Oerlikon Components – Enabling Information Technology
Kurt Trippacher, CEO Oerlikon Components & Head of Oerlikon Esec
Oerlikon Capital Market Days 2008Zurich, September 25-26, 2008
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Disclaimer
This presentation is based on information currently available tomanagement. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected.
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OerlikonComponents
OerlikonComponents
Oerlikon Coating
Oerlikon Vacuum
Oerlikon Solar
Oerlikon Textile
Oerlikon Drive Systems
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Agenda
§ Overview Components
§ Oerlikon Esec at a Glance
§ Markets & Strategy
§ Key Take Aways
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Segment Oerlikon Components
The business activities of Oerlikon Components include applications and technologies,fulfilling the requirements of highest precision and accuracy.
Provider of payload fairings for launch vehicles, spacecraft structures, mechanisms and electro-optical systems.
Provider of system solutions and equipment for theback-end market of the chip manufacturing industry.
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Agenda
§ Overview Components
§ Oerlikon Esec at a Glance
§ Markets & Strategy
§ Key Take Aways
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Oerlikon Esec at a glance
§ Leading in epoxy and soft solder die bonder, one of the top providers of wire bonder and flip chip bonder
§ Approx. 580 employees within its global footprint
§ Organization– Product lines: Die Attach (Epoxy, Soft Solder, Flip Chip and Wire Bonder) – Strong global functions:
Sales and Services, Operations, Global Sourcing and R&D
– Complemented by dedicated management support functions
§ Asia represents the largest market for Oerlikon Esec (approx. 80%),Europe and the US remain strategically important
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Agenda
§ Overview Components
§ Oerlikon Esec at a Glance
§ Markets & Strategy
§ Key Take Aways
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Touching your life for more than 40 years...
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Think about all the products you use today….
Oerlikon Esec is present in many areas of your life!
CONSUMER ELECTRONICS• Cell Phones• Gaming• Televisions• Digital Camera’s• MP3 Players• Home Appliances
COMPUTERS• Lap Tops• Workstations• Mainframes• Peripherals
INDUSTRIAL/MEDICAL• CAT Scans• Hearing Aids• Pace Makers• Radar• Satellites
AUTOMOTIVE• Transmissions• Climate Controls• Cruise Controls• ABS• GPS• On-Board Diagnosis
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Where is Oerlikon Esec positioned in market?
Electronics: USD 1,560 billion
SemiconductorsUSD 217 billionSemiconductorEquipmentUSD 56.9 billion
Wafer Fab & TestEquipment USD 53.1 billion
Assembly & PackagingEquipmentUSD 3.8 billion
Addressed MarketUSD 1.65 billion
(Source: VLSI Research, figures for 2007)
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What do we do?
WaferFab
WaferMount,
Dice
Die Attach Cure Wire
Bond
encaps.mold
singu-late
trim &form
test,burn-inpack,ship
boardassembly
MoldTrim
& Form
Semiconductor Assembly Steps
Page 13 Oerlikon Capital Market Days 20082001 2002 2003 2004 2005 2006 2007 2008
COMPUTERS• Lap Tops• Workstations• Mainframes• Peripherals
CONSUMER ELECTRONICS• Cell Phones• Gaming• Televisions• Digital Camera’s• MP3 Players• Home Appliances
AUTOMOTIVE• Transmissions• Climate Controls• Cruise Controls• ABS• GPS• On-Board Diagnosis
INDUSTRIAL/MEDICAL• CAT Scans• Hearing Aids• Pace Makers• Radar• Satellites
• It is estimated that the average person used products containing less than 15 semiconductors 25 years ago.
• Today, the average person uses products which will contain over 150 semiconductors every day!
Existing Semiconductor drivers
Mill
ions
Sem
icon
duct
or U
nits
DOUBLE DIGIT CAGR
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2001 2002 2003 2004 2005 2006 2007 2008 2009
Future drivers of semiconductor industry
Mill
ions
Sem
icon
duct
or U
nits
DOUBLE DIGIT CAGR
EXISTING MARKETS
§ Consumer§ Computer§ Automotive§ Industrial
EMERGING MARKETS
Hybrid Automotive
• Pocket Computing• Mobile Computing
• Photovoltaics• Solar Concentrators
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Market dynamics
§ Semiconductor Equipment Industryis Highly Cyclical, but Positive CAGR
MarketVolatility
§ Smaller Consumer Goods Demands Smaller Semiconductor Packages withHigher Levels of Performance
iPod Nano
PackagingTrends
§ Customer’s strive toDouble Performance at Equalto Less Cost Every Two Years
PerpetualNeed for NewTechnology
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Market dynamics
§ Equipment Suppliers are Forced to Rapid Development Cycles to Meet Market Demands & to Stay Ahead ofCompetition § Innovation and Cost Reduction is Vital
Highly Competitive
§ High Volume Manufacturing in Asia§ Strategic Alliances & New Technology
from US and Europe§ New Emerging Markets
(Russia, India, Vietnam)
Globalization
§ Fluctuations Will Impact Top Line &Bottom Line Performance
Exchange Rate Fluctuations
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How is Oerlikon Esec ready for the market challenges?
MarketVolatility
PackagingTrends
Perpetual Need forNew Technology
Globalization Exchange Rate Fluctuations
Highly Competitive
GLOBAL FOOTPRINT OPERATIONAL EXCELLENCE
INNOVATION & TECHNOLOGY PRODUCTS
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Innovation & technology – Example die attach
ϕPick
Bond
y
Pick & Place
Innovation
Customer benefit
Company benefit
Parallel moves: Phi (swing) and Y
Highest UPH (units per hour)
Unique selling proposition, IP protected
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Innovation & technology – Example wire bonding
Rotative and Air Beared Bond Head
Innovation
Customer benefit
Company benefit
Frictionless, low weight & high acceleration at same time
Maintenance free, high productivity & accuracy
Unique selling proposition, IP protected
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• Unsurpassed speed at 20um accuracy• Reliable working horse with highest uptime • Highest flexibility due to fastest product
change over
Die Bonder 2100
Most modern fleet in the market – 3 platform strategy
Introduction of new Flip Chip Version in Q1/09
• Best available DB for advanced power packages
• Highest productivity for Matrix application• Best Soft Solder Process Control
Soft Solder DB
• Highest available process repeatability• One platform for all applications• Maintenance free, unique bond head design
Wire Bonder 3200
Introduction of new Soft-Solder in Q4/08
Introduction of Copper Bonding process in Q4/08
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Operational excellence – Example “Lean Manufacturing”
Lean Manufacturing Program expands scope into supply chain and R&D
Cycle Time
Inventory
Production lead time reduction by 50-80%
Inventory reduction of 25-50%
Productivity Productivity improvement up to 20%
Enter ThetaBox
Y-coilPCB’sCablingTest
bench 2
Test bench 1
Final test
Test bench 3
Test bench 4
Main flow
• Box• Sensor• T-Motor• Scale• MTC
• T-bearing top• T-bearing bottom T-axis
• Rotary carrier (single parts)• Reset Z-axis (single parts)• Z-stator• Y-encoder
Optic-carrier
• Air bearing focus assy.• PSD LED• Theta-scale holder• Optic carrier• VS tread assembly• Side light• ….
Cabling• Coupling mass (single parts)
• Coil
• Left cable harness (single parts)• Right cable harness (single parts)• Cable fixture• Cross bar
Opt
ics
• Z-axis (single parts)
Z-axis
Gluing Service
ESUS
demand-driven production
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Global Footprint – Transformation into a balanced set-up
Increased customer proximity
R&DOperations & Global Sourcing
Product line Management
Innovations made in CH with R&D expanding to AsiaLean processes and operations; driving natural hedge increases and total cost reductions
Leading edge products and excellent customer support levels
Sales & Service Manufacturing HQ
Sales & Service High expertise level close to our customers.Product installation, application and process support
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Customer and market recognitions in last two years
ST Microelectronics (Shenzhen) 2007 Best Supplier
VLSI 2007 Best Equipment Supplierin China
Infineon (Malaysia) 2007 Top Supplier AwardAsia Pacific
ST Microelectronics (Shenzhen) 2006 Best Service Support
Spansion (USA) 2006 Spansion Spotlight Award(World Class Supplier)
Offered by For year CategoryImage
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Agenda
§ Overview Components
§ Oerlikon Esec at a Glance
§ Markets & Strategy
§ Key Take Aways
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Long term improvement pathShipments & Forex
§ Significant natural hedge improvementsand capability build up in Asia
§ Market downturn and unfavourableFX impact in 2008
§ Requires acceleration of restructuringand transformation measures
2005 2011 E2008
LCC HCC
2005 2008 E 2010 E
Natural Hedge II: LCC Sourcing
Natural Hedge I: Regional Workforce
50100150200250300350400450500550600650700
2004 2005 2006 2007 2008E 2009E 2010E
-26%
Asia: +33%
2005 2006 2007 2008 E 2009 E 2010 E
Uni
t Shi
pmen
ts
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
USD
-CH
F Ex
chan
ge R
ate
HCC LCC
Europe: -46%
2005 2006 2007 2008 E 2009 E 2010 E
LCC sourcing and design-to-costlower COGS by 8-10% p.a.
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Due to market downturn and FX impact:Acceleration of restructuring measures and transformation
Product portfolio improvements & product offensive – „3 platform strategy“
New Die Bonder Epoxy 05/08New Soft Solder Q4/08Wire Bonder 3200 Copper Q4/08
New Flip Chip Q1/09
Continuous releases ofnew applications and processes 2009
ü
Fixed cost reductions, natural hedge, organizational simplifications and improvements
2008 2009 - 2010
Capacity adjustments 16%Workforce Asia (from 26% to) 45%Fixed cost reduction 14%LCC sourcing content 30%
Further org. developments and adj. ~10%Increase share >50% Additional fixed cost reduction ~10%LCC sourcing content >60%
üüüü
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Oerlikon Esec: Key take aways
-30%-20%-10%
0%10%20%30%
2008 2009 2010
Assembly Packaging Market Growth FC
VLSI Research (September 2008)
SEMI (July 2008)
Gartner (September 2008)
2005 - 2008
New competitive, flexible global footprintestablished and product fleet renewal implemented
Positioned to minimize external influences andprofitably grow above market growth, due to:
§ Leading edge products and technology§ Combined with flexible and optimized
cost structures§ Customers demand fulfilment with
below market response time
2009 - 2010