Presentation Title – 2 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Four levels of supply chain risk management
1. Anecdotal, un-calibrated opinion
Read the papers, ask around, develop an opinion
2. Objective data informed opinion
Independent tracking of critical supply chain metrics, develop a more informed opinion or an informal model
3. Objective data, objective projections
Independent tracking of critical supply chain metrics that enable a projection of supply/demand balance with confidence levels
4. Quantification of risk
Risk quantified scenario planning
Multiple scenariosanalyzed
Supply Chain Projections
Supply Chain Scenarios
Opinion
Objective w/
confidence level Opinion
Objective w/
confidence level
Opinion 1
Objective 2 3 3.5 4
Supply
Chain
in
form
ati
on
Presentation Title – 3 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Critical supply chain metrics
Multi-sourced or substitutable products
Inventory
Capacity
Demand profiles and elasticity
Price – as the reflection of where supply = demand
Proprietary sole sourced products
Process Cpk (manufacturing and supply chain processes)
Available supplier capacities and inventories
Other demand for the capacity and end product demand for hardware that consume products that use the capacity
Presentation Title – 4 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Semiconductor supply chain – 2005
Semiconductor Suppliers$241,055
OEMsTop 10
$75,253
OEMs11 To 100$89,338
OEMs> 100
$76,464
Distributor
EMS
ODM$25,584$25,584$24,894
$45,060 $69,323
$55,802$50,222
$36,678
$42,432 $42,774
$41,769 $47,572 $47,572
$5
,80
3
$3
42
$5
,58
0
$2
4,2
63
$6
90
$2,9
72
$4
,16
9
$6,3
01
$16
,311
$2
7,2
35
$1
6,1
68
All Semiconductor FlowValues are at SupplierPoint-of-Purchase and
Do Not IncludeIntermediate Mark-Ups
The semiconductor supply chain is highly inter-connected
Presentation Title – 5 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
0
5
10
15
20
25
30
35
40
45Q
199
Q29
9Q
399
Q49
9Q
100
Q20
0Q
300
Q40
0Q
101
Q20
1Q
301
Q40
1Q
102
Q20
2Q
302
Q40
2Q
103
Q20
3Q
303
Q40
3Q
104
Q20
4Q
304
Q40
4Q
105
Q20
5Q
305
Q40
5Q
106
Q20
6
Da
ys
(S
ale
s B
as
is)
Days of Inventory for Communication Chip Companies
Presentation Title – 6 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
-25
-20
-15
-10
-5
0
5
10
15
Da
ys
Ov
er/
Un
de
r T
arg
et
Q205 Q305 Q405 Q106 Q206
Retail
Computer
Storage
Wireless OEMs
Networking Systems
Automotive EMS
ODM Distribution
Semiconductor
WSP
Total Inventory Levels Relative to Targets
*COGS, except Semi Companies and Semi Foundry, which are calculated on a Cost of Revenue basis
Presentation Title – 7 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Memory Semiconductor Factory Capacity and Utilization
0
30
60
90
120
150
180
210
2000
2001
Q10
2Q
202
Q30
2Q
402
Q10
3Q
203
Q30
3Q
403
Q10
4Q
204
Q30
4Q
404
Q10
5Q
205
Q30
5Q
405
Q10
6Q
206
Q30
6Q
406
Q10
7Q
207
Q30
7Q
407
2008
2009
2010
Mill
ion
s S
q.In
./ M
on
th
50
60
70
80
90
100
Percen
tage U
tilization
Capacity million Sq. In/ mo. Memory Utilization
Presentation Title – 8 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Mobile PC Value Chain Entering Q2 2006, DOI Trends
HDD CPUs Mobile Chipsets DRAM Display Distributors ODM OEM
Over Supply
Under Supply
Substrates remain tight
Inventories healthy, but
some gains in the quarter
Supply leveling off
Inventories declining
Supply coming down; tight
supply expected
exiting the quarter
Overall, inventories
remain lean
Stocks leveling off from gains/corrections in H1 2006
Presentation Title – 9 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Component Health Watch
Price and lead time trending for 12 different commodity groups
Presentation Title – 10 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Component Health Watch
Presentation Title – 11 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
CPT (Component Price Tracking)
Price is adjusting factor to equalize supply and demand So tracking and projecting REAL prices is the single most important factor in
assessing supply chain risk
Client can compare their
survey points to CPT graphs
Rolling Four-Quarter Forecast
(Contract only)
Graph a Single Price Type or Region or Combine the
Graph Views
Presentation Title – 12 Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Predicted vs. Actual Sales
Time Series Model with Regressor (iSuppli Index)
Ln
Sa
les
1/02 1/03 1/04 1/05 1/06 1/07
13
13.4
13.8
14.2
14.6
15
15.4actualforecast95.0% limits
Predicting next month’s DRAM market
iSuppli has now constructed an “iSuppli Index” that uses our weekly pricing, inventory, mix, and capacity utilization data sets to accurately predict market dynamics month ahead (2 months ahead of release of WSTS) with very high confidence
A key step to giving quantitative market and supply chain risk measurements
Coefficient t-statistic p-value
iSuppli Index 0.589214 7.86084 0.000000
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