Investor Presentation May 25, 2018 Disclaimers Forward Looking - - PowerPoint PPT Presentation

Investor Presentation

May 25, 2018

ACM Research Confidential 2

Disclaimers

Forward Looking Statements

This presentation contains forward-looking statements about ACM Research, Inc. based on management’s current expectations, which are subject to known and unknown uncertainties and risks. Our actual results could differ materially from those discussed due to a number of factors, including uncertainty as to our future revenue and profitability, our ability to raise additional equity and debt financing on favorable terms, the market acceptance of our products, and other risk factors. We are providing this information as of the date of this presentation and do not undertake any obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or otherwise.

Confidentiality

This information is strictly confidential and is for you to familiarize yourself with ACM. You should keep the information we provide at this meeting confidential, and you should not disclose any of the information to any other parties without our prior express written permission.

Non-GAAP Measures

This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures to GAAP measures is contained in the appendix to this presentation. * * * Unless the context requires otherwise, references to “ACM,” “we” and “our” refer to ACM Research, Inc. and its subsidiaries.

ACM Research Confidential 3

Post IPO Summary

Issuer

• ACM Research, Inc.

Transaction Type

• Initial Public Offering (IPO)

Deal Size

• 2,233,000 shares

Concurrent Private Placement

• Sino IC Capital Co., Ltd.: 833,334 shares
• China Everbright Limited: 500,000 shares

Managing Underwriters

• ROTH Capital Partners
• Craig-Hallum Capital Group
• The Benchmark Company

Security Offered

• Class A Common Stock

Offering Price

• $5.6 per share, as May 22, 2018 $11.25,

52 weeks : $4.74-$15.60

Proposed Exchange

• NASDAQ Global Market (ACMR)

IPO Date

• November 3, 2017

Outstanding Share

• 15.8 M share

Lock-up Date

• May 3, 2018

ACM Research Confidential 4

Investment Highlights (ACMR)

Differentiated Technology Improves customers’ yields

• Single-wafer wet cleaning technologies
• Highly effective cleaning for flat and simple structured wafers
• Damage-free cleaning for advanced 3D patterned wafers

China-based Operations Positioned for key trend in semi industry fab growth

• US headquarters in Silicon Valley, a Delaware Corporation
• Extensive Shanghai operations position ACM near high growth potential customers and

the rapid growth of the China semiconductor market

• Reduced R&D, shipping and manufacturing costs

Customers are Leading Chip Companies Validates competitiveness of products Strong IP Technology leadership and commitment to R&D

• As of May 15, 2018 more than 193 patents granted in the U.S., PRC, Japan, Korea,

Singapore and Taiwan

Large and Growing Market Excellent business Opportunities

• 2017 TAM $2.7B with projected CAGR of ~ 7%
• ACM positioned to capture market share in all phases of the fab build-out cycle

ACM Research Confidential 5

ACM Management Team: Decades of Industry Experience

Name: Fufa Chen, Vice President, Marketing, ACM Research (Shanghai),Inc. Degree: Ph.D. State University of New York, Stony Brook, BSc Tsinghua University (Taiwan) Years of Exp: 15 Experience: Marketing director at Novellus and Applied Materials Name: Jian Wang Vice President, Research and Development, ACM Research (Shanghai),Inc.. Degree: MSc Years of Exp: 15 Experience: ACM Research Name: Sothera Cheav Vice President, Manufacturing ACM Research (Shanghai),Inc. Degree: BSc Years of Exp: 25 Experience: ACM Research Name: David Wang, President and Chief Executive Officer Degree: Ph.D. Osaka University; BSc Tsinghua University Years of Exp: 25 Experience: Low-k electronics research director, Quester Tech. Name: Fuping Chen, Vice President, Sales ACM Research (Shanghai),Inc.. Degree: MSc Years of Exp: 12 Experience: Cleaning Manager at SK Hynix Name: Lisa Feng, Chief Accounting Officer, ACM Research (Shanghai),Inc. Degree: Master degree of Accountancy Years of Exp: 28 Experience: Corporate Controller at Amlogic Inc.

ACM Research Confidential 6

• Prof. Chenming Hu

Inventor of FinFET; Professor at UC Berkeley

• Dr. Stephen Chiao

Professor at SJSU; Sycamore Ventures

ACM Board and Advisory

• Dr. David H. Wang

ACM CEO & Founder

• Prof. Srini Raghavan

Professor of MSE at University of Arizona Tracy Liu CPA, M.S. in Accounting & Tax

• Prof. Chenming Hu

Inventor of FinFET; Professor at UC Berkeley Lip Bu Tan CEO at Cadence Design System

• Dr. Haiping Dun

Engineering Director at Intel; CEO at Champion

• Dr. Chiang Yuan Yang

VP & GM Intel Photomask Operation Yinan Xiang General Manger of SSTVC Zhengfan Yang Director of Sino IC

Board of Directors Average of 25+ Years Experience in Semiconductor Industry and High Tech Business Advisory Board 30+ Year Experience in Semiconductor Industry and High Tech Investment

ACM Research Confidential 7

New Digital Applications Drive Semiconductor Market Growth

32.6 103.7 397.4 556.2 623.7 886.7 1022.5 200 400 600 800 1,000 1,200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Billions of Units

Tracking Semiconductor Unit Growth Historical CAGR 6.7% (1987-2018E) > 1 Trillion Units in 2018F

Source: IC Insights

Semiconductor devices are fundamental to digital technology and applications

ACM Research Confidential 8

Wafer Clean Equipment is Critical to Semiconductor Manufacturing

Key Process Equipment Groups

• Implantation
• Deposition
• Microlithography
• Etch
• Clean
• CMP
• Metrology

Device are Continually Driving to Smaller Nodes For: Smaller Nodes Lead to Significant Manufacturing Challenges ACM offers wafer cleaning equipment designed to address one of the two major manufacturing challenges 7 nm FinFET 5 nm NW 14 nm FinFET

• 1. Higher Performance
• 2. Greater Energy Efficiency
• 3. Lower Cost

Most Critical for 22nm and Smaller Node Devices

ACM Research Confidential 9

Importance and Challenges of Wafer Clean in Semiconductor Manufacturing

• New transistor architectures, ever smaller & fragile

features, and 3-D structures lead to inadequacy

• r failure of conventional cleaning
• “Killer Defect” sizes become smaller
• Poor PRE (Particle Removal Efficiency)
• Damage to fine device features
• Wafer cleaning is implemented to remove defects and

particles in order to achieve good die yield

• More than 1/3 of process steps are cleaning steps
• 20 nm node DRAM: as many as 200 cleaning steps

Importance of Wafer Cleaning Challenges for Advanced Technology Nodes

Source: Digital Innovation & Transformation, Harvard Business School “Applied Materials-When machines talk to each other”, November, 2015

ACM’s proprietary SAPS & TEBO solutions are designed to address these issues

33% 67%

Cleaning Steps Other Process Steps

ACM Research Confidential 10

Semiconductor Device Yield Trend and Its Potential Financial Impact

• We estimate that 1% yield loss can lead to annual profit decrease of $30 to $50M
• The estimate is based on a DRAM fab with 100,000 wafer starts per month
• The impact may be even greater for a fab making higher ASP logic chips
• Moreover, a lower yield may require greater fab capacity and greater capital spending
• To remedy the problem, more cleaning steps with breakthrough capabilities are needed

** Both graphs are customer data

ACM Research Confidential 11

Single Wafer Cleaning Equipment Is a Large and Growing Market

Projected Market Growth 6.8% Annually 2015-2020

ACM’s SAPS and TEBO tools’ addressable market: > 30% ACM can grow significantly by capturing:

• 1. New fab growth
• 2. Cleaning step increase
• 3. Existing fab upgrades

Source: Transparency Market Research Pvt. Ltd., Report – Global Semiconductor Wafer Cleaning Equipment Market, December 2016

$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2015 2016 2017E 2018E 2019E 2020E

ACM

Market Size, $ billions

ACM Research Confidential 12

SAPS Clean Technology: Solution for Flat and Simple Patterned Wafer Surface

• Designed for wafers with flat and simple patterned surfaces
• Since 2011, > 40 tools shipped; in volume wafer production

by customers:

• Expected tool ASP $3M +
• price range: $2.5-5.5M depending on configuration and feature options
• 22 patents granted

As the size of “Killer Defects” (defects that impact device yield) continues to shrink at advanced nodes, wafer cleaning becomes more challenging

SAPS Tool SAPS II, 8-chamber SAPS V, 12-chamber System Configurations

ACM Research Confidential 13

SAPS Clean Technology: How It Uniformly Cleans Fine Particles/Defects

Conventional Jet-Spray Clean How Megasonics Clean Works Conventional Megasonic Clean

ACM SAPS Clean

• Spray velocity near-zero

at wafer surface

• Ineffective in removing

small particles

• Megasonic wave

creates cavitation

• Cavitation moves

particle away from surface

• Megasonic energy

delivery non-uniform

• Poor PRE (Particle

Removal Efficiency)

• Proprietary SAPS

ultrasonic design

• Uniform energy delivery

at microscopic level

• Excellent PRE

ACM Research Confidential 14

SAPS Efficiency is Consistently Better than Conventional Technologies

Source: ACM Research & Customer

Significant advantage at smallest defect sizes

ACM Research Confidential 15

• Proprietary technology controls cavitation formation in the

cleaning solution

• Designed for cleaning high-aspect ratio conventional 2D

and advanced 3D patterned wafer surfaces

• Early production at , also being evaluated by a

selected group of leading memory and logic chip manufacturers

• Expected tool ASP $4M+ with price range: $3.5-6.5M

TEBO Clean: Revolutionary Solution for 3D Patterned Wafer Surface

System Configurations TEBO Tool

TEBO II, 8-chamber TEBO V, 12-chamber

ACM Research Confidential 16

TEBO: Proprietary Technology Reduces or Eliminates Feature Damage

As device features become smaller and more fragile with high aspect ratios (feature structure depth to width ratio), conventional cleaning processes can lead to damages and loss of yield

SEM images of damages at 50-nm DRAM storage capacitors following a dSC-1 clean with megasonics in a batch immersion tool using high power densities

Source: Micromagazine.fabtech, by John Rosato, et al., SCP Global Technology

Conventional Megasonic Cleaning TEBO Megasonic Cleaning Transit cavitation results in violent micro-jet causing damage to wafer structures Stable cavitation

ACM Research Confidential 17

TEBO Technology: Works by Controlling Transit Cavitation Formation Conventional Megasonic Cleaning

Transit Cavitation Implosion Damages Wafer Structure

TEBO Megasonic Cleaning

Stable Cavitation, Effective Cleaning, Low/No Damage

Megasonic Energy Cycles Cavitation Temperature Cavitation Size in Oscillation

ACM Research Confidential 18

Off Scale

ACM TEBO vs. Conventional Megasonic on Pattern Damage Performance

• Adequate power level is needed to ensure effective cleaning action on the wafers
• However conventional mega-sonic clean at such power causes severe pattern damages
• TEBO can operate at such power with effective clean and no/low damages

ACM Research Confidential 19

Advanced Packaging Equipment

• Leverage our technology and extend applications to

packaging factories in Asia, especially in China

• Focus on custom-made differentiated equipment with

customer-requested features

• Products include scrubbers, coaters, developers,

photoresist strippers, wet etchers, copper platters

• More than 42 tools shipped
• Expected tool ASP: $500K-$2M except copper platter
• Expected tool ASP for copper platter: $3+ M

Ultra ECP

• For application in Copper Bumper
• Incorporated proprietary plating

technology with 16 plating chambers

• Reduce CoO for customers

ACM Research Confidential 20

ACM Manufacturing

• ISO-9000 certified, 36,000 square feet facility in Shanghai
• 8,000 square feet of class 10,000 clean room space for product assembly and testing
• 800 square feet of class 1 clean room space for product demonstration purposes
• Rest for product sub-assembly, component inventory and manufacturing related offices
• Manufacturing staff of 57 as of March 1, 2018
• Expanding 50,000 square feet facility with cleaning room of 18,000 square feet in Shanghai by 2nd Q of 2018
• Global supply chain strategy
• 1/3 of parts and components from Chinese suppliers
• Remaining from U.S., Japan and Korea

ACM Research Confidential 21

’70s-Mid-’80s, US was the Center

Varian, Ultratech, Eaton, GCA, Applied Materials, LAM Research, Watkins-Johnson, Novellus, Perkin-Elmer, KLA Tencor, etc. As semiconductor manufacturing technologies become more mature, only equipment companies with breakthrough technologies can rise to be global players.

Late ’80s-Early ’00s, Japan was the Center

Nikon, Canon, TEL, Kokusai, Anelva, Ulvac, Hitachi, DNS, JEOL etc.

Mid-’00s-Present, Korea & Taiwan are the Centers

ASML (TSMC driven), Hermes, Semes, SFA, KC Tech, AP System, etc. (Italics: Regional players).

Present-2025, China is Expected to be the Center

ACM is well positioned to take advantage of the growing market China is the emerging global center for semiconductor manufacturing.

’70s- Mid-‘80s Late 80s’- Early-’00s Present- 2025 Mid-’00s- Present

ACM Positioned to Serve Extensive Planned Buildout of Fab Capacity in China

ACM Research Confidential 22

42% 15% 7% 6% 8% 16% 6% China Taiwan Japan Korea SE Asia Americas Europe & ME

Semiconductor Industry Manufacturing Growth Focused on China

Likely New Front-end Facilities and Production Lines Starting Operation New Facilities and Production Lines Starting Operation (2017-2020)

Strong presence in Asia and close proximity to Chinese customers is key competitive advantage

Source: World Fab Forecast Report (November 2016, SEMI)

5 10 15 China Americas Taiwan SE Asia Europe & Mideast Japan Korea Count 2017 2018 2019 2020

ACM Research Confidential 23

Q1 2018 Operating Highlights

• SAPS III Cleaning Tool Used in Mass Production
• SAPS III is being used in mass production in a key customer’s manufacturing line.
• Ideally suited for existing wafer fabs that intend to migrate to next-generation technology node with

more cleaning process steps and limited cleanroom floor space.

• Equipped with 8 chambers; high throughput; 40% reduction in footprint
• ACM Korea R&D and Service Support Center
• Co. established R&D and Service Support Centers in Korea to further strengthen its R&D and

service support capabilities.

• The R&D Center in Bundang will enable ACM to recruit engineering talent locally
• The support facility in Icheon will enable ACM to better support customers in the region
• Multiple Orders for SAPS-based tools
• Co. received multiple orders for SAPS equipment and advanced packaging tools.
• Co. expects to ship all of the ordered tools by 3Q’18, and anticipates acceptance and revenue

recognition in 2018.

ACM Research Confidential 24

Q1 2017 and Q1 2018 Financial Overview

Q1 2017 Q1 2018

US $ in millions GAAP SBC Adj. Non-GAAP Non-GAAP

• f Rev

GAAP SBC Adj. Non-GAAP Non-GAAP

• f Rev

Income Statement Revenue $5.7

• $5.7

100% $9.7

• $9.7

100% Gross Profit $2.4 (0.005) $2.4 43% $5.1 (0.008) $5.1 53% S&M $1.2 (0.006) $1.2 20% $1.9 (0.034) $1.8 19% G&A $1.9 (0.811) $1.1 19% $3.6 (2.106) $1.5 16% R&D $0.9 (0.013) $0.9 16% $1.5 (0.027) $1.5 16% Total OpEx $4.0 (0.830) $3.2 55% $7.0 (2.167) $4.8 50% Operating Income (Loss) ($1.6) (0.835) ($0.7) (13%) ($1.9) (2.175) $0.3 3% Net Income (Loss) ($2.1) (0.835) ($1.3) (22%) ($2.8) (2.175) ($0.6) (6%) Balance Sheet and Cash Flow Cash $12.1 $15.2 Short-term Debt $6.1 $10.4 Note Payable $0.01

• Operating Cash Flow

$0.4 ($7.4) CapEx $0.01 $0.4

ACM Research Confidential 25

Customer 2016 % 2017 %

YMTC $0.0 0.0% $6.7 18.3% SK Hynix $6.6 24.0% $6.6 18.1% ICRD $0.0 0.0% $5.1 14.1% SMIC $6.8 25.0% $4.6 12.6% JCAP $4.5 16.6% $4.6 12.7% HLMC $9.2 33.7% $3.0 8.3% Others $0.2 0.7% $5.9 15.9% Total $27.4 100.0% $36.5 100.0%

Revenue by Customers

US$ in millions

Continued expansion from SK Hynix in 2016 and 2017 Healthy growth in customer base and more balanced customer portfolio in 2017 Non-SK-Hynix revenue more than quintuple in 2017

ACM Research Confidential 26

• ACM SAPS tool addressable market of existing customers with known fab ramps
• These customers already have SAPS tools qualified in production
• Anticipated ACM cleaning tool additional addressable markets for 2018-2019:
• TEBO tool existing customers transitioning from engineering evaluation to production ramp
• New customers adopting SAPS , TEBO and packaging tools such as copper plater

Existing ACM Customer Single-Wafer Cleaning Tool Needs 2018-2019

Existing Customer Application # of Lines Wafer Starts per Month Plan # of Cleaning Tools Needed 2018 # of Cleaning Tools Needed 2019 A DRAM 1 60K 48 58 B Foundry 1 25K 33 30 C Foundry 2 35K 25 73 D 3D NAND 1 60K 30 60 Total # 5 180K 136 221 Yearly Forecast $65 M POs Received >$60 M

ACM Research Confidential 27

Investment Highlights (ACMR)

Differentiated Technology Improves customers’ yields

• Single-wafer wet cleaning technologies
• Highly effective cleaning for flat and simple structured wafers
• Damage-free cleaning for advanced 3D patterned wafers

China-based Operations Positioned for key trend in semi industry fab growth

• US headquarters in Silicon Valley, a Delaware Corporation
• Extensive Shanghai operations position ACM near high growth potential customers and

the rapid growth of the China semiconductor market

• Reduced R&D, shipping and manufacturing costs

Customers are Leading Chip Companies Validates competitiveness of products Strong IP Technology leadership and commitment to R&D

• As of May 15, 2018 more than 193 patents granted in the U.S., PRC, Japan, Korea,

Singapore and Taiwan

Large and Growing Market Excellent business Opportunities

• 2017 TAM $2.7B with projected CAGR of ~ 7%
• ACM positioned to capture market share in all phases of the fab build-out cycle