Oerlikon Components Enabling Information Technology

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1 Oerlikon Components Enabling Information Technology Kurt Trippacher, CEO Oerlikon Components & Head of Oerlikon Esec Oerlikon Capital Market Days 28 Zurich, September 25-26, 28

2 Disclaimer This presentation is based on information currently available to management. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected. Page 2 Oerlikon Capital Market Days 28

3 Oerlikon Textile Oerlikon Coating Oerlikon Solar Oerlikon Vacuum Oerlikon Drive Systems Oerlikon Oerlikon Components Components Page 3 Oerlikon Capital Market Days 28

4 Agenda Overview Components Oerlikon Esec at a Glance Markets & Strategy Key Take Aways Page 4 Oerlikon Capital Market Days 28

5 Segment Oerlikon Components The business activities of Oerlikon Components include applications and technologies, fulfilling the requirements of highest precision and accuracy. Provider of system solutions and equipment for the back-end market of the chip manufacturing industry. Provider of payload fairings for launch vehicles, spacecraft structures, mechanisms and electro-optical systems. Page 5 Oerlikon Capital Market Days 28

6 Agenda Overview Components Oerlikon Esec at a Glance Markets & Strategy Key Take Aways Page 6 Oerlikon Capital Market Days 28

7 Oerlikon Esec at a glance Leading in epoxy and soft solder die bonder, one of the top providers of wire bonder and flip chip bonder Approx. 58 employees within its global footprint Organization Product lines: Die Attach (Epoxy, Soft Solder, Flip Chip and Wire Bonder) Strong global functions: Sales and Services, Operations, Global Sourcing and R&D Complemented by dedicated management support functions Asia represents the largest market for Oerlikon Esec (approx. 8%), Europe and the US remain strategically important Page 7 Oerlikon Capital Market Days 28

8 Agenda Overview Components Oerlikon Esec at a Glance Markets & Strategy Key Take Aways Page 8 Oerlikon Capital Market Days 28

9 Touching your life for more than 4 years... Page 9 Oerlikon Capital Market Days 28

10 Think about all the products you use today. COMPUTERS Lap Tops Workstations Mainframes Peripherals INDUSTRIAL/MEDICAL CAT Scans Hearing Aids Pace Makers Radar Satellites CONSUMER ELECTRONICS Cell Phones Gaming Televisions Digital Camera s MP3 Players Home Appliances AUTOMOTIVE Transmissions Climate Controls Cruise Controls ABS GPS On-Board Diagnosis Oerlikon Esec is present in many areas of your life! Page 1 Oerlikon Capital Market Days 28

11 Where is Oerlikon Esec positioned in market? Electronics: USD 1,56 billion Semiconductors USD 217 billion Semiconductor Equipment USD 56.9 billion Wafer Fab & Test Equipment USD 53.1 billion Assembly & Packaging Equipment USD 3.8 billion Page 11 Oerlikon Capital Market Days 28 (Source: VLSI Research, figures for 27) Addressed Market USD 1.65 billion

12 What do we do? Semiconductor Assembly Steps Wafer Fab Wafer Mount, Dice Die Attach Cure Wire Bond Mold Trim & Form encaps. mold singulate trim & form pack, test, burn-in ship board assembly Page 12 Oerlikon Capital Market Days 28

13 Existing Semiconductor drivers CONSUMER ELECTRONICS Cell Phones Gaming Televisions Digital Camera s MP3 Players Home Appliances AUTOMOTIVE Transmissions Climate Controls Cruise Controls ABS GPS On-Board Diagnosis COMPUTERS Lap Tops Workstations Mainframes Peripherals INDUSTRIAL/MEDICAL CAT Scans Hearing Aids Pace Makers Radar Satellites DOUBLE DIGIT CAGR It is estimated that the average person used products containing less than 15 semiconductors 25 years ago. Today, the average person uses products which will contain over 15 semiconductors every day! Millions Semiconductor Units Page 13 Oerlikon Capital Market Days 28

14 Future drivers of semiconductor industry EMERGING MARKETS EXISTING MARKETS Consumer Computer Automotive Industrial Photovoltaics Solar Concentrators Pocket Computing Mobile Computing Hybrid Automotive DOUBLE DIGIT CAGR Millions Semiconductor Units Page 14 Oerlikon Capital Market Days 28

15 Market dynamics Market Volatility Semiconductor Equipment Industry is Highly Cyclical, but Positive CAGR Perpetual Need for New Technology Customer s strive to Double Performance at Equal to Less Cost Every Two Years Packaging Trends Smaller Consumer Goods Demands Smaller Semiconductor Packages with Higher Levels of Performance ipod Nano Page 15 Oerlikon Capital Market Days 28

16 Market dynamics Highly Competitive Equipment Suppliers are Forced to Rapid Development Cycles to Meet Market Demands & to Stay Ahead of Competition Innovation and Cost Reduction is Vital Globalization High Volume Manufacturing in Asia Strategic Alliances & New Technology from US and Europe New Emerging Markets (Russia, India, Vietnam) Exchange Rate Fluctuations Fluctuations Will Impact Top Line & Bottom Line Performance Page 16 Oerlikon Capital Market Days 28

17 How is Oerlikon Esec ready for the market challenges? Perpetual Need for New Technology Highly Competitive Packaging Trends INNOVATION & TECHNOLOGY GLOBAL FOOTPRINT PRODUCTS OPERATIONAL EXCELLENCE Globalization Exchange Rate Fluctuations Market Volatility Page 17 Oerlikon Capital Market Days 28

18 Innovation & technology Example die attach Pick ϕ y Bond Pick & Place Innovation Customer benefit Company benefit Parallel moves: Phi (swing) and Y Highest UPH (units per hour) Unique selling proposition, IP protected Page 18 Oerlikon Capital Market Days 28

19 Innovation & technology Example wire bonding Rotative and Air Beared Bond Head Innovation Customer benefit Company benefit Frictionless, low weight & high acceleration at same time Maintenance free, high productivity & accuracy Unique selling proposition, IP protected Page 19 Oerlikon Capital Market Days 28

20 Most modern fleet in the market 3 platform strategy Die Bonder 21 Introduction of new Flip Chip Version in Q1/9 Unsurpassed speed at 2um accuracy Reliable working horse with highest uptime Highest flexibility due to fastest product change over Soft Solder DB Introduction of new Soft- Solder in Q4/8 Best available DB for advanced power packages Highest productivity for Matrix application Best Soft Solder Process Control Wire Bonder 32 Introduction of Copper Bonding process in Q4/8 Highest available process repeatability One platform for all applications Maintenance free, unique bond head design Page 2 Oerlikon Capital Market Days 28

21 Operational excellence Example Lean Manufacturing Enter Box Sensor T-Motor Scale MTC Box T-bearing top T-bearing bottom Theta T-axis Z-axis demand-driven production Z-axis (single parts) Rotary carrier (single parts) Reset Z-axis (single parts) Z-stator Y-encoder ESUS Final test Test bench 1 Test bench 2 Test bench 3 Test bench 4 Cabling Cabling Main flow Y-coil PCB s Coupling mass (single parts) Coil Left cable harness (single parts) Right cable harness (single parts) Cable fixture Cross bar Optics Opticcarrier Air bearing focus assy. PSD LED Theta-scale holder Optic carrier VS tread assembly Side light. Gluing Service Lean Manufacturing Program expands scope into supply chain and R&D Cycle Time Production lead time reduction by 5-8% Inventory Inventory reduction of 25-5% Productivity Productivity improvement up to 2% Page 21 Oerlikon Capital Market Days 28

22 Global Footprint Transformation into a balanced set-up Sales & Service Manufacturing HQ Increased customer proximity R&D Operations & Global Sourcing Innovations made in CH with R&D expanding to Asia Lean processes and operations; driving natural hedge increases and total cost reductions Product line Management Sales & Service Page 22 Oerlikon Capital Market Days 28 Leading edge products and excellent customer support levels High expertise level close to our customers. Product installation, application and process support

23 Customer and market recognitions in last two years Offered by For year Image Category Spansion (USA) 26 Spansion Spotlight Award (World Class Supplier) ST Microelectronics (Shenzhen) 26 Best Service Support Infineon (Malaysia) 27 Top Supplier Award Asia Pacific VLSI 27 Best Equipment Supplier in China ST Microelectronics (Shenzhen) 27 Best Supplier Page 23 Oerlikon Capital Market Days 28

24 Agenda Overview Components Oerlikon Esec at a Glance Markets & Strategy Key Take Aways Page 24 Oerlikon Capital Market Days 28

25 Long term improvement path Unit Shipments Shipments & Forex E 29 E 21 E Natural Hedge II: LCC Sourcing E E 21 E USD-CHF Exchange Rate Natural Hedge I: Regional Workforce Asia: +33% Europe: -46% E28E29 E29E21 E21E Significant natural hedge improvements and capability build up in Asia -26% Market downturn and unfavourable FX impact in 28 LCC HCC HCC LCC LCC sourcing and design-to-cost lower COGS by 8-1% p.a. Requires acceleration of restructuring and transformation measures Page 25 Oerlikon Capital Market Days 28

26 Due to market downturn and FX impact: Acceleration of restructuring measures and transformation Fixed cost reductions, natural hedge, organizational simplifications and improvements Capacity adjustments 16% Workforce Asia (from 26% to) 45% Fixed cost reduction 14% LCC sourcingcontent 3% Further org. developments and adj. ~1% Increase share >5% Additional fixedcost reduction ~1% LCC sourcingcontent >6% Product portfolio improvements & product offensive 3 platform strategy New Die Bonder Epoxy 5/8 New Soft Solder Q4/8 Wire Bonder 32 Copper Q4/8 New Flip Chip Q1/9 Continuous releases of new applications and processes 29 Page 26 Oerlikon Capital Market Days 28

27 Oerlikon Esec: Key take aways Assembly Packaging Market Growth FC New competitive, flexible global footprint established and product fleet renewal implemented Positioned to minimize external influences and profitably grow above market growth, due to: Leading edge products and technology Combined with flexible and optimized cost structures Customers demand fulfilment with below market response time 3% 2% 1% % -1% -2% -3% VLSI Research (September 28) SEMI (July 28) Gartner (September 28) Page 27 Oerlikon Capital Market Days 28