Semiconductor Equipment

1
Semiconductor Equipment Materials Market Trends

• Presentation to 2003 Beijing Microelectronics
  Symposium and its CEO Forum
• Paul Davis
• Senior Vice President, SEMI
• President, SEMI China
• October 16, 2003

2
Economic Recovery is

• underway
• Global economy appears to be stabilizing
• Defense and consumer spending recovering in US
• Stock markets rebounding
• SARS contained worldwide
• Wi-Fi is growing
• though uncertainties remain
• Geopolitical situation and global terrorism
• Unemployment concerns
• No new killer application
• Weak business spending - when will IT spending
  pick up?

3
The Electronics Ecosystem
Forecast2005
2002
Electronic End Equipment
966B
790B
Semiconductors
141B
191B

Semiconductor Equipment
20B
30B
SEMI membership
Materials
21B
27B
Source SEMI, SIA/WSTS June 2003, Henderson
Ventures June 2003
4
Global Electronic Equipment Production
Source Henderson Ventures July 2003
5
End Market Applications

• Personal Computers largest semiconductor
  market
• 100-200M PCs produced annually on a worldwide
  basis
• Semiconductor value 200-400 per system
• Cellular Phones strongest semiconductor growth
  
• 400-500M devices produced annually on a
  worldwide basis
• Semiconductor value is 35-40 per handset
• Personal Connectivity Devices
• Anticipated production to be 1-2B units annually
  on a global basis
• Semiconductor value anticipated to be 5-10 per
  device
• Automotive Electronics
• Body chassis control applications
• Semiconductor value 320-370 per automobile

Source Gartner Dataquest, Allied Business
Intelligence, ST Microelectronics
6
Worldwide Semiconductor Trends
Average Selling Price
Billions
Source SIA/WSTS August 2003
7
Capacity Utilization

Source Semiconductor International Capacity
Statistics (SICAS) August 2003, Gartner
Dataquest June 2003
8
1H2003 Top 10 IC Companies
Officially formed on April 1, 2003. Sales
figures include combined semiconductor sales of
Hitachi and Mitsubishi
Source IC Insights July 2003
9
Packaging Test Subcontractor Revenue Trends
Source Companies quarterly press releases
10
Semiconductor Recovery has

• Begun
• Utilization rates are high for leading edge
  capacity
• IC prices are stabilizing
• Unit volumes are close to the peak levels of 2000
• Learning curve for new technologies has been
  achieved
• Packaging and test are strong and generally lead
  the recovery
• but
• ASPs remain low
• Excess capacity remains for non leading edge
  capacity
• Technology challenges remain

11
Semiconductor Revenue Forecasts
12
Capital Equipment Markets
Europe
ROW
Europe
ROW
11
13
12
14
Taiwan Area
Japan
Taiwan Area
9
20
Japan
23
18
Korea
North
8
America
North
Korea
25
America
17
30
2003 YTD Market Billings 10.01B January
through June
2002 Market Billings 19.75B
Source SEMI/SEAJ August 2003
13
Rest of World Capital Equipment Markets
2002 Rest of World Equipment 2.68B
Source SEMI estimates July 2003
14
300mm Will 2003 be a Cross-over Year?
Wafer Processing Equipment
Wafer Processing Equipment
40-50 300mm
30-35 300mm
2002 Market 14.15B
2003 Market Forecast 14.06B
Source SEMI estimates June 2003
15
SEMI 2003 Mid-Year Consensus Forecast By Segment
30.03
29.22
25.42
20.52
19.75
US Billions
Source SEMI June 2003
16
Global Materials Markets
2002 Global Package Materials 8.41B
2002 Global Wafer Fab Materials 12.98B
Source SEMI March 2003
17
Summary Conclusions

• Broad-based technology driven semiconductor
  recovery has begun, lead by 300 mm and advanced
  packaging technology
• Semiconductor revenue forecasts range from 8 to
  17 for 2003
• Package complexity requires increased cooperation
  among device, package and design companies
• Capital expenditures are strong in Korea and
  Japan
• SEMI consensus forecast calls for capital
  equipment market to grow 4 this year, 24 in
  2004
• Package materials forecast to reach 9.4B in 2003
• Packaging materials opportunities include
  improved organic substrates, improved underfills
  for flip-chip and green materials