SEMICONDUCTOR CONTRACT MANUFACTURING SERVICES WORLDWIDE 1996 TABLE OF CONTENTS PERSPECTIVES 9601 5/20/96 1995 Fabless Semiconductor Review 9602 6/3/96 United Microelectronics Corporation 9603 8/26/96 Semiconductor Contract Manufacturing Capacity Update: Is There a Foundry Capacity Glut Looming? 9604 9/28/96 Worldwide Fabless Semiconductor Company Directory 9605 11/25/96 1996 Semiconductor Cost Model 9606 12/16/96 Semiconductor Contract Manufacturing Market Share 9607 12/16/96 Worldwide Planned IC Manufacturing Capacity Outlook 9608 12/30/96 The Year in Review: Developments in Semiconductor Contract Manufacturiag in 1996 9609 1/27/97 Legal Issued in Foundry Manufacturing MARKET TRENDS 9601 5/31/96 Semiconductor Five-Year Forecast Trends -- Spring 1996 9602 12/23/96 Semiconductor Contract Manufacturing Wafer Price Trends REPORTS 9601 4/1/96 Semiconductor Contract Manufacturing (Focus Report) Dataquestj T p D nr 251 River Oaks Parkway • San Jose • CA • 95134-1913 • Phone 408-468-8000 • Fax 408-954-1780 Worldwide Semiconductor Contract [Manufacturing (Foundry) IVJaricet to Triple by 2000 Dataquest has completed a comprehensive study of the worldwide semiconductor contract manufacturing (SCM) industry. SCM consists largely of traditional semiconductor foundry, with a small amount of OEM/ASIC business. The worldwide SCM market is expected to triple from U.S.$6.2 billion in 1995 to U.S.$18.5 billion by 2000. Demand for SCM services in 1996 through 2000 is projected to grow in all four regions of the world, with North America continuing to accotmt for more than half the SCM market. Table 1 shows the projections for SCM market by region for 1993 through 2000. Strong growth of North America-based fabless semiconductor companies wiU continue to fuel demand for SCM services in North America. An emerging fabless industry in Asia/Pacific is also likely to spur the growth of the SCM market. SCM growth in Japan and Europe will continue to rely on integrated device manufacturers outsourcing an increasing amount of IC manufacturing to foimdry. Clients of Dataquest's new Semiconductor Contract Manufacturing Worldwide service should receive a copy of a Focus Report, "Semiconductor Contract Manufacturing," in the next couple of weeks. Others wishing to purchase the report should contact their regional Dataquest sales representative. Table 1 Worldwide SCM Market Forecast by Region, 1993-2000 (Millions of U.S. Dollars) r CAGR (%) X993 1994 1995 1996 1997 1998 1999 2000 1994-2000 Worldwide 3,222 4,565 6,219 7,555 9,329 11,655 14,731 18,525 26.3 North America 1,537 2,200 3,265 4,180 5,313 6,801 8,776 11,319 31.4 Japan 1,367 1,789 2,192 2,483 2,963 3,554 4,278 5,082 19.0 Europe 248 471 592 674 765 920 1,165 1,452 20.6 Asia/Pacific 69 105 170 218 288 380 513 672 36.3 Source: Dataquest (April 1996) SCM Capacity Demand Exceeds Supply into Early 1997 Dataquest also surveyed a large number of SCM suppliers and users for their projected SCM capacity supply and demand. Analysis of the results reveals a likely reversal of the SCM April 15,1996 ©1996 Dataquest SCMS-WW-DA-9601 Dataquest Alert Semiconductor Contract Manufacturing Worldwide undersupply of 1994 through 1996 to an oversupply in 1997 through 1998. The projection of the SCM supply and demand imbalance for 1995 through 2000 is shown in Figure 1. Undersupply of SCM capacity m 1995 has been extended to 1996, resulting m a continuation of firm foundry • wafer prices. However, with the recent slowdown m semiconductor demand in specific segments, the significant increase of capacity added recently in the industry, and the possibility of rising memory-to-foundry capacity conversion stemming from the transition from 4Mb to 16Mb, there are growing signs of the formation of an oversupply in SCM capacity, specifically in the higher linewidth geometry (0.6 micron to 0.8 micron and higher). This is expected to occur durmg 1996. Leading-edge SCM capacity, at 0.5 micron and less, is expected to continue to be in short supply well into 1997. Moreover, sizable new foundry capacity is being added by existing and new SCM suppliers in response to the serious shortage of SCM capacity of recent years. Much of the added capacity — almost all with technology of 0.5 micron and less—will come into production during 1997 and 1998. Continuation of the SCM capacity ramp-up in 1997, as now planned, will likely lead to significant oversupply of 3 percent in 1998 and 7 percent in 1999. An oversupply will exert downward pressure on foundry wafer prices— a situation that may spur demand growth that will, in turn, bring more balanced SCM supply and demand by 2000. Figure 1 Worldwide SCM Capacity Supply and Demand Imbalance Projection Percent MSI Oversupply or Undersupply 1995 1995 1997 1998 1999 2000 Source: Dataquest (April 1996) By Calvin Chang April 15,1996 ©1996 Dataquest SCMS-WW-DA-9601 CONTACT: Tom McCall (408) 468-8312 [email protected] Dataquest Forecasts Worldwide Semiconductor Contract IVianufacturing IVIarlcet to Tripie by 2000 New Dataquest Program Offers Exclusive Look at This Explosive Market San Jose, CaHf., April 22,1996—The worldwide semiconductor contract manufacturing (SCM) market is projected to triple from $6.2 biUion in 1995 to $18.5 biUion by the year 2000, according to a new Dataquest report. The trend toward SCM is a megatrend similar to those that have evolved within the electronic equipment markets. The semiconductor contract manufacturing market consists largely of traditional semiconductor foundry and a smaU amount of a newly defined segment called OEM/ASIC. "The strong grow^th of North America-based fabless semiconductor companies w^ill continue to fuel the demand for SCM services," said Calvin Chang, senior industry analyst and program manager in Dataquest's Worldwide Semiconductor Contract Manufacturing program. "An emerging fabless industry in the Asia/Pacific region is also Ukely to spur the growth of the SCM market. On the other hand, SCM growth in Japan and Europe will continue to rely on integrated device manufacturers outsourcing an increasing amount of IC manufacturing to foundry." Demand for SCM services will continue to grow in all four regions of the world. The North America region will continue to accotint for more than one half of the SCM market through the year 2000 (see Table 1). Table 1 Worldwide Semiconductor Contract Manufacturing Market Revenue Estimates and Forecast (Milliong of U.S. Dollars) Region 1994 1995 1996 1997 1998 1999 2000 North America 2,200 3,265 4,180 5,313 6,801 8,776 11,319 Japan 1,789 2,192 2,483 2,963 3,554 4,278 5,082 Europe 471 592 674 765 920 1,165 1,452 Asia/Pacific 105 170 218 288 380 513 672 Worldwide 4,565 6,219 7,555 9,329 11,655 14,732 18,525 Source: Dataquest (April 1996) -MORE- Dataquest Forecasts Worldwide Semiconductor Contract Manufacturing Market to Triple...Page 2 Additional information about the SCM market is available in the Focus Report titled Semiconductor Contract Manufacturing. Dataquest has spent the last year researching and characterizing the SCM and foundry markets and has issued this new comprehensive report covering business and technology trends, including wafer pricing. A supply and demand analysis through the year 2000 is also presented. "This report represents the only body of research compiled which encompassed both fabless and nonfabless company demand in a global fashion, including Japan," said Clark Fuhs, director of Dataquest's Worldwide Semiconductor Manufacturing program. "We have performed supply analysis at the silicon wafer level to arrive at our conclusion of tight supply into 1997." For more information about subscribing to this program, please call 800-419-DATA. More information about Dataquest's programs, descriptions of recent research reports, and fuU text of press releases can be found on the Internet at http://www.dataquest.com. Dataquest is a 25-year-old global market research and consulting company serving the high- technology and financial communities. The company provides worldwide market coverage on the senviconductor, computer systems and peripherals, commvmications, document management, software, and services sectors of the information technology industry. Dataquest is a Gartner Group Company. ### Dataquest^ Z ^^ ^ 251 River Oaks Parkway • San Jose • CA • 95134-1913 • Phone 408-468-8000 • Fax 408-954-1780 Worldwide Semiconductor Contract Manufacturing (Foundry) IVIarket to Triple by 2000 Dataquest has completed a comprehensive study of the w^orldwide semiconductor contract manufacturing (SCM) industry. SCM consists largely of traditional semiconductor foundry, with a small amoutnt of OEM/ASIC business. The worldwide SCM market is expected to triple from U.S.$6.2 billion in 1995 to U.S.$18.5 biUion by 2000. Demand for SCM services in 1996 through 2000 is projected to grow in all four regions of the world, with North America continuing to account for more than half the SCM market. Table 1 shows the projections for SCM market by region for 1993 through 2000. Strong growth of North America-based fabless semiconductor companies will continue to fuel demand for SCM services in North America. An emerging fabless industry in Asia/Pacific is also likely to spur the growth of the SCM market. SCM growth in Japan and Europe will continue to rely on integrated device manufacturers outsourcing an increasing amount of IC manufacturing to foundry. Clients of Dataquest's new Semiconductor Contract Manufacturing Worldwide service should receive a copy of a Focus Report, "Semiconductor Contract Manufacturing," in the next couple of weeks. Others wishing to purchase the report should contact their regional Dataquest sales representative. Table 1 Worldwide SCM Market Forecast by Region, 1993-2000 (Millions of U.S.