ANALOG IC DYNAMICS & DIRECTIONS

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1 JULY 2016 ANALOG IC DYNAMICS & DIRECTIONS SEMICON WEST Dale Ford, Vice President & Chief Analyst

2 Electronic systems market Growth flattens in 2016 Five year CAGR = 2.0% Industrial Electronics leads growth followed by Automotive, Wired & Consumer Electronics Industrial Electronics passed Data Processing as largest market in 2012; Wireless followed in 2013 Global Electronic Systems Revenue 15% 2015 WW Revenue = $2.05 T 13.3% Year-on-Year Growth 10% 5% 0% -5% 10.3% 7.3% 7.9% 5.8% 2.5% 7.6% 3.7% 4.0% 4.2% 1.4% 0.1% 2.5% 3.2% 1.9% 2.4% -10% -8.7% Source IHS Application Market Forecast Q

3 6% Electronics growth weighed down by Wireless & Data Processing Automotive WW Market CAGR Forecast 15 to 20 4% 2% 0% -2% Wireless Data Processing Consumer Industrial Wired -4% -8% -6% -4% -2% 0% 2% 4% 6% 2016 Growth Source IHS Application Market Forecast Q

4 Semiconductor market growth 2015 Category 2015 Growth Category 2015 Growth Total Semiconductor -2.0% Total ICs -1.7% Memory ICs -2.3% DRAM -2.5% SRAM -14.8% NOR Flash -14.9% Data Flash -0.3% Microcomponent ICs -4.9% MPU -5.7% MCU -3.0% DSP -2.8% Logic ICs -1.0% General Purpose Logic -8.2% ASIC/ASSP Logic 0.2% Analog ICs 2.4% General Purpose Analog -1.0% ASIC/ASSP Analog 4.4% Discrete -6.7% Optical -2.5% Image Sensors 0.0% LEDs -4.3% Sensor/Actuators 1.5% 4

5 Annual semiconductor outlook September 2012 began a new cycle that peaked in Q /16 contracts Long-term outlook sees five-year CAGR of only 1.9% Global Semiconductor Revenue 2015 Revenue = $347.3B 34.1% 30% 23.6% Semiconductor market growth outlook Next four years challenging Year-on-Year Growth 20% 10% 0% -10% 10.3% 4.1% 3.9% -5.1% -10.9% 1.3% -2.5% 6.4% 8.3% 2.5% 3.6% 4.3% 3.8% -2.0% -4.5% -20% Source IHS Application Market Forecast Q

6 Quarterly semiconductor forecast Q1 15 slumps to -9.0%; Q1 16 almost as bad at -8.6% Rest of year disappoints Source IHS Application Market Forecast Q

7 2016 Growth Weak and Negative Source IHS Application Market Forecast Q

8 Historic alignment between economy and electronics Semiconductor growth profile continues to predict accurately Source IHS Global Insight and IHS Technology 8

9 Historical 12 month moving average Consumer Electronics PC GUI PC Multimedia PC WWW Mobile Phone / Mobile PC Economy Source WSTS 9

10 Current cycle weaker than most but longest sustained Annual growth peaked in November 2014 Source WSTS 10

11 Long-term growth trends Source WSTS 11

12 New semiconductor growth drivers for next 5 years 10% 8% Industrial WW Market CAGR Forecast 15 to 20 6% 4% 2% 0% -2% Wireless Data Processing Consumer Wired Automotive -4% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 2016 Growth Source IHS Application Market Forecast Q

13 Share of analog IC revenues by market 35% 30% 25% 20% 15% 10% % 0% Data Processing Wired Wireless Consumer Automotive Industrial 13

14 Analog IC growth drivers for next 5 years 10% 8% Industrial WW Market CAGR Forecast 15 to 20 6% 4% 2% 0% -2% Wireless Data Processing Consumer Automotive Wired -4% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 2016 Growth Source IHS Application Market Forecast Q

15 Analog IC markets Top size & growth Top 10 Revenue Enterprise Ethernet Switches & Routers 2. Powertrain 3. High-Tier Smartphone 4. Mid-Tier Smartphone 5. Automation 6. Other Wireless Communications 7. Infotainment: Other 8. Chassis & Safety: Other 9. Medical Electronics 10. Building & Home Control Top 10 Growth UHD OLED TV 2. Smart Watches & Glasses 3. 3D Printers - Commercial/Industrial 4. UHD LCD TV 5. Chassis & Safety: ADAS 6. M2M Modules 7. Infotainment: Connectivity & Telematics 8. Tablet PCs - Screen Size => 9 9. Fitness & Wellness Wearable Electronics 10. Building & Home Control 15

16 General purpose analog IC growth drivers for next 5 years 10% 8% Industrial WW Market CAGR Forecast 15 to 20 6% 4% 2% 0% -2% Data Processing Consumer Automotive Wired Wireless -4% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 2016 Growth Source IHS Application Market Forecast Q

17 Application Specific Analog IC growth drivers for next 5 years 10% 8% Industrial WW Market CAGR Forecast 15 to 20 6% 4% 2% 0% -2% Wireless Data Automotive Processing Consumer Wired -4% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 2016 Growth Source IHS Application Market Forecast Q

18 2015 semiconductor market share for top 20 suppliers Plus results from major announced acquisitions expected to close in H Top Suppliers of Semiconductors Worldwide - Millions of Dollars * Includes 2015 Acquisitions AND announced acquisitions for 2016 Source IHS Competitive Landscaping Tool Q Percent Percent Cumulative Rank Rank COMPANY NAME Revenue Revenue Change of Total Percentage 1 1 Intel* 49,964 51, % 14.8% 14.8% 2 2 Samsung Electronics 37,093 40, % 11.6% 26.4% 4 3 SK Hynix 16,113 16, % 4.8% 31.1% 3 4 Qualcomm* 19,291 16, % 4.8% 35.9% 14 5 Avago Technologies** + Broadcom** 14,049 15, % 4.4% 40.3% 5 6 Micron Technology 16,110 14, % 4.1% 44.3% 6 7 Texas Instruments 12,246 12, % 3.5% 47.9% 15 8 NXP* 5,483 9, % 2.8% 50.7% 7 9 Toshiba 10,234 8, % 2.5% 53.2% 9 10 STMicroelectronics 7,404 6, % 2.0% 55.2% Infineon Technologies* 5,937 6, % 2.0% 57.2% MediaTek 7,016 6, % 1.9% 59.1% Apple 2,985 6, % 1.7% 60.8% Renesas Electronics Corporation 6,815 5, % 1.6% 62.5% Sony 5,053 5, % 1.5% 64.0% SanDisk 6,264 4, % 1.4% 65.4% ON Semiconductor** + Fairchild Semiconductor** 4,934 4, % 1.4% 66.8% nvidia 4,109 4, % 1.3% 68.1% Advanced Micro Devices (AMD) 5,388 3, % 1.1% 69.2% Analog Devices 3,094 3, % 1.0% 70.2% All Others 114, , % 29.8% 100.0% Total Semiconductor 354, , % 100.0% 18

19 35 All M&A, spinouts, joint ventures, business line sales and other financial transactions by type EXIT BIZ SALE SPIN M&A

20 Combined market shares of top semiconductor suppliers Source IHS Competitive Landscaping Tool Q

21 Combined market shares of top five semiconductor suppliers in each market segment Source IHS Competitive Landscaping Tool Q

22 Combined market shares of top five semiconductor suppliers in each market segment Source IHS Competitive Landscaping Tool Q

23 2015 Surprises #10 Apple Dual Sourced their Application Processor Chips #9 IoT Cybersecurity and Virtualized & Cloud Security Take Center Stage #8 Google Bets Big On Solar Power #7 Technical Leaps Propel Powerful Drone Launch #6 Facebook s Transformation into a Mobile Monetization Machine #5 Major Companies Make Big Investments in Artificial Intelligence #4 China Goes Global in Component Manufacturing #3 Flexible Displays Make Paradigm Shift On Form Factor #2 Extending Global Connectivity #1 Paving the Way to the Autonomous Car 23

24 2016 Predictions 24

25 2016 Predictions 25

26 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 Biomedical Technology 5) Graphene HEVC 6) Advanced User Interfaces High Resolution Displays 7) Sensors of all Types LTE Direct 8) Flexible Displays Smart Extensions 9) Biometrics for Security / Health Quantum Computing 10) Artificial Intelligence Visible Light Communications 26

27 The developing technology triumvirate IoT Cloud Waves of Amplified Growth 5G 27

28 JULY 2016 ANALOG IC DYNAMICS & DIRECTIONS SEMICON WEST Dale Ford, Vice President & Chief Analyst

IoT: New Opportunities for Semiconductor Industry Growth. Andrew C. Russell Vice President Marketing Greater China

IoT: New Opportunities for Semiconductor Industry Growth Andrew C. Russell Vice President Marketing Greater China Agenda The Internet of Things ( IoT ): An Exciting, Disruptive Technology and Application