SemiWEEK: SPIE Highlights, Coronavirus forecast scenarios; Semi Equip Outlook; Stocks recover some lost ground

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Chip Market Research Services
Visibility in 2H20 is blocked and recent fires drive caution.
• Order activity for semiconductor equipment extended its decline,
but at a slower rate from the previous week
• Worldwide Electronics Shipments
Semiconductor Analytics
Semi Market results from last week:
Semiconductor sales rose less aggressively in
the 3rd week of March.
Semiconductor Sales Nowcast: 1Q20/1Q19
Held at +5%
– Semiconductor Weather1 Report:
Cools to Cold
– IC Supply-Demand2 Metrics:
Held at Saturated
– Electronics Price Trend: Turning up
Overall Semi Sales Status Trend:
Peaked: Mar 18 Cold with Dark Clouds: Sep 18 Freezing: Nov 18 Frozen: Jan 19
Freezing: Mar 19 Cold: May 19 Cool: July 19 Temperate: Oct 19 Sunny: Nov 19
Warm: Dec 19 Flu Chills: Feb 28
Chip History Center
The Chip History Hall of Fame — Check out the Chip
History Center’s Semiconductor Hall-of-Fame Section
The Chip Insider
Strategy and Tactics: SPIE Highlights, AI and in-Memory
Computing, Lateral Etch, Coronavirus forecast scenarios.
Equipment & Emerging Markets: Semiconductor
Equipment Outlook
Semiconductor Stocks
• VLSI’s Semiconductor Stock Indices recovered some
of the lost ground this week along with the market
• Semiconductor Stock Index was led up by Western
Digital and Infineon
• Semiconductor Equipment Stock was led up by Onto
Innovation, TEL, LAM, and Advantest
• EDA Stock Index was led up by both Cadence and
Synopsys
• Electronics Materials Stock Index was led up by DNP
• Hottest Stocks: Western Digital, Onto Innovation, TEL,
LAM, Advantest, and Infineon.
Semiconductor WEEK: March 27, 2020
An overview of results and conclusions from recent reports at VLSI

The Chip Insider®'s Graphics File
March 2020
Visibility in 2H20 is blocked and recent fires
drive caution.
This issue contains the latest forecast.
Call us to access more details
• Order activity for semiconductor equipment extended
its decline, but at a slower rate from the previous week
• Even though the chip making industry has been
somewhat insulated from COVID-19 fallout, the overall
sentiment is deteriorating in the face of a sharp
contraction in economic activity
• Second quarter GDP is now expected fall double digits
with services and consumer expected to take the
biggest hit
• The positive is the memories of the Great Recession
are still fresh and the central banks and governments
around the world are pulling their bazookas to
backstop the economy
• The data from China is also becoming more positive,
so there is light at the end of the tunnel even though
timing remains uncertain
• The Chip Price Performance Index (CPPI) slipped by
another point

Mild COVID-19 impact--VLSI Forecast
Forecast as of March 2020: 2019 2020 2021
Semi Equipment ($B): 76.6$ 72.8$ 85.2$
Sequential Change -8.3% -5.1% 17.2%
Capacity Utilization: 84.6% 82.1% 90.3%
ICs ($B): 352.3$ 337.4$ 418.0$
IC Units (BU): 299.4 284.8 342.1
Electronics ($B) : 2,122$ 2,020$ 2,362$
Mild COVID-19, but delayed recovery in 4Q20.
Semi Equipment ($B): 76.6$ 61.9$ 85.2$
ICs ($B): 352.3$ 303.4$ 418.0$
IC Units (BU): 299.4 255.1 342.1
Electronics ($B) : 2,122$ 1,885$ 2,362$
Severe COVID-19 impact, recovery 1Q21
Semi Equipment ($B): 76.6$ 58.4$ 85.2$
ICs ($B): 352.3$ 282.7$ 418.0$
IC Units (BU): 299.4 238.3 342.1
Electronics ($B) : 2,122$ 1,741$ 2,362$

The Chip Insider® Graphics
Worldwide Electronics
Shipments
• Electronics sales are being
hit hard due to Coronavirus
outbreak
Worldwide Electronics Shipments: chart gives rolling averages for
electronics sales

Semiconductor Analytics
Last Week in the Semiconductor Market:
Overall Semi Sales Status Trend:
Peaked: Mar 18 Cold with Dark Clouds: Sep 18 Freezing: Nov 18 Frozen: Jan 19
Freezing: Mar 19 Cold: May 19 Cool: July 19 Temperate: Oct 19 Sunny: Nov 19
Warm: Dec 19 Flu Chills: Feb 28
W/W:Week-over-WeeksequentialgrowthW/Q:Week-over-QuarterW/Y:Week-over-Year
1: Measures Order Activity 2: Measures Pricing Power
5
Thank you for supporting us through this last issue
of 2018. Semiconductor Analytics will return
January .
Semiconductor sales rose less aggressively in the
3rd week of March, as the IC weather cooled to 59˚
F. Strong demand continued to drive electronics
pricing up as well due to the Work-from-Home (WfH)
economic restructuring.
Semiconductor Sales Nowcast: 1Q20/1Q19
Held at +5%
Semiconductor Weather1 Report: 59˚ F
Cools to Cold
IC Supply-Demand2 Metrics:
Held at Saturated
Electronics Pricing Trend: Turning up
Driven by Work-from-Home economic restructuring

2019 Semiconductor Market Drivers
6
Coronavirus has had a deep negative
impact on Integrated Circuit sales:
• Certainties:
– Coronavirus Pandemic
– Macroeconomic Slowdown
– 5G: Smartphone, Auto, Industrial
– Win 7 EoL refresh
– 7/10nm and 5/7nm demand ramps
– Memory Price Elasticity
• Uncertainties:
– Ability of Central Banks to prevent economic
infection from Coronavirus
– 2020 Elections in U.S.

The Chip Insider®
Strategy & Tactics
Strategy and Tactics: SPIE Highlights, AI and in-Memory
Computing, Lateral Etch, Coronavirus forecast scenarios.
Summaries:
SPIE 2020 Highlights: This year’s conference would have had an eerie
feeling even if fears of the Coronavirus had not made it so, because
after a decades-long task as monumental as the seven-wonders of the
world … EUV is done. If the plenary session quietly communicated that
EUV is done, a large part of the rest of the conference was about the
many things that need to be done to optimize EUV.
Evangelos Eleftheriou’s Plenary made an undeniable case for why in-
Memory Computing (iMC) is inexorably linked to the advancement of AI.
He’s out of IBM Zürich, where they really know the topic. He addressed
the elephant in the room that many in the AI intelligentsia don’t want the
world to know: That making these leaps to larger NNs has come at the
cost of an unsustainable rise to compute-power. Evangelos showed how
with iMC, using Phase-Change Memory as an analog storage cell, one
can make a spiking neural network that can do matrix-vector
multiplication without moving data. IBM has made the chip and they
were able to do 8-bit precision multiply operations with an efficiency of
~6fJ! In-memory computing solves the power problem, making it
possible to bring AI to the edge like the CPU brought the computer to
your desktop, lap, and then in your hand. This will be a huge market
driver. The only question is … what to call it? Is it an iMP or in-Memory
Processor?
Applied Materials’ Lateral Etch: It’s rare to see a truly new
revolutionary technology at a conference. SPIE had two. The second I
saw was lateral etch in a presentation given by Regina Freed and
quaintly titled “Materials engineering solutions to extend DRAM scaling.”
What blew me away most was Applied’s development of what they’re
calling “precision lateral etch.” Applied has been able to open up vias,
thereby reducing EPE induced yield loss while lowering cost compared
to a conventional multi-patterned cut mask approach, and carving out a
larger via. Importantly it points to a new trend in strategic marketing. We
show you why.
Important ChipChirps™ Coronavirus Semiconductor Sales Watch
and Equipment Market Impact
“Intelligence is quickness in seeing things as they are”
— George Santayana
Contact us to get the full report and more

The Chip Insider®
Equipment & Emerging Markets
Semiconductor Equipment Outlook
• Semi Manufacturing in the wake of
Coronavirus
• Forecast Scenarios
• Changes since last forecast
• Semi Equipment Trends
• Long-term trend is not impacted
• VLSI’s view
WildPhotons: Fear knocked at the door…

Semi Manufacturing in Wake of Coronavirus
• WGDP is collapsing from Coronavirus
related shutdowns
– Demand is dropping as populations get stay-
in-place or quarantine orders throughout the
world
– 2Q GDP growth projections in U.S. vary wildly
from -10% to -25%
• One thing is clear: consumer and industrial
demand is dropping dramatically short-term
• We expect Electronics and Semiconductor
demand dropping in the wake of WGDP
collapse
• However, this forecast is based on the
following key assumptions:
– 1.3B smartphones will be shipped, of which 7% to
15% will be 5G phones and will require 7nm and 5nm
capacity
– 250M PCs will be shipped
– Datacenter and AI will require additional 7nm and
5nm manufacturing capacity
• Hyperscale capex at least 2019 level
– Consumer, Automotive, and Industrial segments will
be hit in this crisis

VLSI’s View
• Key long-term drivers and trends are
not changing:
– Electronics sales running over $2T
– ICs running at $330B
– Equipment sales over $70B
• New applications drive more complex
processes, which drive equipment demand
• Equipment sales are reliant on healthy
semiconductor sales, units, and
transition to new technologies
• We have not yet seen substantial
reduction in Semiconductor Equipment
sales due to Coronavirus
– The key industry drivers are still intact:
• 5G Phones and Infrastructure
• Datacenter
• PC upgrade cycle
• AI development
• But, we expect activity to decline as
economic activity collapses from local
population movement restrictions
– Segments likely to be affected most:
• Automotive
• Industrial
• Consumer
– 2Q20 is likely to be substantial down
quarter
• Recovery is still uncertain but VLSI is
presenting three different scenarios and
how they impact 2020

semiStockWEEK: VLSI's Semiconductor Stock Indices recovered some of the lost
ground this week along with the market.
Semiconductors +13%, Equipment +21%, EDA +13%, Electronic Materials +14%.

Semiconductor Stocks:
Weekly Growth and Forward P/E Ratios by Company
VLSI’s Semiconductor Stock Index
was led up 12.6% by Western Digital
and Infineon.
IDM +18.7%
Foundry & OSAT +3.1%
Fabless & Fablite +14.0%
AMD AMD Analog Devices ADI AmkorAMKR
ASE ASX Broadcom AVGO IBM IBM
Infineon IFNNY.PK Intel INTC JCET600584.SS
Kingpak Technology6238.TWO
Micron Technology MU
On Semiconductor ON Panasonic PC
MagnaChip Semiconductor MX Maxim MXIM
MaxLinear MXL MediaTek 2454.TW
NVIDIA NVDA Qualcomm QCOM
Samsung Electronics 005930.KS Silicon
Laboratories SLAB Skyworks SWKS SMIC SMI
STMicroelectronics STM
Texas Instruments TXN TSMC TSM UMC
UMC Western Digital WDC Xilinx XLNX
Weekly Gains 3/27/2020
Semiconductor Stocks
Price
Change
Forward P/E Semiconductor Stocks
Price
Change
Forward P/E
IDM Fab-lite to Fabless
Intel 14.3% 11 AMD 17.6% 29
Micron 20.4% 9 Analog Devices 4.2% 16
ON Semiconductor 19.1% 7 Broadcom 20.0% 10
Samsung Electronics 6.4% – IBM 13.0% 8
SK hynix 11.4% Infineon 26.0% 13
STMicroelectronics 22.9% 12 MagnaChip Semiconductor 19.2% 11
Western Digital 36.1% 6 Maxim 7.8% 19
Foundry & OSAT MaxLinear 13.4% 11
Amkor 11.2% 7 MediaTek 13.0% –
ASE 5.5% 13 NVIDIA 22.8% 28
JCET -11.7% 66 Panasonic 15.3% 10
Kingpak Technology 14.0% – Qualcomm 9.3% 11
SMIC -0.2% 1214 Silicon Laboratories 15.7% 22
TSMC 5.3% 15 Skyworks 18.2% 12
UMC -2.7% 13 Texas Instruments 3.0% 18
Xilinx 4.7% 23

Chip Equipment & Related Stocks:
VLSI’s Semiconductor Equipment
Stock Index was led up 20.6% by Onto
Innovation, Tokyo Electron, Lam
Research, and Advantest.
WFE +22.0%
Test +24.4%
Assembly +12.7%
Applied Materials AMAT Advantest ATEYY
ASM International ASMI
ASM Lithography ASML ASM Pacific 0522.HK
BE Semiconductor BESIY.PK
FormFactor FORM KLA KLAC
Kulicke & Soffa KLIC Lam Research LRCX
Onto Innovation ONTO Nikon 7731
Teradyne TER Tokyo Electron Limited 8035
Veeco VECO
Weekly Gains 0 3/27/2020
Equipment Stocks
Price
Change
Forward P/E Equipment Stocks
Price
Change
Forward P/E
Wafer Process: Test:
Applied Materials 18.6% 10 Advantest 28.3% –
ASM International 16.5% 15 Teradyne 23.8% 15
ASML 16.9% 23 FormFactor 21.2% 17
KLA 24.8% 13
Lam Research 28.4% 12 Assembly:
Onto Innovation 33.3% – BESI 22.2% –
Nikon 12.2% – Kulicke & Soffa 11.5% 10
TEL 29.3% – ASM Pacific Technology 4.3%
Veeco Instruments 18.1% 9

Electronic Materials Stocks:
VLSI’s EDA Stock Index was led up 13.1%
by both Cadence and Synopsys.
VLSI’s Electronics Materials Stock Index
was led up 14.4% by DNP.
BASF BASFY Cabot Microelectronics CCMP
Cadence CNDS DNP 7912 DuPont DD
JSR 4185 Shin-Etsu 4063 SOITEC
SOI.PA Synopsys SNPS Tokyo Ohka 4186
Weekly Gains 3/27/2020
EDA & Electronic Materials
Stocks
Price
Change
Forward P/E
EDA & Electronic Materials
Stocks
Price
Change
Forward P/E
EDA DNP 24.9% –
Cadence 13.1% 23 DuPont 7.4% 4
Synopsys 13.1% 21 JSR 18.3% –
Electronic Materials Shin-Etsu 19.6% –
BASF 7.3% 2 SOITEC 5.1% –
Cabot Microelectronics 20.2% 14 Tokyo Ohka 12.6% –

Semi
Stocks
Equipment
Stocks
Materials
Stocks
EDA
Stocks
Semi
Stocks
Equipment
Stocks
Materials
Stocks
EDA
Stocks
23-Aug-19 78.6 74.7 85.7 95.4 -1.3% -0.8% 0.8% 0.6% 19 6.6% -35 -9.5% 16.1% 87.9 -1.4%
30-Aug-19 81.2 75.8 87.7 99.0 3.2% 1.5% 2.4% 3.8% 45 7.3% -9 -6.6% 13.9% 90.3 2.8%
06-Sep-19 84.7 79.3 91.2 101.4 4.3% 4.6% 4.0% 2.5% 53 10.2% -1 -2.8% 13.0% 91.9 1.8%
13-Sep-19 87.6 83.4 95.8 94.3 3.5% 5.2% 5.0% -7.0% 45 17.1% -8 -7.5% 24.6% 92.8 1.0%
20-Sep-19 85.4 84.5 94.5 95.0 -2.6% 1.3% -1.3% 0.8% 19 5.7% -35 -8.3% 14.0% 92.3 -0.5%
27-Sep-19 83.6 83.6 93.8 94.7 -2.1% -1.1% -0.7% -0.4% 16 3.7% -37 -12.1% 15.8% 91.4 -1.0%
04-Oct-19 84.6 84.4 93.1 96.0 1.1% 1.1% -0.8% 1.4% 34 10.1% -20 -3.5% 13.6% 91.1 -0.3%
11-Oct-19 86.0 86.4 95.0 96.0 1.7% 2.3% 2.0% 0.0% 35 9.0% -15 -4.4% 13.4% 91.7 0.6%
18-Oct-19 86.2 86.7 97.5 94.5 0.2% 0.3% 2.7% -1.5% 28 11.2% -23 -6.0% 17.2% 92.2 0.5%
25-Oct-19 88.2 92.4 100.0 94.9 2.4% 6.6% 2.5% 0.4% 46 15.6% -7 -16.3% 31.9% 93.3 1.2%
01-Nov-19 90.3 92.6 101.2 94.8 2.4% 0.2% 1.3% -0.1% 36 9.9% -15 -12.1% 22.0% 94.7 1.5%
08-Nov-19 91.7 94.9 103.2 96.1 1.5% 2.5% 1.9% 1.3% 37 12.5% -14 -4.2% 16.7% 95.5 0.9%
15-Nov-19 92.0 97.0 101.5 97.6 0.4% 2.1% -1.6% 1.6% 31 10.8% -20 -5.0% 15.8% 96.3 0.9%
22-Nov-19 90.0 92.0 98.7 95.9 -2.2% -5.1% -2.8% -1.8% 7 5.7% -44 -17.7% 23.4% 96.0 -0.3%
29-Nov-19 90.9 93.7 96.7 100.1 1.0% 1.8% -2.0% 4.4% 37 5.0% -14 -15.0% 20.0% 96.9 1.0%
06-Dec-19 92.6 94.7 95.5 95.5 1.8% 1.1% -1.2% -4.6% 33 8.2% -19 -4.8% 13.0% 97.1 0.2%
13-Dec-19 96.7 98.0 100.0 96.9 4.5% 3.5% 4.7% 1.5% 48 10.7% -3 -1.4% 12.1% 97.8 0.7%
20-Dec-19 99.2 99.9 100.1 99.6 2.6% 1.9% 0.1% 2.7% 39 12.5% -13 -8.4% 20.9% 99.4 1.7%
27-Dec-19 100.0 100.0 100.0 100.0 0.8% 0.1% -0.1% 0.4% 29 5.9% -23 2.7% 8.6% 100.0 0.6%
03-Jan-20 100.3 100.2 98.9 100.5 0.3% 0.2% -1.1% 0.5% 23 9.5% -24 -3.4% 12.9% 99.8 -0.2%
10-Jan-20 101.5 100.9 99.2 104.7 1.2% 0.7% 0.2% 4.2% 32 7.2% -22 -4.8% 12.0% 100.8 0.9%
17-Jan-20 104.7 104.8 101.0 106.4 3.2% 3.9% 1.8% 1.7% 45 19.1% -10 -3.8% 22.9% 102.8 2.0%
24-Jan-20 106.1 105.1 100.5 107.8 1.3% 0.3% -0.5% 1.3% 29 14.9% -25 -10.8% 25.7% 101.7 -1.0%
31-Jan-20 98.4 98.4 96.0 103.8 -7.3% -6.3% -4.5% -3.8% 3 2.2% -51 -17.7% 19.9% 99.5 -2.1%
07-Feb-20 102.5 101.3 100.4 107.2 4.2% 2.9% 4.6% 3.3% 45 21.4% -10 -11.7% 33.1% 102.7 3.2%
14-Feb-20 106.5 106.6 101.0 114.2 3.9% 5.3% 0.6% 6.5% 47 27.5% -8 -10.0% 37.5% 104.3 1.6%
21-Feb-20 103.7 99.3 98.1 106.4 -2.6% -6.9% -2.8% -6.9% 6 4.5% -49 -17.1% 21.6% 103.0 -1.3%
28-Feb-20 93.1 90.4 85.5 96.2 -10.2% -8.9% -12.9% -9.5% 0 -0.8% -55 -21.3% 20.5% 91.2 -11.5%
06-Mar-20 91.8 91.0 84.8 95.1 -1.5% 0.6% -0.7% -1.2% 18 7.9% -35 -11.0% 18.9% 91.7 0.6%
13-Mar-20 81.1 78.3 71.0 90.7 -11.6% -13.9% -16.3% -4.6% 0 -2.1% -55 -26.6% 24.5% 83.7 -8.8%
20-Mar-20 69.6 65.2 67.0 78.4 -14.2% -16.7% -5.7% -13.6% 3 15.3% -52 -28.9% 44.2% 71.1 -15.0%
27-Mar-20 78.3 78.7 76.6 88.7 12.6% 20.6% 14.4% 13.1% 52 36.1% -3 -11.7% 47.8% 78.4 10.3%
S&P500
Growth
VLSI’s Indices of Chip Industry Stocks Weekly Growth
The Prior
Week's
Close
S&P500
MaxGrowth
Companies
Up
Companies
Down
Rangeof
Growth
MinGrowth

SemiWEEK: SPIE Highlights, Coronavirus forecast scenarios; Semi Equip Outlook; Stocks recover some lost ground

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