Keynote Speaker - testconxchina.org · Keynote Address Capital Spending and Capacity Trends March 4, 2013 BiTS Workshop Keynote Address 17 March 4, 2013 BiTS Workshop Keynote Address

Keynote Speaker

BiTS Workshop 2013 Archive

THE DRAMATIC RESTRUCTURING OF THE INTEGRATED CIRCUIT INDUSTRY by

Bill McClean President

IC Insights, Inc.

et ready for some really good news as keynote speaker Bill McClean of IC Insights addresses "The Dramatic Restructuring of the Integrated Circuit Industry". In IC Insights’ opinion, the “bottom” of the current

cycle in the worldwide economy and IC industry was reached in 2012 and 2013 will mark the beginning of the next cyclical upturn—one in which the IC industry CAGR will more than triple to 7.4% in the next 5-year period.

ABSTRACT

hroughout 2012, the expectations for global economic growth consistently deteriorated and global GDP expanded by only 2.6%. It should be noted that 2.5% or less worldwide GDP growth is

typically considered a global recession. However, IC Insights’ forecast for 2013 worldwide GDP growth is 3.2%, with increasingly better growth expected for the global economy through 2016. The IC industry is set to emerge from a difficult 5-year period of minimal growth. From 2007-2012, the IC market grew at an average annual rate of 2.0%. In IC Insights’ opinion, the “bottom” of the current cycle in the worldwide economy and IC industry was reached in 2012 and 2013 will mark the beginning of the next cyclical upturn—one in which the IC industry CAGR will more than triple to 7.4% in the next 5-year period. Overall, semiconductor industry cycles are becoming increasingly tied to the health of the worldwide economy. While poor semiconductor industry growth has occurred during periods of strong worldwide economic growth, primarily due to semiconductor industry overcapacity and the resulting IC price declines, it is rare to have strong semiconductor industry growth without at least a “good” worldwide economy to support it. Thus, over the next five years, annual global semiconductor market growth rates are expected to gain significant momentum and closely mirror the performance of worldwide GDP growth.

G

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2013 BiTS Workshop ~ March 3 - 6, 2013

1

Keynote Address

THE�DRAMATIC�RESTRUCTURING�OF�THE�INTEGRATED�CIRCUIT�INDUSTRY

Bill McClean, President—IC Insights

Keynote Address

Conference Ready 2/18/2013

2013 BiTS WorkshopMarch 3 - 6, 2013

Presentation�Outline

• Global Economic Trends and “New” IC Cycle Model

• IC Market Trends

• Capital Spending and Capacity Trends

• Summary

March�4,�2013 BiTS�Workshop�Keynote�Address 2


2

Keynote Address

Global�Economic�Trends




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Keynote Address




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Keynote Address


0.44

0.06

0.67

0.96 0.99

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1980Ͳ1989 1990Ͳ1999 2000Ͳ2009 2010Ͳ2012 2013FͲ2016F

Correla

on Coe

ffic

i

ent

Timeperiod

Worldwide GDP and IC Market Growth Correla on Coefficient History and Forecast (1980Ͳ2016)

Source: IC Insights

Japanese Co's Ramp Produc on

S. Korean & Taiwanese Co's Ramp Produc on

Company Consolida on Begins

Consolida on Gains Momentum


2011 GDP 2011 GDP 2011 2012 GDP 2012 GDP 2012 2013F GDP 2013F GDP 2013F Growth % ($ Trillions) (% of Total) Growth % ($ Trillions) (% of Total) Growth % ($ Trillions) (% of Total)

Developed CountriesU.S. 1.7% 13.92 23.7% 2.2% 14.23 23.6% 2.4% 14.57 23.5%

Eurozone 1.5% 12.17 20.8% -0.8% 12.07 20.1% -0.3% 12.04 19.4%

Japan -0.7%* 4.28 7.3% 1.5% 4.34 7.2% 1.4% 4.41 7.1%

U.K. 0.7% 2.68 4.6% -0.1% 2.68 4.4% 1.3% 2.71 4.4%

Canada 2.4% 1.38 2.4% 2.1% 1.41 2.3% 2.3% 1.44 2.3%

Australia/NZ 2.2% 1.03 1.8% 3.7% 1.07 1.8% 3.0% 1.10 1.8%

Total Developed 1.3% 35.46 60.5% 1.0% 35.80 59.5% 1.3% 36.26 58.4%

Emerging Markets 6.2% 23.19 39.5% 5.2% 24.40 40.5% 5.9% 25.84 41.6%

Worldwide Total 3.2% 58.65 100.0% 2.6% 60.19 100.0% 3.2% 62.10 100.0%

China** 9.2% 4.71 8.0% 7.8% 5.08 8.4% 8.1% 5.49 8.8%

India** 7.1% 1.52 2.6% 5.6% 1.61 2.7% 6.2% 1.70 2.7%*Forecast was 1.5% before the earthquake

Source: World Bank, IMF, IC Insights **Included in Emerging Market figures

Worldwide GDP Breakdown (2011-2013F)

Country/Region


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Keynote Address


65

280

18.1

40

77

310

18.5

46

82

340

19.4

51

10

100

1,000

PC* Cellphone Auto Digital TV

Millions

of U

nits

System

China Market's Impressive Number One Rankings

2010 Market 2011 Market 2012 Market

Source: IC Insights *Not including tablet PCs


$42 $48 $54 $56 $55

$75 $79

$81

$148

$2.5 $3.5 $4.6 $4.9 $4.2 $5.9 $8.2 $9.1 $19.4

0

30

60

90

120

150

05 06 07 08 09 10 11 12 17F

Billion

s of D

ollars

Year

China IC Market vs. IC Produc on Trends

China IC Market ($B) China IC Produc on ($B)

Source: IC Insights

IC Produc on Share of China IC Market: 2005: 6.1% 2012: 11.2% 2017F: 13.1%


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Keynote Address


3.6%

3.0%

3.9%

2.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

93Ͳ97

98Ͳ02

03Ͳ07

08Ͳ12

Percen

t

5ͲYear Timeperiod

5ͲYear Average Annual Worldwide GDP Growth Rates

Source: IC Insights

Global Recession Threshold (2.5%)


2013 Worldwide GDP Growth

2013 Worldwide IC Market Growth

2.5 - 2.8%* <3%

2.9 - 3.3% 3 - 7%

3.4 - 3.7% 8 - 12%

�3.8% >12%

*�2.5% = Global RecessionSource: IC Insights

2013 Worldwide GDP vs. IC Market Growth Scenarios


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Keynote Address

IC�Market�Trends



14.0%

19.8%

16.7%

14.1% 12.7%

17.1%

25.0%

20.8% 19.1%

10.6%

8.1% 6.9%

0.6% 0.2%

5.1% 6.6%

1.9%

12.1% 12.7%

8.0%

0.7%

4.9% 3.3%

2.1%

0%

4%

8%

12%

16%

20%

24%

28%

84/89

85/90

86/91

87/92

88/93

89/94

90/95

91/96

92/97

93/98

94/99

95/00

96/01

97/02

98/03

99/04

00/05

01/06

02/07

03/08

04/09

05/10

06/11

07/12

Percen

t

Timeperiod

5Ͳyear Rolling IC Market ($) CAGR Trends

Source: IC Insights

10.1% AVG.


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Keynote Address


7.2%

13.4%

10.5%

7.2% 6.8%

7.1% 8.0% 7.7%

12.0%

9.2%

10.9%

12.9%

7.4%

6.2%

9.0% 9.1%

6.1%

14.9% 14.0%

11.3%

6.3%

9.6%

6.4%

4.3%

0%

4%

8%

12%

16%

84/89

85/90

86/91

87/92

88/93

89/94

90/95

91/96

92/97

93/98

94/99

95/00

96/01

97/02

98/03

99/04

00/05

01/06

02/07

03/08

04/09

05/10

06/11

07/12

Percen

t

Timeperiod

5Ͳyear Rolling IC Unit CAGR Trends

Source: IC Insights

9.1% AVG.


10

14

18

22

26

30

34

38

42

46

50

54

58

1Q00

3Q

00

1Q01

3Q

01

1Q02

3Q

02

1Q03

3Q

03

1Q04

3Q

04

1Q05

3Q

05

1Q06

3Q

06

1Q07

3Q

07

1Q08

3Q08

1Q

09

3Q09

1Q

10

3Q10

1Q

11

3Q11

1Q

12

3Q12

Billion

s of U

nits

Quarter

2000Ͳ2012 Quarterly IC Unit Volume Shipment Trend

Source: WSTS, IC Insights

9.5% Annual Trend Line (99Ͳ04)

3Q00 24% Above Trend

14% Annual Trend Line (05Ͳ07)


2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2010

6.0% Trend Line


2011

2012


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Keynote Address

Capital�Spending�and�Capacity�Trends



61.3

38.7

27.5 31.3

47.7 48.1

57.5 61.0

43.4

26.1

53.8

65.6 58.8 59.8

85%

Ͳ37% Ͳ29%

14%

52%

1%

19%

6%

Ͳ29%

Ͳ40%

106%

22%

Ͳ10%

2%

Ͳ50%

Ͳ25%

0%

25%

50%

75%

100%

0

10

20

30

40

50

60

70

80

90

00 01 02 03 04 05 06 07 08 09 10 11 12 13F

Annu

al Cha

nge

Billion

s of D

ollars

Year

Worldwide Semiconductor Capital Spending Trends (2000Ͳ2013)

Capital Spending Percent Change

Source: IC Insights


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Keynote Address


31%

26%

22%

21%

28%

26%

18%

18%

21%

20%

22% 22%

17%

11%

17%

20%

19% 18% 8%

Ͳ11%

Ͳ25%

14%

85%

Ͳ37% Ͳ29%

14%

52%

1%

19%

6%

Ͳ29% Ͳ40%

106%

22%

Ͳ10%

2%

Ͳ50%

Ͳ30%

Ͳ10%

10%

30%

50%

70%

90%

110%

130%

10%

15%

20%

25%

30%

35%

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F

Capital Spe

nding Ch

ange

Capital Spe

nding %

of S

emi Sales

Year

Semiconductor Capital Spending as a Percent of Semiconductor Sales

Capital Spending % of Semi Sales Capital Spending Change

Source: IC Insights

= Capital Spending as a % of Sales Trendline


34.8%

18.6%

10.0%

0%

10%

20%

30%

40%

Top 5 Spenders* Industry Average NonͲTop 5 Spenders

Capital Spe

nding as

a %

of S

ales

2012 Capital Spending as a Percent of Sales Comparison

Source: IC Insights *Samsung, Intel, TSMC, SK Hynix, and GlobalFoundries


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Keynote Address



89% 84%

80% 67%

2013F Capital Spending Leaders' Shares of Total WW Semiconductor Industry Spending ($59.8)

Top 5 Leaders

Top 10 Leaders

Top 15 Leaders

Top 25 Leaders

Source: IC Insights

2005 Share Top 5 = 40% Top 10 = 55% Top 15 = 67% Top 25 = 82%


12

Keynote Address


3.5

7.3 7.0 5.0

3.8

0.0

13.0

7.0

Ͳ1.5

2.7

7.7 9.0

16.2 18.8

13.9

Ͳ8.1

8.9

12.0

8.5 7.3

16% 19%

16%

10%

7%

0%

21%

9%

Ͳ2%

3%

9% 10%

16% 16%

10%

Ͳ5%

6%

8%

5% 4%

Ͳ10%

Ͳ5%

0%

5%

10%

15%

20%

25%

Ͳ10

Ͳ5

0

5

10

15

20

25

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13F

Year/Year Increase

Millions

of W

afers

Year

Worldwide IC Wafer Capacity Changes (200mm Equivalents)

Wafer Capacity Change (M) % Increase over PreviousͲYear

Source: SIA, IC Insights

93Ͳ08 10.6% CAGR

08Ͳ13 3.6% CAGR


1.7%

0.9%

Ͳ0.2%

Ͳ1.1%

Ͳ2.0%

Ͳ1.0%

0.0%

1.0%

2.0%

1994Ͳ1999 1999Ͳ2005 2005Ͳ2011 2011Ͳ2017F

IC Units

Shipp

ed per

Wafer

CAG

R

Quarter

IC Units Shipped per Wafer CAGR Trends*

Source: SIA, IC Insights *200mm equivalents


13

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Summary



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Keynote Address



$1.42 $1.45

$1.29

$1.37

$1.00

$1.50

$2.00

$2.50

$3.00

Dollars

Quarter

1992Ͳ2012 Quarterly IC ASP Trends

3Q01Ͳ1Q05 Trend

1Q92Ͳ4Q95 Trend

2Q98Ͳ2Q01 Trend

Source: WSTS, IC Insights

1Q96Ͳ1Q98 Trend

2Q05Ͳ1Q09 Trend 2Q09Ͳ4Q12

Trend


16

Keynote Address


YearIC Unit Shipments

(B)IC Average Selling

Price (ASP) IC Market (B)

1997 60.1 $2.12 $127.7

2012 192.6 $1.35 $259.4

1997Ͳ2012 CAGR 8.1% Ͳ3.0% 4.8%

2012 192.6 $1.35 $259.4

2022F 346.0 $1.62 $560.0

2012Ͳ2022F CAGR 6.0% 1.8% 8.0%2008Ͳ2012 IC ASP Ͳ0.5% CAGR

Source: IC Insights

IC Market to Show Better Growth

March�4,�2013 BiTS�Workshop�Keynote�Address

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17

Keynote Address

March 4, 2013 BiTS Workshop Keynote Address

Thank�you�for�your�attention!

Additional informationwww.icinsights.com

+1-480-348-1133

33

Documents

Keynote Speaker - testconxchina.org · Keynote Address Capital Spending and Capacity Trends March 4, 2013 BiTS Workshop Keynote Address 17 March 4, 2013 BiTS Workshop Keynote Address