A publication of WACHOVIA CAPITAL MARKETS, LLC Equity Research September 18, 2008 Semiconductor Primer 2008 An Overview Of The Semiconductor Industry Source: Comstock Images\Jupiter Images Semiconductors/Computer Hardware/Cell Phones David Wong, Ph.D., CFA, Senior Analyst (212) 214-5007 / david.wong@wachovia.com Lindsey Matherne, Associate Analyst ( 2 ) - 2 / l i n d s e y m a t h e r n e @ w a c h o v i a c o m Brian Cutlip, Associate Analyst (212) 214-5009 / brian.cutlip@wachovia.com Amit Chanda, Associate Analyst ( ) 5 - 3 / a mi t c h a n d a @ w a c h o v i a c o m Please see page 75 for rating definitions, important disclosures and required analyst certifications WCM does and seeks to business with companies covered in its research reports As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision SECOCE091808-100152 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 TABLE OF CONTENTS Map Of The Semiconductor Industry Semiconductor Companies Types Of Semiconductors Semiconductor End Markets Semiconductor Industry Dynamics Growth The Semiconductor Cycle 14 Pricing 16 Capacity 18 The Rise Of The Foundries 24 Semiconductor Inventory And The Electronics Supply Chain 27 Semiconductor Segments 33 Analog 35 Logic 36 Memory 37 Discrete Components 39 Sub-Segments Of Interest 42 Microprocessors 42 Memory 47 Analog 56 Selected Technology Topics Semiconductor Wafers And Chips 61 Manufacturing Transitions—Line Widths And Wafer Size 61 Calculating The Number of Circuits Of A Wafer (Die Per Wafer) 63 Transistors—What They Are And Some Technical Terms 64 The 4GB DRAM Ceiling 66 Solid State Drives (SSDs) Versus Hard Disk Drives (HDDs) 66 Appendix A: Glossary 68 Appendix B: Semiconductor Companies 73 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductors/Computer Hardware/Cell Phones This page intentionally left blank WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 Map Of The Semiconductor Industry Semiconductor Companies Worldwide semiconductor sales amounted to more than $270 billion in 2007 Figure lists the world’s largest semiconductor companies by 2007 revenue share Figure The World’s Largest Semiconductor Companies By Revenue Share (2007) STMicro 4% Texas Instruments 4% Toshiba 4% Samsung 8% Intel 12% Hynix 3% Renesas Infineon (excluding AMD Qimonda) 3% 2% 2% NXP Qualcomm 2% 2% NEC Freescale 2% 2% Sony 2% Micron 2% Matsushita 2% Other 32% Companies with 1% Share Each: Qimonda; Broadcom; Elpida; Sharp; Nvidia; IBM; Marvell; Rohm; Fujitsu; Analog Devices *Numbers due not sum to 100% in pie chart due to rounding Source: Gartner, Wachovia Capital Markets, LLC • The semiconductor industry as a whole is somewhat fragmented The top ten companies make up slightly less than half of total semiconductor sales However, the industry contains several quite distinct segments, of which many semiconductor companies focus on just one or two As a result, there are a number of major segments and sub-segments in which there are just two or three primary competitors We discuss this in more detail further on in this report • Intel is the largest semiconductor company, accounting for 12% of total semiconductor sales The bulk of Intel’s business is related to the computer end market, with Intel being the market leader in microprocessors • Samsung is the second-largest semiconductor company, with 7% of total sales in 2007 However, semiconductor sales make up about one-fourth of total sales for Samsung Electronics Memory, as in dynamic random access memory (DRAM) and NAND flash, accounts for 65-75% of Samsung’s semiconductor revenue The largest semiconductor companies typically manufacture their own products However, there is another group, known as the fabless companies, which design their own chips, but have other companies, known as foundries, manufacture these chips Figure shows the largest fabless companies by 2007 revenue share WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductors/Computer Hardware/Cell Phones Figure 2: Top Fabless Companies By Revenue Share (2007) Nvidia 8% Broadcom 7% Marvell 5% Sandisk 7% LSI Logic 5% Qualcomm 11% Mediatek 5% Xilinx 3% c Avago 3% Altera 2% Others 44% Source: Global Semiconductor Alliance (GSA), Wachovia Capital Markets, LLC • Qualcomm, a producer of semiconductor chips for wireless handsets, is the world’s largest fabless company, with an 11% revenue share One of Qualcomm’s largest competitors, Texas Instruments (TI), has a mixed manufacturing model While TI does a substantial amount of its own manufacturing, it also outsources some chip production to the semiconductor foundries • Nvidia, a primary player in the graphics chip market, is the second-largest fabless company, with an 8% share of total fabless revenue • Broadcom and Sandisk are tied for third place, with 7% share each Broadcom is a producer of a wide range of communications chips Sandisk is unusual for a fabless company in that it competes in the memory market (NAND flash) against competitors that mostly their own manufacturing, though Sandisk does have manufacturing alliances (with Toshiba, for example) and gets actively involved in developing NAND manufacturing technology WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 Types Of Semiconductors Figure Types Of Semiconductors (2007) Optos & Sensors 7% Discretes 8% Total ICs 85% Source: Semiconductor Industry Association, Wachovia Capital Markets, LLC Semiconductors can be divided into three broad categories (see Figure 3): • Integrated circuits (IC) ICs are semiconductor devices (chips) on which an entire electrical circuit is created Eighty-five percent of all semiconductor sales are of integrated circuits ICs are used for most electronics applications in which semiconductors are needed The price of an integrated circuit can range from tens of cents to several thousand dollars, with the average price of an integrated circuit currently running at about $1.45 Most of our discussion in this report will be centered on ICs since they account for the bulk of the industry and most of the major semiconductor companies are primarily IC companies • Discrete semiconductors Discrete semiconductors are single semiconductor devices (as opposed to integrated circuits, which are made up of several devices all connected together on the same chip) Discretes are used in many electronic applications, but one important use of discrete devices is in managing electric power Prices for discrete semiconductor devices range typically from a few cents to a dollar a more, with the average price for a discrete being $0.05 Discretes account for 8% of total semiconductor sales • Optoelectronics and sensors Optoelectronics can be used to generate light (e.g., for displays, for traffic lights, lasers for communications) or sense light (e.g., in digital cameras) Generally the technology used to make optoelectronic devices is different from that needed to make integrated circuits or what we have defined as discrete semiconductor devices, and so there is, for the most part, a different set of companies that participates in this segment Sensors are used to sense temperature, pressure, acceleration (e.g., to activate the airbag in a car), and other things As with optoelectronics, this is a fairly small segment of semiconductors with its own somewhat unique set of participants We not discuss optoelectronics or sensors further in this report We discuss the various types of semiconductors in more detail further on in this report WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductors/Computer Hardware/Cell Phones Semiconductor End Markets Figure Semiconductor End Markets (2007) Mil/Aero/Other 1% Industrial 10% Other Data Processing 7% PCs 32% Auto 7% Wired Communications 6% Wireless Communications 19% Consumer Electronics 18% Source: Gartner and Wachovia Capital Markets, LLC Figure shows semiconductor sales by end market • Personal computers (PC) account for one-third of all semiconductor sales Together with “other computing,” computing as a whole consumes about 40% of all semiconductors (2007) Although the computing market may have slower growth potential than some of the other semiconductor end markets, it remains very important Computing tends to require leading-edge semiconductor technology, especially in microprocessors and memory (DRAM) • Wireless communications (mostly wireless handsets) account for a little less than one-fifth of semiconductor consumption, but are a high-volume segment, as more than 1.1 billion wireless handsets were shipped worldwide in 2007 Wireless handset units are currently growing in the 15-20% per year range, and we think that as handsets get more sophisticated, there may be good opportunities for increasing semiconductor content per handset • Over the past few years, there have been new consumer electronics devices (e.g., digital cameras and Apple’s iPod) with high semiconductor content We expect the development of high-semiconductorcontent consumer devices to be an ongoing driver for this segment of semiconductor demand In particular, we expect consumer electronics to become an increasingly important semiconductor end market • Increasing semiconductor content is also a driver for semiconductor growth in the automotive end market Semiconductor applications in cars include sensors (e.g., every airbag has a micromechanical semiconductor sensor that triggers on the rapid deceleration that occurs in a crash), microcontrollers (e.g., antilock brakes), wireless (e.g., the signal that tells the car to lock its doors), electronic power (e.g., the drivers that lock and unlock the doors), and displays (e.g., dashboard lighting) With the growing popularity of on-board navigation systems and TV monitors, we expect semiconductor demand to be lifted by the technological evolution of the automotive industry WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 Semiconductor Industry Dynamics In this section we use worldwide IC data to discuss semiconductor industry dynamics because ICs account for the bulk of semiconductor sales and most of the semiconductor companies of interest to us sell ICs Overall growth of semiconductors, including discrete components, optoelectronics, and sensors, has for the most part been lower than growth for ICs alone in the past, and we expect this trend to continue In 2007, worldwide IC sales amounted to $218 billion and growth was 4% yr/yr, while total worldwide semiconductor sales were $256 billion and growth was 3% yr/yr Growth Figure Worldwide Semiconductor Sales With Growth Trends Monthly Sales ($000s) $100,000,000 $10,000,000 $1,000,000 Semiconductor Shipments 16%/yr (1980-2000) Dec-06 Dec-04 Dec-02 Dec-00 Dec-98 Dec-96 Dec-94 Dec-92 Dec-90 Dec-88 Dec-86 Dec-84 Dec-82 Dec-80 Dec-78 Dec-76 $100,000 Integrated Circuit Shipments 12%/yr (2000-08) Source: Semiconductor Industry Association, Wachovia Capital Markets, LLC Figure details total worldwide semiconductor and IC sales in dollar terms on a log scale in order to show the long-term growth trend Figure shows IC data on a linear scale • Semiconductor sales grew at a rate of about 16% per year from 1980 to 2000, with IC growth 1-2 percentage points per year above this The IC growth rate is slightly above the total semiconductor growth rate because discrete devices and optoelectronics tend to show less growth than ICs Over the decades, there has been some amount of movement toward integrating one or more discrete components into an IC Also, the opportunities for improving mix to higher-priced products are more limited for discrete semiconductors than for ICs • Although there is, we think, a widely held belief that there was excessive buying of technology-related goods in 1999 and 2000, the graph does not show semiconductor sales above the longer-term trend line in 1999 or 2000 • Following the severe downturn in 2001, semiconductor sales in dollar terms remain far below the trend line we have drawn to fit the earlier period, and more in line with the later trend of 12% per year growth Discretes make up a far smaller portion of total semiconductor sales today than in the 1980s, and so IC sales growth is close to total semiconductor sales growth today Semiconductors/Computer Hardware/Cell Phones WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT 24,000,000 22,000,000 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Dec-77 Dec-78 Dec-79 Dec-80 Dec-81 Dec-82 Dec-83 Dec-84 Dec-85 Dec-86 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Three-Month Rolling Average Shipments $000s Figure Total Worldwide IC Sales (Three-Month Rolling Average) Source: Semiconductor Industry Association, Wachovia Capital Markets, LLC • In Figure it can be seen that semiconductors have been improving steadily from trough levels since early 2002, though sales did not exceed year-2000 highs until the end of 2005 • The seasonal pattern can be seen in Figure Prior to 2005, semiconductor sales were usually down in the first 2-3 months of each year following a December high, but then rose sharply throughout the rest of the year In late 2004 and early 2005, an inventory correction suppressed chip sales, with a seasonal recovery taking hold only in Q3 However, in 2006 and 2007, chip sales followed a similar pattern, with relatively flat month-to-month sales in H1, followed by rising sales in H2 • The Semiconductor Industry Association (SIA) data also show a month-to-month seasonality within a quarter, with shipments in the last month of each calendar quarter being significantly higher than shipments in the first month of the quarter (we have smoothed this out in the graphs presented here by using a three-month rolling average) We believe that this does reflect real business patterns at chip companies, though we wonder whether the extent to which sales swing through the three months of the quarter may be in some cases exaggerated by the way companies report shipments to the SIA An interesting picture emerges when we look at worldwide semiconductor unit shipments as opposed to sales in dollars • Total semiconductor unit shipments have always been significantly higher than IC unit shipments because of the large number of low-priced discrete chips that are sold The financial community often looks at semiconductor unit shipment trends to make decisions about semiconductor stocks (and semiconductor equipment stocks in particular) We think that it is important to look at total unit shipment trends, but we normally quote and discuss IC shipment unit data, not total semiconductor shipment numbers Discrete semiconductors have an average selling price (ASP) of about $0.05, versus the IC ASP of close to $1.50 Therefore, discrete semiconductors account for a far larger percentage of unit shipments than their proportion of economic value to the semiconductor industry Also, the manufacturing equipment needed to make ICs is far more expensive and sophisticated than that needed to make discrete semiconductor devices • IC unit shipment growth has averaged 10% per year for more than two decades, from 1985 to mid-2008 Unit shipments for ICs grew at a rate of 10% per year from 1985 to 2000, percentage points less than growth in sales in dollar terms This implies pricing expansion during this period • As with sales in dollars, the years 1999 and 2000 not appear to be years of excessive buying of semiconductor product in unit terms, although the unit shipments are in slightly higher percentages than the long-term trend of 10% per year 10 Semiconductors/Computer Hardware/Cell Phones WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT The 4GB DRAM ceiling We believe that one intermediate-term risk for the DRAM industry is the fact that computers using 32-bit operating systems are unable to make use of more than 4GB of memory This puts an upper limit on the amount of memory that computer buyers are likely to want in their PCs until the use of 64-bit operating systems becomes widespread Microsoft offers both 32-bit and 64-bit versions of Vista However, we believe that the bulk of PCs will continue to ship with the 32-bit version of Vista for awhile since most software currently available will not run on a 64-bit operating system HP’s website advises computer buyers that a 64bit operating system is needed to take advantage of 4GB or more of memory, and that a 32-bit operating system recognized only up to 3GB of memory The number of bits of an operating system refers to the number of 1s and 0s a computer uses in any instruction One use of instructions is to locate the position of information in the computer’s memory The total number of addresses that can be identified with any given number of bits (i.e., location No 1, location No etc in the DRAM chip) is two, raised to the power of the number of bits available (2x2x2x2… multiplying as many time as there are bits) For example, with two bits, 2^2 = locations can be referenced: 00, 01, 10, 11 In this simple example, in a 2-bit operating system, it would only be possible to use bytes of DRAM memory If a microprocessor cannot identify an address, it cannot use that part of the DRAM Even if a DRAM chip with bytes of memory was part of the computer, a microprocessor with a 2-bit operating system can refer only to the addresses 1, 2, 3, and 4, and therefore cannot use the locations 5, 6, 7, or in the DRAM In a 32-bit operating system, the total number of bits of memory that can be used is 2^32, which happens to be 4,294,967,296 This is just a bit below 4.3 billion bits of memory, or 4.3 GB However, in practice, there are often some other bits of memory the microprocessor has to get to in addition to the main DRAM For example, the microprocessor needs to be able to access memory associated with the graphics processor if there is a discrete graphics processor in the PC Therefore, with a 32-bit operating system, the maximum DRAM that can actually be used by the microprocessor is typically a little below 4GB Solid State Drives (SSD) Versus Hard Disk Drives (HDD) The use of NAND flash to make solid state drives for computers, especially notebook computers, is an important future trend that we think will pick up momentum in H2 2009 The drives are termed “solid state” drives because an old term to describe semiconductor transistors is “solid state,” as opposed to vacuum tubes SSDs, in principle, offer the following advantages over hard disk drives, which make them particularly interesting for notebook computers: • SSDs use less power, in part because there are no mechanical parts that use power An HDD has one or more disks that rotate at high speeds • SSDs are more robust and tolerant to movement In an HDD there is a disk that rotates at high speeds with a magnetic head which has to position itself a tiny distance from the disk to read the magnetic signals • SSDs can access data more quickly Among other things this can improve the start-up time of a notebook These advantages are particularly important for notebooks However, for solid state drives to achieve widespread use in notebooks and in computers in general, they must have a cost that is close to that of a hard disk drive As of the time of writing of this report, the cost to make a low capacity (a few GB) solid state drive is lower than that of a hard disk drive, but the cost of a medium- to high-capacity drive (several tens of GB to hundreds of GB) is higher than that of a hard disk drive For this reason, SSDs are being offered in many low-cost notebooks and as an option in high-end notebooks, but have not become important in highvolume mainstream notebooks as yet We think that the cost of SSDs could well drop to a level at which they begin to be included in a significant percentage of mainstream notebooks by H2 2009 The following are some simple calculations and considerations related to the cost of HDDs and SSDs (1) An HDD must have a magnetic platter (the hard disc) and a sophisticated read/write head etc., so there is a minimum cost, no matter how little memory is on it Generally standardized hard disk drives are not 66 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 sold with just 1GB of memory on them, but if they were, their cost/price would probably be comparable to that of HDDs offering several tens of GB It is only when a hard disk drive reaches very high capacities (100GB or more) that the cost of the hard disk drive goes up (see Figure 66) (2) Unlike a hard disk drive, flash memory has a low starting cost, maybe a few dollars for the controller The cost of any given amount of NAND flash scales fairly linearly with the amount of flash (though there is a somewhat fixed packaging and test cost for the chips.) (This is illustrated in Figure 66.) The cost/capacity graph for an SSD is roughly a straight line with a fairly small initial cost Today (September 2008) the cost of 1GB of MLC NAND flash is about $1.60 Since 1GB = Gb this $1.60 price we have quoted we have quoted is the price of an Gb chip This price was about $5 early in 2007 and rose to as high as $9 by mid-2007, then dropped through the end of 2007 and H1 2008 (3) For PC storage applications, MLC (multi-level cell) flash is used rather than SLC (the single-level cell) flash, which is more expensive MLC flash stores two bits of information per cell and SLC just one, so MLC flash is about half the cost of SLC flash SLC flash is being used in enterprise-level drives, which need higher performance and reliability, but which can also command a higher price (4) Today many low-cost notebooks are made with solid state drives having capacities that range from 2GB to 20GB of NAND flash The content of the NAND flash memory chips in a 2GB SSD is just a little above $3, which makes such a low-capacity SSD less expensive than a hard drive (5) A typical real notebook, though, might have perhaps 100GB of hard drive on it today If we reckon that the transition to SSDs might begin to gather momentum in mainstream notebooks when the price of a 64GB SSD is roughly the same as a 64GB HDD, it might perhaps be necessary for the 32GB of NAND memory content in the drive cost, we estimate, to be close to $30 At a price of $0.50 per GB, the cost of $64GB of NAND flash memory is $32 The price/bit for NAND flash might need to drop by about a factor of from where it is today to hit the right cost structure for broader adoption of SSDs in mainstream notebooks Figure 66 SSDs Versus HDDs Solid State Drive (SSD) Total Cost of Drive Hard disk drive (HDD) Lower NAND Cost Number of Gigabytes Source: Wachovia Capital Markets, LLC 67 Semiconductors/Computer Hardware/Cell Phones WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Appendix A: Glossary A/D converter see analog-to-digital converter analog something that processes information in the form of continuous voltage and current A circuit can be analog or digital A digital circuit thinks in terms of just a “1” or a “0”, whereas an analog circuit has to deal with everything in between (0.1, 0.15, 0.2 … etc) Analog circuits have different requirements and sensitivities from digital circuits and so require different design and manufacturing techniques Typically analog chip manufacturing does not require leading-edge equipment and so is less capital intensive than digital chip manufacturing Both logic chips and memory are typically digital analog-to-digital converter data conversion chip that takes a continuous analog signal and converts it to a stream of digital numbers by making measurements of the height (voltage of the signal) at regular time intervals ASIC (Application Specific Integrated Circuit) a custom-designed chip, as opposed to an off-the-shelf generic chip ASSP (Application Specific Standard Products) a name for something that isn’t an ASIC – a standard product designed for a specific purpose bit see megabit byte a byte is bits See megabit capacitor a device in electronic circuits that can store electric charge (electrons) capacity utilization actual output of a semiconductor fab or group of fabs as a percent of what the fab is theoretically capable of As a rule of thumb, we consider 90-100% capacity utilization as a healthy level of utilization In principle, 100% is the maximum capacity utilization a fab or a company can achieve TSMC has in the past quoted capacity utilization of as much as 110% chip a piece of semiconductor containing a circuit Also called a die clock, clock frequency many chips are synchronous in operation, which means that a clock signal needs to be generated and all calculations or other operations in the circuit wait for the next beat of the clock before they happen This makes sure that signals are transferred at the same time, avoiding errors that may occur as a result of one thing happening earlier than something else The higher the clock frequency, the more things that can happen per second, and the more the chip can achieve Typical clock frequencies are 100s of megahertz (hundreds of million times per second) or several gigahertz (several billion times per second) computing cloud a network of large data centers and high-end servers which facilitate remote access to centrally located software programs via a suitable internet connection The idea of a computing cloud is to spread an extremely large amount of computing power to a variety of users who individually lack the resources to acquire such a high volume of data CMOS “Complementary MOS.” A type of integrated circuit Most digital semiconductor circuits are CMOS these days A CMOS circuit uses two types of transistor, NMOS and PMOS The predecessor to CMOS logic was NMOS logic A circuit might also be bipolar rather than CMOS And bipolar circuits are occasionally used for analog applications, but CMOS has also achieved widespread use even in analog See definition of MOS contract price, contract market semiconductor memory can be bought on contract, in which prices are negotiated in advance, twice per month, or on the spot market, which offers a constantly changing price The bulk of DRAM is sold on contract, but the spot market is often thought to be a leading indicator of contract pricing CPU (central processing unit) the brain of a computer, also known as a microprocessor D/A converter see digital-to-analog converter DDR, DDR2 DDR stands for double data rate DDR and DDR2 are types of DRAM memory, in which operations can happen twice in a clock cycle (hence the term double) 68 Semiconductor Primer 2008 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT data converter a digital-to-analog or analog-to-digital chip See digital-to-analog converter and analog-todigital converter die a square of semiconductor (usually silicon) containing a circuit die bank this refers to chip companies sometimes choosing to keep their semiconductor inventory in the form of fully processed wafers rather than cutting up the wafers into chips and packaging them die size The size of a semiconductor chip Semiconductor circuits are created on wafers of silicon, round discs 200mm or 300mm in diameter An individual chip (die) can have a size ranging from a square or rectangle with a length/width anywhere from mm to more than cm It is a fixed cost to process a wafer, and so the smaller the die, the more die there are on a wafer, which decreases the cost of each die die per wafer the number of chips that can be made on a single wafer See “die size” definition digital-to-analog converter data conversion chip that takes a stream of numbers and makes them into a continuous signal diode one of the simplest types of semiconductor device that can be made A diode allows electricity to flow in one direction but not the other If the diode is made of the right type of semiconductor, when current flows through it, it will give off light This is a light emitting diode (LED) discretes A semiconductor product that is just a single device (e.g., a transistor) rather than an integrated circuit with many devices (up to hundreds of millions of transistors) all connected together on the same chip Typically discretes are fairly inexpensive chips (priced in the range of cents to tens of cents.) The silicon cost of discretes is relatively low, packaging costs can be fairly significant DRAM (dynamic random access memory) a type of memory that is most commonly used as the main memory in a computer DRAM is “volatile” memory, which means that it forgets what it is supposed to remember when the power is switched off, as opposed to “non-volatile” memory (flash memory is one type of non-volatile memory), which remembers its information even with the power off See RAM DSP (digital signal processors) a chip that is designed to be particularly good at computations used in processing communications signals equivalent wafers see wafer equivalent fab a factory (fabrication facility) for processing semiconductor wafers to create semiconductor chips fabless refers to a company that does not have its own fab, but rather, outsources its chip production to a company with fabs (examples of fabless companies include Broadcom and Nvidia, while fab companies include AMD, Intel) floor capacity the capacity a fab would have if it was filled completely with semiconductor manufacturing equipment Often only part of a large fab is initially filled with equipment, and so installed capacity is less than floor capacity foundry typically a semiconductor manufacturer that makes chips for fabless companies TSMC (Taiwan Semiconductor Manufacturing Corporation) is the world’s largest foundry, UMC (also in Taiwan) the second largest, and Chartered Semiconductor (Singapore) the third largest frequency see clock frequency gigabit A quantity of memory 1000 megabits (actually 1024 megabits) See megabit gigabyte A quantity of memory 1000 megabytes (actually 1024 megabytes) See megabit gigahertz (GHz) a billion times per second See clock hard disk drive (HDD) the standard bulk memory device in a personal computer Most computer contain DRAM for storing the information that the microprocessor needs immediately, when the computer is switched on, and bulk memory to store all the files permanently, even when the computer is switched off In a hard disk drive the information is stored on one or more magnetic disks (hard disks) HDD see hard disk drive 69 Semiconductors/Computer Hardware/Cell Phones WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT IC See integrated circuit integrated circuit (IC) A silicon chip on which many (ranging from tens of transistors to hundreds of millions of transistors) are connected together, all on the same chip See discretes for comparison installed capacity The manufacturing capability of the manufacturing equipment in a fab This is sometimes less that floor capacity (see the definition of floor capacity) interface chips Analog chips that provide the interface onto standardized communications signal lines; they are the chips responsible for driving the electrical voltages/currents down the lines For example, in a computer, there would be some PCMCIA chips for driving signals down a PCMCIA bus Linear Another word for analog; see analog line width A semiconductor circuit is made by creating a series of patterns in a number of semiconductor, insulator and metal films that are laid one on top of another The narrowest width that can be used in a pattern is referred to as the line width As technology develops, the line width drops, and so each feature can be made smaller, resulting in either smaller chips, or more typically, chips of the same size that contain more transistors and other devices on them Today leading-edge semiconductor manufacturing is done on 65 nanometer (nm) line widths (Intel is beginning to transition to 45nm technology), with a substantial percentage of worldwide semiconductor manufacturing in fact being done in line widths that are 90nm or larger logic chip a chip that thinks (can computations or make decisions), as opposed to a memory chip (a chip that remembers) or an analog chip (a chip that deals with sending or receiving signals) Examples of logic chips include microprocessors, microcontrollers and programmable logic devices megabit a bit refers to a single “1” or “0” Memory size is measured in the number of bits (the number of separate 1s or 0s) that a memory can store A megabit is approximately a million bits Because of the way memory locations are defined (as a string of 1s and 0s), the amount of memory provided in a chip is not exactly a million bits for a megabit, but actually some number that is 2n In fact, a megabit is 1,048,576 bits The fact that the amount of memory is always defined as a power of two also explains the various choices of standard memory size (e.g., 256Mb, 512Mb etc.) megabyte A quantity of memory megabits make up a megabyte See megabit megahertz (MHz) a million times per second See clock memory a chip that remembers information The two most common types of memory are DRAM (volatile memory) and flash (non-volatile memory) Memory chips tend to be commodity-like in their sales characteristics; prices change on a daily basis on the spot market and contract prices are generally renegotiated twice per month The commodity-like nature of memory makes memory manufacturing very capital intensive, since leading-edge technology is needed to get the lowest costs (the smaller a chip can made, the less expensive it is.) Most of the major memory companies run their own fabs; there are relatively few fabless memory companies memory cell a piece of circuitry that makes up one unit of memory in a memory chip microcontroller a simple thinking chip like a microprocessor but smaller and less smart Electronic devices like washing machines have microcontrollers to the simple thinking required to run themselves microprocessor a chip that is used as the thinking part of a computer It is sometimes call a CPU or the central processor unit MLC see multi-level cell MOS (metal oxide semiconductor) This is a reference to a type of transistor (see definition of transistor below), the one that is most commonly used in integrated circuits today The term MOS is misleading since almost all MOS transistors today are really silicon-oxide-silicon structures Intel is transitioning to “metalgate” transistors, but we believe that even with these new transistors the metal gate is not a pure metal There are two types of MOS transistors: NMOS and PMOS Together NMOS and PMOS transistors can be connected to create a CMOS (complementary MOS) circuit See definition of CMOS above 70 Semiconductor Primer 2008 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT multilevel cell (MLC) a NAND memory cell that can store more than one bit a “1” and/or “0” at the same time Today NAND MLC is invariably a two-level cell two “1”s and/or zeros stored in one cell: 00, 10, 01, or 11 nanometer a billionth of a meter, denoted by the symbol nm Semiconductor manufacturing technology is described by the smallest width of a line that can be created in that technology Currently, the most advanced technology is 45nm NAND flash as opposed to NOR flash NAND is a type of flash memory (non-volatile) that is used in nonvolatile memory applications in which low cost and/or a large amount of memory is needed, typically consumer applications such as storage for digital cameras, music storage for iPods, and removable storage for computers From a circuit point of view, NOR flash differs from NAND flash because it is random access, information in any cell can be looked at, at any point in time Therefore, there must be a connection (a bit line contact) to every memory cell, increasing the size of the cell NAND flash is serial access, a whole row of cells must be read, one after another This reduces the size of the NAND flash cell (no need to have a bit line contact per cell) reducing the cost However, it also reduces the speed of the NAND flash, as well as increasing the error potential; if something goes wrong with one cell it can become impossible to get information in and out of a whole row Non-volatile memory memory that retains its data when the power source is removed NMOS a type of MOS transistor (see definition of MOS above) in which the electrical current comes from the flow of electrons (negative charged particles, hence the “N” in NMOS) NOR flash as opposed to NAND flash NOR flash is used mainly for code storage in cell phones From a circuit point of view, NOR flash differs from NAND flash because it is random access; information in any cell can be looked at, at any point in time Therefore, there must be a connection (a bit line contact) to every memory cell, increasing the size of the cell NAND flash is serial access; a whole row of cells must be read, one after another This reduces the size of the NAND flash cell (no need to have a bit line contact per cell) reducing the cost However, it also reduces the speed of the NAND flash as well as increases the error potential; if something goes wrong with one cell it can become impossible to get information in and out of a whole row optoelectronics a type of semiconductor chip/device, not an integrated circuit, that deals with converting light to electronic energy and vice versa PLD (programmable logic device) an integrated circuit that can be programmed to perform complex logic functions PMOS a type of MOS transistor (see definition of MOS above) in which the electrical current comes from the flow of positive charges (hence the “P” in PMOS) RAM (random access memory) a semiconductor memory in which the information can be retrieved in from any memory cell without looking through all the other memory cells DRAM and SRAM are random access NOR flash is random access, but NAND flash is serial access For a NAND memory, all the cells in a whole line (a row) must be looked at one after the other Random Access Memory (RAM) – see RAM semiconductor a material that is neither a good conductor nor a good insulator, but can exhibit both properties The most commonly used semiconductor material is silicon sensor a chip/device that can sense heat, light, or pressure and generate a corresponding signal that can be measured or interpreted single-level cell (SLC) as opposed to a multilevel cell, a single-level cell is a NAND memory cell that can store just one memory bit (a or a 0) at a time SLC see single level cell Solid-state drive (SSD) a form of computer memory, replacement for a hard disk drive, made of NAND flash memory 71 Semiconductors/Computer Hardware/Cell Phones WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT spot price, spot market semiconductor memory can be bought on contract, in which prices are negotiated in advance, twice per month, or on the spot market which offers a constantly changing price The bulk of DRAM is sold on contract, but the spot market is often thought to be a leading indicator of contract pricing SDRAM synchronous DRAM, not to be confused with SRAM A type of DRAM SDRAM was used in the 1990s, but in the past two years DDR has become the standard type of DRAM SRAM (static random access memory) type of volatile memory that is generally faster and more reliable than DRAM due to the fact that it does not have to be refreshed like DRAM It is generally more expensive and is commonly used as cache memory in a computer standard linear standard analog chips for doing generic tasks (as opposed to applications-specific functions), general sold through catalogs synchronous many chips are synchronous in operation, which means that a clock signal needs to be generated and all calculations or other operations in the circuit wait for the next beat of the clock before they happen This makes sure that signals are transferred at the same time, avoiding errors that may occur as a result of one thing happening earlier than something else The higher the clock frequency, the more things that can happen per second, and the more the chip can achieve Typical clock frequencies are 100s of megahertz (hundreds of million times per second) or several gigahertz (several billion times per second) transistor a basic building block of integrated circuits generally working as a switch (turning on or off the flow of electrons) or as an amplifier (making a small voltage bigger) The term transistor comes from the concept of trans-resistance, being able to influence a current in one place by a current or a voltage in another place The first transistors were not semiconductor transistors at all, but vacuum tubes volatile memory memory that loses its data when the power is turned off wafer a round semiconductor disk, about half a millimeter thick, most commonly with a diameter of or 12 inches, on which semiconductor circuitry is made After a wafer has passed through the circuit fabrication process, it is cut up into squares, the semiconductor chips, each containing a circuit wafer capacity the rate at which semiconductor wafers can be processed in a semiconductor fab, typically described in wafer starts per week or wafer starts per month (how many wafers begin being processed in a week or month) wafer equivalent Since the transition to different wafer sizes often takes place over the span of years, at any given point in time the semiconductor industry as a whole is doing its manufacturing on more than one size of wafer A lot of manufacturing is done on 200mm (8 inch) and 300mm (12 inch) wafers, but there still remains some manufacturing on 6-inch and even some 5-,4- and 3-inch wafer processing To normalize all these different wafer sizes, capacity numbers (and other things associated with wafers, such as, for example, prices charged per wafer by foundries) are often couched in “wafer equivalent” numbers A 300mm wafer has 2.25x the area of a 200mm wafer, and hence, 2.25 more chips can be fabricated on such a wafer Therefore, a 300mm wafer counts as 2.25 200mm wafers when adding up wafer capacity wafer starts, wafer output semiconductor chip production can be measured in terms of wafer starts per week or wafer starts per month (how many wafers begin being processed in a week or month) An alternative measurement is wafer outs per week or wafer outs per month (how many wafers complete their process in a week or month.) Since it typically takes about 13 weeks to process a wafer, the time difference between wafer starts and wafer outs is about a quarter 72 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 Appendix B: Semiconductor Companies (Figures In Millions Of Dollars, Except Per Share Data) Market Cap Company Ticker Revenues As of 9/17/08 2007 INTEL INTC SAMSUNG ELECTRONICS Not listed in US $ 127,886.70 TEXAS INSTRUMENTS (TI) TXN TOSHIBA Not listed in US INFINEON TECH ADR IFX $ 5,548.09 STMICROELECTRONC ADR STM $ 9,930.40 TAIWAN SEMICOND ADR TSM $ 49,079.68 $ HYNIX QCOM RENESAS $ Microprocessors memory chips DRAM, NAND $ 13,835.00 broad-based (analog, DSP) Analog, DSP memory chips NAND $ 10,923.04 Broad-based, esp comms Application specific analog, specialized logic $ 10,001.00 broad-based (analog, memory, etc.) Analog, microcontrollers, ASSPs $ 9,948.52 makes wafers for fabless companies Wafer foundry 9,100.00 memory chips DRAM, NAND $ 8,871.00 chips for wireless handsets Application specific analog, specialized logic $ 8,001.00 broad-based (microcontrollers etc.) Microcontrollers, memory, etc $ 6,013.00 chips for PCs Microprocessors, graphics processors $ 5,869.00 broad based (consumer applications) Application specific analog, specialized logic $ 5,738.00 memory chips DRAM, NAND ADVANCED MICRO DEV AMD NXP Not listed in US MICRON TECHNOLOGY MU NEC Not listed in US $ 5,593.00 broad based very broad FREESCALE Private company $ 5,324.00 broad based (wireless etc.) Application specific analog, microcontrollers etc QIMONDA QI $ 5,130.00 memory chips DRAM SONY Not listed in US $ 5,103.00 chips for consumer electronics Specialized logic, application specific analog NVIDIA NVDA $ 4,097.86 graphics chips for PCs etc Graphics Processors MATSUSHITA (PANASONIC) Not listed in US $ 4,085.00 broad based Discretes, App specific analog, microcontrollers etc BROADCOM BRCM ELPIDA Not listed in US SHARP Not listed in US UNITED MICROELEC ADR UMC IBM division of IBM MARVELL TECH GROUP MRVL $ LSI LOGIC LSI ANALOG DEVICES ADI SILICONWARE ADR $ $ $ $ 2,593.68 chips for PCs $ 90,970.80 $ 38,334.00 $ 11,820.00 31,644.57 Not listed in US $ Chip Category $ 20,464.00 Not listed in US QUALCOMM Description 3,553.87 605.34 6,013.32 $ 3,776.40 chips for communications Application specific analog, specialized logic $ 3,708.00 memory chips DRAM $ 3,530.00 $ 3,494.03 makes wafers for fabless companies Wafer foundry $ 3,015.00 microprocessors, makes wafers for others Microprocessors, wafer foundry 8,874.55 $ 2,894.69 chips for comms and storage Application specific analog, specialized logic $ 4,402.52 $ 2,603.64 chips for comms and storage Application specific analog, specialized logic $ 8,761.65 $ 2,511.12 Broad-based (analog, DSP) Analog, DSP SPIL $ 4,099.19 $ 1,752.87 Packaging and testing of chips NAT'L SEMICONDUCTOR NSM $ 4,775.01 $ 1,885.90 Broad-based (analog) XILINX XLNX $ 6,968.09 $ 1,841.37 Broad-based (programmable logic) PLDs MAXIM INTEGRATED PRD MXIM $ 6,173.28 $ 1,671.71 Broad-based (analog) Analog FAIRCHILD SEMI INT'L FCS $ 1,498.65 $ 1,670.20 Broad-based (analog, discretes) Analog, Discrete ATMEL ATML $ 1,599.40 $ 1,639.24 Broad based (microcontrollers, memory) Microcontrollers, EPROM CYPRESS SEMICONDUCTR CY $ 3,999.23 $ 1,596.39 Memory and programmable logic SRAM, PLDs ON SEMICONDUCTOR ONNN $ 3,713.67 $ 1,566.20 Broad-based (analog, discretes) Analog, Discrete SEMICONDUCTOR MF ADR SMI $ 1,004.02 $ 1,465.32 makes wafers for fabless companies Wafer foundry Wafer foundry $ 12,170.13 6,254.85 Analog CHARTERED SEMI ADR CHRT $ 1,074.84 $ 1,355.49 makes wafers for fabless companies ALTERA ALTR $ 6,451.18 $ 1,263.55 Broad-based (programmable logic) PLDs LINEAR TECHNOLOGY LLTC $ 6,868.55 $ 1,083.08 Broad-based (analog) Analog MICROCHIP TECH MCHP $ 5,819.58 $ 1,035.74 Broad-based (microcontrollers) Microcontrollers INT'L RECTIFIER IRF $ 1,238.56 $ 1,171.12 Power Management Analog, Discrete RF MICRO DEVICES RFMD $ 896.61 $ 956.27 wireless handsets applications spedific analog CONEXANT SYSTEMS CNXT $ 270.48 $ 808.87 Imaging and PC Media, broadband access ICs for networking OMNIVISION TECH OVTI $ 568.14 $ 799.63 Image sensor ICs for handsets and cameras optoelectronics for handsets INTEGRATED DEVICE IDTI $ 1,702.54 $ 781.47 Broad-based, esp comms SRAM, Appl Spec Analog SUNPOWER SPWR $ 6,506.09 $ 774.79 solar chips INTERSIL HLDG ISIL $ 2,969.62 $ 756.97 Broad-based (analog) Analog SKYWORKS SOLUTIONS SWKS $ 1,542.49 $ 741.74 Wireless Application specific analog CHIPMOS TECHNOLOGIES IMOS $ 195.14 $ 625.20 LCD, FPD and advanced memory testing and assembly TTM TECHNOLOGIES TTMI $ 500.85 $ 669.46 broad PCB manufacturer ARM HOLDGS ADR ARMHY $ 2,469.84 $ 514.25 Processors for wireless (IP) Intellectual property/processors ZORAN ZRAN $ 421.56 $ 507.36 Digital Consumer Electronics Specialized logic CREE CREE $ 1,561.96 $ 394.12 Light Emitting Diodes Optoelectronics TRIQUINT SEMICONDCTR TQNT $ 812.38 $ 475.78 RF wireless analog ICs PMC-SIERRA PMCS $ 1,574.58 $ 449.38 chips for communications Application specific analog, specialized logic MICROSEMI MSCC $ 2,035.43 $ 442.25 Power Management Analog, Discrete ATHEROS COMMUNIC ATHR $ 1,813.63 $ 416.96 Wireless LAN chips Application specific analog SILICON STORAGE TECH SSTI $ 330.99 $ 411.75 Broad memory chips (Flash) DIODES DIOD $ 1,035.90 $ 401.16 Broad Application Specific (Discrete and Analog) STANDARD MICROSYSTMS SMSC $ 604.16 $ 377.85 Broad analog ICs SILICON LABORATORIES SLAB $ 1,586.16 $ 337.46 Wireless Application specific analog SIRF TECHNOLOGY SIRF $ 203.30 $ 329.38 ICs for GPS standalone and GPS handsets Application Specific Analog SILICON IMAGE SIMG $ 506.54 $ 320.50 consumer electronics, PCs ICs II-VI IIVI $ 1,136.44 $ 263.20 industrial laser components infrared optoelectronics IXYS SYXI $ 377.38 $ 304.46 Broad Power MOSFETs and mixed signal Ics Source: Company reports and Wachovia Capital Markets, LLC 73 WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductors/Computer Hardware/Cell Phones Market Cap Company Ticker Revenues As of 9/17/08 2007 Description Chip Category SEMTECH SMTC $ 890.23 $ 284.79 Broad MICREL MCRL $ 648.25 $ 257.97 Broad analog and mixed-signal ICs analog, mixed-signal ICs TRIDENT MICROSYS TRID $ 180.96 $ 270.80 Digital TV and multimedia mkts analog ICs DSP GROUP DSPG $ 210.73 $ 248.79 Broad ICs APPLIED MICRO CIRCTS AMCC $ 498.16 $ 246.15 Broad Optical components INTEGRAT SILICON SOL ISSI $ 120.77 $ 245.40 Broad SRAM and DRAM memory chips optoelectronics BOOKHAM BKHM $ 181.33 $ 202.81 Broad TOWER SEMICONDUCTOR TSEM $ 87.82 $ 187.44 Broad Specialty wafer foundry ANADIGICS ANAD $ 376.95 $ 230.56 RF wireless analog ICs LATTICE SEMICONDUCTR LSCC $ 276.38 $ 228.71 Broad PLDs SIGMA DESIGNS SIGM $ 457.17 $ 221.21 ICs for IPTV and media players specialized logic ACTEL ACTL $ 340.80 $ 197.04 Broad PLDs POWER INTEGRATIONS POWI $ 827.18 $ 191.04 Broad analog ICs VITESSE SEMICONDUCTR VTSS $ 169.26 $ 190.78 communication networking, storage ICs SIMPLETECH STEC $ 512.34 $ 188.65 memory, storage ICs ZARLINK SEMICONDCTR ZL $ 93.04 $ 142.60 communications and healthcare ICs CIRRUS LOGIC CRUS $ 361.00 $ 181.89 industrial, auto analog and mixed-signal ICs SILICON MOTION ADR SIMO $ 250.29 $ 180.31 NAND flash digital consumer, handsets Specialized logic RAMBUS RMBS $ 1,665.63 $ 179.94 Memory (IP) Intellectual property - memory EMCORE CORPORATION EMKR $ 357.58 $ 169.61 fiber optics, solar power ICs PERICOM SEMICONDUCT PSEM $ 362.94 $ 123.37 computing, comms, consumer Analog, digital, mixed signal Ics Application specific analog HITTITE MICROWAVE HITT $ 998.18 $ 156.41 Wireless MONOLITHIC POWER SYS MPWR $ 785.96 $ 134.00 Broad analog and mixed-signal ICs and power management MINDSPEED TECH MSPD $ 88.40 $ 127.81 communications apps ICs O2MICRO INT'L ADR OIIM $ 186.21 $ 124.92 broad ICs for power mgmt & security apps NETLOGIC MICROSYS NETL $ 671.41 $ 109.03 Enterprise switching ICs IKANOS COMMUNICATION IKAN $ 61.82 $ 107.47 Ethernet First Mile ICs for DSL and ethernet PIXELWORKS PXLW $ 23.35 $ 105.98 Digital TVs, Digital Consumer digital, analog and video signal processing WHITE ELEC DESIGNS WEDC $ 110.89 $ 104.24 defense, commercial embedded components MICROTUNE TUNE $ 180.65 $ 91.14 Cable, DTV, Automotive tuners analog ICs EXAR EXAR $ 345.69 $ 89.74 power mgmt, comms, interface analog, mixed-signal, & digital ICs MIPS TECHNOLOGIES MIPS $ 166.09 $ 83.31 Broad processors, analog SUPERTEX SUPX $ 380.94 $ 82.56 broad analog and mixed-signal ICs PLX TECHNOLOGY PLXT $ 155.37 $ 81.73 Broad I/O interconnect semiconductors VOLTERRA SEMICNDCTR VLTR $ 379.24 $ 74.69 PC, storage, networking, consumer analog and mixed-signal ICs ZILOG ZILG $ 63.72 $ 82.00 broad microprocessors & microcontrollers 8X8 EGHT $ 68.27 $ 61.07 VoIP services ICs CALIF MICRO DEVICES CAMD $ 70.70 $ 59.22 wireless, PCs, digital consumer analog and mixed-signal ICs RAMTRON INT'L RMTR $ 95.75 $ 51.09 broad ICs VIRAGE LOGIC VIRL $ 154.24 $ 46.53 SRAM and DDR memory controllers Application Specific IP ON TRACK INNOVATIONS OTIV $ 53.26 $ 43.49 payment solutions, petroleum, smart ID microprocessor based smart cards and readers HI/FN HIFN $ 59.83 $ 42.97 network and storage security ICs STAKTEK STAK $ 30.39 $ 40.87 memory module tech and IP for stacking LEADIS TECHNOLOGY LDIS $ 32.35 $ 39.58 wireless analog and mixed-signal ICs CENTILLIUM COMMUNIC CTLM $ 29.61 $ 39.18 optical, VoIP, broadband optoelectronics QUICKLOGIC QUIK $ 44.12 $ 34.42 consumer, industrial, comms, military programmable logic CEVA CEVA $ 159.20 $ 33.21 Handsets and consumer electronics IP for DSPs TRANSWITCH TXCC $ 103.77 $ 32.57 broadband, ethernet, VoIP optical transport products, VoIP SRS LABS SRSL $ 80.45 $ 18.85 home entertainment audio semiconductor technologies METALINK MTLK $ 22.31 $ 14.48 wireless and wireline broadband comms ICs MONOLITHIC SYS TECH MOSY $ 142.20 $ 14.33 Semi, comms, networking and storage equipm embedded memory and analog IP TVIA TVIA $ 0.33 $ 5.60 digital TVs LOGIC DEVICES LOGC $ 7.73 $ 4.69 broad digital ICs TRANSMETA TMTA $ 177.27 $ 2.48 computing microprocessors NEOMAGIC NMGC $ 3.61 $ 2.08 handsets, mobile TV ICs MATHSTAR MATH $ 12.85 $ 0.59 industrial, DSP ICs (FPOAs) ALLIANCE SEMICONDCTR ALSC $ 19.82 $ memory, EMI, PCI bridging ICs ESS TECHNOLOGY ESST DVD decoder chips acquired by Imperium Partners Group LLC #N/A #N/A Source: Company reports and Wachovia Capital Markets, LLC 74 display processors WACHOVIA CAPITAL MARKETS, LLC EQUITY RESEARCH DEPARTMENT Semiconductor Primer 2008 Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report 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Gary S Liebowitz, CFA Michael D Conlon Automotive Rich Kwas, CFA David H Lim Containers & Packaging Ghansham Panjabi, PhD Matthew Wooten, CFA Diversified Industrials Wendy B Caplan Allison Poliniak, CFA William Boland Machinery Andrew Casey Justin Ward Sara Magers, CFA Transportation Justin B Yagerman Robert H Salmon Michael Webber ENERGY Exploration & Production David R Tameron (303) 357-4688 John Ragozzino, Jr., CFA (303) 357-4687 Gordan Douthat (303) 357-4689 Midstream Energy/Master Limited Partnerships Michael Blum (212) 214-5037 Sharon Lui, CPA (212) 214-5035 Eric Shiu (212) 214-5038 Praneeth Satish (212) 214-8056 Ronald Londe (314) 955-3829 Jeff Morgan, CFA (314) 955-6558 Utilities Samuel Brothwell (212) 214-5044 Darin Conti, CFA (212) 214-8062 Michael Bolte (212) 214-8061 Jonathan Lefebvre (212) 214-8026 Neil Kalton, CFA (314) 955-5239 Sarah Akers (314) 955-6209 Jonathan Reeder (314) 955-2462 Oilfield Services and Drilling Tom Curran, CFA (212) 214-5048 EQUITY STRATEGY Equity Strategy Gina Martin Adams, CFA Phillip Neuhart (212) 214-8043 (212) 214-8063 Lisa Hausner (443) 263-6522 Global Publishing Director lisa.hausner@wachovia.com (212) 214-5055 (212) 214-5056 (410) 625-6370 (443) 263-6565 (212) 214-5057 (212) 214-5058 (212) 214-5043 (212) 214-5062 (212) 214-8044 (617) 603-4265 (617) 603-4268 (617) 603-4270 (212) 214-8024 (212) 214-5029 (212) 214-8012 HEALTH CARE Biotechnology Aaron Reames Matthew Andrews Health Care Services William Bonello Stephen Anderson Derek Wilder Managed Care Matt Perry Julie Pavlovsky Nicole Nesmith Medical Technology Larry Biegelsen Steve Beuchaw Medical Technology/Devices Michael Matson, CFA Vincent Ricci Pharma Services Greg T Bolan Specialty Pharmaceuticals Michael K Tong, PhD, CFA Hudson R Boyer James Omstrom, CFA (617) 603-4219 (617) 603-4218 (612) 342-0789 (612) 342-0505 (612) 342-0501 (212) 214-8019 (443) 263-6517 (443) 263-6701 (212) 214-8015 (212) 214-8036 MEDIA & TELECOMMUNICATIONS Broadcasting Marci Ryvicker, CPA, CFA (212) 214-5010 Timothy Schlock, CPA (212) 214-5011 Publishing & Advertising John Janedis, CFA (212) 214-5027 Jaime Neuman, CFA, CPA (212) 214-5015 Brendan Metrano, CFA (212) 214-8064 Telecommunication Services - Wireless/Wireline Jennifer M Fritzsche (312) 574-5985 Gray Powell, CFA (212) 214-8048 (212) 214-8017 (212) 214-8016 (615) 525-2418 (212) 214-8020 (212) 214-8011 (212) 214-8057 REAL ESTATE, GAMING & LODGING Gaming and Theatres Brian McGill (212) 214-5064 Denis Kelleher (212) 214-8039 Lodging/Retail/Self Storage & Net Lease Jeffrey J Donnelly, CFA (617) 603-4262 Dori Kesten (617) 603-4233 Robert Laquaglia (617) 603-4263 Office and Industrial/Diversified and Specialty Christopher P Haley (443) 263-6773 Brendan Maiorana, CFA (443) 263-6516 Young Ku, CFA (443) 263-6564 Philip DeFelice, CFA (443) 263-6442 Lisa Howard (410) 625-6380 Director of Administration & Operations lisa.howard@wachovia.com TECHNOLOGY & SERVICES Electronic Processing Daniel R Perlin, CFA (443) 263-6557 Matthew Roswell, CFA (443) 263-6417 Enterprise Hardware/Networking Hardware Aaron Rakers, CFA (314) 955-4404 Matthew Nahorski (314) 955-4638 Information Technology (IT) Services Edward S Caso, Jr., CFA (443) 263-6524 Christopher Wicklund (410) 625-6381 Suman Kaba (443) 263-6540 Eric Boyer (443) 263-6559 Semiconductors/Computer Hardware David Wong, PhD, CFA (212) 214-5007 Amit Chanda (314) 955-3326 Lindsey Matherne (212) 214-5022 Brian Cutlip (212) 214-5009 Software Philip Rueppel (617) 603-4260 Priya Parasuraman (617) 603-4269 Sid Nargundkar (617) 603-4266 Paul Jeanne, CFA (443) 263-6534 Global Research COO paul.jeanne@wachovia.com Colleen Hansen (410) 625-6378 colleen.hansen@wachovia.com September 16, 2008 ... 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