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Display Technology Inflections

Brian Shieh, Ph.D. Vice President, General ManagerDisplay and Flexible Technology Group

June 20, 2017

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Safe Harbor

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This presentation contains forward-looking statements, including those regarding anticipated growth and trends in Applied’s businesses and markets, industry outlooks, technology transitions, and other statements that are not historical facts. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements and are not guarantees of future performance. Information concerning these risks and uncertainties is contained in Applied’s most recent Form 10-K or 10-Q and other filings with the SEC. All forward-looking statements are based on management's current estimates, projections and assumptions, and Applied assumes no obligation to update them.

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APPLIED TODAY

SEMI SYSTEMS

SERVICES

DISPLAY and ADJACENT MARKETS$2.1B

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FY16 ORDERS

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Applied’s Display and Flexible Technology Products

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PVD

E-Beam Tester Roll-to-Roll E-Beam Evaporation PVD CVD

CVD

Thin Film Encapsulation

In-Line SEM Review

NEW PRODUCTS(launched in 2016)

CORE PRODUCT PORTFOLIO

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Entertainment

Fashion

Social Networking

Productivity

Education Health

Safety

Displays are the Window to the Information Universe

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TODAY

New Display Era on the Horizon

Laptop PC Monitor Large Screen TV

LCD EraCRT Replacement

OLED Era Advanced 3-D Era

SCALING

RESOLUTION

FORM FACTOR / VISUAL PERFORMANCE

2-D “NATURAL” 3-D

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Display Technology Roadmap

SIZETV 40” 55” 70”PHONE 4.5” 5.5” >5.5”

TRANSISTOR DISPLAY

a-Si

LTPS

OR

MOx

LCD OLED

FORM FACTOR/PERFORMANCE

RESOLUTIONTV HD 4K 8K

PHONE >326ppi >600ppi >700ppi

VR/AR 400ppi

TODAY

3-D2-D

Curved Rollable FoldableFPD

>1000ppi >2500ppi

FlexibleRigid

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Display “Mega-Trend”: Components to Process

RGB OLED emitter

Wire-grid polarizer

In-cell / on-cell touch

Thin film encapsulation / hard coat

OLED emitter

Wire-grid polarizer

OLED emitter

Color filter

Polarizer

Touch panel

Cover glass

Liquid crystal

TFT backplane

Polarizer

Backlight

LCD PANEL CROSS-SECTION IN-CELL / ON-CELL

Needs Materials Engineering Innovation

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Key Technology Challenges for Flexible Displays

CHALLENGESSTRUCTUREDISPLAY

Flexible TFT

Flexible OLED Emitter

Cover WindowCover Window

Touch ScreenTouch Screen

EncapsulationEncapsulation

CathodeCathode

Emitting LayerEmitting Layer

AnodeAnode

Transistor (TFT)Transistor (TFT)

SubstrateSubstrate

Flexible Encapsulation

Flexible Touch Sensor

Flexible Window

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3-D Displays: Its Time is Coming?

1993: Apple Newton Message Pad~300k units sold - discontinued

23 years later!

2016: Apple iPhone>1billion units sold

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3-D Displays – Why Previous Attempts Fell Short?Glasses, Content, Gimmicky, Eye Strain, More Hassle than Worth…

We perceive 3-D through several cross-linked cues –getting all of them right is critical to “natural” 3-D

So far, binocular disparity (i.e. stereoscopy) has been the focus of 3-D solutions

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Human Eyes Use Multiple Cues to “See” 3-DAvoiding cue conflicts and providing natural and consistent stereo, parallax and focus cues Winner !!

1. Binocular Disparity

2. Convergence

MONOCULAR CUES

1. Retinal Blur

2. Accommodation/Focus

4. Others: Shading, Color, Texture, Size, Perspective, Gradient, Lighting…

View from the left View from the right

3. Parallax & Occlusion

BINOCULAR CUES

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Candidates for “Natural” 3-D

HolographyDiffraction grating waveguides for holographic construction

Foveated RenderingEye tracking to render fovea image in high resolution, rest blurred

Light Field DisplaysMulti-focal planes (time multiplexing)

Multi views (spatial multiplexing)

Lends itself to large area displays

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Backplane Yield Challenge Example: Particles

Smaller TFTs have more (& smaller) killer particles

OLED TFT active area larger than LCD increasing chance of “killer particle”

Increasing resolution increases # transistors/area requires smaller TFT increases # of killer particles

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Semiconductor Methodologies for Advanced Displays Example: Yield Management

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You can’t FIX

What you can’t SEE

Semiconductor Methodologies for Advanced Displays Example: Yield Management

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Roll-to-Roll Product Examples: Current and FutureFood Packaging Touch Sensors Security / Decorative Window Films

Current Applications

Features Advanced functionality Transparent + barrier + microwavable + retortable

7.9” Retina Display Film based TP

thinner; lighter

Banknote securityAnticounterfeit labelingDecorative packaging

Energy savingIncreased comfort

Blocks heat and UV

Future Applications

Thin-Film Batteries

Smart CardsSensor Products

RF-ID Tags

RobustWriting speedContact free

Intelligent Packaging

Time/temp indicatorsGas indicators

Thermochromic sensors

Flexible Displays

Robust LightweightForm Factor

Features

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Displays are the window to the “information universe” and better displays are constantly in demand

Many display technology inflections need materials engineering innovation & “semiconductor” methodologies

The industry is creating the building blocks to enable roll-to-roll manufacturing of more complex flexible devices and applications