Semiconductor Manufacturing Technology Summer 2018 Safe Harbor - PowerPoint PPT Presentation

Advancing Semiconductor Manufacturing Technology Summer 2018

Safe Harbor This presentation may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements concerning our beliefs, forecasts, estimates and expectations, and those regarding our expected financial results for third quarter of 2018 are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that our results of operations are cyclical and may fluctuate from period to period; the risk that we rely on a small number of customers for a significant portion of our revenue; the risk that the industries in which we participate are highly competitive and other risks outlined in our public filings with the Securities and Exchange Commission, including as set forth under “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed with the Securities and Exchange Commission. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made in this presentation. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events Non-GAAP Management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included in the Appendix. 2

The Past 3 Years 97% Increase in DELIVERING Revenue (1) VALUE TO 98% Increase in Market Cap (2) INVESTORS 631% Increase in (1)(3) Non-GAAP EPS 1) FY2017 over FY2015 2) Increase in market cap from beginning of FY2015 to August 21, 2018 assuming ~39M shares outstanding 3) See Appendix for reconciliation of percentage increase and GAAP EPS to non-GAAP diluted EPS. 3

Investment Highlights Capitalizing on fastest growing segments of WFE market (Dep & Etch) Flexible, vertically integrated model supports significant growth and creates high barriers to entry Key customers enabling robust organic growth opportunities Increasing revenues drive financial leverage and strong operating profitability Accelerating share growth through acquisitions 4

Customers Choose UCT Through All Steps of the Value Chain PROTOTYPING/ MANUFACTURING SUPPLY CHAIN INTEGRATION MANUFACTURING DEVELOPMENT ENGINEERING MANAGEMENT & TEST Design for New product Global network of Comprehensive Subsystem manufacturability design and strategic suppliers new product through full tool (DFM) manufacture introduction process integration Highly integrated, one-stop, full spectrum solution for semi equipment customers 5 5

Outperforming our Served Markets * 80% 70% WFE * 60% Y/Y Growth Rate Etch + CVD * 50% UCT Semi 40% 30% 20% F Y 2 0 1 7 10% >80% of UCT DEP/ETCH Semi Sales 0% 2015 2016 2017 * Source: Gartner Semiconductor Wafer Fab Equipment Forecast (July 2018) 6

Driving UCT’s Rapid Financial Growth Historical Revenue and EBITDA Margin (1) FY 2017 Revenue Breakdown (1) ($Millions) (% margin) 18% $1,200 Europe Others $924 4% 6% 12% $800 Singapore United 11.7% 31% States $514 $563 55% $444 $469 7.6% 6% $400 6.8% China 6.0% 4% 5.1% $0 0% 2013 2014 2015 2016 2017 7

Key Customers Enable Organic Growth FACTORY TRANSFER INTERFACE CHAMBER GAS PANEL PROCESS CHAMBER UCT’s solutions provide avenues for organic market expansion going forward * Based on UCT internal estimates 8

UCT Supplies Critical Elements of the Semiconductor Manufacturing Process Semi Manufacturing Process Prep Front-end Processing Back-end Processing Photo- Litho- Epitaxial resist graphy CMP CMP Etch Certain Steps Package Repeated and Test 20x – 30x Depos- Slicing Implant ition Ingot Clean Process step with liquid Process step with gas delivery Core UCT offering delivery Source: Company Information. 9

Leading Manufacturer in a Highly Fragmented Supply Chain Semi Equipment Revenue Scale is Difficult to Achieve Thousands of additional suppliers A CM- CM-A B CM-B C D E F CM-C G H CM-D I J K L M N O P Q R S T U V W UCT Manufacturers Specialty Manufacturer Contract Manfacturer Scale positions UCT to provide differentiated, comprehensive global solutions. Source: VLSI 2017 Critical Subsystems Market Share (excludes pump and optic suppliers), UCT internal estimates. 10

Growth Strategy 1 Targeting fastest growing market segments (dep & etch) 2 Scaling operations to capitalize on market growth (close to customers) Increasing content on customers’ platforms 3 (new modules) 4 Accelerating share growth through acquisitions 11

Disciplined Track Record in Executing Acquisitions American Integration Technologies (AIT) Jul Feb Aug Sep 2012 2015 2015 2018 Added to customer base & Facilitated vertical Bolstered position in the Further capitalize on the expanded manufacturing integration in chemical chemical delivery fastest growing WFE capabilities and gas delivery market; augmented segments; become leading capabilities for wet clean outsourcing manufacturer and CMP subsystems for semiconductor capital equipment Purchase Price: $100.3mm Purchase Price: $43.6mm Purchase Price: $22.8mm Purchase Price: $342mm EV / EBITDA: ~5.0x EV / EBITDA: ~11.8x EV / EBITDA: ~6.2x EV / EBITDA: ~6.6x PF Debt / EBITDA: ~1.5X PF Debt / EBITDA: ~2.2x PF Debt / EBITDA: ~3.7x PF Debt / EBITDA: ~2.2x Highly strategic M&A; on targets accretive to earnings with recurring cash flows Source: Company materials, Company filings and website. 12

Quantum Global Technologies at a Glance Business Overview FY 2017 Revenue Breakdown Headquarters: Quakertown, PA Segment Breakdown Geography Breakdown Founded: 2000 Employees: ~ 1,800 Asia ChemTrace 31% 11% Business Description: Largest global outsourced provider of cleaning, coating and refurbishment (“CCR”) United and micro-contamination analytical lab services to the Quantum States Cleaning EMEA semiconductor industry 66% 89% 3%  Operates in two segments: Outsourced Parts Cleaning – Quantum Clean  Leader in cleaning of sub-14nm process parts with  Historical Revenue and Adj. EBITDA Margin estimated 33% of market share 18 Advance Technology Cleaning Centers  ($mm) (% margin) 4,000+ production cleaning and recoating methods  $300 36% Recurring revenues from Fabs (IDMs) and OEMs  $218 Analytical lab services – ChemTrace  $185 $200 $179 24% Five micro-contamination analytical laboratories $145  23.2% Rrecurring revenues from the semiconductor and  $108 solar industries 17.8% 17.0% $100 12% 16.2%  Growth Drivers 13.3%  Total Wafer Starts / IC Production $0 0%  Increased utilization of equipment 2013 2014 2015 2016 2017 Source: Company information. 13

Strategically and Financially Compelling Transaction Platform investment enhances UCT’s position as a differentiated 1 global solutions provider to the semiconductor industry Expands UCT into a complementary adjacent market that broadens 2 the Company’s addressable market Increases durability and recurring nature of revenues; positioned for 3 growth as semiconductors become increasingly pervasive 4 Vertically integrated portfolio strengthens barriers to entry 5 Accretive to margins and free cash flow with attractive coverage ratios 14

QGT’s Services and Capabilities All Semiconductor Manufacturing Processes Served Chemical Physical Atomic Layer Diffusion Etching Lithography Implant Subfab Vapor Vapor Deposition Deposition Deposition Services Performed Materials Cleaned • Ultra-High purity, validated parts cleaning Metals Aluminum • Performance coatings Stainless Steel • Titanium Quartz fabrication and repair • Refurbishment and rebuilding Ceramics Alumina • Complex analytical and engineering services Quartx • On-site logistics and support Silicon Silicon Carbide Ta Coated Shield Etch Other Anodized Aluminum Coated materials Pre-Clean Post-Clean Before and After Clean Source: Company information. 15