Cohu, Inc. · NASDAQ:COHU
Cohu — Investor Day (June 2015)
79 slides from Cohu's investor day presentation, Jun 18, 2015
Slide 1: Cohu Investor and Analyst Day
Exhibit 99.1 Cohu Investor and Analyst Day June 18, 2015 9:30 a.m. –1:00 p.m. NASDAQ MarketSite – NY Times Square
Slide 2: Forward Looking Statements and Regulation FD
Forward Looking Statements and Regulation FD .. Certain matters discussed in this presentation, including statements regarding our growth strategy, market expansion, revenue growth rate, near and mid-term financial models, orders, sales, revenues and operating results are forward-looking statements
Slide 3: Agenda
Agenda- June18, 2015at NASDAQ MarketSite Schedule Event Presenter 9:30 a.m. – 10:00 a.m. Registration 10:00 a.m. – 10:25 a.m. Opportunities for Growth and Differentiation L. Müller 10:25 a.m. – 10:45 a.m. Pick-and-Place and Thermal Subsystems S. Kabbani 10:45 a.m. – 11:05 a.m. Gravity and Test-in-St
Slide 4: Senior Leadership Team
Senior Leadership Team CEO Luis Müller Corporate Product Groups Functional Groups CFO Delta Design Technology Jeff Jones Samer Kabbani Max Schaule Finance & Administration Rasco Sales & Service Alex Waldauf Hock Chiang John Allen Human Ismeca Operations Resources Ian von Fellenberg L. Müller - inter
Slide 5: Opportunities for Growth and Differentiation
Opportunities for Growth and Differentiation Luis Müller President and CEO June 18, 2015
Slide 6: Strategy Yields Results
Strategy Yields Results NASDAQ: COHU is the global technology and market leader in Semiconductor Final Test and Inspection Handlers Leader in $850M* handler market: #1 in Served Markets Delivered Strong Financial Results • Sales increased 48% Year-on-Year to $317M • Gross margin improved by 520 bps
Slide 7: Our Growth Strategy
Our Growth Strategy Expand Share in Core Markets • Mobility, Automotive and LED • Optimizing test yield [1% yield improvement ~ 3x Handler Capex] • Innovative technologies for growing segments – thermal, vision Increase TAM from $850M to $2B • New business unit (ITS) to drive growth in contactor mar
Slide 8: What is Test Handling?
What is Test Handling? Handling is the automation and thermal control of semiconductors (ICs, LEDs, Opto, Discrete, Sensors) during final test Enables higher yield for high ASP products Optimizes productivity through high-speed automation Semiconductor Back-end Manufacturing Front-end Test Singulati
Slide 9: Consumer Trends Fueling Growth
Consumer Trends Fueling Growth * IC unit volume – 6% CAGR Expanding Applications Growing applications -Mobile- -Automotive- -Server Farms- -LED- * Vehicle IC content increasing – 11% CAGR Mobility & Comm. – mobile, IoT, sensors, ... * LED – General Lighting 15% CAGR Emerging Tech. – Adv. Packaging K
Slide 10: Automotive & Industrial Markets
Automotive & Industrial Markets Secular growth for ICs, Discretesand Sensors 2014 e2019 * Automotive – 11% CAGR: connectivity, power, ADAS SAM * ~$260M ~$350M driving processors and high frequency radar sensors * COHU share 52% Industrial – 6% CAGR: renewables, aircraft, medical * $M MATRiX * $M Sat
Slide 11: Solid State Lighting Market
Solid State Lighting Market Applications for high power (>50 lm) LEDs 2014 e2019 * General Lighting – 15% CAGR: industrial & outdoor SAM * ~$55M ~$110M * Automotive – 10% CAGR: currently 3% penetration COHU share 27% * Automotive $M Headlamps Industrial High Bays Outdoor NY32 Wafer Street Lights * $
Slide 12: Mobility Market – Processors & RF ICs
Mobility Market – Processors & RF ICs Mega trend in smart, connected devices 2014 e2019 Processors – adv. mobile processors = active thermal SAM * ~$310M ~$430M RF – IoT driving billions of connected devices COHU share 29% * $M Eclipse ATC (Active Thermal Control) * $M WLP Prober *IC Insights and Co
Slide 13: Multiple Markets – Leading Solutions
Multiple Markets – Leading Solutions Markets Capital Equipment - IC Test Handlers Automotive - Package Inspection - LED Test, Sort, Taping Business Units Industrial ~60% of Solid State sales Pick-and-place test handlers and thermal sub-systems for burn-in and system-level Lighting (LED) test Mobilit
Slide 14: Broad Product Portfolio – Test Handlers
Broad Product Portfolio – Test Handlers Diversified applications – breadth of products in $850M market Solving key customer challenges – innovative technologies & IP Markets Platforms Enabling Technologies Thermal Solutions Vision Solutions Pyramid MATRiX Eclipse Die Inspection MEMS Modules T-Core L
Slide 15: Sales Synergies
Sales Synergies Cross-selling works – leveraging our leading customer support: More than doubled Rasco market share in the last 5 years Delivered $25M incremental sales in 2014 from the Ismeca acquisition Next – grow Contactors and WLP Probing June 18, 2015 Page 15
Slide 16: TAM Expansion – Contactors & WLP Test
TAM Expansion – Contactors& WLP Test Expanding Total Available Market (TAM) from $850M to ~$2B with Contactors and Wafer-Level-Package (WLP) test Differentiating opportunities – test yield, thermal, high frequency 1 – Delta Design, Rasco, Ismeca growth strategies for share gains 2 – Core markets are
Slide 17: Pick-and-Place Thermal Subsystems
Pick-and-Place Thermal Subsystems Samer Kabbani VP and GM, Delta Design June 18, 2015
Slide 18: Pick-and-Place and Thermal Portfolio
Pick-and-Place and Thermal Portfolio Market Leader in pick-and-place; best-in-class thermal Addressable market ~ $370M Markets Platforms Enabling Technologies Thermal Solutions Vision Solutions Pyramid MATRiX Eclipse Die Inspection T-Core LinX Alignment Actuators June 18, 2015 Page 18
Slide 19: Markets
Markets Pervasive growth of processors in various end-markets Mobility Automotive Computing High Performance Memory Seasonal, consumer driven markets – no longer PC-centric Thermal control becoming a critical challenge in IC test Computing Growth Drivers Over Time, 1960-2020E Source: KPCB June 18, 2
Slide 20: Best in Class Active Thermal Control
Best in Class Active Thermal Control Leading active thermal management incumbent position with a large IP portfolio and know-how Improved Thermal Control (T-Core) = Optimized Test Yield ($$) 1% Yield benefits ~3x Handler Capex Broad / highly scalable thermal solutions covering various IC form factor
Slide 21: Computing: CPUs & GPUs
Computing: CPUs & GPUs Growth in Cloud and Gaming processor segments Market leader in CPU (Central Processing Unit) and GPU (Graphics Processing Unit) test – Active thermal Developing next generation Test Handler with T-Core thermal for GPU and high-end CPU (server) – yield, multi-site test and flex
Slide 22: Mobility: Application Processors
Mobility: Application Processors Increased functionality of next generation smart phone processors driving need for active thermal control to optimize yield Delta Design is uniquely positioned to capitalize on the mobile test paradigm shift Secured key smart phone customer in 2014 with T-Core Subsys
Slide 23: Automotive: µControllers & Analog ICs
Automotive: µControllers & Analog ICs Vehicle IC content growing at ~ 11% CAGR Technology leadership in multi-site – cryogenic thermal MATRiX is the tri-temperature (cold-hot) pick-and-place benchmark MATRiX High Parallelism Active MEMS Thermal High Average IC content per vehicle could double in the
Slide 24: New Opportunity: Advanced Memory
New Opportunity: Advanced Memory Server demand introducing disruptive memory IC test requirements Memory IC has led transistor scaling and now 3D-IC packaging (vertical structures) resulting in overheating challenges in test Opportunity to solve customer challenge with T-Core thermal Early win at a
Slide 25: Breadth of Solutions
Breadth of Solutions Test Parallelism Logic Test Industry’s largest pick-and-place test 2 Handlers coverage offering leading solutions in Automotive, Mobility and Computing Summit 4 2.5/3D packaging with embedded memory driving longer test time and 8 Pyramid higher power densities that benefits our
Slide 26: Aligned with Growth Segments
Aligned with Growth Segments MATRiX handler gaining share in T-Core thermal engine capturing automotive applications with customers in evolving Mobile and extreme cold-hot test capability Advanced Memory markets Incumbent leader in CPU & GPU fueling IP for emerging markets * * * * $M $M $M $M Positi
Slide 27: Gravity and Test-in-Strip, MEMS Test
Gravity and Test-in-Strip MEMS Test Alex Waldauf VP and GM, Rasco June 18, 2015
Slide 28: Gravity & Strip, MEMS Test Portfolio
Gravity & Strip, MEMS Test Portfolio Market Leader in gravity segment Addressable market ~ $220M Markets Platforms Enabling Technologies MEMS Modules ATU Acoustic Saturn Jupiter Jaguar MTU Hall PTU OTU Pressure Optic June 18, 2015 Page 28
Slide 29: Markets
Markets 90% Automotive and Industrial mainly power management ICs Energy requirements driving growth of large packages (Automotive & Industrial) and small devices (Consumer) MEMS growth in mobility products is driving sensor integration in small, difficult to handle packages Opportunities in LED and
Slide 30: Power Management ICs
Power Management ICs Hybrid electrical vehicle and renewable energy ICs are growing (~8% CAGR) and driving the need for large package gravity handlers Mobile products are driving growth of small packages June 18, 2015 Page 30
Slide 31: New Products Driving Share Growth
New Products Driving Share Growth Product Portfolio Market Leader - Innovation - Sales Synergies Saturn Jaguar Jupiter Differentiation: Highest quality – “zero defect” for automotive Leading cryogenic test capability: -60°C to +175°C Scalable platform for small to mid-size packages Rasco’s YieldBoos
Slide 32: MEMS Market
MEMS Market MEMS sensors growing from $11B (2014) to fcst. $20B* (2020) Key drivers – mobility, Internet-of-Things, automotive (ADAS) Leading in Magnetic and Pressure in automotive applications Sensorization of the Electronics Industry * * YoleDevelopmentStatus – of the MEMS Industry 2015 June 18, 2
Slide 33: MEMS Test
MEMS Test $1M Test solution with handler + MEMS module 75% of the total Handlers $250K to $450K: amb or tri-temp x4 to x100 parallelism MEMS $50K to $350K: x8 acoustic to x100 gyro Testers are mostly simple, dedicated solutions (not “big iron” ATE) HANDLER MEMS ATE $250K - $450K $50K - $350K $100K -
Slide 34: New Opportunities: 3D-IC and LED
New Opportunities: 3D-IC and LED 3D-IC packages (Advanced Memory) may benefit from in-process test control – opportunity for incremental Jaguar sales Parallel test of LED tiles could set a new cost benchmark in the industry and be an enabler to growth in 3D-IC Market grow 52%+ CAGR general lighting
Slide 35: Positioned for Continued Growth
Positioned for Continued Growth Doubled gravity share since New solution for multi-site LED acquisition, largely through sales test synergies Bare die capability for testing Leader in Magnetic and Pressure advanced 3D-ICs in Memory automotive MEMS applications * * * * $M $M $M $M Strong incumbent po
Slide 36: Turret and Vision Inspection
Turret and Vision Inspection Ian von Fellenberg VP and GM, Ismeca June 18, 2015
Slide 37: Turret Portfolio
Turret Portfolio Market Leader in turret segment Addressable market ~ $260M Markets Platforms Enabling Technologies Vision Solutions Die Inspection Alignment Actuators Package Inspection NY20 NX32 (wafer and package) June 18, 2015 Page 37
Slide 38: Markets
Markets High Performance Mixed Signal, RF devices, sensors and MEMS – connectivity, Internet-of-Things, portable and wearable devices, mobility, communication, cyber security and power management, Small signal & power discrete – mobility, industrial & automotive – very high volume Solid State Lighti
Slide 39: Broad Process Capabilities
Broad Process Capabilities Product Portfolio: 2 platforms -150 process modules Bowl Tray Wafer Tube Tube Inspection Inspection Inspection Contactors Contactors NY20 series NY32 series NY32W Wafer series 20 positions turret 32 positions turret 32 positions turret Differentiation through technology Mo
Slide 40: Enabling Technology: Vision
Enabling Technology: Vision Fast & high accuracy image processing New 3D vision technology for WLP inspection High speed true 3D inspection – Moiré interferometry 3D imaging of WLP Micro crack in silicon die 5 Side inspection Few micron cracks 3D Flex – Miniaturized Module Inspects up to 30,000 part
Slide 41: HPMS, RF, Sensors & MEMS
HPMS, RF, Sensors & MEMS Represents approx. half of revenues Markets with double digit growth rates Higher end applications – Ismeca profits from Cohu synergies Thin & fragile device handling, WLPs High Vision inspection requirements 20 billion in 2018 Internet of Things June 18, 2015 Page 41
Slide 42: Small Signal & Power Discrete
Small Signal & Power Discrete Represents approximately 30% of revenues Steady growth, low single digits, cyclical Very high volume – standard products (transistors, diodes) Strong incumbent position, large installed base NY20 highest productivity solution in the market NY20: 1 million / day Small Si
Slide 43: Solid State Lighting
Solid State Lighting Approximately 20% of revenues High & super high power LED Automotive and outdoor lighting with double digit growth rates Higher requirements for test reliability, vision, traceability, fragile devices LED in Outdoor Luminaires LED in Automotive Exterior Headlamps 22% to 42% Sour
Slide 44: Expanding Test & Inspection Capabilities
Expanding Test & Inspection Capabilities Leader in small device handling Optimized test reliability for high for mobility, portable and power SSL applications wearables, IoT, cyber security Leverage sales and product Best solution for integrated test synergies to accelerate growth and scan processes
Slide 45: TAM Expansion: Contactors
TAM Expansion: Contactors Max Schaule Chief Technologist June 18, 2015
Slide 46: What is Test Contacting?
What is Test Contacting? Mechanical and signal path interface between Handlers and Testers Consumables: contacts wear-out and are replaced multiple times a year Yield Improvement: YieldBooster technology optimizes overall test efficiency Semiconductor Back-end Manufacturing Front-end Test Singulatio
Slide 47: Test Contacting Market
Test Contacting Market Total available market $650M * 2014 e2019 higher margin than equipment SAM * ~$650M ~$825M Growing with IC unit volume, not tied to COHU share 2.6% Capex – less volatile Fragmented market – no supplier has greater than 10% share Spring Probes Cantilever Contacts Rocking Contac
Slide 48: Strategy
Strategy Aligning with strong Cohu handler share in key markets Automotive, Industrial, LED: thermal and high voltage/current Kelvin Mobility, Comm., Computing: RF, small device, tight pitch, thermal Drive consolidation and growth Cohu Handler Markets Technology Differentiation Share * • Thermal man
Slide 49: Expanding Product Portfolio
Expanding Product Portfolio New products aligning with growth markets Spring Cantilever Cantilever Kelvin up to 80 GHz Probes Precision Series Power Series Integrated RF Exact Small Kelvin ESX ESX Power G-Pin Solutions Available for all Cohu Handlers and competitors’ systems Gravity MEMS Pick & Plac
Slide 50: Our Value Proposition
Our Value Proposition Integration – leveraging our leading handler share to solve the greater parallelism and complexities challenging test yield at key customers Technology – solving key market challenges MATRiX x32 test solution delivers Automotive & Industrial: better thermal control, thermal per
Slide 51: Market Penetration Roadmap
Market Penetration Roadmap * $M Grow business organically, through M&A and partnerships Strategy Expand in automotive and MEMS Accelerate growth in Consumer and Mobility Partnership for high bandwidth RF contactors Capturing pogo probes replacement sales Leverage synergy with handler customers Expan
Slide 52: TAM Expansion: WLP Probing
TAM Expansion: WLP Probing Max Schaule Chief Technologist June 18, 2015
Slide 53: What is WLP Probing?
What is WLP Probing? Probing is the automation and thermal control of wafer-level packages (WLPs) during test Enables higher yield for high ASP products Optimizes productivity through improved process flow Semiconductor Back-end Manufacturing Front-end Test Singulation Assembly Back-end Test Handlin
Slide 54: WLP Growth
WLP Growth Wafer Level Packages (WLPs) are growing faster than traditional packages and are expected to account for ~ 23%* of total 300 mm wafers equivalents by 2017 Top growth driver is mobile consumer devices Mobile devices are becoming smaller, thinner, more complex and less expensive * *Source:
Slide 55: WLP Market Drivers
WLP Market Drivers Smaller form factor, higher speed, broader RF bandwidth, less power consumption and lower costs are key drivers for WLPs Typical applications: power management, RF communication, stacked memory, MEMS sensors, LEDs and mobile processors A large percentage are tested on wafer prober
Slide 56: Today's WLP Test Flow
Today’s WLP Test Flow Test on Back grinding + Singulation 5S Vision Wafer prober Laser mark Dicing Tape & Reel Final test performed on wafer, prior to singulation – downstream mechanical processes can induce quality escapes and µ-cracks Devices are extensively vision inspected, creating large (5-25%
Slide 57: New Approach in WLP Test
New Approach in WLP Test Reconstruct wafer High parallel Singulation on AccuChuck Test on Vision Inspection Dicing Tape & Reel WLP Prober “any pattern” WLP Prober Final test on finished die (WLP), 100% quality check after singulation – higher yield Stress free handling – no mechanical clamping (i.e.
Slide 58: Market Penetration Roadmap
Market Penetration Roadmap * Replace up to 20% of wafer $M probing with new WLP test flow Strategy to grow sales Singulated WLP probing improves final test yield Solve key challenges in RF and Power Mgmt. IC test Later expand to MEMS and processor front-end test Cohu has the technology portfolio to
Slide 59: Delivering Profitability and Shareholder Value
Delivering Profitability and Shareholder Value Jeff Jones VP Finance and CFO June 18, 2015
Slide 60: Global Operations & Customer Support
Global Operations & Customer Support Largest installed base – drives recurring business 40% of sales Asia manufacturing – optimizing operations to deliver model profitability, infrastructure flexibility and scalability Global support – a key competitive advantage ISMECA RASCO DELTA DESIGN Germany Sw
Slide 61: Asia Manufacturing Strategy
Asia Manufacturing Strategy Malaysia operation acquired with Ismeca in 2013 Consolidating handler manufacturing and supply chain for all products Converting fixed costs to variable by outsourcing major sub- assemblies; performing value-add final assembly and test in-house Consolidated facility in 1H
Slide 62: Strategic Actions Delivering Results
Strategic Actions Delivering Results Realizing sales synergies from Ismeca acquisition ~$25M in 2014 New products gaining in key segments – est. 5 pt share gain in 2014 Enhancing gross margin with Asia manufacturing +520 bps YoY Broad customer base and diversified markets 2014 Sales Breakdown Year-o
Slide 63: Profitable Through Cycles
Profitable Through Cycles Five quarters of profitable results Delivering adjusted EBITDA in-line with financial model Revenue ($M) Gross Margin ~ ~ * * Adjusted EBITDA Opex ($M) In-line with Financial Model SG&A ~ R&D * * *Updated Q2’15 guidance from June 10, 2015 press Amounts are Non-GAAP and excl
Slide 64: First Half 2015
First Half 2015 Profitable in seasonally slow Q1 Q1 GM comparable YoY excluding accounting impact in 2014 * 1H’15 Sales projected to be ~ 2% higher YoY * 1H’15 projected results are in-line with financial model Year-on-Year Guidance* Q1’14 vs. Q1’15 Q2’14 Q2’15 Sales $60.2M +5% $63.4M $74.3M ~flat ~
Slide 65: Near Term Financial Model
Near Term Financial Model Gross Margin improving with Asia manufacturing transition Scalable model 40% Fall Through Target Effective Tax Rate in the low 20% range Revenue $55M $70M $85M Gross Margin 33% 36% 38% Operating Expenses 33% 28% 24% Adjusted EBITDA 0% 10% 15% EPS - Quarterly $0.00 $0.17 $0.
Slide 66: Mid-Term Financial Target
Mid-Term Financial Target 2013 2014 Mid Term Actual Actual Target Revenue $215M $317M $400M Gross 30% 36% 40% Margin Adjusted - 5% 13% 17% EBITDA Acquired Ismeca in Jan 2013 - Realized sales synergies TAM expansion in contactors rationalized workforce, and growth in mobility and WLP probing technolo
Slide 67: Strong Balance Sheet ($M)
Strong Balance Sheet ($M) Cash from operations LTM of $37M Assets 12/27/2014 3/28/2015 Q1’15 cash balance ~ $70M (excludes Cash & Equivalents $72.0 $69.7 $5.5M proceeds from 6/10/15 sale of BMS) Accounts Receivable 70.5 62.6 $35M to support operations including Capex Inventory 49.2 53.0 of $3M - $5M
Slide 68: Corporate Development
Corporate Development Strong track record of successful acquisitions Rasco Ismeca Criteria Dec 2008 Jan 2013 Market Expansion Gravity, Test-in-Strip, MEMS Turret, Inspection, LED Market Share #2 in 2008, grew to #1 in 2014 #1, acquired the leader 100% complementary products; 100% complementary produ
Slide 69: Closing Remarks
Closing Remarks Luis Müller President and CEO June 18, 2015
Slide 70: Increasing Total Available Market
Increasing Total Available Market Driving for profitable growth in expanded $2B TAM Differentiate through thermal, vision, automation – higher yield Expanded $2B TAM Test Contactors $850M Handler Market WLP Probing June 18, 2015 Page 70
Slide 71: Key Takeaways
Key Takeaways Driving Expanding Strong Growth Share in Core Balance Sheet With new products and Markets ~$70M in cash and no synergies; 2014 sales with innovative thermal & bank debt; $37M cash were up 48% YoY vision technologies from operations LTM Increasing Strategic Mid-Term Total Available Acqu
Slide 72: Thank You
Thank You June 18, 2015 9:30 a.m. –1:00 p.m. NASDAQ MarketSite – NY Times Square
Slide 73: Biographies
Biographies June 18, 2015
Slide 74: Biographies
Biographies Luis A. Müller President and Chief Executive Officer LuisA. Müller joinedCohu'sDeltaDesignin 2005andhasbeenPresidentandChief Executive Officer of Cohu, Inc. since December 2014. Mr. Müller was previously President of Cohu'sSemiconductor Equipment Group (SEG) since January 2011, Managing
Slide 75: Biographies
Biographies Samer Kabbani Vice President and General Manager, Delta Design SamerKabbanijoinedCohu'sDeltaDesignin 2003andhasbeenVicePresidentandGeneral Manager of Delta Design business unit since March 2015. He was previously President of Delta Design’s Systems Group and also held the positions of Vi
Slide 76: Biographies
Biographies Alexander J. Waldauf Vice President and General Manager, Rasco AlexWaldaufwasoneof the foundersof Cohu'sRascosubsidiaryin 1998andhasbeen VicePresidentandGeneralManagerof RascosinceJanuary2011.Hewaspreviously responsiblefor the Test-In-Stripproductline,ManagingDirectorof RascoandglobalVic
Slide 77: Appendix
Appendix June 18, 2015
Slide 78: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results (In thousands except per share amounts) 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending Mar 29, Diluted June 28, Diluted Sept 27, Diluted Dec 27, Diluted Mar 28, Diluted Earnings Reconciliation 2014 EPS 2014 EPS 2014 EPS 2014
Slide 79: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results (In thousands except per share amounts) 12 Months Ending 12 Months Ending Dec 28, Basic Dec 27, Diluted Earnings Reconciliation 2013 EPS 2014 EPS Income (Loss) From Continuing Operations - GAAP ($28,682) ($1.15) $14,780 $0.57 Share Based Compensation 5,113