ESIA & WSC Further examples of semiconductor cooperation

1. ESIA & WSCFurther examples of semiconductor cooperation April 25 2007

2. Main points • European & European-based cooperation within ESIA • Structure • Some ESIA issues • Global cooperation at the WSC & GAMS

3. Some European s/c realities… • European operating s/c companies support over 100,000 direct jobs in a market valued at around €32 bn • Around 16% of total world market • Around 80% of national legislation ‘goes through Brussels’ • There are 3 major decision-making EU institutions. There are also 27 Member State governments • ESIA is one of around 1000 business representation groups in Brussels

4. ESIA working methods… • Proactive, ‘lean’ approach • Prioritisation of issues • Direct Member involvement • Technical & communication expertise • Credible & European partner to EU, nat. instit. & global bodies. • International representation/support within industry (WSC, ISESH, ITRS, WSTS…) • High dependency on ‘3-tier-representation route’, mirroring decision-making structure in the EU • Mixed membership model

5. ESIA & WSC • ESIA MissionTo represent, promote and defend the vital interests of the European-based semi-conductor industry and to ensure its competitiveness in the global market

6. Cooperation within Europe - ESIA Direct Members TEXAS INSTRUMENTS ALTIS SEMICONDUCTOR INFINEON TECHNOLOGIES QIMONDA AMD INTEL CORPORATION RENESAS TECHNOLOGY ATMEL STMICROELECTRONICS MICRON TECHNOLOGY MICRONAS ROBERT BOSCH NXP SEMICONDUCTORS FREESCALE SEMICONDUCTORS

7. Cooperation within Europe - National Associations AETIC (Spain) AGORIA (Belgium) ANIE (Italy) FEEI (Austria) Hellenic SIA (Greece) NMI (UK and Ireland) SITELESC (France) VI/SECA (Sweden) ZVEI (Germany)

8. Some ESIA issues… • Trade / customs • March 2006: « Multilateral agreement brings duties on multichips to zero. WW revenues of European-based s/c companies already exceeded €2bn in 2005 and the market is set to double by 2008. ». 2 year process involving regional levels & global bodies. From VW Beetle to Rolls-Royce? From classification to ITA treatment? • EU Customs’ reform. • EU Trade Defence Instruments. • Rules of Origin. What do we need to do in Europe for global agreement?

9. Some ESIA issues… High level of cooperation on difficult trade issues Ensure link between next product generations and successful trading in a tariff-free ITA environment

10. Some ESIA issues… • ESH • PFOS. Oct. 2006: Conditional exemption for critical uses for photoresists or anti-reflective coatings in photolithography processes, following 2 year process. Now LRTAP & Stockholm Convention. • REACH. From terrible to bad to … workable?... ESIA key involvement in ‘RIP’ process. • PFC reduction – post 2010? • ISESH. Hosting of conference June 2006.

11. Some ESIA issues… Supplier-side cooperation Identifying potentially problematic materials at early stages –… e.g. nano

12. EU competitiveness factors R&D Spending R&D & innovation policies, research investment targets Global Strength of European End-User Industry Global industry leadership, Electronics value added driven Pre-competitive Co-operation / Partnership Effectiveness Joint research and design centres, framework programmes, technology Globally Effective EU Monetary Policies Stability of exchange rates relative to other currencies Educational System Reinforcement Curricula, industry-university research, exchange programmes, brain retention Strength of European Internal Market End-user / consumer demand in Enlarged 25 EU Internal Market Target Investment Support / Incentives Levels Tax havens, access to capital, property incentives Free & Fair Trade Policy Reciprocal world free trade Environment, elimination of tariffs EU Legislative Environment Environment, safety & health,customs & security, IP rights European Labour Policies Sectoral flexibility of working hours and employment conditions

13. “Semiconductors are for the information society, what grain was for the agrarian society and what iron & steel were for the industrial society…” José Manuel Barroso, Brussels 2006 Shanghai Museum of Urban Development, 2004

14. Further global pre-competitive cooperation – WSC & GAMS WSC in NICE – May 2003

15. Some Geneva WSC issues • MCP Agreement - product scope expansion • ITA – geographical expansion of MCP • Rules of Origin – Working towards a possible agreement? • Full integration of China into WSC – 1st meeting • IP – protecting key to future • PFOS, PFC – next steps • Technology update? – ITRS? • Guest speaker WTO Dir.-Gen. – trade liberalisation / Doha

16. WSC / GAMS(Government / Authorities Meeting on Semiconductors) EU 1997 Korea 1997 USA 1995 Japan 1995 China 2006 Taiwan 1999 India? Build-up of a unique model of industry-to-industry; industry-to-government; government-to-government cooperation

17. WSC/GAMS issues which… • Feed into wider Government processes as sectoral international consensus builders • Reinforce proactive, voluntary approach in line with general Government positions: • Antidumping • MCPs (& gen. standardisation) • PFC MoU • China issues (WSC membership, IP…) • ITA expansion • Rules of Origin • Market Access policies • E-commerce duty moratorium • DDA & WTO • WCO & HS2007 & ITA • Kyoto • WTO commitment review • WTO • WTO

18. WSC/GAMS issues which… • Assess the global impact of legislation: • REACH, PFCs, RoHS, PFOS • Internet promotion • Make Governments aware of current or future issues: • Internet Levies • Technology cooperation

19. Benefits for Governments • GAMS enables Governments to establish a regular dialogue with one of the most dynamic, transparent, competitive, innovative, global markets in the world • GAMS enables Governments to receive & support recommendations discussed & approved at global level • GAMS process can identify, approach & help resolve issues of global reach also beyond the sector • GAMS provides opportunity of regular face-to-face meetings with industry executives and Government officials

20. Ensure pre-competitive cooperation is effectively linked at all levels GAMS JSTC GAMS JSTC