Global Fabless/Foundry Collaboration and Innovation

GLOBAL FABLESS/FOUNDRY COLLABORATION AND INNOVATION

Dr. Jeremy Wang Asia Pacific Executive Director, FSA August 15 2007 Proposal for Re-branding

Why Global Semiconductor Alliance?

It better reflects what we already do and allows us the flexibility to offer more services to a broader range of members long term.

Global best represents the current efforts of the organization and differentiates it from other regional or national organizations. Semiconductor encompasses the entire value chain, including the consumers of semiconductors. Alliance connotes that all types of companies have voluntarily come together to achieve the broader mission of greater supply chain efficiency and growth and success of the electronics industry.

It allows us to use GSA in a similar fashion as FSA to maintain a consistent brand look and feel. UNDERSTANDING FABLESS IC TECHNOLOGY

Understanding Fabless IC Technology Jeorge S. Hurtarte Evert A. Wolsheimer Lisa M. Tafoya Fabless Semiconductor Association

Covering Fabless IC Design from application techniques to business management skills; this book has it all! KEY FEATURES: *Written by board members of Fabless Semiconductor Association (FSA), an industry consortium, including leading semiconductor, wafer foundry, assembly & test services, intellectual property, electronic design automation, and many other service partnering companies that support the outsourced business model

*Appropriate for a wide range of integrated circuit (IC) designers and users who need to understand the outsourcing process and its advantages/limitations

*Discusses important topics such as negotiating with outside fabrication companies, choosing the right electronic design tools, protection of intellectual property and business plans, and maintaining quality control UNDERSTANDING FABLESS IC TECHNOLOGY

DESCRIPTION:

Fabless (without fabrication facility) IC (integrated circuit) techniques are growing rapidly and promise to become the standard method of IC manufacturing in the near future, this book will provide readers with what will soon be required knowledge of the subject. Other books on IC fabrication deal with the strictly physical process aspects of the topic and assume all factors in IC fabrication are under the control of the IC designing company. By contrast, this title recognizing that fabless IC design is often as much about managing business relationships as it is about physical processes. “Fabless” ICs are those designed and marketed by one company but actually manufactured by another.

ISBN 13: 978-0-7506-7944-2 ISBN 10: 0-7506-7944-1

PUB DATE: August 17, 2007

LIST PRICE: $69.95 DISCOUNT: Agency/FSA FORMAT: Paperback, Illustrated PAGES: c. 296 TRIM SIZE: 7 1/2 X 9 1/4 in AUDIENCE: IC engineers, design engineers (analog and digital), engineering management. Overview

State of the Global Semiconductor Industry—Challenges and Opportunities Common Attributes of Successful Companies Trends Affecting the Semiconductor Industry— Collaboration and Innovation FSA Introduction and Conclusion MARKET OVERVIEW Attributes of a Successful Fabless Company: Fabless Revenue Growth

Semi Industry Fabless Industry $300,000 $60,000

Semi Industry Fabless Industry $49.6B $250,000 $247.7B $50,000 Fabless CAGR = 26% $204.4B Semiconductor CAGR = 8% $200,000 $40,000

$150,000 $30,000 ($M) ($M)

$100,000 $17.0B $20,000

$50,000 $10,000

$0 $0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: FSA WORLDWIDE 2006 TOP 25 SEMICONDUCTOR SALES LEADERS

2005 2006 2005 2006 Tot Tot Tot Tot 2006 2005 Semi Semi 06/05 % 2006 2005 Semi Semi 06/05 % Rank Rank Company ($B) ($B) Change Rank Rank Company ($B) ($B) Change 1 1 Intel 35.4 32.3 -9 % 14 12 Micron 5 5.5 11 % 2 2 Samsung 17.8 19.7 10 % 15 21 Qimonda 3.4 5.4 58 % 3 3 TI 11.3 13.2 17 % 16 13 Infineon 4.9 5.1 5 % 4 5 ST 8.9 9.9 11 % 17 19 Qualcomm 3.5 4.4 28 % 5 4 Toshiba 9 9.8 8 % 18 18 IBM 3.5 4 13 % 6 7 TSMC 8.2 9.7 19 % 19 17 Fujitsu 3.5 3.9 10 % 7 8 Hynix 5.6 8 43 % 20 15 Matsushita 4.1 3.8 -6 % 8 6 Renesas 8.3 7.9 -4 % 21 22 UMC 3.3 3.7 13 % 9 9 Freescale 5.6 6 8 % 22 24 Broadcom 2.7 3.7 37 % 10 11 NXP 5.2 5.9 13 % 23 29 Elpida 2 3.5 78 % (former Philips) 24 20 Sharp 3.4 3.5 1 % 11 14 Sony 4.2 5.8 37 % 25 26 Nvidia 2.4 3 27 % 12 10 NEC 5.6 5.7 2 % Top 10 Total 115.4 122.4 6 % 13 16 AMD 3.9 5.6 44 % Top 25 Total 170.6 188.9 11 %

Source : IC Insights / FSA The State of the Global Fabless Business Model Top 15 Companies by Revenue (Top 15 Fabless ALL FSA Members)

CY 2006 CY 2005 Company Revenue Revenue (Highlighted companies–Non U.S.) Stock Ticker ($000) ($000) 1 QUALCOMM (QCT Division) NASDAQ QCOM $4,331,000 $3,457,000 2 Broadcom NASDAQ BRCM $3,667,818 $2,670,788 3 SanDisk Corporation NASDAQ SNDK $3,257,525 $2,306,069 4 NVIDIA Corporation NASDAQ NVDA $3,068,771 $2,375,687 5 Marvell Technology Group Ltd NASDAQ MRVL $2,237,596 $1,670,266 6 LSI Logic NYSE LSI $1,982,148 N/A** 7 Xilinx, Inc. NASDAQ XLNX $1,871,604 $1,644,890 8 MediaTek Incorporation TSEC 2454 $1,624,486 $1,410,986 9 Avago Technologies Private Private $1,600,000* $1,800,000 10 Altera NASDAQ ALTR $1,285,535 $1,123,739 11 Conexant Systems NASDAQ CNXT $985,615 $812,818 12 NovaTek TSEC 3034 $964,314 $788,558 13 Himax Technologies NASDAQ HIMX $744,518 $540,204 14 CSR LSE CSR.L $704,700 $486,531 15 VIA Technologies, Inc. TSEC 2388 $657,901 $580,698 *Avago’s 2006 net revenue accounts for the 12 months ended Oct 31, 2006. Source: FSA **LSI Logic not fabless until 2006. Worldwide Foundry Ranking

Foundry Service Provider Revenues & Market Share by Year 2000 2002 2004 2006 $M % $M % $M % $M % TSMC $5,325 42.3 $4,654 46.6 $7,653 42.6 $9,875 45.9 UMC $3,183 25.3 $1,939 19.4 $3,670 20.4 $3,168 14.7 SMIC $0 0.0 $50 0.5 $975 5.4 $1,439 6.7 Chartered $1,134 9.0 $449 4.5 $932 5.2 $1,405 6.5 IBM $392 3.1 $760 7.6 $731 4.1 $698 3.2 Samsung $26 0.2 $71 0.7 $196 1.1 $526 2.4 Powerchip $108 0.9 $63 0.6 $331 1.8 $478 2.2 DongbuAnam $354 2.8 $248 2.5 $382 2.1 $419 1.9 Vanguard $584 4.6 $240 2.4 $499 2.8 $398 1.8 MagnaChip $298 2.4 $210 2.1 $262 1.5 $324 1.5 HHNEC $142 1.1 $145 1.5 $227 1.3 $320 1.5 X-FAB* $129 1.0 $145 1.5 $278 1.5 $312 1.4 SSMC $0 0.0 $82 0.8 $251 1.4 $293 1.4 HeJian $0 0.0 $0 0.0 $176 1.0 $292 1.4 Grace $0 0.0 $0 0.0 $140 0.8 $224 1.0 Jazz $0 0.0 $141 1.4 $220 1.2 $212 1.0 Tower $105 0.8 $52 0.5 $126 0.7 $186 0.9 ASMC $62 0.5 $89 0.9 $139 0.8 $170 0.8 Silterra $0 0.0 $68 0.7 $150 0.8 $165 0.8 Episil $213 1.7 $189 1.9 $149 0.8 $139 0.6 CSMC $34 0.3 $41 0.4 $80 0.4 $115 0.5 Winbond $358 2.8 $74 0.7 $30 0.2 $20 0.1 Others $134 1.1 $284 2.8 $385 2.1 $340 1.6 TOTAL $12,581 100.0 $9,994 100.0 $17,981 100.0 $21,518 100.0 Note: * Includes 1st Silicon from 2000-2006 (est). Source: IBS Back-end Market

2006 Assembly/Test Companies

2006 Revenue 2006 Market Rank Company ($M) Share

1 ASE $3,088.9 16.2%

2 Amkor $2,728.6 14.3%

3 SPIL $1,733.4 9.1%

4 STATS ChipPac $1,616.9 8.5%

5 UTAC $637.5 3.3%

-- Others $9,262.8 48.6%

Total $19,068.1 100%

Source: Gartner 2005/06 TOP 4 EDA FIRMS IN REVENUE

2005 2006 Rank Company Name Sales ($M) Sales ($M) Growth 1 Cadence Design Systems $ 1,329.2 $ 1,483.8 $ 11.6% 2 Synopsys $ 991.9 $ 1,095.6 $ 10.5% 3 Mentor Graphics $ 705.2 $ 791.0 $ 12.2% 4 Magma Design Automation $ 155.7 $ 172.1 $ 10.5%

Source: Company Reports

According to the EDA Consortium's (EDAC) Market Statistics Survey (MSS), EDA industry revenue grew 15.3 percent in 2006 to total $5.274 billion

•North America was the fastest growing region in 2006. EDA and IP revenue there was $2.589 billion, up 22 percent over 2005. •Western European revenue was up 12 percent to $977 million, •Japanese revenue was up 3 percent to $1.051 billion, and •Rest-of-world was up 19 percent to $657 million. TOP 10 SILICON IP PROVIDERS

Offer AMS IP Cumalative Rank Worldwide IP Revenues ($M) 2005 2006 Growth Share Share 1 ARM $ 373.1 $ 440.5 18 % 33 % 33 % 2 Synopsys $ 81.2 $ 91.0 12 % 7 % 40 % 3 MIPS Technologies $ 58.7 $ 76.2 30 % 6 % 46 % 4 Virage Logic $ 51.3 $ 59.3 16 % 4 % 50 % 5 Imagination Technologies $ 29.2 $ 38.8 33 % 3 % 53 % 6 Silicon Image $ 18.5 $ 32.8 77 % 3 % 55 % 7 Ceva $ 35.6 $ 32.5 -9 % 2 % 58 % 8 Faraday Technology $ 22.9 $ 32.0 40 % 2 % 60 % 9 Chipdea $ 24.5 $ 31.5 29 % 2 % 63 %

10 Rambus $ 27.7 $ 30.7 11 % 2 % 65 % Top 10 $ 722.6 $ 865.2 20 % 65 % 65 % Others $ 441.7 $ 469.0 6 % 35 % 100 % Total $ 1,164.4 $ 1,334.2 15 % 100 % 100 %

Source : Gartner Dataquest / FSA Foundry Sales by Process Node

2006 Pure-play Foundry Sales by Node

> 90nm - <= > 0.13um- 0.13um 0.18um 25% 31%

<= 90nm > 0.18um 18% - < 0.25um > 0.25um 8% >= - < 0.35um 0.35um

Source: IC Insights Foundry Sales by Process Node and Geographic Region

Source: FSA IDMs Giving More Business to Foundries

2006 Foundry Business by Customer Type

System 1%

IDM 32%

Fabless 67%

Source: IC Insights Foundry Sales by Customer Type and Geographic Region

Source: FSA Recent IDM Announcements

Fab-Lite Strategies

IDM Outsourcing Goal Details Overall No plans to sell fabs NXP 30% - 40% Foundry: TSMC (in 2 years) % Current Outsource = 15% All digital logic Texas Instruments processes at 32nm, Plan: Foundries: TSMC, UMC, SMIC, Chartered, IBM 22nm, below 45nm Cell processor, beginning 2008 All 45nm and below Sony Foundry: IBM Cell processor Partnering with Toshiba & IBM All 65nm and below 90nm and above both internal and external Cypress SRAM Foundry: UMC

Consolidation IDMs Details LSI/Agere The combination gives them broader portfolio across electronics - focused on cost savings then creating a new leader in any of their existing markets. By merging, the two companies hope to slash costs by as much as $125M/year beginning in 2008 from increased efficiencies in manufacturing and operating expenses. GLOBAL FABLESS BY REGIONS The State of the Global Fabless Model

Europe 100 North America Asia 600 Israel 400 75

U.S. Companies dominate in development and concept of new technology Taiwan creates unique business models Europe and Israel provide innovation China still in the maturation process Japan to adopt fabless next Korea growth dependent upon only a few customers India exploiting design and software capabilities The State of the Global Fabless Business Model North America

North American IC companies remain strong. 18% of total semiconductor revenue Accounts for about 45% of all semiconductors consumed Broad platform design knowledge Software expertise and utilization Talent and experience in engineering and marketing Fully understand the global ecosystem

% of Top 10 Semiconductor Company Revenue by Region 1994 2006 North America 38% 43% Asia 57% 43% Europe 5% 13%

Source: FSA, Gartner “The U.S. still leads in information technology, and it can sustain its world leadership if it continues to innovate.” – Dwight Decker, Chairman/CEO, Conexant

Source: EETimes, Morgan Stanley The State of the Global Fabless Business Model Taiwan

Maintaining its position as the leading global foundry supplier (80% share) Fabless strength Taiwan Fabless in Top 15 WW Fabless Companies by 2006 Sales Established, experienced design talent CY2006 66 public companies Sales Company Symbol (US$000) $8.3B in 2006 sales, 17% of all fabless MediaTek 2454 $1,624,486 4 of the Top 15 companies in 2006 NovaTek 3034 $964,314 Strong financial position Himax HIMX $744,518 Challenges VIA Tech 2388 $657,901 Fabless companies are focused on local consumption and not global Are not allowed by government to expand into China putting them at a disadvantage Financial mandates, becoming more like North America—capital gains tax for stock issued by technology companies

Source: FSA Geographical Observations of Success: Taiwan

Top 10 Taiwan Fabless Companies by 2006 Sales

2006 Sales Company Exchange Symbol (US$000) MediaTek Incorporation TSEC 2454 $1,624,486 NovaTek TSEC 3034 $964,314 Himax Technologies NASDAQ HIMX $744,518 VIA Technologies, Inc. TSEC 2388 $657,901 Phison TSEC 8299 $382,080 Realtek Semiconductor Corp. TSEC 2379 $381,191 Etron Technology TSEC 5351 $321,571 CoAsia Microelectronics TSEC 8096 $310,187 Silicon Integrated Systems Corp. TSEC 2363 $242,682 (SiS) Elite Semiconductor Memory TSEC 3006 $178,490 Technology Source: FSA The State of the Global Fabless Business Model China’s Growing Importance

China’s role increasing—end product demand, supplier and incubator for fabless design community

2006 R&D spending grew 22%

2006 Sales of Top 10 Fabless Companies = $1.3B* (55% YoY growth) Most Chinese fabless companies make chips for low-end consumer electronics products, mobile handsets, digital TVs, MP3 players, and telecom and network equipment Major customers of Chinese fabless companies are domestic

About 35 to 50 companies in production at less than or equal to 0.18um

Challenges remain Limited exit strategy with basically no public markets—Hong Kong, NASDAQ Limited design experience, and especially in platform and software IP protection remains a concern

*iSuppli Estimates China Update

More than 80% of Chinese fabless revenue comes from consumer electronics, mobile phones and fixed-line phones.(1) Revenue in China's fabless industry is expected to top $3.5B in 2007 and to more than double by 2011. (1) The rapid growth of fabless ventures in China has been largely driven by demand from system manufacturers, which have moved their operations to China, and by foundries such as SMIC and GSMC. The annual growth rate for China's domestic IC industry has averaged >30% during the past 5 years.(2) By 2010 China is forecasted to have 20-30 IC design houses with over $100M annual output, including 2-3 large IC design houses of over $1B annual output. (2) Semiconductor shipments in China are set to rise to $51.7B in 2007, up 20% from $43B in 2006. This compares to 15% revenue growth in 2006. (1)

(1) iSuppli (2) ResearchinChina.com The State of the Global Fabless Business Model China’s Exploding IC Demand

For the second year in a row, China’s IC market surpassed the Americas in 2006 to rank No. 1 worldwide. Grew 15% to $45.4B in 2006, greater than the 9% growth rate for the IC industry worldwide.

China Became Largest Market in 2006 $50 $45 $41 2005 2006 $39 $40 $37 $33 $34

$30 $26 $24

$20($B)

$10

$0 Americas Europe China Taiw an

Source: IC Insights TOP 10 SEMICONDUCTORS SUPPLIERS IN GREATER CHINA IN 2006

Top 10 Suppliers in China, Hong Kong and Taiwan in 2006 (Ranking by Revenue in Millions of U.S. Dollars) 2006 Company Name 2006 Percent Rank Revenue Change 1 Intel $ 8,404 -8.10 % 2 Texas Instruments (TI) $ 4,408 32.20 % 3 Hynix $ 3,475 59.90 % 4 Samsung Electronics $ 3,454 -2.50 % 5 STMicroelectronics $ 2,927 11.60 % 6 Toshiba $ 2,496 10.80 % 7 NXP $ 2,320 -1.30 % 8 Freescale Semiconductor $ 1,911 11.80 % 9 Advanced Micro Devices (AMD) $ 1,784 144.00 % 10 Qualcomm $ 1,462 19.00 %

Source: Nikkei Electronics TOP 10 SEMICONDUCTORS SUPPLIERS IN TAIWAN IN 2006

Top 10 Semiconductors Suppliers in Taiwan in 2006 (Ranking by Revenue in Millions of U.S. Dollars) 2006 Company Name 2006 Percent Rank Revenue Change 1 Intel $ 2,967 3.40 % 2 Samsung Electronics $ 1,472 -17.00 % 3 Texas Instruments (TI) $ 1,383 21.90 % 4 Powerchip Semiconductor (PSC) $ 1,352 24.30 % 5 Hynix $ 1,226 31.80 % 6 STMicroelectronics $ 854 3.80 % 7 Broadcom $ 822 50.50 % 8 NVDIA $ 788 14.40 % 9 Advanced Micro Devices (AMD) $ 768 193.10 % 10 NXP $ 632 0.30 %

Source: Nikkei Electronics The State of the Global Fabless Business Model Top 10 China Companies

2006 2006 Revenue Rank Company (US$M) 1 Solomon Systech Ltd. $322 2 Actions Semiconductor Co. Ltd. $170 3 HiSilicon Technologies Co. Ltd. $151 4 Datang Microelectronics Technologies Co. Ltd. $139 5 Vimicro Corp. $128 6 Hangzhou Silan Microelectronics $113 7 Spreadtrum Communications $106 8 Huahong Integrated Circuit $88 9 CEC Huada Electronic Design $68 10 Wuxi China Resources Semico Microelectronics $51 TOTAL $1,336

Source: FSA & iSuppli Corp. Estimates Korea Update

50+ fabless chip makers currently in Korea are actively designing and developing sophisticated chips for a broad range of applications.(1) The combined revenue of KOSDAQ-listed fabless companies is currently ~10% of the combined revenues of Taiwanese fabless companies. If South Korea is to catch up with Taiwan in five years, there needs to be at least three fabless companies whose revenues range from KRW 500 billion to 1 trillion (~US$500 million to $1 billion).(2) The average sales of 53 domestic fabless system semiconductor companies was 21.4 billion won, a 29.7% increase from 2005 (16.5 billion won).(3) Small companies with less than 1 billion won in sales decreased from 17 to 6, while the companies with 10+ billion won in sales increased from 20 to 24, which means the companies are transferring from the stage of product development to stable status. The sales of the top 10 companies took 65% of total sales but the numbers decreased from 2005 as small and medium businesses showed big growth.(3)

(1) iSuppli (2) SST (3) IT-SOC Assoc. The State of the Global Fabless Business Model Korea

Over 100 fabless companies, most VERY small

2006 estimated public fabless revenue =$700M

Primary applications include mobile phones, MP3/PMP, TFT/LCD, automotive, security and memory

Most companies affiliated with Samsung or LG—highly trained and experience engineering teams

Market cap of Core Logic and Mtekvision in the KOSDAQ market have exceeded their paid-in-capital by more than 100x.

Market needs to consolidate to have a large vendor that can provide economy of scale for 65nm designs

* Winbond bought 15% stake in EMLSI in Dec.’06 ** Pixelplus traded on NASDAQ and KOSDAQ The State of the Global Fabless Business Model Korea

2006 2005 % ‘06 ‘05 ($M) ($M) Growth Major Product Rank Rank Company

Corelogic 12 $200.7 $174.54 15.0% Mobile Phone

21Mtekvision $125.1 $192.24 -34.9% Mobile Phone

37Fidelix $75.1 $36.13 107.9% Memory

43EMLSI $66.1 $87.30 -24.3% SRAM, Pseudo SRAM, SDRAM

54Telechips $65.4 $69.88 -6.4% MP3

68C&S Tech $52.2 $32.58 60.2% DMB, IP Telephony

75Dawintech $51.2 $48.38 5.8% Display

89TLI $47.3 $32.22 46.8% Display

96TomatoLSI $46.6 $43.08 8.2% Display Driver IC

10 N/A SiliconWorks $31.7 N/A N/A LCD Driver IC

Source: IT-SOC/FSA The State of the Global Fabless Business Model India

Semiconductor Market: $2.8B in 2005 — VLSI Design Market: Revenue expected to reach $36.3B in 2015 (29.8% CAGR) Forecast, 2003-2015 India’s IC design services market set to grow Revenue over 20% through 2010 Revenue Growth Year ($M) Rate Major end-use segments: Communications, IT, 2003 $314.4 -- Consumer Electronics 2004 $423.3 35% Mobile Phone Surge 2005 $583.0 38% Will have 405M mobile-phone subscribers by 2006 $749.8 29% 2010, up from 140M at the end of 2006.* 2007 $986.9 32% Design and Software 2008 $1,261.3 28% Design starts in India set to rise from 600 in 2009 $1,607.2 27% 2005 to 3,248 in 2015. 2010 $2,007.6 25% Software design talent 2011 $2,462.8 23% Fabless companies making strategic investments – looking at burgeoning market by 2012 $3,020.0 23% 2015 and consistency of consumption growth in 2013 $3,691.8 22% end markets. 2014 $4,351.0 18% 2015 $5,085.5 17%

*iSuppli forecast, 12/06 The State of the Global Fabless Business Model India

“We are [hiring engineers in India] more aggressively than any semiconductor company.” – Dwight Decker, Chairman/CEO, Conexant

India is part of Conexant’s long-term growth strategy, cost is only part of it Conexant hired 700+ research engineers in India to cut overall costs by 50%-65% of its engineers by the end of 2006 50% semiconductor design and other high-tech engineering work now done at CNXT-India Engineers work on the "innovation and architecture" of Conexant’s semiconductor systems Conexant reduced costs by $36M in first year of large-scale work in India The number of Indian IC design engineers is set to increase from 12,352 in 2005 to 40,893 by 2010.

Average # of Engineering Graduates Average Salary of Engineers Per Year Per Year 400,000 $120,000 350,000 $103,900 350,000 $100,000 300,000 $80,000 250,000 200,000 $60,000 $39,500 150,000 $40,000 100,000 76,000 $20,000 50,000 0 $0 U.S. India U.S. India The State of the Global Fabless Business Model Europe

2006 estimated fabless sales = $1.5B (3% of WW fabless) CSR grew >64% YoY – 2006 sales expected to total more than $700M Corporate Shifting Infineon spin-off Qimonda raised $546M in its IPO Sale of Philips Semiconductors to a consortium of equity companies —now named NXP STMicroelectronics reports 51% of sales are in Asia. China is worth $600M/qtr., Japan is 25% of the market served in terms of product categories. Start-up history has not been as strong as North America While semiconductor R&D continues to be an area of traditional strength in Europe, there are alarming signs that Europe stands at a crossroads with total R&D investment seriously lagging behind regions such as N. America At the same time, the gap between private R&D funding and public funding is also dangerously increasing in Europe.

Source: FSA The State of the Global Fabless Business Model Europe

2006 (CY) 2005 (CY) ’06 Stock Revenue Revenue Rank Company Exchange Ticker (US$000) (US$000) 1 Cambridge Silicon Radio (CSR) LSE CSR.L $704,700 $486,531 2 Melexis NV BRU MLXS $265,841 $229,127 3 Wavecom NASDAQ WVCM $249,028 $170,495

4 Wolfson Microelectronics Pls LSE WLF.L $204,133 $166,558 5 Dialog Semiconductor FWB DLG $94,024 $170,725 6 Nordic Semiconductor ASA OSL NOD $45,778 $47,332

7 SwitchCore AB STO SCOR $8,665 $15,786 N/A ClearSpeed LSE CSD N/A $755 N/A CML Microcircuits Ltd. LSE CML.L N/A $42,598 N/A Cyan Holdings AIM CYAN.L N/A $52 N/A IndigoVision, Ltd. LSE IND.L N/A $9,212 N/A Innovision Research & AIM INN N/A $2,835 Technology N/A Thomson (Fabless Division) PAR TMS N/A N/A

Source: FSA The State of the Fabless Business Model Israel

More than 50 fabless companies headquartered in Israel Highest level of VC funding outside North America Wide variety of end markets: microprocessors, data & voice communications, wireless, IP and networking communications, consumer, automotive and defense. Israel's fabless sector is 3rd only to the U.S. and Taiwan.

Company Products/Markets Comment Flash memory for Digital cameras, cell Saifun Labeled most promising start-up in Israel phones, PDAs Developer of equipment to convert audio NASDAQ: DSPG / Holds 60% market DSP Group data to digital for phones/answering share in their field devices, PCs, consumer, wireless Awaiting IPO / Named #1 on the 2006 Wintegra Networking Deloitte Israel Technology Fast 50

Sources: InvestInIsrael.com, Compiler.com FINANCIAL IMPLICATIONS TOP 10 N.A vs. TAIWAN COMPANIES

Nroth America Taiwan 1 QUALCOMM (QCT Division) MediaTek Incorporation 2 Broadcom NovaTek 3 SanDisk Corporation Himax Technologies 4 NVIDIA Corporation VIA Technologies, Inc. 5 Marvell Technology Group Ltd Sunplus Technology 6 LSI Logic Phison 7 Xilinx, Inc. Realtek Semiconductor Corp. 8 Altera Etron Technology 9 Conexant Systems CoAsia Microelectronics 10 QLogic Corporation Silicon Integrated Systems Corp. (SiS)

Source: FSA TOP 10 N.A vs. TAIWAN AVG ROE 2000-2006

Top 10 North America vs. Taiwan Average Return On Equity 2000-2006 80.0% 67.8% 70.0% 67.1% 66.1% N.A. Taiwan 60.0% 55.2% MediaTek 50.0% 40.0% 33.8% 36.4% 38.3% 37.6% 30.0% 24.0% 19.6% 22.5% 21.3% 19.8% 20.0% 16.3% 14.5% 10.0% 15.9% 12.9% 0.0% -2.1% -10.0% 2000 2001 2002 2003 2004 2005 2006 -20.0% -11.9% -11.9% -20.8% -30.0% Source: FSA TOP 10 N.A vs. TAIWAN AVG ROA 2000-2006

Top 10 North America vs. Taiwan Average Return on Assets 2000-2006 60.0% 49.4% 50.6% N.A. 50.0% 46.2% Taiwan 45.7% MediaTek 40.0% 32.0% 33.1% 32.4% 30.0% 25.9% 19.0% 20.0% 15.5% 15.7% 11.2% 14.9% 13.8% 10.0% 6.5% 12.1% 12.5% 4.1% 0.0% 2000 2001 2002 2003 2004 2005 2006 -10.0% -8.6% -4.2% -20.0% -17.1% -30.0% Source: FSA TOP 10 N.A vs. TAIWAN AVG ROIC 2000-2006

Top 10 North America vs. Taiwan Average Return on Invested Capital 2000-2006 80.0% 67.8% N.A. 70.0% 67.0% 66.0% Taiwan 60.0% 55.1% MediaTek 50.0% 40.0% 35.6% 36.3% 36.9% 36.5% 30.0% 24.3% 16.8% 19.3% 16.2% 20.0% 16.8% 15.9%

10.0% 9.8% 14.3% 14.5% 5.1% 0.0% -10.0% 2000 2001 2002 2003 2004 2005 2006 -8.9% -4.5% -20.0% -18.2% -30.0% Source: FSA TOP 10 N.A vs. TAIWAN AVG NET PROFIT MARGIN 2000-2006

Top 10 North America vs. Taiwan Average Net Profit Margin 2000-2006 60.0% 43.6% 41.5% 43.4% 39.3% 42.7% 40.0% 35.8% 25.9% 20.8% 17.9% 18.1% 16.8% 20.0% 13.3% 10.0% 7.4% 13.2% 12.7% 0.0% 6.3% -8.5% 2000 2001 2002 2003 2004 2005 2006 -20.0% -8.3%

-40.0% -31.3% N.A. -60.0% Taiwan MediaTek -80.0% -70.5% Source: FSA CHALLENGES The Challenges Are Greater Than Ever

Slowing Growth Escalating Costs of Design Causing a decline in traditional VC funding Increasing Profitability Pressure Volume increasing ASP falling Time-to-Market Pressures There are big penalties to being late to market IP Integration and Verification is Difficult and Costly R&D Investment Increasing Important as DFM and DFT become critical at advanced nodes Changing Landscape—Consolidation of the Industry Back-end business model reinvents itself

Technical problems keep getting harder; the cost of new designs keeps escalating; and no end to these trends is in sight. Increasing Challenges Slowing Growth—Is This the Golden Age?

Semiconductor Industry’s $ Amount Growth Over the Years $300,000

$247.2B $250,000 growth ‘90-’06 $115.8B growth ’96-’06 $200,000 $108.8B growth $20.2B ‘01-’06 growth ‘05-’06 $150,000 ($M)

$100,000

$50,000

$0 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2001 2002 2003 2004 2005 2006

Source: FSA Increasing Challenges Escalating Cost of Design

$65M “It costs a new venture at least $15 million to reach tape-out. $60M Such high initial investment is too steep for a venture investor unless there was a good probability of a really huge return. $55M There is no value to the venture investor in putting $25 million into a company to achieve a $50 million exit.” — Lip-Bu Tan $50M Chairman, Walden International

$45M

$40M Prototype Software $35M

Cost ($M) $30M Validation $25M Physical $20M

$15M

$10M Verification $5M $0M Architecture 0.35µm 0.25µm 0.18µm 0.13µm 90nm 65nm Source: IBS, 2007 Costs are Rising – Especially Design

IC Cost by Process Node $110 $100M $100 Yield Ramp-up Mask Cost $90 $13 Design Cost $80 $12 $61M $70 $60 $12

($M) $50 $34M $9 $40 $24M $75 $30 $16.1M $10.1M $10 $20 $9 $3 $40 $1 $10 $6 $0.1 $21 $5 $0.1 $10 $14 $0 $5 180-nm 130-nm 90-nm 65-nm 45-nm 32-nm

300mm Fab Costs: 45-nm = $3B 32-nm = $10B Source: Chartered, Synopsys, FSA Increasing Challenges Fabless Funding

$3,000

Round A Higher Rounds $2,500

$2,000

$1,500 $1,759 37 22 41 42 33 43 32 Deals Deals$2,036 Deals Deals Deals Deals Deals $1,000 $1,607 $1,707 $1,506 $867 $1,493 16 $1,444 $500 Deals* 55 $466 32 $376 53 40 32 $208 27 $188 33 $176 18 $184 $0 2000 2001 2002 2003 2004 2005 2006

Round A deals have declined nearly 80% between 2000-2006 and currently account for only 10% of VC funding. Increasing Challenges Time to Market Is Critical--Cycle Time for Consumer OEMs

Must manage risk through inventory Lead times Current lead time management and risk sharing Fraction of Weeks Average industry lead times Handset production cycle time overall cost* Best-in-class lead times Weeks Percent

Assembly, test, 1 ~3 14-20 transport ICs 8-9 4-6 14-16 Manufacturing 1 ~7 Displays 10-11 3-4 13 Supplier lead Image 14+ 85 10-11 times sensors 2-3 4-8 Plastics TBD 16+ Total cycle time 1-2

Supplier lead times key *Does not add up to 100% due to “warranty and other” accounting for to flexibility ~5% of total cost Minimal focus on lead times Source: Client data; Purchasing Magazine; McKinsey experience Focus on price

50 Increasing Challenges Time-To-Market is Critical

Revenue Loss for Being Late to Market

100% 90.8% 90% Revenue Loss 80% 67.6% 70% 60% 47.4% 50% 40% 26.9% 30% 20% 10% 0% 3 Months 6 Months 9 Months 12 Months

Source: IBS, 2007 Increasing Challenges IP Qualification Costs Escalating

$30 31% of total cost Design Cost $25 IP Cost

$20 23% $18.6 $15 of total cost ($M) 16% $10 12% of total of total cost cost $9.1 $5 $8.4 $4.5 $2.8 $2.7 $0 $0.4 $0.9 .18um (30M) 0.13um (47M) 90nm (54M) 65nm (60M)

Node (Transistor Count)

As nodes advance, IP costs exponentially increase as a % of total cost Companies need a way to determine potential hidden costs – Hard IP Quality Risk Assessment Tool

Source: IBS, 2007 Increasing Challenges R&D Expenditure Trends

80,000 Fabless companies increasing the number of process engineers Other DFM is really bridging two separate disciplines 20.2% of Rev 70,000 Process EDA, fabless and foundry must come together to solve the DFM issues 19.7% Hardware Product Development of Rev 60,000 19.4% Software Product Development of Rev 18.9% of Rev 50,000 18.2% of Rev

17.2% Product Development 40,000 16.0% of Rev 15.6% of Rev 15.5% of Rev of Rev 30,000 16.8% 12.7% 18.5% 18.4% of Rev R&D Expenditures($M) of Rev of Rev of Rev 12.3% 20,000 12.2% of Rev of Rev

10,000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008* 2009* 2010* 2011* 2012* * Estimate. Year Source: IBS, 2007 Back-end Market

2006 Assembly/Test Companies

2006 Revenue 2006 Market Rank Company ($M) Share

1 ASE $3,088.9 16.2%

2 Amkor $2,728.6 14.3%

3 SPIL $1,733.4 9.1%

4 STATS ChipPac $1,616.9 8.5%

5 UTAC $637.5 3.3%

-- Others $9,262.8 48.6%

Total $19,068.1 100%

Source: Gartner Increasing Challenges Changing Landscape and Business Models

Packaging becoming increasingly important part of success equation Packaging accounts for 25% of the cost of a chip Increasing complexity of test and packaging More than 1,500 different packages today! Competition for attention increasing IDMs increasing outsourcing adds a new competition Units grow from 32 million in ‘05 to 49.5 million in ‘08 Companies have redefined the business model 168% CAGR for packaging segment between 2003 and 2009 Investments by packaging companies are more controlled to increase profitability and stability—6% to 35% GPM Tender offer for ASE and Stats demonstrates the increasing attractiveness of this segment due to margin expansion UPSIDE & OPPORTUNITIES So Why are There Still so Many Companies? It’s All About the Upside

Increasing End Market Opportunities Cell phones driving IC market growth Consumer electronics products—digital cameras, digital TVs, MP3 players account for over 20% of all semiconductor consumption Video game consoles shipments rose to 34.5M in ’06 up 30% Potential applications at the intersection of computing with entertainment and medical applications New Ways to Solve Challenges “As technology gets more restrictive and successive nodes yield fewer gains in raw performance, thinking outside the architectural box becomes a potentially valuable skill…new applications coming in areas like multicore computing and parallel processing—things we haven’t thought about yet…”

New Geographical Markets China—expected to urbanize 1 billion people by ‘10, strong markets for handhelds and digital televisions through the next decade. India—In Oct 2006 India added 7 million new mobile phone users in a one month! Attributes of a Successful Semiconductor Company

The fabless model has major advantages Control vs. Ownership is an important distinction Must possesses talent and expertise in process, software, platform, test Effective clustering Fabless-to-partner and partner-to-partner collaboration Financial performance Benchmarking against the leaders when modeling your business Expertise in software development Product diversification Diversification can protect overall margins Adaptability to new landscape Cost models need to adjust to the slowing growth of the industry Attributes of a Successful Semiconductor Company Cost Structure Advantage

Aggregate industry cost structure, 2005 % of sales Fabless companies have a more profitable cost structure than IDMs COGS 32.3 48.5 Fabless companies have a 53.0 better average EBITA margin than the IDMs

Depreciation 38.4 2.0 R&D and SG&A are similar as 16.2 a percentage of revenue 16.0 15.2 R&D 7.1 10.0 Significant portion of the SG&A 5.1 foundries EBITA contribution 11.1 EBITA 17.2 19.0 is due to TSMC alone 9.1 Foundry* IDM** Fabless**

*TSMC, UMC, SMIC, Chartered, Dongbuanam, Tower **TI, ST, Infineon, Hynix, AMD, Freescale, NEC EL, Micron, Qimonda, Rohm, ADI, Vishay, Natl Semi, Elpida (Intel excluded) ***Broadcom, nVidia, SanDisk, ATI, Xilinx, Marvell, MediaTek, Altera, Sunplus, Novatek, Conexant, Via, Qlogic, Omnivision (QCOM excluded) 1 Median for each set of companies Source: McKinsey CPC Semiconductor Database

59 Attributes of Successful Fabless Companies Fabless Performance Parameters

Fabless vs. IDM: Return on Equity vs. Return on Assets 2006

12.5%Fabless 12.5%

15% 5.3%IDM 5.2% 10%

5% 0% ROE ROA

Source: FSA Attributes of a Successful Semiconductor Company Control Versus Ownership

What defines fabless is NOT OWNING a fab; BUT Some fabless companies develop and own the process—Matrix Some co-develop the process with their foundry partner—Xilinx Some companies make investments in their foundry partner to develop proprietary technology to guarantee capacity—SanDisk Fabless companies often do extensive IP development Fabless companies are required to do platform design More emphasis and differentiation is dependent upon software capabilities Knowledge in packaging and testing necessary Attributes of a Successful Semiconductor Company Collaborative Clustering

"It's not enough to ask for something and hope the foundry can deliver it. You have to have the expertise in-house to understand what the foundry is wrestling with and anticipate how far they can get, and how far you will have to go to help them.“ –a Qualcomm Executive

IDM Fabless/Foundry Vertical Integration Horizontal Segmentation

Application & Application & EDA/IP Subsystem Design Subsystem Design Chip Design

Chip Design Design Foundry Wafer Fab Wafer Fab

Packaging/Test Packaging/Test Attributes of a Successful Semiconductor Company Financial Success

Fabless Leaders by Financial Metrics (2006)

Net Profit Operating Gross Profit Company Region Margin Margin Margin ROA ROE

Altera N. America 25.4% 34.4% 66.0% 10.5% 24.3%

Broadcom N. America 23.3% 23.6% 52.1% 19.0% 21.0% Marvell N. America 26.1% 28.4% 53.3% 15.4% 16.2% MediaTek Asia 41.0% 46.0% 57.8% 28.3% 23.1% Qualcomm CDMA N. America 27.4% 27.0% 60.0% 17.0% N/A Technologies Actions Asia 46.3% 13.3% 59.3% 9.2% 14.0% Faraday Asia 25.8% 20.8% 45.0% 24.3% 32.7% Holtek Asia 27.3% 16.8% 45.7% 24.0% 29.6% Vimicro Asia 16.3% 25.9% 31.6% 1.21% 13.58% Ali Asia 21.1% 25.3% 74.7% N/A N/A Industry Average 21.8% 26.2% 45.9% 12.0% 14.8%

Source: FSA Attributes of a Successful Semiconductor Company Diversity Creates Margin Protection

Example of 2 fabless companies successfully competing in different end-market applications

Broadcom Xilinx

Broadcom Markets Broadcom Products/ Xilinx Markets Xilinx Products/ Applications Applications Enterprise Networking Fully integrated Ethernet Communications (Wireless) 3G/4G cellular base (39.8% of sales) switch chips for equipment (49% of sales) stations; WiMAX makers (Wireline) Metro Area Networks; Single-chip Gigabit Ethernet FTTx-Passive Optical Networks; DSL Modems controller products, C-NICs, (Networking) Multi-Service that incorporate a TCP/IP Provisioning Platform (MSPP); offload engine Switches; Routers

Broadband Digital cable and satellite Storage & Servers (Storage) Security and Encryption; Communications Set-top boxes (11% of sales) Network Attached Storage (34.4% of sales) High-def TV and DVD (Servers) High-end Servers; PC players Peripherals

Mobile & Wireless Cutting-edge mobile (Consumer) Video Display Systems, TVs-LCD/PDP; DVR/STB/ (25.8% of sales) phones Consumer/Auto/ IPTV; Smart Handhelds Game console Industrial/Defense (Industrial) Medical Imaging; Test Portable media players (40% of sales) and Measurement Equipment VoIP chips for Gigabit (Auto) Multimedia Systems; GPS Ethernet networks and (Audio Video Broadcast) Cable wireless applications Head-end System; Production Switchers; Cameras (Defense) Satellite Surveillance

Source: FSA Attributes of a Successful Semiconductor Company Investment in Software Development Costs

80 90nm 65nm 70 45nm 69.5 62.9 32nm 65.3 60 56.6 60.7 58.4 56.8 56.8 50 49.6 47.4 46.3 40 45.7 41.2 37.6 30

Development Costs (%) 20 Percentage of Software Product Percentage 10

0 2002 2005 2008 2011 2014

Year Source: IBS, 2007 Attributes of a Successful Semiconductor Company Investment in Software Development

HW/SW Distribution Among Development Teams* 500 Intel now has 8,000+ Hardware software developers Software 400 (32% of all R&D employees) The value in software is marketshare not GPM 300 At Xilinx, 40% of R&D employees are in 200 software development

In 2004, STMicro 100 hired 1,000 R&D staff – half of these 0 were software 0.18 0.13 90nm 65nm engineers

* Survey of development teams across a variety of electronics fields (including semiconductors) Source: Embedded.com; Literature search; Rabo Securities Attributes of a Successful Semiconductor Company Example of Managing Change

Successful small companies and start-ups will NOT try to differentiate their product by its package—standard packaging means more reliable supply—even many of the larger companies can adopt this methodology Formulation of long term relationships and multi-year contracts with packaging companies to ensure the capex dollars are put into the right capacity Packaging and Test Suppliers are consulted earlier in the process and early decisions are made about the right package Broad understanding of end market application and physical requirements Package design done along with die design Utilization of standard materials Joint development partnerships are evaluated to provide a complete solution, faster time to market and minimize redundancy of effort and resource Concluding Observations

How will the consolidation and business model changes impact supply in the long term? Who will pay for process technology development? The industry will continues to thrive with new market opportunities and unique business models Must have appropriate cost structure to adapt to slowing growth Prepare company for an exit from the beginning with financial discipline and proper design methodology Achieve operation excellence and EXECUTE Economic globalization and advanced technology development will continue to go hand-in-hand – driving new products to market Design teams will continue to be challenged with design issues to solve Leverage collaboration and integration of supply-chain partners into a cohesive unit – designers, EDA and IP vendors & foundries Creation and support of standards to facilitate the inclusion third party IP into the fabless semiconductor supply chain. FSA MEMBERSHIP FSA Mission

Accelerate the growth and increase the return on invested capital of the outsourced semiconductor business model by promoting an environment for innovation. Identify and articulate opportunities and challenges to enable solutions

Provide a non-competitive platform for meaningful global collaboration between semiconductor companies and their partners

Provide members with market intelligence via research, resources, publications and survey information

Promote the outsourced business model FSA GLOBAL LEADERSHIP

FSA leaders are committed to the goals and principles of FSA and contribute to the well-being of the Association.

European FSA Board of Asia-Pacific Leadership Council Directors Leadership Council

VC Advisory FSA Technology CEO Council Board Committee FSA BOARD OF DIRECTORS

Sanjay Jha Dwight Decker Danny Biran Aart de Geus Jodi Shelton Bill Broklehurst Rick Cassidy Qualcomm Conexant Altera Freescale TSMC North Synopsys, Inc. Corporation Semiconductor America

Michael J. Fister David Colin Harris Chris Cadence Design French Oleg Khaykin Dr. Nicky Lu PMC-Sierra, Inc. Fu Tai Liou Malachowsky Systems, Inc. formerly of Amkor Etron Cirrus Logic UMC Technology, Inc. NVIDIA

Vahid Manian Hans Olsen Michael Rekuc Jack Harding Ron Torten Dr. Albert Wu Dr. Tien Wu Broadcom Pixelworks, Inc. Chartered eSilicon Corp Nemerix Marvell ASE, Inc. Corporation Asia-Pacific Leadership Council

Chairman Dr. Chintay Shih Xiaolang Yan Dr. Zhonghan Chou-Chye Dr. Nicky Lu Wen-Chi Gordon Gau Dr. Ki Soo Special Advisor Special Advisor (John) Deng Huang Etron Chen Holtek Hwang VIA Vimicro Sunplus Core Logic, Inc.

H.P. Lin K.C. Shih Ming Kai Tsai Qin-Sheng Wang CSIA IC Design Dr. Shaojun Wei Faraday Global Unichip MediaTek Dr. Woodward Lun Zhao Branch Pheonix Microelectronic Yang Datang Technology, Co. Silicon7 Microelectronics Ltd. EUROPEAN LEADERSHIP COUNCIL

David Baillie Chris Ladas Svenn Tore Larsen Erwin Leichtle David Milne CamSemi CSR Nordic Semiconductor SwitchCore Wolfson Semiconductor Microelectronics

Anthony Sethill Frontier Silicon FSA VC ADVISORY BOARD

Wayne Cantwell Rob Chaplinsky Steve Domenik Phillip T. Gianos Kenneth P. Lawler Crescendo Ventures Bridgescale Partners Charles Chi Sevin Rosen Funds InterWest Partners Battery Ventures L.P. Greylock Partners

Josh Ofstein Jake Seid David Vimal Patel Chris Rust Venu Shamapant The Carlyle Group LightSpeed Venture Silverman Sierra Ventures US Venture Partners Austin Ventures Partners 3i

Rob Soni Mark Stevens Lip-Bu Tan Ron Yara Matrix Partners Sequoia Capital Walden International Tallwood Venture Capital LEADERSHIP/VISIBILITY OPPORTUNITIES

Board of Directors Company Regional Leadership Councils Profile VC Advisory Board White Papers Articles Speaking Opportunities Articles, White papers Supplier Products and Services for Start-Ups Sponsorship Recognition— FSA Awards Subcommittees Sponsorship Visibility

Discounted Advertising GLOBAL FSA EVENTS FSA’s hosts four premier events and expositions dedicated to bringing together fabless companies, IDMs and OEMs with suppliers in the areas of foundries, packaging, test, assembly, IP, software, etc.

FSA/SEMI/SICA IC Design Suppliers Pavilion In conjunction with SEMICON CHINA 2007 March 21-23, 2007 Shanghai, China

IET& FSA International Semiconductor Forum, Venues alternate throughout Europe each Year - May 14-15, 2007 Paris, France

FSA Suppliers Expo Santa Clara Convention Center September 12, 2007 Santa Clara, CA

FSA Semiconductor Leaders Forum TAIWAN Taipei International Convention Center November 7, 2007 Taipei, Taiwan FSA AWARDS DINNER CELEBRATION

This prestigious dinner celebration includes an awards ceremony recognizing fabless companies that Mark Your Calendar have shown exemplary success, for 2007: vision, strategy and promise throughout the year. December 6, 2007 5:00 p.m. – 10:00 p.m. Companies host tables for key Santa Clara Convention Center clients and industry analysts for an Santa Clara, CA enjoyable evening of powerful executive networking. ACCESS TO COMPREHENSIVE DATA

FSA conducts ongoing research and surveys, providing our members with a variety of valuable data.

FSA produces a range of publications, reports and directories that serve the semiconductor industry.

Wafer Fabrication Profile and Directories Assembly & Test Reports

Global Fabless FSA Forum Fundings Magazine and Financial Report INDUSTRY FOCUSED COMMITTEES

Standard Foundry Process Intellectual Property (IP) Qualification (SFPQ) Projects: Standards for Hard and Soft Major Accomplishment: JEDEC IP; IP Business Modeling Adopted Process Qual available

Modeling Business Management Systems Projects: Standards for Model Projects: MIS Survey; Forums Verification; Model Survey and Technical Programs Mixed Signal/RF Foundry Projects: Accelerate the Foundry Supply Chain Performance Supply Chain Ecosystem through a Projects: Wafer Pricing and Test, standard roadmap Packaging and Assembly Survey

VC/Finance Advisory Board Education Projects: Tracking trends and Projects: Work with education identifying challenges faced by small community on curricula to support the companies and identifying models and fabless model business systems SiP Projects: SiP Patent Map beginning with Standard I/O 3D stacking as the top priority. Later-- Projects: Develop general guidelines for KGD (known good die)/Wafer Level BGA IC design with area I/O (flip chip) and of SiP, RF SiP Design and Design for align I/O roadmaps Testability FSA IPecosystem (IPe) Tool Suite

FSA Goal: Drive Hidden Costs of IP Down by Improving Communication to Reduce Risk and Create Efficiencies IP Quality – IP assessment remains problematic and risky for integrators IP Licensing – takes significant time and money IP Technology – Choosing a reliable and fully supported technology is complex and risky IP Manufacturability – leaves many questions unanswered

Risk Assessment, Productivity & Communication FSA Hard IPe Quality Risk Assessment Tool What is it? Series of questions that communicate quality aspects of an IP core Accumulates information about an IP vendor’s Design Methodology, Foundry Qualification, Specific IP, etc. Simple, brief to complete, developed with vendor perspective in mind Follows a workflow system in a robust Excel application

Multiple Uses and Benefits: 3rd-party IP risk evaluation Internal IP reuse risk evaluation risk evaluation Evaluating internal IP at a baseline quality level

Benefits Feature-based, flexible, customizable: Use as-is, Off the shelf, plug-n-play Blend into existing quality efforts to enhance internal operations Strong communication link between IP vendor, integrator and foundry in the IP engagement in every stage with value to: IP Vendor via structured feedback from integrator Integrator via structured categorical comparison with vendor comments Foundry via additional level of quality valuation with no additional work Comparison of up to 20 different IP vendors at a visual glance and detailed level Hard IP Working Group – Developers

IP Vendors Foundries Synopsys IBM Mentor Graphics TSMC Cadence UMC Virage Logic SMIC Impinj Chartered Sarnoff Samsung Dolphin Integration

Integrators (Fabless/IDMs) Workflow and Programming Support Avago IBM PMC-Sierra Synopsys Cirrus Logic Qualcomm Technical Leader ATI Raminderpal Singh, IBM Via Microlinear (Sirenza) IDT LSI Logic Philips Freescale Tool Output: Integrator Risk Profile

Dynamically generates risk profile with normalized results Shows where IP product’s strengths/weaknesses may exist at a glance for dialogue Allows Integrator to custom weight important areas after vendor responds to questions

Vendor’s Baseline Risk Assessment Integrator Custom Weighted Categories Assessment Red bar indicates a critical question was Table: How answered negatively Questions Were Answered Contact

Questions/comments regarding specific instructions pertaining to the IPe Tool Suite: Lisa Tafoya VP of Global Research [email protected]

Visit www.fsa.org to download

Technical questions regarding the IPe project: Raminderpal Singh Technical Leader – IPe Initiative [email protected] System-in-Package FSA SiP Subcommittee

Special Thanks to Our SiP Subcommittee—

Co-chairs Ho-Ming Tong, ASE Group Sebastian Liau, ITRI

Subcommittee Members Airoha, Amkor, Ardentec, ASE, Cadence, Cisco, D-Tek Semicon, Etron, Faraday, Global Unichip, Holtek, ITRI, MediaTek, Progate Group, RichTek, SPIL, Sunplus, Tong Hsing Electronic, TSMC, UMC, VIA…etc. System-in-Package FSA SiP Market and Patent Analysis Project

Purpose: The research and development of this SiP project is intended to create greater awareness of SiP applications and technologies.

Other objectives include: Understanding SiP market and technology trend Identifying the talents of competitors and major worldwide leaders in various arenas of SiP related patents & RD status Planning the direction of RD and patent strategy Creating seamless vertical integration of the SiP supply chain

Launch Date: September 5, 2006 SiP PROJECT: SiP TECHNOLOGIES FISHBONE DIAGRAM

Thermal/Stress Electrical Design/ Packaging Design Technology Modeling Technology Technology Heteroge neo us Heat Spreade r Embedded Passives Design Chips Integration Wide Band Differential & Modeling Encapsulation Stress Struc ture for Circuit Design W ideband Low Impedance Interc onnec tion Design Wire Bonding Packaging Built-in Basic Element Thermal Interface Statistic & Scalable Wafer Thermal Modeling Material Design Modeling Bumping Sensor Flip-Chip Pac kaging ESD Protection Bare Die Assembly EDA Design Environment RF Fro nt - end Design 3D Stacking* EMC Design Built-in Devices for Thermal/ Antenna Design SiP Stress Enhance ment* RF S iP Desig n* SiP Products Technology Design for Low Loss SiP Re liability SiP Burn-in Metal Substrate Substrate MEMS Sensor Design Bio-sensor Design Integrated Passives Organic Substrate SiP KGD* Sample Treatment Design fo r Dev ic e Testability * Bio-reac tor Control Ceramic Substrate Chip in Substrate* SiP BIST* Micro-fluidic Design & Flexible Substrate Built-in Devices Bio-compatibility Simulation Si Substrate* for Re liability

Testing & MEMS/ Substrate Reliability Sensor Technology Technology Technology System-in-Package FSA SiP Market and Patent Analysis Project

The Content of This Report Includes: – Chapter One Preface – Chapter Two Brief Introduction of SiP Packaging – Chapter Three SiP Patent Analysis – Chapter Four Dynamic Analysis on Major SiP Companies – Chapter Five SiP Market Forecast – Chapter Six Summary

Special Thanks to Our SiP Subcommittee Members

And Our Project Sponsors – System-in-Package FSA SiP Market and Patent Analysis Project

For the further information, please refer to our SiP website: http://www.fsa.org/publications/sip/ MEMBERSHIP WITH FSA

Semiconductor Membership: This membership is open to all semiconductor companies including fabless, fab-lite and IDMs.This category of membership is based on revenues. FSA provides special consideration for start-up semiconductor companies.

FSA provides special leadership opportunities to this category of members including voting privileges and participation on its Board of Directors.

Apply On-line at www.fsa.org/membership/application LEARN MORE…

Contacts to support you and help you maximize the value your FSA membership brings.

Jodi Shelton Executive Director [email protected] Dr. Jeremy Wang Asia-Pacific Executive [email protected] Director Vivian Pangburn VP, Global Marketing [email protected]

Lisa Tafoya VP, Global Research [email protected]

Irene Yu VP, Asia Pacific [email protected]

Donna Hoye Member Services Manager [email protected]

FSA 1-888-322-5195 www.fsa.org FSA Asia-Pacific Contacts

Taipei Office: 886-2-8712-8661

Irene Yu Asia Pacific Vice President [email protected]

Francine Chang Project Coordinator (Media, PR relations) [email protected]

Power Chi Project Coordinator (Events) [email protected]

Babbie Liu Sr. Manager, Events, Marketing & Membership [email protected]

Crystal Wang Project Coordinator (Membership) [email protected]

[email protected] Gillian Wei Shanghai Representative 86-13795475403 Beijing Representative [email protected] Joy Wu office 86-10-5872-7696 86-13701207590

www.fsa.org FSA MEMBERSHIP Information, Collaboration, Innovation