World-Semiconductor-Dynamics

WorldSemiconductorDynamics:MythvsRealityJuly15,2009WaldenC.RhinesCHAIRMAN&CEOWCRSemiconductorDynamics:MythvsReality2InaRecession,It’sHardfortheSemiconductorMarkettoFareAnyBetterthantheOverallEconomyWCRSemiconductorDynamics:MythvsReality3SemiconductorRevenueDropsto2006LevelsSIA/WSTSSemiconductorRevenue010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,000Q190Q490Q391Q292Q193Q493Q394Q295Q196Q496Q397Q298Q199Q499Q300Q201Q102Q402Q303Q204Q105Q405Q306Q207Q108Q408$248.6BSource:SIA/WSTS,May,2009WCRSemiconductorDynamics:MythvsReality4Q4-Q1SequentialUnitVolumeDeclineWasLargestinHistorySIA/WSTSTotalSemiconductorUnits020,000,00040,000,00060,000,00080,000,000100,000,000120,000,000140,000,000160,000,000180,000,000Q190Q191Q192Q193Q194Q195Q196Q197Q198Q199Q100Q101Q102Q103Q104Q105Q106Q107Q108Q109Units#(000)TotalSemiUnitsSource:SIA/WSTS,May,2009-31.9%-36.7%-31.6BillionUnits-56.1BillionUnitsWCRSemiconductorDynamics:MythvsRealitySIA/WSTSTotalSemiconductorUnitsvsASP020,000,00040,000,00060,000,00080,000,000100,000,000120,000,000140,000,000160,000,000180,000,000Q177Q378Q180Q381Q183Q384Q186Q387Q189Q390Q192Q393Q195Q396Q198Q399Q101Q302Q104Q305Q107Q308Units#(000)TotalSemiUnitsSource:SIA/WSTS,May,2009OnlyFiveYearsofNegativeSemiconductorUnitGrowthinHistory2001-20.8%YoY1996-2.3%YoY1992-0.4%YoY1985-1.1%YoY2008-3.4%YoY5WCRSemiconductorDynamics:MythvsReality6WorldEconomyvs.ICChipIndustry01234561980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007GDPGrowth(ConstantPrices)-40-30-20-1001020304050ICIndustryGrowthSource:MentorGraphics,IMFWorldEconomicOutlookDatabase,10/2008,VLSIResearch&ICInsightsWCRSemiconductorDynamics:MythvsReality77WorldEconomyvs.ICChipIndustry01234561980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007GDPGrowth(ConstantPrices)-40-30-20-1001020304050ICIndustryGrowthy=4.6271x-2.9181R2=0.0864-40-2002040600246Source:MentorGraphics,IMFWorldEconomicOutlookDatabase,10/2008,VLSIResearch&ICInsightsWCRSemiconductorDynamics:MythvsReality8WorldEconomyvs.ICChipIndustry01234561980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007GDPGrowth(ConstantPrices)-40-30-20-1001020304050ICIndustryGrowthInventoryAdjustmentOverCapacityUnderCapacityMemoryASPSource:MentorGraphics,IMFWorldEconomicOutlookDatabase,10/2008,VLSIResearch&ICInsightsWCRSemiconductorDynamics:MythvsReality12%38%65%25%47%65%13%26%76%19%2%-16%-4%-35%-23%-8%-50%0%50%100%CapitalEquipmentGrowth198319841985199319941995199619981999200020012005200620072008fLackofaBubblePrecedingthe2009SemiconductorDownturnSource:ICInsights,McCleanReport–2ndQuarterWebcast9198215%13%12%2%10%2%-3%-8%-5%-13%-11%-7%-20%-10%0%10%20%ICASPGrowthWCRSemiconductorDynamics:MythvsReality10InQ109UnitVolumeDropped28%(yr/yr)WithOnlyan8%ASPDeclineSIA/WSTSICUnitsvsICASP010,000,00020,000,00030,000,00040,000,00050,000,000Q190Q191Q192Q193Q194Q195Q196Q197Q198Q199Q100Q101Q102Q103Q104Q105Q106Q107Q108Q109Units#[phone]ASP$ICChipUnitsICChipASPSource:SIA/WSTS,May,2009WCRSemiconductorDynamics:MythvsReality11TheSemiconductorRecoveryWillBeFasterthantheOverallEconomyInaRecession,It’sHardfortheSemiconductorMarkettoFareAnyBetterthantheOverallEconomyWCRSemiconductorDynamics:MythvsReality12197929,000Transistors80881982134,000Transistors2861985275,000Transistors38619891,290,000Transistors48619933.1M+TransistorsPentium19955.5M+TransistorsPentiumPro19977.5m+TransistorsPentiumII19999.5M+TransistorsPentiumIII200042MTransistorsPentium42004592MTransistorsItanium2(9MBcache)20051.72BTransistorsDualCoreItanium2002220MTransistorsItanium2SlowingAdoptionofNewTechnology20082BilliontransistorsTukwilaQuadCoreWCRSemiconductorDynamics:MythvsReality1313FrequentStatementsAbouttheSlowingofTechnologyAdoption“TheproblemisthatMoore'sLawhascollapsed,hesays.Coburnassertsthattherehasbeenaslowdowninthepreviouslysteadymovetosmallergeometriesandlargerwafersizes.PipCoburn,CoburnVenturesDecember15th,2008Source:Barron’s“Whyit’sgoingtogetalotworse,”EricJ.Savitz.Dec.15,2008=gartner“Theslowdowninprocesstechnologytransitionswillmeanthatthesemiconductorindustrywillbedrivenmorebyeconomicsthantechnology…”“Youarenotseeingthesegeometriesriseandfalloffthewaytheydidbefore.Rather,theyarelivingon.”LenJelinek,Directorandchiefanalyst,SemiconductorManufacturing,foriSuppliSource:EETimes,“ISuppli:GearcoststoderailMoore'sLawin2014,DylanMcGrath,June16,2009=217900102“And,thecustomershavesloweddownordelayedtheirtechnologytransitionseitherbyleveragingtheirexistinginstalledbaseorjustbydelayingtheirnewproductintroductionforlater.”EricMeurice,Chairman,PresidentandCEOASMLHoldingN.V.Source:Q42008EarningsCall.January15,2009=-1WCRSemiconductorDynamics:MythvsReality14DesignCompletionTrendsDesign