Market Briefing Semiconductor Market Outlook

Wednesday, September 30, 200908:30 - 12:10

Conference Room 2, TWTC

SEMI Equipment and Materials Market Outlook

Clark TsengSr. Manager Industry Research & Statistics

SEMICON Taiwan 2009Market BriefingSept 30, 2009

Clark TsengClark TsengSenior Research Manager, SEMISenior Research Manager, SEMI

• Clark is a senior research manager at SEMI, a global industry association serving the manufacturing supply chains for semiconductor industry. His major responsibility is to track and evaluate front-end fab investment in Asia Pacific region. His research also spans over flat panel display and PV industries. His expertise includes in-depth analysis of the industry dynamics, as well as the fundamentals of market forecasting, competitive analysis, and strategic planning.-

• Prior to SEMI, Clark worked for Qimonda as the manager at Strategy and Business Development division, where he managed market & competitive intelligence function in Asia/Pacific. In this role, he tracked market supply/demand, pricing, competitors’ capacity planning, technology roadmap, and product portfolios.

• Clark Tseng received a bachelor business administration and a bachelor of arts in international relations from National Chengchi University in Taiwan.

Semiconductor Equipment and Materials Outlook

SEMI products and services include:• Expositions: SEMICON®, PV, FPD, etc.• International Standards• Public policy/EHS• Technical & Business Conferences • Industry Research & Statistics• Website: www.semi.org

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SEMI: The Global Association

HsinchuHsinchu

SeoulSeoul TokyoTokyo

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MoscowMoscow

Washington DCWashington DC

ShanghaiShanghaiHsinchuHsinchu

About SEMI

• Global industry association• Over 2000 members• Established in 1970 to serve

the semiconductor supply chain• Today serves members in

the following industry’s– Semiconductor– Flat Panel Display– Photovoltaic/Tech-Energy– Nanotechnology– MEMS

Industry Strategy Symposium—ISS

Book-to-Bill

About SEMI Industry Research & Statistics

The SEMI Industry Research and Statistics group provides market data and market research reports covering semiconductor capital equipment, photovoltaic equipment, semiconductor materials, packaging materials, and semiconductor fabs.

For our major reports, we collect actual data from suppliers around the world following strict professional standards of confidentiality. Our reports provide trends, forecast, and outlook to help the industry make important investment, strategic, and business planning decisions.

For additional information regarding our products and our data collection program, please visit us at www.semi.org/marketinfoor contact us at mktstats@semi.org.

Market Research Reports

Semiconductor Equipment

Semiconductor Materials

• Equipment Market Data Subscription (EMDS)

• China Domestic Fab Equipment Suppliers

• China Equipment Subsystems, Components, and Parts Vendors Overview

• Historical SEMI Book-to-Bill Report

• Material Market Data Subscription (MMDS)

• Photomask Report*• Silicon Reclaim

Wafer Report*

Semiconductor Fabs

• World Fab Forecast • FabFutures• World Fab Watch• 300 mm Report

Semiconductor Packaging

• Global Semiconductor Packaging Materials Outlook (Oct ’09)

Notes: * These reports are included FREE with the purchase of the MMDS report, but also available as separate reports.

Market Research Reports (con’t)

Photovoltaic

• PhotovoltaicEquipment Market Subscription Coming Soon

• Chemicals & Materials for Photovoltaic Cells and Modules New ***

• PV Fab Database***

MEMS/MST

• Global MEMS Markets and Opportunity***

*** Third-party reports

Enabling Products

• LED Manufacturing Technologies ***

• Sapphire Market ***

• Mass Flow Controller

Visit www.semi.org/store

• Solar Cell Capacity, Shipment, and Company Profile Database and Report New ***

• PV Supply Chain Health ReportNew ***

• Photovoltaic Technologies, Equipment, Applications, and Markets (PV TEAM) ***

Custom Semiconductor Fab Reports

Custom reports generated• Fab Transitional Report

(fabs to be sold, sold, for sale, may-be-closed, etc)

• Historical Fab Report – # of fabs operational/year (1988-2008)– Total spending on fabs per year (1988-2008)– wafer capacity by geometry (1994 – 2008)

• Historical Fab Report– Fab Construction spending (1996 – 2007)– Fab Equipping spending (1996 – 2007)

• Regional Fab Capacity Report (2000 - 2008)

Topics of Discussion for Today

Overall Semiconductor Industry Outlook

Semiconductor Fab Spending Outlook

Semiconductor Equipment Outlook

Semiconductor Materials Outlook

Summary

Overall Semiconductor IndustryOutlook

Semiconductor Cycles

3345 49 51 55 60

77102

144132137

126150

204

139141166

228

256249

196222208

248

213

$0

$50

$100

$150

$200

$250

$30019

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

09 F

2010

F20

11 F

-50%

-25%

0%

25%

50%

75%

100%

Semiconductor Revenue Annual Growth

Source: SIA/WSTS historical year end reports, SIA June 2009 Forecast

Glo

bal S

emic

ondu

ctor

Rev

enue

US

$B

(bar

gra

ph)

Ann

ual G

row

th %

(lin

e gr

aph)

2009 Semiconductor Revenue Forecasts

Source: SEMI

-13.8%

-14.0%

-15.6%

-16.0%

-17.0%

-21.3%

-21.6%

-23.0%

-12.7%

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

VLSI Research (Jun 09)

Semico Research (May 09)

Future Horizons (Aug 09)

Henderson Ventures (Sep 09)

IC Insights (Jan 09)

Gartner (Aug 09)

SIA (Jun 09)

WSTS (Jun 09)

iSuppli (Jul 09)

2010 Semiconductor Revenue Forecasts

Source: SEMI

13.1%

10.6%

9.6%

7.3%

6.5%

15.1%

0% 5% 10% 15% 20%

VLSI Research (Jun 09)

iSuppli (Jul 09)

Gartner (Jun 09)

Henderson Ventures(Sep 09)

WSTS (Jun 09)

SIA (Jun 09)

Capital Equipment Cycles

58 9 9 9 8

1015

2426 28

2225

48

28

2022

3733

4043

30

14

21

$0

$10

$20

$30

$40

$50

$6019

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

08 F

2009

F20

10 F

-60%

-35%

-10%

15%

40%

65%

90%

115%

Capital Equipment Revenue Annual Growth

Source: SEMI and SEMI/SEAJ year end historical reports, SEMI Year-End 2008 Forecast

Glo

bal C

apita

l Equ

ipm

ent R

even

ue U

S $B

(b

ar g

raph

)

Ann

ual G

row

th %

(lin

e gr

aph)

7 8 9 9 9 1013

1519 21 22

2023

20 2124

2931

37

43 43 41

28

37

05

1015202530354045505560

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

E20

09 F

2010

F

-50%

-25%

0%

25%

50%

75%

100%

Materials Revenue Annual Growth

Source: Rose Associates historical reports 1987 through 1999, SEMI 1999 through 2010, August 2009

Glo

bal M

ater

ials

Rev

enue

US

$B(b

ar g

raph

)

Ann

ual G

row

th %

(lin

e gr

aph)

Semiconductor Materials Cycles

Silicon Area Shipment Index

Source: SEMI Silicon Manufacturers Group September 2009

Worldwide Wafer Area Shipment Index(Three-month moving average)

507090

110130150170190210230250

Jan-

98M

ay-9

8Se

p-98

Jan-

99M

ay-9

9Se

p-99

Jan-

00M

ay-0

0Se

p-00

Jan-

01M

ay-0

1Se

p-01

Jan-

02M

ay-0

2Se

p-02

Jan-

03M

ay-0

3Se

p-03

Jan-

04M

ay-0

4Se

p-04

Jan-

05M

ay-0

5Se

p-05

Jan-

06M

ay-0

6Se

p-06

Jan-

07M

ay-0

7Se

p-07

Jan-

08M

ay-0

8Se

p-08

Jan-

09M

ay-0

9

Outsource Manufacturers- Monthly Sales Trends through August

August 2009 sales

Six months of consecutive increases

4.6% below Aug 2008

Source: Company monthly reports

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

NT$

Mill

ions

Semiconductor Fab Capacity & Spending Outlook

Fab Construction-Investments at minimal levels

Source: SEMI World Fab Forecast

Quarterly Construction Spending by Region

$-

$200

$400

$600

$800$1,000

$1,200

$1,400

$1,600

$1,800

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Taiwan

SE Asia

Korea

Japan

Europe &Mideast

China

Americas

in US$ Million

Equipment Spending –70% below 1Q 2008

Source: SEMI World Fab Forecast

Quarterly Equipment Spending by Region

$-$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000

$10,000

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Taiwan

SE Asia

Korea

Japan

Europe &MideastChina

Americas

in US$ Million

Total Fab Spending- Increasing off of the 2Q 2009 low

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

US$

Mill

ions

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Total Spending on Fabs(includes construction, facilities, and equipping)

TaiwanSE AsiaKoreaJapanEurope & MideastChinaAmericas

Source: SEMI World Fab Forecast

Installed Capacity by Product Type

Since 1998, Memory share of fab capacity has grown to ~36% from 15%.

Installed Capacity by Product Type(in 200mm Equivalents)

02468

1012141618

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Millions per Month

Source: SEMI World Fab Forecast (August 2009)

MEMS/Other

MPU

Memory

Logic

Foundry

Discrete

Analog

Source: SEMI World Fab Forecast

Semiconductor Equipment Market Outlook

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 (f) Aug-09 (p)

Boo

k-to

-Bill

Rat

io

Source: SEMI September 2009

SEMI North America Book-to-Bill Ratio

$0

$200

$400

$600

$800

$1,000

$1,200

Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 (f) Aug-09 (p)

US$

Mill

ions

Bookings Billings

North American Headquartered Manufacturers Global Capital Equipment Book-to-Bill(based on three month averages)

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-

97Ap

r-97

Jul-9

7O

ct-9

7Ja

n-98

Apr-

98Ju

l-98

Oct

-98

Jan-

99Ap

r-99

Jul-9

9O

ct-9

9Ja

n-00

Apr-

00Ju

l-00

Oct

-00

Jan-

01Ap

r-01

Jul-0

1O

ct-0

1Ja

n-02

Apr-

02Ju

l-02

Oct

-02

Jan-

03Ap

r-03

Jul-0

3O

ct-0

3Ja

n-04

Apr-

04Ju

l-04

Oct

-04

Jan-

05Ap

r-05

Jul-0

5O

ct-0

5Ja

n-06

Apr-

06Ju

l-06

Oct

-06

Jan-

07Ap

r-07

Jul-0

7O

ct-0

7Ja

n-08

Apr-

08Ju

l-08

Oct

-08

Jan-

09Ap

r-09

Jul-0

9

US$

Bill

ions

Billings Bookings

Source: SEMI/SEAJ September 2009

SEMI® 2009 Mid-Year EquipmentConsensus Forecast By Segment

$0

$10

$20

$30

$40

$50

Wafer Process Assembly & Pack. Test Other

Other 2.92 2.00 0.99 1.43Test 5.05 3.45 1.78 2.54Assembly & Pack. 2.84 2.04 0.96 1.34Wafer Process 31.95 22.03 10.42 15.43

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

US$

Bill

ions $29.52

$14.14$20.74

$42.77

Totals may not add due to rounding

Source: SEMI Mid-Year 2009 Semiconductor Consensus Forecast, July 2009

SEMI® 2009 Mid-Year EquipmentConsensus Forecast By Market Region

Source: SEMI Mid-Year 2009 Semiconductor Consensus Forecast, July 2009

Totals may not add due to rounding

$0

$10

$20

$30

$40

$50

N. America Japan Taiwan Europe S.Korea China ROW

ROW 3.05 2.61 1.19 1.61China 2.99 1.89 0.78 1.59S.Korea 7.35 4.89 1.88 3.59Europe 2.94 2.45 1.40 1.77Taiwan 10.65 5.01 2.37 3.56Japan 9.31 7.04 2.96 4.32N. America 6.55 5.63 3.56 4.30

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

US$

Bill

ions

$42.77

$14.14$20.74

Totals may not add due to rounding

$29.52

Equipment Spending Trends

16%

13%15%

17%

20% 20%

17%

20%

14%13%

17%

14%

10%

7%

17%

13%

17%

24%

12%

16%

$139.0$140.7$166.6

$213.0$227.5 $208.3$195.6

$248.6

$255.6$247.7

$55.0$60.0$77.0

$102.0$144.4$132.0

$137.2$149.4

$125.6

$204.4

0%

5%

10%

15%

20%

25%

30%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

F20

10F

$0

$50

$100

$150

$200

$250

$300

$350

US

$ B

illio

ns

Equipment Spending % of Semiconductor Revenue

Semiconductor Revenue ($B) WSTS

Source: SEMI and SIA July 2009

Line ChartBar Charts

Semiconductor Equipment Sales

Total Semiconductor Equipment Spending

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

US$

Mill

ions

Americas-EU-Japan Other Asia-Pacific

Source: SEMI/SEAJ Worldwide Semiconductor Equipment Market Statistics

Semiconductor Materials MarketOutlook

Global Silicon Wafer Diameter Trends

Source: Rose Associates 1978 to 1995; SEMI SMG 1995 to 2006; SEMI SMG

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Mill

ions

of S

quar

e In

ches

75 mm

100 mm 150 mm

125 mm

200 mm

300 mm

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

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Mill

ions

of S

quar

e In

ches

75 mm

100 mm 150 mm

125 mm

200 mm

300 mm

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

Quarterly Silicon Trends- Strong 2Q Recovery across all Regions

Polished and Epi Silicon Area Shipments

0

200

400

600

800

1,000

1,200

Americas Europe Japan Asia Pacific

Mill

ions

of S

quar

e In

ches

1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009Source: SEMI SMG July 2009

Global Silicon Shipments (from the wafer suppliers to the fabs)

Worldwide Silicon Wafer Shipments

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Mill

ions

of S

quar

e In

ches

Americas-EU-Japan Other Asia-Pacific

Source: SEMI Silicon Manufacturers Group

2008 2009F %$B $B Change

China 1.17 0.99 -15%

Europe 2.63 2.27 -14%

Japan 6.91 5.90 -15%

Korea 3.63 3.14 -13%

North America 4.36 3.71 -15%

Taiwan 3.73 3.14 -16%

Southeast Asia 1.65 1.37 -17%

Total Regions 24.08 20.52 -15%

Region

Regional Fab Materials Markets

2008 = $24.1 BillionTotals may not add due to rounding

China5% Europe

11%

Japan29%

Korea15%

NorthAmerica

18%

Taiwan15%

SoutheastAsia7%

Source: SEMI Materials Market Data Subscription August 2009

Regional Semiconductor Packaging Materials Markets

2008 = $18.5 Billion

2008 2009F %$B $B Change

China 2.32 2.26 -3%

Europe 0.69 0.63 -9%

Japan 3.30 2.80 -15%

Korea 2.15 1.88 -13%

Americas 0.59 0.52 -12%

Taiwan 4.00 3.66 -9%

Southeast Asia 5.48 4.78 -13%

Total Regions 18.53 16.53 -11%

Region

Totals may not add due to rounding

SoutheastAsia30%

Taiwan22% Americas

3%

Korea11%

Japan18%

Europe4%

China12%

Source: SEMI Materials Market Data Subscription August 2009

Materials Market Forecast By Segment

$0

$10

$20

$30

$40

$50

Fab Packaging

Packaging 11.95 12.77 15.54 17.45 18.58 16.00Fab 16.86 18.17 21.70 25.20 24.12 20.00

2004 2005 2006 2007 2008 2009 F

US$

Bill

ions

Totals may not add due to rounding.

$28.81$30.94

$42.65 $42.70

Source: SEMI February 2009

$37.25

2009 Down

-15% to -20%?

Total Regional Materials Markets

Totals may not add due to rounding

2008=$42.7 B

China8%

Europe8%

Japan24%

Korea13%

Americas12%

Taiwan18%

SoutheastAsia17%

2008 2009F %$B $B Change

China 3.43 3.00 -13%

Europe 3.32 2.84 -14%

Japan 10.28 8.68 -16%

Korea 5.73 4.92 -14%

Americas 4.96 4.15 -16%

Taiwan 7.72 6.48 -16%

Southeast Asia 7.22 6.07 -16%

Total Regions 42.66 36.14 -15%

Region

Source: SEMI Materials Market Data Subscription May 2009

Summary

Summary

• Industry Trends– Unit shipments bottomed in January/February with a strong rebound into the

third quarter– Investments on fabs are increasing on a quarterly basis– Overall outlook is for growth in semiconductor sales to continue into 2010

• Semiconductor Equipment Market– Earlier this year, bookings fell to levels last reported in the early 1990s.– Bookings have been slowly improving from this bottom– Market forecast

• a -50% or so decline in 2009• +40% to +50% spending growth in 2010

• Semiconductor Materials Market– 2009 forecasted to decline -15% to -20%– 2010 outlook to be inline with overall semiconductor market growth

Thank You