Photronics, Inc. · NASDAQ:PLAB
Photronics — Semiconductor & Systems Conference (March 2003)
38 slides from Photronics's conference presentation, Mar 4, 2003
Slide 1: Semiconductor & Systems Conference
March 4, 2003 Semiconductor & Systems Conference www.photronics.com
Slide 2: “Safe Harbor” Statement
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this presentation that may be considered forward-looking statements may be subject to certain risks and uncertainties that could cause the actual results to
Slide 3: What is a Photomask?
What is a Photomask? ¾ Photomasks, or reticles, are a critical enabling technology in the fabrication of high performance semiconductors ¾ Photomask demand is being accelerated by: - Design activity and drive towards increased functionality - Rapidly changing IC performance requirements - Shorter IC
Slide 4: High Performance Semiconductors Rely on Photomask Technology
High Performance Semiconductors Rely on Photomask Technology ... New semiconductor applications New masks Increased device complexity More masks per set Shrinking feature sizes More complex masks
Slide 5: Increased High-End Complexity
Increased High-End Complexity Products Minimum Number of Masks Memory Products: 16M 16 64M 23 256M 27 1G 31 4G 35 Microprocessors: 8 Bit 8 16 Bit 12 32 Bit 16 Source: Dataquest
Slide 6: Photomask Technology is Critical to Supporting Wafer Lithography
Photomask Technology is Critical to Supporting Wafer Lithography… ¾ Advanced wafer lithography strategies put photomasks into critical path - Wafer lithography drives semiconductor fab strategy ¾ High-end photomasks are essential in resolving shrinking features - As well as being critical to maximiz
Slide 7: The Photomask Industry Today
The Photomask Industry Today ¾ Semiconductor manufacturers are bouncing off a cyclical bottom - Design activity stable, end market concerns hold back tape-outs over the near term ¾ Migration to 180nm, 130nm & 90nm dominates strategic discussions with customers ¾ Stable pricing environment at 180nm a
Slide 8: High-end Pricing Trends
High-end Pricing Trends $95,000 $100,000 $75,000 $75,000 $43,700 $50,000 $34,843 $25,000 $9,982 $0 1989 1999 2000 2001 2002 Source: VLSI Research & Photronics
Slide 9: Cyclicality has made Photronics…
Cyclicality has made Photronics… ¾ Focused, flexible and stronger ¾ The industry’s premiere service leader ¾ The industry’s strategic technology provider of Sub- Wavelength Reticle Solutions™ − A manufacturer with a proven record of profitability − Decisive in a downturn ¾ The leading, fastest growi
Slide 10: Photronics…The Photomask Industry’s Largest and Leading Supplier
Photronics…The Photomask Industry’s Largest and Leading Supplier ¾ Positioned to service the increasing demand for sub- wavelength reticle solutions ¾ Five installed Nano Technology Lines strategically located throughout the globe ¾ Photronics has shown steadily improving liquidity - Comprehensive c
Slide 11: Projected 2002 World Wide Photomask Market $2.7 Billion
Projected 2002 World Wide Photomask Market $2.7 Billion Photronics 18% DuPont 16% Captive Compugraphics 27% 1% DNP 16% Other TMC Infineon Hoya Toppan 1% 3% 3% 3% 12%
Slide 12: Photronics in Asia….
Photronics in Asia…. ¾ Use of foundries will continue to grow ¾ Process technology satisfies most stringent 130nm ¾ Total Asia Solutions market strategy strengthened with planned China facility ¾ Shipped reticle technology for early 90nm test chips & 157nm litho tools 0 Working with ASML and other c
Slide 13: Providing Innovative Photomask Solutions to Foundry Partners
Photronics…Providing Innovative Photomask Solutions to Foundry Partners ¾ Photronics is the leading photomask technology supplier in Taiwan and Korea - 130 nm qualifications at UMC and Samsung ¾ Photronics Taiwan is a source of advanced capability close to large Japanese markets ¾ Asian opportunitie
Slide 14: Photronics’ Asian Strategy
Photronics’ Asian Strategy ... ¾ Speed, Flexibility & Cost ¾ Continue to support DRAM requirements in Korea and Taiwan ¾ Focus on volume ramp for UMC 130nm requirements ¾ Broaden second source position to TSMC’s captive ¾ Supply China’s early requirements for ≤ 250nm from Singapore
Slide 15: Photronics Asian Outlook…
Photronics Asian Outlook… ¾ Recovery in foundries first ¾ 130nm yields improving ¾ 90mm test chips in development ¾ U.S. & Japanese IDM’s continue outsourcing ¾ New China facility ¾ Samsung remains robust
Slide 16: Photronics in Europe
Photronics in Europe ... ¾ Major semiconductor companies are committed to strategic manufacturing in Europe ¾ NTL infrastructure aligns Photronics with the requirements these companies have for advanced wafer processing
Slide 17: Photronics’ European Strategy
Photronics’ European Strategy ... ¾ Leverage Sub-Wavelength Reticle SolutionsTM process technology to support 120nm production and 90nm development ¾ Support IMEC’s Industrial Lithography development program for both the 193nm and 157nm wafer litho systems − Photronics is first supplier to build PSM
Slide 18: Photronics’ European Outlook
Photronics’ European Outlook ... ¾ Technology acceleration & consolidation aligns Photronics’ capabilities with demand ¾ Highly focussed on optimizing productivity across all technology nodes ¾ Speed, Flexibility & Cost
Slide 19: Photronics in North America
Photronics in North America ... ¾ Worst cycle on record for North American semiconductor industry ¾ Continued consolidation, acquisition & cost control strengthen competitive position ¾ Installation of leading-edge technology for 130nm & 90nm ¾ Focus on the basics – Service! Service! Service!
Slide 20: Photronics’ North American Strategy
Photronics’ North American Strategy … ¾ Accelerate qualifications of the installed NTL for 130nm − Mix & Match Toshiba electron beam and laser platforms ¾ Control costs through new & innovative data management initiatives based on automation − CyberMask and advanced front-end automation ¾ Effectivel
Slide 21: Photronics’ North American Outlook
Photronics’ North American Outlook ... ¾ Signs of cyclical recovery still clouded – Consumer and corporate IT markets still soft ¾ Photronics continues to match its capabilities and capacity to dynamic changes in the region ¾ Leverage the unified technology force that is the Photronics Global Enterp
Slide 22: Photronics’ Leading High-End Research & Development
Photronics’ Leading High-End Research & Development ¾ Proprietary Sub-Wavelength Reticle Solutions™ processes leverage NTL investments - Advanced Binary - Optical Proximity Correction - Phase Shift ¾ R&D success translates into technical alliances - Downturn provides opportunities to use enhanced re
Slide 23: Research and Development
Research and Development $ Millions $35 $30.2 $30 $24.9 $25 $20.7 $16.6 $20 $13.4 $15 $10 $5 $0 1998 1999 2000 2001 2002
Slide 24: It All Comes Down to Service…
It All Comes Down to Service… ¾ Technological capability ¾ Advanced manufacturing capacity ¾ Fast turn around time ¾ Global Support
Slide 25: Photronics Services Global Industry Leaders
Photronics Services Global Industry Leaders
Slide 26: Photronics Financial Highlights
Photronics Financial Highlights ¾ Benefits from technology driven demand ¾ Multiple sources of margin leverage - Improving mix shift & stable pricing at high-end - Global infrastructure - Ongoing consolidation (internal and external) ¾ Growing market share in Asia and Europe accelerate revenue growt
Slide 27: 5 Year Revenue Growth
5 Year Revenue Growth $400.0 $375.0 $350.0 $325.0 $300.0 $275.0 $250.0 1998 1999 2000 2001 2002 Net Sales $M
Slide 28: Quarterly Revenue & High-End Mix
Quarterly Revenue & High-End Mix $120.0 30% $100.0 25% $80.0 20% $60.0 15% $40.0 10% $20.0 5% $0.0 0% Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Quarterly Revenue $M % High End
Slide 29: Increasing Global Presence
Increasing Global Presence 1Q 2003 2001 40% 31% 69% 60% International 2002 North America 53% 47%
Slide 30: Operating Income … Most Recent Quarters
Operating Income … Most Recent Quarters (excludes consolidation & restructuring charges) $20.0 $15.0 $10.0 $5.0 $0.0 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 -$5.0
Slide 31: EPS … Most Recent Quarters
EPS … Most Recent Quarters * $ Per Share 0.4 $0.32 $0.28 0.3 0.2 $0.07 $0.08 $0.06 $0.06 0.1 $0.04 -$0.06 -$0.26 0.0 Q1 - Q4 Q1 - Q4 Q1 2001 2002 2003 Fiscal year ending October 31 * Before consolidation and other charges
Slide 32: Improving Liquidity … Solid Financial Position
Improving Liquidity … Solid Financial Position $ millions November 3, February 3, 2002 2003 Working Capital $ 142 $145 Current Ratio 2.3:1 2.8:1 Cash and Short Term Investments $129 $107 Total Assets $832 $805 Long Term Debt $297 $291 Equity $339 $340
Slide 33: Cash Flow Highlights
Cash Flow Highlights $ millions Fiscal Year First Qtr Ended 2002 2003 Operations $ 136 $ (7) Acquisitions of Photomask Operations – – Capital Expenditures (126) (9) Free Cash Flow $10 ($16) Net Issuance of Convertible Debt 193 – Net Repayment of Debt (115) (7) Other, Net (6) (1) Increase (Decrease)
Slide 34: Capital Expenditures
Capital Expenditures $ Millions $126.0 150 $112.3 125 $80.7 $83.7 100 $48.7 75 $43.6 50 25 0 1997 1998 1999 2000 2001 2002
Slide 35: Key Financial Objectives
Key Financial Objectives ¾ Maximize revenue growth ¾ Significantly improve gross and operating margins and balance sheet metrics ¾ Maximize - Liquidity - ROA - EPS ¾ Increase shareholder value
Slide 36: Long Term Financial Goals
Long Term Financial Goals Annual Revenue Growth 15%-20% Gross Margin 40% + Operating Margin 20% + Return on Assets 10% Debt-to-Equity 25% Free Cash Flows $25mn
Slide 37: Photronics … Poised for Continued Growth!
Photronics … Poised for Continued Growth ! ¾ Photomasks are a critical enabling technology ¾ Revenues driven by steady stream of design activity ¾ Stable high-end pricing environment; more layers per set ¾ Expanding presence in Asia provides opportunity to gain market share ¾ Best positioned to supp
Slide 38: www.photronics.com
March 4, 2003 Semiconductor & Systems Conference www.photronics.com
Photronics — Semiconductor & Systems Conference (March 2003) on 6ix