Company Overview Decembers2.q4cdn.com/391606028/files/doc_presentations/Corp... · · 2015-10-18Lighting and Display MBE for Research & Industry Data Storage, ... Largest Near-Term

Company Overview

December 2013

Copyright ©2013 Veeco Instruments Inc. 2

Our R&D is Best-in-Class Veeco’s exceptional R&D

organization delivers systems that

enable the future

Our Technology aligns with three mega

trends: energy efficiency,

personal mobility and

advancing thin film

technologies

We Make Thin Film

Process Equipment Growing, depositing,

etching and processing

thin films is our core

competency

Veeco At A Glance

High Growth

Market Focus Our equipment enables the

manufacture of:

• LEDs

• Power devices

• MEMS

• Hard disk drives

• OLEDs

Market-Leading

Positions in: • MOCVD & MBE

• IBE/IBD/PVD

• ALD


Thin Film Technology: At the Core of Everything We Do

LED

Wireless

Power Electronics

Hard Drives

OLED


2007 2008 2009 2010 2011 2013

Transformation from Industry Player to Industry Leader

2012

John Peeler

joins as CEO

• Veeco launches

TurboDisc® "K-

series" MOCVD

platform including

K300™ MOCVD

system

• Investment in world-class Asia customer

support and training sites

• New supply chain hub in Singapore

• Quintupled MOCVD manufacturing capacity

• Strengthened sales and services team

• Metrology business sold

• “Portfolio

management”

approach to R&D

• Outsourced

manufacturing

• Established High

Performance

Culture

• GEN10™ MBE

cluster tool

introduced

• K465™ MOCVD

introduced

GEN2000® Supports

Global Wireless

Device Ramp

• NEXUS® CVD

System and TAMR

PVD System

introduced for Data

Storage customers

NEXUS PVD-1

Physical Vapor

Deposition

System

• TurboDisc

K465i™ MOCVD

System

launched…

becomes #1

selling system

• Achieved #1

market share in

MOCVD

• Record Data

Storage

revenues

• October 2013

Veeco Acquires

Synos

Technology and

Enters Flexible

OLED

Equipment

Market

• Variable

business

model enables

high R&D

through

industry cycles

• TurboDisc

MaxBright®

MOCVD system

introduced…

becomes #1 selling

system

• NEXUS DLC-X and

Optium® ADS-

800TM for Data

Storage customers

• VCE Launched

• GENxplor

R&D MBE

System

Launched

• Veeco launches

MaxBright MHP™,

Maxbright M™ and

TurboDisc K465i HP™


Veeco provides process equipment

solutions that drive tomorrow’s

technology breakthroughs today

We are a dynamic, innovative and

high-growth company recognized as

the best in the markets we serve

Vision

We help customers make

products for a more productive

world and a cleaner and

sustainable environment


Operating Principles

Speed is a vital competitive weapon

Our people drive our success

Promote a results-oriented, high performance environment

Be passionate about technology & product leadership

Customers are our reason for being


CEO & Leadership Team

John Peeler Chairman & CEO

Bill Miller EVP, Process Equipment

Nino Federico SVP, Operations

Peter Collingwood SVP, WW Sales & Services

David Glass EVP, CFO

Ken MacWilliams SVP, Strategic Marketing & Growth

Monica DeMarco VP, Quality, Customer Satisfaction & Business Excellence

Robert Bradshaw SVP, Human Resources

Greg Robbins SVP, General Counsel


Other Key Leadership Team Members

Jim Northup VP/GM, MBE, Optical Systems and Ion Sources

Vivek Vohra VP/GM, Data Storage

Jim Jenson SVP/GM, MOCVD

Debra Wasser SVP, Investor Relations and Corporate Communications

John Kiernan SVP, Finance and Corporate Controller

Ilsong Lee SVP/GM, ALD


Market Leadership

• MOCVD technology leader for solid-state lighting

• Foundation Businesses MBE and Data Storage are #1

• Deep process expertise, patents and know-how

• Lowest CoO products at the technological forefront

TurboDisc MaxBright MHP GaN

MOCVD Multi-Reactor System

GEN200® Edge™

Production MBE System NEXUS IBE-420Si™ Ion

Beam Etching System


Lighting and Display

MBE for

Research &

Industry

Data

Storage,

Optical and

EUV

World Leaders Choose Veeco


Customer Connectivity Our Approach is a Competitive Differentiator

Proximity to customers is a strategic priority

resulting in stronger customer support, better

R&D alignment, and new customer conversion

Camarillo & Fremont, CA

Fort Collins, CO

Plainview, NY

St. Paul, MN Somerset, NJ

Poughkeepsie, NY

Santa Clara, CA

Edina, MN Mannheim, Germany

Shanghai, China

Hsinchu City, Taiwan

Penang, Malaysia

Seoul and Suji-gu, Korea

Singapore

Philippines

Bangkok, Thailand

Tokyo, Japan

R&D/Engineering/Training

Sales and Service

U.S.: ~ 580 Employees Europe: ~ 15 Employees Asia: ~ 200 Employees


Veeco’s Growth Opportunities

Growth Exciting

Power

Electronics OLED EUV MBE R&D

Systems MEMS MOCVD

Services

OPP RTUNITY in LED Lighting

Huge


LED - New, Greener Paradigm for Lighting

62%

Source: DOE website; data for U.S. alone

Reduce electricity

demands from

lighting by:

By 2025,

LED Lighting Adoption Will…


Eliminate 258 million metric

tons of carbon

emissions


By 2025,




Save over $280B and enable us to

avoid building 133 new power plants

By 2025,



2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

LED TV 1500 MOCVD

LED Lighting Adoption is Accelerating

LED Lighting projected to grow at 35% CAGR from 2010 to 2020

LE

D D

em

an

d b

y A

rea (

B m

m2)

Cellphone 250 MOCVD

LED Lighting ~3000+ MOCVD

LED Lighting

CAGR 35%

LED TV

Wall Street and Veeco Estimates


Veeco Innovation Helped Accelerate LED Bulb to the “Teens Price”

Veeco Epi Cost reduction is 2X faster than U.S. DOE Forecast (‘10-’12)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Norm

aliz

ed E

pi C

ost ($

/m

.cm

2)

2010 2012 2015 2020

$50 LED bulb Price

$13

$23

$6 $5

Throughput

Yield (HP)

Automation

Cluster Yield

Next Gen

Next Gen

U.S. Dept of Energy projected bulb cost

Actual bulb cost Reduction of Epi cost from Veeco innovations


Veeco Investing to Expand Our Leadership Position

24 % 29 %

44 %

62% 51%

2007 2008 2009 2010 2011 2012

Competitive Advantage: Lowest CoO and Superior Customer Connectivity

Note: Estimated comparative market share Veeco and Aixtron only

K465i and MaxBright are

#1 Selling MOCVD Systems with

the Industry’s Highest Productivity

Veeco

Market Share

63%

9M 2013

Next-Gen


Focus on Services Growth Continues

• New Service Products

• Expand Veeco Certified Equipment across more product lines

• “Designed in” Services for new products

• MOCVD: post-warranty parts and services, local depots, consumables, performance upgrades

MOCVD Services to Increase

~70% from 2011 to 2013

25%

Grew Services

in 2012


Power Electronics: New Growth Opportunity for MOCVD

Power Supplies

Solar

Consumer

Electronics

Wind

Automobile

• Power Electronics device market continues to grow1

• GaN-based power devices offer higher efficiency, switching speed and lower power consumption

• Veeco is positioned at key customer sites around the globe to support this high growth segment

Notes: 1) Yole Nov 2011, 2) IMS Research Feb 2012

GaN

Pow

er

Devic

e M

ark

et2

2011 2012 2013 2015 2018 2021

71% CAGR


GENxplor MBE Driving Increased R&D Market Share

2013

Product

Launched

3 systems

booked

2 systems

booking

First tool

shipped

System Generating Worldwide

Interest for Cutting Edge

Research

August September November

Customer engagements span multiple research fields including:

IR detectors, laser diodes, novel HEMTs, graphene, solar, high-

temp superconductors, UV LEDs, and thermo electrics

October


Hard Disk Drives Will Continue to Dominate Storage

2012

3,500

0 2020

It took Seagate 29

years to reach their

first billion hard

drives… and only

four years to

reach their

second billion

Source: Western Digital

Exab

yte

Ship

men

ts

Over 85% of

exabytes in 2020 will

be stored on HDDs

2016

Client PC

Personal Consumer Electronics

Cloud

Smart Phones/ Tablets

Cloud SSD

Client SSD


Data Storage Business Growth: More than Just Hard Drives

End Market Blended

CAGR ~20%

High Performance Optical Coatings

MEMS & Magnetic Sensors

*Seagate Technology

End Market

CAGR ~ 10%

PVD CVD DLC IBD IBE Lap

& Dice

From 1960- 2010

approximately 1 billion

terabytes of data was stored.

In 2012, 1 billion terabytes

will be stored.*

EUV Masks


Global Trends Driving Veeco’s MEMS Opportunity

• We are the largest

supplier of thin film

magnetics process

equipment

• Over 800 etch and

deposition systems

installed worldwide

• Strong technical team

and dedicated

applications lab

Source: Semico Research Corp. Dec 2012

$B

illi

on

s o

f d

oll

ars

$20

2005 2015

MEMS Revenue by Application

Automotive

Smartphones

Displays

$0


Veeco IBD Required for EUV Mask Roadmap

• $300B semiconductor

market investing heavily

in EUV to solve

lithography challenges

• Defect-free photomasks

are a technical

roadblock

• We have 100% market

share in Ion Beam

Deposition for this

application

Currently engaged with key

industry players on next-gen

equipment solutions


Entering OLED Market Through Core Deposition Source Technology

Veeco Deposition Source for OLED

OLED equipment is

quickly becoming a billion

dollar plus opportunity


New FAST-ALD Fits for our “Three Mega Trend” Strategy

Energy Efficiency Personal Mobility Emerging Applications

& Technologies

LED Lighting (MOCVD) Wireless Chips (MBE)

Semiconductor Research (MBE)

Hard Disk Drives (Data Storage)

Optical Coatings (Data Storage)

Build on Existing Leadership

Advancing Thin Film

Technologies

NOW: ALD for OLED Mobile

Displays Future: ALD for OLED TV

Displays

EUV Mask Blanks, Semi

Establish a Strong Position in New Markets

Power Devices

Future: ALD for

OLED Lighting, Solar,

Batteries

MEMS


Veeco ALD: 10x Faster Than Traditional ALD and Scaled With Virtually No Limits

A new generation of ALD:

Fast deposition

Low temperature

Large area format

Inflection Point for Flexible OLED

Production Manufacturing Ramp


Mobile OLED Display Technology Transition

Rigid Unbreakable Curved Bendable Foldable

Flexible Product Introductions Have Begun


$ in B

illio

ns

Mobile Displays: Largest Near-Term OLED Market

• OLED industry revenues forecasted to exceed $35B by 2020

• Flexible being adopted for mobile phones and two years from now for

tablets…TVs and Lighting also an opportunity

*Display Search Dec 2012 report

“The next WOW FACTOR

in mobile will come from Flexible Displays”*

0

5

10

15

20

25

30

35

40

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mobile PC Mobile Phone OLED TV

Display Search


OR

Flexible OLED is a Big Needle Mover for Mobile

Rigid OLED Display

10% Thinner

&

15% Lighter

20%

Longer

Battery

Lifetime

With Plastic

OLED

Weight: 130g

Thickness: 7.9mm

Battery: 2,600mAh

Weight: 111.7g

Thickness: 7.1mm

Battery: 2,600mAh

Weight: over 130g

Thickness: 7.9mm

Battery: 3,100mAh

Source: IHS Electronics & Media, Mobile & Emerging Display Report


0

200

400

600

800

1000

1200

1400

1600

2013 2014 2015 2016

Ph

on

e S

hip

men

ts (

Mil

lio

ns)

Huge Growth Wave as Flexible Displays Penetrate Mobile

Source: IHS iSuppli research, March 2013, Veeco estimates

Mobile Flexible OLED Sales

Forecasted to Surge to $5.5B by 2020

~14% of smartphones will be flexible

by 2016

OLED Mobile Handsets

Smartphone

Flexible OLED Units


Flexible OLED: “Zero-to-Sixty” Market Opportunity

Polarizer

Encapsulation layers

OLED Layers

TFT (Plastic)

Today: 1 ALD cluster = 15-18M flexible phone

displays/year

Tomorrow: ~250M flexible OLED phones will

be produced in 2016

Veeco estimate flexible OLED mobile shipments / production system throughput &

yield

Assumes Veeco Wins

Multiple ALD Encapsulation

Layers at a Key Customer

That’s a

$200-400M market

opportunity


$1B+ Near-Term Growth Opportunities

OLED Mobile

$200-400M TAM

OLED TV and Lighting

>$200M TAM

Energy Storage

>$100M TAM

Semiconductor

>$200M TAM Solar and Other

>$200M TAM

Veeco estimates for FAST-ALD TAM 2014 and 2015

Assessing Adjacent Market

Opportunities for Product Development

FAST-ALD


Solid Track Record Supports Our Future


Product and Services Leadership Initiatives

• LED Lighting with MOCVD

• Flexible OLED encapsulation with ALD

• GaN Power Electronics with MOCVD

• Compound Semiconductor with MBE

Funding Product Development

to Extend Leadership in:

Established New Core R&D Group

Extending Services Offerings

Prospecting for Acquisitions

Use our new Core R&D group to address

adjacent market opportunities

Capability that adds more value to

our customers

Businesses that align with core

markets and technology profile


Strong growth and

Profitability

Veeco’s Future State

• LED lighting (MOCVD)

• Flexible OLED

encapsulation (ALD)

• Compound semi

production and R&D

(MBE)

• GaN Power

Electronics (MOCVD)

• Niche applications like

EUV Mask Blanks

(IBD) and MEMS (IBE)

Global #1 in Exciting Markets: A Services business that

contributes substantially to

the bottom line

Gross Margins >40%

World class quality and

customer satisfaction


Veeco Summary

1 Market Leaders

We are a leader in each of our core technologies – MOCVD, MBE, ALD,

IBE/IBD and Advanced Thin Film Process Technologies

2 Exceptional Technology

Our people, technology and process knowledge enables us to deliver

systems with the lowest CoO to the world’s leading companies

Tied to High Growth Markets

LEDs for lighting, flexible OLEDs for mobile phones, power electronics

for energy conversion, hard drives, wireless chips and MEMS for cloud

computing and state-of-the-art electronics

4 High-Performance Organization

Fast and agile culture featuring speed as a competitive differentiator,

customers count on our flexibility and value proposition

3

Documents

Company Overview Decembers2.q4cdn.com/391606028/files/doc_presentations/Corp... · · 2015-10-18Lighting and Display MBE for Research & Industry Data Storage, ... Largest Near-Term