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Veeco Technology UpdateSemicon West 2007
July 18, 2007
©2007 Veeco Instruments Inc. 20707 Investor Relations Presentation
Agenda/WelcomeDeb Wasser, SVP IR and Corp. Comm.
Ed Braun, Chairman – Introduction
John Peeler, Chief Executive Officer
Bob Oates, EVP, Veeco Process Equipment –Introduction
• HB-LED Opportunity: Sudhakar Raman, VP Marketing MOCVD
• Data Storage Opportunity: David Bruns, formerly VP Slider Operations (recently promoted to VP, GM, Veeco Asia)
Lloyd LaComb, SVP, Veeco Metrology
Q&A Session
©2007 Veeco Instruments Inc. 30707 Investor Relations Presentation
Agenda/WelcomeAgenda/Welcome
Technology/Market Focused Presentations Technology/Market Focused Presentations
No Q2 Financials to be DiscussedNo Q2 Financials to be Discussed
We are reporting our results on Friday, July We are reporting our results on Friday, July 27th before the market open. Conference call 27th before the market open. Conference call at 10:00am EST.at 10:00am EST.
Details on call available on Details on call available on www.veeco.comwww.veeco.com IR IR sitesite
©2007 Veeco Instruments Inc. 40707 Investor Relations Presentation
Safe Harbor StatementSafe Harbor Statement
To the extent that this presentation To the extent that this presentation discusses expectations or discusses expectations or otherwise makes statements about the future, such statements areotherwise makes statements about the future, such statements areforwardforward--looking and are subject to a number of risks and looking and are subject to a number of risks and uncertainties that could cause actual results to differ materialuncertainties that could cause actual results to differ materially ly from the statements made. These factors include the risk factorsfrom the statements made. These factors include the risk factorsdiscussed in the Business Description and Management's Discussiodiscussed in the Business Description and Management's Discussion n and Analysis sections of and Analysis sections of Veeco'sVeeco's Annual Report on Form 10Annual Report on Form 10--K for K for the year ended December 31, 2006 and subsequent Quarterly the year ended December 31, 2006 and subsequent Quarterly Reports on Form 10Reports on Form 10--Q and current reports on Form 8Q and current reports on Form 8--K.K. Veeco Veeco does not undertake any obligation to update any forwarddoes not undertake any obligation to update any forward--looking looking statements to reflect future events or circumstances after the dstatements to reflect future events or circumstances after the date ate of suchof such..
In addition, this presentation may review nonIn addition, this presentation may review non--GAAP financial GAAP financial measures. For GAAP reconciliation, please refer to the reconcilimeasures. For GAAP reconciliation, please refer to the reconciliation ation section in this presentation as well as Veecosection in this presentation as well as Veeco’’s financial press s financial press releases and 10K and 10Q filings available on www.veeco.comreleases and 10K and 10Q filings available on www.veeco.com
Edward Braun, Chairman of the Edward Braun, Chairman of the BoardBoard
©2007 Veeco Instruments Inc. 60707 Investor Relations Presentation
Data Semiconductor HBData Semiconductor HB--LED ScientificLED ScientificStorageStorage Wireless ResearchWireless Research
Embedded Storage for CEEmbedded Storage for CEMicrodrives / Femto TFMHMicrodrives / Femto TFMHPerpendicular recordingPerpendicular recording
90 and 65nm90 and 65nm300mm300mm
HBHB--LED / Wireless, LED / Wireless, Automotive, Camera Cell Automotive, Camera Cell Phones, Backlit LCD TVPhones, Backlit LCD TV
Nanotech, Material &Nanotech, Material &Life ScienceLife Science
Veeco Provides Enabling Technology in Veeco Provides Enabling Technology in Process Equipment and Metrology for Process Equipment and Metrology for
Multiple Growth MarketsMultiple Growth Markets
©2007 Veeco Instruments Inc. 70707 Investor Relations Presentation
Veeco’s Strategy For Growth
Offer a Offer a broad product linebroad product line of well differentiated enabling Process of well differentiated enabling Process Equipment and Metrology technologiesEquipment and Metrology technologies
Establish Establish strategic relationshipsstrategic relationships with technology leaders worldwidewith technology leaders worldwide
Capture Capture leading market shareleading market share in all product linesin all product lines
Leverage our exposure to Leverage our exposure to highhigh--growth end marketsgrowth end markets
Fuel our growth through internal Fuel our growth through internal development of multi generational development of multi generational new productsnew products aligned to our customersaligned to our customers’’ new technology strategic new technology strategic roadmapsroadmaps
Continually Continually improve our operationsimprove our operations to remain profitable through to remain profitable through industry cyclesindustry cycles
WE BELIEVE THERE IS A MULTIWE BELIEVE THERE IS A MULTI--HUNDRED MILLION DOLLAR HUNDRED MILLION DOLLAR GROWTH OPPORTUNITY FOR VEECO EXISTING IN THE GROWTH OPPORTUNITY FOR VEECO EXISTING IN THE
TECHNOLOGIES WE OWN TODAYTECHNOLOGIES WE OWN TODAY
©2007 Veeco Instruments Inc. 80707 Investor Relations Presentation
Veeco Has Diverse…Multi-Product…Multi-Market…Worldwide Exposure
Revenue by ProductRevenue by ProductEquipment up 9%Equipment up 9%Metrology up 1%Metrology up 1%
Revenue by MarketRevenue by MarketHBHB--LED/Wireless up 39%LED/Wireless up 39%
Scientific Research up 18%Scientific Research up 18%Data Storage down 11%Data Storage down 11%
Revenue by RegionRevenue by RegionJapan up 33%Japan up 33%
Veeco benefits from product, market and geographic diversityVeeco benefits from product, market and geographic diversity
Q107 Q107 REVENUEREVENUE $99M up 6% Y/Y$99M up 6% Y/Y
EquipmentEquipment59%59%
Rev $58.1MRev $58.1MGM 40%*GM 40%*
MetrologyMetrology41%41%
Rev $41.1MRev $41.1MGM 49%GM 49% HBHB--LEDLED
/Wireless/Wireless21%21%
ScientificScientificResearchResearch
33%33%
Data Data StorageStorage
36%36%
SemiconductorSemiconductor10%10%
EuropeEurope15%15%
U.S.U.S.35%35%
AsiaAsiaPacificPacific
30%30%
JapanJapan20%20%
©2007 Veeco Instruments Inc. 90707 Investor Relations Presentation
Veeco’s Technology/Market Universe
Process Equipment
61%
39%Metrology
Data StorageTFMH42%
Semiconductor13%
LED/Wireless20%
Scientific Research/Industrial
25%
Solar(emerging)
Process Equip.
Ion Beam Etch (IBE)
Ion Beam Dep (IBD)
Physical Vapor Dep (PVD)
Atomic Layer Dep (ALD)
Lapping/Dicing
Metal Organic Chem.VaporDep (MOCVD)
Molecular Beam Epitaxy
% of $441m Revs 2006
Our Core Technologies Drive New Market Opportunities
Metrology
Automated AFM
Research AFM/SPM
Optical Interferometer
Stylus Profilers
©2007 Veeco Instruments Inc. 100707 Investor Relations Presentation
Veeco’s Technology/Market Universe
Process Equipment
Metrology
Data StorageTFMH30%
LED/Wireless/Solar40%
Scientific Research/Industrial/Semiconductor
30%
Metrology
Automated AFM
Research AFM/SPM
Optical Interferometer
Stylus Profilers
Veeco’s Future Opportunity
Process Equip.
Ion Beam Etch (IBE)
Ion Beam Dep (IBD)
Physical Vapor Dep (PVD)
Atomic Layer Dep (ALD)
Lapping/Dicing
Metal Organic Chem.Vapor Dep(MOCVD)
Molecular Beam Epitaxy
©2007 Veeco Instruments Inc. 110707 Investor Relations Presentation
Welcome John Peeler
John Peeler joined Veeco 7/1 as CEO
“Perfect fit” with our specs:
• Joined Veeco from JDSU, where he was head of $600m, highly profitable Test and Measurement Group
• 30 years diversified global management expertise
• Multi-product, multi-market experience
• Experienced at “$500m- $1B” revenue size
• Leadership skills – product development, marketing, sales, global operations, manufacturing/operational excellence
John Peeler, Chief Executive John Peeler, Chief Executive OfficerOfficer
©2007 Veeco Instruments Inc. 130707 Investor Relations Presentation
My Background And Philosophy
Long history in high-tech, multi-product, multi-market businesses
Ran JDSU’s largest and most profitable business –Manage for growth and profitability
Understand complex business models, global distribution, cyclicality, “portfolio” businesses, multi-factories
My philosophy:
• Do a great job for our customers – help them achieve their business objectives better than our competitors do
• Be a company where high performance people want to work
• Deliver strong financial performance and returns for our investors
My approach is to develop plans and programs to achieve goals and then relentlessly manage to execution
©2007 Veeco Instruments Inc. 140707 Investor Relations Presentation
After 2 ½ Weeks on the Job…
Lots of Great things at Veeco
• Impressive products and technology
• Leading market positions in key areas
• Attractive growth in several market segments
• Motivated and committed workforce
• Excellent teamwork between engineering, marketing and operations
• An enormous number of new products coming from R&D efforts
Key challenge: to take Veeco to the next level of growth and profitability
©2007 Veeco Instruments Inc. 150707 Investor Relations Presentation
Initial Focus
Initial Learning Initial Learning –– JulyJuly--Early AugustEarly August•• Develop Business Unit and Functional group understandingDevelop Business Unit and Functional group understanding
•• Visit key factories and Veeco global regionsVisit key factories and Veeco global regions
•• Preliminary Assessment of People, Products and ProcessesPreliminary Assessment of People, Products and Processes
Situation Assessment Situation Assessment –– Mid AugustMid August-- Mid SeptMid Sept•• Lead the senior management team to assess organizational Lead the senior management team to assess organizational
strengths and weaknesses and develop plansstrengths and weaknesses and develop plans
•• Identify top opportunities, issues and resource prioritiesIdentify top opportunities, issues and resource priorities
Strategy and Plan Formulation Strategy and Plan Formulation –– Mid SeptMid Sept--Mid OctMid Oct•• Formulate and launch Strategic Initiative Programs and begin Formulate and launch Strategic Initiative Programs and begin
planning 2008planning 2008
•• Discuss strategy and initial plans with Veeco Board and InvestorDiscuss strategy and initial plans with Veeco Board and Investors s Late OctoberLate October
Process Equipment IntroductionProcess Equipment Introduction
Bob Oates, EVP, Veeco Process EquipmentBob Oates, EVP, Veeco Process Equipment
©2007 Veeco Instruments Inc. 170707 Investor Relations Presentation
Data Semiconductor HBData Semiconductor HB--LED ScientificLED ScientificStorageStorage Wireless ResearchWireless Research
Embedded Storage for CEEmbedded Storage for CEMicrodrives / Femto TFMHMicrodrives / Femto TFMHPerpendicular recordingPerpendicular recording
90 and 65nm90 and 65nm300mm300mm
HBHB--LED / Wireless, LED / Wireless, Automotive, Camera Cell Automotive, Camera Cell Phones, Backlit LCD TVPhones, Backlit LCD TV
Nanotech, Material &Nanotech, Material &Life ScienceLife Science
Veeco Provides Enabling Technology in Veeco Provides Enabling Technology in Process Equipment and Metrology for Process Equipment and Metrology for
Multiple Growth MarketsMultiple Growth Markets
Primary PEMarkets
©2007 Veeco Instruments Inc. 180707 Investor Relations Presentation
Veeco Process Equipment Core TechnologiesVeeco Process Equipment Core Technologies
GaNGaN MOCVDMOCVD
As/P MOCVDAs/P MOCVD
MBEMBE
IBD/IBE/DLCIBD/IBE/DLC
PVD/ALD/PVDPVD/ALD/PVD--HiRateHiRate
Lappers/SawsLappers/Saws
Core ProductsCore Products
HBHB--LED/WirelessLED/WirelessData StorageData Storage
©2007 Veeco Instruments Inc. 190707 Investor Relations Presentation
Phases of Process Equipment Evolution
New Growth New Growth EnginesEngines
Improve Improve ProfitabilityProfitability
Grow Core Grow Core TechnologiesTechnologies
Continue MOCVD Continue MOCVD share gains for HBshare gains for HB--LEDLED
Maximize DS with Maximize DS with PVD, ALD, DLC and PVD, ALD, DLC and After Market salesAfter Market sales
Enter thin film Enter thin film solar deposition solar deposition
Increase Increase outsourcing outsourcing content of new content of new productsproducts
Common hardware Common hardware and software and software platformsplatforms
Shorter Shorter manufacturing manufacturing cyclescycles
Focus on Focus on operational operational excellenceexcellence
MOCVD for HBMOCVD for HB--LEDLED
(TurboDisc)(TurboDisc)
Saws and Lapping Saws and Lapping for Data Storagefor Data Storage
Investment in Investment in FluensFluens for Alumina for Alumina PVD depositionPVD deposition
Internal R&D focus Internal R&D focus on PMR Product on PMR Product Development Development
20072007--2010201020052005--2007200720032003--20062006
LED Market OpportunityLED Market Opportunity
Sudhakar Raman, VP MarketingSudhakar Raman, VP MarketingVeeco MOCVDVeeco MOCVD
©2007 Veeco Instruments Inc. 210707 Investor Relations Presentation
Contents
LED Market Drivers
LED Technology & Performance
Customers
MOCVD Technology Update
Emerging Market Opportunity
©2007 Veeco Instruments Inc. 220707 Investor Relations Presentation
Why Light Emitting Diodes (LED)
100,000 hours150-200 lumens/wattFuture white LEDs (2010+)
35,000 hours50 lumens/wattToday’s white LEDs
10,000 hours50 lumens/wattFluorescent lamp
1000 hours16 lumens/wattIncandescent bulb
LifetimeLifetimeBrightnessBrightnessLight SourceLight Source
Main Advantages:Main Advantages:• Energy Savings
• Lifetime
Additional Benefits• No moving parts
• No Mercury
• No Fragile glass environments
• No Toxic gases
• No Filament
Energy Savings and Lifetime
Source: US DOE
Cumulative energy savings of SSL over next 20 years in US alone could eliminate 258 Mtons of carbon emission, alleviate need for 133 power plants (1000MW), and account for savings of > $100B
©2007 Veeco Instruments Inc. 230707 Investor Relations Presentation
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2006 2007 2008 2009 2010 2011
$M
Mobile/Signals/Auto/Other Signs/Displays General Illumination
LED Market Opportunity
Source: Strategies Unlimited
Signs and Displays Segment Grows at CAGR of 42%
CAGR: 17%
©2007 Veeco Instruments Inc. 240707 Investor Relations Presentation
Current Market Drivers
Laptop BacklightingLaptop Backlighting
•• 1313”” –– 1515”” by Apple and HP being by Apple and HP being introducedintroduced
Mobile devicesMobile devices
•• Sony Ericsson, SamsungSony Ericsson, Samsung
•• Camera flash in cell phonesCamera flash in cell phones
AutomotiveAutomotive
•• Head lampsHead lamps
Audi R8 and Lexus 600hAudi R8 and Lexus 600h
•• DRL, CHMSL, Stop lightsDRL, CHMSL, Stop lights
Large screen displaysLarge screen displays
•• Beijing OlympicsBeijing Olympics
•• 6000 buses outfitted with indoor 6000 buses outfitted with indoor LED lightingLED lighting
©2007 Veeco Instruments Inc. 250707 Investor Relations Presentation
Current Market Drivers
Penetration in SSL Penetration in SSL happeninghappening
•• Retail LightingRetail Lighting
•• Street LampsStreet Lamps
•• Spot lightingSpot lighting
•• ArchitecturalArchitectural
•• LandscapingLandscaping
©2007 Veeco Instruments Inc. 260707 Investor Relations Presentation
The Next Big Thing - Large LCD Backlighting
All major players are investing
• Samsung, Sony, LG, Phillips
Several key MOCVD customers in R&D phase
Capacity purchases may happen 2H’08
No mercury
Color gamut > 105%
High dynamic contrast ratio
Key challenges are Cost, Uniformity and Brightness Source: Luminus
MOCVD technology is a key to success
©2007 Veeco Instruments Inc. 270707 Investor Relations Presentation
Long Term Driver – 2009 & Beyond General Illumination
0
100
200
300
400
500
600
700
800
900
1000
Ma
rket
Siz
e (
$M
)
2006 2007 2008 2009 2010 2011
CAGR: 37%
Architectural and Retail Lighting account for > 60% in 2011Source: Strategies Unlimited
©2007 Veeco Instruments Inc. 280707 Investor Relations Presentation
HB-LED: “Moore’s Law” – Brighter Diodes at Lower Cost
Semiconductor industry must lower cost per function by 50% every 18 months
• Each reduction creates new markets
LED industry has similar opportunity – “Haitz law”
• ~30% improvement per year
• Enables new markets
Transistors/Chip
Cos
t/Tra
nsis
tor Moore’s
law
Semiconductors
Lumens/Watt
Cos
t/Lum
en
High Brightness LEDs
HighLow
Low
Hig
h
HighLow
Low
Hig
h
HB-LEDs are just getting started!
©2007 Veeco Instruments Inc. 290707 Investor Relations Presentation
LED Fabrication – MOCVD is Critical Production Step
Sapphire Wafers
Epitaxial Process
Thinning/Dice
Etch
Encapsulation/Lens
Contacts
Heat Sink/WB
P-GaN
N-GaNBuffer
Sapphire
MOCVD
Chip Processing
Packaging
MOCVD is >50% of the LED Fab Capital Expenditure
©2007 Veeco Instruments Inc. 300707 Investor Relations Presentation
LED Technology Basics: Multiple Methods for Making White light
RGBChips
400 500 600 700
+ +
• Multi Chip: R+G+B (3 in 1 LED)
400 500 600 700
+
• Multi Chip: Blue + Orange Chip (2 in 1 LED)
BlueChip
OrangeChip
All of the above require MOCVD technology
400 500 600 700
• UV LED + RGB Phosphor
+ +
Preferred for Large LCD Backlighting400 500 600 700
+
• Blue + Yellow Phosphor
BlueChip
Preferred method for White Light
©2007 Veeco Instruments Inc. 310707 Investor Relations Presentation
LED Industry Roadmap to Solid State Lighting
AllAllFlourescentFlourescentIncandescentIncandescentLowLow--FluxFluxMarkets Markets PenetratedPenetrated
1.51.50.40.4<2<2<5<52020200200Cost ($/Cost ($/klmklm))
404075757.57.56.76.72.72.711Input Power Input Power (W/lamp)(W/lamp)
340034001200120015001500100010002002002525Flux (lm/lamp)Flux (lm/lamp)
101011>100>100>100>100>20>202020Lifetime (Lifetime (KhrKhr))
8585161620020015015075752525Efficiency (lm/W)Efficiency (lm/W)
FluorescentFluorescentIncandescentIncandescentSSLSSL--LED LED 20202020
SSLSSL--LED LED 20122012
SSLSSL--LED 2007LED 2007SSLSSL--LED LED 20022002
TechnologyTechnology
Source: Optoelectronics Industry Development Association (OIDA)
• Luminous efficacy of LED is equal to or better than incandescent• LED manufacturers are making significant improvements to reduce cost/Klm
Cost Improvements will enable significant adoption in SSL (2010+)
©2007 Veeco Instruments Inc. 320707 Investor Relations Presentation
White LED PerformanceWhite LED Performance
2000 2005 2010 2015 2020
50
100
150
200
Eff
icie
ncy
(lm/W
)
Lab Results Production Level
OIDA R
oadmap
• Lab results at >110 lm/w• Production at 70-90 lm/w• Customers are ahead of OIDA roadmap
©2007 Veeco Instruments Inc. 330707 Investor Relations Presentation
LED Food Chain – 1 year ago
Chip
Com
pone
nts
Prod
uct
Syst
em
ChipMakers
LED Components
LED Modules/Controls
OEM’s &Luminaires
LightingSolution
Lum
ileds
Phill
ips
ColorKinetics
Osr
amO
pto
Cre
e
Nic
hia
Toy
oda
Gos
ei
Everlight
Optotech
HPO
Epistar
Highlink
SEMCO
SOD
SeoulSemi
Conductor
Samsung Display(SDI)
CO
TC
O
Osr
amSy
lvan
iaCMOAUO
FoxConn
SpaceCannon,
Xilver
GE
Gel
core
MOCVD = Veeco /Aixtron /Nippo Sanso
©2007 Veeco Instruments Inc. 340707 Investor Relations Presentation
LED Food Chain – Today
Phill
ips –
Lum
ileds
, TIR
, Col
or K
inet
ics
Osr
amO
pto
Cre
e -C
otco
Nic
hia
Toy
oda
Gos
ei
Everlight
Optotech
HPO
Epistar/Highlink/Epitech SEMCO
SOD
SeoulSemi
Conductor
Samsung Display(SDI)
Chip
Com
pone
nts
Prod
uct
Syst
em
ChipMakers
LED Components
LED Modules/Controls
OEM’s &Luminaires
LightingSolution
Osr
amSy
lvan
iaCMOAUO
FoxConn
SpaceCannon,
Xilver
GE
Lum
inat
ion
Lex
edis
Tri
doni
c/A
tco
ZUM
TO
BE
LMOCVD = Veeco /Aixtron /Nippo Sanso
©2007 Veeco Instruments Inc. 350707 Investor Relations Presentation
LED Chip Manufacturers – Large Customer Base
0
200
400
600
800
1000
1200
1400
20
06
Reven
ue
($
M)
Nichi
a
Osram
Lum
ileds
Cree
Epist
ar
SOD
Everli
ght
Rohm TG
Huga
Other Customers:- Sanan- Forepi- Century Epi- Rainbow- Arima- Showa Denko- GPI- Tekcore- etc.
Today: Top 10 Manufacturers Capture >60%of the Market
Source: Strategies Unlimited
©2007 Veeco Instruments Inc. 360707 Investor Relations Presentation
Regional MarketsRegional Markets…….Evolving.Evolving
HB-LED Supply by Region ($4B)
Japan49%
China4%
Korea10%
NA13%
Europe10%
Taiwan14%
Source: Strategies UnlimitedAsia-Pacific will grow significantly over next 3 years
©2007 Veeco Instruments Inc. 370707 Investor Relations Presentation
Regional Market LandscapeRegional Market Landscape
Vertical Integration to increase product value
Phillips bought Color Kinetics
Cree bought Cotco
Strong Focus on SSL
Toshiba Lighting & Technology
Citizen Electronics
Matsushita Electric Works
Major Players
Osram
Phillips-Lumileds
Cree
Major Players
Nichia
TG
Show Denko (SDK)
Rohm
Key Drivers
Automobile
Lighting
Camera Flash
Signs/Displays
Key Drivers
Lighting
Automobile
7” – 12” led BLU
Mobile devices
North America/EuropeNorth America/EuropeJapanJapan
©2007 Veeco Instruments Inc. 380707 Investor Relations Presentation
Regional Market LandscapeRegional Market Landscape
Seoul Semiconductor claims rapid adoption of SSL in Korea
AC LED
No AC to DC converter
Major Players
Semco
SOD
LG
Key Drivers
Lighting - commercial buildings
Street lamps
Auto Head lamps
Mobile devices
KoreaKorea
Heavy investment in SSL20% total energy savings by
2012
Investing > $250m/yr in SSL
Increased investment by Flat Panel makers
AUO
CMO
Foxconn
Major Players
Sanan
Lumei
Century Epi
Major Players
Epistar (Consolidation)
Arima
Everlight
Key Drivers
Signs/Displays
Street lamps
Lighting
Key Drivers
BLU for Laptops
Automobile
7” – 12” led BLU
Mobile devices
ChinaChinaTaiwanTaiwan
©2007 Veeco Instruments Inc. 390707 Investor Relations Presentation
Brightness and Cost Improvements Drive Industry Growth and Applications
Cost per 1000 Lumens
Effic
ienc
y Lu
men
s/W
att
150
130
110
90
70
50
30
20
15
5
LCDBacklighting
MobilePhonesTraffic
Lights OutdoorSignage
General Lighting
2003
2004
2006
20072008
2005
>2011
2002
< $9< $9$12$12$20$20$28 $28 $50$50$70$70$95$95$125$125
Blue Keypads
GaNzilla I MOCVD
GaNzilla II MOCVD
K- 465 MOCVD
Next Gen MOCVD
Headlights
Laptops
©2007 Veeco Instruments Inc. 400707 Investor Relations Presentation
Veeco TurboDisc Technology Advantage
AdvantageAdvantage
•• Strictly controlled flow and Strictly controlled flow and temperature dynamicstemperature dynamics
•• Thin boundary layerThin boundary layer
•• Sharp interfacesSharp interfaces
•• Scaleable Scaleable -- transfer of processtransfer of process
•• Excellent UniformityExcellent Uniformity
The heat causes the gas molecules to breakdown (crack) into atoms (Ga, N,
etc.)
NH3
TMGa
AlkylsHydrides
©2007 Veeco Instruments Inc. 410707 Investor Relations Presentation
Next Generation K-series MOCVD Production Platform
KK--Series PlatformSeries Platform
•• Modular Upgradeable PlatformModular Upgradeable Platform
•• Common across GaN & As/P product linesCommon across GaN & As/P product lines
•• Only platform capable of continuous operationOnly platform capable of continuous operation
•• More productivity than any other platformMore productivity than any other platform
KK--Series GaN Series GaN –– K300 & K465K300 & K465
•• K300K300
Based on production proven Based on production proven GaNzillaGaNzilla II reliabilityII reliability
Upgradeable to K465 GaNUpgradeable to K465 GaN
•• K465K465
Our most advanced reactor technologyOur most advanced reactor technology
>50% greater throughput than competition>50% greater throughput than competition
Largest reactor capacityLargest reactor capacityExcellent Acceptance Since December ’06 Introduction… Helping Veeco Gain Share
©2007 Veeco Instruments Inc. 420707 Investor Relations Presentation
TurboDisc K465 GaN Advantage TurboDisc K465 GaN Advantage
TurboDisc K465 GaN TurboDisc K465 GaN modular platform modular platform produces highest margin produces highest margin for HBfor HB--LED LED manufacturersmanufacturers•• Only automated, high capacity Only automated, high capacity
system delivers highest system delivers highest throughputthroughput
•• Next generation TurboDisc Next generation TurboDisc technology produces excellent technology produces excellent yieldyield
•• Extendable platform for long Extendable platform for long capital lifecapital life
45-120% More Throughput with TurboDisc K465 GaN
90903030Competitor BCompetitor B
1381384242Competitor ACompetitor A
2022024545TurboDisc K465 TurboDisc K465 GaNGaN
Wafers/Wafers/
DayDay22”” Wafer CapacityWafer Capacity
©2007 Veeco Instruments Inc. 430707 Investor Relations Presentation
TurboDisc E450 AsP Advantage
40-50 % More Throughput with TurboDisc E450 AsP with World Class
Process Quality 6464909044”” waferwafer
20920931031022”” WaferWafer
Competitor Competitor ––Wafers/dayWafers/dayVeeco Veeco –– Wafers/dayWafers/day
Production proven E450 Production proven E450 produces the highest margin produces the highest margin for HBfor HB--LED manufacturersLED manufacturers•• RealTempRealTemp®® 200 temperature 200 temperature
control assures accurate process control assures accurate process reproducibilityreproducibility
•• Flow FlangeFlow Flange™™ enables excellent enables excellent uniformity and repeatability for uniformity and repeatability for high production yieldshigh production yields
•• Vacuum loadlock minimizes idle Vacuum loadlock minimizes idle time for highest production time for highest production throughputthroughput
•• Low maintenance TurboDiscLow maintenance TurboDisc®®technology enables highest technology enables highest uptimeuptime
©2007 Veeco Instruments Inc. 440707 Investor Relations Presentation
Beyond TurboDisc K465 – Next-Generation Solutions, Higher Gross Margins
ApproachApproach
•• Modular platform with multiModular platform with multi--chamber capabilitychamber capability
•• Platform extendable for multiple Platform extendable for multiple technology generationstechnology generations
•• High level of commonality High level of commonality between GaN & As/Pbetween GaN & As/P
Expect to see continuous Expect to see continuous improvements in 2007 & 2008improvements in 2007 & 2008
LED Manufacturers• Lower MOCVD CoO• Improve Yield
Veeco Process Development Programs- UCSB- KOPTI
+ =
GaNzilla I
GaNzilla II
K-Series GaN
E450 LDM
Next Generation
Product Roadmap
©2007 Veeco Instruments Inc. 450707 Investor Relations Presentation
Estimated Market Share - GaN & As/P
2006 Est. Market Share
NS7%
Veeco32%
A61%
2007 Est. Market Share (Q1)
NS9%
Veeco44%A
47%
Goal: Continue to gain share due to GaNzilla/K-series performance advantage and E450 performance advantage
GaNzillaGaNzilla II gained significant share due to high productivity and reliabII gained significant share due to high productivity and reliabilityilityIntroduced ROY solution through E450 As/P Introduced ROY solution through E450 As/P •• Best in Uniformity, Productivity and ReliabilityBest in Uniformity, Productivity and Reliability
Introduction of KIntroduction of K--series GaN continues to drive market share gainseries GaN continues to drive market share gain
©2007 Veeco Instruments Inc. 460707 Investor Relations Presentation
0
50
100
150
200
250
300
350
400
450
500
2006 2007 2008 2009 2010 2011
$M
GaN MOCVD B/G TAM AsP MOCVD ROY TAM
MOCVD TAM Forecast 20-30% CAGR
Source: Veeco Estimate
Small Display Backlighting Driven
Large Display Backlighting Driven
General Lighting Driven
©2007 Veeco Instruments Inc. 470707 Investor Relations Presentation
Veeco’ Emerging Solar Opportunity
WW Solar Cell Consumption (MW)
01,0002,0003,0004,0005,0006,0007,0008,0009,000
10,00019
99
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
MW
Other Thin Films
CIGS
Cadmium Telluride
Amorphous - Si
Other (i.e Ribbon)
Poly - Si
Mono-Si
Thin Film
Crystalline Si
2006-2010 CAGR% Total = 40.7%Cryst. Si = 37.1%Thin Film= 71.3%
Source: Information Network,Photon Consulting
Veeco is uniquely positioned in Thin Film Solar
©2007 Veeco Instruments Inc. 480707 Investor Relations Presentation
Major Solar Cell TechnologiesMajor Solar Cell Technologies
Crystalline Si Thin Film
Mono-Si Poly-Si a-Si CuInGaSe2(CIGS)
CdTe(Cad-Tel)
III-Vs(Multi-Jct.)
Si Wafer Glass, Stainless Steel, Plastic Ge Wafer
Terrestrial$/Watt
TerrestrialLower $/Watt
Simpler Production Process
Space40% Efficiency
©2007 Veeco Instruments Inc. 490707 Investor Relations Presentation
Current Veeco Products for SolarCurrent Veeco Products for Solar
Crystalline Si Thin Film
Mono-Si Poly-Si a-Si CuInGaSe2(CIGS)
CdTe(Cad-Tel)
III-Vs(Multi-Jct.)
Deposition Sources
MOCVD
Veeco’s Solution Space - 2008 Opportunity >$15-20M
©2007 Veeco Instruments Inc. 500707 Investor Relations Presentation
Early Stage, High-Growth Opportunity
LED market opportunity in its infancy – traffic lights, key pads
Veeco’s “sweet spot:”technology-focused, immature worldwide market
We have key enabling technology, MOCVD
Each LED generation requires new MOCVD equipment
Our focus on process development, support and strategic customer relationships will enable our success
HDD Market and Technology HDD Market and Technology UpdateUpdate
David Bruns, VP/GM Veeco AsiaDavid Bruns, VP/GM Veeco Asia
©2007 Veeco Instruments Inc. 520707 Investor Relations Presentation
Outline
HDD industry outlook
• Technology
• Capacity
• CAPEX drivers
Veeco’s growth strategy for the Data Storage market sector
Summary
©2007 Veeco Instruments Inc. 530707 Investor Relations Presentation
Living in the Digital World
Digital world continues to drive storage requirements
Flash continues to make inroads into low-capacity storage market… and stimulates HDD technology investment
Industry consolidation is a reality … vertical integration is the response 320 GB
©2007 Veeco Instruments Inc. 540707 Investor Relations Presentation
HDD Demand Continues… Driven by Multiple Markets
• Consumer applications are high-growth segments that complement base desktop, mobile and enterprise segments
• Small Form Factor (SFF) drives are beneficiaries of this growth and are driving areal density requirements
Unit Growth by Market Segment
-
100
200
300
400
500
600
700
800
2004 2005 2006 2007 2008 2009 2010
Mill
ions
Year
Enterprise DesktopPersonal Storage PortableConsumer
44 %
54 %
Areal density
Technology Advances
Consumer applications
New Process Equipment
SFF Drives
©2007 Veeco Instruments Inc. 550707 Investor Relations Presentation
The HDD Value Proposition is Cost-Effective Storage
• HDD areal density growth of 30-40% required to maintain lead over flash
• HDD wins over Flash in large capacity consumer applications
Areal density growth
Technology Advances
Flash Competition
New Process Equipment
$$/GByte
Flash vs. HDD
$0.10
$1.00
$10.00
$100.00
2005 2006 2007 2008 2009 2010
NAND </= 1.0in HDD 1.8in HDD 2.5in HDD SSD
Source: IDC-June 2007
©2007 Veeco Instruments Inc. 560707 Investor Relations Presentation
SSD Penetration in Notebook PCs
0%10%
20%
30%
40%50%
60%
70%
80%
90%100%
2006 2007 2008 2009 2010 2011
HDD SSDSource: IDC-June 2007
HDD core mobile markets will continue as a Data Storage industry growth segment
©2007 Veeco Instruments Inc. 570707 Investor Relations Presentation
Areal Density Growth Requires Investment
0.0001
0.001
0.01
0.1
1
10
100
1000
10000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Gb/
in2
~ $21B
25%
60%
100%
35 - 40%
MRNanoHeads
GMRPico
Heads
TuMR/PMR
sub-PicoHeads
AFCMedia
~$30.9B
Source: IDC-June 2007
2000-2010 is expected to require a 50% increase in R&D
spending to support industry technology
development
©2007 Veeco Instruments Inc. 580707 Investor Relations Presentation
Thin Film Magnetic Heads (TFMH)
ABS
Areal density gains are driven by TFMH technology improvements
©2007 Veeco Instruments Inc. 590707 Investor Relations Presentation
Component Demand Solid Long-Term Growth
M
500 M
1,000 M
1,500 M
2,000 M
2,500 M
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Heads Platters
Source: IDC-June 2007
11% CAGR
©2007 Veeco Instruments Inc. 600707 Investor Relations Presentation
Industry Dynamics are Shifting…
Consolidation continues Consolidation continues –– TDK purchase of ALPS, HGST TDK purchase of ALPS, HGST
GDL plant shutdownGDL plant shutdown
Overall industry financial health continues to improveOverall industry financial health continues to improve
Wafer size increase being evaluatedWafer size increase being evaluated
HDD MfgHDD Mfg’’ss
ArealAreal density gains require introduction of new processing density gains require introduction of new processing
stepssteps
FemtoFemto adoption nearly completeadoption nearly complete
Rapid PMR adoption (<15% to 50% by end of 07)Rapid PMR adoption (<15% to 50% by end of 07)
TechnologyTechnology
TrendTrendAreaAreaImpact Impact ononVeecoVeeco
Only one OEM TFMH supplier remainsOnly one OEM TFMH supplier remains
Strong technology challenge from Samsung with a 3Strong technology challenge from Samsung with a 3--
platter, 1 TB HDDplatter, 1 TB HDD
WDC purchase of Komag (media) reinforces the vertical WDC purchase of Komag (media) reinforces the vertical
integration model of our customersintegration model of our customers
CompetitionCompetition
Overall storage demand is healthyOverall storage demand is healthy……Pressure from flash for Pressure from flash for
≤≤1.81.8”” HDDHDD
Seasonal slowness in 1H07Seasonal slowness in 1H07…… industry predictions of a industry predictions of a
robust 2Hrobust 2H
HDD HDD
MarketMarket
©2007 Veeco Instruments Inc. 610707 Investor Relations Presentation
Cost-effective HDD Supply = Vertical Integration
HDD Markets
HDD Manufacturers
TFMH Manufacturers
Capital Equipment Suppliers
Consumer Electronics
Desktop MobileEnterprise
©2007 Veeco Instruments Inc. 620707 Investor Relations Presentation
Technology Advances to Remain on the ArealDensity Curve
Rapid adoption ofRapid adoption of PMRPMR andand TMR TMR Technology Technology
and Transition toand Transition to FemtoFemto SlidersSliders
Areal DensityAreal Density GrowthGrowth
125 to 500 Gbits/in125 to 500 Gbits/in22
Femto, PMR and TMR technologies have stringent
requirements for Process Equipment and Metrology
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010
Year
Ado
ptio
n [%
]
0
100
200
300
400
500
600
700
800
900
1000
GB
its/in
2
PMR
Areal Density
TMR
CPP-GMR
Femto
40% CAGR
©2007 Veeco Instruments Inc. 630707 Investor Relations Presentation
Small Form Factors Demand New Veeco Solutions
Mini Micro Namo Pico Femto(100%) (70%) (50%) (30%) (20%)
19751987 1990 1995 2006-7
Femto FF increases heads/wafer by >25%, delivering increased areal density at lower
price points.
2007 and beyond – wafer starts will be needed to increase capacity
Device Feature Manufacturing Challenges Process SolutionAir Bearing Surface (ABS) Etch
Increased number of critical step etches with improved sigma control
NEXUS IBE
ABS Characterization Metrology advances to support advanced ABS designs
HD8100
Slider Shape Control Stress management during mechanical processing of femto sliders
Veeco Advanced Slider Lapper
Reliability Reduction of particles via improved mechanical processing.
Veeco ADS line of saws
Flyheight Reduction Improved head overcoat capability required to reduce head-media spacing.
NEXUS DLC-FCA
©2007 Veeco Instruments Inc. 640707 Investor Relations Presentation
Sensor Changes Demand New Veeco Process Solutions
Device Feature Manufacturing Challenges Process Solution
Sensor Definition Symmetrical interface engineering across wide range of materials
Low-energy NEXUS IBE
Sensor Materials Nano-scale engineering requires new materials and deposition techniques
Flexible NEXUS platform with IBD, PVD, ALD capability.
Sensor Isolation Dense conformal film integrated with sensor definition (etch)
NEXUS IBE-ALD
Surface finish CPP devices subject to "smearing" & sensitive to surface roughness
Veeco Advanced Slider Lapper
Scaling Non-destructive quality control of sensor shape & advanced litho patterns
Veeco X3D
Current Perpendicular to Plane (CPP)
Tunneling Effect (<1,000Gb/in2)
Current In Plane (CIP)
GMR Effect (<200Gb/in2)
©2007 Veeco Instruments Inc. 650707 Investor Relations Presentation
Perpendicular Recording Demands New Veeco Solutions
PMR: arranges magnetic transitions perpendicular to the media surface, enabling increased storage capacity for the same media area.
Device Feature Manufacturing Challenges Process Solution
Pole DefinitionSymmetrical, low-damage interface engineering of re-entrant feature, followed by alumina encapsulation.
Low-energy NEXUS IBE with integrated ALD
Pole Materials New, high-moment materials and nano-laminates.
Flexible NEXUS platform with IBD, PVD, ALD capability.
Reader-writer offset PMR requries tight machining control of both reader and writer shapes
Veeco Advanced Slider Lapper
Pole Tip Recession (PTR)
PTR measurement exceeds optical limits; AFM capability is required
Vx series AFM
Scaling Non-destructive quality control of pole shape & advanced litho patterns
Veeco X3D
©2007 Veeco Instruments Inc. 660707 Investor Relations Presentation
Veeco… A Strategic Partner in Every Step of the TFMH Manufacturing Process
New in 2007
©2007 Veeco Instruments Inc. 670707 Investor Relations Presentation
2007 New Product Lineup – Introducing NEXUS PVD & ALD
NEXUS PVD-MTNEXUS PVDi
NEXUS PVD-HR NEXUS ALD
Sensor & HMM
Alumina & Metals
Isolation& Seed for TMR /PMR
High RateAlumina
©2007 Veeco Instruments Inc. 680707 Investor Relations Presentation
Veeco NEXUS PVD-MT Multi-Target Planetary PVD System
30% Lower Cost of Ownership
• Highest Throughput
• Lowest Acquisition Cost
Higher Yield
• 50% Better Thickness Repeatability
• 25% Better Uniformity
Multi-application and multi-Generational asset
• Sensor: TMR MgO & CPP-GMR
• HM Materials: Laminated poles
©2007 Veeco Instruments Inc. 690707 Investor Relations Presentation
Veeco NEXUS PVD-HR High-Rate Alumina Deposition System
Lowest Cost of Ownership• 3x Higher Rate
• Less Floor Space
Higher Yield• 2-4x Better Uniformity
• Tunable Film Properties
Robust Design• Automated handling
• Production-proven platform
Addresses larger wafer format processing requirement
DepositionZone
OxidationZone
©2007 Veeco Instruments Inc. 700707 Investor Relations Presentation
Veeco NEXUS ALD Atomic Layer Deposition System
Broadest Process Capability
• Low-stress, high-rate Al2O3
• Conformal metal coatings
Low Cost of Ownership
• Low Acquisition Cost
• 5 hr PM cycle time
Integration Ready
• Clusterable w/ PVD, IBE, IBD
• Sensor-etch and isolation
©2007 Veeco Instruments Inc. 710707 Investor Relations Presentation
New Product PenetrationNew Product Penetration
250250
2525
3232
99
3030
5151
105105
20062006
20201212IB EtchIB Etch
220220
2525
1616
2323
3434
110110
20072007DDCC
260260
SawsSaws3939
LappersLappers
1818DLCDLC
MetrologyMetrology2525
MetrologyMetrology
3434IB Etch & IB Etch & DepDep
ALDALD124124
PVDPVD20082008BBAA
Wafer
Slid
er
TAM
Tool of record Tool in qual or demoTool not currently being considered
©2007 Veeco Instruments Inc. 720707 Investor Relations Presentation
Looking at the Next Form Factor Change
State-of-the-art wafer format for Data Storage TFMH mfg is 6” wafers
8” wafer format allows a 50% increase in sliders/wafer… without investment in facility expansion
Larger wafer format requires retooling in >50% of the process steps to achieve comparable yields
©2007 Veeco Instruments Inc. 730707 Investor Relations Presentation
Growing in a Mature Data Storage Market
Blanket the TFMH manufacturing space with world-class new products
• Maintain leadership position in core products
• Introduce new products for total fab coverage
Exploit the Veeco global install base with industry-specific after-market support
• Veeco has the largest fleet of Data Storage TFMH capital equipment in the world…more than 3,000 tools
Match the Veeco business model to the HDD market cyclical realities
• Outsourcing allows Veeco to manage cyclicality in a niche market
©2007 Veeco Instruments Inc. 740707 Investor Relations Presentation
After-Market Business Represents the Largest Veeco Data Storage Opportunity
Spare Parts Repairs Upgrades Site Svcs
Regional Depots
Regional Repair Centers Local Service Teams
Improved Tool UtilizationAsset Extendibility
Variable cost control
We estimate that 2006 Data Storage After-Market TAM was >$150M… our business was half that…Significant
opportunity to increase share
Veeco Investment Required
Customer Benefits Realized
©2007 Veeco Instruments Inc. 750707 Investor Relations Presentation
Summary
The digital life increasingly drives digital storage demands
Flash memory is a friend and a foe to the HDD industry
• Digital storage is now ubiquitous
• The HDD industry will drive areal density to remain the storage medium of choice… HAMR is next
HDD consolidation and industry cycles will continue…business has stabilized
Veeco will maintain a business model to maximize products, technology deployment and market coverage
Driving Metrology Growth
Lloyd LaComb,Senior Vice President, TechnologyVeeco Metrology & Instrumentation
©2007 Veeco Instruments Inc. 770707 Investor Relations Presentation
Veeco’s Leading Metrology Solutions
NT9800Dimension V AFM Dektak 150BioScope II
2006 Revenues $172M
Leadership positions in• Semiconductor, Data Storage, General Industrial, MEMS Metrology
• Nano/Bio Research – university & nano-center focused business
2007 & Focus for Nano-Bio Research AFM and Optical• Launch Next Generation Products and Drive Emerging Opportunities
2007 Focus for Automated AFM• Launch New Platform
• Drive Next Level of Market Adoption via new Key applications in Semi & DSDS
Dimension AFP
©2007 Veeco Instruments Inc. 780707 Investor Relations Presentation
Driving Metrology Growth
Five Key Areas of Veeco Product Development Focus:• Semiconductor Metrology
• Data Storage Metrology
• Medical Device & Bio Life Science Applications
• Nano Materials Development & Education
• Emerging Opportunity in Solar Metrology
R = 100nm
R = 10 nm
©2007 Veeco Instruments Inc. 790707 Investor Relations Presentation
Semiconductor Key Application Space – Broad Based Veeco Products
Advanced Etch/Lithography CD
• X3D provides accurate 3D metrology for RMS & Unique capability for LWR & Sidewall roughness
Etch Depth
• X300 provides direct, stable, no-model, in-line, etch depth metrology with low CoO
CMP
• AFP provides in-line CMP and etch depth metrology for 65nm and below
Mask
• X3D provides required resolution for defect repair & accurate 3D metrology of mask Resist & MoSi features
FinFets 45/32nm
CMP STI
©2007 Veeco Instruments Inc. 800707 Investor Relations Presentation
Semiconductor Industry Today: 45nm -Significant CD Metrology Concerns
Data from leading Semiconductor manufacturers
Key Issues:
• Accuracy
• Optical CD model development
• Tool to Tool matching
These specific applications are not adequately addressed by CDSEM & OCD
0
1
2
3
4
5
6
7
8
PR Shrinka
geCurre
nt too
lbase
capabili
tyOve
rlay A
lignment
Matchin
g/FMP
Accurac
y
Scatterom
etry D
evelopment
Throughp
ut
DBM
AFM has potential to resolve these critical CD issues
3D AFM will be required
©2007 Veeco Instruments Inc. 810707 Investor Relations Presentation
Current Fab CD Metrology Strategy
Current >65nm CD Metrology Strategy
CD or X-Section SEM Scatterometry (OCD)
•In-Die•Bias Control
•Test Structure
While SEM and OCD are key fab tools…
• Critical CD application also utilize 3D AFM
• CD-SEM or X-Sectional SEM used to validate Optical CD models
©2007 Veeco Instruments Inc. 820707 Investor Relations Presentation
Emerging Fab CD Metrology Strategy
65nm & 45nm CD Metrology Strategy
Scatterometry (OCD)
•Test Structure
CD-SEM
•In-Die•Bias Control
3D-AFM
•In-Die•Bias Control
Total Measurement Uncertainty (TMU) from Edge effects, Material Bias etc. drives the 3D-AFM as the fab reference system
Increased AFM adoption driven by a higher throughput, more accurate system
©2007 Veeco Instruments Inc. 830707 Investor Relations Presentation
Veeco is Meeting Future Fab Requirements
Introducing our New Semiconductor Platform in 2007
• 45nm & 32nm Capable
• Improved Throughput (3x)
• Improved Accuracy & repeatability (2x)
• Reduced CoO
First tool shipped…additional orders received…multiple customer evaluations occurring
Official product launch Fall ‘07
Applicable to both Semi and DS requirements
©2007 Veeco Instruments Inc. 840707 Investor Relations Presentation
New Platform = Increase in Veeco AFM Serviceable Market Size in Semi and DS
Multiple metrology technologies required for critical applications (Gate, STI, Trench, Contact, Pole Shape)• In-line capability with productivity improvements
3D Metrology required for Reference Metrology• Accuracy at <45nm will be required
New materials and 3D structures (FinFets, Metal Gates)
Semiconductor Module Dimension System New PlatformEtch CD/Depth 1 to 2 2 to 3
(Gate, STI, Trench,) + (FinFet,Divot, DSL, Spacer, Contact)CMP & CIS 0 to 2 0 to 3
(Optical, AFM & Stylus) (STI, D&E) + (DieMap & Defect Detection)Lithography 0 1 to 2
(Reference/Modeling) + (LER/LWV/Profile)Total Tools/Semi Fab 1 to 4 3 to 8PhotomaskPhotomask 1 2
(MoSi, Resist, COG) (MoSi, Resist, COG, Defect)Data StorageData Storage 1 3 to 5
©2007 Veeco Instruments Inc. 850707 Investor Relations Presentation
Veeco’s Key AFM Applications in Data Storage
Write Pole Geometry Resist/Post RIE
• X3D provides in-line, non-destructive and repeatable CD & SWA metrology of pole geometry with the industries lowest CoO
Damascene Trench – Resist/Metal
• X3D provides direct, in-line, damascene metrology with the industries lowest CoO and improved SWA
CMP, Defects & Roughness
• AFP provides in-line CMP, etch depth and roughness metrology for 65nm and below
PTR Slider
• VxPTR provides automated PTR metrology
Perpendicular MagneticRecording Trench Metrology
Perpendicular Magnetic Recording Pole Metrology
©2007 Veeco Instruments Inc. 860707 Investor Relations Presentation
Veeco’s Key Optical Metrology Applications in Data Storage
Material Corrected Optical PTR in Slider• HD Series with Dual AccuPhase provides higher
accuracy PTR at automated production speeds for lower cost of process control.
Localized Slider Flatness • Monitor critical fly height information with the wide
view of the HD Series. Process control improves disk drive performance in higher density drives.
Emerging opportunities for optical in Wafer• Developing opportunities for wafer roughness, step
heights and film thicknesses. Replaces some stylus and FIB/SEM applications.
Optical PTR with Material Correction
Flatness Monitor withLocalized Flatness Deviation
©2007 Veeco Instruments Inc. 870707 Investor Relations Presentation
Veeco’s Semiconductor Packaging Opportunity –SP Product Line
Market: High end semiconductor packaging applications
• Flip Chip, Chip Scale Package, 3D packaging, etc.
Two products:
• SP3X50 platform - panels up to 16”x20”
• SP9900 platform - panels up to 24”x24”
Business worth greater than $10M annually to Veeco with current customer base & many opportunities to expand business
New customers (> 400 suppliers in packaging, ~ 100 with FC/CSP capability)
Market adjacencies - OLED panels, printed electronics, medical test devices
©2006 Veeco Instruments Inc.
SP9900 ASP $550KHDI Interconnect / FCBGA
©2007 Veeco Instruments Inc. 880707 Investor Relations Presentation©2006 Veeco Instruments Inc.
Veeco Opportunity – Medical Devices
Large TAM - 8-10% CAGR (Frost & Sullivan)
Metrology needed for:
• Heart Stents
• Pacemakers and other implantable devices
• Artificial joints
• MEMS power sources
• Sharps
NT9300/9800 Applications Enable Critical Manufacturing Challenges• Surface Quality
• Critical Dimensions
• Drug Film Thickness
• Tribology Studies
• Environmental degradation
Current Customers• Boston Scientific, Medtronic, J&J
Guidant, WL Gore
©2007 Veeco Instruments Inc. 890707 Investor Relations Presentation
AFM enables scientists to examine biological structure beyond the optical limit
Veeco has the worlds largest installed base of Biological AFM’s
The ASP for a biological AFM is $200k – $250kVeeco has partnered with Pasteur de
Lille, the premier European cell biology research center, to further disease
research and treatments.
Tubular MicellesTubular Micelles1.72 micron image1.72 micron image
1 Å 100 nm 100 μm 100 mm
AFM Optical
DNA Cell
Proteins
Veeco’s Bio-Instrumentation Opportunity
Sara E. Cross, “Application of Atomic force Microscope-Based Cytological Analysis: A novel Technique Platform for Cancer Diagnosis and Evaluation,”
Seeing at the Nanoscale V
00 5050 100100 150150 200200 250250 300300 350350 400400001122334455667788
Co
un
tsC
ou
nts
Cell Stiffness
Cancerous Cells Normal Normal
CellsCells
AFM Can Identify Cancer in Tissue By Quantifying Cell Stiffness… Analysis of a tissue sample
using a Veeco AFM
©2007 Veeco Instruments Inc. 900707 Investor Relations Presentation
Bio-Life Science Activity-Reaching Out To…
Bio Research Base
• Partnerships with industry leading researchers in US and Europe including:
Pasteur Institute, Dr. Frank Lafont
University of Muenster, Dr. Oberleithner
Life Science Community
• Veeco founded and co-Sponsored AFM BioMed, the premier International Meeting on AFM in Life Sciences and Medicine.
Industrial Partners
• Veeco is in active Marketing and Engineering partnership with Leica Instruments to expand our products and channel through the education and promotion of combined light and force microscopy.
Living in a world of Forces:Axon Manipulation to Regeneration
©2007 Veeco Instruments Inc. 910707 Investor Relations Presentation
Capitalizing on the Demand for NanomaterialsMetrology
0
200
400
600
800
1000
1200
1400
1600
198919901991199219931994199519961997199819992000200120022003200420052006
# AFM papers on mechanical properties
Lack of nanomaterialmetrology is a “key
bottleneck”Nanoscale domains in a
block copolymerStrong growth in scientific
publications
Nanoscale structures impact macroscopic material performance of wide range of consumer products
• Electronics packaging, tires, automotive parts, food packaging, shoes, etc.
Strong demand for measurements of material properties at the nanoscale
©2007 Veeco Instruments Inc. 920707 Investor Relations Presentation
Veeco Enables Broad-Based Research
Innova• Launched: Q2 2007
• Geared to second tier universities and industrial customers… lower cost option to our mainstream MultiModeor Dimension
Market Position
The Nano-Suite
The Innova delivers high-resolution imaging with a wide range of functionality for physical and materials sciences.
Innova is the entry point into Veeco’s R&D SPM suite. It takes researchers to the upgrade point for ultimate performance, function, and/or automation.
©2007 Veeco Instruments Inc. 930707 Investor Relations Presentation
Expanding Veeco’s Educational Market Opportunity
Caliber based “Fundamentals of Nanotechnology”curriculum, to proactively address:Nascent Eastern European and APAC educational institutions that are simultaneously advancing their education and research efforts on limited budgets
The Nanotechnology in Schools Act: An effort by congress to increase the level of technical education in US schools
Brand Leadership and Opinion Ownership with leading research and educational institutions through a demonstrated commitment to Nanotechnology and Education
Caliber based “Fundamentals of Nanotechnology”curriculum, to proactively address:Nascent Eastern European and APAC educational institutions that are simultaneously advancing their education and research efforts on limited budgets
The Nanotechnology in Schools Act: An effort by congress to increase the level of technical education in US schools
Brand Leadership and Opinion Ownership with leading research and educational institutions through a demonstrated commitment to Nanotechnology and Education
©2007 Veeco Instruments Inc. 940707 Investor Relations Presentation
Expanding Veeco’s Educational Market Opportunity
New Caliber
• Launched: Q4 2006
Market Position
Curriculum Development
Caliber delivers highly reliable functionality and performance at a tremendous value
Classroom and laboratory exercises that explore nanotechnology, physics, and engineering being developed in 2007
©2007 Veeco Instruments Inc. 950707 Investor Relations Presentation©2006 Veeco Instruments Inc.
Veeco Metrology Opportunity in Solar CellVeeco Metrology Opportunity in Solar Cell
Market• 43% CAGR 2003 – 2010 (Yole Research )
(9.2GWatt)
• Strong Gov’t incentives to drive development
Veeco Growth Strategy• NT-9300/9800 Applications Target
• Film ThicknessSi, AR coating, Front collector traces
• Top Surface Roughness
Current Customers• 1st Solar – EU/USA
• Bangkok Solar - Asia
• BP Solar - EU
• Global Solar - USA
• REC Scancel - EU
• TopSolar – Asia
• >20 customers
©2007 Veeco Instruments Inc. 960707 Investor Relations Presentation
Nano RulerNano Ruler
World Leader in Surface Science and Metrology
Magnetic Bits (HDD)Magnetic Bits (HDD)160nmx40nm (100Gb/in2).160nmx40nm (100Gb/in2).MEMSMEMS
10um 10um –– 1mm1mm
TransistorTransistor0.5um 0.5um –– 90nm90nm
Quantum DotsQuantum Dots20nm wide ea.20nm wide ea.
Silicon AtomSilicon Atom0.2nm dia0.2nm dia
Nan
otec
hN
anot
ech
1,000,000nm1,000,000nm
100,000nm100,000nm
10,000nm10,000nm
1,000nm1,000nm
100nm100nm
10nm10nm
1nm1nm
0.1nm0.1nm
NanoNano
Mic
rote
chM
icro
tech
Veeco Has the Broadest Line of Tools For Micro to Nano ApplicationsVeeco Has the Broadest Line of Tools For Micro to Nano ApplicatiVeeco Has the Broadest Line of Tools For Micro to Nano Applicationsons
DMEMS OpticalDMEMS Optical
Dimension VDimension V
Dektak StylusDektak Stylus
Multimode VMultimode V
Installed Base of >20,000 Installed Base of >20,000 toolstools
PolymersPolymers5nm 5nm –– 500nm500nm
Q&A Session