Fairchild Semiconductor International, Inc.

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Fairchild Semiconductor International, Inc.
Fairchild Semiconductor
International, Inc.
May 2010
Investor Presentation
www.fairchildsemi.com
1
Notes on Forward Looking Statements
and Non-GAAP Measures
• Comments in this presentation other than statements of historical fact may constitute forward
looking statements and are based on Fairchild’s management’s estimates and projections and are
subject to various risks and uncertainties
• These risks and uncertainties are described in the Company’s periodic reports and other filings with
the Securities and Exchange Commission (see the Risk Factors section) and are available at
http://sec.gov and investor.fairchildsemi.com
• Actual results may differ materially from those projected in the forward looking statements
• Some data in this presentation may include non-GAAP measures that we believe provide useful
information about the operating performance of our businesses that should be considered by
investors in conjunction with GAAP measures that we also provide. You can find a reconciliation
of non-GAAP to comparable GAAP measures at the Investor Relations section of our web site at
http://investor.fairchildsemi.com
Recent additions to our website at http://investor.fairchildsemi.com
Updated Financials (through Q1 2010, with segment revenue/gross margin breakouts)
• Quarterly Fact Sheet with Q1 2010 highlights
• This investor presentation
2
www.fairchildsemi.com
Fairchild Overview
www.fairchildsemi.com
3
Markets That Drive Our Business
• Wireless Convergence and Energy
Efficiency mega-trends
• Power silicon content grows
faster than end market sales –
premium paid for efficiency
• Segment structure increases our
apps knowledge and ability to
sell solutions
• Large customers dominate these
markets and align well with
Fairchild’s strengths in SCM,
global presence and wide product
breadth
4
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Power Silicon Content Growth
Handsets
Silicon Content Growth - Handsets
1,600
5,000
1,400
M Units
1,000
3,000
800
2,000
600
400
200
M$
4,000
1,200
8% Handset Unit CAGR
19% Voltage Regs/Refs & Interface Sales CAGR
1,000
0
0
2009
2010
Handset Units
2011
2012
2013
Voltage Regs/Refs & Interface Sales
• Handset growth still impressive as market hits 1.5B units in 2013
• Voltage regulator CAGR of 19% reflects greater power management value in the
handset to support new features, better resolution displays and 3G/4G
Source: iSuppli, Jan 2010
5
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Power Silicon Content Growth
Power Supplies
Power Silicon Content versus Efficiency
$12.00
Total Discrete Content ($/supply)
$10.00
Total IC Content ($/supply)
$8.00
$6.00
$4.00
$2.00
$0.00
80%+
82%+
85%+
87%+
Efficiency
• Greater power supply efficiency requires more advanced topologies and
greater power silicon content
• Fairchild is a leader in supplying integrated and discrete power management
solutions to the top power supply manufacturers in the world
Source: Climate Savers Computing Initiative 2008
6
www.fairchildsemi.com
Power Silicon Content Growth
LCD TV
Silicon Content Growth - LCD TV
250
1400
1200
200
150
800
100
600
400
15% LCD TV Unit CAGR
18% Power Analog & Transistor Sales CAGR
50
M$
M Units
1000
200
0
0
2009
2010
LCD TV Units
2011
2012
2013
Power Analog & Transistor Sales
• LCD TVs expected to continue to grow rapidly
• Power analog & transistor sales forecasted to grow even faster as screen resolution
and backlighting requirements advance and concern over energy efficiency of these
devices increases
Source: iSuppli, Jan 2010
7
www.fairchildsemi.com
Power Silicon Content Growth
Appliances/Industrial Motors/Pumps
Note: VF=Variable Frequency Control T=Total worldwide Shipments
• Conversion to inverter type or BLDC variable speed motors significantly increase
energy efficiency (60%+ typically) and improves cost of ownership
• This transition opens huge new markets to Fairchild power management
solutions…typical SPM content on a washing machine is $4 – 6…no content before
• Fairchild is uniquely positioned to provide a full range of discrete and integrated
power management solutions across the complete range of power requirements
Source: iSuppli, Jan 2010
8
www.fairchildsemi.com
Power Silicon Content Growth
Advanced Lighting, PV, Wind Power & Smart Grid
>20% Semi Growth
in Solar Inverters
through 2014
CFL
2009
2010
Growth
Rev (M$)
4,604
5,697
23.7%
ASP
4.5$
4.3$
-4.4%
Units(Mu)
1,023
1,325
29.5%
• New markets for power discrete and analog solutions in the lighting, PV, wind
and smart grid create huge new opportunities for Fairchild
• Fairchild has wide range of products to support these markets including PSR for
low power apps and PFC for higher power requirements…both discrete and
integrated power management solutions
Source: iSuppli, Jan 2010, IMS Research
9
www.fairchildsemi.com
Power Silicon Content Growth
Automotive
Functional Drivers ($0.30 – $2.15)
• Smart Switches
• Gate Drivers
• Motor Controls
Engine Control
Ignition
Fuel Injection
Glow Plug
Power Modules ($8.00 – $14.28)
• EPS/EHPS Modules
• Auxiliary VSD’s
BLDC Motor Control
EPS
Cooling
Pumps
Ignition ($0.30 – $4.00)
• Current Limit IGBTs
• Smart IGBT
Body Load Control
HID
PTC-Heater
Transmission Control
HEV
Full Hybrid
Mild Hybrid
Micro Hybrid (Start/Stop)
Discrete Power($0.07 – $0.35)
• Low Voltage MOSFET’s
• Mid Voltage MOSFET’s
• High Efficiency Diode
• Semiconductor content is growing rapidly in automotive designs to increase fuel
efficiency and improve user experience
• Fairchild is expanding our power module technology into electronic power
steering (EPS) control. Design wins at 3 major customers and more in process
• Fairchild is also a leader in ignition IGBTs that provide more precise spark
control and better fuel efficiency
10
www.fairchildsemi.com
Power Silicon Content Growth
Notebook PC
350
3,500
300
3,000
250
2,500
200
2,000
150
1,500
17% Notebook PC Unit CAGR
9% Power Transistor Sales CAGR
100
M$
M Units
Silicon Content Growth - Notebook PCs
1,000
50
500
0
0
2009
2010
Notebook Units
2011
2012
2013
Power Transistor Sales
• Notebook unit growth projected to be robust through 2013
• Power transistor/FET sales growth remains strong even as CULV and netbooks
require fewer power rails but place greater value on size and weight
Source: iSuppli, Jan 2010
11
www.fairchildsemi.com
Capitalizing on these Market Trends
• Engage with industry-leading customers in key markets to build our
applications expertise (ex. Handsets, power supplies)
• Leverage our technology leadership in analog switches, HF Voltage
Regulators to expand content and increase integration level in handsets &
ultra-portable apps
• Leverage silicon-based technology leadership in power MOSFETs and
IGBTs to gain share and deliver industry-leading margins
• Accelerate share gains in power conversion business driven by new products
and transition to higher efficiency power supply designs
• Expand SPM business beyond Japan to support transition to variable speed
motors in appliances
• Drive higher GM and double-digit sales growth
12
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Gross Margin Trend
New Products & Mix Powering Breakout
40.0%
35.0%
MCCC
Analog
MOSFET
Current 1st Benchmark
40 - 50%
45 - 55%
33 - 40%
35 - 50%
PCIA
Analog
MOSFET
35 - 45%
30 - 33%
40 - 50%
35 - 40%
GM breakout
30.0%
2 - 3 point GM swings
25.0%
10 point GM swings
20.0%
SCM fix
Mix Out/Product Direction
15.0%
R&D focus on MCCC and PCIA markets
SG acquisition/prod line upgrade
Q1 00
Q2 00
Q3 00
Q4 00
Q1 01
Q2 01
Q3 01
Q4 01
Q1 02
Q2 02
Q3 02
Q4 02
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
Q1 05
Q2 05
Q3 05
Q4 05
Q1 06
Q2 06
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10 Mid Guide
10.0%
13
www.fairchildsemi.com
Mobile, Computing, Consumer &
Communications (MCCC) Group
Overview
www.fairchildsemi.com
14
Fast Growing End Market Exposure
Energy
Regulations
Handsets and
wireless
Wireless
convergence
and need for
greater
efficiency in
lower voltage
applications
Mobile
Computing
Telecom &
Server High
Efficiency
Power Supplies
Consumer
electronics
15
www.fairchildsemi.com
MCCC Mobile Products
Extend Battery Life, Enable Greater Functionality
Power
Subsystems
GPS
HDMI
LMU
DC:DC
SD card
LMU
Sub Display
Camera
PMIC
RF
Camera
DC:DC
PMIC
Base Band and
Application Processor
Memory
Microphone
Display &
Camera
“uSerDes
Signal Path
Subsystems
•
•
•
•
Audio
Video
Data
Display
Power
•
•
•
•
MOSFET
IntelliMAX™
Building Block Regulators
ASSP Regulators
16
Analog Switches
USB
µSerDes™
Mixed Signal ASSP
www.fairchildsemi.com
Increasing Power Consumption
2.75G
2G
GSM
GPRS
EDGE
DATA RATE (bps)
9.6k
56k
VOICE
SMS
10hr
180k
Internet
Browsing
Email
5hr
3G
3.5G
UMTS
WCDMA
TD-SCDMA
HSDPA
HSPA
14Mbps
384K
Video call
Video Download
Interactive Gaming
2:30hr
Pre 4G
WiMax / WiFi
WiBro
70M
Video Conference
Video Broadcast
VOIP
1:00hr
4G
LTE
172M
HDTV
Multiview Video
Digital TV
?hr
Talk / Connection time
17
www.fairchildsemi.com
Mobile Handset Targeted Subsystems
Features
MP3
Audio
AMP
AMP
Bluetooth
Module
Codec
DAC
P
Mobile TV
WLAN
Module
ADC
Switch
Distributed Architecture
Drivers :
LCD
P1
P
GPS
AMP
Backlight
Driver
•
Display
•
•
PN
Other
P
•
Connectors
SDIO
T
X
Chipset
RF Power
Broadband Application
Processor
Processor
PMIC
MU
S
USB Switch
OVP
•
Dissimilar Process
Technology
Dissimilar IC lifecycles
Optimized power
consumption/efficiency
Improved Time to Market
(modularity)
Differentiation (feature
sets and user experience)
FAIRCHILD FOCUS: Distributed Signal Path
Subsystems and Power
18
www.fairchildsemi.com
Battery Life in Smartphones
Bridging the energy gap:
• Higher energy density batteries (new Chemistries)
• Optimized usage of features (HW & SW)
• More efficient conversion of battery power
• Lower power consuming components
• Only 5 – 6.4 hrs of 3G talk time
for leading smartphones
• Battery life gates user
experience
• All 4 phones use a similar
battery with a capacity of
1400mAh
• More functions…same battery
form factor
5.0 GBit/s datarates
10MP image sensors
Multi core apps processors
3D MEMS gyroscopes
AMOLED WQVGA displays
8 RF Bands
19
….
www.fairchildsemi.com
Fairchild’s Mobile DC/DC Products
Batt Mngment
RF Power Management
RF DC/DC
Battery Management
RFPA Power
Managament
Lighting
Management
Switching Chargers
microPMIC RF subsystem
W-CDMA
RFPA
GSM
RFPA
Core Power
Management
Memory
I/O
WiMax
Application
Processor
Lighting
Core Power
DC/DC converters for digital cores
LCD back lighting
PMICs
AMOLED
LED Flash
Efficient DC/DC Conversion = Longer Battery Life
20
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Mobile Power Solutions
We strive for excellence in electrical performance:
• Ultra Low standby current
• Highest Efficiency
• Fast transient response
• Low EMI
• High precision regulation
• Digital control
21
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Mobile Subsystem Capabilities
Charging/
OVP
PMIC
USB TRX
Class G
Audio
Class D
CODEC
Base Band/
Application
Processor
Switch
Class A/B
uSerDes
Video
uSerDes
USB
Accessory Detection
Switches
Transceivers (Std, full, high)
Over Voltage Protection (OVP)
Charging
OVP
Acc. Det. MUX
USB
Display
Camera
Switch
Audio
Class D Amp
Class G Amp
Class A/B Amp
Digital Mic. IC
Switches
Video
Filter/Drivers
Switches
MIPI Switch
uSerDes
Camera Switches
ASSP
ASSP
ASSP
PLL
Tiny Logic
Reset Timer
Translators
GPIO Expanders
SIMM Card Switch
Memory Switch
www.fairchildsemi.com
Mobile USB
Maximizing USB port functionality in mobile electronics
• Solutions for the full USB signal path
• USB Switches
• Multimedia Switches
• Accessory Detection
• Transceivers
• Enable USB port sharing for data, audio,
video, and charging
• Reduce external components
• Power savings with low power modes
• Ultra-small packaging
USB Accessory
Detection
USB
Transceivers
Detect an accessory type
for automatic application
routing.
Maximizes design
flexibility and
assures USB
compliance.
23
www.fairchildsemi.com
LV MOSFET
Leading Technology = Best in Class Margins
Long Term Die Cost Trends
• Leading silicon and package
technology enables optimum size,
performance and profitability
Relative Package Cost Curve
$70
1998
Next Gen
2002
2003
2005
2006
2007
2008
2009
2010
2011
Current Pkg
$60
Current Pkg
• Move to next-gen packages lower
costs and improves performance
Next Gen
$50
Package Cost
2000
Next Gen
$40
• Technology leverage is greater
than scale leverage
$30
$20
$10
$0
1
2
3
4
5
6
7
Volume Scenario
24
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Form Factor Transition
A once every ten year event:
Leaded (SO) to Leadless (QFN) conversion
SO-8
Notebook Footprint Transitions
S08
Power56
Power33
Other Packages
100%
90%
80%
Power56
70%
and
60%
Power33
50%
40%
30%
20%
10%
Power33
0%
2008
2009
2010
2011
2012
2013
Fairchild is investing in PQFN capacity and is ahead of the transition
Fairchild product portfolio is positioned for the transition
25
www.fairchildsemi.com
Form Factor Leading Package Technology
• Form Factors for Singles:
Power 56
Reference: SO-8
Power 22
Power 33
4 mm2
11 mm2
QJA = 65.8ºC/W
QJA = 59.5ºC/W
QJA = 48.6ºC/W
QJA = 74.2ºC/W
Pd = 475 mW/mm2
Pd = 190 mW/mm2
Pd = 86 mW/mm2
Pd = 56 mW/mm2
30 mm2
30 mm2
A package portfolio to drive mobile computing transitions!
• Power56 to Power33
• SO8 to Power33
• Power33 to Power22 and PowerStage Duals
www.fairchildsemi.com
Infineon Partnership
27
www.fairchildsemi.com
Power Trench® Dual Cool™
25A Control and Synchronous Solutions
S
7.2mΩ
30A Control and Synchronous Solutions
M
Dual CoolTM 3x3
7.2mΩ
Dual CoolTM 3x3
7.2mΩ
M
2.4mΩ
Component
Area:49mm2
M
Dual CoolTM 5x6
1.2mΩ
Dual CoolTM 3x3
2.4mΩ
Component
Area:21.5mm2
Component
Area:62mm2
Component
Area:41mm2
www.fairchildsemi.com
Shifting the Form Factor
MLP 3x3 Dual
9 mm2
2 x SO-8
60 mm2
29
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Fairchild Integrated PowerStage Solutions
High Side and Low MOSFETs in a Single Package
25A Buck
Converter Solution
HS
HS
6mm
LS
6mm
LS
LS
5mm
Standard Solution: 90mm2
5A Buck
Converter
Solution
S08
5mm
PowerStage Solution: 30mm2
Better Performance, 3X Smaller Footprint
HS
HS
3mm
LS
Standard Solution: 60mm2
LS
3mm
PowerStage Solution: 9mm2
Better Performance, 7X Smaller Footprint
www.fairchildsemi.com
Summary
• Focused R&D investment in mobile analog
• Gaining share in mobile analog…voltage regulator sales up 5%
in 2009
• Proliferating HF voltage regulator designs at multiple customers
• Customers moving to standard USB pin outs drive strong analog
switch sales growth
• Leading silicon and package technology enable profitable
growth of LV MOSFETs
31
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Power Conversion,
Industrial & Auto (PCIA)
Group Overview
www.fairchildsemi.com
32
Markets that Drive PCIA Growth
Energy
Regulations
Highly Efficient
Induction
Heating
LED
Lighting
Higher
efficiency
through
innovative
semiconductor
power mgmt
solutions
Transition to
Variable Speed
Inverter Type
Motors
High
Efficiency
Power
Supplies
High Voltage
Backlight for
Flat Panel TVs
and Displays
PV, Alt
Energy &
Smart Grid
33
www.fairchildsemi.com
Power Management Content Growth
In servers and high efficiency power supplies mandated efficiency regulations
are driving higher power management content
2007
Major
Efficiency Level
BOM in HV
Discrete(based on
600W)
2010
Industry practice was Over 80~90% efficiency
85 ~90% efficiency
at 20% load and over
@100% load
95% at 100% load
$2.80
$3.90
34
2013
Efficiency at light load
(10%) proposed to go
up as telecom
rectifier> 80%
$6.50
www.fairchildsemi.com
Power Level vs. Topology Complexity
Topology
Multi
Phase
Aircon
Full
Bridge
Server
Forward
Desktop PC
32” ~ 50” LED TV
LLC
Resonant
Game
Console
LC
Resonant
CFL
DVD
STB
FF/QR
Flyback
32” ~ 50” LCD TV
LFL
LCDM &
Printer
Consumer
NB Adapter
LED Lighting
LED Lighting
PSR
Flyback
Cell Phone
Charger
Power Level
5W
75W
BCM PFC
250W
CCM PFC
35
500W
Interleave PFC
www.fairchildsemi.com
Technology Roadmap
Environmental-friendly,
Highly-efficient, Highly-integrated
Lower Standby Power
Higher Power Efficiency
• Decrease Operating Current
• Decrease Quiescent Current
• Decrease Switching
Frequency
• Reduce Acoustic Noise
• Reduce Control-circuit
• Reduce Switching/
Conduction Losses
• Reduce the need of EMI/EMS
Filter
• Frequency Hopping
• Soft Switching
• High-side Transistor Driver
• Synchronous Rectifying
36
Reduce Device Count
• Integrated Device Processes
• Analog Signal Process
• HV VDMOS & Multi-Chips
Packaging
• Combo Circuits
• Primary-Side Control
www.fairchildsemi.com
Power Conversion
Market Opportunity
• Growing demand for greater efficiency is driving
rapid adoption of advanced power conversion
solutions is a wide range of end markets from power
supplies and industrial motors to consumer
electronics, LED lighting and battery chargers
Features and Performance
• Industry leading efficiency
• Ultra-low standby power consumption
• PSR technology now 30mw vs 1.0w industry
standard just 2 – 3 years ago
• Longer product life and lower cost of ownership
• Using HV IC to drive LED lights doubles the
element life vs current discrete approaches
• Lighter, smaller, simpler form factors
• Advanced power conversion techniques
enable smaller magnetics and less copper use
in power supplies and chargers
Strategic Importance to Fairchild
• Fast growing market
• Fairchild is worlds largest supplier of power
conversion products
• Industrial design wins typically generate longer
demand flows
37
www.fairchildsemi.com
LCD TV Technology Trend
400V
PFC
400V
Lamps
PFC
Inverter
Lamps
Multi
Power
(Flyback)
Std by
Power
13V Audio
12V or 5.3V Main
5.3V Stand by
Main
Power
(LLC)
24V Inverter
12V Main
Std by
Power
5V stand by
5V Stand by
Direct Inverter Type
PSU Type
high efficiency, low standby, LED BLU, Slim, BOM reduction
2008
2009
2010
2011
Main size
32~42inch
40/42inch
40~50inch
50inch
Backlight
CCFL
CCFL
CCFL / LED
LED BLU
250Watt
300Watt
300 / 180Watt
180Watt
PSU  Direct inverter
Direct inverter
Direct inverter  PSU
PSU
PFC
CRM
CRM
CRM
CRM
Efficiency
80%
82%
85%
>85%
170mWatt
150mWatt
130mWatt
100mWatt
Output Power
Power type
Stdby
38
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Lighting Technology Trend
Efficiency, Life Time, Environment
• Ban Incandescent
• Ban Magnetic ballast
• Get Phasing out
• Discrete solution is major portion for
CFL
• Get Compact (Integration solution)
• Get Thinner T8  T5
(High efficiency and Reliability,
EOLL function required)
• Dimming solution
• High efficiency
• Longer Life time
• Environment (Hg free, No UV)
• Cost issue
• Dimming
• Broad light color
• Market : Emerging, Government Driving.
• Philips, GE, Osram and Many makers join
• Market : Still big potential
• Philips, GE, Osram, Lutron, ULT
LED
Incandescent
Halogen
CFL
LF
Lighting efficiency
(lm/W)
59
10
20
50
75
Efficiency of
lighting equip (%)
80~90
30~50
30~50
50~60
50~70
Total efficiency
(lm/W)
42
4
8
23
38
Life expectancy
(Hr)
10K~50K
1k
3k
10k
15k
(Source : LEDs Magazine, 2007 May)
39
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HV Product Portfolio
MOSFET
HV Planar MOSFET
- UniFET1/2
- Standard QFET
- QFET C/V2 Series
- Old FET
SuperJunction
MOSFET
- SupreMOS
- SuperFET1/2
MV MOS
- PT3/4/5/6/7
- UFT, UFP
IGBT
SPM
FR Diode
Legacy IGBT
- Standard IGBT
- SMPS IGBT
UltraFast Diode
HyperFast Diode
Non-Punch Through
Trench IGBT
Stealth Diode
Punch Through
Trench IGBT
Duexpeed Diode
Field Stop IGBT
- FS Planar IGBT G2
- FS1 Trench IGBT
- FS1/2 SA Trench IGBT
Damper Diode
Motion SPM
- SPIM <10kW
- SPM2 <5kW
- SPM3 <2.2kW
- SPM4 DBC<2.2kW
- SPM45L/H <1.5kW
- SPM5 <0.1kW
- SPM7 <0.1kW
- PFC SPM
HID SPM
SPM2 ~5kW
SPM45 ~1.5kW
SPM5~0.1kW
SPIM ~10kW
SPM3 ~2.2kW
40
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Motion SPM Portfolio
Fairchild Supports Full Range of
Power Needs
Application
Mid. Power
Industrial Inv.
SPIM
600V / 50A ~ 100A
1200V / 30A ~ 75A
System A/C
SPM2
Low Power
Industrial Inv.
600V / 15A ~ 75A
1200V / 10A ~ 20A
Package A/C
SPM3
600V / 3A ~ 30A
Room A/C
SPM45
W/M
Refrigerator
E-bike
Power tool
Vacuum
Cleaner
Pump
Dish washer
Fan motor
600V / 3A ~ 15A
40V / 60A
60V / 40A
SPM45H
SPM45L
SPM4
600V / 20A ~ 30A
SPM7
500V / 1A
SPM5
500V / 1A, 3A
250V / 3A
0.1kW
0.5kW
2kW
1kW
41
5kW
10kW
Capacity
www.fairchildsemi.com
Motion-SPM
Market Opportunity
• Home appliance market is rapidly adopting inverter
technology to improve efficiency
BLDC Fan Motor
Drive
Features and Performance
• Simple to Design
–Optimized footprint
–Built-in protection functions
–Matched component performance
Compressor
Drive
• Simple to Assemble
–Reduced components
–Increases productivity and reliability
–Eliminates additional insulation material
Strategic Importance to Fairchild
• Key component in an inverter system
• Value solutions
• Growth driver for HV organization
2008
Market Size
2011
Market Size
2008 – 11
CAGR
$238M
$408M
20%
Source: IMS, Fuji Chimera Institute, Fairchild
42
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Why Use Inverters in Motion Control?
 Because of Energy Savings and High Performance !!
Comfortable
In air contitioner,
Inverter can
- save cooling time
(50% faster)
- Precise temperature
control (±1ºC control)
Energy Saving
Inverter control can save
average 40% electricity than
conventional on/off control
Silent
In fan motor, Inverter can reduce
audible noise
43
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Smart Power Integrated Module
System Air Conditioning
Market Opportunity
• New energy regulations driving rapid increase
in variable speed drives
Features and Performance
• 3 phase IGBT inverter using HVIC reduces
auxiliary power parts
• Higher reliability
• Advanced IGBT technology
• Built-in sensing
Strategic Importance to Fairchild
• Increased functionality evolution of SPM
• Flexible structure easily modified
2008
Market Size
2011
Market Size
2008 – 11
CAGR
$42M
$97M
32%
Source: IMS, Fuji Chimera Institute, Fairchild
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High Voltage MOSFET
Transition to Deep Trench Requires Strong IP
Superjunction MOSFET
Planar MOSFET
Muti-Epi tech
Deep Trench tech
• Significant Design IP Required to Make Transition
• Termination and isolation critical in handling high voltage
• High Epi efficiency required to reduce specific resistance
• No standard design approach in HV
• Process challenges and difficulties
• Deep junction & long diffusion process required…3X longer than planar
• Deep trench uniformity
• Process control for Superjunction is challenging
• Capex investment and experienced, tight maintenance control required
• Epi
•
•
•
expertise is essential
Control the uniformity in thickness and resistivity for various HV devices
Epi process-sensitive device are common
In-house Epi capability is required
Smaller, local competitors rarely enter the HV market!
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HV MOSFET – SupreMOS
PFC Switching
Market Opportunity
• Address the PFC switching needs in the LCD
TV market and other high power/efficiency
applications such as Servers
[LCD TV PSU & BLU board]
Features and Performance
• World-class deep Trench Super-junction
technology
DC-DC
AC Input
PFC
Strategic Importance to Fairchild
• Next generation super-junction MOSFET
improves both cost and performance
2008
Market Size
2011
Market Size
2008 – 11
CAGR
117M units
208M units
21%
HV BLU
Driver
& FB
HV BLU
Switch
Source: iSuppli 2008
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HV MOSFET - Ultra FRFET
HV Back Light Unit
[LCD TV PSU & BLU board]
DC-DC
Market Opportunity
• LCD TV makers constantly driving for reduced system
AC Input
cost
AC Input
• HV BLU solution is more cost effective than
LVBLU
PFC
HV BLU
Driver
& FB
Features and Performance
• Ultra FRFETTM supports the fastest reverse recovery of
body diode and good EMI performance
HV BLU
Switch
Conventional
MOSFET
(trr > 200ns)
Driver
 Current CCFL HV inverter
• Eliminates four external diodes in existing HV BLU
• System cost reduction, eases assembly, and reduces PCB
sizes
Ultra
FRFETTM
(Ultra fast trr)
Strategic Importance to Fairchild
• Unique solution for HV BLU applications with class
leading technology
Driver
2008
Market Size
2011
Market Size
2008 – 11
CAGR
25M units
90M units
53%
Source: Displaybank 2008
 HV inverter with Ultra-FRFET
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Summary
• Drive for greater energy efficiency fuels demand for our
products
• Higher power supply efficiency requires greater power
management complexity and content
• Move to inverter style motors with much greater energy
efficiency creates enormous opportunity for our SPMs
• Deep trench, high voltage MOSFET and IGBT technology is IP
intensive and creates a significant competitive edge
• Revenue and margin progression will occur through a
combination of new product/technology introductions and cost
reductions
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Finance Overview
www.fairchildsemi.com
49
Highlights of the Quarter – Q1 2010
 Sales were $378m, up 7% QoQ and 69% YoY... Solid performance in what is typically a down sales quarter
 Demand was higher across a broad range of end markets and regions
 Under-shipped POS to reduce channel inventory 2% QoQ or 1/2 week to record low 7.8 weeks supply
 Internal inventory held at very lean 69 DOI…higher sales more than offset the $9m increase in raw materials
& WIP
 Generated $36m in free cash flow (cash from operation – capex) due to margin and earnings growth coupled
with strong asset management…Net cash positive…as cash & securities top $481m at the end of Q1
 Adjusted gross margin was 32.5%, up >2 points QoQ, due to ramp of new products, mix out of less profitable
products, and higher factory loadings
 Pricing remained better than typical at down <1% QoQ as customers continue to focus on product availability
 Utilization increased again in Q1 causing lead times to extend. Using capacity reservations for top tier
customers (75% of sales) to continue to provide them the product support they need
50
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Q2 Forward Guidance & Current Market
Environment
• Sales expected to be $395 – 400m…current scheduled backlog covers low end of
this range
• Gross margin expected to improve to 33 – 34%
• R&D and SG&A forecast at $82 – 84m…<21% of sales at mid-point…making
good progress towards our target of 20% of sales
Current Market Environment
• Demand remains robust and Q2 sales and gross margin are tracking to the high end
of the range
• Demand strength remains broad based across all regions
• Backlog continues to build for Q3 indicating seasonal strength is likely
51
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Adjusted Revenue & GM%
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Adjusted EPS
$0.40
$0.33
$0.30
$0.23
$0.27
$0.27
$0.25
$0.25
$0.23
$0.20
$0.21
$0.21
$0.16
$0.19
$0.17
$0.11
$0.10
$0.14
$0.12
$0.10
Q1'10
Q4'09
Q3'09
Q2'09
Q1'09
Q4'08
Q3'08
Q2'08
Q1'08
Q4'07
Q3'07
Q2'07
Q1'07
Q4'06
Q3'06
Q2'06
$(0.03)
Q1'06
Q4'05
Q3'05
Q2'05
$(0.02)
$Q1'05
Adj EPS $
$0.06
$(0.03)
$(0.10)
$(0.20)
$(0.30)
$(0.32)
Option expense included starting in Q1 06
$(0.40)
53
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Gross Margin Improvement
Key Drivers
• Growth of new product families with higher margins
• USB and Mutimedia Switches, HF Voltage Regulators, PT6 & 7 LV
MOSFETs, Power Conversion T-Series, primary side regulator (PSR),
SupreMOS, integrated power systems (SPM), IntelliMAX™
• Improved product mix
• Mix out standard products and older technology MOSFETs to free up
capacity to support higher margin new products
• Manufacturing cost reductions and product redesigns
• Lean manufacturing techniques
• Capex spending < depreciation
• Convert to 8” wafers…Maine largely done, more to follow
• Fab process upgrades/shrinks for HV & LV MOSFETs, IGBTs and Power
Conversion
• Close Mountain Top fab…current schedule Q2 2011
• Higher factory loadings
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Balance Sheet Improvement
Disciplined Asset Management
• Q1 balance sheet is strongest in the history of the company:
•
•
•
•
•
Cash and investments exceed debt
Debt at lowest level in company history at $471m
Internal inventory at near record low of 69 DOI
DSO at very low 37 days
Days of payables at normal level of 45 days
• S&P recently upgraded Fairchild’s corporate credit rating to BB
from BB- with a stable outlook
• Generated record $129m FCF in 2009 and on track to deliver even
greater FCF in 2010
• Primary focus remains investing in our business
• Reducing debt to increase operational flexibility is also a top
priority
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Fairchild Inventory Trends
Tight Supply Chain Control Drives Inventory to Historic Lows
140.0
120.0
100.0
80.0
60.0
Higher ratio of A to C
runners enables
Fairchild to meet
customers needs at
historically lean
inventory levels
40.0
20.0
0.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09
Internal Inventory DOI
Q3 Q4 Q1
09 09 10
Distribution Inventory DOI
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Capex Trends
Continued Discipline – 4 Qtr Rolling Average & 2010 Consensus
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Q1 08
Q2 08
Q3 08
Q4 08
FCS
Q1 09
ONNN
Q2 09
IRF
NSM
Q3 09
ISIL
Q4 09
Q1 10
2010
Average
Capex budgets remain disciplined at 7 – 8% of sales for FCS & peer
group…still well below prior super-cycle peaks of 12%+
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4 Qtr Rolling Depreciation vs Capex
25.0%
500.0
450.0
20.0%
400.0
350.0
Depreciation expense is returning to a
more normalized 6 – 8% of sales
15.0%
300.0
250.0
10.0%
200.0
150.0
5.0%
100.0
50.0
0.0%
-
Revenue
4 Qtr Rolling Depreciation
58
4 Qtr Rolling Capex
www.fairchildsemi.com
Free Cash Flow % of Revenue
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4 Qtr Rolling Free Cash Flow
45.0
40.0
35.0
4Qtr Rolling Free Cash Flow Millions $
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
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Millions
Debt Composition & Interest Trend
1,200
1,000
800
600
400
200
0
1997
1999
2001
2007
Term Loan
Drawn Revolver
61
2008
High Yield
2009
2010
Convert
www.fairchildsemi.com
Net Debt & Interest Trend
$700.0
9.0%
8.0%
$600.0
7.0%
$500.0
Cash exceeds debt for
first time in our history!
$400.0
6.0%
5.0%
$300.0
4.0%
$200.0
3.0%
$100.0
2.0%
$0.0
1999
2000
2001
2002
2003
2004
2005
2006
-$100.0
2007
2008
2009
2010
1.0%
0.0%
Net Debt
Net Interest % of Revenue
62
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Fairchild: The Power Franchise®
•
Wireless convergence and energy efficiency mega-trends create huge market
opportunities
•
New products and better mix are driving improved margins
•
•
Profitable sales growth in analog and power management products
•
Better mix of products due to more new products and reduction of low margin
business
•
Product cost reduction driven by efficiency gains, fab shrinks, fab consolidation and
new processes
•
Reduced D&A due to consolidations and long term lower CAPEX spending
•
Structural changes to reduce OPEX and improve earnings
Earnings growth coupled with capex and working capital discipline expected to
enable strong cash generation in 2010
63
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