Cohu, Inc. · NASDAQ:COHU
Cohu — Investor Day (July 2017)
41 slides from Cohu's investor day presentation, Jul 11, 2017
Slide 1: Event to be Held July 13, 2017
Event to be Held July 13, 2017 g:00 am —12:00 pm Marriott, Santa Clara, CA
Slide 2: Safe Harbor Statement
| Safe Harbor Statement | Certain matters discussed in this presentation, including statements concerning market growth rates for loT, auto semiconductor, processor and advanced packaging; “Cohu400” and “Cohu500” strategy goals and financial targets; market share gain targets; SLT platform market op
Slide 3: Agenda - July 13, 2017
| Agenda - July 13, 2017 | | schedule) vent, Presenter 9:00a.m.—9:05a.m. Welcome J. Jones g:05a.m.—9:15a.m. Opportunities for Growth and Differentiation _L. Muller Keynote Speaker Secure Connections for a Smarter World eo keshvall Nx 9:15 a.m. —9:35 a.m. 9:35a.m.-9:50a.m. _ Digital Test Handlers C.
Slide 4: Luis Muller, President & CEO
Luis Muller President & CEO
Slide 5: Corporate Profile
| Corporate Profile | Global technology and market leader in $1.5 billion* Semiconductor Final Test Handlers and Contactors al % @ fi Company Revenue EBITDA Net Cash Employees NASDAQ (tT™M™) (LTM™) (2037) (Worldwide) COHU $297M 12% $96M ~1,750 We create leading-edge solutions for semiconductor test
Slide 6: Multiple Markets — Leading Solutions
| Multiple Markets — Leading Solutions | - . . Thermal and Vision Inspection technologies enabling higher yield > customer value End-Markets Pr Technologi Device Segments az Digital EB svvemotive Memory Semiconductors sivnacon $ Industrial CQhy Salid state Lighting (LED) Microcontrollers MixedSignal
Slide 7: Key Industry Trends
| Key Industry Trends Bitlons of devices | Increasing integration > test and inspection challenges Unit Growth System in Package Integration Increasing IC content in vehicles, Growing integration of wafer-level factory automation (robotics) CSP in complex packages and exponential increase in (2.5D -
Slide 8: Competitive Differentiation
| Competitive Differentiation ‘Solutions that result in higher test and inspection yield 1% better yield on $300 billion semiconductor industry = $3 billion Scale > Largest R&D (~$35 million) in the industry Global Operations meeting production ramp requirements Sales & Service to support customers
Slide 9: Delivering Positive Results
| Delivering Positive Results Achieving growth > share gain in core handlers, new WLCSP prober, expansion in test contactors Revenue $345M" $282M $269M 2015 2016 +2017 _ Cohu4oo Cohu400 Strategy 4, to 6 points handler share gain 4 to 8 points test contactor share gain Enter WLCSP probe for 30-50% sh
Slide 10: Cohu500 Strategy
| Cohus00 Strategy Extending mid-term (3-5 years) target to Revenue of $500 million on expanded ~$2 billion* Addressable Market that includes Inspection IC Handlers $800M* Logic Pick-and-Place Gravity & Strip Contactors '$700M* NS Digital / Mixed Signal Inspection $450M" Analog 3D Wafer / Power ‘Ana
Slide 11: Device Segments
Device Segments jcroprocessors ie Mobile Processors cy z, MixedSignal__~ Chris Bohrson vicecnvaien QD vero EE General Manager
Slide 12: Attractive Growth Markets
Attractive Growth Markets Automotive Semi Sales 400 *° 10% CAGR 300 250 8 200 150 100 50 CAGR through 2020* >) Q Mixed signal: 7% * ASIC (application specific IC) * DSP (digital signal processor) Q Automotive Processors: 12% * Microprocessor Unit (MPU) * MicrocontrollerUnit (MCU) Q Growth of autonom
Slide 13: Increasing Thermal Related Yield Challenges
| Increasing Thermal Related Yield Challenges | Automotive Processors Extreme temperature control range Market: Handler: +150°C +275°C “45°C “55°C iene With high test parallelism eeene- 6 oe 3 July 14, 2017 Page 13
Slide 14: High Performance Solutions
| High Performance Solutions MATRiX for Automotive Eclipse for Processors Higher yield -55 Cto +275 Ctest Control down to +/- 2C High throughput x32 parallelism 26K units per hour Higher yield + Active Thermal Control + Control down to +/-2C S High productivity + x46 parallelism + 23K units per hour
Slide 15: T-Core Delivers Yield Advantage
| T-Core Delivers Yield Advantage MATRIX with T-Core __ x32 Production Device Temperature Performance @ 152°C 2X improvement in device temperature accuracy Higher yield w/ downto +/-2C control in high parallelism Core _ ep Eclipse with T-Core Active heat dissipation to maintain down to +/-2 C temper
Slide 16: What is System Level Testing; why is it needed?
| What is System Level Testing; why is it needed? Discontinuity: denser devices (< 10 nm devices) & higher quality levels driving changes in testing Gap: traditional test coverage from Cyareniteve lion? Functional and Structural testing no longer adequate for testing complex devices Full Test Covera
Slide 17: High Density SLT Platform
| High Density SLT Platform High volume manufacturing T-Core Q Massively parallel test architecture jetauat svevea sal p> Q Lower CAPEX/OPEX Q T-Core Thermal architecture ~$150M market opportunity Ve i | Q Application Processors le yf: Q Entry into Memory test == a | Paget +.Cohu
Slide 18: Gerhard Gschwendtberger, General Manager
Gerhard Gschwendtberger General Manager
Slide 19: Growing Contactor Market
| Growing Contactor Market | $700M growing at 5% CAGR Q Consumable, recurring business Q Fragmented, small regional suppliers Unique multi-beam and spring probe warket technologies deliver better thermal & signal performance Leveraging handler market share and global customer support Targeting rapid
Slide 20: Multiple Markets & Solutions
| Multiple Markets & Solutions End Application Semiconductor Devices Contactor Solutions re Automotive — (( !) «+ RF/Analog (7s SolidState Lighting (LED) 6) Gis a) « Oy SS MEMS Sensors/LED eS Computing 0) High Speed Cantilever multi-beam Smart Power ape 20 +.Cohu High Performance multi-beam Digital
Slide 21: Achieving Higher Yield Faster
| Achieving Higher Yield Faster Accurate temperature control, integration with Cohu handlers One-stop-shop reduces integration & setup time — “time to yield” is key differentiation for our large handler installed base = / Contact Element Contactor Housing Temperature Control Total Integration Paget
Slide 22: Differentiating Technologies
| Differentiating Technologies Best in Class Temperature Control Q Embedded temperature sensing Q Integration with T-Core enabled Gchu handlers High parallel, temperature controlled contactor solution Manufacturing Technology Q Enabling fine pitch WLCSP probes Q Longlifespan and stable yield " Fine
Slide 23: Solving Next Generation Test Challenges
| Solving Next Generation Test Challenges | Unique WLCSP solution for 5G / WiGig high frequency test Traceability & recipe management enabling Industry 4.0 Optimized for stringent quality requirements in Automotive radar REVENUE FORECAST BY ADVANCED PACKAGING PLATFORM FROM 2014TO 2020 — IN US$ BILLI
Slide 24: Power Discrete — Ian von Fellenberg, General Manager
Power Discrete MEMS & SS aa @ MixedSignal “452° Power Management - RF > atti lan von Fellenberg up & General Manager
Slide 25: Attractive Growth Markets
Attractive Growth Markets * Automotive Semi Sales CAGR through 2020 400 Q Mixed Signal, RF, Sensors: 10% a ae + ADAS, drivers, converters, Infotainment, 300 connectivity, low-gyro, pressure a Q MEMS: 10% ‘= + Inertial, Environmental, Optical i Q Power Management, Discrete: 7% 50 * Power sequencing,
Slide 26: Increasing Quality Requirements
| Increasing Quality Requirements | Micro-scale defect detection in thin & fragile devices and WLCSPs is a growing challenge Optical Electrical Ay =O Electrical yQ™ test Thermal / Mechanica o —— Electrical A test — Need micro-scale defect detection systems aa 2Cohu
Slide 27: Broad Product Solutions
| Broad Product Solutions NY Turret — Jaguar Mobile & loT HE Higher yield Test contact solutions Hi-Resolution vision inspection Thin & Fragile device handling High throughput ‘50K units per hour Fully integrated Back-end processes, optimized footprint WLCSP test High parallelism NY Turret - Gravity
Slide 28: Growing Revenue in Vision Inspection
| Growing Revenue in Vision Inspection | Introducing new Aguilae module Expanding addressable share of $450M inspection market Focused R&D investments to meet challenge of increasing quality WLCSP inspection Micro-crack detection “Aquilae” — Package and die inspection 3D Inspection “3D-Flex” sus I i
Slide 29: Disruptive Solution for Advanced Packages
| Disruptive Solution for Advanced Packages Unveiling PANTHER The first prober optimized for test and inspection of singulated wafer- level chip scale packages (WLCSPs) and bumped dies Differentiating Features a Integrated final test, inspection and tape-and-reel—smallest footprint Tri-temperature t
Slide 30: Jeff Jones, VP Finance & CFO
Jeff Jones VP Finance & CFO
Slide 31: Preliminary Q2 and 1H17 Results
| Preliminary Q2 and 1H17 Results | Q37° Ha7** Sales ~ $93M ~ $174M Gross Margin*** ~ 40% ~41% Operating Expense**™* ~ $23M ~ $45M Record orders in 2017 Strong 2017 results reflects early customer acceptance of new products and increased recurring revenue due to higher utilization Projecting second
Slide 32: Strategy & Execution Yielding Results
|Strategy & Execution Yielding Results Revenue (sm) Gross Margin™ EBITDA” Diluted EPS” 2017 2015 = 2016 2017 2015 2016 «2017 2015 2016 «2017 2015 = 2016 Share gain in handler automotive and mobility markets Growth in contactors with Kita acquisition Gross margin expansion from Asia manufacturing Tig
Slide 33: Expanding Mid-Term Target — Cohu500
| Expanding Mid-Term Target — Cohus500 | nies miiifies 2ndiEiiis \GQDULLS eniillbietees Sales $269M $282M $345M $400M $500M (s86M/qtr) (s200M/qtr) (s125M/qtr) Gross Margin” 35% 36% 40% 42% 45% Adj. EBITDA" 9% 10% 16% 18% 20% On track to Cohug4oo ~ 2 pts handler share gain: automotive and mobility ~
Slide 34: Path to Cohu500
| Path to Cohus500 | mn Sales $500 $450 Ya $4000 Yj $350 $300 $250 2017 Est. Handler Contactor WLCSP. Inspection (alysts) ShareGain Share Gain Probe Systems Approx. 6 pts handler share gain in growing automotive and mobility Grow to #1/#2 in contactors: product performance, global support Expand in
Slide 35: Accelerating Growth with Acquisitions
| Accelerating Growth with Acquisitions Strong track record of successful acquisitions Criteria Market Expansion Rasco Dec 2008 Gravity, Test-in-Strip, MEMS Ismeca Jan 2013 Turret, Inspection, LED ita Jan 2017 Spring Probe Contactor Market Share #2 in 2008, grew to #1 in 2014 #1, acquired the leader
Slide 36: Strong Cash Balance to Support Growth
| Strong Cash Balance to Support Growth sM Net Cash $140 = $120 4 1 increase, $100 Excess cash cern for strategic $80 Balance| investments $60 $40 7) Cash req'd for Ops, #29 Capex & $0 Dividend FY13 FY14 FY15 FY16 FY17 Est. $15M deployed to acquire Kita in January 2017 Operating cash flow of >$20M a
Slide 37: Jeff Jones, VP Finance & CFO
Jeff Jones VP Finance & CFO
Slide 38: Expanding Mid-Term Target to $500M
| Expanding Mid-Term Target to $500M Increasing TAM to $2 Billion with new WLCSP prober, investments in vision inspection and test Focused on Differentiation thermal control, vision inspection and integrated test solutions that enable Gaining Share in Core Markets with growing automation, artificial
Slide 39: Thank You
Slide 40: Appendix
Slide 41: Reconciliation of GAAP to Non-GAAP Results
| Reconciliation of GAAP to Non-GAAP Results Earnings Reconelation income (Let) From Continuing Operations GAAP ‘Share Based Compensation lrvortisaon of Purchase Intangible Assets Manufactunng Tanstion and Severance Costs (ther Acquistion Costs inventory step-up imparmentof Goodwiland Other Assets G