An Overview and Perspective on Taiwan Broadband , Wireless and IC/SoC Industry Dr. Teddy Huang Deputy General Director Computer & Communications Research Laboratories Taiwan November 30, 2002 Asian Telecommunications Industry Exchange Hong Kong 2018/9/17

Contents Introduction Development status of Taiwan’s Broadband Networking and Wireless Communications Industry Development status of Taiwan’s SoC/IC Industry R & D Strategy for Broadband, Wireless and SoC/IC Technology National Si-Soft Project Program related to Broadband and Wireless Communications Conclusions 2018/9/17

Telecommunication Service Industry In Taiwan Subscribers :K Service Telecomm. Revenue Over GDP Mobile Comm. Internet Local Call Broadband Access Year Subs. POP Subs. POP Subs. POP Subs. % of BA --- --- 1996 1997 1998 1999 2000 2001 2002(1H) 970 1,492 4,727 11,541 17,874 21,633 23,010 4.51% 6.86% 21.56% 52.24% 80.24% 96.55% 98.75% 100.00% 600 1,660 3,011 4,800 6,260 7,820 8,080 8,340 3.00% 8.00% 13.73% 21.39% 27.00% 35.00% 36.00% 37.00% 10,011 10,862 11,500 12,044 12,642 12,847 13,052 46.51% 49.96% 52.45% 54.52% 56.76% 57.34% 58.43% 2.12% --- --- 2.12% --- --- 2.53% --- --- 2.80% 262.8 1,164 3.99% 14.85% 3.13% 3.31% --- --- --- 1,639 2,055 20.90% 26.21% --- 2002(e) 23,300 Broadband Access Statistic includes:ADSL,Cable Modem,ISDN,Leased Line,Direct PC, etc. subscribers. Broadband Access Subscribers number will over 2,000K at the end of 2002 . The penetration rate of Taiwan’s mobile communication will remain number one in the world in 2002, but the market will be saturated, so , to provide new digital content and service model will be the major challenges for the telecommunication operators. Subs: Subscriber POP: Penetration rate over population BA: Broadband Access Source : DGT;Office of Planning/CCL; 2002/08 2018/9/17

Rapid Growth of Broadband Access Service Industry in Taiwan In Thousands Sub Broadband user Internet Subscriber grow over 8M and Broadband Access over 1.6M as to June, 2002. Cable Modem service grow steadily, and 60% are with bi-directional service。 2018/9/17 Source：FIND.ORG，ITRI IEK ITIS，2001/12

Revenue of Telecom Industry in Taiwan Latin America 4.5% (4.1%) 100M NT$ 1830.4 1776.7 3.1% 1382.9 28.5% 1166.3 18.6% 902.9 883.0 831.0 29.3% 2.2% 6.1% 82% 84% 80% 83% 84% 78% 9% 18% 22% 20% 17% 16% 16% *：LNB is not included Growth of Telecomm Revenue Export Distribution % in 2002 (estimated) & 2001 % in “( )” Source：ITRI IEK ITIS，2002/10 2018/9/17

Changes of Telecom Industry in Taiwan Unit: 100M NT$ 1830.4 1776.7 0.6% 2.3% 17.5% 16.6% 1382.9 4% 11.7% 1166.3 14% 15% 883.0 902.9 32% 36.8% 44.0% 23% 25.8% 27% 29.2% 2018/9/17 Source: ITRI IEK ITIS， 2002/10

Product Ranking in 2001 in Taiwan Unit: 100 M NT$ 2018/9/17 Note：1.( ) 2000 ranking, 2.LNB is not included Source: ITRI IEK ITIS，2001/12

2002 3Q Results & YE Forecast Products 2002 (3Q) 2002 (e) Unit: 100 M NT$ Products 2002 (3Q) 2002 (e) Wireless Equipment (including Mobile Phone) 580.0 805.6 - Mobile Phone 286.5 398.0 LAN (including NIC, Hub, LAN Switch, and Router 331.3 473.0 CPE (Telephone, FAX, ...) 160.3 213.7 Wired Transmission Equipment (ADSL, Cable Modem) 238.8 327.1 CO Switch 8.4 11.0 Total 1318.5 1830.4 Source: ITRI IEK ITIS，2002/07 2018/9/17

Taiwan’s Wireless , Broadband, and Networking Products’ World Position Taiwan has upgraded from manufacturing Low-end Analog Modem to producing High-level WLAN, Broadband, and Networking Equipment 2018/9/17 Source: ITRI IEK ITIS，2002

Rapid Growth of Wireless Industry in Taiwan 100M NT$ Source：ITRI IEK ITIS， 2001/12 2018/9/17

Rapid Growth of Network Products Taiwan Network Product Revenue In Taiwan Taiwan Network Product Revenue In 100M NT$ Switch Product Switch 2001 Distribution 10M 2% 10/100M 92% Gigabit 6% Layer2 75% Layer3 25% NT$43.8B in 2001 with growth rate of 16.9% over 2000 Ethernet Access/Metro Ethernet market developed rapidly，and Switch & Router market becoming very promising Over 60% exports are for North America and Europe , and export to Mainland China is growing rapidly 36 6% is the estimated growth in 2002 2018/9/17 Source: ITRI IEK ITIS，2001/12

Global Telecom Market by Key Products US$M 2000-2004 CAGR 9.3% 1% 28% 38% -39% -9.9% 3.4% 7.7% 24.8% Source：Gartner Dataquest ，Teleseeq ，ITRI IEK ITIS，2001/12 2018/9/17

Revenue of IC Industry in Taiwan Unit: 100M NT$ 7,144 6,274 -26.2% 68.7% 5,269 19.2% 17.4% 4,235 5.9% 2,834 49.4% 2,479 14.3% 2018/9/17 Source：ITRI IEK ITIS， 2002/11, * : 2002 Taiwan’s IC Design Industry growth rate 17.4%

2002 2Q Results & YE Forecast Year IC Design IC Manufacturing Unit: 100 M NT$ Year IC Design Annual Growth Rate IC Manufacturing Annual Growth Rate IC Packing Annual Growth Rate IC Testing Annual Growth Rate Revenue Annual Growth Rate Source : ITRI IEK ITIS， 2002/07 2018/9/17

Major IC Applications in Taiwan Application Distribution Top 10 Applications Miscellaneous Communications Consumer Electronic Information 2001 122B NT$ Source: ITRI IEK ITIS， 2002/03 2018/9/17

Communications & Electronics Products 2001 World Ranking Top 3 Communications & Electronics Products Taiwan is the world leader in Communications and Optoelectronics Products Top 1 Top 2 Top 3 Wireless LAN IC Manufacturing IC Packaging ADSL Modem Ethernet Card Hub LCD Monitor CD-R CD-RW DVD Notebook Mask ROM PC Camera Analog Modem IC Design Cable Modem Ethernet Switch S&M-Area TFT LCD Module S&M TN/STN LCD Module Mother Board IC Resistor Digital Camera Large-Area TFT LCD DRAM 2018/9/17 Source: ITRI IEK ITIS, 2002/04

Taiwan Communications & Optoelectronics Products Worldwide Market Share in 2001 Market Share (%) Unit：thousand units 357,835 5,710 5,115 14,161 66,328 3,313 2,036.5 45,612 1,573 13,500 Note book PC CD/DVD/RW Wireless LAN Cable Modem STB NIC LAN Switch Cellular Phone ADSL PDA 2018/9/17

Revenue of IC Design Industry in Taiwan Unit: 100M NT$ Source：ITRI IEK ITIS， 2002/07 2018/9/17

Taiwan IC Industry Development Vision 15912 2001-2006 CAGR IC Design : 33.64% IC Manufacturing : 22.10% IC Packaging : 18.96% IC Testing : 21.36% 12939 10783 8569 6283 5269 2018/9/17 Source: ITRI/IEK (2002/03)

Bandwidth Demand is Still Increasing 60 50 40 30 20 10 US Internet Traffic increases 300% per year Monthly Growth (P Bs) Total traffic ISPs’ traffic Jan 00 Apr 00 Jul 00 Oct 00 Jan 01 Apr 01 Jul 01 Oct 01 Jan 02 Source: L. Roberts, Caspian Network, 2002/01 e-Commerce, Networked Multimedia, P2P, etc. new services create huge demands for bandwidth DSL, and Cable broadband access population over 30 Million (2001) (Ovum) GbE technologies used in LAN will cut in Metro Access and FITL DWDM technologies used in Backbone will cut into Metro Access 2018/9/17

Global Wireless Communications Market by Key Products 89,591.4 86,472.7 99,388.6 109,563.8 125,885.9 5,208.50 4,658 3,524.20 2,369 1,765 / 155.8 / 472.7 / 2,207.90 / 1,672.50 / 1,083.70 44,700 15,600 19,900 25,800 33,800 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 2001 2002 2003 2004 2005 Revenue(US$ M) Mobile Phone WLAN Bluetooth Module GPS Hand-held+In-Car Annual Total 178,002.25 149,694.25 129,796.46 109,214.40 107,112.17 2018/9/17 Source：ITRI IEK ITIS，2002/07

Global Semiconductors Market 400 350 300 250 200 150 100 500 Semiconductor Market 2001~2010 CAGR=10.4% Unit: US$B 2001: Around 150B US$ 2010: Around 350B US$ 1980~2001 CAGR=11.6% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2010 Source: IC Insights，ICE，Dataquest ，WSTS ， ITRI IEK ITIS，2002.3. Mainland China, etc. countries have already established their Low-level IC Manufacturing capabilities, so upgrading to High-level IC manufacturing and IC design are the only choices for the original players 2018/9/17

SoC is the Next Battleground for IC Design Technology Market 99-04 CAGR 30.62% Source: In-Stat(2000/10) Capital Alliances/Specialization Fab-less companies will focus efforts on IP/Design Reuse/R&D 2018/9/17

R&D Strategy in Taiwan Broadband , Wireless & SoC Technology Participate in International Standards Orgs Research & Development Broadband , Wireless & SoC Technology Joint Development with Industry Collaboration with Universities Technology Transfer & International Collaboration 2018/9/17

Broadband Communications R&D programs Network Access Gateway - Virtual Private Network - Optical Transmission - Network Management and Service Technologies Network Access Gateway Key Component Video Communications -Transmission Key Component - xDSL Transceiver - Advanced CATV Transceiver - Broadband CATV HE System - CATV CPE & Access - Networked Video System Broadband Communications Programs Multi-layer High Speed Switch Routing Internet Telecommunications - Softswitch - Voice Packet Processing - VOIP Applications - High Speed Routing - PHY - Switching Fabric 2018/9/17

MLC Ceramic Components Wireless Communications R&D Programs RF Subsystems & Key Components Modules 1.Passive Components e,g, filters, antenna, etc 2.Power Amplifier Radio Access Network & UE System MLC Ceramic Components 1.GSM Dual Mode Handset 2.GPRS BSS 3.WCDMA UE 4.WCDMA RAN 5.Software Defined Radio 1.LTCC Material 2.MLC/LTCC Module Wireless Communications Programs Wireless IC 3G Core Network & Service 1.GSM/GPRS RF IC 2.CMOS RF IC 3.Mixed-mode SoC 4.3G Cellular BB & RF IC 1.GPRS SGSM/GGSN Key Systems 2.3G SGSN/GGSN/HSS Key Systems 3.Open Service Access 4.Softswitch Technology 5. All IP Core Network 2018/9/17

Si-Soft National Project Goals Platform Service IP Mall Demonstrative Product/Technology Strategy Products Design SoC Design SoC Industry Infrastructure TW Design Houses Foreign Design IP Mall 27 2018/9/17

Si-Soft National Project SoC Platform Development Human Resources SoC Platform Development + Advanced R&D Advanced Products Platform Infrastructure and Services IP 2018/9/17

Si-Soft Project’s Vision Taiwan be an SoC advanced design center Taiwan be a worldwide SoC design service center Taiwan be an recognized leader in SoC design Taiwan be an established brand name in SoC design service 2018/9/17

Worldwide Leader in Design : Silicon Manufacture, Silicon Design, SOC, Silicon Product Taiwan Platform Taiwan IP Mall Foundry Package 　Mask Testing 　IC/IP 　EDA 　AP 　Product 　OS 　IP 　IC Network 　O.E. Comm. B.E. CS Design Manufacture 30 2018/9/17

Brand Name: Taiwan Silicon Solution=Taiwan Silicon System=MIT (made in Taiwan) Manufacture  Design Purpose: Taiwan silicon is the worldwide solution Taiwan’s SoC design is the worldwide design 2018/9/17

Demonstrative Products Si-Soft Three Major Product Lines Wireless LAN SOC Wireless Communications W-CDMA SOC Digital TV SOC Optical Electronics Optical Gigabits Ethernet SOC HD-DVD SOC / DVC SOC Processor IA Processor Special DSP Processor for Broadband Transceiver Network Processor for Home/SOHO 2004 2005 2006 2007 2008 2018/9/17

SoC Research & Development Wireless Communications Processor Opto-Electronics Advanced SoC Technologies SOC IP Verification and Secured Trading Platform Technologies -802.11x -WCDMA Common Chip -DSP/MCU Embedded -Processor Embedded -HD-DVD -Optical Ethernet -High Resolution DSC/DVC -LCD Display -Universal RF Front-End -Radio Processor -Programmable ADC/DAC for Generic DSL -High-speed Optic Communication Network OE/EO Interface IC -10Gbps Design -10 Gigabit Ethernet PHY-PCS Circuit Design -IP Qualification & Validation Technologies -Advanced SoC Vehicle Product Testing & Product Platform Integration Technologies -IP Secured Trading Platform Technologies □ 2018/9/17

Conclusions Taiwan will continue to focus on Broadband,Wireless, and IC/SoC technologies Taiwan is striving to become worldwide leader in SoC design & Services Centers. Innovative Island and SoC Design Paradise will become an Hi-Tech symbol for Taiwan 2018/9/17

Thank You! 2018/9/17