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Company Overview
December 2013
Copyright ©2013 Veeco Instruments Inc. 2
Our R&D is Best-in-Class Veeco’s exceptional R&D
organization delivers systems that
enable the future
Our Technology aligns with three mega
trends: energy efficiency,
personal mobility and
advancing thin film
technologies
We Make Thin Film
Process Equipment Growing, depositing,
etching and processing
thin films is our core
competency
Veeco At A Glance
High Growth
Market Focus Our equipment enables the
manufacture of:
• LEDs
• Power devices
• MEMS
• Hard disk drives
• OLEDs
Market-Leading
Positions in: • MOCVD & MBE
• IBE/IBD/PVD
• ALD
Copyright ©2013 Veeco Instruments Inc. 3
Thin Film Technology: At the Core of Everything We Do
LED
Wireless
Power Electronics
Hard Drives
OLED
Copyright ©2013 Veeco Instruments Inc. 4
2007 2008 2009 2010 2011 2013
Transformation from Industry Player to Industry Leader
2012
John Peeler
joins as CEO
• Veeco launches
TurboDisc® "K-
series" MOCVD
platform including
K300™ MOCVD
system
• Investment in world-class Asia customer
support and training sites
• New supply chain hub in Singapore
• Quintupled MOCVD manufacturing capacity
• Strengthened sales and services team
• Metrology business sold
• “Portfolio
management”
approach to R&D
• Outsourced
manufacturing
• Established High
Performance
Culture
• GEN10™ MBE
cluster tool
introduced
• K465™ MOCVD
introduced
GEN2000® Supports
Global Wireless
Device Ramp
• NEXUS® CVD
System and TAMR
PVD System
introduced for Data
Storage customers
NEXUS PVD-1
Physical Vapor
Deposition
System
• TurboDisc
K465i™ MOCVD
System
launched…
becomes #1
selling system
• Achieved #1
market share in
MOCVD
• Record Data
Storage
revenues
• October 2013
Veeco Acquires
Synos
Technology and
Enters Flexible
OLED
Equipment
Market
• Variable
business
model enables
high R&D
through
industry cycles
• TurboDisc
MaxBright®
MOCVD system
introduced…
becomes #1 selling
system
• NEXUS DLC-X and
Optium® ADS-
800TM for Data
Storage customers
• VCE Launched
• GENxplor
R&D MBE
System
Launched
• Veeco launches
MaxBright MHP™,
Maxbright M™ and
TurboDisc K465i HP™
Copyright ©2013 Veeco Instruments Inc. 5
Veeco provides process equipment
solutions that drive tomorrow’s
technology breakthroughs today
We are a dynamic, innovative and
high-growth company recognized as
the best in the markets we serve
Vision
We help customers make
products for a more productive
world and a cleaner and
sustainable environment
Copyright ©2013 Veeco Instruments Inc. 6
Operating Principles
Speed is a vital competitive weapon
Our people drive our success
Promote a results-oriented, high performance environment
Be passionate about technology & product leadership
Customers are our reason for being
Copyright ©2013 Veeco Instruments Inc. 7
CEO & Leadership Team
John Peeler Chairman & CEO
Bill Miller EVP, Process Equipment
Nino Federico SVP, Operations
Peter Collingwood SVP, WW Sales & Services
David Glass EVP, CFO
Ken MacWilliams SVP, Strategic Marketing & Growth
Monica DeMarco VP, Quality, Customer Satisfaction & Business Excellence
Robert Bradshaw SVP, Human Resources
Greg Robbins SVP, General Counsel
Copyright ©2013 Veeco Instruments Inc. 8
Other Key Leadership Team Members
Jim Northup VP/GM, MBE, Optical Systems and Ion Sources
Vivek Vohra VP/GM, Data Storage
Jim Jenson SVP/GM, MOCVD
Debra Wasser SVP, Investor Relations and Corporate Communications
John Kiernan SVP, Finance and Corporate Controller
Ilsong Lee SVP/GM, ALD
Copyright ©2013 Veeco Instruments Inc. 9
Market Leadership
• MOCVD technology leader for solid-state lighting
• Foundation Businesses MBE and Data Storage are #1
• Deep process expertise, patents and know-how
• Lowest CoO products at the technological forefront
TurboDisc MaxBright MHP GaN
MOCVD Multi-Reactor System
GEN200® Edge™
Production MBE System NEXUS IBE-420Si™ Ion
Beam Etching System
Copyright ©2013 Veeco Instruments Inc. 10
Lighting and Display
MBE for
Research &
Industry
Data
Storage,
Optical and
EUV
World Leaders Choose Veeco
Copyright ©2013 Veeco Instruments Inc. 11
Customer Connectivity Our Approach is a Competitive Differentiator
Proximity to customers is a strategic priority
resulting in stronger customer support, better
R&D alignment, and new customer conversion
Camarillo & Fremont, CA
Fort Collins, CO
Plainview, NY
St. Paul, MN Somerset, NJ
Poughkeepsie, NY
Santa Clara, CA
Edina, MN Mannheim, Germany
Shanghai, China
Hsinchu City, Taiwan
Penang, Malaysia
Seoul and Suji-gu, Korea
Singapore
Philippines
Bangkok, Thailand
Tokyo, Japan
R&D/Engineering/Training
Sales and Service
U.S.: ~ 580 Employees Europe: ~ 15 Employees Asia: ~ 200 Employees
Copyright ©2013 Veeco Instruments Inc. 12
Veeco’s Growth Opportunities
Growth Exciting
Power
Electronics OLED EUV MBE R&D
Systems MEMS MOCVD
Services
OPP RTUNITY in LED Lighting
Huge
Copyright ©2013 Veeco Instruments Inc. 13
LED - New, Greener Paradigm for Lighting
62%
Source: DOE website; data for U.S. alone
Reduce electricity
demands from
lighting by:
By 2025,
LED Lighting Adoption Will…
Copyright ©2013 Veeco Instruments Inc. 14
Eliminate 258 million metric
tons of carbon
emissions
LED - New, Greener Paradigm for Lighting
By 2025,
LED Lighting Adoption Will…
Copyright ©2013 Veeco Instruments Inc. 15
LED - New, Greener Paradigm for Lighting
Save over $280B and enable us to
avoid building 133 new power plants
By 2025,
LED Lighting Adoption Will…
Copyright ©2013 Veeco Instruments Inc. 16
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
LED TV 1500 MOCVD
LED Lighting Adoption is Accelerating
LED Lighting projected to grow at 35% CAGR from 2010 to 2020
LE
D D
em
an
d b
y A
rea (
B m
m2)
Cellphone 250 MOCVD
LED Lighting ~3000+ MOCVD
LED Lighting
CAGR 35%
LED TV
Wall Street and Veeco Estimates
Copyright ©2013 Veeco Instruments Inc. 17
Veeco Innovation Helped Accelerate LED Bulb to the “Teens Price”
Veeco Epi Cost reduction is 2X faster than U.S. DOE Forecast (‘10-’12)
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
Norm
aliz
ed E
pi C
ost ($
/m
.cm
2)
2010 2012 2015 2020
$50 LED bulb Price
$13
$23
$6 $5
Throughput
Yield (HP)
Automation
Cluster Yield
Next Gen
Next Gen
U.S. Dept of Energy projected bulb cost
Actual bulb cost Reduction of Epi cost from Veeco innovations
Copyright ©2013 Veeco Instruments Inc. 18
Veeco Investing to Expand Our Leadership Position
24 % 29 %
44 %
62% 51%
2007 2008 2009 2010 2011 2012
Competitive Advantage: Lowest CoO and Superior Customer Connectivity
Note: Estimated comparative market share Veeco and Aixtron only
K465i and MaxBright are
#1 Selling MOCVD Systems with
the Industry’s Highest Productivity
Veeco
Market Share
63%
9M 2013
Next-Gen
Copyright ©2013 Veeco Instruments Inc. 19
Focus on Services Growth Continues
• New Service Products
• Expand Veeco Certified Equipment across more product lines
• “Designed in” Services for new products
• MOCVD: post-warranty parts and services, local depots, consumables, performance upgrades
MOCVD Services to Increase
~70% from 2011 to 2013
25%
Grew Services
in 2012
Copyright ©2013 Veeco Instruments Inc. 20
Power Electronics: New Growth Opportunity for MOCVD
Power Supplies
Solar
Consumer
Electronics
Wind
Automobile
• Power Electronics device market continues to grow1
• GaN-based power devices offer higher efficiency, switching speed and lower power consumption
• Veeco is positioned at key customer sites around the globe to support this high growth segment
Notes: 1) Yole Nov 2011, 2) IMS Research Feb 2012
GaN
Pow
er
Devic
e M
ark
et2
2011 2012 2013 2015 2018 2021
71% CAGR
Copyright ©2013 Veeco Instruments Inc. 21
GENxplor MBE Driving Increased R&D Market Share
2013
Product
Launched
3 systems
booked
2 systems
booking
First tool
shipped
System Generating Worldwide
Interest for Cutting Edge
Research
August September November
Customer engagements span multiple research fields including:
IR detectors, laser diodes, novel HEMTs, graphene, solar, high-
temp superconductors, UV LEDs, and thermo electrics
October
Copyright ©2013 Veeco Instruments Inc. 22
Hard Disk Drives Will Continue to Dominate Storage
2012
3,500
0 2020
It took Seagate 29
years to reach their
first billion hard
drives… and only
four years to
reach their
second billion
Source: Western Digital
Exab
yte
Ship
men
ts
Over 85% of
exabytes in 2020 will
be stored on HDDs
2016
Client PC
Personal Consumer Electronics
Cloud
Smart Phones/ Tablets
Cloud SSD
Client SSD
Copyright ©2013 Veeco Instruments Inc. 23
Data Storage Business Growth: More than Just Hard Drives
End Market Blended
CAGR ~20%
High Performance Optical Coatings
MEMS & Magnetic Sensors
*Seagate Technology
End Market
CAGR ~ 10%
PVD CVD DLC IBD IBE Lap
& Dice
From 1960- 2010
approximately 1 billion
terabytes of data was stored.
In 2012, 1 billion terabytes
will be stored.*
EUV Masks
Copyright ©2013 Veeco Instruments Inc. 24
Global Trends Driving Veeco’s MEMS Opportunity
• We are the largest
supplier of thin film
magnetics process
equipment
• Over 800 etch and
deposition systems
installed worldwide
• Strong technical team
and dedicated
applications lab
Source: Semico Research Corp. Dec 2012
$B
illi
on
s o
f d
oll
ars
$20
2005 2015
MEMS Revenue by Application
Automotive
Smartphones
Displays
$0
Copyright ©2013 Veeco Instruments Inc. 25
Veeco IBD Required for EUV Mask Roadmap
• $300B semiconductor
market investing heavily
in EUV to solve
lithography challenges
• Defect-free photomasks
are a technical
roadblock
• We have 100% market
share in Ion Beam
Deposition for this
application
Currently engaged with key
industry players on next-gen
equipment solutions
Copyright ©2013 Veeco Instruments Inc. 26
Entering OLED Market Through Core Deposition Source Technology
Veeco Deposition Source for OLED
OLED equipment is
quickly becoming a billion
dollar plus opportunity
Copyright ©2013 Veeco Instruments Inc. 27
New FAST-ALD Fits for our “Three Mega Trend” Strategy
Energy Efficiency Personal Mobility Emerging Applications
& Technologies
LED Lighting (MOCVD) Wireless Chips (MBE)
Semiconductor Research (MBE)
Hard Disk Drives (Data Storage)
Optical Coatings (Data Storage)
Build on Existing Leadership
Advancing Thin Film
Technologies
NOW: ALD for OLED Mobile
Displays Future: ALD for OLED TV
Displays
EUV Mask Blanks, Semi
Establish a Strong Position in New Markets
Power Devices
Future: ALD for
OLED Lighting, Solar,
Batteries
MEMS
Copyright ©2013 Veeco Instruments Inc. 28
Veeco ALD: 10x Faster Than Traditional ALD and Scaled With Virtually No Limits
A new generation of ALD:
Fast deposition
Low temperature
Large area format
Inflection Point for Flexible OLED
Production Manufacturing Ramp
Copyright ©2013 Veeco Instruments Inc. 29
Mobile OLED Display Technology Transition
Rigid Unbreakable Curved Bendable Foldable
Flexible Product Introductions Have Begun
Copyright ©2013 Veeco Instruments Inc. 30
$ in B
illio
ns
Mobile Displays: Largest Near-Term OLED Market
• OLED industry revenues forecasted to exceed $35B by 2020
• Flexible being adopted for mobile phones and two years from now for
tablets…TVs and Lighting also an opportunity
*Display Search Dec 2012 report
“The next WOW FACTOR
in mobile will come from Flexible Displays”*
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mobile PC Mobile Phone OLED TV
Display Search
Copyright ©2013 Veeco Instruments Inc. 31
OR
Flexible OLED is a Big Needle Mover for Mobile
Rigid OLED Display
10% Thinner
&
15% Lighter
20%
Longer
Battery
Lifetime
With Plastic
OLED
Weight: 130g
Thickness: 7.9mm
Battery: 2,600mAh
Weight: 111.7g
Thickness: 7.1mm
Battery: 2,600mAh
Weight: over 130g
Thickness: 7.9mm
Battery: 3,100mAh
Source: IHS Electronics & Media, Mobile & Emerging Display Report
Copyright ©2013 Veeco Instruments Inc. 32
0
200
400
600
800
1000
1200
1400
1600
2013 2014 2015 2016
Ph
on
e S
hip
men
ts (
Mil
lio
ns)
Huge Growth Wave as Flexible Displays Penetrate Mobile
Source: IHS iSuppli research, March 2013, Veeco estimates
Mobile Flexible OLED Sales
Forecasted to Surge to $5.5B by 2020
~14% of smartphones will be flexible
by 2016
OLED Mobile Handsets
Smartphone
Flexible OLED Units
Copyright ©2013 Veeco Instruments Inc. 33
Flexible OLED: “Zero-to-Sixty” Market Opportunity
Polarizer
Encapsulation layers
OLED Layers
TFT (Plastic)
Today: 1 ALD cluster = 15-18M flexible phone
displays/year
Tomorrow: ~250M flexible OLED phones will
be produced in 2016
Veeco estimate flexible OLED mobile shipments / production system throughput &
yield
Assumes Veeco Wins
Multiple ALD Encapsulation
Layers at a Key Customer
That’s a
$200-400M market
opportunity
Copyright ©2013 Veeco Instruments Inc. 34
$1B+ Near-Term Growth Opportunities
OLED Mobile
$200-400M TAM
OLED TV and Lighting
>$200M TAM
Energy Storage
>$100M TAM
Semiconductor
>$200M TAM Solar and Other
>$200M TAM
Veeco estimates for FAST-ALD TAM 2014 and 2015
Assessing Adjacent Market
Opportunities for Product Development
FAST-ALD
Copyright ©2013 Veeco Instruments Inc. 35
Solid Track Record Supports Our Future
Copyright ©2013 Veeco Instruments Inc. 36
Product and Services Leadership Initiatives
• LED Lighting with MOCVD
• Flexible OLED encapsulation with ALD
• GaN Power Electronics with MOCVD
• Compound Semiconductor with MBE
Funding Product Development
to Extend Leadership in:
Established New Core R&D Group
Extending Services Offerings
Prospecting for Acquisitions
Use our new Core R&D group to address
adjacent market opportunities
Capability that adds more value to
our customers
Businesses that align with core
markets and technology profile
Copyright ©2013 Veeco Instruments Inc. 37
Strong growth and
Profitability
Veeco’s Future State
• LED lighting (MOCVD)
• Flexible OLED
encapsulation (ALD)
• Compound semi
production and R&D
(MBE)
• GaN Power
Electronics (MOCVD)
• Niche applications like
EUV Mask Blanks
(IBD) and MEMS (IBE)
Global #1 in Exciting Markets: A Services business that
contributes substantially to
the bottom line
Gross Margins >40%
World class quality and
customer satisfaction
Copyright ©2013 Veeco Instruments Inc. 38
Veeco Summary
1 Market Leaders
We are a leader in each of our core technologies – MOCVD, MBE, ALD,
IBE/IBD and Advanced Thin Film Process Technologies
2 Exceptional Technology
Our people, technology and process knowledge enables us to deliver
systems with the lowest CoO to the world’s leading companies
Tied to High Growth Markets
LEDs for lighting, flexible OLEDs for mobile phones, power electronics
for energy conversion, hard drives, wireless chips and MEMS for cloud
computing and state-of-the-art electronics
4 High-Performance Organization
Fast and agile culture featuring speed as a competitive differentiator,
customers count on our flexibility and value proposition
3