1

Happy Days Are Here Again?

Lara ChamnessSenior Market Analyst

SEMI TheatreJuly 14, 2010

2

Outline of Today’s Talk

• Industry Overview

• Current Trends

• Materials & Equipment Forecasts

• Summary

3

2010 Semiconductor and IC Revenue Forecasts - Initial

Source: SEMI January 2010

14.7%

14.0%

15.0%

13.0%

10.2%

12.2%

22.0%

15.4%

22.4%

10.4%

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

Databeans (Jan 10)

VLSI Research (Dec 09)

IC Insights (Jan 10)

Gartner (Nov 09)

SIA (Nov 09)

WSTS (Jun 09)

Semico Research (Jan 10)

iSuppli (May 10)

Future Horizons (May 10)

Henderson Ventures (Jan 10)

4

2010 Semiconductor and IC Revenue Forecasts - Current

Source: SEMI January 2010 and June 2010Yellow indicates initial forecast, blue is the adjustment up

14.7%

14.0%

15.0%

13.0%

10.2%

12.2%

22.0%

15.4%

22.4%

10.4%

11.0%

12.0%

14.1%

18.2%

16.4%

7.8%

15.2%

8.6%

22.3%

8.3%

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

Databeans (Apr 10)

VLSI Research (May 10)

IC Insights (May 10)

Gartner (Jun 10)

SIA (Jun 10)

WSTS (Jun 10)

Semico Research (May 10)

iSuppli (May 10)

Future Horizons (May 10)

Henderson Ventures (Jun 10) 32.7%

31.0%

27.0%

25.0%

23.0%

27.1%

28.4%

28.6%

29.8%

30.6%

5

Semiconductor Cycles

33 45 49 51 55 6077

102

144132137126150

204

139141166

228256249

318

226

309291

248

213

$0

$50

$100

$150

$200

$250

$300

$35019

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

F20

12F

-50%

-25%

0%

25%

50%

75%

100%

Semiconductor Revenue Annual Growth

Source: SIA/WSTS historical year end reports, SIA June 2010 Forecast

Glo

bal S

emic

ondu

ctor

Rev

enue

US

$B

(bar

gra

ph)

Ann

ual G

row

th %

(lin

e gr

aph)

6

The Worst Downturn Ever?

-46%-41%Equipment

-19%-23%Materials

-9%-32%Chips

09/0801/00Revenues

*In 2008, equipment market was -31%, chips -3%, materials essentially flat

*

*

7

Fact or Perception?

-19%

-46%*

-9%*

09/08

-19%

-63%

-11%

09/07

-41%**Equipment

-23%Materials

-32%Chips

01/00Revenues

It’s not easy to be an equipment supplier to this industry

8

Total Equipment Revenue vs. Total Material Revenue Trends

$0

$10

$20

$30

$40

$50

$60

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

US$

Bill

ions

Equipment $B Materials $B

200 mm ramp

“IrrationalExuberance”

Source: Rose Associates, SEMI Materials Market Data Subscription, May 2010, SEMI/SEAJ

300 mm ramp

9

Current Trends and Statistics

10

IC Unit Shipment Trends

Source: WSTS June 2010

0

5

10

15

20

25

30

35

40

45

50

1Q99

2Q99

3Q99

4Q99

1Q00

2Q00

3Q00

4Q00

1Q01

2Q01

3Q01

4Q01

1Q02

2Q02

3Q02

4Q02

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

IC U

nits

(Blu

e Li

ne)

(Billi

on)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

ASP (R

ed L

ine)

($/D

evic

e)

ASPs declining

Shipments increasing (long-term trend)

11

Silicon Area Shipment Index

Source: SEMI Silicon Manufacturers Group June 2010

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

9Se

p-09

Jan-

10M

ay-1

0

12

Other Unit Trends-Leadframes and Semiconductor Units

Unit Trends(3-Month Average)

0

10,000

20,000

30,000

40,000

50,000

60,000

Jan-

04Ja

n-05

Jan-

06Ja

n-07

Jan-

08Ja

n-09

Jan-

10

Mill

ions

of U

nits

Leadframe Semiconductor

• Leadframe Units– 2010 YTD shipments up 146%

compared to same period in 2009

• Semiconductor Units– 2010 YTD shipments up 60%

compared to same period in 2009

Source: SEMI, SIA/WSTS

13

Worldwide Semiconductor (Fab, Test & Assembly) Equipment Trends

Source: SEMI/SEAJ June 2010

Worldwide Billings forSemiconductor Equipment

(based on 3-month averages)

$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5

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

14

Forecasts

15

2010 Americas14%

China8%

Europe & Mideast10%

Japan24%

S. Korea20%

SE Asia5%

Taiwan19%

Capacity Trends:Share of Capacity by Region Since 2000

2000Americas

22%

China2%

Europe & Mideast

15%

Japan34%

S. Korea11%

SE Asia3%

Taiwan13%

2000Regional Capacity

Based on 200mm equivalents.

Source: World Fab Watch and SEMI World Fab Forecast, May 2010

2010Regional Capacity

Growth 2000 to 2010China 993%S. Korea 372%Taiwan 289%SE Asia 273%Japan 79%Americas 68%Europe & Mideast 66%

16

Billion Dollar Club

Source: World Fab Forecast, June 2010

Company 2008 in $M Company 2009 in $M Company2010 in $Mestimated Company

2011 in $Mestimated

Samsung (Semiconductor)

6245 Intel 4500 Samsung (Semiconductor)

9000-10000 Samsung (Semiconductor)

8000-9000

Intel 5200 Samsung (Semiconductor)

3500 Intel 4700-5000 Intel 4800-5100

Toshiba includes Alliance with Sandisk

2600 TSMC 2670 TSMC 4700-5000 TSMC 5000-5500

Hynix 2200 Toshiba includes Alliance with Sandisk

1239 Hynix 2500-3000 Hynix 2800-3100

TSMC 1886 Globalfoundries (with Chartered)

2600-2900 Globalfoundries (with Chartered)

3000-3500

Rexchip (Powerchip/Elpida)

1800 Inotera (Micron/Nanya) 1500-1800 Micron Incl Tech and IM Flash

2000-3000

Sandisk 1600 Toshiba includes Alliance with Sandisk

1500-2000 Toshiba includes Alliance with Sandisk

2000-2500

Elpida alone 1030 UMC 1200-1500 Inotera (Micron/Nanya) 1200-1500

Micron Incl Tech and IM Flash

2345 TI 800-1000 UMC 1600-1800

ST Micro 981 Micron Incl Tech and IM Flash

800-1100 TI 500-800

17

SEMI® 2010 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 6.78 7.13China 1.28 1.64 2.38 3.31 3.57 3.26 3.86 4.25S.Korea 3.10 3.78 4.88 6.10 5.90 4.69 5.74 6.16Europe 2.80 2.88 3.39 3.68 3.32 2.52 2.96 3.09Taiwan 4.85 5.31 6.74 8.34 7.87 6.77 8.17 8.8Japan 7.61 7.58 8.57 9.19 9.96 7.63 8.69 9.01N. America 4.63 4.72 5.11 5.25 4.99 3.79 4.29 4.48

2004 2005 2006 2007 2008 2009 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 May 2010

$42.67 $42.92$40.48

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

Global Silicon Wafer Outlook by Diameter

19

SEMI® 2010 Mid-Year Equipment Forecast By Market Region

Source: SEMI Mid-Year 2010 Semiconductor Consensus Forecast, July 2010

Totals may not add due to rounding

$0$5

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

N. America Japan Taiwan Europe S.Korea China ROW

ROW 3.05 2.61 1.44 3.01 3.80China 2.92 1.89 0.94 2.24 2.64S.Korea 7.35 4.89 2.60 7.49 8.08Europe 2.94 2.45 0.97 1.92 2.10Taiwan 10.65 5.01 4.35 9.18 9.28Japan 9.31 7.04 2.23 4.08 4.70N. America 6.55 5.63 3.39 4.57 4.94

2007 (A) 2008 (A) 2009 (A) 2010 (F) 2011 (F)

US$

Bill

ions

$15.92

$32.50$29.52$35.53

$42.77

20

SEMI® 2010 Mid-Year EquipmentForecast 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 1.85 1.99Test 5.05 3.45 1.55 3.23 3.44Assembly & Pack. 2.84 2.04 1.41 2.95 2.81Wafer Process 31.95 22.03 11.84 24.46 27.29

2007 (A) 2008 (A) 2009 (A) 2010 (F) 2011 (F)

US$

Bill

ions

$29.52

$15.92

$32.50$35.53

Totals may not add due to rounding

Source: SEMI Mid-Year 2010 Semiconductor Consensus Forecast, July 2010

$42.77

21

Equipment Spending Trends

16%

13%15%

17%

20% 20%

17%

20%

14% 13%

17%

14%12%

16%

12%

24%

17%

13%

17%

7%

11%$139.0$140.7$166.6

$213.0$227.5

$308.7

$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

$290.5

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

2010

F20

11F

$0

$50

$100

$150

$200

$250

$300

$350

US$

Bill

ions

Equipment Spending % of Semiconductor Revenue

Semiconductor Revenue ($B) WSTS

Source: SEMI 2010 Mid-Year Consensus Forecast and SIA June 2010 Forecast

Line ChartBar Charts

22

Total Equipment Revenue vs. Total Material Revenue Trends

$0

$10

$20

$30

$40

$50

$60

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

F20

11F

US$

Bill

ions

Equipment $B Materials $B

Source: Rose Associates, SEMI/SEAJ, SEMI Mid Year Consensus Forecast, July 2010, SEMI Materials Market Data Subscription, May 2010

23

Summary

• The upturn is here!• Not all segments are created equal• Forecast

– Materials: +17% in 2010, +6% in 2011– Equipment: +104 in 2010, +9% in 2011