I N V E S T O R S P R E S E N T A T I O N - Camtek needham_jan20.pdfa result of changing industry...

January 2020

Rafi Amit, CEO

I N V E S T O R S

P R E S E N T A T I O N

Copyright of Camtek Ltd© 2017. All rightsreserved

The information presented today contains “forward-looking statements” as defined in the Private Securities Litigation Reform

Act of 1995. Such forward-looking statements are based on the beliefs, expectations and assumptions of Camtek’s

management that represent Camtek’s views only as of the date they are made, including with respect to market size, Total

Available Market (or “TAM”) and revenue targets, and necessarily involve risks and uncertainties. Moreover, our stated

revenue targets are aspirational and should not be taken as projections of actual future results. We do not assume any

obligation to update the information provided. Actual events or results may differ materially from those projected, including as

a result of changing industry and market trends, reduced demand for our products, the timely development of our new

products and their adoption by the market, increased competition in the industry, price reductions as well as other risks and

uncertainties identified from time to time in Camtek’s Annual Report on Form 20-F and Camtek’s other filings with the SEC.

The presentation includes non-GAAP financial measures which are not intended to be considered in isolation or as a

substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and

non-GAAP measures when evaluating the business internally and therefore believes it is important to make these non-GAAP

measures available to the financial community. Reconciliations of non-GAAP measures to the most relevant GAAP amounts

are included in the Company press releases.

This presentation includes the company’s estimations on Market size and TAM. These estimations can vary and may be differ

materially from the reality and are based on internal estimations. TAM or market size is the company’s estimation on the total

yearly market size.

2

SAFE HARBOR

Copyright of Camtek Ltd© 2017. All rightsreserved 3

CAMTEK ID CAPITAL

Market Cap

$427M*

Employees

320

Net Cash

$83M*

Capital equipment for the Semiconductors industry, specializing in inspection and metrology for yield enhancement

*Market CAP as of January 3rd 2020Net Cash as of September 30, 2019

GLOBAL

PRESENCE:

Tripled

Semiconductors revenue

from 2013 to 2019

18% Operating Income

in 2018

4455

6879

93

123133

2013 2014 2015 2016 2017 2018 2019Forecast

Annual Revenue


WE ARE OUTPERFORMING THE INDUSTRY

0%

25%

55%

80%

111%

180%

202%

0%11% 11% 11%

34%

52%

36%

0%

50%

100%

150%

200%

250%

2013 2014 2015 2016 2017 2018 2019Forecast

Growth in Revenues vs Growth in Semiconductor Market 2013-2019

Camtek Revenues Global semiconductor market (YOLE)

Gaining Market Share


TECHNOLOGY DRIVES MARKET GROWTH

Source: Cisco Global Cloud Index, Gartner, Camtek estimates

2010 2017 2020

PC + Internet Era

Mobile & Social Media Era

2000

• Advanced Interconnect Packaging

• Memory

• Power

• RF

• CMOS Image Sensors

• MEMS


END-PRODUCTS DRIVING THE INDUSTRY

Automotive IOTSmart phones Data centers

1 2 3 4

AI

5


SMARTPHONES DRIVE MARKET EVOLUTION

Sup

po

rts

on

ly s

ub

-6G

Hz

5G

Sup

po

rts

mm

Wav

e5

G

Motorola5G Moto Mod

for Z3/Z4

SamsungGalaxy S10 5G

OppoReno 5G

Huawei Mate 20X 5G

XiaomiMi Mix 3 5G

LGV50 ThinQ 5G

OnePlus7 Pro 5G

ZTEAxon 10 Pro 5G

April 2019 May 2019 June 2019 July 2019

Source: TechSearch International, Inc., adapted from TPSS.

• How we fit in:

• More AIP

• More memory

• More RF filters (driven by 5G)

• More cameras

• More power management

devices

5G phones in mass production


5G IS HERE - COMING FASTER THAN WE THOUGHT

Smartphone Semiconductor Revenue by Generation, 2019-2023

The lower phones are 4G+ or sub 6GHZ 5G, the top phones are full 5G or mmWave 5G Motorola and Huawei (Source: IDC)


CMOS IMAGE SENSORS

Source: IC Insights

Optoelectronics Market Snapshot

• Increased # of cameras

in smartphones and

smaller pixel size

requiring new equipment

• Camtek is the leading

Inspection provider to

CMOS image sensors

Source: IC Insights


DRAM OUTPUT CONTINUES TO GROW

Camtek serves capacity growth and transition to AP


HETEROGENEOUS INTEGRATION REPLACES SOC

11

The rate of cost-per-transistor improvements with process technology scaling has slowed. (Source: TSMC) CoWoS® package integration (Source: TSMC)

- Silicon scaling

Copyright of Camtek Ltd© 2017. All rightsreservedCopyright of Camtek Ltd© 2017. All rightsreserved 12

HETEROGENEOUS INTEGRATION: FROM 10 TO

24 DEVICES PACKAGED AS SIP

2-5 Camera modules

1-2 Optical sensors

Min. 3 MEMS

Sensors

1-2 Memory Packages

1-4 Power amplifier module

1-3 switch filter

module

WLAN/Bluetooth Module

Power

PoP

Antenna Module

(AiP)


100% INSPECTION OF ALL THE COMPONENTS

Solder Balls

C4 (Flip Chip)

DRAM

DRAM

DRAM

DRAM

DRAM

HBM Controller

DRAM

DRAM

DRAM

DRAMSmall bumps

Small bumps

Missing bumps



Missing Bump Bridged Bumps

Bump Height

Inspection and metrology of tens of Millions bumps growing exponentially, including sub-micron defects at high TPT

2 8 2060

500

0

100

200

300

400

500

600

2015 2017 2018 2020 2023

Number of bumps/wafer in M

Series 1



• More bumps → denser and finer RDLs >2µm and keeps getting smaller

• Multi-layer RDL requires high expertise for inspection


INSPECTION ECONOMIC ASPECTS

Committing Known-Good-Package

OSAT End-user

Detecting Failure

Return ALL shipment

Make new audit

Suspend all POs

Pay penalty to cover all direct and indirect costs

Final product fail

Detecting Failure


BARRIER TO ENTRY

ZERO DEFECT2µ RDL on several transparent layers

2-20µ Bump~50M bumps/waferCustomization

Critical inspection capabilities

100% Inspection & metrology

Width / Line space

~80% of our systems are customized


STRATEGIC PLAN AHEAD

Double

Revenuein 3-5 years

Maintaining our

leadership in

Metrology

Increasing our 2D

Inspection market share

Expanding penetration to

Front-End

Strengthening our

position in China

Improved Profitability

Consider synergic

M&A

Copyright of Camtek Ltd© 2017. All rightsreserved

19

LOOKING AHEAD TO 2020

Source: WSTS

9.8%

8.0%

-6.3%

1.9%

3.5% 3.2%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

11,000

11,200

11,400

11,600

11,800

12,000

12,200

12,400

12,600

12,800

13,000

2017 2018 2019 2020 2021 2022

MSI Annual GrowthSource: Semi MSI = Millions of Square Inches

Front-end equipment forecast

Assembly equipment forecast

Source: SEMI Equipment Market Data, September 2019 Source: VLSI, July 2019

Semiconductors revenues forecast summary Semiconductor silicon shipments


OUTPERFORMING THE INDUSTRY

Inspection and

metrology

equipment is

key factor in

adopting new

technologies and

products to

achieve high yield

and stability in

production

We are a market leader

0%

25%

55%

80%

111%

180%

202%

0%11% 11% 11%

34%

52%

36%

0%

50%

100%

150%

200%

250%

2013 2014 2015 2016 2017 2018 2019Forecast

Growth in Revenues vs Growth in Semiconductor Market 2013-2019

Camtek Revenues Global semiconductor market (YOLE)


PROGRESS TO MID-TERM MODEL

44.7%

46.7%

49.7%

50% - 52%

2016 2017 2018 Camtek > $150M

Gross Margin

7.2%

11.1%

18.0%

20% - 22%

2016 2017 2018 Camtek > $150M

Operating Margin

T H A N K

Y O U


FINANCIAL RESULTS - GAAP

FY 2017 FY 2018 Q1 Q2 Q3

(US $ in Millions)

Revenues 93.5 123.2 34.0 34.3 32.5

Gross Profit 45.5 60.8 17.2 16.6 15.2

Gross Margin 49% 49% 51% 48% 47%

R&D 13.5 14.6 3.9 3.8 4.2

SG&A 22.0 26.2 6.6 6.4 6.7

Loss from litigation 13.0 - - -

Operating Profit (Loss) -3.0 20.0 6.7 6.4 4.4

Operating Margin -3% 16% 20% 19% 13%

Net Income from Continuing Operations 1.7 18.8 6.0 6.0 4.2

Net Income from Discontinued Operations 12.3 - - 1.2 -

Net Income (Loss) 14.0 18.8 6.0 7.2 4.2

Annual 2019

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