Transcript Document

China’s Fast Growing IC
Industry and SMIC’s Role
Mr. Marco Mora
SMIC Chief Operating Officer
March-15, 2005
TM
Outline
 Global Semiconductor Trend
 Huge Market Potential in China
 Emergence of China’s IC industry
 SMIC’s Role in China’s IC Industry
 Conclusion
IDMs Outsourcing Trend
IDM continual outsourcing strategy
Outsourcing expected: US$3.2bn
US$6.5bn
(2001)
(2005)
IDM (Integrated Device Manufacturer) / System Company
Partial outsourcing
Fabless
design
house
Outsourcing
Foundry (dedicated
foundry & IDM)
Partial outsourcing
Outsourcing
Packaging
company
Testing
company
Shipment
Sources：Nomura Asian Equity Reseach 2004
“Foundry-Fabless” Model Success
Rapid fabless expansion boosting global foundry business
2001 total
SC market:
US$139B
1994 total
SC market:
US$102B
Fabless
$4.1bn
Foundry
$8.2bn
Fabless
$12.5bn
Sources：Dataquest, Semico Research 2003
Foundry
$10bn
2005 total
SC market:
US$216B
Fabless
$32bn
Foundry
$30bn
Sources：Prudential Equity Group, FSA 2004
Transition to 12” Wafer Manufacturing
Source: Semico 2005
WW 10 12” fabs in production, 11 12” fabs in ramping
Capacity by Wafer Size
Source: IC Insights 2003
Geographical Shifts
IDMs, Fabless, Foundries, Assembly& Testing companies
shifting to China
TI
Intel
STATS/ChipPAC
AMD
Freescale
IBM
Fairchild
ST
Philips
Infineon
Mainland
China
Toshiba
Elpida
Hitachi
NEC
Samsung
Sony
TSMC
ASE Group
SPIL
Amkor
Outline
 Global Semiconductor Trend
 Huge Market Potential in China
 Emergence of China’s IC Industry
 SMIC’s Role in China’s IC industry
 Conclusion
China Semiconductor Demand & Supply
Source: CCID, 2005
Semi Market: China vs. World
Source: WSTS, Gartner, CCID, Yuanta Core, 2004
IC supply (capacity): China vs. World
‘000 wafers (8”)
Billion USD$
18,000
$250
China
China
World
$213
$204
$200
16,000
World
15414
14367
16152
14353
14,000
$166
$159
12,000
$141
$150
10,000
8,000
$100
$50
7%
$15
11%
$18
15%
$22
18%
$30
20%
$43
6,000
4,000
2,000
1%
165
1%
208
2%
348
3%
502
0
$0
2000
2001
2002
2003
2004
2001
2002
2003
2004
China is to date the 3rd largest IC market in the world, but its
domestic production capacity lags far behind
China: The Fastest-Growing Market
China expected to be the largest semiconductor market in Asia in
2005-06 due to the fastest-growing end-use markets
• Projected total demand:
5.8 mn units in 2005
(People’s Daily Online, Jan 2005)
• World's #2 PC market
• Expect to grow 17% for next 3 years
after a 10-year rapid growth
• World’s #1 mobile phone market
• 320mn+ subscribers as of Oct-2004
• 30 mn units TV per year
Source: CCID, 2004
China’s Dominance in Electronic
System Production
China’s share of global electronic system production (2003)
60%
56%
52%
50%
49%
48%
42%
42%
40%
40%
39%
37%
35%
33%
32%
30%
29%
Notebook
PC
Handset
30%
20%
10%
0%
Legacy
phone
LCD
monitor
DVD
player
Graphics
card
CRT
monitor
Desktop
PC
Analog
STB
Game CD player Optical
console
disk drive
CRT TV
Printer
China needs more IC manufacturing to accommodate its
insatiable demand for semiconductors
Sources: CCID, Gartner, 2004
Growth of Chinese OEMs Increase
Opportunities for Local Component Sourcing
Telecommunications
China companies with $billion
sales:
Consumer Electronics
China companies with $billion sales:
Shanghai Guang Dian
Aggressive growth companies:
Computers
China companies with $billion sales:
Sources: Woetzel, Taiwan and China Semiconductor Industry Outlook
2003, Company web sites
Outline
 Global Semiconductor Trend
 Huge Market Potential in China
 Emergence of China’s IC Industry
 SMIC’s Role in China’s IC Industry
 Conclusion
IC Industry Supply Chain Maturing
Mainland China’s IC Production Value by Sector
Design
Manufacturing
Testing&Packaging
US$9.6B
5000
US$5B
4000
$4B
US$4.6B
3000
$3B
2000
$2B
1000
$1B
$0
US$3.2B
US$2.4B
2002
$ 2.6B
$1.9B
$ 2.6B
$1.5B
$0.6B
$0.3B
$4.4B
$0.8B
Assembly
& Testing
180+
$ 2.2B
$0.5B
$1.0B
2003
2004
$1.6B
2005F
Foundry
35 fabs (4”-12”)
Design House
460+
Production value: The value of goods produced according to market price
Source: CCID Consulting, 2005
Booming China’s IC Design Industry
China IC Design Revenue, $Million
$7,000
$6,240
Annual Revenue（ $M）
$6,000
$5,000
$4,000
$3,480
$3,000
$2,462
$2,000
$1,590
$1,752
$995
$1,000
$543
$129
$179
$261
2000
2001
2002
2003
2004E
2005F
2006F
2007F
2008F
2009F
33.1%
37.8%
46.1%
107.9%
83.2%
59.8%
10.2%
40.6%
41.3%
79.3%
$0
% YoY
Data Source: CCID,. 2005
The Rise of China’s Chip Makers
New foundry players will serve to boost China’s already growing IC
manufacturing capabilities and further strengthen its IC value chain
Numbers of Fabs in China by Wafer Size
2000
15 15
36
2004
15
SMIC: 4
30
10
6 6
SMIC
10
7
3
5
1
1
# of Fabs
# of fabs
40
SMIC: 4
20
Number of Fabs in China by Technology
SMIC
20
10
3
0
0
4"
5"
6"
8"
12"
*Not included 3” fabs
Data Source: CCIDConsulting, 2005
6
10
10
1
0
>=1µm
0.6/0.8µm
0.5µm
0.350.11µm
0.11µm &
below
Data Source: iSuppli, 2004
Assembly and Testing Industry Growth
Emerging foundry market and international packaging companies’ presence
expected to drive Mainland China’s assembly & test industry to $10.3 bn in 2007
Mainland China Assembly&Test Industry Forecast
Represent 30% of
global A&T market
16% of global
A&T market
*iSuppli: Including board level assembly and test
Sources: iSuppli, 2004
China IC Industry in Next 5 Years
Manufacturing industry:
• China foundry capacity: expected CAGR of 50%+ during 2004-2006 (Nomura)
• Local foundries are catching up the pace of technology migration of global leaders
• More and more local design houses switching to use local foundry services
IC design industry:
• Expected growth rate: 30~40% over the next 5 years
• Robust demand for smart card and systems-related
showing chances for China IC design houses
Assembly and testing industry:
• Emerging foundry market and international packaging companies’
presence expected to drive China’s assembly & testing industry to $10.3 bn
in 2007
• Use of high-end technologies, including BGA, CSP and MCP, expected
increase to 27% in 2007 from 13% in 2003 (iSuppli)
Outline
 Global Semiconductor Trend
 Huge Market Potential in China
 Emergence of China’s IC Industry
 SMIC’s Role in China’ IC Industry
 Conclusion
SMIC’s Role in the of china’s IC industry
 Brought advanced & service-oriented IC manufacturing solutions
into China
 Help “China-designed” chip to commercialize: fully supports to
China fabless: more than 12% of our 4Q04 revenue deriving from Chinese customers
 Contribute to facilitate the formation of China IC supply chain
 Brought world-class customers and investors into China
 Promote environmental responsibilities
 Nurture China’s semiconductor talents
Help Advance China’s Semi Technology
10.0 µm
Other Fabs in China
3µm
Micron (log)
1.0 µm
SMIC
Commercial
Production
US & Taiwan
0.8µm
0.25µm
0.35µm
0.18µm
0.25µm
0.18µm
0.13µm
0.1 µm
1994
1997
2000
0.13µm
90nm
90nm
2003
0.13µm
65nm
65nm
45nm
0.0 µm
* Note: data points show commercial production date
Source：ITRS, DIR, SMIC
Full-line Services to Customers
Flexible & customized solutions + quick cycle time
Design Services
Mask Making
Wafer
Manufacturing
Wafer Bumping
Wafer Probing
PLCC
QFP
µBGA
Assembly & Final Test
Flip Chip
CSP
SOP
TSOP
BGA
And more…
Multi-Project Wafer (MPW) Shuttle Service
Cost reduction
Multiple customers and/or projects share common masks
and engineering wafers
Frequent availability
Monthly or bi-monthly shuttles for 0.35μm, 0.25μm, 0.18μm, 0.15μm and
0.13μm logic, mixed signal and EEPROM processes
8 MPW centers in China:
• Beijing:
EDA Center Chinese Academy of Sciences;
Beijing IC Design Park
MPW Center, Peking University
• HongKong: Science and Technology Park
• Nanjing: RF & IC, Southeast University
• Shanghai: Shanghai Research Center for IC Design
• Shenzhen: Shenzhen IC Design Incubation
• Xi'an: Xi'an IC Industrial Center
Creating Cluster Effects for China’s IC Industry
SMIC plays an important role in facilitating supply chain development in China
All IC players benefit from the well-established IC supply chain and the growing market
Motorola
VIA NEC
RFID
Nokia
Datang Micro
More…
SMIC
Bohai Gulf
Foundry
Yangtze River Delta,
Shanghai
HuaHong
SMIC
Hitachi Siemen
Intel
ARM Amkor
Applied Materials
Cadence
More…
Bring Partners and Customers into China
And more…
Bring Investors into China
SMIC has attracted world class strategic and financial
investors from the U.S. and the world
Key Investors:
Promote Environmental Friendly IC
Manufacturing
• Water recycle
• Water re-use
• Recycle Station
• Bio-Chemical treatment
• Waste water treatment
• Waste Material
Management & Recycling
• Toxic chemical removal
• Diversify sources
Water
Recycling
and Re-Use
Environmental
Protection
Power
Consumption
Savings
• Exhaust treatment
• Co-operate with
Power Bureau
• Exhaust abatement
• Independent
precaution systems for
safety
• Improve
transmission
technology
Safety
Precautions
Energy
Consumption
Savings
• Cooling system
• Air intake system
• Absorber/chiller
system
Nurture china’s Semiconductor Talents
Continuous training & personal development in SMIC
 Mentorship between experienced and junior
staff members
 More than 500 classes on technology, business
operations, management, personal development
 Joint education (graduate and postgraduate)
programs with Fudan, Jiaotong, and Tonji
universities
Outline
 Global Semiconductor Trend
 Huge Market Potential in China
 Emergence of China’s IC Industry
 SMIC’s Role in China’s IC Industry
 Conclusion
Conclusion
 “Fabless Module” success boosting global foundry business:
global foundry business is expected to be double in 2005 comparing to that in 2001
 Global IC-related and system manufacturing shifting to China
 China expected to continue to top the global IC market growth
in the future, and have more significant effect on global IC
industry: China is expected to be the biggest IC market in very near future and
represent 20% of world IC consumption in 2005 (IC Insights, 2005)
 China’s IC industry keeps growing fast:
China IC market will keep a double-digit growth rate, comparing to a –5%~2% growth rate
for the rest of the world (IC Insights, 2005)
 SMIC contributes to the development of China’s IC industry
China’s Fast Growing IC
Industry and SMIC’s Role
Mr. Marco Mora
SMIC Chief Operating Officer
March-15, 2005
TM