Creating a
New Global Innovator
Srinivas Tirumala GFP&A, Applied Materials
FP&A for High-Tech Summit April 8th, 2014
Introduction
Merger Background
Financial Model
Integration planning Topics
Summary
2 External Use 2
Global Proliferation of Modern Devices
External Use
Advanced Transistors Enable Newer Devices
Devices push boundary on performance & power consumption
4 External Use
Moore’s Law
Performance goes up! 100,000
Cost goes down
10,000
1,000
100
Frequency (MHz)
10
2000 2012
1 1980 1985 1990 1995 2000 2005 2010 2015
5 External Use
Ponder this
You hold technology in your hands more powerful than a Cray-2 Supercomputer and it doesn’t burn your hand!
6 External Use
Industry Dynamics
Ever increasing demand for computing and mobility
Moore's Law drives smaller, faster, and cheaper
devices consuming lower power
Focus on technological innovation and cost
reductions while improving performance
External Use 7
Applied Materials
Applied Materials, Inc. is the global leader in providing
innovative equipment, services and software to enable the manufacture of advanced
semiconductor, flat panel display and solar
photovoltaic products. Our technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to
consumers and businesses around the world.
8 External Use
Competitive Landscape*
Applied Materials 18%
ASML 16%
Tokyo Electron Limited 13%
9% Lam Research
KLA-Tencor 8%
Dainippon Screen Manufacturing 5%
Hitachi High-Technology 3%
Nikon 3%
Hitachi Kokusai Electric 2%
Murata Machinery 1%
Others 30%
*Source: 2012 Gartner Rankings
External Use 9
th Sept 24 2013 Announcement
Applied Materials and Tokyo Electron combining in a merger of equals
Creates a new global innovator in Precision Materials Engineering and Patterning
All stock transaction with new company valued at approximately $29B
10 External Use
FOUNDED: November, 1967 November, 1963
HEADQUARTERS: Santa Clara, California, USA Tokyo, Japan
EMPLOYEES: ~15,000 worldwide ~12,000 worldwide
PATENTS: ~10,500 issued ~16,000 issued
LTM REVENUE1: $7.2 Billion $5.4 Billion2
CVD, PVD, Epi, Implant, CMP, Track, Furnace, Wet Clean, TECHNOLOGY Anneal, Conductor Etch, Dielectric Etch, ALD,
EXCELLENCE: Defect Review, Display CVD, Wafer Prober, Display Etch, Display PVD Display Track
INSTALLED BASE: 33,000 tools 54,000 tools
1. LTM = Last Twelve Months through June 2013 for TEL and July 2013 for Applied 2. TEL revenue of $5.4B assumes average yearly exchange rate of 1 USD = 86 JPY
11 External Use 11
Expanded Profitable Cash
Opportunity Growth Returns
Combined portfolio Mutual commitment Share repurchase of strong products to improve post-closing and ability to profitability invest in highly Company structure differentiated Significant pre-tax enhances ability to products operating synergies increase cash
returns to investors
Significant opportunities to grow services business
Value Creation for Customers and Shareholders
External Use 12
Due Diligence Financial Model
Financial models