Infineon Technologies Ag · XETR:IFX
Infineon Technologies — Merger or Acquisition (July 2016)
25 slides from Infineon Technologies's merger presentation, Jul 14, 2016
Slide 1: Infineon to acquire Wolfspeed
Infineon to acquire Wolfspeed Investor Presentation 14 July 2016
Slide 2: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 2
Slide 3: Key facts of the deal
Key facts of the deal › Transaction perimeter: ´s SiC wafer substrate business (excluding LED) › Purchase price: US$ 850m › Transaction type: cash and debt free › Financing: US$ 720m bank loans US$ 130m cash-on-hand › Signing date: July 13, 2016 › Expected closing date: ~ end of calendar year 2016 2
Slide 4: Key facts about the acquired business
Key facts about the acquired business Recent performance: › Revenues of US$173m in the twelve months ending 27 March 2016 Outlook: › Revenue CAGR of ~20% and gross margin* of ~55% expected going forward Core competence in compound semiconductors: › SiC**-based products for power applications › GaN-o
Slide 5: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 5
Slide 6: Deal rationale
Deal rationale › Margin and adjusted EPS accretive from day 1 Financial fit › Expected gross margin*: › Incremental revenue CAGR: 55% 20% › Become #1 in RF power Strategic Fit › Create #1 in SiC power › further strengthen automotive and industrial businesses › accelerate SiC adoption › expand power
Slide 7: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit – RF power 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 7
Slide 8: 5G redefines global connectivity: high bandwidth and speed enabled by SiC
5G redefines global connectivity: high bandwidth and speed enabled by SiC › 10 times faster › ~25 times The promise of 5G download shorter latency 5G › 10 .. 100 times › 1000 times 4k video streaming anywhere more connected higher data devices volume › 5G redefines – automotive connectivity – manufa
Slide 9: Compound semiconductors are a necessity to deploy 5G cellular infrastructure
Compound semiconductors are a necessity to deploy 5G cellular infrastructure At higher frequencies, only compound semiconductors deliver the required output ~5 GHz 5G relevant additional spectrum ~80 GHz power Available: today Available: tomorrow Available: today [log scale] remains for low-end lowe
Slide 10: Infineon is the only player with the full suite of RF power technologies
Infineon is the only player with the full suite of RF power technologies necessary for 5G Infineon today Acquired business Infineon in future Si GaN-on-Si GaN-on-SiC RF power › #3 in RF power* (Si-based LDMOS) › Most comprehensive › #2 in GaN-on-SiC* Competitive position › GaN-on-Si under portfolio
Slide 11: Technology roll-over paves the path to global #1 in RF power by ~2020
Technology roll-over paves the path to global #1 in RF power by ~2020 RF power market for cellular infrastructure [US$ m] GaN-based products: IFX: #3* #1 CAGR(15-25): +22% 1200 1000 110 +33% 460 800 112 +18% 260 600 +8% 380 400 746 530 200 280 0 2015 2020 2025 Si (LDMOS) GaN-on-SiC GaN-on-Si Source:
Slide 12: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit – Power 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 12
Slide 13: Compound semiconductors allow for novel topologies increasing the semi market
Compound semiconductors allow for novel topologies increasing the semi market Silicon carbide components offer benefits on system level (e.g. in solar inverter) Total system cost [US$] Reduction of cost, higher semi-value: › 15 to 20% lower bill of material for other inverter manufacturer (e.g. resi
Slide 14: GaN and SiC enable higher efficiency through faster switching with lower losses than Si
GaN and SiC enable higher efficiency through faster switching with lower losses than Si 10M › Reaching tipping point SiC › Targeting 600 V – 1.7 kV P [W] › High power › High switching frequency 1M Central PV* pile › Lower cost than SiC 100k › Targeting 100 V – 600 V › Medium power OBC** › Highest sw
Slide 15: Further strengthening cost-performance leadership in power semiconductors
Further strengthening cost-performance leadership in power semiconductors Acquired Infineon Infineon today business in future Si GaN-on-Si SiC SiC Power › Stronger › #1 in Si* with › #2 in leadership in relative market SiC** power semis share of >2.7 › #1 in SiC** › Cost- Competitive position › Tren
Slide 16: Infineon accelerates the silicon carbide market with cutting edge products
Infineon accelerates the silicon carbide market with cutting edge products › Leverage Infineon‘s global customer access and application know-how on Wolfspeed‘s SiC product portfolio › Combine Wolfspeed‘s technologies with Infineon‘s superior packages and modules › Optimize products across subs
Slide 17: Silicon carbide can help accelerate the adoption of plug-in (hybrid) electric vehicles
Silicon carbide can help accelerate the adoption of plug-in (hybrid) electric vehicles SiC onboard charger SiC main inverter › Higher efficiency – higher reach › Smaller form factor › Smaller form factor › Lower cooling effort › Lower cooling effort Total xEV market* 14 [units m] 12 10 CAGR16-21: 30
Slide 18: Electro-mobility, photovoltaics and drives trigger demand for SiC-based components
Electro-mobility, photovoltaics and drives trigger demand for SiC-based components Total silicon carbide market [US$ m] CAGR2015-2025: 1600 +23% CAGR2015-2020: 1200 +20% 800 400 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 tipping points PV* inverter drives xEV charging xEV onboard xEV m
Slide 19: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 19
Slide 20: Transaction is expected to be margin and adjusted EPS accretive from day 1
Transaction is expected to be margin and adjusted EPS accretive from day 1 Gross margin*: Revenue growth CAGR: 55% 20% › Fits perfectly into Infineon‘s growth and margin expansion strategy › Supports 8% long-term revenue growth target * According to US GAAP, excluding effects from purchase price acc
Slide 21: Solid balance sheet after cash-/debt-financed transaction
Solid balance sheet after cash-/debt- financed transaction › Financed with US$720m (~€652m*) of new debt, plus US$130m (~€118m*) cash-on-hand › Bank financing split into different maturities: – 3-year, 4-year, 5-year – largely US$-denominated Balance sheet after Q2 FY16 Pro-forma balance sheet after
Slide 22: Deal is preserving Infineon's well balanced maturity profile
Deal is preserving Infineon‘s well balanced maturity profile Maturity profile [EUR m; US$ m] €500 new debt $350 $350 €300 $250 $250 $235 €200 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 3-year 4-year 5-year 8-year 10-year 12-year Eurobond $-term €-term $-term Eurobond USPP USPP USPP Sep 2
Slide 23: Table of Contents
Table of Contents 1 Key facts 2 Deal rationale 3 Strategic fit 4 Financial fit 5 Summary 2016-07-14 Copyright © Infineon Technologies AG 2016. All rights reserved. 23
Slide 24: Summary of deal rationale
Summary of deal rationale › Become #1 in RF power amplifier market by ~2020 with most complete technology portfolio by capitalizing on technology disruption in cellular infrastructure › #1 in silicon carbide for power, strengthen automotive and industrial and accelerate market introduction with cutt
Slide 25: Part of your life. Part of tomorrow.
Part of your life. Part of tomorrow. infineon
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