gt advanced technologies corporate overviewdoc.xueqiu.com/1442109a82c243fdcdcf0c58.pdf · 2014. 2....

GT Advanced Technologies

Corporate Overview

January 2014

©2013 GTAT Corporation. All rights reserved.

Forward Looking Statement

• This presentation contains information about

management’s future expectations, plans and

prospects of our business that constitute forward-

looking statements for purposes of the safe harbor

provisions under The Private Securities Litigation

Reform Act of 1995.

• Please see final slide for additional information

regarding these statements.

2 ©2013 GTAT Corporation. All rights reserved.

©2013 GTAT Corporation. All rights reserved. 3

GT Advanced Technologies (“GT”) is a

diversified capital equipment maker

supplying leading crystal growth

technologies & process tools

– Serves the high growth global LED,

consumer electronics, power

electronics and solar industries

– A market share and technology

leader in each of its served markets

Building a sapphire materials business to

drive recurring revenues and take

advantage of industry leading cost

structure

Provider of advanced materials & innovative crystal growth equipment for a

diversified set of high-growth markets

Significant Growth Forecast In

Served Markets

Company Overview

GT Advanced Technologies Overview

LED &

Industrial

Solar ~100% of revenue

in CY2010

Power

Electronics

Consumer

Electronics &

Non-LED


New products are expected to further diversify the business & drive growth

Select Applications

Note 1. Annealing, GaN HVPE,, HiCz™ and Hyperion products in development

4

GT’s Diversifying Product Portfolio

Low Cost LEDs

High Efficiency

Solar Panels

Display

Applications

Power Systems for

Electric Vehicles

Hyperion™ Ion

Implant1

Thin substrate solution targeted to deliver value across core and

new markets

LED & Industrial

Power

Electronics

GT’s Equipment Products

SiClone™

Silicon

Carbide

Systems

GaN HVPE 1 ASF® Systems Inspection Sys.

Solar HiCz™

Mono

Systems1

SDR™

Reactors

DSS™

Consumer

Electronics

& Non-LED

GaN HVPE1 ASF® Systems Inspection

ASF® Systems Annealing1 Inspection


Combination of advanced equipment technology and new materials business to accelerate growth

Sapphire

materials business

New growth opportunities in

LED sector and as a

materials player in other

segments

Foundation of

core products &

equipment revenues

Market leading ASF ® platform

Large scale

Supply chain leverage

Expert team

Low cost structure

Opportunity to grow GT’s

LED sapphire business

Potential to add other

materials platforms

Base equipment growth

fueled by new products

Growing market opportunities

Serv

ed

Mark

ets

Consumer

Electronics &

Non-LED

LED &

Industrial

Power

Electronics

Advanced Solar

GT’s Evolving Business Model Drives Growth

Financial Overview


$79

$164

$182

$88

$0.54

$1.13

$1.41

$0.73

-$0.50

$0.00

$0.50

$1.00

$1.50

$2.00

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

CY09 CY10 CY11 CY12

$M

M

Non-GAAP Net Income Non-GAAP EPS Diluted


$M

M

GT has established a foundation for future growth through its diversification strategy

Historical Financial Performance

CY09 CY10 CY11 CY12

Sapphire $0.0 $8.9 $54.7 $224.0

Polysilicon $228.2 $194.9 $288.6 $460.6

PV $259.9 $618.2 $530.2 $48.9

Non-GAAP GrossMargin %

40% 41% 45% 38%

$488

$822

$874

$734

40% 41%

45%

38%

10%

15%

20%

25%

30%

35%

40%

45%

50%

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Revenue, Non-GAAP Gross Margin (%)

Non-GAAP EPS Fully-Diluted, Net Income

PV, $2

$301

$355

$0

$100

$200

$300

$400

$500

$600

$700

$800$658M Backlog

PV Poly Sapphire

$62

$4, Letters of Credit

$90

$502

Deferred Revenue (already shipped)

Letters of Credit

Non-Refundable Customer Deposits

Balance of Unshipped Orders

Reported Backlog Profile (as of September 28, 2013)


Note: Certain amounts in the above chart may not sum due to rounding

Backlog Profile

($ in millions)

Growth & Diversification

Increased Shareholder Value

Supports Targeted Investment

To Preserve Balance Sheet

To Drive Organic

Growth/Diversification

$42.6

$70.6

$78.7

$0

$10

$20

$30

$40

$50

$60

$70

$80

CY11 CY12 LTM

Solid Balance Sheet, Continued Commitment to R&D

R&D Spending

Leaner Operations,

Targeted M&A Program

Focused R&D Solid Balance Sheet

$258 $261

-$25

$25

$75

$125

$175

$225

$275

$325

$375

As of Q3CY13

Cash and Cash Equivalents Debt

Cash Position


($ millions) ($ millions)

9

LTM as of September 28, 2013

Sapphire Business


Sapphire Business Snapshot


Primary Products

• Crystal Growth

Technology: ASF®, KY

• Automated sapphire

inspection tools

• Annealing technology

• Sapphire materials

End Markets

• LED backlighting and

general illumination

• Non-LED devices

• Medical, Aerospace,

Military, Industrial

Market Position

• Market Leader; several

hundred ASFs in the field

• Establishing non-LED

sapphire materials business

• Driving technical

innovation, cost reduction

& new markets

Select Segment

Financials

•Backlog2: $355M

•LTM Revenue2: $35M

1 –In development 2 - As of 9/30/13

Sapphire Business Overview


Sapphire Equipment Business

GT offers market-leading equipment solutions

that increase yields and lower costs, including:

• A variety of sapphire growth systems,

including the market leading ASF®

sapphire growth furnace

• Automated sapphire inspection tools

• Annealing furnace

Sapphire Materials Business

GT produces high-quality sapphire materials

for a wide variety of markets including

optical, photonics, POS and Ti:sapphire.

• In Nov 2013, GT signed a multi-year

sapphire materials supply agreement

with a leading OEM which is expected to

to provide GT with a platform for

recurring sapphire materials revenues

GT is a leading provider of sapphire production equipment solutions and

sapphire materials for a growing number of end market applications

What is Sapphire?

• Sapphire is a single crystal

Al2O3 (Alumina)

• Recognized for its high optical

performance and mechanical

strength

• Used in a wide range of

applications: LED substrates,

aerospace, armor, photonics,

dental, lasers, non-LED

electronics


A boule of single crystal sapphire

Because of its strength and optical purity sapphire is used

in a wide range of applications

The ASF® Sapphire Growth Platform

• GT’s ASF® sapphire growth platform delivers high system throughput, high productivity and low cost of ownership

• ASF technology can be used to grow high quality sapphire for use in a variety of markets including LED, industrial, medical & non-LED

• GT is accelerating the development of its next generation, large capacity ASF furnaces to deliver low cost, high volume manufacturing of sapphire material


GT’s proprietary ASF solution is built upon 40+ years of technical innovation

Heat extraction

Sapphire Business Drivers

• Overall sapphire market conditions have

continued to improve

• Sapphire demand/pricing has shown

strength driven largely by LED general

lighting and the emerging use of sapphire in

new applications

• GT’s ASF® customers continue to operate

at high utilization rates

• GT’s expanding sapphire materials

business is expected to provide a recurring

revenue stream and contribute to GT’s

diversification


Sapphire business is expected to be a key driver of GT’s business in 2014

Solar Businesses: PV and Polysilicon


Photovoltaic (PV) Business Snapshot



HiCz™

DSS™650

Primary Products

• DSS™ Ingot Growth Systems

(DSS™MonoCast™,

DSS™450, DSS™450HP,

DSS™650, DSS™850)

• HiCz™ Monocrystalline

Growth Systems1

Market Position

• Market Leader ≈3400 DSS in the field2

• Enabled top PV players in the world

• Driving critical transition to Cz systems (HiCz™)

End Markets

• Solar

Select Segment

Financials

•Backlog2: $2M

•LTM Revenue2: $27M

PV Business Overview

• Market Leader with >3300 DSS Systems in the field

– Majority of the world’s multicrystalline silicon wafers

are produced from ingots grown in GT’s DSS

• Driving critical transition to higher efficiency, n-type monocrystalline materials with HiCz™

– HiCz is GT’s next-gen monocrystalline PV furnace

– Optimized to produce N-type silicon wafers that

enable high conversion efficiency cells

– In development for availability in late 2014


Focused on enabling improved economics & efficiencies for PV manufacturing

HiCz™

DSS™450

PV Business Q3CY13 Update

• Encouraged by improving fundamentals in

the solar market. However, GT believes

the next major PV capital equipment cycle

is not likely to begin until late 2014 at the

earliest

• Continue to advance HiCz n-type material

solution

– Demonstrated HiCz’s unique capability

to grow high quality 10-meter long

ingots (3-4x length of typical batch Cz

process)

• HiCz market introduction targeted for late

2H 2014


HiCz puller (above)

HiCz ingot (below)

Polysilicon Business Segment Snapshot


Market Position

• Market Leader; >300 reactors in the field2

• Established merchant market in 2006

• Enabled OCI Top 3 polysilicon producer


Primary Products

• SDR reactors for

polysilicon growth

• Hydrochlorination, TCS &

Silane Equipment

• Engineering services

End Markets

• Solar (primary)

• Semiconductor

• Chemicals

Select Segment

Financials

• Backlog2: $301M

• LTM Revenue2: $307M

21

Polysilicon Business Overview


• GT is a leading provider of key polysilicon equipment and technologies including:

– SDR Reactors (>300 shipped1)

– Hydrochlorination TCS equipment & services

• GT’s best-in-class polysilicon solutions can enable profitable polysilicon operation of <$14/kg cash costs

• Innovation drives market leadership

– GT’s Gen 7 reactor targets 10x productivity improvement, >60% energy savings compared to SDR100

21

GT is the established polysilicon merchant market leader


1- As of Sep 30, 2013 *This is for informational purposes only and contains forward-looking statements for the purposes of the Safe Harbor provisions. The

Company reserves the right to modify or delete elements of its development plan and is under no obligation to update such plans.

Polysilicon Business Q3CY13 Update

• Remain optimistic about long term poly

opportunities

– Pipeline continues to develop

– Supply and demand are coming into

balance

– Expect poly pricing to stabilize over

next 6-9 months

– China’s preliminary ruling on silicon

tariffs favorable for GT’s largest

customers

• While polysilicon opportunities exist, GT

does not expect increase in bookings until

2015; polysilicon revenues likely to remain

light through 2014


Hyperion™ Ion Implanter Technology


Targets production of thin substrates with negligible kerf loss and lower consumable cost

Potential benefits of Hyperion Ion Implanter:

• Reduced material costs

• Elimination of grinding/thinning processes

• Potential for creation of advanced multi-layered substrates

Competitive Advantages:

• Targeted to be highest power/throughput commercial ion implanter

• Hyperion has 30 issued patents (US) and 30+ pending (US & Intl)

Targeted Applications:

• Thin sapphire laminates

• Thin solar wafers

• SiC exfoliates

Hyperion Business Update

• GT acquired the Hyperion technology in

November 2012

• GT has made significant progress across

several applications, including:

– Producing ultra-thin silicon wafers

– Developing low cost composite glass

and thin sapphire structures

– Thin, relatively inexpensive, SiC wafer


• Pre-production Hyperion tool is in operation in GT’s development lab

• Targeting Hyperion market availability in 2015

• GT believes that the Hyperion business, once mature, could rival the

size of GT’s PV business at its peak

Pre-production Hyperion tool in Danvers,

MA Development Lab

HVPE - Path to Low Cost LED Manufacturing

• HVPE equipment is expected to

produce GaN templates w/ higher

quality, lower cost

• GT is developing a high-volume

production tool HVPE process

• GT has continued to receive very

positive feedback on HVPE from

market leaders, LED

manufacturers

• Targeting commercial availability at

back end of 2014; expect revenue to

ramp gradually starting in 2015

© 2013 GT AT Corporation. All Rights Reserved. 25

HVPE positions GT to participate in downstream LED manufacturing process

Hydride Vapor Phase Epitaxy (HVPE)

system currently in development

Key differentiators:

• >80% reduction in precursor

costs vs. traditional MOCVD

• Uniform multi-wafer via

proprietary injector system

• In-situ cleaning

HVPE – Breakthrough Value


Sapphire

uGaN

nGaN

SLS

MQWs

pGaN

Sapphire

Nucleation/Transition Layer

nGaN

SLS

pGaN

Current Process - MOCVD Only

MQWs

HVPE+MOCVD

MO

CV

D

AS

F®

AS

F®

M

OC

VD

H

VP

E

Benefits of HVPE

• Helps drive ~25% reduction in the Epi stack cost

(Higher growth rates, lower consumable/precursor costs)

• Increases LED quality (thicker/less defective nGaN layer)

• Significantly increases throughput/ reduces Capex for MOCVDs

pAlGaN pAlGaN

HVPE Solution Lowers CAPEX Expense


GT HVPE solution expected to lower CAPEX up to 25%

HVPE MOCVD

With HVPE Without HVPE

MOCVD


• No other capable SiC merchant

equipment suppliers

• GT released its first generation silicon

carbide sublimation furnace in Q2 2013

and is developing differentiated process

recipes that will provide a path to

producing lower cost SiC

– Targeting 4” solution release in 1H14;

6” solution by end of 2014

• Expect SiC business will ramp slowly

given long design-in cycles for new

power devices

• Longer-term, growth opportunity is in

pairing SiC with Hyperion™ technology

Silicon Carbide (SiC) Sublimation Technology

28

GT SiClone™ sublimation furnace (above)

GT-grown SiC boules (below)

SiC is a high-temperature

semiconductor material used in

power electronics devices

Next-Gen Solar Update

• New technologies that drastically lower the cost of solar

manufacturing are key to sustained solar industry recovery

• In addition to HiCz™, GT continues to work on advanced

Polysilicon reactors & other technologies not yet disclosed

• As solar industry returns to health, GT expects to play an

important role in helping customers lower cost throughout

the process of manufacturing solar cells


SE

RV

ED

MA

RK

ET

S

GT’s Business Model


Crystal Growth

Si, SiC, GaN, Sapphire

Thin Wafer Tech.

Hyperion, Bonding

LED Mfg. Tools HVPE, PVD

Process Tools Anneal, Inspect, etc.

Equipment Business

Sapphire Materials

Materials Business

Potential Expansion Opportunities

Thin Wafers , Composites, Consumables

Consumer

Electronics

LED Manufacturing

Industrial/ Military

Power Electronics

Advanced Solar

Technology & Know-how Transfer

Thank You.

Investor Relations Contact: [email protected]

Media Contact:

[email protected]


mailto:[email protected]

mailto:[email protected]

Forward Looking Statements Certain of the information in this presentation relates to the Company’s future expectations, plans and prospects for its business and industry that constitute "forward-looking

statements" for the purposes of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to: the Company serves several high-

growth markets; Company is actively diversifying into new growth markets including next-gen solar, consumer electronics and power electronics; Company’s strong balance

sheet supports targeted investment; Company is targeting leaner operations and targeted M&A program (to preserve balance sheet); Company will continue focused R&D (with

intention to drive organic growth/diversification); Company intends to grow and diversify and increase shareholder value; Company positioned as the total solution for high

volume sapphire manufacturing; potential future applications for sapphire material; LED market environment is improving; sapphire is expected to be the key driver of the

Company’s business in 2H 2013 and through 2014; Company remains confident in ability to expand sapphire business into non-LED markets; Company confident that ASF

shipments and orders will resume in second half of the year based on LED and non-LED opportunities; Company’s innovation in polysilicon business drives market leadership;

future performance metrics for Gen 7 polysilicon reactor and targeting further future improvements (including with respect to output and energy consumption); the Company

having good visibility with respect to polysilicon revenue for the second half of 2013; polysilicon business’ order pipeline and backlog will drive polysilicon revenues over next

several years; there are projections of tightening polysilicon supply; China’s ruling on polysilicon imports will be favorable to the Company; Company’s PV business is driving

critical transition to higher efficiency, n-type monocrystalline materials with HiCz™; HiCz™ optimized to produce N-type silicon wafers that enable high conversion efficiency

cells; HiCz™ in development and will be available in late-2014; Company has continued success in converting DSS inventory to cash, albeit at low gross margins; Company

continues to make progress with HiCz™ tool; China’s commitment to increase domestic PV consumption; the next PV investment cycle will likely begin in late 2014/early 2015;

Company expects SiC business to ramp slowly and, in the longer-term, the higher growth opportunity with SiC is in pairing it with Company’s Hyperion technology; Hyperion tool

broadens potential applications by allowing high productivity at high film thickness; Company expects to take Hyperion technology to market in 2015; HVPE tool is expected to

lower the cost of LED production; HVPE will allow producers to better utilize their existing MOCVD capital assets, lower consumable costs and reduce cycle times; Company is

intending to grow based upon a diversified foundation; future product releases by the Company (and timing of product introductions); Company’s product roadmap; Hyperion is

targeting to drive performance/value advancements in several applications; Company’s financial guidance (including expected ranges of financial results) related to the calendar

year 2013 with respect to: revenue, gross margins, total operating expenses, R&D expenses, capital expenditures, non-GAAP earnings per share, and cash and cash

equivalents (at December 31, 2013); Company is driving technical innovation, cost reductions and new markets in sapphire industry; HiCz™ is targeted to enable critical move to

higher efficiency; cost per good kg Si produced and cell efficiency based on several technologies; and HiCz is targeted to enable 22%+ cell efficiencies which will be critical in

reducing total system costs ($/watt). These forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many

of which are outside the Company's control, which could cause actual events to differ materially from those expressed or implied by the forward looking statements. These

factors may include the possibility that the Company is unable to recognize revenue on contracts in its order backlog. Although the Company's backlog is based on signed

purchase orders or other written contractual commitments in effect as of the end of our fiscal quarter ended June 29, 2013, we cannot guarantee that our bookings or order

backlog will result in actual revenue in the originally anticipated period or at all, which could reduce our revenue, profitability and liquidity. Other factors that may cause actual

events to differ materially from those expressed or implied by our forward-looking statements include the impact of continued decreased demand and/or excess capacity in the

markets for the output of our solar and sapphire equipment, general economic conditions and the tightening credit markets having an adverse impact on demand for the

Company’s products, trade disputes involving China, limited sales of PV equipment products, the possibility that changes in government incentives may reduce demand for solar

products, which would, in turn, reduce demand for our equipment, technological changes could render existing products or technologies obsolete, the Company may be unable to

protect its intellectual property rights, competition from other manufacturers may increase, exchange rate fluctuations and conditions in the credit markets and economy may

reduce demand for the Company's products and various other risks as outlined in GT Advanced Technologies Inc.'s filings with the Securities and Exchange Commission,

including the statements under the heading "Risk Factors" in the company's quarterly report on Form 10-Q for the quarter ended June 29, 2013. Statements in this presentation

should be evaluated in light of these important factors. The statements in this presentation represent GT Advanced Technologies Inc.'s expectations and beliefs as of the date

hereof. GT Advanced Technologies Inc. anticipates that subsequent events and developments may cause these expectations and beliefs to change. GT Advanced Technologies

Inc. is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events,

or otherwise.


Non-GAAP Financial Measures


December 31, December 31, January 1, December 26,

2012 2011 2011 2009

Non-GAAP Gross Profit and Gross Margin

Revenue $733,536 $873,442 $822,033 $488,113

Cost of revenue 527,132 482,106 487,831 302,742

Gross profit 206,404 391,336 334,202 185,371

Non-GAAP adjustments:

Write-down of inventory and vendor advances 71,754 - - 11,587

Accelerated depreciation for early retirement of fixed assets 2,520 - - -

Non-GAAP gross profit $280,678 $391,336 $334,202 $196,958

Non-GAAP gross margin 38.3% 44.8% 40.7% 40.4%

Twelve Months Ended

GT Advanced Technologies Inc.

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

Non-GAAP Financial Measures


December 31, December 31, January 1, December 26,

2012 2011 2011 2009

Non-GAAP Net Income & Earnings per Share

Net income ($63,235) $156,218 $156,132 $65,743

Non-GAAP adjustments:

Amortization of acquired intangible assets 10,165 6,630 4,313 3,163

Share-based compensation expense 15,176 13,118 7,531 4,806

Third party acquisition related expenses 1,550 3,574 785 -

Write-down of inventory and vendor advances 71,754 - - 11,587

Accelerated depreciation for early retirement of fixed assets 2,520 - - -

Impairment of goodwill 57,037 - - -

Restructuring charges and asset impairments 33,441 - - -

Contingent consideration (income) expense (8,965) 5,193 1,000 -

Non-cash portion of interest expense 3,799 9,942 652 360

Income tax effect of non-GAAP adjustments (1) (35,349) (12,989) (6,900) (7,064)

Non-GAAP net income $87,893 $181,686 $163,513 $78,595

Non-GAAP earnings per diluted share ("Non-GAAP EPS") $0.73 $1.41 $1.13 $0.54

Diluted weighted average shares outstanding 120,067 128,680 145,150 145,034

(1) The Company utilized the with and without method to determine the income tax effect on non-GAAP adjustments.

Twelve Months Ended

GT Advanced Technologies Inc.

Reconciliation of GAAP to non-GAAP results

(In thousands, except per share data)

(Unaudited)

Use of Non-GAAP Financial Measures


In addition to providing financial measurements based on generally accepted accounting principles in the United States of

America (GAAP), GT Advanced Technologies is providing additional financial metrics that are not prepared in accordance with

GAAP (non-GAAP). We believe that the inclusion of these non-GAAP financial measures helps investors to gain a meaningful

understanding of our past performance and future prospects, consistent with how management measures and forecasts

company performance, especially when comparing such results to previous periods or forecasts. Our management uses these

non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and

comparing our performance to prior periods and to the performance of our competitors. Management also uses these

measures in its financial and operational decision-making.

We define “non-GAAP gross profit” as GAAP gross profit excluding inventory and vendor advance write-downs and the

accelerated depreciation for early retirement of fixed assets. We consider non-GAAP gross profit to be an important indicator of

our operational strength and performance of our business because it eliminates the effects of events that are not part of the

Company's core operations.

We define "non-GAAP net income" as GAAP net income excluding share-based compensation expense, amortization of

acquired intangible assets, acquisition and acquisition related expenses, contingent consideration, inventory and vendor advance

write-downs, goodwill impairment, restructuring and asset impairment, and the non-cash portion of interest expense. We consider

non-GAAP net income to be an important indicator of our operational strength and performance of our business because it

eliminates the effects of events that are not part of the Company's core operations.

We define "non-GAAP earnings per share on a fully-diluted basis" as our non-GAAP net income divided by our weighted average

shares outstanding on a fully-diluted basis.

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