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www.fairchildsemi.com
1
Fairchild Semiconductor
International, Inc.
May 2010
Investor Presentation
www.fairchildsemi.com2
Notes on Forward Looking Statements
and Non-GAAP Measures
• Comments in this presentation other than statements of historical fact may constitute forward looking statements and are based on Fairchild’s management’s estimates and projections and are subject to various risks and uncertainties
• These risks and uncertainties are described in the Company’s periodic reports and other filings with the Securities and Exchange Commission (see the Risk Factors section) and are available at http://sec.gov and investor.fairchildsemi.com
• Actual results may differ materially from those projected in the forward looking statements
• Some data in this presentation may include non-GAAP measures that we believe provide useful information about the operating performance of our businesses that should be considered by investors in conjunction with GAAP measures that we also provide. You can find a reconciliation of non-GAAP to comparable GAAP measures at the Investor Relations section of our web site at http://investor.fairchildsemi.com
Recent additions to our website at http://investor.fairchildsemi.com
Updated Financials (through Q1 2010, with segment revenue/gross margin breakouts)
• Quarterly Fact Sheet with Q1 2010 highlights
• This investor presentation
www.fairchildsemi.com
3
Fairchild Overview
www.fairchildsemi.com4
• Wireless Convergence and Energy
Efficiency mega-trends
• Power silicon content grows
faster than end market sales –
premium paid for efficiency
• Segment structure increases our
apps knowledge and ability to
sell solutions
• Large customers dominate these
markets and align well with
Fairchild’s strengths in SCM,
global presence and wide product
breadth
Markets That Drive Our Business
www.fairchildsemi.com5
Power Silicon Content GrowthHandsets
• Handset growth still impressive as market hits 1.5B units in 2013
• Voltage regulator CAGR of 19% reflects greater power management value in the handset to support new features, better resolution displays and 3G/4G
Source: iSuppli, Jan 2010
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Silicon Content Growth - Handsets
Handset Units Voltage Regs/Refs & Interface Sales
8% Handset Unit CAGR19% Voltage Regs/Refs & Interface Sales CAGR
www.fairchildsemi.com6
Power Silicon Content GrowthPower Supplies
• Greater power supply efficiency requires more advanced topologies and greater power silicon content
• Fairchild is a leader in supplying integrated and discrete power management solutions to the top power supply manufacturers in the world
Source: Climate Savers Computing Initiative 2008
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
80%+ 82%+ 85%+ 87%+
Efficiency
Total Discrete Content ($/supply)
Total IC Content ($/supply)
Power Silicon Content versus Efficiency
www.fairchildsemi.com7
Power Silicon Content GrowthLCD TV
• LCD TVs expected to continue to grow rapidly
• Power analog & transistor sales forecasted to grow even faster as screen resolution and backlighting requirements advance and concern over energy efficiency of these devices increases
Source: iSuppli, Jan 2010
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Silicon Content Growth - LCD TV
LCD TV Units Power Analog & Transistor Sales
15% LCD TV Unit CAGR
18% Power Analog & Transistor Sales CAGR
www.fairchildsemi.com8
Power Silicon Content GrowthAppliances/Industrial Motors/Pumps
• Conversion to inverter type or BLDC variable speed motors significantly increase energy efficiency (60%+ typically) and improves cost of ownership
• This transition opens huge new markets to Fairchild power management solutions…typical SPM content on a washing machine is $4 – 6…no content before
• Fairchild is uniquely positioned to provide a full range of discrete and integrated power management solutions across the complete range of power requirements
Source: iSuppli, Jan 2010
Note: VF=Variable Frequency Control T=Total worldwide Shipments
www.fairchildsemi.com9
Power Silicon Content GrowthAdvanced Lighting, PV, Wind Power & Smart Grid
• New markets for power discrete and analog solutions in the lighting, PV, wind and smart grid create huge new opportunities for Fairchild
• Fairchild has wide range of products to support these markets including PSR for low power apps and PFC for higher power requirements…both discrete and integrated power management solutions
Source: iSuppli, Jan 2010, IMS Research
CFL 2009 2010 Growth
Rev (M$) 4,604 5,697 23.7%
ASP 4.5$ 4.3$ -4.4%
Units(Mu) 1,023 1,325 29.5%
>20% Semi Growth
in Solar Inverters
through 2014
www.fairchildsemi.com10
Engine Control
Ignition
Fuel Injection
Glow Plug
BLDC Motor Control
EPS
Cooling
Pumps
Body Load Control
HID
PTC-Heater
HEV
Full Hybrid
Mild Hybrid
Micro Hybrid (Start/Stop)
Transmission Control
Engine Control
Ignition
Fuel Injection
Glow Plug
BLDC Motor Control
EPS
Cooling
Pumps
Body Load Control
HID
PTC-Heater
HEV
Full Hybrid
Mild Hybrid
Micro Hybrid (Start/Stop)
Transmission Control
Power Modules ($8.00 – $14.28)
• EPS/EHPS Modules
• Auxiliary VSD’s
Discrete Power($0.07 – $0.35)
• Low Voltage MOSFET’s
• Mid Voltage MOSFET’s
• High Efficiency Diode
Ignition ($0.30 – $4.00)
• Current Limit IGBTs
• Smart IGBT
Functional Drivers ($0.30 – $2.15)
• Smart Switches
• Gate Drivers
• Motor Controls
Power Silicon Content GrowthAutomotive
• Semiconductor content is growing rapidly in automotive designs to increase fuel efficiency and improve user experience
• Fairchild is expanding our power module technology into electronic power steering (EPS) control. Design wins at 3 major customers and more in process
• Fairchild is also a leader in ignition IGBTs that provide more precise spark control and better fuel efficiency
www.fairchildsemi.com11
Power Silicon Content Growth Notebook PC
• Notebook unit growth projected to be robust through 2013
• Power transistor/FET sales growth remains strong even as CULV and netbooksrequire fewer power rails but place greater value on size and weight
Source: iSuppli, Jan 2010
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2009 2010 2011 2012 2013
M $
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Silicon Content Growth - Notebook PCs
Notebook Units Power Transistor Sales
17% Notebook PC Unit CAGR
9% Power Transistor Sales CAGR
www.fairchildsemi.com12
Capitalizing on these Market Trends
• Engage with industry-leading customers in key markets to build our
applications expertise (ex. Handsets, power supplies)
• Leverage our technology leadership in analog switches, HF Voltage
Regulators to expand content and increase integration level in handsets &
ultra-portable apps
• Leverage silicon-based technology leadership in power MOSFETs and
IGBTs to gain share and deliver industry-leading margins
• Accelerate share gains in power conversion business driven by new products
and transition to higher efficiency power supply designs
• Expand SPM business beyond Japan to support transition to variable speed
motors in appliances
• Drive higher GM and double-digit sales growth
www.fairchildsemi.com
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25.0%
30.0%
35.0%
40.0%Q
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Mid
Gu
ide
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Gross Margin TrendNew Products & Mix Powering Breakout
Current 1st Benchmark
MCCC Analog 40 - 50% 45 - 55%
MOSFET 33 - 40% 35 - 50%
PCIA Analog 35 - 45% 40 - 50%
MOSFET 30 - 33% 35 - 40%
SCM fix
Mix Out/Product Direction
10 point GM swings
2 - 3 point GM swings
GM breakout
SG acquisition/prod line upgrade
R&D focus on MCCC and PCIA markets
www.fairchildsemi.com
14
Mobile, Computing, Consumer &
Communications (MCCC) Group
Overview
www.fairchildsemi.com15
Fast Growing End Market Exposure
Wireless convergence and need for
greater efficiency in
lower voltage applications
Energy Regulations
Mobile Computing
Telecom & Server High Efficiency
Power Supplies
Consumer electronics
Handsets and wireless
www.fairchildsemi.com16
MCCC Mobile ProductsExtend Battery Life, Enable Greater Functionality
• MOSFET
• IntelliMAX™
• Building Block Regulators
• ASSP Regulators
• Analog Switches
• USB
• µSerDes™
• Mixed Signal ASSP
Base Band and
Application Processor
PMIC
Memory
Display
Sub Display
LMU
Camera
Audio DataVideo
Display &
Camera
“uSerDes
Signal Path
Subsystems
GPSPower
SubsystemsLMU
DC:DC
RF
SD cardHDMI
Camera
DC:DC
Microphone
Power
PM
IC
www.fairchildsemi.com17
Increasing Power Consumption
3G 3.5G Pre 4G 4G2.75G2G
GPRS
UMTS
WCDMA
TD-SCDMA
HSDPA
HSPAGSM
WiMax / WiFi
WiBroLTEEDGE
70M172M
14Mbps
384K180k56k9.6k
DATA RATE (bps)
VOICE
SMS
Internet
Browsing
Video call
Video Download
Interactive Gaming
Video Conference
Video Broadcast
VOIP
HDTV
Multiview Video
Digital TV
10hr 5hr 2:30hr 1:00hr ?hr
Talk / Connection time
www.fairchildsemi.com18
USB Switch
WLAN
Module
Mobile Handset Targeted Subsystems
Audio
Connectors
Distributed Architecture Drivers :
• Dissimilar Process Technology
• Dissimilar IC lifecycles
• Optimized power consumption/efficiency
• Improved Time to Market (modularity)
• Differentiation (feature sets and user experience)
FAIRCHILD FOCUS: Distributed Signal Path
Subsystems and Power
OVPT
X
MU
S
Bluetooth
Module
SDIO
SwitchDACCodecADCAMPAMP AMP
Application
ProcessorPMIC
Broadband
ProcessorRF Power
Chipset
LCDBacklight
Driver
DisplayGPS
Mobile TV
FeaturesMP3
Other
P
P
P1
PN
P
www.fairchildsemi.com19
Battery Life in Smartphones
• Only 5 – 6.4 hrs of 3G talk time
for leading smartphones
• Battery life gates user
experience
• All 4 phones use a similar
battery with a capacity of
1400mAh
• More functions…same battery
form factor
10MP image sensors
Multi core apps processors
3D MEMS gyroscopes
5.0 GBit/s datarates
AMOLED WQVGA displays
8 RF Bands….
Bridging the energy gap:
• Higher energy density batteries (new Chemistries)
• Optimized usage of features (HW & SW)
• More efficient conversion of battery power• Lower power consuming components
www.fairchildsemi.com20
RFPA Power
Managament
Batt Mngment
ApplicationApplication
ProcessorProcessor
MemoryMemory
I/OI/O
WiMaxWiMax
Lighting
Management
WW--CDMACDMA
RFPARFPA
GSMGSM
RFPARFPA
Core Power
Management
Fairchild’s Mobile DC/DC Products
Battery Management
Core Power
RF Power Management
LightingDC/DC converters for digital cores
PMICs
RF DC/DC
microPMIC RF subsystem
LCD back lighting
AMOLED
LED Flash
Switching Chargers
Efficient DC/DC Conversion = Longer Battery Life
www.fairchildsemi.com21
Mobile Power Solutions
We strive for excellence in electrical performance:
• Ultra Low standby current
• Highest Efficiency
• Fast transient response
• Low EMI
• High precision regulation
• Digital control
www.fairchildsemi.com
Mobile Subsystem Capabilities
USBAccessory DetectionSwitchesTransceivers (Std, full, high)Over Voltage Protection (OVP) Charging
AudioClass D AmpClass G AmpClass A/B AmpDigital Mic. ICSwitches
VideoFilter/DriversSwitchesMIPI SwitchuSerDesCamera Switches
ASSPPLL GPIO ExpandersTiny Logic SIMM Card SwitchReset Timer Memory SwitchTranslators
Display
uSe
rDe
s
Base Band/ApplicationProcessor
CameraSwitch
PMIC Charging/OVP
USB TRX
Acc
. Det
. MU
X
uSerDes
USB
Audio
Video
ASSPASSP
SwitchCO
DEC
Class G
Class D
Class A/BO
VP
www.fairchildsemi.com
Mobile USB
23
• Solutions for the full USB signal path
• USB Switches
• Multimedia Switches
• Accessory Detection
• Transceivers
• Enable USB port sharing for data, audio,
video, and charging
• Reduce external components
• Power savings with low power modes
• Ultra-small packaging
Maximizing USB port functionality in mobile electronics
USB Accessory
DetectionDetect an accessory type
for automatic application
routing.
USB
TransceiversMaximizes design
flexibility and
assures USB
compliance.
www.fairchildsemi.com24
LV MOSFETLeading Technology = Best in Class Margins
1998 2000 2002 2003 2005 2006 2007 2008 2009 2010 2011
• Leading silicon and package
technology enables optimum size,
performance and profitability
• Move to next-gen packages lower
costs and improves performance
• Technology leverage is greater
than scale leverage
$-
$10
$20
$30
$40
$50
$60
$70
0 1 2 3 4 5 6 7Volume Scenario
Pa
cka
ge
Co
st
Next Gen
Current Pkg
Current Pkg
Next Gen
Next Gen
Long Term Die Cost Trends
Relative Package Cost Curve
www.fairchildsemi.com
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013
Notebook Footprint Transitions
S08 Power56 Power33 Other Packages
Form Factor Transition
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A once every ten year event:Leaded (SO) to Leadless (QFN) conversion SO-8
Power56and
Power33
Fairchild is investing in PQFN capacity and is ahead of the transition
Fairchild product portfolio is positioned for the transition
Power33
www.fairchildsemi.com
Form Factor Leading Package Technology
Reference: SO-8Power 33
Power 56
QJA = 74.2ºC/W
Pd = 56 mW/mm2
QJA = 59.5ºC/W
Pd = 190 mW/mm2
QJA = 48.6ºC/W
Pd = 86 mW/mm2
30 mm230 mm211 mm2
• Form Factors for Singles:
Power 22
QJA = 65.8ºC/W
Pd = 475 mW/mm2
4 mm2
A package portfolio to drive mobile computing transitions!
• Power56 to Power33
• SO8 to Power33
• Power33 to Power22 and PowerStage Duals
www.fairchildsemi.com
Infineon Partnership
27
www.fairchildsemi.com
25A Control and Synchronous Solutions
S
7.2mΩ
Dual CoolTM 3x3
7.2mΩ
Dual CoolTM 3x3
2.4mΩ
30A Control and Synchronous Solutions
M
M
Power Trench® Dual Cool™
Component
Area:49mm2
Component
Area:21.5mm2
M
2.4mΩ
Dual CoolTM 3x3
7.2mΩ
Dual CoolTM 5x6
1.2mΩ
Component
Area:62mm2
Component
Area:41mm2
www.fairchildsemi.com
Shifting the Form Factor
29
MLP 3x3 Dual
9 mm2
2 x SO-8
60 mm2
www.fairchildsemi.com
Fairchild Integrated PowerStage SolutionsHigh Side and Low MOSFETs in a Single Package
25A Buck
Converter Solution
6mm
5mm
6mm
5mm
5A Buck
Converter
Solution
S08
3mm
3mm
Standard Solution: 60mm2
PowerStage Solution: 30mm2
Better Performance, 3X Smaller Footprint
HSHS
LS
LS LS
HS
LS
HS
LS
Standard Solution: 90mm2
PowerStage Solution: 9mm2
Better Performance, 7X Smaller Footprint
www.fairchildsemi.com31
Summary
• Focused R&D investment in mobile analog
• Gaining share in mobile analog…voltage regulator sales up 5%
in 2009
• Proliferating HF voltage regulator designs at multiple customers
• Customers moving to standard USB pin outs drive strong analog
switch sales growth
• Leading silicon and package technology enable profitable
growth of LV MOSFETs
www.fairchildsemi.com
32
Power Conversion,
Industrial & Auto (PCIA)
Group Overview
www.fairchildsemi.com33
Markets that Drive PCIA Growth
Higher efficiency through
innovative semiconductor
power mgmt solutions
Energy Regulations
LED Lighting
High Efficiency
Power Supplies
High Voltage Backlight for
Flat Panel TVs and Displays
PV, Alt Energy &
Smart Grid
Transition to Variable Speed Inverter Type
Motors
Highly Efficient Induction Heating
www.fairchildsemi.com34
Power Management Content Growth
In servers and high efficiency power supplies mandated efficiency regulations
are driving higher power management content
2007 2010 2013
Major Efficiency Level
Industry practice was 85 ~90% efficiency @100% load
Over 80~90% efficiency at 20% load and over
95% at 100% load
Efficiency at light load (10%) proposed to go up as telecom rectifier> 80%
BOM in HV Discrete(based on
600W)$2.80 $3.90 $6.50
www.fairchildsemi.com
Power Level vs. Topology Complexity
5W 75W 250W
Cell Phone
Charger
DVDSTB
Consumer
LCDM &
Printer
NB Adapter
32” ~ 50” LCD TV
32” ~ 50” LED TV
LED LightingLED Lighting
Desktop PC
PSR
Flyback
FF/QR
Flyback
Forward
LLC
Resonant
LC
ResonantCFL LFL
BCM PFC CCM PFC
ServerFull
Bridge
Aircon
500W
Interleave PFC
Multi
Phase
Topology
Power Level
Game
Console
35
www.fairchildsemi.com
Technology Roadmap
• Decrease Operating Current
• Decrease Quiescent Current
• Decrease Switching Frequency
• Reduce Acoustic Noise
• Reduce Control-circuit
• Reduce Switching/ Conduction Losses
• Reduce the need of EMI/EMS Filter
• Frequency Hopping
• Soft Switching
• High-side Transistor Driver
• Synchronous Rectifying
• Integrated Device Processes
• Analog Signal Process
• HV VDMOS & Multi-Chips Packaging
• Combo Circuits
• Primary-Side Control
Lower Standby Power Higher Power Efficiency Reduce Device Count
Environmental-friendly, Highly-efficient, Highly-integrated
36
www.fairchildsemi.com37
Power Conversion
Market Opportunity
• Growing demand for greater efficiency is driving
rapid adoption of advanced power conversion
solutions is a wide range of end markets from power
supplies and industrial motors to consumer
electronics, LED lighting and battery chargers
Features and Performance
• Industry leading efficiency
• Ultra-low standby power consumption
• PSR technology now 30mw vs 1.0w industry
standard just 2 – 3 years ago
• Longer product life and lower cost of ownership
• Using HV IC to drive LED lights doubles the
element life vs current discrete approaches
• Lighter, smaller, simpler form factors
• Advanced power conversion techniques
enable smaller magnetics and less copper use
in power supplies and chargers
Strategic Importance to Fairchild
• Fast growing market
• Fairchild is worlds largest supplier of power
conversion products
• Industrial design wins typically generate longer
demand flows
www.fairchildsemi.com
2008 2009 2010 2011
Main size 32~42inch 40/42inch 40~50inch 50inch
Backlight CCFL CCFL CCFL / LED LED BLU
Output Power 250Watt 300Watt 300 / 180Watt 180Watt
Power type PSU Direct inverter Direct inverter Direct inverter PSU PSU
PFC CRM CRM CRM CRM
Efficiency 80% 82% 85% >85%
Stdby 170mWatt 150mWatt 130mWatt 100mWatt
high efficiency, low standby, LED BLU, Slim, BOM reduction
Inverter
Multi
Power
(Flyback)
13V Audio
5.3V Stand by
12V or 5.3V Main
Lamps
Lamps
400V
Std by
Power5V Stand by
PFCMain
Power
(LLC)
Std by
Power
400V24V Inverter
12V Main
5V stand by
PFC
Direct Inverter Type PSU Type
LCD TV Technology Trend
38
www.fairchildsemi.com
Lighting Technology Trend
• Discrete solution is major portion for
CFL
• Get Compact (Integration solution)
• Get Thinner T8 T5
(High efficiency and Reliability,
EOLL function required)
• Dimming solution
• Market : Still big potential
• Philips, GE, Osram, Lutron, ULT
• High efficiency
• Longer Life time
• Environment (Hg free, No UV)
• Cost issue
• Dimming
• Broad light color
• Market : Emerging, Government Driving.
• Philips, GE, Osram and Many makers join
Efficiency, Life Time, Environment
• Ban Incandescent
• Ban Magnetic ballast
• Get Phasing out
LED Incandescent Halogen CFL LF
Lighting efficiency
(lm/W)59 10 20 50 75
Efficiency of
lighting equip (%)80~90 30~50 30~50 50~60 50~70
Total efficiency
(lm/W)42 4 8 23 38
Life expectancy
(Hr)10K~50K 1k 3k 10k 15k
(Source : LEDs Magazine, 2007 May)
39
www.fairchildsemi.com40
HV Product Portfolio
IGBT
Non-Punch Through Trench IGBT
Field Stop IGBT- FS Planar IGBT G2- FS1 Trench IGBT- FS1/2 SA Trench IGBT
HV Planar MOSFET- UniFET1/2- Standard QFET- QFET C/V2 Series- Old FET
MOSFET
MV MOS- PT3/4/5/6/7- UFT, UFP
FR Diode
HyperFast Diode
UltraFast Diode
Damper Diode
Stealth Diode
Duexpeed Diode
SPM
Motion SPM
- SPIM <10kW
- SPM2 <5kW
- SPM3 <2.2kW
- SPM4 DBC<2.2kW
- SPM45L/H <1.5kW- SPM5 <0.1kW- SPM7 <0.1kW- PFC SPM
HID SPM
SuperJunctionMOSFET- SupreMOS- SuperFET1/2
Legacy IGBT- Standard IGBT- SMPS IGBT
Punch Through Trench IGBT
SPM5~0.1kW
SPM2 ~5kW
SPIM ~10kW
SPM45 ~1.5kW
SPM3 ~2.2kW
www.fairchildsemi.com
Motion SPM Portfolio
Capacity
Application
Mid. Power Industrial Inv.
Fan motor
System A/C
Room A/C
Refrigerator
W/M
VacuumCleaner
Power tool
Low Power Industrial Inv.
Dish washer
SPIM
600V / 50A ~ 100A
1200V / 30A ~ 75A
10kW5kW2kW1kW0.5kW0.1kW
Package A/C
SPM2
600V / 15A ~ 75A
1200V / 10A ~ 20A
SPM3
600V / 3A ~ 30A
SPM5
500V / 1A, 3A
250V / 3A
SPM4
600V / 20A ~ 30A
PumpSPM7500V / 1A
E-bike
SPM45600V / 3A ~ 15A
40V / 60A
60V / 40ASPM45H
SPM45L
41
Fairchild Supports Full Range of
Power Needs
www.fairchildsemi.com42
BLDC Fan Motor
Drive
Compressor
Drive
Motion-SPM
Market Opportunity
• Home appliance market is rapidly adopting inverter
technology to improve efficiency
Features and Performance
• Simple to Design
–Optimized footprint
–Built-in protection functions
–Matched component performance
• Simple to Assemble
–Reduced components
–Increases productivity and reliability
–Eliminates additional insulation material
Strategic Importance to Fairchild
• Key component in an inverter system
• Value solutions
• Growth driver for HV organization
2008
Market Size
2011
Market Size
2008 – 11
CAGR
$238M $408M 20%
Source: IMS, Fuji Chimera Institute, Fairchild
www.fairchildsemi.com
Why Use Inverters in Motion Control?
43
Because of Energy Savings and High Performance !!
Energy SavingInverter control can save average 40% electricity than conventional on/off control
ComfortableIn air contitioner, Inverter can - save cooling time (50% faster)
- Precise temperature control (±1ºC control)
SilentIn fan motor, Inverter can reduce audible noise
www.fairchildsemi.com44
Smart Power Integrated ModuleSystem Air Conditioning
Market Opportunity
• New energy regulations driving rapid increase
in variable speed drives
Features and Performance
• 3 phase IGBT inverter using HVIC reduces
auxiliary power parts
• Higher reliability
• Advanced IGBT technology
• Built-in sensing
Strategic Importance to Fairchild
• Increased functionality evolution of SPM
• Flexible structure easily modified
2008
Market Size
2011
Market Size
2008 – 11
CAGR
$42M $97M 32%
Source: IMS, Fuji Chimera Institute, Fairchild
www.fairchildsemi.com
High Voltage MOSFETTransition to Deep Trench Requires Strong IP
• Significant Design IP Required to Make Transition• Termination and isolation critical in handling high voltage• High Epi efficiency required to reduce specific resistance• No standard design approach in HV
• Process challenges and difficulties• Deep junction & long diffusion process required…3X longer than planar• Deep trench uniformity• Process control for Superjunction is challenging• Capex investment and experienced, tight maintenance control required
• Epi expertise is essential• Control the uniformity in thickness and resistivity for various HV devices• Epi process-sensitive device are common• In-house Epi capability is required
Smaller, local competitors rarely enter the HV market!
Planar MOSFETSuperjunction MOSFET
Muti-Epi tech Deep Trench tech
45
www.fairchildsemi.com46
HV MOSFET – SupreMOSPFC Switching
Source: iSuppli 2008
2008
Market Size
2011
Market Size
2008 – 11
CAGR
117M units 208M units 21%
AC Input
PFC
HV BLU
Switch
DC-DC
HV BLU
Driver
& FB
[LCD TV PSU & BLU board]
Market Opportunity
• Address the PFC switching needs in the LCD
TV market and other high power/efficiency
applications such as Servers
Features and Performance
• World-class deep Trench Super-junction
technology
Strategic Importance to Fairchild
• Next generation super-junction MOSFET
improves both cost and performance
www.fairchildsemi.com47
HV MOSFET - Ultra FRFETHV Back Light Unit
Source: Displaybank 2008
2008
Market Size
2011
Market Size
2008 – 11
CAGR
25M units 90M units 53%
ConventionalMOSFET(trr > 200ns)
UltraFRFETTM
(Ultra fast trr)
AC Input
HV inverter with Ultra-FRFET Current CCFL HV inverter
DriverDriver
PFC
HV BLU
Switch
DC-DC
HV BLU
Driver
& FB
[LCD TV PSU & BLU board]Market Opportunity
• LCD TV makers constantly driving for reduced system
cost
• HV BLU solution is more cost effective than
LVBLU
Features and Performance
• Ultra FRFETTM supports the fastest reverse recovery of
body diode and good EMI performance
• Eliminates four external diodes in existing HV BLU
• System cost reduction, eases assembly, and reduces PCB
sizes
Strategic Importance to Fairchild
• Unique solution for HV BLU applications with class
leading technology
AC Input
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Summary
• Drive for greater energy efficiency fuels demand for our
products
• Higher power supply efficiency requires greater power
management complexity and content
• Move to inverter style motors with much greater energy
efficiency creates enormous opportunity for our SPMs
• Deep trench, high voltage MOSFET and IGBT technology is IP
intensive and creates a significant competitive edge
• Revenue and margin progression will occur through a
combination of new product/technology introductions and cost
reductions
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Finance Overview
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Highlights of the Quarter – Q1 2010
Sales were $378m, up 7% QoQ and 69% YoY... Solid performance in what is typically a down sales quarter
Demand was higher across a broad range of end markets and regions
Under-shipped POS to reduce channel inventory 2% QoQ or 1/2 week to record low 7.8 weeks supply
Internal inventory held at very lean 69 DOI…higher sales more than offset the $9m increase in raw materials
& WIP
Generated $36m in free cash flow (cash from operation – capex) due to margin and earnings growth coupled
with strong asset management…Net cash positive…as cash & securities top $481m at the end of Q1
Adjusted gross margin was 32.5%, up >2 points QoQ, due to ramp of new products, mix out of less profitable
products, and higher factory loadings
Pricing remained better than typical at down <1% QoQ as customers continue to focus on product availability
Utilization increased again in Q1 causing lead times to extend. Using capacity reservations for top tier
customers (75% of sales) to continue to provide them the product support they need
www.fairchildsemi.com51
Q2 Forward Guidance & Current Market
Environment
• Sales expected to be $395 – 400m…current scheduled backlog covers low end of
this range
• Gross margin expected to improve to 33 – 34%
• R&D and SG&A forecast at $82 – 84m…<21% of sales at mid-point…making
good progress towards our target of 20% of sales
Current Market Environment
• Demand remains robust and Q2 sales and gross margin are tracking to the high end
of the range
• Demand strength remains broad based across all regions
• Backlog continues to build for Q3 indicating seasonal strength is likely
www.fairchildsemi.com52
Adjusted Revenue & GM%
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Adjusted EPS
$0.10
$(0.02)
$(0.03)
$0.11
$0.21
$0.23 $0.25
$0.21 $0.16
$0.14
$0.27
$0.33
$0.19
$0.17
$0.27
$0.06
$(0.32)
$(0.03)
$0.12
$0.23
$0.25
$(0.40)
$(0.30)
$(0.20)
$(0.10)
$-
$0.10
$0.20
$0.30
$0.40
Q1
'05
Q2
'05
Q3
'05
Q4
'05
Q1
'06
Q2
'06
Q3
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Q4
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Q1
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Q2
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Q3
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Q1
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Q2
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Q3
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Q4
'08
Q1
'09
Q2
'09
Q3
'09
Q4
'09
Q1
'10
Ad
j EP
S $
Option expense included starting in Q1 06
www.fairchildsemi.com54
Gross Margin ImprovementKey Drivers
• Growth of new product families with higher margins
• USB and Mutimedia Switches, HF Voltage Regulators, PT6 & 7 LV MOSFETs, Power Conversion T-Series, primary side regulator (PSR), SupreMOS, integrated power systems (SPM), IntelliMAX™
• Improved product mix
• Mix out standard products and older technology MOSFETs to free up capacity to support higher margin new products
• Manufacturing cost reductions and product redesigns
• Lean manufacturing techniques
• Capex spending < depreciation
• Convert to 8” wafers…Maine largely done, more to follow
• Fab process upgrades/shrinks for HV & LV MOSFETs, IGBTs and Power Conversion
• Close Mountain Top fab…current schedule Q2 2011
• Higher factory loadings
www.fairchildsemi.com55
Balance Sheet ImprovementDisciplined Asset Management
• Q1 balance sheet is strongest in the history of the company:
• Cash and investments exceed debt
• Debt at lowest level in company history at $471m
• Internal inventory at near record low of 69 DOI
• DSO at very low 37 days
• Days of payables at normal level of 45 days
• S&P recently upgraded Fairchild’s corporate credit rating to BB from BB- with a stable outlook
• Generated record $129m FCF in 2009 and on track to deliver even greater FCF in 2010
• Primary focus remains investing in our business
• Reducing debt to increase operational flexibility is also a top priority
www.fairchildsemi.com
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Q1 02
Q2 02
Q3 02
Q4 02
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
Q1 05
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Q1 06
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Q3 06
Q4 06
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Q3 07
Q4 07
Q1 08
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Q3 08
Q4 08
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Q3 09
Q4 09
Q1 10
Internal Inventory DOI Distribution Inventory DOI
56
Fairchild Inventory TrendsTight Supply Chain Control Drives Inventory to Historic Lows
Higher ratio of A to C
runners enables
Fairchild to meet
customers needs at
historically lean
inventory levels
www.fairchildsemi.com57
Capex TrendsContinued Discipline – 4 Qtr Rolling Average & 2010 Consensus
Capex budgets remain disciplined at 7 – 8% of sales for FCS & peer
group…still well below prior super-cycle peaks of 12%+
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 2010
FCS ONNN IRF NSM ISIL Average
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-
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Revenue 4 Qtr Rolling Depreciation 4 Qtr Rolling Capex
58
4 Qtr Rolling Depreciation vs Capex
Depreciation expense is returning to a
more normalized 6 – 8% of sales
www.fairchildsemi.com59
Free Cash Flow % of Revenue
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4 Qtr Rolling Free Cash Flow
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
4Q
tr R
olli
ng
Fre
e C
ash
Flo
w M
illio
ns
$
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Debt Composition & Interest Trend
0
200
400
600
800
1,000
1,200
1997 1999 2001 2007 2008 2009 2010
Mill
ion
s
Term Loan Drawn Revolver High Yield Convert
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Net Debt & Interest Trend
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
-$100.0
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Debt Net Interest % of Revenue
Cash exceeds debt for
first time in our history!
www.fairchildsemi.com63
Fairchild: The Power Franchise®
• Wireless convergence and energy efficiency mega-trends create huge market opportunities
• New products and better mix are driving improved margins
• Profitable sales growth in analog and power management products
• Better mix of products due to more new products and reduction of low margin business
• Product cost reduction driven by efficiency gains, fab shrinks, fab consolidation and new processes
• Reduced D&A due to consolidations and long term lower CAPEX spending
• Structural changes to reduce OPEX and improve earnings
• Earnings growth coupled with capex and working capital discipline expected to enable strong cash generation in 2010