Growing a fabless economy in India: challenges, pitfalls & opportunities

Transcription

1 Growing a fabless economy in India: challenges, pitfalls & opportunities IESA Vision Summit 2014 Bangalore, Feb 3, 2014 Joep van Beurden CEO CSR plc.

2 Agenda Two successful strategies The semiconductor industry To win, cooperation is key CSR examples Q&A 2

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5 $ Billions Semiconductor market revenue $400 $350 $300 $250 $200 $150 $100 $50 $0 Forecasted Source: Gartner, IC Insights, IDC, CSR Estimates, Includes foundry revenues 5

6 Costs associated with node progression have been rising significantly Fab cost $ Millions Process development cost $ Millions Chip design cost including fabless overhead costs $ Millions 6,700 1, % p.a. 4, % p.a % p.a. 4, ,450 1,800 2, nm 90nm 65nm 45nm 32nm 22nm 130nm 90nm 65nm 45nm 32nm 22nm 130nm 90nm 65nm 45nm 32nm 22nm SOURCE: Press Reports; isuppli; ICKnowledge; GSA; WorldFabWatch; ITRS 6

7 Applications that can sustain leading-edge product development TAM required to sustain each application for given IC design cost at each node 1 $ Millions 720 1,020 1,830 3,000 4,520 Number of applications meeting product development cost hurdle 90nm: 31 Assumptions 2 years per node 3 players per application 3 ICs per player R&D spend at 30% of revenue Considers only IC design costs 65nm: 26 45nm: 23 32nm: 18 22nm: 13 90nm nm nm nm nm SOURCE: isuppli; McKinsey analysis 1: Application types defined as per isuppli AMFT definition 7

8 Growth is mostly driven by portfolio momentum and M&A Revenue growth decomposition 1, percent, growth cylinders Overall sample Telecom High tech Portfolio momentum Total growth M&A Market share gain Based on a proprietary database of ~400 large companies, using revenue growth from SOURCE: McKinsey 8

9 The answer 9

10 Example 1: WLCSP Reduced chip area Reduced chip thickness Lower cost Higher reliability Lower moisture sensitivity Huge success in early adoption of Bluetooth in cell phones 10

11 Example 2: Voice & Music The Voice & Music Platform APPLICATION SOFTWARE CONNECTIVITY PROCESSING & MEMORY Audio BT USER INTERFACE POWER AUDIO 11

12 What is the extension Program? Allows third party companies to develop DSP software to run on CSR s Audio platforms for applications including: Mono Headsets Stereo Headphones Universal Communications Audio Adaptors Wireless stereo speakers Sound Bars Automotive Handsets And more. 12

13 The extension Partners Music enhancements Voice Controlled UI NEW NEW Noise Cancellation 13

14 The result: Voice & Music Q $80m $70m $60m $50m $40m $30m $20m $10m $0m $53.0m Q % $76.1m Q313 $300m $250m $200m $150m +72% $296.7m $100m $50m $0m $173.0m Q312 LTM Q313 LTM 14

15 Example 3: Cambridge Cluster Key strengths: University Research labs Technical consultancies High tech companies Biotech companies Angel and VCs Networking and mentoring organizations 15

16 The result for Cambridge Number of technology companies 1525 Number of high tech employees 53,000 Combined turnover Companies with market cap over $1 billion over the past 15 years Cambridgeshire unemployment 12 billion % (below frictional) House prices Up 10% over 2013 Top 50 companies 23% more jobs, 18% more revenue Big companies ARM, Humira, CSR, AstraZeneca 16

17 Key points The semiconductors industry is a key engine for innovation and value creation To enter, significant invested is needed To win against formidable incumbents, focus on key strengths and partner to overcome areas of weakness 17

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