ICT Industry development in Taiwan and

worldwide penetration

Outlines

• IC Design Industry

• Optoelectronics Industry

• Internet Communication Industry

Market Share

2009 Taiwan IC Industry in Global Position Taiwan IC Industry in Global Position

Demand side

WW Semiconductor Market226,313

WW IC Market 190,342

Asia Pacific IC Market102,333

Taiwan IC Market12,88612.6%

6.8%

5.7%

Revenue WW Share Rank Leaders

brand IC 16,797 4 US, JP, KR

DRAM 2 KR

Mask ROM 1

Fabless 11,694 25.8% 2 US

Manufacturing US, JP, KR

Foundry 12,370 66.7% 1 TW

Packing 6,048 45.2% 1

Testing 2,655 70.0% 1

17,473 9.2% 4

8.8%

3,511

336

15.7%

97.2%

TW

TW

Supply side

Unit: Million US$ / Exchange rate NT/US = Unit: Million US$ / Exchange rate NT/US = 33.033.0

TW

• DRAM contributes the highest production value in Taiwan brand IC and ranked second.• Foundry service ranked number one in the world 66.7% of global revenue in 2009.• Packing and Testing service ranked number one in the world 45.2% and 70.0% of global revenue in 2009.

Source： IEK/ITRI(2010/03)

NO.1Foundry : US$ 14,187M (67.0%)IC Testing : US$ 3,314M (70.6%)IC Packaging : US$ 7,371M (49.6%)Mask Rom : US$ 344M (98.7%)

NO.2DRAM : US$ 4,900M (20.0%)IC Design : US$ 11,902M (28.0%)

NO.1MB ： US$ 6,609M (93.5%)NB PC ： US$ 57,309M (92.0%)TN/STN LCD : US$ 1,596M (41.7%)

NO.1WLAN ： 100,623K Units (92.0%)xDSL CPE ： 57,221K Units (71.7%)Cable CPE ： 24,893K Units (75.9%)PND ： 39,461K Units (89.0%)

IC

Computer & Peripheral Devices

Networking Products

( ) : World PenetrationNote: including overseas production

Source:ITRI IEK(2009/03)

NO.2

DSC ： : US$3,396M(26.6%)

L/S TFT-LCD(>10”) : US$ 30,159M (42.1%)

S/M TFT-LCD(<10”) : US$ 4,906M (24.1%)

OLED : US$ 241M (34.4%)

LED : US$ 1,713M (25.3%)

2008 Taiwan Top 3 ICT Products Worldwide2008 Taiwan Top 3 ICT Products Worldwide

Si-Soft - Knowledge EconomySi-Soft - Knowledge Economy

5

Electro-OpticalLCD, Optical Communication,

Storage DevicesInformationAppliances

PDA’s , GamesHumanities/Art

Internet Intra-netSoftware, Routers

Protocols, Switches, Applications

EnergyBatteries, Cells

P-SOCS/W O/S

System Integration

CommunicationsWireless, Satellite

Bio-MedicalBio-Informatics,Bio-chips, BME

MEMs

Nano-Technology

MaterialMechanical

Automotive, Aerospace

Chemical

Civil/Environmental

Packaging Foundries

Si-SoftSOC, EDA,

IP, Products, Services

Si-HardFoundry, GaAs

ODM/OEM, Services

Design IP Industry

Taiwan’s IC Industry in 2009Taiwan’s IC Industry in 2009

5 TaiwanPowertech5 USGlobalfoundries

Taiwan's Market Share 50.6%Taiwan's Market Share 66.7%

4 SingaporeSTATS ChipPAC4 ChinaSMIC

3 TaiwanSPIL3 SingaporeChartered

2 USAmkor2 TaiwanUMC

1 TaiwanASE Group1 Taiwan TSMC

RankingCountryCompanyRankingCountryCompany

Package & TestingFoundry

5 TaiwanNanya

Taiwan's Market Share 15.7%

4 USMicron

3 JapanElpida

2 S. KoreaHynix

1 S. KoreaSamsung

RankingCountryCompany

DRAM

5 USNvidia

Taiwan's Market Share 25.8%

4 TaiwanMediaTek

3 USBroadcom

2 USAMD

1 USQualcomm

RankingCountryCompany

Design

WW No. 1

WW No. 2

Source： IEK/ITRI(2010/03)

Worldwide #1Foundrypackage & testing

Worldwide #2DRAMFabless

WW No. 2

WW No. 1

IC Design Industry Sustained Growth

Source: MIC(2010/03)

Taiwan’s Semiconductor Industry in 2012Taiwan’s Semiconductor Industry in 2012

2002 2009 2012(f)

Number of 8" fabs 21 15 15

Number of 12" fabs 4 18 21

Technology node 0.18µm 40nm 22nm

Output Value of SoC Products

Main Products of SoC in Taiwan include: Baseband SoC, DVD Player SoC, Digital TV SoC, Communication Application SoC, etc.Source: MIC (2010/03)

IC Design Industry Shipment Value Share By IC Design Industry Shipment Value Share By Application AnalysisApplication Analysis

Source: MIC (2010/03)

IC Design Industry Shipment Value Share By IC Design Industry Shipment Value Share By Product AnalysisProduct Analysis

Source: MIC (2010/03)

Source： IEK/ITRI(2010/03)

• Foundry and IC Design is the locomotive of Taiwan’s IC industry• The production value of Taiwan's IC Design decline 1.7% in 2009 and will grow 13.1% in 2010.• The production value of Taiwan's Foundry decline 12.8% in 2009 and will grow 26.8% in 2010.• Because of the DRAM price erosion, the production value of Taiwan's Memory decline 29.9% in 2009 and will grow 50.7% in 2010(Rising DRAM prices + strong PC demand).• The production value of Taiwan's IC Packing decline 14.1% in 2009 and will grow 26.0% in 2010.• The production value of Taiwan's IC Testing decline 13.3% in 2009 and will grow 27.1% in 2010.

IC Manufacturing = Foundry + Memory + others(IDM)

Taiwan’s Semiconductor Industry

IC Design Industry Future Trend In TaiwanIC Design Industry Future Trend In Taiwan

1,220

1,478

1,902

2,608 2,850

3,234

3,997 3,749 3,859

5.9%

21.1%

28.7%

37.1%

9.3%

13.5%

23.6%

-6.2%

2.9%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2001 2002 2003 2004 2005 2006 2007 2008 2009

Output ValueGrowth Rate

Hundred Million (NTD)

IC Design Industry Output Value And Growth RateIC Design Industry Output Value And Growth Rate

Information ICInformation IC

1996 2000 2004 2008 2010

Consumer ICConsumer IC

LCD ICLCD IC

Cell phone ICCell phone IC

IC Design Application DevelopmentIC Design Application Development

Source: IEK(2010/03)

Outlines

• IC Design Industry

• Optoelectronics Industry

• Internet Communication Industry

Taiwan FPD Production Vale and Growth Rate

-3.9%

25.8%

94.3%102.2%

-22.9%

39.7%

158.0%

2.4% 30.0%

75.7%

37.0%

27.1% -5.7%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mill

ion

USD

-40%-20%0%20%40%60%80%100%120%140%160%180%

Production Value Growth Rate

Track of Taiwan’s Flat Panel Display IndustryTrack of Taiwan’s Flat Panel Display Industry

In 2009, Taiwan suffered by global economic crisis. Production Value of flat panel display in Taiwan is estimated as US$28.4 billion, exclude the production value of key components industry.

Taiwan ranked #2 in worldwide 2009.

Source： IEK/ITRI(2010/03)

GlassSubstrate

GlassSubstrate

ITO Glass

ITO Glass

Color Filter

Color Filter

PolarizerFilm

PolarizerFilm

Liquid Crystal

Liquid Crystal

Back LightModule

Back LightModule

DriverIC

DriverIC

CorningAsahiAvanstrateNEG

TN LCD STN LCD TFT LCD

Module VendorsModule Vendors

ConsumerProducts

InformationProducts

TelecommunicationProducts

DashboardProducts

DisplayProducts

OLED LCOS

PhotoMask

PhotoMask

UpstreamUpstream

MaterialsComponents

MidstreamMidstream

PanelsModules

DownstreamDownstream

End-Products

AimCoreSNPMerck

ToppanSintekCandoSumika

OptimaxNitto DenkoSumikaDaxon

MerckChissoDaily Polymer

CoretronicRadiantForhouseForwardKenmosK-bridgeDarwin

WinbondHimaxNovatekOris TechSitronix

FinexHoyaPLKTAIPCLG Micron

CMELRit Display

WintekUnited RadiantMesostate

WintekGiantplusNPCUnited Radiant

AUO CPT HannstarChimei-Innolux

Himax DisplayTMDC

Ampire, Sharp, Hitachi, m-Display, EDTC, DataImage, Solomon, Starworld

Material,CCFL…

Material,CCFL…

Tama Fine Opto ULCOATJSR Micro Toyo Ink FujifilmStanleyWellypower

Vertical integration is the trend for Taiwan’s TFT LCD panel makers

A Complete Flat Panel Display IndustryA Complete Flat Panel Display Industry

Prime ViewWintekGiantPlus

Source： IEK/ITRI(2010/03)

Milestones of Foreign Investment in TaiwanMilestones of Foreign Investment in Taiwan

SUMIKASUMIKA

(BEF/DBEF)

(Glass)

Asashi(Glass) (ITO Glass)

(Liquid Crystal)Finex

(Mask) (Mask)

(Mask)

NEG(Glass)

Nitto Denko(Polarizer)

Sumitomo(Polarizer)

Toppan(Color Filter)

(Resist)

(Color Resist)NHT

(Glass)

1997 20012000 20021999 2003 2005 2006

(Equipment)

Daifuku(Equipment)

(Stepper)

Major world-class component companies have expanded investment in Taiwan

Corning has built 19 glass furnaces and Asahi built 2 in Taiwan since 2004

Source： IEK/ITRI(2007/04)

Outlines

• IC Design Industry

• Optoelectronics Industry

• Internet Communication Industry

29.0%

8.0%

22.0%

4.0%

50.0%

40.0%

11.7%15.1%

-20.8%

3.6%

28.0%

32.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10(e)

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Communication Equipment Industry Production Value(Made by Taiwan) Growth Rate(%)

Revenue of Taiwan Communication IndustryRevenue of Taiwan Communication Industry

Taiwan major communication products include cellphone, PND, WLAN, xDSL, CPE, Cable Modem, IP STB, WiMAX…etc.

Unit: USD Million

Source： IEK/ITRI(2010/03)

Production Value & Market Share Production Value & Market Share for Taiwan Communication Productsfor Taiwan Communication Products

2009 ProductionValue(US$M)

2009 Worldwide Market Share

Mobile Phone 6,661 7%

Portable Navigation Device 3,771 95%

Wireless LAN 1,723 80%

xDSL CPE 1,412 89%

Cable CPE 1,260 93%

CPE: Customer Premise EquipmentCPE: Customer Premise Equipment

Taiwan has been the one of major ODM base for worldwide mobile phone supply. Production of Windows OS Smartphone and PND both ranks worldwide No. 1

Production of network equipment (xDSL 、 Cable CPE 、 WLAN) took 80% of global market

Source： IEK/ITRI(2010/03)

Long-term Prospect of Market Share for Main Communication Products in Taiwan

Source: MIC (2010/03)

Long-term Prospect of Market Share for Main Mobile Devices Products in Taiwan

Source: MIC (2010/03)

Broadband Communication Application Needs Broadband Communication Application Needs & The Development of Terminal Equipments & The Development of Terminal Equipments