inSilicon Corporation, incorporated on November 1, 1999, is a provider of digital and analog communications technology used by semiconductor and systems companies to design complex semiconductors called systems-on-a-chip, which are critical components of a wide variety of electronic products. Over 450 customers use inSilicon's communications technology in hundreds of different digital devices ranging from network routers to handheld computers. inSilicon's modular approach emphasizes customer-proven reusable semiconductor intellectual property that focuses on communications and connectivity, and is compatible with a wide range of microprocessor designs. Semiconductor and systems companies integrate inSilicon's communications technology into their overall semiconductor designs, saving time and money and allowing them to focus on the core competencies that differentiate their products. By integrating inSilicon's communications technology into their complex designs, customers are better able to solve the widening "design gap" caused by the difficulty of designing complex systems-on-a-chip in the time necessary to get to market with their products. inSilicon provides communications platforms that allow semiconductor and systems companies to focus their development resources on their core competencies that differentiate their products. This improves time to market and reduces risk and development costs in the design of complex systems-on-a-chip, thus narrowing the design gap. The Company targets high growth markets requiring high performance, quick time to market, design flexibility and compliance with industry standards. The Company's communications technology includes semiconductor intellectual property and related software. The Company's semiconductor intellectual property includes a wide variety of both standards-based and proprietary communications technology. The Company's semiconductor intellectual property platforms vertically combine many of these technologies into functional blocks tailored for ease of use and faster integration by customers. The Company supplies its technology as Verilog source code and GDS II databases, which are the primary design representations in use today. Semiconductor and systems companies then integrate the Company's communications technology into their overall semiconductor designs using electronic design automation tools, such as those provided by Synopsys, Mentor Graphics and Cadence. The Company uses a modular approach that emphasizes silicon-proven reusable, licensable technology and software that are compatible with a wide range of processor designs. inSilicon has developed a strong customer base among semiconductor and systems companies that use the Company's communications technology to design complex semiconductors. The top ten customers for fiscal 2001 (ended September 30, 2001) include: 3com, Aeronix, Alchemy, Fuji, LSI Logic, Quicklogic, NEC, Sanyo, Sony and ST Microelectronics. These top customers represented approximately 27% of the Company's total revenue in fiscal year 2001. The Company's largest competitors include ARM Holdings, MIPS Technologies, Rambus, Inc. and Mentor Graphics. The Company's existing competitors also include other merchant semiconductor intellectual property (SIP), suppliers, such as the Mentor Graphics' Inventra Division, Synopsys, Enthink, Gain Technology and the VAutomation subsidiary of ARC Cores; and suppliers of application specific integrated circuits (ASICs) such as LSI Logic, and the ASIC divisions of IBM, Lucent, Toshiba and NEC. The Company also competes with the internal development groups of large, vertically integrated semiconductor and systems companies, such as Intel, Motorola, Cisco and Hewlett-Packard. Companies whose principal business is providing design services as work-for-hire, such as Intrinsix, Sci-worx, Parthus Technologies and the Tality subsidiary of Cadence, also provide competition.