Speakers Indrek Grabbi Semiconductors Brad Hess Market Development Cooperator Program Office of...

For US Government Use Only 1

Speakers

Indrek GrabbiSemiconductors

Brad HessMarket Development Cooperator Program

Office of Planning, Coordination, and Management

Information Technologies TeamOffice of Health and Information Technology

Dorothea BlouinSemiconductor Mfg. Equipment


Market Development Cooperator Program

Partnering to generate exports


Market Development Cooperator Program (MDCP)

Cooperator

Targeted foreignmarkets

$300,000 Trade associations

Each year the International Trade Administration (ITA) selects 7-9 trade associations and other non-profits industry groups for awards of up to $300,000 each.

MDCP award recipients, “cooperators”, design projects to help small firms (SMEs) to export to targeted foreign markets.

Project activities vary depending on the industry a cooperator is helping and the markets targeted. Examples include:

- Participating in foreign trade shows- Opening a product demo center- Coordinating industry standards

SMEs

SMEs export

Cooperator


MDCP first authorized in 1988, funded in 1993

Enabling legislation:Omnibus Trade and Competitiveness Act of 1988:MDCP is to be a unique way to "develop, maintain and expand foreign markets for nonagricultural U.S. goods and services." 15 U.S.C. Sec. 4723

Funding: Jobs Through Exports Act of 1992 andFreedom Support Act of 1992:First MDCP awards, totaling over $2 million, were made in fiscal 1993


MDCP is a very cost effective way to help U.S. industry to export. For every $1 in MDCP award made, MDCP projects generate $327 in exports.

MDCP is a tool ITA can use to engage U.S. SMEs by partnering with the industry groups that represent them.

ITA staff at headquarters and in the foreign and domestic fields can all leverage MDCP by:

- Recruiting industry groups to compete for awards - Debriefing unsuccessful MDCP applicants

- Participating on MDCP project teams

Message to U.S. industry groups: Want to grow? Export


Cooperator

MDCP Public-private partnership

ITA .

Trade associations Chambers of commerce State trade departments Other non-profits

MDCP encourages industry groups to partner with ITA


Export multipliers: industry groups that do not export, but whose companies or business constituents do export

Cooperator projects strengthen the global competitiveness of a U.S. industry, not just a particular company

Each MDCP project team includes ITA and other federal specialists who work shoulder-to-shoulder with a cooperator

SMEs export


Market Development Cooperator Program (MDCP)

CooperatorOther federal

agencies

I&AIndustry & Analysis

GMGlobal Markets

Project activities helpsmall U.S. firms export


Non-profit industry groups compete for MDCP awards from ITA:

Up to $300,000

Partner w/federal agenciesen

Applications due: Februaryen

“Cooperators” commit to:

Projects to engage small

. firms in exporting

Term: 1-3 years

Two-thirds of total cost

Joint team coordination

$1

ITA .

Trade associations Chambers of commerce State trade departments. Other non-profits

Report export results

Project-generated exports per $1 of MDCP award

Product demo centerTrade mission Technical seminar

Foreign trade showIndustry standardsForeign rep office

$327Report export results

Evaluation Criteria

20% Potential to generate exports that . . . . . create or sustain U.S. jobs

20% Export performance measurement

20% ITA partnership & priorities

20% Creativity & institutional capacity

20% Budget, match, sustainability


MDCP application evaluation, debriefing, awards

GMGlobal Markets


-Foreign posts-U.S. Export Assistance Ctrs-Area experts

-Industry specialists-OPCM/MDCP

MDCP Merit

Review Panel I&A

Assistant Secretary

Top ranked

Unsuccessful applicants

Award announcement: -Members of Congress-DOC press release-Orientation-Industry events

-Industry specialists-OPCM/MDCP

Comments

20% Potential to generate exports that . . . . . create or sustain U.S. jobs

20% Export performance measurement

20% ITA partnership & priorities

20% Creativity & institutional capacity

20% Budget, match, sustainability

Applications due: February July-August

Evaluation

Debrief

September

GMGlobal Markets

-Foreign posts-U.S. Export Assistance Ctrs-Area experts



MDCP federal teams help cooperators achieve export success

TV Standards for Latin America

Apparel to Japan

Graphics Equipment to India

An FCC expert works with ATSC Forum regarding Latin America’s adoption of a high-definition TV standard. Within days of Mexico’s adoption of the ATSC standard used in the United States, U.S. manufacturers were selling new transmitters and other HD-TV equipment.

ITA industry and Commercial Service specialists helped NPES set up an office in India, which helps member companies, such as Martin Automatic, Inc., facilitate sales.

ITA’s North Carolina-based Export Assistance Center, and Washington, DC-based industry experts help the Hosiery Technology Center translate use of a quality seal into sales to choosy foreign consumers.


MDCP federal (ITA) project teams

CooperatorOther federal

agencies

Project activities helpsmall U.S. firms export


Joint team coordination

$1

Report export results

Project-generated exports per $1 of MDCP award

Product demo centerTrade mission Technical seminar

Foreign trade showIndustry standardsForeign rep office

$327Report export results

Teams formed: August-September

MDCP project duration varies: 1-4 years

CS harvests export successes from quarterly reports

Regular meetings and informal coordination

Pre-event participant list to USEACs

Each MDCP project team includes staff designated by I&A and GM

Initial meetings w/new cooperators at September orientation

Currently 168 ITA staff serve on 22 MDCP project teams


GMGlobal Markets


Over the years cooperators have targeted 70 different markets (only the top 40 appear in the tag cloud above)

China has overtaken Mexico as the market most often targeted by cooperators

Gaining in popularity: Brazil, UAE, Indonesia

Markets targeted by cooperators


Cooperators 1993-2013: 128 awards to 101 industry groups


Commitment and sustainability

A cooperator must commit to provide at least two thirds of the resources required to undertake the project

At 67% of project cost, MDCP’s cost share requires commitment

Minimum requirement

Actual

0% 20%

40%

60%

80%

100%

67%

73%

33%

27%

CooperatorITA

Still operating today

Continued after MDCP

project

Footholds undertaken

0 2 4 6 8 10 12 14 16 18 20

14

16

18Sustainability is evident in the foreign presence (foothold) that we have helped industry groups to establish abroad *

_______________________________________________

* Does not include three established in 2013


Generating exports takes time and commitment


MDCP Printing & graphics equipment to China

Chinese Dealers Learn About U.S. ProductsITA helped NPES establish a training center in China. U.S. firms that are members of NPES use the Shanghai facility to train sales reps and technicians in China.

Troy Greenwald, of Connecticut-based inc.jet Inc., shows potential dealers how his firm's ink jet engines work. The demonstration is one of many that take place each year at the demonstration center of MDCP partner NPES.


MDCP RVs in China, Japan, Korea

Temp Solution for PermsThe Recreation Vehicle Industry Association (RVIA) received $300,000 in MDCP. One year into the project, RVIA has now hired a full-time representative who lives and works in East Asia. To date the project has generated $7 million in exports. Sales measured in hundreds of millions of dollars per year are on the horizon, especially in China, but not until China addresses standards and regulatory issues. Through the MDCP project, ITA is helping RVIA remove barriers.

RVIA helped a member company sell this temporary beauty shop that replaces one destroyed in the recent tsunami.


MDCP specialty auto equipment to Gulf States & China

Measuring session & trade showsITA is helping the Specialty Equipment Market Association (SEMA) boost export to the Gulf States and to China. Rules on what is “street-legal” and who is authorized to customize a vehicle, e.g. vehicle manufacturer or local auto shop, are issues SEMA is addressing with ITA’s help.

U.S. specialty auto equipment makers measure a Toyota Hi-Lux 4x4 truck. ITA helped SEMA get special permission to import the truck temporarily in the United States. The vehicle is not authorized for U.S. sale but is the highest selling vehicle worldwide that is likely to be customized.


Brad HessDirector, Market Development Cooperator ProgramIndustry & Analysis1401 Constitution Ave., NW, rm 4320Washington, DC 20230T 202-482-2969M 202-384-0491

Market Development Cooperator Program

(MDCP)


Industry and Analysis’Spotlight on Semiconductors &

Semiconductor Manufacturing Equipment

April 23, 2014

Prepared by Office of Health & Information Technologies


Semiconductors Semiconductors: Semiconductor and Related Device Manufacturing -- Fabs, Foundries -

(NAICS 334413) Semiconductor Design or Fabless (NAICS 334413, SERVICES, WHOLESALE).

http://www.globalfoundries.com/home


Semiconductor Manufacturing

Design

(Fabless, IDM)

Semiconductor

Fabrication (Foundry, IDM)

Test Packaging/Final AssemblyIDM: Integrated Device Manufacturer


Semiconductor End Use Applications• n


U.S. Semiconductor Industry• U.S. Company Leadership: U.S. companies recorded sales of $155 B in 2013

and had a 51 percent share of the $306 billion global market

• Jobs: Employs 245,000 jobs directly and supports more than one million additional U.S. jobs

• Strong and growing domestic manufacturing base: majority of production from U.S. companies is located in the U.S.

• One of the nation’s top exports: along with autos, airplanes, and petroleum

• Intellectual Property: World class; in 2012 U.S. companies invested $32 billion in R&D, totaling 22 percent of total sales; cutting edge university research

• Small and Medium Sized Companies: Especially in semiconductor design (fabless companies)

*Source: Isuppli 2013 Projection; **Semiconductor Industry Association, BLS – 2012;


Semiconductor Industry Impact on the U.S. Economy

(2013)

Total Domestic Exports: $ 26.66 billion

Total Manufacturer Employment*: 244,800

Balance of Trade Deficit**: $-12.78 billion

% of U.S. Production Exported***: 53%

* Semiconductor Industry Association** Negative due to overseas packaging in Costa Rica, Malaysia, Taiwan, China (top 4 importers) *** 2011, based on total exports


U.S. Industry Leadership

2013 Top 20 Semiconductor Sales Leaders Forecast ($M, Including Foundries)

2013F Rank

2012 Rank

Company

Headquarters

2012 Tot Semi

1Q13 Tot Semi

2Q13 Tot Semi

3Q13 Tot Semi

4Q13F Tot Semi

2013F Tot Semi

2013F/2012 % Change

1 2 3 4 5

1 2 3 4 8

Intel Samsung TSMC* Qualcomm** SK Hynix

U.S. South Korea

Taiwan U.S.

South Korea

49,114 32,251 16,951 13,177 9,057

11,555 7,946 4,460 3,916 2,577

11,785 7,769 5,152 4,222 3,521

12,366 8,805 5,377 4,457 3,692

12,615 9,070 4,815 4,550 3,250

48,321 33,590 19,804 17,145 13,040

-2% 4%

17% 30% 44%

6 7 8 9

10

6 5

10 9 11

Toshiba TI Micron ST Broadcom**

Japan U.S. U.S.

Europe U.S.

11,217 12,081 8,002 8,364 7,793

2,938 2,718 2,158 1,994 1,954

2,868 2,872 2,493 2,033 2,035

3,356 3,064 2,900 2,077 2,146

3,035 2,820 3,000 2,080 1,975

12,197 11,474 10,551 8,184 8,110

9% -5% 32% -2% 4%

11 12 13 14 15

7 14 13 12 15

Renesas Infineon AMD** Sony NXP

Japan Europe

U.S. Japan

Europe

9,314 4,928 5,422 5,709 4,325

1,886 1,208 1,088 1,247 1,085

1,920 1,327 1,161 1,144 1,188

2,101 1,390 1,461 1,203 1,249

1,920 1,340 1,534 1,295 1,265

7,827 5,265 5,244 4,889 4,787

-16% 7% -3%

-14% 11%

16 17 18 19 20

22 17 19 20 18

MediaTek** GlobalFoundries* Freescale UMC* Nvidia**

Taiwan U.S. U.S.

Taiwan U.S.

3,366 4,013 3,803 3,730 3,965

817 946 925 898 939

1,115 1,020 987

1,016 903

1,308 1,125 1,030 1,060 1,005

1,275 1,170 1,000 945 905

4,515 4,261 3,942 3,919 3,752

34% 6% 4% 5% -5%

Top 20 Total 216,582 53,255 56,531 61,172 59,859 230,817 7% *Foundry **Fabless

Source: IC Insights' Strategic Reviews Database


Computer36.3%

Gov/Mil0.9%

Industrial6.2%Auto

7.6%Consumer

11.2%

Communications37.9%

Smartphones Surging –smartphone shipments have

overtaken PC shipments

2014F IC Market by Application ($287.18 B)Smartphones and Tablets Drive Convergence

PC/Computer usage shifting; -- consumers

purchasing tablets in record numbers

Source – IC Insights 2013

Flat Panel TVs dominate in

this end market


World Semiconductor Market is Growing 2009 - 2015

2009 2010 2011 2012 2013 2014F 2015F0

50

100

150

200

250

300

350

$226.30

$298.30 $299.50 $291.60$305.60

$318.10$328.90

$ Bi

llion

s

F: ForecastSource: WSTS, SIA


U.S. Semiconductor Exports 2009-2013

2009 2010 2011 2012 20130

5

10

15

20

25

30

35

$25.66

$32.29$30.14

$27.07 $26.66

$ Bi

llion

s

Domestic Exports: Excludes re-exports for semiconductor testing in the U.S.


Top U.S. Semiconductor Export Markets 2013

China$3,625

Malaysia$3,242

Korea$3,128

Mexico$2,592Philippines

$1,963

Taiwan$1,592

Hong Kong$1,564

EU $1,530

Canada$1,303

Thailand$1,128

Costa Rica$962

Other$4,035

In $ Millions

Domestic Exports


2013 Semiconductor End Markets

China* Americas Korea* Europe Japan Taiwan** 0

20

40

60

80

100

120

140

160

180

$153.07

$61.50

$34.92 $34.88 $34.80

$20.04

$ Bi

llion

s

* China, Korea 2012 data** Taiwan : Integrated Circuits (IC) only, 2012 data Source: WSTS Autumn Forecast 2013, Price Waterhouse Coopers (China), Invest Korea (Korea) , TSIA (Taiwan)


FDI in the Semiconductor Industry $36.1 Billion in 2012

Global Foundry, Abu Dhabi

• $9 billion fab, outside of Albany, NY

Samsung, South Korea

• $13 billion fab, Austin Texas

FDI: BEAImage: Forbes


Opportunities• Successful expansion of the WTO Information Technology

Agreement to cover new technologies

• Growing demand in China, India, and Latin America for smart phones, tablets, set top boxes, flat screen TVs, and other consumer electronic products; an increase in automobile electronics; and investment in broadband and mobile networks is driving demand for semiconductors.

• Growing demand for cloud services is increasing demand for servers

Semiconductor Manufacturing Equipment

Semiconductor Manufacturing Machinery (NAICS 333242*) Semiconductor Test Instrumentation (Part of NAICS

334515**) Flat Panel Display Manufacturing Equipment (Part of NAICS

333249)

* Formerly NAICS 333295** NAICS 334515: Instruments and Apparatus for Measuring and Testing*** NAICS 333249: Other Industrial Manufacturing Machinery



Mm

Semiconductor Manufacturing Equipment Categories:

Semiconductor Wafer Fabrication

Equipment• Lithography• Metallization• Chemical

Deposition• Etc.

Test and Inspection Equipment

Packaging/Final Assembly Equipment

Mask/Reticle Manufacturing

Equipment

Silicon Boule/Bare Wafer Manufacturing

Equipment


World Semiconductor Manufacturing Equipment Market Growing 2014-2015

2009 2010 2011 2012 2013 2014F 2015F0

5

10

15

20

25

30

35

40

45

50

$15.92

$39.92$43.53

$36.93

$31.58

$39.46 $40.40

$ Bi

llion

s

25%

F: ForecastSource: SEMI


2014 Semiconductor Equipment End Markets

Taiwan Korea U.S. Japan Europe China Other0

2

4

6

8

10

12

$10.39

$7.80 $7.60

$4.11 $4.08

$3.05

$1.90

World Market $39.46 Billion

$ Bi

llion

s

Source: SEMI December 2013 Projection. U.S. is North America


Semiconductor Manufacturing Equipment Impact on the U.S. Economy

(2013)

Total Domestic Exports: $ 9.89 billion

Total Manufacturer Employment*: 16,568

Balance of Trade Surplus: $3.5 billion

% of U.S. Production Exported**: 74%

* 2011**Production: U.S. Company Production, Source: SEMI


US Companies: 42% Share of World Semiconductor Equipment Sales

Japan9.99332%

EU*6.3220%

Other1.968

6%

US13.299

42%

In $ Billions

*Estimate. Source: SEMI, SEAJ (Japan), Electronic Leader’s Group (EU); 2013 data


U.S. Companies: Top Equipment Suppliers


Top U.S. Semiconductor Equipment Export Markets 2013

Taiwan324533%

Korea195720%

EU130213%

China124213%

Japan96910%

Singapore7327%

Other4374%

In $ Millions

Domestic Exports

Opportunities (1) U.S. Companies represent 42% of the World Market

Upturn of Sale Cycle Expected for 2014 and 2015.Growing Demand for Semiconductors and greater

density/narrow line widths lead to more Semiconductor Manufacturing Equipment Sales

Semiconductor Equipment Sales lead to Services and Parts Sales

Illustrations: Global foundries For US Government Use Only 41

Opportunities (2)For the Semiconductor Equipment industry, a successful WTO Information Technology Agreement (WTO ITA) Expansion will:

Ensure Duty Free treatment of all types of semiconductor manufacturing equipment.

Eliminate tariff on certain semiconductor manufacturing accessories and fab floor equipment, including: FOSB (Front Opening Shipping Box) for wafer

handling/protection

Photomask

Gas/Chemical Purification Equipment FOSB picture: Entegris For US Government Use Only 42


Certified Trade Show for Semiconductor Manufacturing Equipment and Materials

Japanese semiconductor equipment market forecasted to grow in 2015

Japan is the 3rd largest world market (excluding the U.S.) but the 5th largest export market for the U.S.

Difficult market for lesser known U.S. companies to penetrate due to strong Japanese company competition

U.S. SMEs can make connections with Japanese semiconductor companies through the Show

http://www.semiconjapan.org/en/

• Government/Authorities Meeting on Semiconductors (GAMS): USTR, Industry (World Semiconductor Council). U.S., Japan, South Korea, EU, Chinese Taipei (Taiwan), China

Governments and Industries

• IPR: USTR, US Patent and Trademarks (USPTO), Customs and Border Patrol, Other ITA (JCCT)

• Information Technology Agreement Expansion: USTR, Customs and Border Protection, State Department, Other ITA; Industry

• Work with ITA/GM to promote U.S. exports at semiconductor manufacturing industry trade show Semicon Japan, December 2014

Examples of ITA and Interagency Activities



Information Technologies Team Staff

Linda Astor; Acting Team [email protected]; 202-482-4523

Cary Ingram; Communications, Network, and Transmission Equipment [email protected]; 202-482-2872

Indrek Grabbi; [email protected]; 202-482-2846

Dorothea Blouin; Semiconductor manufacturing equipment, WTO ITA, [email protected]; (202) 482-1333

http://trade.gov/td/OHIT

Robin Gaines; Computer equipment [email protected]; (202) 482-3013

Sergio Delgado; Computer [email protected]; (202) 482-3548

mailto:[email protected]






Speakers Indrek Grabbi Semiconductors Brad Hess Market Development Cooperator Program Office of...

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