DNB SME CONFERENCE. APRIL 5 th 2017 <<<<<

Transcription

1 DNB SME CONFERENCE APRIL 5 th 2017

2 The Company

3 NEXT BIOMETRICS GROUP ASA Oslo (HQ) Seattle Sillicon Valley Munich Spain Prague Shanghai Japan Taipei India Brazil NEXT BIOMETRICS GROUP ASA Headquartered in Oslo, Norway. 75 employees, half of these in Seattle. Dedicated to Active Thermal sensors Listed at OSE / 5000 shareholders 2016 OPERATIONS First full year of operations Yield curves climbed to mid 90 s Significant supplier related costdowns achieved SALES 2016 / 2017 NOK 92.1 mill in 2016 Integration in 12 Dell Notebooks More than 1.8 mill sensors shipped Technology & Cost positioned for significant growth

4 The core technology Area sensor technology Thermal conductivity vs Capacitive sensing Active Thermal Heat conductivity A heat pulse is generated and a response measured by every pixel Capacitive sensing An electrical radio frequency signal is generated and response is measured by every pixel Players Players 5-6 NEW CHINESE

5 The Active Thermal Principle core advantage LTPS Manufacture at Rigid & Flexible substrates -> 840 sensors per sheet The Active Thermal Principle, patented and owned by NEXT, is based on transfer of heat from sensor into finger ridges and valleys The unique simplicity of the NEXT Active Thermal pixel designs allows for mass production in standard high quality display fabs Facilitating mass production at a lower costs plus access to both rigid and flexible product formats

6 5 strong and significant competitive advantages Rigid & Flexible Adaptable to both rigid and flexible or shaped substrates Significantly lower costs 70% lower production cost vs same sized silicon area sensor modules (fully realized from Gen 2 ASIC) Uncompromised security & convenience Company not forced to compromise on sensor size in order to stay competitive For close to 100% of a population Scalable Scalable to 10 s & 100 eds of millions of sensors Strong IP Strong IP - protected by a range of patents & trade secrets Strength vs crowded capacitive space

7 Strategic focus NEXT Strongholds Smart Cards NEXT-enabled & Traditional markets Notebooks & Tablets Smartphones Key requirements -Large size -Physical flexibility -Low cost -ISO compliance Key requirements -Large size -Low cost Key requirements -Medium & Large size -Attractive ID -Low cost Key requirements -Small size (today) -Attractive ID -Low cost Addressable market 100 eds of millions Addressable market 10 s of millions Addressable market 10 s of millions Addressable market 100 eds of millions FOCUS FOCUS FOCUS FOCUS VERY HIGH HIGH HIGH LOW

8 Strategic focus Competition Smart Cards NEXT-enabled markets Notebooks & Tablets Smartphones LARGE SENSORS ONLY NEXT LARGE SENSORS ONLY NEXT SMALL SYNAPTICS FPC EGISTEC LARGER NEXT SMALL SYNAPTICS FPC (APPLE) LARGER NEXT SMALL/MEDIUM IDEX, FPC GOODIX IDEX EGISTEC SILEAD FOCALTECH MD Chipone MicroArray Pixir. QUALCOMM Vkansee Holtek

9 Second Generation ASIC A2 Generation 2 ASICs Status & Milestones Testing completed in March First volume order placed Initial shipments targeted July 2017 Volume customer modules prioritized in Q3 Financial impact Major cost down from Q3-17 More than $ 2.5 per module Significant reduction of module components (BOM) Significant ASIC cost down (vs Gen 1) Major milestone passed in March 17 Enabling attractive margins in all targeted market segments

10 Strategic Direction > R&D & Operations Flexible sensors Flexible sensor development for mass production Further Cost Reductions New ASICs will yet again reduce module and system level costs Economies of scale will further reduce module & inlay COGS Further Power Reductions New ASICs will further reduce sensor system power consumption Scaling Going from millions to 100 eds of millions annually

11 Introducing CEO - Ritu Favre Background Bachelor s and Master s in Electrical Engineering Career Highlights Launched career at Motorola in 1988 in wafer fab and A/T Managed P&L s of increasing size and complexity at Freescale Semi Freescale SVP/GM of Radio Frequency Group (staff of 600) Synaptics SVP/GM of Biometrics Product Division (staff of 400) Expertise Scaling volume from pilots to hundreds of millions to meet market windows Semiconductor product development and manufacturing Selling the value of system solutions

12 Smart Card industry mandatory requirements As defined by leading smart card industry projects I Technology/ Performance FRR <1% at FAR 1: Full compatibility with all the ISO standards below - ISO/IEC 17839, Biometric System-on-Card and - ISO/IEC 7810, Physical characteristics and - ISO/IEC 10373, Test methods and - 8 other partially overlapping ISO standards II Scalability Access to credible, high volume production processes Strong and credible partners Ability to ramp up production to millions and 10 s of millions units per month III Cost Cost levels compatible with the value proposition of the targeted volume markets

13 Sales - Smart cards 1 st Project May units (rigid & flexible) > Potential 10 mill + Governmental US 2 nd Project November units (all flexible) Non-Governmental For close to 100% of a population 3 rd Project November units (all flexible) Governmental - US NEXT has won all three projects for flexible sensors announced so far in the world market.

14 Ramp up - Flexible sensors and smart cards INNOLUX INNOLUX further ramping up mass production team and activities Laser cutter - testing and installation to be completed end of May New high capacity coating machine flexible On track for end of May 1 st Customer Ramping up production capacity rigid and flexible smart cards Investments in tools and staff -> 1 st stage to be completed late in Q2 Other Multiple new partner dialogues in process Successful launch at Cartes / Trustech in France

15 Relevant user group testing Major Worlds Markets Testing Regimes Sensing area = 100 mm 2 Sensing area = 148 mm 2 Sensing area = 201 mm 2 TYPICAL INHOUSE CUSTOMER TESTS Inhouse tests (typical) - Limited number of prints collected - Limited number of individuals - Ages years - Indoor, clean, office worker environment - Normally poor methodology ESTIMATED BY NEXT FRR 3-4% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR 1-1.2% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR % Such tests are not credible in mass market implementation context

16 True population level implementations Security & Convenience for close to 100% of the targeted users FRR at UNCOMPROMISED FAR Temporary disabled fingers Problem conditions outdoor usage Skewed finger placements Humid / Wet / Sweaty fingers Cut, worn, damaged fingers x% <1% / 2% An average in a representative part of a population Normal usage by average part of population 60-80% 80-90% 90-96% 96-98% 0-60% REAL LIFE USER EXPERIENCE / POPULATION ADOPTION %-AGE

17 Relevant user group testing Major Worlds Markets Testing Regimes Sensing area = 100 mm 2 Sensing area = 148 mm 2 Sensing area = 201 mm 2 TYPICAL INHOUSE CUSTOMER TESTS Inhouse tests (typical) - Limited number of prints collected - Limited number of individuals - Ages years - Indoor, clean, office worker environment - Normally poor methodology ESTIMATED BY NEXT FRR 3-4% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR 1-1.2% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR % Such tests are not credible in mass market implementation context The Madrid Tests - 3 x prints collected individuals - Representative part of population - Ages 20 to 65 (80% less than 30) - Indoor, clean environment - ISO Best Practices methodology - Western world user group test CONDITIONS/RESULTS - Capacitive silicon sensor - High Quality algorithms - Simulation by cropping - Full enrollment (stitching) - Not ISO BSoC Compliant - FRRs at 1/ 10,000 FAR DOCUMENTED-MADRID FRR 1.54% CONDITIONS/RESULTS : - Capacitive silicon sensor - High Quality algorithms - Rigid only - Not ISO BSoC compliant - FRRs at 1/ 10,000 FAR DOCUMENTED-MADRID FRR 0.63% CONDITIONS/RESULTS : mm 2 sensor - NEXT Active Thermal sensor - High Quality algorithms - ISO BSoC compliant - FRRs at 1/10,000 FAR

18 Relevant user group testing Major Worlds Markets Testing Regimes Sensing area = 100 mm 2 Sensing area = 148 mm 2 Sensing area = 201 mm 2 TYPICAL INHOUSE CUSTOMER TESTS Inhouse tests (typical) - Limited number of prints collected - Limited number of individuals - Ages years - Indoor, clean, office worker environment - Normally poor methodology ESTIMATED BY NEXT FRR 3-4% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR 1-1.2% Such tests are not credible in mass market implementation context ESTIMATED BY NEXT FRR % Such tests are not credible in mass market implementation context The Madrid Tests - 3 x prints collected individuals - Representative part of population - Ages 20 to 65 (80% less than 30) - Indoor, clean environment - ISO Best Practices methodology CONDITIONS/RESULTS - Capacitive silicon sensor - High Quality algorithms - Simulation by cropping - Full enrollment (stitching) - Not ISO BSoC Compliant - Western world user group relevant test - FRRs at 1/ 10,000 FAR DOCUMENTED-MADRID FRR 1.54% CONDITIONS/RESULTS : - Capacitive silicon sensor - High Quality algorithms - Rigid only - Not ISO BSoC compliant - FRRs at 1/ 10,000 FAR From Madrid to Outdoor, demanding markets FRR s Increase by 2-3 times DOCUMENTED-MADRID FRR 0.63% CONDITIONS/RESULTS : mm 2 sensor - NEXT Active Thermal sensor - High Quality algorithms - ISO BSoC compliant - FRRs at 1/10,000 FAR CHALLENGING USER GROUP WORLD MARKETS Major Volume World Markets - Developing country user group - Representative population - Ages children to 80 years - Hot and dry, often dirty outdoor conditions - Quality methodology - Relevant outdoor challenging market - user group FRR = VERY HIGH NOT APPLICABLE FRR 3-5% NOT APPLICABLE ISO/IEC Minimum 169 mm 2 DOCUMENTED FRR UNDER 2%

19 NEXT Enabled volume markets Typical Context When close to a 100% of a population needs to be served When level of security may not be compromised When documentation of performance is required When keyboard based fallback (pin-code/password) may not be offered Key Fobs Smart Home Concepts Product requirements Large area sensors One-touch enrollment Credible, large field test based documentation Internet of Things Remote controls The NB-2023-Series A Gen-2 Sensor based module targeting markets where processing is done in separate controllers Tokens Portable hard drives

20 The Notebook Segment Status NEXT sensors now sold in 15 different DELL Notebooks & Tablets Growth Potential Higher attach rates in the Notebook industry Second generation ASIC opens opportunities for margin attractive expansions within the Notebook segment 2017 notebook volumes are expected to grow compared to 2016

21 Outlook As of April 2017 Implementation of A2, reducing module COGS by more than $ 2.5 (Q3-17) Flexible sensor mass production ramp up Outlook 3-9 Months Continued progress with major players in the Smart Card industry Increased focus on next generation ASICs Capitalize on A2 rigid modules in Notebooks and NEXT Enabled segments

22 Q&A