5 IC PRODUCT OVERVIEW

Transcription

1 5 IC PRODUCT OVERVIEW IC PRODUCT LIFECYCLES The IC industry is often looked upon to introduce new and innovative devices. Ever-increasing electrical and technological advances necessitate that new products enter the market. As new products are introduced to the marketplace, existing components are pushed further along their lifecycle patterns. Figure 5-1 shows ICE s view of the IC product lifecycle for. In general, an IC in the introduction-phase is an upgrade in circuit density over existing parts. However, advanced CMOS and ECL SRAMs, flash memories, RISC MPUs, and BiCMOS ICs are notable exceptions. In the case of the new SRAMs and RISC MPUs, increased speed is the primary feature. For flash memories and BiCMOS ICs, innovative process technologies (e.g., the mixing of bipolar ECL and CMOS) or architectures (e.g., one-transistor EEPROM cells or EPROM, SRAM, or EEPROM memory circuitry used for PLDs) are used to create unique IC characteristics that are attractive to the marketplace. In, a lot of attention was focused on MPUs (Pentium and PowerPC families), 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 often stole the headlines because of their speed, density, or replacement of existing devices in applications. Although introduction-type ICs receive most of the trade press publicity, the IC manufacturer makes the majority of its money on ICs in their growth and maturity stages. However, because of the competitive nature of the marketplace and the need to acquire production experience (to move down the learning curve), it has proven very difficult to enter a market segment in the profitable stages without having had a part available in the introductory stage. The IC industry has historically 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 256K DRAM 1M SRAM 256K SRAM 64K SRAM 64K DRAM HIGH SPEED CMOS/BiCMOS K SRAM 256K SRAM K SRAM 1M SRAM 64K SRAM 4K SRAM 64K ECL SRAM K ECL SRAM 4K ECL SRAM 1K ECL SRAM ROMs 32M ROM 64M ROM M FLASH M ROM 128K PROM 4M EPROM M EPROM 1M EEPROM 4M EEPROM 256K EEPROM 4M FLASH 8M ROM 64K PROM 4M ROM 1M ROM 256K ROM 64K ROM 32K PROM K PROM 1M EPROM 256K EPROM 64K EPROM 512K EPROM 64K EEPROM 32K EEPROM 1M FLASH K EEPROM 128K EPROM 4K EEPROM 32K EPROM K EPROM MCUs AND MPUs GaAs OTHER RISC 64-BIT RISC 32-BIT MPU MPU 32-BIT MPU 8-BIT MCU 32-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 988Q Figure 5-1. 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 to two lifecycle stages behind commercial ICs (Figure 5-2). 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. 5-2 INTEGRATED CIRCUIT ENGINEERING CORPORATION

3 SALES INTRODUCTION GROWTH MATURITY SATURATION DECLINE OBSOLETE ACL/FCT 256K CMOS SRAM 64K CMOS SRAM GaAs BIPOLAR LINEAR Lin ASIC AS/FAST FPGA FL. PT. DSP ALSTTL BCT CMOS EEPROM CMOS LINEAR 4M DRAM ASIC 1M DRAM K CMOS SRAM STTL BIPOLAR MPU K DRAM 256K DRAM TTL LTTL NMOS EEPROM 64K DRAM HTTL BIPOLAR RAM DTL NMOS MPU NMOS SRAM SUHL ECL LOGIC BIPOLAR PAL NMOS EPROM BIPOLAR PROM NMOS DSP LSTTL CMOS PLD FX. PT. DSP Source: TI/ICE, "Status 1996" 14487F Figure 5-2. Military IC Product Lifecycle In the coming years, the number of military-only ICs will dwindle. The U.S. Department of Defense has issued a mandate for military procurement to buys 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 system s 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. 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, period. Analog ICs are forecast to decline in marketshare and account for 11 percent of the total IC mar- INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-3

4 ket in the year 00, partly due to ICE s inclusion of the fast growing mixed-mode standard cell ASICs in the MOS logic category. Moreover, many consumer and industrial applications are moving to digital circuitry % % 19% 13% 12% 1% ANALOG BIPOLAR LOGIC MOS LOGIC* OTHER MOS MPUs, MCUs AND PERIPHERALS BIPOLAR MEMORY % % 5% 3% % 19% 28% 26% 14% % 26% 2% <1% 11% % 25% <1% 29% MOS MEMORY 31% 36% 41% 49% $.2B *Includes GaAs Year $68.0B $90.3B (EST) $128.5B 00 (FCST) $331.9B 198R Figure 5-3. Worldwide Merchant Market IC Product Trends The MOS microcomponent segment, which held only 12 percent of the total IC market in 1982, was estimated to account for 26 percent of the overall market in. As will be discussed in another section, MPUs and MCUs are becoming more and more like a complete system on a chip. One only has to consider the Pentium Pro and the PowerPC to realize this. 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 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. 5-4 INTEGRATED CIRCUIT ENGINEERING CORPORATION

5 The MOS memory market segment has displayed tremendous growth since. Its percent of the worldwide IC industry is forecast to increase to 49 percent by the year 00. As MOS memory products become more specialized (graphics RAMs, FIFOs, low-power versions, etc.), they will become less of a commodity and subsequently command higher prices than non-specialized memory parts. In terms of dollars, MOS memory and MOS microcomponents are easily the two largest IC product segments. ICE estimates that in, 67 percent of all IC dollars were from one of these two categories. Further, ICE forecasts that in the year 00, 74 percent of IC sales will be from products in one of these two categories. Large shipments of Pentium- and PowerPC-based systems will stir the microcomponent segment to new sales levels. Additionally, new operating system software such as new versions of Windows95 will drive memory sales in the coming years. Figure 5-4 shows the IC product market by units. Analog (linear) ICs led the way in unit shipments accounting for 43 percent of the total unit volume (but only 14 percent of the worldwide IC dollar volume). As far as leadframe and molding compound manufacturers were concerned, much of the IC unit action remained in the bipolar (especially analog) marketplace. Analog 43% Microcomponent 9% Total 49.0B MOS Logic 25% MOS Memory 13% Digital Bipolar % 4 On the other hand, ICE estimates Figure 5-4. Worldwide Merchant IC Product that MOS memory ICs represented Marketshare (Units) 13 percent of the units shipped in and MOS microcomponents about nine percent. However, together these two segments accounted for 67 percent of the IC dollar market. IC PRODUCT MARKET FORECAST Figure 5-5 depicts the history of the IC market by major product type. With the exception of the bipolar memory, most bipolar logic, and EPROM markets, all IC segments grew rather nicely during the time period. In fact, represented the third consecutive year of greater-than- 30-percent overall growth in the IC industry. Shown in Figure 5-6 is ICE s forecast of the various IC products through the year 00. On the whole, ICE forecasts that growth rates of MOS products will continue on an upward course, though at a somewhat slower pace than was seen in the first part of the decade. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-5

6 Product Category 1992 ($M) ($M) Change ($M) Change ($M, EST) Change CAGR () CAGR () Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog Amplifiers 8 1,000 1,5 1, Interface ,1 31 1, Consumer/Automotive 3,905 4, ,570 7,0 Volt. Reg. and Ref , , Data Conversion , Comparators Other (including Telecom) 2,095 2,665 3, , Total Analog 9,095 11,5 14,0, Bipolar Logic ECL GPL Schottky/Other 1,1 1,300 1,0 1, Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL Total Bipolar Logic 2,995 3, ,7 11 2, MOS Microcomponents MPUs 5,460 8,590 57, , MCUs 5,245 6, ,5 26, MPRs 3,5 3,925 4,550 8, Total Microcomponents 13,9 19,075 37, , MOS Memory DRAM 8,525 13,140 54, , SRAM 2,890 3, , , EPROM 1,250 1, , , ROM 1,5 1, ,890 2,0 6 5 EEPROM Flash , Other Memory Total MOS Memory 14,840, , , MOS Logic General Purpose Logic 1,075 1, ,835 2, Gate Array* 2,9 3,555 4,4 24 5,395 Standard Cell* 2,280 2,745 3, , FPL (PLDs) ,1 1, Other Special Purpose 3,745 4, , , Total MOS Logic,680 13,435 26,005,7 28 Total ICs 51,875 67, , , * Including NREs 264A Figure IC Market Segment Analysis 5-6 INTEGRATED CIRCUIT ENGINEERING CORPORATION

7 INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-7 Product Category Bipolar Memory Total Bipolar Memory Analog Total Analog Bipolar Logic Total Bipolar Logic MOS Microcomponents Total Microcomponents MOS Memory Total MOS Memory MOS Logic Total MOS Logic Total ICs Bipolar RAM Bipolar PROM Amplifiers Interface Consumer/Automotive Volt. Reg. and Ref. Data Conversion Comparators Other (including Telecom) ECL GPL Schottky/Other Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL MPUs MCUs MPRs DRAM SRAM EPROM ROM EEPROM Flash Other Memory General Purpose Logic Gate Array* Standard Cell* FPL (PLDs) Other Special Purpose 1996 Change 1997 Change ($M, EST) 1996 ($M, FCST) 1997 ($M, FCST) 1998 ($M, FCST) -00 CAGR () ,430 1,360,500 2,625 1,5 5 6,670 25, ,957 24,055 19,5,085 59,365 75,265,280 1,035 1,960 1,5 3, ,950 3,390 8,050 8,0 2,760 11,250 33,630 4, ($M, FCST) ,870 1,500 12,500 3,0 1,7 3 8,000 30, ,671 28,9,360,725 70,000 0,595 12, ,925 1,4 4, ,325 4,000 9,400,050 3,435 13,5 40,0 264, ,960 1,2 8,325 2,025 1, ,0, , ,554,0 13,505 11,090 41,755 50,075 7,0 1,240 2,050 1,0 2, ,4 2,680 6,0 5,700 1,940 8,825 25,345 4, ,1 1,0 8,960 2,5 1, ,650, ,268,5,065 13,195 49,4 57,7 8,435 1,1 1,980 1,090 2, ,745 2,950 7,000 6,650 2,255 9,600 28,455 5, Change ,660 1,5 7,0 1,685 1,1 2 4,450, , ,748 14,090,865 8,255 33,2 40,700 6,000 1,365 2, , ,5 2,330 5,395 4,700 1,660 7,630,7 128, Change Change ($M, FCST) ,445 1,650,000 3,8 2, ,840 36, ,411 35,455 25,890,440 82, ,780, ,875 1,700 5, ,875 4,800 11,0 12,550 4,350,800 48, , A * Including NREs Figure IC Market Segment Analysis

8 Figure 5-7 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 bipolar attached to it appears to be part of a dying breed. Meanwhile, the 1990 s will be dominated by growth in the MOS memory and MOS microcomponent segments CAGR -00 CAGR CAGR Bipolar Memory % % 19% Bipolar Logic 3% 12% 9% Analog 24% % 19% MOS Microcomponents 34% % 25% MOS Memory 53% 25% 35% MOS Logic % % % Total ICs 35% % 26% 8A Figure 5-7. Cumulative Average Annual Growth Rates (CAGRs) of IC Product Segments What is impressive is the 53 percent CAGR for MOS memory products from This was a very sizable market to begin with in For a mature 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 5-8. Here the best performing products are shown with the highest CAGRs. DRAMs, flash memory devices, and ASIC products top the list of products that will flourish during the next five years. Japanese and Korean companies have diversified from memory products and moved to greater production of ASICs, especially standard cells. Figure 5-9 reinforces what has been displayed in previous graphs. MOS memory, microcomponents, and logic are amassing a greater percentage of the overall IC market. The other category is mostly attributed to analog devices. By the year 00, it is forecast to account for only 11 percent of the overall IC market. Figures 5- and 5-11 further define the percentage that each product segment contributes to the overall IC market. Figure 5-12 ranks the top IC products by the growth rates. As a group, ICE estimates the hot IC products grew 73 percent in and represented 45 percent of the total IC market. The leading growth segments are those from categories that have been highlighted so far; MOS memory, MOS microcomponent (MPR), and ASIC devices. Flash memory, a relative newcomer to the IC industry, will likely make the hot IC list for several years as the nascent market matures. Another hot IC segment is the programmable logic device (PLD) market. It is estimated to have grown 48 percent in. 5-8 INTEGRATED CIRCUIT ENGINEERING CORPORATION

9 Product Category DRAM Flash MOS Standard Cell* MOS FPL (PLDs) MOS MPRs MOS MPUs SRAM MOS MCUs Volt. Reg. and Ref. Other Analog (Including Telecom) Amplifiers Consumer Analog General Purpose MOS Logic MOS Gate Array* Special Purpose MOS Logic EEPROM Data Conversion Other MOS Memory Comparators Interface ROM ECL GPL Special Purpose Bipolar Logic EPROM Schottky/Other Gen. Pur. Bipolar RAM Bipolar Gate Array/Standard Cell* Bipolar FPL (PLDs) Bipolar PROM Bipolar MPU/MCU/MPR Total ICs *Including NREs CAGR () A Figure 5-8. IC Products Ranked by CAGR (-00) Unfortunately for some IC companies, their product portfolios are thin on new and innovative products and heavy on older mature devices. Bipolar digital IC products head the list of notso-hot IC devices for and (Figure 5-13). The percent decline of the not-so-hot products has been steep and the combined total dollar volume of the five product segments is estimated to have amounted to two percent of the total IC market in. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-9

10 Other % MOS Logic % 1992 $51.9B MOS Memory 29% MOS Microcomponents % MOS Logic % Other 11% 00 (FCST) $331.9B MOS Microcomponents 25% MOS Memory 49% MOS Logic % Other % (EST) $128.5B MOS Microcomponents 26% MOS Memory 41% 263A Figure 5-9. MOS Memory, Microcomponents Dominate IC Market ANALOG IC TRENDS Overview Integrated circuits can be classified into two general categories, digital and analog (synonymous with linear). Digital ICs process on-off electrical signals, represented by the binary digits 1 and 0. Analog ICs represent real-world phenomena such as temperature, pressure, sound, images, speed, acceleration, position, and rotation anglesthat is, continuously varying voltages and currents. Analog ICs oftentimes take this real-world data and convert it to a digital format where upon it is manipulated, displayed, or otherwise stored. The analog IC market has historically been more stable than the digital market. Compared to the digital IC marketplace, overspending and overcapacity have not been significant problems for analog IC vendors. 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. After declining slightly during the 4Q90 through 1Q92 time period, the analog IC market displayed renewed strength (Figure 5-14). Overall, ICE forecasts that the analog market will grow at an average annual rate of percent from through 00 (Figure 5-). Anticipated growth rates for the second half of the decade are forecast to be slower than they were during the time period, but the analog market will still be a growing force. As a percentage of the overall IC market, the presence of analog products is shrinking (Figure 5- ). As shown in Figure 5-, analog ICs made up percent of the total IC market in 1992, but are estimated to have accounted for 14 percent of the total IC market in. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

11 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 1992 ($M) , ,095 9, , ,995 5,460 5,245 3,5 13,9 8,525 2,890 1,250 1, ,840 1,075 2,9 2, ,745,680 51,875 of 1992 Market ($M) , , ,665 11,5 5 1, ,055 8,590 6,560 3,925 19,075 13,140 3,295 1,350 1, ,000 1,440 3,555 2, ,735 13,435 67,950 of Market ($M) ,5 1,1 5,570 1, ,855 14,0 0 1, ,7,995 8,5 4,550,8,4 3,755 1,390 1, ,455 1,835 4,4 3,660 1,1 5,980,005 90,305 of Market ($M, EST) ,660 1,5 7,0 1,685 1,1 2 4,450, , ,748 14,090,865 8,255 33,2 40,700 6,000 1,365 2, , ,5 2,330 5,395 4,700 1,660 7,630,7 128,493 of Market Figure IC Market Segment Analysis () INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-11

12 Product Category 1996 ($M, FCST) Bipolar Memory Bipolar RAM Bipolar PROM Total Bipolar Memory Analog 0 Amplifiers Interface Consumer/Automotive Volt. Reg. and Ref. Data Conversion Comparators Other (including Telecom) 1,960 1,2 8,325 2,025 1, ,0 Total Analog Bipolar Logic,195 ECL GPL Schottky/Other Other Special Purpose Gate Array/Std. Cell* MPU/MCU/MPR FPL 2 1, Total Bipolar Logic MOS Microcomponents 2,554 MPUs MCUs MPRs,0 13,505 11,090 Total Microcomponents MOS Memory 41,755 DRAM SRAM EPROM ROM EEPROM 50,075 7,0 1,240 2,050 1,0 Flash 2,300 Other Memory 530 Total MOS Memory MOS Logic 64,4 General Purpose Logic Gate Array* Standard Cell* FPL (PLDs) Other Special Purpose 2,680 6,0 5,700 1,940 8,825 Total MOS Logic Total ICs 25,345 4,434 * Including NREs of 1996 Market ($M, FCST) ,1 1,0 8,960 2,5 1, ,650, ,268,5,065 13,195 49,4 57, ,1 1,980 1,090 2, ,745 2,950 7,000 6,650 2,255 9,600 28,455 5,853 of 1997 Market ($M, FCST) ,430 1,360,500 2,625 1,5 5 6,670 25, ,957 24,055 19,5,085 59,365 75,265,280 1,035 1,960 1,5 3, ,950 3,390 8,050 8,0 2,760 11,250 33,630 4,382 of 1998 Market ($M, FCST) ,870 1,500 12,500 3,0 1,7 3 8,000 30, ,671 28,9,360,725 70,000 0,595 12, ,925 1,4 4, ,325 4,000 9,400,050 3,435 13,5 40,0 264,291 of 1999 Market ($M, FCST) ,445 1,650,000 3,8 2, ,840 36, ,411 35,455 25,890,440 82, ,780, ,875 1,700 5, ,875 4,800 11,0 12,550 4,350,800 48, ,866 of 00 Market Figure IC Market Segment Analysis () 5-12 INTEGRATED CIRCUIT ENGINEERING CORPORATION

13 Rank "Hot Products" Market (EST, $M) / Change ($) Market ($M) / Change ($) 1 Flash Memory 1, MPRs 8, ,550 3 DRAM 40,700 74, SRAM 6, , PLDs 1, ,1 Total 58, , H Figure Hot IC Products Rank "Not-So-Hot" Products Market (EST, $M) / Change ($) Market ($M) / Change ($) Bipolar MPU/MCU/MPR Bipolar PLDs Bipolar PROM EPROM Schottky/Gen. Purp. Bipolar Logic Total ,365 1,085 2, ,390 1,0 2, H Figure Not-So-Hot IC Products Billings In Millions 5,600 5,600 5,0 4,800 $0.77 4,400 4,3 4,000 3,600 Units ASP 3,0 2,800 2,400 Dollars 2,000 1,600 1,0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (EST) Year G Figure Analog Market Trends (Dollars and Units in Millions) INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-13

14 Amplifiers % % % Interface 19% 7% 12% Special Consumer % % % Voltage Regs & Refs 33% % % Data Conversion % 13% 14% Comparators % % 12% Other Analog 29% % % Total Analog 24% % 19% 249B Figure 5-. Analog IC Market CAGRs 140,000 Millions of Dollars 1,000 0,000 80,000 60,000 40,000 Total Analog Total IC, Year (EST) 1992 (EST) Analog Market ($M) 9,095 11,5 14,0,390 Change 5 Total IC Market ($M) Change 51, , , , A Figure 5-. Growth of Analog and Total IC Markets 5-14 INTEGRATED CIRCUIT ENGINEERING CORPORATION

15 % % % 14 14% 13% Year (EST) 1996 (FCST) 387A Figure 5-. Analog IC of Total IC Market Regional Markets Regionally, Japan and the ROW were tied as the largest consuming regions of analog ICs in (Figures 5- and 5-19). Japan s large, indigenous consumer products industry has kept it the leading market for analog ICs. However, since the early 1990 s, Japan s 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 Without the support of its huge domestic market, Japan cannot maintain its large share of the analog market. A second factor promoting a smaller Japanese analog market is the fact that manufacturers in Korea, Taiwan, and other Pacific-rim countries have undermined Japanese manufacturers prices. Demand for electronics in Southeast Asia and North America was met by companies in these countries. By the year 00, the analog IC market is expected to be greatest in the ROW region. This shift in consumption will result from intensified competition from ROW countries involved in the consumer products sector. Additionally, in order to take advantage of low labor costs and to reduce the effects of the strong yen, Japanese companies are increasingly willing to farm-out low-end assembly of consumer products to ROW locations. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

16 % North America % 24% % % PERCENT % Europe % 38% 19% 32% % 28% % 26% 30 33% Japan $2.3B 8% ROW % 1991 $9.0B YEAR 25% $11.1B 28% $.4B (EST) 31% 00 $36.1B (FCST) 119P Figure 5-. Analog IC Market Trends ($) 1,500 Millions of Dollars 1,400 1,300 1,0 1,0 1, , ,334 1,8 1,073 1,140 1,075 1, ,0 1,192 1,2 1, Q94 3Q94 1Q95 3Q95 1Q94 3Q94 1Q95 3Q95 2Q94 4Q94 2Q95 4Q95 2Q94 4Q94 2Q95 4Q95 1Q94 3Q94 1Q95 3Q95 1Q94 3Q94 1Q95 3Q95 2Q94 4Q94 2Q95 4Q95 2Q94 4Q94 2Q95 4Q95 (EST) (EST) (EST) North America Europe Japan Asia Pacific Market Change / +19% +30% +% +% Source: WSTS/ICE, "Status 1996" (EST) 895G Figure Quarterly Analog Geographic Market Trends 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

17 Leading Manufacturers Though digital ICs are primarily 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 are shown in Figure 5-. Most of the companies shown in the figure saw their analog sales increase at about the same pace as the analog market itself. ICE estimates that North American and Japanese companies produced the majoity of analog ICs in (Figure 5-). The European marketshare is almost exclusively due to SGS- Thomson and Philips. A great deal of analog ICs were imported into ROW countries. Although the ROW market manufactured only about six percent of all analog ICs, it consumed 28 percent the output (Figure 5-). The North American segment is quite the opposite. ICE estimates that North American producers made 38 percent of all analog devices, but consumed only percent of the total analog 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 are exported, lending support to the figures shown above. Rank Source: ICE, "Status1996" Company SGS-Thomson Philips Motorola Toshiba Matsushita National NEC TI Sanyo Analog Devices ($M) 1, (EST, $M) 1,6 1,5 1,195 1,5 1,135 1,1 1,050 1, / Change S Figure 5-. Worldwide Top Ten Analog IC Manufacturers North American Companies (EST) 38% $.4B ROW Companies 6% European Companies % Japanese Companies 36% Figure 5-. Analog IC Production 14500L Region Consumption Production North America Japan Europe ROW Figure 5-. Analog IC Consumption/Production Comparison ( of Total) INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

18 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 first half of the 1990 s is shown in Figure 5-. 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. 4, , , Billings in Millions 3,000 2,500 2,000 1,500 Market ($M) Units (M) , Year Market ($M) ,000 1,5 1,660 Units (M) 2,735 2,894 2,685 3,089 3,454 4, A Figure Amplifier Market 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

19 Bipolar or 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 as 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 , , , Billings in Millions 3,000 2,500 2,000 1,500 Market ($M) Units (M) , Year Market ($M) ,250 1,685 Units (M) 1,878 2,092 2,139 2,526 3,080 4, A Figure Voltage Regulator and Reference Market 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 5-25 shows the recent interface IC market. INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-19

20 1, , , Billings in Millions Market ($M) Units (M) Year Market ($M) ,1 1,5 Units (M) ,132 1,1 1, A 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 5-26 displays the market for data converters. After increasing percent in, the data conversion market grew six percent in. This segment is estimated to have rebounded to 24 percent growth in. Comparators Comparators are those analog ICs designated as voltage comparators. Figure 5- shows the recent market history for comparator ICs. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

21 1, , Billings in Millions Market ($M) Units (M) Year (EST) 0.00 Market ($M) ,1 Units (M) A Figure Data Conversion Market Billings in Millions Market ($M) Units (M) Year Market ($M) Units (M) A Figure Comparator Market INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

22 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. The market for special consumer analog ICs is shown in Figure , , , Billings in Millions 5,000 4,000 3,000 2,000 Market ($M) Units (M) , Year (EST) 0.00 Market ($M) 3,555 3,940 3,905 4,640 5,570 7,0 Units (M) 5,305 5,880 5,425 6,5 7,140 7, A Figure Special Consumer Market The special consumer analog market experienced substantial growth over the past three years, surging percent in. Other Analog Other 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 5-29 shows the market for other analog devices. 5- INTEGRATED CIRCUIT ENGINEERING CORPORATION

23 5, ,500 4, , Billings in Millions 3,000 2,500 2,000 1,500 1, Market ($M) Units (M) Year (EST) 0.00 Market ($M) 1,525 1,7 2,095 2,665 3,855 4,450 Units (M) 1,6 1,697 1,9 2,7 2,977 3, A Figure Other Analog Market Consumer ICs had the largest share of the analog market in, 41 percent (Figure 5-30). In this figure, automotive and telecom devices have been separated out from the total other category. By the year 00, voltage regs/refs, automotive, consumer, and telecom product segments are forecast to have the largest shares of the analog market. Automotive 8% Comparators Other 1% 3% Data Conv. 6% Interface 7% (EST) $.4B Consumer 41% Amplifiers 9% Other Interface 2% Comparators Data Conv. 5% <1% 6% 00 (FCST) $36.1B Consumer 41% V Reg % Telecom 14% Automotive % Telecom % Amplifiers % V Reg 11% 335T Figure Analog Marketshare Trends by Product Type INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

24 In general, standard-function linear ICs (e.g., amplifiers, data converters, references and regulators, interface circuits, and comparators) will lose marketshare to special purpose linear devices (e.g., telecom ICs, camcorder devices, imaging circuits, automotive sensors, disk-drive components, etc.). Figure 5-31 shows the characteristics of the two types of analog markets. Toward the year 00, system-specific or customer-specific analog devices will be in greater demand as general purpose products are de-emphasized. Standard Function Linear ICs Large customer base Low volume requirements Long lifecycle Slow ramp Low complexity designs Design intensive Low risk/low consequences Special Purpose Linear ICs Small customer base High volume requirements Short lifecycle Fast ramp High complexity designs Process intensive High risk/high consequences Source: Analog Devices/ICE, "Status 1996" 889 Figure Business Characteristics of the Linear 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 helped to keep the analog market growing. Figure 5-32 provides a sampling of some of the new applications for analog ICs. Although representing only six percent of the analog IC market, data conversion products have scored well with wireless communications, high-end video/multimedia, and imaging applications. Figure 5-33 lists some of the typical applications for data converters. 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 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) INTEGRATED CIRCUIT ENGINEERING CORPORATION

25 Device Type Company Unique Features Targeted Application Op Amps Data Converters Voltage Regulators National Semiconductor Burr-Brown Micro Linear Analog Devices Linear Technology SGS-Thomson Uses small packaging Dual, ultra-wideband, low-power current feedback D-to-A converter has 8-bit DACs with independent shutdown A-to-D converter in 8-pin SOIC uses single volt supply Contrast control for both LCDs and cathode fluorescent lamps Offers low voltage drop of 1.2 volts Portable equipment Video, medical imaging, signal processing Cellular phones, pagers, notebook CPUs Hand-held instruments Portable CPUs, auto displays Battery-powered devices Source: Electronic Business Buyer/ICE, "Status 1996" 261 Figure Applications Breathe New Life Into Analog IC Market Market Typical Applications Design Considerations for A-D Converter Choice Wireless communications Imaging applications High-end video/multimedia Wireless base station receivers, paging systems with broadband capabilities. Still-image digital cameras, medical imaging systems. HDTV and other high-end standards-based video systems. Noise specifications are key. Good dynamic range for db. Applications demand 12-bit resolution converters with speeds of Msamples/s. Cost of A-D converters in this performance range is in the hundreds of dollars, but prices are coming down. Speed determined by scan time and the number of points digitized. More pixels require faster scanning. Still-image digital cameras digitize images using a 12-bit A-D converter at speeds between 2- Msamples/s. Speed is determined by how quickly the CCD sensor outputs data. Noise specs are less important. Primarily driven by standards. You need enough speed to accommodate the bandwidth of the video signal. Higher data rates and higher resolution aren't needed until HDTV becomes available. An HDTV system requires -bit resolution and speeds around 74 Msamples/s. No cost-effective ADCs available in the performance range for HDTV yet. S/N ratio and spurious-free dynamic range are both important. Source: Computer Design/ICE, "Status 1996" 259 Figure Three Market Segments for High-Speed A-D Converters Cellular phones, though lightweight and compact, consist of a great number of components both mechanical and electrical. Fortunately for some analog companies, they are able to address a good portion of the requirements of cellular phones as outlined in Figure INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-25

26 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 1996" 396 Figure Emerging Opportunities for Analog ICs Millions of Dollars Year Source: ADI/ICE, "Status 1996" 397 Figure Worldwide Market for Semiconductors in Mobile Communications 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. The automotive market is another area of outstanding growth potential for analog ICs. The current electronic content of automobiles is approximately $500 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

27 Mechanical Passives Memory ASIC* Power Management* RF* Baseband* DSP* Year *Many leading analog IC manufacturers can address these needs. Source: ADI/ICE, "Status 1996" 398 Figure Estimated Content of Digital Cellular Phone (% Bill of Materials, $) 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 devices continues to grow. ICE estimates that BiCMOS analog ICs, which represented seven percent of the analog market in, will increase to nine percent of the market by the year 00. Bipolar 72% Bipolar 59% GaAs 2% (EST) $.4B CMOS* 19% BiCMOS 7% GaAs 4% 00 (FCST) $36.1B CMOS* 28% BiCMOS 9% *Includes DMOS 031V Figure Analog Market by Technology ($) INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-

28 BiCMOS is an excellent choice in demanding 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 pricesensitive 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 INTEGRATED CIRCUIT ENGINEERING CORPORATION