Arasor Investor Update July 2007

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Agenda

� Corporate Overview

� Strategy & Solutions

� Key Milestones

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� Financial Growth

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Company Highlights

� Arasor is a global developer of solutions for the telecommunications and consumer electronics markets

– Products based on our proprietary optical chip platform

� Strong sales performance & growth– Increased guidance already this year from $85M to >$120M– Exceeded 2006 revenue shipments by June 1, 2007

� Industry leading customers– Huawei, Pirelli, China Netcom (China), BSNL (India), Mitsubishi, Sony

� Strategic Partnerships– Novalux � laser TV, laser backlit LCD, cell phone projector

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– Novalux � laser TV, laser backlit LCD, cell phone projector

– Semindia

– eCinema with PSTL

– Bangalore unwired

– China Netcom

– Shanghai Media Group

– ITI (network architect to BSNL)

– China Techfaith

� Large Market opportunity A$5 billion– China and India are leaping over copper infrastructure directly to wireless

� Experienced Management team with global public company background� Significant new orders from India & ChinaF

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Highly experienced team

Oplink (OPLK)

Avanex Corp(AVNX)

E-Tek, now part of JDS Uniphase (JDSU)

Iridex(IRIX)

Designs and manufactures components for optical networks

Designs and manufactures photonics processors used in

Designed and manufactured WDMs and other optical components

Designs and manufactures lasers for therapeutic applications

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for optical networks processors used in optical networks

other optical components therapeutic applications

Simon Cao: founder, VP Sales & Marketing

Simon Cao: founder, CTO, SVP of Business Development, DirectorCharles Mao: SVP of Sales & Marketing

Simon Cao: one of early employees at E-Tek Dynamics (Product marketing, Engineering)

Larry Marshall: Co-Founder, Vice-President (CEO, Light Solutions)

Management team have deep and diversified experienc e resulting in billions of dollars in value being delivered to shareholders

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Growth Drivers for Arasor - “Thirst for Bandwidth”

� Google has made content King � Need massive high speed storage � Optical

� Carriers need to deliver richer content � Need more Bandwidth � Optical

� Need faster access to consumer � Wireless

� We take the best of optical & merges it with wireless for Fastest Access– The more wireless we sell at the edge, the more optical is needed in the core & metro

IPTV

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Ban

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Feature - Rich Content

VoIPTelephony

MobileInternet

3G+ / WiFi /WiMax

IPTV

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Major Announcements to date

� PSTL Theatres purchase order and MOU for $32mill

� Strategic Partnership with Semindia

� ITI/BSNL purchase orders

� Completed >300,000 unit shipment to BSNL

� Oerlikon purchase orders

� Sony, Mitsubishi show at CES

� Acquisition of Xalted Networks in India

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� Acquisition of Xalted Networks in India

� Venture with Shanghai Open Labs and SMG re: IPTV

� Successful follow-on raising – 4x oversubscribed

� Acquisition of Bandwidth Foundry in Australia

� Upgraded 2007 guidance

� Added to All Ordinaries Index

� China Techfaith JV

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Arasor’s products drive speed & bandwidth all the way to the Consumer……

Across countries & Oceans

In hands & living roomsMassive Consumer Volumes

In Cities

RichContent

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GoogleYahooVideoIPTV

Leverage core technologies

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New Acquisitions

Alfalight AOFR Arasor

� Gives Arasor control over 3 core technologies for all our products

Laser chip Optical chip

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Wireless System

Laser TV engine

Telecom Pump

Telecom Wireline Tx

Telecom optical bridge

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Assets & Consolidation

� Assets– 50M invested capital

– 20M government funding

– $20M worth of automated manufacturing gear

– $25M Semiconductor FAB & Packaging gear

– $7M cash

– Strong patent portfolios

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� Consolidation– Move AOFR production & Alfalight packaging to

Nansha

– Secure Taiwanese foundry for Alfalight laser FAB

– Consolidate financials of Bandwidth Foundry thru AOFR; Alfalight thru Mountain View

– AOFR sales team to carry Arasor & Alfalight products in USF

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Customer Synergies

Components Systems Carriers

Northern CHINA

National Carrier AUSTRALIA

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Northern CHINA

National Carrier INDIA

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Wireless & IPTV

� In Broadband Access & IPTV, Arasor cuts out the copper– Takes optical to wireless

ArasorArasor ~ ~ 5050Mb/sMb/s

Traditional 3G ~ 4Mb/sTraditional 3G ~ 4Mb/s

Versus Versus

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ArasorArasor ~ ~ 5050Mb/sMb/s

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Brisbane

Sydney

STM-1

Wynyard

Town Hall

Existing Network box

Arasor Optical-Wireless Architecture

� Optical � WiMax � WiFi � Mesh Network

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Melbourne

Circular QuayCPE

Mesh NetworkWiMax feeding WiFi(currently unique to Arasor)

λ 1

λ 2

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Margin Progress

� Carriers need to deploy many, many CPEs to leverage wireless system– Unwilling to pay much more than a conventional CPE

� Margins are high on Wireless Systems ~ 40%

� Margins are low on CPEs ~ 10%

� Product mix is slowly shifting toward Wireless System– Have shipped over 600,000 CPEs � model does scale

– Successful mesh deployment in Bangalore

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– Successful mesh deployment in Bangalore

� The more CPEs we ship, the more entrenched we are in Network– As our Market “footprint” grows it locks Carriers into our Wireless Systems & WiMax

� Each quarter has seen a gradual increase in margin on CPE

� Shift of product mix toward Wireless System will shift margin towards 40%

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Laser LCD

� Laser backlit LCD adds $52B to available display market

� Doubles our available market to $2B

Novel Backlights in Long BeachMay 24th, 2007

In LCD manufacturing, cost is king. That’s why many of the most interesting things to be seen and heard at the SID Symposium and Exhibition in Long Beach this week deal with materials, components, and processes that will

allow LCDs to be made less expensively - and may even, secondarily, improve performance.

Ken WernerSenior Analyst and Editor

The most expensive key component in an LCD module is the backlight. In a 32-inch LCD, the backlight unit (BLU) accounts for about 30% of the total module cost. So it comes as no surprise that a lot of work and ingenuity is

being devoted to cost-reducing current BLUs and developing new BLU technologies.

The most striking new BLU technology in Long Beach was shown in a hotel suite by Novalux, where the company showed a 32" LCD TV with a backlight based on the company’s Necsel lasers. Novalux has been

Tiny fluorescent tubes provide backlight

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APRIL 7, 2006

Mitsubishi Introduces the World's First

Laser- Based HDTV

Just as we were getting used to the current HDTV

technology, Mitsubishi has decided to throw us a curve ball. According to a new press release:

Mitsubishi Digital Electronics America, Inc. demonstrated the world's first laser- based, high-

definition television at its 2006 National Dealer Line Show today. The Mitsubishi laser HDTV

utilizes separate red, green and blue semiconductor lasers in an exclusive implementation

together with Texas Instrument's 1080p DLP(R) HDTV chip. Mitsubishi's laser technology

enables a completely new look in large screen television, both in high- performance picture

reproduction and sleek, lightweight, and compact design.

backlight based on the company’s Necsel lasers. Novalux has been aggressively developing these lasers for rear-production (RP) television, where they promise to improve the colour gamut and illumination source lifetime of the set. LCD TVs were an obvious next target. In a few months they developed an impressive technology demonstrator, and a company

representative reports intense interest from LCD TV and backlight makers.

The following information is true and accurate at the time of publicationJanuary 08, 2007

Sony to Showcase Next Generation Displays (prototype) at 2007International CESOLED TV, Laser Projection TV, and 82inch LCD TV“Sony is exhibiting the following prototype TVs featuring newly developed technologies from January 8th 2007, at “2007 International CES”, Las VegasThis will broaden the possibilities for future next generation TVs.

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Display applications

In yourphone…

In the cinema…

In your home…

In your car…

In your pocket…

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$120.0

$29.6

$3.6

2005A 2006A 2007E

Significant Revenue & Profit Growth

•Revenue Growth

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$4.0

-$17.1

-$6.9

2005A 2006A 2007E

•Profit After Tax Growth

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