The Value of Gartner Allen Liao B S

The Value of Gartner

Allen Liao 廖銘仁 § 學歷: B. S. 清華大學核子程系 M. S. Manufacturing Engineering, Syracuse University, New York, USA § 經歷: 15 years in IT and High-Tech Manufacturing Industry - 業務協理, Gartner Taiwan - 專案經理, HP 顧問事業群, HP Taiwan & Singapore - 資深顧問, SAP Taiwan - Project Logistic & Global Supply Chain Leader, Ericsson Taiwan - 資材部經理, Ultima Electronics © 2006 Gartner, Inc. All Rights Reserved. 2

Gartner Company Profile © 2006 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner, TCO and ITxpo are registered trademarks of Gartner, Inc. or its affiliates. © 2006 Gartner, Inc. All Rights Reserved. 4

~Gartner made in 1998 E-Business Hype Cycle Visibility 1998 We are here E-Business Forever Dot-com share fallout E-Tailing E-Business subsumed into corporate DNA Investor disillusionment Optimized E-Business disillusionment Dot-com starts “True” E-Business emerges Internet / WWW 1990 -1996 Trigger 1997 1998 1999 Peak of Inflated Expectations © 2006 Gartner, Inc. All Rights Reserved. 2000 2001 2002 Trough of Disillusionment 5 2003 2004 2005 2006 Slope of Enlightenment 2007 2008 Year Plateau of Productivity

Corporate Overview Gartner. The leader in technology research. § Trusted – 信賴的 § Objective

Gartner Basic § Gartner, Inc. (NYSE: IT) § Founded in 1979 § Headquartered in Stamford, Connecticut, U. S. A. § Delivery : technology-related insight necessary for our clients to make the right decisions, every day § Client base: - CIOs and other senior IT executives in corporations, education institutions and government agencies - Technology companies - Investment community. © 2006 Gartner, Inc. All Rights Reserved. 7

People Data § Number of employees 3, 900 § Number of analysts 650 § Number of consultants 550 § Number of quota-bearing salespeople 655 § Direct contact with clients: Yes § ISO 9000, ISO 9001, ISO 12000 © 2006 Gartner, Inc. All Rights Reserved. 8

Client Data § Number of countries where we have clients : 75 § Client organizations worldwide: 45, 000 clients representing 10, 000 distinct organizations worldwide § Client base: - Technology sector is responsible for approximately 30% of Gartner revenue - Other sectors comprise 70% of Gartner revenue § Fortune 1000 penetration 66%, Global 500 penetration 80% © 2006 Gartner, Inc. All Rights Reserved. 9

University Clients § - U of California (USA) § § § § - U of Chicago (USA) - U of Cambridge (UK) - U of Hong Kong (HK) - Singapore Management University (Singapore) - SUNY - Buffalo, Albany (USA) - MIT (USA) - U of Illinois (USA) - U of London (UK) - U of Michigan - Ann Arbor (USA) - U of Minnesota (USA) - U of Washington (USA) - U of Wisconsin (USA) - U of Israel (Israel) - U of Berlin (Germany) ……etc © 2006 Gartner, Inc. All Rights Reserved. 10

Gartner Services © 2006 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner, TCO and ITxpo are registered trademarks of Gartner, Inc. or its affiliates. © 2006 Gartner, Inc. All Rights Reserved. 11

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Gartner is in a unique position to deliver insight you can’t find anywhere else. 10, 000 Media Inquiries 215, 000 Client Inquiries 2, 000 Consulting Engagements 75 Countries 66% of Fortune 1000 80% of Global 500 650 Analysts 70+ Conferences 17, 000 Benchmarks 3, 100 CIOs 45, 000 Clients Source: This data is accurate as of March 31, 2006. © 2006 Gartner, Inc. All Rights Reserved. 13 “Gartner acts as an extension to my staff and as an intelligent filter to the oceans of information that I need to track and monitor. With Gartner, I get opinions that are objective, unbiased and candid. ” JOSEPH D. “JODY” GILES CIO, Under Armour

Hype Cycles Hype cycles help determine when a technology will pay off. © 2006

Magic Quadrants help you position the leading players. © 2006 Gartner, Inc. All Rights

Example: Magic Quadrant for North America ERP Service Providers, 2006 © 2006 Gartner, Inc.

Sample of Gartner Research & Deliverables © 2006 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner, TCO and ITxpo are registered trademarks of Gartner, Inc. or its affiliates. © 2006 Gartner, Inc. All Rights Reserved. 18

Worldwide DRAM Forecast, 1 Q 07: Who is Adding Capacity? % New Cap. % Increase 4 Q 08 3 Q 06/4 Q 08 Billions of Megabytes 26% 193% 21% 163% 26% 193% 197% 8% Total © 2006 Gartner, Inc. All Rights Reserved. 19 158% 100% 182%

Regional Semiconductor Packaging Materials Markets 2006 Estimate = $14. 7 Billion © 2006 Gartner, Inc. All Rights Reserved. Source: SEMI Materials Market Data Subscription March 2007 Totals may not add due to rounding 20

CIOs expect modest increases in their IT budgets. Anticipated average IT budget increase Half of CIOs expect their budgets to increase an average of 4. 9% while 30 percent expect no change and 20 percent expect an average decline of 1. 5% 3. 0% 2. 5% 2. 7% 3. 0% 2. 0% 1. 5% 1. 4% 1. 3% 1. 0% 0. 5% 0. 0% 2002 2003 2004 Trend Line © 2006 Gartner, Inc. All Rights Reserved. 21 2005 2006 2007

CIOs must to do more than control cost and service quality to meet business expectations. Top 10 CIO Strategies: To what extent is each of the following a priority for you in 2007? 2007 2006 2005 Delivering projects that enable business growth 1 1 1 Linking business and IT strategies and plans 2 2 2 Improving the quality of IS service delivery 3 7 7 Attracting, developing, and retaining IS personnel 4 5 ** Demonstrating the business value of IT 5 4 3 Providing new types of information (e. g. : analytics) 6 * * Developing or managing a flexible technology infrastructure 7 8 ** Improving IT governance 8 9 10 9 3 9 10 * * Building business skills in the IS organization Leading change initiatives (involving more than IT) * New question for 2007 ** New question for 2006 © 2006 Gartner, Inc. All Rights Reserved. 22

Ben Lee 李輔邦 § 學歷: B. A. , 交通大學管理科學系 M. B. A. , 交通大學管理科學研究所 § 經歷: 17 years in Semiconductor Industry - 首席分析師, Gartner Taiwan -專案經理, 資策會 MIC 業務/行銷經理, Clevo Computer Inc. Taiwan © 2006 Gartner, Inc. All Rights Reserved. 23

Taiwan Semiconductor Industry – Strength in Diversity Ben Lee Principal Analyst, Semiconductor AP ben. lee@gartner. com

Taiwan Semiconductor Market Forecast § Key Issues - Global Semiconductor Market Overview - What is the semiconductor market forecast in Taiwan through 2011? by applications, and by device…. . - Who are leaders of semiconductor vendors in Taiwan? - Taiwan’s semiconductor industry update © 2006 Gartner, Inc. All Rights Reserved. 25

Semiconductor Forecast: 2 Q 07 Update Market Weakening Billions of Dollars and Revenue Growth $222 24. 6% $156 1. 4% $237 7. 3% $263 10. 2% $269 2. 5% $293 8. 7% $314 7. 2% $222 $235 $260 $276 5. 7% 10. 7% 6. 4% Source: Gartner Dataquest Estimates (May 2007) © 2006 Gartner, Inc. All Rights Reserved. $337 6. 6% Revenue CAGR 06/11 = 5. 1% $178 14. 5% 1 Q 07 24. 6% $316 0. 9% 26 $299 8. 2% $306 2. 2% $326 6. 7% $352 7. 7%

WW Semiconductor Market and Electronics Equipment Growth Rates © 2006 Gartner, Inc. All Rights

Taiwan Semiconductor Market Forecast § Key Issues - Global Semiconductor Market Overview - What is the semiconductor market forecast in Taiwan through 2011? by applications, and by device. . . - Who are leaders of semiconductor vendors in Taiwan? - Taiwan’s semiconductor industry update © 2006 Gartner, Inc. All Rights Reserved. 28

Taiwan Semiconductor Market Will Drop to US$ 9. 2 Billion in 2011, from US$ 12. 8 in 2006 Millions of US Dollars Market size in Taiwan has dropped down gradually… Market CAGR 06/11 = -6. 4% WW% 5. 7% 4. 9% 4. 2% 3. 8% 3. 4% 3. 1% 2. 8% Source: Gartner Dataquest Estimates (May 2007) © 2006 Gartner, Inc. All Rights Reserved. 29

Taiwan ODMs Will Grap More Semiconductor PTAM to US$ 82 Billion in 2011, from US$ 59 in 2006 Millions of US Dollars Market size is increasing dramatically over the period… Market CAGR 06/11 = 6. 6% WW% 21% 22. 6% 23. 4% 23. 7% 24. 3% 24. 7% Source: Gartner Dataquest Estimates (May 2007) © 2006 Gartner, Inc. All Rights Reserved. 30

Taiwan Semiconductor Market Forecast by Device Percentage Source: Gartner Dataquest Estimates (May 2007) ©

AP High TAM Applications Semiconductor 2006 2011 2006 -2011 2006 2011 Total Available Market (M$) CAGR Share Digital Cellular, 2. 5 G 16, 169 14, 045 -2. 8% 11. 7% 6. 9% Mobile PC 13, 139 25, 805 14. 5% 9. 5% 12. 7% Digital Cellular, 3 G 9, 089 33, 831 30. 1% 6. 6% 16. 6% Desktop PC (CPU and memory) 8, 872 7, 425 -3. 5% 6. 4% 3. 7% Desktop PC (motherboard) 5, 404 7, 230 6. 0% 3. 9% 3. 6% RS 3 -Flash Cards 4, 593 6, 268 6. 4% 3. 3% 3. 1% Portable Media Players – Flash 4, 349 5, 765 5. 8% 3. 2% 2. 8% Flat Panel Monitor 4, 007 5, 983 8. 3% 2. 9% Graphic Cards 3, 977 4, 222 1. 2% 2. 9% 2. 1% Rigid Disk Drive 3, 879 5, 967 9. 0% 2. 8% 2. 9% Video Game Consoles 3, 597 3, 978 2. 0% 2. 6% 2. 0% Optical Disk Drive 3, 171 4, 754 8. 4% 2. 3% Digital Still Camera 2, 721 3, 556 5. 5% 2. 0% 1. 7% 54, 850 74, 412 6. 3% 39. 8% 36. 6% 137, 815 203, 240 8. 1% Others SUM © 2006 Gartner, Inc. All Rights Reserved. 32

AP Emerging Applications Semiconductor 2006 2011 2006 -2011 2006 2011 Total Available Market (M$) CAGR Share 9, 089 33, 831 30. 1% 6. 6% 16. 6% GPS, Portable Navigation Device 951 3, 146 27. 0% 0. 7% 1. 5% Airbags 336 916 22. 2% 0. 2% 0. 5% 2, 147 4, 683 16. 9% 1. 6% 2. 3% Server, Entry-Level 845 1, 760 15. 8% 0. 6% 0. 9% Smart Cards 632 1, 270 15. 0% 0. 5% 0. 6% 13, 139 25, 805 14. 5% 9. 5% 12. 7% LAN Switches 894 1, 733 14. 1% 0. 6% 0. 9% Wireless LAN Infrastructure 719 1, 379 13. 9% 0. 5% 0. 7% Appliances 697 1, 202 11. 5% 0. 6% 1, 379 2, 296 10. 7% 1. 0% 1. 1% 705 1, 142 10. 1% Others 106, 280 124, 076 3. 1% Sum 137, 815 203, 240 8. 1% Digital Cellular, 3 G TV, LCD PC, Mobile Video Game Handhelds Security/Energy Management © 2006 Gartner, Inc. All Rights Reserved. 33 0. 5% 0. 6% 77. 1% 61. 0%

Taiwan Semiconductor Market Forecast § Key Issues - Global Semiconductor Market Overview - What is the semiconductor market forecast in Taiwan through 2011? by applications, and by device …. . - Who are leaders of semiconductor vendors in Taiwan? - Taiwan’s semiconductor industry update © 2006 Gartner, Inc. All Rights Reserved. 34

2006 Taiwan Semiconductor Market Share Leaders 2005 2006 2005(M$) 2006(M$) Growth 2006 Rank Revenue (%) Share (%) 1 1 Intel 5, 168 4, 572 -12% 15% 2 2 Samsung Electronics 1, 931 2, 059 7% 7% 10 3 Advanced Micro Devices 438 1, 822 316% 6% 3 4 Texas Instruments 1, 220 1, 548 27% 5% 5 5 Hynix Semiconductor 736 1, 029 40% 3% 6 6 NVIDIA 733 951 30% 3% 7 7 Powerchip Semiconductor 600 923 54% 3% 4 8 Media. Tek 925 888 -4% 3% 8 9 Infinion (+Qimonda) 564 655 18% 2% 9 10 Toshiba 524 618 18% 2% Others 13, 593 14, 893 10% 50% Total Market 26, 432 29, 968 13% 100% © 2006 Gartner, Inc. All Rights Reserved. 35

Taiwan Semiconductor Market Forecast § Key Issues - Global Semiconductor Market Overview - What is the semiconductor market forecast in Taiwan through 2011? by applications, and by device …. . - Who are leaders of semiconductor vendors in Taiwan? - Taiwan’s semiconductor industry update © 2006 Gartner, Inc. All Rights Reserved. 36

2006 Taiwan Semiconductor Manufacturers Leaders Company Name 2005 2006 Nanya Technology 1440 2111 47% Media. Tek Inc. 1438 1609 12% Power. Chip Semiconductor 1027 1513 47% Pro. MOS Technologies 871 1462 68% Novatek 809 964 19% Himax 540 743 38% Winbond Electronics 655 629 -4% Macronix International 511 615 20% VIA Technologies 590 559 -5% Realtek Semiconductor 352 380 8% 4179 4779 14% Total Taiwan 12, 412 15, 364 24% global share 8. 0% 8. 6% others © 2006 Gartner, Inc. All Rights Reserved. AGR 37

2006 Taiwan Semiconductor Foundry Leaders company name 2005 2006 AGR( %) TSMC 8, 228 9, 716 18% UMC 2, 882 3, 191 11% 114 122 7% 14 16 14% 353 398 13% Epsil 75 92 23% Mosel-Vitelic 80 99 24% 11, 746 13, 634 16% Power. Chip Semiconductor Winbond Electronics Vanguard total foundry © 2006 Gartner, Inc. All Rights Reserved. 38

2006 Taiwan Semiconductor Capital Spending 2006 GR 2007 G R 2005 2006 2007 Taiwan Semiconductor Manufacturing Group 2, 527. 0 2, 473. 7 2, 801. 0 -2. 1% 13. 2% Powerchip 1, 308. 7 2, 600. 0 2, 000. 0 98. 7% -23. 1% 80. 0 122. 0 1, 900. 0 52. 5% 1457. 4% Pro. MOS 860. 0 862. 0 1, 875. 0 0. 2% 117. 5% Inotera (was Hwaya Semiconductor) 718. 0 1, 413. 0 1, 229. 0 96. 8% -13. 0% United Microelectronics Group 722. 0 1, 018. 0 1, 006. 0 41. 0% -1. 2% 25. 0 36. 4 225. 0 45. 6% 518. 1% 929. 5 861. 1 495. 3 -7. 4% -42. 5% Taiwan Companies 7, 170. 2 9, 386. 2 11, 531. 3 30. 9% 22. 9% Global Share 15. 2% 16. 7% 20. 2% Nanya technology Vanguard International Semiconductor Others © 2006 Gartner, Inc. All Rights Reserved. 39

Taiwan Semiconductor Market Forecast § Complementary…. © 2006 Gartner, Inc. All Rights Reserved. 40

Cellular Phone Production Forecast, Worldwide Unit: K 2 G Cellular CAGR(06 -11): - 42. 4% Driver for semiconductor market: 2. 5 G Cellular CAGR(06 -11): - 2. 9% 3 G Cellular CAGR(06 -11): 32. 9% © 2006 Gartner, Inc. All Rights Reserved. 41 § Higher-than-expected demand for memory, especially flash, could boost overall semiconductor content and increase growth for the semiconductor market. § Advanced mobile devices, offering digital services and robust access to the Internet at attractive prices, could boost sales of 3 G devices. § The addition of functions such as GPS functionality and mobile TV could add to the cost of components and increase overall semiconductor value in the handset and devices for enterprise users.

Manufacturers' Sales of Mobile Terminals to End Users: Worldwide, 2006 and 2005 manufacturer 06 units (K) 06 mkt shr 05 units (K) 05 mkt shr Mkt shr change Nokia 344, 916 34. 8% 265, 615 32. 5% 2. 3% Motorola 209, 251 21. 1% 144, 920 17. 7% 3. 4% Samsung 116, 480 11. 8% 103, 754 12. 7% -0. 9% Sony Ericsson 73, 642 7. 4% 51, 774 6. 3% 1. 1% LG 61, 986 6. 3% 54, 925 6. 7% -0. 4% Ben. Q Mobile 23, 558 2. 4% 39, 692 4. 9% -2. 5% Sagem 15, 893 1. 6% 16, 327 2. 0% -0. 4% Sharp 12, 589 1. 3% 9, 881 1. 2% 0. 1% Sanyo 9, 040 0. 9% 10, 690 1. 3% -0. 4% NEC 8, 403 0. 8% 10, 572 1. 3% -0. 5% Ohters 115, 105 11. 6% 108, 414 13. 4% -1. 8% Total 990, 863 100% 816, 563 100% ODM Handsets as Percentage of Total is expected to be around 18% in 2006. © 2006 Gartner, Inc. All Rights Reserved. 42

Taiwanese ODMs: Strong R&D Keeps Them Competitive in 2006 Name Own brand Technologies supported Technology supplier Customers Shipm. 05(K) Shipm. 06(K) Shipm. 07(K) Arima Comm. - GSM/WCDMA Broadcom, Agere, Ericsson Mobile Sony Ericsson, NEC, LG, O 2, i. Smart 12, 000 13, 000 20, 000 Asus Comm. - GSM Infineon Technology Vodafone, O 2 600 1, 000 Ben. Q Mobile Ben. QSiemens GSM/WCDMA, CDMA - - 3, 980 2, 400 - Chi Mei Comm. - GSM/WCDMA TI, Infineon Motorola 700 12, 000 30, 000 Compal Comm. - GSM/WCDMA, CDMA TI Motorola, Alcatel, Eastcom, Datalog, Panasonic, 30, 000 65, 000 75, 000 HTC Dopod WCDMA, CDMA Broadcom, TI, Ericsson Mobile, Qualcomm, Samsung O 2, T-Mobile, Orange, Palm, Dopod International, NTT Do. Co. Mo, Cingular Wireless, Softbank 6, 850 8, 000 10, 000 Inventec Okwap GSM - Huawei technologies, Ji. Tong 1, 800 2, 000 3, 000 Mi. TAC Mio GSM Intel Own-brand only 500 500 Quanta - GSM ADI, Qualcomm Toshiba, O 2, NEC, HP, E-ten 2, 900 2, 000 2, 600 Others 9, 690 1, 000 1, 200 Total 69, 020 106, 500 143, 300 © 2006 Gartner, Inc. All Rights Reserved. 43

Personal Computer Production Forecast, Worldwide Forecast Overview: Desktop PCs CAGR(06 -11): 4. 0% Unit: K Mobile PCs CAGR(06 -11): 18. 2% © 2006 Gartner, Inc. All Rights Reserved. 44 § The upward revision reflects expectations for stronger mobile PC shipment growth as well as morerobust emerging market growth. § Deskbased PC shipment growth has been reduced on expectations of weaker replacement activity and moreaggressive mobile-for-deskbased substitution in mature markets. § Worldwide PC ASP will decline 9. 7 percent in 2006 and 7. 3 percent in 2007. Windows Vista impact could drive demand gradually in 2007.

Complement— 1. Focus Strategy on design-in TAM (1) Five major EE manufacturing models (Blanks indicate Y or N is possible) Remember: OEM, ODM, EMS etc are not Company Types but Manufacturing Models © 2006 Gartner, Inc. All Rights Reserved. 45

Complement-2. Focus Strategy on design-in TAM (2) 3 TAM analysis for Digital Still Cameras: Gartner 2007 plan includes 3 TAM reports for: 1. 3 G Phone 2. Mobile PC 3. Video Game Console Semiconductor Consumption per EEM (US$M) Equipment Brand Design-Win Purchasing Suppliers Potential Canon 977 98 Sony 818 655 Sanyo 53 692 Premier 264 371 148 Kodak 634 290 Panasonic 264 132 4. Wireless LAN Infrstr 5. LCD TV Casio 132 6. Fuji Photo Portable Navigation dev. 132 58 26 Konica Minolta 95 53 26 7. Airbag Nikon 132 24 Olympus 158 21 8. DSL CPE Ricoh 48 11 Pentax 26 11 0 Others 50 62 1529 3, 783 Total © 2006 Gartner, Inc. All Rights Reserved. 46