Solar Applied Materials Technology Corp. · TPEX:1785
Solar Applied Materials Technology — Investor Presentation (March 2023)
38 slides from Solar Applied Materials Technology's investor presentation, March 2023
Slide 1: Investor Presentation
Investor Presentation March 2023
Slide 2: Table of Contents
PART 1 Understandings PART 2 Table of Trends & Technologies Contents PART 3 Measurement 2
Slide 3: Part 1: Understandings
HOME > About SOLAR Company Info Organization and Executives Policy Milestones
Slide 4: Led by a strong team of experienced professionals
Led by a strong team of experienced professionals VP AVP AVP VP Chairman/President Thin-film & Electronic Functional Ceramics & Precious metals & Green Intelligence Operations Materials BU Compound BU Management BU Center C.F. Huang Gary Chung Seward Hu Vincent Huang Ben Hong 黃啟峰 鍾怡歡 胡書華 黃明山 洪本展 30
Slide 5: SolarTech: A Leading Circular Materials Technology Company
Circular Economy We are A Leading Circular Materials Technology Company with an extensive expertise in the fields of material science, chemistry and metallurgy SolarTech We are UNIQUE because we provide truly innovative material solutions to solve our customers’ most complex technical challenges Adv
Slide 6: Company milestone
Company milestone Alloy design and target manufacturing for thin film applications Digital Transformation SEMI OE (Optoelectronics) SEMI Cu Drive Digital MDS Sputtering Target Transformation to (Magnetic Data Storage) (FPD / PV / LED) Ta Expand Margin Sputtering Target 1st in SEMI industry ODS Coppe
Slide 7: Enabling circular economy
Waste Resources Scrap / Spent Solution / Electronic Waste End of Life High Purity Metals Materials Au Ag Pt Ru Enabling Pd In Ga Ta A CLOSED-LOOP circular SOLUTION Cu economy Electronic Reliable & Sustainable Products Advanced Smartphone / PC / Server / Display / Technology Automobile Materials Sput
Slide 8: SOLAR at a glance
SOLAR at a glance NT$25.8 Bn NT$22.1 Bn 1978 2005 1,521 Total Sales in 2022 Founded Listed (1785 TT) US$725 Mn Employees (2022) -17.7% YoY Market Cap as of Feb, 2023 Tainan, Taiwan NT$5.5 Bn SolarTech’s Industry Headquarters Value Added Sales in 2022 Position +1.5% YoY World No.1 Value Added Sales B
Slide 9: Strong track record of growth generation
Strong track record of growth generation Precious Metals Sales (NT$mn) Value Added Sales (NT$mn) Precious Metals Sales 25,948 5,406 5,485 5,072 22,175 4,713 20,305 4,490 16,174 16,914 Precious metals are sold mainly as part of raw materials in products. In addition to the growth of business volume,
Slide 10: Why invest in SolarTech?
We are a global leader in advanced materials solutions. We are the world‘s largest manufacturer of sputtering targets for hard-disk drives (HDD), as well as Taiwan's largest manufacturer of sputtering targets for semiconductors. Our unique foundation as a circular materials company and our ability t
Slide 11: Part 2: Trends & Technologies
PART 2 Trends & Technologies 11
Slide 12: Key megatrends that propel our growth
Key megatrends that propel our growth Megatrend 1 Megatrend 2 Megatrend 3 Increasing complexity of The growing importance of Companies’ shift electronic devices local supply chains towards a requiring new solutions and and substitutes circular economy more varieties of alloy materials More Volumes M
Slide 13: Strategy: Scale Up, Optimize our Portfolio, Level up in Tech
Scale Up ▪ Capacity investments synchronized to customers’ expansion plans. ▪ Ability to tackle industry challenges & supply reliability. ▪ Continue localizing footprint close to customers in Taiwan and elsewhere in the world. Optimize our Portfolio ▪ Commitment to relevant portfolio breadth in high
Slide 14: Megatrend 1: Increasing complexity of electronic devices
The era of the Data-Centric Environment requires a wide range, and a large quantity of chips, storage, and display solutions to deliver the myriad functions and applications Megatrend 1 being designed. Increasing complexity of With these new drivers, there comes an expectation for electronic devices
Slide 15: Industries driven by the era of the data-centric environment
Industries driven by the era of the data-centric environment Data Centric & AI Big data Artificial Intelligence Autonomous Vehicles PC & Internet Mobile Virtual/ Augmented Reality 2000 2010 2025 100’s of chips per household? One PC One mobile device per household 1000’s of chips per factory? per per
Slide 16: Our products are used in thin film deposition processes
Our products are used in thin film deposition processes Target (-) Ion Implantation Lithography Plasma Wafer Semiconductor Manufacturing Process Thin Film Deposition Etching Wafer Chip Characteristics of Our Materials - High Purity - Proper texture - High relative density Planarization Clean/Strip -
Slide 17: Establish partnership with customers to develop designed-in solutions
Establish partnership with customers to develop “designed‐in” solutions 4 - We provide customers the 1 - We work with our customers best solution to solve function & to understand their current and manufacturing bottleneck future challenges 4 Customer 1 High Performance Products Technology & Rapid E
Slide 18: Material Spend per Wafer
Semiconductor Solutions More complex chip drive more materials demand $1,000 Global Sputtering Target for Semi 3 nm (Value in US$mn) 2,237 $800 Material Spend per Wafer 1,305 5 nm 10 nm $600 7 nm 2020 2027 $400 16 nm Sputtering Target Consumption Other 28 nm regions, $200 40 nm 65 nm 25% Asia- 90 nm
Slide 19: Provide Best-fit Solutions to new HAMR recording technology
Storage Solutions Provide Best-fit Solutions to new HAMR recording technology Rising demand for greater storage capacity ▪ Data growth fuel the demand for larger HDD Capacity. ▪ HDD leading company actively moves toward new HAMR recording technology since PMR technology is reaching its limit. Seagat
Slide 20: Data explosion drive higher HDD capacity demand
Storage Solutions Data explosion drive higher HDD capacity demand HDD Revenue TAM (US$bn) Average HDD platters in each drive 2017-2027E 4.63 4.08 3.31 $29B 2.63 2.85 2.46 $24B 24 24 22 22 2016 2017 2018 2019 2020 2021 20 Seagate Product Roadmap 2019 2020 2021 2022 2023 2024 2025 2026 Rise of Growth
Slide 21: Solar is leading in HDD target supply
Storage Solutions Solar is leading in HDD target supply Layers layout of HDD Carbon Solar is the only full spectrum supplier. Recording Layer All global HDD companies are our customers 35% Exchange Tuning Recording Layer with one-third market share. Inter Layer (Ru Alloys) Seed Layer (Ni Alloys) SUL
Slide 22: Commitment to relevant portfolio breadth in high growth areas
Optimize our Portfolio Commitment to relevant portfolio breadth in high growth areas Strong portfolio of High-Tech Critical Alloy Solar’s Applications Materials Needed Focus metallurgies technologies empowering today’s application Ultra-high purity Data Processing (UHP) alloys for Pt Ru Cu Ta Logic
Slide 23: Megatrend 2: The growing importance of local supply chains
The pandemic and supply-chain disruption have inspired a build-out of local supply chains, particularly for critical materials and components. Megatrend 2 Taiwan remains the largest semiconductor hub in the world. The growing importance of local supply chains Growing needs for finding local substitu
Slide 24: The growing importance of local supply chains and substitutes
Semiconductor Solutions The growing importance of local supply chains and substitutes 1Q22 IC Foundry Market Share tsmc – Percentage of Local Sourcing in Taiwan Indirect raw materials Spare parts 64% 60% 60.4% 60.5% 59% 60% Rest of world, 36% 50% 50% Taiwan, 46.4% 45% 64% Source: TrendForce, 2022/6
Slide 25: Target industry at a glance – Chip Manufacturing
Semiconductor Solutions Target industry at a glance – Chip Manufacturing Upstream Midstream Downstream End-Customers Metal refining Target Manufacturing Sputtering & Coating Application 25
Slide 26: Megatrend 3: Companies' shift towards a circular economy
Stricter legislation and pressure from society continue to push companies for a lower carbon footprint. Megatrend 3 Increasing resource scarcity and need for closing the loop. Companies’ shift towards a Growing complexity of materials to recycle, in particular end-of-life materials. circular economy
Slide 27: Collaborate with Wafer Foundry in Circular Economy
Responsible Business Collaborate with Wafer Foundry in Circular Economy Semiconductor Nearly 10 tons Manufacturing Foundry 1st Copper Copper of regenerated target materials per year are Circular Economy Regenerated Sulfate returned to manufacturing process Target Waste for Foundry Liquid SolarTech O
Slide 28: 1st certified 100% Recycled Gold Material used in brand products
Responsible Business 1st certified 100% Recycled Gold Material used in brand products • In 2017 initiated by Brand to dialogue with SolarTech for the feasibility of the concept. • Within 2019, several meeting with BRAND focused on the feasibility to apply 100% recycled gold material. • As of Q2 2020
Slide 29: Reducing carbon emissions through material recycling
Responsible Business Reducing carbon emissions through material recycling 441,564 tons Metals Recycled (kg) of carbon emissions saved 320,000 per year equivalent to 300,000 291,118 carbon footprint generated by 278,986 98,783 people 280,000 260,000 per capita carbon emission in the 252,718 247,146 w
Slide 30: Continued progress in ESG
Responsible Business Continued progress in ESG GHG Emission – Scope 1+2 (ton CO2e) Total Energy Consumption (MWh) Total Waste Generation (ton) Intensity (ton CO2e/NT$ million) Intensity (kWh/NT$ thousand) Recycling Rate (%) 100000 7.23 7.5 6000 55 3.62 3.55 44.14 6.67 4 95000 45 7 31.92 44000 5000 2
Slide 31: Achieve Operational Excellence: Digital transformation
Achieve Operational Excellence Digital transformation to deliver maximum value Connecting Our Factories… One Standard Transformed With Automation • Efficient and reliable sourcing • Better execution • Leaner, simpler product line-up Monthly cost reduction amount (vs Jul-22) (NT$mn) Dec-22 Aug-22 Nov
Slide 32: Part 3: Measurement
PART 3 Measurement
Slide 33: Our revenue model and trends
Our revenue model and trends Precious Metals Sales (NT$mn) Value Added Sales (NT$mn) 25,948 5,406 5,485 22,175 5,072 4,713 4,490 20,305 16,174 16,914 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Precious metals are sold mainly as part of raw Value-added sales (VAS) reflect the true materials in
Slide 34: Value Added Sales Break Down By Industry
Value Added Sales Break Down By Industry Value Added Sales – By Industry (NT$mn) Value Added Sales Breakdown – By Industry 2018 2019 2020 2021 2022 Storage Semiconductor Display Automotive Others 3,000 2,304 13% 13% 7% 9% 10% 1,982 15% 14% 9% 2,000 17% 15% 11% 1,536 18% 14% 1,407 17% 18% 28% 23% 26%
Slide 35: Strong profitability
Strong profitability Gross Profit (NT$mn) Operating Profit (NT$mn) SolarTech’s operating profit as % of value added sales 2018-2022 CAGR: 11% 2018-2022 CAGR: 22% 3,605 1,597 1,617 1,630 36% 3,473 1,433 3,046 30% 30% 2,901 28% 2,248 745 16% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019
Slide 36: Hedge Accounting (under IFRS 9)
Hedge Accounting (under IFRS 9) Inventory Evaluation VS Net Hedging Position 600,000 w/o Hedge Accounting Hedge Accounting applied 400,000 200,000 0 (200,000) (400,000) (600,000) (800,000) 1Q20 2Q20 3Q20 4Q20 2020Y 1Q21 2Q21 3Q21 4Q21 2021Y 1Q22 2Q22 3Q22 4Q22 2022Y Inventory Evaluation Net Hedging
Slide 37: Dividend Payout and Capex (2017 ~ 2021)
Dividend Payout and Capex (2017 ~ 2021) 1.5 1.2 1.0 2017 2018 2019 2020 2021 Payout Ratio (%) - - 48% 84% 71% Dividend Yield* (%) - - 2.4% 2.5% 3.8% Capex (NT$ mn) 142 266 991 352 706 Capex to Sales (%) 0.9% 1.3% 4.5% 1.3% 2.3% *Note: Cash yield is calculated based on Solar’s market cap on the day b
Slide 38: Contact Information
Contact Information Maggie Chin, Financial Manager Dr. Kerry Hsieh, Investor Relations Email: shareholders@solartech.com.tw Phone Number: 06-5110123 38
Solar Applied Materials Technology — Investor Presentation (March 2023) on 6ix