[SEMI Theater] Fab Spending and Capacity Trends

Companies Roar Again: Fab Spending and Capacity Trends Christian Gregor Dieseldorff SEMI Industry Research & Statistics Group SEMI Theater at SEMICON West 2010 July 14, 2010

Sources and definition • All numbers (historic and forecast) are from the SEMI “World Fab Watch” and “World Fab Forecast” Check for “Fab Database reports”: www.semi.org/fabs • All forecasts are estimates. Forecasted numbers shown are subject to change. Final numbers are available through one of SEMI’s Fab Database Reports. • All data refer to Front End Facilities • All capacity numbers are installed capacity in 200mm equivalent wafers per month (wpm) unless otherwise specified. • All spending numbers are in US$ unless otherwise specified. Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 2

Outline  Overview of World Fab Database Reports  Construction Projects  Equipping Fabs  Capacities  LEDs  Summary Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 3

Acknowledgement I Good Times in the Middle of ‘Somewhat More Than Normal Uncertainty’ Quarterly Fab Report, July 2010 George Burns President Strategic Marketing Associates “Verify, verify, verify” Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 4

Overview of World Fab Database Reports  Semiconductor Front End Facilities (no Back End, Assembly & Test)  Volume production, Pilot, R&D, Consortia  Includes: such as EPI Wafer fabs, MEMS fabs, LEDs, Discretes Closed/ For Sale Main features:  Construction $  Equipping  Excel  3 Years of data  Capacities  Wafer Sizes  Forecast (1 ½ years)  Tech Nodes  Products By Fab on quarterly basis Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 5

Overview of World Fab Database Reports Available Fab Database Reports  World Fab Forecast (over 1000 records)  World Fab Watch (over 1000 records) Overview and Activity  FabFutures (only fabs with investments) World Fab Forecast May 2010:  NEW: Opto/LED Fab Watch  Total changes: 299 on 235 fabs  Transition Report  New records: 25 (Fabs closed, will be closed, for sale etc)  Total number of records: 1117  Custom reports such as  Operational: 994 (Volume: 804) - Regional Report (NA, China, Japan)  Future Facilities: 69* - Historic Reports - Product Type * Future Facilities with various probabilities - 300mm report - Construction Monitor - Fabs Equipping Monitor Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 6

Fab Construction Projects Fab Construction Projects Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 7

Fab Construction Projects: Spending by Region In US$ Million Spending on Construction Projects (Front End) $9,000 250% $8,000 200% Taiwan $7,000 SE Asia 150% $6,000 S. Korea $5,000 100% Japan $4,000 50% Europe & ME $3,000 China 0% $2,000 Americas -50% $1,000 Change % $- -100% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 SEMI World Fab Forecast reports (June 2010) Spending on Fab construction projects in 2009 was below $1.6 Billion (lowest since at least 1995) Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 8

Fab Construction Projects: New Facilities Starting Construction IV Probability >60%. Showing: Volume + (R&D/Pilots) 2010: Europe/Mideast: 1 2010: Americas: 3 2010: Korea: 2 2010: China: 8 2010: Japan: 3 2010: Taiwan: 4 2011: S.Korea: 1 2010: 21 facilities: Only 9 are Non-Discrete Volume Fabs Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 9

Equipping Fabs Equipping Fabs Lit h 30 0 o 0 Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 10

Equipping Fabs: Effect of Economy on Forecast US$Billion Worldw ide Spending on Equipping Fabs All spending related to equipping Front End Facilities (incl Discretes) $12 $10 $8 $6 SEMI World Fab Forecast Predictions $4 Begin/m id 2008 Spending on equipping fabs Feb 13, 2009 US$B US$B $2 end June 2010 Report date 2009 2010 2009 2010 $- June 2009 -48% 60% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Aug 2009 -49% 63% Nov 2009 -47% 65% Source: SEMI World Fab Forecast reports (June 2010) 2010 Feb -45% 88% 14 27 mid May 2010 -45% 117% 14 31 end June 2010 -45% 120% 14 32 Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 11

Equipping Fabs: Spending by Region Money spent on equipping Front End Facilities by Year and by Region Change (YoY) US $ Billion $45 140.0% Taiwan $40 120.0% 100.0% SE Asia $35 80.0% S. Korea $30 60.0% $25 Japan 40.0% $20 Europe & 20.0% Mideast $15 China 0.0% $10 -20.0% Americas $5 -40.0% Change % $- -60.0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: SEMI W orld Fab Forecast reports (June 2010) Spending on Front End facilities equipping declined by 46% to about $14B in 2009 - the lowest level since 1994. Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 12

Equipping Fabs: Spending vs. Count of Fabs Equipping (including Discretes) Money spent Equipping Fabs and Count of Fabs equipping US$ Billion Count of fabs 45 Spending for Equipping 250 All 40 300mm 35 200mm 200 30 150 25 20 100 15 10 50 5 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: SEMI World Fab Forecas t reports (June 2010) Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 13

Equipping Fabs: Top Spenders Companies with about equal or more than $900M equipment spending 2006 2007 2008 2009 2010 2011 9 10 6 3 9 11 Samsung Samsung Samsung Samsung Samsung Samsung Intel Intel Intel Intel Intel Intel Hynix Hynix Hynix Hynix Hynix TSMC TSMC TSMC TSMC TSMC Powerchip Powerchip Globalfoundries Globalfoundries Globalfoundries Globalfoundries Sony Toshiba Toshiba Toshiba Toshiba Toshiba UMC UMC Elpida Elpida Elpida Micron Micron Micron Micron Micron SMIC NanYa NanYa NanYa Share  65% 66% 60% 49% 72% 73% of total WW Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 14

Equipping Fabs: New Facilities Starting Operation (Pilot) V 2010: Europe/Mideast: 6 2010: Americas: 3 2010: China: 7 2010: Japan: 3 2011: 26 Americas: 3 2010: Taiwan: 4 China: 9 Europe/Mideast: 4 Japan: 2 Korea: 2 SE Asia: 2 Taiwan: 4 2010: 23 (12 are for LEDs, 3-4 for 8-inch, 4-5 for 12-inch) Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 15

Capacity Capacity Artist’s impression Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 16

Capacity: Change of Plan Change of Plan: Installed Capacity Forecast In millions wafers per month (Volume fabs, without Discretes) In millions wafers per month 18 18 Aug 2008 17 17 Aug 2008 Sept 2008 Aug 2009 16 Sept 2009 June 2010 15 14 13 12 11 10 1Q10 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Source: W orld Fab Forecast reports (June 2010) Source: W orld Fab Forecast reports (June 2010) Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 17

Capacity: Capacity by Region (without Discretes) In Millions Millions 200mm Equivalent Equivalent Worldwide Installed Capacity (without Discretes) Worldwide Installed Capacity (without Discretes) w af ers/month ers/month Change%of Capacity Change in in % Change 18 Compare 2010 and 25.0% 25.0% Taiwan Taiwan 22.6% 22.6% 2011 with 2008 16 20.9% 20.9% SESE As ia As ia 20.0% 20.0% 14 2008 to 2010 4% 14 S. S. Korea Korea 14.9% 14.3% 14.9% 15.0% 2008 to 2011 15.0% 12% 12 14.3% 12 12.7% 12.7% Japan 11.8% 11.8% Japan 10 9.9% 9.9% 10.0% 10.0% 10 8.3% 7.4% 7.6% 8.3% 7.4% Europe & & Europe 7.0% 7.0% 5.8% 7.6% 8 8 5.8% 5.0% Mideas t t Mideas 5.0% China 3.4% 3.4% China 6 6 Share of Capacity by Region 1.0% 1.0% 0.0% Am ericas 0.0% Am ericas 4 4 1997 2011 -3.7% -3.7% Change -5.0% -5.0% Change 2 2 Americas 27% 14% 0 Japan 37% 23% -10.0% 0 -10.0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Europe/ME 14% 10% Asia Pacific Source: SEMI 53% Fab Forecast reports (June 2010) 22% Source: SEMI W orld Fab Forecast reports (June 2010) W orld We have never before seen installed capacity with negative change rate (YoY)! Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 18

Capacity: Count of Fabs Starting vs. Closed VI About 31 facilities closed in 2009 12-inch: 2 (3 with R&D) (memory) Count of Facilities Closed and Starting Production 8-inch: 11 (7 for memory) Front End Facilities (R&D, Pilot, Volume) with Discretes 6-inch: 7 (1 for memory) 70 < 6-inch: 9 60 50 40 About 22 facilities will close in 2010: 30 8-inch: 6 (1 MPU, 3 Logic) 20 6-inch: 9 10 0 < 6-inch: 7 No Memory facility close in 2010 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -10 -20 -30 Closed in 2009 and 2010: 53 -40 -50 Number Facilities started vol prod Americas: 26 -60 Number Facilities closed China: 2 -70 Europe/ME: 10 Source: SEMI W orld Fab Forecast reports (June 2010) Japan: 13 Korea: 2 Taiwan: 0 Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 19

LEDs Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 20

LEDs Changing LED Landscape: Year (begin operation) 2001 2006 2011 (est) Count Volume fabs 34 59 105 Capacity (in 200mm EQs w/m) 42,219 107,288 >375,000 Americas Europe/Mideast 3 3 3 1 2 4 SKorea 4 8 9 Japan 7 9 12 China 6 15 36 Taiwan 13 22 38 SEAsia 0 0 3 Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 21

LEDs: Changing Landscape: LED dedicated Fabs VII Year (begin operation) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Change % Capacity 22 27 10 13 30 34 18 22 >33 >40 Growth rate of capacity for LED dedicated fabs is double digits every year. Major Players In 2007: 4 In 2009: 8 In 2011: 12 Nichia Nichia Nichia Rohm Epistar Samsung :LED Epistar Samsung LED Epistar Sanken Rohm LG Innotek LG Innotek Lextar Sanken Cree Osram Osram Cree Rohm Formosa Epitaxy Sanken Capacity >10k wafers per month (200mm EQs) Genesis (sorted by capacity in descending order) Toyoda Gosei Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 22

Summary  Sudden rush of record investments by some companies, with some companies beginning to invest more in capacity.  Installed Capacity has slow recovery with single digit growth in 2010 and 2011.  2010 Fab investments are still way below the 2006 level (just surpassing 2004). It will take until about 2011 to reach same levels as we had in 2007.  Fabs equipping expected to have spending growth rate of 120% in 2010 and 10-20% in 2011. Spending for equipping also still below 2006 level.  New LED fabs pop up like mushrooms: strongest presence in Asia. LED capacity growth for 2010 >35% and 2011 >40% Good Times in the Middle of ‘Somewhat More Than Normal Uncertainty’ George Burns, July 2010 Christian Gregor Dieseldorff, SEMI - Industry Research and Statistics, July 14, 2010 23

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[SEMI Theater] Fab Spending and Capacity Trends

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