Transcript Document
The Changing Business Model in IC Design House
Jeremy Wang, Asia Pacific Executive Director, FSA
亞太區執行長
全球IC設計與委外代工協會
Agenda
Review of the Fabless Semiconductor Association
Status of the Global Fabless Segment
Regional Fabless Company Progress
Trends Creating Opportunities for Asia
Summary
About the FSA
History: Established in ‘94 to achieve a more
optimal balance between wafer supply and demand
Today: Improve growth and increase the return
on invested capital of the global fabless business
model through a conducive environment for
innovation.
Provide a platform for meaningful global
collaboration between fabless companies, their
partners and among partners;
Identify, debate and discuss business and
technical issues and a focused effort to impact
solutions to certain challenges
Provide members with timely research,
resources, publications and survey information
Promote the fabless business model
Why Fabless Works
Technology
Supply
Capital
Effectiveness
Gain the benefits of process
technology ownership with minimal
investment
Fab Independence: Able to migrate
quickly to the most effective process
technologies
Multiple sourcing improves response
to volatile changes in demand
Access best in class supply chain
advances
Effective use of capital for R&D
High return on assets (ROA)
Enables increased focus driving
improved business execution
Fabless business model benefits from
more effective capacity utilization
FSA Spurs EcoSystem Development
Photomask
Foundry Partners
EDA/IP
Design
Services
Over 200 Fabless Semi Companies
OEM and ODM Customers
Testing and Subsystems
Packaging
Assembly
FSA Global Strategy
Benefits for Global Members
Collaboratively identify and address industry challenges
Education,
networking
and
partnership
events
Global Industry
Leadership
Visibility
Plug into an
existing
infrastructure
of best
practices and
global
leadership
network
Business and
technical tools
and solutions
Access to comprehensive
data, surveys and
resources
The Global Voice
Membership Growth
The FSA has grown 10x since its inception in 1994
Nine of the ten largest fabless companies worldwide are
FSA members
Taiwan fabless leaders are members of the FSA
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Company
QUALCOMM (QCT Division)
NVIDIA Corporation
Broadcom
ATI Technologies
Xilinx, Inc.
MediaTek Incorporation
SanDisk Corporation
Altera
Marvell Semiconductor, Inc.
Conexant Systems
VIA Technologies, Inc.
QLogic Corporation
Silicon Integrated Systems (SiS)
Adaptec, Inc.
Stock
Exchange
NASDAQ
NASDAQ
NASDAQ
NASDAQ
NASDAQ
Taiwan
NASDAQ
NASDAQ
NASDAQ
NASDAQ
Taiwan
NASDAQ
Taiwan
NASDAQ
Ticker
QCOM
NVDA
BRCM
ATYT
XLNX
2454
SNDK
ALTR
MRVL
CNXT
2388
QLGC
2363
ADPT
2001 (CY)
Revenue
($000)
$1,393,778
$1,371,400
$961,821
$945,660
$1,149,101
$450,758
$366,301
$839,376
$288,795
$847,056
$992,320
$358,000
$292,559
$422,065
2002 (CY)
2003 (CY)
Revenue
Revenue
($000)
($000)
$1,941,366 $2,466,331
$1,909,447 $1,822,945
$1,082,948 $1,610,095
$1,093,704 $1,510,992
$1,123,961 $1,299,900
$865,235
$1,115,931
$541,273
$1,079,801
$711,684
$827,207
$505,285
$819,762
$625,103
$633,100
$736,496
$597,664
$411,066
$516,200
= FSA member
$462,046
$490,331
FSA
$410,599 Source:
$437,200
A Global Community of Leaders
Dr. Chin Wu
ALi
Jensen Huang
NVidia
Jimmy S.M.
Lee ISSI
Bob Bailey
PMC Sierra
Dwight Decker
Conexant
Sanjay Jha
Qualcomm
Woody Yang
Silicon7
Ming Kai Tsai
MediaTek
Wim
Roelandts
Xilinx
David
French
Cirrus Logic
Chia Song
Hwee
Chartered
Over 450
corporate
members
worldwide
Dr. Morris
Chang
TSMC
Richard
Chang
ASE
Robert Tsao
UMC
KY Ho
ATI
Dr. Nicky
Lu
Etron
Leadership Council Members
Chairman
Dr. Nicky Lu
Etron
Ming Kai Tsai
MediaTek
Gordon Gau
Holtek
Chou-Chye Huang
Sunplus
Japanese
Delegate
Dr. Chin Wu
ALi
Wen-Chi Chen
VIA
H.P. Lin
Faraday
Dr. Woodward Yang
Silicon7
Korean Delegate
Chinese
Delegate
The Need for a Global Voice
We are at a critical point in the semiconductor
industry facing serious challenges.
An industry in transition: Fabless/hybrid model is
the future business methodology for all but a few
players…this in turn…
Creates serious challenges: A dominant
outsourcing model will put a significant strain on
the foundries, combined with the challenges of
transitions to more advanced technologies.
The FSA seeks to identify solutions: A global
unified voice is necessary to reduce industry
barriers. Partnerships are more vital than ever
at every point in the supply/design chain.
Now a Global Model
Fabless Companies by Geography
Regional Company Distribution
China
7%
Others
Europe
Canada
<1%
10%
4%
India
1%
Israel
4%
Japan
1%
Korea
2%
U.S.
56%
Malaysia
<1%
Taiwan
15% Singapore
<1%
Approximately 1,000 Fabless Companies Worldwide
Source: FSA
Now a Global Model
CY2003 Public Company Revenues
Regional Public Company Revenue Distribution
Japan
2%
Canada
China <1%
2%
Europe
2%
Taiwan
18%
2003 Total Revenue
United
States
76%
$24.2B
Source: FSA
Fabless Leaders
Top Public Company Revenues
Company
Exchange
Ticker
CY Q1 2004
Revenue
($000)
1
QUALCOMM
(QCT Division)
NASDAQ
QCOM
$711,257
2
Broadcom
NASDAQ
BRCM
$573,406
3
NVIDIA Corporation
NASDAQ
NVDA
$471,905
4
ATI Technologies
NASDAQ
ATYT
$463,337
5
Xilinx, Inc.
NASDAQ
XLNX
$403,380
6
SanDisk Corporation
NASDAQ
SNDK
$386,930
7
MediaTek Inc.
Taiwan
2454
$285,120
8
Marvell
Semiconductor
NASDAQ
MRVL
$269,577
9
Conexant Systems
NASDAQ
CNXT
$243,781
Altera
NASDAQ
ALTR
$242,908
10
Note: CYQ2’04 revenue will be available in early August
Source: FSA
Fabless Leaders
Market Capitalization
Company
Exchange
Ticker
April 2004
Market Cap
($000)
1
Broadcom
NASDAQ
BRCM
$13,131,781
2
Xilinx, Inc.
NASDAQ
XLNX
$12,387,111
3
Altera
NASDAQ
ALTR
$8,155,664
4
MediaTek Inc.
Taiwan
2454
$5,886,103
5
Marvell
Semiconductor
NASDAQ
MRVL
$5,818,844
6
SanDisk Corporation
NASDAQ
SNDK
$4,337,329
7
NVIDIA Corporation
NASDAQ
NVDA
$3,774,831
8
ATI Technologies
NASDAQ
ATYT
$3,650,075
9
Silicon Laboratories
NASDAQ
SLAB
$2,615,217
10
QLogic Corporation
NASDAQ
QLGC
$2,524,277
Source: FSA
Fabless Funding Trends
2003 Investment Focus
VCs primarily attracted to the Wireless,
Networking and Consumer markets
Wireline
5%
Consumer
20%
Other
12%
Industrial
1%
Medical
1%
Wireless
27%
Telecom
3%
Security
1%
PC
5%
Networking
25%
Fabless Funding Trends
Dollars/Deals by Quarter
$3,000
156 Deals
$2.6B Total
162 Deals
$2.5B Total
$2,500
$748.3
$493.3
$2,000
($M)
$561.7
$1,500
109 Deals
$1.6B Total
135 Deals
$1.6B Total
$344.0
483.6
$927.0
$468.1
92 Deals
to Date
$299.8
$1,000
$394.9
$589.7
$429.5
$500
$767.7
$335.4
$954.8
$511.4
$0
$154.1
2000
2001
Q1
2002
Q2
Q3
$423.4
$560.1
2003
2004
Q4
Regional Report - EMEA
Leaders in Europe
Company
2003 (CY)
Revenue
($000)
End Market
Melexis NV
$168,231
Auto, PC, Consumer
Dialog Semi
$117,017
Wireless, Auto, Industrial
CSR
$67,622
Wireless
Wolfson Micro
$75,735
Consumer Audio,
Digital Imaging, Comm
Imagination Tech
$34,790
Graphics, Audio
CML Micro
$22,023
Communications
Nordic VLSI
$16,435
Communications
$16,045
Networking,
Data Comm, Internet
Appliances
$3,190
Video Comm.
2003 (CY)
Revenue
($000)
End Market
$130,054
Internet Appl, Telecom
AudioCodes
$44,228
Digital Telephony
Metalink
$14,943
Telecom, Networking
SwitchCore AB
IndigoVision
Company
Leaders in Israel M-Systems
Regional Report - Taiwan
A Surging Segment of the Industry
Taiwan Fabless Revenue
$7,000
58%
$4,000
29%
$3,000
29%
System company
abundance
Quick follower
design capability
40%
29%
21%
80%
$1,000
$0
60%
$4,490
6%
50%
29%
21%
10%
0%
1997 1998 1999 2000 2001 2002 2003
40%
30%
20%
$1,457
$1,113
$3,588
$3,491
$2,363
Now focused on
greater valueadded offerings
Gig Ethernet
Wireless LAN
Cellular
50%
$3,491 $3,588
$2,363
$5,780 70%
55%
60%
$4,490
55%
58%
$5,780 70%
67%
$5,000
67%
Second in
worldwide fabless
revenue
80%
$6,000
$2,000
$M USD)
YoY Growth
30%
Source: IEK/ITRI (March 2004)
Regional Report - Taiwan
Major Taiwan Fabless Companies
Company
2003 Sales
($000)
Products
$1,115,931
Consumer/ Optical
Storage
VIA Technologies
$597,664
PC Chipsets
Sunplus
$325,349
Consumer
NovaTek
$319,706
LCD Driver Peripherals
Realtek
$272,005
Networking
ALi Corporation
$191,082
Consumer/
PC Chipsets
Elite Semiconductor
Memory Technology
$156,358
Memory
ELAN
Microelectronics
$135,354
Consumer
MediaTek
Fabless Industry Trends
System-level knowledge is a must for success
Software becoming an increasingly important
part of the fabless offerings
Accelerating shift to 300mm
Accelerating scale of leading-edge
manufacturing and process technology
The Tail that Wags the
Global Semiconductor Industry
The Great China Debate
Utopia Soon
Significant Impact
Over Time
“By 2007…10% of world’s
entire wafer capacity will be
located in China, up from
4% today.” —iSuppli
“China accounts for only 2.4%
of world capacity. By 2005 it will
move to 3.1%.” —Dataquest
China's cell phone
subscribers will double over
the next five years from a
base of nearly 207M
customers, a CAGR of more
than 10% during the next
five years. –InStat/MDR
According to Semiconductor
Reporter--China reported that a
government agency has overcounted badly the number of cell
phones in use in China.
China’s Role in the Global
Semiconductor Industry
The Customer — a Huge Silicon Consumer
The Manufacturing Ally
A Huge Reservoir of Design Talent
Potential Design Partner or Competitor
China—As The Customer
Large potential market base
China accounted for approximately 18% of
global semiconductor consumption in 2003.
China used $25 billion in microchips in 2003
Consumer Demand
1.3 billion consumers
Domestic demand for television sets
exceeds 30 million units per year with 380
million TVs installed.
Yearly demand for PCs in China is
expected to grow by more than 17% over
the next three years.
Domestic Chinese cell phone
manufacturing is forecast to reach 140
million in 2005.
China—The Manufacturing Ally
Planned Groundbreakings/Openings ‘04
Foundry Name
Location
Fab Type
Singapore
300mm foundry
Wuxi
150mm
Shanghai
200mm foundry
Suzhou
200mm foundry
Shenzhen
GaAs fab
STMicroelectronics
TBD, China
200mm
Centry Semi/Fab 1
Shenzhen
150mm
ASMC/Fab 3
Shanghai
30k,200mm
Keysi-STL S/C Mfg
Shenyang
6k,150mm
ON Semiconductor
Leshan
8k,150mm
JiLin
20k,150mm
SinoMOS S/C
Ningbo
30k,150mm
SMIC/Fab 4
Beijing
15k,300mm
China
27k, 150mm
Chartered/Fab 7
CSMC/Fab 2
Shanghai Hua Hong NEC/Fab 2
He Jian/Fab 2
Bayton/Shenzhen Bayton
Philips JiLin S/C/NA
Ultimiate Semi/Fab 1
Strong/High Likelihood of Groundbreaking or Upgrade
Possible Likelihood of Groundbreaking or Upgrade
New Openings
Source: Strategic Marketing Associates
China—The Manufacturing Ally
“WTO membership will bring China into [compliance] with normal
global business practices.” —Chris Chang, SMIC
Grace
Semiconductor
CSMC
Commodity Flash,
DRAMs, SRAMs
SMIC
Hua Hong NEC
(HHNEC)
CMOS
Logic, Flash,
SRAM, SDRAM
Logic, mixedsignal, RF, LCD
Drivers
25K/month by
end of 2003
10k 4”/11k
5”/6k
6-inch/month
Fab conversion—
300mm
5um down to
0.8um
Expanding to
0.35um
Foreign
investment,
domestic
investment and
future IPO
Received $67M
to expand 6-inch
capabilities
45K/month by
end of 2003
30K/month by
end of 2003
300mm fab in
Bejing in 2004
Next fab
300mm
Foreign
investment,
domestic
investment and
IPO 3/04
Foreign
investment,
domestic
investment and
future IPO
Regional Report—China
Semiconductor demands in China are serviced by 6-inch
wafer suppliers building 0.30 to 2.0-micron technology…
Q1 2003
Technology Migration
70%
60%
Wafer Size Production by Feature Size
8-inch wafers
3, 4,
5-inch wafers
6-inch wafers
50%
40%
30%
48%
20%
42%
10%
Feature Size (Micron)
5.00
3.00
1.50
0.80
0.60
0.45
0.35
0.15
0.25
10%
0%
Source: iSuppli
Advantages vs. Disadvantages
Disadvantages
Advantages
IP protection limited
Immature design skills—no
product, system or
architectural talent
Lack of management
Lack of 3rd party IP
No technology roadmap
Quality issues
Lack of IP-rich content
Older technology
Lack of high gate count
design expertise
Inability to keep pace with
the market
Immature VC market & no
IPO market
Proximity to end markets—
24% CAGR
Ecosystem developing—end
mkts, mfg., design, test,
assembly and human capital
Government tax incentives
Reduction in VAT
Tax free and then 50%
reduction
Training bases
Duty-free treatment for
material imports for fabs
Free land and
infrastructure assistance
The Shift to 300mm
Enormous Capacity Ramp
300mm Fab Status
Max. Wafers/Mo. (000)
500
400
300
200
100
0
Online
Constr/Equip
Planned
Source: Strategic Marketing Associates, 2004
Foundry Capex
Foundries Doubling 2004 Capex
Capex by the chip industry for new tools, plants,
property and other long-lived assets will grow 42% in
2004, while capital spending by foundries will double
Strategic Marketing Associates (SMA) expects
foundry investment at $9.9B represents 23% of the
total $43B, more than double last year's amount.
• Largest amount ever spent by foundries, both
as a percentage of total spending and in
absolute terms
Slightly more than $4B will be spent to add 0.13um
capacity and almost as much will be spent to add 90nm capacity.
TSMC, UMC and Chartered are focusing mainly on 90nm
capacity, primarily in their 300-mm fabs.
Source: SMA
Foundry Capex
Foundries Doubling 2004 Capex
Altogether, Chinese foundries will increase capacity by
64%, adding 140,000 in equivalent 200-mm wafer
capacity.
SMIC will account for 60% of added capacity, not only
by continuing to ramp its fabs in Shanghai and
ramping its recently acquired Motorola fab in Tianjin,
but also by finishing its Fab 7 in Beijing, China's first
300-mm facility.
Six more foundry fabs to come on line in 2005, four of
which will be 300mm. Those six fabs could add as
much as 250,000 equivalent 200mm wafers in
monthly capacity to the foundry industry, possibly
fueling the next round of overcapacity early next year.
Source: SMA
2004 Foundry Capex Rankings
Pure-play & IDMs
2004 (E) Capex
($B)
Rank
Company
Pure-play or
IDM
1
UMC*
Pure-play
$2.1
2
TSMC
Pure-play
$2.0
3
SMIC
Pure-play
$1.95
4
TI
IDM
$1.3
5
NEC Group
Pure-play
$1.2
6
IBM Micro
IDM
$0.9
7
Grace
Pure-play
$0.8
8
Chartered**
Pure-play
$0.7
9
ProMOS
IDM
$0.6
10
DongbuAnam
Pure-play
$0.6
Sources: iSuppli, IC Insights
*UMC includes revenues from UMCj
**Chartered includes revenues from SMP
Fabless Industry Challenges
Increasingly complex supply chain
Aggressive product, process and packaging
roadmaps—developed independently
Escalating product development costs
Accelerating scale of leading-edge
manufacturing and process technology
An Industry Challenged
Cost Per Design by Technology
$ 25
$ 20
$13M
$ 10
$ 05
Design costs are
rising from $2M
for designs at
0.35-micron to
more than $13M
at 0.09-micron.
$17M
$11M
$ 15
$6M
$8M
$9M
$2M
Hardware Validation
Design & Verification
Synthesis + Place & Route
Masks & Wafers
0.065µ
0.09µ
0.13µ
0.15µ
0.18µ
0.25µ
$ 00
0.35µ
Total Development Costs
($M)
Escalating Cost of Chip Design
These costs
assume that
much of the
design and
verification can
be done in low
labor-rate
geographies.
Today, design
and verification
of complex ICs is
now running at
80% of total
design cost.
Summary
The fabless model is now considered the future of
the semiconductor industry
The FSA is The Global Voice for this critical industry
segment
Difficult technology transitions and increasing
product development complexity challenge our
members
Taiwan/China are uniquely positioned to take
advantage of certain industry trends and
challenges
Thank you!
王智立博士
亞太區執行長
e-mail: [email protected]
全球IC設計與委外代工協會
Fabless Semiconductor Association (FSA)