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Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All.

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Presentation on theme: "Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All."— Presentation transcript:

1 Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc TM Ken Davis Semiconductor Market Overview July 2005

2 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 1 Semiconductor Market Approaching The Cycle Trough?

3 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 2 May SC Shipments Down From Peak 3 Month Moving Sum Of Worldwide Industry Revenues Billions of $% Change From Year Ago Nov 2004 is All-Time High Monthly Growth Rates Down From June 2004 Peak May 2005 May

4 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 3 Semiconductor Market: Approaching The Cycle Trough? World Semiconductor Market Cycles Percent Change Year Ago Years By Quarter Gulf War Asian Financial Crisis PC Bubble 1st Oil Shock 2nd Oil Shock Market Growth Peak Market Growth Trough Perfect Storm

5 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 4 Revenue Downturns Last Between 5-6 Qtrs Semiconductor Market Revenue Cumulative % Chg From Peak Quarter % 2Q00- 3Q01 The Worst Downturn Ever!! Quarters From Peak 1Q84-3Q85 1Q88- 1Q90 2Q95-3Q96 3Q97-2Q98 1Q91-4Q91 3Q73-1Q75 2Q04- For the current cycle: Quarter 0 is 2Q 2004, Quarter 4 is 2Q 2005.

6 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 5 Semiconductor Market Billions of Dollars $204 $139 $141 $166 $213 $226 $246 $273 $309 Semiconductor Market Forecast World Semiconductor Market Revenues Annual % Change Average Growth Jan 2004 Forecast % % % % Source: Semiconductor Industry Association CAGR: 10%

7 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor Market Growth By Region Source: Semiconductor Industry Association, Annual % Change Americas Asia Pacific Japan Europe % % 2004: $39 Bil / 18% of Total 2008: $49 Bil / 16% of Total 2004: $89 Bil / 42% of Total 2008: $143 Bil / 46% of Total 2004: $46 Bil / 22% of Total 2008: $62 Bil / 20% of Total 2004: $39 Bil / 18% of Total 2008: $55 Bil / 18% of Total CAGR: 13% CAGR: 8% CAGR: 9% CAGR: 6%

8 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor Market Growth By Product Source: Semiconductor Industry Association, Annual % Change Non-DRAM DRAM Microcontrollers DSP % % 2004: $12 Bil / 6% of Total 2008: $20 Bil / 6% of Total 2004: $8 Bil / 4% of Total 2008: $13 Bil / 4% of Total 2004: $27 Bil / 13% of Total 2008: $30 Bil / 10% of Total 2004: $186 Bil / 87% of Total 2008: $279 Bil / 90% of Total CAGR: 3% CAGR: 12%CAGR: 13% CAGR: 11%

9 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor Market Growth By Product Source: Semiconductor Industry Association, Annual % Change Microprocessors Analog Logic % % 2004: $50 Bil / 23% of Total 2008: $81 Bil / 26% of Total 2004: $31 Bil / 15% of Total 2008: $44 Bil / 14% of Total 2004: $30 Bil / 14% of Total 2008: $45 Bil / 14% of Total CAGR: 9% CAGR: 13% CAGR: 10%

10 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor End-Market Growth Source: Dataquest May 2005, Annual % Change Total Data Processing Automotive Consumer % % 2004: $89 Bil / 41% of Total 2008: $117 Bil / 39% of Total 2004: $16 Bil / 7% of Total 2008: $25 Bil / 8% of Total 2004: $36 Bil / 16% of Total 2008: $49 Bil / 17% of Total CAGR: 7% CAGR: 8% CAGR: 12%

11 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor End-Market Growth Source: Dataquest May 2005, Annual % Change Communications Wireless Subscriber Wireline Wireless Infrastructure % % 2004: $36 Bil / 17% of Total 2008: $51 Bil / 17% of Total 2004: $56 Bil / 26% of Total 2008: $77 Bil / 26% of Total 2004: $18 Bil / 8% of Total 2008: $24 Bil / 8% of Total 2004: $2 Bil / 1% of Total 2008: $2 Bil / 1% of Total CAGR: 9% CAGR: 8% CAGR: 2% CAGR: 7%

12 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Semiconductor End-Market Growth Source: Dataquest May 2005, Annual % Change Industrial Military % 2004: $4 Bil / 2% of Total 2008: $6 Bil / 2% of Total 2004: $19 Bil / 8% of Total 2008: $26 Bil / 9% of Total CAGR: 9% CAGR: 8%

13 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Gartner SIA May 2005 June 2005 IC Insights June 2005 Semico May iSuppli May Merrill Lynch Apr NA NA Semiconductor Market Growth Forecasts Percent Change

14 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 13 Drivers Of The Semiconductor Market

15 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 14 Healthy World Economic Growth Is Supporting Semiconductor Market Growth World Economic Growth Annual % Change World Semiconductor Growth Annual % Change Avg Growth Average Growth Source: Global InsightSource: SIA CAGR: 10%

16 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 15 Excess Semiconductor Inventory in the Electronics Supply Chain Source: iSuppli Corporation

17 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slowing Semiconductor Capital Spending In Bil $% Revenues Capital Spending as % of Revenues (CAPEX) SC Capital Spending (Bil $) Source: Gartner % Change In Capital Spending Apr % +31% +3% -29% +10% Oct % +1% -16% +9% +50% Jan % -12% +3% +15% +38% Apr % -8% -8% +11% +33% Jul % -7% -9% +10% +37%

18 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 17 Capacity Utilization Drives Semiconductor Market Pricing Average Selling Price (In Dollars) Capacity Utilization 1Q 1998 – 4Q 2005 Annual % Change Capacity Utilization (%) $ % Lower in 1Q 2005

19 TM Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc Slide 18 Summary The semiconductor market in 2004 posted its strongest growth since For 2005, the consensus expectation is for slower semiconductor market growth. How much slower depends upon: The slowdown in the global economy The impact of semiconductor capital spending on the semiconductor pricing environment Shifts in inventory demand

20 Freescale Semiconductor Confidential and Proprietary Information. Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc


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