Challenges and Opportunities Around the Globe: Criteria of Successful Fabless Companies SEMICONDUCTOR MARKET OVERVIEW

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Nov 1, 2013 (4 years and 8 days ago)

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Challenges and Opportunities Around the Globe:

Criteria of Successful Fabless Companies

SEMICONDUCTOR MARKET OVERVIEW

April 2011

GSA Mission

1.
GSA is the only organization that brings together the entire
semiconductor ecosystem in order to represent industry
-
wide
interests and thoughts

2.
GSA strives to promote the visibility of our members both
internally and externally

3.
GSA provides a neutral environment for executives within the
semiconductor industry to meet and collaborate on ways to
improve efficiencies and resolve industry wide problems

4.
GSA identifies and discusses market trends & opportunities, and
how our members can best capitalize on these

5.
GSA encourages and supports entrepreneurship as we recognize
that this is what continually pushes our industry forward


Accelerate the growth and increase the return on
invested capital of the global semiconductor industry by
fostering a more effective ecosystem through
collaboration, integration and innovation

Phase I: 1994 Established
Fabless

Semiconductor Association


Saw a need to bring together the
fabless

manufacturers, foundries, and
back
-
end to achieve a more collaborative working relationship


Began with 40
Charter Members

and a 9
-
person board of directors

Phase II: Acceptance of the Fabless Business Model


The
Fabless

model began to evolve and become accepted as a viable
alternative to traditional IDM’s

Phase III: Growth and Expansion


The organization grew to nearly 300 members and we expanded our
presence in Asia
-
Pacific and Europe

Phase IV: Transitioned to Global Semiconductor Alliance


A conscious decision to include the entire semiconductor ecosystem as
the lines of delineation began to blur between
fabless
,
fab
-
lite
, and
IDM’s

About GSA: Our History and Future

The number of companies that seek support from GSA


Represent nearly 500 companies and their partners in 30 countries.


In 2010, 73 companies joined membership.

The executives exposed to and involved in our efforts


Over 100 executives involved in a GSA leadership role.

Multiple Interest Groups & Working Groups


IP, EDA, Test, 3D IC, MEMS, Supply Chain, AMS/RF


Organized to discuss common issues and concerns as well as accelerate
the adoption of specific technology and ideas

Collaborate and host global events


Europe, Israel, China, Taiwan, Japan, U.S. and Canada

Provide numerous resources, surveys & reports, unique to GSA
membership


Collaborative Innovation in the Global Semiconductor Industry; Wafer
Fabrication & Back
-
End Pricing Report; Memory Conference Report; Global
Semiconductor Financial Tracker; Global Semiconductor Funding, IPO &
M&A Update;
GSA Forum;
Leading Indicator Index

GSA Success Model

Rick Cassidy

TSMC NA

Aart de Geus

Synopsys

Danny Biran

Altera

David N.K. Wang

SMIC


Debora C.
Shoquist

NVIDIA

Dr. Nicky Lu

Etron

Technology

GSA Board of Directors

Kenneth Joyce

Amkor

Colin Harris

PMC
-
Sierra

Jack Harding

eSilicon

Sagar

Pushpala

Intersil

Vincent Tong

Xilinx

Tien Wu

ASE

Lip
-
Bu Tan

Cadence Design

Ted Tewksbury

Integrated
Device
Technology


Ana

Molnar Hunter

Samsung
Semiconductor

Mark Ireland

IBM

Dr.

Craig Barratt

Atheros


Communications

Steve

Mollenkopf

QUALCOMM

Joep Van
Beurden

CSR, Plc.

Neil Kim

Broadcom

EDA

Back
-
End

Wafer
Foundry

Open

EMEA Regional
Leadership Director

N.A. Regional
Leadership Director

AP Regional
Leadership
Director

Semiconductor

Member Elected

Japan Regional
Leadership Director

Open

Open

Loïc Liétar

STMicro

Chairman

Dr. Nicky Lu

Etron

Technology

Doug
Grose

GLOBALFOUNDRIES

Roawen Chen

Marvell

Value
-
Chain
Producer

GSA Board of Directors

Shozo

Saito

Toshiba
Corporation

J.P Morgan/GSA Semiconductor Index of
Leading Indicators



March Index fell below 50, implying that some near
-
term caution has
developed



Prospects for the industry & economy have been negatively impacted
by the crisis in Japan, the Middle East and political uncertainty in the
U.S. and Europe.


Revenue


Quarterly

Source: IHS
iSuppli

Corp. March 2011

$54,780

$45,244

$53,198

$62,787

$68,965

$70,958

$75,802

$80,135

$77,180

$76,063

$78,026

$84,506

$86,622

$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011F
Q2 2011F
Q3 2011F
Q4 2011F
Millions of U.S. Dollars)


Q4 2010



Q
-
o
-
Q Revenue Growth =
-
3.7%



First Q
-
o
-
Q decrease since Q1 2009


Revenue


Annual

Source: IHS iSuppli Corp. March 2011



2010 Growth: 32.1%



2011 Forecasted Growth: 7%
(Source: IHS iSuppli)

0

$134.5

$161.5

$220.7

$157.5

$161.3

$186.7

$230.9

$240.1

$264.4

$274.5

$260.1

$230.2

$304.1

$
325.2

$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Revenue ($B)

Revenue


2010 End Market Growth

Source: Databeans, April
2011

Growth Drivers: Mobile PCs and Smartphones, LCD TVs, energy efficient tools, industrial
automation, emerging hybrid and electric vehicles, infotainment, and engine controls

$16,626

$61,590

$44,710

$26,381

$50,869

$4,818

$5,187

$2,719

$2,734

$10,685

$22,955

$89,293

$58,156

$31,428

$60,402

$6,294

$7,251

$3,751

$3,707

$15,084

$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Worldwide Semiconductor Revenue by Market Segment ($M)

2009
2010
38%

Growth

45%

Growth

30%

Growth

19%

Growth

19%

Growth

31%

Growth

40%

Growth

38%

Growth

36%

Growth

41%

Growth

Revenue


2011 End Market Growth

Fast Growing Component Areas: FPGAs, SoC’s & baseband processors for tablets and phones,
RF/Wireless ICs, touch screen interface devices, automotive/power semiconductor devices,
HD processing chips
(Source: EE Herald)

$22,955

$89,293

$58,156

$31,428

$60,402

$6,294

$7,251

$3,751

$3,707

$15,084

$24,176

$92,714

$59,102

$33,141

$65,194

$6,370

$7,694

$3,655

$4,047

$14,349

$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Worldwide Semiconductor Revenue Forecast by Market Segment ($M)

2010
2011
5%

Growth

4%

Growth

2%

Growth

5%

Growth

8%

Growth

6%

Growth

-
3%

Growth

9%

Growth

-
5%

Growth

Source: Databeans, April
2011

1%

Growth

Revenue


Top 10



Company

Stock
Exchange

Ticker

CY 2010
Revenue
(US$000)

CY 2009
Revenue
(US$000)

YoY Growth
(%)

1


Intel

NASDAQ

INTC

$43,623,000

$35,127,000

24.2%

2


Samsung
Electronics
-

Semiconductor
Division

KSE

005930

$33,266,160

$23,040,563

44.4%

3


Texas
Instruments

NYSE

TXN

$13,966,000

$10,427,000

33.9%

4


Toshiba
Semiconductor Co.

Private

Private

$13,199,427

$10,334,475

27.7%

5


Renesas

Electronics
-

Semiconductor Division

TSE

6723

$
11,813,557*

$
9,649,000*

22.4%

6


Hynix

Semiconductor
(HSI
)

KSE

000660

$10,692,779

$6,794,732

57.4%

7


STMicroelectronics

NYSE

STM

$10,346,000

$8,510,000

21.6%

8


Sony
Electronics
-

Semiconductor & Component

Divisions

Private

Private

$9,211,049

$7,597,211

21.2%

9


Micron Technology

NASDAQ

MU

$8,994,000

$5,141,000

74.9%

10


QUALCOMM
-

QCT Division

NASDAQ

QCOM

$7,204,000

$6,409,000

12.4%

11


Broadcom
Corporation
-

Product Division

NASDAQ

BRCM

$6,589,270

$4,272,726

54.2%

Source: GSA; *The merged entity of
Renesas

and
NEC.

Trends


Wafer Pricing

Median Price Per Wafer by Survey and Wafer Size (Production CMOS Wafers)

$438

$475

$475

$570

$501

$403

$314

$722

$338

$970

$960

$860

$800

$835

$870

$787

$785

$821

$3,320

$3,521

$3,132

$3,200

$2,897

$3,200

$3,200

$3,058

$3,211

$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Median Price

Survey

150mm
200mm
300mm
Source: Q1 2011 GSA Wafer Fabrication Pricing Report

Trends
-

Design Costs

Source: IBS; GlobalFoundries

Trends


R&D Investments

22.2%

24.8%

20.2%

0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2008
2009
2010
Average R&D
-
to
-
Sales of Current U.S. Listed Semiconductor
Companies

Source: GSA



On average, R&D spending for US listed companies decreased from 2009 to 2010 in
terms of per cent of sales, but not in terms of total spend




On average, foundries only spend 5% to 10% on R&D, whereas IDM’s and
fabless

companies spend 20% on R&D. Of course this is off
-
set by the foundries CAPEX




Of the top 10 companies, Broadcom had the highest R&D to sales ratio at 28%




TSMC was the first pure
-
play foundry to join the top 10 R&D spenders (7%, $945K)


Trends
-

Capital Expenditures

In US$ Million

2007

2008

2009

2010

2011 F

2012 F

Fab

construction

projects

$8,282

$4,412

$1,947

$5,334

$4,637

$4,208

Change %

10%

-
46%

-
57%

174%

-
13%

-
9%

Fab

equipment

spending
(
new&used
)

$38,111

$25,942

$14,311

$33,308

$42,577

$40,877

Change %

13%

-
32%

-
45%

133%

28%

-
4%

Total
Fab

spending

$46,393

$30,308

$16,201

$38,644

$47,214

$45,085

Change %

21%

-
35%

-
47%

139%

22%

-
5%

Source: SEMI World
Fab

Database Reports (February 25, 2011)

Front End
Fab

Spending over Time

Trends


The Shift from Digital
to Analog


Why the move?



Increased margin


Less software, CAPEX, and R&D intensive


Market growth


Worldwide analog sales climbed to $42 billion in 2010


Analog chip revenue will rise by about 14% in 2011


High
-
growth analog devices: power ICs, sensors, displays, actuators and
lighting


Sustainability


Applications that will drive the analog market: energy conservation, power
control for transportation, alternative energy sources, and other applications
in clean
-
tech



2010 M&A Activity




For 2010, 109 semiconductor M&A deals were announced which is a 10%
increase over 2009


4

4

8

6

3

4

5

7

2

7

8

10

2

4

1

5

5

8

3

4

2

3

5

2

3

2

0
2
4
6
8
10
12
14
Number of Deals

Semi Supplier M&A Deals
Fabless/IDM M&A Deals
5

4

10

12

13

8

5

13

11

11

7

9

9

2011 M&A Activity

M&As


28 semiconductor M&A deals were announced in Q1, however the pace is
expected to increase as companies try to fill holes in their product lines


Jan
-
Apr
2011 M&A Deals

Acquirer

Acquired

Amount ($US, $M)

M&A Strategy

TI

Nat ional Semiconduct or

$6,500.00

To grow analog and power
semi segment and t ake a
larger share of t he LED driver
IC market.

QUALCOMM

At heros

Communicat ions

$3,100.00

Add Wi
-
Fi, Et hernet,
Bluet oot h and
powerline

t echnologies t o 3G and 4G
Long
-
Term Evolut ion (LTE)
smart phone

and t ablet
chipset s

Advant est

Verigy

$1,100.00

St rengt hen posit ion in t est ers
for chips used in smart phones
and ot her mobile devices

CSR Plc

Zoran

$679.00

Creat e chips for locat ion
-
aware, connect ed mult i media
devices

MediaTek

Ralink

Technology

$616.00

Expand Wi
-
Fi business and
offer t echnologies such as
Bluet oot h, GPS,
xDSL

and
Et hernet

Source: GSA

2010 Funding Activity


The total number of deals closed, decreased from 139 in 2009 to 121 in
2010


However the total funding raised was increased, from $1.1B in 2009 to
$1.2B in 2010

$79.6

$139.8

$53.0

$144.5

$60.6

$170.9

$54.4

$42.3

$54.0

$61.6

$67.5

$65.8

$27.5

$22.6

$42.2

$6.8

$67.5

$22.9

$26.8

$14.7

Undisclosed

$25.0

$28.9

$12.9

$19.0

$5.5

$0
$50
$100
$150
$200
$250
($M)

Semi Supplier Investment
Fabless/IDM Investment
$79.0

$90.5

$80.4

$33.0

$102.2

$182.0

$59.8

$212.0

$83.5

$197.7

$69.1

$42.3

$84.8

2011 Funding Activity

Q1 2011 Funding


21 semiconductor companies raised $407.1 million


Number of companies funded decreased by 3 when compared to Q4
2010 and decreased by 23 when compared to Q1 2010


The dollar amount invested increased by 5% when compared to Q4
2010 and decreased by 10% when compared to Q1 2010.




Source: GSA

2010 IPO Activity


15 semiconductor IPOs priced in 2010 versus 2 pricings in 2009


Seeing a disproportionate increase in the number of Asia
-
based companies that went
public



Company

Stock Exchange

Ticker

IPO Date

Offer Price

MStar

Semiconductor

TSE

3697

12/24/2010

$10.05

SemiLEDs


NASDAQ

LEDS

12/08/2010

$17.00

Aeroflex

Holding

NYSE

ARX

11/18/2010

$13.50

Inphi


NYSE

IPHI

11/10/2010

$12.00

RDA Microelectronics

NASDAQ

RDA

11/09/2010

$9.00


AZ Electronic Materials

LSE


AZEM

10/29/2010


$3.80


Chingis Technology


Taiwan ESM


3408

10/29/2010

N/A


JMicron Technology


Taiwan ESM


4925

10/28/2010

N/A


Lumitek


Taiwan ESM


3575

9/27/2010

N/A

NXP Semiconductors

NASDAQ

NXPI

8/5/2010

$14.00

Alpha & Omega Semiconductor

NASDAQ

AOSL

4/28/2010

$18.00

Rexchip Electronics

Taiwan ESM

4932

4/20/2010

N/A

MaxLinear

NYSE

MXL

3/23/2010

$14.00

Sensata Technologies


NYSE


ST

3/10/2010

$18.00


Nuvoton Technology


Taiwan ESM (Listed on
TSE since 9/27/2010)


4919

1/29/2010

N/A

2011 IPO Activity

Company

Stock Exchange

Ticker

IPO Date

Offer Price

BCD Semiconductor Manufacturing

NASDAQ

BCDS

1/27/2011

$10.50

NeoPhotonics

NYSE

NPTN

2/1/2011

$
11.00

MagnaChip

Semiconductor

NYSE

MX

3/10/2011

$14.00

Source: GSA

Conclusion


We’re in a healthy, sustainable market with a projected
CAGR of 4% to 5% through 2015


Semiconductor content will continue to increase in all major
markets


Automotive, communications, industrial/medical, CE


2010 inventories have been corrected and increased
capacity is being brought on line


Semiconductors are responsible for fueling 20% of the
worlds GDP


We continue have the smartest, most innovative work force
in the world