Onto Innovation Inc. · NYSE:ONTO
Onto Innovation — 8th Annual NYC Investor Summit 2019
29 slides from Onto Innovation's conference presentation, Dec 17, 2019
Slide 1: Introducing: Onto Innovation
INVESTOR PRESENTATION Introducing: Onto Innovation December 2019
Slide 2: Safe Harbor
The information presented herein contains forward-looking statements that relate to anticipated future operating results and performance. These statements are only predictions based on management’s current expectations and assumptions, including market size and forecasted growth, Served Available Ma
Slide 3: Two Strong and Complementary Companies Coming Together
Two Strong and Complementary Companies Coming Together… $286M TTM • Optical Metrology • Surface Analysis $248M TTM • Defect Inspection • Film Metrology • Lithography • Software c 3
Slide 4: Creating a First Tier Semiconductor Capital Equipment Company
Creating a First Tier Semiconductor Capital Equipment Company Now a Top 4 U.S. Capital Equipment Company TOP 45 WFE Companies TOP 30 WFE Companies TOP 15 WFE Companies 4
Slide 5: Onto Innovation (Merger: Oct 2019)
Pro-Forma Revenue Mix by Geography Onto Innovation (Merger: Oct 2019) 20% US & Europe High tech capital equipment company specializing in 14% process solutions for semiconductor and related markets 66% Domestic China Asia Balance Sheet COMPANY $337 Million Cash NYSE (ONTO) No Debt Pro-Forma Revenue
Slide 6: Thesis for Growth
Thesis for Growth Focus on Innovation, Growth, and Value for Customers & Shareholders MARKET AND PRODUCT LEVERAGE $100M R&D STRONG CASH POSITION DIVERSITY TIED TO HIGH SPEND AND CASH GENERATION GROWTH SEGMENTS $20M SYNERGIES IN 2020 OUTPERFORM EXPAND GROSS AND INCREASE SHAREHOLDER MARKET OPERATING M
Slide 7: Multiple Mega-trends Drive Demand for Semiconductors
Multiple Mega-trends Drive Demand for Semiconductors Process innovation is needed to achieve leading-edge technologies VR Autonomous Vehicles Data Center Semiconductors enable transformational change in the world 5G Facial Recognition Mobile Medical Devices 7
Slide 8: Our Products Strengthen the Semiconductor Value Chain
Our Products Strengthen the Semiconductor Value Chain WAFER MANUFACTURING FRONT-END ADVANCED NODES ADVANCED PACKAGING Better Silicon: Better Chips: Better Packages: Higher yield transistors Smaller, Faster, Multi-Chip, Faster, Sub-10nm More Capabilities 3D Stack NovusEdge | QS4300 Atlas | MetaPULSE
Slide 9: R&D Leverage Strengthens Core Product Lines
R&D Leverage Strengthens Core Product Lines IP and Technology Leverage to Accelerate Pace of Innovation #1 OR #2 IN PROCESS $2 BILLION SAM CONTROL MARKETS #1 $480 SAM $950 SAM #1 MACRO $118 DEFECT SAM INSPECTION METROLOGY #2 #1 METAL METROLOGY SOFTWARE $275 SAM #2 OPTICAL METROLOGY $100M LITHOGRAPHY
Slide 10: Strong R&D Investment Expands Margins and Markets
Higher % of R&D Investment vs Process Control Competition R&D SPEND (% of TTM REVENUE) 20% 18% 20% Strong R&D 16% of spend on R&D Investment 14% Expands 12% Margins and 10% Markets 8% 6% 4% 2% 0% Competitor 1 Competitor 2 Competitor 3 Onto Innovation *Process Control Equipment Competitors’ Trailing
Slide 11: 5G Adoption is Here
Growth Ahead 5G Adoption is Here CEO of Skyworks “We're at the forefront of a 5G Handset Shipments major inflection in 5G, a 800 700 major upgrade cycle…and 5G Phones (M) 600 500 it's going to go well 400 300 200 beyond the mobile 100 phone.” 0 2020 2021 2023 Source: Canalys 5G Forecast 2019 11
Slide 12: 5G Drives Multiple Onto Innovation Markets
5G Drives Multiple Onto Innovation Markets 10% more advanced packaging for greater consolidation of heterogeneous ICs into single package 20% more silicon content Moving to 5G drives 2X more 3D NAND for greater device storage (video) 5G for additional RF frequencies (sub 6 and front-end and advanced
Slide 13: 5G Opportunities for Onto Innovation
5G Opportunities for Onto Innovation 2019-2022 Average DRAM bit 2019-2022 Average NAND bit 2012-2022 Average Advanced Growth = 24% Growth = 34% Packaging Growth = 20% AI &VR IoE 5G Drives Automotive Private Cloud Data Centers “30B devices” ADAS >3 Annual Growth = 24% Source: VLSI Research Oct 2019 1
Slide 14: Synergies: >$10M in Cost Savings by End of March
Synergies Gross Margin Operating Efficiencies 25% >$10M in Cost Savings by $20M by End of March 2020 75% 14
Slide 15: Strong Cash Generator
Cash Generated from Operations 25% Strong 20% Forecasted Cash 15% Range Generator 10% 5% Synergies and 0% 2015 2016 2017 2018 2019 * 2020 * Excluding ~$23M in merger expenses $20M in Annualized Operational Synergies Enhances Cash Generation 15
Slide 16: Strong Pro-Forma Cash Position and Capital Allocation Priorities
Strong Pro-Forma Cash Position and Capital Allocation Priorities Cash & Cash Equivalents $360 $337M $310 Capital Priorities $260 Fund organic growth initiatives $210 Cash ($M) RTEC $160 NANO Strategic M&A $110 Return to shareholders, $80M stock buy back $60 authorized. $10 2016 2017 2018 2019 YTD -$
Slide 17: Pro Forma Model
Pro Forma Model Annual $600M $700M $800M Revenue Model Model Model Gross Margin 54% - 55% 54% - 56% 55% - 56% Operating Profit 24% - 25% 26% - 28% 29% - 30% Earnings per Share $2.40 - $2.50 $3.00 - $3.25 $3.85 - $4.00 17
Slide 18: Thesis for Growth
Thesis for Growth MARKET AND PRODUCT DIVERSITY LEVERAGE $100M R&D SPEND STRONG CASH POSITION TIED TO HIGH GROWTH SEGMENTS $20M SYNERGIES IN 2020 AND CASH GENERATION OUTPERFORM EXPAND GROSS AND INCREASE MARKET OPERATING MARGINS SHAREHOLDER VALUE 18
Slide 19: Thank You!
谢谢 | 謝謝 danke ありがとう Thank You! 감사합니다 merci obrigado info@ontoinnovation.com www.ontoinnovation.com
Slide 20: Learning Center
Learning Center 20
Slide 21: Front-end Advanced Nodes
Front-end Advanced Nodes 21
Slide 22: Increasing Pace of Innovation: OCD Metrology Tool
The OCD Metrology Tool For All Leading-edge Devices Atlas III+ Precision 2X Noise Level 30% Lower Throughput 30% Faster 7/5nm Foundry & Logic <16nm DRAM Gen 5 3D-NAND Increasing Pace of Atlas III Innovation Precision 2X Noise Level 70% Lower Throughput 25% Faster Fastest Ever Nanometrics Product Ram
Slide 23: OCD – Enabling 3D Process Control Metrology
OCD – Enabling 3D Process Control Metrology Foundry / IDM Logic NAND Flash Planar FinFET Planar 3D ◼ In-line & integrated solutions CD-SEM ◼ Non-destructive & high-speed ◼ Full structure detail OCD Profile ◼ Depth & width profile ◼ Atomic-level sensitivity OCD 3D Model 23
Slide 24: Thin Film Metrology
Thin Film Metrology TRANSISTOR THROUGH MEASUREMENT OF INTERCONNECTS MetaPULSE® System PIEZO AND ELECTRODE STACK SIMULTANEOUSLY S3000™ Series Measuring film stacks, whether opaque or transparent, requires accuracy and repeatability. Onto BIT LINE, WORD LINE, CONTACTS, CAPACITORS, AND METAL Innovation
Slide 25: Advanced Packaging
Advanced Packaging 25
Slide 26: Why is Advanced Packaging Important?
Why is Advanced Packaging Important? Stacked DRAM Recent Orders for 2D/3D Systems > $35M to Support 2.5D-3D Wire Bonded Advanced Packaging from One Customer 120% 450.0 Package Interconnect % 100% 400.0 Total Packages (Billions) 80% 350.0 60% 52% 300.0 40% 250.0 HBM DRAM 29% Cu Pillars 20% 200.0 0% 1
Slide 27: Increasing Pace of Innovation: Macro Inspection Tool
The Macro Inspection Tool For All Advanced Packaging Dragonfly G2 Capture Rate 2X Throughput 50% Faster Sensitivity 0.7µm Bumps down to 2µm Simultaneous Inspection and Metrology Increasing Pace of Dragonfly Innovation Capture Rate 1.5X Throughput 20% Faster Sensitivity 2.0µm Next-Generation optical
Slide 28: Automated 2D/3D Macro Defect Inspection
Automated 2D/3D Macro Defect Inspection Dragonfly® G2 Inspection System Firefly® Inspection System ✓ Up to 50% Faster than Legacy BF/DF- Cannot See Residue ✓ Panel and Wafer Inspection Capability Systems ✓ Sub-micron 2D Defect Sensitivity ✓ New 3D Metrology down to 0.3µm ✓ Bump Measurement/Analysis
Slide 29: StepFAST Solution
The Onto Innovation Difference: Solutions not Tools StepFAST™ Improving productivity and yield: reducing cost for panel lithography Solution Die Shift & Rotation Providing Analyze Customers Discover® Adaptive Higher Step Productivity, Measure JetStep® Lower CoO Firefly® Onto Innovation +3% Yield Ste
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