Solutions for Intelligent Bandwidth

2

Forward-looking statements in this presentation involve a number of risks and uncertainties which are detailed in IDT’s SEC filings. Actual results may differ materially from the Company’s projections.

3

IDT is…

• A global semiconductor solutions provider to leading-edge communications companies

• Generating approximately 75% of revenues from communications and SAN markets

• Financially strong and well-positioned as the market stabilizes and begins to grow

4

Prepared for Growth

Resized the organization

Dramatic reduction in discretionary spending

Capital spending reduced

Manufacturing consolidation announced - $6-8 million savings per quarter

RESULTS:

50% gross margin at $90 million in revenue

Pro forma break-even at $90 million in revenue

Cash flow break-even at $80 million in revenue

High fall-through to profits with revenue growth

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Serving The Communications Infrastructure

Communications

Enterprise/Carrier-Class

Wireless/Mobile

Broadband Access

Storage Area Networks

Personal Computing

Miscellaneous

46%

18%6%

3%

19%

8%

Revenue Across All ProductsCalendar Q4 2001

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Leading Communications Customers

• Alcatel

• Cisco

• EMC

• Ericsson

• Fujitsu

• IBM

• Lucent

• Motorola

• NEC

• Nokia

• Nortel

• Siemens

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EDGE

Entridia

Metro Core

MetroTransport

SANFibre Channel

MetroTransport

ATMVoice

MetroTransport

EdgeRouter

ATMCore

Switch

OC-48c / 192c / 768

OC-48c / 192c

Edge Router

MetroTransport

Metro Router

CoreRouter

Edge Aggregation

Core Routing

WebSwitch

ATM

The Changing Global Network

WirelessWireless

Broadband

Access

Broadband

Access

EnterpriseEnterprise

IP

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Key Growth Segments

Application Segment Growth Rate

Wireless Broadband Access High

Core Routers Moderate

Metro Edge Routers Moderate

Multi-Service Access Switches Very High

LAN Switch Ports Moderate

VPN Equipment Moderate

Web Switches Moderate

Fibre Channel SAN High

Source: Gartner Dataquest & IDT, December 2001

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Intelligent Bandwidth

Th

rou

gh

pu

t

Classification

10 Mbit

Layer 3 Layer 3-7

OC-768

40 GbpsMajor performance increase needed to service wire-speed throughput and deeper classification

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Key Market Drivers

• Faster, more intelligent packet processing

• The convergence of data and voice

• Distributed intelligence throughout the network

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IDT’s Increasing Integration

Integrated Technology

Integration ofMemory & Logic

Blocks ofIntellectual

Property

System

DevelopmentPlatforms

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Strengthening Solutions Focus

• Residential gateway reference designs• Alcatel, Wind River (high-end), Jungo (low-end)

• Managed LAN switch reference design • Broadcom, Wind River

• Voice access solution• Intersil

• High performance packet processing/classification• AMCC – integrated interface to NPU • Solidum – classification processing solution• Xelerated Packet Devices – joint solution

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Products for Communications

SRAMs

FIFOs Multi-Ports

Communications ASSPs

Clock Management

Digital Logic

TelecomProducts

IPCo-Processors

IntegratedProcessors

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Product Execution

• 2001 – Most prolific year for new products in IDT history

• Continued to deliver leadership products in traditional businesses

• New business opportunities represent over $1 billion in new TAM

• Strong design activity mitigated by:– Timing of new system ramps– Competing/cancelled projects

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Our Communications Foundation

#1 Market Share – FIFOs#1 Market Share – Multi-ports#1 Market Share – FCT Digital Logic#1 Market Share – Bus Switches#2 Market share – ALVC/LVC Digital Logic

A growing portfolio of clock generators, clock distribution and clock buffering products.

These products represent more than 60% of IDT’s revenues

Source: Insite/Onsite & IDT estimates

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IP Co-Processors

• Faster, more intelligent packet processing required for >OC-48 emerging market segment

• Accelerates deep packet classification and high-speed packet forwarding, working with ASICs or NPUs

• Integration of CAM (content addressable memory) with high-performance logic – core competence of IDT

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IP Co-Processor Benefits

• High performance– Portfolio of 2 Mbit to 18 Mbit devices– Up to 4 million entries at 200 MSPS*– Wide-width searches - up to 576 bits

• Advanced database support– Multiple databases allowing for integration of services

• Significant power savings– Up to 60% savings over traditional approaches

• Quick time to market– Software driver support– Pin-compatible family (2 Mbit - 9 Mbit)

• Strategic partnerships for easier integration

* MSPS – millions of searches per second

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IP Co-Processor Update

• Cisco-specific IP co-processor ramping– Inventory depleted

– New programs beginning to ramp

• Major announcements for commercial products– Shipping fastest, full-featured products in production

– Roadmap to 200 MSPS, 1 million entry – 2nd half CY02

– Roadmap to integrated IP co-processors for major NPUs – summer CY02

• Current design activity will drive late CY02 revenue for commercial products

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Telecom Products

• Address the convergence of data and voice

• Industry-leading position in TSI switching, voice processing, transport, roadmap to HDLC control – The addition of mixed-signal/voice expertise

complements IDT competencies in data systems

– June 2001 - introduced the industry’s first octal CODEC, capable of 8 voice channels

– November 2001 - introduced octal T1/E1/J1 line interface unit (LIU) and octal T1/E1/J1 framer

• IDT’s goal is to be the broadest provider of telecom semiconductors in the market by 2005

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Integrated Processors

• Provide distributed intelligence across network

• Blend industry-standard IP modules with differentiated, value-added proprietary IP

• Utilize MIPS architecture CPU core

• Partner to supply complementary hardware and software technology for complete solutions to specific applications

• 3 out of top 5 managed LAN switch vendors use IDT RC32332 integrated processor

Financials

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Revenue From Operations

$269 $279

$213

$116 $97 $80

$0

$50

$100

$150

$200

$250

$300

Q2F01 Q3F01 Q4F01 Q1F02 Q2F02 Q3F02

$ Millions

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Earnings Per Share

$0.77

$0.87

$0.51

$0.00 -$0.05 $-0.11

-$0.10$0.00$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90$1.00

Q2F01 Q3F01 Q4F01 Q1F02 Q2F02 Q3F02

(Excludes special items)

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$0

$100

$200

$300

$400

$500

$600

$700

$800

Q2F01 Q3F01 Q4F01 Q1F02 Q2F02 Q3F02

* Excludes equity investments

Cash and Investments*Net of Debt

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Gross Margin Leverage*

40%

45%

50%

55%

60%

65%

$90 $110 $130 $150 $170 $190

(Millions of Dollars)* Includes closure of the Salinas Fab

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Pre Tax Margin Leverage*

(5%)

0%

5%

10%

15%

20%

25%

30%

35%

40%

$90 $110 $130 $150 $170 $190

(Millions of Dollars)

* Includes closure of the Salinas Fab

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IDT Delivers Value

• IDT delivers innovative communications IC solutions to maximize the use of bandwidth in the converging global network– A strong foundation of products for communications– A growing portfolio of leadership products for

• Packet classification – IP co-processors• Voice/data convergence – telecom products• Distributed Intelligence – integrated processors

• IDT has held costs in check while continuing to execute new products during the downturn

• IDT has a business model that is poised to perform well as the market recovers

Thank You