Welcome to Credence Analyst Day 2006

Transcription

1 Welcome to Credence Analyst Day 2006

2 Forward-Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, statements regarding industry leadership, profitability, accretion, expected synergies, and execution of integration plans are all forward-looking statements. Please see the risks that are described from time to time in Credence's Securities and Exchange Commission reports (including, but not limited to Credence's annual report on Form 10-K for the year ended October 31, 2005 and Credence s most recent report on Form 10-Q). If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Credence's results could differ materially from Credence's expectations in these statements. Credence assumes no obligation and does not intend to update these forward-looking statements.

3 Welcome 8:00 Company Update Dave Ranhoff 8:20 Sapphire S Chetan Desai 8:40 Sapphire D Larry Dibattista 9:10 Finance & Operations John Batty 9:30 Q&A 9:50 Closing Comments Dave Ranhoff

4 Credence Systems Corporation Dave Ranhoff, President and CEO Credence Confidential

5 Credence Overview Highly integrated solutions from engineering through production Technology leadership and innovation for cost efficiency Diversified customer base across IDMs, fabless and subcontractors

6 Consumer Age Semiconductors Consumers - the primary drivers of semiconductor investment Previously driven mainly by enterprise requirements % Consumer-Oriented Investment in the Semiconductor Market Source: Gartner, March 2006

7 Challenges in the Consumer Age Consumer electronics account for >50% of IC demand Cost Power Performance Time to Market $60 50 Cost Driven Devices Performance Driven Devices Dollars in billions Lower ASPs Higher ASPs 0 Low Complexity High

8 Focus on Large, High Growth Markets 3,500 Total Worldwide Cellular/PCS Subscriber Base* ( ) LCD TV Unit Shipments from Asia Pacific (Thousands of Units) CAGR - 40% 3,000 2,830 3,080 20,000 Millions 2,500 2,000 1,500 1,720 2,035 2,285 2,525 Actual Forecast 15,000 10,000 1,000 5, Year * End-of-Year Computing Electronics Consumption WW ($ Millions) CAGR - 9.6% Source: IC Insights, Gartner: June ,000 20,000 15,000 10,000 5,000 0 Microcontrollers Revenue, WW ($ Millions) 32 bit CAGR - 9.2% bit 16-bit 32-bit

9 Strategy Prioritize and focus on high growth markets From debug and characterization through production test Apply innovative technology to solve business problems Fastest time-to-market & time-to-volume Lowest cost of test Optimize our financial model across the cycle Engineering Production Debug & Characterization Computing Mobile Consumer Home Entertainment Automotive & Industrial ~$200M Market ~$3B Market for SOC & AMS ATE Debug Characterization Production Test

10 Engineering Diagnostics & Characterization Leading technology for next generation ICs Early involvement in new designs Differentiated time-to-market value proposition Solid contributor & counter cyclical to ATE cycle Installed at major microprocessor, chipset, consumer and memory manufacturers Solutions for designs to 45 nm Integrated lab solutions for rapid time-to-volume Expanding products for further grow and leverage

11 Mobile/Consumer - Mobile Phone - Wireless Communications -GPS Sapphire D series Key Components ASL D-10 D-40 MCU/DSP RF PA/Transceiver RF WiFi/WLAN Baseband Integrated Phone GPS Receiver Power Management MPEG Discretes LCD Driver Top IC Suppliers Vendor 2005 Rank TI 1 Qualcomm 2 ST 3 Intel 4 Freescale 5 Samsung 6 Philips 7 Renesas 8 Toshiba 9 Current Customers

12 Home Entertainment - Set Top Box -Audio - Video Gaming - HDTV -DVD - Digital Camera Sapphire Platform Key Components ASL D-10 D-40 S MPU Game Cells Chipsets/Graphics MCU/DSP RF PA/Transceiver RF WiFi/WLAN Baseband Power Management HDMI (HD TV) Digital TV TV Tuners MPEG Discretes LCD Driver Top IC Suppliers Vendor 2005 Rank Toshiba 1 Samsung 2 Sony 3 Renesas 4 Matsushita 5 ST 6 Philips 7 Hynix 8 NEC 9 Rohm 10 Current Customers

13 Computing - Mobile - Desktop - Server -Storage -PDA Sapphire Platform Key Components ASL D-10 D-40 S MPU Chipsets/Graphics Computer Peripherals MCU/DSP RF WiFi/WLAN Baseband Wired Comm. Power Management HDMI (HD TV) MPEG Discretes LCD Driver Top IC Suppliers Vendor 2005 Rank Intel 1 AMD 2 NVIDIA 3 IBM 4 ATI 5 Marvell 6 TI 7 ST 8 Agere 9 VIA 10 Current Customers

14 Automotive/Industrial Control - Engine - Environmental - Entertainment - Industrial Sapphire D Key Components ASL D-10 D-40 Falcon MCU/DSP Engine Controls Emission Controls Environmental Controls RF PA/Transceiver GPS Receiver Baseband Power Management Digital TV TV Tuner MPEG Discretes Sensors LCD Driver Top IC Suppliers Vendor 2005 Rank Renesas 1 Freescale 2 Infineon 3 NEC 4 ST 5 Philips 6 Toshiba 7 TI 8 Microchip 9 Matsushita 10 Current Customers

15 Diversified Customer Base Credence: Strength in leading IDMs, Fabless and OSATs Fabless IDMs OSATs

16 Summary Highly integrated solutions from engineering through production Focusing on high growth applications Differentiate with end-to-end solutions Technology leadership and innovation for cost efficiency Engineering solutions to 45nm Production solutions designed for the lowest cost Diversified customer base across IDMs, fabless and OSAT s Stable and growing base for growth Participating in both technology and capacity buys

17 Sapphire S Series Chetan Desai Vice President of Sapphire S Group (SSG)

18 Sapphire S Platform Highlights Growing installed base 200 systems Volume growth at AMD and ST Microelectronics POR for engineering debug at Intel Fully utilized installed base at key subcons Key design wins in graphics and home entertainment Graphics chipsets wins at nvidia, POR in two high-growth business units HDMI/DVI penetration with key IP drivers New capabilities extend Sapphire S reach 200 Mbps to 6.4Gbps digital instruments Wide choice of power supplies raging from 40 milliamp to 500 amps Range of mixed signal options including Gigabit sampler Complete solution for debug, characterization and production

19 Sapphire S Target Markets =$377M CAGR : 4.6% Computing Intel AMD Freescale IBM Sun Transmeta Chipsets / Graphics Intel nvidia ATI VIA SIS Microsoft =$113M CAGR :7.9% =$278M CAGR : 9.4% Home Entertainment Samsung TI Toshiba ST Infineon Renesas Sony Philips NEC Matsushita IBM Sharp Atmel SiliconImage Mediatek SunPlus

20 Expanding Device Test Challenges Computing - HyperTransport -NG FSB - PCI Express - SATA - DDR-X -FBDIMM -FSB Home Entertainment Chipsets/Graphics - HyperTransport - PCI Express - GDDR - DDR-X -AGP -8X - HDMI -DVI - PCI Express - SATA - DDR / GDDR - SVGA - HD-DVD

21 Differentiation in Addressed Markets Key Needs: Increasing system complexity and performance Sapphire Benefits: Proven solutions and experience in high speed test Platform scalable from engineering to production Solves challenge of non-determinism in high-speed serial buses Lowers COT single insertion test Roadmap to serve leading edge performance (12Gbps) Improved yields through mission mode test capability Credence Instrument

22 Sapphire S High Speed Solutions Home Entertainment Graphics / Chipsets Microprocessor BUS TYPES HT HT 2 HT 3.0 Next Gen FSB DDR2 / DDR3 FBDIMM FBDIMM2 GDDR PCIe PCIe Gen 2 DVI / HDMI SATA I, II Serial Attached SCSI USB 2.0 DFT, GP Logic Credence Solutions 400Mbps/ 800Mbps 1.6Gbps 3.2Gbps 6.4Gbps 12+Gbps

23 Why Sapphire S Will Win Market Share Fully integrated, scalable platform solution available TODAY capitalizes on key platform inflexions with competitors Highly differentiated high speed serial test solutions address mainstream requirements Roadmap aligned with key industry influencers in served markets Critical mass OSAT installed base provides foundation for fabless penetration

24 Sapphire D Series Larry Dibattista Vice President of Sapphire D Group (SDG)

25 Sapphire D-10 Introduction Semicon West 2005 Digital Baseband Multi-site/Cost of Test Integrated capability Scan support Display Controllers Performance Multi-site/Cost of Test High voltage/current Micro-controllers Multi-site/Cost of Test 200 Mbps digital Pattern flexibility APG / BIST / SCAN Wafer Sort Multisite/Cost of Test High pin count digital Zero footprint

26 Sapphire D-10 Year in Review Focus on high growth market segments Over 50 systems installed in first nine months 5 new customers per quarter Installed at 5 IDM s, 13 Fabless and 8 OSAT s Lowest cost of test available today Low capital & facility costs, high throughput, zero footprint Faster time-to-market (ease-of-use) First IOA (industry open architecture) solution cpci architecture accepts 3 rd party instruments Allows for expandability by Credence, 3 rd party and customer Next generation replacement for: Our own Quartet and SC family Competitive platforms (J750, C200, other)

27 Sapphire D-40 Applications Target Expansion 2006 Digital Baseband Multi-site/Cost of Test Integrated capability Scan support Display Controllers Performance Multi-site/Cost of Test High voltage/current Wireless Baseband Multi-site/Cost of Test Integrated RF Test MXSL Instruments Consumer Parallel Test Efficiency Scalable Instrumentation Optimized Throughput Micro-controllers Multi-site/Cost of Test 200 Mbps digital APG / BIST / SCAN Wafer Sort Multisite/Cost of Test High pin count digital Small footprint

28 Winning Strategy Focus on consumer device COT High growth, high volume Designed for shortest time-to-money Test development efficiency Scalable to meet declining device ASP Reconfigurable to match device life cycle

29 Scalability 1500 Pin Digital 1000 Pin MS 32 RF Ports MS RF MS MS MS RF MS OPEN MS MS >3000 Pin Digital >2000 Pin MS MS OPEN OPEN RF 768 Pin Digital 384 Pin MS 16 RF Ports OPEN OPEN 768 Pin Digital 384 Pin MS Capability

30 Test Engineering Focus Engineering Debug Environment Versatile Tool Set Scan support Wafer Sort Multi-site Efficiency Data Automation Tools HW/SW IF Solutions Final Test Multi-site Efficiency High Density Instruments Low Cost Interfaces Engineering to Final Test

31 Why Sapphire D Will Win Market Share The lowest cost solution for consumer IC s MCU, display controllers, baseband ICs Compelling wafer sort & final test solutions Parallel RF Test - MVNA Enabled The next generation consumer test platform Low capital cost / small footprint / scalable Over 50 Sapphire D s installed in first 7 months 10 new customers in H1 06 Priced for tomorrow s test economics Scalable mixed-signal performance Extremely low operating costs Small Footprint Test & Measurement

32 Financials John Batty, CFO Credence Confidential

33 Financial Performance & Guidance (1) 2Q06A 3Q06F Revenue $124.8M $125M - 129M Gross Margin (1) 45% 46-47% Opex (1) $50M $50M EPS (1) $0.05 $0.05-$0.08 Cash $128.5M $129M-$133M (1) Non-GAAP financial results exclude special charges, amortization of intangibles and stock compensation expense

34 Business Model Leverage

35 Q2 FY06 Balance Sheet Summary Q4'05 Q1'06 Q2'06 Expect 2 nd half FY 06 to be cash flow positive Cash ($M) (1) AR - DSO (2) Net Inventory ($M) Memory inventory write-off in Q2 Increased focus on asset management Debt ($M) $180M convertible note matures in May 2008 (1) Cash, cash equivalents, investments (2) Adjusted for deferred revenue

36 Closing Comments Credence Confidential

37 Summary Highly integrated solutions from engineering through production Focusing on high growth applications Differentiate with end-to-end solutions Technology leadership and innovation for cost efficiency Engineering solutions to 45nm Production solutions designed for the lowest cost Diversified customer base across IDMs, fabless and OSAT s Stable and growing base for growth Participating in both technology and capacity buys