FSA Releases Q2 2005 Analysis For The Fabless Sector

SAN JOSE, Calif.—(BUSINESS WIRE)—Sept. 26, 2005— FSA, the voice of the global fabless business model, today released key data and statistics, along with analysis of trends from the second quarter of 2005.

Financial Highlights:

Public fabless revenue totaled $9.3 billion in Q2 2005, which equates to 7.9% sequential growth and 4.2% growth over the same quarter the previous year. Fabless revenues outpaced global semiconductor revenues of $53.9 billion for the quarter, which reflected a decrease of 2.1% from the previous quarter. Revenues from public fabless companies accounted for 17% of total semiconductor sales in Q2 2005. North America represented 76% of Q2 2005 fabless revenues, followed by Asia at 21% and Europe at 3%.

For the first six months of 2005, public fabless revenue totaled $17.9 billion, an increase of 6% over the first six months of 2004. Global semiconductor sales totaled $109.0 billion in the first half of 2005, a 6.5% increase over the same period the previous year.

Please see the attached chart for a breakdown of the top ten fabless companies by Q2 2005 revenue.

"Overall, we expect the fabless industry to achieve 7% growth in 2005," said Jodi Shelton, co-founder and executive director of FSA. "However, the top ten fabless companies are collectively on track to achieve double-digit growth this year. With these companies at $1 to $3 billion and more in sales, this is a tremendous feat."

Funding Highlights:

New private capital for fabless companies increased in Q2 2005. Thirty-seven fabless companies raised $448.1 million in the quarter, an increase of 24% sequentially. Fabless companies represented 64% ($448.1 million) of the $703.65 million raised by the semiconductor industry. The total number of private fabless deals increased 23% from the previous quarter, but was down year-over-year by 19%.

Venture capitalists focused on early stage companies in Q2 2005, as 51% of all investments went to first and second rounds. Eight fabless companies received first round funding, totaling $60.3M, while eleven received second round funding of $140.3M. Collectively these 19 start-ups closed $200.6M; later stage fabless companies raised the balance of funds, totaling $247.5M.

IPO Highlights:

Three fabless companies completed initial public offerings in 2005, with one additional company having filed its registration statement.

M&A Highlights:

The total M&A activity for the first six months of 2005 is $2.5 billion, which exceeds the total amount in 2004. In Q2 2005 among the largest deals since Q4 2000 was Integrated Device Technology's acquisition of fabless Integrated Circuit Systems, totaling $1.7 billion, followed by Pixelworks' acquisition of Equator Technologies, totaling $109 million.

Wafer Pricing Highlights:

FSA's Q2 Wafer Fabrication & Assembly/Test Survey results showed that overall average prices for 200mm CMOS wafers increased 11% sequentially. This data coincides with recent statements from industry analysts that foundries are increasing prices for several technology nodes, specifically 0.35-micron, 0.25-micron and 0.18-micron, as new applications using these nodes are driving demand and filling fabs. Price increases at foundries are reportedly on a product-by-product and customer-by-customer basis.

The Q3 Wafer Fabrication & Assembly/Test Survey results will be available at the end of October for the latest pricing trends.

More information can be found in the CYQ2 2005 Global Fabless Financials & Fundings Report, which includes a downloadable spreadsheet with extensive data breakdowns of financials for all public fabless companies worldwide, as well as the Q2 Wafer Fabrication & Assembly/Test Pricing Report, both available via the FSA Store at www.fsa.org/store.

About FSA:

FSA is the voice of the global fabless business model. Incorporated in 1994, FSA positively impacts the growth and return on invested capital of this business model to enhance the environment for innovation. It provides a platform for meaningful global collaboration between fabless companies and their partners; identifies and articulates opportunities and challenges to enable solutions; and provides research, resources, publications and survey information. Members include fabless companies and their supply chain and service partners, representing more than 21 countries across the globe. www.fsa.org.
Top 10 Fabless Companies by CYQ2 2005 Revenue
     Company                   Stock          Ticker       Q2 2005
                                 Exchange                  Revenue
---- ------------------------- ------------ ----------- --------------
 1   QUALCOMM (QCT Division)      NASDAQ       QCOM          $766,000
 2   Broadcom                     NASDAQ       BRCM          $604,861
 3   NVIDIA Corporation           NASDAQ       NVDA          $574,812
 4   ATI Technologies             NASDAQ       ATYT          $530,235
 5   SanDisk Corporation          NASDAQ       SNDK          $514,896
 6   Agilent (SPG Division)        NYSE          A           $450,000
 7   Xilinx, Inc.                 NASDAQ       XLNX          $405,379
     Marvell Technology Group
 8    Ltd.                        NASDAQ       MRVL          $390,454
 9   MediaTek Incorporation        TSEC        2454          $314,908
10   Altera                       NASDAQ       ALTR          $285,477
Source: Company Reports, DigiTimes

Vivian Pangburn, 972-866-7579 ext. 140  

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Kevin Metz, 972-239-5119 ext. 135

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