Nova Ltd. · NASDAQ:NVMI
Nova — Nova Measuring Instruments — Investors Meeting, Tel-Aviv Stock Exchange (March 2013)
40 slides from Nova's conference presentation, Mar 11, 2013
Slide 1: Nova - partnering for process control
N<OvA @ partnering for process control
Slide 2: Investors Meeting, Tel-Aviv Stock Exchange
Investors Meeting Tel-Aviv Stock Exchange Gabi Seligsohn, President & CEO Dror David, CFO March 11, 2013
Slide 3: Meeting Outline
Meeting Outline — Brief Company background — FY 2012 summary — Industry’s main drivers — Developing new horizons — Nova & the market - 2013 & beyond — Summary
Slide 4: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation includes statements that constitute forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future financial performanc
Slide 5: Business highlights
Business highlights — Pure player in the semiconductors optical metrology market, enjoying strong business fundamentals: — Nova is exposed to the highest growing semiconductor applications serving industry leading manufacturers — Nova continuously outperforms the industry — Nova is entering the emer
Slide 6: Company overview
Company overview — Founded in 1993 - IPO in 2000 (NASDAQ - NVMI) — Headquarters: Rehovot, Israel — Global presence: — Asia Pacific - Taiwan, Korea, Singapore, China — United States, Japan and Europe — Employees: 370 — Active installed base >1200 systems — Listed on NASDAQ and Tel-Aviv Stock Exchange
Slide 7: Optical CD - leading and emerging technology
Optical CD - leading and emerging technology Semiconductor Wafer Cross-Section View Using Electron Microscope Same View Using Optical CD Scatterometry View Integrated Circuit Die
Slide 8: Nova's products portfolio
Nova’s products portfolio SW SA NovaMARS SW Packages Fleet Management NEXT T500 T600 3D-IC IM TSV NEXT i500 Process control for current and future technologies
Slide 9: Well positioned in most critical segments
Well positioned in most critical segments 9 Memory: NAND: Design win 1Y (<10nm) DRAM: < 30nm Foundry: Ramping 28 nm. Design wins: 20,14,11 nm Source: Barclays, Needham 2012/3 Semi Market - Capital Spending Strong position with leading market spenders
Slide 10: Well positioned in the right sectors
10 Well positioned in the right sectors Source: Gartner Foundry Revenue Source: Micron, Gartner NAND Outlook Capitalize on strong presence in memory once spending resumes Foundry revenues and spending will continue to grow
Slide 11: Unification of the metrology market
Unification of the metrology market $800M-$900M Source: Gartner, Yole Research & Company Estimates * Expected metrology and inspection SAM for 3D Integration Expecting a further SAM increase of ~ $100M for 3D-IC starting in 2013/14* $284M - - Expansion of Nova’s Addressable Market Thin Film Metrolog
Slide 12: Optical CD - growing adoption rate
Optical CD - growing adoption rate Disruptive Technology to meet the industry’s most difficult challenges Source: Gartner
Slide 13: Summary of FY 2012 and Q1/13 Guidance
FY 2012 Summary and Q1/13 Guidance
Slide 14: 2012 - a year with many achievements
2012 - a year with many achievements — Proliferating previously announced products and launching new ones: — T600, i500 and NovaMARS adopted by all key customers for advanced tech nodes down to 11nm — Ground breaking announcement of V2600 for 3D interconnect yielded 4 customers in 6 months — Shippin
Slide 15: Nova - Best start for the year
Nova - Best start for the year Nova Q1/13 Guidance - $25M-$27M non GAAP EPS of $0.09-$0.13
Slide 16: Industry's main drivers
N<OVA’ partnering for process contro
Slide 17: Excellent exposure to growing markets
Excellent exposure to growing markets Source: Jeffries & Company, iSupply Source: Gartner Q3/12 Tablet Semiconductor Content % of Tablet BOM NAND Flash Memory 7% P Mobile DDR DRAM 7% P App Processor 5% P Baseband / RF 4% P Wi-Fi / BT 2% P Power Management 2% P Accelerometer 1% P Memory Controller 1%
Slide 18: 70-100K WSPM needed capacity increase for 28nm
70-100K WSPM* needed capacity increase for 28nm at foundries in 2013 Mobile Device Capacity needs for 2x Tech Nodes * WSPM - Wafer Starts Per Month
Slide 19: Mobile revolution continues to gain traction
Mobile revolution continues to gain traction OCD - the only way to measure and control Source: Intel, IDC, Company records High performance low power - new chip designs are the enablers 3D Gates for foundries 3D Gates for Flash
Slide 20: Developing New Horizons in Stormy Waters
r performance Developing New Horizons in Stormy Waters partnering for process contro
Slide 21: The Environment Entering 2013
The Environment Entering 2013 — The US fiscal cliff is still ahead of us — The ECB is taking some responsibility but can’t fix broken economies — China’s GDP growth has tempered and India is slower too — The world is all about “playing delay” and not paying debts — PC sales have seen a significant d
Slide 22: The Environment Entering 2013 - Our customers
The Environment Entering 2013 Customers demand extendable high end solutions from all vendors — Very tough to meet yield requirements at <28nm — Customers are having to work in parallel on ~6 generations — This is something we never experienced — The cost and risks are HUGE - a multibillion $ game —
Slide 23: Growing Pace of Technology Development
Growing Pace of Technology Development — Time interval between advanced technology nodes is decreasing — Chip manufacturers are developing multiple tech-nodes in parallel — All are fighting for a limited customer base - Intel joining the race (Altera announcement) — Equipment vendors need to enhance
Slide 24: Huge Optical Metrology Opportunity
24 Huge Optical Metrology Opportunity — Modeling complexity and measurement precision increases by tech node: — More investment in future products is needed to properly address the market — Metrology TAM grows as number of metrology steps per tech node increases
Slide 25: Nova's TAM more than tripled 2009-2012
Nova’s TAM more than tripled 2009-2012 2013 Opportunity (<28nm) Implant Litho Etch CVD/EP CMP Notes: Company data. Based on Foundry with 100,000 wafer starts per month (updated 1/2013) <65nm $30-40 M Process control needs expand as geometries shrink Wafer In Wafer Out $150M - $200M Opportunity
Slide 26: Nova Continuously Exceeds Industry Performance
26 Nova Continuously Exceeds Industry Performance Nova significantly outperforms industry’s 5 year CAGR (2011/2012: Nova -10% vs. Industry -17%) Source: * Nova 2012 product revenues, Gartner WFE Q4/2012, Needham & Co. Foundry
Slide 27: Nova's Solid Growth Strategy
Nova’s Solid Growth Strategy Execution continues to drive success Expanding Product Portfolio Increased Fab Footprint Displacing Traditional Metrology Integrated and Standalone Metrology; Software 4 Process Steps 2012E TAM = $700M 2006 TAM = $100M 1-2 Process Steps Integrated Metrology
Slide 28: Solid Financial performance
Solid Financial performance Enabling the needed investments in advanced technology Product strategy drives high margins
Slide 29: Nova and the market - 2013 and beyond
Nova and the market and beyond
Slide 30: Wafer Fab Equipment 2013 Outlook
Wafer Fab Equipment 2013 Outlook — 2013 outlook — Expecting WFE to be 0% to down 5% — Foundry/Logic - spending increase - ramping demand for leading edge mobility à all major players continue to invest in capacity increase for 28/20nm nodes and development of 16/14nm nodes — Memory - no major growth
Slide 31: Market Expectations for 2013
Market Expectations for 2013 — Foundry 28nm ramp up is still under way: — Significant capacity insufficiency - expecting an addition of 70,000-100,000 wafer starts per month — Smartphone market remains key driver for 28nm node with several trends driving growth: — Windows 8 proliferation; Nokia Lumi
Slide 32: Nova's plans for 2013
Nova’s plans for 2013 — Strategic software development team: — Developing multiple new products to extend differentiation and strategic position with customers and PEM partners — Products include productivity enhancements, modeling capabilities and novel approaches to process control — Strong suppor
Slide 33: Developing New Horizons in Stormy Waters
Developing New Horizons in Stormy Waters Shooting for a step function in the role we play for our strategic customers — The cost associated with retaining a competitive position is rising — New technology horizons are critical - delivery in the present — Customers depend on innovation - not just to
Slide 34: New Horizons - what does it take
New Horizons - what does it take WE NEED SOMETHING DIFFERENT The elephants’ trail is crowded — Working assumption: mature industry — Implication: scarce opportunities for secular growth — Look for disruptive technologies - attain a diverse tech portfolio — Look for enabling technologies — High value
Slide 35: 3D technology driving Nova application growth
3D technology driving Nova application growth 2010 2012 onwards Nova introducing novel TSV metrology solution in time for transition to production The need: Low power high performance 3D Devices Planar Transistor 3D Transistor Requires significant increase in number of Etch and CMP layers Multi-Chip
Slide 36: New Market being developed by Nova
New Market being developed by Nova — This market segment represents $30M-$80M new business potential for Nova in the coming years - with significant software content! * Source: Gartner and company data
Slide 37: Strategy for taking Nova to the next level
Strategy for taking Nova to the next level Nova will continue its strategy of investing in creating future growth opportunities Short Term Mid Term Long Term Continue to enhance infrastructure and customer technology Strong end market position and excellent technological collaboration with leading P
Slide 38: Financial model: FY2011, 2012 and target model
38 Revenues FY2011 $103M 2012 $96M Target Model Total Revenues 100% 100% Products Revenues 83% 80% Services Revenues 17% 20% 15% - 20% Total Gross Margins 56% 53% 55% Products Gross Margins 61% 59% 58%+ Services Gross Margins 36% 30% 30%+ Total Operating Expenses 32% 42% 30% - 35% R&D, net 18% 26% 1
Slide 39: Summary
Summary — The foundry “Arms Race” is in full swing and the stakes are high — The move to FinFet (3D gates) is focused on 14nm — Demand for high end low power devices is solid — The 28nm ramp up continues in 2013 and 20nm will run well into 2014 — We expect two strong years for foundry — Memory spend
Slide 40: Nova's ability to continue growth is well founded
Nova’s ability to continue growth is well founded Litho Etch CVD/EP CMP Further Growth Accelerating Op CD Adoption Industry New strategic Initiatives Expanded Customer Base Providing an excellent platform for further growth Outpacing industry growth rate Expanding Fab footprint Mid cycle behavior We
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