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The Commercialisation of Research & Intellectual Property Assets

AKEPT June 2012

Silterra Malaysia Sdn Bhd

“Innovation at Silterra –

A Perspective”

Strictly Private and Confidential

Presentation Outline

The Global Semiconductor IndustryThe Global Semiconductor Industry1

Silterra & The Malaysian IndustrySilterra & The Malaysian Industry2

Perspectives on InnovationPerspectives on Innovation3

4 ConclusionsConclusions

1. The Global Semiconductor Industry


The Semiconductor Industry – some macro characteristics

One of the fundamental building blocks of modern human life; enables ‘everything’. This shall intensify in scope and scale.

Driven by Technology and Innovation.

Knowledge-Intensive, Critical Dependency on a Highly Competent and Motivated Work-force.

Capital-Intensive and Requires Constant Re-investments.

Highly Complex and Demanding Environment for Volume Production.

Challenging and Dynamic Global Market Conditions; Volatile and Cyclical, …..almost Chaotic.


One TransistorOne Transistor

0.13μ

Gate Dimensions are measured in terms of microns (u) or nanometer

Human Hair

50μ

•Several hundred transistors can fit into the diameter of one single human hair.• 10-50 Million transistors in a single chip• Each one of the transistor needs to perform to specifications


Fabrication of an IC on a silicon wafer involves 300 to 900 process steps. To fully complete the whole process takes 30 to 90 days.

IC

Yield >98.5%

30,000 wafers/ month

Effective Cycle Time

High Product Mix (30 to 50 products)

90nm – 180nm tech

RAW WAFER

Diffusion Photo Etch

ImplantCMPThin Film

Metrology Cleaning

• 24hrs/day operation• > 400 equipment sets• > 30 equipment types• Engineering & Development• Utility & Power quality

Wafer Fabrication is a highly complex process…


2010 Global Foundry Ranking by Gartner. Clear lines are drawn. It’s the Top 4 and the Rest….

2009 Rank 2010 Rank Change in Rank Company 2010 Revenue 2010 Share (%)

1 1 0 TSMC 13,332 47.1

2 2 0 UMC 3,824 13.5

3 3 0 Globalfoundries* 2,643 12.4

4 4 0 SMIC 1,554 5.5

7 5 2 Dongbu HiTek 512 1.8

8 6 2 TowerJazz 509 1.8

6 7 -1 Vanguard International 505 1.8

5 8 -3 IBM Microelectronics 500 1.8

10 9 1 MagnaChip 410 1.4

9 10 -1 Samsung 390 1.4

14 11 3 HHNEC 370 1.3

12 12 0 X-Fab 317 1.1

11 13 -2 Fujitsu Semiconductor 275 1.0

18 14 4 Grace Semiconductor 250 0.9

17 15 2 CSMC Technologies 225 0.8

15 16 -1 HeJian Technology 212 0.7

16 17 -1 Silterra 180 0.6

19 18 1 Rohm 174 0.6

20 19 1 Powerchip Technology 140 0.5

22 20 2 Phenitec Semiconductor 110 0.5

Others 1,047 3.4


Silterra vs Its Peers (Revenue / Available Capacity Index) for 2010


Opportunities – Malaysia has excellent attributes to be a SUSTAINABLE Semiconductor Fabrication Hub for Mature Tech (0.22 to 0.11 micron)

Demand for greater efficiency in the industry is a real opportunity for a country like Malaysia–

China CANNOT win all due to inherent global sensitivities

–

China is NOT universally capable yet–

Taiwan/Korea/Singapore is not cost competitive compared to Malaysia

–

India/Vietnam/Thailand/Indonesia yet to be ready

US IDM’s and European Foundries are very keen to explore establishing foot-print in Malaysia. This structural IDM outsourcing is a valid industry trend

Silterra is currently in deep discussions with Japanese players to support Japan’s recent shift in corporate strategy. This is being driven by their Business Continuity Plan and the appreciating Yen

iSuppli

Forecasts

Opportunity for Malaysia:

•

Estimated $20b to $30b/year mature technology market (0.22 to 0.11 micron)

•

Malaysia can leverage on the presence of the existing Assembly & Test operations in Malaysia.

2. Silterra and the Malaysian Industry


Silterra

Business Performance

Where we Stand

Current Efforts

Issues and Challenges


1217

33 34 39

11

20

2004 2005 2006 2007 2008 2009 2010

Silterra Continues to serve the Semiconductor Business in 2011 and repeats its Strong Performance for the 3rd year running..

Silterra had a strong year in 2010 and 2011 and is a respected Tier 2 player in the industry

Significant Growth in Active Customer Base 2010 Revenue by Geography

In the last two years, Asian fabless companies have grown much strongerCurrently, East Asian firms account for 79% of Silterra’s revenues

CAGR: 32%

With a IP / Design focused strategy, Silterra’s active customer base grew by 3.1xIncludes leading semiconductor design companies

Shipping close to 300K wafers this year – which represents approx. ½ billion chips

Sustained Traction with Top Tier Customers

Tier 1 customers, best –in-class in their respective fields

Active Customers

Taiwan71.0%

US11.0%

Korea11.0%

ROA7%

http://www.siliconmotion.com/index.php


Silterra has a significant share in the small panel Display Driver ICs (DDI’s) market, with 21% share of the global market in 2010

Bigger Screen,GPS, Touch ScreenAccelerometer,NFC, WiFiMobile Internet/TV

MP3, Camera,Bluetooth, VoiceRecording, MMS

Basic Function, SMS

QCIF,CSTN, MSTN,

QVGA, QCIF+

WQVGA, HVGA,WVGA, VGAWSVGA

PANELRESOLUTIONFEATURES


LG74 –

LG4261B : Nokia N8 Smart phone 5.5M 1.84um2 SRAM

Chip fabricated by SIlterra


Amazon “Kindle Fire” launched end September 2011

The touch controller IC is fabricated in Silterra

http://thestar.com.my/news/worldupdates/


The Malaysian Industry

Scale and Size

Structure

Economic Transformation Programme

Issues and Challenges


The Significance of the Electronics Industry to Malaysia

MALAYSIA - EXPORTS BY MAJOR PRODUCTS, JAN 2008 - AUG 2009

0

1

2

3

4

5

15

20

25

Electrical & Electronic Prod.

Crude Petroleum

2008

Palm Oil

Chemicals & Chemical Prod.

LNG

2009

Figures from MITI 2009

The Electronics Industry:

•

Employs 29% of manufacturing employment.

•

Accounts for 56% of all manufacturing exports

•

Recently identified as a Key Area of Economic Activity in the “New Economic Model”

•Silterra value-add is 60%, compared to industry average of 10-20%


The Semiconductor Ecosystem – filling-up the gaps of the Value-Chain and the Supply-Chain

Market…the customers

Raw WaferWafer Fabrication

Assembly & Test

Product Assembly

Fabless IC Design

VALUE-Adding

In the last 40 years, Malaysia has developed an industrial base across the entire semiconductor value chain populated by local players and multinationals.

Chem/Gas Suppliers

Tool Vendors

Bumping

Refurbishers/R&M

Supporting PlayersIndustry Segment

“Traditional”

E&E Industry of Malaysia. Value-add is in the 10-20% region.

10-20 %

30-40 %

60-70 %

80-90 %

Strictly Private and Confidential19

The E&E in 2020 Strategy: Higher value added; larger scale; Malaysian champions

Scale

Large

Small

Value addLow High

Large scale, high value add

Large scale, low value add

Small scale, low value add

Small scale, high value add

E&E 2020

Electronicstoday

Electricaltoday

Increase scale of domestic Electrical

sector

Increase depth of the value chain

Strictly Private and Confidential20

The E&E 2020 Strategy: Focus on 4 sectors and 4 regional clusters

4 Focus Sectors 4 Regional Clusters

▪

Semicon: Build out value chain capabilities with fabs, design and advanced packaging

▪

Solar: World’s #2 producer by 2020 (from #3 in 2011)

▪

LEDs: Light up the world with Solid State Lighting

▪

Industrial Electronics: Build on test & measurement and wireless communication clusters; expand and strengthen other Industrial Electronics sub-segments

▪

Build regional E&E clusters in Northern Corridor, Klang Valley, Johor and Sarawak, leveraging on each regions’ unique value proposition

▪

Fix region specific enablers and cross-cutting enablers to create world-class operating environment

4 X 4

$16B in GNI by 2020

3. Perspectives on Innovation


Silterra’s Competitiveness is built on Innovation..

•

It has 350 scientists, engineers and technologists fully dedicated to innovation at its high-tech plant in Kulim.

•

Silterra spends 10-15% of its annual revenues on Research and Development. It has the highest number of US and Local Patents for a Malaysian company. Many of these patents are embedded in the fabrication processes used to produce commercial products.

•

Being a local company run mainly by Malaysians, Silterra taps its innovation strength from the local Universities and other Malaysian entities. Its close relationship with the local Universities has resulted in numerous mutual benefits. Through its Multi-Project Wafer Services (MPW), Silterra has fabricated more than 150 IC designs for the local Universities. These designs form part of Masters and PhD projects from the Universities.

•

Silterra’s

support and collaboration with local Universities and other institutions is a key component part of its strategic outlook.

Unlike multi-national corporations (MNC’s) who are operating in Malaysia for cost reasons, Silterra

hopes to be an enabler for Malaysian innovation and commercialisation.

Strictly Private and Confidential23Source: Int’l Technology Roadmap For Semiconductors (ITRS), SIlterra

More of M

oore

22 nm

32 nm

45 nm

65 nm

90 nm

130 nm

180 nm

More Than Moore:

Logic

Silterra’s Current

Target Market

Silterra’sFuture Target Market

Mixed-Signal Analog / RF Sensors / Actuator

Big Four Market

BioChip

Big-4’sStrategic Direction

Choose a Strategy where Survival is enhanced..

•

Integrated HV Display and Touch panel controller

• Power Management

• MEMS

•Logic + MCU

•RF

•Other specialty

• Higher ASP

•

Sustainable competitive advantage

•

Low ASP HV products to achieve economies of scale through partner fabs


Silterra’s has forged ahead on its ‘asset-light’ strategy to find sustainable growth paths..

ProMOS and Silterra to offer advanced HV technology for smartphone market Press release; Jessie Shen, DIGITIMES [Thursday 9 June 2011]

ProMOS

Technologies and Silterra Malaysia have announced the successful completion of the first joint technology development project to bring Silterra's

0.13-

and 0.11-micron High-Voltage (HV) process technology for small-panel LCD driver IC applications to ProMOS's

12-inch fabrication facilities in Taichung, Taiwan. The technology is now in the pilot-run stage ready for customers' tape-out, and is on track for mass production starting fourth quarter of 2011.This project marks the first step of the long-term strategic partnership between ProMOS

and Silterra to leverage on each other's strength to bring together ProMOS's

12-inch production scale and advanced manufacturing capabilities and SilTerra's

advanced HV technology to enable the fast growing smart phone market.

According to Gartner, the smartphones

market is forecast to be around 450 million units this year and

expected to double to 900 million units by 2014. Another important trend in smart phone market is screen resolution. The most popular screen resolution for today's smartphone

is HVGA and WVGA and this is rapidly transitioning to WSVGA and HD. Both the accelerated volume and the demand for higher resolution screens are driving the demand for more advanced process nodes and larger wafer capacity."In our efforts to diversify business portfolio, we have identified mobile applications, particularly smartphones, as the key market we would like to engage," said ProMOS

chairman and president ML Chen. "Small-panel LCD driver IC is, of course, a vital component for smartphones

and Silterra is one of the global leaders in foundry services for this product. I am very excited that, with the successful execution of technology transfer, we have reached the first major milestone of our continuous process of business diversification."

"We are delighted to partner with ProMOS

to bring together Silterra's

award-winning advanced high-voltage technology and ProMOS's

advanced 12-inch capacity and manufacturing capability to the smart phone market. This project is a significant breakthrough for SilTerra

as it enables us to continue to deliver new innovations and capacities to our customers to win in the market. In addition, it also gives our engineers the necessary exposure and training in advanced 12" capabilities," said Kamarulzaman Mohd

Zin, CEO of SilTerra

Malaysia.


Silterra’s 1TSRAM Technology enabling a World’s First

“Synaptics Introduces World's First Capacitive Multi-Touch Interface Solutions for Use with Integrated Displays in Mobile Devices”

SANTA CLARA, Calif., Feb. 8, 2011 /PRNewswire/ --

Synaptics Incorporated (Nasdaq: SYNA), announced today the world's first line of capacitive multi-touch interface solutions for use with integrated displays, the ClearPad™

Series 3 and Series 4. With on-cell and in-cell integrated displays, Synaptics makes it possible to seamlessly enable capacitive multi-touch sensing in mobile devices. Both ClearPad Series 3 and Series 4 are on-cell and in-cell display ready. The ClearPad Series 4's revolutionary approach combines Synaptics state-of-the-art ClearPad multi-touch technology with the display driver (DDI) into a single-chip solution that delivers the most advanced display noise management and best-in-class capacitive sensing performance. Synaptics' display integration solutions provide cost effective

http://mail.silterra.com/exchweb/bin/redir.asp?URL=http://studio-5.financialcontent.com/prnews?Page=Quote%26Ticker=SYNA


Serving the ‘under-served markets’…..

From EE Times:

Brazil's Chipus partners with second foundryPeter Clarke

9/9/2011 7:23 AM EDT

LONDON –

Chipus

Microelecrtronics

SA, a Brazilian startup licensor of analog and mixed-signal circuit designs, has said it has begun designing a library of low-voltage, low-power analog IP cores for implementation on a 0.18-micron CMOS process used by foundry Silterra Malaysia Sdn

Bhd.

A partnership has evolved between the two companies after executives from Chipus

(Florianopolis, Brazil) visited Silterra's

foundry in Malaysia in July, Chipus

said. "This partnership builds on a mutual attraction between both players," said Paulo Dal

Fabbro, CTO of Chipus, in a statement. He added: "Silterra's

process came in handy for our low-power requirements and their wafer price is very competitive. Furthermore, they provide a very good support to partners and customers."


The Innovation Continuum

Incremental Discontinuous Architectural Systems Radical Disruptive Breakthrough

Modifications, refinements, enhancements, simplifications

Changes core design concept to new architecture

Obsoletes technologies, processes and people

Dominated by societal and governmental regulations

Develops into major new business or spawns an industry

Brings the user a new value proposition

Moments in history that set the stage for the future


Support for Universities and Human Capital DevelopmentArea

Industry / Univ

Collaboration

Key Points

Collaboration on semiconductor and advanced manufacturing projectsExamples: RF design with MMU, IP development with CEDEC (USM), industrial engineering with UniTENReview board for university electronics syllabusProvide subsidized access to state-of-the-art FA facilityMoU with USM in to formalize collaboration activities

Internships & Training

Human capital development for undergraduates, graduates and post-graduatesIn-house programs: Young Malaysian Graduate Program, Undergraduate, Postgraduate, and Lecturer Internship programs Collaboration programs: INSEP, NCITES, GEMS, Job Camp (UNIMAP)250+ individuals have undergone the programs to date

Fabrication Services

University IC Design Consortium agreement with 7 Universities – USM, UM, UKM, UPM, UiTM, UTM and MMU – through CEDEC (a unit under USM)Silterra provides free MPWs – which would otherwise cost RM30-40K eachMore than 150 devices fabricated since 2006.Graduate students hone design skills and come better prepared for industry

SponsorshipsSponsorship of conferences and student awardsUniMAP electronics conference 2008, ASQED 2010Top student awards for UniMAP, UKM, UiTM, UTM in MicroelectronicsSponsorship of postgraduate student presentationsProvide keynote speakers for technical conferences at universities

4. Conclusions


Innovation Myths

Individuals Drive Innovation

Innovations begin with Brainstorming

Innovation Requires Creative People

An innovation process will give you the results you need

• Innovation is a Team

Sport

• Innovations begin with Understanding the Customer

• Innovation Requires Effective Problem Solvers

rather than Creative People

• The innovation process is just ONE

tool for

successful innovation


What is needed for Innovation

Resources

Infrastructure

Culture

Process


Making it Happen in Silterra… (Gus Gaynor – Innovation by Design)

Infrastructure–

Where do I begin, shall I even consider doing it in this organisation–

Operational, Technical, Financial, Human Infrastructures

Resources–

24 x 7–

Where can I get help in….–

Where can I get that equipment/software/book/ etc

Process–

IP acknowledgement/ownership/sharing–

How fast can I convert these ideas into becoming a successful product

Culture–

How will I be rewarded–

Why Should I do this–

Will I be recognised


A transition to an ‘open innovation model’

Research Development Production

Research

Development

Production

Terima Kasih

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