ICSOC Workshop Chengdu Guest Speech Dr Jeremy Wang

ICSOC Workshop (Chengdu) Guest Speech Dr. Jeremy Wang Asia Pacific Executive Director, FSA August 16, 2005

Overview Ø About the FSA Ø The superiority of the fabless business model Ø The global semiconductor environment Ø Challenging the successful innovation model Ø Future trends

FSA MISSION Accelerate the growth and increase the return on invested capital of the global fabless business model by promoting an environment for innovation. § Provide a platform for meaningful global collaboration between fabless companies and their partners § Identify and articulate opportunities and challenges to enable solutions § Provide members with research, resources, publications and survey information § Promote the fabless business model

A Global Community of Leaders Dr. Chintay Shih Special Advisor Bob Bailey PMC-Sierra Woody Yang Silicon 7 David French Cirrus Logic Chia Song Hwee Chartered Robert Tsao UMC 500 corporate members worldwide Jensen Huang NVIDIA Jimmy S. M. Lee ISSI Dwight Decker Conexant Sanjay Jha Qualcomm Ming Kai Tsai Media. Tek Wim Roelandts Xilinx Dr. Morris Chang TSMC Richard Chang ASE KY Ho ATI Dr. Nicky Lu Etron

FSA’s BOARD Fabless Seat Foundry Seat EDA Seat Special Director Fabless Seat Foundry Seat IDM Seat Director Emeritus Fabless Seat Foundry Seat Fabless Seat Back-end Seat Jodi Shelton Executive Director FSA Special Director 12 Fabless, 3 Foundry, 1 IDM, 1 EDA, 1 Backend, 1 FSA = 19 total 1 Director Emeritus, 2 Special Directors

FSA BOD Members Sanjay Jha Qualcomm David French Cirrus Logic Vahid Manian Broadcom Corporation Dwight Decker Conexant Gina Gloski Formerly with Fyre. Storm, Inc. Michael Rekuc Chartered Jodi Shelton Colin Harris PMC-Sierra, Inc. Dennis Segers Matrix Semiconductor Ron Boyd Freescale Semiconductor Almost 500 corporate members worldwide Jim Seto ATI Technologies Rick Cassidy TSMC North America Dr. Jackson Hu UMC Ron Torten Agilent Technologies Aart de Geus Synopsys, Inc. Jeorge Hurtarte Tran. Switch Corporation Dr. Tien Wu ASE, Inc.

FABLESS INFRASTRUCTURE/ECOSYSTEM Photomask Almost 500 corporate members worldwide EDA/IP Design Services Foundry Partners Wafer Fabs Over 1, 100 Fabless Semiconductor Cos OEM and ODM Customers Testing and subsystems Packaging Assembly

The Global Fabless Model 1, 300+ Fabless Companies Worldwide Europe 150 North America 600 China & Taiwan 500 Israel 100 Growth of global membership—nearly 500 global members!

Fabless Leaders The Fabless “Billion-Dollar Club” Ø In 2004, nine fabless companies achieved $1 B+ in sales. Rank Billion-Dollar Club Companies 2004 CY Revenue ($000) 1 QUALCOMM (QCT Division) $3, 224, 000 2 Broadcom $2, 400, 610 3 ATI Technologies $2, 140, 871 4 NVIDIA Corporation $2, 010, 033 5 San. Disk Corporation $1, 777, 055 6 Xilinx, Inc. $1, 588, 700 7 Media. Tek Incorporation $1, 252, 470 8 Marvell Semiconductor, Inc. $1, 224, 580 9 Altera $1, 016, 364 Source: FSA

ASIA-PACIFIC LEADERSHIP COUNCIL Chairman Dr. Nicky Lu Etron Gordon Gau Holtek Dr. Chintay Shih Special Advisor Ming Kai Tsai Media. Tek Chou-Chye Huang Sunplus Wen-Chi Chen VIA H. P. Lin Faraday Dr. Woodward Yang Silicon 7 Qin-Sheng Wang Huada Electronic Design Co. , Ltd. Dr. Zhonghan (John) Deng Vimicro K. C. Shih Global Unichip Dr. Shaojun Wei Datang Microelectronic Technology, Co. Ltd.

EUROPEAN LEADERSHIP COUNCIL David Baillie Cambridge Semiconductor David Milne Wolfson Microelectronics John Hodgson Cambridge Silicon Radio Roland Pudelko Dialog Semiconductor Svenn Tore Larsen Nordic Semiconductor Anthony Sethill Frontier Silicon

The Superiority of the Fabless Model Fabless vs. Overall Semi Revenue Ø Fabless companies have a higher gross margin than IDMs (47. 3% vs 44. 5%) Ø Fabless companies have significantly higher R&D expenditure than IDMs 23. 7% vs. 15. 2% of sales Fabless CAGR=22% vs. Overall Semiconductor Growth at 7%

The Rising Cost of Manufacturing ($B) Semi Industry Revenue Growth 5 x Source: Goldman Sachs % Growth Industry Revenue Fab Cost Growth 7 x

Who Can Afford a 300 mm Fab? “A company must have the long-term endurance for maintaining its technology leadership or risk falling behind foundries. ” Top 20 Semiconductor Companies by 2004 Revenue ($M) A company must have revenue $5 B - $7 B to support 300 mm expansion Source: Goldman Sachs; FSA

Recent Hybrid and Partnership Models STMicro Freescale Philips Partnered with TSMC to achieve process alignment for 90 -nm Samsung IBM Infineon Partnered with Chartered for 65 -nm down to 45 -nm technology development AMD Takes 50% investment in UMC Infineon Makes 30% investment in UMC Philips Announced “capital-efficient” manufacturing strategy”; Halted current plans to build a new fab; Goal is 50% outsourcing on advanced CMOS processing TI To outsource 40 -50%+

The Proliferation of the Foundry 50+ Foundries Worldwide

Cost of Implementing Designs Increasing Source: IBS (2005)

Probability of Re-spin Increasing Source: IBS (2005)

Design Composition (Typical) 0. 18µm (5 M gates) Design engineering head count 0. 13µm (10 M gates) EDA tool exp Design engineering head count EDA tool exp 90 nm (20 M gates) Design engineering head count EDA tool exp 65 nm* (40 M gates) Design engineering head count EDA tool exp No. % % Architecture & project mgmt 3 10. 0 2. 0 8 13. 3 3. 0 29 20. 4 4. 0 66 21. 2 ? Specification to RTL 3 10. 0 3. 0 9 15. 0 26 18. 3 7. 0 58 18. 7 ? 13 43. 3 52. 0 22 36. 7 50. 0 42 29. 6 47. 0 88 28. 4 ? Physical design 9 30. 0 42. 0 16 26. 7 39. 0 28 19. 7 36. 0 58 18. 5 ? Post-GDSII 2 6. 7 1. 0 5 8. 3 3. 0 17 12. 0 6. 0 41 13. 2 ? Subtotal hardware 30 100. 0 60 100. 0 142 100. 0 311 100. 0 ? Software 18 37. 5 54 47. 4 170 54. 5 390 55. 6 TOTAL 48 100. 0 114 100. 0 312 100. 0 701 100. 0 Functional verification * Estimate HEAD COUNT WITHIN DESIGN TEAMS IS INCREASING RAPIDLY

Future Trends & Challenges Ø Standard Setting is the key Ø PC (Intel), Multimedia, DVD (Media Tek), Ø Wi-Fi (WAPI), Wimax, 3 G (Qualcomm), Digital TV, Ø Leverage collaboration and integration of supply chain partners into a cohesive unit--designers, EDA and IP vendors & foundries Ø Si. P vs. SOC (Hybrid model) Ø Heterogeneous Integration for Si. P Ø 3 rd party IPs for SOC Ø Consumer and communication applications Ø System and software knowledge

Thank you! Dr. Jeremy Wang王智立博士 Asia Pacific Executive Director e-mail: jwang@fsa. org 全球IC設計與委外代 協會 FSA (Fabless Semiconductor Association ) www. fsa. org