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SemiWEEK: Catching up; Stocks rose

The Coronavirus drove Integrated Circuit sales towards recession and now the WAHE is pulling it out. Semiconductor sales continued to run well above 2019 levels last week, with a 2nd half revenue ramp similar to 2018.

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SemiWEEK: Catching up; Stocks rose

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  1. Semiconductor WEEK: May 29, 2020 An overview of results and conclusions from recent reports at VLSI Chip Market Research Services It's warming up • Order activity for semiconductor equipment continued to warm up, jumping by two points to 74 degrees • Worldwide Electronics Shipments Semiconductor Analytics Semi Market results from last week: Coronavirus drove Integrated Circuit sales towards recession and now the WAHE is pulling it out. Semiconductor Sales Nowcast: 2Q20/2Q19 Jumped to +19% – Semiconductor Weather1Report: Warmer – IC Supply-Demand2Metrics: Tight – Electronics Price Trend: Soaring Overall Semi Sales Status Trend: Peaked: Mar 18 Cold with Dark Clouds: Sep 18 Freezing: Nov 18 Frozen: Jan 19 Freezing: Mar 19 Cold: May 19 Cool: July 19 Temperate: Oct 19 Sunny: Nov 19 Warm: Dec 19 Flu Chills: Feb 28 WAHE Spring: Mar 25 Chip History Center People: Mark Bohr, Intel Fellow discusses process technology development on Intel's 65nm Process in this 2003 interview. Exhibits: The Near Impossibility of Making a Microchip: This superb article, about the birth of the Perkin Elmer Projection Scanning Aligner. The Chip Insider Strategy & Tactics: Catching up. Semiconductor Stocks • VLSI’s Semiconductor Stock Indices rose this week • Semiconductor Stock Index was led up 2.4% by Panasonic • Semiconductor Equipment Stock Index was led up 1.4% by Teradyne • EDA Stock Index jumped 5.9% to a new yearly high • Electronics Materials Stock Index was led up 5.8% by DNP • Hottest Stocks: DNP, BASF, Cabot Microelectronics, Panasonic, Amkor, and JSR VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  2. The Chip Insider®'s Graphics File May 2020 It's warming up Order activity for semiconductor equipment continued to warm up, jumping by two points to 74 degrees All segments posted healthy gains with Subcon/Advanced Packaging recording the biggest increase Chipmakers are sticking to their roadmaps and spending plans despite ongoing uncertainty at the macro level Strong demand from datacenters, coupled with big content increases in 5G devices, will likely offset the decline in unit volumes that are projected for smartphones, PCs, and tablets This should keep IC sales in positive territory in 2020 VLSI’s Chip Price Performance Index (CPPI) fell half a point • • This issue contains the latest forecast. • • • • VLSIresearch … intelligence to make better decisions faster Call us to access more details Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  3. VLSI's Current Forecast Forecast as of May 2020: Semi Equipment ($B): Sequential Change Capacity Utilization: ICs ($B): Sequential Change IC Units (BU): Sequential Change Electronics ($B) : Sequential Change 2021 88.1 $ 6.5% 95.2% 408.6 $ 15.2% 334.4 12.8% 2,284 $ 13.0% 2019 77.0 $ -8.0% 84.6% 352.3 $ -13.4% 299.4 -6.0% 2,122 $ -2.0% 2020 82.7 $ 7.3% 88.6% 354.8 $ 0.7% 296.4 -1.0% 2,020 $ -4.8% Severe COVID-19 impact in 2H20, recovery 2021 Forecast as of May 2020: Semi Equipment ($B): Sequential Change ICs ($B): Sequential Change IC Units (BU): Sequential Change Electronics ($B) : Sequential Change 2021 88.1 $ 23.8% 408.6 $ 23.5% 334.4 20.9% 2,284 $ 21.2% 2019 77.0 $ -8.0% 352.3 $ -13.4% 299.4 -6.0% 2,122 $ -2.0% 2020 71.2 $ -7.6% 330.8 $ -6.1% 276.6 -7.6% 1,884 $ -11.2% VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  4. The Chip Insider®Graphics Worldwide Electronics Shipments • Electronics sales are expected to improve in 2H20, but will still be in the red for the second consecutive year Worldwide Electronics Shipments: chart gives rolling averages for electronics sales VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  5. Semiconductor Analytics Last Week in the Semiconductor Market: The Coronavirus drove Integrated Circuit sales towards recession and now the WAHE is pulling it out. Semiconductor sales continued to run well above 2019 levels last week, with a 2nd half revenue ramp similar to 2018. W/W: Week-over-Week sequential growth W/Q: Week-over-Quarter W/Y: Week-over-Year Semiconductor Sales Nowcast: 2Q20/2Q19 Jumped to +19% Semiconductor Weather1Report: 72˚ F Warmer IC Supply-Demand2Metrics: Tight Electronics Pricing Trend: Soaring Notebooks, Smartphones, and Consumer Electronics have a seasonal inversion driven by WAHE (Work-at-Home Economy) Thank you for supporting us through this last issue of 2018. Semiconductor Analytics will return January . Overall Semi Sales Status Trend: Peaked: Mar 18 Cold with Dark Clouds: Sep 18 Freezing: Nov 18 Frozen: Jan 19 Freezing: Mar 19 Cold: May 19 Cool: July 19 Temperate: Oct 19 Sunny: Nov 19 Warm: Dec 19 Flu Chills: Feb 28 WAHE Spring: Mar 25 1: Measures Order Activity 2: Measures Pricing Power VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  6. 2020 Semiconductor Market Drivers Coronavirus drove Integrated Circuit sales towards recession and WAHE is pulling it out: • Certainties: – Coronavirus Pandemic infected economies • Unparalleled Supply and Demand shocks to IC sales of <10% and units of ~20% – Macroeconomic ‘V’acuum or ‘U’ – not ‘L’ – World’s Economy saved by Semiconductors – WAHE (Work-At-Home Economy) – 7/10nm and 5/7nm demand ramps • Uncertainties: – Ability of Governments to defibrillate economy out of shelter-in-place – 2020 Elections in U.S. VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  7. The Chip Insider® Strategy & Tactics Strategy and Tactics: Catching up. Summaries: was recognizing you for everything you have done just because it’s so rare a major government recognized someone from the semiconductor equipment industry. In no small way, the contributions made are why the world has been able to move on, in spite of the Coronavirus, via the electronic communications achievements made possible via many of TEL’s products in which you played a role. Comments, Questions & Answers: Huawei vs. DOC: The strategic changes in business structures likely to occur. Strategically, it’s time to recognize that the era of free trade globalism with little government intervention is over. While it may not be practical for our industry or economically efficient, governments matter again and the barrier of national borders is getting higher. This will define our industry’s winners and losers in this decade. America’s search for leading-edge fabs: Thinking way outside the box and what the small size of TSMC’s 20K WSM number could mean. For Your Reference: Fortunes of High Tech: A history of innovation at ASM International 1958-2008 —a rare look into the history of an equipment company and the man who built it: Arthur del Prado. What’s Happening and What’s the Meaning: U.S. Attorney General William Barr’s factual error in saying "For the first time in history, the U.S. is not leading the next technology era" and why the better approach would be for The U.S. to take off the oxfords and lace-up some running shoes. TEL’s Terry Higashi was awarded Japan’s Order of the Rising Sun, Gold and Silver Star: Congratulations, Terry, you certainly deserve this. You have done so much for our industry and Japan. It was exciting to hear that Japan “The only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance” — Franklin D. Roosevelt’s 1933 inaugural address Contact us to get the full report and more VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  8. semiStockWEEK: VLSI's Semiconductor Stock Indices rose along with the market. EDA stock index hit another yearly high this week. Semiconductors 2%, Equipment 1%, EDA 6%, Electronic Materials 6%. VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  9. Semiconductor Stocks: Weekly Growth and Forward P/E Ratios by Company Weekly Gains 5/29/2020 VLSI’s Semiconductor Stock Index was led up 2.4% by Panasonic. IDM +4.4% Foundry & OSAT -2.6% Fabless & Fablite +6.8% Price Change Price Change Semiconductor Stocks Semiconductor Stocks Forward P/E Forward P/E IDM Fab-lite to Fabless Intel 1.1% 13 AMD -2.5% 35 Micron 10 Analog Devices 1.7% 22 6.6% AMD AMDAnalog Devices ADIAmkorAMKR ASE ASXBroadcom AVGOIBMIBM Infineon IFNNY.PK Intel INTCJCET600584.SS Kingpak Technology6238.TWO Micron Technology MU On Semiconductor ONPanasonic PC MagnaChip Semiconductor MXMaxim MXIM MaxLinear MXLMediaTek 2454.TW NVIDIA NVDAQualcomm QCOM Samsung Electronics 005930.KS Silicon Laboratories SLABSkyworks SWKS SMIC SMI STMicroelectronics STM Texas Instruments TXNTSMC TSMUMC UMCWestern Digital WDCXilinx XLNX ON Semiconductor 11 Broadcom 12 4.8% 5.3% Samsung Electronics SK hynix STMicroelectronics Western Digital Foundry & OSAT Amkor IBM Infineon MagnaChip Semiconductor Maxim MaxLinear MediaTek 10 19 13 27 25 – 4.0% 0.2% 2.9% 4.6% 5.5% 1.1% 3.1% 2.8% 2.4% 4.8% – 20 7 14 7.8% ASE JCET Kingpak Technology SMIC TSMC UMC 0.6% -1.8% -3.2% -0.5% 1.1% 3.5% 10 91 – NVIDIA Panasonic Qualcomm Silicon Laboratories Skyworks Texas Instruments Xilinx -1.7% 8.9% 2.8% -0.7% 1.3% 4.7% 6.2% 39 37 14 29 17 24 27 1684 16 13 VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  10. Chip Equipment & Related Stocks: Weekly Growth and Forward P/E Ratios by Company VLSI’s Semiconductor Equipment Stock Index was led up 1.4% by Teradyne. WFE +1.7% Test +4.1% Assembly -1.3% Weekly Gains 0 5/29/2020 Price Change Price Change Equipment Stocks Equipment Stocks Forward P/E Forward P/E Wafer Process: Applied Materials Test: Advantest 13 1.1% 3.3% – ASM International ASML 1.9% 3.2% 19 30 Teradyne FormFactor 19 22 6.8% 4.3% Applied Materials AMAT Advantest ATEYY ASM International ASMI ASM Lithography ASML ASM Pacific 0522.HK BE Semiconductor BESIY.PK FormFactorFORMKLA KLAC Kulicke & Soffa KLIC Lam Research LRCX Onto Innovation ONTONikon 7731 Teradyne TER Tokyo Electron Limited 8035 Veeco VECO KLA Lam Research 1.7% 4.8% 18 15 Assembly: Onto Innovation Nikon TEL Veeco Instruments -2.3% 2.9% -2.8% 2.5% BESI Kulicke & Soffa ASM Pacific Technology -1.7% 0.4% -2.5% – – – – 13 13 VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  11. Electronic Materials Stocks: Weekly Growth and Forward P/E Ratios by Company VLSI’s EDA Stock Index jumped 5.9% to a new yearly high. Weekly Gains 5/29/2020 Price Change Price Change 14.6% 4.2% 6.9% 5.8% -1.6% -2.0% EDA & Electronic Materials Stocks Forward P/E EDA & Electronic Materials Stocks Forward P/E VLSI’s Electronics Materials Stock Index was led up 5.8% by DNP. EDA Cadence Synopsys Electronic Materials BASF Cabot Microelectronics DNP DuPont de Nemours JSR Shin-Etsu SOITEC Tokyo Ohka – 4 – – – – 34 31 6.1% 5.7% BASF BASFY Cadence CNDS DNP 7912 JSR 4185 SOI.PA Synopsys SNPS Cabot Microelectronics CCMP DuPont DD Shin-Etsu 4063 SOITEC Tokyo Ohka 4186 2 9.8% 9.0% 20 VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

  12. Companies Companies Max Growth Weekly Growth VLSI’s Indices of Chip Industry Stocks Min Growth Range of S&P 500 S&P 500 The Prior Week's Close Growth Growth Down Up Semi Stocks Equipment Stocks Materials Stocks EDA Stocks Semi Stocks Equipment Stocks Materials Stocks EDA Stocks 25-Oct-19 01-Nov-19 08-Nov-19 15-Nov-19 22-Nov-19 29-Nov-19 06-Dec-19 13-Dec-19 20-Dec-19 27-Dec-19 03-Jan-20 10-Jan-20 17-Jan-20 24-Jan-20 31-Jan-20 07-Feb-20 14-Feb-20 21-Feb-20 28-Feb-20 06-Mar-20 13-Mar-20 20-Mar-20 27-Mar-20 03-Apr-20 10-Apr-20 17-Apr-20 24-Apr-20 01-May-20 08-May-20 15-May-20 22-May-20 29-May-20 88.2 90.3 91.7 92.0 90.0 90.9 92.6 96.7 99.2 100.0 100.3 101.5 104.7 106.1 98.4 102.5 106.5 103.7 93.1 91.8 81.1 69.6 78.3 77.1 85.6 89.1 88.7 89.1 94.8 91.4 95.1 97.4 92.4 92.6 94.9 97.0 92.0 93.7 94.7 98.0 99.9 100.0 100.2 100.9 104.8 105.1 98.4 101.3 106.6 99.3 90.4 91.0 78.3 65.2 78.7 73.4 84.0 88.4 86.1 83.9 91.9 87.1 89.8 91.0 100.0 101.2 103.2 101.5 98.7 96.7 95.5 100.0 100.1 100.0 98.9 99.2 101.0 100.5 96.0 100.4 101.0 98.1 85.5 84.8 71.0 67.0 76.6 72.6 82.6 82.7 82.5 85.0 88.4 86.8 89.7 94.9 94.9 94.8 96.1 97.6 95.9 100.1 95.5 96.9 99.6 100.0 100.5 104.7 106.4 107.8 103.8 107.2 114.2 106.4 96.2 95.1 90.7 78.4 88.7 89.9 99.7 111.3 111.9 107.5 115.9 115.1 122.3 129.5 2.4% 2.4% 1.5% 0.4% -2.2% 1.0% 1.8% 4.5% 2.6% 0.8% 0.3% 1.2% 3.2% 1.3% -7.3% 4.2% 3.9% -2.6% -10.2% -1.5% -11.6% -14.2% 12.6% -1.6% 11.1% 4.0% -0.4% 0.5% 6.4% -3.6% 4.0% 2.4% 6.6% 0.2% 2.5% 2.1% -5.1% 1.8% 1.1% 3.5% 1.9% 0.1% 0.2% 0.7% 3.9% 0.3% -6.3% 2.9% 5.3% -6.9% -8.9% 0.6% -13.9% -16.7% 20.6% -6.7% 14.5% 5.2% -2.6% -2.6% 9.6% -5.3% 3.1% 1.4% 2.5% 1.3% 1.9% -1.6% -2.8% -2.0% -1.2% 4.7% 0.1% -0.1% -1.1% 0.2% 1.8% -0.5% -4.5% 4.6% 0.6% -2.8% -12.9% -0.7% -16.3% -5.7% 14.4% -5.3% 13.8% 0.2% -0.2% 3.1% 3.9% -1.8% 3.3% 5.8% 0.4% -0.1% 1.3% 1.6% -1.8% 4.4% -4.6% 1.5% 2.7% 0.4% 0.5% 4.2% 1.7% 1.3% -3.8% 3.3% 6.5% -6.9% -9.5% -1.2% -4.6% -13.6% 13.1% 1.4% 10.9% 11.7% 0.6% -4.0% 7.8% -0.7% 6.3% 5.9% 46 36 37 31 7 37 33 48 39 29 23 32 45 29 3 45 47 6 0 18 0 3 52 14 54 41 17 27 52 10 42 43 15.6% 9.9% 12.5% 10.8% 5.7% 5.0% 8.2% 10.7% 12.5% 5.9% 9.5% 7.2% 19.1% 14.9% 2.2% 21.4% 27.5% 4.5% -0.8% 7.9% -2.1% 15.3% 36.1% 17.4% 38.2% 17.0% 9.2% 19.1% 31.0% 16.8% 13.5% 14.6% -7 -15 -14 -20 -44 -14 -19 -3 -13 -23 -24 -22 -10 -25 -51 -10 -8 -49 -55 -35 -55 -52 -3 -41 -1 -10 -37 -28 -3 -45 -12 -12 -16.3% -12.1% -4.2% -5.0% -17.7% -15.0% -4.8% -1.4% -8.4% 2.7% -3.4% -4.8% -3.8% -10.8% -17.7% -11.7% -10.0% -17.1% -21.3% -11.0% -26.6% -28.9% -11.7% -15.1% -2.3% -6.1% -9.8% -11.9% -2.4% -21.1% -11.7% -3.2% 31.9% 22.0% 16.7% 15.8% 23.4% 20.0% 13.0% 12.1% 20.9% 8.6% 12.9% 12.0% 22.9% 25.7% 19.9% 33.1% 37.5% 21.6% 20.5% 18.9% 24.5% 44.2% 47.8% 32.5% 40.5% 23.1% 19.0% 31.0% 33.4% 37.9% 25.2% 17.8% 93.3 94.7 95.5 96.3 96.0 96.9 97.1 97.8 99.4 100.0 99.8 100.8 102.8 101.7 99.5 102.7 104.3 103.0 91.2 91.7 83.7 71.1 78.4 76.8 86.1 88.7 87.6 87.4 90.4 88.4 91.2 94.0 1.2% 1.5% 0.9% 0.9% -0.3% 1.0% 0.2% 0.7% 1.7% 0.6% -0.2% 0.9% 2.0% -1.0% -2.1% 3.2% 1.6% -1.3% -11.5% 0.6% -8.8% -15.0% 10.3% -2.1% 12.1% 3.0% -1.3% -0.2% 3.5% -2.3% 3.2% 3.0% VLSIresearch … intelligence to make better decisions faster Copyright © 2020 VLSI Research Inc. All rights reserved. Distribution rights contained in T&Cs.

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