Investor Presentation
`18th Annual Needham Growth Conference
`
`Dr. Timothy J. Stultz, President and CEO
`Jeffrey S. Andreson, CFO
`
`January 2016
`
`Energetiq Ex. 2066, Page 1, IPR2015-01362
`
`

`
`2NANO IR Pres [January 2016 Update]
`
`Forward-Looking Statements
`
`This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private
`
`Securities Litigation Reform Act of 1995, including, but not limited to statements regarding Nanometrics’ (“us” “our” or
`
`“the Company”) future financial results, including, but not limited to our market share, industry demand and growth. These
`statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult
`to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes
`and results may differ materially from what is expressed herein. In any forward-looking statement in which Nanometrics
`expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to
`have a reasonable basis, but there can be no assurance that the result will be achieved. The risks and uncertainties
`include, but are not limited to: our ability to achieve desired product mix and pricing; our ability to achieve desired market
`position; growth in target industries; levels and timing of capital expenditures in our target industries; customer adoption of
`certain technologies; market acceptance and timing of acceptance of our new products; interruptions or changes to supply
`chain; our ability to identify, complete and integrate acquisitions; and other economic, business, competitive and/or
`
`regulatory factors affecting Nanometrics’ businesses generally, including those set forth in Nanometrics’ filings with the
`SEC, including its Annual Report on Form 10-K for its most recent fiscal year, its most recent Quarterly Reports on Form
`10-Q and its Current Reports on Form 8-K. All forward-looking statements included in this communication are based on
`information available to Nanometrics on the date hereof. We disclaim any intent or obligation to update publicly any
`forward-looking statements, whether in response to new information, future events, or otherwise.
`
`Energetiq Ex. 2066, Page 2, IPR2015-01362
`
`

`
`Nanometrics Process Control
`Accelerating Yield and Profit
`
`Yield
`
`In-line information
`accelerates yield ramp
`
`3NANO IR Pres [January 2016 Update]
`
`Hundreds of process steps / Weeks of manufacturing
`
`Time
`
`bare
`wafers
`
`patterned
`wafers
`
`semiconductor
`devices/chips
`
`product/devices
`
`Energetiq Ex. 2066, Page 3, IPR2015-01362
`
`

`
`NANO: Leading Solutions for In-Line Process Control
`
`Comprehensive
`Suite of Highly-
`Differentiated
`Systems and
`Solutions
`
`Utilizing High-Speed,
`Non-Destructive
`In-Line Technologies
`
`Atlas / Lynx
`
`IMPULSE
`
`NanoCD
`
`UniFire
`
`Ellipsometry
`
`Scatterometry
`
`Interferometry
`
`Photoluminescence Inspection
`
`4NANO IR Pres [January 2016 Update]
`
`Technology Inflection Points
`Expanding Our Market,
`Footprint and Share
`
`FinFET
`
`3D NAND Advanced
`3D Packaging
`
`Energetiq Ex. 2066, Page 4, IPR2015-01362
`
`

`
`Qualified for All Advanced Device Process Control
`
`5NANO IR Pres [January 2016 Update]
`
`Atlas: OCD & Films
`
`Integrated Metrology: OCD & Films
`
`100% of Devices
`at 16/14 nm &
`below
`
`> 80% of All
`NAND Flash
`
`IMPULSE, T3
`
`Logic l DRAM l Foundry
`
`1X-1Y-1Z l G1-G3 3D NAND
`
`UniFire: Advanced Packaging
`
`NanoDiffract: Modeling/Analytics S/W
`
`80% of Devices
`at 16/14 nm &
`below
`
`100% DRAM
`TSV
`
`100% of Devices
`22nm & below
`
`50% of Image
`Sensors
`
`Logic l DRAM l Foundry
`
`Logic l DRAM l Foundry l NAND/3D-NAND
`
`Energetiq Ex. 2066, Page 5, IPR2015-01362
`
`

`
`2015 Highlights and Achievements
`
`Record Foundry Sales
`
`OCD market share gains led to TSMC becoming our largest customer
`in 2015 and record sales to all foundry customers.
`
`Record 3D NAND Sales
`
`Market share gains and tool-of-record positions at every one of the four
`leading memory customers for 3D NAND process control led to record
`sales to this segment.
`
`Record Integrated
`Metrology Sales
`
`Significant new customer penetrations and market share gains led to
`record-level integrated metrology sales and a 60%+ revenue CAGR
`since 2013.
`
`Financial Model
`Improvement
`
`Top line growth, improved gross margin, reduced opex in 2015 vs 2014,
`high incremental revenue flow through.
`
`6NANO IR Pres [January 2016 Update]
`
`2015 Revenues +10-13% YoY
`
`Flow-Through vs. 2014:
`
`4 Straight Quarters of GM
`Improvement (Q3’14-Q3’15)
`
`~60% Gross Margin
`
`~70% Operating Margin
`
`Comments reflect fourth-quarter 2015 guidance ranges provided as of October 29, 2015.
`
`Energetiq Ex. 2066, Page 6, IPR2015-01362
`
`

`
`NANO Revenues Continue to Outperform
`
`WFE ($B)
`
`NANO Revenues ($M)
`
`7NANO IR Pres [January 2016 Update]
`
` $200
`
` $175
`
` $150
`
` $125
`
` $100
`
` $75
`
` $50
`
` $25
`
` $-
`
`100%
`
`80%
`
`60%
`
`40%
`
`20%
`
`0%
`
`$186
`
`$166
`
`$144
`
`2013
`
`2014
`
`2015 Midpoint of Q4
`Guidance
`
`Share of Optical CD Market
`
`60%
`
`40%
`
`2013
`
`55%
`
`45%
`
`50%
`
`50%
`
`2014
`
`2015 Est.
`
`NANO
`
`Competitors
`
`WFE figures represent average of at least 10 research analysts as of January 2016.
`Share of OCD Market source = public filings and Nano estimates.
`
` $35
`
` $30
`
` $25
`
` $20
`
` $15
`
` $10
`
` $5
`
` $-
`
`15%
`
`10%
`
`5%
`
`0%
`
`-5%
`
`$32
`
`$32
`
`$28
`
`2013
`
`2014
`
`2015E
`
`Comparative YoY Growth 2015
`
`12%
`
`5%
`
`-2%
`
`KLAC (Midpoint of
`Q4 Guidance)
`
`NVMI (Guidance
`net of Revera)
`
`NANO (Midpoint of
`Q4 Guidance)
`
`Energetiq Ex. 2066, Page 7, IPR2015-01362
`
`

`
`Gaining Share in Integrated Metrology (IM)
`
`8NANO IR Pres [January 2016 Update]
`
`Increasing Role of IM for OCD
`
`NANO Market Share Gains
`
`IM $ Share of OCD Market
`
`NANO $ Share of IM Market
`
`100%
`
`80%
`
`60%
`
`40%
`
`20%
`
`0%
`
`74%
`
`78%
`
`72%
`
`26%
`
`2013
`
`22%
`
`2014
`
`28%
`
`2015 Est.
`
`100%
`
`80%
`
`60%
`
`40%
`
`20%
`
`0%
`
`85%
`
`80%
`
`15%
`
`2013
`
`20%
`
`2014
`
`67%
`
`33%
`
`2015 Est.
`
`Integrated OCD
`
`Automated OCD
`
`NANO
`
`Competitor
`
` Increasing role of CMP with IM for 3D devices
`
` NANO 2 year CAGR in IM sales >60%
`
` IM use transitioning from films to OCD
`
` Increasing use for APC & wafer-to-wafer control
`
`Source: Gartner & Company estimates
`
`Energetiq Ex. 2066, Page 8, IPR2015-01362
`
`

`
`9NANO IR Pres [January 2016 Update]
`
`Gaining Share in Foundry Market
`
`NANO Product Revenue by Device Type
`($M)
`
`NANO Foundry Sales
`as % of Foundry Capex
`
`$200
`
`$175
`
`$150
`
`$125
`
`$100
`
`$75
`
`$50
`
`$25
`
`$0
`
`0.25%
`
`0.20%
`
`0.15%
`
`0.10%
`
`0.05%
`
`0.00%
`
`2013
`
`2014
`
`2015E
`
`2013
`
`2014
`
`2015 Est.
`
`DRAM NAND
`
`Logic/IDM Foundry
`
`Other
`
` NANO Foundry Sales CAGR 61% From 2013
`
` Foundry Capex CAGR -5% Since 2013
`
`Source: Foundry Capex is an average of 10 analyst estimates as of January 2016.
`
`Energetiq Ex. 2066, Page 9, IPR2015-01362
`
`

`
`Realizing a More Balanced Revenue and Customer
`Model with Success in Penetrating Key Accounts
`
`NANO 10% Customers
`
`NANO IR Pres [January 2016 Update]
`
`10
`
`Toshiba
`
`TSMC
`
`Micron
`
`SK Hynix
`
`Intel
`
`Samsung
`
`11%
`
`17%
`
`16%
`
`22%
`
`30%
`
`28%
`
`FY'11
`
`FY'12
`
`18%
`
`30%
`
`14%
`
`FY'13
`
`10%
`
`12%
`
`13%
`
`27%
`
`10%
`
`19%
`
`15%
`
`10%
`
`13%
`
`FY'14
`
`FY'15E
`
`80%
`
`70%
`
`60%
`
`50%
`
`40%
`
`30%
`
`20%
`
`10%
`
`0%
`
`% Contribution to NANO Total Revenues
`
`Energetiq Ex. 2066, Page 10, IPR2015-01362
`
`

`
`Continued Consolidation of SEMI Capital Spending
`
`NANO IR Pres [January 2016 Update]
`
`11
`
`All Others
`
`Toshiba/Sandisk
`
`Micron Alliance
`
`SK Hynix
`
`Global Foundries
`
`TSMC
`
`Intel
`
`Samsung
`
`24%
`
`6%
`
`6%
`
`5%
`
`8%
`
`12%
`
`18%
`
`20%
`
`20%
`
`6%
`
`10%
`
`9%
`
`5%
`
`14%
`
`12%
`
`23%
`
`16%
`
`6%
`
`10%
`
`9%
`
`5%
`
`17%
`
`17%
`
`20%
`
`39%
`
`9%
`
`11%
`
`10%
`
`4%
`4%
`
`9%
`
`14%
`
`2007
`
`2011
`
`2015 Est
`
`2016 Est
`
`Source: Capex by company obtained from press releases, SEC filings and conference call transcripts.
`Total Capex for each period is an average from at least 10 industry analysts as of January 2016.
`
`100%
`
`90%
`
`80%
`
`70%
`
`60%
`
`50%
`
`40%
`
`30%
`
`20%
`
`10%
`
`0%
`
`68%
`
`3%
`2%
`3%
`3%
`
`6%
`
`11%
`
`4%
`
`2000
`
`Energetiq Ex. 2066, Page 11, IPR2015-01362
`
`

`
`NANO IR Pres [January 2016 Update]
`
`12
`
`Expansion of Nanometrics’ Metrology Footprint
`
`Memory
`
`Logic
`
`Foundry
`
`Broadening our Customer Exposure
`Across All Device Types
`
`1
`
`2
`
`3
`
`3
`
`4
`
`2
`
`4
`
`2007 Cycle
`
`2010-11 Cycle
`
`2015-2016 Cycle
`
`2D – Planar
`
`2D – Planar / 3D Transistor
`
`3D-NAND / FinFET
`
`Energetiq Ex. 2066, Page 12, IPR2015-01362
`
`

`
`3D Device Roadmap Trends Driving Increased
`Demand for Complex Metrology
`
`PLANAR
`
`3D FinFET
`
`Complex
`structures
`
`NANOWIRES
`(future)
`
`More patterning
`steps
`
`New
`Architectures
`
`NANO IR Pres [January 2016 Update]
`
`13
`
`High aspect
`ratios
`
`Increasing
`layers
`
`DRAM SCALING
`
`ReRAM
`
`PLANAR
`
`G1 3D-NAND
`
`Gx 3D-NAND
`
`FinFET
`Logic
`(speed &
`power)
`
`DRAM
`(data
`density)
`
`NAND
`(data
`density)
`
`Energetiq Ex. 2066, Page 13, IPR2015-01362
`
`

`
`3D Devices Require Tighter Control of Complex
`Processes & Architectures
`
`Planar Logic
`<5 critical parameters
`vs.
`
`NANO IR Pres [January 2016 Update]
`
`14
`
`3D FinFET @14nm
`>15 critical parameters/steps
`
`Width
`
`Height
`
`Height
`Coating/
`Thickness
`
`Sidewall angle
`
`Width
`Recess
`Height
`
`Height
`
`Undercut
`
`Height
`
`Recess
`
`Angle/
`Curvature
`
`− More Measurement Parameters
`− Simultaneous 3D Measurements
`
`Tighter process control
`~ Measurement accuracy
`needs to be at Angstrom level
`
`Metrology Tolerance
`
`N-1
`
`N
`Design Node
`Logic 20nm
`14nm
`
`N+1
`
`10nm
`
`Energetiq Ex. 2066, Page 14, IPR2015-01362
`
`

`
`OCD: Disruptive Force in 3D Metrology
`
`OCD
`
`CD-SEM
`
`OCD: INCREASING SHARE
`OF A GROWING MARKET
`
`NANO IR Pres [January 2016 Update]
`
`Critical Dimension Market
`
`Market Size $475M $600M ~ $700M
`
`100%
`
`80%
`
`60%
`
`40%
`
`20%
`
`0%
`
`86%
`
`14%
`
`2005
`
`67%
`
`33%
`
`2014
`
`33%
`
`67%
`
`Future
`
`Optical CD
`
`CD-SEM
`
`- Total CD CAGR 3−4%
`- OCD CAGR of 10−20%
`
`Source: Gartner & Company estimates
`
`15
`
`TEM
`
`AFM
`
`Throughput
`
`Parameters Measured
`
`CD-SEM = CD-Scanning Electron Microscope
`AFM = Atomic Force Microscope
`
`OCD = Optical Critical Dimension Metrology
`TEM = Transmission Electron Microscope
`
`Energetiq Ex. 2066, Page 15, IPR2015-01362
`
`

`
`NANO IR Pres [January 2016 Update]
`
`16
`
`Technology Roadmaps Driving Increased OCD Demand
`
`45 nm
`
`32 nm
`
`2X nm
`
`1X nm
`
`DRAM
`
`DRAM
`
`DRAM
`
`DRAM
`
`OCD
`
`Etch
`
`CMP
`
`Etch CMP
`
`Films
`
`NAND
`
`Films Litho
`
`NAND
`
`Etch CMP
`
`Etch CMP
`
`Films
`
`Films Litho
`
`CMP
`Etch
`Litho
`Films
`Materials
`
`NAND
`
`Etch
`Films
`
`CMP
`Litho
`
`LOGIC (FF)
`
`Etch
`Films
`
`CMP
`EPI
`
`FOUNDRY
`
`Etch
`
`Litho
`
`CMP
`Etch
`Litho
`Films
`Materials
`
`NAND/3D-NAND
`
`CMP
`Etch
`Litho
`Films
`Materials
`
`LOGIC (FF)
`
`Etch
`Films
`Materials
`
`CMP
`Litho
`
`FOUNDRY (FF)
`
`Etch
`Films
`Materials
`
`CMP
`Litho
`
`EXPANDING APPLICATIONS
`
`INCREASING DEPENDENCE
`DRIVEN BY:
`
`NON-DESTRUCTIVE
`
`IN-LINE, HIGH SPEED
`
`METROLOGY FOR 3D
`DEVICES
`
`PHYSICS COMPATIBLE
`WITH FUTURE NODES
`AND SHRINKS
`
`Energetiq Ex. 2066, Page 16, IPR2015-01362
`
`

`
`3D Wafer Starts on Rapid Growth Trajectory
`
`WSPM by Year End for 3D Devices
`(Wafer Starts Per Month, In Thousands)
`
`Majority of Incremental
`Capital Investments
`Taking Place for 3D Structures
`
`NANO IR Pres [January 2016 Update]
`
`2013
`
`2014
`
`DRAM 3D Pkgs
`
`2015E
`
`3D NAND
`
`2016E
`
`FinFET
`
`2017E
`
`Source: Analyst and Company estimates
`
`17
`
`1200
`
`1000
`
`800
`
`600
`
`400
`
`200
`
`0
`
`Energetiq Ex. 2066, Page 17, IPR2015-01362
`
`

`
`Advanced Process Control (APC) Driving Increased
`Demand
`
`Adoption of
`In-line, In-Situ
`and Integrated
`
`ATLAS Profile Control
`– Wet-Etch feed-back
`
`IM Deposition & CMP
`– CVD Integrated feed-forward
`to CMP
`
`IMPULSE Etch
`– Pre-Etch feed-forward
`
`NANO IR Pres [January 2016 Update]
`
`18
`
`– Fill feed-forward
`
`– Integrated
`CMP feed-back
`
`2X
`2Y
`HVM
`HVM
`DRAM
`
`2X
`HVM
`
`1X
`HVM
`LOGIC
`
`1Y
`R&D
`
`1X
`HVM
`
`1Z
`R&D
`
`1Y
`HVM
`NAND
`
`2X
`2Y
`HVM
`HVM
`DRAM
`
`1X
`HVM
`
`1Y
`HVM
`NAND
`
`1Z
`R&D
`
`1Z
`R&D
`
`3D NAND
`
`1Y
`2X
`1X
`R&D
`HVM
`R&D
`FOUNDRY
`
`Energetiq Ex. 2066, Page 18, IPR2015-01362
`
`

`
`Organic Growth Opportunities For Nanometrics in Process Control:
`Continued Share Gains + SAM Expansion = Continued Outperformance
`
`NANO IR Pres [January 2016 Update]
`
`19
`
`APC
`Solutions
`
`Software
`and
`Analytics
`
`Nova
`$92M
`
`Nano
`$10M
`
`Source: 2014 Product Revenues from Gartner
`
`In-Device &
`On-Device
`Metrology
`
`Scanner
`Monitoring
`& Control
`
`Energetiq Ex. 2066, Page 19, IPR2015-01362
`
`

`
`Organic Opportunity to Grow SAM by > 50% in 2 Years
`
`NANO IR Pres [January 2016 Update]
`
`20
`
`TAM
`$1.7B
`
`SAM
`$1.2B
`
`OCD & Thin Films
`
`Incremental from CD-SEM
`
`Other Metro & APC
`
`CD-SEM
`
`Incremental from Other & APC
`
`Incremental from OVL
`
`Overlay*
`
`$2,000
`
`$1,500
`
`$1,000
`
`$M
`
`$500
`
`$0
`
`2013
`
`2014
`
`2015E
`
`2016F
`
`2017F
`
`Source: Gartner & Company estimates
`* Includes estimate of ASML’s overlay market participation with YieldStar and associated solutions
`
`Energetiq Ex. 2066, Page 20, IPR2015-01362
`
`

`
`Leverage ToR Positions => Expand Applications and
`Customer Footprint
`
`Fab Position
`
`Device Position
`
`Etch
`
`Transistor
`
`Deposition
`
`Lithography Interconnect
`
`FinFET/
`Logic
`
`3D-NAND
`
`DRAM
`
`NANO IR Pres [January 2016 Update]
`
`21
`
`Opportunity
`
`Tool of Record Position
`
`A B C D E F G
`
`Customer
`
`Energetiq Ex. 2066, Page 21, IPR2015-01362
`
`

`
`Organic Growth Roadmap to $300M
`
`$15-$20
`
`$14-$20
`
`$10-$14
`
`$300+
`
`$25-$30
`
`$20-$30
`
`$30-$40
`
`$186
`
`NANO IR Pres [January 2016 Update]
`
`22
`
`2015E
`(Midpoint
`of Q4’15
`Guidance)
`
`Market &
`Share Growth
`(OCD & Thin
`Films)
`
`SAM
`Expansion
`(CDSEM Use Case)
`
`Software &
`Analytics
`
`Advanced
`Packaging
`
`Service &
`Support
`
`Materials
`Characterization
`
`$35B
`WFE
`
`($ Millions)
`
`Energetiq Ex. 2066, Page 22, IPR2015-01362
`
`

`
`Recent Results and Guidance
`
`Revenue
`
`Q3’15
`Results
`
`$45.8M
`
`Q4’15
`Guidance
`
`$39 - $43M
`
`Gross Margin*
`
`49.7%
`
`47.0% - 49.5%
`
`Operating Expenses*
`
`$20.9M
`
`$20.0 - $20.6M
`
`EPS*
`
`$0.05
`
`($0.10) - $0.00
`
`NANO IR Pres [January 2016 Update]
`
`23
`
`Full-Year 2015 Results vs 2014 (at Midpoint):
`
`Incremental Margin Model:
`
` 10-13% Revenue Growth
` ~60% Gross Margin Flow-Through
` ~70% Operating Margin Flow-Through
`
` Gross Margin of 50% - 60%
` Operating Margin of 45% - 50%
`
`* Reflects the company’s non-GAAP financial model, which excludes the impact of amortization of acquired intangible assets and
`certain other charges. A reconciliation between GAAP operating results and non-GAAP operating results is provided on last slide.
`
`Energetiq Ex. 2066, Page 23, IPR2015-01362
`
`

`
`Long-Term Financial Model
`(Annual Revenue)
`
`NANO IR Pres [January 2016 Update]
`
`24
`
`2014 Actual
`$166M
`
`2015 Midpt.
`$186M
`
`$200M
`Model
`
`$250M
`Model
`
`$300M
`Model
`
`Gross Margin*
`
`47.2%
`
`~49%
`
`50% - 51% 52% - 54% 54% - 56%
`
`Operating Expenses*
`
`50.9%
`
`~45%
`
`~40%
`
`34% - 36%
`
`<30%
`
`Operating Profit/(Loss)*
`
`(3.8%)
`
`~4%
`
`10% - 12% 18% - 20%
`
`25%+
`
`Free Cash Flow
`(Cash From Operations – Capex)
`
`(3.8%)
`
`n/a
`
`10%
`
`15%
`
`20%
`
`Tax Rate**
`
`(8%)
`
`~30%
`
`28% - 30% 30% - 32%
`
`32%
`
`* Reflects the company’s non-GAAP financial model, which excludes the impact of amortization of acquired intangible assets and certain other charges.
`A reconciliation between GAAP operating results and non-GAAP operating results is provided at the end of this presentation.
`** Assumes reversal of certain tax asset valuation allowance and U.S. R&D tax credit. Prior to reversal of Tax asset valuation allowance, tax expense to range
`from $0.5M to $0.8M per quarter. 2015 tax rate is non-GAAP.
`
`Energetiq Ex. 2066, Page 24, IPR2015-01362
`
`

`
`TECHNOLOGY AND
`PRODUCT INNOVATION
`
`TRACK RECORD OF FIRST TO
`MARKET SOLUTIONS
`
`STRENGTHS
`
`OCD MARKET
`LEADERSHIP
`
`INDUSTRY-PROVEN
`MANAGEMENT TEAM
`
`TOOL OF RECORD POSITIONS:
`EVERY INDUSTRY LEADER
`ALL DEVICE TYPES
`
`DEMONSTRATED ABILITY
`TO COMPETE AND
`DELIVER RESULTS
`
`Combining our Strengths with Opportunities to
`Deliver Revenue Growth and Operating Leverage
`
`NANO IR Pres [January 2016 Update]
`
`25
`
`GROWTH MARKETS
`
`OCD, ADVANCED
`PROCESS CONTROL,
`INTEGRATED METROLOGY,
`ADVANCED PACKAGING
`
`NEW APPLICATIONS
`
`BUSINESS MODEL
`
`N+1/ N+2 3D DEVICES
`NEW MATERIALS/FILMS
`COMPLEX LITHOGRAPHY
`
`IMPROVING GMs
`EXISTING INFRASTRUCTURE
`STRONG FLOW-THROUGH
`
`OPPORTUNITIES
`
`Energetiq Ex. 2066, Page 25, IPR2015-01362
`
`

`
`
`
`
`
`
`
`nanometrics
`
`advanced process control systems and solutions
`
`INSPECTION
`
`_
`V
`_
`‘QEHARYACTERIZATIGN
`
`DEFECT
`
`Thank You
`Thank You
`
`Energetiq Ex. 2066, Page 26, |PR2015—O1362
`
`Energetiq Ex. 2066, Page 26, IPR2015-01362
`
`

`
`Strong Multi-Year Cycle Driven by Top Spenders
`
`Semiconductor CapEx by Top Industry Spenders
`
`NANO IR Pres [January 2016 Update]
`
`27
`
`Samsung
`
`TSMC
`
`Intel
`
`Micron Alliance
`
`SK Hynix
`
`Toshiba /
`SanDisk
`
`Global
`Foundries
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015 Est.
`
`2016 Est.
`
`Source: Capex by company obtained from press releases, SEC filings and conference call transcripts.
`Total Capex for each period is an average from at least 10 industry analysts as of January 2016.
`
` $14.0
`
` $13.0
`
` $12.0
`
` $11.0
`
` $10.0
`
` $9.0
`
` $8.0
`
` $7.0
`
` $6.0
`
` $5.0
`
` $4.0
`
` $3.0
`
` $2.0
`
` $1.0
`
` $-
`
`CapEx in $Billions
`
`Energetiq Ex. 2066, Page 27, IPR2015-01362
`
`

`
`NANO Opportunity: Increasing OCD Metrology Intensity
`
`NANO IR Pres [January 2016 Update]
`
`28
`
`Device
`Type
`
`NAND
`
`3D NAND
`
`DRAM
`
`FOUNDRY
`
`FOUNDRY
`
`LOGIC
`
`Node
`
`1X/1Y
`
`32p
`
`2X
`
`2X/2Y
`
`1X/1Y
`
`2Y/1X
`
`Relative
`Intensity
`(current node)
`
`Segment
`Opportunity/
`10K wspm
`
`1.0
`
`1.1
`
`1.2
`
`1.6
`
`2.0
`
`2.4
`
`$4M - $6M
`
`$5M - $7M
`
`$5M - $8M
`
`$6M - $10M
`
`$8M - $12M
`
`$10M - $15M
`
`10-20% increase in OCD metrology investment
`with successive technology nodes
`
`Source: Company Estimates
`wspm: wafer starts per month capacity
`
`Energetiq Ex. 2066, Page 28, IPR2015-01362
`
`

`
`Revenue Segmentation Reflects Concentration of Spending
`
`Q3 ’15
`
`Total Revenues
`by Geography
`
`11%
`
`15%
`
`Total Revenues
`by Product/Svc
`
`20%
`
`Product Revenues
`by End Market
`
`12%
`
`22%
`
`15%
`
`17%
`
`17%
`
`10%
`
`46%
`
`27%
`
`25%
`
`24%
`
`33%
`
`7%
`
`South Korea
`
`N. America
`
`Taiwan
`
`China
`
`EMEA
`
`ROW
`
`Automated
`
`Integrated Mat. Char.
`
`Service
`
`DRAM Flash
`
`Logic/IDM Foundry Other Devices/Substrates
`
`NANO IR Pres [January 2016 Update]
`
`FY 2014
`
`23%
`
`25%
`
`0%
`
`17%
`
`23%
`
`12%
`
`20%
`
`6%
`
`9%
`
`65%
`
`9%
`
`25%
`
`21%
`
`12%
`
`33%
`
`South Korea
`
`N. America
`
`Taiwan
`
`China
`
`ROW
`
`Automated
`
`Integrated
`
`Mat. Char.
`
`Service
`
`DRAM Flash
`
`Logic/IDM Foundry
`
`LED/Discrete/Si
`
`Mat. Char. = Materials Characterization Metrology Systems
`
`29
`
`Energetiq Ex. 2066, Page 29, IPR2015-01362
`
`

`
`NANO IR Pres [January 2016 Update]
`
`30
`
`RECONCILIATION OF GAAP TO NON-GAAP RESULTS
`(In thousands, except per share amounts)
`(Unaudited)
`
`Reconciliation of GAAP gross profit to non-GAAP gross profit
`
`Inventory write-down
`Amortization of intangible assets
`
`GAAP gross profit
`
`Non-GAAP gross profit
`
`10,486$
`
`
`-
`
`658
`
`11,144$
`
`14,480$
`
`
`-
`
`647
`
`15,127$
`
`15,801$
`
`2,439
`
`
`658
`
`18,898$
`
`21,909$
`
`
`-
`
`670
`
`22,579$
`
`62,676$
`
`
`2,439
`
`2,633
`
`67,748$
`
`(a)
`
`24,149$
`
`
`-
`
`674
`
`24,823$
`
`22,908$
`
`
`-
`
`677
`
`23,585$
`
`11,416$
`
`
`-
`
`688
`
`12,104$
`
`17,349$
`
`
`-
`
`684
`
`18,033$
`
`75,822$
`
`
`-
`
`2,723
`
`78,545$
`
`23,379$
`
`
`-
`
`632
`
`24,011$
`
`23,264$
`
`-
`
`
`457
`
`23,720$
`
`22,219$
`
`
`-
`
`468
`
`22,687$
`
`Q1
`
`Q2
`
`Q3
`
`Q4
`
`FY
`
`Q1
`
`Q2
`
`Q3
`
`Q4
`
`FY
`
`Q1
`
`Q2
`
`Q3
`
`Fiscal 2013
`
`Fiscal 2014
`
`Fiscal 2015
`
`Reconciliation of GAAP operating income (loss)
`
`to non-GAAP operating income (loss)
`
`Total operating expenses
`
`GAAP gross profit
`
`GAAP operating income (loss)
`
`
`10,486$
`
`20,089
`
`(9,603)$
`
`
`14,480$
`
`20,636
`
`(6,156)$
`
`
`15,801$
`
`23,043
`(7,242)$
`
`
`
`21,909$
`
`20,617
`
`1,292$
`
`
`62,676$
`
`84,385
`
`(21,709)$
`
`
`24,149$
`
`22,133
`
`2,016$
`
`
`22,908$
`
`22,162
`
`746$
`
`
`11,416$
`
`22,025
`
`(10,609)$
`
`
`17,349$
`
`21,155
`
`(3,806)$
`
`
`75,822$
`
`87,475
`
`(11,653)$
`
`
`23,379$
`
`21,138
`
`2,241$
`
`
`23,264$
`
`20,755
`
`2,509$
`
`
`22,219$
`
`20,955
`
`1,264$
`
`(a)
`
`(c)
`
`Non-GAAP adjustments to operating income (loss):
`Inventory write-down
`Amortization of intangible assets included in cost of revenues
`Amortization of intangible assets included in operating expenses
`Restructuring
`Total non-GAAP adjustments to operating income (loss)
`Non-GAAP operating income (loss)
`
`Reconciliation of GAAP net income (loss)
`
`to non-GAAP net income (loss)
`
`-
`
`
`658
`
`198
`
`-
`
`856
`
`(8,747)$
`
`-
`
`
`647
`
`195
`
`-
`
`842
`
`(5,314)$
`
`2,439
`
`
`658
`
`195
`
`1,740
`
`5,032
`
`(2,210)$
`
`-
`
`
`670
`
`113
`
`-
`
`783
`
`2,075$
`
`2,439
`
`
`2,633
`
`701
`
`1,740
`
`7,513
`
`(14,196)$
`
`(b)
`
`-
`
`
`674
`
`108
`
`-
`
`782
`
`2,798$
`
`-
`
`677
`
`
`107
`
`-
`
`784
`
`1,530$
`
`-
`
`
`688
`
`103
`
`1,715
`
`2,506
`
`(8,103)$
`
`-
`
`
`684
`
`102
`
`551
`
`1,337
`
`(2,469)$
`
`-
`
`2,723
`
`
`420
`
`2,266
`
`5,409
`
`(6,244)$
`
`(c)
`
`632
`
`
`38
`
`58
`
`728
`
`2,969$
`
`457
`
`25
`
`
`-
`
`482
`
`2,990$
`
`468
`
`
`26
`
`-
`
`494
`
`1,758$
`
`GAAP operating income (loss)
`
`Other income (expense)
`
`GAAP income (Loss) before income taxes
`Provision (benefit) for income taxes
`
`GAAP net income (loss)
`
`(9,603)$
`
`
`(161)
`
`(9,764)
`
`(4,182)
`
`(5,582)$
`
`(6,156)$
`
`
`(822)
`
`(6,978)
`
`(2,412)
`
`(4,566)$
`
`(7,242)$
`
`
`(445)
`
`(7,687)
`
`(3,133)
`
`(4,554)$
`
`1,292$
`
`
`(428)
`
`864
`
`308
`
`556$
`
`(21,709)$
`
`
`(1,856)
`
`(23,565)
`
`(9,419)
`
`(14,146)$
`
`2,016$
`
`
`166
`
`2,182
`
`587
`
`1,595$
`
`746$
`
`(170)
`
`
`576
`
`(12)
`
`588$
`
`(10,609)$
`
`
`(134)
`
`(10,743)
`
`17,919
`
`(28,662)$
`
`(3,806)$
`
`
`170
`
`(3,636)
`
`1,003
`
`(4,639)$
`
`(11,653)$
`
`
`33
`
`(11,621)
`
`19,497
`
`(31,118)$
`
`2,241$
`
`
`632
`
`2,873
`
`317
`
`2,556$
`
`2,509$
`
`
`(348)
`
`2,161
`
`817
`
`1,344$
`
`1,264$
`
`
`267
`
`1,531
`
`713
`
`818$
`
`Non-GAAP adjustments to net income (loss):
`
`783
`
`
`
`7,513
`
`
`
`782
`
`
`
`784
`
`
`
`2,506
`
`
`
`1,337
`
`
`
`5,409
`
`
`
`728
`
`
`
`482
`
`
`
`494
`
`Total non-GAAP adjustments to non-GAAP operating income (loss)
`Valuation allowance on deferred tax assets and other non-cash
`adjustments related to tax assets
`Tax effect of non-GAAP adjustments to operating income (loss)
`Non-GAAP net income (loss)
`
`Per share data:
`
`
`
`856
`
`
`
`842
`
`
`
`5,032
`
`
`
`-
`
`
`(306)
`
`(5,032)$
`
`-
`
`
`(299)
`
`(4,023)$
`
`-
`
`(1,785)
`
`
`(1,307)$
`
`-
`
`
`(317)
`
`1,022$
`
`-
`
`
`(2,706)
`
`(9,339)$
`
`-
`
`
`(282)
`
`2,095$
`
`-
`
`(281)
`
`
`1,091$
`
`21,141
`
`
`(877)
`
`(5,892)$
`
`303
`
`
`-
`
`(2,999)$
`
`21,444
`
`
`(1,440)
`
`(5,705)
`
`(d)
`
`-
`
`
`-
`
`3,284$
`
`-
`
`
`-
`
`1,826$
`
`-
`
`
`-
`
`1,312$
`
`GAAP net income (loss) per diluted share
`
`
`
`(0.24)$
`
`
`
`(0.20)$
`
`
`
`(0.20)$
`
`
`
`0.02$
`
`
`
`(0.61)$
`
`
`
`0.07$
`
`
`
`0.02$
`
`
`
`(1.19)$
`
`
`
`(0.19)$
`
`
`
`(1.30)$
`
`
`
`0.11$
`
`
`
`0.06$
`
`
`
`0.03$
`
`0.14$
`
`
`
`0.08$
`
`
`
`0.05$
`
`Non-GAAP net income (loss) per diluted share
`
`
`
`(0.22)$
`
`
`
`(0.17)$
`
`
`
`(0.06)$
`
`
`
`0.04$
`
`
`
`(0.40)$
`
`
`
`0.09$
`
`
`
`0.05$
`
`
`
`(0.24)$
`
`
`
`(0.12)$
`
`
`
`(0.24)$
`
`
`
`Shares used in non-GAAP diluted income per share calculation
`
`
`
`23,341
`
`
`
`23,138
`
`
`
`23,261
`
`
`
`23,913
`
`
`
`23,290
`
`
`
`24,159
`
`
`
`24,220
`
`
`
`24,132
`
`
`
`24,048
`
`
`
`23,958
`
`
`
`24,257
`
`
`
`24,285
`
`
`
`24,352
`
`Notes:
`
`(a) Represents charges associated w ith w riting dow n inventory related to a discontinued product line.
`
`(b) Includes severance and RSU modification charges accrued in connection w ith the notification of future closure of our Nanometrics Germany Inc office (Nanda).
`
`(c) Includes severance, facility lease termination and other costs associated w ith consolidating operations into the U.S. and management changes.
`
`(d) Reflects a non-cash valuation allow ance related to certain deferred US tax assets and other non-cash adjustments.
`
`Energetiq Ex. 2066, Page 30, IPR2015-01362