Nova Ltd. · NASDAQ:NVMI

Nova — Investor Day (July 2021)

68 slides from Nova's investor day presentation, July 2021

Slide 1: Investor & Analyst Day July 2021
Investor & Analyst Day July 2021
Slide 2: Forward Looking Statements
This presentation contains forward-looking statements within the These factors are updated from time to time through the filing of reports and meaning of safe harbor provisions of the Private Securities Litigation registration statements with the Securities and Exchange Commission. Nova Reform Act o
Slide 3: Agenda and presenters
Eitan Oppenhaim Dror David Zohar Gil Dr. Shay Wolfling Closing remarks President & CEO CFO CMO & BD CTO Q&A Performance highlights Financial milestones Industry forecast It’s all about technology and strategic plans and future directions and Nova’s growth and differentiation engines 3 © Nova Proprie
Slide 4: Performance Highlights and Strategic Plans
Performance Highlights and Strategic Plans Eitan Oppenhaim, President & CEO
Slide 5: Nova is a leading innovator and key provider of solutions for semiconductor manufacturing
Nova is a leading innovator and a key provider of solutions for advanced used in semiconductor manufacturing 5 © Nova Proprietary information
Slide 6: Key Facts
Key Facts Post COVID Revenues- Accelerated Market Cap- organic growth significant growth 1993 Date Founded Dually Traded Gross cash reserves 50% production output growth Major Sites USA & Israel R&D investment in New technologies new technologies launched HQ & global employees - Patents - accelerate
Slide 7: Strong Fundamentals
Unique Portfolio Dimensional and Materials Disruptive Technology X-Ray and Optical, HW and SW Strong Diversified Exposure Segments, Customers, Territories Fundamentals Solid Operational Model Agility, Efficiency, Profitability Cultural Advantage Leadership, Values, Social Responsibility 7 © Nova Pro
Slide 8: Measuring The Invisible
30 Pairs 150 Pairs Transistor Measuring Optical/X-Ray Physical & Mathematical Algorithms The Invisible 150M 11.8B Transistors Transistors Transistor 2015 2020 8 © Nova Proprietary information
Slide 9: Growing Demand
Growing 1 2 Demand Semiconductors enable advanced digitization Architecture Smartphone Gaming Cryptonomy & Video 5G IOT Sensors Wearables Materials Cloud Data AI Automotive Acceleration Explosion Enablement 9 © Nova Proprietary information
Slide 10: Dimensional Metrology Intensity
Dimensional Metrology Intensity Planar FinFet Nano Sheet Logic 3D NAND Single Stack Multi-deck Over Periphery Scaled devices 3D profiles Multiple parameters DRAM 1Y 1a 1b Thinner films Packaging 10 © Nova Proprietary information
Slide 11: Materials Engineering
Materials Engineering Beyond Moore’s Law Growth in IC Embedded Materials Broader Metrology Scope (Composition, Stress, Strain) Ternary & up Alloys Binary Alloys Past Present Future Dielectrics 21 62 66 Binary Alloys Dielectrics Metals Dielectrics 2D Materials Metals Metals Semiconductors Semiconduct
Slide 12: Nova 500
Nova 500 $500M Organic Growth Services $400M Share gains $300M TAM expansion Products Disruptive innovation $200M SW HW optimization Installed base utilization $100M 2015 2020 Target 12 © Nova confidential & proprietary information 12 Source: company financial information © Nova Proprietary informat
Slide 13: Total Organic Addressable Market
Total Organic Addressable Market $300M New TAM $1,300M $975M Differentiated technology $500M Innovative metrology 2015 2020 2023 Physical and ML algorithms Investment in New Technologies Deep tech data-driven solutions (of Total R&D, Gross) $56M Service revenue $43M 26% Extendibility & enhancement $
Slide 14: Inorganic Approach
Inorganic Approach Search Guidelines Early access Lab to Fab technology Top line synergy Materials Complementary Leadership technology Operational Software offering leverage (accretion) Enhancement Diversification within Adjacent core capabilities Process control markets 14 © Nova Proprietary inform
Slide 15: Financial Milestones & Future Directions
Financial Milestones & Future Directions Dror David, CFO
Slide 16: Dror David, CFO biography
Joined Nova in 1998. Appointed as CFO in 2005. Beforehand, held positions of Company Controller, Vice President of Operations and Vice President of Resources in charge of finance, operations, IT and HR. Led Nova’s private placement in 2007, secondary public offering in 2010 and bond issuance in 2020
Slide 17: H1 2021 Financial Performance
H1 2021* Financial Performance * Including Q2 2021 Mid-Guidance 17 © Nova Proprietary information
Slide 18: Annual Growth
123% Sustainable Profitable $269M Annual Growth $121M $222M Revenue 2014 2017 2020 2020 Performance 75% 13% 24% Revenue CAGR Operating income CAGR $56M $42M $32M R&D Investment $269M 24% 2014 2017 2020 (Gross) Revenue Operating margin 242% $63M $65M CAGR – 2015-2020 Operating $19M Non-GAAP Financial
Slide 19: Financial Performance Half Year
Financial Performance Earnings Per Share (Non-GAAP) Half Year 48% Continuous Revenue Growth 38% $1.41 $0.95 $172M H1 20 H1 21 $125M Note: Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our
Slide 20: Memory and Logic mix and territories H1-21
20% 35% 30% 70% China Memory Trailing Leading 10% 35% Other Taiwan H1-21 65% H1-21 H1-21 Foundry/ Logic 35% Korea Logic/Foundry strength 3 large territories Multiple end market dynamics US gaining momentum 20 © Nova Proprietary information * Non-GAAP Financials
Slide 22: Business Tailwind
Overall TAM Growth Market Share Gains Business Software Revenues Tailwind High Value of New Technologies Leverage Installed-Base 22 © Nova Proprietary information
Slide 23: Target Revenue
Target Revenue Organic Growth $500M Services Share gains $400M TAM expansion Products $300M Disruptive innovation Market tailwinds $200M Installed base utilization $100M 2015 2020 Target Source: company financial information 23 © Nova Proprietary information Non-GAAP Financials
Slide 24: Cost investments by year
$12M $5M $2M (2022) (2022-2023) (2021-2022) Source: company financial information 24 © Nova Proprietary information Non-GAAP Financials
Slide 25: Cost Trends
Cost Trends Talent Costs Macroeconomics Increased demand for talent across territories: US | Israel | Taiwan Exchange rates Copper prices and global manufacturing PMI Source: World Bank, March 2021, xe.com, June 2021 25 © Nova Proprietary information
Slide 26: Nova 500 financial model targets
R&D Revenue Investment Tax $500M 17%-19% 15% (IL-13%, US-18%) Gross Margin SG&A Share Count 57-59% 13%-15% 32M Operating Margin Quarterly Earnings 26-29% Power of $1 EPS 26 © Nova Proprietary information * Non-GAAP Financials
Slide 28: Enabling inorganic growth, facilitating continuous investment
Enabling inorganic growth Facilitating continuous investment $200M convertible debt due 2025 $178M $191M 2018 2019 Current 28 Non-GAAP Financials © Nova Proprietary information
Slide 29: Capital Allocation Plans
Capital IT & New Sites: $10M Manufacturing Facilities: $12M Allocation Plans Working Capital: $40M-$50M Baseline 20% Revenue: $80M-$100M M&A Shareholders Opportunities: $300M-$350M Return 29 © Nova Proprietary information Non-GAAP Financials
Slide 30: Inorganic Approach
Inorganic Approach Search Guidelines Early access Lab to Fab technology Top line X-Ray revenue synergy growth Materials Complementary X-Ray & Optical Leadership technology synergy Operational Accretion day 1 Software offering leverage 50% EPS growth Y2 Enhancement (accretion) Diversification Within
Slide 31: Industry Forecast and Nova's Growth Engines
Industry Forecast and Nova’s Growth Engines Zohar Gil, CMO & BD
Slide 32: Zohar Gil, CMO biography
Joined Nova in 2011. Appointed as CMO in 2016. Beforehand, held senior positions of marketing and business development at Nova and in Israeli high-tech companies. Engineering and Executive MBA from Tel Aviv and Northwestern Universities. 32 © Nova Proprietary information
Slide 33: Semiconductors are the Foundation for this Revolution
Semiconductors are the Foundation for this Revolution 33 © Nova Proprietary information
Slide 34: Growth drivers: AI, 5G, Cloud, IoT
Robotic Process Automation AI VR Cloud Autonomous 5G Computing Industrial Vehicle 25% IoT 42% CAGR 36% 37% CAGR CAGR 25% 20 TB CAGR CAGR 23% Per Car Daily CAGR 2010 2015 2020 2025 Mobile Internet Data Augmentation Enhanced Connectivity Data Efficiency Mobility Productivity Resiliency Veracity 34 © N
Slide 35: Growing Demand
Growing 1 2 Demand Semiconductors enable advanced digitization Architecture Smartphone Gaming Cryptonomy & Video 5G IOT Sensors Wearables Materials Cloud Data AI Automotive Acceleration Explosion Enablement 35 © Nova Proprietary information
Slide 36: Semiconductor 2020 – COVID Impact
Semiconductor 2020 – COVID Impact Semiconductor Segments in 2020 – Pre Covid Prediction vs Actual Growth, % -10% 0% 5% 10% 15% 20% 4% Mobile 10% 0% Compute 11% 11% Storage 18% 9% Server 11% 7% 2020 Pre COVID Automotive -9% 2020 Actual 10.5% 36 © Nova Proprietary information Source – McKinsey Analysi
Slide 37: Increase in National Investment in Semi
CHIPs for America Act Increase in National Made in China 2025 Investment in Semi 2030 Digital Compass Government Incentives InvesTaiwan System chips vision and strategy 37 © Nova Proprietary information Source – BCG Sept 2020, BofA Global Research, April 2021
Slide 38: Key Semi Applications
Key Semi Applications Growth & Size Market Size CAGR 2020-25 Automotive $50B 14% Network / Data Centers $90B 7% Consumer / IOT $60B 7% Wireless $160B 7% IOT Sensors PC / Laptop $110B CAGR 2020-25 38 © Nova Proprietary information Source – Gartner Q1/2021
Slide 39: Mobile, Data Storage, Video Game, Driver Assistance trends
Data Video Game Driver Mobile Storage Consoles Assistance Trend 4G to 5G Data Explosion Cloud & Next Gen L1/2 to L4/5 Content +30% +30% +150% +200% 39 © Nova Proprietary information Source – Gartner Q1/21 Semiconductor Forecast Database by Application
Slide 40: Semi CAPEX reaching $160B in 2025
+9% 160 113 Semi CAPEX reaching $160B in 2025 65 Investment in all device segments 2015 2020 2025F +11% 86 Nova outperforming the market 65 32 2015 2020 2025F 405 +14% 209 111 2015 2020 2025F 40 © Nova Proprietary information Source – IC Insights & Gartner 2021 reports, Nova
Slide 41: Semi Technology Inflections
Semi Technology Inflections Architectures and Materials Packaging Schemes Cost Device Architecture Economics Materials Engineering Efficiency Power 3D Memory Structures Device Scaling 41 © Nova Proprietary information
Slide 42: Device Technology Roadmap
Device Technology Roadmap Trends and Challenges 2021 2022 2023 2024 2025 • Increased complexity Transition to • More CDs Nanosheet devices • Individual properties measurement • New materials, new metals in BEOL 3D scaling to • CMOS under array/wafer bonding multi/triple deck • Multi/triple-deck - hi
Slide 43: Over $700M Addressable Market
Integrated Metrology Stand Alone Metrology • Extending Nova IM Leadership • A New Dimension in Optical CD • Targeting high volume production and R&D of • Addressing advanced metrology challenges in next generation nodes logic,3D-NAND and DRAM • Adopted by leading logic and memory customers • Adopted
Slide 44: Over $500M Addressable Market
X-Ray Metrology Optical Metrology • In-line Raman Spectroscopy • Adopted by all the leading customers • Adopted by leading logic and memory customers • Marking Nova's materials metrology leadership 44 © Nova Proprietary information Over $500M Addressable Market
Slide 45: Modeling and Fleet SW Solutions
Physical and Mathematical Modeling Fleet SW Solutions • Holistic Approach to Modeling Driven Insights • Central management • Performance monitoring • Unique algorithms solutions and Machine learning leadership • Big data analytics 45 © Nova Proprietary information Adopted by all leading customers
Slide 46: It's All About Technology and Differentiation
It’s all About Technology and Differentiation Dr. Shay Wolfling, CTO
Slide 47: Dr. Shay Wolfling, CTO biography
Joined Nova as CTO in 2011. R&D manager at KLA-Tencor-Belgium, leading multidisciplinary metrology & inspection projects. Founder and VP R&D of Nano-Or-Technologies, a start-up company with a proprietary 3D optical technology, acquired in 2005. PhD in physics from the Hebrew University. 47 © Nova Pr
Slide 49: Expanding Challenges at the Advanced Nodes
Expanding Challenges at the Advanced Nodes Process Challenges Metrology Opportunity More steps In-die & New Shorter Tighter specs as materials & higher sampling complex structures R&D cycles design rule shrinks Local variation is critical: Monitoring more parameters Dimensional complexity High aspec
Slide 50: Key Challenges
Key Challenges Across all device segments Overlay Slit TCD 1. Multiple Nanowires – Slit shapes, spacing & thickness 4 7,8 1 MCD 4 2. Thin deposition surrounding nanosheets 5 Single tier 3. Buried structures Slit BCD thickness 4. Local topography variations 1 2 3 3 2 5 6 8 5. Si / SiGe uniformity 6.
Slide 51: Core and Disruptive Technology
Core Disruptive Technology Technology Spectral Reflectometry (SR) Spectral Interferometry (SI) Multi Channel Integrated Metrology X-Ray Photoelectron Spectroscopy (XPS) Advanced X-Ray X-Ray Fluorescence (XRF) Raman Spectroscopy Physical Modeling Mathematical Modeling & Big Data Fleet Management 51 ©
Slide 52: Unique Technology Solutions
• Critical Dimensions NOVA ASTERA NOVA PRISM Stand Alone performance in IM OCD Full Wavefront Metrology Unique • Material Properties Technology NOVA VERAFLEX NOVA ELIPSON Solutions In-Line composition & thickness In-Line stress / strain and crystallinity Nova Nova Fleet • Physical & Machine MARS FIT
Slide 53: Multi-Channel Integrated Metrology
Multi-Channel Integrated Metrology World-Leading IM Performance • World’s first IM with both oblique and normal incidence spectral information • Stand-alone level performance: accuracy, sensitivity, parameters de-correlation • Algo: dedicated modeling and ML package • R&D and pilot • Complex CMP & e
Slide 54: Case Study: Residue Detection in 3D NAND
Multi-Channel Integrated Metrology Case Study: Residue Detection in 3D NAND • Demonstrated measurement sensitivity of below 20A • Oblique channel as enabler to solve thin film on structure • Improved accuracy and stable WiW variation • 50% precision improvement VS normal only Normal only Multi-Chane
Slide 55: Spectral Interferometry (SI)
Spectral Interferometry (SI) Unique Optical CD Technology: Hardware & Software Added on top of advanced Reflectometry (SR) & Ellipsometry (SE) Extract complete wave-front of measured sample Spectral Traditional (inaccessible by other methods) Interferometry Channels Addition “Interferometry-like” Pr
Slide 56: Spectral Interferometry Example Use Cases
Top deck Individual Nanosheet Logic Source/ applications properties (*) Drain etch Spectral Interferometry CMOS underlayer architecture Example Use Cases (*) SPIE 2021: OCD enhanced: implementation and validation of 56 © Nova Proprietary information spectral interferometry for nanosheet inner spacer
Slide 57: XPS In-Line for Materials Metrology
XPS In-Line for Materials Metrology The Market Standard for Ultra Thin Films Inline non-destructive X-Ray for composition & thickness (World unique) Precise control of ultra-thin films (e.g. HfO), enabling accurate Vt tuning Simultaneous measurement for complex multi-stacks (e.g. SiGeB) measurement
Slide 58: XPS for Materials Metrology Use Cases
XPS for Materials Metrology Example Use Cases Nanosheet: Thickness and composition control DRAM: Complex High-K multi stack thickness control Ti:Al % Composition Control TiAl TiN HfO SiO HfO Thickness Control In line XPS and XRF deliver precise control of thickness and Only surface sensitive XPS can
Slide 59: Raman Spectroscopy for Materials Metrology
Raman Spectroscopy For Materials Metrology hni h(ni-nR) • Known powerful, optical technique for material characterization • Small-spot on-structure metrology • Sensitive to multiple material properties Virtual Level • HVM-ready in-line Raman Energy 3 • Algorithm and modeling: 2 translating raw Raman
Slide 60: Raman Application Space
Raman Application Space Validated by Leading Logic & Memory Customers * SPIE 2021: In-line Raman spectroscopy for 60 © Nova Proprietary information stacked nanosheet device manufacturing
Slide 61: Raman system features
• Fully automated HW and measurement sequence • Recipe-driven 300mm wafers • Fab connectivity for statistical process control • Non-destructive • High throughput, accuracy & repeatability • Algorithm suite for material information analysis 61 © Nova Proprietary information fractalmonster / Shutterst
Slide 62: Comprehensive Modeling
Comprehensive Modeling Source: Imec, 2021 Physical Nova Unique External Modeling Reference Reference SI, Raman, XPS, Multichannel IM TEM, E-test Nova Machine Learning • Accuracy & robustness  tighter process specs • Reduce (destructive) reference  time to market • Expand applications  more proces
Slide 63: Software & Hardware Synergy
Software & Hardware Synergy The Best of Both Worlds • Unique HW & dedicated Nova PRISM Nova MARS Nova FIT IM for CMP algorithms • Cross – platform synergy • Continuously and actively optimize machine learning models 63 © Nova Proprietary information
Slide 64: Summary
Summary Unique Technologies to Answer Key Challenges NOVA VERAFLEX NOVA PRISM NOVA ASTERA NOVA ELIPSON Nova MARS Nova FIT 64 © Nova Proprietary information
Slide 65: Different energy sources probe different dimensions
Different energy sources probe different Depth-profile measurement Comprehensive Modeling – dimensions of the structure Physical and Mathematical 65 © Nova Proprietary information
Slide 66: Closing Remarks
Closing Remarks Eitan Oppenhaim, President & CEO
Slide 67: Key Takeaways
Key Takeaways Revenue $500M $269M Positioned for Continuous Growth $164M Growing demand for IC drives capacity & Increasing complexity 2016 2020 Nova 500 Increasing need for advanced metrology solutions Gross Margin 56-59% Unique and disruptive technology portfolio 57% Driving a stronger position an

Nova — Investor Day (July 2021) on 6ix

Nova — Investor Day (July 2021)

Slide 1: Investor & Analyst Day July 2021

Slide 2: Forward Looking Statements

Slide 3: Agenda and presenters

Slide 4: Performance Highlights and Strategic Plans

Slide 5: Nova is a leading innovator and key provider of solutions for semiconductor manufacturing

Slide 6: Key Facts

Slide 7: Strong Fundamentals

Slide 8: Measuring The Invisible

Slide 9: Growing Demand

Slide 10: Dimensional Metrology Intensity

Slide 11: Materials Engineering

Slide 12: Nova 500

Slide 13: Total Organic Addressable Market

Slide 14: Inorganic Approach

Slide 15: Financial Milestones & Future Directions

Slide 16: Dror David, CFO biography

Slide 17: H1 2021 Financial Performance

Slide 18: Annual Growth

Slide 19: Financial Performance Half Year

Slide 20: Memory and Logic mix and territories H1-21

Slide 21: Nova 500 Financial Model

Slide 22: Business Tailwind

Slide 23: Target Revenue

Slide 24: Cost investments by year

Slide 25: Cost Trends

Slide 26: Nova 500 financial model targets

Slide 27: Capital Allocation Plans

Slide 28: Enabling inorganic growth, facilitating continuous investment

Slide 29: Capital Allocation Plans

Slide 30: Inorganic Approach

Slide 31: Industry Forecast and Nova's Growth Engines

Slide 32: Zohar Gil, CMO biography

Slide 33: Semiconductors are the Foundation for this Revolution

Slide 34: Growth drivers: AI, 5G, Cloud, IoT

Slide 35: Growing Demand

Slide 36: Semiconductor 2020 – COVID Impact

Slide 37: Increase in National Investment in Semi

Slide 38: Key Semi Applications

Slide 39: Mobile, Data Storage, Video Game, Driver Assistance trends

Slide 40: Semi CAPEX reaching $160B in 2025

Slide 41: Semi Technology Inflections

Slide 42: Device Technology Roadmap

Slide 43: Over $700M Addressable Market

Slide 44: Over $500M Addressable Market

Slide 45: Modeling and Fleet SW Solutions

Slide 46: It's All About Technology and Differentiation

Slide 47: Dr. Shay Wolfling, CTO biography

Slide 48: Outline

Slide 49: Expanding Challenges at the Advanced Nodes

Slide 50: Key Challenges

Slide 51: Core and Disruptive Technology

Slide 52: Unique Technology Solutions

Slide 53: Multi-Channel Integrated Metrology

Slide 54: Case Study: Residue Detection in 3D NAND

Slide 55: Spectral Interferometry (SI)

Slide 56: Spectral Interferometry Example Use Cases

Slide 57: XPS In-Line for Materials Metrology

Slide 58: XPS for Materials Metrology Use Cases

Slide 59: Raman Spectroscopy for Materials Metrology

Slide 60: Raman Application Space

Slide 61: Raman system features

Slide 62: Comprehensive Modeling

Slide 63: Software & Hardware Synergy

Slide 64: Summary

Slide 65: Different energy sources probe different dimensions

Slide 66: Closing Remarks

Slide 67: Key Takeaways

Slide 68: Thank You