Enovix Corporation · NASDAQ:ENVX
Enovix — Corporate Update (January 2023)
74 slides from Enovix's corporate update, Jan 3, 2023
Slide 1: Special Presentation to Shareholders
SPECIAL PRESENTATION to SHAREHOLDERS T.J. Rodgers Executive Chairman January 3, 2023
Slide 2: Disclaimer
Disclaimer This presentation (this “Presentation”) is provided solely for information purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity or debt. Enovix assumes no obligation to update the information in this Presenta
Slide 3: What? Inglés, Por Favor
Q3 Shareholder Letter: “We expect Fab-1 improvement activities to extend into 2023, but at a slower rate given the decision to redirect resources to Gen2. Given this, we expect to exit 2023 at a run rate of under one million battery cells produced from the Gen1 equipment at Fab-1. There is opportuni
Slide 4: People are openly questioning if the product is manufacturable
“People are openly questioning if the product is manufacturable.” “We’re lucky to be at $10. Revenue in 2023 was supposed to be $176 million. Now it’s $8 million.” “When you can’t name where Fab-2 is going to be it appears that you have no plan.” “This should be like a biotech. There’s a set schedul
Slide 5: Silicon and Moore's Law operations mindset
We are silicon and Moore’s Law operations people and comprehend the sea-change opportunity Enovix and its technology offer. We are going to infuse Enovix with a silicon-industry mindset. 5 TJR 1/3/2023
Slide 6: T.J. Rodgers Appointed Enovix Executive Chairman
ENSVIX T.J. Rodgers Appointed Enovix Executive Chairman Problem 1: The lack of clear and transparent investor communications. | have worked with the Enovix team for ten years. It has always been honest. Yet, we must improve the clarity of our communications. Problem 2: The delay and projected underp
Slide 7: Cells shipped: first disclosure
That’s the first time we ever said how many cells we have shipped! Why? The cumulative number is now 8,812 shipped (Q4) and we expect to at least double our shipments in every quarter of 2023. 7 TJR 1/3/2023
Slide 8: We took Enovix public with a SPAC
We took Enovix public with a SPAC Rodgers Silicon Valley Acquisition Corp. SPAC Investor Presentation November 30, 2020 Rev. 9 12/2/20 The crash to $10.74 is our fault, too. We control the board. Our SPAC sold stock at $10, and although it’s still up, investors are unhappy for good reasons. 8 Rodger
Slide 9: Our SPAC bragged about Enphase
Our SPAC bragged about Enphase Reward So Far >100:1 TJR on board Jan. 10, 2017 Invest $5 million New COO, April 10, 2017 Badri Kothandaraman New CEO, Sept. 3, 2017 Badri Kothandaraman 9 Rodgers Silicon Valley Acquisition Corp. TJR 1/3/20239
Slide 10: Cypress Autoline 2000 – TJR's Personal Project
We bragged about the Cypress chip autolines Cypress Autoline 2000 – TJR’s Personal Project TJR’s personal project Line 1: 3,600 UPH .. . Line 10: 10,000 UPH 10 TJR 1/3/2023 10 Rodgers Silicon Valley Acquisition Corp.
Slide 11: Cypress Acquires SunPower
We bragged about SunPower Cypress Acquires SunPower Invest in entrepreneurs… Dick Swanson T.J. Rodgers CEO SunPower CEO Cypress 11 TJR 1/3/2023 11 Rodgers Silicon Valley Acquisition Corp.
Slide 12: Autoline: Continuous River of Silicon
And the SunPower Autoline: 5 months install-to-silicon; 11 months 10% to 90% yield Autoline: Continuous River of Silicon 12 TJR 1/3/2023 12 Rodgers Silicon Valley Acquisition Corp.
Slide 13: SunPower Autoline complexity
And about the complexity of the SunPower Autoline Rodgers Silicon Valley Acquisition Corp. 13 TJR 1/3/2023 13 Rodgers Silicon Valley Acquisition Corp.
Slide 14: Cypress-SunPower Manila Solar Plant
And about SunPower’s new low-cost plant built in Manila Cypress-SunPower Manila Solar Plant Greg Reichow Minh Pham Manny Hernandez 14 TJR 1/3/2023
Slide 15: Silicon-industry executives watching over Enovix
We deployed four Silicon-industry executives to watch over Enovix Rodgers Silicon Valley Acquisition Corp. Enovix Board IPO by SPAC: Our Criteria for the Initial Business Combination TJR ETH JDM SG JM GR LH SPAC S1 filing Target Company Criteria X X X X X X X 1.? Public company readiness. This does
Slide 16: IPO by SPAC: Mitigation Matrix
Rodgers Silicon Valley Acquisition Corp. IPO by SPAC: High Reward but with High Risk – Mitigation Matrix TJR ETH JDM SG JM GR LH X X 7. A formal plan to grow rapidly by taking a dominant share of a growing medium-sized market versus a small share of a huge market, as explained by Peter Thiel in his
Slide 17: A formal plan to meet street expectations
A formal plan to meet street expectations Created fear of failure: slow decisions defensive communication 17
Slide 18: Our PIPE plan to investors
Our PIPE plan to investors Financials Fully owned Fab-1 and Fab-2 Competitor Data1 (All $M unless noted) 2021 2022 2023 2024 2025 Low High Revenue 72 11 176 410 801 NRE Mix Four lines running in Fab1 GM% 14% 46% 52% 20% 35% 80 Operating Expense 35 34 47 83 157 Manual lines Opex% 194 operators 26% 20
Slide 19: TJR 1/3/2023
19 19 TJR 1/3/2023
Slide 20: TJR 1/3/2023
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Slide 21: TJR 1/3/2023
21 21 TJR 1/3/2023
Slide 22: The SPAC provided a board with relevant knowledge
The SPAC provided a board with relevant knowledge Greg Reichow – Advisor (manufacturing, quality) • General partner of Eclipse Ventures • SunPower: built and ran automated solar-cell plant • Built and ran Tesla Fremont plant 22 TJR 1/3/2023
Slide 23: Dan McCranie – Director
Dan McCranie – Director (board governance, restructuring, M&A, strategic planning) • 1966-2000: Multiple semiconductor EVP & CEO positions • 2000-2020: Served on 10 semiconductor boards, avg 6.4 years • Chairman of the two boards of Motorola, both Freescale and ON • Six board positions involved sign
Slide 24: Manny Hernandez – CFO, Director
Manny Hernandez – CFO, Director (financial controls, SEC, SOX) • CFO of both Cypress Semiconductor and SunPower • Ran SunPower IPO and created financial infrastructure • Chairman of audit committee, ON Semiconductor • Chairman of BrainChip Inc. (an AI company) 24 TJR 1/3/2023
Slide 25: TJ Rodgers – CEO
TJ Rodgers – CEO (quality, culture, strategic planning, technology) • Dartmouth: Trustee Emeritus (‘04-’12); Hazeltine Award, Physics & Chemistry MSEE, PhDEE Stanford 1975 • Founded Cypress Semiconductor; IPO 37 months after Series A funding • Cypress CEO 34 years (1982-2016): sold to Infineon in 20
Slide 26: The Board Was Active
The Board Was Active We started to address the PIPE plan miss in August 2022: 8/5 Board discusses CEO change; I informed Harrold Rust 8/24 Launch of COO hiring (Minh Pham) 10/3 Board discusses mechanism for CEO change; I informed Harrold Rust 11/1 TJR took over COO search to address No. 1 problem 11
Slide 27: CEO Harrold Rust
CEO Harrold Rust B.S. Mech. Eng. UC Davis, MSME Stanford FormFactor: VP Operations 2002-07, IPO 2003, $369M revenue 2006 IBM: 17 yrs operations, ran disk-drive fab 94 patents, plus 63 pending Co-founded Enovix: Raised $789 million Created $1.9 billion market valuation 27 TJR 1/3/2023
Slide 28: Guiding Principles 2023 AOP
Guiding Principles 2023 AOP (Rev. A, 11/27/22) The AOP is Late: It needs to be wrapped up: 1st draft, 12/1; 2nd draft, 12/22; final draft, 1/19; presentation, 1/26 board meeting The major assumptions in the AOP must be clearly stated in writing AOP financials and milestones should have 80%-plus achi
Slide 29: COO Ajay Marathe
COO Ajay Marathe M.S. Industrial Engineering (Texas Tech) AMD (23 years) Thailand plant manager (6M units/wk) VP Ops: Computation Products (2,500 people) VP Ops: Asian Assy & Test (4 plants) CEO: AMD, India LLC Lumileds (10 years) COO ($1.4B lighting company) Western Digital ($17B data storage compa
Slide 30: COO Ajay Marathe Initiatives
COO Ajay Marathe Initiatives (First 49 days) Ownership & accountability — every rejected unit; every down machine has an “owner” Machine-centric yield plans – specific actions with co-owners (maintenance, engineering, operations) Cost of Non-quality program — detect problems earlier; drive down valu
Slide 31: 2023 Manufacturing Guiding Principles
2023 Manufacturing Guiding Principles PoC Proof of Concept: process to make equipment “heads” to be validated (for stacking, etc.) and then automated R&D line Existing manual Fremont line that makes 20 batteries per day with Line 1 PoC equipment Line 1 Existing Fremont wearables line using PoC equip
Slide 32: Fab-1 Will Make a 3D Battery Every 2.0 Seconds
Fab-1 Will Make a 3D Battery Every 2.0 Seconds1 (4 lines) “The real problem is execution. By my math Fab-1 is doing less 4.1 2 lines @ 550 UPH, 80% OEE than 10% of what it should be doing.” 22.5 2 lines @ 100 UPH, 80% OEE – Shareholder 72.0 2 lines @ 100 UPH, 25% OEE Industry Standard Enovix 3D Cell
Slide 33: Anode PoC Stacker Head
Anode PoC Stacker Head 33 TJR 1/3/2023
Slide 34: Stacker PoC Head (Side View)
Stacker PoC Head (Side View) 34 TJR 1/3/2023
Slide 35: Stacker Battery Fixture
Stacker Battery Fixture 35 TJR 1/3/2023
Slide 36: Subsequent Steps
Subsequent Steps Electrode Stacking Constraint Application Interconnect Heads are what make the battery: Gen 2 vs. Gen 1 is about how many heads there are and how they are transported, not redesigning the heads. 36 TJR 1/3/2023
Slide 37: Stacker Battery Transport
Stacker Battery Transport Gen 1 Conveyor Belt ‒ 100-micron Precision 37 TJR 1/3/2023
Slide 38: Gen 2 vs. Gen 1 Lines
Gen 2 vs. Gen 1 Lines Parameter Gen 1 Gen 2 Placement Conveyor belt (100µ) Linear motors (20µ) Parallelism 3x wide (laser) Up to 12x wide (vacuum bake) Metrology 7 stations 30 stations Cost $30M $55M UPH 550 (200 achievable) 1350 Depr./unit1 $1.12 ($3.08) $0.84 Heads 45 120 Heads redesigned 13 (3 ty
Slide 39: Gen 2 Heads Are Mostly Reused Gen 1 Heads
Gen 2 Heads Are Mostly Reused Gen 1 Heads Zone Process Gen 1 Gen 2 Comments Cathode 3 5 same5vendor, Gen2 up to 1KW laser heads Anode 3 5 same Gen2 5 laser headsto 1KW vendor, up no/small change Zone 1 Separator 1 3 same Gen2 3vendor, up to 1KW laser heads minor redesign Laminator 1 1 major redesign
Slide 40: Gen 2 Line Changes
Gen 2 Line Changes Zone Process Gen 1 Gen 2 Comments Vac Bake 3 4 Gen 2 smaller bake Tab Weld 1 4 PPL 1 6 no/small change Li Flag 1 6 Pouching 1 2 minor redesign Zone 3 E-Fill 1 4 Major redesign Flag-pull 1 4 Degas 1 4 Trim 1 4 “You could have a slide that shows that all Glue & Fold 1 4 the steps ar
Slide 41: Our (new) Chief Designer
Our (new) Chief Designer Former member Romanian Naval Special Forces “The Right Stuff” (Russians beat the first U.S. astronaut to space) “He had to keep smiling and aw-shucking and playing Mr. Modest, just as if it might, in fact, be he who was going up on top of the rocket on May 2 as the first man
Slide 42: Gen 2 Line Milestones
Gen 2 Line Milestones (changes in green) 2023 2024 Milestone Number Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EDR2—Design Apv’d 34 17 17 PO—Purchase Order 7 71 7 FAT—Factory Test 34 12 4 18 Installation 34 16 18 SAT—Site Test 34 24 10 PCR2—Line Functionality 34 34 ES10—Samples 1,000 1K PCR3—Line Production 34 34 QS10
Slide 43: FAB 1 Weekly Yield Executive Review Meeting
FAB 1 Weekly Yield Executive Review Meeting Kim Han Lee Yield/Integration 2022 WW52 Confidential │ ©2021 ENOVIX
Slide 44: M2. Stacking Module Weekly Yield
Module Weekly Yield M2. STACKING — O2.STACKING 12/26/22 Latest FinishDate_PST SeqStep 12/20/22 12/at/22_ 12/22/22 12/23/22 12/24/22 12/25/22 12/26/22 Volume, Daily_Yield and 4WK_RA by FinishDate_PST 41-STK_STRT @Volume @Daily_Vield @4WK RA 2-STK MID 3-STK_END - 21K 4 4-STKEPIN ae! ay ttt S-STK_C2A =
Slide 45: Scrap by Code and cause_step last 7 days
Scrap by Code and cause_step last 7 days 10 pareto graphs (each module) 10 teams x8 people, cross-functional 45 TJR 1/3/2023
Slide 46: 10-Panel Module Charts
10-Panel Module Charts–6 / 10 modules meets or exceed Q4 yield target 46 TJR 1/3/2023
Slide 47: Yield learning rate accelerated in Q4
Yield Yield learning rate accelerated in Q4 0% 40% Classic “S” curve 100% 47 TJR 1/3/2023
Slide 48: FAB 1 Weekly Yield Executive Review Meeting
FAB 1 Weekly Yield Executive Review Meeting Our yield team is very competent and making good progress Kim Han Lee Yield/Integration 2022 WW52 Confidential │ ©2021 ENOVIX
Slide 49: Our Fab 1 Quality Return Rate is 0/8812
Our Fab 1 Quality Return Rate is 0/8812 49 TJR 1/3/2023
Slide 50: Safety and Accelerated Lifetime (ALT) Testing
Safety and Accelerated Lifetime (ALT) Testing Other specified tests: Safety and accelerated lifetime 595 Safety/lifetime margin 200 These tests must be repeated UN38.3 (airplane shipping) 40 every time a cell changes. UL1642 (consumer-US) 70 IEC-62133 (consumer-Europe) 125 (Various other country spe
Slide 51: SVP Sales and Business Development Ralph Schmitt
SVP Sales and Business Development Ralph Schmitt B.S. Electrical Eng. (Rutgers) Joined Enovix 2021 Turnaround CEO (16 Years) Exar-Sipex – Power Analog PLX Technology – Networking (acquired by Broadcom) OCZ Technology – Solid State Drives (acquired by Toshiba) Sensera – IoT MEMS Sensors Cypress Semic
Slide 52: Customer Funnel – Dec '21
Customer Funnel – Dec ‘21 “Design wins translating to Customer Purchase contracts would be useful value drivers – which give investors a better line of sight on revenue path forward.” – Shareholder 52 TJR 1/3/2023
Slide 53: Customer Funnel – Dec '21
Customer Funnel – Dec ‘21 Funnel Milestone ES10 CS10 QS100 P1K P10K FM$ Technology Custom Cell Production Product Product Pre Production Customer Milestone Qual Development Cell Qual Integration Production Milestone Duration 3-9 Months 6-9 Months 4-6 Months 3-6 Months 2-6 Months 12-36 Months 53 TJR
Slide 54: Customer Funnel – Dec '21
Customer Funnel – Dec ‘21 S25 S24 K23 Account Code K22 S: Strategic – Top 3 V21 K49 S*: Mega-cap – $200B Mkt Cap K20 K48 43 Accounts sampled from Pilot Line K: Key – Top 10 K19 K47 L: Lead – First application K18 V46 V: Venture – Innovative product K17 K45 K16 K44 Market Classification L15 K43 Samsu
Slide 55: Customer Funnel – Dec '21
Customer Funnel – Dec ‘21 S25 OPPO S24 K23 Genius Account Code K22 BBRaun S: Strategic – Top 3 V21 K49 S*: Mega-cap – $200B Mkt Cap K20 K48 Nintendo 43 Accounts sampled from Pilot Line K: Key – Top 10 K19 K47 Casio L: Lead – First application K18 V46 V: Venture – Innovative product K17 K45 Sonos K16
Slide 56: Customer Funnel – Dec '22
Customer Funnel – Dec ‘22 Fab1 Enabled Progression to QS100, P1K and P10K Account Code K42 S: Strategic – Top 3 K41 K60 V78 78 Accounts From Sampled to Pre-Production S*: Mega-cap – $200B Mkt Cap K40 K59 V77 K62 K: Key – Top 10 K39 K58 V76 V35 L: Lead – First application K38 V57 K75 K34 V: Venture –
Slide 57: Customer Funnel Plan 2023
Customer Funnel Plan 2023 Account Code V78 S: Strategic – Top 3 K41 K59 V77 K47 S*: Mega-cap – $200B Mkt Cap K40 K58 V76 K45 K: Key – Top 10 K39 V57 V75 K41 K48 L: Lead – First application K38 V56 V74 K40 L15 V: Venture – Innovative product K37 K55 V73 V66 K39 V67 K36 V54 K72 K59 K38 K52 Market Clas
Slide 58: 2022 Fab1: 8812 Cell Shipments to Customers
2022 Fab1: 8812 Cell Shipments to Customers Shipments by customer code Customer # of Cells Customer # of Cells D01 3000 K29 30 L05 1608 K31 30 S24 1125 K32 30 S*09 730 S*03 26 K33 300 V91 24 K34 300 K38 18 S*06 300 K23 15 X1 275 S25 15 K01 250 X3 12 K17 100 X4 11 S*11 100 V35 10 S*14 100 X6 10 V21 1
Slide 59: Funnel Statistics – Dec '22
Funnel Statistics – Dec ‘22 $13B Mobile Computing Battery TAM 2025E1 ES10= $754M Engaged Opportunities CS10+QS100+P1K= $669M Active Designs + Design Wins $1.42B Revenue Funnel (11% TAM) Gross Value of Full Production Year for all Projects2 1IDC, Trendforce, company estimates as of January 2021 59 2B
Slide 60: CEO Raj Talluri
CEO Raj Talluri (1/18/23) Ph.D. Electrical Eng. (U.T. Austin) Micron (2018-2022) SVP/GM; Mobile Business Unit ($6B/yr) Qualcom (2009-2018) SVP: Qualcomm IoT (>$1B/yr) SVP: Qualcomm CDMA T.I. (1993-2009) GM: OMAP and wireless product lines GM: Imaging and audio BU Mgr: Digital still cameras Mgr: Vide
Slide 61: Conclusion
Conclusion Fab 1 is finally working 8812 Units shipped – zero quality returns Yields improved to 40% and rising Experienced new COO: Ajay Marathe Will ship 180,000 units in 2023 Gen 2 will be board-approved 3/15/23 Common PoC heads, faster automation (1350 UPH) Gen 2 will be installed in Fab 2 in SE
Slide 62: TJR 1/3/2023
62 62 TJR 1/3/2023
Slide 63: Appendix
Appendix Final 63 63 TJR 1/3/2023
Slide 64: Ajay M. Marathe
Ajay M. Marathe + 38 yoars career spanning Semiconductor, Solar; Opto Electronics and Storage industries + Diverse Leadership portfolio from Chief Operating Officer to Corporate VP Operations to CIO to President of an Emerging Region + Currently managing $8 Bilion Direct Material spend plus $3 Billi
Slide 65: Ajay Marathe career details
Manage 6 Automotive Lamps and Accessories Manufacturing sites ~ 4 in Europe and 2 in China ~ Jiaxing and Songel Manage internal Phosphor powder and Garnet ceramic manufacturing site in Aachen, Germany ‘+ Workforce of over 5,000 Direct Labor; 1000 Engineers and Technicians and over 400 Support person
Slide 66: Ajay Marathe: Reliance Industries
Nov 2007 to Feb 2009: Rellance Industries Ltd (Ranked ##1 Marketcap corporation in India) ‘Roliance industres Lid (Ril) isa diversified company headquartered in Murnbal India, with business interests in ney petrochemicals, textes, ret, entertainment, matonals and tlecommunicaton sectors with a gross
Slide 67: Ajay Marathe: AMD roles
‘+ Transformed the profile of customers from all distribution! whitebox to doing business with all major OEMs in the country (local and Mutinationals) ‘+ Made an entry info most of the top 50 prestigious customers of India including the Central Government as well as many State governments. + Collabo
Slide 68: Ajay Marathe: AMD operations
Model and Predict with high accuracy, the output of each factory on a weekly basis to feed the domand engine. Actas an offical iaison between various product groups and the factories. Manage Dice, packaged and finished goods inventory at each factory. Including the SMl programs with Key customers. M
Slide 69: Raj Talluri, Ph.D. résumé
Raj Talluri, Ph.D Senior Vice President, General Manager, Mobile Business Unit, Micron Technology, Inc. Résumé 28+ years of executive corporate management experience spanning various ‘discipines including product management, business management, product marketing, press, investor communications and
Slide 70: Raj Talluri: Qualcomm roles
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Slide 71: Raj Talluri: Texas Instruments roles
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Slide 72: Raj Talluri: education and publications
‘mien eco uienas eduip "Position Estimation Techniques for Autonomous Mobile ect Robots” | research Enage roceseng. computer atom nd Razobes a on ‘fe promer Computer ‘Vion esearia nte M.Eng Anna University, Madras, India bupoen ana. B.Engg Andhra University, Waltair, India ‘Advisor Dr. J. K. Agrawal
Slide 73: TJR 1/3/2023
73 73 TJR 1/3/2023
Slide 74: TJR 1/3/2023
74 74 TJR 1/3/2023