MARCH 2016

OUTLOOK FOR SEMICONDUCTORS & POWER DISCRETES & MODULES Forecast Outlook

Dale Ford, Vice President

© 2015 IHS. ALL RIGHTS RESERVED.

Semiconductor & Power Discrete & Module Outlook

Electronic systems market – Growth drops below 2% in 2016 • Five year CAGR = 2.6% • Industrial Electronics leads growth followed by Automotive & Consumer Electronics & Wired • Industrial Electronics passed Data Processing as largest market in 2012; Wireless followed in 2013

Global Electronic Systems Revenue 2014 WW Revenue = $2.02 T

Year-on-Year Growth

15%

10%

13.3% 10.4% 7.3%

7.9%

7.5% 5.7%

5%

3.7% 3.7%

2.5%

4.4%

3.4%

2.7% 2.4% 1.9% 2.3%

0%

-5%

-10%

-8.7% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

© 2015 IHS. ALL RIGHTS RESERVED.

2

Semiconductor & Power Discrete & Module Outlook

Electronics growth weighed down by Wireless & Data Processing Industrial

WW Market CAGR Forecast ’14 to ‘19

5%

Automotive

3%

Consumer

Wired

1% Wireless Data Processing

-1% -2%

0%

2% 2016 Growth

4%

6%

Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

3

Semiconductor & Power Discrete & Module Outlook

Annual semiconductor outlook

• Semiconductor market growth outlook – Next four years challenging • September 2012 began a new cycle that peaked in Q4 2014 – 2015/16 contracts • Long-term outlook sees five-year CAGR of only 1.9% Global Semiconductor Revenue

2015 Revenue = $351.5B 34.1% 30%

Year-on-Year Growth

23.6% 20%

10.3%

10%

4.1%

6.4%

3.9%

8.6% 3.2% 3.1%

1.3%

0%

-5.1%

-10%

-2.5%

4.8%

-1.0%-0.4%

-10.9% -20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source – IHS Application Market Forecast Q4 2015

© 2015 IHS. ALL RIGHTS RESERVED.

4

Semiconductor & Power Discrete & Module Outlook

Historic alignment between economy and electronics Semiconductor growth profile continues to predict accurately 5%

4% 30% 3% 20%

10%

1%

0% 2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

0%

Real GDP Growth

2%

1990

Electronic Equipment and Semiconductor Revenue Growth

40%

-1% -10% -2% -20% -3%

Electronic Equipment OEM Factory Revenue -30%

Semiconductor Revenue

WW Real GDP -4%

Source – IHS Global Insight and IHS Technology

© 2015 IHS. ALL RIGHTS RESERVED.

5

Semiconductor & Power Discrete & Module Outlook

Quarterly semiconductor forecast Q1 2015 slumps below -8.0%; Rest of year disappoints and drops 2015/16 negative 20%

Quarter-to-Quarter Growth

15%

10%

Alignment with Weak Electronics Seasonality

Supply Chain Seizes

5%

-10%

‘Snap Back’ More Than Anticipated

Q2 Becomes New Peak

Weak 2015 Start

Q4'16

Q3'16

Q2'16

Q1'16

Q4'15

Q3'15

Q2'15

Q1'15

Q4'14

Q3'14

Q2'14

Q1'14

Q4'13

Q3'13

Q2'13

Q1'13

Q4'12

Q3'12

Q2'12

Q1'12

Q4'11

Q3'11

Q2'11

Q1'11

Q4'10

Q3'10

Q2'10

Q1'10

Q4'09

Q3'09

Q2'09

Q1'09

Q4'08

Q3'08

Q2'08

-5%

Q1'08

0%

2016 Continues Weakness

-15%

-20% Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

6

Semiconductor & Power Discrete & Module Outlook

2016 Growth – Weak and Negative

40%

30%

20%

10%

Total Semiconductor -20% © 2015 IHS. ALL RIGHTS RESERVED.

DRAM + Data Flash

Q4 2016F

Q3 2016F

Q2 2016F

Q1 2016F

Q4 2015F

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Q4 2012

Q3 2012

Q2 2012

Q1 2012

Q4 2011

Q3 2011

-10%

Q2 2011

0% Q1 2011

Quarter-over-Quarter Revenue Growth

50%

Rest of Semiconductor

Source – IHS Application Market Forecast Q4 2015 7

Semiconductor & Power Discrete & Module Outlook

3/12 and 12/12 moving averages 0.60 0.50 0.40 0.30 0.20 0.10 0.00 -0.10 -0.20 -0.30

IHS 3/12 Average

IHS 3/12 Forecast

IHS 12/12 Average

IHS 12/12 Forecast

Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

8

Dec-16

Aug-16

Apr-16

Dec-15

Aug-15

Apr-15

Dec-14

Aug-14

Apr-14

Dec-13

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

Aug-11

Apr-11

Dec-10

Aug-10

Apr-10

Dec-09

Aug-09

Apr-09

Dec-08

Aug-08

Apr-08

Dec-07

Aug-07

Apr-07

Dec-06

Aug-06

Apr-06

Dec-05

Aug-05

Apr-05

Dec-04

Aug-04

Apr-04

Dec-03

-0.40

Semiconductor & Power Discrete & Module Outlook

New semiconductor growth drivers for next 5 years 8%

WW Market CAGR Forecast ’14 to ‘19

Industrial

6% Automotive

4%

Wired

2%

Wireless

Data Processing

0% Consumer

-2% -6%

-4%

-2%

0%

2% 2016 Growth

4%

6%

8%

10%

Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

9

Semiconductor & Power Discrete & Module Outlook

Power discrete revenues by market 2015 Revenue = $12.4B

2019 Revenue = $14.6B Other Communications Renewable Medical 1.3% 3.5% Energy

Renewable Medical Energy Other 1.1% 1.9% Communications

2.2%

3.3%

Cellular Handsets & Infrastructure 6.8%

Cellular Handsets & Infrastructure 6.8%

Lighting 4.8%

Lighting 4.2%

Automotive & Transportation 27.4%

Consumer 15.5%

Automotive & Transportation 29.4%

Consumer 14.8%

Computer & Office Equipment 18.2%

Industrial 21.0%

Computer & Office Equipment 16.2%

Industrial 21.7%

Source – IHS The World Market for Power Semiconductors – 2015 Edition © 2015 IHS. ALL RIGHTS RESERVED.

10

Semiconductor & Power Discrete & Module Outlook

Power discrete module revenues by market 2019 Revenue = $6.3B

2015 Revenue = $4.6B

Power Supplies 4.2%

Power Supplies 3.7%

Other Applications 10.5%

Other Applications 9.7%

Solar Energy 4.8%

Solar Energy 4.8% Industrial Motor Drives 38.0%

Wind & Other Renewable Energy 5.7%

Wind & Other Renewable Energy 4.9%

Industrial Motor Drives 35.4%

Car & Light Trucks 13.5%

Car & Light Trucks 10.3% Traction 11.6%

Traction 11.5% Consumer 14.9%

Consumer 16.6%

Source – IHS The World Market for Power Semiconductors – 2015 Edition © 2015 IHS. ALL RIGHTS RESERVED.

11

Semiconductor & Power Discrete & Module Outlook

Power discretes & modules growth drivers for next 5 years 8%

WW Market CAGR Forecast ’14 to ‘19

6% Industrial

Wired

4% Automotive

2%

0%

Data Processing Wireless

-2% Consumer

-4% -10%

-8%

-6%

-4%

-2%

0% 2016 Growth

2%

4%

6%

8%

10%

Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

12

Semiconductor & Power Discrete & Module Outlook

Power discrete revenues by device type 2015 Revenue = $12.4B Pressure Protected Contact IGBTs MOSFETs 0.6% 2.9%

2019 Revenue = $14.6B Pressure Contact IGBTs Protected MOSFETs0.6% 3.3%

GTOs, IGCTs & GCTs 0.5%

Thyristors 5.0%

Thyristors 4.7% Bipolar Power Transistors 6.2%

Bipolar Power Transistors 7.1%

Discrete IGBTs 8.0%

Rectifiers 27.5%

GTOs, IGCTs & GCTs 0.5%

MOSFETs 48.5%

Discrete IGBTs 9.0% MOSFETs 49.2%

Rectifiers 26.5%

Source – IHS The World Market for Power Semiconductors – 2015 Edition © 2015 IHS. ALL RIGHTS RESERVED.

13

Semiconductor & Power Discrete & Module Outlook

Power discretes growth opportunities 10%

WW Market CAGR Forecast ’14 to ‘19

Protected MOSFETS

8%

6%

Pressure Contact IGBT MOSFETS

4% Rectifiers

2%

Thyristors GTO, IGCT, GCTs

0% -4%

-2%

Bipolar Power Transistors

0%

2% 4% 2016 Growth

6%

8%

10%

Source – IHS Application Market Forecast Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

14

Semiconductor & Power Discrete & Module Outlook

Power discrete module revenues by module type 2015 Revenue = $4.6B

MOSFET Power Modules Integrated 4.4% Modules (PIM)/CIB 7.4% Thyristor/Diode Modules (& Rectifier Bridges) 9.4%

MOSFET Modules Power 5.0% Integrated Modules (PIM)/CIB 7.8% Thyristor/Diode Modules (& Rectifier Bridges) 10.9%

Intelligent Power Modules (IPM) 29.9%

2019 Revenue = $6.3B

Standard (NonIntegrated) IGBT Modules 46.5%

Standard (NonIntegrated) IGBT Modules 48.2% Intelligent Power Modules (IPM) 30.7%

Source – IHS The World Market for Power Semiconductors – 2015 Edition © 2015 IHS. ALL RIGHTS RESERVED.

15

Semiconductor & Power Discrete & Module Outlook

Power module growth opportunities 10%

Standard (Non Integrated) IGBT Modules

WW Market CAGR Forecast ‘14 to ‘19

9%

Intelligent Power Modules (IPMS)

8%

Power Integrated Modules (PIM) / CIB

7%

6%

5% MOSFET Modules

4%

Thyristor / Diode Modules

3% 3%

4%

5%

6%

7%

8%

9%

10%

2016 Growth

© 2015 IHS. ALL RIGHTS RESERVED.

16

Semiconductor & Power Discrete & Module Outlook

Preliminary 2015 semiconductor market share for top 20 suppliers Top Suppliers of Semiconductors Worldwide - Millions of Dollars 2014

2015

Rank

Rank

1

1

Intel**

49,964

49,319

-1.3%

14.0%

14.0%

2

2

Samsung Electronics

38,064

40,722

7.0%

11.6%

25.6%

4

3

SK Hynix

16,113

16,944

5.2%

4.8%

30.4%

3

4

Qualcomm*

19,291

16,205

-16.0%

4.6%

35.0%

5

5

Micron Technology

16,110

14,759

-8.4%

4.2%

39.2%

6

6

Texas Instruments

12,246

12,285

0.3%

3.5%

42.7%

15

7

NXP*

5,483

10,104

84.3%

2.9%

45.6%

7

8

Toshiba

10,234

9,203

-10.1%

2.6%

48.2%

8

9

Broadcom**

8,398

8,414

0.2%

2.4%

50.6%

14

10

Avago Technologies**

5,644

6,951

23.2%

2.0%

52.6%

9

11

STMicroelectronics

7,404

6,887

-7.0%

2.0%

54.6%

13

12

Infineon Technologies*

5,937

6,870

15.7%

2.0%

56.5%

23

13

Apple

2,985

6,664

123.2%

1.9%

58.4%

10

14

MediaTek

7,016

6,571

-6.3%

1.9%

60.3%

11

15

Renesas Electronics Corporation

6,815

5,731

-15.9%

1.6%

61.9%

17

16

Sony

5,053

5,250

3.9%

1.5%

63.4%

12

17

SanDisk

6,264

4,796

-23.4%

1.4%

64.8%

19

18

nVidia

4,109

4,296

4.6%

1.2%

66.0%

16

19

Advanced Micro Devices (AMD)

5,388

3,914

-27.4%

1.1%

67.1%

21

20

ON Semiconductor**

3,516

3,528

0.3%

1.0%

68.1%

119,178

112,102

-5.9%

31.9%

100.0%

355,212

351,515

COMPANY NAME

Other Semiconductor Companies Total Semiconductor

2014

2015E

Percent

Percent

Cumulative

Revenue

Revenue

Change

of Total

Percentage

* Includes 2015 Acquisitions; ** Does not include announced acquisitions for 2016 © 2015 IHS. ALL RIGHTS RESERVED.

-1.0% 100.0% Source – IHS Competitive Landscaping Tool Q4 2015 17

Semiconductor & Power Discrete & Module Outlook

Preliminary 2015 semiconductor market share for top 20 suppliers Plus results from major announced acquisitions expected to close in H1 2016 Top Suppliers of Semiconductors Worldwide - Millions of Dollars 2014

2015

Rank

Rank

1

1

Intel** + Altera**

49,964

50,957

2.0%

14.5%

14.5%

2

2

Samsung Electronics

38,064

40,722

7.0%

11.6%

26.1%

4

3

SK Hynix

16,113

16,944

5.2%

4.8%

30.9%

19,291

16,205

-16.0%

4.6%

35.5%

5,644

15,365

172.2%

4.4%

39.9%

COMPANY NAME

2014

2015E

Percent

Percent

Cumulative

Revenue

Revenue

Change

of Total

Percentage

3

4

Qualcomm*

8

5

Avago Technologies** + Broadcom**

5

6

Micron Technology

16,110

14,759

-8.4%

4.2%

44.1%

6

7

Texas Instruments

12,246

12,285

0.3%

3.5%

47.6%

15

8

NXP*

5,483

10,104

84.3%

2.9%

50.5%

7

9

Toshiba

10,234

9,203

-10.1%

2.6%

53.1%

9

10

STMicroelectronics

7,404

6,887

-7.0%

2.0%

55.0%

13

11

Infineon Technologies*

5,937

6,870

15.7%

2.0%

57.0%

23

12

Apple

2,985

6,664

123.2%

1.9%

58.9%

10

13

MediaTek

7,016

6,571

-6.3%

1.9%

60.7%

11

14

Renesas Electronics Corporation

6,815

5,731

-15.9%

1.6%

62.4%

17

15

Sony

5,053

5,250

3.9%

1.5%

63.9%

21

16

ON Semiconductor** + Fairchild Semiconductor**

3,516

4,889

39.1%

1.4%

65.3%

12

17

SanDisk

6,264

4,796

-23.4%

1.4%

66.6%

19

18

nVidia

4,109

4,296

4.6%

1.2%

67.8%

16

19

Advanced Micro Devices (AMD)

5,388

3,914

-27.4%

1.1%

69.0%

22

20

Analog Devices Other Semiconductor Companies Total Semiconductor

3,094

3,358

8.5%

1.0%

69.9%

124,482

105,745

-15.1%

30.1%

100.0%

355,212

351,515

* Includes 2015 Acquisitions AND announced acquisitions for 2016 © 2015 IHS. ALL RIGHTS RESERVED.

-1.0% 100.0% Source – IHS Competitive Landscaping Tool Q4 2015 18

Semiconductor & Power Discrete & Module Outlook

Combined market shares of top semiconductor suppliers 100%

90%

Cumulative Market Share

80% Top 5 70%

Top 10

+8.7%

Top 20 Top 25

60%

Top 50 Top 100

50%

+11.0%

Top 200

40%

+8.2% 30%

20% 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

19

Semiconductor & Power Discrete & Module Outlook

Combined market shares of top power discrete & module suppliers 90%

+0.9%

80%

70% +7.3%

60%

50% +10.6%

40%

Top 5 30%

Top 10 Top 20

20% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

20

Semiconductor & Power Discrete & Module Outlook

Average annual semiconductor revenue by ranking group

20,000

2001 2002 2003

15,000

Millions of Dollars

2004 2005 2006 2007 10,000

2008 2009 2010 2011 2012

5,000

2013 2014 2015E

Top 10

Top 11-25

Top 26-50

Top 51-100

Top 101-200

Top 201 plus

OVERALL AVERAGE

Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

21

Semiconductor & Power Discrete & Module Outlook

Average annual power discrete / module revenue by ranking group 1,400

Millions of Dollars

1,200 1,000 800 2001 2008

600

2015 400 200 Top 5

Top 6 to 10

Top 11+

OVERALL AVERAGE Source – IHS Competitive Landscaping Tool Q4 2015

© 2015 IHS. ALL RIGHTS RESERVED.

22

Semiconductor & Power Discrete & Module Outlook

Combined market shares of top five semiconductor • Samsung suppliers in each market segment • Micron • SK Hynix • Toshiba • SanDisk

90%

80%

• • • • •

Intel NXP AMD Renesas TI

• • • • •

Qualcomm Avago Intel Samsung MediaTek

Cumulative Market Share

70%

60%

50%

Total Semiconductor

40%

Memory IC Microcomponent Logic IC

30%

Analog IC Discrete Optical Sensor / Actuator

20% 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014 2015E

Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

23

Semiconductor & Power Discrete & Module Outlook

Combined market shares of top five semiconductor suppliers in each market segment 90%

80%

Cumulative Market Share

70%

60%

• • • • •

50%

Infineon Mitsubishi Toshiba Fairchild STMicroelectronics Total Semiconductor

40%

Memory IC Microcomponent Logic IC Analog IC

30%

Discrete Power Discrete Optical

20%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

Sensor / Actuator

Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

24

Semiconductor & Power Discrete & Module Outlook

Combined margins of 100 companies with semiconductor revenues over 70% of total company revenue Representing over 63% of semiconductor revenue in 2014 60%

50%

12.6% 4.3%

Annual Margin

40%

WEIGHTED GROSS MARGIN

30%

WEIGHTED OPERATING MARGIN

20%

AVERAGE GROSS MARGIN

15.6% AVERAGE OPERATING MARGIN

10% 1.6%

0% 2007

2008

2009

2010

2011

2012

2013

2014

-10% Source – IHS Competitive Landscaping Tool Q4 2015 © 2015 IHS. ALL RIGHTS RESERVED.

25

Semiconductor & Power Discrete & Module Outlook

Comparison of Top 10 power discrete & module suppliers 2001 to 2015

Rank

2006

2015

1

STMicroelectronics

Infineon Technologies

2

Fairchild Semiconductor

Mitsubishi

3

International Rectifier

Toshiba

4

Toshiba

Fairchild Semiconductor

5

Infineon Technologies

STMicroelectronics

6

Mitsubishi

Vishay Intertechnology

7

Vishay Intertechnology

Fuji Electric

8

Fuji Electric

ON Semiconductor

9

ON Semiconductor

Renesas Electronics Corporation

10

Sanken Electric Company

ROHM Semiconductor

Source – IHS The World Market for Power Semiconductors – 2015 Edition © 2015 IHS. ALL RIGHTS RESERVED.

26

Semiconductor & Power Discrete & Module Outlook

Top Ten Transformational Technologies . . . And More CURRENT IHS TECHNOLOGY RESEARCH COVERAGE

1) Internet of Things

• Encryption & Security

2) Cloud Computing / Big Data

• Carrier Aggregation

3) 3D Printing

• Wireless Charging

4) Energy Storage / Advanced Battery Technology

• Virtual Reality

5) Graphene 6) Advanced User Interfaces 7) Sensors of all Types 8) Flexible Displays 9) Biometrics for Security / Health 10) Artificial Intelligence © 2015 IHS. ALL RIGHTS RESERVED.

• Biomedical Technology • HEVC • High Resolution Displays • LTE Direct • “Smart” Extensions • Quantum Computing • Visible Light Communications 27

Semiconductor & Power Discrete & Module Outlook

The developing technology triumvirate

IoT

Cloud © 2015 IHS. ALL RIGHTS RESERVED.

Waves of Amplified Growth

5G 28

Semiconductor & Power Discrete & Module Outlook

For More Information • The World Market for Power Semiconductors –2015 Edition https://technology.ihs.com/Services/426851/power-semiconductor-intelligence-service

• Semiconductor Application Forecast AMFT Intelligence Service https://technology.ihs.com/Services/548447/semiconductor-application-forecast-amftintelligence-service

• Semiconductor Competitive Landscaping CLT Intelligence Service https://technology.ihs.com/Services/548450/semiconductor-competitive-landscape-cltintelligence-service

© 2015 IHS. ALL RIGHTS RESERVED.

29

MARCH 2016

OUTLOOK FOR SEMICONDUCTORS & POWER DISCRETES & MODULES Forecast Outlook

Dale Ford, Vice President

© 2015 IHS. ALL RIGHTS RESERVED.