1

Semiconductor Equipment and Materials Outlook

SEMICON Singapore 2010

Dan TracySEMI Industry Research & Statistics Group

May 19, 2010

2

Outline

Update on current market and forecast for,Industry Trends

Semiconductor Equipment

Semiconductor Materials

Summary

3Source: Company reports

Outsource Manufacturers Monthly Sales

1Q 2010

- Flat vs. 4Q 2009

- 102% above 1Q 2009

Combined Monthly Revenues- 3 Mo. Avg.(ASE, SPIL, TSMC, and UMC)

-

10,000

20,000

30,000

40,000

50,000

60,000

Jan-

03M

ar-0

3M

ay-0

3Ju

l-03

Sep-

03N

ov-0

3Ja

n-04

Mar

-04

May

-04

Jul-0

4Se

p-04

Nov

-04

Jan-

05M

ar-0

5M

ay-0

5Ju

l-05

Sep-

05N

ov-0

5Ja

n-06

Mar

-06

May

-06

Jul-0

6Se

p-06

Nov

-06

Jan-

07M

ar-0

7M

ay-0

7Ju

l-07

Sep-

07N

ov-0

7Ja

n-08

Mar

-08

May

-08

Jul-0

8Se

p-08

Nov

-08

Jan-

09M

ar-0

9M

ay-0

9Ju

l-09

Sep-

09N

ov-0

9Ja

n-10

Mar

-10

NT$

Mill

ions

4

2010 Semiconductor and IC Revenue Forecasts

Source: SEMI

21.9%

23.0%

24.0%

27.0%

27.2%

30.6%

31.0%

19.9%

0% 5% 10% 15% 20% 25% 30% 35%

Gartner

VLSI Research

Databeans

Semico Research

IC Insights

Henderson Ventures

iSuppli

Future Horizons

5

Front End Fabs SpendingSpending in Front End Facilities

(Construction + Equipping)

-22%

77%

17%

-42%

-5%2%

64%

-6%

22%10%

-33%

-46%

88%

0

5

10

15

20

25

30

35

40

45

50

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

US$ Billion

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Growth %

Taiwan

SE Asia

S. Korea

Japan

Europe &MideastChina

Americas

Growth

Source: SEMI World Fab Forecast, February 2010

6

Semiconductor Equipment

7

Worldwide Semiconductor (Fab, Test & Assembly) Equipment Trends

Worldwide Bookings and Billings forSemiconductor Equipment

(based on 3-month averages)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Jan-

97A

pr-9

7Ju

l-97

Oct

-97

Jan-

98A

pr-9

8Ju

l-98

Oct

-98

Jan-

99A

pr-9

9Ju

l-99

Oct

-99

Jan-

00A

pr-0

0Ju

l-00

Oct

-00

Jan-

01A

pr-0

1Ju

l-01

Oct

-01

Jan-

02A

pr-0

2Ju

l-02

Oct

-02

Jan-

03A

pr-0

3Ju

l-03

Oct

-03

Jan-

04A

pr-0

4Ju

l-04

Oct

-04

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8Ju

l-08

Oct

-08

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10

US$

Bill

ions

Billings Bookings

Source: SEMI/SEAJ May 2010

8

Equipment Forecast By Market Region

Source: SEMI

$0$5

$10$15$20$25$30$35$40$45

N. America Japan Taiwan Europe S.Korea China Southeast Asia

Southeast Asia 3.05 2.61 1.44 2.60China 2.99 1.89 0.94 1.90S.Korea 7.35 4.89 2.60 4.70Europe 2.94 2.45 0.97 2.40Taiwan 10.65 5.01 4.35 7.90Japan 9.31 7.04 2.23 3.90N. America 6.55 5.63 3.39 4.70

2007 (A) 2008 (A) 2009 (A) 2010 (F)

US$

Bill

ions

$15.92

$28.10$29.52

$42.84

-Totals may not add due to rounding- Includes fab, test, assembly, & other equipment

9

Equipment Forecast by Segment

$0$5

$10$15$20$25$30$35$40$45

Wafer Process Assembly & Pack. Test Other

Other 2.92 2.00 1.11 1.90Test 5.05 3.45 1.55 2.50Assembly & Pack. 2.84 2.04 1.41 2.30Wafer Process 31.95 22.03 11.84 21.40

2007 (A) 2008 (A) 2009 (A) 2010 (F)

US$

Bill

ions

$29.52

$15.92

$28.10

$42.84

Source: SEMI

-Totals may not add due to rounding

10

Equipment Spending Trends

16%

13%15%

17%

20% 20%

17%

20%

14%13%

17%

14%16%

12%

24%

17%

13%

17%

7%

11%$166.6

$213.0$227.5

$140.7$139.0

$204.4

$125.6

$149.4$137.2

$132.0

$144.4$102.0

$77.0$60.0$55.0

$247.7 $255.6$248.6

$226.3

$267.0

0%

5%

10%

15%

20%

25%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

F

$0

$50

$100

$150

$200

$250

$300

US$

Bill

ions

Equipment Spending % of Semiconductor Revenue

Semiconductor Revenue ($B) WSTS

Source: SEMI and SIA, SEMI Forecast Estimate

Line ChartBar Charts

11

Semiconductor Materials

12

Leadframes-Unit shipments have recovered

Global Leadframe Shipments

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Jan-0

6Apr-

06Ju

l-06

Oct-06

Jan-0

7Apr-

07Ju

l-07

Oct-07

Jan-0

8Apr-

08Ju

l-08

Oct-08

Jan-0

9Apr-

09Ju

l-09

Oct-09

Jan-1

0

Mill

ions

of U

nits

IC Discrete

Source: SEMI Materials Market Data Subscription

13

Worldwide Wafer Fab Materials Forecast

Actual Actual Forecast

2007 2008 2009 2010 2011 Silicon Wafers1 12,830 11,924 7,125 8,782 9,745

Photomasks2 2,975 2,948 2,732 2,926 2,994

Photoresists 1,144 1,116 920 1,092 1,184

Photoresist Ancillaries3 1,219 1,225 1,075 1,279 1,389

Wet Chemicals4 904 923 905 941 983

Gases 3,229 3,100 2,465 2,929 3,177

Sputter Targets4 480 508 356 391 438

CMP Slurry & Pads5 1,024 1,007 916 1,105 1,241

Other/New Materials6 1,271 1,439 1,359 1,575 1,757

Total $25,076 $24,191 $17,854 $21,020 $22,908% Growth -3.5% -22.1% 17.7% 9.0%

US$ Millions

Source: SEMI Materials Market Data Subscription February 2010

Totals may not add due to rounding

14

Wafer Fab Materials Forecast Notes

1. Silicon wafers include merchant sales value only; includes SOI wafers; no reclaim wafers

2. Includes captive market3. Includes resist removal chemicals, developers, anti-reflective

coatings, contrast enhancers, edge bead removers, adhesion promoters, etc.

4. Source is Techcet Group LLC, includes precious metals5. Estimates for IC applications only6. Includes low k dielectrics, copper plating solutions, dielectric

precursors, organometallic precursors, etc.7. All forecasts in current dollars8. Source for all data is SEMI, unless otherwise indicated

Source: SEMI February 2010

15

Worldwide SemiconductorPackaging Materials Forecasts

Actual Forecast

2007 2008 2009 2010 2011Leadframes $3,289 $3,013 $2,635 $2,942 $2,997Organic Substrates1 6,656 7,586 6,967 7,674 8,255Ceramic Packages 1,574 1,501 1,290 1,388 1,429Encapsulation Resins 1,624 1,475 1,284 1,464 1,559Bonding Wire3 3,592 3,968 3,838 4,359 4,446Die Attach Materials4 612 588 582 650 682Others5 242 193 179 207 233

Total $17,589 $18,324 $16,775 $18,684 $19,601

% Growth 4.2% -8.5% 11.4% 4.9%

US$ Millions

Source: SEMI Materials Market Data Subscription February 2010

16

Semiconductor Packaging Materials Forecast Notes

1. Source is TechSearch International. Includes PBGA, PPGA, LGA, and CSP laminate substrates and flex BGA and CSP substrates

2. Assume gold value of $660/trz for 2007, $872/trz for 2008, $920 for 2009-2011 forecast period

3. Includes die attach film (tape) materials4. Other includes solder balls and wafer level package

dielectrics5. Source for all data is SEMI, unless otherwise indicated6. All forecasts in current dollars

Source: SEMI February 2010

17

Global Silicon Wafer Diameter Trends

Source: Rose Associates 1978 to 1995; SEMI SMG 1995 to 2009; SEMI

0

5001,000

1,5002,000

2,500

3,0003,500

4,0004,500

5,00019

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10F

2011

F

Mill

ions

of S

quar

e In

ches

75 mm

100 mm150 mm

125 mm

200 mm

300 mm

Includes polished and epi wafers. Excludes reclaim, non polished, and SOI.

18

Gold Bonding Wire- Clear Transition to Smaller Diameter

% Share of Gold Wire Market by Diameter

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009E

>30 micron 25-30 micron <25 micron

Source: SEMI and Techsearch International, Global Semiconductor Packaging Materials Outlook

19

Wire Survey- Current StatusTo what degree is your company

currently using copper wire?

14 14

13

5

0

5

10

15

20

25

30

Not using Some products Majority of products

Num

ber

of C

ompa

nies

FablessIDM

20

Wire Survey-Potential use over the next three years

Plans for Copper over the Next Three Years

3

24

1

4

9

5

0

5

10

15

20

25

30

35

Are not considering Are considering for some newproducts

Are considering for the majorityof new products

Num

ber o

f Com

pani

es

FablessIDM

21

Wire Survey-Issues and Concerns Remain

Main Issues/Concerns that would Prevent the Use of Copper Wire

1215

3

9 9 7

8

11

4

95

1

20

5

10

15

20

25

30

ProcessYield

In-ServiceReliability

IncrementalProcessCosts

UnprovenHistorical

Performance

CustomerSpecification

Other None

# of

Res

pons

es

FablessIDM

22

Global Bonding Wire Market

Global Bonding Wire Markets

2007 Actual 2008 Actual 2009 Estimate Bonding Wire

Market Revenues

$M Millions

of Meters Revenues

$M Millions

of Meters

Revenues $M

Millions of Meters

Gold Wire 3,552 15,287 3,921 14,422 3,779 13,680 Aluminum Wire 32.0 980 29.5 898 26.0 800 Copper Wire 8.0 272 17.4 476 33.2 885 Total Bonding Wire Market

$3,592.0

16,539

$3,967.9

15,796

$3,838.2

15,365

Source: SEMI and TechSearch International, Global Semiconductor Packaging Materials Outlook

23

Materials Forecast By Segment

$0

$10

$20

$30

$40

$50

Fab Packaging

Packaging 11.95 12.77 15.54 17.59 18.32 16.78 18.68 19.60Fab 16.86 18.17 21.70 25.08 24.19 17.85 21.02 22.91

2004 2005 2006 2007 2008 2009 2010F 2011F

US$

Bill

ions

Totals may not add due to rounding.

$28.81 $30.94

$42.67 $42.47

$34.63$39.70

$37.25

Source: SEMI Materials Market Data Subscription February 2010

$42.51

24

SEMI® Materials Forecast By Market Region

$0$5

$10$15$20$25$30$35$40$45$50

N. America Japan Taiwan Europe S.Korea China Southeast Asia

Southeast Asia 4.55 5.03 6.18 6.79 6.90 5.98 6.68 7.02China 1.28 1.64 2.38 3.31 3.57 3.26 3.82 4.20S.Korea 3.10 3.78 4.88 6.10 5.90 4.69 5.36 5.71Europe 2.80 2.88 3.39 3.68 3.32 2.52 2.89 3.09Taiwan 4.85 5.31 6.74 8.34 7.87 6.77 7.91 8.50Japan 7.61 7.58 8.57 9.19 9.96 7.63 8.63 9.24N. America 4.63 4.72 5.11 5.25 4.99 3.79 4.42 4.75

2004 2005 2006 2007 2008 2009.00 2010F 2011F

US$

Bill

ions

$37.25

$28.82

$42.52

$34.63$30.94

Totals may not add due to rounding.

Source: SEMI Materials Market Data Subscription February 2010

$42.67 $42.51$39.70

25

Summary• Fab Trends

– Total fab investments could grow by over 80% in 2010– -4% decline in installed capacity in 2009, and forecasting 6% or more

capacity growth in 2010.

• Semiconductor Equipment Market– -46% decline in 2009– Spending could increase 80% or more in 2010

• Semiconductor Materials Market– 18% decline in 2009– 2010 outlook to be in line with overall semiconductor market growth