SMU-2010-03 Mar

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FUTURE HORIZONSPresents

The Global

Semiconductor

Monthly Report

March 2010

Time For A Reality Check

Pessimism Has Swung Too Far

In This Issue:Executive Overview ...................................................................................... 1

Market Summary ........................................................................................... 6Industry Capacity ........................................................................................ 11

World Economic Round Up ........................................................................16

Russia/CIS Mixed Blessings In Ukraine................................................... 20

Economic Case Study Big vs Small Government..................................... 22

Market Trends Ultra-Wideband................................................................ 24

Semiconductor Spotlight Photovoltaic Developments ............................. 27

plus Exchange Rate Trends & FH Reports & Upcoming Events

Sign up Now IEF2010 19

thAnnual International Electronics Forum

5-7 May 2010, Dresden, Germany(Visit Our Website www.futurehorizons.com for Further Details & Registration)

Future Horizons Ltd, 44 Bethel Road, Sevenoaks, Kent TN13 3UE, England

Tel: +44 1732 740440 Fax: +44 1732 740442

Affiliates In Bangalore India; Tel Aviv Israel; Tokyo Japan; Moscow Russia; & San Jose, California, USA

www.futurehorizons.com e-mail: [email protected]

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The Global

Semiconductor

Monthly Report

March 2010

A CEO favourite, the Global Semiconductor Monthly Report provides

analysis and commentary on the global semiconductor industry and its impact

on Future Horizons semiconductor market forecast, as published in the Annual

Semiconductor / Semiconductor Application Markets (previously called KeyMarket Drivers) Reports. These three reports provide a comprehensive in-depth

analysis of the worldwide semiconductor, electronics equipment and economic

environment. Together they provide the latest information on developments in thesemiconductor industry, the companies involved, the changes in the markets, and

the impact of the global economic and political situation.

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securities. This firm and/or its officers, stockholders, or members of their families may,from time to time, have a position or may sell or buy such. The information contained inthis report has been derived from statistical and other sources deemed to be reliable but

its completeness and accuracy cannot be guaranteed. Opinions expressed are based onour studies and interpretations of available information. They reflect our judgement at

that time and are subject to future change. Whilst the report has been prepared in goodfaith, Future Horizons bears no responsibility for any consequences whatsoever aroused

to the buyer through the reading of, or acting upon, any data or information, etc.contained in the report.

Future Horizonswww.futurehorizons.com [email protected]

In Russia Tel/Fax: East-West Electronics +7 (495) 151 4635 / e-mail: [email protected]

(East-West Electronics is a Wholly-Owned Subsidiary of Future Horizons)

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SMU-2010-03 Mar.doc 2010 Edition

The Global Semiconductor Monthly Report

March 2010

Future Horizons 1989-2010, All Rights Reserved - Reproduction Prohibited 1

Executive OverviewFigure E1 shows the 12/12 worldwide monthly growth rates for IC sales in dollars,

units and ASP for January 1997 to January 2010 inclusive. They need to be

looked at in conjunction with the other 12/12 and rolling 12-month charts

provided in the Market Summary section of this report.

Januarys WSTS results continued to follow the underlying industry recovery

trend, with ICs sales up 4.8 percent versus December (on a 5-week month adjusted

basis). They were also up 73.7 percent versus January 2009, a relatively

meaningless number other than to recall just how bad things were this time last

year. The real significance of January is its potential impact on first quarter sales.

Were this run rate to continue through February and March, first quarter sales

would be up 8 percent versus Q4-09. That would make 2010 grow a staggering 40

percent on 2009. This is by no means a forecast but it does serve to illustrate the

strength of the recovery from the abyss this time last year.

Figure E1 - 12/12 Worldwide IC Monthly Growth Rates

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%40%

50%

60%

70%

80%

Jan-97

Apr

Jul

Oct

Jan-98

Apr

Jul

Oct

Jan-99

Apr

Jul

Oct

Jan-00

Apr

Jul

Oct

Jan-01

Apr

Jul

Oct

Jan-02

Apr

Jul

Oct

Jan-03

Apr

Jul

Oct

Jan-04

Apr

Jul

Oct

Jan-05

Apr

Jul

Oct

Jan-06

Apr

Jul

Oct

Jan-07

Apr

Jul

Oct

Jan-08

Apr

Jul

Oct

Jan-09

Apr

Jul

Oct

Jan-10

IC UnitsIC Value

IC ASP

Total IC Units ASP Value

Jan 2010 vs Jan 2009 78.4% -2.6% 73.7%

Jan 2010 vs Dec 2009 10.0% -4.7% 4.8%

Source: WSTS/Future Horizons (Growth rates adjusted for 5-week months)

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March 2010


Figure E2 shows the 12:12 monthly total semiconductor sales trend versus our2009 and 2010 forecasts. Ignoring the structurally (and typically) wild individualmonthly fluctuations which simply means no single month is a good indicator of

the underlying trends the month on month numbers will not settle down until the

second quarter of 2010. That being said, given the likely strength of the first

quarter versus Q4-09, our current 22 percent forecast for the total year now looks

far too low.

Figure E2 2009 12:12 Monthly Forecast Sales Trend

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Jan

2009 vs

Jan

2008

Feb

2009 vs

Feb

2008

Mar

2009 vs

Mar

2008

Apr

2009 vs

Apr

2008

May

2009 vs

May

2008

Jun

2009 vs

Jun

2008

Jul

2009 vs

Jul

2008

Aug

2009 vs

Aug

2008

Se p

2009 vs

Se p

2008

Oct

2009 vs

Oct

2008

Nov

2009 vs

Nov

2008

Dec

2009 vs

Dec

2008

Jan

2010 vs

Jan

2009

YoYGrowth

-40%

-20%

0%

20%

40%

60%

80%

Monthly12:12GrowthRate

FH YoY F'Cast Value

2009 Actual -9.0%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Jan

2009 vs

Jan

2008

Feb

2009 vs

Feb

2008

Mar

2009 vs

Mar

2008

Apr

2009 vs

Apr

2008

May

2009 vs

May

2008

Jun

2009 vs

Jun

2008

Jul

2009 vs

Jul

2008

Aug

2009 vs

Aug

2008

Se p

2009 vs

Se p

2008

Oct

2009 vs

Oct

2008

Nov

2009 vs

Nov

2008

Dec

2009 vs

Dec

2008

Jan

2010 vs

Jan

2009

YoYGrowth

-40%

-20%

0%

20%

40%

60%

80%

Monthly12:12GrowthRate

FH YoY F'Cast Value

2009 Actual -9.0%

Source: WSTS/Future Horizons

Our 22 percent forecast for 2010 was based on the relatively benign quarterly

growth pattern of -1.0, +1.0, +6.2 +2.0 percent; in essence a very weak year. No

one we speak with is seeing a negative first quarter, with a consensus now

building for at least 3 percent positive growth. That alone would bring the year on

year growth up to 28 percent.

At the same time, almost everyone is also boasting a strong Q2 backlog with pricestabilisation, even increasing; low inventory levels; and tightening supplies which

places severe doubt on the credibility of our plus 1 percent second quarter growth

forecast. Were this to be say plus 3 percent, the year on year growth would be 30

percent.

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March 2010


It does however give us further confidence in our analysis and now places ourforecast at the low end of the forecast range. Barring an epic 9/11, Act Of God orimmoral banker style disaster, growth of anything less than 22 percent in 2010 is

now all but impossible.

We fully expect to be increasing our forecast to around the plus 30 percent level at

our forthcoming IEF2010 International Electronics Forum in Dresden, May 5-7

bringing the 2010 market within spitting distance of US$300 billion in revenues.

The real irony behind this recovery is it is taking place in the first half of the year

when things are usually quiet and the strength of the recovery is therefore

understated. In addition no one believes (a) what they see it or (b) that it will last,

even though there is not a shred of evidence to support a second-half year market

collapse, quite the contrary. This is really a very serious problem indeed.

With everyone still running on empty neither hiring nor spending money the

industry is in a very weak structural position to grow. Capacity is maxed out,

wafer shortages are becoming rife, lead times are stretching and some firms are

even paying their foundries a price premium to jump the delivery queue.

Some are also finding the low-ball orders they took at rock bottom margins are

now loosing money due to foundry wafer price increases. Both of the issues

(wafer deliveries and cost) are a fundamental problem of the fabless, and now

fablite, business models. Never forget the sole reason for the FSAs (now

renamed GSA) formation in 1994 was to address the wafer shortage issue during

the then market boom, following three years of low market growth and capacity

under investment.

The chip market sentiment pendulum has clearly swung to far towards pessimism,

driven in part by the 2000s decade of lost growth. The overall IC market

compound annual growth rate (CAGR) for 2000-2009 was a paltry 0.8 percent, the

worst decade ever for the semiconductor industry, prompting cries of despair thatthe chip market glory days are over. We strongly disagree.

Clearly, from a mathematical perspective the 0.8 percent CAGR number is correct

but the conclusions to be drawn from this need to be interpreted with care. For a

start, the data range covered happens to measure a peak (2000) to trough (2009)

period; the CAGRs one year either side of this period were 7.8 percent for 2001-

2010 and 5.4 percent for 1999-2008. Moreover, looking at the correspondingvalues for IC units rather than US dollars shows the underlying annual 10 percent

IC unit growth rate intact.

Herein lies the fundamental danger of statistics though. You can derive any

CAGR value you want simply by choosing the right start and finish points. In so

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March 2010


doing you can then prove virtually any scenario you like, providing amply fodderfor the optimists and pessimists alike.

The fact that IC units showed growth in line with their average points to the fact

that the problem with the 2000s was one of declining average selling price

(ASP) not growth. The 2000s were thus a decade of depressed ASPs.

The real question is thus not the low market value growth this was the effect

but whether the cause an above average decline in ASPs was a bell weather of

things to come, as many believe, or a temporary occurrence, the result of a

coincidence of events? We believe the latter, as first reported in our November

2009 Report.

Just to recap and bring the situation up to date. ASPs are a very complex issue,

driven not just by price increases but also product mix, IC innovation, fab capacity

and production techniques. For sure the industry has seen declining ASPs since

the 2001 crash but it is fundamentally flawed logic to extrapolate this into the

future; a little like saying real-estate prices will forever keep on rising. They do

not; neither will IC ASPs keep on falling.

We see the 2000s ASP fall as one side of a cycle; the coincidence of events rather

than a sign of more bad news to come. It is vital therefore to understand the

events that caused the problem.

First the industry experienced a major yield bust at the 130nm node, delaying its

introduction by a year and destroying the ASP price enhancement it would

otherwise have brought.Second was the transition to 300mm wafers, the sole purpose of which was to

reduce IC costs. A 2x plus increase in gross die per wafer for only a 40 percent

wafer cost increase means a 40 percent die cost decrease. As is typical in our

industry, all of this cost reduction was immediately passed on to the customer

meaning all 300mm wafer sourced ICs were reduced in selling price by up to 40percent. By the end of the decade this was over half of all silicon made.

Third, for DRAMs, where fabs must always be kept fully loaded, the increase in

die output due to the 300mm transition was more than the market could use

meaning rampant oversupply and the mother of all price wars. It is only now that

this massive one-off incremental capacity increase has been absorbed that pricing

has return to its normal pricing curve.

With DRAM demand hot 4Gb is the entry point for 64-bit/Window 7 systems;

strong demand for servers; new Intel processors in prospect; and a two to four year

backlog in enterprise workstation upgrades and Flash growing too, driven by

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March 2010


exploding demand for Smart phones, the memory market has entered a positivecycle for growth and profits.

The last two years of DRAM Cap Ex restraint has now triggered a fab famine, the

like of which no amount of die shrinking can offset. ASPs are already now double

what they were just 12 months ago, with a minimum two-year period of positive

ASP news now in prospect. The DRAMeXchange experts even say three.

A fourth factor was the brutal Intel-AMD 32-bit MPU price war that saw ASPs

fall around 30 percent from their more normal US$100 level to US$70. With

AMD now bloodied, bruised and losing money, we can expect to see MPU ASPs

trending up.

Finally, excess capacity also played its role but is already no longer a factor due to

the significant slow down in new capacity investment over the past two plus years.

Wafer fab capacity is now essentially sold out, with allocations, extended lead

times and price increases the new industry norm. As mentioned earlier, some

firms are already paying a price premium in order to jump the foundry wafer

delivery queue. Those that refuse will simply not get their parts. No wafers, no

sales; yes it really is that simple. Interestingly overall industry revenue per wafer

start increased to US$7.70 per sq cm in 2009 from US$ 6.96 in 2008, despite 2009

being the worst recession year in the history of the chip industry. Watch for this

number to hit its US$8.00 to US$9.00 long-term average in 2010.

With current wafer fab capacity tight, additional capacity will now be driven

primarily by Cap Ex, not one-off gains such as wafer size transitions, and this will

be governed by industrys willingness to invest they currently are not which

translates into no new capacity for at least the next 12 months, due to last years

incredibly low level of investment. Even a 50-80 percent increase in 2010 Cap Ex

the current top end of the forecasts will not significantly increase 2011s net

new capacity; the current starting point is so low. Prices, and therefore ASPs, willrise. 10 percent IC unit growth (the underlying growth trend) coupled with any

positive ASP growth means double-digit growth at the IC value level.

This is all really good news for the industry as a whole but not for all companies.

For a start, the OEMs will need to get used to a capacity (supply) limited market

with increasing, rather than decreasing, IC buying prices. Secondly, the fabless

and fablite firms will need to adjust to a world of tight foundry wafer supply and

increasing prices. It will be a sanguine moment when they suddenly realise that

they are no longer in control of the delivery times and prices they quote to their

customers; their business is now at the mercy of their foundry partners. Better

start to learn the new industry lexicon Please Sir may I have some more?

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March 2010


Market SummaryFigures M1 and M2 show the worldwide and European 12/12 industry growth

rates for ICs, Opto, and Discrete Devices from January 1998 to date. These show

the current month as compared with the same period 12 months ago, and are a

useful industry momentum indicator. Figures M3a-M3h show 15-month rolling

worldwide and European sales by major product category. Figure M4a-M4h show

the comparable worldwide unit and ASP trends.

Figure M1 - World Sales By Product Category 12/12 Growth Rate

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

IC Opto Disc

Figure M2 - Europe Sales By Product Category 12/12 Growth Rate

-70%

-50%

-30%

-10%

10%

30%

50%

70%

90%

110%

130%

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

IC Opto Disc

Source: WSTS/Future Horizons

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March 2010


Figure M3 - 12 Month Rolling Worldwide & Europe Sales By Product(Billions Of US$)

M3a - Total WW Semiconductor

12

13

14

15

16

17

18

19

20

21

22

23

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M3b - Total Europe Semiconductor

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 71.9%

Jan 2010 vs Dec 2009 5.9%

Jan 2010 vs Jan 2009 41.9%

Jan 2010 vs Dec 2009 12.6%

M3c - Total WW IC

10

11

12

13

14

15

16

17

18

19

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M3d - Total Europe IC

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 73.7%

Jan 2010 vs Dec 2009 4.8%

Jan 2010 vs Jan 2009 41.6%

Jan 2010 vs Dec 2009 10.0%


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March 2010


Figure M3 - 12 Month Rolling Worldwide & Europe Sales By Product (Cont)(Billions Of US$)

M3e Total WW Optoelectronics

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M3f Total Europe Optoelectronics

0.07

0.09

0.11

0.13

0.15

0.17

0.19

0.21

0.23

0.25

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 42.5%

Jan 2010 vs Dec 2009 13.5%

Jan 2010 vs Jan 2009 25.6%

Jan 2010 vs Dec 2009 18.6%

M3g Total WW Discretes

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M3h Total Europe Discretes

0.18

0.20

0.22

0.24

0.26

0.28

0.30

0.32

0.34

0.36

0.38

0.40

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 85.9%

Jan 2010 vs Dec 2009 10.7%

Jan 2010 vs Jan 2009 57.1%

Jan 2010 vs Dec 2009 28.7%


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March 2010


Figure M4 - 12 Month Rolling Worldwide Unit Sales & ASPs By Product(Units In Billions & ASP In US$ Dollars)

M4a Total Semiconductor Units

28

30

32

34

36

38

40

42

44

46

48

50

52

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M4b Total Semiconductor ASP

0.38

0.39

0.40

0.41

0.42

0.43

0.44

0.45

0.46

0.47

0.48

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 93.3%

Jan 2010 vs Dec 2009 16.7%

Jan 2010 vs Jan 2009 -11.1%

Jan 2010 vs Dec 2009 -9.3%

M4c Total IC Units

7

8

9

10

11

12

13

14

15

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M4d Total IC ASP

1.20

1.25

1.30

1.35

1.40

1.45

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 78.4%

Jan 2010 vs Dec 2009 10.0%

Jan 2010 vs Jan 2009 -2.6%

Jan 2010 vs Dec 2009 -4.7%


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March 2010


Figure M4 - 12 Month Rolling Worldwide Unit Sales & ASPs By Product (Cont)(Units In Billions & ASP In US$ Dollars)

M4e - Total Optoelectronics Units

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M4f - Total Optoelectronics ASP

0.16

0.17

0.18

0.19

0.20

0.21

0.22

0.23

0.24

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 41.7%

Jan 2010 vs Dec 2009 27.6%

Jan 2010 vs Jan 2009 0.6%

Jan 2010 vs Dec 2009 -11.0%

M4g - Total Discretes Units

12

14

16

18

20

22

24

26

28

30

32

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

M4h - Total Discretes ASP

0.055

0.060

0.065

0.070

0.075

0.080

0.085

Nov

Dec

Jan09

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan10

Jan 2010 vs Jan 2009 127.5%

Jan 2010 vs Dec 2009 16.8%

Jan 2010 vs Jan 2009 -18.3%

Jan 2010 vs Dec 2009 -5.2%


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March 2010


Industry CapacityOverall MOS wafer fab capacity increased marginally by 0.4 percent in Q4 versus

Q3-09, from 1,877k 200mm equivalent wafer starts per week to 1,884k, Figure

C1. Only 300mm leading edge capacity showed any increase in the quarter, at

around 3.7 percent growth, Table C1 and Figures C2 and C3. This increased was

not enough to offset the previous quarters 0.7 percent decline but is a reversal of

the 1.6 percent quarterly decline reported this time last year.

Overall MOS capacity is down 12.3 percent from Q4-2008 and on a par with

where it was in the first half of 2007. Capacity has been essentially flat for the last

three consecutive quarters.

Figure C1 - MOS Wafer Fab Capacity By Feature Size(200mm Equ Wafer Starts/Week x000)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

1 Q- 05 2Q -0 5 3 Q-0 5 4 Q- 05 1 Q- 06 2 Q- 06 3 Q- 06 4 Q- 06 1 Q- 07 2 Q- 07 3 Q-0 7 4 Q- 07 1 Q-08 2Q -08 3Q -08 4Q -08 1Q -0 9 2 Q- 09 3 Q- 09 4 Q- 09

200mmEquWSpWx

1000

0.7m & Above < 0.7m to 0.4m < 0.4m to 0.3m< 0.3m to 0.2m < 0.2m to 0.16m < 0.16m to 0.12m< 0.12m to 0.08m < 0.08m to 0.06m < 0.06m

Source: SICAS/Future Horizons

Table C1 Q4-09 vs Q3-09 Wafer Fab Capacity Increase By Wafer Size

Wafer Technology wsw (k) Q4 vs Q3

Total MOS 6.9 0.4%

200mm Wafers in MOS Total -26.4 -4.0%

300mm Wafers In MOS Total 37.6 3.7%150mm & Below Wafers in MOS Total -4.3 -2.3%

BIPOLAR (5 inch equivalents) -1.3 -1.0%

TOTAL IC's (8 inch equivalents) 6.4 0.3%


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March 2010


Figure C2 - MOS Wafer Fab Capacity By Wafer Size(200mm Equ Wafer Starts/Week x000)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

1Q-05 2Q-05 3Q-05 4Q-05 1Q-06 2Q-06 3Q-06 4Q-06 1Q-07 2Q-07 3Q-07 4Q-07 1Q-08 2Q-08 3Q-08 4Q-08 1Q-09 2Q-09 3Q-09 4Q-09

150mm & Under 200mm 300mm


Figure C3 - MOS Wafer Fab Mix By Feature Size(200mm Equ Wafer Starts/Week x000)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 Q- 05 2 Q- 05 3 Q-0 5 4Q -05 1 Q-0 6 2Q -0 6 3 Q- 06 4Q -06 1 Q- 07 2 Q- 07 3 Q- 07 4Q -0 7 1 Q-0 8 2 Q- 08 3 Q- 08 4Q -0 8 1 Q- 09 2 Q-0 9 3Q -0 9 4Q -09

200mmEquWSpWx1000

0.7m & Above < 0.7m to 0.4m < 0.4m to 0.3m< 0.3m to 0.2m < 0.2m to 0.16m < 0.16m to 0.12m< 0.12m to 0.08m < 0.08m to 0.06m < 0.06m


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March 2010


Figure C5 - MOS Wafer Fab Capacity Utilisation(Percent Of Total)

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

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Figure C6 - Advanced MOS Wafer Fab Capacity Utilisation(Percent Of Total)

100

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March 2010


Figure C7 - MOS 200mm & 300mmWafer Fab Capacity Utilisation(Percent Of Total)

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It doesnt get more sold out than this and this at the START of the IC

recovery cycle. Given the further 46 percent cut back in 2009 Cap Ex spending,

2010 capacity will be scarcer than hens teeth. Foundry price rises, extended leadtimes, allocations and premiums for priority delivery will dominate the landscape

watch out for an awful lot of fabless and fablite firms to be caught with their

trousers down committed to woefully low IC ASPs based on anticipated

continuingly low foundry wafer prices.

2010s capacity cannot increase much beyond todays level, so any increase in die

output is dependent on shrinks and yield improvements. 2011s capacity increase

will depend on 2010 Cap Ex, off to a flat start on Q4-09. This means capacity

will be tight through at least mid-2011 yet industry is STILL in collective denial.

We have said it before and well say it again. There is already not enough

capacity in place to meet 2010s demand, 2011 will be even worse the fablitemodel will be the worst hit by this shortage; depending on who you are, the

fabless firms wont escape unscathed either. Never forget the FSA (now renamed

GSA) was formed in 1994 as a direct result of the wafer starvation caused by the

early 1990s Cap Ex underinvestment and the 1993-1994 market boom. Dj vu?

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March 2010


World Economic Round UpWorld Economy

The global recession was made in America, but the recovery is being made in

Asia. During the crisis, emerging market consumers (Asia), more numerous and

better off than they were a couple of decades ago, outspent American consumers

for the first time in modern history. Experts calculate emerging market consumers

will account for 34 percent of global consumption, and US consumers 27 percent

in 2010.

It therefore appears that the Asian markets have done the same for the world in

2009 that the US consumers did back in 1998 (during the Asian financial crises).

However, Asia cannot lead the world to growth by itself. Their economies rely onexports, and they need the worlds mature economies - the US, Europe and Japan

to make a recovery sooner rather than later. None are yet healthy, but the US is

doing better than the others.

The US economy is growing helped by a mix of fiscal and monetary stimulus

along with the eagerness of businesses to rebuild depleted inventories. But by the

standards of past recoveries, it is not growing very fast. March saw oil dip toward

US$82 a barrel and gold slipped towards US$1 120/oz, reacting to the dollar

strengthening against the euro.

North America

Despite the Federal Reserve (FED) announcement that the labour market wasstabilising (it held steady at 9.7 percent in February) and business spending on

equipment and software significantly rose, the US Central Bank are to keep

interest rates close to zero for an extended period.

Despite the labour market stabilising, American businesses and the government

shed 36,000 positions in February compared to 26,000 in January; however, this is

better than the 60,000 industry experts predicted. US consumers increased their

borrowing for the first time in a year, indicating Americans may be starting to feel

more comfortable about spending.

The US manufacturing sector continued to expand in February. The

manufacturing index of activity was 56.5, down 1.9 from a month earlier, but a

number above 50 represents expansion. Manufacturing has played a significantrole in the nascent recovery, even adding jobs as other industries cut them.

New home construction fell in February as snowstorms and wavering demand

deterred building. The fragile state of the economic recovery still warranted a

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March 2010


very loose monetary policy and the FED is not expected to change this any timesoon.

Eurozone

The eurozones recovery remains fragile. Service sector companies are struggling

to keep pace with export-led growth in manufacturing and Februarys GDP

announcement of just 0.1 percent in the last three months of 2009 has done

nothing to boost confidence in the 16-country region. This poor performance is

likely to keep interest rates on hold at 1 percent for the remainder of the year, and

economists continue to predict the eurozone to expand just 0.7 percent in 2010.

Despite this, the European Central Bank (ECB) is continuing to unveil its own

plans to unwind economic stimulus.

The number of Europeans with jobs dropped in 2009 for the first time in the 14-

year history of the statistic, and experts predict that it could fall again in 2010 if

the fragile economic recovery fails to gain strength. January saw retail sales fall

with economists blaming the harsh winter weather. But, with people concerned

about job security February sales could fall further. February saw the Euro

tumble to a one-year low against the yen and 4.8 per cent against the dollar this

year, hurt by the persistent worries about Greeces fiscal woes.

Germanys economy did not grow at all in the fourth quarter of 2009 and the only

reason it didnt contract was that German industry managed to boost exports to

healthier economies. It is predicted that Germanys budget deficit will rise to

almost 6 percent in 2010. Spain continues to operate in a double-digit budget

deficit and an unemployment rate of nearly 19 percent. Greece currently has a

public deficit of 12.7 percent, four times higher than eurozone rules allow.

UK

The UK economy grew by 0.3 percent in the final three months of 2009, faster

than expected. This was due to stronger growth in services and production.However, British unemployment rose sharply in January after two months of

decline and is expected to rise again in the coming months. Average earnings rose

at a record-low pace for a third straight month.

Despite the British Retail Consortium (BRC) reporting an increase in sales from a

year earlier, they also warned that these are not strong results. The results are

compared with very weak figures from a year ago. The Bank of England (BOE)has not ruled out further quantitative easing programmes and has said the UK now

needs to secure growth from investment and net exports rather than household and

government consumption.

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March 2010


The beginning of March saw sterling extend losses to a nine month low againstthe dollar as uncertainty about looming national elections, combined with a higherthan predicted public borrowing rate of 4.3 billion in January, compared to the

predicted 2.8 billion. February saw mortgage lending edge 6 percent higher than

January, however this is still the second lowest since February 2000.

House prices recorded their first monthly fall since June 2009 with a 1.5 percent

drop in February. The end of the stamp duty holiday, the cold weather and more

properties being put up for sale caused the drop. The average home is now worth

166,857. Consumer price inflation hit 3.5 percent in January, well above the

BOE 2 percent target, although it is expected to fall back within target by the end

of the year. Car production rose for the fourth successive month in February with

weaker sterling cited as one of the factors helping the industry.Japan

Japans economy grew at a slower rate than previously thought in the fourth

quarter of 2009. GDP expanded at an annualised rate of 3.8 percent in the fourth

quarter of 2009, less than the 4.6 percent predicted. Currently the worlds second

largest economy, Japan risks ending the year in third place as it struggles to cope

with renewed deflation and a shrinking population. However, the Bank of Japan

(BOJ) said they are striving to end deflation by the end of 2010.

Japans strong yen is also causing them problems. The yen is 18 percent stronger

than it was in August 2008 compared to an inflation-adjusted basket of currencies

weighted toward Japans largest trade partners. The strong yen has negatively

affected exports. Japans debt problem is now likening them to Greece. The main

tool to be considered to ease the debt problem is an increase in sales tax to 5

percent (almost 15 percent lower than European tax levels).

However, even at 5 percent experts worry it could knock consumer spending and

push the country back into recession. It was not all bad news as January sawJapans jobless rate and consumer spending improve. However, industry experts

warn these positive trends could be short lived once the government stimulus

measures expire.

China

The rapid growth in Chinas bank lending and investment spending slowed in

February. Chinese inflation hit a 16-month high in February and industry expertshave warned Bejing to unwind stimulus measures even further to avoid further

inflation. The Consumer Price Index (CPI), the nations key inflation gauge, rose

2.7 percent in February from a year earlier the fastest rise in more than a year.

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March 2010


However, the Chinese New Year holiday may have impacted this, with peoplebuying more food and travelling over the holiday, which tends to drive up prices.Interest rates, which have been on hold since 2007, may now rise in the second

quarter of 2010. Some experts are still worried that the government is not doing

enough to prevent the economy from overheating.

Chinas exports jumped by 46 percent in February compared with a year ago,

raising hopes of a strong recovery in global trade. This increase is likely to

increase pressure on the government to raise the value of the yuan, which the US

in particular complains it is undervalued, in order to boost exports. As China

powers out of the recession there is growing pressure on policymakers to let the

yuan appreciate.

India

Indias economy is expected to grow by 8.7 percent in the current fiscal year.

Their economy is recovering faster than expected, growing at an annual rate of 7.9

per cent in the three months to the end of September 2009. Weakness in

agriculture had checked the speed of Indias recovery after a growth of 9 percent a

year before the global financial crisis, however, strong growth in Indias

manufacturing sector is also helping to compensate for falling agricultural output.

The government has stressed the need to cut Indias fiscal deficit, as well as cut

public debt and spending. The budget deficit has grown to its highest level in

more than 15 years, at 6.9 percent of GDP. There plan is to cut this to 5.5 percent

by 2011. The government realise there is a huge threat of inflation which needs to

be controlled. In December 2009 prices rose by more than 15 percent, the highest

rate of inflation in 11 years.

Asia Pacific

The global recessions recovery is being made in Asia. Thailands economy

expanded at an annual rage of 15.3 percent in the fourth quarter and Taiwansgrew at 18 percent. It would appear that it is the Asian countries closely linked to

China i.e Taiwan, Malaysia, Singapore that have been growing the fastest.

However, China cannot take the full credit for this growth, Asia consumers are

doing their part too.

In January auto sales in Malaysia were up 33 percent from a year earlier compared

to only 6 percent in the US, and not far behind Indias 50 percent. Asiaunemployment rates are falling and this has given Asians the confidence to travel

and spend. Personal travel is a real indicator of consumer spending and tourism is

a good industry to stimulate growth. South Korea in particular has come out of

the financial crisis so fast that they have seen prompt interest rate rises.

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March 2010


Russia/CIS Mixed Blessings In UkraineEven in Ukraine, elections can end. After two rounds of voting and weeks of legal

rumbles, Viktor Yanukovich has been inaugurated as Ukraines fourth

democratically elected president. In November 2004 he tried and failed to steal

the crown. Now he has played (mostly) by the rules - and won. Although Yulia

Tymoshenko, his charismatic rival and Ukraines prime minister, refuses to

recognise Mr Yanukovichs victory, she withdrew her legal appeals this week.

Ukraines highest office has thus moved from an incumbent to an opposition

leader, a rare achievement in an ex-Soviet republic.

Mr Yanukovichs legitimacy is now accepted by the worlds leaders and not justby Russias prime minister, Vladimir Putin, who rashly congratulated him on his

rigged victory in 2004. This time Moscow made no such crude statements.

Instead, it asserted its feelings of fraternity towards Kiev by dispatching Patriarch

Kirill, head of the Russian Orthodox Church, to bless Mr Yanukovich before his

inauguration. This says as much about Mr Yanukovichs piety as about Moscows

tactic of using the church to extend its influence. Rarely have the Russians used

soft power so well. Yet Mr Yanukovich, conscious of his pro-Russian image,

tried to downplay the patriarchs visit, and is planning his first foreign visit to

Brussels, not Moscow.

His biggest problems lie at home, where his slender victory is yet to turn into real

power. Ms Tymoshenkos legal challenge was not meant to overturn the election

or trigger street protests. Her aim was to rally supporters by showing that she

never gives up, to label Mr Yanukovichs victory illegitimate and to blameUkraines corrupt courts for cynically refusing to establish the truth. All this

was meant to chip away at Mr Yanukovichs mandate. As it is, he is the first

directly elected president in Ukraines history to win with less than 50 percent of

the vote.

The election has affirmed Ukraine as a functioning democracy, but it has neither

brought political stability nor resolved the crippling question of where power lies

in a country of 46 million people. Ukraine is still trapped in the constitutional

compromise agreed to by the outgoing president, Viktor Yushchenko, which

divides executive power between the President and a Prime Minister chosen by

the Verkhovna Rada (parliament). This means that, despite his win, Mr

Yanukovich can do little without a new parliamentary coalition.

Creating one has proved harder than he expected, not least because of conflictinginterests in his own Party of Regions. After a long and expensive campaign, his

backers want to turn his victory into profit and are thus reluctant to share power.

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March 2010


Ms Tymoshenko is now calling on the Rada to hold a confidence vote in hergovernment. Her nominal coalition could formally break up shortly, but even thatwould not resolve Mr Yanukovichs problem.

Mr Yanukovich may muster sufficient votes to oust Ms Tymoshenko as prime

minister. But to form a majority coalition he needs the support of Mr

Yushchenkos Our Ukraine block. Our Ukraines deputies have their own

financial and political interests - and satisfying them does not come cheaply. Ms

Tymoshenko is also bidding to hang on to some of the partys deputies. Despite

Mr Yushchenkos spectacular defeat in the presidential election - he won just 5

percent of the vote in the first round - his party is now in a position to be

kingmaker.

Despite the cynicism of Ukrainian politics, ideology plays a part in all this. OurUkraine draws support exclusively from western Ukraine, the more nationalistic

part. Its voters will see betrayal in any alliance with Mr Yanukovich, who madehis first victory speech in Russian, who has suggested that the Russian Black Sea

fleet may stay in Sebastopol after its lease runs out in 2017, and who has offered

Gazprom the lure of a joint consortium to operate Ukraines gas pipelines. The

blessing by Kirill may be the last straw.

To make an alliance more palatable, Mr Yanukovich may have to accept a

compromise prime minister. One choice is Arseniy Yatseniuk, a former central

banker who has served as foreign minister and speaker of the Rada. Mr

Yatseniuk, who himself tried for the presidency, has proved flexible in dealing

with different political forces and yet is popular with Our Ukraines voters. He isalso said to be favoured by Rinat Akhmetov, Ukraines richest tycoon and Mr

Yanukovichs sponsor.

Yet part of the new presidents entourage feels this would be too much of a

concession to a losing party. Mr Yanukovich would prefer to see an old comrade,Nikolai Azarov, as Prime Minister. Mr Azarov served as Mr Yanukovichs deputy

in 2006 and is loyal to him rather than to Mr Akhmetov. He is seen by some as an

ideal caretaker Prime Minister who could bring Ukraines dire public finances into

some sort of order, even if he may not turn out to be much of a reformer.

If Mr Yanukovich fails to build a new coalition, he will have to call a new

parliamentary election. This may be the best way to break the stalemate. It would

certainly be more democratic than gluing together a coalition dependent only on

participants vested interests. But it would be risky for Mr Yanukovich. Given

his narrow win in the presidential election, there is a chance that his party would

lose more seats than it would gain in a parliamentary vote.

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March 2010


Serhiy Tyhypko, who came third in the first round of the presidential election,taking votes from both front-runners, will form a faction and have demands of hisown. Unlike Mr Yatseniuk, Mr Tyhypko is seen as a potential rival to Mr

Yanukovich.

The next few months may bring more clarity. But for the moment Ukraines

politics continues to be in chaos and its politicians are too busy making deals to

pay much attention to the countrys economic problems - or its national interests.

Economic Case Study Big vs Small Government

Under the rein of Blair (UK) and Clinton (US), downsizing the State and

privatising State-run companies was the fashion of the day. Due to the globalcrisis it appears the trend of the BIG government is returning. The US has seen

its financial capital shift from New York to Washington DC, and the government

has been trying to extend its control over the healthcare industry. Britain has seen

many of its banks collapse only to be rescued and essentially nationalised by the

government.

The obvious reason for this change is the financial crisis. Global markets

collapsed like a pack of cards from car manufacturers, banks, financial

organisations and even organizations deemed too big to fail. Following Lehman

Brothers collapse, the American government found itself the proud owners of

General Motors and Chrysler, whilst the British government found themselves

running high street banks.

However, there is evidence that both the US and Britain were on the march forBIG Government before the collapse of Lehmans. UK Prime Minister Gordon

Brown reverted from his Mr Prudent reputation of the first three years to an Old

Labour spending binge. He increased National Health Service spending by 6

percent a year and boosted spending on education. Labours 13 year reign has

seen two thirds of all new jobs created in the public sector, with pay growing

faster than in the private sector.

America on the other hand was never reserved with money. In 2001, Bush

responded to the September 11th terrorist attacks by spending huge sums on

weapons. He also added a big new drugs entitlement to Medicare, created the

Department of Homeland Security and expanded the federal governments control

over education and the states.

Public spending is not the only way to indicate the states power. Americas

federal government employs a quarter of a million bureaucrats whose job is to

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March 2010


write and apply federal regulations. The power of the regulations is growing allthe time. It seems there are now rules on everything and anything.

However, it appears that the majority of American and British citizens meet these

changes with wide spread approval. There are some logical reasons for this

acceptance.

1) The demand for public services will soar in the coming decades. The worlds

aging population is expected to rise significantly, the over 60s population

group is expected to rise from 11 percent today to 22 per cent by 2050. In the

developed world by 2050 one in three people will be pensioners and one in ten

will be over 80. In America alone more than ten thousand babies will become

eligible for social security and Medicare every day for the next two decades.

2) Fear of terrorism and crime has helped to inflate the state. Britain has one

CCTV camera for every 14 people, and under Bush, there was a massive

programme of telephone tapping before the Supreme Court shut it down.

3) Some of the worlds largest companies are now either directly owned or

substantially owned by the state, with numbers likely to grow. Chinese state

controlled companies have been buying up private companies and Russias

state controlled companies have a long history of purchasing private

companies on the cheap.

4) Concern over global warming and an implicit acceptance that government

intervention is needed to deter people and companies from over heating the

world and to change their behaviour.

However, the economic crisis may have promoted state growth in the short term,

but in the long term it is likely to incur serious cuts in public spending, especially

in those regions where public debt is high. It may however transpire that these

cuts may be difficult to make in reality, for example, if people continue to retire atage 65s, they may go on to live for another 20 years. With an increasing aging

population, this will place huge demands on government spending, unless they

simultaneously increase the age of retirement.

Within the public sector, 75 percent of public officials are in some sort of pay for

performance scheme and in America, 30 percent of people in the public sector areunionised, compared with seven percent in the private sector, all who enjoy better

pension rights and higher pay. Add the above to the perverse incentives used by

the politicians to buy public sector votes using public money means governments

can still spend a lot of money without actually improving public sector services.

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March 2010


The lack of agreement caused the IEEE Standards Association to disband theIEEE 802.15.3a Task Group. Nevertheless, some of the world's top chip firmsstill consider the UWB market important, especially for the high volume and

potentially lucrative home consumer market.

The industry was helped, during 2006, by some more concrete applications for

wideband wireless Bluetooth version 3.0 and wideband wireless USB links. An

example of wireless USB hub currently in production is shown in Figure 1.

Figure 1 UWB Wireless-USB Hub

Source: Belkin/Future Horizons

On 28 March 2006, the Bluetooth Special Interest Group announced its selection

of the WiMedia Alliance Multi-Band Orthogonal Frequency Division

Multiplexing (MB-OFDM) version of UWB for integration with current Bluetoothwireless technology (although it does also see the Bluetooth protocol stack being

used with WiFi as well). However, in 2009, the Bluetooth SIG made an

announcement concerning Bluetooth 3.0 High Speed, which (notably) did not

mention UWB and only 802.11 as the physical layer, which must come as a

warning sign for UWB technology.

Unfortunately, UWB has seen a number of technical and standards issues and

although the technology shows some promise, the full potential has yet to be

realised. Despite the initial optimism over the use of UWB a number of

companies have either been taken over or ceased operations. Tzero Technologies

joined a shakeout of UWB manufacturers in 2009 that also claimed Focus

Enhancements. WiQuest and Artimi also merged with Staccato to pool resources.

Intel also announced that it was stopping development in November 2008.

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March 2010


Bluetooth technology using the UWB physical radio layer has the capability tomeet the high-speed demands of synchronising and transferring large amounts ofdata but at the moment appears to be beset by technical problems with a very

much lower than expected data rate in current silicon. However, these problems

are likely to be temporary and it could still be an ideal solution to enable high-

quality video and audio applications for portable devices, multi-media projectors

and television sets.

Home video networking applications cannot easily be met using existing wire-

based technologies (for installation and aesthetic reasons), and modified existing

wireless technology is struggling to meet the latest video networking

requirements. UWB could resolve most of these issues at least in a single room -

at short range. It does, however, need the broad agreement of the consumerelectronics industry on standards for this to happen. If it does, then home video

networking applications could drive UWB with connections likely to be seen on abroad range of consumer products.

In summary UWB has lost some traction because of standards and technical

problems but Future Horizons believes the technology is delayed rather than dead

and our forecast for unit sales in Figure 2 shows steady growth from 2011

onwards.

Figure 2 Worldwide UWB Unit Sales, 2004-2014

0

200

400

600

800

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UWB Semi M. Units 0 0 0 1 7 11 57 287 574 775 1400

2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F 2014F

Source Future Horizons March 2010

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March 2010


Semiconductor Spotlight Photovoltaic DevelopmentsPhotovoltaic (PV) cells are arrays of cells that convert radiation from the sun into

(direct current) electrical energy. This conversion happens without intermediate

steps although the efficiency of the conversion can vary. Semiconductor materials

used for photovoltaic devices include various types of silicon and other

semiconductors with dopants including boron and phosphorus.

The increasing interest in green energy sources including photovoltaic modules

has spurred research and development in PV especially in the last four years.

Production has been increasing, especially, as government grants and incentives

have become available for smaller installations.

Although the total power produced by PV modules installed worldwide hasincreased significantly in the last two years it is still a very small percentage of the

electricity produced by fossil fuels and is still far behind nuclear power stations.

The worldwide production from photovoltaic sources is approximately 21

Gigawatts and for nuclear is 370 Gigawatts

The PV effect is caused by photons of light stimulating electrons into a higher

state of energy. When a photon is absorbed, the energy of the photon is

transferred to an electron in an atom of the semiconductor cell photodiode. The

higher energy electron is able to escape from its normal position associated with

the atoms in the material to become part of the current in an electrical circuit.

The absence of the electron in its usual position causes a hole to form and the

current flows through the PN junction with enough voltage and current to drive aload viz.charge a battery or light a light bulb. Polysilicon (c-Si) is the primarymaterial of wafers used to fabricate crystalline silicon solar cells but cheaper

alternatives are being developed such as thin film (CdTe) casting wafers instead of

sawing, thin film copper indium gallium and selenium (CIGS), as well amorphous

and microcrystalline silicon.

Almost all photovoltaic devices are an adapted photodiode with a large light

collecting area. An example of a solar cell arrangement is given in Figure S1.

The semiconductor interest is primarily in the PV cell itself but there is also the

need for control and management of the system using microprocessors and also

the components necessary for the inverter. The inverter is needed to bring the low

voltage direct current battery or from the solar cell to AC mains voltages for use in

the premises or for onward transmission to the grid.

Advances in technology and increases in manufacturing competence have resulted

in price reductions for PV solar cells and modules, which is typical of other

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March 2010


semiconductor devices. Financial incentives, including attractive feed-in tariffsfor solar-generated electricity, have also led to growth of solar PV installations inmany countries where these incentives exist. Australia, China, Germany, Greece,

Israel, Japan, Spain and the United States are examples of countries where

incentives are offered and others are set to follow.

Figure S1 - Photvoltaic Cell & System

Source US Department Of Energy/Future Horizons

Solar PV installations can either be stand-alone or connected to the grid depending

on the location. Stand-alone applications include cellular base stations, telemetry,

electrical power for remote buildings, rural communities, parking meters and

emergency telephones. Grid connected systems are used in houses and in

industrial buildings as a supplementary source of power. Some more extensivearrays for commercial energy production are also grid connected.

Many governments are pushing green energy and solar cells and arrays are

important components in the mix of renewable energy options, especially for

smaller installations and also on a larger scale in more extensive arrays in suitable

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March 2010


locations. Because of this, the demand for PV cells has almost doubled every twoyears for the last seven years, despite the relatively high cost of installation and along time for payback (tens of years).

Further reductions in the cost of PV installations will reduce this payback and

encourage future market growth. The main suppliers of PV modules include

Suntech, Sharp, JV Solar, Q-Cells, BP Solar and SunPower.

The economic downturn did have an effect on the PV market but it has shown

some resilience and despite a build up of inventory in the early part of 2009 the

inventory has mostly been consumed during the upturn in the second half of the

year. The forecast in Figure S2 shows the growth in the generation capacity of PV

modules to 2014.

Figure S2 - PV Generation Capacity Production Forecast

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

2007 2008 2009 2010 2011 2012 2013 2014

YEAR

Gigawatts

Source Future Horizons March 2010

Thin film based technologies will grow its share of total production from 15

percent in 2008 to over 35 percent by 2014. The technology is advancing and

prices are falling which will encourage uptake. On the other hand, this growthwill be negatively affected by the gradual reduction of government subsidies either

as direct grants or the benefit of generous feed-in-tariffs.

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To summarise, the PV market is still growing and is forecast to grow at a CAGRof 54 percent between 2008 and 2014. The effective price of PV silicon andmodules will reduce by approximately 40 percent during the same period, which

will encourage this growth. The forecast does not include the essential peripherals

such as inverters, which will also add to the semiconductor total for these

installations.

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March 2010


This Page Left Intentionally Blank

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March 2010


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March 2010


Exchange RatesFigure R1 shows the weekly Euro exchange rate vs the US$ and UK for 2009.

Figure R2 shows the historical trend since its 1st Jan 1999 launch.

Figure R1 - 2010 Exchange Rate Trend(Euro vs. US$/UK)

0.65

0.70

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Dec06

Dec27

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1.60/Euro $/Euro

Figure R2 - Exchange Rate History, 1999-To Date(Euro vs. US$/UK)

0.55

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

Jan1999

Jul

Jan2000

Jul

Jan2001

Jul

Jan2002

Jul

Jan2003

Jul

Jan2004

Jun

Jan2005

Jul

Jan2006

Jul

Jan2007

Jul

Dec31

Jul

Dec29

Jul29

Dec28

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60/Euro $/Euro

Jan 1999 Launch Rates

Source: Financial Times/Future Horizons

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March 2010


Tired Of Over Paying For

Market Research Reports Or Due Diligence?

We ARE the Global Semiconductor Industry Analysts. We DO NOT

charge stratospheric prices for so-called 'information services', essentially a

hyped-up name for ad hoc/multi-client reports. NOR do we hold our clients

to ransom by the age-old technique of bundling up products to lock out

competition. We DO, however, offer a better value alternative, with a

research efficiency and analysis that is second to none.

We know old habits are hard to break, but with budgets tight and discretionary

spending curtailed, the time for change is long overdue Future Horizons is

proud to be at the forefront of this change. This is no dream, just a win-win

situation for us both. You save substantially on your valuable market research

dollars, and the more you support us, the more we can help you.

Market Research Reports - Covering The Basic Industry Statistics

Informed Analysis -From Industry-Experienced Experts

Monthly Newsletters -For The Latest News & Information

Dedicated Research -For Added Insight & Analysis

Flexible Resource Support -From A Few Hours To A Custom Study

Clearly Defined Objectives - You Get Exactly What You Want Predefined Budget - You Pay Only For What You Need

Founded in 1989, Future Horizons offers the highest possible standards in all of its

activities, be it industry reports, consulting assignments, engineering support

services, or industry symposia. Our current range of research reports includes:

Global Semiconductor Update Report (12 issues p/a)

Penn On Paper Newsletter (12 issues p/a)

East European Report Newsletter (12 issues p/a)

Annual Semiconductor Report

Semiconductor Application Markets Report

European Fabless Semiconductor Report (Optional Database) European Semiconductor Wafer Fabrication Capacity (Optional Database)

Russian Electronics Industry Report

Russia & The Other Countries Of The Former USSR IC Manual

East European Semiconductor Report

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March 2010


Summary Of Key Reports 2010 Reports Now OutBrochure downloads are available from our website. Reports can be purchased online, by fax, oremail and are supplied in A4-ring binder and CD-ROM format. Respect copyright laws, multi-

user/site licenses are required for additional users and/or posting on company Intranets.

Global Semiconductor Update Report

A CEO favourite, this report is all a busy executive needs to keep in touch with industry trends. E-

mailed monthly, the report provides a useful industry momentum indicator by compiling 12-monthly rolling charts for Units, Average Selling Prices (ASP) and Revenues broken down by totalSC, IC, Optoelectronics and Discretes. Also included is a review of the world economy, broken

out by region, plus a monthly feature on a key semiconductor market driver. The link between theeconomy and the semiconductor industry is not perfect but by measuring and understanding theimpact of wafer fab capacity on lead-times and prices, and by monitoring the level of system OEM,

distribution and semiconductor company inventory, more sense can be made of this fundamentallyunstable industry. The report focus is on in-depth analysis and the underlying industry trends.


This report provides market analyses and forecasts of the worldwide and European semiconductormarket analysed by major product and application segments. This value-added bundle is a must-have for anyone interested in the global semiconductor market and European market size detail.

Semiconductor Application Markets Report(Previously called the Key Market Drivers Report)

The Annual Semiconductor report provides a detailed analysis of the key semiconductor end-user

applications and industry market drivers, collectively accounting for around 90 percent of the totalIC market. Individual chapters, available for separate purchase, describe how each applicationworks, the technology used, the unit sales history and forecast, the semiconductor content and the

associated semiconductor market size. This vital research resource volume is a proven industryfavourite. Individual applications are also available as separate reports; please call for details.

European Fabless Semiconductor Report(Previously called the European Chipless & Fabless IC Design House Report)

This report covers the European and Israeli, chipless, fabless and independent IC design housecommunity, and is essential for those planning the resources of subcontracting new product design,

both in the semiconductor industry and the final system end product. It will also prove invaluablefor authorities and government departments, planning and directing economic growth, as well ascompanies seeking investments, potential partners or acquisitions. As an added user benefit,

chipless and fabless IC design house company database is available in Excel format as an optionalCD extra (not available separately), with both pre-organised sorts (by country, design skill and

application) and in raw data format allowing customised searches and analyses. This best-selling

report has a proven track record as an invaluable research resource.

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March 2010



Updated Annually Over 370 Pages / 350 Figures & Tables

Annual Analysis & Forecast Of The

Worldwide & European SC IndustryTopics Include

Semiconductor Market & Product Forecasts

Semiconductor End-Use Markets

Global Economic Environment

Regional Market Analysis

5 Year History Plus 5 Year Forecast

- ThereISNo Better Value-Added Package -

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March 2010


Semiconductor Application

Markets ReportUpdated Annually - Over 450 Pages / 320 Figures & Tables

Digital TVHDD

Mobile

Phone

Navigation

DigitalStill Camera

Amusement

STB

H/PC

PDA

10:30

DigitalTV

DVD Player

SOCSOC

EngineEngine

Annual Analysis & Forecast Of The Top

Semiconductor Applications For The

Worldwide Electronics & SC Industry(Previously Called The Key Market Drivers Report)Topics Include (32 Top Applications Analysed)

Mobile Phone Handsets & GPS

Personal Computers & PDAs

Automotive Electronics & Robotics

Smartcards & RF-ID Tags

DVD Recorders & Players

Bluetooth, Wireless LANs & Wi-Fi

Digital STB & Still Cameras

Video Games Consoles

- Report Covers Around 90 Percent Of The Worldwide IC Market -

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March 2010


European Fabless

Semiconductor ReportUpdated Annually - Over 320 Companies Analysed

BoardChip

4 Mbit

DRAM

2 Mbit

DRAM

2 Mbit

DRAM

DISP

CPU

I/F

Graphic

Engine

Annual Strategic Analysis & Reference Guide For The

European Chipless & Fabless IC Design Industry(Previously Called The European Chipless & Fabless IC Design House Report)

Topics Include

European IC Design House Phenomenon

IC Design House Industry Drivers

IP Market Development

IC Design House Market Segmentation

IP Portfolios & Design Skills Analysed

Over 320 Design Companies Profiled (Europe & Israel)

- Includes The Popular European Fabless SC Database Disk -(Optional Extra, Available Exclusively To Report Purchasers Only)

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March 2010


2010 Diary Dates (Sign Up Now Online @ www.futurehorizons.com)Jan 26

th Industry Forecast Semiconductor Industry Briefing, London

Annual analysis & forecast of the European & WW semiconductor market plus B2BSpeed Networking (optional)

Jan 27th

Industry Forecast Semiconductor Industry Briefing, Geneva


Mar 15th

Silicon Chip Industry Training Seminar, London

Presented in laymans terms, this seminar provides a complete overview of theintegrated circuit industry, its background, technology, manufacture & markets

Mar 16th

IC Economics Industry Workshop, London

This seminar reviews the economics of the IC manufacturing industry, covering factory

costs, yields, die size trends, process defects, and industry cost modelsMay 5-7

th International Electronics 2010 Forum

IEF2010 - 19th Annual International Electronics Industry Forum. An international forumto update market forecasts, develop new business opportunities, meet new contacts,share experiences, explore ideas, and refine strategic thinking

Jun 7th


Presented in laymans terms, this seminar provides a complete overview of theintegrated circuit industry, its background, technology, manufacture & markets

Jun 8th


This seminar reviews the economics of the IC manufacturing industry, covering factorycosts, yields, die size trends, process defects, and industry cost models

Jul 20th

Industry Forecast Semiconductor Industry Briefing Mid-Term Update,

London


Sep 6th


Presented in laymans term, this seminar provides a complete overview of the integratedcircuit industry, its background, technology, manufacture & markets

Sep 7th



Nov 22nd

- Silicon Chip Industry Training Seminar, London

Presented in laymans term, this seminar provides a complete overview of the integratedcircuit industry, its background, technology, manufacture & markets

Nov 23rd



All seminars are available on an In-House basis. Custom presentations and seminars are also available.

For more details, please call: Tel: +44 (0)1732 740440 or e-mail [email protected]

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March 2010


The Complete B2B SolutionMarket Research is not an expensive luxury but a key strategic tool, not just for established firms

but also for start-ups and SMEs. It is never too timely to access industry intelligence even the best-targeted products come unstuck due to unforeseen market or competitive developments.Likewise even the best-run companies benefit from a regular external health-check in order to

make sure that their plans have not become sanitised and drifting from the real-world reality.

In the same vein, it is never too early to think about branding, even if still

operating heavily in stealth mode. As such, coincident with the November 2008

launch of our new Website, Future Horizons has combined with EML and

Freshleaf Media to provide a coherent range of B2B solutions; from industry

intelligence to branding and messaging.

Future Horizons is a global semiconductor industry analyst with over 148 man-years of electronics industry experience, starting from 1962 and the first

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industry analyst has the breath and depth of experience. Our research services

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http://www.futurehorizons.com/Tel: +44 1732 740440 Email: [email protected]

EML is a technology PR agency specialising in national, regional and global

campaigns that get results. They are equally at home working with the world's

biggest technology brands and with early stage start-ups; targeting senior decision

makers or highly informed technical experts.

http://www.eml.com/ Tel: +44 20 8408 8000 Email:[email protected]

Freshleaf Media: Technology Website Experts - are experts in corporate

website design services to the high-tech electronics and engineering industries.

With 10 years experience and clients including Sentec, Innovision, CSR andFuture Horizons, Freshleaf offers a full range of professional corporate design and

development services to include; creating practical and usable B2B websites,

content management systems, making updates easy, logo and brand design and the

creation of intranets and extranets.

www.freshleafmedia.co.ukTel:+44 1202 847160 Email:[email protected]

We are all semiconductor/IT industry specialists, able to walk the walk and talkthe industry talk. Together we offer a complete B2B development solution

package, each adding a real value to your organisation.

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Future Horizons Order FormPrice List Effective Jan 01, 2009 (Prices Subject To Change Without Notice)

Order on-line @ www.futurehorizons.com. E-mail: [email protected]

Three Easy Ways To Order: Online:By Fax:By mail:

Please Enter Our Order For The Following Publications (Check Appropriate Boxes)

Item Report Title Euro

1 [ ] Semiconductor Applications Market Report - Binderplus CD-ROM 3,975.00

[ ] Intranet/Site Licence 5,600.00

2 [ ] Annual Semiconductor Report (Includes 1 above)- Binderplus CD-ROM 4,580.00


3 [ ] Global Semiconductor Update Report - By E-Mail (1 year, 12 Issues) 2,300.00


4 [ ] European Fabless Semiconductor Report - Binder plus CD-ROM 3,975.00

[ ] Optional Database Disk(only with Report/CD-ROM) 615.00

[ ] Intranet/Site Licence (Excluding Database Disk) 5,600.00

[ ] Intranet/Site Licence (Including Database Disk) 6,200.00

5 [ ] Penn On Paper Newsletter (1 year, 12 Issues) 765.00


6 [ ] East European Report Newsletter (1 year, 12 Issues) 765.00


7 [ ] International Electronics Forum Proceedings - Includes Postage 620.00

8 [ ] International System & SoC Forum Proceedings - Includes Postage 620.00

9 [ ] International Forecast Seminar Proceedings - Includes Postage 690.00

10 [ x ] Shipping Costs (courier) 80.00Total Amount Due (Pre-payment or PO Number Required)

(Respect Copyright Laws - Multi User/Internal/Intranet Distribution Needs A Site Licence)

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BIC: RBOS GB 2L / IBAN: GB81RBOS 1610 9010 001457

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