A UNIQUE TECHNOLOGY COMPANY

Silex Systems Limited

Forward looking statements

Silex is a research and development company whose assets are its proprietary rights in technologies, including, but not limited to, the SILEX technology, Translucent technology and Fiberbyte technology. The company's technologies are in the development stage and have not been commercially deployed. Accordingly, the statements in this presentation regarding the future of the company's technologies and commercial prospects are forward looking and actual results could be materially different from those expressed or implied by such forward looking statements as a result of various factors. Some factors that could affect future results and prospects include, but are not limited to, results from the uranium enrichment development program and the stable isotopes program, the demand for enriched materials including uranium, silicon, oxygen, carbon and others, the outcomes of the company's interests in various semiconductor and photonics technologies, the time taken to develop various technologies and the development of alternative technologies.

OUR VISION IS.

to become a world leader in:

> Isotopically enriched materials

• $\triangleright$ Uranium
• $\triangleright$ Silicon

> Wafer Scale Semiconductor materials

• $\triangleright$ Optical Silicon

• Advanced Electronic Materials

Current Operations and Target Markets

Introduction

2004 Highlights

• Translucent secured initial key US Patent for its 'optical silicon' invention.
• Fiberbyte commenced development of its data acquisition technology.
• SILEX Uranium Project measurements resumed. Discussions with 3rd Parties regarding commercial partnerships in progress.
• Translucent signed MOU for strategic alliance with key semiconductor equipment manufacturer.
• Silex commissioned world's first silicon laser enrichment pilot plant tests continuing.

SILEX Technology Division

What is the SILEX Technology?

• Separation of Isotopes using Laser EXcitation.
• Changing 'isotopic' composition of elements (enrichment) creates new ultra-pure materials with unique qualities.
• Isotopes are different forms of the same element (different number of neutrons).

U238 - 3 extra neutrons - heavier

U235 - Lighter and more active

SILEX Technology Division

Uranium "Enrichment" = increase concentration of U235 from 0.7% to 5% for nuclear fuel.

Uranium Enrichment

Nuclear Power

• 17% of world's electricity
• 440+ reactors ø
• 70+ being built / planned
• No greenhouse gas impact

SILEX v Existing Technologies

SILEX Technology Division

(1) Classified - more detailed information not available

(2) Indicative estimate only - needs to be verified in Pilot Program.

(3) Approximately 15% supplied via Russian HEU material.

(Sources: WNA/NEI Symposia and Fuel Cycle Conferences '02, '03, '04)

HEU - Highly Enriched Uranium

• Centrifuge

$\mathbb{C}$

SILEX Technology Division

9

Uranium Enrichment Project Current Progress

• USEC withdrew in April 2003 after $\sim$ 7 years in partnership and ⊕ ~US\$40M in expenditure (causing significant delays).
• The 'direct measurement' (DM) program is now in its final stages $\oplus$ (Q1 '05 completion) – focus is on optimising process efficiency.
• The outcome of the DM testing program will be critical in determining
  the economics of the SILEX Technology for uranium enrichment. $\oplus$
• If the results of the DM program are positive, we are confident these discussions will lead to a new commercial deployment partnership. ⊕
• Discussions continuing with 2 potential new partners (large overseas organisations).

Lucas Heights Laboratories DM Laboratory

SILEX Technology Division

Lucas Heights Laboratories

DM Laboratory

V

Lucas Heights Laboratories

DM Laser Lab

13

SILEX Technology Division

Silicon Enrichment Project Status

• Isotopically engineered (enriched) silicon can improve thermal conductivity of silicon – potentially alleviating heat build-up issues.
• Sematech (Semiconductor Industry body) said in March 2004: ₩

"lateral heat transfer within the isotopically pure (silicon) layer is improved and may help reduce peak temperatures in localised 'hot spots' within the (integrated) circuit".

• Collaboration with Sumitomo Mitsubishi (SUMCO) aims to demonstrate this in ₩ device tests – results in the near future.
• In parallel, Silex is testing its silicon enrichment pilot plant (operational in July $2004$ ) to:
• Optimise process parameters and working compound.
• Establish performance and economics of the process.
• Key issue is economics semiconductor materials must be low cost.
• If test results from SUMCO and the pilot plant are both positive move forward with the SUMCO collaboration to consider commercialisation opportunities

Silicon Enrichment Program Lucas Heights Laboratories

Mini Module

Collector Module

Silicon Pilot Plant Lucas Heights Laboratories

m

SILEX Technology - Summary

• Focus is now solely on uranium and silicon enrichment. ₩
• Silicon - process works well
• pilot plant program in full swing $\rightarrow$ efficiency and scaling
• should know economics and future prospects in the near future
• Uranium - process works well
• DM program nearing completion $\rightarrow$ process efficiency
• should know process potential and future prospects in near future

SILEX Technology Division

• aim to establish a new commercial partnership in 2005
• Development of SILEX Technology to current status is:
• an outstanding achievement
• a world-class effort
• hopefully the prelude to greater things.

Silex Semiconductor Division

Silex/Translucent projects focus on solutions to fundamental semiconductor & photonics problems

• Division grew out of SILEX Technology application to enrich silicon for ⊕ semiconductor industry.
• Activities now encompass potential wafer-scale solutions for a number of critical ⊕ silicon-based semiconductor and photonics problems:
• 1. No Optical / Photonic Capability $\Rightarrow$ Silicon cannot absorb or emit light
  2. Optical Silicon Invention (Translucent) first optical/electronic integration
• Materials approaching limit of electronic capability (Moore's Law threatened) $\mathbf{2}$ .
  • Advanced Electronic Materials $\Rightarrow$ Translucent's 'life buoy' for silicon
• $3¹$ Thermal Management Issues $\Rightarrow$ Heat dissipation and miniaturisation problems
  • Enriched Silicon-28 Wafers low cost potential via SILEX Technology

Silex Semiconductor Division

International Sematech Lists Key Semiconductor Materials Issues

• In early 2004, Sematech (leading industry body), listed key materials issues & solutions needed to meet anticipated semiconductor industry roadmap targets (ie, Moore's Law).
• Silex and US-based Translucent Inc, have potential solutions to 4 of the 5 emerging materials groups discussed (and possible solutions for the 5^th)

Silex Semiconductor Division

Translucent Inc.

• Translucent technology addresses two major roadblocks facing the semiconductor industry
• Photonics + microelectronics integration in silicon $\rightarrow$ Optical Silicon
• Limitations on the fundamental electronic capabilities of silicon $\rightarrow$ Advanced Electronic Materials
• If successful, Translucent well positioned to penetrate photonics markets currently worth ~US\$6 billion p.a. and mainstream semiconductor industry segments worth >\$10 billion pa (initially).
• The development program is progressing well key 'Optical Silicon' Demonstration Milestone - November '03, Patent - January '04.
• Advanced Electronic Materials development will be the company's $\oplus$ first technology to market - still in "stealth mode".

Silex Semiconductor Division

Overview of the Translucent Technology

Optical Silicon

• Translucent aims to bring Silicon economics to Telecommunications.
• In its natural form, Silicon is an "indirect band-gap" material that can't be ⊕ used for optical communications.
• This forced the use of expensive "compound semiconductors" (eg. GaAs and InP).
• The result is very high cost optical communications systems, compared to the low cost $\frac{1}{2}$ Silicon chips used in electronics industry.
• Translucent's Optical Silicon PLC Technology has the potential to change all this. $\overline{\phantom{a}}$

Advanced Electronic Materials

• Aim to address semiconductor industry roadblocks extend life of silicon and Moore's Law.
• Substantial patenting effort in progress further details during 2005.

Translucent Silicon Planar Lightwave Circuits (SPLC)

CURRENT TECHNOLOGY

Expensive, discrete components

TRANSLUCENT TECHNOLOGY

• 10 x lower cost
• Fully integrated silicon VLSI

Thermal Management

(Enriched Silicon Wafers)

Natural Silicon Wafers

Isotopic assay

Si-28: 92% $Si-29:5%$ Si-30: 3%

8% heavy isotopes act like 'defects' and impede flow of heat through the wafer causing heat buildup.

Enriched Silicon-28 Wafers:

Isotopic assay $Si-28 > 99\%$

Other < $1\%$

• 10% to 60% higher thermal conductivity potential 30-40° lower operating temperature
• 'Hot Spots' key issue for thermal management. $\pmb{\psi}$
• Possible gains in processor speed and miniaturization.

Silex Semiconductor Division

ZÓ

Thermal Management

(Enriched Silicon Wafers)

• Potentially large market for advanced microprocessors and communications devices - silicon wafer industry > US\$6,000M p.a.
• Competing Technologies silicon enrichment:
• Centrifuge: uneconomic high capital and operating costs.
• Chemical Distillation : inefficient and costly.
• SILEX must demonstrate first economic source of enriched silicon pilot plant test program underway (Sydney).
• Silicon Wafer partner Sumitomo Mitsubishi Group (SUMCO) must ₩ demonstrate technical benefits of using enriched silicon with device customers.

Silex Semiconductor Division

Collaboration Project - expected to be completed in first half 2005

Thermal Management (Enriched Silicon Wafers)

Cooling Cost Comparison

• ¹ Incremental to natural silicon wafer assumes 200 die/wafer
• ² 10u epi thickness

Fiberbyte Technology

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• Fiberbyte P/L Adelaide based technology company.
• Fiberbyte has two unique "USB-inSync" technologies:
• 1. PC-based Data Acquisition Technology current focus.
• 1. Fibre Optic Test & Measurement Equipment Technology.
  2. $\rightarrow$ deferred due to continuing market downturn
• Silex has 85% interest in Fiberbyte ₩

Fiberbyte Technology

"USB Real Time" Data Communications Platform Technology:

• Capitalises on core "USB-in-Sync" proprietary technology.
• Primary target market: PC based Data Acquisition (~US\$400M p.a).
• Manufacturers & System Integrators of real-time I/O systems broad spectrum including:
• Laboratory applications
• Electronics, semiconductor & photonics markets.
• Fiberbyte's "USB Real-Time" Technology offers 1^st possibility for standardised PC based data acquisition platform.
• Discussions with potential commercial partners ongoing $\rightarrow$ 2005

Silex Facilities and Resources

Facilities

• Silex operates a major laboratory complex at its Lucas Heights Facility in Sydney for the development of the SILEX enrichment technology.
• With the support of Silex, Translucent has established a state-of-the art semiconductor laboratory in Palo Alto – in the heart of Silicon Valley.
• With the support of Silex, Fiberbyte is establishing an ⊕ electronics/communications laboratory and product development facility in Adelaide.
• Alliances with university research laboratories:
• University of NSW Sydney Australia (SIP)
• Keio University - Tokyo Japan (SIS)

Silex Facilities and Resources

HUMAN RESOURCES

• $>$ SILEX (Sydney) - 30

• Translucent (US) 5

• Fiberbyte (Australia) $-8$

The Silex research teams are world-class, and include 14 PhD's, 10 Engineers and 14 Technicians.

FINANCIAL RESOURCES

• $>$ Silex has cash of $\sim$ A\$27M (30 September 2004).
• $\triangleright$ Existing cash reserves sufficient to fund current development activities thru '05.

Summary

• Silex A mission focused technology company. $\clubsuit$
• Excellent Resources
• Technical Teams
• Facilities
• Funding
• Intellectual Property Protection
• Patents and Applications
• Classification
• Clear Corporate Strategy $\spadesuit$
• Alliances with industry leaders
• SUMCO Silicon wafer partner
• Broad exploitation of core technology
• Diversification into synergistic technologies

A unique company developing technology and advanced materials for the 21^st Century.