SemiWEEK: The bright & dark sides of the Coronavirus; Stocks fell

1. Semiconductor WEEK: April 3, 2020An overview of results and conclusions from recent reports at VLSI Chip History Center People: Robert N. Noyce, Intel’s first CEO. Some links to learn about him. The Chip Insider Strategy and Tactics: The bright & dark sides of the Coronavirus. Semiconductor Stocks • VLSI’s Semiconductor Stock Indices returned to negative territory • March jobs report missed expectations • Semiconductor Stock Index gave back 1.6% • Despite claiming five of the top six stocks • Semiconductor Equipment Stock plunged 6.7% • All companies finished in the negative • EDA Stock Index was led up 1.4% by Cadence • Electronics Materials Stock Index fell 5.3% • SOITEC came out on top • Hottest Stocks: MagnaChip Semiconductor, Xilinx, SOITEC, Kingpak Technology, Intel, and Max Linear. Chip Market Research Services Caution prevails as storm clouds continue to gather • Order activity for semiconductor equipment continued to trend lower, slipping to 57 degrees • IC Inventory Levels Semiconductor Analytics Semi Market results from last week: Semiconductor sales slowed significantly last week Semiconductor Sales Nowcast: 1Q20/1Q19 Slipped to +3% • Semiconductor Weather1 Report: Warmed from Cold to Chilly • IC Supply-Demand2 Metrics: Saturated • Electronics Price Trend: Rising 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

2. The Chip Insider®'s Graphics File • Order activity for semiconductor equipment continued to trend lower, slipping to 57 degrees • Although the rate decline in order activity has moderated in the last two weeks the level of uncertainty among chipmakers and equipment suppliers is high • Equipment suppliers have not seen a significant reduction in demand yet; however, tool delivery in some areas has been challenging due to ongoing lockdown • Chipmakers’ visibility in the near term is fairly limited • The Chip Price Performance Index (CPPI) tumbled This issue contains the latest forecast. Call us to access more details March 2020 Caution prevails as storm clouds continue to gather

4. The Chip Insider® Graphics I:B ratio is soaring as sales are falling faster than inventories IC Inventory Levels: chart gives rolling averages for semiconductor integrated circuit inventories held at OEMs, in Die Banks, and the total Inventory-to-Billing Ratio

5. Semiconductor Analytics Last Week in the Semiconductor Market: Semiconductor sales slowed significantly last week as logistics issues from COVID-19 slowed OEM shipment levels. It also re-infected the 1Q20/1Q19 Semiconductor Nowcast. DRAM, NAND, Logic, Auto, Analog & Power IC sales were all below 2019. Semiconductor Sales Nowcast: 1Q20/1Q19 Slipped to +3% Semiconductor Weather1 Report: 61˚ F Warmed from Cold to Chilly IC Supply-Demand2 Metrics: Saturated Electronics Pricing Trend: Rising Notebooks, Smartphones, and Consumer Electronics have a seasonal inversion driven by WAHE (Work-at-Home Economy) • W/W: Week-over-Week sequential growth W/Q: Week-over-Quarter W/Y: Week-over-Year 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 • 1: Measures Order Activity 2: Measures Pricing Power

6. 2020 Semiconductor Market Drivers Coronavirus has had a deep negative impact on Integrated Circuit sales: • Certainties: • Coronavirus Pandemic • Macroeconomic ‘V’acuum • WAHE* & Win 7 EoL refresh • 7/10nm and 5/7nm demand ramps • Memory Price Elasticity • 5G: Smartphone, Auto, Industrial • Uncertainties: • Ability of Governments to prevent economic infection from Coronavirus • 2020 Elections in U.S. *Work-At-Home Economy

7. The Chip Insider®Strategy & Tactics Strategy and Tactics: The bright & dark sides of the Coronavirus Summaries: The bright side of the Coronavirus: Chip makers have been working hard as ever to come out of the COVID-19 storm gaining market share. What is good about this is it can generally be expected that semiconductor manufacturers will keep Capital Expenditures going for technology upgrades for new nodes, and even capacity expansions where they see growth opportunities. Chipmaker responses to the Coronavirus was to aggressively… Meanwhile, TSMC Taiwan started … SMIC and other Chinese companies in the semiconductor industry were quickly propped up by the China Big Fund. The backdrop to this is a government in China that sees semiconductor self-sufficiency as essential to its future. Outside of China, wafer fabs around the world are running at utilization rates similar to normal times that would be expected for this year back in early January. Macroeconomics and the WAHE restructuring: The Coronavirus has had an unprecedented impact everywhere in a way that hasn’t been seen since Pearl Harbor with its forced restructuring of business to a Work-At-Home Economy (WAHE, pronounced like the words ‘Way’ and ‘Whey’). WAHE will be to the post-Coronavirus world what the Auto was to the post-WWII and the second half of the twentieth century. The dark side of the Coronavirus: The business and macroeconomic issue can be framed by China’s experience, where general utilization dropped below 50% with the shutdown. Since then, it increased back to normal levels for semiconductor, as well as for other factories. However, consumers have not returned to normal patterns… Another macroeconomic problem facing China’s factories and economy is that the rest of the world is well behind them in recovering from the Coronavirus. Supply Chain constraints: If you’re a semiconductor equipment or materials supplier, there are two constraints affecting delivery to customers and demand is not currently one of them. One is in the 2nd and 3rd tiers of critical subsystem suppliers and the other is in logistics… Supply Chain strategy had shifted from Just-in-Time to Just-in-Case, creating new problems. Contact us to get the full report and more

8. semiStockWEEK:VLSI's Semiconductor Stock Indices returned to negative territory along with the market following the March jobs report missed expectations. Semiconductors -2%, Equipment -7%, EDA 1%, Electronic Materials -5%.

9. Semiconductor Stocks: Weekly Growth and Forward P/E Ratios by Company VLSI’s Semiconductor Stock Index gave back 1.6% despite claiming 5 of the top 6 stocks. IDM -5.5% Foundry & OSAT -0.2% Fabless & Fablite -0.7% AMD AMD Analog Devices ADI AmkorAMKR ASE ASX Broadcom AVGO IBMIBM Infineon IFNNY.PK Intel INTC JCET600584.SSKingpak Technology6238.TWO Micron Technology MU On Semiconductor ON Panasonic PC MagnaChip Semiconductor MX Maxim MXIM MaxLinear MXL MediaTek 2454.TW NVIDIA NVDAQualcomm QCOM Samsung Electronics 005930.KS Silicon Laboratories SLAB Skyworks SWKS SMIC SMI STMicroelectronics STM Texas Instruments TXN TSMC TSM UMC UMC Western Digital WDC Xilinx XLNX

10. Chip Equipment & Related Stocks:Weekly Growth and Forward P/E Ratios by Company VLSI’s Semiconductor Equipment Stock Index plunged 6.7% with all companies finishing in the negative. WFE -7% Test -9.4% Assembly -5.1% Applied Materials AMAT Advantest ATEYY ASM International ASMI ASM Lithography ASML ASM Pacific 0522.HK BE Semiconductor BESIY.PK FormFactorFORM KLA KLAC Kulicke & Soffa KLIC Lam Research LRCX Onto Innovation ONTO Nikon 7731 Teradyne TER Tokyo Electron Limited 8035 Veeco VECO

11. Electronic Materials Stocks:Weekly Growth and Forward P/E Ratios by Company VLSI’s EDA Stock Index was led up 1.4% by Cadence. VLSI’s Electronics Materials Stock Index fell 5.3%, SOITEC came out on top. BASF BASFY Cabot Microelectronics CCMPCadence CNDS DNP 7912 DuPont DD JSR 4185 Shin-Etsu 4063 SOITEC SOI.PA Synopsys SNPS Tokyo Ohka 4186