GLOBAL FABLESS/FOUNDRY COLLABORATION AND INNOVATION

Dr. Jeremy WangAsia Pacific Executive Director, FSA

August 15 2007

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 aconsistent brand look and feel.

Proposal for Re-branding

UNDERSTANDING FABLESS IC TECHNOLOGY

Understanding Fabless IC TechnologyJeorge S. HurtarteEvert A. WolsheimerLisa M. TafoyaFabless 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

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

PUB DATE: August 17, 2007

LIST PRICE: $69.95DISCOUNT: Agency/FSAFORMAT: Paperback, IllustratedPAGES: c. 296

TRIM SIZE: 7 1/2 X 9 1/4 inAUDIENCE: IC engineers, design engineers (analog and digital), engineering management.

UNDERSTANDING FABLESS IC TECHNOLOGY

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

Overview

MARKET OVERVIEW

$204.4B

$247.7B

$17.0B

$49.6B

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,0001987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

($M

)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

($M

)

Semi Industry Fabless Industry

Source: FSA

Attributes of a Successful Fabless Company:Fabless Revenue Growth

Semi Industry Fabless Industry

Fabless CAGR = 26% Semiconductor CAGR = 8%

WORLDWIDE 2006 TOP 25 SEMICONDUCTOR SALES LEADERS

44 %5.63.9AMD 1613

2 %5.75.6NEC1012

4.2

5.2

5.6

8.3

5.6

8.2

9

8.9

11.3

17.8

35.4

2005 Tot

Semi ($B)

19 %9.7TSMC76

13 %5.9NXP (former Philips)

1110

37 %5.8Sony1411

8 %6Freescale99

-4 %7.9Renesas68

43 %8Hynix87

8 %9.8Toshiba45

11 %9.9ST54

17 %13.2TI33

10 %19.7Samsung22

-9 %32.3Intel 11

06/05 % Change

2006 Tot

Semi ($B)Company

2005 Rank

2006 Rank

11 %5.55Micron1214

6 %122.4115.4Top 10 Total

27 %32.4Nvidia2625

11 %188.9170.6Top 25 Total

58 %5.43.4Qimonda2115

1 %3.53.4Sharp2024

37 %3.72.7Broadcom2422

13 %3.73.3UMC2221

78 %3.52Elpida2923

28 %4.43.5Qualcomm1917

-6 %3.84.1Matsushita1520

10 %3.93.5Fujitsu1719

5 %5.14.9Infineon1316

13 %43.5IBM1818

2005 Tot

Semi ($B)

06/05 % Change

2006 Tot

Semi ($B)Company

2005 Rank

2006 Rank

Source : IC Insights / FSA

The State of the Global Fabless Business ModelTop 15 Companies by Revenue

(Top 15 Fabless ALL FSA Members)

$540,204 $744,518 HIMXNASDAQHimax Technologies13

$657,901

$704,700

$964,314

$985,615

$1,285,535

$1,600,000*

$1,624,486

$1,871,604

$1,982,148

$2,237,596

$3,068,771

$3,257,525

$3,667,818

$4,331,000

CY 2006 Revenue($000)

$580,698

$486,531

$788,558

$812,818

$1,123,739

$1,800,000

$1,410,986

$1,644,890

N/A**

$1,670,266

$2,375,687

$2,306,069

$2,670,788

$3,457,000

CY 2005 Revenue($000)

LSINYSELSI Logic6

ALTRNASDAQAltera10

2388TSECVIA Technologies, Inc.15

CSR.LLSECSR14

3034TSECNovaTek12

CNXTNASDAQConexant Systems11

PrivatePrivateAvago Technologies9

2454TSECMediaTek Incorporation8

XLNXNASDAQXilinx, Inc.7

MRVLNASDAQMarvell Technology Group Ltd5

NVDANASDAQNVIDIA Corporation4

SNDKNASDAQSanDisk Corporation3

BRCMNASDAQBroadcom2

QCOMNASDAQQUALCOMM (QCT Division)1

TickerStockCompany(Highlighted companies–Non U.S.)

Source: FSA*Avago’s 2006 net revenue accounts for the 12 months ended Oct 31, 2006. **LSI Logic not fabless until 2006.

Foundry Service Provider Revenues & Market Share by Year2000 2002 2004 2006

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

Worldwide Foundry Ranking

Note: * Includes 1st Silicon from 2000-2006 (est). Source: IBS

48.6%$9,262.8Others--

100%$19,068.1Total

3.3%$637.5UTAC5

8.5%$1,616.9STATS ChipPac4

9.1%$1,733.4SPIL3

14.3%$2,728.6Amkor2

16.2%$3,088.9ASE1

2006 Market Share

2006 Revenue($M)CompanyRank

Back-end Market

2006 Assembly/Test Companies

Source: Gartner

2005/06 TOP 4 EDA FIRMS IN REVENUE

Rank Company Name2005

Sales ($M)2006

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

15 %

6 %

20 %

11 %

29 %

40 %

-9 %

77 %

33 %

16 %

30 %

12 %

18 %

Growth

$ 1,334.2

$ 469.0

$ 865.2

$ 30.7

$ 31.5

$ 32.0

$ 32.5

$ 32.8

$ 38.8

$ 59.3

$ 76.2

$ 91.0

$ 440.5

2006

100 %100 %$ 1,164.4Total

55 %3 %$ 18.5Silicon Image6

65 %2 %$ 27.7Rambus10

100 %35 %$ 441.7Others

65 %65 %$ 722.6Top 10

63 %2 %$ 24.5Chipdea9

60 %2 %$ 22.9Faraday Technology8

58 %2 %$ 35.6Ceva7

53 %3 %$ 29.2Imagination Technologies5

50 %4 %$ 51.3Virage Logic4

46 %6 %$ 58.7MIPS Technologies3

40 %7 %$ 81.2Synopsys2

33 %33 %$ 373.1 ARM1

CumalativeShareShare2005

Offer AMS IP Worldwide IP Revenues ($M)Rank

Source : Gartner Dataquest / FSA

Foundry Sales by Process Node

2006 Pure-play Foundry Sales by Node

> 0.25um- <

0.35um

<= 90nm18%

>=0.35um

> 0.18um- <

0.25um8%

> 0.13um-0.18um

31%

> 90nm -<=

0.13um25%

Source: IC Insights

Source: FSA

Foundry Sales by Process Node and Geographic Region

IDMs Giving More Business to Foundries

2006 Foundry Business by Customer Type

System1%

IDM32%

Fabless67%

Source: IC Insights

Source: FSA

Foundry Sales by Customer Type and Geographic Region

Recent IDM Announcements

All 65nm and below SRAM

All 45nm and below Cell processor

All digital logic processes at 32nm,

22nm, below

Overall 30% - 40%(in 2 years)

Outsourcing Goal

90nm and above both internal and externalFoundry: UMC

Cypress

45nm Cell processor, beginning 2008Foundry: IBMPartnering with Toshiba & IBM

Sony

Plan: Foundries: TSMC, UMC, SMIC, Chartered, IBMTexas Instruments

No plans to sell fabsFoundry: TSMC% Current Outsource = 15%

NXP

DetailsIDM

Fab-Lite Strategies

Consolidation

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.

LSI/Agere

DetailsIDMs

GLOBAL FABLESS BY REGIONS

The State of the Global Fabless Model

North America600

Europe100

Asia400Israel

75

U.S. Companies dominate in development and concept of new technologyTaiwan creates unique business modelsEurope and Israel provide innovationChina still in the maturation process Japan to adopt fabless nextKorea growth dependent upon only a few customersIndia exploiting design and software capabilities

The State of the Global Fabless Business Model North America

Source: EETimes, Morgan Stanley

North American IC companies remain strong. 18% of total semiconductor revenueAccounts for about 45% of all semiconductors consumedBroad platform design knowledgeSoftware expertise and utilizationTalent and experience in engineering and marketingFully understand the global ecosystem

% of Top 10 Semiconductor Company Revenue by Region

43%38%North America

5%

57%

1994

13%

43%

2006

Europe

Asia

“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: FSA, Gartner

Maintaining its position as the leading global foundry supplier (80% share)

Fabless strength

Established, experienced design talent

66 public companies

$8.3B in 2006 sales, 17% of all fabless

4 of the Top 15 companies in 2006

Strong financial position

Challenges

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

The State of the Global Fabless Business Model Taiwan

$744,518HIMXHimax

$657,901 2388VIA Tech

$964,314 3034NovaTek

$1,624,486 2454MediaTek

CY2006 Sales

(US$000)SymbolCompany

Taiwan Fabless in Top 15 WW Fabless Companies by 2006 Sales

Source: FSA

Geographical Observations of Success: Taiwan

Source: FSA

TSEC

TSEC

TSEC

TSEC

TSEC

TSEC

TSEC

NASDAQ

TSEC

TSEC

Exchange

$964,3143034NovaTek

$744,518HIMXHimax Technologies

$657,9012388VIA Technologies, Inc.

$321,5715351Etron Technology

$381,1912379Realtek Semiconductor Corp.

$382,0808299Phison

$178,4903006Elite Semiconductor Memory Technology

$242,6822363Silicon Integrated Systems Corp. (SiS)

$310,1878096CoAsia Microelectronics

$1,624,4862454MediaTek Incorporation

2006 Sales (US$000)SymbolCompany

Top 10 Taiwan Fabless Companies by 2006 Sales

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 remainLimited exit strategy with basically no public markets—Hong Kong, NASDAQLimited design experience, and especially in platform and software IP protection remains a concern

The State of the Global Fabless Business Model China’s Growing Importance

*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

Source: IC Insights

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

$37$33

$39

$24

$41

$34

$26

$45

$0

$10

$20

$30

$40

$50

Americas Europe China Taiwan

($B)

2005 2006

TOP 10 SEMICONDUCTORS SUPPLIERS IN GREATER CHINA IN 2006

144.00 %$ 1,784Advanced Micro Devices (AMD)9

10

8

7

6

5

4

3

2

1

2006 Rank

Qualcomm

Freescale Semiconductor

NXP

Toshiba

STMicroelectronics

Samsung Electronics

Hynix

Texas Instruments (TI)

Intel

Company Name

$ 1,462

$ 1,911

$ 2,320

$ 2,496

$ 2,927

$ 3,454

$ 3,475

$ 4,408

$ 8,404

2006Revenue

Top 10 Suppliers in China, Hong Kong and Taiwan in 2006 (Ranking by Revenue in Millions of U.S. Dollars)

11.60 %

19.00 %

11.80 %

-1.30 %

10.80 %

-2.50 %

59.90 %

32.20 %

-8.10 %

Percent Change

Source: Nikkei Electronics

193.10 %$ 768Advanced Micro Devices (AMD)9

10

8

7

6

5

4

3

2

1

2006 Rank

NXP

NVDIA

Broadcom

STMicroelectronics

Hynix

Powerchip Semiconductor (PSC)

Texas Instruments (TI)

Samsung Electronics

Intel

Company Name

$ 632

$ 788

$ 822

$ 854

$ 1,226

$ 1,352

$ 1,383

$ 1,472

$ 2,967

2006Revenue

Top 10 Semiconductors Suppliers in Taiwan in 2006 (Ranking by Revenue in Millions of U.S. Dollars)

31.80 %

0.30 %

14.40 %

50.50 %

3.80 %

24.30 %

21.90 %

-17.00 %

3.40 %

Percent Change

TOP 10 SEMICONDUCTORS SUPPLIERS IN TAIWAN IN 2006

Source: Nikkei Electronics

The State of the Global Fabless Business ModelTop 10 China Companies

2006 Rank Company

2006 Revenue (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. IfSouth 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 (16.5billion 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 from2005 as small and medium businesses showed big growth.(3)

(1) iSuppli(2) SST(3) IT-SOC Assoc.

The State of the Global Fabless Business ModelKorea

* Winbond bought 15% stake in EMLSI in Dec.’06** Pixelplus traded on NASDAQ and KOSDAQ

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

The State of the Global Fabless Business Model Korea

‘06 Rank

‘05 Rank Company

2006($M)

2005($M)

% Growth Major Product

1 2Corelogic

$200.7 $174.54 15.0% Mobile Phone

2 1 Mtekvision $125.1 $192.24 -34.9% Mobile Phone

3 7 Fidelix $75.1 $36.13 107.9% Memory

4 3 EMLSI $66.1 $87.30 -24.3% SRAM, Pseudo SRAM, SDRAM

5 4 Telechips $65.4 $69.88 -6.4% MP3

6 8 C&S Tech $52.2 $32.58 60.2% DMB, IP Telephony

7 5 Dawintech $51.2 $48.38 5.8% Display

8 9 TLI $47.3 $32.22 46.8% Display

9 6 TomatoLSI $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

Semiconductor Market: $2.8B in 2005 —expected to reach $36.3B in 2015 (29.8% CAGR)

India’s IC design services market set to grow over 20% through 2010Major end-use segments: Communications, IT, Consumer ElectronicsMobile Phone Surge

Will have 405M mobile-phone subscribers by 2010, up from 140M at the end of 2006.*

Design and Software Design starts in India set to rise from 600 in 2005 to 3,248 in 2015. Software design talent

Fabless companies making strategic investments – looking at burgeoning market by 2015 and consistency of consumption growth in end markets. 18%$4,351.02014

22%$3,691.82013

27%$1,607.22009

28%$1,261.32008

32%$986.92007

29%$749.82006

38%$583.02005

35%$423.32004

--$314.42003

2015

2012

2011

2010

Year

17%$5,085.5

23%$3,020.0

23%$2,462.8

25%$2,007.6

Revenue Growth

RateRevenue

($M)

VLSI Design Market: Revenue Forecast, 2003-2015

The State of the Global Fabless Business Model India

*iSuppli forecast, 12/06

India is part of Conexant’s long-term growth strategy, cost is only part of itConexant hired 700+ research engineers in India to cut overall costs by 50%-65% of its engineers by the end of 200650% semiconductor design and other high-tech engineering work now done at CNXT-IndiaEngineers work on the "innovation and architecture" of Conexant’s semiconductor systemsConexant reduced costs by $36M in first year of large-scale work in IndiaThe number of Indian IC design engineers is set to increase from 12,352 in 2005 to 40,893 by 2010.

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

The State of the Global Fabless Business Model India

$103,900

$39,500

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

U.S. India

76,000

350,000

050,000

100,000150,000200,000250,000300,000350,000400,000

U.S. India

Average # of Engineering Graduates Per Year

Average Salary of Engineers Per Year

Source: FSA

2006 estimated fabless sales = $1.5B (3% of WW fabless)CSR grew >64% YoY – 2006 sales expected to total more than $700MCorporate 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 AmericaWhile 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. AmericaAt the same time, the gap between private R&D funding and publicfunding is also dangerously increasing in Europe.

The State of the Global Fabless Business Model Europe

The State of the Global Fabless Business Model Europe

$2,835N/AINNAIMInnovision Research & Technology

N/A

N/AN/ATMSPARThomson (Fabless Division)N/A

$9,212N/AIND.LLSEIndigoVision, Ltd.N/A

$52N/ACYAN.LAIMCyan HoldingsN/A

$42,598N/ACML.LLSECML Microcircuits Ltd.N/A

$755N/ACSDLSEClearSpeedN/A

$15,786$8,665SCORSTOSwitchCore AB7

$47,332$45,778NODOSLNordic Semiconductor ASA6

$170,725$94,024DLGFWBDialog Semiconductor5

$166,558$204,133WLF.LLSEWolfson Microelectronics Pls4

$170,495$249,028WVCMNASDAQWavecom3

$229,127$265,841MLXSBRUMelexis NV2

$486,531$704,700CSR.LLSECambridge Silicon Radio (CSR)1

2005 (CY) Revenue (US$000)

2006 (CY) Revenue (US$000)Ticker

Stock ExchangeCompany

’06 Rank

Source: FSA

More than 50 fabless companies headquartered in IsraelHighest level of VC funding outside North AmericaWide 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.

Networking

Developer of equipment to convert audio data to digital for phones/answering

devices, PCs, consumer, wireless

Flash memory for Digital cameras, cell phones, PDAs

Products/Markets

Awaiting IPO / Named #1 on the 2006 Deloitte Israel Technology Fast 50

Wintegra

NASDAQ: DSPG / Holds 60% market share in their field

DSP Group

Labeled most promising start-up in Israel Saifun

CommentCompany

Sources: InvestInIsrael.com, Compiler.com

The State of the Fabless Business Model Israel

FINANCIAL IMPLICATIONS

TOP 10 N.A vs. TAIWAN COMPANIES

10

9

8

7

6

5

4

3

2

1

QLogic Corporation

Conexant Systems

Altera

Xilinx, Inc.

LSI Logic

Marvell Technology Group Ltd

NVIDIA Corporation

SanDisk Corporation

Broadcom

QUALCOMM (QCT Division)

Nroth America

Phison

Silicon Integrated Systems Corp. (SiS)

CoAsia Microelectronics

Etron Technology

Realtek Semiconductor Corp.

Sunplus Technology

VIA Technologies, Inc.

Himax Technologies

NovaTek

MediaTek Incorporation

Taiwan

Source: FSA

TOP 10 N.A vs. TAIWAN AVG ROE2000-2006

14.5%

55.2%

-20.8%

-11.9% -11.9%

-2.1%

12.9% 15.9%

33.8%

19.6% 22.5%16.3% 21.3%

24.0%19.8%

37.6%38.3%36.4%

66.1%67.8%67.1%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2000 2001 2002 2003 2004 2005 2006

N.A.TaiwanMediaTek

Top 10 North America vs. Taiwan Average Return On Equity2000-2006

Source: FSA

TOP 10 N.A vs. TAIWAN AVG ROA2000-2006

6.5%

45.7%

-17.1%

-8.6% -4.2%

4.1%12.1% 12.5%

25.9%

15.5% 15.7%11.2% 14.9%

19.0%13.8%

32.4%33.1%32.0%

50.6%49.4%46.2%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2000 2001 2002 2003 2004 2005 2006

N.A.TaiwanMediaTek

Top 10 North America vs. Taiwan Average Return on Assets2000-2006

Source: FSA

TOP 10 N.A vs. TAIWAN AVG ROIC2000-2006

9.8%

-18.2%

-8.9% -4.5%

5.1%14.3%

16.2%

35.6%

16.8% 16.8% 15.9% 19.3%24.3%

14.5%

55.1%

36.5%36.9%36.3%

66.0%67.8%67.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2000 2001 2002 2003 2004 2005 2006

N.A.TaiwanMediaTek

Top 10 North America vs. Taiwan Average Return on Invested Capital2000-2006

Source: FSA

TOP 10 N.A vs. TAIWAN AVG NET PROFIT MARGIN2000-2006

-8.5%

-70.5%

-31.3%

-8.3%

6.3%

18.1% 16.8%20.8%10.0% 13.3% 7.4%

13.2%

17.9%

12.7%

43.4% 42.7%39.3%35.8%

41.5%43.6%

25.9%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

2000 2001 2002 2003 2004 2005 2006

N.A.TaiwanMediaTek

Top 10 North America vs. Taiwan Average Net Profit Margin2000-2006

Source: FSA

CHALLENGES

The Challenges Are Greater Than Ever

Slowing GrowthEscalating Costs of DesignCausing a decline in traditional VC funding Increasing Profitability Pressure

Volume increasing ASP fallingTime-to-Market PressuresThere are big penalties to being late to marketIP Integration and Verification is Difficult and Costly R&D Investment IncreasingImportant as DFM and DFT become critical at advanced nodesChanging Landscape—Consolidation of the IndustryBack-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.

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

2000

2001

2002

2003

2004

2005

2006

($M

)

$247.2B growth ‘90-’06 $115.8B

growth ’96-’06$108.8B growth ‘01-’06

$20.2B growth‘05-’06

Semiconductor Industry’s $ Amount Growth Over the Years

Source: FSA

Increasing ChallengesSlowing Growth—Is This the Golden Age?

Architecture

Verification

Software

$0M

$65M

0.35µm 0.25µm 0.18µm 0.13µm 90nm 65nm

Cost

($M

)

Validation

Prototype

Physical

Source: IBS, 2007

Increasing ChallengesEscalating Cost of Design

$60M

$55M

$50M

$45M

$40M

$35M

$30M

$25M

$20M

$15M

$10M

$5M

“It costs a new venture at least $15 million to reach tape-out. Such high initial investment is too steep for a venture investor

unless there was a good probability of a really huge return. There is no value to the venture investor in putting $25 millioninto a company to achieve a $50 million exit.” — Lip-Bu Tan

Chairman, Walden International

IC Cost by Process Node

$5 $10 $14 $21$40

$75$9

$12

$5$6

$9$10

$12

$13

$3$1

$0.1$0.1

$0$10$20$30$40$50$60$70$80$90

$100$110

180-nm 130-nm 90-nm 65-nm 45-nm 32-nm

($M

)

Yield Ramp-upMask CostDesign Cost

$34M$24M

$16.1M$10.1M

Costs are Rising – Especially Design

Source: Chartered, Synopsys, FSA

$61M

$100M

300mm Fab Costs:45-nm = $3B32-nm = $10B

Increasing ChallengesFabless Funding

43 Deals

42Deals

22Deals

37Deals

41Deals

33Deals

32Deals

Round A deals have declined nearly 80% between 2000-2006 and currently account for only 10% of VC funding.

16Deals*

32

$1

,75

9

$2

,03

6

$1

,50

6

$1

,49

3

$1

,60

7

$1

,44

4

$1

,70

7

$184$176$376

$188$208

$466

$867

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2000 2001 2002 2003 2004 2005 2006

Round A Higher Rounds

55 5332 27

4033 18

50

*Does not add up to 100% due to “warranty and other” accounting for ~5% of total cost

Source: Client data; Purchasing Magazine; McKinsey experience

Current lead time

Average industry lead times

Best-in-class lead timesHandset production cycle timeWeeks

1

1

16+

14+

Assembly, test, transport

Manufacturing

Supplier lead times

Total cycle time

Fraction of overall cost*Percent

~3

~7

85

14-20

14-16

13

4-8TBD

8-9

10-11

10-11

1-2

4-6

3-4

2-3

ICs

Displays

Image sensors

Plastics

Lead timesWeeks

Increasing ChallengesTime to Market Is Critical--Cycle Time for

Consumer OEMs

Supplier lead times key to flexibilityMinimal focus on lead timesFocus on price

Must manage risk through inventory management and risk sharing

Increasing ChallengesTime-To-Market is Critical

Revenue Loss for Being Late to Market

26.9%

47.4%

67.6%

90.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3 Months 6 Months 9 Months 12 Months

Revenue Loss

Source: IBS, 2007

Increasing ChallengesIP Qualification Costs Escalating

$2.7

$8.4$2.8

$4.5

$9.1

$18.6

$0.9$0.4$0

$5

$10

$15

$20

$25

$30

.18um (30M) 0.13um (47M) 90nm (54M) 65nm (60M)

Node (Transistor Count)

($M

)

Design CostIP Cost

Source: IBS, 2007

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

12% of total

cost

16% of total

cost

23% of total

cost

31% of total cost

Increasing ChallengesR&D Expenditure Trends

* Estimate.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008* 2009* 2010* 2011* 2012*

Year

R&

D E

xp

en

dit

ure

s ($

M)

12.2%of Rev

12.3%of Rev

12.7%of Rev

18.5%of Rev

18.4%of Rev

16.8%of Rev

15.5%of Rev

15.6%of Rev

16.0%of Rev

17.2%of Rev

18.2%of Rev

18.9%of Rev

19.4%of Rev

19.7%of Rev

20.2%of Rev

Other

Process

Hardware Product Development

Software Product Development

Pro

du

ct Develo

pm

en

t

Source: IBS, 2007

Fabless companies increasing the number of process engineersDFM is really bridging two separate disciplines

EDA, fabless and foundry must come together to solve the DFM issues

48.6%$9,262.8Others--

100%$19,068.1Total

3.3%$637.5UTAC5

8.5%$1,616.9STATS ChipPac4

9.1%$1,733.4SPIL3

14.3%$2,728.6Amkor2

16.2%$3,088.9ASE1

2006 Market Share

2006 Revenue($M)CompanyRank

Back-end Market

2006 Assembly/Test Companies

Source: Gartner

Increasing ChallengesChanging 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 growthConsumer 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 distinctionMust possesses talent and expertise in process, software, platform, test

Effective clusteringFabless-to-partner and partner-to-partner collaboration

Financial performanceBenchmarking against the leaders when modeling your business

Expertise in software development

Product diversificationDiversification can protect overall margins

Adaptability to new landscapeCost models need to adjust to the slowing growth of the industry

59

Attributes of a Successful Semiconductor CompanyCost Structure Advantage

*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

IDM**

53.0

2.0

16.0

10.0

32.3

Fabless**

COGS

Depreciation

R&DSG&A

EBITA

38.4

7.15.1

17.2

Foundry*

48.5

16.2

15.2

11.1

9.119.0

Aggregate industry cost structure, 2005% of sales Fabless companies have a

more profitable cost structure than IDMs

Fabless companies have a better average EBITA margin than the IDMs

R&D and SG&A are similar as a percentage of revenue

Significant portion of the foundries EBITA contribution is due to TSMC alone

Source: FSA

Attributes of Successful Fabless CompaniesFabless Performance Parameters

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

12.5% 12.5%

5.3% 5.2%

0%

5%

10%

15%

ROE ROA

FablessIDM

Attributes of a Successful Semiconductor CompanyControl 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 CompanyCollaborative 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

IDMVertical Integration

Fabless/Foundry Horizontal Segmentation

Application & Subsystem Design

Chip Design

Application &Subsystem Design

Chip Design

Wafer Fab

Packaging/Test

EDA/IP

DesignFoundry

Wafer Fab

Packaging/Test

21.0%19.0%52.1%23.6%23.3%N. AmericaBroadcom

16.2%15.4%53.3%28.4%26.1%N. AmericaMarvell

23.1%28.3%57.8%46.0%41.0%AsiaMediaTek

N/A17.0%60.0%27.0%27.4%N. AmericaQualcomm CDMA Technologies

N/AN/A74.7%25.3%21.1%AsiaAli

13.58%1.21%31.6%25.9%16.3%AsiaVimicro

29.6%24.0%45.7%16.8%27.3%AsiaHoltek

32.7%24.3%45.0%20.8%25.8%AsiaFaraday

14.0%9.2%59.3%13.3%46.3%AsiaActions

N. America

Region

45.9%

66.0%

Gross Profit Margin

12.0%

10.5%

ROA

26.2%

34.4%

Operating Margin

24.3%25.4%Altera

14.8%21.8%Industry Average

ROE

Net Profit

MarginCompany

Source: FSA

Attributes of a Successful Semiconductor CompanyFinancial Success

Fabless Leaders by Financial Metrics (2006)

Attributes of a Successful Semiconductor Company Diversity Creates Margin Protection

Source: FSA

Broadcom Markets

Enterprise Networking (39.8% of sales)

Broadband Communications (34.4% of sales)

Mobile & Wireless(25.8% of sales)

Broadcom Products/ ApplicationsFully integrated Ethernet switch chips for equipment makersSingle-chip Gigabit Ethernet controller products, C-NICs, that incorporate a TCP/IP offload engine

Digital cable and satelliteSet-top boxes High-def TV and DVD players

Cutting-edge mobile phones Game consolePortable media playersVoIP chips for Gigabit Ethernet networks and wireless applications

Xilinx Markets

Communications (49% of sales)

Storage & Servers (11% of sales)

Consumer/Auto/ Industrial/Defense(40% of sales)

Xilinx Products/ Applications(Wireless) 3G/4G cellular base stations; WiMAX(Wireline) Metro Area Networks; FTTx-Passive Optical Networks; DSL Modems(Networking) Multi-Service Provisioning Platform (MSPP); Switches; Routers

(Storage) Security and Encryption; Network Attached Storage(Servers) High-end Servers; PC Peripherals

(Consumer) Video Display Systems, TVs-LCD/PDP; DVR/STB/ IPTV; Smart Handhelds(Industrial) Medical Imaging; Test and Measurement Equipment(Auto) Multimedia Systems; GPS(Audio Video Broadcast) Cable Head-end System; Production Switchers; Cameras(Defense) Satellite Surveillance

Broadcom

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

Xilinx

Attributes of a Successful Semiconductor CompanyInvestment in Software Development Costs

37.6

49.647.4

58.4 56.8

69.5

45.746.3

41.2

56.8

56.6

62.965.3

60.7

0

10

20

30

40

50

60

70

80

2002 2005 2008 2011 2014

Year

Perc

enta

ge

of

Soft

war

e Pr

oduct

D

evel

opm

ent

Cost

s (%

)90nm65nm45nm32nm

Source: IBS, 2007

0

100

200

300

400

500

0.18 0.13 90nm 65nm

Intel now has 8,000+ software developers (32% of all R&D employees)

At Xilinx, 40% of R&D employees are in software development

In 2004, STMicro hired 1,000 R&D staff – half of these were software engineers

Attributes of a Successful Semiconductor CompanyInvestment in Software Development

* Survey of development teams across a variety of electronics fields (including semiconductors)Source: Embedded.com; Literature search; Rabo Securities

HW/SW Distribution Among Development Teams*

Hardware

Software

The value in software is marketshare not GPM

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 methodologyFormulation 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 requirementsPackage design done along with die designUtilization of standard materials

Joint development partnerships are evaluated to provide a complete solution, faster time to market and minimize redundancy of effort and resource

Attributes of a Successful Semiconductor CompanyExample of Managing Change

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.

Concluding Observations

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 Leadership Council

VC AdvisoryBoard

Asia-PacificLeadership Council

FSA Board of Directors

CEO CouncilFSA TechnologyCommittee

FSA BOARD OF DIRECTORS

Danny BiranAltera

Corporation

Sanjay JhaQualcomm

Dwight DeckerConexant

Jodi Shelton

Ron TortenNemerix

Dr. Tien WuASE, Inc.

Dr. Albert WuMarvell

Rick CassidyTSMC North

America

Aart de GeusSynopsys, Inc.

Bill BroklehurstFreescale

Semiconductor

Michael J. FisterCadence Design Systems, Inc.

Colin HarrisPMC-Sierra, Inc. Fu Tai Liou

UMC

Chris Malachowsky

NVIDIA

Oleg KhaykinAmkor

Dr. Nicky LuEtron

Technology, Inc.

Hans OlsenPixelworks, Inc.

Jack HardingeSilicon Corp

Michael RekucChartered

Vahid ManianBroadcom

Corporation

David French

formerly of Cirrus Logic

Asia-Pacific Leadership Council

Gordon GauHoltek

Chou-ChyeHuangSunplus

Wen-Chi ChenVIA

Dr. Woodward YangSilicon7

Dr. Zhonghan(John) DengVimicro

Dr. Shaojun WeiPheonixMicroelectronicTechnology, Co. Ltd.

ChairmanDr. Nicky LuEtron

Ming Kai TsaiMediaTek

H.P. LinFaraday

Dr. Chintay ShihSpecial Advisor

Qin-Sheng Wang CSIA IC Design Branch

K.C. ShihGlobal Unichip

Xiaolang YanSpecial Advisor Dr. Ki Soo

HwangCore Logic, Inc.

Lun ZhaoDatang Microelectronics

EUROPEAN LEADERSHIP COUNCIL

David BaillieCamSemi

Erwin LeichtleSwitchCore

Semiconductor

Svenn Tore LarsenNordic Semiconductor

Anthony SethillFrontier Silicon

David MilneWolfson

Microelectronics

Chris LadasCSR

FSA VC ADVISORY BOARD

Charles ChiGreylock Partners

Chris RustUS Venture Partners

Steve DomenikSevin Rosen Funds

Phillip T. GianosInterWest Partners

Kenneth P. LawlerBattery Ventures L.P.

Josh OfsteinThe Carlyle Group

Jake SeidLightSpeed Venture

Partners

David Silverman

3i

Mark StevensSequoia Capital

Venu ShamapantAustin Ventures

Rob ChaplinskyBridgescale Partners

Wayne CantwellCrescendo Ventures

Ron YaraTallwood Venture Capital

Lip-Bu TanWalden International

Vimal PatelSierra Ventures

Rob SoniMatrix Partners

Board of Directors

Regional Leadership Councils

VC Advisory Board

White Papers

Articles

Speaking Opportunities

Supplier Products and Services

for Start-Ups

Sponsorship

Recognition— FSA Awards

Subcommittees

LEADERSHIP/VISIBILITYOPPORTUNITIES

Company

Profile

Articles, White papers

Sponsorship

Visibility

Discounted Advertising

FSA’s hosts four premier events and expositions dedicated tobringing together fabless companies, IDMs and OEMs with suppliers inthe areas of foundries, packaging, test, assembly, IP, software, etc.

GLOBAL FSA EVENTS

FSA/SEMI/SICA IC Design Suppliers PavilionIn conjunction with SEMICON CHINA 2007

March 21-23, 2007 Shanghai, China

IET& FSA International Semiconductor Forum,Venues alternate throughout Europe eachYear - 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

Mark Your Calendarfor 2007:

December 6, 20075:00 p.m. – 10:00 p.m.

Santa Clara Convention CenterSanta Clara, CA

This prestigious dinner celebration includes an awards ceremony recognizing fabless companies that have shown exemplary success, vision, strategy and promise throughout the year.

Companies host tables for key clients and industry analysts for an enjoyable evening of powerful executive networking.

FSA AWARDS DINNER CELEBRATION

Wafer Fabrication

and Assembly & Test Reports

Global Fabless

Fundings and

Financial Report

FSA Forum Magazine

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.

Profile Directories

INDUSTRY FOCUSED COMMITTEESStandard Foundry Process

Qualification (SFPQ)Major Accomplishment: JEDEC Adopted Process Qual available

Intellectual Property (IP) Projects: Standards for Hard and Soft

IP; IP Business Modeling

Modeling Projects: Standards for Model Verification; Model Survey and

Technical Programs

Supply Chain Performance Projects: Wafer Pricing and Test, Packaging and Assembly Survey

Business Management SystemsProjects: MIS Survey; Forums

VC/Finance Advisory BoardProjects: Tracking trends and

identifying challenges faced by small companies and identifying models and

business systems

Education Projects: Work with education

community on curricula to support the fabless model

Mixed Signal/RF FoundryProjects: Accelerate the Foundry

Supply Chain Ecosystem through a standard roadmap

SiPProjects: SiP Patent Map beginning with 3D stacking as the top priority. Later--KGD (known good die)/Wafer Level BGA of SiP, RF SiP Design and Design for Testability

Standard I/OProjects: Develop general guidelines for IC design with area I/O (flip chip) and

align I/O roadmaps

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 integratorsIP Licensing – takes significant time and money IP Technology – Choosing a reliable and fully supported technology is complex and riskyIP Manufacturability – leaves many questions unanswered

Risk Assessment, Productivity & Communication

What is it?Series of questions that communicate quality aspects of an IP coreAccumulates information about an IP vendor’s Design Methodology, Foundry Qualification, Specific IP, etc.Simple, brief to complete, developed with vendor perspective in mindFollows a workflow system in a robust Excel application

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

BenefitsFeature-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 integratorIntegrator via structured categorical comparison with vendor commentsFoundry 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

FSA Hard IPe QualityRisk Assessment Tool

Hard IP Working Group – Developers

IP VendorsSynopsysMentor GraphicsCadenceVirage LogicImpinjSarnoffDolphin Integration

Integrators (Fabless/IDMs)AvagoPMC-SierraCirrus LogicQualcommATIViaMicrolinear (Sirenza)IDTLSI LogicPhilipsFreescale

FoundriesIBMTSMCUMCSMICCharteredSamsung

Workflow and Programming SupportIBMSynopsys

Technical LeaderRaminderpal Singh, IBM

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

Tool Output: Integrator Risk Profile

Vendor’s Baseline

Risk Assessment

Integrator Custom

Weighted Assessment

Red bar indicates a critical question was

answered negatively

Categories

Table: How Questions Were

Answered

Contact

Questions/comments regarding specific instructions pertaining to the IPe Tool Suite:

Lisa TafoyaVP of Global Research

ltafoya@fsa.org

Visit www.fsa.org to download

Technical questions regarding the IPe project:Raminderpal Singh

Technical Leader – IPe Initiativeraminder@us.ibm.com

Special Thanks to Our SiP Subcommittee—

Co-chairsHo-Ming Tong, ASE GroupSebastian Liau, ITRI

Subcommittee MembersAiroha, Amkor, Ardentec, ASE, Cadence, Cisco, D-TekSemicon, Etron, Faraday, Global Unichip, Holtek, ITRI, MediaTek, Progate Group, RichTek, SPIL, Sunplus, Tong Hsing Electronic, TSMC, UMC, VIA…etc.

System-in-PackageFSA SiP Subcommittee

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 trendIdentifying the talents of competitors and major worldwide leaders in various arenas of SiP related patents & RD statusPlanning the direction of RD and patent strategyCreating seamless vertical integration of the SiP supply chain

Launch Date: September 5, 2006

System-in-PackageFSA SiP Market and Patent Analysis Project

SiP PROJECT:SiP TECHNOLOGIES FISHBONE DIAGRAM

Stress Structure for Interconnection

Electrical Design/ Modeling

Technology

MEMS/ Sensor

Technology

Thermal/Stress Design

Technology

Testing & Reliability

Technology

Packaging Technology

Substrate Technology

MEMS Sensor Design

Sample Treatment Device

Micro-fluidic Design & Simulation

SiP Technology

SiP Products

Bio-sensor Design

Bio-reactor Control

Bio-compatibility

SiP Burn-in

SiP KGD*

SiP BIST*

Design for Reliability

Design for Testability*

Built-in Devices for Reliability

Low Loss SiP Substrate

Integrated Passives

Chip in Substrate*

Si Substrate*

Metal Substrate

Organic Substrate

Ceramic Substrate

Flexible Substrate

Encapsulation

Wire Bonding Packaging

Flip-Chip Packaging

3D Stacking*

Bare Die Assembly

Wafer Bumping

Heterogeneous Chips Integration

Built-in Devices for Thermal/ Stress Enhancement*

Thermal Interface Material

Heat Spreader

Built-in Thermal Sensor

Wide Band Differential Circuit Design

Basic Element Modeling

ESD Protection

RF Front-end Design

Antenna DesignRF SiP Design*

Embedded Passives Design & Modeling

Wideband Low Impedance Design

Statistic & Scalable Design Modeling

EDA Design Environment

EMC Design

Stress Structure for Interconnection

Electrical Design/ Modeling

Technology

MEMS/ Sensor

Technology

Thermal/Stress Design

Technology

Testing & Reliability

Technology

Packaging Technology

Substrate Technology

MEMS Sensor Design

Sample Treatment Device

Micro-fluidic Design & Simulation

SiP Technology

SiP Products

Bio-sensor Design

Bio-reactor Control

Bio-compatibility

SiP Burn-in

SiP KGD*

SiP BIST*

Design for Reliability

Design for Testability*

Built-in Devices for Reliability

Low Loss SiP Substrate

Integrated Passives

Chip in Substrate*

Si Substrate*

Metal Substrate

Organic Substrate

Ceramic Substrate

Flexible Substrate

Encapsulation

Wire Bonding Packaging

Flip-Chip Packaging

3D Stacking*

Bare Die Assembly

Wafer Bumping

Heterogeneous Chips Integration

Built-in Devices for Thermal/ Stress Enhancement*

Thermal Interface Material

Heat Spreader

Built-in Thermal Sensor

Wide Band Differential Circuit Design

Basic Element Modeling

ESD Protection

RF Front-end Design

Antenna DesignRF SiP Design*

Embedded Passives Design & Modeling

Wideband Low Impedance Design

Statistic & Scalable Design Modeling

EDA Design Environment

EMC Design

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-PackageFSA SiP Market and Patent Analysis Project

System-in-PackageFSA SiP Market and Patent Analysis Project

For the further information, please refer to our SiP website:

http://www.fsa.org/publications/sip/

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.

MEMBERSHIP WITH FSA

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

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

LEARN MORE…

Jodi Shelton Executive Director jshelton@fsa.org

Dr. Jeremy Wang Asia-Pacific Executive Director

jwang@fsa.org

Vivian Pangburn VP, Global Marketing vpangburn@fsa.org

Lisa Tafoya VP, Global Research ltafoya@fsa.org

Irene Yu VP, Asia Pacific iyu@fsa.org

Donna Hoye Member Services Manager dhoye@fsa.org

FSA1-888-322-5195

www.fsa.org

www.fsa.org

Gillian Wei Shanghai Representative gwei@fsa.org86-13795475403

Joy Wu Beijing Representative office 86-10-5872-7696

jwu@fsa.org86-13701207590

FSA Asia-Pacific Contacts

iyu@fsa.orgAsia Pacific Vice PresidentIrene Yu

Taipei Office: 886-2-8712-8661

Francine Chang Project Coordinator (Media, PR relations) fchang@fsa.org

Power Chi Project Coordinator (Events) pchi@fsa.org

Babbie Liu Sr. Manager, Events, Marketing & Membership bliu@fsa.org

Crystal Wang Project Coordinator (Membership) cwang@fsa.org

FSA MEMBERSHIPInformation, Collaboration, Innovation