Siltronic – a leading producer of silicon wafers

Siltronic – a leading producer of silicon wafers

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Description: Siltronic is a leader in wafer technology and quality: Technological capabilities and leadership are implemented with the highest level of quality expertise- First supplier to ship 300 mm wafers, Development of 8 nm design rule started in 2013 (commercialization 2017); Concurrently optimizing on 50+ wafer parameters of each design rule, >400 engineers worldwide, 1,700 patents issued and pending (as of Dec. 31, 2015), Single wafer traceability for 300 mm, Standardized processes across sites enabling “copy exactly” at product level, Quality awards from virtually all top semiconductor players.

 
Author: Petra Mueller (Senior) | Visits: 590 | Page Views: 1181
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Contents:
Siltronic – a leading producer of silicon wafers
Fact Book 2016
Investor Relations, June 30, 2016

© Siltronic AG 2016

The whole electronic value chain is based on semiconductor
silicon wafers.
Value Chain Electronics
2015

Electronics
$1,423bn

Semiconductors
$335bn
Semiconductor Silicon Wafers
$7.2bn
Silicon for
Electronic Applications
$1.2bn
Source: Electronics (IC Insights), Semiconductors (WSTS), Silicon Wafers (SEMI, Siltronic), Electronic Applications (WACKER estimate)

© Siltronic AG 2016

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2

Strong #3 wafer supplier with stable market share
Top 5 wafer producers serve more than 90% of market
100%
90%

80%
70%
60%

Strong #3 position

50%
40%

30%

15%

16%

16%

16%

20%
10%

~16%

0%

2012

2013

2014

stable market
share

2015

Sources: Companies’ revenue reports until Q3 2015, converted to USD using annual foreign exchange rates

© Siltronic AG 2016

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Siltronic is a leader in wafer technology and quality
Technological capabilities and leadership are implemented with the highest level of quality
expertise
 First supplier to ship 300 mm wafers

 Single wafer traceability for 300 mm

 Development of 8 nm design rule started in
2013 (commercialization 2017);

 Standardized processes across sites enabling
“copy exactly” at product level

 Concurrently optimizing on 50+ wafer
parameters of each design rule

 Quality awards from virtually all top
semiconductor players

 >400 engineers worldwide
 1,700 patents issued and pending (as of Dec.
31, 2015)

© Siltronic AG 2016

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Focus on growing 300 mm and attractive 200 mm business
Development of total wafer demand per diameter, in mn 300 mm equivalents per month
Strong
demand
&
growth

6
300 mm

200 mm

SD

5
4
3

Stable &
attractive

2
1
0
2010

Mid-term
decline
2011

2012

2013

2014

2015

Source: SEMI, Siltronic estimates

© Siltronic AG 2016

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Broad product portfolio
Siltronics offers a broad product portfolio to address all high volume wafer types and to meet
different application requirements

Diameter

300 mm

125 – 200 mm
+
SD

Process

CZ

CZ
+
FZ

Share of portfolio

Product

Applications

60%

Double side polished wafer
Epitaxial wafer
Argon annealed wafer
Ultimate SiliconTM

Memory, Logic, Analog

40%

Standard products:
Polished wafer
Epitaxial wafer
Cut/lapped/etched wafer
Special products:
Lowly-doped and highly-doped
wafer

Logic, Analog, Discretes,
Microprocessors, Image sensors,
Power and opto-electronics,
IGBTs

Note: CZ: Czochralski crystal growing, FZ: Float zone technology

© Siltronic AG 2016

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6

Value creation at Siltronic

© Siltronic AG 2016

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International manufacturing network supports
market leadership and business focus
US
Portland
200 mm
Wafer

Germany
Freiberg
300 mm
Crystal(1) + Wafer

Burghausen
150 200 300 mm
Crystal(1) + Wafer

High volume facilities
for 300 mm in Germany
and Singapore

Among world’s newest &
largest fabs in Singapore

Singapore
SSP
200 mm
Wafer

SSW
300 mm
Crystal(1) + Wafer

SSW majority
strengthens fab network
and market position

(1) crystal pulling

© Siltronic AG 2016

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Customer base well diversified across all major semiconductor
silicon wafer consumers
Siltronic is a supplier to all top 20 silicon wafer consumers

Siltronic well positioned at all
major silicon consumers

Top 10 customers represent ~65%
of 2015 revenues

Note: Top 20 consumers defined according to their fab capacities in the Fab Data Base from Gartner
Source: Company Information; Gartner Fab Data Base; Companies’ web pages

© Siltronic AG 2016

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Excellent customer service and support reflected in several of
the industry’s most important quality awards
Excellent customer service
50+ years track record

hour response time anytime and

24 anywhere in the world

Industry quality awards
 Supplier Continuous Quality Improvement
Award 2011 by Intel
 Preferred Quality Supplier Award by Intel for
the 6th time in a row in 2015

 Supplier Awards from almost all Top 20
customers

Local sales network

~100% on-time delivery

Meets demands of highest
international quality standards

© Siltronic AG 2016

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Silicon area demand continues to grow
Silicon wafer demand, in bn in2

10.1
9.4

2010

9.0

9.0

2012

2013

2014

2015

9.1

2011

10.4

Source: SEMI SMG Silicon Area until 2015, IHS Semiconductor Silicon Demand Forecast Tool Q1 2016 (growth rates from 2016 onwards)

© Siltronic AG 2016

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Growth in silicon area demand driven by sustained
diversification and new applications
New applications in micro-electronic
Applications
 Internet of
Things (IoT)
 Industry 4.0

 Wearables
 Eletronics in
cars
 …

1972

Today
© Siltronic AG 2016

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Major applications with silicon demand
Demand 2000/2015, in bn. cm²
2000
Mobile phones / Smartphones

2015

2,7 16,5

Desktop, Notebook & Server PC

8,7 9,9

Industrial

5,5 6,7

Automotive

2,1 5,0

Household

5,3 4,6

SSD hard drives

4,2

Switches, Hubs, Modems etc.

3,8 3,7

Tablets

2,6

LCD TVs

2,3

Mobile Infrastructure etc.

2,3 2,3

Other (printers, game consoles,,
cameras, MP3-player…)

3,2 5,6

Source: IHS Semiconductor Silicon Demand Forecast Tool (Q2 2016 Update)

© Siltronic AG 2016

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Cars are full of assistance systems
Infotainment

Safety & control

 Audio

 Airbag

 Navigation

 Electronic parking assistant

 Instrument panel

 rearview camera
 Collision warning

Networking
 Intra-car (BusSystem)

Engine control
 Engine / emission
control

 Car-2-X
Communication

Comfort

 Electric drive

 Aircondition

 Hybrid drive

 Central locking
 Power windows

Electronic

 Seat adjustment

 Light

Chassis

 Battery management

 Control

 Starter

 Break (ABS)

 Diagnosis

 Traction control

Source: McKinsey

© Siltronic AG 2016

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Financials improved strongly over the last years

Adjusted1 financial figures (EUR mn)

2015

2014

2013

2012

Sales

931.3

853.4

875.5

1030.0

EBIT

2.7

(31.6)

(87.3)

(75.5)

EBIT margin in %

0.3

(3.7)

(10.0)

(7.3)

EBITDA

124.0

117.7

112.6

122.5

EBITDA margin in %

13.3

13.8

12.9

11.9

(75.0)

(40.7)

(39.7)

(144.3)

37.4

86.3

64.7

(134.4)

CapEx
Free cash flow

1

figures 2014 adjusted for consolidation effects resulting from acquisition of SSW and restructuring

© Siltronic AG 2016

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Successful cost reduction program continues
Cost reduction, in EUR mn1
Additional savings levers:
Additional savings
from SSW

Operational excellence
Site closure

~80

 Cost reduction roadmap defined
for 2016 and beyond

 up to 500 employees to be
transferred to WACKER between
2014 and 2019 (~200 already
transferred by the end of 2015)

~55

 Investing in automation in
~45

Germany

 Investing in new crystal pullers to
improve yields and capabilities

 Poly cost optimization ongoing
 Further productivity increases
through various initiatives
2013
1

2014

2015

Based on the prior year cost basis to current year volumes and adjustments to certain current year costs to reflect prior year contractual and economic parameters
(e.g. prior year unit labor cost)

© Siltronic AG 2016

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Major successes in cost reduction and efficiency improvements
Number of employees

Variable costs of 300 mm wafer
(Germany),
in EUR / Wafer

300 mm Productivity1 (Germany)
200

6,953

>40%
3,894

>100%

from 7 to 4 Sites
100

2002

2015

Successful restructuring
including Germany

1

2010

2015

More than 40% reduction of
the variable unit costs in
300 mm wafer in 5 Years

2009

2015

Almost 100% increase of
employee productivity in 300
mm wafer in 5 years

Delivered wafer / paid hours (2009 = 100)

© Siltronic AG 2016

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Strategic focus
 Drive 300 mm and 200 mm utilization
Benefit from markt
growth

 Broaden market access
 Improve product mix
 Drive automation and optimization of polysilicon supply & usage

Cost reduction
roadmap

 Selectively invest in technology and equipment & debottlenecking
 Continue reduction of direct and indirect staff
 Stay at least “one generation ahead”

Technology &
quality leadership

 Support customers with innovation & intensify customer cooperation
 Continue highest quality and global customer service & support
 Capital discipline – focus on cash generation

Financial
performance

 Continue operational excellence
 Capex below depreciation – drive debottlenecking

© Siltronic AG 2016

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Shareholder structure
Freefloat by regions1
100

42.2
11%

20%
53%
57.8

16%
USA

UK

Germany

Rest of World

Major shareholdings included in freefloat2
Baupost Securities Group
MainFirst Sicav

Wacker Chemie
1
2

post IPO
Free Float

5.1%

Wellington Management Co.
pre-IPO

8.9%

2.8%

Morgan Stanley

1.8%

as at January 2016
as at June 2016

© Siltronic AG 2016

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Investment Highlights – Siltronic Strengths

1

Strong market position in semiconductor silicon wafer manufacturing

2

Technology and quality leader

3

Supplier to all top 20 silicon wafer consumers with
well-established relationships

4

Strong track record in efficiency improvement and cost reduction

5

Strategic supply of high-quality polysilicon at competitive cost

6

Experienced management team and highly skilled workforce

© Siltronic AG 2016

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Contact and additional Information
Issuer and contact

Additional information

Siltronic AG
Hanns-Seidel-Platz 4
D-81737 München

ISIN:
WKN:
Deutsche Börse:
Listing:

Investor Relations:
Petra Mueller
Tel. +49 89 8564-3133

DE000WAF3001
WAF300
WAF
Frankfurt Stock Exchange
Prime Standard

Financial calendar

Q2 2016 Results:

July 28, 2016

Q3 2016 Results

October 27, 2016

© Siltronic AG 2016

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Disclaimer
The information contained in this presentation is for background purposes only and is subject to
amendment, revision and updating. Certain statements contained in this presentation may be
statements of future expectations and other forward-looking statements that are based on
management's current views and assumptions and involve known and unknown risks and uncertainties.
In addition to statements which are forward-looking by reason of context, including without limitation,
statements referring to risk limitations, operational profitability, financial strength, performance targets,
profitable growth opportunities, and risk adequate pricing, as well as the words "may, will, should,
expects, plans, intends, anticipates, believes, estimates, predicts, or continue", "potential, future, or
further", and similar expressions identify forward-looking statements. By their nature, forward-looking
statements involve a number of risks, uncertainties and assumptions which could cause actual results or
events to differ materially from those expressed or implied by the forward-looking statements. These
include, among other factors, changing business or other market conditions and the prospects for
growth anticipated by Siltronic AG’s management. These and other factors could adversely affect the
outcome and financial effects of the plans and events described herein. Statements contained in this
presentation regarding past trends or activities should not be taken as a representation that such trends
or activities will continue in the future. Siltronic AG does not undertake any obligation to update or revise
any statements contained in this presentation, whether as a result of new information, future events or
otherwise. In particular, you should not place undue reliance on forward-looking statements, which
speak only as of the date of this presentation.

© Siltronic AG 2016

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