Quad-core Smartphone Processors To Increase Semiconductor Usage By The Middle Of Next Year; UBS Investment Bank Managing Director Identifies His Top Picks

67 WALL STREET, New York - December 27, 2011 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Energy Efficiency, Cloud Computing and Telecommunications - Semiconductor Content Increase Across Verticals - Semiconductor Manufacturer Consolidation

Companies include: ARM Holdings' (ARMH); AMD (AMD); AT&T (T); ATI (ATI); AUO (AUO); Aixtron (AIXG); Alcatel-Lucent (ALU); and many more.

In the following brief excerpt from the Semiconductors Report, expert analysts discuss the outlook for the sector and for investors.

Uche Orji is a Managing Director in the technology group of UBS Investment Bank. He covers large-cap semiconductor companies. Before joining UBS, Mr. Orji worked at J.P. Morgan Securities in London, where he established the team as one of the top semiconductor teams in Institutional Investor's "All-Europe Research Team." Mr. Orji also has held top positions in the Thomson Reuters Extel Survey. Previously, he was an Analyst and Fund Manager with Goldman Sachs Asset Management based in London. Before that, he had positions in Lagos, Nigeria, with Diamond Bank Ltd. and Arthur Andersen LLP. Mr. Orji holds an MBA from Harvard Business School and a bachelor's degree in engineering from the University of Port Harcourt in Nigeria.

TWST: Please explain your semiconductor coverage.

Mr. Orji: I coordinate all the semiconductor Analysts at UBS. I am the global coordinator, so that includes all the semiconductor Analysts in Europe, Asia, Japan. I am also in charge of the U.S. Analysts as well. In other words, I coordinate all the semiconductor Analysts at UBS regardless of where they are located, and I am in charge of the UBS house view on investing in the global semiconductor sector.

TWST: What are the major growth areas in the space?

Mr. Orji: There are still many growth areas in semi. Let's start with smartphones. The semiconductor content in smartphones is increasing from the processor to the storage to all the peripherals. High-end smartphones are going from a single-core processor to a dual-core processor and will go on to a quad-core processor by the middle of next year. That drives the incremental value of the microprocessor in the phone. If you look at the storage, recently Apple (AAPL) launched the 4S with a new 64-gigabit version of its phone. All of that storage is solid-state storage, also known as NAND flash.

That's 100% semiconductor. So the value of the storage is doubling now within the phone. But more importantly is the fact that smartphones are growing significantly faster than just about any other single gadgetry that we know. So that's one. Tablets also are growing. The iPad has gone from zero a year and a half ago to something like to 11 million to 12 million units every quarter. There is a significant amount of semiconductor content in the iPad. So tablets and smartphones are one category. PCs are still growing. Even if the PC units themselves don't grow, the semiconductor content within the PC continues to rise. Intel has outgrown most tech companies purely by increasing within the PC market. Intel (INTC) is what's pushing growth close to low double digits this year, even in a tough year like this.

While it's true that PC growth has slowed down a little bit relative to where it has been in the last 10, 15 years, it's still relatively growing. Unit basis is growing in the emerging markets, for example. Brazil has gone from the number eight market for PCs five years ago to number three now. China currently buys more PCs than the U.S. does now, and is number one is the world. U.S. is number two, Brazil is number three. So emerging markets is growing. Turkey, Indonesia, Malaysia, all these countries are growing their PC purchases, and it's all coming from the affordability factor. They can afford it now. The number of weeks of wages required to buy a PC in an emerging market has dropped significantly and the price of the PC itself has also dropped a lot. So this affordability is what's driving the growth of PC in emerging markets. Automotive is another market.

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