Kla Corporation · NASDAQ:KLAC
Kla — Investor Day (June 2022)
27 slides from Kla's investor day presentation, Jun 16, 2022
Slide 1: 2022 KLA Investor Day
2022 KLA Investor Day New York City • June 16, 2022 1
Slide 2: Disclaimer
Disclaimer Statements in this presentation other than historical facts, including but not limited to: (i) future trend of digitization, semiconductor and EPC industry growth and evolution; (ii) geographic breakdowns of future global semiconductor production; (iii) our results of operations and finan
Slide 3: Sustainable Outperformance
Sustainable Outperformance Rick Wallace President and CEO
Slide 4: Today's Key Themes
Today’s Key Themes The semiconductor industry has become essential to a large number of industries 1 and geographies and is expected to grow and change in ways that benefit KLA Our portfolio of innovative solutions positions the company for sustained 2 outperformance as Process Control becomes more
Slide 5: Reflecting on Our September 2019 Investor Day
Reflecting on Our September 2019 Investor Day Resilient business model positions us well to capture expanding growth opportunities What We Knew What’s New Semi demand was accelerating across a broad base New design starts accelerated on diversified end markets The introduction of EUV enables the
Slide 6: Digitization of Everything Driving Strong Industry Revenue Growth
Digitization of Everything Driving Strong Industry Revenue Growth Semiconductor Revenue Estimated to Exceed $1T by 2030 – CAGR ~7% 1,000 More industries designing at the leading-edge than ever before 800 Ecosystems Driving Leading Edge Growth Semiconductor Revenue $B 600 Data 400 PCs Drove Industry
Slide 7: Scaling Resumed at 7nm with EUV and Moore's Law Pace is Just Right
Catalyst for Return to Growth Scaling Resumed at 7nm with EUV and Moore’s Law Pace is Just Right 100% Cost/Transistor vs. 90nm 90nm 28nm 28nm 10nm 10nm 2nm ~22% CAGR Decrease ~13% CAGR Decrease ~23% CAGR Decrease 10% EUV 90nm 65nm 45nm 28nm 20nm 16nm 10nm 7nm+ 5nm 3nm* 2nm* 1% Moore’s Law Driv
Slide 8: Rapid Growth of Design Starts is Fueling Growth
Rapid Growth of Design Starts is Fueling Growth >50% Increase in Design Starts and WSPM 1 at 7nm 2 Design Starts have become 3 rd Year After Introduction WSPM more affordable driven by: Foundry ecosystem Massive design libraries AI driven design tools Design starts Incentive programs for sta
Slide 9: Supply Chain Regionalization is Driving Significant Investments
Supply Chain Regionalization is Driving Significant Investments Asia: China 14th 5-Year Plan Korea K-Belt Percentage of Initiative Japan, Singapore Semi Production* EU Digital & Malaysia Compass & Govt. Subsidies Country Investments U.S. Fabs 4 53% 50% Act and 48 70% 80% CHIPS Act 10 19% 20% 13% 28%
Slide 10: KLA is a Diversified Leader in the Electronics Value Chain
KLA is a Diversified Leader in the Electronics Value Chain KLA at a Glance (NASDAQ: KLAC) Founded in Headquarters in 19 1976 Milpitas, CA Countries ~13,200 $8.2B >65% PhD/Master’s among Employees (CY21) CY21 Revenue professional roles 10
Slide 11: Proven Leadership Team Utilizing the KLA Operating Model
Proven Leadership Team Utilizing the KLA Operating Model to Drive Collaboration, Innovation, and Execution Rick Wallace Bren Higgins Ahmad Khan Oreste Donzella Brian Lorig CEO & EVP, CFO & President, Semiconductor EVP, Electronics, Packaging EVP, President Global Operations Process Control and Compo
Slide 12: ESG at KLA
ESG at KLA Environmental Began annual reporting of global climate emissions in 2021 100% renewable electricity commitment by 2030 $1.5B sustainability-linked revolving credit facility Social First inclusion and diversity (I&D) disclosure in 2020 Driving cultural change to benefit from I&D
Slide 13: KLA Strategic Planning Process Drives Targets to Meet Objectives
KLA Strategic Planning Process Drives Targets to Meet Objectives Market size, trends, drivers KLA Strategic Planning Environment Governance of the annual plan Opportunities Check in and update market Priorities Corporate priorities and financial objectives drivers & environment Identify
Slide 14: The KLA Operating Model Guides Our Strategy and Differentiation
The KLA Operating Model Guides Our Strategy and Differentiation Consistent Strategy and Execution Application of common processes and discipline Cascades throughout the organization Strong focus on talent development Management by Metrics Culture of performance and accountability Expectati
Slide 15: The KLA Operating Model Guides Our Strategy and Differentiation
The KLA Operating Model Guides Our Strategy and Differentiation KLA Operating Model at Work Common language across multiple divisions BKMs implemented across acquired companies Operational rigor to prioritize performance Scorecard measurement against progress Scorecard Example by Business Gr
Slide 16: How We Approach Product Development with the KLA Operating Model
How We Approach Product Development with the KLA Operating Model Collaboration Work closely with customers in early process technology development Work closely with suppliers' early technology development Work across KLA to reuse applicable technology Innovation Invest heavily in core techno
Slide 17: Hybrid R&D Structure for Strong Customer Focus
Hybrid R&D Structure for Strong Customer Focus Semi PC EPC Services Product Specific Technology and Engineering Engineering Group Pro Engineering ~2,100 design engineers ~400 design engineers ~90 design engineers Central + distributed R&D produces differentiated products Long Range, Highly Different
Slide 18: Innovation on Core Technologies Across Multiple Product Lines
Innovation on Core Technologies Across Multiple Product Lines Laser Illumination Image Sensors, Cameras DUV/UV, Visible, IR, Precision Stages, e-Beam, X-ray Optics Motion Control, Robotics High-Speed Data Processing, Broadband Plasma High-Performance Computing Illumination AI, Algorithms, Machine Le
Slide 19: Semi PC Continues to Lead the Industry
Semi PC Continues to Lead the Industry 6,000 Semi PC System Revenue 5,000 Innovative and differentiated 4,000 process control portfolio $M 3,000 Deep customer relationships 2,000 to deliver right products at 1,000 the right time 0 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 Sig
Slide 20: EPC Represents an Attractive Growth Vector for KLA
EPC Represents an Attractive Growth Vector for KLA EPC Systems Revenue ~15% CAGR $M 6,000-10,000 semiconductors per vehicle 1 CY19 CY20 CY21 CY22E Automotive: zero defect, new materials EPC Operating Income ~40% CAGR $M CY19 1 CY20 CY21 CY22E Advanced packaging: semi roadmap enabler Demonstrated the
Slide 21: Our Services Business Provides Visibility and Resiliency
Our Services Business Provides Visibility and Resiliency KLA Services Revenue 1 Highest percentage of pure service revenue 2,000 in the industry 1,500 Resilient and predictable revenue stream $M 1,000 500 Funds R&D, M&A, Dividends 0 Exponential revenue growth: $1B in 40 years, $2B in 4 years Service
Slide 22: KLA's Revenue Growth is Accelerating into the Digitization Era
KLA’s Revenue Growth is Accelerating into the Digitization Era Digitization Era Diversified semi markets Datacenter and cloud expansion PC + Mobile Era Automotive electrification 12,000 Reduced cyclicality COVID-19 accelerated digitization 10,000 Emergence of foundry AI & 5G PC Era C
Slide 23: Track Record of Revenue Growth and Free Cash Flow Generation
Track Record of Revenue Growth and Free Cash Flow Generation Revenue Free Cash Flow 1 10,000 3,500 9,000 3,000 8,000 7,000 2,500 6,000 2,000 $M $M 5,000 1,500 4,000 3,000 1,000 2,000 500 1,000 0 0 2 2 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22E CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY2
Slide 24: Product Differentiation and Operational Excellence Drive Success
Product Differentiation and Operational Excellence Drive Success Product Differentiation Operational Excellence Measured by Gross Margin 1 Measured by Operating Margin 1 50% 70% KLAC 40% KLAC 60% 30% 50% 20% 40% 10% 30% 0% CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY11 CY12 CY13 CY14 CY
Slide 25: Sustainable Outperformance Drives Strong Results & Achievements
Sustainable Outperformance Drives Strong Results & Achievements Collaboration, Innovation and Execution are critical to our success 2019 Commitments for 2023E Targets Results New 2026E Targets Based on 2021 Growth 7-9% revenue growth 9-11% revenue growth CAGR from 2021 – 2026E 6-7% revenue CAGR an
Slide 26: The Future is Bright
The Future is Bright Sustainable outperformance driven by KLA Operating Model $14B $38 2026E Target Model powered by collaboration, innovation, +/- $500M +/- $1.50 and execution Target 2026E Target 2026E Revenue Diluted EPS* Optimizing total shareholder return with a focus on assertive capital alloc
Slide 27: Key Takeaways
Key Takeaways 1 2 3 4 5 The semiconductor Our portfolio of We have a history of We demonstrated Our resilient business industry has become innovative solutions enabling innovations the strength of our model powered by essential to a large positions the and we continue to Operating Model by our portf