5 IC PRODUCT OVERVIEW

Transcription

1 5 IC PRODUCT OVERVIEW INTRODUCTION The IC industry is looked upon to introduce new and innovative devices. Demands from customers for more sophisticated and technically advanced systems necessitate that new IC products enter the market. When new products are introduced to the marketplace, existing components are pushed further along their lifecycle patterns. Figure 5-1 shows ICEÕs forecast of where various IC products will fall in the product lifecycle for 97. In general, an IC in the introduction-phase is a density upgrade of an existing circuit. However, there are exceptions. For instance, ICs in the introduction phase might include those built for specific applications (e.g., VRAMs, SGRAMs, EDRAMs for video/graphics applications), those manufactured using an innovative process technology (e.g., BiCMOS ICs that mix bipolar ECL and CMOS technologies on a single chip), or those designed using new architectures (e.g., one-transistor EEPROM cells or EPROM, SRAM, or EEPROM memory circuitry used for PLDs). In 96, a lot of attention was focused on MPUs (high-speed Pentium and Pentium ProÑand competitors), DSPs (TI believes its devices will rival and replace many MPU/MCUs in existing platforms), embedded microcontrollers, M DRAMs, specialty DRAMs, and flash memories. These devices stole the headlines because of their sophistication, speed, density, or the way they could replace existing devices in applications. In the case of memory products, the dramatic drop in average selling price (ASP) also received considerable attention. IC manufacturers make the most profit from an IC when the device is in the growth and maturity stages of its lifecycle. Due to the competitive nature of the marketplace, it has proven very difficult for an IC supplier to enter a market segment in the profitable growth and maturity stages without having first had a part available in the introductory stage. Historically, the IC industry has introduced or described products well before the time that the devices were ready for commercial mass production. While some of the advances tout device or process enhancements or unique design methods, it usually takes some time before most introductory products are embraced by the IC industry. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-1

2 SALES PRODUCT INTRODUCTION GROWTH MATURITY SATURATION DECLINE (OBSOLETE) RAMs 64M DRAM 4M SRAM M DRAM 4M DRAM 1M DRAM 6K DRAM 1M SRAM 6K SRAM 64K SRAM 64K DRAM HIGH SPEED CMOS/BiCMOS K SRAM 6K SRAM K SRAM 1M SRAM 64K SRAM 4K SRAM 64K ECL SRAM K ECL SRAM 4K ECL SRAM 1K ECL SRAM ROMs 3M ROM 64M ROM M ROM 8K PROM 8M ROM 64K PROM 4M ROM 1M ROM 6K ROM 64K ROM 3K PROM K PROM 4M EPROM 1M EPROM 6K EPROM 64K EPROM 3K EPROM M EPROM 1M EEPROM 5K EPROM 8K EPROM K EPROM 4M EEPROM 6K EEPROM 64K EEPROM 3K EEPROM 4K EEPROM M FLASH 4M FLASH 1M FLASH K EEPROM 3M FLASH 8M FLASH M FLASH 6K FLASH 5K FLASH MCUs AND MPUs GaAs OTHER RISC 64-BIT RISC 3-BIT MPU MPU 3-BIT MPU 8-BIT MCU 3-BIT MCU -BIT MCU 4K SRAM 1K SRAM 4-BIT MPU MICROWAVE ANALOG ASIC BiCMOS ICs MONOLITHIC A/D FERROELECTRIC ANALOG CMOS ICs SINGLE-CHIP DSP MONOLITHIC D/A -BIT MPU 4-BIT MCU 8-BIT MPU 988S Figure IC Product Lifecycle The underlying causes of this typically slow acceptance of new ICs are high initial costs, existing infrastructures, and oftentimes, user concerns about the quality and reliability of the new technology or products. When one is forecasting the rate of acceptance of a new technology or product, the IC industry should be viewed as evolutionary, not revolutionary, in nature. Military ICs are typically one or two lifecycle stages behind commercial ICs (Figure 5-). Because of the extensive military IC qualification requirements and the extremely long lifecycles of many military electronic systems, ensuring a consistent supply of hi-rel ICs has always been a demanding task. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

3 SALES INTRODUCTION GROWTH MATURITY SATURATION DECLINE OBSOLETE ACL/FCT K CMOS SRAM STTL BIPOLAR MPU K DRAM 6K CMOS SRAM 64K CMOS SRAM TTL LTTL GaAs BIPOLAR LINEAR NMOS EEPROM 64K DRAM HTTL Lin ASIC AS/FAST BIPOLAR RAM DTL FPGA NMOS MPU NMOS SRAM SUHL FL. PT. DSP ALSTTL ECL LOGIC BCT CMOS EEPROM BIPOLAR PAL NMOS EPROM CMOS LINEAR BIPOLAR PROM 4M DRAM ASIC NMOS DSP 1M DRAM LSTTL CMOS PLD 6K DRAM FX. PT. DSP Source: TI/ICE, "Status 97" 487H Figure Military IC Product Lifecycle In the coming years, the number of Òmilitary-onlyÓ ICs will dwindle. The U.S. Department of Defense has issued a mandate for military procurement personnel to buy COTS (commercial off the shelf) ICs in greater numbers. Off-the-shelf products, besides often being state of the art and readily available, offer many of the performance characteristics of military-standard parts but at a much reduced price. As IC manufacturers concentrate capital resources and R&D efforts on commercial ICs in the early part of their lifecycles, less support will be given to devices in the saturation and decline stages. This situation becomes especially serious for military IC users when an IC part that is in the maturity stage of the military lifecycle (with maybe more than years left in the systemõs lifetime) is also in the decline stage of the commercial IC lifecycle. IC PRODUCT MARKET TRENDS The evolution of the major IC product segments is depicted in Figure 5-3, while a more detailed look at the percentage that each individual product category contributes to the overall IC market from 9-01 is displayed in Figures 5-4 and 5-5. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-3

4 % 4% % % ANALOG BIPOLAR LOGIC OTHER BIPOLAR MEMORY <1% % 5% % 13% % <1% % % % % 1% % 13% % <1% % % MOS LOGIC* MOS MPUs, MCUs AND PERIPHERALS 8% 6% 33% 35% 33% 9% MOS MEMORY 31% 4% 31% % 35% 0 8 $1B *Includes GaAs Year 93 $68.0B 95 $8.7B 96 $1.9B 97 (FCST) $1.4B 01 (FCST) $83.5B 198U Figure 5-3. Worldwide Merchant Market IC Product Trends The MOS microcomponent segment, which held only percent of the total IC market in 8, accounted for 6 percent of the overall market in 95, then jumped to 33 percent in 96. Although the MOS microcomponent marketshare of the total IC grew nicely in 96, much of the increase can be attributed to the fact that the MOS memory market declined substantially. ICE estimates that the microcomponent share will increase to 35 percent in 97. One only has to consider the Pentium Pro, the PowerPC, and a growing number of leading-edge devices to realize that MPUs and MCUs are becoming more and more like a complete system on a chip. Large amounts of memory and control circuitry are now being implemented on MPU and MCU devices. Although there will be increased competition in the MCU and the RISC and CISC MPU markets, the rising complexity and density of these devices will allow the microcomponent segment to grow at a pace about equal to the total IC market through the year 01. The MOS memory market segment displayed tremendous growth in 93, 94, and 95. However, as noted in several of the figures, the MOS memory market crumbled in 96. Its percent of the worldwide IC industry in 96 was estimated to be 31 percent, down from 4 percent in 95. The DRAM market alone was $ billion smaller in 96 than in 95 due to the rapid and steep decline in average selling prices. For companies such as Samsung, NEC, Hitachi, and LG Semicon, selling more DRAM units but yet receiving several billion dollars less for those devices was a painful pill to swallow. 5-4 INTEGRATED CIRCUIT ENGINEERING CORPORATION

5 Product Category Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog Amplifiers Interface Consumer/Automotive Volt. Reg. and Ref. Data Conversion Comparators Other (including Telecom) Total Analog Bipolar Logic ECL GPL Schottky/Other Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL Total Bipolar Logic MOS Microcomponents MPUs MCUs MPRs Total Microcomponents MOS Memory DRAM SRAM EPROM ROM EEPROM Flash Other Memory Total MOS Memory MOS Logic General Purpose Logic Gate Array* Standard Cell* FPL (PLDs) Other Special Purpose Total MOS Logic Total ICs * Including NREs 9 ($M) , ,095 9, , ,995 5,460 5,45 3,5 13,9 8,5,890 1,0 1, ,840 1,075,9, ,745,680 51,875 of 9 Market ($M) , , ,665 11,5 5 1, ,055 8,590 6,560 3,9,075 13,0 3,95 1,350 1, ,000 1,440 3,555, ,735 13,435 67,950 of 93 Market ($M) ,5 1,1 5,570 1, ,855,0 0 1, ,7,995 8,5 4,550 3,8 3,4 3,755 1,390 1, ,455 1,835 4,480 3,585 1,1 5,980,000 90,95 of 94 Market ($M) ,6 1,5 7,0 1,6 1,1 4,4,60 1, ,655,80,735 8,385 33,400 40,835 6,075 1,385 1, , ,465,5 5,5 4,860 1,650 7,395 1,670 8,680 of 95 Market ($M, EST) ,500 1,0 6,8 1,460 1,0 5 5,60, ,855,5 11,6 9,8 38,950,5 4,805 1,0 1,335 9, ,85,045 5,550 6,0 1,800 6,465,0 1,9 of 96 Market B Figure IC Market Segment Analysis () INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-5

6 Product Category Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog Amplifiers Interface Consumer/Automotive Volt. Reg. and Ref. Data Conversion Comparators Other (including Telecom) Total Analog Bipolar Logic ECL GPL Schottky/Other Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL Total Bipolar Logic MOS Microcomponents MPUs MCUs MPRs Total Microcomponents MOS Memory DRAM SRAM EPROM ROM EEPROM Flash Other Memory Total MOS Memory MOS Logic General Purpose Logic Gate Array* Standard Cell* FPL (PLDs) Other Special Purpose Total MOS Logic Total ICs * Including NREs 97 ($M, FCST) ,6 1,3 7,400 1,550 1,0 5 6,65, ,405,685 13,040 11,880 45,605,7 5, ,0 1,0 3, ,440,0 5,800 7,900,0 7,40,0 1,380 of 97 Market ($M, FCST) ,850 1,475 8,0 1,7 1,0 0 7,450, ,135 4,405,375,5 54,035 31,495 6, ,1 1,0 5, ,785,405 6,500 9,950,700 8,470,0 4,60 of 98 Market ($M, FCST) 50 65,0 1,700 9,365 1,975 1,450 8,855, ,85,1,8 64,40 40,990 7,8 9 1,050 1,3 6, ,075,635 7,400,600 3,375 9,995 36,005 6,035 of 99 Market ($M, FCST) 40 50,5 1,990 11,065,3 1,670 45,5, ,980 1,400,5 76,895 54,770 9, ,580 8, ,6,955 8,400,0 4,85 11,795 43,535 8, of 00 Market ($M, FCST) ,000,350 13,0,800 1,950 5,635 36, ,0,5,8 93,450 73,785 11, ,855, ,570 3,0 9,700,9 5,575,000 53,505 83,500 of 01 Market B Figure IC Market Segment Analysis () 5-6 INTEGRATED CIRCUIT ENGINEERING CORPORATION

7 As MOS memory products become more specialized (graphics RAMs, FIFOs, low-power versions, etc.), they will become less of a ÒcommodityÓ device and subsequently command a higher price than non-specialized memory parts. ICE forecasts MOS memory products will account for 35 percent of the total IC market in the year 01. In terms of dollars, MOS memory and MOS microcomponents remained the two largest IC product segments in 96. ICE estimates that 64 percent of all IC dollars were from one of these two categories. The increasing need for greater processing power and the memory to accompany PC systems based on such devices will continue to make both the memory and microcomponent segments the largest IC product segments through the year 01. Meanwhile, standard bipolar TTL logic continues to lose marketshare to CMOS standard products and ASIC devices. Suffice it to say just about every product made using bipolar technology is losing marketshare. The analog IC marketshare will decline slightly through the year 01, partly due to many consumer and industrial applications moving to digital circuitry. IC PRODUCT MARKET FORECAST Figure 5-6 depicts the 9-96 IC market by major product type. With the exception of the bipolar memory, bipolar logic, comparators, and the ROM and EPROM markets, all IC segments grew rather nicely during the time period. The 9 through 95 period witnessed three consecutive years of greater-than--percent overall growth in the IC industry. However, nothing lasts forever, and the good times experienced by the IC industry during the past several years are no exception. In this case, ICE estimates that the 96 IC market declined ten percent. As noted from the history of the IC market in Section 1, a Ònegative growthó year in the IC industry is quite rare. Still, it happens. In 96, the decline in the IC market was largely the result of the sudden and drastic decline in the price of memory (more specifically, DRAM) devices (Figure 5-7). Figure 5-8 ranks the top IC products by the 96 growth rates. As a group, ICE estimates the ÒhotÓ IC products grew 3 percent in 96 and represented 36 percent of the total IC market. Flash memory, a relative newcomer to the IC industry, topped the list by growing an estimated 4 percent in 96. The flash market will likely make the ÒhotÓ IC list for several years as the nascent market matures. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-7

8 Product Category 9 ($M) 93 ($M) ($M) ($M) ($M, EST) CAGR () 9-01 CAGR () Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog Amplifiers 8 1,000 1,5 1 1,6 35 1,500 8 Interface ,1 31 1,5 1,0 5 Consumer/Automotive 3,905 4,640 5,570 7,0 6,8 4 Volt. Reg. and Ref ,0 37 1,6 1,460 Data Conversion ,1 3 1, Comparators Other (including Telecom),095,665 3, ,4 5,60 6 Total Analog 9,095 11,5,0,60,5 Bipolar Logic ECL GPL Schottky/Other 1,1 1,0 1,0 1, Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL Total Bipolar Logic,995 3,055,7 11,655 1, MOS Microcomponents MPUs 5,460 8,590 57,995 8,80, MCUs 5,45 6,560 8,5 6,735 11,6 8 MPRs 3,5 3,9 4,550 8, ,8 3 4 Total Microcomponents 13,9, ,8 33, , MOS Memory DRAM 8,5 13,0 54 3, ,835 74, SRAM,890 3,95 3,755 6, ,805 1 EPROM 1,0 1, , ,385 1, ROM 1, 1,6 33 1,890 1, , EEPROM Flash ,860 1, Other Memory Total MOS Memory,840 1, , , , MOS Logic 13 General Purpose Logic 1,075 1, ,835,5 3,045 9 Gate Array*,9 3,555 4, ,5 3 5, Standard Cell*,80,745 3, , ,0 9 FPL (PLDs) ,1 1, , Other Special Purpose 3,745 4, , , , Total MOS Logic,680 13,435 6,000 1,670,0 1 Total ICs 51,875 67, , , ,9 9 3 * Including NREs 64C Figure IC Market Segment Analysis 5-8 INTEGRATED CIRCUIT ENGINEERING CORPORATION

9 Product DEC 95 SEPT 96 DRAM SRAM ROM Flash EPROM Total IC A Figure 5-7. Memory ASPs: Long Fall in Short Time 96 Rank "Hot Products" 96 Market (EST, $M) 96/95 95 Market ($M) 95/94 1 Flash Memory, ,860 1 MOS Standard Cells 6,0 4, MOS MPUs,5 3,80 4 Other (e.g., Telecom) Analog 5,60 4,4 5 MPRs 9,8 8, Total 41, , L Figure ÒHotÓ IC Products Indicative of the rough year for IC manufacturers was the fact that market growth for eight product categories declined by percent or more in 96! Figure 5-9 shows the list of Ònot-so-hotÓ IC devices for 96 and 95. Perhaps the biggest surprise is the fact that DRAMs appear on the Ònotso-hotÓ list for 96 after having made the ÒhotÓ list in 95! The DRAM market grew 74 percent in 95. However, big price declines on 4M and M devices occurred throughout 96, which caused the DRAM market to decline 38 percent. Total 96 IC shipments are estimated to have remained level at roughly 48.8 billion units. Figure 5- provides a break out of unit shipments by product for 95 and an estimate for 96. In 95, analog ICs led the way in unit shipments accounting for 45 percent of the total unit volume (but only 13 percent of the worldwide IC dollar volume). ICE estimates that analog ICs again shipped the most units in 96. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-9

10 96 Rank "Not-So-Hot Products" 96 Market (EST, $M) 96/95 95 Market ($M) 95/94 1 Bipolar PLDs DRAM, , Bipolar RAM Schottky/Gen. Purp. Bipolar Logic , ROM 1, ,965 4 Total, , K Figure ÒNot-So-HotÓ IC Products Analog 45% Total 48.9B MOS Logic 4% Analog 44% Total 48.8B MOS Logic 4% MOS Memory 13% MOS Memory 13% Digital Bipolar 9% Microcomponent 9% Digital Bipolar 8% Microcomponent 11% B Figure 5-. Worldwide Merchant IC Product Marketshare (Units) MOS memory ICs represented 13 percent of the units shipped and MOS microcomponents about 11 percent. Although the percentage of unit shipments was not particularly high, these two segments together accounted for almost two-thirds of the 96 IC dollar market. Figure 5-11 summarizes the percentage of unit shipments and total market for the several product categories. Shown in Figure 5- is ICEÕs market forecast for various IC products through the year 01. ICE forecasts that growth rates of MOS memory products will lead the way through the year 01, followed closely by MOS microcomponents and MOS logic devices. In all cases, ICE forecasts growth to be at a somewhat slower pace than was seen in the first part of the decade. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

11 95 96 of Unit Shipments of Market of Unit Shipments of Market Analog Digital Bipolar 9 8 MOS Logic 4 4 MOS Memory MOS Microcomponent Total 48.9B $8.7B 48.8B $1.9B 4A Figure Major Product Marketshares Figure 5-13 lists the cumulative average annual growth rates (CAGRs) for various IC product segments during three separate time periods. As noted earlier, any product with the word ÒbipolarÓ attached to it appears to be part of a dying breed. Meanwhile, the 90Õs will be dominated by growth in the MOS memory and MOS microcomponent segments. Impressive is the percent CAGR for MOS memory products from 9-96 (especially when including the 3 percent decline in 96). For a ÒmatureÓ MOS memory market to grow as much as it did during the first half of the decade is quite amazing. DRAMs, flash memory, and SRAMs contributed most to the dramatic increase in the size of the MOS memory market. ICE forecasts the fastest growing individual products for the second half of the decade in Figure 5-. Certain memory devices, microcomponents, and ASICs top the list of products that will perform well during the next five years. Seeing how well many logic markets are forecast to perform, it is no wonder that many Japanese and Korean memory suppliers want to quickly diversify into ASIC and microcomponents devices, rather than focusing so heavily on memory ICs. ANALOG IC TRENDS Overview Integrated circuits can be classified into two general categories, digital and analog (also called linear). Digital ICs process on-off electrical signals, represented by the binary digits Ò1Ó and Ò0.Ó Analog ICs represent Òreal-worldÓ phenomena such as temperature, pressure, sound, images, speed, acceleration, position, and rotation anglesñthat is, continuously varying voltages and currents. Analog ICs take this real-world data and convert it to a digital format where upon it is manipulated, displayed, or otherwise stored. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-11

12 Product Category 96 ($M, EST) 97 ($M, FCST) ($M, FCST) ($M, FCST) ($M, FCST) ($M, FCST) CAGR () Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog Amplifiers 1,500 1,6 9 1,850 13,0,5 3,000 Interface 1,0 1,3 1,475 1,700 1,990,350 Consumer/Automotive 6,8 7, ,0 11 9,365 11,065 13,0 Volt. Reg. and Ref. 1,460 1, ,7 11 1,975,3,800 Data Conversion 1,0 1,0 7 1,0 1,450 1,670 1,950 Comparators Other (including Telecom) 5,60 6,65 7,450 8,855,5,635 Total Analog,5,5 11,0,7,350 36,3 1 Bipolar Logic ECL GPL Schottky/Other Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL Total Bipolar Logic 1,855 1, , MOS Microcomponents MPUs,5,685 4,405 9,85 35, ,0 1 MCUs 11,6 13,040,375,1 1,400,5 MPRs 9,8 11,880 1,5,8,5,8 Total Microcomponents 38,950 45,605 54,035 64,40 76,895 93,450 MOS Memory DRAM,5,7 31,495 40,990 54, , SRAM 4,805 5,460 6,565 7,8 9,375 11,0 EPROM 1, ROM 1,335 1,0 1,1 7 1, EEPROM 9 1,0 1,0 13 1,3 1,580 1,855 Flash,650 3,6 37 5,0 38 6,4 8 8,335, Other Memory Total MOS Memory 36,85 38, ,785 59, ,6 99,570 MOS Logic General Purpose Logic,045,0 8,405 9,635,955 3,0 Gate Array* 5,550 5, ,500 7,400 8,400 9,700 Standard Cell* 6,0 7,900 9,950 6,600,0 8,9 FPL (PLDs) 1,800,0,700 3,375 4,85 5,575 Other Special Purpose 6,465 7,40 8,470 9,995 11,795,000 Total MOS Logic,0,0,0 36,005 43, ,505 3 Total ICs 1,9 1,380 4,60 6, , 3 83,500 4 * Including NREs 65C Figure IC Market Segment Analysis 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

13 9-96 CAGR CAGR 9-01 CAGR Bipolar Memory % % 3% Bipolar Logic 11% % % Analog % % % MOS Microcomponents 9% % 4% MOS Memory % % 4% MOS Logic % % % Total ICs 3% % 1% 38C Figure Cumulative Average Annual Growth Rates (CAGRs) of IC Product Segments Product Category Flash MOS Standard Cell* MOS FPL (PLDs) DRAM MOS MPUs SRAM Other Analog (Including Telecom) MOS MPRs MOS MCUs Special Purpose MOS Logic Other MOS Memory EEPROM Amplifiers Consumer Analog Volt. Reg. and Ref. Interface MOS Gate Array* Data Conversion General Purpose MOS Logic Comparators EPROM ROM ECL GPL Schottky/Other Gen. Pur. Bipolar Gate Array/Standard Cell* Special Purpose Bipolar Logic Bipolar RAM Bipolar FPL (PLDs) Bipolar PROM Bipolar MPU/MCU/MPR Total ICs *Including NREs CAGR () C Figure 5-. IC Products Ranked by CAGR (96-01) INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-13

14 The analog IC market has historically been more stable than the digital market. Although the digital IC market has traditionally been viewed as more glamorous, the analog market has given numerous IC producers years of steady and usually profitable business. Further, compared to the digital IC marketplace, overspending and overcapacity have not been significant problems for analog IC vendors. Shown in Figure 5- are analog market, unit shipment, and ASP trends beginning in 90. During the past five years, the analog market experienced some peaks and valleys, but the overall trend was steadily upward. ICE forecasts that the analog market will grow at an average annual rate of percent from 96 through 01 (Figure 5-), which is down two percentage points from the growth rate experienced between 9 and 96. Billings In Millions 5,600 5,0 4,800 4,400 4,000 3,600 3,0,800,400,000 1,600 1,0 Units ASP Dollars Year 5,4 $0.81 4,400 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q 1Q Q 3Q 4Q J Figure 5-. Analog Market Trends (Dollars and Units in Millions) Although the analog market grew consistently since 9, its percentage of the overall IC market trended downward (Figure 5-). In other words, growth of the overall IC market outpaced growth in the analog IC market. As shown in Figure 5-, the analog IC market did not grow at a level that kept pace with the digital IC industry. ICE foresees that through the year 01, analog market growth will continue to lag behind that of the overall IC industry. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

15 Amplifiers % % % Interface % % % Special Consumer % % % Voltage Regs & Refs % % % Data Conversion 11% % 11% Comparators 6% 9% 8% Other Analog 6% % % Total Analog % % % 49D Figure 5-. Analog IC Market CAGRs % % % % % 13% Year (FCST) 387C Figure 5-. Analog IC of Total IC Market Regional Markets Regionally, the large, indigenous consumer products industry in Japan has kept it the leading market for analog ICs since at least 8 (Figures 5- and 5-). However, since the early 90Õs, JapanÕs share of the analog market has slipped. One element contributing to this decline has been the economic doldrums that have plagued the island nation since around 90. Without the support of its huge domestic market, Japan cannot maintain its large share of the analog market. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

16 0,000 Millions of Dollars 1,000 0,000 80,000 60,000 40,000 Total Analog Total IC, Year (FCST) Analog Market ($M) 9,095 11,5,0,60,5, Total IC Market ($M) 51,875 67,950 90,95 8,680 1,9 1, C Figure 5-. Growth of Analog and Total IC Markets % North America % 4% 3% % 3% PERCENT % Europe 1% 38% % 3% 1% 9% % % % 3% 33% Japan 0 8% ROW 1% % % 8% 9% 8 $.3B 91 $9.0B YEAR 93 $11.1B 95 $.3B 96 $.5B 01 $36.3B (FCST) 1R Figure 5-. Analog IC Market Trends ($) 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

17 Millions of Dollars 1,500 1,400 1,0 1,0 1,0 1, ,0 1,061 1,03 1, ,091 1,334 1,8 1,051 1,6 1,6 1,081 1,075 1,0 1, 1, 1,087 1,1 1,0 1,1 1,5 1Q95 3Q95 1Q96 3Q96 1Q95 3Q95 1Q96 3Q96 1Q95 3Q95 1Q96 3Q96 1Q95 3Q95 1Q96 3Q96 Q95 4Q95 Q96 4Q96 Q95 4Q95 Q96 4Q96 Q95 4Q95 Q96 4Q96 Q95 4Q95 Q96 4Q96 North America Europe Japan Asia Pacific Market 96/95 +13% +6% % +3% Source: WSTS/ICE, "Status 97" 895J Figure 5-. Quarterly Analog Geographic Market Trends Another factor influencing the analog market is the fact that manufacturers in Korea, Taiwan, and other Pacific-Rim countries have undermined Japanese manufacturersõ prices. Demand for electronics in Southeast Asia and North America is being met increasingly by companies from the ROW region. In fact, demand in the Asia-Pacific region (excluding Japan) has increased to the point that ICE estimates the ROW region surpassed Japan in 96 as the largest market for analog ICs. By the year 01, ICE forecasts that the regional analog market will look different than it did in 96. The ROW and North American regions will increase their shares of the analog market at the expense of Japan. The shift in consumption will result from intensified competition from ROW companies involved in the consumer products sector. Additionally, in order to take advantage of low labor costs and to reduce the effects of the fluctuating yen, many Japanese companies are increasingly willing to farm-out low-end assembly of consumer products to ROW locations. Leading Manufacturers Though digital ICs are usually at the center of headlines and press announcements, there remain numerous opportunities for those companies focused on the analog segment of the semiconductor market. The leading analog IC suppliers for 95 and estimates for 96 are shown in Figure 5-1. In 96, SGS-ThomsonÕs analog business grew nicely despite a rather sluggish analog IC market. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

18 96 Rank Company 95 ($M) 96 (EST, $M) 96/ SGS-Thomson TI* Phillips Motorola National Toshiba Analog Devices Siemens Matsushita NEC 1,64 1,0 1,395 1,9 1,090 1, ,090 1,050,035 1,365 1,5 1,5 1,060 1,045 1,0 1, * Includes Silicon Systems' analog sales for U Figure 5-1. Worldwide Top Ten Analog IC Manufacturers Though European-based SGS-Thomson and Philips were among the leading analog IC suppliers, ICE estimates that North American and Japanese companies produced the majority of analog ICs in 96 (Figure 5-). A great deal of analog ICs were imported into ROW countries. Although the ROW suppliers manufactured less than percent of all analog ICs, the ROW market consumed 8 percent of the total analog output (Figure 5-3). North American Companies 39% 96 $.5B Japanese Companies 31% European Companies % ROW Companies 5% 500N Figure 5-. Analog IC Production The North American segment is quite the opposite. ICE estimates that North American producers made more than one-third of all analog devices, but consumed percent of the total analog dollar volume. Many of the major North American analog IC vendors (National, Motorola, TI, Analog Devices) stated that about half (or more) of their analog ICs were exported, lending support to the figures shown above. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

19 Region Consumption Production North America Japan Europe ROW B Figure Analog IC Consumption/Production Comparison ($, of Total) Product Segments Listed below are definitions of the principal analog product categories and their functions. In addition, the market size, unit shipments, and ASPs for the time period are shown for each category. Amplifiers Amplifiers (amps) are circuits that amplify the voltage or output current of a device. The amplification represents the ratio of the output voltage or current to the input voltage or current. Examples include operational amps, instrumentation amps, buffers, general purpose video amps, and RF ICs (MMIC devices). The history of the amplifier market during the early- and mid-90õs is shown in Figure 5-4. CMOS amps have advantages in energy conservation and die size, but are rather limited in their availability and are generally higher priced as well. This has prevented them from gaining the upper hand over bipolar amplifiers. Bipolar and CMOS vendors have introduced several new amps in the past few years, many of which are far superior to their predecessors. The new amps reduce the wide-ranging trade-offs of speed, power, cost, accuracy, and size. Several manufacturers have even gone so far as to make their amps application-specific, providing special features unique to a system. Most new amplifiers have targeted low-power, single-supply applications. Voltage Regulators and References Voltage regulators control the voltage of a device or circuit at a specified level and are often used to protect sensitive electronic systems from voltage overloads. References serve as electronic benchmarks, allowing the voltage of a given device to be compared against an established standard. The voltage regulator and reference market is shown in Figure 5-. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

20 4, , , Billings in Millions 3,000,500,000 1,500 Market ($M) Units (M) , Year Market ($M) ,000 1,5 1,6 1,500 Units (M),735,894,685 3,089 3,454 4,97 4, C Figure Amplifier Market 4, , ,500 5 Billings in Millions 3,000,500,000 1,500 Market ($M) Units (M) , Year Market ($M) ,0 1,6 1,460 Units (M) 1,878,09,139,56 3,080 4,03 3, C Figure Voltage Regulator and Reference Market 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

21 Interface Interface ICs act as an intermediary to transfer signals between or within electronic systems. Examples include driver circuits such as line drivers, receivers, keyboard encoders, error checking circuits, and display drivers. Figure 5-6 shows a brief history of the interface IC market. 1, , , Billings in Millions Market ($M) Units (M) Year Market ($M) ,1 1,5 1,0 Units (M) ,13 1,31 1,89 1, C Figure Interface Market Data Converters Data converters are mixed-signal circuits (analog/digital circuitry) containing more than 50 percent analog chip area. Data converters change linear signals into digital signals, or vice versa, and are often referred to as A/D or D/A converters. Figure 5- displays the market for data converters. Comparators Comparators are those analog ICs designated as voltage comparators. Figure 5-8 shows the recent market history for comparator ICs. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-1

22 1, , ,000.5 Billings in Millions Market ($M) Units (M) Year Market ($M) ,1 1,0 Units (M) C Figure Data Conversion Market Billings in Millions Market ($M) Units (M) Year Market ($M) Units (M) C Figure Comparator Market 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

23 Special Consumer Special consumer analog ICs are application-specific circuits designed specifically for use in consumer equipment such as automobiles (powertrain controls, entertainment circuits, air bag and anti-lock brake circuits, etc.), radios (IF, RF, etc.), televisions (video, sound, etc.), personal or home appliances, cameras, games, and so forth. In 96, ICE estimates that the special consumer market declined four percent (Figure 5-9). Much of the blame for this decline can be traced to the very competitive market for wireless and cordless communication systems, which incorporate significant numbers of analog devices, especially RF semiconductors. 8, , , Billings in Millions 5,000 4,000 3,000,000 Market ($M) Units (M) , Year Market ($M) 3,555 3,940 3,905 4,640 5,570 7,0 6,8 Units (M) 5,5 5,880 5,4 6,5 7,0 7,600 6, C Figure Special Consumer Market However, the outlook for special consumer devices is rosy. Numerous advanced systems, including, direct broadcast satellite receivers for set top boxes, GPS, and wireless LANs will stimulate demand through the year 01. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-3

24 Other Analog ÒOtherÓ analog products are those that cannot be classified in any one of the previous categories. Examples include the myriad of application-specific telecom ICs such as filters, CODECs, MODEMs, cross-point switches, and mass storage devices. Figure 5- shows the market for ÒotherÓ analog devices. 5, ,000 4, , Billings in Millions 3,500 3,000,500,000 1,500 1, Market ($M) Units (M) Year Market ($M) 1,5 1,7,095,665 3,855 4,4 5,60 Units (M) 1,6 1,697 1,9,7,977 3,360 3, C Figure ÒOtherÓ Analog Market ICE estimates that consumer systems were the largest users of analog ICs in 96 (Figure 5-31). However, since 91, communications systems have grown rapidly as end users of analog ICs. The increasing popularity of wireless and cordless communication systems allowed the communications end use segment to grow quickly. ICE believes standard-function analog ICs (e.g., amplifiers, data converters, references and regulators, interface circuits, and comparators) will lose marketshare to special purpose analog devices (e.g., telecom ICs, camcorder devices, imaging circuits, automotive sensors, disk-drive components, etc.). Figure 5-3 shows the characteristics of the two types of analog markets. Toward the year 01, system-specific or customer-specific analog devices will be in greater demand as general purpose products are de-emphasized. 5-4 INTEGRATED CIRCUIT ENGINEERING CORPORATION

25 Military 3% Military 1% Auto 8% Industrial % Computer % 91 $8.7B Consumer 45% Industrial % Computer % Auto 11% 96 $.5B Consumer 34% Communications 1% Communications % Source: WSTS/ICE, "Status 97" Figure Analog IC Usage by System Type Standard Function Analog ICs Large customer base Low volume requirements Long lifecycle Slow ramp Low complexity designs Design intensive Low risk/low consequences Source: Analog Devices/ICE, "Status 97" Special Purpose Analog ICs Small customer base High volume requirements Short lifecycle Fast ramp High complexity designs Process intensive High risk/high consequences 889A Figure 5-3. Business Characteristics of the Analog IC Market Applications Emerging electronic system markets are quickly changing the landscape of the analog IC market. New products such as cellular phones and other wireless communications devices and various new video applications have prevented a decline in the overall analog market. Figure 5-33 provides a sampling of some of the newer applications for analog ICs. Communications, consumer, and computer applications are three areas that present many emerging possibilities for the growth of analog ICs. Some of the specific products in these areas are presented in Figure INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

26 Device Type Company Unique Features Targeted Application Op Amps National Semiconductor Uses small packaging Portable equipment Burr-Brown Dual, ultra-wideband, low-power current feedback Video, medical imaging, signal processing Data Converters Micro Linear D-to-A converter has 8-bit DACs with independent shutdown Cellular phones, pagers, notebook CPUs Analog Devices A-to-D converter in 8-pin SOIC uses single volt supply Hand-held instruments Voltage Regulators Linear Technology Contrast control for both LCDs and cathode fluorescent lamps Portable CPUs, auto displays SGS-Thomson Offers low voltage drop of 1. volts Battery-powered devices Source: Electronic Business Buyer/ICE, "Status 97" 61 Figure New Applications Breathe Life Into Analog IC Market Communications Video Imaging Hybrid Fiber Coax Cellular and Micro Cell Base Stations CATV-Head Ends ADSL/HDSL Cameras Mixing Editing Multimedia Distribution Video Conferencing MPEG Displays Scanners Medical Imaging Commercial Imaging Source: Analog Devices Inc./ICE, "Status 97" 396 Figure Emerging Opportunities for Analog ICs The worldwide market for ICs in mobile communications is growing rapidly. Analog ICs are likely to make a significant impact in this area as the need arises for better bandwidth and higher signal quality (Figure 5-35). Cellular phones, though lightweight and compact, consist of a great number of componentsñ both mechanical and electrical. A few analog companies are able to address a good portion of the IC requirements of cellular phones as outlined in Figure In addition, base stations for cellular phones represent perhaps the strongest growth opportunity for analog applications in mobile communications. High-speed amplifiers and converters, frequency synthesizers, and mixers are vital components in processing signals in both the transmit and receive channels. 5-6 INTEGRATED CIRCUIT ENGINEERING CORPORATION

27 Billions of Dollars Source: ADI/ICE, "Status 97" Year (FCST) 397A Figure Worldwide Market for Semiconductors in Mobile Communications ,,,,,,,,,,,,,,,,,,,,,,,,,,,, 91,,,,,,,,,,,,,,,,,,,,, 93 Year,,,,,,,,,,,,,,,,,,,,, 95 *Many leading analog IC manufacturers can address these needs.,,,,,,,,,,,,,,,,,,,,, 97 (FCST) Mechanical Passives Memory ASIC* Power Management* RF* Baseband*,,, DSP* Source: ADI/ICE, "Status 97" 398 Figure Estimated Content of Digital Cellular Phone (% Bill of Materials, $) The automotive market is another area of outstanding growth potential for analog ICs. The current electronic content in automobiles is approximately $600 per vehicle and is increasing at an annual rate of about percent. Sensors and signal conditioning ICs are particularly gaining marketshare in the automotive segment. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

28 Process Trends CMOS technology offers low power consumption for analog as well as digital ICs. For this reason, more and more attention is being devoted to analog CMOS and BiCMOS, and their abilities to interface well with digital CMOS. Figure 5-37 illustrates the expected growth of CMOS, BiCMOS, and GaAs in the analog marketplace. While the marketplace remains steadfastly bipolar, demand for low-power CMOS and BiCMOS devices continues to grow. ICE estimates that BiCMOS analog ICs, which represented 13 percent of the analog market in 95, increased to percent of the market in 96. SGS-Thomson and Philips led the way in the production of BiCMOS analog devices in 96. BiCMOS % GaAs 3% CMOS* 9% 96 $.5B Bipolar 7% BiCMOS % GaAs 5% CMOS* % 01 (FCST) $36.3B Bipolar 65% *Includes DMOS 031X Figure Analog Market by Technology ($) BiCMOS is an excellent choice in applications such as smart power ICs where the combination of control logic, power drivers (i.e., high power or high voltage output capabilities), and other functions are incorporated onto one chip. Smart power ICs built using BiCMOS technology are aimed at emerging automotive power supply and motor control applications. Eventually, when smart appliances become more commonplace, these ICs will infiltrate the price-sensitive consumer market as well. With portability and mobility becoming more important in the electronics environment, high performance as well as low-voltage capabilities will continue to be emphasized in all product areas, including analog ICs. Many analog designers are working with dual-voltage systems. This situation will likely change over the next few years as systems begin operating exclusively at 3V. Most likely, there will be an increase in battery-charging and -monitoring and power-management ICs in the low-voltage arena. 5-8 INTEGRATED CIRCUIT ENGINEERING CORPORATION