1

Semiconductor Materials Outlook

Strategic Materials Conference

Dan TracySEMI Industry Research & Statistics Group

January 14, 2010

2

Outline

Update on current market and forecast for,

Fab Materials

Packaging Materials

Summary

3

Fab Materials

4

Silicon Area Shipment Index

Source: SEMI Silicon Manufacturers Group December 2009

Worldwide Wafer Area Shipment Index(Three-month moving average)

507090

110130150170190210230250

Jan-

98M

ay-9

8Se

p-98

Jan-

99M

ay-9

9Se

p-99

Jan-

00M

ay-0

0Se

p-00

Jan-

01M

ay-0

1Se

p-01

Jan-

02M

ay-0

2Se

p-02

Jan-

03M

ay-0

3Se

p-03

Jan-

04M

ay-0

4Se

p-04

Jan-

05M

ay-0

5Se

p-05

Jan-

06M

ay-0

6Se

p-06

Jan-

07M

ay-0

7Se

p-07

Jan-

08M

ay-0

8Se

p-08

Jan-

09M

ay-0

9Se

p-09

5

Photoresist Market Quarterly Sales

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

$US

Mill

ions

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09

Global Semiconductor Photoresist Sales

Advanced Positive Negative

Source: SEMI CGMG November 2009

6

Ancillary Chemicals Market (includes developers, removal chemicals, anti-reflective coatings, and other)

104117 116

89

61

95 100

$0$10$20$30$40$50$60$70$80$90

$100$110$120$130

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09

$US

Mill

ions

Global Anti-Reflective Coatings Market

*Total may differ slightly due to roundingSource: SEMI CGMG November 2009

Total Ancillary Chemicals

America18%

Europe9%

Japan27%

Taiwan17%

Korea16%

China5%

Southeast Asia8%

2009F = $1,144M

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Worldwide Wafer Fab Materials Forecast

Actual Actual Forecast

2007 2008 2009 2010 2011 Silicon Wafers1 12,830 11,924 7,229 9,010 10,052

Photomasks2 2,975 2,900 2,491 2,590 2,846

Photoresists 1,144 1,116 926 1,091 1,198

Photoresist Ancillaries3 1,219 1,225 1,144 1,350 1,483

Wet Chemicals4 904 923 905 941 983

Gases 3,229 3,100 2,515 2,965 3,257

Sputter Targets4 480 508 356 391 438

CMP Slurry & Pads5 1,024 1,007 897 1,092 1,218

Other/New Materials6 1,271 1,439 1,359 1,575 1,757

Total $25,076 $24,143 $17,822 $21,005 $23,232% Growth -3.7% -26.2% 17.9% 10.6%

US$ Millions

Source: SEMI January 2010

Totals may not add due to rounding

8

Wafer Fab Materials Forecast Notes

1. Silicon wafers include merchant sales value only; includes SOI wafers; no reclaim wafers

2. Includes captive market3. Includes resist removal chemicals, developers, anti-reflective

coatings, contrast enhancers, edge bead removers, adhesion promoters, etc.

4. Source is Techcet Group LLC, includes precious metals5. Estimates for IC applications only6. Includes low k dielectrics, copper plating solutions, dielectric

precursors, organometallic precursors, etc.7. All forecasts in current dollars8. Source for all data is SEMI, unless otherwise indicated

Source: SEMI January 2010

9 Source: Rose Associates 1978 to 1995; SEMI SMG 1995 to 2008; SEMI Forecast

75 mm

100 mm150 mm

125 mm

200 mm

300 mm

Includes polished and epi wafers. Excludes reclaim, non polished, and SOI.

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

F20

10F

2011

F

Mill

ions

of S

quar

e In

ches

Global Silicon Wafer Outlook by Diameter

10

2009F 2010F %$B $B Change

China 0.84 0.96 14%

Europe 1.93 2.27 18%

Japan 4.97 5.85 18%

Korea 2.77 3.27 18%

North America 3.20 3.76 18%

Taiwan 2.78 3.34 20%

Southeast Asia 1.34 1.56 16%

Total Regions 17.83 21.01 18%

Region

Regional Fab Materials Markets

2009 = $17.8 BillionTotals may not add due to rounding

China5% Europe

11%

Japan27%

Korea16%

North America

17%

Taiwan16%

Southeast Asia8%

Source: SEMI January 2010

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Packaging Materials

12

Leadframes-Shipments return to year ago levels

Source: SEMI December 2009

Global Leadframe Shipments

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jan-

06

Mar

-06

May

-06

Jul-0

6

Sep

-06

Nov

-06

Jan-

07

Mar

-07

May

-07

Jul-0

7

Sep

-07

Nov

-07

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Mill

ions

of U

nits

IC Discrete

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Gold Bonding Wire:Transition to Smaller Diameters

% Share of Gold Wire Market by Diameter

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009E

>30 micron 25-30 micron <25 micron

Source: SEMI and TechSearch International, Global Semiconductor Packaging Materials Outlook

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Worldwide SemiconductorPackaging Materials Forecasts

Actual Forecast

2007 2008 2009 2010 2011Leadframes $3,289 $3,013 $2,586 $2,908 $2,976Organic Substrates1 6,656 7,586 6,967 7,674 8,255Ceramic Packages 1,574 1,501 1,290 1,388 1,429Encapsulation Resins 1,624 1,475 1,284 1,464 1,559Bonding Wire3 3,592 3,968 3,838 4,359 4,446Die Attach Materials4 612 588 582 650 682Others5 242 193 179 207 233

Total $17,589 $18,324 $16,726 $18,650 $19,580

% Growth 4.2% -8.7% 11.5% 5.0%

US$ Millions

Source: SEMI November 2009

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Semiconductor Packaging Materials Forecast Notes

1. Source is TechSearch International. Includes PBGA, PPGA, LGA, and CSP laminate substrates and flex BGA and CSP substrates

2. Assume gold value of $660/trz for 2007, $872/trz for 2008, $920 for 2009-2011 forecast period

3. Includes die attach film (tape) materials4. Other includes solder balls and wafer level package

dielectrics5. Source for all data is SEMI, unless otherwise indicated6. All forecasts in current dollars

Source: SEMI November 2009

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Packaging Materials Unit Outlook

160.7

18.0

343

7,055

2010F7,4796,5737,574Organic Substrates

(K square meters)

171.3137.4158.0Mold Compound (millions of kg)

20.315.415.8Bonding Wire (billions of meters)

365300331Leadframes(billions of units)

2011F2009F2008Segment

Source: SEMI and TechSearch International, Global Semiconductor Packaging Materials Outlook

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Regional Semiconductor Packaging Materials Markets

2009 = $16.7 Billion

2009F 2010F %$B $B Change

China 2.42 2.84 17%

Europe 0.55 0.59 7%

Japan 2.71 2.84 5%

Korea 1.95 2.17 11%

Americas 0.48 0.52 8%

Taiwan 3.97 4.51 14%

Southeast Asia 4.65 5.18 11%

Total Regions 16.73 18.65 11%

Region

Totals may not add due to rounding

Southeast Asia28%

Taiwan24% Americas

3%

Korea12%

Japan16%

Europe3%

China14%

Source: SEMI November 2009

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Trends in China:Packaging houses

- More than 15 companies are capable of substrate-based packaging technology- Seven bumping fabs with wafer size arranged from 125mm to 300mm- TSV for CIS is under mass production

Packaging Materials- China is estimated to represent about 15% of the packaging materials market in 2010- Substrate drives the growth of packaging material market in the next several years- China headquartered packaging material suppliers have made progress in developing

and manufacturing leadframes, bonding wires, mold compounds, solder balls, and plating chemicals

China Semiconductor Packaging Market

Source: SEMI China Semiconductor Packaging Market Overview (new report to be issued)

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Summary

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SEMI® 2009 Materials Forecast By Market Region

$0$5

$10$15$20$25$30$35$40$45$50

N. America Japan Taiwan Europe S.Korea China Southeast Asia

Southeast Asia 6.79 6.90 5.99 6.74 7.12China 3.31 3.57 3.26 3.80 4.16S.Korea 6.10 5.90 4.71 5.44 5.92Europe 3.68 3.29 2.47 2.86 3.08Taiwan 8.34 7.90 6.76 7.85 8.55Japan 9.19 9.98 7.67 8.69 9.34N. America 5.25 4.93 3.68 4.27 4.63

2007 2008 2009F 2010F 2011F

US$

Bill

ions

$42.47

$34.55

Totals may not add due to rounding.

Source: SEMI January 2010

$42.67 $42.81$39.65

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Summary• Semiconductor Materials Market

– 2009 forecasted to decline -19% overall• -26% decline in Fab Material spending• -9% decline in Packaging Material spending

– 2010 outlook to be inline with overall semiconductor market growth

• +18% increase in Fab Material spending• +11% increase in Packaging Material spending