1

Semiconductor Equipment and Materials Outlook

SEMICON KOREA 2010

Dan TracySEMI Industry Research & Statistics Group

February 3, 2010

2

Outline

Update on current market and forecast for,Industry Trends

Semiconductor Equipment

Semiconductor Materials

Summary

3

Monthly Sales Trends-

Outsourcing manufacturersCombined Monthly Revenues- 3 Mo. Avg.

(ASE, SPIL, TSMC, and UMC)

-

10,000

20,000

30,000

40,000

50,000

60,000

Jan-

03M

ar-0

3M

ay-0

3Ju

l-03

Sep-

03N

ov-0

3Ja

n-04

Mar

-04

May

-04

Jul-0

4Se

p-04

Nov

-04

Jan-

05M

ar-0

5M

ay-0

5Ju

l-05

Sep-

05N

ov-0

5Ja

n-06

Mar

-06

May

-06

Jul-0

6Se

p-06

Nov

-06

Jan-

07M

ar-0

7M

ay-0

7Ju

l-07

Sep-

07N

ov-0

7Ja

n-08

Mar

-08

May

-08

Jul-0

8Se

p-08

Nov

-08

Jan-

09M

ar-0

9M

ay-0

9Ju

l-09

Sep-

09N

ov-0

9

NT$

Mill

ions

Source: Company reports

4

2010 Semiconductor Revenue Forecasts

Source: SEMI

10.4%

12.2%

13.0%

14.0%

15.0%

22.0%

22.4%

10.2%

0% 5% 10% 15% 20% 25%

SIA (Nov 09)

Henderson Ventures (Jan 10)

WSTS (Jun 09)

Gartner (Nov 09)

VLSI Research (Dec 09)

IC Insights (Jan 10)

Semico Research (Jan 10)

Future Horizons (Dec 09)

5

Front End Fabs SpendingSpending in Front End Facilities

(Construction + Equipping)

-22%

77%

17%

-42%

-5%2%

64%

-6%

22%10%

-34%

-49%

66%

0

5

10

15

20

25

30

35

40

45

50

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: SEMI World Fab Database (Nov. 2009)

US$ Billion

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Growth %

Taiwan

SE Asia

S. Korea

Japan

Europe &MideastChina

Americas

Growth

6

Installed Capacity and Fabs closuresInstalled capacity vs. facilities closed

-0.1

-0.05

0

0.05

0.1

0.15

0.2

0.25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: SEMI World Fab Forecast, Nov. 2009

-70

-60

-50

-40

-30

-20

-10

0 % change installed capacityNumber Facilities closed

7

Installed Capacity by RegionWorldwide Installed Capacity over Time

in 200mm Equivalents

13.6%

8.9%

6.0%6.0%

12.2%13.6%

3.8%

9.7%

14.1%13.2%

20.1%17.5%

7.0%

-4.0%

4.4%6.4%

0

2

4

6

8

10

12

14

16

18

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: SEMI World Fab Database, Nov 2009

In Millions

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Change in %

Taiwan

SE Asia

S. Korea

Japan

Europe &MideastChina

Americas

Change

8

Semiconductor Equipment

9

0.450.550.650.750.850.951.051.15

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 (f) Dec-09(p)

Boo

k-to

-Bill

Rat

io

Source: SEMI December 2009

SEMI North America Book-to-Bill Ratio

$0

$200

$400

$600

$800

$1,000

$1,200

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 (f) Dec-09 (p)

US$

Mill

ions

Bookings Billings

North American Headquartered Manufacturers Global Capital Equipment Book-to-Bill(based on three month averages)

10

Worldwide Semiconductor (Fab, Test & Assembly) Equipment Trends

Worldwide Bookings and Billings forSemiconductor Equipment

(based on 3-month averages)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Jan-

97A

pr-9

7Ju

l-97

Oct

-97

Jan-

98A

pr-9

8Ju

l-98

Oct

-98

Jan-

99A

pr-9

9Ju

l-99

Oct

-99

Jan-

00A

pr-0

0Ju

l-00

Oct

-00

Jan-

01A

pr-0

1Ju

l-01

Oct

-01

Jan-

02A

pr-0

2Ju

l-02

Oct

-02

Jan-

03A

pr-0

3Ju

l-03

Oct

-03

Jan-

04A

pr-0

4Ju

l-04

Oct

-04

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8Ju

l-08

Oct

-08

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

US$

Bill

ions

Billings Bookings

Source: SEMI/SEAJ December 2009

11

SEMI® 2009 Year-End Equipment Forecast By Market Region

Source: SEMI 2009 Year-end Semiconductor Forecast, December 2009

Totals may not add due to rounding

$0$5

$10$15$20$25$30$35

N. America Japan Taiwan Europe S.Korea China ROW

ROW 2.61 1.40 2.31 2.96China 1.89 1.05 1.87 2.56S.Korea 4.89 2.95 4.47 5.90Europe 2.45 1.01 1.87 2.15Taiwan 5.01 4.04 5.92 7.76Japan 7.04 2.25 3.64 4.50N. America 5.63 3.33 4.41 5.39

2008 (A) 2009 (F) 2010 (F) 2011F

US$

Bill

ions

$16.03

$24.49

Totals may not add due to rounding

$29.52 $31.22

12

SEMI® 2009 Year-End EquipmentForecast By Segment

$0

$5

$10

$15

$20

$25

$30

$35

Wafer Process Assembly & Pack. Test Other

Other 2.00 1.14 1.63 2.02Test 3.45 1.57 2.54 3.27Assembly & Pack. 2.04 1.36 1.95 2.38Wafer Process 22.03 11.95 18.37 23.55

2008 (A) 2009 (F) 2010 (F) 2011 (F)

US$

Bill

ions

$29.52

$16.03

$24.49

$31.22

Totals may not add due to rounding

Source: SEMI 2009 Year-end Semiconductor Forecast, December 2009

13

Equipment Spending Trends

16%

13%15%

17%

20% 20%

17%

20%

14% 13%

17%

14%12%

16%

12%

24%

17%

13%

17%

7%

10%$139.0$140.7$166.6

$213.0$227.5

$262.3

$204.4

$125.6

$149.4$137.2

$132.0

$144.4$102.0

$77.0$60.0$55.0

$247.7$255.6

$248.6$219.6

$242.1

0%

5%

10%

15%

20%

25%

30%

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

F20

10F

2011

F

$0

$50

$100

$150

$200

$250

$300

$350

US$

Bill

ions

Equipment Spending % of Semiconductor Revenue

Semiconductor Revenue ($B) WSTS

Source: SEMI and SIA November 2009

Line ChartBar Charts

14

Semiconductor Materials

15

Leadframes-Shipments return to year ago levels

Source: SEMI Materials Market Data Subscription

Global Leadframe Shipments

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jan-

06

Mar

-06

May

-06

Jul-0

6

Sep

-06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep

-07

Nov

-07

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Mill

ions

of U

nits

IC Discrete

16

Worldwide Wafer Fab Materials Forecast

Actual Actual Forecast

2007 2008 2009 2010 2011 Silicon Wafers1 12,830 11,924 7,229 9,010 10,052

Photomasks2 2,975 2,900 2,491 2,590 2,846

Photoresists 1,144 1,116 926 1,091 1,198

Photoresist Ancillaries3 1,219 1,225 1,144 1,350 1,483

Wet Chemicals4 904 923 905 941 983

Gases 3,229 3,100 2,515 2,965 3,257

Sputter Targets4 480 508 356 391 438

CMP Slurry & Pads5 1,024 1,007 897 1,092 1,218

Other/New Materials6 1,271 1,439 1,359 1,575 1,757

Total $25,076 $24,143 $17,822 $21,005 $23,232% Growth -3.7% -26.2% 17.9% 10.6%

US$ Millions

Source: SEMI Materials Market Data Subscription November 2009

Totals may not add due to rounding

17

Wafer Fab Materials Forecast Notes

1. Silicon wafers include merchant sales value only; includes SOI wafers; no reclaim wafers

2. Includes captive market3. Includes resist removal chemicals, developers, anti-reflective

coatings, contrast enhancers, edge bead removers, adhesion promoters, etc.

4. Source is Techcet Group LLC, includes precious metals5. Estimates for IC applications only6. Includes low k dielectrics, copper plating solutions, dielectric

precursors, organometallic precursors, etc.7. All forecasts in current dollars8. Source for all data is SEMI, unless otherwise indicated

Source: SEMI November 2009

18

Worldwide SemiconductorPackaging Materials Forecasts

Actual Forecast

2007 2008 2009 2010 2011Leadframes $3,289 $3,013 $2,586 $2,908 $2,976Organic Substrates1 6,656 7,586 6,967 7,674 8,255Ceramic Packages 1,574 1,501 1,290 1,388 1,429Encapsulation Resins 1,624 1,475 1,284 1,464 1,559Bonding Wire2 3,592 3,968 3,838 4,359 4,446Die Attach Materials3 612 588 582 650 682Others4 242 193 179 207 233

Total $17,589 $18,324 $16,726 $18,650 $19,580

% Growth 4.2% -8.7% 11.5% 5.0%

US$ Millions

Source: SEMI Materials Market Data Subscription November 2009

19

Semiconductor Packaging Materials Forecast Notes

1. Source is TechSearch International. Includes PBGA, PPGA, LGA, and CSP laminate substrates and flex BGA and CSP substrates

2. Assume gold value of $660/trz for 2007, $872/trz for 2008, $920 for 2009-2011 forecast period

3. Includes die attach film (tape) materials4. Other includes solder balls and wafer level package

dielectrics5. Source for all data is SEMI, unless otherwise indicated6. All forecasts in current dollars

Source: SEMI November 2009

20 Source: Rose Associates 1978 to 1995; SEMI SMG 1995 to 2008; SEMI

75 mm

100 mm150 mm

125 mm

200 mm

300 mm

Includes polished and epi wafers. Excludes reclaim, non polished, and SOI.

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

F20

10F

2011

F

Mill

ions

of S

quar

e In

ches

Global Silicon Wafer Outlook by Diameter

21

Gold Bonding Wire- Clear Transition to Smaller Diameter

% Share of Gold Wire Market by Diameter

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009E

>30 micron 25-30 micron <25 micron

Source: SEMI and Techsearch International, Global Semiconductor Packaging Materials Outlook

22

Packaging Materials Outlook

160.7

18.0

343

7,055

20107,4796,5737,574Organic Substrates

(K square meters)

171.3137.4158.0Mold Compound (millions of kg)

20.315.415.8Bonding Wire (billions of meters)

365300331Leadframes(billions of units)

201120092008Segment

Source: SEMI and Techsearch International, Global Semiconductor Packaging Materials Outlook

23

Materials Forecast By Segment

$0

$10

$20

$30

$40

$50

Fab Packaging

Packaging 17.59 18.32 16.73 18.65 19.58Fab 25.08 24.14 17.82 21.01 23.23

2007 2008 2009F 2010F 2011F

US$

Bill

ions

Totals may not add due to rounding.

$42.67 $42.47

$34.55

$39.66

Source: SEMI Materials Market Data Subscription November 2009

$42.81

24

SEMI® 2009 Materials Forecast By Market Region

$0$5

$10$15$20$25$30$35$40$45$50

N. America Japan Taiwan Europe S.Korea China Southeast Asia

Southeast Asia 6.79 6.90 5.99 6.74 7.12China 3.31 3.57 3.26 3.80 4.16S.Korea 6.10 5.90 4.71 5.44 5.92Europe 3.68 3.29 2.47 2.86 3.08Taiwan 8.34 7.90 6.76 7.85 8.55Japan 9.19 9.98 7.67 8.69 9.34N. America 5.25 4.93 3.68 4.27 4.63

2007 2008 2009F 2010F 2011F

US$

Bill

ions

$42.47

$34.55

Totals may not add due to rounding.

Source: SEMI Materials Market Data Subscription November 2009

$42.67 $42.81$39.65

25

Summary• Fab Trends

– Fab construction spending at lowest level in 15 years– Total fab spending to increase over 60% in 2010– -4% decline in installed capacity in 2009, and forecasting 4% to 5%

capacity increase in 2010.• Semiconductor Equipment Market

– At the beginning of 2009, bookings fell to levels last reported in the early 1990s.

– -46% decline in 2009– +53% growth in 2010 and +28% growth in 2011

• Semiconductor Materials Market– 2009 forecasted to decline -19%– 2010 outlook to be inline with overall semiconductor market growth