north district Okayama city Shimonoseki city Kochi city Kurume city Kitakyushu city Tagawa district, Fukuoka prefecture Okinawa north district -Project body: METI (Ministry of Economy, Trade and Industry) -Project budget: 17000M Yen (around140M US$) -Project purpose: Trial of Smart Card for public use -Trial Card Number: Over 2M cards -Selected area: 21 pilot sites (See Map) -Trial period : Fiscal 2001 and continue

4. Smart Card CONFIDENTIAL 4 The research project on Cities Equipped with Information Technologies (Japanese Government Project) Major Applications ① Residential Card (Public ID) Name, Age, sex, Birthday ② Health Care ③ Public facility booking ④ Transportation ⑤ Point Card ⑥ e-Ticket ⑦ Debit Card ⑧ Credit Card

5. Smart Card CONFIDENTIAL 5 Establishment of Smart Card Systems based on a Common Platform. To investigate - Cost share model for Smart Card System Scheme. - the Contract, Law for New Scheme. - System Security for Smart Card System. - Certification Authority (CA) model for public use. Card Issuer, Service Provider, Card Manufacture, Application, Card To make System Reference Specification. To realize MULTOS, JAVA(GP),WSC and Native OS etc. on a Common Platform. Goal of NICSS-Framework Scheme

6. Smart Card CONFIDENTIAL 6 What is Common Platform of Smart Card ? What is Common Platform of Smart Card ? 1. Infrastructure of Smart Card system 2. Cost Sharing by Multi-Application Next Generation Smart Card Public ID E-payment E-Ticket PublicTransportation OtherApplication (Rented flat structure)

7. Smart Card CONFIDENTIAL 7 Role of Players Registering an Issuer Service provider registration APP registration Card authorization Card Authorization Body Card Authorization Body Card Supplier Issue Registration and Certification Body Issue Registration and Certification Body Card Issuer Service Provider Service Provider Service Registration Body Service Registration Body Smart Card (Card holder/user) Providing Service Collecting Service Charge Purchasing a Card Collecting Issue Cost Collecting Cost (Cost Sharing Model of Next Generation Smart Card)

8. Smart Card CONFIDENTIAL 8 Benefits to the players Card Holder –Selection of the services -> optimized card –Most convenient –Less number of cards Card Issuer –Reimbursement of card cost –Card holders’ satisfaction Service Provider –Reduction of the initial installation cost –High security card at low cost

9. Smart Card CONFIDENTIAL 9 Smart Card Basic Info. Service A Service B Local Authority Card Issue Center Service Provider A Service Provider B Card Holder Card issue Card request Service request Authorize Request Permission APP Download Service request APP Download Request Permission Authorize Receipt NICSS Card Operation

10. Smart Card CONFIDENTIAL 10 NICE and eLWISE realized NICSS Framework Completely ・ Multi Application ・ Downloadable ※ eLWISE: SHARP & NTT Joint Development NICE:Network-Based IC Card Environment (NTT Development) IC Card - Comparison eLWISE Card 16bit, 30MHz RSA, ECC 、 T-DES 、 E Ｔ C Key length up to 1152bit 16kB 1MB Flash memory 100K times re-writable Synchronous Transmission(T1) Speed of Transmission 9.6 ～ 76kbps(contact) 106 ～ 424kbps(contactless) ISO/IEC 7816 adaptive (contact) ISO/IEC14443 Type-B adaptive (contactless) Others 8bit, 5MHz RSA 、 DES 128B ～ 1kB 8 ～ 16kB EEPROM 10K times re-writable Synchronous Transmission(T1) Speed of Transmission 9.6kbps(contact) 106kbps(contactless) ISO 7816,14443 Function CPU Verify/Encryption Co-processor RAM Un volatile memory I/O Interface Standards

11. Smart Card CONFIDENTIAL 11 SHARP’ ｓ Concept of Technology and Product Development Key Device Design Tech :IP Core,Library,CAD,Middleware,Test,Analysis,Packaging LCD LSI Analog IC Flash Memory/ Flash Memory Embedded LSI CCD/CMOS Imager Network System LSI Basic Tech :Advanced Key Tech,Flash/Logic Process,Manufacturing System/Device Solutions for LCD Digital Network Applications Cellular Phone LCD Digital TV Digital Still Camera MD Game Machine LSI for Smart Card The 5th Business Pillar

12. Smart Card CONFIDENTIAL 12 Medical & Healthcare passport birth certificate driving license maternity record disability benefit Transport/Automotive ticket loyalty security, ID Library/ Leisure ID, bookkeeping Business Education ID, access control health data, prepaid Multi-application IC Card  verification (ID)  personal information  usage information  electronic money  customer loyalty, etc Retail E-money credit card loyalty card Health data prescription booking, payment insurance Public Sector Private Sector Government Certificates security corporate ID network access SIM card value-added services security Telecommunications e-World

13. Smart Card CONFIDENTIAL 1st phase Smart Card Situation in Japan E-Money 19971998199920002001200220032004 Pachinko Card Phone ’00.Mar Target Number ： 60K units Residential Card Credit Card 240M sheets JR-East Tokyo Commuter Pass ： 4M sheets Bank Card Mizuho, Sanwa Bank ETC （ Highway ） 1time/week user: 4M cars 2nd phase Cash Card340M sheets Hitachi ID Card Mondex300K persons Osaki Sony20K persons Shinzyuku NTT’s E-money100K persons Internet Cash NTT’s E-money10K persons Omiya Postal Saving70K persons Omiya Part2 Shibuya Visa Cash100K persons Kobe Visa Cash30K persons Kobe Part2 David Smart Card IC Card (memory) From Daiwa Securities Market Watch 2000.Nov

14. Smart Card CONFIDENTIAL 14 ‘00‘01‘02 ’03 ～ 【 Density 】 Public Personal IT Card Computer ’01 ・ IC Credit card ・ Transportation ticket ・ Employ ID ・ Pachinko(lesser) 4Mbit 8Mbit ～ 512Kbit 8Mbit ～ ～ ’00 ・ Phone card ・ Student ID ・ Members 、 Royalty ： Implemented project Multi Application Single Application The others competitors Cards ～ 512kB USIM Dynamic Download ’02 ～ Multi Application Cards ’99-’00 Implementation test of Yokosuka City an applicant can get this Resident card Many of consortiums(2 1) will choose our card Public institution booking, etc. Money/ Transportation/ Education Passport Driving License Network ’01 Government Card Implementation Test ’02 Resident Card Implementation Test ’02 The research on Cities Equipped with Information Technologies Application for Smart Card in the Future in Japan ’03 Resident Card

15. Smart Card CONFIDENTIAL 15 High Density Mounting Technology Super Multi-Purpose IC Card ・ High Density ・ Multi-Application ・ High-Security Flash Memory 1st Product in the Market 64~ times Memory Capacity as Current IC Card IC Card (Memory Density :8k~128kbit) Flash Memory RAM CPU Co Processor SHARP Smart Card Current SHARP Cost （ $ ） 7 25 Application 1 30 Cost Sharing

16. Smart Card CONFIDENTIAL 16 - Large Flash Memory Embedded (1MByte Flash Memory) - Corresponding to various Encryption Method (Coprocessor) -RSA : Key length more than 1024 bits -ESIGN : Key length more than 1008 bits -Elliptical Curve : Key length more than160 bits - Communication I/F - ISO/IEC 14443-2 type B Compliance - Carrier Frequency : 13.56 MHz - Modulation Method : ASK 10% - Coding Method : NRZ / BPSK-NRZ - Protocol - ISO/IEC 14443-3 type B Compliance -Time-slot method with Slot-marker - Transfer Protocol : ISO/IEC 14443-4 Compliance - JICSAP Support - Large Flash Memory Embedded (1MByte Flash Memory) - Corresponding to various Encryption Method (Coprocessor) -RSA : Key length more than 1024 bits -ESIGN : Key length more than 1008 bits -Elliptical Curve : Key length more than160 bits - Communication I/F - ISO/IEC 14443-2 type B Compliance - Carrier Frequency : 13.56 MHz - Modulation Method : ASK 10% - Coding Method : NRZ / BPSK-NRZ - Protocol - ISO/IEC 14443-3 type B Compliance -Time-slot method with Slot-marker - Transfer Protocol : ISO/IEC 14443-4 Compliance - JICSAP Support NINA (Service Oriented IC Card Plat form) & NICE - “Nomadic Information-sharing Network Architecture” - Sharp, NTT and Gemplus Joint Development - Large Flash Memory Embedded ELWISE (Multi-purpose Smart Card) - Corresponding to various Encryption methods - Large Flash Memory Embedded - Sharp & NTT Joint Development - Sapphire （ Java Card) NINA (Service Oriented IC Card Plat form) & NICE - “Nomadic Information-sharing Network Architecture” - Sharp, NTT and Gemplus Joint Development - Large Flash Memory Embedded ELWISE (Multi-purpose Smart Card) - Corresponding to various Encryption methods - Large Flash Memory Embedded - Sharp & NTT Joint Development - Sapphire （ Java Card) Platform by NTT SHARP Smart Card

17. Smart Card CONFIDENTIAL 17 Specification

18. Smart Card CONFIDENTIAL 18 APE CM ・・ Java VM LIB (Crypto Etc.) LSI Hardware JICSAP AP Multos Applet 1 Applet 2 AP 1 AP 2 Multi Application Fire Wall Software Construction

19. Smart Card CONFIDENTIAL 19 200120022003 Memory 1MB 512KB 256KB ＊＊ MB LSI for Smart Card Road map

20. Smart Card CONFIDENTIAL 20 Peripheral Devices for Smart Card Line-Up Application Development SimuratorEvaluation Base Reader Writer Contactless Contact Combi Viewer Card Issuing System On PCROM ICE,Evaluation Board Open Type For Transport Embosser

21. Smart Card CONFIDENTIAL 21 20012002 Type Reader Writer for Smart Card Road map Contact Contact less Combination RW3010RW3020 RW4010 PD8080 PD8080B PD9090 PDXXXX ISO/IEC7816 for Application Development use Open Deck Type for Transport ISO/IEC14443 Type B Close Deck Type, ISO/IEC14443 Type B ISO/IEC7816 & ISO/IEC14443 Type B ISO/IEC7816 Low Cost, Personal use ISO/IEC14443 Type B

22. Smart Card CONFIDENTIAL 22 Reader Writer for Smart Card Road map

23. Smart Card CONFIDENTIAL 23 High Low Commercial/ Finance LowHigh Personal/ Indoor Private Viewer Personal/ Mobile Smart Card ATM Service Terminal Reader Writer for Business use connected to PC E-Purse Reader Writer for Personal use connected to PC Reader Writer forPersonal use connected to Phone line Business use Viewer For built-in to machine use Module Cost Peripheral Security Reader Writer for Business use connected to Phone line

24. Smart Card CONFIDENTIAL 24 Can Get TV program information tailored only for yourself from the Net. Can Access your private music library Enables automatic control of the room temperature to your pre-set one as well as while going out Can set your own recipe easily Can read out private fax sent to you Your private e-mail is a secret Can access your private video library by the card Can set your own washing method easily Air conditioner Internet microwave oven Liquid crystal digital TV Network 1bit audio Network video deck Network PC Washing machine Expanding Digital Consumer Electronic Applications of Smart Card