business changes and challenges in the competitive ... · 2007-06-29 · challenges in the...

"Business Changes and Challenges in the Competitive

Semiconductor Industry"

Allen C.-H. WuSyntronix Corporation

June 29 2007

Syntronix Corporation © 2007206/29/2007

Outline

Induction to Semiconductor Business

Semiconductor Industry Trend

Electronic-Product Supply Chain

DRAM Business Trend

ASSP/ASIC Business Trend


Worldwide GDP Changes vs. Electronic System Growth/Semiconductor Industry Growth

Worldwide GDP Change

1.7%

4.6%

3.9%

3.4%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

F

Electronic System Growth/Semi Industry Growth

7%10%

28%

-32%

5%

7%

13%

-14%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

85 87 89 91 93 95 97 99 01 03 05 07F

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

WW Semi Indust ry Growth World Ele c t ronic System Growth

Source: IC-Insights(2007/02); ITRI/IEK(2007/03)


GDP by Nation

2003-2007 GDP Trends

3.1

0. 4

2. 73. 1

1. 1

3. 2 3. 3

4. 2 4. 4 4. 6

6. 4

5. 7

4. 6

3. 5

1. 4

9. 9

4. 64. 3

4 3. 9

2. 1

5. 1

7. 8

4

2. 41. 9

9. 3

4. 3

5

3. 5

9. 1

10. 1

1. 7

2. 3

10. 5

3. 9

2. 3

3. 33. 4

2. 2

0

2

4

6

8

10

12

An

nu

al P

erce

nt

Ch

ang

e

2003

2004

2005

2006

2007F

2003 3.1 0.4 2.7 9.1 3.1 1.1 3.2 3.3

2004 4.2 1.7 4.4 10.1 4.6 6.4 5.7 4.6

2005 3.5 1.4 2.3 9.9 4.6 4.3 4 3.9

2006 3.3 2.3 2.1 10.5 5.1 7.8 4 3.9

2007F 2.4 1.9 2.2 9.3 4.3 5 3.5 3.4

U.S. Europe Japan China S. Korea Singapore Taiwan Worldwide



Electronic System Semiconductor Content

System Type 2005 % of Total 2006 % of Total 2007 % of TotalComputer 97.9 50.8% 103.6 49.6% 110.5 49.6%Communications 47.2 24.5% 52.1 24.9% 55.7 25.0%Consumer 25.2 13.1% 29.1 13.9% 31.1 13.9%Automotive 10.9 5.7% 12.3 5.9% 13.2 5.9%Industrial 10.6 5.5% 11.0 5.2% 11.5 5.2%Gov/Military 0.9 0.5% 0.9 0.4% 0.9 0.4%Total 192.8 100.0% 209.0 100.0% 223.0 100.0%

2005

50.8%24.5%

13.1%

5.7%

5.5%

0.5%

Computer communications consumer

Automotive Industrial Gov/Military

2006

49.6%

24.9%

13.9%

5.9%

5.3%

0.4%

Computer communications consumer


2007F

49.6%

25.0%

14.0%

5.9%0.4%

5.2%

Computer Communications Consumer




Worldwide PC Shipments

Worldwide PC Unit Shipments

128

146139 142

158

182

231

258

295305

338

210

0

50

100

150

200

250

300

350

99 00 01 02 03 04 05 06 07 08 09 10

Mil

lio

ns

of

Un

its

99 00 01 02 03 04 05 06 07 08 09 10

2006 PC Unit Shipment Estimate by System Type

34%

2%64%

Notebook PC Servers Desktops

0

50

100

150

200

250

300

350

99 00 01 02 03 04 05 06 07 08 09 10

Bil

lions

of D

oll

ars

PC ICs

Other ICs

10%

12%

14%3%

11%

39%

36%

34% 38%37%

36%36%35%

35%

34%34%

34%


(2010:46%)

(2010:52%)


Mobile Phone Shipments

163275

415 385 420520

670805

985 10501230 1290

1410

61%69%

51%

7% 9%

24%29%

20% 22%

7%17%

5% 9%0

300

600

900

1200

1500

98 99 00 01 02 03 04 05 06 07 08 09 10

Milli

ons

of C

ellu

lar H

ands

ets

0%10%20%30%40%50%60%70%80%

Gro

wth

Rat

e

Worldw ide Handset Shipments Grow th Rate

New ultra-low-cost phone demands for China/India/Africa:2006: 7% 2010: 41%

Camera Phones:2006: 53% (mainly<2M)2010: 78%(mainly>2M)

2G/2.5G GSM/GPRS/3G2006: 12%/67%/21%2010: 2%/59%/39%



Worldwide TV Units Shipments

185 190 202 210 215

177

20%28%

37%50% 54%

64%

0

50

100

150

200

250

05 06 07 08 09 10

Mill

ions

of U

nits

0%

20%

40%

60%

80%

100%

% D

TV

Millions of Units % DTV

2006: DTV => 5M units/28% ( 77% LCD)

2010: DTV => 64% ( 84% LCD)

2007: DTV => 37% growth



Worldwide IC Market by RegionWorldwide IC Market by Region(2001-2011)

27%19% 19% 19% 16%

22%

17% 16% 15%12%

22%

17% 17% 16%

13%

29%

47%59%

50%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2005 2006 2007 2011

Mar

ket

shar

e

Asia -Pa c i fi c

Japan

Europe

Ame ric a s

2006 Regional Market IC Average Selling Prices

$2. 88

$1. 74$1. 55$1. 24

$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00

Asia-Pacific Japan Europe Americas

AS

P

China/Hong Kong 45.1%Taiwan 26.1%South Korea 13.0%Singapore 9.4%

China/Hong Kong 56.0%Taiwan 21.9%South Korea 10.2%Singapore 7.1%



Worldwide Semiconductor Capacities

Source: SICAS(2007/03); ITRI/IEK(2007/03)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

01Q1 01Q2 01Q3 01Q4 02Q1 02Q2 02Q3 02Q3 02Q4 03Q1 03Q2 03Q3 03Q4 04Q1 04Q2 04Q3 04Q4 05Q1 05Q2Q5Q305Q4 06Q1 06Q2 06Q3 06Q4

Th

ou

dsa

nd

pcs

/we

ek

12% 11% 12% 11% 12% 12% 11% 11%

14% 13% 13% 12% 12% 12% 12% 12%

13% 13% 13% 13% 13% 13%12% 13%

8%7% 7%

7% 7% 7%7% 7%

12%12% 11% 11% 11%

11%10% 10%

20%20% 19% 19% 19%

19%19% 19%

21% 23% 26% 28% 31% 35%41% 45%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

05Q1 05Q2 05Q3 05Q4 06Q1 06Q2 06Q3 06Q4

MOS<0. 12um

MOS<0. 16um to >=0. 12um

MOS>0. 2um to >=0. 16um

MOS<0. 3um to >=0. 2um



MOS>=0. 7um


Outline




DRAM Business Trend



Semiconductor Industry Trend (I)

Moore’s law

Continuous advance technology developments

Cost down


Semiconductor Industry Trend (II)

Advance FabTechnology

Advance DesignTechnology

Cost Down/Performance Up

Large QuantityAdvance Design/Manufacturing Technology


Semiconductor Industry Trend (III)

Does Moore’s law still the driver?What types of products (and the total demands)

need technology of 90nm & below?How many players can afford it?


Semiconductor Industry Trend (IV)

Technology Driven Market DrivenProduct competitiveness by migrating designs into advanced process technologies (more # of dies + more features => lower cost)!Technology barrier among players is narrowingWhat are the main differential points between players? TTM, Cost & Key IPs.


Semiconductor Industry Trend (V)

Is semiconductor industry entering the traditional industry era???

Mature technologies + limited applications => many players can enter the ball game and compete in the same marketProfit margin dropsSlow growthThe bigger is getting bigger


Outline




DRAM Business Trend



Electronic-Products Supply Chain

Consumers $$$

Sales Channel

ElectronicProducts

Chips OtherComponents

Standard ICsASSPsASICs

Direct SalesDistribution Network

SystemCompanies

OEMODM

IDMFabless/Foundry

Memory

OtherComponents


Three Major Chip Categories

Standard ICsCPU: (INTEL:INTEL:INTEL)Memories: Cost is the key!

ASSPs /ASICsDesign-in capability is the key!


Outline




DRAM Business Trend



Worldwide DRAM Market

15 16 18 25 28 34 34 32 40 41 41 4362 71

80

110

140152

168179

240

9.6%12.5%

38.9%

10.5%

21.3%

2.0%

5.5%

23.7%

1.6%0.1%

6.5%

42.7%

14.9%13.2%

36.8%

27.3%

8.6%7.2%

9.8%

34.1%

0

50

100

150

200

250

300

350

400

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

B p

cs

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Gro

wth

Rat

e

Billion pcs Grow th Rate

Vista System

Source: Gartner(2007/02); ITRI/IEK(2007/03)


1987 Market Share

Total Market 2,902

NEC 469 16.2

Fujitsu 409 14.1

Toshiba 379 13.1

TI 320 11.0

Mitsubishi 292 10.1

Hitachi 279 9.6

Samsung 153 5.3

OKI 152 5.2

1992 Market Share

Total Market 8,765

Samsung 1,192 13.6

Toshiba 1,123 12.8

NEC 894 10.2

Hitachi 824 9.4

TI 667 7.6

Mitsubishi 628 7.2

Fujitsu 547 6.2

LG Semicon 513 5.9

2004 Market Share

Total Market 26317

Samsung 8119 30.9

Hynix 4288 16.3

Micron 4167 15.8

Infineon 3499 13.3

Elpida 1569 6.0

Nanya 1186 4.5

PowerChip 1128 4.3

ProMOS 900 3.4

Worldwide DRAM Market Share

2005 Rank

2006 Rank

2005 2006 2005-2006 Change

2006 Share

1 1 Samsung 8,020 9,834 22.6% 28.7%

2 2 Hynix 4,111 5,644 37.3% 16.5%

4 3 Qimonda 3,181 5,370 68.8% 15.7%

3 4 Micron 3,867 3,697 -4.4% 10.8%

5 5 Elpida 1,784 3,489 95.6% 10.2%

6 6 Nanya 1,440 2,111 46.6% 6.2%

7 7 Powerchip 1,027 1,479 44.0% 4.3%

8 8 ProMOS 871 1,462 67.9% 4.3%

#1 Japan; #2 USA; #3 Korea #1 Samsung #1 Korea; #2 TaiwanUSA/EU/Japan only 1 company left

Korea #1, world market share 45.2% (Hynix:ProMOS foundry)Taiwan #2, world market share increases: by products 18%, by capacity 25%Qimonda15.7% (Nanya: foundry)Micron world market share drops to 10.8%Elpida 10.2% (PSC: foundry)

Source: Dataquest(2007/02); ITRI/IEK(2007/03)


Worldwide DRAM Strategy Changes

Terminated the business/Sold the fabTI, IBM, ToshibaVanguard, Mosel, Winbond

Established New CompaniesElpida (by NEC, Hitachi, Mitsubishi)Rexchip (by Elpida, PSC)

Merged, Purchased fabMicron (TI, Toshiba)

Capacity & Technology CooperationInfineon: Nanya, Winbond, SMICElpida: PSC, SMICHynix: ProMOS

New PlayersSMIC, Grace


Worldwide DRAM Supply and Demand

2006 2007 2008 2009 2010 2011 2012

Worldwide DRAM demand (B pcs) 79 110 141 154 166 181 210

Growth rate 17.8% 38.3% 28.8% 8.8% 7.7% 9.1% 16.3%

#12” fabs (40k wafers/month) 23 31 35 40 47 52 57

2006 2007 2008 2009 2010 2011 2012

Samsung 4 5 6 8 10 12 14

Hynix 1 2 2 3 3 4 4

Micro 1 2 2 2 2 2 2

Qimonda 2 2 2 2 3 3 3

Elpida 1 1 1 2 2 2 2

SMIC 1 2 3 3 3 3 3

Subtotal 10 14 16 20 23 26 28

PSC+Rexchip 3 4 5 8 11 12 13

Nanya+Inotera 1 3 4 5 5 6 6

ProMOS 2 3 4 5 6 7 7

Winbond 1 1 1 1 1 1 1

12” fab in Taiwan 7 11 14 19 23 26 27

Total 17 25 30 39 46 52 55

Demand : # of 12” fabs

Supplier : # of 12” fabs


DRAM Business Trend

A typical commodity business

Pricing is the key to success

Keep pushing cost-driven advanced design and manufacturing technologies

Market-driven penny-pinch cost-down strategy on the entire supply chain


Outline




DRAM Business Trend



IDM v.s. Fabless/Foundry

CustomersChip

Sales &Marketing

R&D Manufacturing

Sales &Marketing

R&D Manufacturing

IDM

MaskProduction

WaferProduction

WaferTest

FinalTest

Fabless / Foundry

Assembly


Product Trend

Two camps: luxury and low-cost items

Lack of killer applications

3C(Computer, Communication, Consumer) integration: what’s next?

Hardware may not be the profit source, software and service will be the main profit sources!

Free phone + serviceCheap game box + softwareScanner + suppliers


Cost-Driven ASIC/ASSP Sales Strategy

Reducing the overall cost by squeezing the entire supply chain

Establishing alliances and partnerships in order to guarantee capacity and pricing

Locality market-driven sales strategy

=> China: total solution based sales strategy

=> Japan: multiple agent and distribution channelsproblem!

Strong design-in capability and service


Cost Structure

SalesPrice = Direct Cost+ Indirect Cost + Profit

Customers Sales/MarketingCost

R&D Cost

ManufacturingCost

MaskProduction

WaferProduction

WaferTest

Assembly FinalTest


Globalization Cooperation Strategy

GlobalizationCost reductionTime-To-MarketMarket Locality

Design ManufacturingSales &Marketing

Library Software

SoC Design

IPs Integration

Wafer Production

Assembly Test

JapanUSA

EU

Taiwan

India Korea China


Design, Manufacturing and R&D Costs of 45nm/32nm Process

45nm 32nm

Fab $3B $5B-10B

Process R&D $2.4B $3B

Design $20M-50M $75M

Mask $9M NA

Source: EE Times, Synopsys, VLSI Research


Technology Trend

Deep submicron technology(65nm up), R&D cost is very expensive

Co-development with foundry companiesOwn technology

Chip development cost is getting higher and higherOnly the top players will surviveChip development strategy is changing


Semiconductor Industry Evolution

IDM

Fabless/Foundry

What’s next?

“ IC Industry in midst of fundamental change”Wofgang Ziebart-Infineon CEO


Business Trend

Cost-down strategy

More strategic partnerships

Market Driven: Name-brand (Luxury items) and

Non-Name-brand (Low-cost items)

Moving toward traditional industry

business changes and challenges in the competitive ... · 2007-06-29 · challenges in the...

Documents